tv Bloomberg Markets European Open Bloomberg April 16, 2019 2:30am-4:00am EDT
matt: welcome to "bloomberg markets: the european open." i'm matt miller in berlin. the markets say stay positive. asia stocks tick higher despite badly received results from goldman sachs and citigroup. european futures point higher. the cash trade is less than 30 minutes away. a friendly subpoena. democrats seek documents
from deutsche bank and others, stepping up their probe of president trump's dealings with russia. sanctions settlement. unicredit agrees to pay 1.3 billion dollars to resolve allegations its german unit violated restrictions on dealing with iran, and notre dame. thousand toron rebuild the iconic parisian cathedral after it was engulfed by flames. we are less than half an hour from the start of european trading. let's look at -- i've got the bunds, and we are seeing continued gains above the zero bound. bunds are gaining seven basis points. look at futures, we are looking at positive indications for european stocks. german futures and ftse futures
were doing well early this morning and continued -- to climb higher. they climbed back but softened a little. dax up .1%, ftse .2%. earnings inighed the u.s. and japan. earlier, the s&p 500 snapped a three-day gain but futures ticked higher. sentiment was hit after goldman sachs missed estimates for tray revenue. citigroup retreated after its revenue matched expectations. mark cranfield, bloomberg mliv strategist is in singapore. it wasn't really a stall for the csi 300. decent gains on the day, but making up what we lost yesterday. what do you see when you look at the chinese economy and attempts by authorities there to kickstart it? bloomberg's european headquarters in london --
pboc forstarted at the chinese markets opened today. money into the short-term money markets in china for the first time in 18 leaving the market to its own devices. it wasn't a huge amount but the growing impact was pretty important and that helped give equities a good start in the morning and they built on it during the afternoon. outfact the pboc is helping as filtered through the chinese markets and the hong kong markets. we also have central banks standing dovish around the region, as well. it has been a day when equity markets can feed off of the fact that the interest rate part of their equation is quite docile. no threat from that side of things, so they can get on with building their equity positions under what looks like reasonable conditions and the earnings
season in the u.s. is still going on and the bank of america will react to the results you talked about earlier. matt: we also had a the impetus of a couple of central banks governors, evans and rosen grand -- evans saying a cut is a possibility. his associate saying we shouldn't be -- we should be looking at 2% being ok, even more than 2% wouldn't bother him if it weren't for too long. what do you think the fed is feeding into markets today? what they are giving investors as a message is they are willing to see inflation pick up and not do anything about it. they will not jump to any conclusions just because inflation may rise in the short term. there are a lot of factors they take into account in their decision-making and jerome
chairman has made it clear in the past that for now, he sees enough conflicting signals that he is happy to take a long pause. what you are hearing from the other fed members really is an endorsement of the message we have heard from him. really going to look through the data. it is reminiscent of when janet yellen was first in charge of the fed and willing to let inflation and the economy to run hot. that is maybe what the fed is willing to do here. they don't mind if the gdp number picks up in the second quarter because it has been weaker recently. they are willing to see a bit of growth, let inflation to what it will but they will take a long pause and that is good for other asset classes like equities. matt: thanks for joining us. mark cranfield, bloomberg and life strategist. strategist.liv
today's question of the day, does the car market have macro significance? is it a canary in the coal mine, as it seems to continue to weaken? mliv team onthe your bloomberg terminal. we are live at the shanghai auto show all day today and tomorrow. we will hear from our top interviews with executives including vw's ceo, lamborghini's ceo and bmw's cfo. that is something you don't want to miss on bloomberg tv. now let's get to the historic cathedral of notre dame in paris. it has been gutted. 500 firefighters worked through towersht to save the two but not the spire. emmanuel macron vowed to rebuild the 800-year-old monument.
the worst has been avoided, even if the battle hasn't been completely won. the next hours will be difficult but due to their courage, the facade and two towers did not crumble. matt: let's get the latest now from our paris bureau's geraldine pamiel. what is the status of the cathedral this morning? geraldine: the minister this morning said the fire was under control but not totally extinguished. i went there myself and could see firemen were still hosing the south side. it is hot inside and experts are roaming the premises to find out if the structure of the building that has been salvaged is stable and strong enough to sustain.
