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tv   Countdown  Bloomberg  March 15, 2016 2:00am-3:31am EDT

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change the way you experience tv with x1 from xfinity. anna: the boj holds fire. this is a bank keeps the inchmark rakes -- rates negative territory. it emphasizes it will ease if necessary. speculators, the chinese central bank is set to -- the curb speculative set against the yuan. britain pulls back. russia will withdraw forces in syria and a surprise move. russia turns to assad to reach a peace agreement. ♪ anna: -- manus: welcome to
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countdown. i'm manus cranny. anna: i am an edwards. let's get things off talking about what the boj has done. the dollar yen. stronger once again. we have a weak equity environment. ande that is playing more to investors thinking. some strengths coming through in the dollar yen. we have a chart showing the chalice the boj is facing no matter what they do. isn'tpanese currency substantially devalue waiting. manus: that is the bank of japan and that is your reference point. anna: they have given us some words today to suggest there can be more easing to come. they talk about continuing easing. sound thate words could be more coming and economists are expecting. manus: the irony is not lost on the traders. they are adding to their
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positions. the best-performing currency in terms of this month. it is the underdog of 2016. adding, piling up their bullish bets on the currency. how is this all playing out? the fed begins a two-day meeting . that is front and center. china considering introducing -- that is a negative effect on the market did the bank of japan holding pat. let's to go look at the radar. i think the tobin tax is weighing a little bit. a great article on if you have seen a rally in oil, you could be at the top. brent oil down. iran of the most in two decades. the russians is saying it is a reasonable set of arguments. copper coming off .4%. anna: interesting to see that move lower in equity markets. this around the tobin tax.
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people suggesting you can put a negative spin on that. cap controls are being placed at the moment are not sufficiently doing around the currency let's tell you about -- pop life is where you'll see analysis. the boj meeting that has taken place and the press conference is yet to come. a live blog site on the terminal. topline is where you'll find that. heidi bloom and standing by. of -- there is a lot trying to digest waiting for boj. the lead up to that. not that the yen was doing much of anything. it was unfortunately to the downside. the nikkei 225 ending the day just a couple of minutes ago down by .7%. we were down over 1% in the more
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immediate aftermath of that boj announcement. certainly coming back up those day lows. .etting a real leg up it is interesting because the in that bojknow is statement, the reference to further cut the interest rates into negative territory was removed. i wondered if traders are trying to work out what that means. certainly we have seen gun -- governor kuroda learned his lessons from draghi. leave the door ajar when it comes to easing also around the reason -- easing. also around the region sydney down .4%. this is an account of that overnight fog and oil prices. some pretty have to losses across the energy mining and the strokes space as well. china, shanghai is down by 1%. we have seen -- leading those
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losses they are. we had a whole lot of news flow coming out of china. as you have been talking about this tobin tax. the reaction has not been positive. cba saying this is a form of capital control. it is going to create further panic and put a freeze on liquidity. it is going to be bad for market development. is much a backward step it for capital account liberalization. in japan, we had toyota at some of these exporters sing losses as the yen strengthened. closer to that stronger hand after we had the boj announcement. we saw quite a pop when it comes to the financial. securities -- daiwa
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securities ending the day in negative territory. australia -- one of the top danish yesterday. down by 5.5%. these are -- oil produces down by close to a percent. in china we had the housing minister essentially acknowledging that the entire process to get company prices of again to do with oversupply. that hasn't worked. you still have oversupply and a lot of the smaller countries. -- and a lot of the smaller countries. you have this overheated situation when it comes to major tier one cities, he talked about new efforts to clamp down on overheating in some of the major cities. stabilizing and rebalancing the market here and we saw some producers for these chinese property developers in countries -- is the country's largest developer. just quickly, this is where we are for yen.
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this is really we had the announcement, one leg up. we saw further strength in the afternoon. we saw gains of .4% it is trading up for the yen. guise? haidi, thank you. the click the takes it to a whole new level. if you do not know and you tuned boj day right here on bloomberg. haidi, think you very much. let's say with asia. the big of japan refrained from bolstering money. policymakers gauge the impact. the impact in terms of negative rates. the strategy they adopted back in january. anna: kuroda kept the target unchanged. cap the benchmark at -- and kept the benchmark at .91%. great to have you on the program this morning. give us your
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response to what the bank of japan has done. i guess you were not surprised. most economists were not expecting any big change. do you think we are going to get more quantitative easing? more negative rates moves from the boj later this year?, i do believe more of acies will be reactive to what is happening in the global economy, rather than taking a leadership. bank of japan is feeling that they are close to exhausting their monetary policy appeal, so they want to preserve that for the rainy day. quite you are demonstrative in terms of your view that it has not worked. worked and it hasn't what would you suggest if you had a seat at the table with mr. abe on wednesday what would you
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be recommending, in terms of stimulus for the economy? there are simple measures they can take. what is lacking in japan is demand. fiscal -- it has been restrictive for the last two years. there has been a huge demand from the reconstruction after the earthquake. these demands are long gone. the fiscal policies are now restricting the growth. that is the first place the japanese government needs to change. mecca you mentioned -- manus: you mentioned fiscal. the sales tax hike which was delayed. the system with abe on wednesday. is another sales tax just simply delusional and should be completely wiped off the cards?
