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tv   Bloomberg Markets European Close  Bloomberg  March 29, 2016 11:00am-12:01pm EDT

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you're watching the european close on bloomberg markets. we are going to take you from new york to london. this is what we are watching. debate isled brexit taking a new turn. it could drive up foreign costs. areie: u.s. stocks recovering right now. they are awaiting a speech from janet yellen. the justice department dropped its case against apple. they say they can break into an iphone without their help. the global debate about privacy and security is not over.
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let's head to the market desk. julie: stocks are coming back a little bit. are not seen much change overall is the bottom line. the nasdaq has turned higher. it doesn't seem in addition to janet yellen the oil is driving the bus today. oil prices have been lower today and accelerating their declines. 3%, at one point they dipped below $38 per barrel. industry numbers tonight. we will get government numbers tomorrow on those weekly oil inventories. that affects the market. given that the klein oil, if you it lookshe bloomberg, like a mixed picture when you look at the green and red on your screen. energy in particular is down more than 1%.
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we did have barclays out with a note today saying the advance in commodities that we have been seen is not justified by the fundamentals. that appears to be weighing on stocks. volume continues to be low. the volume for the various groups in the s&p versus the 20 day average, they are all lower once again. yesterday was the lowest volume of the year so far. a lot of people out in spring break. we will see how it goes today. frome going to be hearing herself, janet yellen. let's take a look around. let's see what we are seeing. this is the way that the bloomberg measures interest-rate futures. this can calculate the probability of increases in rates. for the april meeting, we are around 4%. there's a low likelihood.
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higher and that go higher as we get toward the end of the year. it's about 33% for june. seeing that increase and low rates in terms of treasuries and a weaker dollar today. caroline: thank you very much indeed. we are seen minor oil companies pulling on the downside when it comes to stocks. we've got the first day of gains in 500 we are up 4/10 of a percent. that's what's really galvanizing trade what's really been lagging is copper plane to the downside yourhis is the function on 600 and this digs in. i said it was miners and put it. you look at some of those on the downside. check out these numbers.
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we know they are volatile stocks and this seems to be the cause coming from one bank in particular. this is the over exuberance of where metal prices gone. i give you barclays. got to saying you've overoptimistic when it comes to copper in oil. to rallies are likely dissipate. see 4000warns we could overall. slumpld see a significant overall in copper prices. we could see oil prices go to the early 30's. we are currently trading at $39 per barrel. fundamentals have not driven this rally. it's been the weaker dollar at the fellow reserve. it's take a look at another.
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the bank of england with its central bank focus, we will hear from the financial policy committee coming up. they are worried about exit area -- brexit. this chart tells you everything , this shows in gdp you the implied volatility on the british pound. look how it spikes. we are at highs we haven't seen since 2010, since the depths of the financial crisis. this enveloped greece, italy, and spain. volatility is on the upside. this is before we had any idea. let's check in on the first word news this morning. now that hijacking is over, authorities are trying to figure out what it was about. he claimed to have an explosive belt. he forced a jet to fly to cyprus.
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he let most of the people on board leave buried he forced some to stay on. they were eventually freed and escaped. the hijacker was arrested. he wanted a meeting with his ex-wife lives on cyprus. the brussels airport says operations will be back tomorrow it damaged the airport to calls he says the airport is set to reopen tomorrow, but will only be able to handle 20% of the normal number of flights. the supreme court nominee will meet with a illinois center. it's his first courtesy call this comes with senate gop leaders still insisting they will not act on president obama's pick to fill the court vacancy. 17 senate republicans say they will meet with him. president obama will be in atlanta for a conference on an exploding drug problem.
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soaredlinked to opioids in 2014. mr. obama is looking for money for a federal fund to fight the problem. for the second year in a row, the amount of ice in the art blamingnd they are crazy warm temperatures. temperatures were as much as six degrees above average between december and february. that's global news 24 hours a day. we have more than 150 news bureaus around the world. we have the central bank focus once again. this is a warning shot about those exits. riskentral bank says around the referendum on the european union could weaken the sterling they are tightening rules to morgan -- mortgage lending.
