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tv   Countdown  Bloomberg  October 6, 2016 1:00am-2:31am EDT

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anna: global growth in focus, the fed's stanley fischer says fiscal banks need help, and the imf says the record debt hits or hundred $52 trillion. the u.k. chancellor heads to wall street to reassure banks over brexit. we speak to fil philip hammond later today. and samsung circus, as the activist investor calls for the company to restructure. a warm welcome the countdown everybody.
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i am anna edwards. manus: i am manus cranny. the reach for yield, what we search for for personified in dollar-yen.the dollar having the longest rally since. march what we have here is five-year. the white line with the five year yield between the u.s. and of course japan. and this is again against the dollar. we know it is appreciating your we have a bit of attorney dollar had a nice run for the past seven days. what can stop that? the real yield, talking about .57 yield,ve japanese are -.48. that could drive money back into the yen, the stop the traded bullish bets on the yen, anna, for the much there a record high. it looks as if this reach is what is going to try the next move on dollar-yen. anna: hedge fund expectation setting up for further gains in the yen, not something the boj
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would want, and ominous signal to the rate coinciding with the japanese currency inflation divergence. we will talk more about that through the show. let us bring up the risk radar, show you the long-term picture, at least the last seven days in what we're talking about with the yen and the dollar. this is the risk radar right now, not moving that far. 103.54 , the yen has been dropping against the dollar, this is the picture as we stand at the moment. oil in focus. manus: there is a cracking note sachs.byman the way, the inventory data from the u.s. has caused the halt. you have goldman sachs singh $55 are enough records will come back in. stockpiles below 500 billion barrels, for the first time since january.looks as if there are a lot of notes sing when you get the $50 you will see a knockout level. anna: 55 is the number for them.
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we have msci asian-pacific up by half of a percent. ingles, he hasid the first word news. good morning, david good morning, deutsche bank has been indicted for colluding with the italian lender. dozens of others, according to the audit commission by the german regulator that was seen by bloomberg. the frankfurt-based lender adjusted the italian game back in 2013, in addition, changing them from loans that have been kept off the books to derivatives. the lenders say there is no connection between these trays and the case of the italians. plan issachs retirement pulling $300 billion from the frim omega advisors. meanwhile, yesterday, according to those familiar with the situation. omega has been accused of
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insider trading, which he denies. it was the second time they cut ties with the employee in trouble with the authorities. the bank also pulled money over bribery in africa. the u.k. chancellor philip hammond will meet with wall street executives today. he will tell representatives from banks including goldman sachs and stanley that he wants to break the deal that europe could access the financial currency. the trip comes amid mounting concerns that they could lose jobs and operations out of the u.k. did you watch the interview with philip hammond? you can see it today. moving along, the fbi has arrested a contractor assigned to the nsa national security agency for allegedly stealing classified documents. harold martin was employed through consultant booz allen hamilton. the company also employed and
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were snowed in, who fled after releasing the files. this was on the scale of government surveillance. booz allen hamilton shares fell on the news. hurricane matthew's is heading for the u.s. southeast, where it is expected to batter more than a million people. losses are seen as high. the national hurricane center describes matthew, which has already battered cuba and the bahamas as a category three life-threatening storm with power the u.s. has not seen for at least a decade. samsung electronic shares hit a sresh high, after activist investors want the south korean firm to separate into an altar rating company and a holding company. this will be a paid dividends, and improving governance by adding three independent
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directors. he is arguing that would make the market more transparent and also provide tax benefits. now, to twitter. shares plunged in extended trade, after reports that the technology website recode says that google does not have the plans, saying apple is unlikely to be interested. only last week, google was said to be working with a financial advisor for a potential offer.a representative from google declined to comment on that. global news 24 hours a day powered by more than 12 2600 analysts and one hundred 20 countries. find more stories the bloomberg at top . i am david ingles. manus: david, thank you very much. let us get into the stock market. juliette saly is standing by. we have asian equities picking up on the good service numbers. all about the economy, stupid. that is what they say to me in the morning time. [laughter] juliette: also, the oil price
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weighing into things. we have asian stocks very much tracking positive gains, a lot of fixed income from the asian session, the regional index at a one-week high. really driving that is the pickup in the nikkei. four sessions worth of games, holding at the one-month low on the dollar rising as you say on the positive economic data out of the state. 1%also have half a rise, and hong kong rising for a fourth session as well. the hang seng up by half of 1%. those energy players really leading the game, along with casino in her chemistry galaxy up by 3%. the pickup we see in crude really helping obvious trillion sharemarket. you do have new zealand closed down by 1%, third or fourth session of losses today. in a little bit of weakness coming through in some of those