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takuji: yes i agree. i think the first tax hike in that was ald say blow to the state of economics. that reduced the chance of economics succeeding. now the economy is growing slowly and there is no inflation, do you want to tax away -- text japanese operations ? that would be a very bad policy. anna: what is your reading on how strong the japanese economy is in the first quarter? we saw negative growth. if we get another quarter of negative growth, that would be a technical recession once again for japan. how weak is the picture? that japan's potential growth is very close. japan basically has a 50-50 percent chance of going negatively in any given quarter.
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native growth in the gdp, recession is a little too much for japan. a technical recession is likely to be where japan -- this technical recession may give us some excuse for mr. abe to start to formulate expansion the school policy. that might be good news for japan. manus: i am going to show our viewers the dollar yen chart. i am sure you are well aware of what happened since dollar yen. since the 29th of january, dollar yen has strengthened. negative rates have not -- well they require, the desired effect on yen. dollar yen is up 6% in 2016. traders are raising their most since 2008.
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this currency attack by the bank of japan, it is unwinding, isn't it? it is not working. it is running out of things. believe so. i for the past three years, global economy seems to be doing ok. it was not growing robustly peered -- robustly. there was no crisis crawling -- crisis growing anywhere. patient's of the global international policymakers have run out. cannot tryws they and depreciate further. danica can ask you politically about the upper house elections was a coming up -- anna: can i ask you politically about the upper house elections coming up? are we like to see any material change yet go are they going to do anything between now and then
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? theji: it does depend on news flow. in the next few months, in the run-up to the summer election, i do expect more negative news for japan to come out into the market. it could be the pension funds making sizable losses. it could be the global economy turning down. it could be an over theme of economic space failing to deliver. we will see negative news. there is a chance that the ruling party could lose heavily in the upcoming election. anna: thank you so much for joining us. .reat silver lining story if japan goes into a technical recession, the upside according to our guest is that it persuades people they need to do more fiscal stimulus. in that sense, it could be good news. -- do you use gdp
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as a measure? currency is not the focus. let's set up now with the first word news. good morning. : question president ordered the withdrawal from syria saying the objective has been achieved. russia's intervention sprung a war in favor of assad. the surprise pullout increases pressure on assad to strike a deal at peace talks resuming in geneva. the war is now entering a six-year. is a skilled a quarter of a million people and displaced many more. the people's make of china has drafted rules for a task force on it -- on force this aimed to curb speculation. the rate of the tobin tax may be kept at zero to allow authorities time to refine the rules. the lovely would be the most extreme policy -- the levy would
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be the most extreme policy. australia's central bank may cut interest rates if it continues to remain weak. traders are betting that it will keep rates at a record low. low inflation provides scoped to ease policy makers have been mulling the impact of the slowdown in china as australia's economy grew 3% in the fourth brazil's -- fourth quarter. brazil's legislators -- as early as this week. that after millions of people protested of the weekend the amending the ousting of the president. the supreme court is expected to issue guidelines on the peaceful protest tomorrow. the governor of bangladesh's central bank has offered to resign as tensions escalate with the government after hackers stole $101 million from the nation's foreign reserves. governor says he has a
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resignation letter ready and is waiting for an appointment with the prime minister. the nation's finance minister calls mainly this is bank very incompetent and accused it of failing to inform him about the missing funds. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more top stores on the bloomberg at top . anna: here's your day ahead. the bank of japan governor kuroda will take to the stage for a post policy meeting press conference. that starts in 15 minutes time. we'll bring you all of the news that comes through from that event here domenico we are going to turn our that -- manus: we're going to turn our attention to the u.s. both of those come in at 12:30 u.k. time. anna: key u.s. states head to
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the polls for primaries today. -- so many central banks, so little time. manus: taxing transactions. china is said to plan a levy on foreign -- in an attempt to curb currency speculation. tobin tax, in case you were unsure. ♪
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anna: welcome back. this is countdown did 2:20 in the afternoon if you're watching in hong kong. stocks weaker in the asian session, down by .7%. weaker on the hang seng. cut 2.5plans to to an halfbs --
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thousand jobs. the sick up will cost $60 million -- the shakeup will cost $60 million in the first quarter. sony has reached a $750 million deal with michael jackson's estate to buy out his stake in his -- in their joint music business. publishing as well as feature description. the deal consolidates sony control over a catalog of over 4 million songs. volkswagen is facing its biggest losses in germany over the emissions scandal. it is being sued for 3.3 billion euros in a transaction involving 278 institutional investors around the world. the suit claims vw failed to publish information about the scandal and a time the matter. that is your bloomberg business flash.
