Skip to main content

tv   Countdown  Bloomberg  September 2, 2015 1:00am-3:01am EDT

1:00 am
says thatder, a study only half the forecast of the china forecast continues. late ins trade higher the session, the head a world war ii military victory parade. check it out. a $6 billion deal for the south korean unit. >> welcome to countdown. i am guy johnson. >> i am and edwards. let's talk about the gdp number coming out half of what we would expect it. more china, negative news.
1:01 am
this is the most exposed economy. the slowdown, as we know, is all currency. guy: a proxy on the dollar taking a hammering of late. helping out the gdp story slowdown, this is happening another story. you wonder what it would be like. but the aussie dollar versus the u.s. dollar. we hit that down here, a fairly significant moment there. we popped up above the line now. but nevertheless, weakness continuing to be the scene. running through the currency, i want to show you what happened. you talked about the late turnaround in shanghai yesterday. stocks around the world got absolutely hammered. today, we are bouncing back. positive a much more session, this is the dow jones and the s&p 500. they will open up a little bit
1:02 am
stronger on the dow average, 1.4%. we will understand the european session in a bit. the: what is historically worst month of the year for trading. september is the worst month. and we saw those markets down more than 2% -- nearly 3% at some stages. technology, oil, banks -- all of those maple sectors falling. picking up on the weakness in china news, we will talk later the program how they are saying structural changes, the cut down on giftgiving by the chinese authorities. guy: and we will talk about abs olut vodka. a little early for a bloody is behind that.
1:03 am
he will join us at a: 30 a.m. u.k. time to talk about a business. anna: we will see him later again. and we will hear from the oil minister from iran. we have conversations, and it seems they want their market share back. that could make difficult lives for opec. guy: i later around for shanghai. what else is going on? let's go to juliet to find out. juliet: guy, things have been turning around. we saw the shanghai composite open at 5%. two hours 1%, still for the military commemoration. funding can stabilize this market, china wanting to put its
1:04 am
best face on for these events. we are seeing the turnarounds in hong kong, as well. the index now up half of 1%. the enterprise index, those would be the mainland shares owned by foreign investors, they hit a 17-month low. south korea also high, japan has been a standup today. we have comments coming through the japanese economy minister saying this is not what we saw in 1997 or in 2008, when lehman brothers collapsed. there has been positivity coming through, particularly some of the health-care stocks coming back in japan today, as well. australia looking better than it was earlier in the session, we are still seeing weakness from the commodity price. and of course the gdp figure as you mentioned, this is when the number came through. we saw that dip below 70 for the first time in six years. previous just
1:05 am
before the market opened, it could be resistance. sent u.s. that 70 level, and the aussie dollar is higher in the afternoon session. but we will be watching what happens in china very closely in the last couple of hours of trade. ahead of that two-day holiday. anna: juliet there in hong kong. let's focus on austria. the economy expanded last quarter and only have to paste that was forecasted. they show a meager 0.2% growth popped up why government and household spending. while they saw a slowdown on exports. paul allen is in sydney, he has more on the data. paul, we heard that the china story was disappointing. how disappointing are the results? paul: they were very disappointing. afterwards,r spoke
1:06 am
and he did his best to put a positive spin on it. it is difficult to do so. t2% is half of the wha market was exciting. back in 2011 was the first time quarter ofeported a contraction. this is the weakest quarter since then. and it gives as an annualized figure of 2%. this was in the bank of australia's range of expectation. but they were accused of a pessimistic government. is definitely a commodity story you are seeing there, both in price and volume. we saw that foreshadowed with the account blowout to $19 billion. as you say, it could've been a lot worse. public-sector consumption was up, milley thanks to the government ordering. speaking,ard joe putting a brave face on it.
1:07 am
saying we are not in a recession like the canadian. that seem to be the silver lining. can australia get around the problem, that is this weakening demand from china. drew went on to say he thinks australia is well-positioned to deal with any weakness in china. and again, he is taking a very careful approach. but he is not legally wrong, either. thes true that most of exports go to china. and the price of oil has been coming off heavily. but in the meantime, joe said the growth of the service industry has been encouraging. it was worth $60 billion at the end of 2014, and has now outstripped iron ore as an export in terms of value. and as the australian dollar falls, other sectors such as tourism and education pickup. so joe not completely wrong when he talks about the optimism.
1:08 am
but in the context of today's disappointing figures, it does look a lot like spend there. guy: thank you very much, andy. paul allen joining us from sydney. belowthe oil rig as did $45 a barrel. but that has not derailed iran's plan. elliott has more. good morning to you. in the exclusive interview, the oil minister talked about an million barrels a day. elliott: that is right. he wants to boost oil production, no matter what the cost is. he feels that the oil market share was stolen away by the sanctions that it has been under for the past two years. and once in market share back. and once it back fast. >> we are planning to increase production to half a million barrels a day. after four months, we plan to increase it another half a
1:09 am
million barrels. out at: iran is pumping million barrels a day. if you do the math, that makes 3.9 billion barrels. quotame context, opec's for the cartel is 30 million a day. it is pumping above that, and there are concerns that any additional production coming from iran would put further downward pressure on prices. guy: we saw these comments that opec wants to have talks to generate a fair price for the price of oil. it would be interesting to see how far that goes. how much of that is internal or external. wanted iran have to say about the subject? elliott: the oil minister responding to some speculation that drove that biggest three-day rally in 25 years in prices. speculation that opec would begin to cooperate
1:10 am
with nonmember cartel. to coordinating with others. but they will not be dictated to. and they will not wait for others to make a move on oil prices. whether they decide to cut or otherwise. and iran as we say was already pumping out 2.9 million barrels a day. the output is increasing at a faster pace, and as soon as those sanctions are lifted and the signs from the u.s. congress seem to be that it is headed in that direction, then the plan to ramp up production will happen as fast as possible. guy: thank you very much. joining us from tel aviv. anna: coming up, the rocket launch from kazakhstan is headed to the international space station. on board are a three-man crew and 20 lego figures. more on that later in the show.