the firemen need to clean inside it and assess the damages. have lessere we results and hopefully the outcome will come out why the end of the day. matt: what is next for notre dame? it, to findebuild out how the fire started, etc.? geraldine: the probe is ongoing. there was an investigation an involuntary fire trigger. it is not criminal for now. out ifd to find structurally the building is stable so investigators can get into it and look into it. of course, as the french thereent said last night,
are plans to rebuild it. money is already pouring in. pledges of 100 million euros last night and a few minutes ago, the lvmh owner, a billionaire, pledged 200 million euros. 10 million euros have been committed for emergency aid and we expect an international fundraising campaign to relaunch -- be launched as soon as today. l in parisldine amie talking about the burning of notre dame that the world watched together last night. let's get the first word news right now with desley humphrey. >> congressional democrats issued subpoenas to deutsche bank and other lenders. they want documents indicating if foreign nationals tried to influence u.s. politics. ofs signals an escalation
the probe into president trump's finances. the chairman of the panel said deutsche bank is cooperating with the probe and the request is a friendly subpoena. mueller report is expected to be released thursday according to the u.s. justice department. it can provide revelations damaging to the president or reinforce his claims of vindication. that the have demanded attorney general provide them with the full report and all the evidence behind it but william barr says he will redact some materials before it goes public. bothroup and goldman sachs delivered better-than-expected earnings but instead of celebrating, executives had to assure investors. the concern is over progress on revamping units that are dragging on results. citi pointed to green chutes in investment. musk a $69arded elon
million contract to fly a spacex rocket into an asteroid. program is seeking to be the first ever to deflect objects with a high-speed collision. the test is targeted for june 2021 on a spacex falcon nine rocket. global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt: thanks for that. bring breaking news on santander. it will redeem $1.5 billion worth of cocoa debt. santander will carry out an early redemption of $1.5 billion in coco. this happened earlier, the redemption of coco debt this year. this is a big number. we will see how the equity market reacts.
15 minutes from the start of cash trading across the continent and in the u.k. futures are gaining across the board. ftse futures up .2%. bmw has joined volkswagen in sounding optimism on china. the carmaker's finance chief expects sales growth between 5% and 10% this year in the world's second-biggest economy. interesting because china has posted its first automotive recession in two back-to-back quarters of contraction in auto sales in a generation. the finance chief of bmw spoke with tom mackenzie at china's annual auto show in shanghai. china is one of our most important markets and despite the downturn of the overall market, we are pretty optimistic
on 2019. we forecasted growth between 5% and 10% in china and this growth is on a strong line up. localized in august of last year. we are launching the car behind theo we are optimistic for chinese market. but bmw sales have held up constraint months of sales declines and concern about weakness in the market. you are optimistic. what gives you that optimism? will things more broadly turnaround for the chinese market this year? forecast for 2019, but we are optimistic for the previous segment and on the bmw group and this is really momentum and the
first three months of the quarter of 2019 was very encouraging growth, slightly above 10%. this will normalize over the year. tom: the pipeline is strong enough? nicolas: the pipeline is strong enough, in particular as we are launching a key model in china. definitely strong enough and dealers are optimistic. tom: you are building out the plans for the electric mini in china. can you give more details on the timeline for that and whether or not you would be exporting from the chinese market at some point? just to start. overall, we will have two important and strong joint ventures. a 16 youre, bmw, partnership and a new agreement signed last year.
