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tv   Countdown  Bloomberg  June 10, 2016 1:00am-2:31am EDT

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yieldss japan's 10 year fall to a record low, we are warned of negative rates, while there is a building of a supernova that could explode. president obama endorses hillary clinton to succeed him, but can he now unified the democrats? and boris gets bashed. the most famous space of the brexit campaign is accused of putting his own interests first. welcome to the program.
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this is "countdown." i'm anna edwards. it is just six of clock in the morning here in london and we have interesting developments overnight in the japanese debt market. let's get straight to that low interest rate environment story we have been tracking. yields on government 10 year week.hit new loads this we saw a record low on the 10 , -0.1%. we have been talking about germany and the u.k., all hitting near record lows. bill is talking about how global yields are at their lowest in 500 years, he says. he says this is a supernova that will explode. we will talk about that as we get to the program. i will show you what other assets are on the move because it is a pretty weak session coming through on the asian
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equities story. hong kong is back in action, of course. china is still closed. the focus seems to be on the risks that lie ahead. the eu referendum is one of those her eine in the u.k. of course, because of the reevaluation of interest rates arehe u.s., investors choosing some of the higher currencies. wti on the back foot, up .8%. that is out of step with the weekly pattern. u.s. stockpiles decreasing, outages in canada and nigeria of course, part of this story. if you thought that was all a little bit too much on a friday morning, let's focus on the football for a moment. we have the euro 2016 tournament kicking off today in
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paris. this is a good time to talk about the economic challenges that face france as they take on big football championship. reporter: barack obama has formally endorsed hillary clinton to succeed him as the next president. this comes after obama met with bernie sanders at the white house. president obama: i want those of you who have been with me at the beginning of this incredible journey to know that i am with her. i am fired up and i cannot wait to get out there and campaign for hillary. reporter: speaking of bloomberg politics, clinton says the endorsement was a treat. clinton: it just means much to have a strong substantive endorsement from the president. obviously, i value his opinion a
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great deal, personally. and as i have said repeatedly on the campaign trail, i think he has been a very successful president, who has made our country stronger and fairer and it is just such a treat because over the years of knowing each other, we have gone from fear competitors to true friends. reporter: the israeli prime hasster benjamin netanyahu pledged to defeat palestinian militants after a shooting in tel aviv that left four dead. he called on palestinian leaders to condemn the attacks. to put mores going troops on the border, as well as in tel aviv. the leader of the brexit campaign has been accused of putting his own future ahead of that of british workers. fourth johnson -- boris johnson was debating the referendum. his opponents say he is using the issue to enhance his
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political credentials. he is seen as the favorite to become the prime minister if david cameron loses the vote. >> they seem to want to take a huge risk. boris, you don't think to care about the millions of jobs that will be at risk if we leave the eu. i think you only care about one job and that is your own. reporter: meanwhile, citigroup says u.s. treasury yields my faulty record lows if britain votes to leave the eu. the brexit good weaken the u.k.'s trade links, curb economic growth, and a spark massive demand for treasuries as a haven. that providealists early financing to google, amazon, and other tech companies had died. opening with an
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additional $8 million, the firm invested in tech over the next leading to the silicon valley boom. 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 . thank you very much, yvonne. let's find out how the asian markets session has been doing. david inglis is standing by with an update. it is a pretty weak session, david. david: absolutely. we are down 1.1% on the benchmark. we are not looking at the full squad today. china is still on holiday, but you are looking at the weakest day for equities in asia in about a month. you can see bright spots, though, in new zealand and vietnam. e big market story in asia, forget equities.
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it is about what is happening in the bond markets. this is your japanese 10 year bond yields over the last year. it has gone nowhere but down. this is one of the boj that the policy to the negative interest rate policy and we are here at the moment, -.14. that is a record low. that is the 10 year. have a look at how that plays out when it comes to these spreads here. i have put the u.k.'s and germany's here, just to give you a sense of where the field lie relative -- where these yields lie relative to each other. you have doubt that the boj can meet the inflation target. and you have what is happening to borrowing costs with the german and u.k. 10 years at record lows.