1:11 am
guy: we will talk china and tough times in the u.s. market with a chief financial officer. joining us later on. gets a newxt, google look. we will show you the search giant's new logo and why they feel they need a facelift. guy: that is a twitter question. should google be rebranding? let us know what you think. join us on twitter. we will see you in a moment. @guyjohnsontv and @annaedwardsnews. ♪
1:12 am
1:13 am
1:14 am
guy: it is 6:14 in london. these are the stories you need to know this morning. grew australia's economy at have to pay forecasted. it marked a slowdown for the first three months, when gdp extended by 0.9%. a slowdown in exports to keep trading partner china weighed on
1:15 am
australia's economy. the government's household spending is helping to keep the number above zero. barrel, theow the government fought out today, and the biggest independent oil player says it will remain below $40 for the next year. tesco is said to be nearing an agreement to sell its south korean unit four $6 billion, including debt. a group led by certain partners one exclusive rights, that is according to people with knowledge of the deal. it is korea's largest overseas market and more than 6 million customers a week. in terms of market updates, we also see the a'sian session turning around. shanghai is beginning to fade.
1:16 am
anna: just as a look that the markets woodhead towards positive territory, they tended to do that. guy: there has been speculation that maybe some involvement by authorities in forcing that. anna: we are heading to parades marking the end of world war ii, and that has led that speculation. just as things are positive, we see the shanghai composite down. things are a little choppy again. decided to alter its iconic logo. why is doing this, let's find out. caroline hyde is here with more. give us a history, why they're doing this. caroline: this is the biggest change since 1999, when it cleaned up the logo. the 14 colors. sayingt that is actually is the color of the same. but what is changing is the
1:17 am
font, it is sands serif. to keep the font size simpler, they can be there for scaled-down to smaller sizes. bandwidther connection. it can save and fit on your smart watch, mobile device, they're changing to adapt. not only as a search engine, but all of the progress. bye-bye the little icon, hello capital g in colors. that is something that can ring through the various apps and products that they give us, as ittle colorful dots that move around. that is maybe showing you how to use google, even if you are using a colorful work phone. they want you to use it when you're typing, but also when you are speaking. the reason they are changing is to make it easier to use, lower bandwidth when they ask for
1:18 am
broadband in india. it is growing nationally, but scaling down to smaller devices. anna: how do they get to this? caroline: i am told a lot of money. hundreds of people involved, as well. they call it a sprint -- tech jargon for very intense work. they kicked off earlier in new york, the brought in hundreds of designers to start capitalizing this sort of change. it was a week-long sprint they say. interestingly, a came just after their major restructuring as a corporation. member, they now have a parent company -- out of it. the new logo is rather similar to out for that. so you are making a parent company, and one that we will interact with on a daily races, far more intimate and seamless. and i think generally this is going to be what hundreds of
1:19 am
as not theiree first change in 17 years, serving other last. it is her most major change since 1999. the new way you are using google, all of the various apps and devices, and being able to used in lower bandwidth. guy: leaders of europe's tops banks are gathering in frankfurt for the banks in transition conference. the event which will last for a couple of days will focus on changes within the banking industry. there have been plenty. hans nichols is here to runs us through. well, guy, banks in transition would be one way to translate. there is a sense of great transition, how they make the bridge to digitization, sort of figuring out what what to do with regulated.
1:20 am
the german finance minister has written introductory remarks welcoming everyone here. all of these bankers coming from holiday, here is what they're learning, he is talking about greater integration with the n.rket unio is talking about concerns with shadow banking, which he says is a force of the overall system. he is warning of old risk, we know what they are. high debt payments, but we are talking about new risks -- millie the effects and what will happen with this low interest rate environment. what that will do to bank profitability. there is a great deal of queasiness. your about angela merkel talk about there was no guarantee to the industrial engine of germany would make the transition if they do not have a strong digital component. the digitization is a key component here. we have some great interviews coming up. it is a full schedule speaking your.
1:21 am
we will have the outgoing coo of deutsche bank, how they made the transition. they talk the conversation here. we also have axl weber. he will be speaking with mr. and what you're really saying here is a partnership. you are seeing a lot of the regulators, at least a lot of the officials from the government, try to ease the transition for banks. keeping them competitive but also keeping them solvent. guy, i know this looks like a boring conference from behind me. it will be full with german bankers back from holiday discussing what is next. discussing how they will return to profitability and help the german economy grow for the rest of this year and next year, and figuring out china. guy: great stuff, thank you very much. look forward to it. hans nichols joining us in frankfurt.
1:22 am
anna: i think he is talking himself. not that he wears makeup, of course. we are in a week when central banking is the focus. our next guest seems to think that the dollar will continue. good morning, hans. let's talk about your view on the dollar. you think that the bull market is not yet done. we are presenting this mid-2012 should be some in like 50%. and so we have already more than aboutt is not undervaluation as it used to be. it is now about return differentials. capacity, youhis have too much debt and emerging
1:23 am
markets. that culmination is going to lead to a deleveraging in that place. firmou have relative expectations on returns in the united states and in core economies. this return divergence is going to leave the capital showing. outflowss the capital out of the emerging markets, but you have the question from where does the inflow come 10 years ago? that came out of dollars. so the repopulation into the dollar is alive and kicking. and i think that will continue. now there will be of course traders in the trend. and that means within the uptrend here, cups and down. you have to think about what will happen the next few days. we have two key events, number one we have the european central bank. number two is the payroll reform. i think the european central bank will consider what is
1:24 am
happening to the euro. but does not, i can predict that under those circumstances a goes on autopilot. it moves higher because of commercial demand, which is quite strong because of the trade surplus in the current economy. purposes,nding emerging markets our problematic. on the payroll report from friday, i think it will be positive for risk. if you look to the payroll report as increasing the risk,hood of the negative and next year the central bank would not have exited with a decisive voice trying to reduce. under those circumstances, here at dollar could go up. that actually means you need to diverge between the commodity blocks. it was below 70, and there is
1:25 am
ies that could be supported. guy: this is a correlation between the dollar and the eu interest rate. you have been alluding to that. it happens thursday. you talk about policy looking forward, is that what we should be focusing on? is it about interest-rate differential? what are the mechanics of this? hans: they are part of the story, but the most important thing you have to consider is a trade surplus. the trade surplus in europe is increasing, it is now beyond 2%. on that point, you have commercial needs to buy euros what are the circumstance. so you need to buy euros. and you need to have flows which need to overwhelm the commercial by need to get down. that is where the interest rate differential comes down, as the swap differential comes in. it tells you that there is no
1:26 am
charm, that you will see the euro being used for funding purposes. under those circumstances, it goes up. therefore, it is relevant. but it is one of the factors. anna: is the fed worried about the dollar strength against the euro? or is it weighted against the currencies, you have been suggested they might not tells the same thing as the year goes on. hans: i think they're looking on the broader index. that actually supports my view. so we need to look into how we are saying that there is going to be dollar strength. but we have the fed saying they would not be ambitious. a year ago, they were saying it is going to be mark. mark became june, june become september. we are now closer to what morgan stanley thinks. it is always going to be in december. we stick to that view. they are hiking rates. but it will be relative part to the interest rate.