the timeline is a little early, but we are planning to export be mini electric, which will produced in china to other markets in the world. matt: that was the finance chief of bmw speaking to tom mackenzie at the shanghai auto show. talk ans us now to little about what is going on. sound so optimistic about the automotive market, even though we have seen such shrinkage in what has been till now a growing miracle market. absolutely. it is the world's largest car market, but as you point out, we have had 10 straight months of falling sales overall. there are executives here concerned about that, but many of the ones we have spoken to,
including the boss at volkswagen and the cfo at bmw, they are banking on the tax cuts pushed through by policymakers here and stimulus measures to support and stabilize the market. as the cfo was saying, he thinks you will not see a large pickup in the market overall, it will stabilize and stay flat. , bmw inium segment particular, they have done well despite the gradual slowdown here and other segments have held up like electric vehicle demand has picked up. pace, eventained its as the government starts to roll back subsidies. that is another big question playing into the conversations among executives. bmw is sounding more optimistic. volkswagen, as well. saying this is part of a significant strategy shift for that company. the investment in china and they are looking to invest heavily in their partnerships. they may take a stake in a smaller partners and a lot of the focus is around our entity in the electric vehicle -- r and
d in the electric vehicle space. chart thatgot a shows annual car sales in china fell for the first time in at least 20 years last year but we see is picking up their. -- here. we see the sales trend pickup in 2019. is this electric vehicles? executives say electric vehicles are leading them back to recovery and is there concern there is an electric vehicle bubble at this point? tom: are certainly is. space, thosehe sales have held up pretty well through 2018, even as the overall sector slowed. the questionector, is can this turnaround? can that be sustained? we saw customers on pause last
year. will they come back? in terms of electric vehicles, you are right. there are hundreds. around 500 by one calculation, electric vehicle startups. of the spoke to one leading startup companies in the space, he says he does expect consolidation. back byder of neo ked by tencent, he expects investors to lose a lot of money. you will get a consolidation because it is an incredibly competitive space and the pulling back of those subsidies will be a catalyst for that. the: tom mackenzie there at shanghai auto show talking to the most important executives. we are minutes from the open. we will look at your stocks to watch this morning, including lufthansa after the airline slumps to a loss. this is bloomberg.
it is several hundred million euros bigger than expected, so that could be. the german unit, the focus of the fine, has to admit to criminal elements of the case. that could be worse in some ways and it is more than they provision for. we should definitely see something. matt: what is the story with zalando? the german online retailer said it was profitable by a few hundred million euros last quarter. that is counter to analyst estimates of a 10 million euro loss at the adjusted ebit level. the stock is called up today. matt: finally, lufthansa? >> it posted a loss for q1. a lot of the weakness had to do with fuel costs. the bill climbed by 200 million euros at the start of the year and remember, they have cut
♪ >> we are just about one minute away from the start of cash equities trading across europe and the u.k.. dani burger is standing by. set up here for a pretty solid risk on day -- just look at china, shares heading higher by 2.7% at the close in asia. although the gains weren't necessarily even, we did have positive data yesterday, credit beating expectations. but small caps underperformed in china so clearly this is not widespread. we will see if it is the case in europe or not. treasury yields ticking lower, data shows three months of
buying from china. when we look at the futures, it is moving higher, but not quite a clear signal in the dax and the cac. less than 1% off in the ftse. we are seeing solid games, not much movement for brexit, and that might be helping the ftse. let's see how it opens up. looking like it is in the green, ibex going back and forth between gains and losses. but really it is all about the earnings picture today. in the u.s. we have all the large banks reporting, and week, there was that smashing beats that allowed the stoxx 600 financial companies to bust through their 200 day moving average -- that helped equities, but yesterday we didn't see the same strength. maybe that won't help out equities as much as it did yesterday. let's go ahead and see what the sectors are doing and see if financials can keep up with the game. when we are looking over, we do
see a mixed picture. financials very mixed. that data from goldman, where sales, trading revenue missed expectations rang on stocks. santander also redeeming $1.5 million. if we look at the commodities actor, commodities are weaker as the dollar is strengthening. a big lead streak and oil is also weaker today, even though oil previously had it in threeof gains years, that now seems to be taking a break. but we do see more defensive sectors gaining, utilities in the green, even though it does look like we are widely seeing gains. this is typically what we would see on a risk off day. interesting movements in terms of sectors. what are you looking at with those individual names? >> i'm looking at -- i look at the moves screen and typically i like to look at points. right now 300 49 gainers, 228
losers. typically i look at who is moving the markets, but there are a lot of big market movers. if i like a percentage change on individual stocks, i don't see a lot of movement -- nothing more than 2% with the exception of to nara's on the winning side, rising after a court decision , that argentina reversed stock is up. gaining here in germany but only 1.6%, a pretty volatile stock. the losers have the airlines that are all down in terms of absolute change. ryanair is off, air france is golf. are made up primarily on the top of the airlines that are taking a 2% hit. i also want to talk about next the, opening up at eight euros,
take a look. euros sorice was nine it is down a little bit from its ipo price, and we will see how it goes. now the training is down for the night euro high to eight euros. european markets opening slightly higher as investors weigh earnings in the u.s. sentiment was hit after goldman sachs missed estimates and citigroup also retreated just a bit after revenue only maxed expectations. joining us now is caroline simmons, deputy head of the u.k. investment office at ubs, also jim hertling, our senior finance editor. let me ask you -- it seems like the fed governor statements must have done the most to move the market.
