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tv   Countdown  Bloomberg  May 17, 2016 1:00am-2:31am EDT

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anna: asian markets continue their two-day rally sealed right oils climbed to a six-month high. bullish in the long-term, black rocks larry fink tells us that we all have to worry about china's debt but the country's leaders have done a good job. solving a mystery. saudi arabia's u.s. treasury holdings are unveiled after 41 years. it is among the top dozen holders. the toughest job in european banking. martin gilbert says deutsche bank has it difficult road ahead. -- has a difficult road ahead. martin gilbert: a lot of them are relatively new to the job.
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jobs.ave tough i don't envy them what they have to do at the moment. anna: welcome to countdown. i am anna edwards in london. manus: i am manus cranny in dubai. good morning, and a. anna: let us talk about the oil price. wti yesterday. we are rallying once again this morning. is due seeing increasing in the united eights. decrease ino weeks back to back numbers since september. we have a number of factors coming in. i have a chart that contextualizes this move. all the way back to 2005. inventory are forecasted --
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inventories are forecasted to decline again. bouncing up since the lows in february. 80% since we saw the 12th year those in the price of oil. a number of factors. wildfires in canada that on the agenda. warm weather fanning flames. supply disruptions in nigeria as well. talking about oil and what you do with the proceeds of oil. manus, inc. news in your part of the world. manus, big news in your part of the world. manus: i love this. i love the cover. have a look. saudi secret -- what is the truth? 40 years of information. today, bloomberg gets the truth. they have 117 dollars.
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rounded up by .2. -- 117 billion dollars. 42 years it has taken us to find this out. look at the bart chart. china has one point $2 trillion. recordstill at a near high for saudi. the big question is this -- is this all of the u.s. treasury holdings? what have they got in offshore hedge funds? futures? options? this answers many questions but it also raises many issues. two thirds of the nation's fx reserves are in treasuries. this is only 20%. it also brings back, back to an year, congressis suggesting that saudi arabia
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could have been responsible for the 911 attacks. oil is on the move. more indie hedge funds. they have moved these bond markets. that is what they have done for the last 30 years. they move on to markets. anna: the saudi secret is out. more secrets to be discovered no doubt. let us focus on the oil prices. let us bring up the risk radar. wti, 48 point 19. -- 48.19. could be at a psychological level for some. aussie dollar moving higher, up by 9/10 of 1%. rba -- analysis from around those minutes suggests that the decision in
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may was not a slamdunk. that causes the market to reassess whether the rba will deliver yet another great cut so quickly. on the pound, the pound is rallying against many current. up half a percent against the u.s. dollar. a poll in the telegraph newspaper suggesting a little bit more of a push toward the remain camp. leave the markets for a moment and had to leave on. yvonne: the rba says the broad-based weakening of inflation pressures was behind this month surprised rate cuts. the first reduction in a year coming after cpi fell in the first quarter for the first time since 2008 even as the growth outlook remained steady. --less said the decision analysts said the decision was not a slamdunk.
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george soros has cut his investment in u.s. stocks i'm more than a third in the first quarter. and bought a stake in the world biggest bullion producer. -- he said it is practically unopened with -- unavoidable. betting that the man will be listed by uncertainty surrounding the outcome of the u.s. elections and brexit. manfred expects gold, silver, and platinum markets to rebound by as much as a present. in octoberlast seen 2012. deutsche mark co-ceo has the most challenging job among all of his european counterparts in turning around the german
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lender. that is according to martin gilbert. he spoke with bloomberg's francine lacqua. he has a tough job. they have a good manager. i think they have all got investment banks that they are probably trying to downsize. still: prime minister abe plans to raise japan's sales tax next year. he told lawmakers he will make a final decision regarding the hike at an appropriate time. they are reporting he would delay the increase as it would threaten efforts to defeat inflation. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the bloomberg at top . anna: you've on, thank you very
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much -- yvonne, thank you very much. oil price is on the move. juliette saly joins us from hong kong. juliette: that positive or stronger oil price is helping things in this part of the world. we are seeing a good day for most asian markets. up for a second consecutive session. switch out from the china market, down 4/10 of 1%. to weaknessly due coming through from consumer related stocks. the high oil price is boosting energy players in the region. kong.china in hong the australian share market is getting a boost from the rise in commodities as well. the nikkei 225 up a 10th of 1%. the weaker yen has played into sentiment there today. quarter gdp first number coming through out of japan on wednesday.