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southeast asian markets. but generally, very positive for nader does having a look at some of the corporate movers that we have been watching. there is reports that tokyo and lenovo in hong kong could be kind of the business. both of those doing quite well. and a statement was mentioning, samsung electronics targeted by the activist investor, so the near 4% gain could be a cost as well today. anna: thank you very much, juliette saly in hong kong. eight years after the financial crisis, the world is suffering from a debt hangover of unprecedented proportions. manus: the imf says that gross debt in the financial sector has more than doubled in nominal terms, since the turn-of-the-century. and reach $152 trillion. that was last year. and it is still rising. anna: the fiscal chief says that excessive private debt is a major headwind against the global recovery and the risk to financial stability. meanwhile, the federal reserve
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chairman stanley fischer said the banks need fiscal health to spur growth. that echoes previous comments from mario draghi. manus: ultralow interest rates are not necessarily your tuesday, and has called for transparent and sound monetary policy here and abroad. continuing the central bank theme, the ecb september meeting is at 12: 30 u.k. time. anna: the report will be especially interesting in the wake of the story suggesting they could be planning a tapering of quantitative easing, when they designed the program needs to come to an end. joining us now in the studio, jeremy stretch, head of fx strategy at cib. join.of dots to jeremy, let me start with we heard from the imf, contrasting that with what we are hearing that put it next to what we're hearing from central bankers. on the one hand, the imf says there is too much debt. and central bankers say come on
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governments, we need you to . that might result in more borrowing. how do we work that out? jeremy: it is very difficult to square that circle. what we are talking about from central banks is a recognition that monetary policy experiments are running into fruition. we have seen that you mention about mario draghi repeatedly in his press convention got talking about those that have fiscal room spending more. and of course, that subtext for germany. i think we are seeing a recognition of policymakers have said we have done our best. we have really put our shoulder to the wheel the last seven or eight years. we have taken monetary policy into very unexpected places, unconventional policies. we now need to see more of a cause and effort, and that involves fiscal policy. that is rather counterintuitive, when you see the imf warns about that. manus: i mean, has monetary policy work is always going to be debated. who knows about that? but this is the most recent data from the u.s. yesterday,
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nonmanufacturing side in the are seeing u.s. momentum pickup. monetary policy has contributed to that. stanley fischer says ultralow rates are not necessary here to stay.it is the right policy putting in place, we could be stuck in a new longer run equilibrium. quite a warning from the deputy chair of the fed. jeremy: it is. he is talking about ultralow rates. is that a subtle differentiation between ultralow and low? i think we are in an environment where a sort of equilibrium rate is going to be substantially lower than we would have seen the precrisis world, now talking about perhaps nominal terms of 2%, as opposed to 5%. we have seen a step change, assuming there is not going to be a large berth in inflationary we have seen a structural shift in the context, but i think the classic counterfactual, particularly in terms of the
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monetary policy of negative rates. the counterfactual is that going to be the panacea for the market? we will have economists picking that up the next 20 years. that is a whole governing body of literature set up in the context of trying to understand which of the policies the central banks pursue, which was the silver bullet and the one that perhaps graded unintended consequences? anna: we only have two minutes, jeremy. in terms of the fiscal question, is it time can do you think we see a concerted attempt to spend more, to stimulate more? clearly, a questionable very by geography. but if so -- jeremy: that may the one that causes the issue, and we may well see tentative areas in certain jurisdictions. using for example the bank in canada, we saw that transitioning government last year to create fiscal expansion, which would alleviate pressure on the central bank. we may find philip hammond here
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talking about further fiscal expansion next month, to try and alleviate some of the pressures of monetary policy. so i think it is what to be a very ad hoc basis, the idea of the concerted effort will come through. manus: there was a cracking story yesterday on bloomberg about u.s. banks discussing tapering. jeremy, really the yield curve in germany, ok? in europe, they are considering -- look at what is happening with the yield curve here, a slight steepening. if tapering is being discussed by the ecb, let us take it back to your word, is that fundamentally a euro strengthening story? jeremy: yes, it is. over time, if we see a stable curve, we are going to see the spread in the u.s. particular. and i think that does imply the euro will be stronger. certainly, that is our thesis that we will have a higher level in 2017 than 2016, because we're not talking about tapering