1:27 am
anna: thank you very much. hans whitaker. guy: netflix tries his hand in asia. that story when we come back. ♪
1:28 am
1:29 am
1:30 am
anna: welcome back. have passed 6:00 in london. have to paste forecasted, it marks a slowdown for the first three months when gdp expanded by 0.9%. a slowdown in exports with china of course weighing on australia's economy. isre government spending helping to get the number above zero. anna: china stocks rose towards the end of the trading day. loss, that islier most recent trading i should say. shanghai composite is down around half a percent in the special today.
1:31 am
it is the biggest rebound in six years. you may not think these things matter, but they do. sameatures the watercolors, but the original thought has changed. it was designed for a single desktop browser. it is meant to now work across mobile devices and of course watches. the redesign follows an even bigger shift in the corporate structure. with a new parent company taking the name alphabet. netflix launches in japan. at the start of an ambitious plan to reach a wider audience in asia, the success of far has been coming of a phenomenon. most of its users are from the united states. caroline hyde has the details. japan has been a tough nut to crack. what are the prospects for netflix in japan? caroline: it is trying to take on the new market. but it is interesting that the first foray into asia -- using
1:32 am
japan is a sounding board of how to get into the likes of china, a much bigger market. but they are launching in japan today overall. the instructor resorting there. i have access to broadband in most of the homes when you look across japan. more broadband houses than any other market, apart from the united states that netflix's guardian. and of course mobile devices, rebut he has those. that is why they go there first. this is about rebuilding the injector he across the board. remember, big ambitions by reed hastings, the chief executive. the arty have millions of subscribers. they want to roll out in 150 countries of the in 2016. africa, asia, eastern europe, the middle east. this is how they start to get
1:33 am
into asia, it is a road test. to find doing a lot where the asian user is. it is a challenge. the culture at the moment is not paying for content. le use oneese peopo of the seven free broadcast networks. they prerecord the ones he might miss. so trying to change the way people use it, only 30% of japanese households subscribe to paid tv. just 30%, compared that to 85%. this is of course one of the widest, most prevalent sellers of mobile phones, and they have struck a deeaal. that is going to become preinstalled in your mobile device if you buy after october. and there is going to be a real push in terms of marketing. they have one of the key players in japan already.
1:34 am
and they will be offering local content them up to 40%. other countries offer 10%. they will ramp that up. they have to show in japan similar to mtv. it is trying to woo the japanese user. anna: amazon is quick to start in japan. caroline: that is what is going to be interesting. let's look at the challenges going on. there is a bit of a war. amazon offering not only in japan, but content off-line to prime users. this is why we saw netflix yesterday dropped more than 6% in after-hours trading. amazone prime users of being able to use it off-line. keyalso apple, this is a one. suddenly getting in on the act. we understand according to people familiar they are in
1:35 am
talks about six was a content. suddenly the wealthiest provider of content is a maker of content, as well. the premium content could be for its live tv service. they're planning. that is something we understand is in the service. we understand they are unveiling not only the new iphone but perhaps an updated apple tv. what is the news on apple in terms of the tv service, and what about this it was a content? it is ripping a page out of the netflix book, get original content -- house of cards and the like. usersddenly you get new to do just to be going forward. anna: caroline hyde there. guy: let's stay in asia. a group is nearing an agreement $6buy teco for million. we knew they were getting
1:36 am
out. the question is why? they would have to cut back at home. i guess that is the reason. secondly, south korea is actually a tough market to be in. it is very competitive. and the government want to protect the local mom and pop shop. they also restrict the retail , theirlike tesco operating hours. it is a very tough market to be in. loss ino is recording a the south korean markets. it was a good deal to get out of the market. anna: how would you describe the bidding process? really, because of the antitrust laws in south korea, actually a lot of tesco they weres --
1:37 am
restrained from bidding. so this remains essentially a race between the private equity players. but it has been pretty intense. so far, this is the biggest sale from korea until today. anna: reporting there for us from hong kong. guy: let's bring hans back in. strategyd of global fx at morgan stanley. getting out of south korea at a point when all the markets in that part of the world are under pressure. can you walk me through how long it will take to fully understand the implications of the chinese violation? whether another japanese respond? how does the mechanics work in this one? hans: first of all i would say that the chinese evaluation, how you call it the evaluation,
1:38 am
there can deliver lies the market. at one time, it was just an adjustment. that is the really big issue. the big issue in asia is you have seen many of these economies developing overcapacity. they are now trying to utilize this capacity. tryhen you do that, and you to cut prices, you have to seek demand from elsewhere -- what we are seeing in the vote, those potentials are declining. look at the united states. the fed is suggesting that the growth potential maybe at 1.6%. the question there is how do you utilize overcapacity when your main client base is no longer having the growth potential to create the demand? so that actually means that efforts are on the risk of depreciation, if you do not find other ways of utilizing it. we have seen since
1:39 am
, an increase in private debt in the region. when you look at debt increases globally, and you see that in our world it has been mainly government sectors increasing in asia, it has been the private sector doing that. they were pumping this into housing or into production capacity. now when you have these two forces, declining returns on investment because you over invested, at the same time the cost of funding may increase because the fed may hike interest rates. they are estimating that the policy locally and asia is bigger than central-bank licy locally. the combination of low return high funding is going to force you into the leverage. you to going to force
1:40 am
increase local savings. savings,ot take those you have currency weakness link to that. and that is what we are seeing. we think that the region's want to be in an environment where currencies are going to depreciate, and central banks will have to ease. and monetary stuff is when be big. that could lead to a situation in korea, that an aggressive monetary easing will be good for assets. so we could see something like in japan. for that, however, the central bank has to address. anna: for the reasons you just described, it would make sense that the end of this week they would be talking about currency weakness,, the ris of currency wars. you talk about this before. article outis an there in japanese only. \ i learned that only because i have japanese college.