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a lot of concern that we could see japan going into a technical recession. if you have a look into the overall regional index, every sector except telcos are higher. oil and gas players rising. sectore the technology -- also, the technology sector is rallying on the back of the big game in apple shares in the u.s. on monday after warren buffett from berkshire hathaway revealed it had a $1.1 billion stake in apple. the aussie dollar had a massive had the rbae minutes released. a huge game is continuing. 73.55. we are also seeing bonds fall and yields recover from the losses yesterday. they doeconomics saying not expect to see another interest rate cut in australia anytime soon now that the may decision seems to be a bit of a libel from the rba. thank you juliette saly
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with the latest on the markets. what do we have in store for you? let us talk about japan. we have one of the world biggest money managers. institution have hit out on japan's monetary policy. negative rates are not having positive results. the whole concept of negative interest rates for japan to be terrible. i also believe they are terrible for europe also. i feel badly in criticizing kuroda or any other governor. i believe the central banks are the only game in town. they are in a position now , the europeanment leaders, the u.s. leaders, have not done enough in building infrastructure for the future. anna: that was larry fink. bullish on another
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asian economy, china. speaking at the companies annual symposium, he said despite reforms, china's debt remains of worry. larry: i would give the chinese leadership some of the best marks in trying to transform their society. in the fourth year of the 10 year plan. to reoriented china away from manufacturing and export dependency economy to a one more a morece more -- resilient domestic economy is very difficult. it takes many countries 50 years and country generally have recessions in the transition. recentlyat china, most has informed policy behaviors, the market is saying that china's dependency on debt and
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the leveraging of the balance sheet and the continuation of investment is not a good long-term solution. not ad say in deed it is good long-term solution. only aly, this is short-term remedy and they will get back to the basics of trying to build a better domestic economy. our guestus bring in for the next 45 minutes. very good morning to you, michael. great to have you on the program. let us look at china. i have a great chart which talks about the reliance of the chinese economy on real estate once again. inking about debt levels china. when you look at property, the percentage of fixed asset investment in china seems to be on the rise once again. another warning sign for the chinese economy? could be a warning
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sign. we are seeing a general transition in china. one thing investors are having a hard time with is the growth in the service sector. when you see growth in building property or infrastructure or factories, it is tangible. when it is the growth of the service sector, it is not as tangible. investors are having to readjust to the new growth coming out of china. manus: good morning. the new growth is lower. we have our live tracker showing 6.6%. no hard landing. the debt problem or the slowdown in growth at this pace. michael: you are completely right. when we look at the data that came out over the weekend, one thing that was turning is that to theed the stimulus chinese economy has given them a temporary benefit.
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this shows the challenges that the policymakers have. structural reforms are needed. the transition is needed. this needs to be delivered at the same time as growth remains robust. many economies struggle to make this transition without entering into recession. he was talking about the need to keep the balance sheet growth at the growth rate. what should we be watching for in terms of what separates a transition that the market is struggling to understand in china from something that looks like a hard landing and something fairly explosive? michael: what we want to see from china is reasonable activity that means the market could be comfortable that china is growing. the pace of the growth is slowing it is still reasonable. china can still implement the reforms it needs while keeping
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the economy afloat. one ofi want to show you the most important functions that we have on a daily basis. this is our year to date in terms of the asia region. the strongest currency being the yen. what i want to know is how do i look at the currency situation? not so much where the yuan is going but there is a contagion impact in this affects space. space.: -- in this fx michael: the japanese yen has been the long -- the strongest currency. the bank of japan has delivered substantial policies this year. whereas the last couple of years we have seen monetary policy divergence as the driver of currencies, that is no longer the case.
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there are other things happening. the balance of payments become more important. we have much broader talk when you are analyzing fx. manus: michael, thank you. with us. up next, we give you the day ahead. of the brexit scrutinize the data. get the. u.k. time, we u.s. inflation. 45 minutes later, industrial production comes on the slate. anna, over to you. anna: we have also got a democratic primary in kentucky while oregon holds both the democratic and republican primaries. the uk's biggest fund manager it says brexit would not trigger another lehman moment.
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more with the aberdeen asset management, martin gilbert. that is up next. ♪
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manus: 6:19 a.m. in london. a.m. in dubai. it is time to get your bloomberg business flash. bridgewater associates have become the first foreign hedge fund to set up a wholly owned management business in china. one permission to operate in the free-trade zone in march. expectations that china may lift a moratorium on investment firms that was imposed over concerns regarding activities. twitter is planning to give users more freedom to express themselves. the microblog will soon stop counting photos and characters.
