tv On the Move Bloomberg November 10, 2015 3:00am-4:01am EST
points negotiations with the eu membership at stake. those are the burning issues for markets to deal with as we get the start of trading under way. it looks like european equity markets got a little bit of a bounce. we lost a little less than 1%. let's see if we've got that rebound. a little asia after bit of a choppy trade overall. we open up the european equity markets. have a look at what is happening. ftse 100 up when 2%. .2%. of focus -- up a lot of focus on u.k. about -- still waiting for the dax. just under .3% higher. a bit of a rebound. shrugging off that chinese data,
the slowing inflation that came in worse than expected. .he factory gate deflation extending to a record 44 months. i will take you through some of the big stocks we have been watching. starting with vodafone. one .7%. this is after the second-biggest mobile phone company reported second-quarter service revenue better than expected. it was growth. boost.down from a a market that has been a difficult for vodafone. what the company has done is reshuffled its management. the minute to desk committed billions. it looks like it could be paying off. moving on to national grid, another u.k. plc. the operator of the uk's electricity and national gas todayk started a process
for the potential sale of a majority stake in its domestic gas is to be should business. we are seeing that move higher. julius baer, the third biggest wealth manager, that stock down. it's growth margin narrowed. restrained client activity. i said stocks in europe were shrugging off the china data. you can see copper down just about .5%. lossess been leading the . nickel has dropped to its lowest since 2008. ask to you, manus. manus: lovely. .ejra cehic there what is happening later in the show? first up, chinese inflation data
points to slowing demand in the world's biggest economy. what is the contagion echo that is the question for us on the move today. -- i love this. no mission is impossible. that is according to the prime minister here, david cameron. british membership of the eu. ♪ would china's consumer inflation slowed in october while factory --e deflation extended listening to and the -- spent to -- speak to enda. the consumer simply underwhelmed.
enda: good morning, manus. has to be a big disappointment. interest rate six times now to record lows. it is not just a china problem. major economies around the world struggling to get inflation off the ground. in china, don't forget the factory gate has been in deflationary territory for 44 consecutive months. on the consumer side, we're seeing a sliding prices for food prices and nonfood prices. there is a global angle on all of this. it is not really a great picture in china. it doesn't point to any quick turnaround in demand as we head toward year-end. manus: the great debate is this, it will continue in terms of the next steps from the pboc. are we in a hiatus. period we in a hiatus
before we see any action from the pboc? there is a base effect in all of this. the big fall in the oil prices a year ago will eventually washed through the system. on the other side of that, we're seeing some stabilization and data, such as lending and credit data. data will pickr up further. it will self correct. if it doesn't, then yes, the is they hadproblem not been getting any traction. take largest us to rev up demand. at the very least, i don't think pboc inan rollout the
the near-term just yet. medical they are the -- manus: and the current, numbers chief -- bloombergs chief. without it slightly better reading. -- we got a slightly better reading. to break the they down, let's bring in david crawl. david, when we look at the they have to do a lot more structural reform. they are delivering better than estimated and manufacturing on the month. they be on industrial production. >> the month over month was better than expected. it did not contract. if you take a step back and look at relative to the previous quarter, reduction is still flat. -- production is still flat.
manus: the beginnings of the next move lower in the euro is going to help on this hard data for france. give me some kind of perspective in terms of relevance of the euro and the ability to grow in france. david: if you look the weakness of the euro, it has helped the euro recovery as a whole. euro sees decline in the face of monetary easing, these listrs will probably get a in the months next year. manus: one less question. there were reports yesterday the ecb was going to get a deeper more negative rate. it is all about expanding.
what is your perspective? -- david: draghi -- that would expand the crunch the numbers. there are enough assets available to buy. that suggests the ecb is gearing up for an expansion of those monthly purchases. that is why they are doing that rate cut. manus: david, thank you very much. let's bring in matthew beasley. he joins us now over the next half hour. he is the head of global equities, innocent investors. data from france. i can i get excesses -- i can get excited about french data. the german data especially more in that it is the real contagion bellwether for me in terms of china. am i misreading?
matthew: about one third of the euro gdp is from germany. germany is the most important data to watch for. the lack of growth is france. the french data has been mixed at best. today's reading is a slightly positive as best desk positive at best. positive atk to -- best. when we speak to companies, they tell us that france is a pretty soggy geography. the buildings and materials company warned, licking their shortfall -- linking their shortfall to a lack of traction. manus: you cannot bet your whole against on a euro being one dollar by christmas, according to goldman sachs. forgive me, you cannot base a whole and you factoring industrial services industry on
mariota draghi getting the currency lower. absolutelym to be lacks to that. the long-term medicine has to be structural reform -- matthew: the long-term medicine has to be structural reform. if you look across europe, there are some junkies are you have seen an improvement in regulation. labor performed or revelatory seductions. in spain you have seen some pretty important labor reforms as well. this needs to happen in concert with short-term benefits of ecb. data, if you look at the april it was a record.
