Skip to main content

tv   Countdown  Bloomberg  April 7, 2015 1:00am-3:01am EDT

1:00 am
anna: australia keeps its key interest rates at a record low but leaves the door open for further easing. we will go live to sydney as the markets react to the decision and friday's disappointing jobs for u.s. mark: we bring you the details on what could be a multibillion dollar deal. manus: the prime minister had to moscow as more funds from european creditors looks weeks away. anna: forecasts of record u.s. supplies and betting on rising demand.
1:01 am
mark: welcome to countdown. caroline: i'm caroline hyde. manus: one system is testing to eliminate all traffic accidents. we take a sneak peek at the driverless cars. stick around for that. caroline: breaking news -- it is a deal. express will be offered by fedex. it is offering a third premium at 3.3% in terms of the premium of the sharepoint which is six euros. they are offering eight euros per ordinary share. it is a really interesting deal because it is over two years ago we saw that are for -- that
1:02 am
offer trying to snap up tnt express. that deal unraveled because regulators got involved. they felt they would not be enough competition in next day delivery because it would be owned by ups and dhl. seemingly, maybe fedex will be able to increase its prevalence in europe. it is a key area of growth for them. they say profitability, they want to boosted by $1.7 billion. it is part of fred smith's plan to boost profits. expansion in europe. by buying up tnt express, table be able to do -- they will be able to do that. an agreement on a recommended all caps off are. implied the value is 4.4 billion
1:03 am
euros for tnt express. mark: it was nine euros and offer in 2012 so slightly less than the ups offers. manus: they will have to sell because the deal fell apart last time because the challenge in terms of regulation and competition here. we will get the details later. it'll be next year before the deal closes. the first half of 2016. mark: the australian dollar spiking as the world bank of us really holds rates -- of australia holds rates. let's go to paul. why did the rba decide to leave rates on hold? paul: the rba decided that rates were appropriate for the time being. there was not a lot of terribly new in that statement they put out.
1:04 am
they noted the falling commodity prices. growth remains below trend. there continues to be capacity in the labor market and economy. there was no compelling reason to push the rba into cutting at this stage. they noted property prices, residential property prices particularly in sydney which have spiked 40% in the past three years, that is believed to have stayed thereireir hand. they say they are working with regulators. nothing in the statement to make a compelling case to the rba to cut this time. mark: what about the next month or two? how likely is the rba to cut in coming months? paul: the easing is still in place. in the statement, they said more easing might be appropriate further ahead, but this is the
1:05 am
first time in eight years the traders got it wrong. they were expecting a cut. the economists got it right. 17 of the interviewed economist correctly predicted that they would hold at the current rate. the feeling is it is probably going to be may. 29 of the 30 surveyed think it is coming then. by june i it is unanimous -- they believe we will have a 2% raise. mark: the day-to-day taller chart -- dollar chart -- it shows the australian dollar rose sharply before the decision was announced. is that likely to attract the attention of regulators? paul: yes, it is. regulators are already looking at this. after the march decision, the b australian securities and exchange commission was asked to
1:06 am
look into these moves. back in february, 10 seconds before the rba released its decision to cut, the dollar fell .8%. 37 seconds before the decision last month, it rose half a percent. and this time, some seconds before the decision, the dollar spiked 1.1%. it does look terribly suspicious. there is really no way to interpret this. something is going on. it is being investigated and we will see what the result will be. mark: thanks, paul allen. the rba kepts rates unchanged. manus: after jumping on the news that saudi arabia raised its pricing in asia as investors weigh forecast from u.s. crude supplies. bloomberg intelligence phillip joins us for a little more of a discussion.
1:07 am
it is great to have you with us. let's work out what is the bigger piece of news. is it iran and their potential supply as a result of possible deal? or is it supply coming out of the system in the u.s.? the market was up 6% yesterday. philip: i think the u.s. news is more in the short-term. the refineries each spring they are in maintenance, that will has nowhere to go. stockpiles are surging in the u.s.. i think it allows some kind of legislation for the u.s. to export more crude oil because they need a safety valve if the oil has nowhere to go in the domestic market. iran i would say it is very relevant but more in the long term because it will take some time for iran, for oil companies to apply their western technology and to rent production back -- ramp
1:08 am
production back up again. it will not be overnight. caroline: remind us of what amount we could see coming from iran in the longer term and what this could add to the supply. philipp: it used to be 9 million barrels years ago before the iranian revolution. years ago, it was 3 million. now it is near 300,000 barrels. most estimates say they will not go beyond one million barrels by the end of this year. mark: oil has gone as low as $43 in march. it has come as high as $51. the inn economists strategists you talk to -- philipp: there are a lot of moving parts. saudi arabia bonding oil,
1:09 am
the nigerian election spark some insecurity in this region. it is really a very volatile time at the moment. and the bottom is not there yet. mark: that is the call. the bottom is not there yet. caroline: also, cankenya. philipp: they have very promising licensing and prospects. again, similar to yemen and nigeria, they have insurgencies there. a lot of insecurity. mark: saudi arabia the charging for its oil in asia is narrowing? philipp: that is true. it seems like before they were only going for the market share and now they might have overdone it a little bit and going back into the market with a little bit higher price. let's see where it goes. mark: thanks philipp.
1:10 am
caroline: let's get to iran because they could potentially reenter the oil market. we were discussing nuclear talks that left it in agreement last week. the white house says sanctions are still in dispute. we need more information. let's bring in golna. how has last week's nuclear statement been received in iran? >> well, in tehran on friday huge celebrations on the street. generally among the people, it has been received extremely positively. many people were waiting for this to happen. there was that feeling of almost a desolation publicly. politically, there are people that are unhappy with it
1:11 am
hard-liners in parliament and commentators who haven't quite vocal about it and unhappy about the definitions being used in the agreement and the perception that there has been different agreement for statements published by the different parties and that they are not all analogous. there is some tension but the overall, it has received the backing of very important people, including the head of iran's security forces. yesterday, he came out to congratulate the supreme leader for the efforts of the foreign ministry in securing the pact. that was very important yesterday. caroline: certainly a bit of a surge in trying to convince the rest of the electorate, the population that that this is popular bankthing. talk to was about -- us about
1:12 am
politics continuing with the turkish president visiting. molnar: he has arrived this morning. it is a visit that has been quiteon the cards for quite a long time. meantime, we have had saudi airstrikes on yemen and everyone has publicly backed those. iran is on the other side. that has caused a bit of tension and friction. mp's here in parliament have lobbied to try to get it down in parliament. it is going to be a very interesting visit because they are very extremely important trade partners. there is a huge pile of iranian natural gas in turkey and that relationship is very important for the both of them. it will be overshadowed by the
1:13 am
airstrikes in yemen by saudi. caroline: molnar, thank you so much for shining that light. mark: greece promises to pay at least the imf. assuring imf and christine lagarde on sunday that greece will make its $450 million debt payment by tuesday. hans joins us with the latest. what brought him to washington? hans: it was an unscheduled visit to what sparked some speculation whether or not greece would pay the imf. we don't know why they planned it. we know he gave his assertions assurances that they would make april 9 that 450 million euro payment. they have some 9 billion due to the imf. the calculation could be a little different.