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23 characters is the current limits. the move is part of a larger plan by the ceo jack dorsey to give the site more flexibility. corporate loan issuance in the lowest ink to 16 years as private he equity firms -- as u.k. decides to stay in the european union. 59% down from the same timeframe in 2015 and the lowest since 2000. that is your bloomberg business flash. of the uk'so biggest fund manager it says brexit would bring severe volatility to market but will not cause another lehman brothers moment. to francinelusively lacqua, martin gilbert says it is best to ignore political
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risks. martin gilbert: you have got to ignore it really. from the bottom up. you look at what effect it might have on a bank or an insurance company when you are investing in there. we don't take a top-down approach to new investment and say political risks are two great in this country. francine: not even for brexit? martin gilbert: not really. the asset management industry is the least affected between banks and insurance companies and runt management because we our european operations out of lumps it -- luxembourg. an investor in germany or france, luxembourg is there how. --in the u.k. are definitely would buy dublin registered funds or u.k. registered funds.
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we will not be hugely affected. but if we do vote to come out, there will be some unintended consequences we have not thought about. there will be a lot of market volatility. francine: could there be a systemic freeze? it willilbert: i think be uncomfortable for a few days. currency will be volatile. the share market will be volatile. people will try to work out what the affect is. marketsthat is because are really pricing in that we are staying in. currency markets, certainly. extreme volatility if we vote to come out. anna: martin gilbert. is still with us here on set. let us talk about the pound tying in with that brexit conversation.
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we have seen a decent bounce in the pound this morning against a number of currencies. is this all to do with the poll in the telegraph? compared to the last reading, it is becoming increasingly remain. -- when with the pound, you have slightly positive news, it can turn into a big reaction for the currency. what we have seen over the last few months is that polls have been trending towards the high likelihood that the u.k. will vote to remain in the eu. you have seen that lead through two more support for the pound and when you look at our gauge of how the fx market is decision with the pound, -- is positioned with the pound come it shows it is holding short positions.
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slowly unwinding. let us bring our viewers some working headlights. some working headlights. nes. helicopter money is not a topic for the ecb. he is not in favor of the helicopter money discussions. i want to wrap this slightly back to brexit if you will allow me. he is not in favor of helicopter money. the head of the bank of england defended his position to talk about recession. michael: the helicopter money discussion is an interesting one. if you break it down, what is it? it is not throwing money out of a helicopter but having the central bank keep policy loose
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and buy government bonds. demand up.mestic looking at the history, you can already see the distinction between the eu and bit -- the eurozone at the u.k.. last time, when we did qe, the government kept -- kept the budget deficits high. eurozonerasts with the where during the crisis, there was a lot of pressure on governments to reduce their spending to get within the gdp deficits. what that means is we have the where it in the u.k. has not gone as far as helicopter money. you can see the impact of what happens when you have a central bank that keeps policy loose. anna: thank you, michael for
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your analysis. next, golden year. showing howet is bullion is doing. the chart of the hour. ♪
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anna: welcome back. bloomberg first word news. says thehe rba broad-based weakening of inflation pressure was behind the rate cut. -- us trillion central bugs the australian central banks -- even as the growth outlook remained steady. the aussie dollar jumped. the analysts said the decision was not a slamdunk. reducing the likelihood of a followthrough in june. with exclusive interview
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blackrock ceo larry fink says negative rates are not having positive results. concept ofwhole negative interest rates afford to plan to be terrible. i also believe they are terrible for europe also. i feel badly in criticizing kor oda or any other governor. the central banks are the only game in town. they are in a position now abe and thernment, european and u.s. leaders have not done enough to build infrastructure for the future. the demand will be lifted by uncertainties the surrounding the u.s. elections and brexit. manfred expects gold, silver, and platinum markets to rebound right you percent in the next two years to a level last seen
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in 2012. deutsche bank co-ceo has the most challenging job among all of his european counterparts. according to aberdeen asset officer martin gilbert. martin gilbert: john at deutsche bank has a tough job. they have a good wealth manager. withy good retail bank reasonable return on equities. they have all got good bits and they all have investment banks that they are probably trying to downsize. the prime minister says he still expects to raise to be of sales tax unless there is serious -- there are serious reasons not to. it comes after the nikkei business daily reported he would delay the increase as it would
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threaten efforts to beat inflation. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the bloomberg at top . manus: let us get straight to the touch screen. the nearly one year anniversary of the record high on the s&p. aussie dollar is on the move. what is grabbing your attention? nejra: starting with asian stocks which are rising for a second day. japan is rising but we are seeing losses in china. if you look at the asia-pacific index, a broad-based rally. every industry group is gaining and it is led by energy stocks. not as a surprise. wti and brent crude are heading higher. the beauty i hitting a six-month high ahead of the u.s. crude
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inventory numbers tomorrow. the expectation is that it will slow -- it will fall. remember, this is after we saw oil gain yesterday after goldman inhs talked about a deficit oil markets. oil heading higher. about the aussie dollar. it has jumped the most in more than a month. this is about the minutes from the rba. leavingmbers considered the cash rate unchanged earlier this month. they didn't cut it to a record low. the speculation has been pulled back regarding another rate cut in june. the aussie has jumped and bond yields have also jumped in australia. staying in the currency markets, sterling has had its biggest danger this month. after a telegraph whole of u.k.