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today. the bond buying program we have now, i think that is one differentiation we need to remember. markets reacted immediately on the bloomberg story and the euro rally. but we are talking about something in 2017, but i think it will be the case that as the tapering likely comes in, that will provide residual support for the euro. and we will see a high euro dollar trajectory. anna: the fed moving in december, 60 2% probability i'm looking at? jeremy: i think there is going to be the parallel with q3 a into4 last year. when they had should have moved, we have seen them hemmed in. in the dollar rallies, but then catches up. anna: becoming a december thinganna:. jeremy, thank you very jeremy stretch stays with us on countdown. manus: stay with bloomberg. we haven't host of imf coverage.
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we will bring you christine lagarde, u.k. chancellor philip hammond. anna: looking to the philip hammond interview for any information about the eu and u.k. brexit conversation. any details. we will have retail pmi data from european countries, followed by the overall eurozone reading at 9:10 london time. manus: 12:30, the ecb will publish the account of monetary policy meeting account in december. and we get jobless claims. anna: out of the u.s., had a friday's payroll. hitting the right note, the billionaire activist says samsung to be split into two companies. this shares rally. we get the latest mac. manus: all ok and the boj? hawkish fed commentary give the central banks something to cheer, as the yen weakens? how low can ago? anna: a rollback in sinless is
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on the cards as norway release of the 2017 budget. we look ahead to the release. this is bloomberg. ♪
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manus: it is six: 18, a glorious day in hong kong. looking over the harbor, 1:18 in the afternoon. that is up one half of 1%. equities in asia are generally stronger, get a nice numbers from good service data out of the u.s. let us get the blit business flash. surging in tokyo, on news they may be merging with renault though. shares trading the highest and nine months. a person with knowledge of the matter says the two sides are focused. suisse has agreed to
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pay $90 million, inflating new client assets managed from the fourth quarter of 2011 22012 essentially, to meet sales target. they admitted wrongdoing. the ceo agreed to pay $80,000 a penalty for allegedly pressuring employees. hut, fallingza after missing estimates. the ceo said sales in china were down because anti-western sentiment after an international court rejected claims in the south china sea. yum still plans a spinoff in china by the end of this month. and that is your bloomberg business flash. anna: thank you very much. david ingles in hong kong. samsung electronics touching record highs, but the
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global recall of note 7 hit a causeden a device was for evacuating the southwest airlines plane. manus: peter joins us now. what is finger aiming at? looking at two different listings, what realistically are the chances for success? he is pushing for this let between operating company and a holding company at samsung, as well as a massive dividend. like the company to pay out $27 million in cash, but some more independent directors on the board. this idea of two companies make some sense, something speculated about in korea for a long time. the air apparent and the company has been pushing for structural changes. samsung roof is made up of about 60 companies. there have been cross shares
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historically. as he prepared the company forward, this idea of holding company in a pretty company has been discussed.and it is something that is possible in the future. anna: 60 companies, the structural chart must be something to behold. the reports of the new fire samsung note 7 batteries? this is an issue that samsung has to clarify. of course, had the battery fires just over a month ago, than they did the recall with 2.5 million phones sold around the world. they were replacing those phones. ok. said the batteries are this is a passenger on a southwest airlines flight, whose phone apparently lit up. airplane.cuate the he said it was a new phone, bought just recently. so officials in the u.s. are digging into that to try to figure out exactly what is it.nd
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for samsung of a certain has to be an issue. we did talk with the consumer in china who also claimed one of the new phones and burst into flames.so these are issues they have to take very seriously. manus: ok, let us see where that activist investor takes us. peter, thank you for joining us, bloomberg's managing editor. on the longest losing streak since march, continuing as hawkish fed commentary and positive u.s. data boost the the dollar. anna: some relief for the boj, it comes as speculation swirls of the bank of japan dipping its toes into foreign bond purchases. still with us, jeremy stretch with, cibc. we have some other data that suggest the chart, if you actually look at the hedge funds positioning themselves, the next three months positioning for strength. jeremy: i think you're absolutely right. kuroda sitting in japan hoping
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very much against hope that the fed step up to the plate and do indeed raise rates before the end of the year. that will provide a dollar-yen, and help alleviate some of those inflationary pressures that continue in japan. so i think it is not just about japan, they are hoping the fed the liver, because the bank of well. also hoping that as that is interesting. but it is as any to look at the way the market is positioned because it is rather counterintuitive. and i think we have seen this perception that those that have been focusing on strong gains, proved to be unfulfilled. they were unfulfilled on several occasions. anna: we seem to run into the roadblock. manus: we started the show company the five year yield. trump, excuse the pun, trump coming to victory. #463.
