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tv   Bloomberg Markets European Open  Bloomberg  June 20, 2018 2:30am-4:00am EDT

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>> good morning. open i ame european alongside guy johnson -- i am alongside matt miller, in portugal. matt: markets are bouncing back. haven assets are giving up the gains they saw yesterday, ahead of this important panel with the fed, ecb, and bank of japan leaders this afternoon. ♪ guy: stocks are bouncing back,
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equities climbing in asia, european futures pointing higher. boc hasernment of the p given a, i will do whatever it takes, kind of interview. will this calm last? againstsa may loses parliament, will the currency search below 130? bloombergkbuster panel with the head of the ecb, fed, bank of japan, and reserve bank of australia. it starts at 2:30 p.m. u.k. time. matt: taking a look at the world equity index futures -- strong gains in europe. but a gloomy day yesterday,
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back andkets came posted strong gains at the end of the session. we are now looking at a positive direction to the start of trading in europe. backear yields are coming 2.904. investors are willing to let go of that u.s. debt this morning. bit,chinese, up a little interesting considering where we are with the straight story. -- this trade story. we are seeing australian markets higher.cing the brazilian markets finished up, european futures are pointing positive. , saying it will do
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whatever it takes. out, have been pointing the s&p gap has been lower in the previous three sessions, finishing higher on that initial gap. let's push this off and show you what is going on. the british pound is a little bit lower. the bloomberg commodity index is trading positive. higher. trading we have opec going on as well. don't ignore that. let's go to the first word news. trump hasald threatened to impose tariffs on another $200 billion of chinese imports and could it cut as much
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as half a percentage point from the economic growth of that nation. this is as the simmering trade into a risks spiraling protracted trade war. iran has put itself on a collision course with saudi a potentialcting compromise that would appease energy consumers at the opec meeting. saudi arabia once to unwind output curbs by engineering moderate supply in the second half of the year. an independent organization. it is not an american organization.
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opec is not an organization to receive an instruction from president trump. does notm jong-un appear to be in a rut -- rush to dump his nuclear weapons. he reiterated his call to carry out the results of last week's summit with president donald trump. chinese state media said denuclearization will open up new prospects if both sides can implement the consensus of the summit step-by-step. will take on the pro-european rebels in her own party as she battles to keep control of brexit. the battle could have far-reaching consequences for exituture and britain's from the european union. she is facing a revolt from european party lawmakers over whether she can take the country
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out of the european union without a deal. the trump administration has withdrawn from the un's human rights council, a body it has long accused of anti-israel bias and hypocrisy. there have been growing criticisms of trumps policy of separating undocumented immigrant children at the u.s.-mexico border. global news on air, 24 hours a day and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. guy: thank you. stocks in asia rebounding. a choppy session. we are awaiting the next development in the u.s.-china trade story. the treasury yields, sinking a little lower. we have this interview with the governor of the pboc. we are joined now by mark from
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our mliv team. is this a pause? mark: i think it is. people have gotten tired after last week. mosts supposedly brexit's important week, economically. people are waiting to work out the next direction. dollars come off the radar. people are unsure on equities. some traits have not worked out. people are waiting for more direction. guy: the desire to buy the pound has been a pain trade. we have a continue to slide and a key vote in parliament today. i really struggle to see how the downgrade that 50-50 estimate right now if the bank raises in august.
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>> i don't see where inflation is coming through. growth is important to the united kingdom and brexit is a mess. narrative last year, that the u.k. was underpriced in the market, it is going on this year and i think they will not come through like people think. it is hard to be bearish when hasn't fallen that much, but i am not bullish on the pound yet. of people are talking about the ability the fed has to raise rates due to trump's fiscal policy. there has been concern that they may go too far. how do you feel about the fed' h, especially with the 10-year at 290 and the dollar not shown incredible strength?