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they are moving ahead with thanks to extra cap misses scott hamilton who has been following the story for us. give us a sense of the ramifications of this. the factake away was that this is already having effects on the run. scott: we get the eight men from their meeting. -- statement from their meeting. they had a lot on their plate at this meeting. into theseally fed other risks. there are risks around credit areas in the u.k. a there is the international risk in terms of global markets and volatility. there are emerging markets. that the big picture
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is the best will become increasingly active as the policy committee sets interest rates. they are committed to not raising interest rates for time to come. we have another number of measures today. caroline: give us a sense of happened on the banking side. they are asking more capital to be required. it doesn't seem to be more sell shares. they just want to make it more transparent. they already have that in place. scott: this was a historic move.
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it was the requirement to hold capital on top of what's already required. the race to 20.5%. increased the buffer by .5%. other capital requirements. it was a shifting of how this money is classified rather than an aggregate increase in capital. wide net.ey cast a how much of this will be successful? have you heard any response from tanks? they havearea where repeatedly warned about an increase in growth that market. they don't have powers of direction over that market.
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they can't instruct banks to do it. they expect us to decrease over the subsequent quarters. far, we've had a number of initiatives from the treasury as well. that's going to take a few months to feature before we have an actual impact. caroline: thank you very much. , an exclusive interview with the ukrainian billionaire. he was indicted in 2014 on bribery charges. he is pushing for extradition to the united states. usl the tumult to
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performance continue? there will be major battle between one of the biggest companies on the planet. what happens now that fbi no longer needs apple's help? we will speak with darrell issa.
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caroline: this is the european close. next hour, in the janet yellen will speak at an event hosted by the economic club of your. we will have live coverage at noon right here on bloomberg television of. strong employment
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growth is helping in a rate hike. it's global uncertainty that is weighing on the fed. insight earlier. 3% globalforecasting growth. the problem is there's are some indicators like the rate of growth of trade which is 2%. only five times in the last 50 years has a rate of growth of trade been below the rate of growth of the world economy. every time that happened, we had a slowdown or recession. we are not forecasting a recession. tom: it's adjusted in the last 90 days. francine: this is crazy. you haven't really changed your growth forecast. they haven't really changed the growth forecasts.
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in the last five weeks, we've had more and more stimulus is out there. why does this money from central banks not helping the real economy? >> the question is that central banks, the heroes of the last several years, they have done the most of what they could do. you've been there and done that with monetary policy. you've been there and done that with most of the fiscal policy. you have to move toward structural change. you have to move toward education and innovation and more competition. take a few years in order to gel. it's eight years of consolidation, there may be room like candidate just somenced to go for
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infrastructure investment and give a push for short-term growth. that will bring down the debt to equity ratio. the economy will be growing. in a way, this is only possible now after eight years. the situation is a lot more stable than it was. >> there is no helicopter money solution. >> there is no more easy fix. we've got to think medium and long term. we have to go for the fundamentals again. your fitok at economist. is our dysfunction right
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now? it's not just u.s. and china. it's a bigger story than that. >> it shows you in some of the indicators, trade is sluggish. it should be growing it double the rate. there are a number of uncertainties and blockages. there is more protectionism all the time. together, we get leaders make commitments to open trade. this is not helping. investment is the seed of tomorrow's growth. half the speed at which it should be growing. credit is not flowing. the restrictions of the sectors and the institutions, the reason
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we are growing so sluggishly in the last 10 years. there is a big slowdown. china is 6.5%. brazil is in a recession for the second year. russia is in a recession. is adamant suisse that our fears of deflation are overdone. should we be worried about deflation? >> the way to do that is to look at demand. , the bad kindion of deflation, when the oil drops you will get a reduction in the prices. when it's because of a lack of demand, you've got to do something on the other side. we've been focusing on the supply side. we have to look at the demand side. vonnie: that was the secretary
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general. still ahead, a billionaire ukrainian is living in austria under a $140 million bail bond. himexclusive interview with . he is also on the fbi wanted list. ♪
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caroline: live from london, this is the european close. parliament ise's meeting today. they were to confirming a new government. the battle for the future is playing out in a different way. a ukrainian billionaire is printed against the u.s. government. he amassed a fortune in russia's gas trade and was indicted on bribery charges. he says it's politically motivated.