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voters showing 55% of them in favor of staying in the eu while 40% wanted to leave. that proportion of the remained camped increased from if the 2% 52% similar survey -- from in a similar survey in april. had anold 20% rally has effect on the share prices. manus has some details. manus: what you have got is the were the rock bottom in 2015 are now the rock stars in 2016. we are rocking it higher. the value of those stocks have in 2016.ubled so far 70 6% drop over the last five years. look at some of the names.
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harmony gold. george soros has dropped his u.s. equity investments i really 7% but he -- by 37%. $264 million. gold callold options, options are rising. in terms of soros, we know he is not a fan of china but he is a fan of gold. the best quarter since 1987. up by 17%. a slow down recently. rand aree and the all playing into the story. this is the bloomberg index. that is anything to go by, those are the lofty highs. play inthe state of
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your chart of the hour. let us talk about all things precious. ken hoffman is joining us. he is the global head of metals and mining. i'd like a bullish story. bullish story. the gold story has many facets. what convinces you on the precious metal side? ken: the biggest thing we have seen is a switch to more mainstream. people are looking at gold as a true currency. one thing that is surprising -- all analysts got gold wrong including goldman. gold has gone mainstream. a lot of big funds trying to take a small allocation of currency in gold. something they have not done in the past. in the past, you have seen physical buying from the retail sector.
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many funds are worried about the currency system. let us have a couple of percent in gold. the gold market is very small. up this year.old it has caught people by surprise. a that continues, it would be bullish signal for gold. anna: the foreign exchange system concerns. is that a good reason to be in gold? en: when you look at why soros is buying gold, he is concerned about china. they are growing their money supply at two in a half times the rest of the world, 13%. he is saying that in china, the chinese are the biggest producers and importers of gold. once it goes into china, it will not come back out. goldys the chinese think
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is important. even though he does not like what is going on in china, he sees the macro in -- macro implications. anna: michael, to bring you into the conversation. do you see the reasons to buy gold? the problem you have if you want to sell the dollar, you are to choose something you want to buy. traditionally, that would be the euro or the yen. banks are very cautious about stronger currencies on their inflation outlook. gold makes a clean way. -- makes a clean way of shorting the dollar. manus: we say thank you to 10 hoffman. hoffman. saudi arabia come it took us 40 years to find the information.
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the u.s. has finally revealed how much debt from the u.s. saudi arabia has. this is a big story. putting saudi arabia as one of the biggest holder us of treasuries. we have put a number around that. we know how big of a hold. secrets have been lifted off. see what you can discover when you ask. michael is still with us. this treasury story around saudi arabia just revealing more detail about who owns treasuries and where. what are your expectations on treasuries? michael: when the sovereign wealth fund space, one thing that has been concerning investors has been where you
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have had a situation where reserves are declining. saudi arabia -- the breakeven in the government spending is around $100 a barrel. they are in a budget deficit at the moment. then the decline in the reserves leads to a selloff of treasuries. the data from the last year has have that wall governments been selling treasuries and reducing their holdings, private buyers have been buying treasuries to a greater extent. that shows the implications of the japanese and ecb you we. investors in japan and the eurozone to sell their local assets. the yields are so low. treasuries and guilds have been the biggest benefactors. the flow for treasuries has been very supportive. that is the whole point. everyone is saying -- if the
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japanese do act again in some form and we have yet to work out what that might be, michael, are the proceeds of them selling yen if it went for fx intervention after the g7, if it float act into treasuries. 66 analysts have different opinions. will driveentally the next leg of the dollar. do you think that fading of the dollar has ended? ishael: one thing that interesting -- over the last six months, the one biggest barrier ball has been -- the one biggest variable has been the 10 year treasury yields. the u.s. treasury yields are going to remain under pressure.