indications that he could imagine at least a rate cut -- is the fed turning more dovish than the market had anticipated? even from december the fed really surprised the market. they are airing on the side of caution, which we have seen a lot of central banks doing. we will see how the year progresses. all is hinging on whether this global growth pick up some people are anticipating for the second half of the year comes through. if it does, then obviously the fed will be more dovish. if it does come through and we then they can be a bit more hawkish. . from theo you take bank earnings that seem to be disappointing? broad beat on friday but goldman sachs really disappointed investors yesterday in the u.s. >> good morning, matt.
my take away so far has been that the market is really differentiating, and all of these institutions have their own idiosyncratic issues, and with the rate picture being as muddy as it is investors are taking a closer look at each individual institution as opposed to a broader view on the sector. >> how important is this sector? it that thet is financials do well to keep this rally go in? >> they are not the largest sector so it would be better if but we are not necessarily expecting strong earnings growth this quarter but we do like this sector overall because valuations are priced for a weaker patch in earnings. >> european banks have fared worse than their u.s. peers,
really since the financial crisis. what do you see as far as that u.s.? how much more are they dominating? >> the european banks are dealing with such choppy waters -- they will not retake any ground from the u.s. banks when you have institutions like bank of america, not to mention goldman and morgan stanley. they have the pockets to make the investments that are needed in digital banking and european banks are sprinting to stay in place. i wonder what you think -- we looking at the equity performance, u.s. banks in white, european banks in blue. is there some point with the price adjust gets so low that it makes sense to buy european banks? >> i guess it depends.
if you have a long enough time horizon now is probably ok but isis next in the short-term they will be quite volatile. evaluation of the european banks is very attractive but you need and continued week news flow, particularly around the litigation -- it is unhelpful to the sector and i suspect you will need to get more hawkish comments out of the ecb and an indication that rates will be moving negative before you have the full value potential of the european bank. >> let me ask you what is ahead -- is that bank of america today and morgan stanley tomorrow? >> that's right. >> what are we expecting? >> we are expecting bank of america to put up some decent inbers in morgan stanley
terms of the black box aspect of scales and trading -- that will give you the swing one way or with j.p. morgan better than expected. it's a tough sector to hit because so much of their results are not exactly transparent. >> absolutely. we have analysts raising their price forecast and i want to show you the analyst targets in they have come down at the end of last year but are starting to go back up and you have those prices. thank you for joining us -- jim hertling in london. caroline will stay with us as our guest host for the hour. we will bring you the stocks on the move so far, including the online clothing retailer which
and this is a great result -- if you think where the beginning was just four years ago, it is impressive in terms of perception. generation,e young this is looking ahead. for sure china will be at the podium in terms of position in the next couple years. >> 8000 units, and in terms of the chinese market, are you expanding your footprint? >> yes. years wen the next two will have 17 to 19 dinners in china and in shanghai we have to. we are getting stronger and stronger in terms of structure and level of service because of course now lamborghini has gone a step forward. ceohat was the lamborghini speaking to tom mackenzie at the
shanghai auto show. caroline simmons is still with us. i want to point to you the question of the day which i think is one of the most interesting we have asked yet. does the car market still has macro significance and i think what they mean is in terms of the car industry, it is the canary-in-a-coal-mine line. we take a look at that chart hillary threw together of global car sales we can see that they turned down in 2008. this is before lehman brothers went out of business, before the financial crisis became apparent to everybody else. a great indicator of what was to come. global car sales are turning down now and the question is is this a warning sign that we should watch out for with global growth problems?
