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tv   Countdown  Bloomberg  March 22, 2016 2:00am-3:31am EDT

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anna: the fbi cancels its iphone hearing as it may have found a hack to unlock the terrorists phone. on currencies. the former bank of england governor says the ecb and boj are both in the executive race push down the value of the euro and the yen. >> i think the stock exchange is still closest to gambling. ferragamoceo of distances his chinese businesses from volatility in the country's equity markets.
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more on that exclusive interview to come. manus: you are welcome to "countdown." anna: a warm welcome to the program. it has just gone 6:00. let's talk about the oil price. we are back up at $41. both wti and brent equal with each other right now. not often that you see that. no differential. anna: late last night, we had a member of opec talking about his expectations about the oil price, something moderate, but not high. that is even if iran does not agree to enjoy the growing group of companies that have agreed to implement some kind of production freeze. 15 out of the 16 nations
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are coming together in delhi -- doha. we do have a chart. this is oil production. u.s. daily oil production is just coming lower. this is part of the strategy that opec would say. wti is trading in the opposite direction. this is about many consequences. have a look at this. up for not had the ruble a wild. it has gone from being the most tortured soul of a currency to one with reprieve. you have a shift around the market potentially getting ready. there is sentiment out there that you could see the central bank come in and intervene because they are happy with this lower ruble. dollar, do you believe the san francisco fed, williams and
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lockhart, that maybe the fed could be more in play than we thought? the dollar iswhat doing. it is pretty much flat. hawkish comments coming from john williams and dennis lockhart. let's get to bloomberg first word news. >> good morning. the yields on 10-year u.s. treasury's grows the most in more than a week yesterday. that was after two federal reserve officials suggested the central bank may raise interest rates as soon as next month. >> there is evidence by the economic data to justify a further step at one of the coming meetings. a further step in raising rates, possibly as early as the meeting scheduled for the end of april. >> the european central bank and the bank of japan are essentially trying to push down the value of their respective
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currencies with the use of negative interest rates. that is according to the view of mervyn king. >> the central banks are trying to push down the exchange rate. are countries in the world saying, if the rest of the world was going normally, we would be fine. what is left? push down the exchange rate. not everyone can push down the exchange rate. most countries are trying to do that at the expense of the dollar. now the federal reserve is concerned about the strength of the u.s. dollar. >> preparing to defend his budget. is talking about his deficit reduction. brushing off decades of distrust, barack obama and to been president raul castro have shaken hands.
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both men expressed hope for the improving relationship, but also highlighted deep differences. >> the relationship between our governments will not be transformed overnight. we continue, as president castro indicated, to have some serious differences, including on democracy and human rights. firms haveancial shifted bonuses to increase female representation. according to a government commission review of gender diversity. it stopped short of calling for mandatory goals. the founders of -- one of the founders of intel has died at the age of 79. grove played a key role in building it into the largest semiconductor maker. he was also a mentor to steve jobs and larry ellison. bill gates said he was at the forefront of creating the
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+++ whenever we spent time together, i always came away impressed by his brilliance and vision. global news 24 hours a day, hard by 2400 journalists and more than 150 news bureaus around the world. manus: let's get straight into these markets. we are seeing a little bit of a hole from the chinese in terms of what they are doing about the fixing of the currency. yvonne: it is important, but we have fallen below that once again. we saw shanghai snap out of those seven days of gains, which was the longest stretch of gains we have seen for some time now. shanghai now down .2%. mostly in the red. not getting too much of a catalyst to push stocks higher. some analysts say we need fresh news. with the exception of japan,
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which is coming back from a holiday. nikkei endingthe to day close to 2%, close session highs. the weaker yen driving stocks, giving a boost to some exporters. manufacturing pmi data showed contraction in march. it was the lowest reading that we have seen in three years. i want to talk about some tech news today. that was a big sector, news-generating issue. 9.8% in taiwan after it was cut to sell. nintendo surging after its smartphone at reached one million users. this is its first foray into smartphone apps. dena, a company it is partnering with, is also rallying as well as they make the transition from
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consoles to smartphones. when you talk about the dollar rally, we do see that continuing today. it is the malaysian ringgit seeing quite a bit of strength. this level for the first time since august, strengthening 1.4%. anna: thank you. yvonne man in hong kong. technology names in the asian session. let's stick with the technology theme. hearing hasne court been canceled after the fbi said it may be able to access data on the terrorist device without apple's help. u.s. government wanted apple to create software to override security features. ceo tim cook remained resolute, saying he is not prepared to compromise the privacy of millions of users. >> we did not expect to be in this position, at odds with our own government. but we believe strongly that we
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have a responsibility to help you protect your data and protect your privacy. weoh it to our customers -- owe it to our customers and our country. this is an issue that impacts all of us. shrink from this response ability. anna: joining us now in the studio, david, global market strategist at j.p. morgan asset management. we also have details on the apple story. the government canceled the court hearing. really quite unexpected, wasn't it? >> particularly the cousin came from the government side. they said the government wanted to test a possible message for accessing the data -- a possible method for accessing the data without apple's help.