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from the dollar, we would expect to see more dollar weakness. it has had a good run in the last month. weakness has gone too far. short-term, they have moved up. 10 year yields are moving lower. this is not constructive for the dollar. anna: expectations around the rate hike by the end of the year up justng up -- ticking a touch. almost 50-50 as to whether they will or will not. michael: over the next few months, there is a lot of risks as we have the referendum in the u k and the election in the u.s.. comfortablebe more if the equity markets are more stable. when you look at the u.s. economy, you're not sure if the
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u.s. economy warrants another hike. anna: we will get u.s. data later this week. looking at the cpi excluding food and energy. that has gone above 2% this year. michael: the latest inflation data -- what is a worrying to us is the activity indicators. the u.s. economy is showing signs of growth at a slower pace. growth at a slower pace. in terms of the cross-ice, where do you want to be -- in terms of the crosses, where do you want to be? the fed has got issues around the election. the bank of japan has to act next. michael: our favorite trades at the moment is in short u.s.
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dollar versus the swedish currency. what we are seeing in sweden is gross is incredibly strong. at the end of last year, sweden was growing at a pace of 4.5% year on year. they came to the end of their aggressive easing. also a currency that has been quite week over the last month in contrast to the dollar. a lot of opportunity. anna: thank you, michael. next, it is all about the guidance. we will take a look at what to expect. that is up next. ♪
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in new york..m. what a beautiful site.
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there is the empire state building. it is 9:48 a.m. in dubai. futures unchanged. oil is rising. what happens next for the s&p? let us get you up to speed. the business flash. bridgewater associates has become the first foreign toge fund to win approval set up a wholly owned investment business in china. won permission to operate in the free trade zone in march. raising expectations that china may lift a moratorium. in china's biggest operator has fallen as the government plans to step up pressure with the countries largest mobilephone carriers. the ministry says surge in
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profits says the company has room to reduce costs. twitter is planning to give you more freedom to express themselves. -- twitter is planning to give express freedom to yourself. twitter automatically shortens them. ceo jackr plan are the dorsey to get the site more flexibility. corporate though in issuance in pounds has slumped to the lowest in 16 years. leverage loan in sales this from is at -- is 59% down 2015. the lowest since 2000. that is your bloomberg business flash. flexing to 140 characters.
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here for a look ahead to the our in the list intelligence. and andrew is with us. good morning to you both. specifically let us talk about the vodafone subject. acceleration of service growth. 1.4last quarter, there was growth in revenue. it is expected to jump to 1.6. europe is still contracting. we want to see an acceleration in revenue growth. vodafone, in its largest market in germany had some problems because of net work issues. -- network issues. made a few -- a huge play in 4g.
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is that investment paying off? >> that is a good question. they have overspent their competitors. mixed, the results show a outcome. some markets are increasing. at the same time, if you look at the u.k. or germany, the network quality is in the midrange. they still have to do more to improve the quality. this will be an important point to see if they are sustainable. anna: is this a sector you are interested in? >> we are holders of vodafone. some thou has come back into the shares. -- some value has come back into the shares. the big challenge is 4g and the
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competition and the quality of the spectrum. that will be the issue going forward. beyond 2017. the internet of all things and data use our keys. -- our keys. the competition angle remains intense. got this failed deal. what does that mean for vodafone? means that the opportunity and the u.k. has been missed. as a result, the benefit of conservation in pricing. vodafone with the requirements to build a scale in broadband would definitely benefit. prices were relatively less competitive. anna: thank you very much.
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andew, let us come back you speak more broadly about the earnings season. -- had some ski things scathings things to say. >> it is not all about negatives. it is a widespread outcome. almost.two economies particularly when you look at europe. the domestic side has been quite good generating sales and profit growth. --n you come to go label global traded goods, it looks more like a recession. that is the story of europe. to speed growth. domestic economy is doing quite well. exposed to the global trade are struggling including oil, and gas.
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which areld banks still failing to demonstrate anything in the way of growth. we want to show this to our viewers. we are benchmarking everything. the irony is not lost. basic materials are rocking it out and consumer goods. it has not been a tortuous reporting season. >> it has been widespread. it is interesting to look at where the sales growth is coming from. .ore positive surprises most companies are disappointed in the sales line. a long time frame of stagnant growth forcing
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companies to look at efficiencies and self-help. that is the underlying encouraging story in europe. up, thel growth picks leverage in europe is quite strong. anna: that could prevent us from going into a profit recession. >> the profit recession refers to the u.s. you look at whole economy profits. profits has been under pressure for 15 months. down 50% from their peak. -- down 15 percent from their peak. when you look at s&p cap profits it is a different matter. the reason for highlighting profits in the u.s. is the corporate profits cycle are a harbinger of tougher things to calm. some people have been suggesting it is a harbinger for recession. i think that goes too far. anna: thank you very much.