caroline? i think it's interesting in that there's a lot of things going on in the auto sector that are quite specific. there's the emissions scandal they are recovering from, the tariffs, and there's a lot of disruption in that sector as well. you can really decide that some and thisset specific manufacturing slowdown has been a slow down in oil manufacturing and it has been different to the indicators we've seen in the service actor. i don't think you can say it is a pure indicator of the backdrop but you can say it is a sector which is very important to certain economies and which is not out of the woods yet. we have consumer discretionary and we don't think that is about
to for many times in. >> one of the things we have this time that we didn't have in 2008 was a technological disruption. it looks like a massive investments are being poured into electrification of the fleet. folks leg and talking about $30 billion to $50 billion depending on the time horizon. are you concerned that this is a possible bubble, for do you think this is a great opportunity for investors? when we think of the longer-term it is clearly the direction of travel, toward more electric vehicles. always,et there, as people tend to overestimate the short-term impact and estimate the long-term. perspective, it is something that we believe in. we have a smart mobility theme ist we are saying
bringing about change in opportunities for investors over more than one business cycle. exactly what happens near-term is a bit more difficult to say. as i mentioned, we are underweight consumer discretionary, even though we see the longer-term trends supported. >> do you think there will be -- what do you think about disruptors, smaller players versus the traditional incumbents like the biggest carmakers in the world? >> i think we are going to see more and more disruptors coming. it is clearly an area of turmoil is goingment and that to continue. ultimately it is hard to say who situations, and the best way to deal with that is take a diversified approach. >> ubs global wealth management,
right now we will get to our individual stocks stories. we are seeing some big losses analysts say bat, they are cutting the stock and you can see the construction unit with negative value to the company. that is why you are seeing shares down more than 15.5%. also speaking of surprises, there is a positive profit for the year, unexpectedly for the first quarter profitability picture. this is going to be its fourth consecutive gains of profitability, since it seems like they are building up this picture where they can beat analyst estimates. they had missed expectations for five quarters, so we see a turnaround for the online retailer. and here we are seeing a
first-quarter loss, this is a much weaker picture than estimates that what is really weighing on the company our fuel costs and pricing pressure. >> all right, thanks very much. she will continue to keep track of the stocks for us. charles evans says rates may needs to be cut. up next, find out what could thek a rate cut from central bank and the most important jurisdiction in the world, as mario draghi called it. this is bloomberg. ♪
♪ it is burning at a level that , it isely see fire burn one of the great treasures of the world. >> that was president trump speaking in the aftermath of the notre dame fire last night, that swept through the cathedral yesterday evening, forcing the evacuation of thousands of visitors a local residents. president macron postponed a planned speech to the nation, but vowed to rebuild the cathedral. and billionaires are helping out. one family has now pledged 100 another company million.ledged 200
so far about $340 million pledged to go to rebuilding the cathedral. this function allows you to see the richest people in the world. you can see this is the third richest person in the world with $90.4 billion, but expect to see over the coming hours and days some of these names come out with big donations, because this is obviously such an important building for french and global history. you see hundreds of millions of dollars turn into billions relatively quickly from the richest people in the world. let's turn now to the u.s. central bank. the federal reserve may need to cut interest rates if the u.s. inflation continues to fall, according to the chicago fed president, charles evans, who currently sees rates on hold until autumn of 2020.