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this is volatility. the top line is vol. it is the bottom line. just not seeing volatility on the possibility of a donald trump victory. we are less than a month away. do you expect these to spite? would you pick some volatile positions ahead of a potential donald trump victory? jeremy: of course, we have seen the perception of a donald trump victory diminished after the first president of the bank. we had the second debate this weekend. i was talking to us yesterday to your point, saying there is the risk that can trump do as badly in the second as he did in the first? with donald trump, we never can quite tell.but openly the rest has to be the probability does start to head higher again, and the fed waiting until after the election. i think there is a possibility. assuming that donald trump does not necessarily blow his own chances. anna: what are your expectations
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for the dollar? julius baer saying it could go higher on a donald trump victory cut the emerging market currency lose ground with a protectionist rhetoric, but they also say that it is higher on a clinton victory because it is more status quote. jeremy: the status quo argument has the fed in play under a traditional status quot argument. donald trump is rather more interesting, because if we were to see a donald trump victory we would actually see a risk-off move. unfortunately, that is the worst-case scenario for the boj because dollar-yen will be 95-110. europe will benefit from a risk-off. but the dollar will probably gain against the canadian dollar, mexican peso, so i think it is very much a case of up but not up against the other g3. anna: the boj do not like brexit
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much. jeremy: they will be watching very closely. anna: jeremy stretch stays with us. when we come back, talking about norway. the budget is due. and more on oil prices. this is bloomberg. ♪
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manus: looking at a glorious shot of the imperial palace in tokyo. yen at the bottom of the screen. will it break trend again, day eight of the declining dollar yen. we turned it around. 103.53. excuse me, you have a new edition of daybreak on your bloomberg and on your terminal. let us take a look at some the stories at the top addition. anna, we have oil rough. anna: the cover story is the news that u.k. natural gas prices could rise if norwegian oil companies fail to sign a wage agreement. if the deal is not done today, a
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strike starting on friday could cut off about 20% of britain's supply. manus: interesting because you see the oil price just busting away at $50. we will talk about it again on the risk radar.the next story is the look ahead to the release -- this is critically important, what were the details? that comes out of 12:30 u.k. time. in terms of the brexit and bloomberg report this week suggesting the central bank could be planning so-called tapering of qe. did that it into the official minutes? mario draghi doing the news conference, what took bund yields down to zero.because he said we did not discuss the extension of qe. that took us back to zero. anna: these conversations are happening at the governing council, where is this consensus voting? finally, daybreak looks ahead to a ruling about whether they can frack for natural gas in northern england, following a
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2.5 year battle in many protests. this we watched by many other companies, who also have designs on fracking in the united kingdom. watched of course also because if they are allowed to do this, than a lot of people will get more detail on just how much potential there is in the u.k. the labour party send their conference they would ban it, if they were in power. let us a look at the markets now. ring of the risk radar. manus: risk radar says msci, on the bottom of the screen, of one half of 1%. the bottom line is that -- by the way, the job on the services number, of 5.7 months. that is driving stocks all about the economy. if the u.s. a strong commitment and whether a 25 basis point hike, everything should be granted as they say. anna: some conversations on the asian session saying it is yena and oil.