1:14 am
a total of 20 billion will be due. they also talked about ways they could improve talks with greece's european creditors. he met with officials from the u.s. treasury department. they are seeing a deal by april 24. that is what he is telling local papers. april 20 four, that is when eurogroup finance ministers meet. it will be a big meeting and it is getting very close to the deadline. he is talking about a new five-point plan. it does include primary surplus of 1.5%, debt restructuring connected with growth. he is talking about the longer-term. he is talking about new investments from the european investment bank. he also wants to create a bad bank inside of greece. the also want to see some help from the eu further exporters, for their producers. remember the context of all this, they have the big payment
1:15 am
due april 9. they have to roll over some debt later in the month. greece is saying march was a good month for tax receipts. that follows after january and february when it did not meet expectations. mark: greece has come up with thiss figure with world war ii reparations from germany. 279 billion euros. how did they come up with this figure? hans: it is 278.8 billion euros million. they had a special committee in parliament that looked into this last week. the greek accounting office's including things like the rush mark alone from world war ii that was about 450 marks. now they are calculating it at 10.3 billion euros in today's present dollars. we look at that figure, 278 billion euros in reparations, that is 40% of germany's gdp. it is being mocked in the press
1:16 am
in germany. a tabloid leading the charge. it will only antagonize relations between greece and germany. mark: thanks a lot hans. manus: a bloomberg exclusive -- it has been confirmed, caroline has the story, tnt express will fall into the fedex family. give us some of the details. 33%, i think? caroline: exactly. it is an all cash offer. this is fedex looking to get into europe. buying tnt express, eight euros per share. it was a bloomberg exclusive. the companies have come out and confirmed they are indeed in talks and the offer is eight euros a shoreare. post mmll likes it.
1:17 am
it looks like all are on board in terms of the deal looking pretty good you are looking at the management side of things. they have to convince the shareholders. this is a key pillar to boost the profitability of fedex. the chief executive has been focusing on this. fred smith in 2012 said fedex's view is the boost profitability by looking at europe. they want to get into european air and ground networks. they want to boost that for fedex which is already the world's largest cargo airline. data want to focus on airline, but also groundwork. it is an all cash offer. what will be crucial is how you persuade the regulators because this has happened once before. it is a bit of deja vu for tnt express. it was more than two years ago
1:18 am
january 2013, deal fell apart for ups to buy tnt express. they were offering a 40% premium. we can look at the real previews of that deal, but the previous nature we saw, the turnaround that tnt express has had to look at. the deal was scrapped back in 2013. since then four straight years of losses coming on the back of that. problems in terms of their profitability, in terms of their market value, in terms of their earnings. it has been adverse conditions. they expected 2015 to be a challenging year. competition in france, united kingdom driving down pronto prices -- parcel prices. this is a great way for tnt express to exit to a better future and therefore shareholders might like the one third premium being offered over the current market value. more than 4 billion valued at.
1:19 am
mark: some top headlines. george osborne will take back claims that his party may families worse off. he said the previous labour government imposed taxes on the average household. the two main parties continue to clash on tax bans as the economy has become a key battleground in the campaign. polls shows the two parties are up ahead -- head to head in the next month's election. former treasury secretary larry has called for the creation of the asian infrastructure investment bank. a turning point for u.s. economic power. the bank is china's plan to start in the first and development bank in decades. more than 40 countries applied including the u.k. and germany. samsung shares rose.
1:20 am
chips and displays despite a slump in smartphones. the company is banking on its friday debut of the galaxy s5 model. mark: we discussed comments from the federal reserve bank of new york president next.
1:21 am
1:22 am
1:23 am
>> the likely passive sort term interest rates is just as important as the timing of liftoff. i does make the pass will be relatively shallow. manus: those were the words -- the continued low rates from the fed's handling the dollar tumbling. for more, let's bring in v alentin mariner. great to have you with us. it is a hard one to call. calling it a shallow liftoff. lockhart is not ready to say the economy is slowing down. he says it could be july or september. where are we in this debate? >> quite a range of views. stanley fischer highlighting that rates will go up sometime this year. it was quite vague. it highlights a range of views.
1:24 am
it is the start of the cycle. i think later this week we will see more indication as to how the fed views it is evolving. chances are more bets on early rate hikes will be discouraged. presumably, the dollar might not like it. it feels like a lot of negatives already. caroline: the dollar index up a percent. we are seeing a little bit of a rebounding after a couple of days. ing group already saying buy into this weakness. would you agree? valentin: it depends. it feels like the dollar is still the largest one out there. you would potentially be doing that fairly cautiously. if anything the dollar because
1:25 am
of the rda at the moment. it will be unwound. i think the safest trade would be selling fx volatility. if anything, that uncertainty was introduced some time ago. the dollar is no longer a one bet. that could help fx volatility subsides a some more. going into the april meeting, and all the way to the june meeting -- not much is expected to happen in terms of new information. that could help fx volatility to subside. mark: the euro-dollar -- 1.09 is where we are right now. you are seeing parity. to use your words, it is possibly waiting to happen. valentin: this week, data will confirm the eurozone is indeed
1:26 am
experiencing acyclical upturn. we do see investments being delayed. also hiring from tourist season to support the recovery. all of that helping europe. we have concerns about greece not so much about the 7.2 bailout fund extension they will likely get at some point in the coming weeks. it is really about the sustainability issue which will come in june. that is when the current bailout extension comes to an end. that is when the creditors we really have to decide what do we do from here? do we provide debt relief or is it asking for more funds? i think that is when the issue about greece could escalate. they could drag the euro lower. mark: valentin stay there. back with you in a moment.