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manus: tennis central bank has drafted rules for a tax fort foreign-exchange transactions. the so-called tobin tax would help curb speculation that could be said to give authorities time they need. anna: the speed to robin. -- let us speak to robin in hong kong here at -- hong kong. further capital controls coming in. robin: it most certainly is. this goes against the grain of the pboc. it promises to free up market access to allow as much trading as possible. what is interesting is the 0% interest at the start it i was speak to my colleague, the one who broke the story. he was saying the idea behind this is for the authorities to
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tell speculators that we have this weapon in hand and we can use it when needed. this will increase intervention costs while letting speculators know that they have this thing to be worried about. manus: when you read the story, and you think about it, you stand back and say we know the pboc are in the business of wreaking havoc. should we be more worried that this is what we are resorting to? a tobin tax. which europe can i get his head around and the brazilians are frightened of. you don't think it spells more concern than it does control? robin: it definitely does. the potential to test the pboc wants to attract influence while getting rid of speculation. this has the potential to
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concern investors. should we be putting our money into the currency? into the nation? this comes at a time when china is trying to attract as much money as it can to support a 6.5% annual growth rate in the next five years. this is not really excellent news. this is more a concern for investors and people who are watching china's economy. anna: thank you for joining us. the bank of japan governor is about to begin his press conference. let's get you nejra cehic for what is happening in the markets. governor kuroda about to speak. you have been looking at the outlook. nejra: i have been. we have been talking a lot about the yen resilience this year. it is the best-performing major currency against the dollar over the past three months.
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however, if you look at the debbie crs, rate function -- the debbie crs, the rate function, the japanese yen is the worst performing currency against the dollar this month. i want to talk about the outlook . if we look at what hedge funds have been doing, they are the speculators have built up the biggest bullish bets on the yen since 2000 and eight. this came pre-the bank of japan decision did this data going up to march 8. i want to see what options traders have been doing we can take a look at this. arepremium that traders paying to protect against yen strength. you can see where that line drops. that shows that premium increasing. that happened after we got the decision from the bank of japan. i would to leave you with a comment from socgen. he said celli and already. -- he said to sell yen already.
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manus: millions of dollars to interpret the liquids when it comes out tomorrow. one of the things we should be focused on is how many time the dollar going to impair that's how many times is the dollar going to appear? -- how many times is the dollar going to appear? nejra: the fact that we are seeing the bets on the dollar versus the yen strength here it it has jumped to 70%, the highest level in two months. he is the chart that shows you why the dollar is coming down. look at what is rising, u.s. treasury two-year yields. do you follow the yields? manus: follow the yields. anna: 70% chance of a rate hike by the end of the year. -- 78 percent chance of a rate hike by the end of the year. the chart that nara was showing.
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putin takes the world by surprise. we will break down what a russian pullout could mean for serious peace talks -- for syria's peace talks. coming up. ♪
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manus: emperor's palace in emperor's palace in the background. 6:30 london, 7:30 in brussels. let's get you the bloomberg first world news. -- first word news. >> the bank of japan is bolstering its record monetary stimulus as policymakers gauge the impact of a negative interest rate strategy, adopted in january. the bank kept the target for increasing the monetary bank unchanged and left its benchmark rate unchanged. by decision was forecasted
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35 of 40 economists surveyed. president putin ordered the extraction of most of his troops from syria. increases pressure to complete peace talks . the war has killed millions of people and displaced more. has draftedchina rules for attacks on foreign exchange transactions, according to people familiar with the matter. the initial weight may be kept at zero to allow authorities to define the rules. mostevy would be the extreme policy yet to prevent speculation against the yuan. australia's central bank may cut interest rates as wage growth continues to remain weak. trainers are betting it will
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keep rates at a record low of 2% minutes from the rba's march 1 meeting. lo inflationw -- policymakers have been mulling the impact of the slowdown in china. brazil's legislators are gearing up to revise the nations stalled impeachment proces's as early as this week. millions of people protested over the weekend, demanding impeachment of the president. the supreme court is expected to issue guidelines on the protest tomorrow. global news, 24 hours a day, powered by 2400 journalists in 150 news bureaus around the world. you can find more stories at topgo. anna: thanks. techpictures of the conference taking place at the bank of japan. haruhiko kuroda is speaking there, just a couple minutes in, saying the virtuous economic
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cycle is working in japan's economy. they left policy essentially unchanged. production and exports are muted on the emerging markets. we get more news flow, we'll bring that to you. joining us on set is guy johnson. you found a really interesting graphic, which crystallizes the power is the impact of the bank of japan. guy: two ways of looking at this. yes, the market is being affected, because the market keeps getting surprised by what kuroda does. here's the thing -- is not
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working. you compare and contrast draghi and kuroda, and it is interesting -- the market is anticipating that we will get more from kuroda. he's batting down negative rates, but what will he do next? th chars chart here shows the boj having a much bigger impact than the fed, even in december, which i think is interesting, the boj delivered a bigger amount of volatility down the fomc. we talk too much about the fed and not enough about the boj? that obviously is the equity side of the story. there is another chart we prepared this morning on japan, on the growth in terms of the impact. let's have a look. this is a huge risk factor. this is post-tsunami. we have the sales tax, the
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delay. this is going into a room on wednesday with abe and his advisers to talk about the next move. anna: and that ties in nicely with what our guest was saying earlier. more fiscal spending by governments. our guest earlier was saying if they slip into a technical recession, because this could be a second quarter of negative saying thats underlines the argument for anybody who is arguing we need more fiscal stimulus. he thought we should have more fiscal stimulus. cpis: kuroda says japan --l reach 2% by -- drumroll the first half of 2017. guy: all evidence of point against that at this point. manus: [laughter] anna: are you contradicting the bank of japan? manus: yeah. both kuroda and draghi will --
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the interesting thing is the only thing that can make them hit that target would be a spike in oil prices. manus: we have already had a 40% -- guy: we hav anna: interesting that the theyncy continues -- talked about more easing coming, and economists are expecting more easing. wonder whether he will look at what has come out of the ecb and how the market has reacted to that and say, actually, maybe we need to lead more on the qe side. manus because ofeasing, course they have all three things to play with. guy, thank you very much. manus: let's get a little bit more with our tokyo bureau chief, accuraki aito.