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we are fairly flat, talking a lot about where that particular trait is going. crude down by half a percent, but as you pointed out, goldman sachs has interesting note out sing the global glut remains in 2017.but they say prices stalled at around $55. sticking with oil. manus: absolutely, $50 after crude stockpiles dropped. the nuance of oil that nobody has, it is yousef gamal el-din with a chart of the hour in dubai. good morning. yousef: good to see you. the reality is i stayed up very late for these inventories to come out, and they came with a surprise because the bloomberg estimate forecasted 1.5 million barrels. taking a look at this chart from you can see what really happened. it was the fifth consecutive week of decline, looking at 2.8 9 million barrels. we are giving for the first time
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under the 500 million barrel mark. and that again is that we are in the highest seasonal level in some three decades. those levels would be the lowest since january. important to note out that imports declined 125,000 barrels a day. you also had output, production falling as well. as an always said, goldman sachs said he could get $55 a barrel. u.s. shale production can bring more into the market. the other thing i'm watching for you is the upcoming meeting, informal talks by opec next week in istanbul. now from what we understand, a larger role in the conversation with non-opec members specifically russia, which remember is pumping a post-soviet record high. they are trying to firm up that agreement that they had back in algiers. maybe when you're some production quotas, may be
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additional details, but a very important opportunity after the formal meeting in vienna in november. anna: yousef gamal el-din joining us with the latest on oil. to recordway will act spending of the oil income next year, withdrawing cash from the $890 billion fund. anna: full details of the 2017 but it will be released at 9 a.m. u.k. time team leaderrdic jonas bergman joins us on the phone from oslo. have you read the oil pricing to be easing a little bit for the norwegian economy. what are we going to see today? how that play out in today's news? jonas; good morning. yes, norway has been hit hard over the past years in the oil plunge, but the finance minister already this morning let it slip that the budget next year will
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be a little less stimulative next year, as the economy looks to survive the oil shock relatively well. but of course, the tighter budget in norway, one of the world's richest country is very relative. we will find out a later that the spending level will rise to a record approaching almost 8% of gdp.few other countries can do that. it has really gotten norway out of a tight spot over the past two years, and it looks like the sort of continue the fairly expansionary next year. but what the market will really be looking at is what it means for the country's wealth fund, as you mentioned earlier. it is hard to say because we haven't seen the oil price forecast yet, but they stay around this level, spending or withdrawals from the fund will not need to rise to much. they are about 84 billion kroner. but they rise to about 100 billion kroner next year, that could be politically sensitive. but we are of course trying to figure out that figure now, as
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we speak. oils: i mean, the price of the next 18 months, good luck in terms of what happens at opec. let us look ahead to the election next year. how does that look for the current government? mentioned, the economy seems to have done, you know, pretty well. and the finance minister said that she thinks unemployment may have peaked. so if they can point to getting the government or the economy through this massive shock, then it looks pretty good for the government to remain in power. though,e pretty tight, even one released this morning showing the prime minister is topping her rivalry in the main rivalry with the labour party. anna: bloomberg's jonas bergman joining us on the phone from oslo. still with us, jeremy stretch, cibc.ategy at
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a lot of norwegian news today. it might not need to dip into the fund, unemployment may have pete in norway, how do you see the currency? in recent years, the oil price, things turning around a bit? jeremy: i think things are turning around, central-bank upgrading forecast, in terms that mentality peaking in the and employment level. i think it is supportive. clearly, if the oil price were to be higher, that would be even more beneficial for the norwegian krone as well. might have been the case it was a little too fast in the short-term, but i think it will be a scenario that will stick to 2017. so i think it will be substantially lower, the end, compared to now. looking at the sort of 860-857 towards the end of the year. looking moderately encouraging. manus: you touched a couple of different elements.