1:27 am
coming up, the crash-proof car. we take a look at bmw's latest innovation. ♪
1:28 am
1:29 am
1:30 am
manus: you are watching "countdonwwn." it is a day in which the aussie dollar the euro so close to the six-year low before the decision not to cut rates. the economists thought that the reserve bank ino of australia would hold. twe are getting breaking news on the rupee. the indian central bank leading rates. here is the rupee.
1:31 am
this is dollar rupee. we are seeing this -- no real movement at the moment. no real change. the aussie dollar, the kiwi dollar. another interesting move. let's have a look at the aussie dollar. that is not coming up. you are heading back towards parity on that. we will get back to the conversation. he says it is time to sell volatility in the over months. the new york fed governor saying get ready for a shallow liftoff in rates. dennis at atlanta says he is not ready to conclude the slowdown is underway. he says there is a possibility for a rate hike in july. any weakness in dollar that you
1:32 am
see is an opportunity to consider getting back in. this is over the past 30 days. that will be the view from the most accurate forecaster on foreign exchange. any weakness you have seen is your opportunity to reenter a long position. that would probably translate more so on the euro-dollar. there is very much similar opinion which is you continue to see dollar strength, euro weakness. that will morph itself into a parity level by the middle of the year, according to ing. that will probably break parity down to $.95 by the end of the year. let's check in with the rupee. what you got here is dollar trading higher by 2/10 of 1%. that is a currency that is falling. caroline: thank you. let's turn to valentine,, head of
1:33 am
g10 fx research. australia holding steady. are you surprised by perhaps this wait-and-see approach or is it necessary? valetntin: it is interesting timing. we have a similar response, or cluster response by that's lackluster response by -- similar response, lackluster response by norway. the way i see it the global central banks, including the rba< they are starting to realize the currency war we have been so used to and helpingoping for, will come to an end. maybe here for a bit longer than expected. a rate cut or a policy measure to drive the currency commodity.
1:34 am
if you think of it the rba was saying six months ago, we will cut rates. we will not do much more because we expected to depreciate. the fed is starting to sound a bit worried about the strength of dollar come impact on exports lack of job creation. these are thinking maybe currency wars are here to stay. maybe the fed will be vague about hiking rates. if you really need your currency lower and you need those rate cuts to keep it under pressure you need to be cautious when delivering those cuts. from that point of view, it will take potential further deterioration into the external environment. china's slowdown further slowing. it is obvious.
1:35 am
if it does not appreciate on a trend base, there is no real pressure on them to deliver. that is the expectation and what we saw in march. not everybody was calling for a cut. there was a bit of a balance which came to an end soon after. we could see a bit of a squeeze in the coming days. mark: a month ago into the u.k. election. we are a month away. volatility has been rising against the dollar. sterling against has been falling worse since july 2013. is this pre-election jitters? valentin: they are likely to stay in place for now. it is tempting to say the pound has moved too much. it is a bold statement to go out and say the pound may be a buy. that is what we saw on the run up to the previous election in
1:36 am
2010. if anything the uncertainty was greater because that was the first hung parliament in many years. you will get the first hung parliament. that is not big news. obviously, it is likely to weigh on the pound sentiment for now but chances are we are close to the lows and maybe the heights in fx. our outlook for the pound is calling for further renewed appreciation against the euro. we expect some more consolidation in the case of cable. that is three months out from here. the timing is to wait for this to play out. if 2010 is anything to go by, the bottom and sterling could be shorted after the election. mark: thank you for joining us valentin.
1:37 am
the top stories on bloomberg -- the dire view on europe is paying off. his bridgewater associates, the world's largest hedge fund climbed about 40%. according to a person familiar the bets against the euro. the commission is looking into information to determine whether to investigate into the get legality of bank underwriting by countries. the commission is currently studying information before deciding whether a full probe is merited. the final stake in gm worth $2.7 billion to goldman sachs. stephen harper is trying to stick to his promise to balancing the budget this fiscal year. falling oil prices, the slump in crude has led annual revenues of canada to be $6 million less than forecasted.
1:38 am
manus: let's they with the auto theme. smart sensing devices in cars is becoming closer to be a reality. many of the same technology that can make cars autonomous could make driving a lot safer. sam grobart visited to bmw in munich to test out a system that the company says could eliminate all traffic accidents. sam: nobody likes to think about it, but the truth is every time you get behind the wheel of a car, you are risking your life. no matter how cautiously you drive, you could end up becoming a statistic. one of the more one million people who die in car related deaths globally each year. but, you know, you have a life to live and places to go so you take that risk again and again. it turns out one automaker is
1:39 am
working on a new kind of car. one that could help reduce that risk to zero. i have come to munich to visit bmw. at its research and innovation center, the company is developing sensor technology that could do something very simple but also very important -- prevent a car from crashing into anything. what happens when this car starts to close in on a stationary object? >> it waits for you until you get to close, until you have a certain threshold and then it breaks for you -- brakes for you. sam: want to get behind the wheel? ok. so i should start driving towards that? >> yes. sam: i will floor it.
1:40 am
it just stops. i have to do that again. >> the way the car works is it has really precise laser scanners that sees where the obstacles are and how big they are. it builds up a map and as soon as we get to close, it brakes for you in a comfortable way. if the situation gets critical, it will slam on the brakes and prevent a collision. before we tested the car in the real world, we simulate whether the algorithms work the way they were intended to. as you can see, the car slowed automatically down in the simulation and avoided the collision really well. the ultimate goal is to prevent any collisions at all. how far we can get with that
1:41 am
depends on how many people will actually use this kind of technology. when we have 100% of the cars equipped with collision avoidance there is a good chance we could almost prevent any kind of accident. sam: we set up an obstacle course because we have seen how the car performs when it is approaching something from the front. but the system is monitoring the sides, the back of the car. at first, i will drive like i know what i'm doing. this way, i will be a little too close. this would actually hit the door and mess up my paint job. this system is still just a prototype and it does not always work perfectly. it is the beginning of something. as computers and sensors in cars become smarter and more
1:42 am
precise, they do more of the driving while people do less and less. that could mean our cars drive themselves but in the near term it will mean safety systems that can make up for all those human flaws that get us in trouble on the road in the first place. we are talking about systems that never hesitate, never get distracted and see in all directions. the car is not quite here yet but it is coming. caroline: with my parking track record, i could probably use one of those. join the conversation on twitter. let us know what you think. if you want to hear more about different stories, you can reach us on twitter. mark: you are not good at parking? caroline: i have crashed twice while parking. i'm also.