1:41 am
that can sometimes be handy. [laughter] i am suggesting that the upcoming g 20 meeting will trigger in the long form the differential between the asian environment, the underperforming environment. term, this could increase momentum of the fed hiking early. how can we quarter make monetary policy? at there, i think december meeting of the g20, i think december might be called out. we might have to wait for higher interest rates. guy: because of the fact the fed feels it has to coordinate. hans: the fed has become so much more international in the past couple of years. i give you one example. there talking about 2014,
1:42 am
jackson hole. gentlemen making impressive speeches. 2013verybody in august thought that september would start to taper. guy: if they listened to the mexicans. hans: we have to understand the assets of global currency. note08 and 2009, they had choice but to make monetary policy for america. loose for thetoo reference currency, those areas where there was a huge influence of monetary policy on local monetary policy. so another words, the asians e becauseing too loos america had to. at this point, inflation is at 1.2%. it is not 2%. you can buy time if you want.
1:43 am
anna: thank you very much. a fascinating conversation. global strategy at morgan stanley. guy: we will talk about numbers and improving the brand. he will be joining us at 7:30 london time. rockets,m planes to the rocket launch from context kazakhstan. ♪
1:44 am
1:45 am
1:46 am
guy: 6:46 in london. good morning. these are the stories you know. anna: australia's economy grew by 0.2%, have paste it was forecasted. slowdown inr
1:47 am
exports to key trading partners in china, and household spending helped to keep the number above zero. guy: oil has continued to slide, $50 below a barrel. the u.s. government report is out today. it is likely to show that supplies rose last week. one of the world's biggest independent oil traders now says between 40-60ong well next year. anna: the question around the u.k. membership is to be changed. the government has accepted a recommendation by the country's election watchdog. that could have led to a ideaption, and change the that the united kingdom should leave the european union. ofy will vote before the end 2017.
1:48 am
guy: one of my favorite stories of the mowing. thead a danish astronaut, off thetronaut who set international space station aboard the sawyer rocket. toys in hisous hand. anna: what would you take if you are making your country's first-ever trip? badge thataring the belongs to the mission. and space.irst dane a space viking. that is what they call him. kazakhstan, apparently, he is taking personal flags and 20 mini lego figures. that isin kazakhstan,
1:49 am
gegarin took off. a lot of traditions they have to follow, so they all plant trees before they leave the awestruck's. astronauts. this is what they wanted. all astronauts watch this. there have been hundreds of live dos from this location. since 1961, the tradition extends even when they go to the bathroom before the kickoff. guy: the launch vehicle? anna: something like that. for surely, we do not have footage of that. but we do have the spectacular pictures coming from kazakhstan. the 10-day mission will be heading for the international space station. he spends eight days there, delivering a rocket.
1:50 am
it takes one and comes back in a different one. guy: not the first lego and space. anna: not sure if that is on the mind of john goodwin who will be talking about a complete the separate subject. he will be talking about the company earnings. guy: vikings in space. let's take a look at the top stories on pete joins us with a pick from the business site. we have been watching the chinese market very carefully. there was an earlier rally. and people are speculating there may be some pr spin. indeed, there is the belief it is going up ahead of the big parade tomorrow. it is the biggest since 2008 after the beijing olympics. and it marks the 70th anniversary of the end of the second world war. the day that china was over
1:51 am
japan, a big parade, 12,000 troops. 200 planes and around 12,000 factories have also been shut to reduce smog. anna: they want to keep the skies clear. they have ordered a blue sky. >> also, they do not want to put dirt in the air. to try to get rid of birds, is a danger with aircraft flying overhead. but again, i key interesting point is if you look at defense spending in china, relative to gdp it is rising up so much now. this could be pressure for the u.s. to reduce. guy: the shanghai composite is now a negative territory. i'm putting it out there. a commande may have economy, but they cannot achieve everything. anna: it is only 6:51. they're still time. this is about friendly hacking.
1:52 am
pete: banks are not always willing to talk about this. it is becoming an increasingly damaging issue for them. barclays is telling us about their so-called red team. they have this former policeman, former spies, and computer experts all trying to hack internally to find the flaws before thieves do. guy: that is what i would do. thank you for letting us know what is going on. hans, let me take you back to the chinese story. how much more do you think the chinese authorities have in the total bag to stabilize, to keep the stock market doing what they want to do? hans: i think that if micro stimulus is likely. i think it is a culmination between quitting the re
1:53 am
serve requirement. that combined that with a fiscal push, it is accommodation all that. why is it required? when you have very low returns on investments, and you go by monetary policy, then monetary policy alone may not do the trick. what you need to do is at least temporarily pushed a return. the fiscal policy has to return. that could come as a surprise to the market. now we have to think about the timing of this. right? when they are taking liberalization methods, they are telling us that this is would be a one-time push lower. and not that many were believing them. so there was continued pressure on the currency, and continued efforts to stabilize it. potentially as well as the use of reserves. forou get there next week
1:54 am
the month of august, which is going to be a very important highlight. if the currency would be stabilized at this level, we have now seen an increase of the transaction costs. that should take some of the momentum out. this will stabilize, and give us time to think about the macro response. so than the market should be looking in that direction. how would i trade that? super bearishen on the us trillion dollar for a long time. anything that will test us in is actuallyment, 69 our short-term target. at 69, i think it is time to take profit on that and wait for the chinese response. and the chinese response should have a positive impact on the risk of appetite locally and globally. going to be enough question mark that remains to be
1:55 am
seen. something is in the making, people should watch out. anna: what about what they do with the currency? you mentioned the moves to stabilize, but what we saw on august 11, was that a one off? hans: what i never understand is the housing market can againstvely speculate the central bank, which has 3.6 trillion and currency reserves? so that actually means for the this is in our care. if they want to have a stable exchange rate, they get that. so there is a cost with that. you need to spend reserves. but if they are successful in stabilizing the trade, i think that the macro package will be the next thing we need to look into. that could have an implication on on how in the short-term commodities are going to trade, how equity markets are going to trade.
