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tv   Countdown  Bloomberg  September 13, 2016 1:00am-2:31am EDT

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with ahe fed's governor dubbish tone before next week's policy decision. the chances of a september rate hike kleins -- climbs. inflation of on further gradual tightening and labor market conditions will be moderate and gradual. it is less compelling. anna: more signs of stability. the latest data out of china. interview, the most powerful woman in french frexit, talks brexit,
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and the country's upcoming general election. ♪ anna: welcome to countdown. i'm anna edwards. it is 6:00 in london this tuesday morning. let's talk about what is happening in markets. the fed's brainard speaking overnight, talking about what she sees as the case for really pausing and not hiking rates in september, purging them -- urging them with less urgency which is really setting the agenda for markets. we will look at the u.s. equity session yesterday, pushing equities little higher. the story in asia is a little more complicated, some markets were closed previous day so there is not a downdraft from previous bouts equity market
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nervousness. is not. features quite like yesterday's trading picture so that is taking the edge off the asian trading day. we have the aussie dollar at light of the chinese data out in terms of the retail sales numbers, the factory output numbers. all of that looking better than estimated, but the australian dollar is looking low. the aussie dollar has not decreased as far as expected. first wordhe news. china's economy has shown signs of rebounding after july's hiccup. factory output rose in august, beating the median estimate of 6.2%. retail sales exceeded
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expectations. it has helped shore up confidence in the world's second-biggest economy. hillary clinton has said she is feeling better after being ill at a 9/11 commemoration. the democratic presidential nominee also said she did not disclose a recent pneumonia diagnosis because she didn't think it was a big deal. her comments comes as she was trying to fend off accusations that she is not being honest about her health. she will release more information about her medical history. reid hoffman is offering to donate as much as $5 million if donald trump releases his tax returns in time for the final presidential debate. hisays as trump skirts obligations of the american people, we must show and we value accountability and transparency. the british minister overseeing
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the process of leaving the european union says that u.k. can complete negotiations on the future relationship within the two-year time limit set out by article 50. it came as he answered questions. >> one of your previous -- maybe your last hearing, you had evidence in one of your witnesses, calling it will be complete in two years. and, i think we can, but the simple truth is we have to be nimble and fast and responsive. i worry about anything in which we are trying our shoelaces together. shery: the chinese french minister understands theresa may need to take her time on whether the nuclear power plant should go ahead. the uk's prime minister has
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avoided committing her government to the 18 million pounds to build britain's first nuclear power plant in more than two decades. the french government which controls it backs the project because it means exporting of french technology. >> no decision has been taken now. there are negotiations going on. >> when would we expect a decision? by the end of this year? it is not time. what we need is a good decision. >> are you disappointed with the fact theresa may has been quiet about it? right tot she has a take her time to decide what is best for her country. shery: global news 24 hours a day powered by more than 2600 journalists in more than 120
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countries. you can find more stories on the bloomberg app. this is bloomberg. anna: thank you very much, shery, with the latest. let's check in on the markets now over in asia. david england has been standing by. it is a complex picture because on the one hand, we have a strong session in the u.s., but the previous day in asia, it makes things more complex in interpreting the market moves. david: right. that is exactly why we are looking at a very mixed picture for asia. i don't have to tell you which markets were sold off and which are basically playing catch-up. when you look at the markets, it did get sold off yesterday like in australia which was down over 2%. new zealand was down as well. a lot of these markets have come up. we started higher and since then we climbed. these markets in southeast asia
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were shut yesterday so we're seeing gains. the gains we are seeing is up by a quarter of 1%. the volumes that were present during the selloff yesterday are nowhere to be found when you look at markets today. we are not quite reversing yesterday selloff. everyone is convinced the rally perhaps. the s&p futures are down. down-- do we track it to the 10 year yields? there is money going back into safe haven assets like the japanese yen, for example. when you look at the chinese market, the bboc using 28 -day long-term repos. a lot of that comes down to the fact the holiday is coming up and they want the window covered until the first week of october when you have a long holiday in
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china. ratese in money market which is what we're hearing from analysts. strengthening is further from yesterday's move. 3/10 of 1%. 101.93. this is fairly reflected of of what we are seeing with the dollar falling against most asian currencies. anna? anna: thank you very much, david. let's talk more about what we heard from the fed. the chances of the u.s. rate hike has fallen to 22% after a speech by brainard. in the last speech by a fed official before next week's policy meeting, braineard urged patience. >> this asymmetry in risk management, it is proven in the policy accommodation. i believe this approach has served us well in recent months,