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good morning. give us your perspective. >> sure. the decision came in just as we were expecting. we weren't expecting more stimulus this time, because it has only been a month says the negative rate policy have taken effect. -- most economists are thinking you need more time to figure out if policy has had any kind of impact on the real economy. anna: the boj said earlier on, aki, that the economy had continue to recover moderately. kuroda is saying now that the virtuous economic cycle is working in japan. if they are pointing to positives in japan -- we had some positive data earlier this week -- but where are the positives they can point to? >> sure. are certainly some good
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signs in the economy. the volatility, first of all, in financial market, stabilized. the yen stronger now than it was at the beginning of the year, and that stabilized as well. those are pretty good signs for japan. the statement from the boj today, though, did acknowledge a lot of weakness and things like exports, production, which are the main drivers of japanese economic growth. kuroda has virtually on a daily basis been dragged back into parliament from the 29th of january, when he announced the negative rights. another line here is that kuroda, more easing in terms of quality and rates. he's aware there are various options. the market has pummeled its response to japan moving to the negative rates, even though it is a tiered system. it has not been taken will buy the markets, in banking or in the currency market.
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it's not a policy which is warmed by the markets, is it? >> sure. i'll point out, though, that the entire yield curve has come down in japan. the borrowing costs are getting cheaper for companies and for consumers as well. mortgage rates are coming down. will thisuestion is have any kind of impact on the real economy. interest rates across the country were already so low. that is the big question mark. clearto your point, it's to kuroda that interest rates are falling due to negative rates. he clearly believes they are having that impact. thank you for joining us. aki ito. don't forget -- t you can go .top o
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> manus: there has been no dramatic movement in the yen; traders are building bullish bets. for everything he says, it seems as if the market is a little skeptical. anna: 6:38. russia says it will start with joint forces of syria, which puts pressure on president assad to reach a deal at the peace talks that got underway yesterday in geneva. manus: let's get more on this story. ryan chilcote is in moscow. elliott gotkine joins us. ryan, let's pick it up with you. what struck you the most about putin's announcement? ryan: what struck me the most was how surprising it was. i have been watching vladimir putin for 16 years and he continues to surprise -- not just me, but pretty much everyone. i'm not sure there are many
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people who thought this was possible, that you could begin a conflict like this as russia has in the middle east and exit as he says they will in such a quick fashion. keep in mind, the west's experiences. definitely the surprising nature of this is what struck me most. anna: elliott, let's come to you. how to this feed into the peace talks that have been taking place in geneva? elliott: anna, they had collapsed about a month ago. they only got going again on monday, when putin dropped the bombshell. it is unclear exactly what his decision will do. one theory is that it will concentrate the assad regime, make them more flexible, force-fed into some kind of deal with the opposition. conceivably, the opposition might think, hey, the russians
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have it wholeheartedly got us back, and they can get back some territory. of course the civil war has been ongoing for five years and that scenario seems unlikely, but there are a few caveats. the assad regime is far from alone. the regime is backed by the irradiance and ha hezbollah. many important players are not involved in these peace talks, so even if they reached an agreement, it is not as though there will be total piece in eace in syria. it is hard to believe that nuzra and others will lay down their arms. manus: what will be achieved? is it a rapprochement with obama, with europe? know, i think that
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warming relations with the west, trying to improve the relationship, could be part of this. but what vladimir putin wanted to do was send a domestic message, that russia can project its hour. it surprised everyone with his intervention in the fall; it was the first we had seen outside the former soviet union since the collapse of the soviet union. what i think he wants to show now is that russia can exit that with just two fatalities. russian forces, as far as we two fatalitiesst during this intervention. it doesn't have to be a quagmire, as many people were suggesting russia's intervention would be. it could lead to better things. i was watching the russian news, talking about how even the ruble was reacting positively. it's all about the domestic
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audience in russia. the russians have been through an awful lot between the recession and sanctions. there were concerns about this, but they never got to the threshold where people were too concerned. he appears to be removing concerns and turning this into a good feeling. anna: elliott, if the message putin is trying to get across is for the domestic audience, how will it be interpreted internationally? in particular, how will as sad interpret it? elliott: the assad regime is seeing this as a coordinated agreement with the russians. they knew it would happen in they are in complete agreement because it is pretty much mission accomplished. what impact it will have is unclear. we now the obama administration had a phone call with putin on monday, saying a political transition is necessary for long-standing peace, but clinton assad for urged
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the peace talks. even putting the future is a red line, but they can vanish as quickly as they are created. one thing we do know from the u.s. special envoy is that if there isn't an agreement, the only plan b is a return to war and possibly even worse than we have seen. manus: thank you very much. ryan chilcote in moscow, elliott gotkine in tel aviv. anna: up next, super tuesday round three. five u.s. states go to the ballot box. can front runners trump and clinton secure the nomination? ♪
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anna: the bank of japan press conference currently going on. basically, policy unchanged.