1:56 am
risk elements are going to trade , as well as what those will do to the fed. what will happen there? guy: what you are telling me basically is that the move towards a free-floating currency to greet this impression that should be part of the fdr is a bit of a mess. it is effectively a controlled process. hansl: to be perfectly clear, a dollar-picked environment, there was no volatility report 10-15 years. now you have more flexibility, you run the release of volatility. guy: it needs to be managed. hans: so when you go into a more flexible it he regime, you need to manage the volatility threat. anna: i say flexibility. [laughter] hans think you very much.
1:57 am
steve, thank you for sharing the stories is morning. guy: when we come back we will update you on how we think the european markets will be opening. we'll be talking to various people. we will see you in just a moment. ♪ we live in a pick and choose world.
1:58 am
1:59 am
choose, choose, choose. but at bedtime? ...why settle for this? enter sleep number... right now all beds are on sale. sleepiq technology tells you how well you slept and what adjustments you can make. you like the bed soft. he's more hardcore. so your sleep goes from good to great to wow! only at a sleep number store. time is now for the biggest sale of the year, where all beds are on sale. save 50% on the labor day limited edition bed. know better sleep with sleep number.
2:00 am
guy: australian gdp react. stocks decline for third day ahead of a world war ii military victory parade. a $6 billion deal to sell the south korean unit. welcome to "countdown." got another clue in the form of gdp data out of australia.
2:01 am
it is estimated to be. touch below it earlier on. shortg us a moment ago is the target. maybe for a little more weakness. let's show you what has been going on in terms of the u.s. close which was a fairly soft one yesterday. anna: a weak start for the u.s. market picking up on that data. these are the numbers by the close. are we going to put a floor thinks this morning? guy: let me show you a few figures. the fix is where the u.s. market will open. this is the fair value number. a positive 1% open. these are the early indications we are getting the ftse up i .3 of 1%. this time yesterday that was
2:02 am
-2%. a little stabilization may be beginning to come through this wednesday morning. we will continue to monitor that as we work our way through the open and 58 minutes time. volatility in the oil prices. these will be features of the conversations this morning. to -- aboutpeaking how this business which is so exposed to china and dealing aroundtroubled situation the vodka brand. we will talk about how the chinese story is developing. guy: kenny jacobs is the chief marketing officer. we will get his take on with the august figures look like for writer. he will be joining us at 8:30 a.m. u.k. time. oil very much the topic of
2:03 am
conversation with the iranian oil minister. we have some sound for you. an exclusive innovation -- conversation with bloomberg. will that create headaches as opec tries to put a floor under the oil price? birds have been banned above the chinese capital but can they keep the market rosy? hour before the shanghai market closes. the shanghai composite up and down by almost 5%. then we saw some buying coming through. rosie were looking really in hour ago. there was speculation and trying
2:04 am
to stabilize and shore up this market. the sellers are winning out in the last hour of trade. the markets have pulled back a little. the nikkei reversing its earlier gains. it has -- was having a pretty good gain. closed by almost half of 1%. had quite a lot of pressure coming through. the is the picture of regional benchmark index which
2:05 am
was all green. oil and gas stocks leaning the declines. also industrial stocks coming under pressure but there is a bit of a flat. and having a look at some of the actual movers in the region. we have seen some support coming through from some of the key players in the regional benchmark index. toyota was higher and samsung and korea and taiwan semiconductor. the material stocks and the oil stocks coming under a lot of pressure. these are some of the big aims and australia. hp billiton down. and falling significantly on that oil price. even gold stocks, normally a safe haven coming under pressure today. things are turning around and late afternoon asian trade. looking like we are seeing more weakness close out the day today . for the second day of september, yesterday was not a great start
2:06 am
to the new trading month. more news coming from the retail space this time in the form of asos. caroline hyde has the details. caroline: this is the largest online only retailer here in the u.k. but it is now international. it was aimed at the twentysomethings in the chief executive is stepping down. this is something that was reported i sky yesterday. after 15 years the founder of the company robertson, we had him on the show many a time is to stand down a ceo and is to remain with the company as a nonexecutive director. the board has announced another to take the helm. he will become ceo in the succession from nick robertson and the changes take effect immediately. it had been reported by other services that this would happen
2:07 am
in the next few months but it is happening immediately. the new man at the helm joined in april of 20 -- 2009. he was due to be cfo. this is a company always trying to innovate. and trying to find ways in which we can sell to the younger generation. just have a look at this chart because it has been a rocky ride for nick robertson. again have surged december of 2013. slope.been the slippery people questioning the growth of its overalland reliance on few actual areas that they produce the close in. places they are able to deliver from. this is a key issue for the company. how can they diversify and keep up with the growth rates may had built-in.
2:08 am
the new chief executive takes the helm. back to you. ryanair's numbers. we will be talking to the chief marketing officer later on. show 0.2%figures growth prompted by government and household spending. the slowdown in china weighs on exports. in mcdonald is live in sydney. theppointing results for australian economy. ian: that is right. it was only half of what was expected. economists were looking for is a .4% increase. after a zero point 9% rise. it was a weak result. the quality of the result was not good.
2:09 am
that is not something that will last. government is doing a lot to rein in budget deficits so they're trying to reduce spending rather than increase it. they all important investment in the private sector is not coming through yet. we're not saying much of an increase. that is what the central bank in four. the key's talk about events. the ecb and the payrolls. when you look at how those two stories are going to relate to each other and how the various policy responses are likely to be [inaudible] let's start off with the ecb. should we be starting to anticipate that mario draghi will be talking about a dovish
2:10 am
start being adopted by the governing council? >> the talk is going to be dovish and the reason why that is likely to happen is the inflation expectations component , that was declining quite sharply. that is driven by commodity prices. prices stay low -- that could have severe economic implications. the lower expectations are the less likelihood that you have monetary velocity to keep up the pace. a central banker needs to be worried about that. the further that interpretation of inflation expectation is a key element in the way they are interpreting monetary policy.