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department did not identify who actually stepped forward with this new method for unlocking the phone. that is a bit of a mystery. if the method works, it could eliminate the need for this court case against apple to continue. we are talking about a landmark case that could redefine the boundaries between personal privacy and national security. that has been avoided, for now, until april 5, when the government will file a report. manus: he for the news broke, tim cook addressed the issue during the product launch. saying it is for our protection in terms of using the product. >> he actually kicked off the launch talking about this case. he said we need to decide, as a nation, how much power the government should have over our privacy and data. of course, what came out of it were no real surprises. a new, smaller iphone that would start at $399.
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he talked about a new ipad and cut the price of the new apple watch. the iphone will have four stainless steel finishes and a faster processor. share price reaction was not great. fairly muted. if history is any guide, the stock could improve in the short-term. since steve dobbs -- steve jobs died, apple has gained an average of 1.5% a month after product launches. three months after a launch, the shares tend to all 1.8%. -- tend to fall 1.8%. anna: thank you very much. let's get to david, global market strategist at j.p. morgan asset management. your thoughts on the tech sector as a whole? clearly a lot hangs on these new launches. what is your big picture view? david: when you look at apple, two of the things that markets
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are worried about, pricing power , low inflation, nominal growth, and liquidity. pilehave a huge cash internally. this is a linchpin of a number of portfolios. i still like where the tech sector is going. it is leveraged to the strength of the consumer. the case for economies and markets around the world. furthermore, if there is any spending,business spending designed to remove the need for further labor, technology is leveraged to both of those themes. i think it is a good place to be. significanthing when you think of a company like apple. we wrote a case when -- that talks about the premium. industry's90% of the smartphone profitability. they are taking a step in terms
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of changing direction. evolution to come from the area? david: you could take a bull case or a bear case. apple is one of the most powerful brands in the world. we know what a powerful brand does. it allows you to have margins because people will pay up for it. apple is going to run into the problem of large numbers at a high speed. they are taking a little bit of a risk. they had the colors. that was a bit of a flop. they are a premium brand. manus: cutting the price of the watches as well. i don't know whether this is a moment of desperation or appealing to the chinese market, which is huge.
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manus: one of our analysts in taiwan wrote a piece on which talked about why this would be better than is not beingse it pitched as a cutprice model. he says it is a midcycle release which builds on the features of the previous model. spending a little less but you are not getting less for your money. that is the message. away from the tech scene, what do you weigh the tech sector up against right now? what are you moving away from in favor of tech? david: the big question in my mind is where are the financials going? they have had a rough time. in aare transitioning world where free cash flow is maybe going to be king going forward. utilitiesme of the
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look a little bit punchy at these levels. most of the central-bank action we have seen is probably in the price for bond yields and bond proxies. there could be some vulnerable bonds. , until we getme past a few forces that are driving us, such as the reduction in manufacturing and energy globally that we are seeing from the oil price and the fallout from that, i understand why people want to stay slightly more defensive. manus: stay with us. you will hang out for the next half hour. anna: let's take a look at what is on the slate for the day. a slew of pmi data out this morning. ifoour after that is the
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business confidence out of germany. manus: 9:30, we get inflation and ppi. then we are back to germany. anna: in the u.s., the political race for the white house continues. we have seen arizona, utah, and idaho. manus: up next, the chinese conundrum. pressurening yuan puts on luxury brands. our exclusive interview with the ceo of ferragamo. ♪
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anna: welcome back, everybody. this is "countdown." you are looking at a live shot of hong kong. the hang seng is a little weaker at this hour. let's get to the bloomberg business flash. >> shares in valiant pharmaceuticals surged the most in three months yesterday after bill ackman joined the board and
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their ceo was ousted. at the same time, valeant accused its former cfo of engaging in improper conduct and led to the company filing a financial misstatement. schiller refused to resign from the board, saying he did nothing wrong. deutsche bank may have its credit rating cut by moody's on concern that germany's largest lender will struggle to carry out an overhaul and improve profit. moody's says through changing leadership and recalibrating its the outlook has only worsened for deutsche bank. have fallentrograd in after-hours u.s. trading after they posted a surprise fourth-quarter net loss caused by unprecedented asset write-down and falling oil prices. that is your bloomberg business
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flash. manus: thank you very much. ferragamo makes 36% of its revenue in china. ahead of its annual investor meeting, the company's ceo spoke to francine lacqua. she asked if recent market turmoil and the slowdown in the chinese economy has had any effect on sales. , i believe there is not an immediate relationship with the stock market. there have been a lot of things about the number of chinese buying. i do not believe this so much, direct involvement. i think the stock exchange is still closer to gambling. sometimes.y moving what you feel is the mood
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changes. strong impacta move. macau, and in terms of the everybody convinced of 6.2.e midterm growth still, you see the kind of confidence. manus: let's get david's take on everything. it is about adjusting the business model in terms of changes. we have had some significant shifts in terms of how the luxury businesses are doing in china. david: indeed. this is part of the vanguard of changes that china has been trying to make, clamping down on the luxury spending. of course, the impact of china's slowdown on luxury does not stop
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there. that is kind of a sideshow. china's growth pushed up emerging-market growth around the world. that created pockets of wealth. those pockets of wealth were spent on luxury goods. that has been one of the key theers of the earnings in consumer global discretionary sector. some of the expectations for those firms got out of control a year or so ago. now we are seeing similar expectations of what they can deliver on earnings adjusted down. anna: where do you focus your concerns in that regard? are you talking about other countries within asia or further a field -- afield? i think both.