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haruhiko kuroda giving his press conference, saying that he to continue monitoring the rate. manus: the consensus from the bloomberg polls was that we would get more easing, but kuroda is saying you will need some time. you need some time to gauge the impact of negative rates, that markets have calmed down, that they are benefiting. this is about the mortgage rates coming down. anna: let's get the bloomberg business flash. kumutha: good morning. avon plans to cut about 2.5 thousand jobs and shift its headquarters to the u.k. to reduce costs and streamline operations. currently based in new york, the company says the shakeup will cost about $60 million in the first quarter. avon expects it to generate savings of as much as $70 million by 2017. sony has reached a $750 million
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deal with michael jackson's estate to buy out his stake in their joint music business. sony must make a lump sum payment of $733 million for the 50% stake. sony'sl consolidates control over a catalog of almost 4 billion songs. full flag and his face -- volkswagen is facing more problems over the emissions scandal, being sued in a class-action lawsuit with 278 institutional investors around the world. the claims vw failed to post information a timely manner. bank of america is is missing three investment bankers as it is in the process of eliminating seven from its brokerage and chile as part of a series of global cuts, according to people with knowledge bit.
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with knowledge of the matter. that is your bloomberg business flash. manus: thank you very much. tonight marks super tuesday, round three in the u.s. primary season. anna: voters go to the polls in florida, ohio, illinois, north carolina, and missouri. the predictions point to another strong showing for trump and clinton, the two front runners. let's get more from the former white house correspondent with us in europe. good morning. what are the polls predicting for the front runners? hans: the two most important states are ohio in florida, because they are winner take all. ohio has fewer delegates in florida, but ohio has the republican establishment, with the best chance of blocking donald trump. when you look at the most recent polls out of ohio, it looks like john kasich is in the lead, a single digit lead, but not like
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it is insurmountable. this really shows you what his challenges are. a cbs poll says there has been more recent polling showing that kasich has a six-point lead. the story is different in florida, where the home state of marco rubio is going to have a much more difficult time winning his state. in florida, trump has a healthy, commanding lead. cruz is lower there as well; cruz is down at 14%. rubio is at 10%, which means john kasich, the governor of ohio is in that poll. this is the last chance -- the poll. it looks much more likely that it will be john kasich, if he can win his home state, if he can keep trump's numbers down, if the republican establishment can keep them lower than expected, you may see a path forward to a brokered convention, but it will be very
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difficult for any of those three remaining candidates not named donald trump to get the requisite number of votes on their own. that said, it will be difficult for trump to get there, too. whether or not he can get a 50% of the delegates -- that is the question. democratic side is not quite as interesting or determinative today, but we will wake up tomorrow and will have a great deal of clarity. manus: amazing how life is imitating art when it comes to the netflix version of "the house of cards." where are we with trump and the republicans? do you see any shift? you cover the white house -- man y of these political moves involve shifts from the candidates or india from the party. have you noticed any nuances? has there been any crack in the armor of trump, that he could move toward something which is moderately acceptable on a global stage? --s: you know, it's not
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there hasn't been any nuance. i hesitate to use the word nuance and trump in the same sentence. we have yet to see trump breakthrough 45%. there has been so much focus and attention on him, it is still unclear to me whether or not a majority of republican voters support him. a plurality clearly do, that he needs to get a majority and of them a conversation about how he will attract suburban moderates, how he will get sling voters, how he can get to a majority. it's unclear whether a majority of the republican party would support donald trump. anna: thank you very much. a former white house correspondent, now in berlin, hans nickel. -- hans nichols. as millions of voters decide across the u.s., investors turned their attention to a decisio a handful of them
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decision-makers. hans: it is predicted that policymakers look at the benchmark unchanged. the probability of a hike in the united states from the federal reserve jumped to 78%. of before we hear -- but before we hear from the fed, we will get a check on the u.s. economy. anna: the headline number is expected to dip into negative territory as spending in february appears poised to be weak. joining us for a quick look at the dollar, richard jones. good morning. how are markets position going into this fed meeting? think nobody is expecting anything to happen today. they probably won't move rates, but as manus said, those odds are creeping higher. what i going to look for from the fed is i want to see whether this statement is like the december statement or is more reflective of what chair yellen
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said to congress last month, where they were more conscious. if you look at since she spoke the dollar weakened,, stocks are on a tear, oil is considerably higher. they could beat that their statement today is more like the december statement and is less cautious. manus: a moment of reprieve. this is the dollar since march of last year. you can see that it is paring off. the fed discussed the dollar in eight meetings in 12 months. peak dollar consideration was in september. this gives them the chance to actually shoe in another rate hike. >> well, yes. continues, it allows them to up the rhetoric and prepare markets for more fiscal policy. anna: we will see how many times they mention that word. thank you very much. richard jones, joining us with a preview of what to expect. manus: up next, more to come.