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mark: the estimate was raised from the 2.5% to 4%, quite a ride range -- wide range. the curve will ultimately invert. they will go above the neutral rate. we might already be close. the next couple of hikes might already be restrictive. i think the terminal rate is probably closer to 3%. i don't believe in the higher estimates and i think we will see the curve invert. the: remind us your take on inverted curve. even if we went into the session, you don't think equity markets need to take a head for some time after that? mark: the current inversion on average has preceded the
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recession by 18 months -- curve inversion on average has preceded the recession by 18 months. normally equity markets top out three months before the recession hits. we might see the cyclical high in equity markets in mid-2020. risk, arted curve is a massive forward indicator. while the curve is going flatter and flatter, equity markets continues to do well. this is a positive sign. the current mate start to steepen again after the inversion -- curve may start to steepen again after the inversion. we have not seen that yet. guy: nobody is certain about what is going on right now. is now the point to put trades on?
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almost feel like you need to have a piece of paper in front of you with what could happen next. how are investors looking at what they do next? they need to find something that provides them with a vector in which to travel. is now the moment to do that? do they need to see more information before they make that decision? subjective,ecomes what is going to play out. you see emerging markets reprice massively. emerging market fundamentals are pretty good. i think there is a lot of good stories. think trump will be restrained. it is hard to find $200 billion of extra tariffs that does not hit his support base.
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was forious money clever expenditures in terms of thing that would not take his supportbase -- hit his base, but the next $200 billion will be hard to do. at some point, there will be pushed back in terms of the group credit process. i am not too negative on the trade war overall. i think this is the time to be quite bullish toward equities and emerging markets. bold call. that's a we'll leave it there. mark cudmore, talking about the smart take on these tariffs. fors going to be difficult the u.s. to find goods it doesn't need itself in order to
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feed it to its manufacturing process. we heard from lloyd blankfein. we will show you what he said on monetary policy normalization on trade war threats and the like. david solomon' joins us for an exclusive interview at 11 a.m. u.k. time. this is bloomberg. ♪
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14 minutes to the start of
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european cash trading for equities. let's get a bloomberg business flash. report murdoch's 21st century fox isn't starting negotiations with comcast, paving the way for a bidding war over its entertainment assets. ago toeed to six months sell assets to disney in an all stock deal and is considering now and all stock proposal from calm cost. may formally evaluate the bed. a semiconductor has set its with an attempted takeover. it is seeking independence from apple and is now conducting due diligence related to the potential deal. the company in question has a market value of $1.7 billion.
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it sells touchpads to apple, samsung, and other leading smartphone makers. tove levinson has threatened leave 21st century fox television, saying he is disgusted by the company's ties to fox news. a statement provided for his take some he would time to see where his colleagues at fox land and make a decision about his future. matt: thanks. let's get back to one of our top stories. lloyd blankfein says trump's administration's tariff threats as a bargaining strategy will not bring about a devastating trade war. he spoke to bloomberg's editor in chief. there is a lot of
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frustration. i know that china is frustrated with the sudden aggressiveness of u.s. policy. anyone who was had transactions with china has had both good and frustrating experiences with china. 15 years ago, we set up are joint venture inch -- we set up venture in china that would lead to is having an investment bank in china. there have been a sip -- a lot of suggestions that would happen quickly. when it is already available, it gets announced at the seniormost level. we found that in order to own our own entity, you have to
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level that would make it not sensible for us. we are back to square one. we are in financed, but advisers to people in other industries. the course it be would recommend. a lot of people who are is assing publicly, this for difficult thing americans, which you know from young economic courses -- have to pay homage to your clients in china and your customers in china. when they are not in public, they could be going to the u.s. government and is saying, what you are doing may not be such a bad thing.
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you now have $200 billion -- it has gone beyond -- >> it is not my style. you want to give someone an incentive -- it is not my style. you want to give someone an incentive to see the world from your point of view. it does not help to remind others that you're negotiating position is a better one. if it is tit-for-tat by the time you get to a hundred, they run things -- run out of things you apply tariffs to. that is what you do if you are crazy and really want free trade. that is what you would do if it was a negotiating position. yourould want to remind negotiating counterparty of how much firepower you had to bring to the negotiation.