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i think it is now pretty much in the price. we have seen the selloff in a lot of these emerging-market which means the luxury goods become that much more expensive. you have seen areas of real , thee, such as florida brazilians are not there and the mexicans are not there. you have seen the rest of asia adjust to a less buoyant chinese luxury consumer. china'ss not mean that economy is going to fall apart. i agree with what the ceo was saying. the stock market and the economy are two different things. entered atential he healthier phase of chinese growth. less about wealth and luxury and more about services, employment, and the retail sector. rebalancing is the
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critical point. i was in paris yesterday. one of my guests, who travels to china a lot, say that china's response to the global recession has manifested itself. we talked about the two things being completely divorced. this is trading volume. you can see the interference. we have had the first drop in eight days below that 3000 level. we have rebounded by 13%. the two things are different. in the psyche of markets, what happens to the chinese equity market. even though we say we should not pay much attention to it, it does -- david: the first thing anyone checked before they came to the studio, you would check what happened in the shanghai stock market. manus: is that because of intervention? david: a little bit. it was coming down from extraordinary highs. the biggest show is the
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currency. can be a market significant part of the emerging market portfolio. i am ok with my fund manager picking a couple of things that they have conviction over. the bigger issue for financial markets is the currency because ramifications. we still think it will get another 5%-6% down in this currency by the end of the year. will not thinks that cause volatility in the markets, they are kidding themselves. anna: i read a great story about how the pboc managed the stock crash last year. does that give you confidence that they talk to each other in that way? david: i think it is heroic, right? [laughter] a good bit of positivity early in the morning. he would love to think that the world central banks do talk.
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they havehat publicly-available documents -- anna: you are raining on my positivity. david stays with else -- stays with us. a short break. ♪
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. odintrg ucin pwifiwiro, fi hthatpsyow usur bs.ines u 'doe t eth dvery.nebusiss. t builbufor sssine manus: 6:30 in london, 7:30 in brussels. let's get the bloomberg first word news. >> good morning. the u.s. government says it may not need apple's help j hgrtoce coheg foda after the justice department said a third party suggested a way to access the phone's data. apple says it has no information about the claim but once the government to share details of the security vulnerability with the company if the case proceeds. ,pple has unveiled a new smaller iphone that will start at $399.
