tv On the Move Bloomberg March 17, 2016 3:30am-4:01am EDT
change the way you experience tv with x1 from xfinity. guy: welcome to on the move, we're counting out the european open. hans nichols is on assignment. growth concerns take a seat to the fomc. when does inflation have its voice heard. whatve a chart that shows sterling is set to sink further as the bank of england's rate decision.
careful. welcome to the program -- program. it looks like it will be a fairly strong one for european equities. it will be opening up around 9/10 of 1% on the euro stocks. whole bunch of stocks this morning. that will affect the market. the cac 40 and the dax up by 8/10 of 1%. the mattel he what else is going on around the world. the big move in the euro-dollar. where we are trading. look what's happening to the kiwi as well. here is the story we're going to get into.
you're watching the story in brazil. look at what crude is doing. nymex is trading up over 2%. here is the bloomberg first word news. >> the yuan fell to a 15 month low. smaller than estimated increase fixing speculation that china is trying to limit gains against the dollar. compared with 1.1%. in brazil a federal judge released recordings that president roosa and her predecessor da silva. earlier she said she was bringing him into the government for his merit the nine it was to shield him from a corruption probe but critics say that a
recording from a police wiretap suggests otherwise. eu leaders in the turkish prime minister will meet in brussels today. ahead, angela merkel proposal to- the take back refugees fleeing into greece in exchange for more visa fee travel and further eu talks. global news toy four hours a day . stories guy:. in a distinctly outward facing policy statement the fomc cited global growth concerns. let's bring in the global head of fixed income strategy.
saw a problem, how big a shift is this? >> i always thought it would be difficult for the fed. but even by my standards that was a very dovish fomc. especially when the cpi is your price and we have signs that the pickup in core surprise is full of. surprisingly dovish and it is an invitation for investors to buy long-range inflation. guy: also it's happening with the shape of the curve. there's quite a big steepening yesterday since december. compare and contrast with happening with japan at the moment. when you look at this inflation inflation isc, nearer in the front side of the
curve. will it even more pronounced? messageed delivers a that we are ready to take a risk with inflation and we are not going to tighten much. in the mid-near-term you might see some corrective steepening i don't think it's going to go too hard. that.ld contribute to that is going to cap that steepening. that is a risk for the long end of the curve. guy: what do you make of the fact or the people concerned with inflation will make of this? they will be champing at the bit. they are already worried this will become a problem. how long can janet yellen keep >> the likes of brent
hard and bullard clearly have been heard. they have been worried about the global economic conditions, but the fact they could not really agree on the balance of risk, some clearly wanted to point toward downward risk. i think that shows some very big dissension. you'll probably hear those voices. we had only george voting against the decision, but i think you'll hear more and more dissenting voices. guy: once you get into inflation being a problem, at some point it will happen. how does the rate half change? >> this is something they want to avoid.
accelerate if they realize they are behind the curve. it is some thing they want to avoid. the bet they are willing to make for now is that global conditions will cap inflation and clearly miss yellen was not convinced about the sustainability of the recent pickup in core inflation. she wants to see signs that it will stay around and that inflation pressure will stick for longer before she can worry. we will have inflation undershooting for some time and it seems they are willing to accept it for some time, given the global economic conditions. guy: we set the groundwork, what is the rate trade on the back of this? we bought inflation, give us for we need to be looking
the position ourselves correctly for this. we will accept it for a little bit longer. >> you buy inflation and a thank you by whiteners between u.s. long rates and european long rates. keep in mind that the ecb will buy much more from early april as the programs increase from $30 billion to $60 billion. all of that will be in covered to createthat's going a greater shock in europe. i think you see widespread drop in on the currency side, it is risk on. you probably want to buy the oil currencies. these are the type of currencies in the near term we like. volatility in japan has
been spectacular for a week or so. do you stay way from that? sothe fact that the fed was dovish is going to some extent help the boj because the market is risk on. off will take some pressure the boj. if that market conditions stays a bit longer, the boj can afford to wait and see. guy: stay with us. that story coming up we will have a great chart view.
guy: let's get you caught up on what you need to know. >> rio tinto, the world after second-biggest mining company announced that jean sebastian will be appointed the chief executive in july. weston smith kline chief executive officer andrew witty plans to step down in 2017. they said he will begin a search for a successor and will consider internal candidates.