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helping to support continued gains in employment and progress on inflation. jamie dimonan ceo says now is the time for a hike. >> the fed at the maintain credibility and i think it is time to raise rates. morality is a good thing. the economy has been going on like this for seven years. it is not a good or bad thing. a return to normal is a good thing and the rate itself has more psychological attention than the actual economic effect. anna: jamie dimon, not as interested. we will talk more about that with andrew perry who joins us now. great to see you on set with us this morning. let's talk about where you see the fed given this is the last fed official we will hear from before next week's crucial policy meeting. expectations are low. they have become lower in the last 24 hours around whether we
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will see a hike from the fed in september. just 22%. what are your expectations? andrew: my expectation is they will not raise rates. one economist thinks they will and that does not reflect what is going on in the market. the speech yesterday was interesting because it was rather rushed. it came out at the last window before the blackout period. i think that reflects the disappointing economic news. pmi, ism, all the survey data has been falling quite sharply in some cases. even the services. may be fact got a little nervous in the short-term. i think the markets are struggling to read the ruins of fed statements. we were talking about the need to have an early rate rise. anna: what does that tell us about it? it tells younk they are still very nervous about the process of
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normalization. jamie dimon talking about the need to normalize because it shows confidence and strength. i think that is something they started last year. the fed raised rates in august 2015. it got derailed by fears of what was going on in china. that was probably their biggest mistake because the growth rate in china is nowhere near as bad as people thought back in january were last year even -- or last year even. i think they need to focus on what is right for the economy. theircktracks was influence and impact on markets. i think they are beginning to be very aware of the influence central banks have on markets. may be some of the negative consequences. i do think that is one of the big stories going forward, is actually -- does central-bank have negative action? anna: jamie dimon talking about
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what he sees for raising interest rates which would benefit his bank, many banks, at least from an overall level. banks generally want to see higher interest rates. are somebodye you who sees the value in that. andrew: they and the being -- end up being distorted. japan is the most distorting market. all the way along the yield curve, the nikkei. when central banks become a dominant player in free markets, then the power of markets begins to diminish. you get to waypoint where -- you get to a point where the central bank becomes exhausted. once they leave a vacuum, you have large spikes and volatility. anna: what does this do to your equity universe? away from the pacific's of the
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fed story. howbroader conversation is supportive central banks are. we will talk more about this around the ecb and japanese story. how supportable center banks be? thwe we have awoken from our slumber. this is the s&p 500 index. 1% swings for many days. some 43 sessions with no more than a 1%. move now it is back with a vengeance. isrew: the last few days reminding us that volatility has not died. i think it is always dangerous making any extrapolations from the summer months and trading values fall away. i think this is a useful wake-up call. there are many challenges out there. they will be lamenting the impact on their pension deficits around the world.
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anna: a quiet summer. almost eerie after recent years. andrew, thank you. he stays with us. in under one hour, we get german inflation data. 9 a.m. u.k. time, italian industrial production. after that, post-brexit vote with inflation data due. the survey out of germany. stay tuned on bloomberg. eric shasta will talk exclusively to the argentinian president live from buenos aires. heming up on countdown, t automaker will sell driverless cars to the public by 20265, but will they be affordable? more on that. chinese factory output, investments and retail sales beat estimates.
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we will discuss that. plus, power play. ministers says a good decision is needed over the project. that exclusive interview is still to come. this is bloomberg. ♪
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anna: welcome back. beautiful shots of hong kong for you this morning. 1:18 in hong kong and 6:18 in london. the hong kong market outperforming the rest of the asian markets. hong kong up by 8/10 of 1%. let's get the business flash. d intends to sell driverless cars by 2025. the ceo says the goal is to
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bring cost down enough to make the vehicles affordable. the plan is start with robot taxes by 2021 and moved to the wider public by the middle of the decade. investors are not reacting favorably and seeing more focus on the profit warnings. the fda has raised questions about a clinical trial involving the drug chantix. regulators say the study may not have adequately captured the number of side effects which means changes in mood or behavior. a number of suicides were linked to the drawing. pfizer says the study was blind so any doctors who might have downplayed side effects may have done so across the board and not affect the final outcome. jeff bezos is going head to head with elon musk and spacex,
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announcing an ambitious space plan. the blue origin is building a more powerful reusable market to launch satellites and take people deeper into space. called new s glenn. bezos expected to make its first launched by the end of the decade. that is your business flash. anna: thank you. china's economy has shown signs of rebounding after july's hiccup as factory output and retail sales exceeded economists estimates. joining us from beijing is tom. great to speak to you this morning. is this a real revival then or just the product of policy support? give us your thoughts. tom: i think that is exactly the right question to be asking. if you look at the headline data, certainly signs of