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up next, germany is back. we look at how shares and asked -- and 60 income markets are doing. fixed incomecom markets are doing. ♪
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manus: asian markets continue their two day rally. bullish in the long-term. an exclusive interview with black rock. we all have to work about the chinese debt. solving a mystery. saudi arabia's u.s. treasury holdings are unveiled after 41 years. the oil producer ranking among the top dozen holders. in the toughest job in european banking. aberdeen asset management is a difficult road ahead.
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>> a lot of them are relatively new to the job. a lot of the is a very tough job. i don't envy them what they have to do at the moment. manus: welcome to "countdown." anna: i'm anna edwards one's get to the vodaf operators. they are talking about q4 revenue growing at 2.5%,ahead of where the estimates suggested. they suggested it would grow by 1.5%. there is the red headline that says just that. q4 organic service revenue grows better than the estimate.
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the value is estimated at 7.77 pence per share. the revenue for the full year is in line with estimates that 41 billion euros. year freeving us four cash flow of one billion pounds as well. there is a lot about the outlook going into these numbers that is going to be watching this sector. we can see an increase in 4g usage, leap year, and the timing of easter -- all of that is at dding into the complex of a of the fourth quarter numbers. update onto see an the investment into the network and what that is doing into the company. they were some people going into these numbers, calling for a 5% increase. be guidance on ebitda will
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watched. the number for the year just gone has come in at 11.6 billion pounds. any guidance on that will be interesting. 15.7 billion pounds to 16.2 billion at a guidance fx rate. manus, that is the vodafone breaking news. how is that going to work its way into the equity trading day? manus: it is obviously going to play in. it is one of the bigger stocks in the london market. we have got futures all trading a little bit higher. futures set the tone. we have dropped for three straight weeks and there are a couple different things driving the market. big correlation with oil, obviously.
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let's look at the risk radar. we have a little bit of a move with the aussi dollar. 1%, that isst under setting the agenda. with of those inventory numbers drop a little but yesterday and we have not seen that for a while. we had the minutes from the rba. they went with of the cut, but that is a sign they are an cautious town mode. in cautious tone mode. brexit, andg about all of those moves. that is your risk radar.a anna? anna: let's get the bloomberg first world news. aidi: speaking of the rba, broad-based weakening of the inflation pressures was behind this month's surprised interest rate cut.
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the australian central bank came out of cpi still the first quarter for the first time since 2008. the growth outlook does remain steady. analysts said the decision was k,t viewed as a slam dun that increases the likelihood of a follow-up move in june. a $260 million stake. soros has warned of risks stemming from the chinese debt. he says such a slump would worsen global deflationary pressures and drive down stocks. planning to increase its holdings in gold. uncertainty is surrounding the outcome of u.s. elections and the eu referendum. investment officer expects gold, silver, and copper markets to rebound to a level
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last seen in october 2012. deutsche bank co ceo has the most challenging job of all of his european counterparts. he is turning around the german lender. he spoke to bloomberg's francine lacqua. cryan has a very tough job. he has a very good wealth manager that he cannot fall back on. i think they have all got good bits. they have all got investment banks that they are trying to downsize. haidi: the japanese prime minister shinzo abe still expects to raise the japanese tax, unless they are serious reasons not to. he told lawmakers he would make a final decision on the hike
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within the appropriate time. he first said it would delay the increase, as it would threaten related to deflation. global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the bloomberg at top . anna? anna: haidi, thank you. germany's equity and fixed income markets were closed yesterday for the holiday. they reopened this morning. now, let's get the equity markets up and running. we are now joined from berlin by bloomberg's matt miller. you still have to go up to nine years to find a positive yield. give us an update on how things opened up, matt. matt: a selloff was what we saw here at the open seven minutes ago. that was after the bundesbank came out and said he did not think helicopter money is the right move. he said he thinks we need to give the ecb measures, room to breathe, time to work their magic on prices. he does see some kind of price
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acceleration here. he gave two interviews. those headlines, not necessarily new comments. would expect to here. but they do spur a little bit of the selloff. you can see the yields rising a little bit this morning at about 5%, or about eight basis points. if you take a look at the long-term, we are still at historic lows. i actually have got that here in the terminal and you can access that on the terminal for bloomberg. here you see a 10 year period, but i have got a much longer period than that, going back to the reunification. we have not seen german bonds at this level, the low that they are at, since well, ever. 2015 we havence touched a very low level, that we are still down at 0.15 this