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>> do you think donald trump is a protectionist? rosencrantz and guildenstern -- you can't even play the flute, how could you play me? i don't know what i would do in his place. me can i give a narrative about how this is a sayul thing to do, i can't this is a lot of people do with respect to almost everything he does -- this makes no sense to me at all. speakingyd blankfein, with our editor in chief. going to joinis us for an exclusive interview at 11 a.m. u.k. time. this is bloomberg.
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guy: five minutes to go until the start of cash trading. joining us.hief, i was reading a piece about the lack of representation of females on the boards of shipping companies.
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how was your company trying to fix a little bit of that? the executive group lacks it. all five are men. four of those five are danes. have been at the company since they were teenagers. the company is not strong on diversity. maersk looks like it is going to be called higher. jp, let's talk about dialogue. j.p.: this moves comes in an effort to reduce dialogue's -- dialog's dependency on apple. it would boost earnings this year. shares are up 2% this morning. the stock was down about 60% in
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the last 12 months. guy: thank you very much indeed. european futures are pointing to a positive start in europe. if you want these stocks news first, you can get that on bloomberg or on your mobile app. this is bloomberg. ♪ guy: one minute to go until the
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start of cash trading in europe. the u.s. dollar down. more currency later on. finished up by 1.2% and declined into the close. oil, $75.47. sessions, thehree s&p has been lower at the get-go and bounced off that gap.
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could be a positive story for the s&p. the european story this morning, this is what the futures look like. we are looking at a larger the -- largely positive session being priced. we will open at a half of 1%. the trade story is still there and can't be ignored. out at $76.03. up by 2/10 of 1%. strongly, 8/10 of 1%, a decent move higher for the spanish market. is.33 is where the ftse 100 by and large, most of the sectors we are watching in europe are in positive territory. 1%.up for tenths of
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-- four tenths of 1%. the trade story is a big feature for the dax at the moment. plus the political tension in germany. let's show you the imap. at most of europe is trading least positively this morning. it will be interesting to see how the miners trade. charts on the bloomberg show the momentum story means they are trading a bit cheap this morning. let's show you what is happening with index points. we are riding the weight. 1%. trading up by 7/10 of glencore trading up by 2/10 of 1%. european banks look like they will be interesting today.
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hear the goldman sachs chairman ceo, lloyd blankfein, causing concern as to what is happening in italy. ceodownside, the loss of a morning -- ass abloy -- assa abloy done by's extensive 1%. matt: lloyd blankfein told bloomberg that the threats are just a negotiating strategy. lloyd: i suspect we are not going to cause a holding on
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steroids. on.n't get what is going some people have commented this is part of a negotiating pattern. that is my best case. att: joining us now is grace peters, european equity strategist from j.p. morgan private bank. what you think of the volley launch by donald trump, $50 billion, $100 billion, now an additional $200 billion? there are a lot of threats headed in china's direction, even as he needs to negotiate a treaty with north korea. this is part of a negotiation tactic on the part of president trump. and out and out trade war is a lose lose situation. 1990's,o back to the
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there was a late in the day deal. there are three weeks to negotiate until the first terex come into play, until the - into play, until the sixth of july. that is reflected in what we are seeing in stocks this morning. investor, i have money in the market, i am watching the turbulence. bit,hunkered down a little assume that this will all blow over? what do i do? grace: growth is visible from the united states. all this trade conflicts -- conflict comes at a time when you are seeing divergence play out. at the beginning of the year, you were seeing global synchronized growth.