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stabilization, even a little bit of acceleration coming towards the end of the summer. retail sales up, data investment stable. a you drill into the details, lot of infrastructure with a lot of property investment, a lot of auto sales with tax breaks. if you look elsewhere in the data, if you look at what the private sector is doing, manufacturing investment, another reflection of the private sector -- still a lot of weakness. anna: what does this mean for policymakers going forward? he was encouraged by the recent data but he does not think china is in the possession to do so. he sees it as necessary. what do you think? think since the middle of the second quarter, what we have
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seen is china's policymakers progressively growing back from some of the extremes of stimulus. we have seen loan growth slowing. new controls on the riskiest shadow banking products. we have seen some major cities introducing controls on poverty -- property speculators. continued stabilization in august which will give policymakers to continue with that trend. we will see it continue modest withdrawal of some of the extremes of stimulus. are we going to see a night and day between policy? lightning?ards absolutely not. the economy requires substantial support and that is likely to come from the physical channels -- more public spending than the monetary channels. we don't expect further cuts in interest rates. anna: thank you very much for your analysis. us in parry is still with
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london. you spoke fairly favorably about data andlying chinese maybe it was not going to be as bad as what the fed. last year. what is your thoughts? andrew: if you look at where we are, when everybody was talking about zero growth in china, it illustrates how many policies china has at its disposal. they are trying to stimulate when things get tough. i think what china has been doing is going through a process of accelerated breaks. we have had a massive fiscal stimulus. when people talk about the arrival of fiscal policy, it is already here in china. now i think they are at the stage where they have overcome the stability. china is balancing reform. it is actually in the short term, retarding growth because
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it is about restructuring the old industries, the soc's, and stimulating the transition to the new economy. path towardsort of a stable 6% gdp growth rate. i think he will continue to see this. some loosening of policy and when things get a little too hot in retail, housing sector, etc. and then they will pull back stimulus thing they do have to encourage reform. that is where china has been a bit disappointing. it is out of necessity rather than a lack of resolve to do long-term reform. anna: how do you rate china's actions to date in taking their economy towards new growth drivers, away from the old state industries? a chart shows some of the pickup and data we have seen and sticking with the blue line -- china retail sales picking up a little bit. the retail sales matters because
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of that tells us a lot about new china and old china. andrew: look at the number of entrepreneurial companies -- from very small to large tech companies -- you can be very upbeat. when we look at this from a stockpicking perspective, we have always been optimistic about china in the same way with your. there were a lot of companies who are doing good things and making use of technology, the rapid shift in technologies to stimulate new products, services. that is the part of china you don't see so much because the soe's, the old legacy business is a very significant user of capital, very large part of the economy. this is balance between the dynamic new economy and the older economy. trying to manage that harmonization. anna: how do you take
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opportunity to invest in china from an equity perspective, or in assets that you see as attractive? what is the strategy around china? andrew: strategy is always about looking for the growth. managers, is easy to succumb to the pessimism or euphoria associated with central-bank policy. the best economists and litmus test about what is going on in the real world where it is a bottom-up process. 3000 quoted companies in china. if you cannot find 10 really good companies in an economy of that size, then you are not trying that hard. anna: thank you very much for that, andrew. andrew stays with us. up next, our x was an interview with -- exclusive interview with ms. royale. we will hear her views on entry points and grexit.
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what does that tell us about the possibility of a frexit. a big force in french politics. she will have things to tell us about that. this is bloomberg. ♪
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anna: welcome back. a live shot of tokyo for you. the dollar against the yen at 101. the nikkei up by 4/10 of 1%. fairly flat. daybreak is now available on your bloomberg app. let's take a look at some the top stories making today's edition. the selfish speech by the fed and was the last comments before last week's policy meetings sets the chances of a u.s. rate hike. just 22%. the kind of stories that have gone with, the cover photo, some
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ice skaters. are they on thin ice? you can make your own metaphor. the next story is rate related with jamie dimon saying it is time for a hike. he says the fed hike is needed for the fed to maintain credibility. perhaps he has got some interest as well, being the ceo of a large u.s. bank. daybreak focuses on the chinese data. the data coming up overnight, showing signs of rebound after july's hiccup. factory output and retail sales exceeding economists expectations. asian stocks are near a one-month low. let's take a closer look at the markets. we are seeing a little bit of a balance of asian equities, but near a one-month low. >> i'm actually starting with
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reaction to brainard. she basically pushed down the probability of a rate hike. it is down to 22% from 30% before her speaking. what we saw yesterday was a weaker dollar but that recovered somewhat, pretty much unchanged. that is the blue line. if we look at the 10 year treasury yields, that is down two basis points at 1.65% at the moment. we saw yields rise globally at the end of last week and also yesterday on concerns the punch bowl may be taken away globally with the ecb kicking off that sentiment on thursday. a bit of reassurance in some parts of the market from brainard. u.s. stocks gained after her comments, all those those gains haven't really translated into gains in asia. this is the asia-pacific index. down just 2/10 of -- actually, looks like we are up 2/10 of 1%.