thatcovered 50% from nemesis. -- we recovered 15% from that nemesis. if you look in the dax chart, the momentum is clear. i want to pick up on one of the comments, the saltiness within france. with european abroad exposure. a interestinge is jack reed in terms of a global investor. the level of the dollar and euro . there is no question it's at the move into the euro has had a dramatic impact on the dax. there --ck to germany, nearly half of the german economy is export driven. the dollar or the euro in this case and the underlying strength is crucially important for the dax.
manus: i am at manus cranny in london. this is "on the move." volkswagen is to give u.s. gesture of0 in a goodwill. the creditomes as rating was downgraded to triple b plus. consumer prices in china rose by 1.3%. missing analysts estimates did the producer price index fell nearly 6%, marking the 44 consecutive month of decline. data signals that policymakers may need to act under inflationary pressures. coalition is poised to vote.
-- the yield on the porch he's 10 year government bond remains close to a four-year high. concerns about spending cut tied to the international bailout may five it was a revenue beat for vodafone this morning. the second largest mobile company said customers said service revenue rose for the second quarter. ,loomberg intelligence european air honduras is joins us now. the liberty global talks are behind them now. vodafone, they are beginning to address the gaps in their operation. some are saying they are focusing on the business. what is going to drive the growth?
>> they've already seen the signs that 4g is driving growth. the growth rate would be the same. this quarter we saw axillary growth on the back of 4g. planhave a projects bring which will be coming by march. also have connections to 66 million households across europe. they do have this convergence capability to an extent. if they want to improve that further, they may be eyeing singular portions. lest i forget they want to remain in a certain credit rating. they will be concerted about it as well. manus: thank you very much. let's bring back in, matthew beasley. we have a lovely graphic which
shows they are gaining 4g. we are all using more data. --y are losing less monday losing less money on 4g. matthew: across the whole eurozone hopes are based on a gentle eurozone recovery. shows, you had a period of losses as a result of the investments needed to make -- 5.5% int is rising from terms of 4g, the number. the volume of organic revenue. they are losing less money and they are taking up 4g customers. that is the driver, is that? matthew: it really is. some severe consolidation across
the eurozone. companieswer for the that have the best networks. we are willing to differentiate in terms of quality. we are willing to pay for that. that is a new thing. my very first mobile phone and what i paid for my first monthly bill. is it strong? is that the right word in terms dish --um eyes asian of ization. of premium eyes asia matthew: the broad telecoms arena. we would argue for a first time, and much more consolidated market as well. you have companies with pricing
power willing to price accordingly. the backdrop of a very difficult margin environment. that is new news. manus: matthew, stay there. we got a little bit of breaking news. we got prudential confident they're going to be up to deliver profitable growth. nejra: it gets half its revenue from asia. 1.7business profit of billion euros today. that pound up 13%. increasedness profit also prudential says it is confident on final solvency. ensures -- and insurance companies are going to
have to use. to quantify risk and determine capital requirements. look the stock spiking on that 1.2% up as much as 2% -- in london trading. dropping back down to .5% right now. back to you. matthew, wequickly, take value where we can get it. a good set of numbers from potential. they talk about their confident. that is darn tough. matthew: across the asian region, it has been incredible strong. we are in aia, the biggest competitive group. they are enjoying similar trends. manus: let's leave it there. you're still with me. we have a little more to get through. up next, china's inflation under
consumer prices missed. epi down for the 44th month. u.s. expectations are the lowest on record. 2.70%. the new york fed. the bank of japan delayed because for another year. the bank of england does not see cpi getting up before the second half of next year. asset manager huge folio to manage, global threat. it is very real. we are not going anywhere with inflation. forhew: we are seven years central banks to fight the inflation. this is the reason we should be concerned. we have had a lack of inflationary pressure. driven by very low interest rates. we have equity markets and or fairly expensive
value zone. that lack of growth surprise still missing. hungry that weat are desperate searching for. it is hard to see how much it has moved from here. are we turning back into a bull market? matthew: technically it is. manus: with that in mind, we have 40 seconds. how do you play that perspective for the numbers? matthew: i look at the eurozone there. i look at markets we do still have efforts to do more. i look at the eurozone. where they has been positive surprise for certain countries undergoing restructuring. after dreadful years, the eurozone fits that bill. it is safe to favor the eurozone over the u.s.