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the u.s. is really doing all the heavy lifting in terms of not just what we saw for the first quarter, but what we expected to see in the second quarter, but also in terms of consumer sentiment. the u.s. is now the preferred equity market, and there are really exciting sectors we can focus on, with catalysts like financials. want to buy the s&p or the dow. it is the u.s. economy i want to buy. where would i put my chips? grace: there are elements in both. the small caps benefited from the tax reform and the domestic policy agenda. but when we get the stress test weults later this week,
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think they believed to about a 25% increase in a bank payout. technology is a real heavyweight in the united states index. the drivers are extremely strong. there are some sectors we really like even within the s&p. matt: how much of this is due to flows? rates,e fed raising people are going to want to get a better return with the dollar strengthening. how much of this is trying to get there ahead of the pack? flows,when it comes to people are often looking for any reason not to invest outside the united states. with what has happened in italy, we actually dollar,
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see attributes to both of those regions that lead to investment opportunities.the united states is the area where the growth is most visible and where you can point to areas of the market that can lead to very attractive returns. matt: you said there are other areas. what are the other industries you like? area: industrials are an that has led to so far. when you look at the output for spending off the back of those higher confidence numbers, industrials is another key area we think can benefit. guy: what if this is as good as it gets? grace: we don't believe you are at peak profit. when the comment was made, the global macro picture was as good
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as it got in terms of that synchronized growth picture, but it doesn't mean we are at peak profits. around.ce will stick up next, some of the stocks on remi,ve, including trading down by 1.10%. this is bloomberg. ♪ guy: 10 minutes into the trading
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day. let's talk about stocks we need to be focusing on. a new cfo was named early this morning. on january 1, 2019. she will focus more on transport. we are seeing the stock trading higher in the session. dialog, the board deciding to proceed with due diligence in connection with a potential acquisition of synaptics. that seems to be pushing the stock higher up 2.3%. seems townside, remy be moving on a re-rating. it has been downgraded to sell at socgen. guy: a long-awaited meeting between macron and merkel --
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beef up thegreed to role of the european stability mechanism. lloyd blankfein commented on the risks that italy now poses to the eurozone in the meantime. euros, notorrows in lira anymore. countries ines the europe used to protect fiscal policy. immigration are risks.gest ricks -- matt: for more on the specifics meeting weon-merkel are joined by our guest from berlin. how significant is this agreement? significant.retty
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when germany and france get together, it is hard for the rest of the euro area to resist . there had been these plans that were negotiated for months. they have come together with a set of measures in the budget and elements of the backstop and will disappoint some, there are many questions that remain unanswered. they have an agreement is so france and germany united is significant. guy: it does not feel like the macron plan. and some of the trickier questions regarding how the budget will actually work have not been agreed upon? >> that is true. was noton plan
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necessarily good for into low merkel or the rest of europe. i don't think he ever expected it to be implemented in full. this is a compromise between the two most important countries in the european area. there waskegaard said the upper range of expectations, because there were other elements of this on migration into the euro area that made this more significant. just in chargeot of germany, but the whole of europe for us at bloomberg. let me ask you about brexit. it is crunch time every week. i feel like an alarmist on this program. is this something more serious
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this week? lan: this is more about domestic british politics, brexitl now, the whole issue played out 95% as a domestic u.k. political issue. may is in trouble, again. clear how much in danger she is. i would expect her to be at the european union summit next week. crawford, are european government editor, joining us out of berlin. let's dig in to the details of what is happening. theresa may is taking on pro-european rebels in her own party today, in what is expected to be a tight vote. decide whether
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she has the power to take the u.k. out of the european union in the event of a know deal. let's get more details on this. we are joined now by a guest and chris peters from j.p. morgan private bank. a couple of big events this week. let's talk about today in a little bit more detail. does theresa may have the vote to get her over the line? >> it depends who you talk to. the numbers on this are complicated. it is not just about the rebels willing to call the government the labour party is willing to call the government
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on this issue. it is going to go right up to the wire. we saw last week there was a compromise reached when theresa may said she would keep talking with the rebels. the time has run out. this is the final opportunity for these amendments to pass. the government said they are not budging. the rebels said they were betrayed by last week's promise that was broken. it is too close to call at this point. lan says he expects to see theresa may at the european union summit. what is the possibility that doesn't happen? what happens next? we are in slightly unknown territory. want there to be this option of no deal. have enough people to challenge theresa may to a leadership vote.