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we were down earlier, near a one-month low. we are seeing weakness on the shanghai composite. it has dropped more than 3% over the last two trading sessions. looking at the shanghai composition, a slightly weaker day today but we got the better than expected data out of china on three fronts. i wanted to highlight this because yesterday the shanghai cop as it was jolted out of its inertia when it jumped the most in seven months. that is the concern of a global selloff. basically, it tumbled as much as 2.6%, having gone 19 trading days without a 1% move in either direction. this shows every time we have hiborhe three-month yuan spy, we have seen the shanghai composite react. barrel before6 a the u.s. government data which
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is forecast to show u.s. crude stockpiles rose. anna: thank you. some breaking news coming across bloomberg this morning in relation to the banking sector in the netherlands. the ceo is to step down in 2017. he announced his departure from the bank. a former politician of the people's party of sweden and in the netherlands. the finance and deputy prime minister in 2003 until 2007. the run-up to the financial crisis. is steppingbn amro down after we heard yesterday about plans to cut as many as 1003 heard 75 jobs through the 75 jobs through the 2020 year. that is the news coming through yesterday affecting jobs and finance. eliminatedobs to be
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by the end of next year, according to a memo sent to employees on monday. now, we hear about the ceo of this business. more to come on this story. the global sovereign conference kicks off in london today. the world economic outlook and growth, and political risks are some of the issues to be in the spotlight. we are glad to be joined by james maccormack who is here on set. andrew parry still with us on the set. james, great to have you. a long list of topics to discuss. the world essentially and all of its trends. let's talk about the u.s. looking at markets and how they are positioning themselves ahead of the fed meeting next week, what are your expectations? dovish comments overnight.
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james: i think our expectation has not changed in the last few months. oncepect the fed to raise this year but now we expect it will be in december. probably two more next year and we base that on what we see in the labor market which is moving towards full employment in the u.s.. and core inflation. when you look at inflation rates and what we see in labor markets, it seems the two primary objectives of the fed are close to being met. our expectation is it is tightening. anna: highlighting how full employment not necessarily resulting in inflation that some people might have expected or seen previously. james: there is this question as to whether or not labor markets and inflation rates are correlated like they used to be. i think that is still a bit of an open question. our expectation is fed hikes,
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they are interested in moving towards normalized monetary policy stance. they move in december. if i had to guess. anna: what about from a political perspective in the united states? the election is looming. that happens before december and that could be crucial, a key point to reassess that december call perhaps the what is your expectation around november? james: this is interesting. from our perspective, a rating perspective, we think about the ratings for the u.s. and what the election means, we step back and think about public financing which is what no one is really talking about the u.s. the debt will increase this year, next year and will increase going forward. there is a fiscal agenda, that regardless of who the next president will be, it will be addressed by the next administration. the obama administration left that issue unresolved.
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i think this is something we are going to be talk about. the debt ceiling comes back next march. some familiar issues in terms of u.s. public financing will be speaking about in the next months. anna: more conversations around the debt ceiling. you don't see anything particularly between the two candidates on which to guide markets -- a difference between them on that crucial fiscal issue? james: not really. what we have heard from mr. trump is we should expect to see tax cuts. probably a deterioration in public financing in the short-term. his expectation is this stimulates growth and results itself in the longer term. clinton, i guess hillary clinton is less clear on her fiscal agenda. kind of more of the same from what we see the current administration. public finance has not been the focus of the campaign, probably
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less than most presidential campaigns. anna: andrew, do you see anything in the presidential campaigns to make you favor one over the other from an equities perspective? andrew: not particularly. i think politics is always an emotional response. you see comments on other people's politics. the u.s. is the least likely to go down the road of fiscal stimulus which seems to be the hope of markets at the moment. anna: let's talk about that, james, the fiscal stimulus. we have seen a lot of talk about the monetary policy, the fiscal actors to stimulate away from the u.s. where do you see room in developed markets for governments to step up and spend more? james: there is the question on where there is room and where we will see it. we don't actually need the room to initiate fiscal stimulus, so we think in western europe, the mood is changing.