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we'll tell you what kuroda is saying. and sainsbury's. anna: we get numbers from them. more, when we return. ♪
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manus: boj holds firm. the central bank refrains from easing, and the governor times the negative rates. the chinese central bank is said to drop a tax on currency transactions to curb speculative bets against the yuan. putin holdback. russia will start pulling forces from syria in a surprise move. attention now turns to president assad to reach a peace deal in geneva.
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welcome to "countdown." anna: a warm welcome to the program. let's look at what is happening on the futures market. manus: a little bit softer tone to these markets. the chinese are considering a tax that has unsettled the markets. this is wei. you are seeing oil below $30 per barrel, just a little bit of a ramp coming off the top. those are the headlines, and the bank of japan did nothing of any note except say we will wait and see. anna: and governor kuroda is still talking over there in tokyo, continuing to say that they will take appropriate easing steps if needed. they're easing in three
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dimensions -- quality, quantitative, and rates. the keep it going -- they keep making that point. a great storyas on bloomberg -- blue slips sink ships. -- loose lips sink ships. he's done nothing -- the whole they of this is that haven't achieved a negative impact. anna: not as negative as he wanted. but they don't want to fall into that trap that draghi was in. let's get the numbers out of sainsbury's. q4 like for like sales. i will start with total retail sales, up against an estimate of 0.9%. it looks to be slightly better than the market was going for.
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estimate was for a reduction of 0.3%. whether it is like for like or total, things are better than expected for the uk's number two supermarket. the big story -- will they or won't they increase their bid for home retail? have until the end of this week to put up or shut up, and they are up against competition if they want to get their hands on his non-grocery retailer. stein offers offered $1.5 billion. retail is already trading above both offer prices. manus: ok. that's the news in terms of the big corporate. let's get you up to speed with the bloomberg first word. kumutha: good morning. russian president vladimir putin has ordered the withdrawal of most of his forces from syria, saying his objectives have been
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achieved. russia's intervention last september slowed the war in favor of president bashar al-assad. the surprised the load increases pressure on him to strike a deal at peace talks resuming in geneva. the war is now entering its sixth year and has killed at least a quarter of a million people, displacing many more. the people's bank of china is said to have drafted rules for a tax on foreign exchange transaction aimed to current currency speculation. according to people familiar familiar with the matter, it will allow authorities time to refine the rules. it would be the most extreme policy yet to prevent speculative bets against the u.s.. australia central bank may cut interest rates if wage growth continues to remain weak. traders are betting it will keep rates at a record low of 2%, minutes from the rba's march 1 meeting. low-inflation provides a scope to ease policy makers as
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australia's economy grew 3% in the fourth quarter. brazil's lawmakers are gearing up to revise the impeachment process as early as this week after millions of people protested over the weekend, demanding the ousting of their president. supreme court is expected to issue guidelines on the impeachment process tomorrow. global news, 24 hours a day, powered by 2400 journalists in 150 news bureaus around the world. you can find more stories on the bloomberg at top go. anna: stocks in asia have retreated from a 10 week high as the yen strengthened. let's get caroline hyde, looking at the asian market action. good morning. caroline: good morning. a fascinating picture being painted. when 35 out of 40 economists expected no move, to have this sort of market reaction -- is it all about oil? have a look at what happened. we did see the nikkei up by
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7/10 of 1%. the miners are on the downside, and there was a significant selloff in the afx, off by 1.4%. clearly there was some heavyweight in the aussie, really feeling the impact on the energy. commodities are the concern. that's the picture in japan -- the nikkei stocks also lower, dollar down against the yen, which is the best-performing major currency. the bond is a negative territory , completely flat at 0% yield. i want to dig into what is happening in the rest of the market. we are seeing some serious concerns when it comes to oil. we're down by 1.1%. is is why we are seeing such a negative start on the market? back to correlation? it seems to be coming off its
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highs because iran it is refusing to play along with the cap have bee happening in the rf opec. look at the affected is happening. aussie down by 3/10 of 1%. i leave you with one interesting area -- the yields on certain bonds. 1.9%, tim: saying go bearish. they could go higher. manus: thank you very much. a pretty big call from pimco. governor kuroda is still speaking in tokyo, saying to give the policy more time. i'm paraphrasing, of course. let's get more from our managing editor, brian fowler. he joins us from tokyo. you listened in. basically, defending his policy, saying we are ready to reconsider everything. brian: yeah.