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morning. and a comments l -- any comments like from widemann, can cause a little bit of a selloff. manus: i am looking at that chart. because we actually might see a .uy to move up som the major fund manager said they used to go to bunds in a major time of crisis, but as anna said, you have to look over nine years to see a positive turn. , yourwn home market treasury market, that has actually got a real yield, doesn't it? >> absolutely and i think gold is the most interesting story there is because you can see a flood of big big names, including druckenmiller that are getting into gold. soros, for example is the most recent headline we have heard about four today. but of course, we have heard
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soros talking about gold before. people really are turning to the precious metal in the first time in a few years because of the fact there is no yield anywhere else. if they were, people would turn away from gold because it obviously has no yield. but they are looking to the as central-bank policy just pushes other rates negative, or near zero. manus: yup, the great experiment on the global basis. matt miller with the latest on the bond market in berlin. thank you. biggest money manager in the world has h commented on the japanese money policy. he's a negative rate -- he said negative rates are not having positive results. concept ofhe entire negative interest rates for japan to be terrible. i also believe they are terrible for europe too, but i feel bad
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any governorg because i believe the central banks are the only game in town. they are in a position now, because government, the european leaders, the u.s. leaders have not done enough and building infrastructure for the future. isus: blackrock's larry fink very bullish on another asian economy, at least in the long-term. that is china. while speaking at the symposium in hong kong heat of is that despite reforms, china's debt remains a worry. >> i would give the chinese leadership some of the best marks and trying to transform their society. we are on the fourth year of the china awayriented and from an export dependence
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economy into a much greater service economy. that is a very hard thing to do. it takes many countries 50 years to do that and countries generally have recessions as a transition. so, to say to china most recently, as for policy behaviors, the market is saying that china's dependency on debt and the leverage of the balance sheet and a continuation and investing in some of the companies is not a good long-term solution. i would say, indeed, it is not a good long-term solution. hopefully, this is only a short-term remedy and they get back to the basics of trying to build a better domestic economy. anna: larry fink there, clearly worried about debt levels in china. andrew parry is still with us in the studio. you said previously about what
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was driving growth in the european economy, you are relying less on those emerging-market drivers. the chinese drivers for example, in your investment at the strategy at the moment. actually look at exports on china, what is really interesting is the low value , the and vietnam, cambodia smaller emerging markets. but beginning market share in the value added within the exports. that is something we have to look at in the west. china is getting more and more sophisticated. it is following a model depended back in the 1970's and germany did before that, and even the u.s. and britain if you go back hundreds of years. that is the key. it is about competition, not just about demand. i would like to go over larry fink. the potential for china over the
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long-term is enormous, but it is the transition from one state to another. they are effectively two economies. new entrepreneurial, more dynamic companies bubbling up underneath our investing in robotics, green energy, health care. there are two different story is going on. anna: and generally moving up the value chain. manus? larry fink on what said, what an it be wonderful if china became the equivalent of what we can see in japan or in the west. 18 rebalancing story is an months story, or a five-month story and the confidence for you as the head of equities. had to take a long-term view of china. is it with cars, infrastructure, big engineering. is it rudimentary basic stuff, or do we get a little more sexy
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into the equities? >> i think we always need to tackle these markets with big policy shifts that need to be enacted, is not to focus on the top down view, but the bottom up. that is elegant unsuccessfully in europe over the last seven or eight years. europe is now only just emerging from crisis and recession. they are always the interesting companies within which to invest. china has about 3000 companies and you are going to find one or two winners in there. look at the world from the perspective of the companies. companies aren't the economy. sometimes, they are a difficult economic environment that spurs economic innovation and restructuring. anna: we were still hurt from the financial crisis we have all been through. andrew, when i look at the comments we get from prominent hedge funds and investors, people are commenting how the chinese debt resembles the
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u.s.'s debt in 2000 and. -- 2008. some say that chinese banks might lose up to four times what the u.s. lost. could they withstand those kinds of headwinds? >> remember, china has a lot more policy levers than the west. it is a different type of economy. there is a lot more control over the economy. i am not under applying any of those risks whatsoever. china is not making much progress as a market. sometimes, it is easy and too fashionable to knock china from the top down. the debt levels actually are the same as the u.s., the u.k., and lots of other economies. is the- the key worry speed by which they have been increasing. they just can't keep it up to