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talked0, the umf about it. we expect the commission to talk about it going forward. politicians are talking about it so domestic is clear that we should expect fiscal policy going forward. maybe not a huge adjustment to public finances, but with all the discussion about central banks perhaps reaching the limit of stimulus, the effectiveness of stimulus and talking about unintended consequences is moving us towards considering fiscal policy. politicians seem to be receptive to this idea, particularly in western europe. we think there will be some kind of fiscal stimulus and some accommodation from the commission in terms of whether or not it is ill advised by european role. anna: how does europe do something that looks significant? we have seen efforts previously that have not gotten investors as excited as they would have
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hoped. james: we might see more of that. i think it will be investment spending, to be honest with you, because there is discussion about the commission looking at investments favorably and maybe excluding this from a deficit calculation. that leads governments as part of the solution. it does make the fiscal rules even more complicated because you have to think about how much spending is investment spending, how much spending in other areas. it also makes it more difficult to follow in real time. the transparency issue and the clarity surrounding fiscal rules will be muddied further in terms of allowing governments to move beyond this sort of deficit rule. anna: governments investing in infrastructure and things that may be delivering in the future? james: what is going to be the effect on growth? we have to think about the debt dynamic. there is no reason to believe in
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the fiscal multiplier. the impact you get in terms of growth from fiscal stimulus has changed. with think the growth impulse will be positive, but will it be lasting? anna: thank you so much for joining us, james. good luck with your conference, covering all those issues. andrew stays with us. says sheroyal now understands theresa may may need to take her time on whether the nuclear power plant should go ahead. in an interview with bloomberg, the woman considered to be the most powerful woman in french politics spoke about her countries upcoming election and the future in the european union. segolene: no decision has been taken out. the discussions are going on. >> when would we expect a decision? by the end of this year? segolene: it is not time.
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what we need is a good decision. we have to make sure it is stabilize. >> theresa may has been quite. g-20 for example. segolene: she has the right to take her time to decide what is best for her country. >> you are considered the most powerful woman in french politics. are you the only one able to save francois hollande? segolene: less just say that for each member of the government, it is not the point to speak about the next elections. >> does that mean it does not matter who will be the candidate of the left? segolene: at this moment, no. hollande, it does not
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where you that much? segolene: it is not the question i'm asking now. >> we know on the far right wing, there are discussions about the frexit referendum. segolene: no. we cannot imagine that. question. answer that >> the frexit referendum will never happen in france? segolene: i don't think so. i don't think the question is for me. the answer would be yes. andrew parry is still with us. the political story around europe and the rise of the right trends we are seeing in france seems to be around that, and in germany and other parts of europe.
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how does that influence what you see in europe, or are you too concentrated on the monetary versus fiscal battle? andrew: i think it will encourage more fiscal checks. ae eurozone, in 2008, had budget deficit of 6.2 .5% 25%. there is plenty of scope technically for more love on the physical side. i think the rise of populism, the anti-austerity movement is a good way possibly of countering that. more beneficial to the majority and negative interest rates which have harmed and a lot of people rather than improve their condition. anna: where does that leave the ecb in your estimates? how supported do you see them being after what we heard last week? andrew: they will remain
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accommodative until such point they have to. the politicians do not respond and it is being asked of the politicians to respond because we are seeing any physical action being national rather than across the eurozone itself. they are in the background. but, they are very conscious about moving policy any further because they are getting into almost a totalitarian area of monetary policy. the economies will recover because of what we tell them to do. i think they know that now. negative interest rates are actually increasing. it is beginning to change peoples behavior in a way they did not believe. wasink draghi's last beach encouraging -- speech was encouraging. anna: what investment opportunities are there? andrew: europe is actually quite positive.
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people have it from a top-down point of view. we have seen a lot of outflows of european equities this year. ironically, just as the economy is catching a bit of a bid. the growth in europe is not exciting. the ecb nudged up growth expectations and from the ground, the message from companies is they are more upbeat. they are more confident in the activity in europe then maybe emerging markets or in the u.s. i remain quite optimistic. anna: thank you for joining us this morning, andrew parry, head of equities at hermes investment. nimble, fast and responsive -- the u.k. brexit minister david davis says a two year time limit is enough for the exit. hillary clinton says she is feeling better after taking ill at the 9/11 commemoration.
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more on that story. plus, a family affair. manus is in zurich to speak with the top man at the top bank for the wealthy. do not miss it. this is bloomberg. ♪
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anna: welcome back. 6:51 in london. a live shot of new york very early on a tuesday morning. suggesting will be a little negative at the start of the u.s. equity day and that could matter because we saw strong balance on u.s. equities yesterday. the extent europe followthrough can affect the futures. we will talk about what is going on in the u.k. david davis, the british who controlled leaving the european union.
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he says they will be able to complete the exit by the two year time limit. he answer questions by the senior committee. hadn your last hearing, you evidence iand at least one of your witnesses called into action if it will be completed in two years. what we will try to do. i think we can, but the simple truth is we have to be nimble, fast and responsive. worry about anything like tying her shoelaces together. anna: joining us now is lucy mcdonald, cio of global equities at allianz. great to have you on set. tell me about your expectations around brexit, the strategy around brexit. we are in the post-brexit environment that has not started in many senses.