1:43 am
meanwhile, just one month ago until the u.k. elections and polls say it is too close to call. our next guest says we could end up with a minority government after may 7. ♪
1:44 am
1:45 am
caroline: let's check in with the top stories. george osborne checked that labor claims that his party
1:46 am
made families worse off. in a speech today, he claims that the previous government had burdens on households. the two main parties continue to clash on tax plans. polls shows the two parties are head to head ahead of next month's election. from a treasury secretary larry summers has called the creation of the asian infrastructure investment bank a turning point for the u.s. economic power. this past month may be remembered as the moment the united states lost its role as the underwriter of the global system. the bank of china's plan to start the first new development bank in decades would have founding members. samsung shares rose after profits beat estimates. rising demand for memory chips and displays helped offset a slump in smartphones with
1:47 am
earnings falling for a sixth straight quarter, the company is counting on the debut of the samsung galaxy s6. manus: one month to go until u.k. voters head to the polls and the outcome is still anybody's guess, according to our next guest. it is david lee, senior europe analyst. welcome to the program. good luck to you in reading the lines between now and then. what caught my eye -- you can talk about the debate from last week -- tony blair, come back tony. he is warning today david cameron's european policy risk triggering the most intense period of instability. where are we on this debate? david: it is quite refreshing that tony blair is jumping in here. what we have had so far in the campaign is germany being fairly
1:48 am
negative assertions that the opposition will do this. tax figures bandied around this kind of thing. none of which really check out when people go through them. now we are getting to the bones of it with a real issue -- the future of the uk's relationship with the euro. blair is a heavy hitter. he is popular within the labour party. yeah, his message does carry a great deal of weight. caroline: talk to us about are the parties getting it wrong? you have heard so much about business. the conservatives having this piece but in the telegraph with business leaders. that is preaching to the converted pretty much. david: absolutely. conservative supporters to a conservative newspaper supporting the conservatives.
1:49 am
that is not really news. there is a disconnect between business and the electorates that has developed in the last five or 10 years over the course of the economic crisis. that is very much an early campaign skirmish. i recko we will probably move onn to slightly more popular policy issues. mark: the poll was released in the sunday times that showed that not only did business leaders prefer those policies but it works for big business. that is a big seachange from those type of workers supporting labor. good that prove significant or not? david: it shows the conservatives' message which is we have been through a rough time but we are now under -- enjoying the recovery and everybody will benefit from that. we have not necessarily seen it yet but stick with it and you will. that does have some
1:50 am
resonance. it shows they are having some success. manus: i want to know wheth er tax really matters. labour will claim you are worse off under the coalition government and labour, -- the last government they would have been 2000 pounds worse off. i want to bring something to our viewers. bloomberg will have an exclusive day on thursday. we would discuss the whole european debate with guy johnson, sir roger carr an. this just popped into my inbox. if you want to sign up for it and you want to come to get the nuts and bolts, join us on thursday. going back to tax. does it matter? go on.
1:51 am
david: that is always going to happen, isn't it? parties will always clash on tax. nobody will ever say that their key audiences going to pay more under them. this is the kind of campaign we are in now. it does echo very strongly the campaign from last year where it was claim, counterclaim, claim counterclaim from one side to the other. a got a great deal of political engagement. i think the end, the decision was made on good feeling and that will be the same here. caroline: what will actually give tangible -- don't play just the business -- but actually played to the voters at home? what will be the key policy areas? will it be immigration? what will be a more clear-cut campaign? david: this is exactly the
1:52 am
problem because the conservatives have said it is a limited message. the economy is going to get better, stick with us. labour wanted the narrative since the last election and have not really developed one. they are getting there with this inequality idea. they want people to talk about immigration. so far, that has not happened. it does seem as if all the parties are scrambling for that covert strategy and arne'ten't really capable of reaching out a lot further and therefore are not trying to do that. mark: david, we will see a lot more in the coming weeks. coming up we will be looking at your favorite stories from bloomberg's digital outlet including china's war on golf courses. ♪
1:53 am
1:54 am
1:55 am
mark: these are our picks from the bloomberg digital hemisphere. an interview to the orange county register. where is your money, he was asked. it is mostly concentrated in cash.
1:56 am
that is not great. i think most asset prices are being pushed by central banks to really elevated alevels. he says central banks are trying to grade his wealth gap between asset prices and fundamental. very interesting when a man like this says something like that. caroline: money where his mouth is. manus: the chinese government literally has gone to war against golf courses. over 600 fairways are built illegally. mao zedong deemed all of them as who's was -- it is try to keep a grip on the market. it takes a lot of water to get those fairways green. caroline: amazing. take me to that golf course immediately. i'm looking at a story on
1:57 am
starbucks now paying a full commission for its workers to get an online degree from the arizona state university online, offering those that work 20 hours a week manageable. mark: stay with us. back in a minute. ♪
1:58 am
1:59 am
2:00 am
caroline: fedex agrees to buy tnt express for 4.4 billion euros expanding in european businesses. we bring you the details. mark: oil prices retreat after rallying. u.s. supplies outweigh demands from saudi arabia. manus: iran, as the framework nuclear deal is reached, theerdogan criticizes the government. we are live in istanbul and tehran. caroline: searchers for support on all fronts -- the greek prime it is their heads to moscow as
2:01 am
creditors are weeks away. ♪ mark: welcome to countdown. caroline: i mark: coming up, today marking a month until the u.k. elections. we continue our coverage of the campaign. the chancellor george osborne tried to take back claims that his party makes families worse off. we continue the election coverage throughout the week. on thursday at 11:00, we will debating the central issues of the u.k. general election. among those taking part here at bloomberg headquarters in london will be the former chancellor lamont and sir roger carr.