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he's really been all over the place today. the comments are still coming out, that he has gone from wishful thinking -- he said the virtuous cycle has kicked into gear, which is a little hard to justify, to claiming that he thinks the negative interest rates will not affect bank profits. if you look at the stock market, the bank index is down 9.5% since a negative interest rate policy was first announced. he's also saying that all options are on the table. consider any kind of policy to further ease in coming months. the emphasis is that we will go forward; we will get the negative interest rate time. but in coming weeks and months, we will see further easing one way or another. anna: brian, as we get closer to the elections in japan later on this year, will kind of pressure is there on the government to do something on other measures,
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things that are not monetary? much pressure is there to do something fiscally? brian: there's a a lot of pressure. first on the list of be a sales tax. that is slated to rise to 10% from april, 2017. all the signals we are seeing is that the government is positioning itself to back away from that. morninghe nikkei this making the case for postponing. a close advisor to the prime minister. we also had joseph stiglitz coming to tokyo; we know he will have a closed-door meeting with abe and his top advisers. we expect him to make the case for putting off fiscal austerity. say he may come out and has had all this great input and he is going to take this very
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popular step of postponing the sales tax hike. manus: brian, thank you very much. brian fowler, our japan managing editor. let's bring you breaking news coming in. net interest income at 297 billion rubles. the estimate was 288 billion. a bit of a beat in terms of net interest income. rubles.lion anna: and the key provisions -- that looks better. better than the markets have been expecting. let's bring in our next guest. fixed income portfolio manager at j.p. morgan asset management, joining us now. great to have you. we're watching with the boj is saying; the negative rates being
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fully analyzed. what do you think is delivered for japan? hasn't been a good policy? >> at the moment, the jury is out. they are expecting the reaction they saw, where it sold off for a few hours, and then the best-performing currency. i think we need to agree with kuroda and give him time. it looks like they made some small tweaks, so maybe the amount of the banks can place -- e additional benefits to banks so they can continue to lend. the next thing will be what do they do next. our cents is that they continue with negative rates. manus: such a backlash, was a better? -- wasn't there? a backlash in terms of banking, globally, in terms of what is going on with negative rates.
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there seems to be a consensus building that negative rates have run their course. is that what people are talking about? in terms of their potential impact? >> i think the potential impact of monetary policy in general -- people are concerned it is running its course. seven years into the expansion, we have had half a decade of qe, no growth globally. i think that is the big problem. people are thinking, what can the central banks do next to stimulate -- anna: there wasn't a commitment to do more on the fiscal side. >> and it's interesting, isn't it, because you are starting to see that language coming through from the ecb, saying that they will do more fiscal spending. government bond yields are at record low levels. should they not borrow and use it to do this? of course, that is a political decision, but it does seem a sensible option. manus: it certainly is an option. that we have here is a function
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where we look at the projection of the view of where yields will be. this is on japan, 10 year government bonds. we're looking at 0.3% it's interesting in terms of the perspective of the market and the shifting yield. 1 out of 10 are in negative territory now in japan. how much deeper from a bond traders perspective were we going to see in terms of negative rates? jgb versus the german curve? what is your perspective? >> there is going to be a floor, which will be where they get the deposit rates. 10 basis points negative in japan -- we wouldn't expect to see 10 year yields go through that unless we saw a big sign that they were looking to take a negative rates even further. one thing thousand resting last week, when draghi said he was
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down on negative rates. but that baby said -- maybe a said the floor was not as low. anna: there is an expectation from economists around japan that we will see more easing. the form it takes, not sure, but there are a lot of economists expecting to see something more negative in japan. would that be your base case? >> our base case further is that they take it further than they did in april. growth is just not good enough. they alluded to the weaker inflation expectations; more is needed out of japan. in what form it takes, we think more negative rates. manus: are the japanese braver than the european central banks? >> well, the die is cast. anna: thank you very much. he stays with us. next, order number one
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at sainsbury's fourth-quarter sales beat estimates. the plans to take over our argus. ♪
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anna: welcome back. 18 minutes past 7:00 this tuesday morning. a little gloomy out there. it's not so bad, we shouldn't be picky. futures in london are set to be weaker. we've still got two minutes to go. let's get the bloomberg business flash. kumutha: thank you. avon plans to cut about two and a half thousand dollars in shift its headquarters to the u.k. to reduce costs and streamline its international operations. currently based in new york, the company says the shakeup will cost about $60 million in the first quarter. avon expected to generate
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savings of as much as $70 million to 2017. a $750 milliond deal with michael jackson's estate to buy out his stake in their joint music business. sony must make a lump sum payment of $733 million for the 50% stake. deal consolidates its control over a catalog of almost 4 million songs. volkswagen is facing its biggest lawsuit yet in germany over the emissions scandal. it's being sued for 3.3 billion euros in a class-action lawsuit involving 278 institutional investors around the world. this suit claims that it failed to publish information about the scandal in a timely manner. that's your bloomberg business flash. manus: thank you very much. supermarket wars. sainsbury's rose by 0.1%,
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beating analyst estimates. let's bring in charles allen to discuss sainsbury's. as you set down, anna must have said no detail on how retail so far,. but let's talk about the numbers. it's the first sales increase in two years. >> yeah. it has been a good performance, and it has been coming for a while because they have been outperforming the other three. one of the key points here is this implication of the business. the amount sold on promotion dropped down to 28% of the total. it had been running in the high 30%. we have something that shows that customers are responding to offerr prices, and an that is closer to what the discount is -- a simple, low price. of course, they are still gaining market share.