that is his base case. he says that if inflation fell to 1.5% to indicate a restrictive policy, they would call for a lower funds rate. he adds that he doesn't expect this to be the case, although hypothetically it is important to hear what he thinks if it did happen that way. meanwhile the boston fed says the economy is not doing too badly but inflation is slightly below the 2% target. he doesn't think it is necessarily that bad, if there is a band that inflation flows through less and possibly more than 2%. caroline simmons from ubs global wealth management is still with us. take from these two fed speakers, and the possibility that we could see rates fall. the dollar has weakened against the developed world currencies over the last couple days. >> i think it is just a reminder
that they will react to the conditions around them. done some rate rises these sectors are starting to buffer so they then said we are not going to do anymore rate rises and those sectors have now stabilized. they have outlined what they need to do as inflation falls. it would be nice to hear what they need to do as inflation rises but i think it is a reminder that they will stay nimble. foro what is your base case an policy over the next year or's? >> the rest of this year and next year, no rate hikes. we have had several pencils in until the number change of tone and now we have flat rate. >> what do you think we will see from other central banks? the ecb could arguably make a case for turning more dovish
again as well except they are trying to into the path of normalization. >> yeah. what we have seen over's early years now is that central banks will err on the side of caution if in doubt. they would rather keep rates lower for longer than risk raising them too soon. if there's any doubt, that is the way all central banks will err, including the ecb. expectation has been pushed out so again we have to wait and the with the of nation data does and how the economy improves, i hope, during the course of the year. >> at the same time, we see china's central bank gaining hawkishness overnight. what do you make of chinese market and emerging markets in general? act, like emerging-market
we are overweight against swiss equities -- the valuation is attractive and they are trading -- if the dollar continues to weaken then that is supported or emerging markets and the debt levels are in any case is better than in the developed markets. we do like china as well, they are one of our overweight position. they will remain highly volatile stock we are expecting the chinese central bank to continue to provide stimulus over the course for more rrr cut that we believe are likely. we are seeing the effects of the tenuous, into the early data points we've had. >> all right. thank you very much for joining us. caroline simmons, deputy head of the u.k. investment office at ubs global of management. she will be joining us on bloomberg radio, daybreak: europe, dab digital.
♪ ♪ >> 30 minutes into the trading day, here are your top headlines. a friendly subpoena. u.s. democrats seek documents from deutsche bank and others, stepping up their probe of president trump's dealings with russia. sanctions settlement. unicredit agrees to pay $1.3 billion to resolve allegations that its german unit violated restrictions on dealing with iran. and notre dame in flames. emmanuel macron to rebuild the iconic parisian cathedral after it is engulfed by fire. good morning, welcome to "bloomberg markets: the european open." i'm matt miller in berlin. we are 30 minutes into the
trading day. let's see how things are shaping up, first with the move screen on the stoxx 600. i will go ahead and pull it up right now and look at the breast. 430 eight gainers, 448 losers. a lot more winners than losers and in the top we can see taking off after a surprise profits, currently up more than 10% this morning. gainingp up, wirecard three. as far as the losers are concerned, hplc is down more than 6%, deutsche lufthansa down almost 2%, and then we see other airlines falling. air france is off as well as ryanair and easyjet -- not a good day for airlines. let's go to dudley humphrey in dubai. >> thanks. a devastating fire swept through notre dame and the blaze raised
before the historic bell towers were saved. the cathedral spire collapsed into the smoke. the president has vowed to rebuild the iconic landmark, with $10 million in emergency aid. one french family has pledged 100 million euros and another has given 200 million. citigroup and goldman sachs both delivered better-than-expected earnings but instead of celebrating executives had to assure investors. the concern is over progress on revamping the unit, driving down results. citi executives pointed to refocus electronic trades that require less capital. out at&t'sbrought 10% stake in a deal worth around $1.4 billion. in values the streaming company
at $15 billion and leaves hulu with just a few billion dollars. they will have to decide how to apportion the stake but they are still set to lose money and not expected to turn a profit until 2023 or 2024. elon musk's spacex has won a asa contract to play real-life version of the arcade game asteroid. spacex will provide launch servers for the double asteroid reader on -- redirect launch system. they need to crash a spacecraft into a meteorite at high speed. global news, 24 hours a day on air and at @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. much.nks very house democrats are escalating their probes into president trump's finances. they have issued subpoenas to deutsche bank and other lenders to obtain documents that
indicate whether other countries tried to influence u.s. politics. joining us now is our reporter in frankfurt. what do democrats want deutsche bank to give them now? they have been asking for documents on the relationship with trump for a long time. we know that deutsche bank, before trump became president, was the primary lender for him as a real estate developer. they still have about $300 million in outstanding loans to him. they haven't extended the new loans democrats obviously want to use this to find out what is going on. they are presumably hoping to find some traces of russian meddling. >> deutsche bank says it is cooperating, right? we have heard this described as a friendly subpoena. is this a problem for the bank? >> i'm not so sure.