we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. manus: welcome back. this is "on the move." let's give you a quick check on the european equity market and how we are faring. european indices speculating that because of the china deflation story, that may add to the discussion that you're going to get more stimulus coming from china. we know the speculation is you would get more easing here from the ecb. are theutilities leaders at the top of the board. within that, you've got the telecoms. it is of course vodafone that
leads that. on the foreign exchange act, let's have a look at that. we saw the euro dropped to a six-month low yesterday. euro-dollar, one of 7.53. there are a couple of lovely lines out there. that is the view coming from a different houses. bank of america, merrill lynch, but the flow. they hedge funds keep on buying the dollar. they are retesting a dip into the negative. keep an eye on dollar brand. brand -- dollar rand at a record low. cehic.et to nejra plc,: i'm keeping it u.k. starting with vodafone. the world's second-biggest mobilephone company. europe's debts europe has been a
bit of a challenging market. it looks like that could be turning around. today, the company reported a second-quarter service revenue. that is the money he gets from customers. that rose 1.2%. better than expected. third consecutive quarter of revenue growth for vodafone. it was because of a boost from rebounding markets in europe over the past few years. we have seen changes in the management team. the ceo committing billions in new network spending. it looks like it is making a difference and it pushed the shares higher today. it is the will -- it is one of the best performers on the stoxx 600. moving onto national grid. one of the best performers announced today it started a process for the potential sale of a majority stake in a domestic gap distribution. business is the operator of the u.k. electricity and natural gas
network. starting in the second half of , it will bel year completed in early 2017. the stock higher as well. company distributes plumbing supplies and building materials to customers in the .k., europe and the u.s. a lot of focus on its u.s. business. it achieved good growth. -- the presidential market offset. back to you. and copperery full into -- manus: a very full and conference of -- kit juckes. i look at this story, cameron is getting ready to tell us.
what is he going to try and get from europe? the oddses are saying of a brexit are rising. give me your perspective. this is going to be a long race, is that? kit: at some point, we're going to see the terms. , in we get a date for this think that is the zynga most important event. when we have a date, a target, a campaign, and when that feeds through to opinion polls, that is when i am certainly nervous that the opinion polls at that point show in missouri once -- show a majority once to leave. debate.cotland real risk. six to eight weeks before the event. scotland is a decent
blooper into how this can go. financially, most people tend to be worse off if the u.k. leaves. says only when you actually people are seriously considering voting for the financially worse decision that suits their emotional decision. then we will get scared. lose halfobably percent of gdp's growth per annum for five to 10 years. when we start to think that could really happen, that is when we have a problem. manus: let's have a look at the dollar sterling and the euro sterling. we are touching some of these lower levels, retesting a bit of a move lower. we got a note saying the volume of dollar sterling trading is almost twice the average. the market is starting to build on the dovish comments from carney.
with a bitr wages, of a boost like it did in the u.s. last friday? is: i think the consensus for them to take up to 3.3. the u.k. has got more weight growth than the united states. it is headed for some time. yet the mpc is much more dovish than the fed. i don't understand that. i would say we have the dovish bias, what if the unemployment total increases and people start saying we are seeing the peak of the upcoming cycle. it is a bit behind us. we are on the downside. i think tomorrow's numbers are in that sense going to be a major factor in driving the mood. i would say the market is not very engaged. there are long since sterling. there are shorts and sterling. longs in sterling. there are shorts in sterling.
manus: there is the pound against the dollar. let's bring up the graphic we had before. there you go. this is like the dollar. the dollar is on a bit of a tear. i think that is a fair reflection. the fed referred to dollar strength 24 times in the last meeting. i know the whole world is convinced that the fed is going to go in december. give me your perspective. when you reflect back on this, these are the moments in time when the federal reserve actually comment on the dollar. are we over egging the putting? the pudding?g the market is gone as far as it can go. go, i amr as it can paraphrasing. he more or less said the market has priced in.
kit: the fed's hope is that they can raise and the ecb can cut and nothing will happen in the world. they are going to give us the message that we priced in enough times in the hopes that we don't overreact. dimension of the dollar in the last meeting -- the mention of the dollar in the last meeting, the fed saying the rates should not be at zero. those who say you do not need to raise interest rates. arguments don't meet in the middle much. what you get is you can talk a lot about other things. look us on the dollar is. look at how weak china is. that is the middle ground debate. if i am a dove on the fed and we get a weaker payroll number next month just before it and the dollar index is up. i might say something. the u.s. economy struggled with
a bit of snow last winter. you think we can come up with a dollar index above 100. we should wait. the governor saying you'll need 60 $200,000 jobs. that's 62 100,000 jobs. 60 to $100,000 jobs. everything is already packed -- we are not precise here. kit: if you think you're going to get euro-dollar significantly lower, you need a fed rate hike
and some new additional impetus to help us along our way, because we've got a lot of news that we are baked indicate. in the cake. manus: what does it take? never mind goldman sachs. what would it take to get to parity? to go i think you need for example 10 year yields in the u.s.. of two three quarters of a percent. the bond market needs to stop pricing in. something to say we are moving on. in is to go back to taking on -- thinking about could the funds be three. manus: that would be a van glorious recovery.