2:02 am
manus: it was a bloomberg exclusive and it is confirmed. tnt express is back in the spotlight with fedex buying the company for eight euros a share, two years after the offer by ups unraveled. caroline hyde has the details. caroline: a nice premium going to way of tnt express shareholders. this is what fedex is offering to buy a tnt express. that is the dutch would just ask company, parcel deliveries. it is equivalent to a third premium. 4.4 billion euros being assigned to tnt express. this is all about fedex's play to get into europe. it is a key pillar of the chief executive. he has really been focusing on this, fred smith, back in 2012.
2:03 am
he said he wanted to step up profits by getting into europe. very key asset for them to be buying in this respect. it is all about tnt express's turnaround. just two years ago, january 2013, that was when a deal unraveled when ups wanted to buy up tnt express. i'm afraid the regulator said that would lead to little competition if you want next day delivery in europe, too little delivery because it would leave adjusted ups and dhl. that deal got terminated by the regulators, but it has been a problematic time for tnt express since then. the last four years, back to back losses. competition is ripe. also prices falling weather -- parcel prices falling weather you're in france or u.k.
2:04 am
this is what the chief executive has been calling a tough time. the chief executive of tnt express as we are continuing to see adverse experiences. they were expecting 2015 to be a challenging year of transition and a time to rectify their boat, selling assets and the like. they have been selling a dutch operation but to no avail. the aim was to cut cost, upgrade their i.t. maybe with fedex, they can do that more efficiently. want to bring up a chart. we have an interesting find a chart. we seem to be returning to where we were previously. back in 2012, this is when we suddenly saw the spike. we saw ups go for the guns. they wanted to buy tnt. they drove the share price up to 40% higher because that was the premium they were offering, but then the deal unraveled.
2:05 am
we have been tracking the bottom pretty much. selloff across the board when it comes to tnt express. we are back to where we started before the ups offer. overall six euros per share. it will spike back higher to eight euros a share. mark: oil paired its rallies off after saudi arabia raised prices to asia. bloomberg intelligence philipp joins us. why did oil jump 6% yesterday? what was the reasoning for this sudden jump? philipp: the u.s. stocks are as high as ever and oil has nowhere to go. as long as the u.s. does not start exporting crude oil as safety valves, this will be a
2:06 am
problem. wti is a very local brand because there is not a lot of ways to put it into other markets. manus: there are different things. one is that thhe saudis have raised prices to their customers in asia. traders however, last week before the oil boom boosted their long bets by the most in four years. iran in. , on the way with doing -- iran in theory about to make a deal with the rest of the world. help me through the last because none of it adds up. philipp: there is a lot of concern about geopolitical risk. the yemen insurgency bombing yemen.
2:07 am
being afraid the shiites will take over and these are promises of saudi arabia -- provinces of saudi arabia where a lot of shia live is a huge concern. the nigerian elections did not add to security. is becoming more insecure. manus: talk about the shia con cept again. philipp: the eastern province of saudi arabia, they're mostly shiites. this is where most of the oil fields are located. this is very close to yemen. the border is open. it is a desert. it is very hard to keep the shia rebels from yemen infiltrating into saudi arabia. there is a risk they will take over these eastern provinces. saudi arabian oil productions is at risk. caroline: they are currently
2:08 am
51.88 dollars per barrel on wti . what is your believing the oil pricing trajectory will go? philipp: i think you have to weigh short-term factors against long-term factors. on the one hand, you have these bearish factors like the u.s. stock levels being very high. this could depress oil. then you have the saudi's and the geopolitical risks which are not as short-term. it might lay out more in the longer term. things like iran and kenya and african oil productions, this is more on the longer term. mark: how soon is it to expect iran oil to reach the market? philipp: most people that i talk to say iran production will not grow by more than half a million barrels a day this year.l so the real big impacts from
2:09 am
iran will not be in 2015. caroline: still some time to wait. mark: thanks a lot, phillip. caroline: meanwhile, let's turn our attention to greece because it promises to pay at least the imf. the finance minister assured the imf managing director christine lagarde that greece would make 415 million debt payment by april 9. hans nichols joins us with the latest. what brought him to washington to begin with? was it all about the imf? hans: he had discussions with treasury officials on monday. in some ways, there is a lot of similarities between the u.s. position and the great position on what needs to happen with greece to return. in terms of his meetings with lagarde it was an unscheduled meeting. the very visit sparked speculation they would not make
2:10 am
that april 9 payment. he assured lagarde that payment would be made. they have 9 million -- 9 billion euros they have to pay to the imf. a total of 20 billion in the next six months will be due for greece. from interview yesterday, he expects a deal on april 24. that is when euro finance group is meeting. that will be a big crucial meeting. that will need to lock some of that money from the 7.2 billion that is left over. he is also talking about a five-point plan. he does want to see a primary by 1.5%. he is talking about investments from the european investment bank in greece. he is talking about restructuring the overall debt level, have it be more to growth bonds. before they talked about doing that in june there is a
2:11 am
difference that he is tying it to the current debt talks. they want help for their exporters. they also want to create a bad bank inside of greece for nonperforming loans. one quick note on how they are doing with finances -- january and march, they were down on their tax receipts. he is saying in march, they were better than expected and recaptured some of the money they expected to get in january and february. caroline: plenty of math for the viewers to be doing when you talk about the amounts they could be paying the imf. there is this one rate figure they have come up with for world war ii reparations from germany. 279 billion euros. how did they come up with that number? hans: they had a special committee in parliament and the general accounting office take a look at historical documents. to give you some example, they take that 450 million loan during wwii and jack eluded that
2:12 am
out to 4.3 billion euros. 278.8 billion euros which is 40% of germany's gdp for 2014. massive amounts of money and it is being discussed quite a bit here in the german press. caroline: catching the headlines everywhere. thank you very much. manus: time for some of the top stories. george osborne will head back to labor claims that his party may families worse off. in a speech today, he will say the previous labour government imposed taxes on the average household worth almost 2000 pounds a year in real terms. the parties continue to class on tax plants. s. the economy becomes a key battleground. polls show the two parties are head to head ahead of last month's -- next month's election. form at treasurie -- former
2:13 am
treasury secretary larry summers calls at a turning point for u.s. economic power. he stages the past months may be remembered as the moment the united states lost its role as the underwriter of the global economic system. the bank is china's plans to start the first new development bank in decades. more than 40 countries applied new founding members, including the u.k., france and germany. samsung shares rose. rising demand for memory chips offset falling sales of smartphones. they are banking on the new debut of the galaxy 6. caroline: you can join the conversation on twitter. we will be looking at samsung and what is behind the profits. everyone focusing on the next edition of the smartphone.