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that rate. anna: andrew, thank you for joining us here on set in lond on. manus, what is next? manus: up next, we are going to talk to the chief executive of gcc. he is in the bloomberg house. is company's four year earnings , still income. ♪
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manus: 7:20 in london and 8:20 in frankfurt. let's get to the bloomberg first word with haidi. haidi: bridgewater associates have become the hedge fund to set up a wholly owned investment management business in china. bridgewater will operate in the
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city's free-trade zone. it raises expectations that china might lift the moratorium on new investment management friends the have been post over concerns. posedms that have been over concerns. the government plans to step up pressure for the largest mobile phone carrier to offer cheaper prices. surging profits show the company can reduce costs. twitter is going to give people more freedom to express themselves. the message will now count 140tos and links within the character limit. this is part of a larger plan by the ceo to give the site more flexibility. that is your bloomberg business flash. manus: thank you for that. the ceo of the u.k.'s biggest fund management company said that he would bring severe
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ut --ility to markets, b of course, we are talking about brexit. but not another lehman's moment. the aberdeen asset management ceo spoke about all of the risks. >> no, i don't think so. i think it will be very uncomfortable for a few days. currency will be volatile. the share market will be try toe while people work out what the affect is. part of that is because markets are really pricing and that we are staying in currency markets. that could be, as i say, create extreme volatility. anna: martin gilbert there. the four year operating profit
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has risen by 46%. joining us now for the first and review of the day is tommy breen, dcc's chief executive. i wanted to guage from you your approach to mma versus organic revenue. you said you got the capacity in balance sheet for further developments. what is your expectations for how much growth comes from mma, and how much are chemically going forward? >> the story from dcc for many years has been, like any other business, we try to drive out whatever organic growth we can. we have been very fortunate that the business has been very cash generative. we have been able to reinvest that. that is what we hope to do. we think we are in a fortunate position at the moment and that they will be opportunities. you can never call the exact time that those will come precisely, that we are confident that there will be three opportunities for us in our three bigger businesses, healthcare, technology.
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manus: some of the big oil companies are setting assets. and downstream assets you are looking at? and give us a little bit more detail on the health care, the kind of assets you would look at their. >> it is absolutely the downstream assets within the health care sector. you know, you can never be precise about the timing of when those things are actually going to come along, but we are confident that we have built relationships and that we are a good partner when they do come to dispose of downstream assets. that is very much part of their strategy. we would be looking at lpg businesses and retail petrol station businesses as well. anna: you talked about the energy side of the business, how it has been driving results. what about the other parts you have seen weakness in.
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for example, technology. are you scaling back investment into technology? >> we have been very fortunate for a number of years that there was extremely strong growth in that area and we had a particularly strong market share with those suppliers in those categories. but we believe that the business is very robust. we are confident we will be back in growt this year. capitalnvest further last year and hopefully, we can do that again. manus: tell me, what does the brexit mean for you? are you seeing a slowdown that the pump, excuse the pun. but is there a change in customer behaviors? >> to give -- we have looked at this from the perspective of our own behavior. the nature of our business is, we don't actually create cross-border. we don't think it is going to have a material impact on our business, apart from the obvious thing.
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that uncertainty is bad for business. but i can't say we have seen any particular impact. that so you can really say as a business that has got 60% in the u k, you really think that the brexit would not have an impact on the company? >> i think uncertainty will be there, but we don't think there will be a direct impact. ,e do think, it is our view that it would bring about uncertainty. everybody knows the uncertainty and volatility with an exchange rates is not good. anna: just briefly, are you hedging the pound? >> know, we are not doing anything like that. we have no problem trying to run our own business day to day. we don't think of it as a material impact directly. anna: thank you for joining us. great to have you on the program. the ceo of dcc. that will do it for "ca ountdown."
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"on the move" is up next. manus: gold is rallying. are higher. 25 points higher on the london markets. see you tomorrow, anna. ♪ markets. see you tomorrow, anna. ♪
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it is 7:30 in london. i'm guy johnson, alongside matt miller, it was over in berlin. apparently, we should all worry about china's debt. why blackrock's the re-think thinks the world -- blackrock's larry fink thinks the world's's second-largest economy needs to de-lever. speculation about further cuts. who has the toughest job in banking. find out


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