2:11 am
the second point is on the fed, here we have a tightening of financial conditions. the dollar is higher. the bond market. the 10 year on market is trading there where the equity market was when it was trading close to a tide. the bond yield has not really come down appropriately. tothe fed would continue leave the impression that it has -- it will hike interest rates and potentially it is a rate hike cycle, under those circumstances i think that you will have continued capital outflows from emerging markets which are going to tighten financial conditions and the united states further. i think that the central bank will take that into consideration. banks will have to
2:12 am
worry. they have different impacts. the moves we have seen in energy prices have been quite staggering. more than 25% in three days and then returning again. this needs to stabilize to get a firm grasp of where we are heading next. >> absolutely. volatility is never a good thing. what we have seen in the commodity market -- you have the the imm positioning so markets [inaudible] this is being squeezed out of the market and it has been done in a very brutal way. a significant decline in oil prices. this morning it continues to happen. we need to watch the supply side of the oil market and that it is a real worry.
2:13 am
i was talking about overcapacity in the case of emerging market economies. the overcapacity is very well supported in the oil market and the commodity market generally and you have seen the australian data. in australia there is significant overcapacity in iron ore and coal production and that has an impact on mining investment. that is the reason why gdp numbers are surprising on the negative side. anna: great to see you this morning. guy: rebranding ryanair. we will talk the traffic numbers and improving the brand with the chief officer kenny jacobs. anna: but first we talked china. joining us on set in just a few minutes. stay here with "countdown." ♪
2:14 am
2:15 am
2:16 am
2:17 am
guy: it's 7:16 a.m. in london. these of the stories you need to know this morning. anna: the economy grew at half the pace as forecast. gdp expanded by 0.9%. the slowdown in exports. government and household spending helping keep the number of us -- above zero. the u.s. government report out likely to show that inventories rose last week. the world's used independent oil traders said crude is remaining in a trading range between $40 and $60 into next year. anna: tesco is nearing an agreement to sell it south korean unit for $6 billion. a group led by indicate partners has one exclusive rates --
2:18 am
rights to negotiate with tesco. korea is tesco's largest overseas market. and more than 6 million customers a week. guy: the world's second-largest wine and spirits company has been weighed down by a crackdown on lavish spending by china. the chinese authorities and is oluting to reboot its abs brand in the united states. the cfo joins us now. nice to see you. good morning. we are accessed with china at the moment. it is the only story that everyone is talking about. you have a footprint that spans the world. can you give us a sense of what the recent turbulence we have seen in china from an economic point of view means for business like yours? china is the number two market. last year we decreased by 2%.
2:19 am
before we were down 23%. we strongly improved and gained market share. that was softer on the back of the macro economic consideration of the chinese economy. there are still some uncertainties on the pace. anna: and the things that were affecting you in china come in two different guises. change,ctural authorities cutting back on giftgiving, clamping down on corruption. that is the structural change in than the cyclical environment. the changingh with start, and we need to focus on the cyclicality of the business? guest: i think it is still there
2:20 am
but the business has been reduced. we are list -- less exposed to the traditional channels which molding.we are what is making the business softer is the global outlooks and macroeconomic environments. the china of the future [inaudible] as opposed to just prestige brands. -- we focus on new brands. we have new channels to [indiscernible] anna: the premium is more premium than prestige. guest: that means less than prestige. more forward we will sell noblige. bleu.t only cordon
2:21 am
guy: we had an interesting piece on our website talking about the reboot of absolut. absolut was an incredibly cool brand. sales storyseen the coming down. you have taken it down in terms of the value. what do you do to get it back on track? u.s. the first is in the good growth everywhere and he represents more than 60% of the volumes. in the last two years the performance and the u.s. has been disappointing. a strong ongoing plan to boost the brand again. to stabilize the brand mid term. it was about the commercial policy.
2:22 am
we will be more audacious and innovation. we launched the superpremium absolut. have aeve that we history. we have roots. a very strong quality of product . it is up to us to do a good job. if you want an authentic product. anna: you're trying to stress the craft that goes into producing absolut. tell me about the shift we are drinks,oward craft craft spirits, craft beer. is this something that is here to stay, is this something that you are reorient hitting your business around? want athe new consumers
2:23 am
differentiation. they want authenticity. is full-- our portfolio of brands that have authenticity. not one thing brands. that is part of the problem. guest: jamison is doing quite well. big brands can still be very strong. it is important for us to make sure that we are not too conservative on our brands, that we bring some newness to the brand, being loyal to the and innovation has to be growing . that is part of the strategy there. ned cash flow is strong but head and some of the ratios are high. does one offset the other? in dollar.debt is
2:24 am
cash flow was strong and i think that -- we kept the leveraging the company and we still do that. it is a transparent -- transition impact on the debt. otherwise it would have done -- down. anna: do you have concerns about the economy broader than china? are you concerned about talk of weakness in emerging market currencies? if it starts to impact on the global economy more broadly, is that something that concerns you? guest: as a global company we look at what happens everywhere in the world. the on the chinese market has marketsome weaknesses in currencies. that said, we remain confident that we can keep improving. .e can do a better performance
2:25 am
we see some signs of recovery. spain last year for the first year since 2008 was back to gross. it is an important market. india is growing at a faster rate. we have the leader there. there are many important markets and good prospects going forward. guy: how much does it cost to ship a bottle of vodka around the world? a bottle is a pretty heavy thing. does it make a difference, does that factor into your thinking? guest: they decrease of oil prices is good news to the input costs but i would not overplay that. impact.t a significant >> the world seems to be -- all the norms that we had over the oil prices,rs, high
2:26 am
strong china, all of these things seem to be moving. when you sit down and tried to build a model for the business, you try to anticipate what is going to happen, how hard is it, how much volatility do you need to build in? guest: we try to look at the long-term. we have monitored the strategy and looking at the long-term. keeping investment up consistently year after year. beyond the shortened activity. there are some uncertainties. the long-term is clear. we want to be the leader in that industry. we want to be strong in the u.s. and in emerging markets. we're confident that either there are good cycles and less good cycles, the long-term is positive. usa: thank you for joining this morning. we have a potential korean
2:27 am
exit for tesco and it is chained to the top of a sauce -- asos. we will update you when we come back. ♪
2:28 am
2:29 am
2:30 am
guy: it is 7:30 a.m. in london. 8:30 a.m. in frankfurt. anna: australia's economy grew by 0.2% last, have a case that was folk -- forecast area -- half the forecasted rate. household spending helping to keep the number above zero. guy: investors gauge the level of [no audio] the shanghai composite has extended its biggest two-month loss since 2008.