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that as the firm seeks to jumpstart sales by enticing more users to of grade, especially in high-growth markets such as china and india. the new iphone has a four-inch screen and incorporates a faster processor that runs the larger iphone 6 s. the yields on u.s. 10-year treasury's rose the most in more than a week yesterday after to federal reserve officials suggested the federal reserve may raise interest rates as soon as next month. >> there is evidence by the economic data to justify a further step that one of the coming meetings. further step for raising rates at one of the coming meetings. possibly as early as the meeting scheduled for the end of april. >> george osborne is preparing to defend his what it he
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addresses parliament later today. the u.k. chancellor is facing a cabinet revolt over his deficit reduction. iain duncan smith quit over the weekend. one of the founders of intel, andy grove, has died at the age of 79. he played a key role in building intel from a 1960's start up to the world's largest semiconductor maker. he was also a mentor to steve jobs and larry ellison. bill gates said, "he was at the forefront of creating a personal computer industry. whenever we spent time together, i always came away impressed by his brilliance and vision." .lobal news 14 hours a day on can find more stories bloomberg top . anna: guy johnson is on set with
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us. good morning. : i look at this and i think europe and japan. i think, what is going to happen europe. you look at the backend of the curve in japan. all of those top lines out there are at the back end of the curve. , whates at the bottom this is showing is the japanese curve flattening out massively. the blue one at the top is the backend of the curve the you can see this collapse that is happening. you wonder if this is going to be the story in europe. long-dated bonds with some yield attached to them will become an increasing priority for managers. david: the story taking this data and seeing how distorted the bond markets are coming -- are becoming in japan and how
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liquidity is a critical issue. this a risk for us in europe or not? the ecb would maintain that they have a plentiful, bountiful source. year, we april of last saw the huge move up in german bund yields. seeing thenk we are risk of a blowout here. when you have a price-insensitive buyers in the market, a massive one. i think the ecb does recognize that it is constrained in some of these core markets. if effect has been dramatic you look at some of the yields. that is a good thing. one of the misunderstandings about quantitative easing, it is
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not just about the interest rates. it is about the ability to raise the quantity of that debt. that is a transmission mechanism to the largest countries in the bloc. it is a stimulus and key driver of quantitative easing in the u.s. manus: one of the debates that had thece yesterday head of the bundesbank and the central bank in france. the ecb would maintain that policy has much further to run. but there was an emphasis from a number of speakers that monetary policy, quantitative easing, had more than run its course. almost by definition, you could say the further they go, the less they have left. that is understandable. david: potentially new ones or even negative rates.
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they can go a lot more negative than people think. our investor bank suggested the europe byy of -.7% in the end of the year. which isa demand issue collapsing the curve. are you going to see the same thing happen in europe? yes, the ecb is moving into asset classes, but it is still buying aggressively. more it pushes down key rates, it will crowd the market even further and you end up with this increasing push towards the back end of the curve. i find it bed to believe they will doing this situation. why should a yield yields more than zero at this point? david: in terms of maturity for down the credit spectrum, i
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think you could see negative rates here. there is a lot of private sector investors, for different reasons , just cannot hold a negative instrument. they have to go further on the curve if they are not going into the credit space, which is why you see this rapid flattening in japan. yes, i think we will probably see that going forward in europe. let's not forget where the ballgame is for the european economy going forward. construction, housing, investment. that is the general growth going forward. anna: guy johnson will be back with "on the move" in just about an hour. the former trade minister in europe has warned that a so-called brexit would have a big impact on the u.k.'s position within the world. >> there would be a loss of british influence. britain has used that influence to make europe much more open.
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free trading, an entity in the world. very open to foreign investment. and though that will not change overnight if britain exits, the loss of that influence would damage europe and cost us economically for the long-term. anna: let's get back to david. where are we in terms of market assess theo likelihood of different outcomes on brexit? david: we have seen a big move in the currency this year. they have always criticized around the announcement of the referendum. the campaign revealed political tensions and the strength of the exit side of the campaign. price, toready in the
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a certain extent. we expect there will be more to come. as for these things, it is about a month for had that we expect to see markets have a renewed focus on it. there have been some widening credit spreads. in my opinion, that is unwarranted. have a sharpe to economic deterioration to want to pay more for the credits of investment-grade companies in the u.k. i think that is maybe a little excessive. furthermore, we are advising u.k. clients to raise their international exposure. we have been saying this a long time. lostace everything that is if we do stay in. with tightening global liquidity , let's focus on our trade deficit.
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manus: you do not necessarily see us retracing all of this. david: exactly. there will be some bounce. the 72 level$1.40, in euro-sterling? 0avid: the pound was above $1.5 a short while ago. i think going back to that is reasonable. i do not think we have seen the adjustment in those deficits that the market wants to see. when you speak to international investors and they want insights, do you think they have got this in focus to the right degree? comments from the fed about how they do not see it as a big risk. time in recently spent both russia and the west coast of the united states.