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everything from the three months to the 15 year is now below zero in japan. anna: thank you, david. the latest on the markets there and we will pick up on one of those things he has mentioning. as we have heard, japan's 10 year bond yields have been driven by rallies in the u.s. to a record low. meanwhile, the bank of japan and other central banks are under fire over negative rates. writing on twitter the money manager says the global yields are at the lowest the may have been. this is a supernova that will explode one day. gross has argued for some time that the economy is at the end of a decade's long cycle that has dominated in negative interest rates, a situation he says is unsustainable. let's discuss where rates go
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next. we have the managing director and chief economist joining us here on set. great to see you this friday morning. so, the bond markets as a who le, under fire from bill gross. he says this is a supernova, ready to explode. do you agree with him? >> if you are a bond manager looking at rising risks and diminishing returns, then yes, you are worried about this. this is the supernova of bond markets. the latest move has been accompanied by the higher equity markets with some dollar supported recovery in yield. all of that has been very much linked to the view that the fed will delay tightening even further. an environment
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where the market risk premium is being driven further. anna: looking at this chart, the things that occurs to me, and this track is back to 2000, it does raise questions about how much of this is a cyclical story and how much is structural, back to the conversation about how just high rates will end up getting this time around. >> of course there is a strong fundamental backbone behind this story. it makes sense that high policy officials will be reluctant about rushing ahead with a rate hike. the markets are now pricing one 25 basis points hike. we had one last december and we might get one this december. the worry here is that the destruction of yields, which is given by the fed's sort of very reluctant hiking strategy,,
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that the markets are losing confidence in the fed. that is a negative thing, if a flat field curve is already putting the risk of a recession on the market's radar. anna: goldman sachs yesterday was talking about the yellen call, and declaring that july is still live. you don't think the fed -- well they are not done with tightening, but you don't think they are on pause for all that long either, do you? >> i think the fed is in a data dependent delay strategy right now. but i don't think they are calling the end of this hiking cycle. the worry here is that the markets will lose confidence in the fed's ability to the fill expectations and also, to give a clear guidance, which is the
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financial dna behind everything. to asian high-yield equities. it is important that the fed has a credible strategy and i think that means a risk hedging strategy, rather than this knee jerk reaction when you have had 20 great months of employment gains. anna: we were just shown at the 18% chance of a fed rate hike in july. we had this on bloomberg under the work function. tell us about the fed's choices, then. we keep hearing they are data dependent. but in your view, do they have some kind of agenda where they do see the dangers posed by a low interest rate environment, and they just want to get things moving? >> well, i think the last payroll report has reduced treasure on the fed -- has
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reduced pressure on the fed to do something now. but they have a choice of raising rates over the summer to a level that is still highly cyclical in real rate terms. anna: and that would be short-term pain, you think? >> yes, because it is a controlled one. the fed can easily communicate and implement without causing any shock to the real economy. or having uncontrolled pain in the future whereby a lot of the control over the financial kin , and with respect to the unemployment rate, or their create in rate, would the worst-case scenario, dependency on a high debt growth environment, where even the smallest rate rise can cause distress. arguably, we are already there. anna: so, we could get some better jobs data in a month or
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so, and then see a hike? >> and that could be a good thing. anna: thank you very much. here are some highlights of your day ahead. to get awe are due rate decision from russia after the european markets closed. the his evening at 8:00, euro 2016 football tournament kicks off in paris, with france versus romania. we wonder how many people will be paying attention to those rating updates. why the former london mayor came under fire in a televised eu referendum, up next. ♪
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anna: welcome back. you are watching "countdown." this is hong kong, 1:17 in the afternoon. the hong kong, down today. it is a weak session in asia. let's get to the bloomberg business flash. reporter: it was a blower is helping the u.s. securities regulator and its investigation of deutsche bank's post crisis trading business. that is according to people with knowledge of the situation. they say the sec received insider information, alleging to which it -- alleging deutsche bank had mass losses around 2013. the bank has declined two, the, but referred to a statement given to bloomberg last month. disney hopes to sprinkle some movie magic in mainland china when the new themepark opens next week.
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bob iger revealed preparations to make a disney-branded film in china with at least one production by the end of the y ear. >> we are very far along on the process, including ideas and concepts four films and identifying talent already to make those films. reporter: can you give us more clarity on the timeline? iger: um, shortly. [laughter] reporter: within the year? iger: we won't have a movie released within a year but we will have a movie in production. forrter: uber has called customers be allowed to book rides 30 days in advance. it is being introduced in seattle at first, but will expand to other cities. lyft tested a similar feature several months ago, which has been a key selling point. back in september, uber's ceo
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dismissed the idea of booking a car in advance. chinese companies have strengthened their grip on virgin australia as a second conglomerate purchased a stake in the carrier. hna group,after another chinese firm, said it plans to purchase 13% of virgin australia. that is your bloomberg business flash. anna: thanks very much. the leader of the so-called brexit campaign has been accused of putting his own future ahead of the of british workers. -- of that of british workers. boris johnson was debating on the eu referendum. his competitors that he was using the campaign to enhance his presidential. he is favored to become the prime minister if david cameron loses the vote and is forced to step down. >> they want to seem to take a