2:14 am
you can reach us on twitter. mark: coming up, europe is back after the easter break. soft jobs data on the u.s. and greek agrees to pay the imf. what more could the markets possibly want? join us for the debate. ♪
2:15 am
2:16 am
2:17 am
manus: we are back from holiday. stocks close that 15 years highs. allen higgins joins us now. welcome to the show. i've had a few days rest. mark: buzzing like a madman this morning. manus: will they continue to buzz like madmen? allex: i did see the payroll. weak where the revisions but the markets continue to go higher so a big message. we have been over the equities for some time. we advise sticking to that. especially the relative value compared to bonds. that little different in our portfolios. we have longer dated bonds and we have had those. we even have russian bonds. we like to get in the center of
2:18 am
geopolitical crisis. caroline: we are talking about equities and you say stick with that. you are not liking u.s. equities. it is u.k. in japan. -- and japan. are you worried about the earnings kicking off and they will be slower? alan: i'm sure they will beat. simply, they are expensive on many measures. if you go back to even before qw measures in 1974, markets have been more expensive. u.s. stocks are all in the price and the dollar is in a headwind. we have had been in this position for a while. only now it is playing out. you needed to hedge the currency clearly. where we can, we have. but, just u.s. stocks are an expensive place to be. mark: peripheral debt, when does
2:19 am
that become expensive? you like portugal 1.66%. relative to its peers, it is a generous yield. at what point do you throw in the towel when it comes the european debt? alan: i wish i knew. talking geopolitical, we went into italy. that was fun and games. we have been in peripheral debt on and off the last three or four years. you hit the nail on the head. the income in europe is in demand. it is quite incredible. i'm not sure everybody appreciates this particular qe which happens when there is a shortage of supply. we had deficits of 10% when the u.s. and u.k. were doing verytheir qe. there was a real shortage. any interesting source of income and now it is easy to find the
2:20 am
source of income. then, what is the risk of that sort of income? we think portugal is improving. a lot of the good news in the price but we still own it. manus: also saw from your notes that you up your exposure to the u.k.. you have gone from 55% to 60%. we are running up to the election. i was looking at the weekend press. osborne promising first-time buyers by 2020. politics or not. there was a lot of talk about housing. where do you look at the u.k. or how do you look at it? did you look at it through that lens? alan: we like commercial property. we have direct commercial property. it is a way of playing the u.k. the real estate investment the
2:21 am
british land, etc. we like that area. generally, with this election who knows? it might be very unpredictable because, for example, if labour wins, is that good or bad for the markets? it means there is no eu referendum. you might get normally the markets like a conservative some kind of conservative parliament but maybe this time in my be difficult to predict. our response is you cannot predict these things. should there be some kind of crisis just like in italy and russia last year? we tend to go against it. we have not gone to greece yet but we are looking closely. mark: what would persuade you to look at greece? it is down for the year. alan: we would be tempted by the debt. equities would be correlated. with looked at it -- it is so
2:22 am
binary, we would rather be late on this one. there should be a deal because -- mark: people keep telling us that. caroline: we do need to see restructuring before going in? alan: governments do not like to lose money to each other. give an interesting analogy with russia. have lent ukraine 3 billion. you have to take a haircut, why shouldn't germany take a haircut on greece's debt? generally, governments don't like to lose money. currently, the german debt is that 30 years in a very low interest rate. we think that will go from 30 to 50 and even lower interest rates. it is like offering you a 100 year loan at a quarter percent. there was a very low interest rate and way into the future
2:23 am
which greases halfway there. the bit they really need is this primary surplus which is a measure of austerity, to bring that down. actually, in terms of running interest costs and greece, it is more sustainable in italy then portugal. there is no reason that germany should make money out of the greece situation. they may want to get their money back eventually. on a deal, they will be a big rally. i can see is getting involved. manus: thank you very much, alan. mark: in the middle east, iran is the focus because one of the nation's most outspoken critics is in the capital. the turkish president is visiting for high-level meetings following a war of words with the islamic republic. our bloomberg producer is in istanbul.
2:24 am
what triggered the tension between the two nations? simmons: the diplomat expect was triggered by the crisis in yemen and the president erdogan accused iran of seeking domination in the region. they are saying iran policy would make a turkey, saudi arabia and other gulf nations uncomfortable and this would not be tolerated. turkey, which is majority sunni muslin likes the saudi led operation against iran. the the came from hard-line conservative mps who wanted parliament to vote against the visit and demand it. their wishes to not become reality. geopolitical differences between turkey and iran do not end there. there at odds regarding the situation in syria. turkey is a staunch supporter of the rebels fighting to overthrow assad.
2:25 am
iran backs the regime. this complicates relations between them. mark: what could we expect realistically from this visit? simin: now, during the visit erdogan talked about bilateral relations with president rouhani. the two have strong economic ties. the sanction hit iran being the second largest gas supplier to turkey. they have been dependent on russia. cooperation on trade, health and transportation has also been discussed. this scheduled meeting comes on the heels of a landmark nuclear deal between iran and major world powers and the easing of sanctions on iran could lead to trade with neighbors. turkey is one of the nations
2:26 am
that stands to gain the most from iran rejoining the global economy. in january 2014, he visited the primus there. he is scheduled to meet the leader of the islamic revolution. we will be following developments from this story throughout the day. mark: separately, political tensions are running high in turkey. what is behind that? simin: in istanbul court, access to twitter, facebook for not removing images of someone that was taken and killed last week. facebook and twitter say they will repeal. these platforms are up and running right now. the ban is not in place of the moment. the government has placed several laws to tighten control over the internet since 2013 after hundreds of tape recordings allegedly showing corruption among politicians were posted on social media.
2:27 am
an interesting time in turkey ahead of the general election june 7. mark: thanks a lot, simin. caroline: in a moment, we will hear more about the debate for the future election. ♪ .