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we talked a lot about brexit. allocated to not u.k. assets. they are allocated to funds. they are expecting the fund manager to deal with the internal consequences of this. so i think it is a curiosity for a lot of people around the world. for asset allocation decisions, no. manus: it is on the radar, but not the highest thing on the radar. fund managers are underweight u.k. equities, making it the least favorite. if you look at this in terms of the actual protection, investors are beginning to pay on the equity story. it is almost a mirror image. is it time to buy protection? people are paying more premium
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to protect themselves on sterling than they are on other currencies. david: you can do that if you have a european portfolio. you can protect the sterling part of your assets. ofhink there are a lot reasons to look at potentially overweighting u.k. stocks. it is relatively cheap and the dividend yield is in excess of 4.4%. this is a market that has been plagued by commodity weakness, mining weakness. we are near the end of that train wreck. we may not be right there at the look over aif you number of years, people will raise their exposure. anna: global commodities on the brexit fear. david: absolutely. sideshow, is a
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think, for the stocks, but not for the currency. anna: thank you. stubbs, global market strategist at j.p. morgan asset management. manus: up next, this is the hopeful layout of stances on israel. ♪
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anna: welcome back. this is a live shot. it is very late or early, depending on how you look at it. futures indicate a weaker start in london. let's get the bloomberg business flash. ant surged theale most in three months after bill ackman joined the board and their ceo was ousted. accusesame time, valeant
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their former cfo of engaging in improper conduct that led to the filing of financial misstatements. but he refused to resign from the board, saying he did nothing wrong. nintendo shares have surged the most in more than a month after users of its first smartphone app surpassed one million. mo topped the rankings on apple devices after it released last week. nintendo has promised to bring its hit games like super mario brothers to smartphones to win back players who stopped using their consoles. deutsche bank may have its credit rating cut by moody's investor service. that is on concern that germany's largest lender will struggle to carry out an overhaul and improve profit. changingays that since leadership and recalibrating strategic plan, the operating environment has only worsened at deutsche bank. that is your bloomberg business flash. manus: thank you very much.
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the race for the white house turned to international matters. the conference organized by america's most powerful pro is really lobbying group. anna: hillary clinton and three of her republican rivals declare their support for the state. elliott gotkine has more details for us. good morning. the candidates are presumably falling over themselves to see who could be the most row israel in front of that -- pro-israel in front of this audience. elliott: not particularly surprising. if you are going to address them, it is nice to say some good things about israel. hillary clinton, the democratic front runner, was speaking earlier in the day on monday. she sought to emphasize how she has always supported israel and has always been consistent in support. >> we need steady hands, not a
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president who says he is neutral -israel on pro tuesday, and who knows what on wednesday because everything is negotiable. israel's security is nonnegotiable. elliott: in case you missed it, there was a bit of a non-subtle slight towards donald trump read earlier, he suggested to reporters that israel might have to forgo the billions in military aid it received each year before seeming to backtrack on that. when he went on stage, he said that he would move america's embassy in israel from tel aviv to jerusalem, trying to undo the question. he also spoke about the peace process, or lack of it in the middle east, saying that the onus was firmly on palestinians to come to the table.
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>> they must come to the table willing and able to stop the beror, the committed -- committed on a daily basis against israel. they must come to the table willing to accept that israel is a jewish state and it will .orever exist as a jewish state elliott: trump also said that he would tear up the iran nuclear deal. no doubt, prime minister netanyahu was a bit more sensitive to some of his views. he will address a conference live in munich later on tuesday. donald didourse, the have a trump card that none of the other candidates really flashed. elliott: you would think that being a jewish presidential candidate would be a great qualification.
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but bernie sanders, who would be the first ever jewish president, was not actually speaking. he was campaigning ahead of primaries. donald trump has a good card up his sleeve as he told the crowd his daughter was about to have a beautiful jewish baby. if you are not jewish, you cannot get much more pro-israel and having a jewish grandchild, can you? manus: i cannot wait to hear where his roots come from. anna: elliott gotkine with analysis there. let's welcome the vice president and chairman of a ds securities. david stubbs is still in studio with us. a very warm welcome to the program. good to have you here. let's talk about the oil markets. the oil prices are higher this morning. we have been talking about it on the program.
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a lot of expectations building around this meeting in your part of the world in april. how high should expectations be? you work in this region all the time. how excited are people about the possibility of freezing output? >> we see things differently when we look at it from here. meeting to go -- we see the oil gradually stabilizing around here. we do not see any big move lower. then that. saying that, the government decided on a plan which is to diversify the revenues and it is working. you sit and have a coffee, you feel the business environment that is going and you feel the big diversification between tourism, hospitals,
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schools, businesses. we do not feel that huge anger falling.bout the oil saying that, we are still sure that oil will keep stabilizing and growing. you have to understand that we have huge volumes going on oil. this has changed from 10 years or 20 years. today, hedge funds can do an withiny move that can be the algorithm. you can see big down and dig up -- big up. price a lot of the oil plays into the politics of the region. there is a move by opec to make room to tolerate iran getting back to scale before they joined the freeze. is that a momentum which plays well in the region? philippe: today, all
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expectations can be received. everything is being studied. i am not from the government. nor do i specializing oil -- specialize in oil. we anticipate diversification, which means restructuring of debt. by positioning our company in the middle of such a region, to be able to restructure all of those companies that would like to acquire more or restructure growth in defense of the banks that are looking into the country, we are definitely going to see things much more stable and new opportunities for investors. iti tells a positive story about diversification around abu dhabi. what are your concerns when you look at that part of the world? are you taking about the currency pegs and wondering if they are going to last? maybe we have dodged something
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as they remain in place. what are your thoughts? everyone was worried about the potential for those pegs to break. the people who are in control of oil in the region know what they are doing and are able to withstand oil at this level for quite some years. having traveled to the region recently, i think there is tremendous diversification in global economies. and the exploitation of the geographic location, which is so fantastic in what it facilitates, the business between europe and asia and africa. foreign investors are still trying to work out the portfolio, but these diversification plans seem to be bearing fruit. philippe: timezone is very important. we are waking up one hour ago.