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huge risk with the implement prospects of millions of people up and down this country. boris, you don't think to care about the millions of jobs at risk. i think you only care about one job and that is your own. toi think i am inclined trust our premise to, david cameron, who only a few months ago before the whole logic of project fear kicked in, was very clear that britain could roster and floors outside of the eu. we could do trade deals and we could have a great future. anna: meanwhile, citigroup says u.s. treasury yields could fall to record those if britain both to leave the eu. a brexit could weaken the trade links and spark massive demand for treasuries as a haven. with us now, the managing director and chief economist. i am drawn to a fascinating story on the bloomberg this morning, which talks about the
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extensive downturn we might see in the u.k. if we were to see a vote for a brexit. it compares various forecasts. it says it is worth delving into the details because the majority of economists say a vote to leave will spark a slowdown, by predicting an outright recession. how weak do you think the economy would get with a brexit? >> is very much depends on what tori leadership does the day after the referendum if britain votes to leave the eu. anna: and what the bank of england might do. >> exactly. they have to respond to the risks as they arise. their only job right now is to make sure everybody is prepared to deal with these risks in a highly shop prone interdependent -- shock prone interdependent european market. what is very clear on this chart, the fact that u.k. stocks
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are 50% higher in formalized terms. the world of depressed volatility, the world where central banks have basically destroyed volatility. this has been the weakest performing currency against both the u.s. dollar and the euro. that has not benefited the u.k. exports to the rest of the world, not just to the eu. all that shows us that the markets are preparing for the brexit. economists are unusually, for once, in agreement. they think this could some be a positive thing for the economy. we don't know the degree to which this will be a negative one. that degree is very dependent on the political clout that the t ori leadership that are
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campaigning for the brexit will have with the populace. clout theyow much will have with the rest of the u.k. parliament as well. >> precisely. it is quite clear that a brexit vote in the first instance will mean a huge political uproar in the u.k., which will throw ou figures for debt management. there are so many questions. anna: you mentioned weakness in the pound, down 1.57% against the u.s. dollar. we have seen a lot of volatility in the pound. i have a chart here, pound the volatility spiking to the highest since 2009. that's seems to continue, even suggestng odds seem to the brexit is less volatility.
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the market is looking for any clues, really, as to where this will go. we have about a 26% chance of a brexit and the has come down from about a 32% to 33% chance earlier on this week. but the has not made it through to the market as reduced volatility. perhaps everybody is just too nervous. just took it is close. the worry here is the dead heat that is emerging. there is a negative message on eu immigration that seems to be pushed by the "leave" campaign good risk creating no clear winne.r in other words, we could have far too tight a result. if there is one thing that markets, like business leaders, are agreeing on is that economic
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o uncertainty is a very negative thing where liquidity is already supported by fermentation across markets. the last thing we need is more political fragmentation. especially with what is going on in the middle east and the uncertainty surrounding the u.s. election. this is not an environment to take economic risks. a year ago, after the general election that allowed for this referendum, somebody had turned around the markets and said, the u.k. is going to walk away from its biggest client for its services and it is a with thebased economy, payment of the economy and it is going to walk away from the political influence with respect to its biggest trade partner, nobody would believe that. and yet, that is what we are
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looking at now. sayinghe other camp of course, there would still be some trade. next, we look at the latest on the u.s. presidential race. ♪
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anna: welcome back. 7:29, 7:30 in the morning if you are watching in paris. day one of the euro 2016 football championships which kick off today with france versus romania. it is 6:30 in london, one goalie -- 1:30 in the afternoon in hong kong. let's go there now. : bill gross issued a warning about negative interest rates. quote, global yields lowest in years.
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this is a supernova that will explode one day. gross has argued for some time that the economy is at the end of a decade-long cycle of extending credit. the situation, he says, is unsustainable. israeli prime minister benjamin called on palestinian .eaders to condemn the attack netanyahu said he was reinforcing troops on the border with west bank as well as tel aviv. citigroup says u.s. treasury yields may fall toward record lows if britain votes to leave the eu. the bank says a brexit may crimp economic growth and spark massive demand for treasuries as a haven. whoventure capitalist provided her the financing to google and other tech firms has died. thomas perkins was 84. he left a job at hewlett-packard
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to establish kleiner perkins in 1972. the firm invested in tech over the next two decades, leading to the silicon valley boom that ushered in the internet age. global news 24 hours a day powered by 2400 journalists in 150 news bureaus around the world. thank you. yvonne man joining us there. japanese 10-year bond yields have fallen to a record low amid concerns about the outlook for the global economy. nejra cehic joins us with these details and others from the asian trading session. nejra: the risk sentiment we were seeing seems to have fallen back. we've got caution in the markets fueling demand for bonds globally. we've seen the japanese 10-year yield fall to a record low. this after we saw u.k. and german 10-year yields fall to lowe's yesterday.
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we are seeing this risk off sentiment inequity markets as well. looking at the msci asia-pacific index, that has all in the most -- has fallen the most in a month. we're seeing losses in japan. with that sentiment fueling demand for some of the safer havens, look at the dollar. bloomberg dollar spot index is up for a second day. it is still headed for a second straight weekly decline. we did see a pullback in the dollar after disappointing jobs data on friday. we are seeking gains over the past couple days. finally, i wanted to focus on metals. we talk about oversupply in the oil markets. we are seeing copper rallying today from a four-month low, but we saw a selloff across industrial metals yesterday.