2:28 am
2:29 am
[office phone chatter] [frogs croaking] you know what, let me call you back. what are you doing?! [scream] [frogs croaking] [yelling and screaming] it's back! xfinity watchathon week. the biggest week in television history. it's your all-access binge-watching pass to tv's hottest shows, free with xfinity on demand. xfinity watchathon week. now through april 12th. perfect for people who really love tv.
2:30 am
mark: -- manus: welcome to "countdown." a variety of voices coming from the fed. the dollar, yesterday afternoon a couple of different voice. the new york federal reserve governor said would lift outcomes, it it will be shallow. the atlanta federal governor saying he is not convinced a slowdown is there. there's more of her action to anything else.
2:31 am
the dollar continues a little higher. ing, it is the most accurate foreign exchange forecaster we take a survey of at bloomberg. they say the dollar will continue. they specifically call that dollar in regard to the euro. they say parity will be hit by the middle of the year. a decent chunk of change. by the middle of 2015, 90 five cents. the market is basically quite subdued. the market should begin to sell volatility. that is what we are hearing. the aussies, they decided to leave rates at a record low of 2%. they did not cut the rate any further. what you have got is the aussie dollar was just that distance away from a six year low. just 1% away. back in 1977. we know the governor at the rba
2:32 am
wants to see it around $.75. that is the chosen level. the talk from the rba's they see further easing may be appropriate at a later date. the aussie dollar is up against all 31 major currencies out there. the dollars of a little bit. the aussie dollar climate a little bit. the indian rupee, the dollars higher. this what you are seeing there in the india rupee at the reserve bank of india leaves rates unchanged. caroline? caroline: thank you. a check on our other top stories. dire look at europe is paying off. the largest hedge fund cut 14% of this year. according to a person familiar fueled by a that against the euro.
2:33 am
the european commission is looking into information to determine whether to investigate the legality of bank underwriting. that was by portugal, spain, and italy according to "the financial times." a are looking at -- they're looking at a full investigation. and canada is selling its final stake in gm. $2.7 billion to goldman sachs group the prime minister is trying to take it from balancing the budget. and falling oil prices. the slump in crude has led canada's annual revenue to be $6 billion less than forecast by the budget office. you can find more on that story at mark: decision day for u.k. voters and the outcome is still anyone's guess according to the polls. it goes down to tax today. good morning. guest: good morning. the debate has been the economy
2:34 am
for a while. and particularly tax and we saw some spats between labour and the tories. it was featured yesterday by osborne and cameron being counted and tories only to benefit the richest. and the tories are saying labour is planning tax cuts. caroline: tony blair might be coming out today. he has tried to avert attention to eu referendum with the labour and the fact it will be more plain saying if labour has met the government because there wouldn't be any concerns going forward. it is about winning voters hearts and minds. svenja o'donnell: labour labour has been focusing on this referendum. mainly to deflect the criticism that the antibusiness party which is the view that many
2:35 am
senior business people held earlier this year and accusations against ed miliband. i think if you look at the polls, the eu doesn't come up as one of the main issues out there. the main issues -- the economy, nhs, immigration. as for labour, the referendum is their main purpose in a this. manus: after the debates in terms of popularity and look and feel and the power broker, where are we on data debate? svenja o'donnell: described as this election's nick clegg. it is a mixed bag. smp has been gaining strength since the referendum. their membership has more than tripled since scotland voted to
2:36 am
stay in the u.k. and he did extremely well in the debates. and in a walk about the next day. manus: it is presidential. svenja o'donnell: absolutely. she is a very good campaigner. she is a very good politician from labour is the party they can take as many as 50 seats from their current six. and that would be labour's presence. manus: always great to get your input. we will see you. [laughter] svenja o'donnell our politics reportedly mark: part chart. it is after the break -- our politics reporter. -- mark: it is time for bart chart. ♪
2:37 am
2:38 am
2:39 am
mark: time for bart chart. is the paneled suffering pre-election blues? with a month to go until the election, what a better time to look at sterling's performance for it shows volatility in the pound against the dollar. it is a measure of future price swings. last tuesday, look at the green circle. volatility rish a 3.5 year high. barely six weeks ago, the red circle, 7.1%. -- the volatility reached a 3.5
2:40 am
year high. the price swing and sterling against the dollar is on the -- of 16 major currencies. -- on the batch of 16 major currencies. this is the pound of versus a back at -- basket of nine other currencies known as the pound, bloomberg correlation weighted currency index. since reaching a 5.5 year high on march 10, that is the pink circle, the pound has fallen by 2.6%. march's 1.6 decline was the biggest since 2013. the reason why is the polls in the u.k. are still showing the two major parties are tied at about 35% of the vote of peas. not enough for an overall majority. that uncertainty means near-term
2:41 am
risk for sterling are to the downside according to the senior forex strategy. she said at the pound will fall to 1.42 by the end of the second quarter. after that, she said sterling will recover and economic news and the likelihood of the bank of england normalizing monetary policy support although currency. one is more bearish than the consensus. 1.47 is the median forecast of the strategists we surveyed for the end of the second quarter. the current quarter, the most bullish is 1.54 call. the most bearish is 1.37 forecast. do keep an eye on these two charts. pound volatility and sterling
2:42 am
versus the basket with the election only a month away. is the sterling suffering from pre-election blues? manus: minutes away from the start at european trade. with had -- we have had 4 days of bravery let's bring in david. great to have you. -- 4 days of break. daschle let's bring in david. the new york said said it will be a -- fed said the job numbers were shallow. 126,000. low rates forever. david: pretty much. isn't she lovely? she is talking deep talk. maybe we have to be patient and maybe i will not be patient. the fact remains she is known that this data is deteriorating. consumer confidence and all of
2:43 am
these things. i do not see any possibility of the rate rising. mark: many say the first quarter because of the weather could be the reason why the data has been weakened. some are saying that the data could be picked up. david buik: it could pick up. the fact remains web seen gdp down. the third quarter of 2014, it was 5%. galloping and making up for it the first of 2014. i would like to see it a bit more robust. we are going to select again. caroline: we have earnings season kicking off this week. and in general, it seems we're expecting quarters declining in profit. would you adhere to that? will see the profits decline? david buik: it will be down about 4.6%. in the united states, they
2:44 am
underplay expectations. i do not think they are going to be absolutely stellar. and i think i am much more interested when we get the banking figures. i think that will go was a proper guide as to how we will get on with the third quarter. this current quarter coming up. manus: yanis varoufakis has promised christine lagarde he will pay the bills. david buik: where's he going to get the money from? manus: i have a question for him. i will beast eking to him on thursday -- i will be speaking to him on thursday. a country going from week to week. david buik: i think you are being kind. it is day to day. the whole situation, a country that owes 240 billion euros and a country with 11 billion people.