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ryan spoke with him. think the do you united states is after? i am not at war with the u.s.. it's not aware with the state. i am fighting with certain officials in the government. they have a flawed strategy about ukraine. they are defending it to the end. ryan: we spoke with your business partners. they think you squealed and told things about your business and your russian of business partners. not extraditing you. i think this absolutely is untrue. nothing like that happen. we never met with the fbi. i never talked to them. there wasn't anything we could talk about.
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i think their main task is to remove me from ukraine. this is their main task. there were not satisfied with the position i held on ukraine it. ryan: your business partners think it's more russian stuff. how the russian ukrainian gas relationship worked in the past. is that not true? dimitry: this is absolutely untrue. somebody likes to tell fairytales. this is nonsense. there is nothing to tell. i did not tell anything to anybody because i have nothing to tell. ryan: -- a recent that was interview. ryan joins us for more. it's not true. there's nothing to tell. officiallywanted with a deal in in india on bribery charges.
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what he says is this is a politically motivated case. the u.s. first sought his arrest in 2014. they were seeking to remove him from the ukrainian political scene. you could argue to an extent that they succeeded in doing that. one austrian judge agreed with him. that's why he hasn't been extradited. he needs to get one more austrian judge from an appellate court to agree with that. maybe he will be asked indicted. the third version is what actually the u.s. wants. news --ormation about vladimir putin's inner circle. he is just upon in this geopolitical attack on russia. vonnie: ukraine's parliament was to have a new government.
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how is that looking? ryan: it's not looking good. they have felt to get a new coalition. the problem is the ukraine needs its bailout program. that was suspended in october. they are short $4 billion ever since. he gets his bond back. he says he has something to contribute to ukrainian products -- politics. caroline: you're always getting these great exclusives for us. let's take a look at where the markets are ahead of the close. we will be holding up to gains. ♪
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caroline: you are watching the european close.
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vonnie quinn is in new york. stocks finished up in european trading today. we hear the closing bell. they are clinging to their gains, up half a percentage. when it comes to the stoxx 600, what would the charge? what felt? check that out. glencore is among the hardest hit. to theteresting regulatory requirements are sparking worries about the nature. the alarm bell is being sounded. that is what i was watching. it's a low volume day once again. i am watching currency markets. the bond market to a certain extent. we are looking at the euro dollar. it got back above 112 for a
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certain part of the day. the dow is up 2/10 of 1%. you are seeing the vicks about 15. there is not much movement. seeing very little movement the yen. even after all of those measures announced today. caroline: money his swarming into the eurozone. thealk more about that and first quarter, u.s. markets are poised and slightly negative. it's been a topsy-turvy year so far. the s&p made a big comeback after being down in february. our next guest says the market will carry a lot of baggage. he is more optimistic. it's a joy to be here in the
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afternoon. about to us janet yellen is about to get on stage. you're not excited? >> i am terribly excited. look at me. i'm not expecting to learn anything. expecting to learn anything from central bankers. i think we have to look at real things. let's have a look at what's really going on in the global economy. we've got a consumption led recovery. that's a great thing. the rest of the global economy is oyster and concerned about the long-term commodities fight to we've got. concerns about the dollar. when the dollar doesn't strengthen, they start to pick up again. if the dollar strengthens because we start to see interest-rate hikes, these
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economies will slow down again. slowthe u.s. economy will down again. we are caught in this balance. caroline: we saw dated yesterday that was not so optimistic on the spending side in the united states. do you think consumption will drive the u.s. economy forward? >> if you look at one single piece of data and it's out of kilter with everything else, you start to think what's happening. look at the general picture and we do seem to be getting a recovery in the states. the fedld justify coming in and doing something. they are not going to say that until we get the actual meeting and it won't be going on. the omens are looking get her. when they look strong enough for the u.s. to be in recovery mode, that's what it all starts to come undone. there are global implications. vonnie: you are on the fence
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about whether we are going into a new bear market. you say the next few days will sort that out for us. how can we be doing either on such little conviction. >> it's a question of looking at the charts. i am not the biggest believer in charts. i know guys who are who know more about these things than i will. the mark is now poised. it goes down from here. we are just at that stage of the market cannot beat 2100, i think we start to go in decline in the u.s.. that would confirm the view that i'm taking, that it's in a seesaw type mode.