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apart from zinc, goldman sachs calls this the bullish exception. the white line is copper stockpiles. they have expanded 39% in the past five sessions. you can really see that relationship. anna: thanks very much. let's move on to u.s. politics. barack obama has formally endorsed hillary clinton as the next u.s. president after obama met with bernie sanders at the white house. bloomberg's megan murphy has more. huge moment in the u.s. political calendar with president obama releasing his endorsement for hillary clinton. president obama: i am fired up and i cannot wait to get out there and campaign for hillary. megan: the president made his endorsement via video, saying hillary clinton was the best to carry out his legacy, in carrying on many softer portions
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of his legacy in terms of social programs. the endorsement has been expected for several days, ever since hillary clinton crossed the delegate threshold to beat bernie sanders in the quest for the nomination. mr. sanders refuses to go quietly. he said he would fight on toward the convention. hillary clinton is now the presumptive nominee. mrs. clinton and the president will begin campaigning as early as next week in wisconsin, where they will talk about the legacy they hope to forge together as they seek to unify the party. we will see what mr. sanders does in the coming days. the euro 2016 football tournament kicks off tonight in paris. the month-long event faces challenges including strikes, flooding, and a terror threat.
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caroline connan is in paris and she has details for us. good to see you this morning. talk us through some of the risks and the atmosphere that welcome those attending this event. for now, it looks beautiful. ,ou can see the eiffel tower where the giant soccer ball is suspended. the challenges are many for this tournament. terror threats, strikes. 1000ity, as many as security officers will be deployed to protect the stadiums and fans, including 10,000 soldiers and 13,000 private security contractors. matchle weeks ago, a revealed some serious flaws, with some managing to bring in firecrackers and smoke bombs hidden inside hotdog sandwiches.
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now, the second major issue for this tournament is the strikes that are continuing in the air, on the trains, and in the streets. the french airline, air france, is planning to strike from tomorrow to tuesday. the ceo has advised supporters to take other airlines, drive, or take trains. two of the major suburban train lines going to the stadium are striking today and the national train director has advised supporters of the opening match tonight between france and romania to arrive as early as 6:00 p.m., when the match only starts at 9:00 p.m. supporters might be surprised by the piles of garbage in the streets of paris. treatment centers have been blocked for the last 10 days. not very nice for the image of france, when the waters of the
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seine river are just receding, leaving behind mud and debris. the french of course want to show that they are ready to play and party. anna: the weather forecast is also set to strike next week. the list is long of those parts of the economy that could be on strike. how is this going to impact president aland's -- president hollande's approval ratings? caroline: president aland needs this to be a success. according to the organizers, it a positive impact on brands are many trying to cash in. one has launched a twitter campaign. we are expecting the 2.5 million supporters to spend an average
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of $1400 -- $400 a day. the president needs this because his popularity is still at the lowest since his election. only 16% positive opinions. the rise of the far right as we've seen in austria is also looming in france, with the national front very strong in the polls. if the french team makes it to the finals or wins this tournament, it could have a positive impact on his popularity. back in 1998, when france won the world cup, it had a positive impact on the president at the time. president holland has the advantage of being a soccer fan himself. when he was a kid, he want to be a striker in normandy, in the local team. he's a soccer fan.
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that could help as well. anna: caroline, thank you very much. sticking with the eurozone growth scenes, the cypriot finance minister has told bloomberg there needs to the adherence to one eurozone members have agreed to. speaking at brussels, harris also said lessons have been learned from the financial crisis. of newow have a number should -- which [indiscernible] anna: stay with bloomberg.
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you will see an interview with former ecb president sean country shea at 10:30 u.k. time. lena, let's talk about football. i'm joking. the look of fear on your face. let's talk about the problems europe faces. mario draghi in brussels about the need for reform. he launched his corporate program. what should the focus be for europe? does it need to be on what the ecb is doing or should it be reform and fiscal stimulus? lena: the eurozone has regained a lot of the mojo it lost during the eurozone crisis. it was just four years ago that the markets were talking about the end of the euro as we know it. here we are with the euro area outperforming growth in the u k and the u.s. and holding its own in the middle of a global
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structural recession led by emerging markets leveraging certain sectors of manufacturing. at this point, it is probably right to say, have we done enough? it is absolutely apt that it should be the man who can be credited for saving the euro, president draghi, that he should be making the case that more has to be done on growth. ultimately, the case for reflation has to be measured against productivity. it has to be measured against long-term growth potential. that is outside the domain of central banks. it is the domain of policy officials. made anexpect -- he interesting point to me. politicians have wised up. they know they don't get reelected if they do tough structural reform.