they actually wanted to cooperate for a long time but given the constraints on talking about the client relationship, especially one as important as this one, they were never able to. now that they have been served a subpoena it is a legal requirement for them to hand over the documents so i think for them it is a relief -- they want to put this behind them and get the documents out there to the house and then wash their hands of the story if they can. >> all right. thanks very much. let's get more on autos. the volkswagen ceo says he is quite optimistic about china in the second half despite the world's largest car market posting its first sales bit in decades. he spoke with tom mackenzie.
>> we have finished two corners with declines and i am quite happy with the development from our viewpoint because we could turn down that market position this year and cut our market share by 1%. china not too scared of and we hope that they can improve relations. there's a huge demand still in also --et, and [indiscernible] i'm quite optimistic. >> the news has broken in the one ceo has been charged in relation to the emissions scandal. when do you think they are able
to put that behind them? i think it could be a long. in germany as well i think they have made a lot of progress, they have updated all the cars, so we are gaining back momentum proceedings, you probably have to do this for the next year. i think we are through the worst. beanother question would given that you are being investigated as well, what is your role in the scandal? if you are charged, what would that mean for your leadership? >> i won't be charged. >> one last question on the u.s. market. what are you seeing in terms of the strength of the u.s. market?
you know, compared to china, we are relatively strong. is mainly an import the newremium fleet but cars are quite successful. andpens a new sector for us we are gaining market share but the team is making a lot of progress. together put the plan which makes significant progress and i'm very confident. ceohat was the volkswagen speaking with bloomberg's tom mackenzie at the shanghai auto show. coming up, as the spanish head to the polls next week, we speak to the economic spokesperson of the opposition party.
spain's general election campaign is underway. : first snapnister vote after parliament rejected his 2019 budget. the latest polls point to the socialist party winning the most votes, but there may be a path to a center-right forming government if they can work with the far right group. let's bring in heather bergsma lower mliv blog to get a perspective -- how have spain's markets performed compared to his peers? >> it has taken advantage of this year's rally, it has lagged italy and a lot of it has to do back, andolding it also italy has outperformed its cheaper valuation and also it has a lower place to start so
people bounced on the relief rally. the bond market has benefited from the strong economic and political fundamentals, and if yields are down about 36 basis is this year compared with at least 20. >> what is the likely impact of the election? how important is this election to markets, and who is their favorite candidate? way, the-- either outcome is going to depend on how much stability there is. right now the polls suggest that the socialists might get the most seats, but it depends who they form a coalition with. my colleague thinks that a center-right coalition might be the most market friendly, however any political uncertainty might hurt the bond markets the most. they beat is not so much the market but how much certainty there is with the election results.
>> thanks very much. heather bergsma are mliv blog. they've been doing great work on spain. just type mliv on your bloomberg terminal. joining us now is the chief economist and the economic spokesperson for the opposition. thanks for joining us, i know you are extremely busy at the moment. let me first ask you what you think about the chances in the upcoming election. >> thank you very much for having me on the show. first i think there's obviously a tremendous amount of voters that are still undecided, about 38% of voters according to polls have not decided yet which party they are going to vote however we believe that most of those voters have a clear preference in terms of leaning toward the center right.