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whether they have enough votes the next the general election with the tories and conservatives are pretty much the and neck -- neck and neck. the possibility of a jeremy corbyn-led government, is that more scary for the tory-led brexiteers, rather than losing? probably. will they rally around her as their best action? that seems likely, but everything is changing so fast in this process. we will have to wait and see. matt: guy made an interesting point earlier about investing in domestically facing companies in the united states to cash in on their economic success. does it make the difference to ftse 100 stocks, if this time is really crunch time?
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they so internationally invested, the big stocks, that it doesn't matter? where in depends on the market you are talking about. the ftse 100 has a sterling hedge given that export nature you mentioned. when you disaggregate the ftse 100 and ftse 250, exporters versus domestic companies, there has been a huge diversion in performance since brexit. to us lies an opportunity. it is difficult to call from a political standpoint how this will play out. our job is to dig deeper and find interesting investment opportunities, regardless of that landscape. guy: sterling has two issues this week, one of which is the political narrative taking
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place in westminster, the other is at the bank of england. at the bank, there is this 50-50 that the bankket will raise in august. ins the economic backdrop the u.k. look strong enough to generate the need to raise rates in august. in britain? grace: the market has proved to be more resilient than expected. unemployment figures and the other macro data since then has calmed investors. it puts upside risks to the bank of england tightening. the direction of rates in the u.k. has turned slightly. matt: david, does the bank of england, does this decision in parliament affect the way the boe runs its monetary policy?
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david: the bank has been saying for the quite some time that the biggest risks facing the british economy is brexit. that hangs over all of their decision-making. we have been watching events in parliament today closely. next week is the european council summit. that would be the summit where we would get progress. the overarching theme is the will it cloud their decision-making over the coming months? there could be a leadership contest in the conservative party. it may well stay the bank's ha nd. guy: plenty of stuff to watch. which of the events could have the bigger effect on sterling? we will wait and see.
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grace will stay with us. we need to talk about what is happening in the emerging markets. saudi arabia and argentina are both members of the emerging markets. there is a difficult time for emerging markets. investors are fleeing as the fed raises interest rates and the dollar is rallying. grace, emerging markets. you talked earlier on about your focus on the united states. the other end of the spectrum is the end of story. very: investors are still unallocated to emerging markets. the key thing is "where" in emerging markets. we don't think clients should be focused on turkey or argentina. it should be china and asia, more probably.
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asian consumers are still a huge driver. the reforms the chinese government has put into place improve the overall risk of the system. chinese banks look interesting. there are areas of interest. the -- i spokeo to the indonesian finance minister yesterday. she met investors here. askedoked pensive when i how investors were viewing her economy right now, which has been one of the darlings of the em world, particularly in asia. yet she is starting to experience what selling feels like. argentinas,urkeys, brazils, but it is starting to
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plead into other areas of emerging markets. grace: i don't think this is a market that is going to run away in the next couple of weeks. we're talking about longer-term investment that still remains solid. at least if you look over the near term. tt: we were talking with mark cudmore about where he thought the terminal rate was going to be for the fed. you don't help if think the fed is going to hike as much as the market is pricing? have ait is true, but we forecast of 310 on the u.s. 10 year until the end of this year. we still think he emerging markets are in a good place because of the fundamentals are emerging markets
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are still in a good place because of those fundamental driver supporting earnings. matt: are there opportunities that have been hit harder than they necessarily deserve? race: investors have done a reasonable job so far at discriminating between the stronger and the beaker economies. the main opportunity for us is china. we think they have policy tools bear any slowdown that comes from external factors. there are opportunities aplenty across consumers to address technology names. they are moving to what is classified as old chinese industry to buy banks and insurance. the russian energy minister
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is speaking in vienna. expectto be opec -- opec-plus and the others to reach an agreement in vienna. crushable discuss everything russia will discuss everything with opec-plus members. we have a great team down there and we will bring you news. grace, oil has come up very quickly. that is one of the reasons why you could argue emerging markets are in a tight space. do you expect oil to be around $70 per barrel? grace: we have a forecast of $67 as an average. approaches where it starts to impact broader economic growth, we go to the low range. grace, thank you very
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much, indeed. mario draghi is going to speak alongside his counterparts at the fed, pog -- bank of japan, and rba. this is bloomberg. ♪ ♪ retail.