2:31 am
anna: the wording of the question in the uk's referendum on european union membership is to be changed. the government has accepted a recommendation by the election lot -- watchdog. question changing the to should the united kingdom remain a member or leave the european union? they are to vote before the end of 2015. it together and figure out how the asians russian is coming to a close. reporter: a turnaround in china. the shanghai composite was up by almost 1%. in the last half hour we are seeing it down by one point 1% ahead of the two-day public holiday that you mentioned to commemorate the end of world war ii where markets will be closed read we were expecting there could be a little bit of buying
2:32 am
coming through and there was some speculation earlier but the sellers have one out. also on the a shares and here in hong kong. a 17 monthng is at low. also a bit of a mixed picture around the region. we have had some solid eying and some of the markets. south korea closing quite flat. the nikkei was doing well but it looks like it has extended. the broader market had a terrible august and more selling coming through. some of the look at movers in the asian region. we saw bhp billiton care back some of its earlier losses losing pretty flat in australia. see thenteresting to gold stocks coming under some selling pressure. and a quick look at the currencies. we have seen the aussie dollar slide at one point hitting below
2:33 am
17 u.s. cents for the first time in six years. a little bit higher in the afternoon session. and malaysia's currency falling. guy: we are 27 minutes to the start of the european session. we will show you what the start of that trade will look like. stocks -- the euro eurostoxx up. it was a sea of red yesterday. u.s. futures, that is the fair value there. 1.2% for the dow and the s&p. the number could change a lot more. quite a way to go before wall street opens. a positive open predicted in europe. anna: ryanair has released
2:34 am
figures showing growth. with us now to talk about the others, the rebrand and matters besides, the chief marketing officer. thank you for coming in. through august. give us your take on where we are right now. how does the business look toward the end of the year? load factor is up and we were at over 90% of punctuality. that rounds up a strong summer. we have carried over 13 million customers. the growth of low fares continues across europe. we have had a strong summer. our customers are loving the changes they are getting always and they are always getting a better program.
2:35 am
business travelers are choosing ryanair and other low-cost airlines more and more every single year. you look at the primary airports in the improvements we're making and especially the improvements in the actual service and a lot of ceos and cfos are encouraging their employees to travel to choose low cost airlines. anna: it might be responding to the change in the branding. how far through the transition are we? there is still an boost to come from that rebranding exercise. is that all to come or is that in the past? nessy: there is a relentless to ryanair. we are two years into the always getting program. we have had a huge amount of improvements. we are flying for more primary airports and keeping costs down and keeping fares down. the fares are down and we are expecting a price war which will push fares even further down.
2:36 am
it is great for customers and great for shareholders but it is focusing on that relentless improvement of the experience and great innovation. anna: has it reached every single bit of the is this? the approach was prevalent for so long, it takes a long time to change that kind of culture. they: this is still part of culture. to have a smile on your face and focus on the customer and give them a better experience. it is a lean machine. we are very efficient. it is a great example of a business that has delivered on the changes we said we would. -- newu have good aircraft coming. you talked about the price war it will be part and parcel over the winter. how much capacity will be coming on, how much pressure do you think that will put on yields. give us the overall picture. kenny: we are guiding that and we expect fares in the second half of the year could come down -8%.
2:37 am
that is very aggressive tracing this coming winter. we say bring it on. we would welcome a price war this coming winter. that is great for consumers. we will take market share from legacy carriers and other low-cost airlines. anna: why the need for an even more intensive price for this time? kenny: there is the capacity, because there is cheaper fuel available to all airlines. some of them will be passing that benefit on to their customers. we have been passing that on. anna: you talked about some of the legacy carriers. which one should be quaking in their boots, where do you go with the price war next? have notthe carriers had to wake up and acknowledge low-cost airlines? kenny: we have created a model that works and has always worked in secondary airports in the
2:38 am
peak summer season but we have a model that reflects throughout the full year and flies toward more primary airports. go from 5% market share to 15% to 20% market share. it will be a tough winter and a tough number of years for lufthansa in germany. you can see it across the european networks. they love lower fares and the improved experience. guy: how are you going to work traffic?larger how does the conversation start, when you talk about this, what do you say to them? kenny: they are very much the ones initiating these conversations. they want to focus on long-haul data. they know that we connect more european destinations than any other airline. they would love our customers and they would love our network across europe that can bring
2:39 am
them customers to fly long-haul. it is something they are pursuing because they see it as a natural development and we see it as a natural development in the market. guy: why do they need their own short-haul? kenny: some of them, what you will see abandoned short-haul and primarily and exclusively only for -- focus on long-haul. anna: why do you want to have these conversations? this first couple getting the business model. would be keen that we do not add complexity. there are some things we need to tease out if we are going to do it. we dominate short-haul in europe. we have the cheapest fares and we find more places. they have a this model that is focused on long-haul. it we when we will do will try to not add complexity to the model and not add any new costs to our model. anna: what you coordinate with them for schedules western mark kenney: we would not want to
2:40 am
take risk on our side. this things are not that big a deal. we might tweak the schedule but it is more about where we fly. guy: what have you got up your sleeve in terms of revenue opportunities? been: airlines have slightly asleep in the past in terms of digital. we have had great progress in digital. guy: you guys were part and parcel of that as well. kenny: we are enjoying the advantage but in the last two years we have had great strides. customers are doing more with ryanair. come you will see a new website. that is a very open platform and you will see us do some interesting things on ancillaries. we launched our new partnership with the new digital partner. what we are moving to is much more targeted ancillary
2:41 am
promotions. trying to get the right front to the right customer at the right time. anna: how do you make a the oil markets? -- navigate the oil markets? 91ny: we are 90% hedged at dollars a barrel. come.nefits we prefer to be hedged because our investors prefer certainty. we're happy with the strategy we have. we always pass that benefit to our customers in terms of lower fares. there is not a egg competitor -- a egg competitor out there. you have seen that in the fares already. guy: this has been a long process to get to where we are now. how is this going to work in ireland? : aer lingus will reduce