2:45 am
i put it to you that hell has a better chance of freezing over it that greece either to service the debt or repaid. caroline: even if they push it into the future and pay much more interest? david buik: what i don't like at of moment is that we understand tsipras is having a chat with vlad russia and then china. a few assets to sell. which of they should've done in the previous five years and promised to do and never did. the fact remains if the european union once agrees to remain, swallow it -- wants greece to remain, swallow it. there is no doubt they cannot go on. everybody will lose credibility. mark: the bart chart showed volatility in the pound against the basket in the past month going to the different direction. more of the same for the next 30 days ahead of the election? david buik: our chief economist
2:46 am
called [indiscernible] he is much more calm. i am levitating because i do not like a volatility. i like certainty. i can go on and just for if we have a tory, i can adjust. this uncertainty just creates waves of what does business beel, what -- feel what does the outside world feel? we are not going to leave the european union. david cameron quite right will have a referendum but at the end of the day it will be too expensive. and the fact remains if he can renegotiate. i very much doubt. it exacerbates all of the problems the volatility with sterling. caroline: where do we go? what do we look at? david buik: all a question.
2:47 am
basically, the ftse 100 dollar-based earnings 60%. we are not going to go crash bounds. a very nice what we call conviction that came out on thursday. i will tell you some of the things they liked. from a tech company called focus right to viva to --ryan air. yes. bank of georgia. tons of them there. another one that has come in its natural oil and gas. there are good deals out there. don't throw the baby out with the bath water. exactly. manus: david, always good to have you with us. you can come back. david buik: let your heart. manus: jonathan ferro can have you. david buik. mark: fedex pushes into europe.
2:48 am
a deal to buy a dutch firm. we will break down the deal with fedex president. that is next. ♪
2:49 am
2:50 am
caroline: welcome to "countdown." we have news fedex will buy a dutch company. for almost 4.5 billion euros
2:51 am
free it pushes expansion into europe. we are joined by the president off fedex in europe, david. great to have you here. talk to me about the deal. your offering 33% premium. why does it make financial sense? david: i think it is a great deal. bringing together of 2 tremendous brands. it is 2 great cultures. the fedex business is known for quality. and that is very much of the reputation that the other company has as well. we think it's a good fit. we really believe it is the customers that will be the big winners out of this. bigger global network as we put to the 2 entities together. we will have the very highly reputation that tnt network
2:52 am
to align with what we operate and the tremendous business that fedex has been building in europe. we think it's a win-win for our customers. it will be good for employees in terms of creating opportunities and a good pressure. when win-win. caroline: what about cost savings? something tnt had promised. it is had 4 years of losses. what will you look for? david binks: there will be many opportunities as we move through the deal. it is important to remember that we do not expect the deal to finally close until the first half of 2016. we want to go to regulatory approvals. once we have done all of that, we think the scale that tnt has particularly in the european business will be a great opportunity for us to reduce some of cost. and we believe we have very complementary networks as well.
2:53 am
if you think about it, tnt has a reputation for being strong on the ground in a good reputation. we have a good reputation and in the air. we are strong in the u.s. and they are very strong in europe. and we think of those things suggest a very complementary and need to fit between 2 very good organizations. that's why we're making the announcement this morning. caroline: you're not worried about antitrust regulatory hurdles? david binks: well, actually, we think it will be good for competition. two very strong players and by putting tnt and fedex together we think we craig a strong third competitor -- create a stronger competitor and that's why wilco do we will get approval. caroline: talk to me about europe. your chief executive has been saying europe is where they're
2:54 am
looking into business for fedex. how much of sales and revenue do we want -- do you want to come from europe? david binks: we don't actually breakdown numbers on a regional level. we have a multibillion-dollar business already in europe that has been growing significantly over the past few years and we had a lot of great activity and great expansion in that european business. that has been very much in developing the express and air segment and that is why this such a great fit because tnt has been absolutely fabulous reputation on the ground. and a trucking side. very complementary and i think it will help us to build our european business. caroline bank great reputation on the ground but not for shareholders. 4 years of losses at tnt. what are the hard choices you have to make and turning the business around? david binks: when we get into
2:55 am
this, we will put together a whole integration team to work through the various steps and pointing to the strength of each organization and expertise of the 2 together. we think it will be positive. not just our employees, not just for customers, but ultimately a positive for shareholders at fedex as well. caroline: job losses? david binks: we have agreed that in the 2 organizations will work carefully together to make sure there are no significant redundancies associated with the program. it is more about creating opportunities for our employees through growing faster if we go forward. i think by bringing the 2 global networks together, it will be very positive and we expect further the growth out of the deal as we move forward. caroline: days, we wish you the best. breaking these 2 very known breast together.
2:56 am
david binks speaking live from amsterdam. 4.4 billion euro deal. they said is about bringing europe and the u.s. to get it for you to on the move." ♪
2:57 am
2:58 am
2:59 am
jon: good morning and a warm welcome to "on the move. we were not all on holiday. u.s. equity markets pushed higher even after some pretty ugly u.s. market data. the euro stoxx 50 and futures up 33 points. dax futures up by over a hundred points. fedex agrees to buy tnt express 44.5 billion euros. tnt shareholders will receive eight euros a share in cash a 33% rhenium.
3:00 am
the art -- premium. the rba does nothing. the aussie dollar surges higher. imf payments loom large. just two days until greece is scheduled to make a 450 million euro payment to the international monetary fund. the things we will be talking about ahead of the open. futures markets a little bit higher. we all get a higher open and with that is manus cranny. manus: the whole discussion is this -- the finance minister in greece going to the u.s. and ushering the imf that it will make -- assuring the imf that it will make its payment. it owes them another 9 billion. you what to make sure you are onside with the imf. everybody else can probably take a secondary po


info Stream Only

Uploaded by TV Archive on