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that is why they rely on central banks. draghi doesn't want to be on his own in the cold. a financially economist, i look at market fundamentals. central-bank policy in the eurozone has done all it can. we have an environment where negative interest rate are destroying liquidity in many markets. has purchasedcb corporate bonds, this is going to undermine the level of inventory available in the market. so, this is not really a sustainable environment. todo need to see an endgame negative interest rates for markets to have a yield curve that can create credit impulses that can create the incentive for banks to lend. anna: we talk about the risks around the eu referendum.
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that is very much a european story. it has moved onto the global radar because of implications a could have for europe. we've got a story about how the implications could be felt in eastern europe. poland and hungary set to lose out. where do you think the pain would be felt in europe if there were to be a brexit? would it just be many questions in many quarters about the sustainability of the eu? lena: this is the question for the day after the referendum. the markets look at this as a u.k.-specific political risk. the reality is this is a european financial shock risk. biggest houses the financial center of the euro area. uncertainty could increase future regulatory pressure and also create pressure on financial institutions to fragment, to create small offices in smaller regional
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, and that would mean higher cost of banking and , whichmarket liquidity is ultimately the worst-case scenario for growth. anna: just days after the eu referendum, move on to the spanish elections. thank you very much. stays with us. up next, russia and real rates. will the central bank ease for the first time in a year? we look at why central banks are divided over the decision. ♪
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anna: welcome back. this is "countdown." live shot of new york there for you. looks like we will be weaker on the u.s. equities session. the wind has come out of the sails.
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long time till we get there of course. let's talk about one big u.s. business making waves in china. $5.5 billiones its theme park in shanghai next week. by the end of the year, it will start making disney movies in mainland china. ceo bob iger revealed his plans. >> in terms of what is going on in china that works to our advantage, clearly establishing a move from a manufacturing to a service economy is very important. we benefit by that, but we also contribute to it. one of the reasons we got permission to do this is the nature of the business, the number of jobs we create in the service sector and the message it sends. another thing is emphasis on tourism. the number of chinese that are traveling today within this fast
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country is up substantially from when we even first decided to build here. the government of shanghai established tourism as a linchpin of sorts of their service economy. we benefit from that as well and contribute to it. many things that i think are going on here, transportation, growth in air travel, high-speed rail, more roads, more cars, all those things play to our advantage. >> there would be some who would say wages will be depressed and that will have an effect on disney ultimately. do you share that concern about wages, about pressure on consumers? circumstancethat is more near-term than long-term, or more current than long-term. we also believe this is a large
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country and the number of people who can afford to bring their families here for a day or go on their own for a day is just huge. something in the neighborhood of 330 million people who can afford a day visit to this park that live within a three-our trip, that is an extraordinary number. this is a big, deep market. , slowdown in today's economy we don't believe will have any impact whatsoever on the business. anna: let's move on. russia's central bank is scheduled to announce an interest rate decision after six consecutive meetings with no change. currently it is 11%. economists are split on whether the bank will hold oresume easing. ryan chilcote will be at the biggest economic forum next weekend is here to talk about policy options.
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lena komileva is still with us. ryan, what is the bank going to do today? ryan: that is what everybody wants to know. the survey we did, they are split right down the middle. 42 in our survey, 20 to say we get a cut of 50 basis points. 20 say, not so fast. you've got a nice chart right there of russian traders. that is basically on the derivatives markets. derivatives traders see a cut of 69 basis points over the next three months. there are a couple of rates decisions, meetings, over those next couple months. realinly we've seen a expectation on the market that we're going to see a cut. if you look at the bond market, people have been piling in, expecting a cut and trying to get in ahead of that.
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there's a chance we get a cut today. anna: you were referencing this chart. this is increasingly economists or markets factoring in cuts from the central bank. not necessarily today. ryan: three-month window. anna: remind us of the case for a cut. economy in contraction since the start of 2015. ryan: the case for a cut is to help the economy. it has been in recession since last year. the sanctions yesterday, we got word out of the eu that it looks like they are going to be extended. no relief on that front. one the russian central bank is most focused on is inflation. there have been encouraging signs. year,october of last inflation was more than double where it is now. we are at 7.3%.
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the is where we have been last three months. expectations are subsiding as well. if you look at the fact that the central bank or has kept the key rate on hold for 10 months at 7%, though it sounds like a lot, if she doesn't do anything today, that is effectively a tightening. your real inflation rate, or your real interest rate is 3.7%. just a few months ago, russia had real interest rates that were negative. this is not a lot of -- economists saying, this is not the time to be aggressive on fighting inflation. lena, your thoughts on this economy? the inflation headache reducing a bit it seems. lena: the central bank of russia has two financial levers to play with. one is the interest rate.
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the other is the exchange rate. they have taken a knock on the balance of payments and market liquidity through foreign-exchange reserves and the exchange rate, allowing depreciation. just as the economy is in recession because of the impact of weaker oil prices on investment, exports -- [indiscernible] i guess the central bank is trying to play a difficult balance between not really allowing market expectations for the ruble to weaken so much as to jeopardize the inflation outlook, but the outlook for oil remains uncertain. idiosyncratic risks have been driving the price of oil. there's little that the central bank can do about the risk facing the russian economy. all we can do --
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anna: ryan, we got used to hearing talk from the previous leadership on how they wanted to diversify away from oil. ryan: it is all about the oil price. one of the things we heard yesterday was, while they are pleased the oil price has been rising, they are not convinced this little bounce is going to last. they are planning on oil remaining in the range between $40 and $50. lena was just talking about a week exchange rate. watch the central bank. they don't want the ruble to get too strong. they need that exchange rate to balance their budget. anna: ryan, thank you so much. lena komileva, thank you for spending your friday morning with us. program, gross' great warning. the fund manager says negative
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rates are like a supernova that will explode. the full story on that coming up next. tracking developed markets, interest rates going number, japan touched a record low. more on that next. ♪
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japan's 10-year yield falls to a record low. bill gross warns negative rates are building up a supernova that will explode. obama endorses clinton to succeed him. can he unify the democrats around hillary? boris gets bashed. the most famous face of the brexit campaign is accused of putting his own ambitions before his country in a tv debate on the eu referendum. warm welcome to the program. this is "countdown" live from
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london. let's have a look at the futures for european equity markets. weaker atf we will be the start of the trading day. wind coming out of the sails of the global stock market rally that we had seen at the start of this week. we are seeing weakness coming through in the asian session. that could be spreading into europe it seems. a little bit less on the euro stoxx overall. a lot of talk about weakness in global bond yields. bonds hittingear record lows. japan, new record low for the 10-year jgb yield. bill gross talking about a supernova that will explode in the bond markets. let's show you where we've been on various asset classes. weakness in the asian session evident here.
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hong kong back in play after a holiday yesterday. closed.rkets still third weekly gain on the asia-pacific story. risks perhaps around brexit and those conversations. dollar index at 94.2. that is out of sync with what the story of the week has been. wti down this morning by 0.8%. again, out of sync with the weekly picture. the trend has been one of a rising oil prices driven by u.s. stockpiles falling and outages in canada and nigeria. the story in paris is very much one of football. we are looking forward to that coming up later in the program. we will get analysis of the challenges for france as we head toward the start of the euro 2016 championships. they kick off today.
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just recap on what has been happening in the bond markets. i talked about the 10-year japanese move. we got a graphic on the cover bond markets. 10-year for u.s. example. let's get to yvonne:. she's got the bloomberg business flash for us. yvonne: thanks. barack obama has formally invoiced hillary -- endorsed hillary clinton. it comes after obama met with bernie sanders at the white house. president obama: i want those of you who have been with me to the first to know that i am with her. i am fired up. i can't wait to get out there and campaign for hillary. yvonne: clinton said the endorsement was a treat. ms. clinton: it just means so much to have a strong,
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substantive endorsement from the president. obviously i value his opinion a great deal personally. as i've said repeatedly on the campaign trail, i think he has been a very successful president who has made our country stronger and fairer and it is such a treat because over the years of knowing each other, we've gone from fierce competitors to true friends. yvonne: the israeli prime minister has pledged to defeat palestinian militants after a shooting in tel aviv. he also called on palestinian leaders to condemn the attacks. netanyahu said he was reinforcing troops on the border with west bank as well as tel aviv. the leader of the so-called brexit campaign has been accused of putting his own future ahead of british workers. boris johnson was donating the
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upcoming eu referendum. his opponents said he is using the issue to enhance his political credentials. johnson is seen as favorite to become prime minister if david cameron loses the vote. >> they seem to want to take a huge risk with the employment prospects of millions of people. boris, you don't seem to care about the millions of jobs that will be at risk if we leave the eu. ou only care about one job and that is your next one. yvonne: european equities could lose value in the aftermath of a brexit. they found that stocks would be hardest hit among asset classes on a hypothetical portfolio of bonds, shares, and other investments. pound 10 nominated investments would slump 10%, more than those in euros, the models showed.
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the venture capitalist who provided financing to google has died. thomas perkins was 84. he left a job at hewlett-packard to establish kleiner perkins in 1972, opening with $8 million. the firm invested in tech, leading to the silicon valley boom. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. find more stories on the bloomberg at top . anna: thank you. breaking news from the u.k. retail scene. numbers out of sainsbury's and home retail. further details from home retail today. they are being bought up. on part of adding their business to their business. the ceo wants this deal done. the ceo is going to step down after the scenes very steel.