2:42 am
the short-haul network. we might end up feeding them with traffic. guy: was that your plan? n?m we no longer have a need for acquiring aer lingus that we once had. we have shown we have a great, simple, low-cost fair. we -- that is reflected toward his best travelers and we have improved the experience. aer lingus could be an interesting brand in the ryanair group. there is no longer that need. they cannot compete with us for low fares. he come partners in terms of supplying them with traffic for their long-haul business. 50% and we expect that to continue. the effort for aer lingus
2:43 am
has become wholly unconditional. 1500ffer will close at irish time. thanks for joining us. off itsr a deal to sell unit. we will tell you everything you need to know about the story after the break. ♪
2:44 am
2:45 am
2:46 am
guy: these of the stories you need to know about this morning. the firstowdown from three months when gdp expanded by 0.9%. the key trading partners china weighed on australia's economy. with household spending helping keep the number above zero area
2:47 am
-- above zero. guy: likely to show that inventories rose by 900,000 barrels last week. to remain in the range of 40 bucks to $60 a barrel. four featuring the same colors but the original font. to worklook is meant across a variety of that forms area the redesign follows an even bigger shift in goebbels corporate structure -- in google's corporate structure painted -- structure. allen joins us now. this was inevitable. we were waiting for it though when, not the if. how important is it that tesco gets the sale? to let the decided
2:48 am
debt rating go. south korea became an inevitable choice. it was worth more than anything else and the market conditions have changed quite a lot. tesco was either going to have to spend more in korea which it cannot do or sell. anna: you are saying the web product is important. is that something that tesco has not been able to capitalize on? not spendingably enough as its main rivals are. this is one of the areas that had to spend or sell. what happens beyond the transaction, what is management going to do?
2:49 am
thailand is another example. it has been a great business for tesco. it is switching rapidly to convenience. tesco needs to invest there to keep that business worth what it has been in the past. thank you very much. guy: less than half an hour to go before european stocks start trading. let's get the details. 1% onne: tesco could rise the back of that news will likely to be selling that unit in south korea. let's talk asos. traded where shares have since nick robinson listed the company in 2001. it is standing aside. they have one billion pounds
2:50 am
worth of sales per year that after 15 years in a grabber it's an is going to be replaced by another -- nick robinson is going to be replaced mby another nick. has skin in the game. he -- a stake of the company is still worth 200 million pounds. and an eye on asos ryanair. up to moreumbers than 10 million passengers. want to keep an eye on is the overall drug companies. novartis is signing a deal, partnership with amgen. and keep an eye on ucb. on thed -- could rise
2:51 am
back of the deal with amgen. thank you. we will see a positive market open in europe. 1.5 percent and a similar story for the cac. it looks like we will see it reasonably positive open on that story. shanghai firming into the close. firming into the close as .ou say, up around .51% some of the banking stocks making moves higher in the last part of the trading day. a portfoliost is manager. what do you make of the last couple of days? stock markets are down sharply.
2:52 am
the markets are trying to figure out where it goes through the month of september. a great month for trading stocks. what are your clients telling you, what are you telling your clients? wast: it was august and it -- is always a volatile month and volumes are thin. trying to make heads and tails of what is happening in china. listen to theeen companies rather than look at the stats that are coming out of the companies. the companies have been saying for some time that things were worsening in china. we have been surprised at how quickly the markets reacted. the valuation was for a much the catalyst. it was almost an admission that things are bad. on behalf of the poc. anna: there have been a perception that some of them have done very well. people worry about that european exposure. are we right to worry or is that to overplay china's impact on
2:53 am
europe? guest: absolutely. the perception is that european companies especially german companies have become a play on china and they did very well to diversity -- to diversify as europe went through a very bad stage but that was happening at the same time as cost-cutting and restructuring. i think it is somewhat exaggerated, the extent to which european companies are dependent on china. if you look at the stats right now in europe, exports to china from the eurozone are 4%. compared to australia this morning, gdp was hit by exports. 36 percent of the total share. in terms of europe's dependency as a whole, it is lower than his generally perceived. you.thank joining us from hermes investment. f gooding markets are about to
2:54 am
open. -- european markets are about to open. be sharp fors will the next few days. as someone said to me this morning, maybe it is the parade protection team. you have seen the shanghai composite that was lower by 4%. that was raising the losses. what is happening in china? and as far as crude is concerned, a 27% rally in three days, that is among the move, the biggest move since 1990. we have not had that kind of event over the last couple of days so what is happening in crude? not the catalyst for the direction, it is the monster moves, 8% moves in either direction. what is happening in global markets, not just in stocks but commodities as well? just so you bit
2:55 am
know on the shanghai composite. we were talking about moving higher. down just a fraction so plunge protection is not quite working as you suggest. coming up very shortly as we work our way into the market open. is how theyou what open is likely to take place. probably a broadly positive one. 100 up andt the ftsi similar for the cac and the dax. you will get a positive open. not the big down day that we saw yesterday by china will be closed for a couple of days. anna: what will we talk about for the next couple of days? we will leave you with jon ferro and his team. ♪
2:56 am
2:57 am
2:58 am
2:59 am
tim cook good morning and welcome to on the move. jonathan:an ferro -- good morning and welcome to on the move. i am jonathan ferro. shanghai swings. stocks see losses up to 4%. ahead of a military parade. down under, australia -- austrian gp -- crude meets softening asize of ron. three of the things i will be talking about. what is seconds away. futures in london higher. dax futures up by 47 points.
3:00 am
the corporate news laced in there as well. the market open and caroline hyde. caroline: it seems we can come back off of that worldwide selloff that we saw yesterday. we see the government in china seeming to arrive to the rescue at the end of trade. we saw the shanghai composite suddenly and in flat territory -- suddenly end in flat territory. getting into the equity territory, into the green slightly. we wait for germany to warm up. euroswe saw 250 billion wiped off the stoxx 600 yesterday. the u.s. has one of its worst days this year. that was yesterday. a lot of economic data disappoints.


info Stream Only

Uploaded by TV Archive on