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lucy: going to the back before the votes as we have a little more cash. we have the opportunity. now, it is slightly put to one side because it is an extended period of discussion. we will not know what is really going on. as far as what the company is doing, how they are responding, are they investing? reception. all the companies we are talking to. it is not a clear picture at all but not a bad picture. it was a two week. period with shock because there was quite a bit of shock for the ceo's. now, they are looking to see what impact it will have on their businesses. put it to one side. anna: are you looking at
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businesses now that are resilient to what could happen around brexit? standing aside from it for whatever reason, or are you looking at businesses that can make in opportunity out of this and have something to gain? what are the different investment strategies? lucy: at the moment, we are looking to see what the companies themselves are doing -- are they continuing to invest? that is an early indicator of confidence. in that case, you still have a little bit of budgets from last year coming through. you will see them vetting businesses next year were the confidence levels are. that is something we are watching. the car market we will be looking at which had a little bit of a dip and it seems to becoming back. housing has been slowing down because of issues, because of taxes. now we are seeing confidence levels on that.
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there is another issue around housing, valuation levels. but, it is a good indication of confidence. anna: i have an interesting chart that talks about housing markets. they are not predicting the message, not predicting a real collapse in house prices in the u.k. they have new instructions to sell and essentially pointing out if we do see a reduction in demand, we will see reduction in supply of housing as well and that stops prices from stopping too much. we have had quite a lot of positive comments. that is one sector that despite the gloom foretold, at the moment, they are performing. lucy: there is a bigger question of demand and supply of housing in the u.k. demand there will be a for houses, we know that. and why it is not going to
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collapse is because of interest rates. they will not have house prices collapsing. i think these are indicators of confidence and there is still volume going through after that initial concern which means there is no real falloff. anna: is the housebuilding sector because of those big issues around a lack of supply over a long time, is that affecting it at the moment? lucy: i think it is relatively small for the global context, but within u.k., they are of interest. anna: lucy, thank you very much, chief investor of global markets of allianz stays with us. no rush to raise rates. the fed governor keeps her dovish tone and urges patience. she is talking about patience.
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we will put her comments into the context of some of the more hawkish comments we heard previously from that officials. she is the last fed official we will hear before last week's meeting. we will hear more from that next. this is bloomberg. ♪
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>> the fed governor strikes a dovish tone in the last speech by a fed official before next week's policy decision. the chance of a september rate hike slide. next to the extent that the effect on inflation of further gradual tightening labor market conditions is likely to be moderate and gradual, the case to tighten policy preemptively is less compelling. >> more signs of stability. july's weakness won't just was not just a hiccup. an exclusive interview, the most powerful woman in french policy joins brexit and the possibility of frexit.
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♪ >> welcome to countdown. i am anna edwards. as you were on the inflation story around europe. that is the message coming from german cpi. exactly as expected. month-to-month cpi, 0%. on year numbers for the month of august at 0.4%. that is exactly as the survey had suggested. as you were on the inflation story, still plenty for the ecb to consider in terms of how inflation is generated. we heard from the ecb last week. the data is out in germany later on this morning we did u.k. inflation later on. china.t of
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let's talk about european equity markets are. the asian equity session, we saw a rebound going up on the strength in the u.s. equity story overnight. a rebound in some of the index and indices in the markets over in asia. that was tempered by some of the closings in the equity markets today. -- we'relike we will expecting euro stoxx 50 up by .7%. the ftse 100 up. that is after weakness in previous sessions. let's pull up their risk radar and show you where we are. the strength and the s&p 500 -- in the s&p 500. 1.5% yesterday. the picture in asia a little more muted. the features in the u.s. are suggesting there will be -- they
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will be weaker in the upcoming u.s. equity sessions did they could have a bearing on where we had -- sessions. they could have a bearing on where we had through the day. day.ere we had through the the aussie dollar has not decreased as far as had been expected. perhaps that is weighing on things. big reassessments about how low and negative interest rates can go, and certainly in the european story and the japanese story. we are at the 10 year german bund, yielding 0.04%. it is still in negative territory. let's get bloomberg first word news. >> china's economy has shown signs of rebounding after july's hiccup. factory output rose 6.2% in august from a year earlier,
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beating the median estimate of 6.2%. investment in retail sales exceeded citations. the numbers build on recent data that have helped shore up confidence. hillary clinton has a she is feeling so much better after being taken ill at a 9/11 commemoration. the democratic presidential nominee also said she had a recent pneumonia diagnosis which she didn't think was a big deal. she has not been honest about her health -- she is promised that she has promised to leave more information about her medical condition in coming days. veterans if donald trump releases his tax returns and times for the final debate. in a blog post, he said trump's first obligation is to the
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american people. the french energy minister says she understands theresa may needs to take her time to decide whether the new powerplant should go ahead. the prime minister has avoided committing her government to the plan to build britain's first nuclear power plant and more than two decades. the french government would control the electricity and friend -- in france. >> no decision has been taken. the discussions are going on. it, by would we expect the end of this year? cooks a lot of time has been taken by this decision and we need a good decision. >> are you disappointed in the fact that theresa may has been quiet about it?