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we are 30 minutes into the trading day. let's get your headlines. european equities follow asia hires after investors shrugged off trade concerns, but how long can that last? weakened sterling faces a key test today with a crunch brexit vote in parliament. if prime minister may loses, or the currency dipped below $1.30? portugal, ara, blockbuster panel with the heads of the ecb, bank of japan, the
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fed. don't miss that conversation with our very own stephanie flanders. welcome to "bloomberg markets: european open." i am matt miller with guy johnson. guy: we see technical problems when it comes to euronext today. it looks like there is an interruption to index calculation when it comes to the bell 20, the portuguese index as well. they are having problems with numbers being generated for those. affected. being we will wait and see exactly what these technical difficulties are. we have a big problem the other day with the ftse 100 and the calculation of that. a quick look at what we see in terms of the individual names. we see some decent numbers generated.
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someone in the financial times was talking about that lack of female representation in the shipping industry. let's see the market performance that we are getting. lower,lux is trading berkeley down -- berkeley down. the u.k. housing market very much under pressure right now. pay attention to what is about to happen next. you're not going to see this too often. it is kind of like a rock start playing a children's birthday party. bloomberg first word news with francine lacqua. >> u.s. president donald trump's ffs on to impose tari another $200 billion of chinese imports could cut as much a percentage point from the nations economic growth.
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a trade dispute with the u.s. risks spiraling into a protracted trade war. the uk's prime minister will take on pro-european rebels in her own party as she battles to keep control of brexit talks. today's clash in parliament could have far-reaching consequences for theresa may's future. she is facing a revolt from conservative party lawmakers over whether she should have the power to take the country out of the eu, or if parliament should have a meaningful boat on the way forward in the event that talks break down. the trump administration has withdrawn from the you when it human rights -- u.n. human rights council.
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business leaders and lawmakers on both sides of a voiced opposition to removing children from their parents. , 24 hours a day, on air, and on tictoc, powered by more than 122 -- 2700 journalists in more than 120 countries. matt: it is day three of the ecb sintra on central banking -- on centralgal ,anking here and -- in sintra portugal. joining me now is lucrezia reichlin. let me ask you first of all about italy. you have started a school in sicily to educate people on business there. what kind of threat do you think italy poses to the eurozone?
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lucrezia: the main threat for italy is growth. it has grown much less than the european average. this is combined with very high public debt. the combination of high public debt and low growth is potentially a threat. i would not say it is an immediate threat, but of course to test for the euro to be sustainable -- for the euro to be sustainable, and for italy to be in the euro in a sustainable way, it is important to address the growth issue aggressively. part of the country, the south of italy, has been very much challenged, not only in recent times, but decades. the great recession has not helped. matt: the migration issue is also a huge problem, right?
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italy is a landing point for so many of these refugees. not at a time when germany wants to throw immigrants who have registered somewhere else first back to their starting point, that seems to make the situation even worse. italy, austria, germany are all having issues with this. how big of a threat is this migration issue? lucrezia: migration is an issue that will be what us for a long time. it has very deep roots which have to do with sovereignty, climate change, and so on, and also conflict. i think it is important that the european union signs this -- this threat. there are also signs of the opposite. italy, part of our government has taken a very aggressive stance.