therefore as we move into the end of the election process we are likely to see a rise in support for the conservative party and also for the other parties that are presenting themselves for the elections within the center-right categories. what do you think about the possibility of working with box? help is it worth it? if we look at what they have presented, as well as the center-right party, both have many things in common. it is very important to understand, for example, that this is not a party against the european union, against the
euro, or that has some of the most drastic approaches that we have seen in the parties that .ould be seen a similar i also think there is a common ground in terms of policy that will support job creation growth and attracting investment. think they have proven that they can work together without looking at the things that therates them but rather of things that unite those parties, particularly in economic policy. >> would you not be concerned about the inclusion of vox hurting your relationship with brussels and other eu countries that have taken a more liberal path? no, and the reason why is
there is absolutely no doubt of the pro-european and moderate approach of the conservative party. they have been a party that has inn absolutely instrumental cementing the european union and supporting the european union and strengthening its position and it will continue to be so. the policiesore, that we are defending are going to be very clear in terms of both europe and the economic policies of spain but also in terms of the fundamental rights in the constitution. the clear message here is that any party that will be in a coalition or government support type of agreement with the party is going to have to obviously supports the constitution, the european union, and the economic
policies that we defend and those are key principles that are going to be supported by anybody that joins us in our government. >> i want to give you a chance to clarify your position on pension and your response to a video that has really gone viral. of your opponents was accusing you of calling for sh to public pensions are canceling them outright. what do you think about the pension system in spain? it is obviously difficult to find, as are most pension systems. pensions has been in spain is clearly finance a bowl. gdp atout 11% or 12% of the peak of what is estimated 15% of gdp, and we will continue to be in line with other members of the european union. the only thing we need to do was to continue to support growth
and job creation, create more attractive investment environments for companies, investors, that want to bring their projects to spain. that is the way in which we are going to defend it. obviously the socialist party has been lying about what i said -- what i said was that i don't want spain to follow the policies that have led other countries in the periphery of europe to cut their pensions and unfortunately those policies were and are the ones that the socialist party or the radical left are proposing, which is to increased are medically the taxes, andincrease that hinders job creation and growth and reduces the potential toopportunities for's rain be more productive, more
competitive, and generate better pensions, not just for 2019 but for 2050 and beyond. obviously the opponents will lie and haters will hate but the realities of what i defend and have always defended is for thriving, sustainable, long-term pension systems. the only way to achieve it is with policy that defends growth and job creation and those are not the ones are opponents are presenting by dramatically raising taxes and putting at risk the improvement of the job market. >> already. thank you very much for your time, the chief economist and candidate for the pp in the upcoming elections. next, you shares fell in the long, trading after the ipo of the payment services company
the worst has been avoided, even if the battle hasn't been won. the next hours will be difficult, but due to the courage, the towers did not crumble. french president emmanuel macron, visiting notre dame last a massive fire ravaged the 850-year-old gothic monument. he says the cathedral will be rebuilt as it was part of the destiny of france. before firefighters were able to stop the blaze the flames had engulfed the roof, before it collapsed, as the world was watching. joining us is our deputy bureau chief. what is the status of notre dame this morning? how does the cathedral look? well, the key thing during
the night was to bring the fire under control and i think we've all seen these dramatic images of flames coming up from the roof of noted on yesterday and the priority for firefighters is to contain the fire and bring the flames under control. that having achieved this, it was really about cooling the structure of the building. still astage there is lot of uncertainty about how stable the building is, how safe it is to enter the building for firefighters. i think people reassured this morning to some extent that at least the structure of the cathedral seems to have survived. certainly the two towers at the west and are still intact. there was an emergency meeting with architectural advisers this morning, where they are trying
to assess the stability of the building and where we go from here. is the status right now? i know we are seeing hundreds of millions of donations pour in, hundreds of millions of euros poured in. what do you think this is going to cost? what is the scale of rebuilding a cathedral like this? >> oh, that's a good question. i obviously can't answer. but if you look at the size of the donations that came in, we have one family behind the luxury goods company coming in with a pledge for 200 million euros. coming inve a family with 100 million euros. paris whoe mayor of just said that they will release 750 million to help with the work on the cathedral.
>> money trail. congressional democrats issue subpoenas to deutsche bank and other lenders that they escalate the probe into president trump's finances. larry summers suggests the fed might be willing to cut rates, meanwhile, eric rosengren says he is ok with target inflations. french president emmanuel macron to rebuild the notre-dame cathedral after a massive fire ed the centuries-old building. we are live in paris. ♪ nejra: