Skip to main content

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

1:00 am
♪ draghi's dashboard, the readings on inflation and guidancet for ahead of the ecb meeting. the uk prime minister gathers cabinet ministers and top officials to get back to work on brexit ahead of the g-20. and the ruling on apple could be the twilight for easing european tax deals, but ireland's finance minister says his government will fight the decision. >> they could take several years, and i have no doubt this will be a matter for one of my successors. ♪ anna: a very warm welcome to
1:01 am
countdown, everybody. i am anna edwards. manus: i am manus cranny. stanley fischer talking yesterday about are we more than one and done? anna: a big question, really fascinated about negative interest rates as well, such a profile internationally in central banking circles talking about how negative rates seem to be working elsewhere, even know they're not on the table in the u.s. pointing out that that will be of interest, but what is of interest to the treasury market in particular is the hawkish commentary we have seen. manus: and it is just a flow, the middle of the curve has had the worst month since last year. we should look at the very short end, two-year government bond yields in the red, never far from the work function is anna edwards. what you have here is the probability of a rate hike,
1:02 am
two-year bond yield in the red, two-year yields are having the worst august since last november. the yield curve itself, two years versus 30 is the narrowest since 2008, and this part of the yield curve is up by 15 basis points. definitely come as one of the commentators was saying a dangerous zone, consumer confidence in the u.s. rising, adding fuel to this debate of more than one and done from stanley fischer. anna: anna: let us bring up the risk radar, various asset classes overnight, general asian session fairly positive come up by 3/10 of 1% on the msci asian pacific area emerging markets down by 1/10 the 1%. we have nymex crude fairly flat, many asset classes not going anywhere very fast overnight it seems. in terms of the majors, this is overnight, increasing for the biggest monthly gain since april. algeria very much in focus.
1:03 am
old in there as well. manus: if you look at gold, a very rare august. down 3% overall, the first august we have seen a decline to 131%. at the moment, the commodity moves are inextricably linked to the movement in the dollar. that stronger movement in the dollar has got repercussions all the way around. that would be the first august since 2009 that we could actually see a loss. anna: definitely a back-to-school feeling, the political story today from france, spain. we will bring all that into the conversation. and we have a lot of data and headlines on unemployment and inflation. let us to the bloomberg first word news. here is rosalind chin. rosalind: goldman sachs is said to have lost 1.8 billion dollar property deal, according to those familiar with the matter, the investment bank was the original wehner of the u.s. real estate sale, before the
1:04 am
transaction fell apart amid a disagreement. that led flex go to prevail with a deal.and it will proceed with the purchase assets worth $450 million. representatives for goldman sachs declined to comment. the uk prime minister marks the end of summer today as she gathers cabinet ministers and top officials at her country residence. negotiator david davis has so far chosen not to flinch out the public details of what they will seek in breaking from the eu, how are they will still face pressures from colleagues and executives to define what really made news when she said brexit means brexit. consumers seem to have cash burning holes in their pockets, showing some eagerness to spend after an initial post-brexit wobble. household confidence index
1:05 am
dropped in august, regaining half of the losses. the second week that shows consumers are recovering from the initial shock in june to leave the eu. donald trump has said he will travel to mexico today for a private meeting with the president. invitations have been sent to both the donald trump and hillary clinton campaign to meet with the mexican president. meanwhile, donald trump is also due to deliver a speech in phoenix, expected to lay out his proposal on immigration after weeks of conflicting reports about whether he is moderating on the issue. has beenry clinton given 30 days to provide written answers 225 questions stemming from her use of a private e-mail server during her time as u.s. secretary of state. among the questions the democratic nominee has been asked to explain our why and how the private e-mail system was created and when she decided to use it for official business? the list has been drawn up by
1:06 am
the watchdog group judicial watch, under a federal judge. mobile news 24 hours a day powered by more than 2600 journalists and analysts and more than 120 countries. you can find more on the bloomberg at top . i am rosalind chin. this is bloomberg. manus: roslind, february much. 1.5 percent, what happens next? there is one man that can tell us about it. david ingles is standing by. david? david: thanks, guys. when we talk about the japanese market, before i get to my equity map here, a lot of this comes down to the move and dollar-yen.i mean, just hole,ed to pre-jackson this is where we are at the moment. trading at about the 103, very hard to decipher at the moment how much of this comes down to, i guess, speculative trade. keep in mind, we are at 110, will be typically get a spike in
1:07 am
demand for u.s. dollars in japanese corporate. and there we go. 103 at the moment. one thing i want to note before the equity markets, we are getting lines from a special advisor, talking about a bunch of things. micst, reconsidering abeno out of the questionnaire he chance tois a better strip not only energy but also asip out fresh food prices the main gauge of inflation. now, it is possible for the boj to consider that cpi gauge at the upcoming review, which coincides with the next meeting. and of the u.s. he thinks, unsurprisingly, would probably object to the boj buying foreign dollars. but anyway, dollar-yen is on the way up, driving equity prices, which you can see the standout across the asia-pacific, really just head and shoulders above
1:08 am
everybody else so far this week. shanghai want to mention, volumes quite thin, earnings continue to be in focus. up one third of 1%, small and mid-cap record highs. but from that, nothing else happening. we are really looking forward to the jobs that were on friday. anna: david ingles in hong kong. mario draghi has been quiet for over a month, as investors turned to the eurozone data out later today for guidance' aheads of next week central-bank meeting. manus: speaking of a young in school of economics -- london school of economics, he was critical of the ecb policy. >> first, just focus on inflation, and the instrument or the intermediate variable they thought about was the interest rate. now, they are talking about negative interest rates. worked. have not negative interest rates have not done extraordinarily carefully, actually weakening the balance sheets of the banks.
1:09 am
his: joining us now with analysis, valentin, very good morning to you. in that context, i want to contrast what we heard him stanley fischer yesterday, we just heard from stiglitz about negative interest rates. they were talking generally, not specifically about europe. but negative interest rates are working elsewhere, not on the table in the u.s., stiglitz saying they have not work. our interest rates working for europe? isentin: the bigger picture positive and negative rates about policy, and the positive side it is certainly encouraging catch holders to spend that cash. should be seen as a stimulus. environment of very low yield, and is having an impact on bank performers. and you could certainly link the introduction of negative rates to the persistence and underperforming bank stocks.
1:10 am
so, the jury is still out. i guess, for the markets, really what the policymakers, the people in charge of potentially cutting those rates even further deeper into negative territory think about that. for the time being, stanley fischer, but also the ecb overwhelmingly still in favor of the policy. they are saying the policy is working. really quite interesting, i think the jackson hole indicator, that in the absence of structural reforms in the eurozone and the absence of concerted fiscal stimulus, they have to dig even deeper. i guess that is the potential for them having to do more, but again from the current levels of the eurozone it is going to get even more difficult to cut further, given the impact on the banking sector. manus: we talk about mario draghi's dashboard, inflation nowhere near the target of three 3%. consumer optimism is fairly well above the long-term average. so the consumer looks at the --
1:11 am
usa the politics would probably trump everything, leaving it vulnerable. valentin: that is the next big risk for that eurozone. what the ecb is helping to achieve is to engineer the recovery, whereby the consumers who would play a key role, and this is where local uncertainty might derail the prospects for more sustained recovery. maybe on the virtue of a couple of months of very heightened political risks in the eurozone, but centered around a couple of key events in regional elections in germany which could see the anti-immigration parties really extending the presence in local and ministrations. but more importantly, i think the key political risk in the euro zone for the year is a referendum in italy on the constitutional reform which may leave us without a government, in italy in early october. anna: i want to ask you about
1:12 am
the specific nature of political risks, do you think it is lack of government? in the spanish case, not so damaging. they have done quite nicely, tourism this year, for reasons we can understand, where does that leave the euro against the dollar and the pound? because against those biggest trading currencies, certainly the nearest neighbor as well, political risks in all cases. the political debate in the u.s. and the brexit. conserving height of the sovereign debt crisis is that anti-europe parties are the biggest parties, especially in italy. so the prospect of having an election after the referendum and having a government potentially led by five-star movements want to co-opt the referendum is quite concerning. from that point, the markets may seem somewhat complacent. at the same time, we are scrapping the policy response, where back in 2012 it was all
1:13 am
brand-new, the intuitive idea of having all the problems that the ecb, all that helped a lot. right now, we are starting the discussion questioning are those policies working at all? so the concern is precisely are we're going to have political risks, where tis greater than bt the same time -- manus: if you say that this is one month volatility over the next month, how real is the risk? valentin: the way we see it in the central case is that the upcoming events could have two different ways. one is the existential risk for the euro, which i don't think you should be attaching anything significant just yet. it is just a rest. the central case is that political uncertainty could lead to uncertain business decisions, delaying hiring, for the consumer the real driver of growth in the eurozone is delaying consumption. so the political risk will leave all into headwinds for growth.
1:14 am
manus: and the downside, dollar-sterling? where do you see it? are both i think they facing downside risk on the back of that. if anything, political risk will increase the chance of the ecb doing more before long. so you watch how this plays out in the euro zone. we think 108, ultimately a long-term prospect, 110 year-end. nov staysentin merriari with us. manus: and under an hour we get the u.k. house prices nationwide. and also a slew of u.s. inflation data collating in the cpi data. that is 10:00 a.m. u.k. time. anna: we get unemployment. and midday it is the mba mortgage applications, and that follows an hour later by employment change data, as we
1:15 am
head towards friday's key day. manus: under pressure, the shares take a hit, as brazilian prosecutors finalize a criminal approach into last year's collapse. this as the group's ceo is asked. we get little that more on this. anna: macro economics, is that a possibility? what does france's biggest employment agency think of the president torres? manus: from race to stand up, spain has been without a government for eight months. will they deny him another shot? all of this? this is bloomberg. ♪
1:16 am
1:17 am
1:18 am
anna: welcome back.
1:19 am
6:18 in london. fairly foggy hang seng, flat at this trading day. chin, the rosalind bloomberg business flash. getlind: anna, bhp will not a 2016 bonus following last year's iron mine in brazil. facing an annual base salary of earn alion could short-term bonus. meanwhile, according to one official, resilient prosecutors that resilient prosecutors are finding that next month, charging the federal use. ireland's finance minister michael noonan says apple will pay all of the tax due to the activities, after the european union said that apple code ireland $14 million in back taxes. between 5000 and
1:20 am
6000 people employed in cork, and there is substantial economic activity, and they pay full activity generated in ireland. rosalind: investment bankers and europe's biggest security firm are watching bonuses melt. according to data compiled by wipederg, a route has more than $2.5 billion from the shares that will pay bonuses the last few years, as barclays, credit suisse, and ubs. awarding $22 million to a former month cento employee. a financial executive for the company said month cento booked revenue without properly recognizing all of the costs, causing it to miss earnings. and the world's best-performing stock fund is discovering the downside of success, after
1:21 am
producing a three-year return of 275%, more than any other active fun with at least $500 million managers, of the microcap fund say bargains are disappearing. the dearth of shares has become so severe, that the clients to the unusual step of limiting the benchmark index, jumping to all-time high this month. and that is your bloomberg business flash. manus: rosalind chin in hong kong. france's economy minister has resigned, due to speculation that he launched a bit to replace the president, france hollande. anna: let's get to caroline and france. very good to see. really fascinating to see how the business community in france is responding to the latest move in the french political saga. what are the intentions?
1:22 am
he stopped short of actually declaring his intention to run didn't he? caroline: he did. and the position within the french government was getting a little tricky. remember, earlier this year he launched his own political movement called on the move, and in july he did his big political rally think he will carry the movement until victory in 2017. so of course, his ambitions were far greater than just the economy. and he had to leave at some point, in order to carry this political movement a little bit further. last night he did a press conference, appearing on national television, but he did not say he was not going to be there for 2070, just saying that he needed a bit more freedom in order to meet his own proposals, that you touched the limit of our political system. and the question remains on whether he will build some
1:23 am
proposal in order to support a socialist candidate, including hollaned, or whether he will run against his former boss. manus: you are at the heart of france business. davos, what are the executive saying? are they enthused by macron? he is the economic reformer of france, many people see him as the architect of change. are they pro or disappointed at this particular departure? those i have been speaking with so far are clearly disappointed about marcon's departure, because i was mentioning he was very much the image of modernity. week,ticized the 35-hour the idea of the prime minister's, proposed year after year.
1:24 am
he proposed some new tax cuts for businesses. the business community is disappointed. ceo who told me why he thought macron was really good for the french government. have a listen. >> two interesting situations, one of the best prime rs, but i see france being far away from business enterprise. and marcon was someone who knew the issues. entertain the discussion and understand what we need. secondly, he was reforming. this is an issue not talk about. it is good news? i do not know. caroline: expected to speak tonight here, even though it was little bit different. anna: yes, indeed.
1:25 am
caroline speaking to us from the conference in versailles. marinov still with us. it must be the shape of the brexit, what is going to look like? brexit means brexit, theresa may said that. nobody knows what brexit means. give us your thoughts on the vulnerability of the pound right now. valentin: brexit is an issue. and if anything, what investors may be getting wrong, actually selling the pound, how much is already priced in terms of the price already? yes, brexit is bad for the going to cause uncertainty. that will be a demand, whereby consumers will be delaying consumption, businesses delaying spending. longer-term, it could lead to a pullout of businesses from the u.k. the morey side, less jobs,
1:26 am
productive employees pulling out of the u.k. because they see diminishing job prospects. but the question is, how much is in the price? and running various models, the message from all of these models, you can start with a simple to fairly complex long-term valuations, the pound is looking pretty cheap. on a less fundamental u.k., if it deteriorates significantly further, which may happen but not near term, i think that the pound need not be selling off significantly further or be on the low side we have seen already. and in terms of where we expected to end of the year, 129 sterling, we have seen those already factored yes, brexit is not good for the pound. likely to remain a significant negative for the pound, but negatives already in the price. manus: oil are a pricing in. stays with us.v
1:27 am
anna: up next on the program, dealing with the fallout. losing a bonus as the mining giant deals with the collapse. we take you to a closer look at the stock reactions to this story. that is next. and this is bloomberg. ♪
1:28 am
1:29 am
1:30 am
♪ manus: it is just after 6:30 a.m. in london. you are looking at a beautiful shot at the emperor's palace. dollar trades, what happens next from the bank of japan? we will to you more of that very surely. anna: we are getting numbers from the french telecom company, the conglomerate reporting a net loss for the first half of the year, 28 million euros. first half operating profit though with 57 million. what is really interesting here is the comments giving about secession, there are pointing two deputy ceos.
1:31 am
confirming the outlook. the focused on succession rather than the numbers here. succession,ring for that is the expectation for many months now. one of his sons and nephews joined the board back in april. and he said he would suggest names for his replacement in coming months.that is what we heard back in april. interesting that these two gentlemen have been made deputy ceos of the company. sales are declining the, first half keeping the outlook and confirming two ceos. manus: let us talk about daybreak. you have a new edition on your mobile, on your bloomberg. hopefully, you are familiar with the. these the top story. if you are a banker in europe, in smoke. bonuses up $2.5 billion. yesterday, we had a leprechaun looking into the gold. on the the money,
1:32 am
market. $2.5 billion. if you think about it valuations of stock,, a great deal of bonuses are tied into longer-term. credit suisse lost, more details than what they say. deutsche bank's stock is equated to nearly $600 million worth of a drop. but if you look at average variable compensation for the high earners, that is trashed by 127% from 2014. quite literally, however, think of the other way. if you could get a load of deferred stock this year as options, and they do not vest, you get the evaluation low. work hard, evaluations rise. work for a takeover. i had lots of that. anna: manus with the silver lining. blackstone considering buying a german company, that is according to a person familiar with the knowledge.
1:33 am
one of our producers was pointing out, perhaps a brexit angle in here somewhere. perhaps banking on jobs in the financial services sector degraded and parts of germany. 5 and finally, it is year beyond, if you understand the irish finance minister. talking about apple. he is confident that the 14.5 billion euro fine will be overturned. but who could emerge as the winner of that ruling? britain has said it would welcome -- i love this -- it would welcome the iphone maker if they decided to split on the eu. the irony. anna: lots of european companies facing this th dilemma. can we get any tax money ourselves? the irish are going to get it, other countries can go after that tax money instead, or do they invite apple to locate there? manus: at which point in all of this, 0.05%.
1:34 am
you have to say -- 0.005. ministercting prime says they are at a serious crossroad in history as a look at the socialist party and a confidence vote. his allies and opponents will respond today with a vote taking place at the end of the day. anna: joining us to discuss the story, maria taddeo in madrid. maria, great to see you. this has dragged on eight months, no prime minister. rajoy is excited to win the vote. he has cobbled together the vote. that is the main betting, isn't it? maria: rajoy is facing the confidence vote, like you said. is not a win, he will scrap the idea. he needs to win the overall majority. that is not going to happen. going into friday's vote, he
1:35 am
needs more yes than no. his argument is that he has the pocket mandate, and they just don't have a plan. the question is will they back friday? plan for and so far the idea is that they will not. so we are looking at a best case scenario of rajoy losing the vote today, losing friday, no government. anna: going into friday's second vote, if he fails to get the socialist party onside then, get them to abstain the ballot, are we heading towards a new election in december? the bar is lower on friday. what are the chances? : maria so that is a big question. what are they going to do? again, the idea we are getting from them is they will not abstain the vote. they will not help him become prime minister in any way shape or form, and that means the country could be on track for new election. having said that, i think it is important to clarify that rajoy has two months to brokered in
1:36 am
immaculate turn to small regional parties. it would not necessarily mean we are heading toward dramatic elections, but the same time there is a sense that people are in spain are becoming increasingly angry at the situation. they had voted three times in december. and that is getting a bit too much. and the voters, on christmas day, an additional issue for people here. excellede economy has relative to the rest of europe, despite no government. maybe there is a bit of a hint there? maria: that is right. the economy so far has shown no impact of the political deadlock. as you mentioned last week, gdp beat expectations. in sumer confidence is holding strongly. i think the problem with spain is that the government caretaker has not been able to approve a single piece of legislation for all of the year now, and the hard work is beginning to add up. most definitely, a budget next
1:37 am
year. spain has a deadline at the end of the month to drop this budget and sent to brussels, but there could be a case with there is no government and no draft of the budget, nothing to send to brussels. nothing ready for next year. maria, very interesting to see of a managed to hold on to the strength in the tourism sector that they have reportedly seen this summer. maria taddeo, madrid bureau reporter for bloomberg news. emerging-market equities headed for the best august in over a decade. and the nikkei is benefiting. ryan chilcote has the chart. the morning. the: let's start off there, nikkei over five days. what you see is the last three days, all good news for japanese stocks. third day rising. best three-day street in as many weeks. shares on japanese stocks generally speaking up today, as they have been the last three days. of course, fifth day of yen weakness on the back of rising
1:38 am
expectations of the fed is going to raise rates this year. an interesting one there. newsown about 3.5% on the that investigators, prosecutors looking into the mine disaster may just announced charges next week.the other news today is in the ceo will not getenzie, his bonus. he was about to get $4 million. he will get his base salary of $1.7 million. shares down the most in almost two months at bhp billiton. and it is the last day of august, a look at your emerging-market asset classes. three of them over the month of august, how have they done? the white line is stocks, purple ise are bonds, blue currency. and as you can see, they have not done that bad this august. emerging markets, at least when you compounded, do not get that excited, 3% for the month of august. not so bad on an annualized
1:39 am
basis. the purple line, sovereign bonds, just under 2%. and currency basically flat. of course, the concern is that as the u.s. raises rates that would take money out of emerging markets, but that is not exactly what we are seeing here. i talked to one strategists who going onlook, what is is that people think rates will be lower longer and that will support emerging markets. not just equity markets but all asset classes. back to you. manus: a question of how much tolerance the market has to hold on to those rate hikes and continue to buy em. let us talk about the federal reserve. stanley fischer said negative rates are not on the table in the u.s. but they do seem to work in other countries. he said capital markets are increasingly connected. and the fed is playing close attention to what others and for banks are doing. stanley: the world is becoming increasingly interconnected,
1:40 am
particularly the capital markets of the world, so what we do affects many other countries. that was always is also true that what they do affects us , so we are dealing with interconnectedness, and we are probably the most important other central banks. was stanley fischer of course talking to tom keene. valentin, increasingly connected world, is anything the world doing right right now stopping the fed from hiking in the near term? valentin: our expectation is for december, but with your question, no, not much to suggest that will stop the fed from hiking rates. using measures like financial conditions in disease, which are also taking into account what is happening in global stock markets. credit metrics and all of that. and a 10-month low, highlighting
1:41 am
if the fedenvisions, was the go-ahead, yet, they can do it. the thing about the fed, but causing all the confusions, one of the reasons for the flatness in the yield curve, you have been highlighting actually the fact that markets do not believe them when they said we have to hike, maybe not once but more. precise that it always gives coming up with more and more reasons not to hike rates. so we think from our point of view, it is safe to assume that september is not as likely, as the fed is telling us. we stick with our december now. manus: what extent is stanley fischer et al. setting them up for a credibility gap? i know they are not supposed to be influenced by politics. but there is brexit risks, real risks, people floating the idea the donald trump to be in the white house. but politics could play to the fed.
1:42 am
stanley fischer's credibility disappears if donald trump is in the white house. valentin: it is a risk, why some clients are arguing if they want to hike, september is your best chance. you not know what will happen. side, id, fx strategy work the central case. clinton will be the new president. federal hike in december. and from that point of view, that is working assumptions at the moment. obviously, payroll is important driver. he said at last week in jackson hole, that the markets will go , greater price probability to a hike as soon as september 21. and for market impacts, the stronger dollar is a factor against the mahdi currencies, potentially win they could break the back of that. but more than that really, up to the february from here, it has been time and time again.
1:43 am
so it is safe to assume that september is a no go for now. anna: is there anything -- i'm looking at the function of the bloomberg, checking of the latest in the estimate forecast for what that payroll number could be, 180,000 is still the consensus estimate for what we are going to see. but with that number have to be to really scare the markets? it is amazing to me that given the tightness in the labor markets that we could still be hanging on unemployment numbers to decide whether the fed goes or not in december? valentin: the way i see it, labor market has been doing spectacularly well, especially compared to the rest of the economy. really it is at, bigger worry. they do not have cap fx. recovery,ee sustained and that is a worry. at the same time, clearly the tightness in the labor market is not producing the same wage growth or indeed core inflation,
1:44 am
not really improving as fast as it did. trespass they wanted it. for that point, reasons to be caught. bothything, something of 200-250,000 the markets will go for that. but on top of that they have to see wage gains accelerating as well. so that will provide the fed with some confidence that indeed that tightness is resulting in wage pressure, building up. so ultimately their better hiking rates that actually staying passing. fxus: valentin, head of credit research. anna: stocks have been rallying, beating the msci emerging-market index. yousef gamal el-din joins us now. you are giving your toe in doha. doha, movingust in away from all of the oil discussions we have in having the last few days.
1:45 am
yes, there is a play outside the oil world. ,his involves the exchange the rally has outperformed the msci emerging-market index them of over 5% so far this month. take a look at what is happening on this chart. i have handcrafted this, color-coded very clearly to show the amount of foreign investor interest that has been gaining momentum here. remember, that momentum that is coming is 2016. right? those net inflows into the exchange, that has quadrupled since the beginning of the year. and what investors are doing here, they are betting on the passive inflow as a result of the imminent upgrade by the ftse russell to emerging markets status. of course, the final list of stocks is to be announced later today. and as much as there is a lot of excitement here, anna, i have also highlighted the yellow line here.
1:46 am
that is your price to earnings ratio. you can see how that goes up all the way to 13 times now, projected earnings, the most expensive level compared to the peers. going in now, are googly a lot of risk. but a very fascinating story. more of a tactical play because the criminals have not really change that much. manus: you just have to get the fundamentals back to oil. that is basically what you have to do. you do not want to step too far from a barrel of oil. yousef: you are coming to go back. i get it. manus: i just having a little poke. anna: yousef, ignore him. thank you very much. no i do not. ,manus: let us do this. tax time for apple. throwing down the gauntlet over a tax deal sweetheart. who is next?
1:47 am
we take a look. anna: brexit key data point, nationwide home index hits u.k. time with. we will bring the number. manus: macrononmics. what does france's biggest employer federation think? all of that ahead. this is bloomberg. ♪
1:48 am
1:49 am
1:50 am
anna: welcome back, everybody. 6:50 in london. 1:50 in new york. fairly flat on the u.s. equity market, at least that is what the futures say. woman to the start of trading on wall street later on this morning. let us get the first word news. here is rosalind chin. ce will: bhp billiton not get his bonuso, following last year's fatal da collapse
1:51 am
in brazil. mandrew mckenzie was paid a base salary of $1.7 million could have earned a maximum of $4 million as a short-term bonus. meanwhile, according to one of the officials on the case, brazilian prosecutors are finalizing a criminal, prosecution expected to ask the judge to charge the employees. investment bankers and europe's biggest security firms are watching bonuses melt, according to data compiled by bloomberg, it has wiped more than $2.5 billion from the value of the chairs that would pay the bonuses the past few years at barclays, credit suisse, deutsche bank, and ubs. fcc as awarded $22 million to a former monsanto employee. the unidentified whistleblower was a financial executive with the company. sec says monsanto did not properly recognize all of the crops, causing it to miss
1:52 am
earnings. that is your bloomberg business flash. anna: rosalind chin, thank you very much. the irish finance minister michael noonan says apple has paid all the tax due, after the european union says apple owes ireland. anna: he said the government will appeal the decision, and reassured companies that ireland was stand by them in the tax rate. >> there is no contagion effect to other countries. what i am saying is we do not think this decision is valid. we are going to appeal this decision beard and we are saying . and we will stand by those coming that invest in ireland, and have a tax rate that is applicable under irish law, and we will stand by them, and we have assurances from many of them that they will continue to invest in ireland and create jobs in ireland. manus: joining us to discuss this and more is peter toogood.
1:53 am
peter, thanks for joining us. maintainiglitz would that this situation with apple and ireland is undermining the global tax system. he said on ireland, you would have thought that this would be a big windfall for them, and it makes you feel like there is a sweetheart deal. the truth is, apple indicated in ireland, something many american companies have done. just that apple has been smart. exactly right. they went in the early 1990's ireland when they were not making any money. ,steve jobs turning up there. that is the reality. there is a much wider debate about corporate tax structure, etc., which it is not. they're all over the place. everyone is doing it. everyone knows it.
1:54 am
that is the point. anna: the more you look at eleanor complicated becomes. i like the risk editorial. apple says this ignores where value is made, and suggest that value is made back in california for the product is designed, etc. peter: nonsense. anna: revenue and profits made -- 100r: this is a difference, years ago the global dominic companies of today were so much wider. and there is a tax grab, but it is not a justified tax grab. apple cannot bring that money back in, or they can but they will be paying a rate. actually, it is an american problem in terms of american tax structure, and this recognition that taxes are based actually where you are selling the product, rather than the ipps. that is partly that, no question
1:55 am
that is going on, in fact american corporations are successful. manus: it may well be merit there, and this might be the only moment on countdown between now and the election where i say this, there may be merit in trump's suggestion of a 10% repatriation tax for money held overseas, rather than 5%, which currently exists. . there is a wider debate about whether corporate tax structures, making such low levels is appropriate in a world in which the corporate structure is undermining many things. -- whys 200 companies are they allowed to get away with this? it is not loopholes, they are legal, but everyone is doing it. apple is not alone. they just had it at this precise moment. anna: interesting to see how this ties into the question of the eu really, because the irish a very cross that they see the
1:56 am
commission interfering in what is a sovereign issue. as a broader significance, corporation, the competition authorities in ireland are getting not have jurisdiction x, whether you can use it for competitive advantage. peter: they had this for years. someone print the balloon. and the appropriate task, whatever it may be, just pointing out what has been going on for you. apple is being picked on at the moment. not the onlyogle, one. they had a headline today. the bigger question about corporate tax structures globally, it is not avoiding tax, it is reallocation. manus: maybe the irish were really ahead of the pack incentivizing people to come, incentivizing. peter: going back decades. we all know that. anna: do you go after that tax
1:57 am
yourself> ? what you ask apple to relocate? peter toogood from citifinancial stays with us. we will talk about the euro data, later. ♪
1:58 am
1:59 am
2:00 am
manus: draghi's dashboard. investors cindy european -- on inflation, unemployment ahead of next week's ecb meeting. made back in play. uk prime minister and top officials, get back to work on brexit ahead of the g-20. the ruling on apple could be the twilight for easy european tax deals. the finance minister says his government will fight the decision. >> the appeals process will take several years. i have no doubt that this will be a matter for one of my successors. ♪
2:01 am
manus: you are welcome to "countdown." i am manus cranny. anna: i am anna edwards. where getting numbers in on the you -- on the u.k. housing. manus: this is a nationwide housing index. this is the month after brexit, year on year. that texas to five point -- that takes us to 5.6%. 1%.ise of 6/10 of shaking his head in disbelief. -- peter toogood shaking his head in disbelief. anna: we have some jim carrey numbers out -- we have some gf k numbers out.
2:02 am
a conversation to be had about the short-term resilience of the u.k. data. bhanu: will the drop in the -- manus: will the drop in the pound be a london centric or southeast u.k. centric issue in terms of supporting the housing market. the: let's have a look at housing trent. the trading day in asia, directing a little bit for the session. orwas positive, up by .1% .2%. medical a lot of things in play. in london -- manus: a lot of things in play. in london, you're good to see the boj story. the dollar turned a little lower to the session. it's look at this radar. emerging markets stocks, they have rallied. stocks nearlyts 3% up. the longest winning streak in
2:03 am
two years. the markets almost sanguine in terms of taking on a quarter of a percentage rise. will it be stemless -- will it be stanley fischer? anna: that was an interesting conversation yesterday. down by .8% or so, but all of those lead to lg area. a formal meet -- leads to algeria. a formal meeting next month. will he get any meaningful free deal? manus: we've got a little bit of gold priced in. this would be the first august
2:04 am
+++ drop. this is the bond market. you're looking at two year government bonds having a tough time. u.s. treasury market, 10 year government bonds in the u.s., 1.57. this is the worst month for treasuries since june of last year. 1.57. that is the worst month since june of last year. the bottom line is this, stanley fischer and the rest setting themselves up for a credibility gap if they do not raise rates by 25 basis points. anna: let's get to bloomberg first word news with rosalind chin. rosalind: -- -- the investment bank was the winner of elected real estate sales transactions fell apart amid disagreements. goldman sachs will proceed with the process of electing u.k. assets worth around four to 57 million -- around 457 million pound. the cape prime minister marks the end of summer today as he gathers cabinet members and top officials. theresa may's ministers such as
2:05 am
david davis have so far chosen not to -- details what they seek. they will face -- investors and mayutives to define what means when she says "brexit means brexit." slide u.k. consumers seems to have cash in their pockets. says it has confidence -- we getting almost half the ground lost the previous month. the report is the second in less than a week that says consumers are recovering from the initial shock of the vote to leave the eu. emmanuel macron has resigned from his job as friends all loans -- france while i loans minister. michelle sophia will take over.
2:06 am
>> i presented this afternoon to the president of the republic it my resignation as minister of the economy and the digital affairs. trustedhim for having me and allowing me to serve my country for two years, dedicated to the reconstruction of our economy. roslyn: donald trump says he will head to new mex go today for a private meeting -- to mexico today for a private meeting with the president nato -- president yentl -- he is expected to lay out his proposals of immigration after reports on whether he has moderated on the issue. hillary clinton has been given 30 days to provide written answers to questions stemming from her use of a private e-mail server, during her time as secretary of state. among the questions, the nominee has been asked to explain why and how the private e-mail system was created and when she decided to use it for official business.
2:07 am
islamic state spokesman has been northern -- while in a northern syrian city. he was targeted in a position strike -- in a precision strike. global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. stories on there bloomberg at top . i am rosalind chin. manus: roslyn, thank you very much p let's get into markets. asian markets have a little bit of a downtick. david: it is not very interesting. fixated sinceeen jackson hole on this upcoming jobs report which the people say if it is good enough, it puts
2:08 am
september realistically back on the table for the fed. that is really playing out when you look at the lack of volume. orchids are reversing what they did the day before it -- markets are reversing what they did the day before. apart from what is happening in japan, given the excitation that the fed might move. -- something special. look at dollar yen, close to 100 on friday. we are at 103 today. the other market i am following as well, have a look at this. if you look at -- underneath the hood, cfi 100 financials up. very strong indicator of final demand on the chinese wheel of economy. easing concerns so we may see curves.
2:09 am
decent bed across markets. -- decent bed across markets. volumes are very thin. we're looking at 10% to 20% lighter compared to what we are used to seeing. before i go, let me mention this . you have been following -- well this stock is still halted. it is south korea's largest containment shipment company. we did the confirmation today that the company has filed or will be filing for receivership at some point. today the board voted unanimously that that is the best option for the company at the moment. the other stock i want to mention is its arrival. -- is its rival. anna: david, thank you very much. ecb president mario draghi has been quiet for over a month.
2:10 am
investors will turn to eurozone data out later today for guidance and of next week's --tral-bank meeting speaking was critical of ecb policy. >> just focus on inflation or the intermediate variable they thought about was the interest rate. now they are talking about -- or the have negative interest rates. they have not worked. these negative interest rates extraordinary. and have a weakened the balance sheet of the banks. toogood is still with us should -- is still with us. yesterday stanley fischer alongside tom keene was much rates.sitive on negative there is irony for you.
2:11 am
keep or rates, better for stocks? keep on buying? peter: is the plan to keep growth or to force money out of your bank account to spend? no, it is stupid on every level. it impairs banks. it is bad for them. europe, you will encourage people to save more to the evidence of everything else. in germany, the savings rate is appreciating, it is going higher because people don't actually do these things. the spending mentality is not there. europe does not need negative rates. you are not going to make the unemployment rate down -- rate come down by having negative interest rates. anna: having negative interest rates are not the aunt -- having negative interest rates is not the answer. having a monitor response.
2:12 am
we might have to do more if we don't see action on the fiscal side. peter: that is the other side of the coin. ityou target monetary -- is an inflation question? or gdp question? specifically attack gdp growth. go for that. all of those things. get the shovel out, put a hold the desperate hole there, did it. -- dig it. japant japan, the bank of -- what are you going to do next? gdp, what comes next? anna: the helicopters coming. peter: is not helicopter money. -- it is not helicopter money. why not? it is the only charge they've
2:13 am
got. 600%. total borrowing, does he come to systemic risk at this stage? -- does it come to systemic risk at that stage, sir? could the g-20 allow japan to keep going at that level? is it systemic risk? peter: they will find a way of amortizing is the way i would look at it. behold fiscal spending thing, they have done it for 22 years, it has not worked. the only answer is to do exactly what i described. they will do it. i'm quite convinced. anna: if they do, what does that do to your investment environment. peter: i think investment comes roaring back. we'll economy stocks, industrial sectors, even banks come to the party. if you want to call those things of value, -- it's like anna: people expect inflation -- value --
2:14 am
anna: people expect inflation? effectivelymeans describing the universal armageddon for the economy. although bond prices have been fully priced in everyone is taking into the real economy because the fed is going to wait for inflation to be right in front of their eyes. manus: is there a backlash in japan? 20 year bond? doesn't that continue in the scenario that you just outlined? -- does that continue in the scenario that you just outlined? peter: the japanese is showing no intonation to do that. -- the fed loose does what? --er cook the u.s. economy peter: the u.s. economy -- i would wait until inflation is right between the eyes.
2:15 am
why not? anna: peter, thank you very much. in fighting form this morning. manus: he literally is. [laughter] anna: thank you for joining us from citifinancial. up next -- , what is his next move? is he eyeing the top job? we're going to discuss with remy rioux. this is bloomberg. ♪
2:16 am
2:17 am
2:18 am
anna: welcome back everybody. 7:18 in london. the pound against the dollar, 130.92 this hour. let's get bloomberg business flash. >> thanks. let's get started with bhp billiton. the company will be getting a 2015 bonus.
2:19 am
were talking about andrew mckenzie who is paid 1.7 u.s. million dollars. meanwhile, according to one of the officials, brazilian prosecutors are finalizing a criminal investigation into the disaster and expected to ask the judge to charge employees. says finance ministers apple -- ireland's finance ministers says apple -- apple was -- apple owes ireland mac texas. taxes here it they have substantial economic activity there. they for -- they gave -- on the profits generated by the activities in ireland. david: investment bankers in europe's biggest firms are watching their bonuses melt
2:20 am
according to data compiled by bloomberg. felt.why more than $2.5 billion, the value for shares use to pay these bonuses. barclays, credit suisse, deutsche and ubs. angry them are in talks about a theyr of equals good battled falling prices and a decline in spending from farmers . a deal could be announced as soon as next week. both companies have said the instructions are still in the elimination a just and there are no assurance -- rmb limitary the preliminary stages. that is your bloomberg business flash. manus: david, thank you very much. french business leaders meet today. the annual summer conference near versailles.
2:21 am
anna: caroline connan is there. by remy: i am joined rioux. and -- ceo.o good morning. the departure yesterday was kind of expected but do you think it is good or bad news for the french economy? when he was at the palace did i know he is really a driving force behind the internationalization of the french economy. i know that he is passionate about africa. whether his position, he will push forward as well. the rest is politics. caroline: do you think he is going to be missed? remy: whatever his position, he will be hopeful. especially in terms of international development which is my competence and work.
2:22 am
caroline: you are now head of , 8 french development bank billion euros in financing. two months after the brexit referendum, d you think this is going to have an impact on the eu element eight system -- eu development aid system? u.k. was know, the very strong for 10 to 15 years. they built a very strong consensus in the u.k. behind it. we don't know what the exact meaning of this vote. is it isolationism? or just distance with europe or the whole world? caroline: how much has the u.k. contributed to the eu? how much can we lose? remy: u.k. is about $18 billion a year. as far as their conservation to
2:23 am
european aid, it is more than 10%. that is the magnitude of the shock. caroline: what would you like to see after brexit in terms of giving a new sense to the eu? remy: the eu is a heavyweight in the field of development. we will present more than half of development financing. this is that his for the brexit. we are very strong. we can be very more assertive to saying we will keep our commitments and we will be extreme active. we built a network of financial germany, italy, france. networks are extremely well structured and active with amounts to about 25 billion year
2:24 am
worldwide. caroline: we won't have the u.k. to contribute to this. are you trying to convince some private investors to help you? remy: strangely, i am awkwardly -- first ceol invited. this gathering of their french business community. i came here with a very simple message, loud and clear, if you have projects, if you want to invest, they will be there to help you, to go with you in this country. caroline: you are ready to finance this project? remy: we are a bank. , frencht hollande investors confirmed his commitment.
2:25 am
this is a very ambitious plan for development and for the french people. i'm here to explain that and here to listen. i am here to say that developments need to be financed because the issue is not financing, the issue is projects that we need investors, people going into these countries and development means business. we are a source of opportunity for africa. -- e's a lot of untapped euroine: that his memory -- that is remy rioux. back to you. anna: caroline connan joining us medef.ta--- from deutsche bank considering a merger according to manager magazine.
2:26 am
important to flag the source. i am told this reflects the magazine is talking here about internal sources in within deutsche bank. it doesn't mention any source. that stories out there in manager magazine -- that story is out there in manager magazine. 17.7 billion,cap to the extent that the stoxx 600 had to weigh some of the banks comments. a impossibility. even make about the story, it is talking about bankers bonus and balancing. that is all tied. what was the line that he used echo maybe putting two companies together that are old and youitional -- line that used? maybe putting two companies together that are old and
2:27 am
traditional. anna: that does it for countdown. on the move is up next. european equity markets open in 34 minutes time from now. on the move is up next. this is bloomberg. ♪
2:28 am
2:29 am
2:30 am
guy: welcome all. you're watching "on the move." it is 8:30 over in frankfurt. i am guy johnson. here is what we are watching. a purely the summer is over at august comes to the clone desk comes to a close, markets come back to life. -- market come to a and a disappearing act. euros bankers see $2.5 billion of bonuses vanish.


info Stream Only

Uploaded by TV Archive on