after a 20 year career at the company that included asia and africa. toshiba is under investigation by the u.s. over allegations that it hid $1.3 billion in assets at its nuclear power operation according to people familiar with the matter. u.s. authorities are scrutinizing allegations made in an internal review. shares plunged over 8% in tokyo and the sheba declined to comment. guy:, after george osborne yesterday delivered his annual budget, the chancellor used his speech in parliament to call on the bank of england officials to keep an even closer eye on the risk to britain's economy. joining us now is bloomberg's technical analyst. .ood morning
just a quick look at what we have got here. we do that sterling has been under pressure and has been for quite some time. but why have we got this amazing chart in front of us and what is this cloud we talk about? >> i had to people outside earlier to see if it were cloudy, it is not. this study is a trend study. traders use it to identify price trends. it used by japanese traders the forecast the likes of the yen. in recent years it has been adopted by the western world and we can analyze this. guy: the basic premise is, the thicker the cloud, the more resistance. it is unlikely that this is
.ikely to break to the upside >> that is right. analyze this care about the following things. where is the relationship between the price and the cloud. how is the cloud slanting. we can see this moving average band which is essentially a cloud slanting downwardly. finally, the orange one you see should be below the blue line so the cloud should be twisted bearish lee. the thickness of the cloud indicates that the market has seen a strong trend lower and stopped consolidating. the key message there is that
they need to work extra hard to change the current bearish sentiment in the market. the need to push through the cloud and break the top of it which is currently 146. guy: can you see anything positive in sterling right now? >> it's coming from the fed. the fact that the fed was so dovish. we have seen the euro shooting higher and they are benefiting from that, but i agree. the potential is very limited. not many people are going to be willing to reverse their short positions on sterling that remains a very close call. let's see what the eu summit brings this week about immigration. the immigration crisis worsens in spring and that will keep people worried about the outcome of the referendum.
have also a fairly dovish bank of england. that could also limit the potential for sterling. guy: you don't see mark carney in his current term raising rights at all? >> that is correct. have at change if we stake in the referendum and we see economic benefit from that that know, for now our central view is there would be no hike in the cycle. guy: carney talks but not wanting to see -- to take part in the currency war. very nice to see you. we are minutes away from the european equity market open. up next with a look at the potential for movers. rio tinto has a new ceo.
guy:, welcome back, eight minutes into the market opens. >> of starting with the world's biggest cement maker. this company lost more than 40% of its values. i tracked that sinking stock price right here. today we had earnings in the fall and profit but that adjusted number did beat so i am getting mixed calls from analysts. it will be interesting to see how those stocks prices compare at the open. i am also looking at rio tinto.
you can see that they had a little bit of a recovery. but they've appointed a new ceo. we are talking about jean sebastian zach. storyet's pick up on that and talk about what is happening with rio. to bloomberg news editor will kelly. this came a little bit out of the blue. i think in the wider context it is not a huge surprise. is 66 years old now and it is about time for him to move on. guy: what has he done? >> he has relentlessly focused on costs.
shapeook in much better and many ways. guy: he has outperformed his sector peers. absolute terms of has been her rent this in relative terms he has done a very good job. he is outperformed glencore. guy: he is an insider and knows the business and he has bought into the strategy. >> a think that is right and what is interesting is that he has the copperhead and not the iron ore head. so the question that investors will be asking is does this signal a shift toward more core projects. developing that will be a huge part of what he has to do. are they going to be the company that does m&a? guy: we have talked to various
of the bosses and you get the sense that the rio is in the driving seat on this story. focus may be an area they on. how easy will it be to buy assets in this space? >> it's like, yes the balance sheet is stronger to do deals if they are there. we've seen before that he suffered because he made bad acquisitions. up.ly good assets came >> it is hard to say, i expect positively. everyone would new he would be going at some point. guy: thank you very much indeed. coming up, it is the market open . futures are fairly positive. we will see a one cent bounce.
you are watching "on the move." we are moments away from the start of european trading and this is your morning brief. your recession, our problem. world concerns -- global growth concerns take a seat with the fomc. scandal in controversy as two bricks hit the wall. those first? the international energy agency says the local oil has come and gone. we speak to executive director later this hour.
welcome to the program. it looks like we will see a pop in equities this morning. you are going to see that market underperforming a little bit. let's check in on the open with nejra cehic. nejra: what we saw from the fed of course, was no change to rates and a bit more of a dovish stance in terms of the future path of rate rise. overnight, we are seeing futures point higher. if we take a look at how the equities are opening. the ftse 100 is up 3/10 of 1%. the cac 40 is unchanged at the moment -- there we go, up 9/10 of 1%. a little bit of risk appetite is seeping in here and we are waiting for the dax open. may get -- let me get you a check on the currency markets. with of the bloomberg dollar index dropped the most in one month. it hit its lowest in almost five months. and if you look at what the pound is doing, pretty much unchanged ahead