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she did not talk about it at all at the g-20 meeting. >> she has a right to take her time to decide what is best for our country. ends atk. house prices -- >> u.k. house prices ends at .1. tax increase and the shock of the budget vote according to data and property services. prices fell half a percentage point in london. gains and more affordable outer areas. global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . i am shery ahn. anna? anna: let's stick with hong kong , david ingles is there. a fairly mixed picture come
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through in asia. the european equity markets hoping they will be stronger. point --actly the exactly. that anted out very well lot of these markets were closed yesterday. a little bit of recovery -- anna: i wished -- i wish we could hear more of what david is saying. david, thank you very much. he would've been giving us an update on markets. pity mixed -- pretty mixed because some markets in asia were closed on the previous day. the chances of a u.s. rate hike this month have fallen to just 22% after that dovish speech from fed governor yesterday. in the last speech from a fed official before next week's meeting, he urged patience setting gradual progress. -- citing gradual progress.
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quips -- >> councils prudence and accommodations. this approach has served as well helping to support continued gains in employment and progress on inflation. anna: jpmorgan's ceo jamie dimon says now is the time for a hike. >> it is time to raise rates. normality is a good thing, not a bad thing. in the economy going on for seven years is a good thing. i return to normal is a good thing. that's a return to normal is a good thing. -- a return to normal is a good thing. lucy macdonald is still in the. -- in the studio with this. i pulled up the work function which i show you. i will do that right now. reassessing where we are on
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interest rates in the united states. the chance of a fed hike in september coming down to 22%. what is your latest assessment? lucy: risk is of the key take away her to very interesting interview. -- take away. very interesting interview. interest rates are going to be raised very slowly because of the concern of pushing the week recovery-- the weak back down again. inflation or precious seem to be -- inflationary pressures seem trick.- that is the that is the key. and it isthe belief now shared by most people --
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shared by the most people and that is interesting from an investment point of view is there is not much disagreement -- high debt, low growth environment. in the past there is not been much established. when you look within the equity market at the stock switch -- high quality growth stocks. they are really pricing in that environment quite well. the question is what do you do as an investor? even if it turns out to be the case, i think you probably want a hedge against that. one reason is the cash balances quite high in the market. it is because of that. proxiesme of those bond
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, a lot of people have been focusing on those as a way to play equity markets for some time in that low interest rate environment. do you stay away from them? some of them are expensive now. this ago i don't think you stay away -- lucy: i don't think you stay away from them. in,more that gets priced therefore you take the money out the table. the question is where do you put it? the fact that cash is a little higher is because of that. the question of where do we govern this money? it affects the fact that we have eventssion of political -- a succession of political events. this conversation will be carried on over the next three years. there are reasons to be a little more cautious.
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overall, this environment is still one which we think is going to continue for years. therefore interest rate will support that. for ajamie dimon calling rise in the interest rates. how do you view the financial in this world? lucy: it is going to remain difficult. from the stock market point of view, they will have periods -- periods of rallies when these expectations change. think rateseople are going to go up, financials will be better. however, that can be a hedge ofinst your other areas portfolios. anna: what stands out to you? yes. areas -- cyclical,
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there are some areas of recovery potential. this environment is going to -- plus, you've got regulation against structural change. there are other areas where you have seen of a depressed cyclical either in emerging markets or energy. that element should be recovering over the next couple of years. that might be an area where you can see more valuation. anna: we seem to have woken up from our summer slumber and equity markets -- in equity markets. drug the summer we have not seen very make it this very many desks throughout the summer we have not seen very many big swings -- throughout the summer we have not seen very many big swings. do you think september brings materially new investment strategy for you in the wake of this development and markets? are you just that element and
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-- lucy: thisment time of year is generally you see a little more of a negative skew and higher volatility as companies going into the end of the year. there tends to be a little downgrading going on. a little higher volatility is on the cards. anna: it has been quite low. big events have happened. chinar that is oil or with the devaluation or brexit, they've all been -- within that -- anna: are you still buying stocks? lucy: generally, yes. not necessarily today.