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winning market share back -- >> broadly speaking, i think they are holding their own against the discounters. overall, they gained a little bit of market share, but we have seen asda it particularly lose a significant amount of market share and tesco is still running low. anna: the big news is that there is no news on the bid and whether they will increase it because the competition -- >> yeah. this is what you might say is the amazonization of retail. retailers have given up ignoring amazon and said, right, what can we do to be done? sainsbury's answer is to say we have to have something in addition. we can offer a broader range of nonfood and possibly a better delivery service. manus: i'll ask -- what is
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amazon going to buy? what fresh food retailer could they buy? anna: they signed a deal with more since. -- with morrison's. >> they have been talking about that for a long time. it's not obvious that they will model. use that anna: charles allen. manus: let's stick with the retail scene, because they will get u.s. retail sales coming out later today. the headline number is expected to dip into negative territory. it appears poised to be week. -- weak. anna: while economists predict policymakers will keep the benchmark unchanged, probability of a rate hike this year has jumped to 78%. the fixed income portfolio
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manager at j.p. morgan is still with us. a great chart -- the big drop-off in expectations of a rate hike, and now the rebound. where do you see the fed heading? how many hikes will we get this year? >> i think our expectation is they may get away with two hikes. they will have to bring down some of their expectations. the dot plots are predicting four. but things are looking better, and we have to accept that. they are focusing on a couple things -- and they are looking pretty strong. ands: i did this chart, pulled in on that theme. what you have here is a bloomberg aggregate for wages. so this is about average hours -- imagine this beginning to fade off, tied in with retail
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sales. there is no huge driver from the income side of the equation in the u.s. numbers thus far. that is going to be very important part. is that correct? >> definitely. we still have that lack of wage inflation, which everyone is focusing on and everyone thinks will appear. that is what the fed would like to see. everyone would love to see some form of wage inflation, and unfortunately it is still pretty lackluster. anna: maybe the fed will get away with two. we are looking at thesedot plot -- we are looking at these dot plots, which hold so much sway over the market's expectations. aberdeen is saying they won't take it at face value, and your concerns yesterday -- you said the fed will have to come down to meet the market. do you get that sense? >> that is definitely the case.
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the market is not taking them at face value. if they bring it down by one, i can't imagine they will -- the theyots made sense when were trying to do the forward rate guidance. the fed obviously has to be the champion of the u.s. economy and the market is very aware that they have overestimated what rate hikes are going to be. manus: they might actually reset the plot, excuse the pun, in terms of expectations. pimco made a considerable call -- u.s. 10 year yields would be between 2% and 2.5% this year. would you concur? hsbc was saying -- 1%? >> we're getting this polemic move. i think in the short-term, we may see yields move higher. a positive sentiment at the
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moment, but longer-term, the top think --at move -- i push me out toward the end of ultimately, the fed will not be able to hike rates that aggressively. the 10 year treasury to us versus the rest of the world -- yields -- 10-year treasury is pretty attractive. anna: thank you for joining us. fixed-income portfolio manager at j.p. morgan. manus: for the next 24 hours in terms of what the fed will do -- kuroda. we'll see how it plays out. -- sorry, "onam the move" is up next. anna: they will be speaking to
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mr. yen. he will be talking to them, next. ♪
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>> welcome to on the move. it is a: 30 over in berlin. were counting you down to the european open. i am guy johnson, alongside hans nichols who is over in berlin. the boj pressing and negative rates after a surprise in january. kuroda says nothing warrants more stimulus -- we will speak to the man known as mr. yan. -- mr. yan. putin pulls back. russia will start withdrawin


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