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and also, of course northern europe. for that survival of europe i think this is maybe the number one question now, to find a response. guy: good morning, it is guy from london. do you think the euro and its current membership sustainable? -- is it sustainable? think the euro is a sustainable and i think that europe has been a very ambitious project, and has been a project which has economics, and political, geopolitical motivations. i think and i hope that we will reinforce it. but, you know, things have to be done. i think it is important that countries which have not been growing, like for example my own country, will address this problem. it is important that we will show that we can sit at the
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table and sign common responses. recently -- yesterday that there was the beginning of an agreement on the euro area reform. i think it is the first step, maybe not as -- enough as we would have hoped, but certainly a step in the right direction. i think we will find some a for optimism after that and i hope that the future meetings of the head of states will bring forth this sense of commitment to go .head and yeah guy: do you think we will get enough economic growth? do you think there will be enough economic reform? do you think the ecb will be able to raise rates enough that we -- when we get to the next downturn, that the euro will be able to sustain itself through that process? how much time does europe got
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before that happens, do you think, and will it be ready? lucrezia: the euro area as a whole is growing like the u.s. i think that our cycle is gradually maturing, and probably the u.s. cycle is maturing, and by maturing i mean reaching the peak. i think we will see a slowdown in the u.s. very likely in the next year or so, and we will see a slowdown in the euro area. this is normal, it is a cyclical phenomenon. we have been growing for a while now, so it will be natural to have a downturn. of course, pacing -- facing a slowdown, we need to be able to use our tools, so the fiscal tools and the monetary tools. the monetary tools are going to
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be challenged by the fact that the interest rates are close to zero and of course if we had to -- we have reached maybe what is called the zero lower bound. it is very difficult to bring interest rates below zero. there are tools. there could be an increase of asset purchases like has been done in the past. there is also the fiscal tools. it would not be so catastrophic. the point is that monetary policy alone, if we would be facing soon a substantial slowdown, would not be enough. so we would need to coordinate fiscal and monetary policy, and put resources on the table for investment, for example. matt: i wonder, at this gathering of the greatest economic minds in the world, and hearing some criticisms and concerns about the way you all do your jobs, what do you think economists are getting wrong
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these days? lucrezia: the topic of this conference has been inflation, and it is true that central bankers -- central banks have been undershooting their target of 2% or so headline inflation. one of the things that has been why of mysterious, has been wages have not been more responsive to the recovery. i think that this reflects the fragility of part of the labor market. i think that this is something that economists are now discovering that there are very issues.t distributional that there are parts of the very market where it is precarious. even economies that are reaching full in -- employment, like germany for example, wages have been slow to respond.
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matt: we appreciate it, lucrezia reichlin, chairman and cofounder of now casting economics. guy: what we have some breaking news to talk about -- we have some breaking news to talk about. xiaomi is said to set terms from $6.1 billion hong kong ipo. we will talk oil next. this is the price. oil next, this is bloomberg. ♪
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♪ guy: 45 minutes into the equity market session. let's talk about what is happening in the vienna today. the oil market certainly paying a great deal of attention, iran has put itself on a collision course with saudi arabia at the meeting. bloomberg's team member on the ground, take it away. >> good morning, guy. the session just kicked off and we saw the iranian minister enter as well as the of the
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-- ofent, opec president president -- opec president. i am very excited to have our guest, who has worked with president bush. you said the one person meeting -- missing from this opec meeting is mr. trump. >> that's right. he is missing because he has interjected himself in this debate we are having. we are going to see more supply from the countries that can increase supply, saudi arabia and russia. that is happening. the question is whether they will be able to agree and whether there will be harmony and unity. is the consensus, and that is where trump comes in. the minister appears to be rolling out even a small increase -- ruling out even a
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small increase. >> do you agree that many are saying that the saudi's are caving to u.s. pressure? >> i would not use the phrase caving to, but sensitive to, responding to, certainly. russia wants to increase supply, so there are other factors. >> and want to talk about where the market is in the june meeting, they have always said that. >> right, but the united states is key. retail pump prices came within a whisker or two of reaching for highs.ghs -- four year few things terrify a president more than high pump prices. >> they were certainly happy with 2016. >> shale was in trouble in february of february 2016 -- trouble in february of 2016. they have logistical problems.