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equities still look the best game. anna: lucy: met thank you for joining us this morning and good to get your thoughts. next, manus speaks to the manager art of ubs's altra will the division. it's the unit helping to drive shareholder returns. live from zurich next. this is bloomberg. ♪
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anna: welcome back. this is "countdown." it is a little dark out there. 7:18 in london. 2:18 if you're watching in hong kong. the skidoo bloomberg business flash -- let's get to bloomberg business flash. -- abn amroold has has announced its ceo will step down next week -- next year.
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the bank's supervisory board has now begun is succession progress -- process. to sell driverless cars by 2025. the goal is not to bring cost down enough to make autonomous beagles affordable. the plan is to start with robot taxes for writing healing services by 2021 -- for ride hailing services by 2021. amazon boss is going announcing aat -- new plan into space flight. his plan is to use more palatable rockets to take people deeper into space.
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it is inspected to make its first launched by the end of this -- that is your bloomberg business flash. anna? anna: david, think you very much good money managers gather in zurich for the best amalie office summit. manus cranny is there and he joins us. good morning. manus: anna, a very good morning to you. they are bringing together the family office over half a chilly in dollars is going to be on the room. we are going to talk about a fee, below zero. politics, emerging markets. let's bring the man in who is going to run this group, josef stadler. joe, great to have you with us. good luck with the conference. half $1 trillion is going to be in that room. my question is wealth creation is getting harder and a zero bond world. it is not our guests have
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taken measures and relocated there -- they are going away from more public markets into private markets. they have taken strategies and hard positions. if you look at the yields in 2016, we are back at 5% to 6%. acceptare they dare to -- are they prepared to accept illiquidity? joe: there -- they are prepared to take the illiquidity premium. manus: a phrase by your on ceo, "paralyzing fear." where nine months into the year do you think investors are still paralyzed by fear? joe: i would not say they are paralyzed. we call it great wealth and by these family officers. there never paralyzed. they have sufficient assets.
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750 to one assets is billion. there significant assets to play with compared to lower bankers. manus: you want to affect conversation into medication. -- conversation and communication. how tough hasn't been? joe: it has been very tough over the last 18 months. they have hardly make any money. isi said, you today, it probe -- it has improved dramatically. manus: that shift in allocation, i am curious, there is a big global shift to property. you can see it is mostly from equities into private equities. what is the biggest shift that you can talk about? -- the shiftt from
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into private equity funds, but also into direct investments into operating companies. you see that from east to west and west from east. another trend we saw is a decline into hedge funds. many officers were disappointed with their perform at this. -- their performances. this push into real estate. people are convinced that is the way to go. manus: talk to me about what creation. i know you on record, let's talk about china. the growth numbers that we have from china suggest soft landing. you are on record, one out of seven days, where are we? can that pays continue in china? joe: the pace has accelerated despite stock market volatility. we're looking today at one billion are printed every five
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days. what has shifted are the industries where these families are invested in. away from intersection, construction towards sectors which were privy to the u.s., like silicon valley. a vertical isee asian of e-commerce -- a ver ticalization where whole segments are you from -- are leapfrogged. china never built up a walmart, they just leapfrogged it. that is what their objective is to show the world they can .eliver they call it ctw, china to the world. china phenomenon, that is global facing? that is worthy wealth creation will come from the -- that is where the
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--th creation will come wealth creation will come for the chinese. when we think of family officers, i think of zurich geneva, but the real growth, the acceleration in growth rates, that -- what will that be? is that argument there? joe: that is the right argument. we see exponential growth in the east in hong kong and singapore. the level of professionalization is a staggering. mental what kind of size can come from that area within whating markets -- manus: kind of size can come from that area within emerging markets? joe: property costs, we would sit within the next five years, a tripling of family office numbers. manus: i want to close with one less thought, the inequality issue was raised it to 20.
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inequality for billionaires and creation of wealth. what does that mean for the argument between emerging markets and developed markets? joe: inequality is a function of risk-taking. inequality was driven by a tookr of people who enormous risks to achieve their goals, creating millions of jobs and billions of income. that should not stop. if there is a debate to question the inequality, we should be careful not to compromise that. if you look in the inequality question in emerging markets versus the west, it is more pronounced. manus: joe, have a great day. .ou will do very well joe stadler, the head of ultra high -- let's see what comes up from below zero. anna: think you very much. -- thank you very much.
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that is it for countdown it on the move is up next. caroline hyde and guy johnson will be picking up the conversation. we will hear from carson block from muddy waters capital. this is bloomberg. ♪
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guy: welcome to on the move. we are counting you down to the european open. i am guy johnson alongside caroline hyde over in berlin. bring art hits the brakes. the fed governor urges caution in the last word before next week's decision. is it all over for september? signs of stability. both china's new and old engines come to light as factory output beat estimates. will the figures be enough to jumpstart


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