tell me about the rand. in themake a recovery rand. south africa would have to raise rates at some juncture. the betting is improving to 60% that they will have to do it. kit: metals prices are low. the weakness in china's inflation does not help. asianriorating move and and latin american currencies that comes through. ringgit, thed, the korean bond. manus: the beginning of a bigger move. kit: if this turns into a move, if we develop momentum, i think we are back to that. where poised in the e.m. i would be costly bearish thinking this could go wrong.
london. this is "on the move." these are your top stories. bb says these top oil prices in the $60 range for about the next three years. the company's regional president for the middle east says that is because demand is increasing. justirm that runs in biggest airline -- that runs india's biggest airline, indigo. and globe rate -- into globe the first ipo for an indian airline since 2006. as korea's it comes janjuah surged. offering thatlic raised euros. that as the dust government begins to unveil its -- the bank
would be valued at 18.8 billion euros. standard chartered has cut jobs in the by, including for managing director roles. bank hasement, the reduced management layers at a global level. fewer senior staff. spain heads to the polls next month. one person hoping to become the country's next prime minister. he is the leader of the pro-market. -- once a rank outsider. surging in the national polls. in an interview, rivera stress the need for a political and institutional reform. years of we have eight this president.
[inaudible] i know that it is not easy. i know in catalonia the situation is very difficult. , thesure in the future situation with our market. sure [indiscernible] the solution is not great. the solution is reform spain. manus: albert rivera. portugal andross alliance of opposition parties -- let's speak to giles lima. he joins us on the phone. great to have you with me. the bond market is critically
nervous about the prospect of socialist with communists support. >> today, there will be a debate in parliament about the center-right coalition government program. aat is set to be rejected in motion later in the day. once that happens, the government automatically falls. it becomes the time of the president. the parties president -- deportees president has enormous discretion. the power to follow other options. in the meantime, the center-right government remains in a caretaker role until the new president -- new prime minister is sworn in. manus: the whole angst of europe is if this is a succession of power by a
socialist led government with commonest backing who has been very -- with communist backing -- what wey understand now from portugal and the prospect in terms of this new and session. what are the biggest issues? party, they are arguing for a swift a rollback of the austerity measures that were implemented over the past cointreau years. the center-right government was rolling some of these austerity measures back, although at a slower pace. they want to accelerate that. they want to increase spending in terms of salaries. they also want to add some taxes . they want to increase the minimum wage. generally, socialists are arguing for a -- for an economic
recovery. there are differences. the socialists argue that they will build keep the debt below the commission. .heir target is slowly higher the -- we still have to see their detailed budget to see how that is possible. that is their plan for the next four years. manus: the president of portugal has a great deal to tackle with if that vote goes through. lima.s updated on joe of next, is it mission impossible? that is the question. will the eu conceded to cameron's come -- cameron's commands. ♪
our two bring in our political correspondent. ofe us perspective in terms -- it is not mission impossible. that is what he wants us to believe. >> of course and david cameron is back up to send out a list of objectives he cannot achieve. however, when you look at the first three, they're not quite a done deal. they're going to be pretty easy to manage. this idea of rejecting brilliant -- rejecting the union has raised eyebrows in brussels. welfare. this really hits to the core of european union. this idea that if you move to another european union country,
you cannot claim on the same basis as a u.k. citizen. this has caused a lot of with easternady european members such as poland, hungary. manus: that is the rub of it. that is what the british press is going to focus on. let's bring in james bevan. when we think of the european perspective, what kind of reaction do you we think we are going to get from eu leaders. in the run-up. the press, a lot of it is about you can ask david, but a lot of what you're asking for your not going to get. the other leaders are anxiously awaiting on this letter from mr. cameron. what they are really interested in are the details on how he is going to go about these demands. how he is going to frame these
proposals. they want to get down to the nitty-gritty of negotiating, how to do this. in the broader sense, they want .he u.k. to stay in the eu it is a matter of getting this referendum set up. getting the negotiations done anyway that lets that happened. that lets that .appene manus: what effectively happens next? >> that is not to say negotiations have not been underway. the problem was until now, we do not really know what britain wanted. david cameron was very careful not to set out until he had to. the problem here is not so much new members. the fact that he is that spell this out means there will be an