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in abu dhabi, we already started. plus, we are still awake and open while we have the u.k., the u.s. and back to asia. the timezone and geographical position, not only to find resources to come and work for you, but also the availability that the country gave us as a business platform to do business. manus: thank you very much for joining us. and of course, to our guest host for the past hour, david stubbs. anna: up next, safeguarding privacy and data. apple remains defiant during its product launch. but there will be no face time with the fbi in court. why the justice department canceled today's iphone hearing. at least, postponed indefinitely.
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the fbi has their own hack in place and might not need the cool operation of apple -- the cooperation of apple. manus: futures virtually unchanged. the rally in oil, can it last? ♪
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matthew: security shattered. the fbi cancels is iphone hearing. they may have found a hack to unlike terrorist phones. a cleansing apples launch event. eventipsing apples launch . the ecb and the boj are using negative rates to push down the value of the euro and the yen. >> the bloomberg stock exchange -- doing business. moving in a way. mahnke the ceo of ferragamo distances -- manus: the ceo of ferragamo distances -- more of
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that to come. ♪ manus: welcome to countdown. anna: 7:00 here in london. manus, a quick look at the futures. that was broadly positive. japan is playing catch-up because they were closed on monday. manus: a little difficult to interpret. you have seen the fair values we have here in london did up three point percent. -- davidbbs come stubbs making the point he thinks the u.k. is one of his favorite takes for a variety of reasons. the brexit, not so much a sideshow, but the revenue within the ftse 100 is really driven by the international story. kicking.e end of that
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anna: talking about the politics. the non-pound revenue back to a company and what that does. manus: the pound probably not going to regain a lot of its losses, even if we vote for the brexit. oil is on the move. $41. anna: we are getting more detail on the april meeting of opec. let's look at the risk radar and tells us where we are trading. let's focus in on -- we've got the dollar in there, pretty flat. despite the fact that we had a couple of officials talking about hawkish -- talking caucus late about the possibility of rate rises in when they might paul: -- when they might fall. sans: w.a.r. p says
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francisco in atlanta trying to push that agenda. that seems to be the move. the reason i have been moved there is the ramp up an oil is causing a rally in dollar ruble. well essential banks in russia -- will central banks in russia tolerate that? they may come in and intervene. bloomberg's first word -- anna: let's get to bloomberg's first word news. kumutha: the yield on bloomberg's tenure treasury rose -- 10 year treasury rose yesterday. they may raise interest rates as soon as next month. >> evidence by economic data that justifies a further step at one of the coming meetings, for the steps in raising rates possibly as early as the meeting scheduled for the end of april.
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kumutha: the european central bank and the bank of japan are trying to push down the valley of the currencies with the use of the use of negative interest rates. that is according to the view of former bank of england governor mervyn king. he spoke to david gura. >> the central banks are trying to push down the exchange rate. most countries can say no. if only the rest of the world was normal, we would be fine. not everyone can push down the exchange rate. most countries have been doing that. conserve -- federal federal is worried about the strength of the u.s. dollar. kumutha: the u.k. chancellor is facing a cabinet revolt over his deficit reduction drive. iain duncan smith quitting over the weekend.