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it's dependent on how the rest of the global economy reacts to what's going on. >> you also say that pressure has been put on the vicks. we are only above 15 on the vicks. it's not making that much difference. why the vicks? >> you have to pick up the rumors and the stories going around. we read the news every morning. what do we have this morning? we had barclays saying the commodities which are is going to get worse. we had people say this was the time to buy. yet the stories about hsbc's dividend yields. that's a big concern for anyone in banks. the big -- fix occurs. who is worried about potential
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higher volatility coming in on the back of this seesaw effect if we start to see treasuries weaken on expectations of higher u.s. rates at the april meeting or afterwards. story, theis kind of picture you paint of the global economy is poised to do something. it probably doesn't make sense. caroline: i want you to tell me where i should be putting my money in this environment. where should i go? >> that is an excellent question. i don't have an immediate answer. every single market is very distorted. as i was coming on, you talked about the european corporate bond market. rumors as there were
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they were going to buy insurance bonds, it tightened dramatically. they've also got global starks benefiting from altra wrote low -- ultralow interest rate policy. the stocks are still distorted. i look at every single financial asset class. i think they are over volume because of these distortions caused by the actions of central bankers. how would you like to create a real return? these are uncorrelated. it may be something as simple as cash flows. these are the kinds of things the banks were buying. i am talking about property lending, aircraft leasing, even shipping. that would take us into a second alternative strategy. markets are obviously very weak.
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the baltic dry suggests shipping has never been cheaper. if we do see recovery, that's when rates will start to rise. things are going to turn the world completely on its head. nobody likes cold. everybody hates cold because it's dirty. what if something happened that made it easy to use coal? that would turn everything around. these are things i would be looking at. real risk returns from cash flows. disruptive technology. offense that are going to change markets. there are things to buy. never despair. caroline: you are always our man. thank you very much. thanks.
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abigail doolittle has more from the nasdaq in midtown. you are looking at apple. is nicely higher after the fbi dropped its case against the iphone maker. they got in through the iphone without the help of the company. this is a bit of a relief pop coming from investors. it will put the focus squarely back on iphone sales. analysts have been more bullish and constructive. morgan stanley was saying the current quarter is tracking ahead of the guidance. all of this bullish thinking more recently about iphone sales is reflected in the stock chart. the buyers are firmly in control of the near term markets. the last time this happened, the stock back above its moving day average. it could suggest that they move toward $112. they are trading only
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slightly higher. what's dragging it down? abigail: ebay has gone lower. been downgraded. they are talking about weak fundamentals after this split from paypal last summer. attractive valuations, it's unlikely to create a reason to buy the stock. went below the stock the 50 day moving average. the sellers are in control now. the last time this happened to ebay, there was some downside ahead. vonnie: thank you. it's time to check in on the news. the hijacker of that egyptian jet really did not have an explosive. the man forced the jet to fly to cyprus. everyone on board was either freed or escaped. the hijacker was arrested. it wasn't a matter of terrorism.
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there are reports that he wanted a meeting with his ex-wife who lives on cyprus. says he willident take part in a nuclear security summit in washington. the president has no plans for a formal one-on-one meeting. that reflects concerns about the crack down on dissent and kurdish insurgents. florida police are charging donald trump's campaign manager with misdemeanor battery. with as from an incident bright part news reporter. he is trump said absolutely innocent of the charge. global news 24 hours a day powered by our journalists. caroline: thank you very much indeed. that is some fascinating news.
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are always seems to be action in the u.s. presidential race. government is dropping its case against apple. someone has hacked into the iphone used by a terror suspect. is the privacy issue over? -- darrellr from cup issa next. ♪
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caroline: this is the european close. hasie: the u.s. government dropped its case against apple after a third-party working on the project gained access. the lawsuit is over. the privacy battle is not. darrell issa from
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san diego. he released a statement saying we must remain critical of government attempts to take advantage of sensitive situations to allow greater power and control. for joining much us. it's a difficult issue. you have ourde privacy issues. you formed a working group which is for republicans and for democrats. where do you see middle ground? darrell issa: i think it's about education. our founding fathers made it clear what your individual rights were, including free association and privacy. there was a structure to which something exists.