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i think president trump's view is that shale can take care of itself. right now he is watching out for consumers. >> is this more about politics than fundamentals? once it cleared the glut it was business investment. now it has become actually, we need to calm the nerves of the consumer. >> it is a little bit of a moving target. until sanctions went into place, a run wanted to see -- iran wanted to see lower prices. now when sanctions go into place, the iranians flipped. >> is there any situation you can see iran getting on board with the hike? >> if they really diluted the que.unicate -- communi if they made the vaguest
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reference to that, it is possible they could sign up. otherwise, iran could decided they will not go along, like they didn't march of -- did in march of 2000. >> what do we hear next from the president of the united states? >> i think the president could care less about what the comm unique says. oil prices have come off of their highs in the last few weeks and he wants to see continue. do whatever it takes, say whatever it takes is his view. >> where do you see brent? >> i see brent falling down into the low 70's. i think we will get a little bit of a dip and then rising into the summer on geopolitical risk. terrible,ing to look venezuela is going to get terrible, and we will have -- push-up. mcnary, whobob
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worked under president bush. he says at the one member missing from this opec meeting is president trump. opec plus,that's the plus, plus meeting. the opec meeting has been quite feisty so far. let's talk about the stock of the hour this morning. let's talk about what is going on. the shipping industry is male-dominated. it is certainly one of the most male-dominated industries that you can find out there, transport generally tends to be. this company -- stock is looking to change that, a.p. moeller-maersk has hired the ceo -- a new ceo. the market likes what it is hearing. a.p.s been waiting for
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moeller-maersk to find a new ceo. let's take a look at the graphics dashboard this morning. this is a stock that has got 16 buys on it. the market likes what it is getting out of a.p. moeller-maersk at the moment. evaluationsg on -- -- valuations could go higher, but trading at an impressive valuation. it is trading on an updated volume story as well. a.p. moeller-maersk definitely the stock of the hour this morning. remember that bloomberg users can interact with all of the charts that we use here on bloomberg. these are the charts we use on television and you can plan the key analysis and pop those charts out as well. this is bloomberg. ♪
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♪ matt: welcome back to "bloomberg markets: european open." it is time for a battle of the charts. you can see them on the bloomberg by running g tv . you can see all of the charts that we use on the program with that function g tv on the bloomberg. will have guy played against guya cehic -- we will have playing against nejra cehic. nejra: a lot of questions over how you trade trade tensions. we are seeing lower tensions
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today, and that is reflected with risk assets gaining and a little bit of weakness in the yen. what i found interesting about this chart is that if you take it back to the end of march, and this chart is normalized with the zero line in the red, you has takene aussie yen a harder hit the dollar-yen during this time period. dollar-yen has risen even though we keep talking about the bid for the safe haven yen in times of risk off against the dollar. some people i have spoken to on radio confirmed the as well. if it breaks lower from its recent trading rate, it could had even lower than that -- had even lower than that -- head even lower than that. they drop below 74 yesterday on interest rate differentials. matt?
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matt: aussie yen the one to watch. very interesting chart, especially considering what is going on with central banks with emerging markets. let's get to my co-anchor, guy johnson, and see what he has got for us. what is your chart? everthis has never, happened before, at least according to bloomberg data that goes back to the 1980's. we have never seen three days in a row where the s&p is lower at the get go of the start of trade only to finish higher from that. it is trying to lift these u.s. stocks towards the end of this quarter. nevertheless, this has never happened before. we get lower and then we finish higher. i think it is a really important story that is happening in the s&p right now. areink the u.s. markets taking this trade story much
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more positively than anything else, the storm alert -- mr. miller. matt: absolutely. i think that is interesting intellectually, but i think the technical issues are fairly ejra'sgless, and n chart is more affable for investors. congratulations. ♪
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francine: goldman sachs chief executive tells us that trumps tariff threats wondering about a devastating trade war, even as economists warn of devastating impacts. >> i don't think we are in a suicide pact. i don't think we will cause the economies to collapse. francine: opec collision course. iran rejects a potential compromise, putting the group on track for a clash at friday's meeting. and may stands for, the u.k. p.m. stands firm ahead of a crucial vote. ♪


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