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purchase by sainsbury's is expected to complete in the third quarter. from the sainsbury's perspective, they are putting their cfo, john rogers, into the position of ceo of home retail. i remember when scenes themselves got a new ceo. i remember asking john rogers whether he wanted the top job. he was diplomatic in his answer. he's going to become the ceo of home retail, part of the sainsbury's group. becomeer's going to the chief financial officer position. let's get back to the asian market session. weak picture coming through. david ingles has that picture for us. david: very weak picture. just to summarize, you look at the price, it is one that underscores risk aversion. not a lot of appetite for risk.
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the japanese markets are just about closing up shop. breaking news a few seconds ago. it comes down to the story in the bond markets. looking at the 20-year yield on japanese debt, now under 19 basis points. that is 20 years. we've been talking about this in asia all day. everything from the five-year until the 15-year, you go to the money markets, three months in japan, all the way to the 15-year, now below zero for the first time on record. this is a quick look at where bond yields are generally speaking. i have the u.k. in germany in here to put some context. 10-year, 15 basis points underwater. i could repeat the same thing that shows you the same picture. this underscores doubts that the boj and japan can reach their
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inflation target. against the backdrop of all these risks, investors are going into haven currencies. not a lot in the yen. what i would watch is euro-yen. we are pushing toward three-year lows. 120.33, that takes us back to 2013. anna: david, thank you very much. that sets up our next conversation nicely. japan's benchmark 10-year government bond yields have fallen to a record low. driven by rallies in u.s. and european bonds, amid concerns about the outlook for the global economy, the bank of japan and under -- and other central banks are under fire from bill gross. the money manager says global yields are the lowest in recorded history. supernova that will
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explode one day. gross has argued for some time that the economy is at the end of a decades long struggle of expanding credit. he says this is a situation that is unsustainable. joining us now is manish singh. great to see you this friday morning. what we a chart echoing were hearing from david ingles in hong kong. weakness in bond yields, strength and bond markets. this chart goes back to 2000. it shows the trajectory in a move downwards. the japanese wanting white lows,ng negative record -0.14%. how sustainable is this situation? how much of a supernova is it? manish: what i think is that we are still using monetary policy to address all the locations we having the economy.
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i'm not a great believer in negative interest rate policy. monetary policy has done its job of presenting -- preventing the 1930's like depression. increasing seem wages are increasing consumption. while people are making money, they don't know where to invest. consumption is not rising. demand has to be injected directly into the economy through wages and we are not seeing that. that is a fiscal measure. so long as we don't see a fiscal response, we will just see the yields falling. unless we see a fiscal response, these things are not going to come back. anna: you sound like you are channeling mario draghi in brussels. he was saying that monetary policy can't stand alone. we've heard this message so many times. does it change anything? manish: it shows the lack of
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leadership. people are not ready to take the unpopular decision. europe is a special case. there is a lot of agreement between eurozone nations before anything happens. japan.alk about that if you look at the real gdp growth from 1990 between japan and italy, japan has been higher than italy. that just shows you the problem in eurozone, that it is a very slow moving change. ultimately it comes down to fiscal response. i think u.s. is again going to lead the way. i think that democrats are going to win and clinton will be president. you are going to see fiscal expansion, higher budgetary spending. there is a case to be made. i'm not quite a buyer of that. secular stagnation was stopped about 1930.
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[indiscernible] was 1930. look how wrong he was. injectionemand directly into the economy. anna: you mentioned u.s. politics. we got a big political event in europe. the eu referendum vote. how big a threat to the growth story of europe is the potential for a brexit? i word in that way because most economists suggest we will see weakness in the u.k. economy if we were to vote for a brexit. manish: brexit is not priced in the market. if it happens, it will be a surprise. nobody is pricing it in. also think brexit is not going to happen. it could be a good thing for u.k., but i don't think it happens. in terms of impact on gdp
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growth, if brexit was to happen, nothing changes from day two. the whole negotiation is going to be a long affair. i don't think the negative impact on gdp is as high. anna: why don't you think there will be such negatives? manish: u.k. has a trade deficit with the rest of eurozone. if somebody says that just to spite u.k., they are going to not trade with them, that seems not very -- anna: but the share of european trade that is british is quite small. manish: it is not that u.k. cannot negotiate with them. i have been at some of the meetings as well. it doesn't mutually benefit either side. the eurozone is also in trouble. they will see this as unraveling of the eurozone. anna: thank you very much. manish singh stays with us on the program. 2016rofit as the euro
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kicks off tonight in paris. we look at the economics of the tournament. ♪
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anna: welcome back. this is "countdown." 7:17 in london, 8:17 in paris. let's go there now. the euro 2016 championship kicks off tonight. carillion kanaan is in the french capital with a guest. caroline? dayline: it is a beautiful in paris for the opening night of the euro 2016, but there are many challenges for this tournament. strikes, fonts, and terror threats. i'm joined by bastions route. he's written several books about