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the courts could turn it over. in the apple case, there was overreach by the fbi. they did not ask for insistence they asked for a back towards a could use on all caps millions of phones, even remotely. we think the fbi will come again with a request that's more modest. the working group needs to understand encryption and the working that it plays in your life. limited things in scope so they don't endanger the ability of you to have and keep your personal records. annie: now that they have hack, do they have an obligation to give the key to apple? darrell issa: that's a great question. methods, had countless countless tools to hack into computers and other things that
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are otherwise private. iice the enigma in world war , they generally keep those tools extremely classified in secret. when they talk about sources, that arethe methods most held close. this will be no different. a tool like this is best held close so nobody knows there is a vulnerability. this is not a vulnerability in all likelihood that exists on the internet. it is more likely one that can be taken advantage of only if you have a phone in your position and can disassemble it. i don't think the american people are afraid of the fbi having that tool. give us a sense of technology companies against the u.s. government. facebook did not want to make a back door. when it comes to concerns over
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security going forward, do you think the population has the on this?he tech giants are they wanting to see ability to track down terrorists? we want to be able to track down the terrorists. we have paid trillions of dollars to be able to do that. breaking encryption is appropriate it's not the foremost tool. we have a lot of eyes in the sky. input and, you can't go in and out of london without being observed countless times. many tools limit our privacy. on somelity to count level of privacy is important. let's not underestimate there's not a single software package you can buy, including windows or apples operating system for the mac that without encryption the software it would be unsafe
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and be able to be taken advantage of my criminals. that is notion available is important. we count on it every day. the working group is important. is the of congress, this balance between what is possible . i want to turn to the campaign trail. it's been a ridiculous weekend. donald trump said it was a carnival. we just got the news that there an accusation of attacking. who should be representing your party?
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darrell issa: that's up to the voters. what we do know is on both sides of the aisle, there has been too much acceptance of violence. you have seen it at donald trump rallies. in this case, it was a reporter being perhaps overly assertive to a candidate. a campaign manager should know better than to touch anyone that's not his job. you'd fire your campaign manager? darrell issa: i think i would. that's an individual decision. i campaign manager should not be involved in those altercations. that something the trump campaign has to look at.
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you have to recognize there are people who are inciting. we see this. we see people trying to create violence. i think that's where speaker ryan has called for in our party for people to realize this is an important event that has to be kept simple. for violencelace or inappropriate speech. will see if there is a move to fire that campaign manager. it's wonderful to have you on the show. still ahead, battle of the charts. we are hitting the slopes. ♪
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vonnie: it is for our battle of the charts. on can access these charts
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the bloomberg by running the function featured at the bottom of your screen. matt: i see from caroline's chart that we have a currency focus. you may not know why mine is currency focus. have them shredded. it's the biggest ski resort in north america. ski resort inst this hemisphere basically. this is a chart of their stocks versus they'll and skistar in sweden. there -- they have clobbered the other two. the reason it has is the pound has been so cheap that sony tourists have been able to go to whistler blackcomb and by their ski passes. they have had above average no.
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it's been canada. you can get this chart. a lot of our viewers are maybe into skiing. they can use this chart and invest as well. caroline: i like a you said both of the americas. matt: north america and south america. they have ski resorts there as well. we are talking about the cheapness of the pound and .ow much it's attracting people i'm showing the slopes of what happened to the british pound. this is on a trade when basis. this is trade weighted index. you can go to my ready-made chart.
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this shows you we have not had this sort of selloff we are set for in the first quarter since all the way back to the third quarter of 2009. we are down 5.5%. they are worried about the pound. they are worried about the effect of the brexit risk. it's causing volatility. i love your truck. i am going to honor matt miller. matt: i vote for caroline. it's a tie in that case. vonnie: i'm not going to make any extra decisions. ♪
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>> welcome to bloomberg markets.
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alix steel: this is what we're watching. janet yellen will give them a clue about interest rates. stocks are trading slightly lower. we are keeping an i am oil. it's dropping for a fourth day. their highest at levels in more than 80 years. let's send it over to julie hyman at the markets desk. julie: i also have hiccups. let's take a look at what's going on in the market. the nasdaq is higher.


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