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brushing off decades of mistrust, obama and raul castro shake hands. at a press conference and of anna, both expressed hope for the improving relationships but also highlighted some deep differences. >> the relationship between our governments cannot be transformed overnight. to have some serious differences. including on democracy and human rights. kumutha: u.k. financial firm should leak bonuses to the internal targets. publish annual reports some progress, that is according to a government commission did it fell sort of -- it felt commission. it fell short of calling for mandatory goals. growth played a key role in building intel's from the 1960's start up to the semiconducting maker. said he was at the
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forefront of creating the personal computer industry. whenever we spent time together, i always came away impressed his brilliance in vision. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stores on the bloomberg at top . anna, manus. manus: let's get to the markets. yvonne, a lot of people are making much of the chinese market. a composition with j.p. morgan asset management saying it is a sideshow. take us to the moves. yvonne: to go to the moves, it has been remarkable. we have seen the longest stretch in two months. we's -- we broke through that 3000 level. lack of correlation between what the economy is doing and what the stock market is doing it today we are seeing an off day
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-- doing. today we are seeing an off day. above that psychological line in the sand all day. the region, we are seeing the succession of japan. most markets flat or falling. not really sing that much catalyst with low volatility. we could be seeing some risk of consolidation. the nikkei 225 ended at 9.5% up. really boosting stocks today. carmakers as well as consumer electronics manufacturers a list today. talk about a lot of tech news, apple suppliers, we have to look today after apple unveiled the new iphone. next picture. pegatron down to 2%. coal holdings down 4% here it -- 4%. volumes all around.
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we not seeing any big central-bank moves good oil is recovered. the dollar here with its modest rally. staging quite a comeback. the malaysian ringgit recovering. we did breakthrough to four against the dollar. theoil price is supporting malaysian ringgit now we are back above $41. , uphe korean yuan as well .8%. 1154.63 is where we stand. returnseeing the cash into the nation's assets. south korea you want is asia's best performer this month after being the year's worst at the end of where he. -- at the end of february. time to go.ill has
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we will continue to watch that one there. we are all -- a pretty uneventful day here in the asian market. still waiting for the catalyst against equities. sending it back to you. anna: yvonne man in hong kong. today's yvonne's desk today's iphone -- today's iphone hearing canceled. manus: u.s. governments wants the company to create software to override security features. tim cook remained resident saying he is not prepared to compromise millions of users. never expected to be in this position to be at odds with our own government. we believe strongly that we have a responsibility to help you protect your data and protect your privacy. we only to our customers and we
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always to our country. this is an issue that impacts all of us. we will not shrink from this response ability. -- from this responsibility. here.caroline hyde is we have more on the apple story good good morning. --oline, and unaffected move an unexpected move. the fbi canceling. caroline: tim cook was up for a fight. did not have to back down because the fbi has found a side door that they can have a look at. just about five hours after apple had that launch. the justice department requested a postponement to today's court hearing. the hearing had been playing with apple to try and help them to find a way to get through the encryption. instead they found a
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third-party. whoever this third-party is is causing quite a stir. them gone tog secret services in the united states. a new technique they feel could and should be tried for a test for unlocking this particular terrorists cell phone to pull out some of the data. a hope it will not damage any of the data. slightly damaging for apple have tooes attorneys say we don't know who these people are. they will want to know from the government what this so-called security vulnerability is within their own iphone. caroline, you have covered apple for a long time. our to know your take. -- for a long time. i want to know your take. they still earn 90% of the profits. -- profits in the industry's
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smartphones. are they beginning to worry flacco -- and share share? caroline: i was beginning to worry about the price point and -- price point. china wants premium products. it doesn't want a cheaper phone. expecting this to be painting a picture of the emerging markets. this is about the upgrade. it is meant to be -- it is better looking, metallic. it is your iphone 6 in a cheaper version. you got a speedycaroline: i waso worry about the price point and -- price point. processor. they are going to be able to protect their margins overall iphone it is a cheaper and ipad pro. pro,.7 inch is a cheaper
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but they are having to downgrade the price of the watch. this is surprising, apple espousing to cut prices. anna: caroline, thank you very much. let's bring a fund manager into the conversation and see what he thinks. it is mark denham. anna: market, you're not able to bet on apple because you are european manager. is that i'm -- is that not a story you're keen on? story from ale distance, we think the smartphone penetration of handsets is still 60%. we expect that to increase. apple has proved itself to be adept to grow to market share. the appeal of apple is there. the question is in europe the
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best way of playing it is through dialogue. 80% of its sales come from apple. as much as we like the apple story, that is too much risk for us to take on one customer. we have a broad perspective on the technology sector. it is one of the areas of concentration in our european portfolios. manus: for our viewers, if you want to know who the suppliers of apple are, they may customers, 156 customers. wanted to 12 suppliers. i want to go to your spl see. they'll tell you who is involved and the percentage they get from apple. people, when they look at the software application. it is about the service and -- application, it is about the service. why do you prefer things like
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terminus. mark: s.a.p. was viewed to be will be hound that's well behind the cloud curve. -- well behind the cloud curve. the cloud business has started to grow strongly. 70% or more in the last few quarters. the key to our investment case is not so much the cloud business, it is the core , theess on-site software recent product upgrade has gained traction with its clients. we have seen licenses grow into three and q4 did we think we can be at the start of a product upgrade for clients. anna: let's step away from these tech sector -- from the tech sector. the state of the u.s. economy. blackrock saying this morning in a piece on the bloomberg that there will not be a recession in the u.s. what is your stance on the u.s.