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the economy of football. do you think that president ollanta has more to lose than to win? i think france has much more to lose than to win. france is the company welcoming the most tourists in the world. to attractnot need foreign tourists. of aimagine a problem terrorist attack or i don't know what. this could deteriorate the image of france worldwide. caroline: do you think the strikes are deteriorating the sports atmosphere? bastien: possibly could deteriorate france's image as a -- this is not really hasistic, maybe, but france
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contributed to this image further. caroline: especially the piles of garbage in the streets, do you think that will prevent or maybe discourage people who haven't bought their tickets yet? bastien: i don't think so. i think people already having tickets will go to the matches. i don't think this problem will present people from going to the stadium. but of course, terrorist attacks , the fear of terrorist attacks, may impact the sales of tickets. caroline: there are estimates that they economic impact for france will be $1.4 billion. does that seem realistic to you? bastien: to be honest, nobody knows. the economic impact of international football tournaments is very often nonsignificant because many people are coming just for this event, but many people are not coming before because of this
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event. they fear expensive hotels. they fear terrorist attacks. the net impact is very often hard to gauge. caroline: do you think the net impact will be short-lived or do you think it could have a positive longer impact in france makes it to the finals on wins? bastien: imagine that france wins. that could have a positive impact on consumer confidence. that is possible. but this effect would be short-lived. france the example of 1998, when we won the world cup. the impact had been very short-lived. caroline: does it actually generate more to the organizers? do they take on the benefits? bastien: that is one of the most controversial issues. like 2y, they will have
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billion euros. that is huge. but this amount will not be distributed to the hosting country or france will receive some money, but that will be very limited. while the french government used a lot of public money to build the new stadium or refurbish a stadium. that is one of the big topics that has to be tackled for the future. caroline: we've seen the global governing body of football last year hit by this corruption scandal. has this damaged the image of football? bastien: for sure, the image of football has been worsened because of these scandals. -- maybethat football united nations, i don't know, theseo try to control
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people at the head of these international institutions. caroline: which team is your money on? bastien: of course france. live from paris on the opening day of the euro 2016. back to you. anna: entirely impartial reporting. you drew france in the office sweepstakes, which i look on with -- i feel it seems kind of dubious. thank you for joining us. manish singh is still with us. he also thinks france is going to win. do you? manish: they have a very good team and the home advantage. anna: talking of things french, breaking news on airbus. airbus agreed, they announced last night to sell their remaining aviation stake. we are hearing this morning that they managed to fully dispose of that. they are going to issue bonds du e in 2021.
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saying essentially they've got growth proceeds of 3.2 9 billion euros. more on that on the bloomberg. let's not talk about football or aircraft. talk about the fed. you wanted to discuss that. have you reassess your expectations based on the jobs number on friday or did that feel like an outlying jobs number? manish: i didn't expect a june rate hike so i'm not surprised at all. my view, we will not get a july rate hike. it probably goes until september. the economic growth outlook is not great. i'm not worried about it. jobshas to create 72,000 to keep stable. the worrying trend is the strong dollar and emerging markets. i don't see the fed in any rush to raise interest rate. i would not be surprised if we
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see only one rate rise this year. adon't see a june, don't see july, possibly a september. if you look at the last 30 years, with the exception of 1996, they have reduced rates during an election year. anna: does this hold the fed back in a way they haven't previously because of a more interconnected world, the strength of the dollar weighing on emerging markets? manish: that is absolutely true. we live in a far more integrated world. the role of chinese yuan, euro-dollar, cannot be underestimated. if things were to backfire, they would not look very good if they were to cut rates after that. you've seen that in eurozone. i don't think they want to go into that camp. anna: what is your investment strategy? we've got various stories about soros' increasingly activist or
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increasingly active in the decisions his fund is making. decreasing u.s. stock holdings, increasing gold. what are you buying? gold, stocks, neither? manish: i'm not in the cap where i advise people to have gold. i believe equities will do well. don't seepect -- if i a fiscal response, i don't see a big growth inequity. what we have been doing is monetizing income. also we are using structures to optimize the entry point. i'm definitely in the cap that equity will do well. you have the government standing behind and central-bank standing behind you. anna: thanks for joining us. ofage singh, head investments at cross bridge capital. that will do it for "countdown." "on the move" is next.
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paris getting the euro 2016 championships underway. the first game will be france versus romania. paris, enjoy the festivities. i will see you bright and early on monday. ♪
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."y: welcome to "on the move we are counting you down to the european open. i'm guy johnson alongside matt miller over in berlin. this is what we're watching, the bond theory. never go places they've be. bill gross warns a supernova will explode in the dense universe. the dollar dictates. asian stocks fall as the greenback climbs. does the buck stop here? pricing for brexit. it is week


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