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economy? mature to talk about? -- premature to talk about such things as recessions over there? people wanting to the strength of inflation in the u.s. mark: we think the u.s. economy is in good shape. fed andtly had the empire state surveys last week. core inflation looks to be pinup in recent months. -- looks to be picking up in recent months. anna: that doesn't mean we are going to get more hikes in the short-term. mark: two to three more hikes. manus: mark, thank you very much. up next, we are going to talk about that. -- talk about debt. negative rates, more to come. ♪
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anna: welcome back. this is "countdown." the sun coming up over the city of london. coming up to 20 minutes past 7:00. 20 minutes past 8:00 if you're watching in frankfurt. shares and pharmaceuticals surged the most in more than three months yesterday after activist investors joined the board and mike pearson was ousted. and -- former cfo schiller refused to resign from the board saying he did nothing wrong. shares and petro. the oil producer at the center of brazil's largest corruption scandal has fallen in after-hours u.s. trading. that is after the firm posted a net loss of $2.2 billion caused by unprecedented, linked to
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falling oil prices. blackrock says investors should pair there treasury holdings because the u.s. will hold -- will avoid a recession. despite indicators that the economy is -- the economy experienced a slowdown. manages 6.6e rock trillion dollars. manus: the european central bank and bank of japan -- with the use of negative rates. to --mervyn king spokes spoke to david guerra. >> most countries in the world can say if only the rest of the world was going normally, we would be fine. since it is not, we are not. what is left? push down the exchange rate. most countries have been doing this have been try to do that at the expense of the u.s. dollar.
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denham,et's get to mark fund manager at of the the. aviva. it is lovely when you see these central bankers, that you begin -- we have a currency war. they are pushing on a string. with david stubbs, he said jpmorgan was potential that's -.7 -- >> mario draghi said he is compared to do more going forward. custom -- cut interest rates where the priority. -- rates were the priority. more along the lines he was thinking. anna: way d.c. this going in this -- where do you see this
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going in this negative rate experiment? we have a lot of warning bells rung. wrong -- being wro mark: we are in uncharted territory. in some cases the answer is no. in addition to that, the top line is the net interest margin is byng squeezed. -- is being squeezed. problems, but cases, valuations have become enough for us to get our toe in the water. historically we have a large exposure to. manus: where are the most appealing to? mark: mainly in the eurozone, where we have taken a state -- a stake in abn amro.
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a fast-growing economy in the european context. 2% or above. a percent of its is is is there. its is this is there. --it's his this is there that is set to grow profits. we like banking in spain. spain is a very fast-growing economy. -- excite anna: mark, hold that thought. breaking news coming through and we are seeing reports of a large explosion at the airport in brussels. this is brussels airport, the international airport, 11 kilometers northeast of brussels. fb d reporting this.
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citing those on the ground. very little detail about this at the moment. as we get more detail, we will continue to update you. manus: back to our conversation, mark denham is with us. we were picking up on some of the financials there. it is interesting to see you see value at going back to the conundrum for the ecb which is, this is our chart of the hour. this talks about japanese ,overnment bonding for 40 years all the way down to two years. it is cascading -- it is a cascading yield curve. bubbles.s is it going to have the same impact? andmatically pushing down causing potential bubbles in the bond market? mark: that is a good point. i think it is not that big of a
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market and the demand is huge. --can mortgages from the sea from the ecb as farce what they are going to be but -- as far as what they are going to be buying. the risk that a huge bond. a german cement company issued a bond at below 2% yesterday. that is a high-yield corporate bond these days. there is a risk getting the is a risk that people misunderstand or that the rules are not clear on what they are going to be buying. company has a car big services arm and as a result they have a banking license. they need to be allowed to buy those corporate bonds. anna: a lot to learn. thank you for spending the last half-hour with us here at -- with us. on the move is up next. this news that is been breaking out of brussels.
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a large explosion at the airport in brussels. just checking on the futures. manus: with that a soft opening. you've got a ceo joining bloomberg. do not miss that conversation. ♪
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guy: welcome to on the move. it is 7:30 here in london. we are counting you down to the european open. i am guy johnson. here is what we are watching. european oil companies traded their highest premium versus the market in over a decade. is it time to sell? -- if --to ceo of april could still be on the cards as the markets down as a result -- how brave is it feeling? what would brexit mean for


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