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we have another chart for our viewers. the is the correlation, correlation between the norwegian krone and the price of oil. it is quite high. last year, even on the downside, there was a correlation of about .6, when we run of correlations. $55.opping out at the wealth fund the government have to decide -- the risk for norway of course the appreciation in the norwegian krone. jeremy: of course, governments and central banks want competitive exchange rates. you want to have the balance. clearly, there is this elevated correlation.norway is not just an oil player, but clearly investors often treated that way. if we were to see the oil price moving substantially higher over a prolonged period, the norwegian krone would get a tailwind. and that would affect competitors such as the swedish krona. manus: do you think oil is capping?
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does goldman have merit saying the run is i-55, the factors come back in? jeremy: unless you think of some geopolitical shock which would impact supply, i think there is increasingly a natural buy at 55 -60. and it will be external supply coming in, because we talk about the opec meetings and informal deals, we have to know opec is that the only show in town. we are not back in the 1970's. some in which they were. [laughter] cartelsability of the to formulate markets and move markets the same way lower, of course there is this increasing oil outside of this remit. and that also is to come back into play as prices move higher. i would agree that the 55 area starr report 60. anna: how do you view some of the aryl or currencies typically linked, like the australian dollar? iressa research this morning
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that the u.s. election is going to guide his currency the next months, the next month and a half, not monetary policy. it seems amazing to think that politics can correct such disparate things as the us trillion dollar, but we saw the aussie dollar climb in the wake of that most recent debate with clinton. jeremy: we have a lot of currencies that are risk-averse. and i think we should not totally downplay the impact of domestic monetary policy in australia and new zealand, but clearly if we are going to have a risk-off mentality, we will find those currencies that are penalized, so you see aussie-yen. that will have an impact on those specific currencies. accommodation of those two things. the next 4-5 weeks will be donated by election risk, but we should not ignore the monetary policy forces. manus: what is your funding
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currency of choice, over the backwater? is the dollar or the euro? could be something else? something of a different? jeremy: i think in the context of funding basis, i would not look at dollar. still accommodation of the euro or the yen. that is the obvious way to look at the mentality. clearly, risk dynamics will have an impact on that. and if there were a donald trump victory, both of those currencies will appreciate. i think that is the cross current we are continuing to deal with. anna: we have asked you about the canadian dollar. given the political events happening next couple of months in the united states, what is your expectation in canada? jeremy: obviously, everyone talking about the correlation with the mexican peso and donald trump's support. there is an element with the canadian dollar as well, because if he were to get the scenario where it is up for grabs, nafta
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ripped up on live tv, which is the way donald trump would do it, clearly that have implications for both north and south of u.s. borders. i think that doesn't suggest there is an upside risk in terms of dollar. but i think there is this discussion ongoing and markets, perhaps in the bank of canada is not actually out of play, vucevic is probably wrong. i think the bank of canada will hold, but markets can consider the probability in terms of additional monetary easing in the bank of canada. i think that does imply the dollar cap does go up, irrespective of the oil price. anna: does a trade deal with europe make a difference? jeremy: not really. don't think it is a game changer. anna: jeremy, thanks. manus: we have brexit headwinds. and the vote to leave the eu, we will look ahead to the numbers for fourth quarter results. anna: also on the program, new
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concerns raised over deutsche bank did we are live in frankfurt as they face the criminal case. manus: central-bank watch with peter toogood, director of citifinancial. this is bloomberg. ♪
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anna: welcome back. a live shot of new york, very early this morning. 1:46 in the morning, fairly flat on the start of the equity trading day, when we get there in the u.s. we have europe to get through first. let us in a bloomberg business flash from david ingles. david: thanks, anna. shares are surging in tokyo on the emerging business with a logo shares -- lenovo shares -nine months. a person with knowledge says they will take a majority stake in the venture. suisse has agreed to pay
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$90 million to settle claims that they did not adequately -- they say more than $1 billion of private wealth and live through 2011,ised managed by the bank with generally generate higher fees. pay andagreed to $80,000 penalty for allegedly pressuring employees to misrepresent them. now, mcdonald's is selling franchise rights in malaysia and singapore, including saudi arabia. that is according to people familiar with the matter. one of them told bloomberg that the sale of the 20-year-old franchise rights could fetch more than 400 million dollars. that was your bloomberg business flash. manus: david, thank you very much. corporate story now, easyjet
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releases fourth-quarter sales and revenue, just under 15 minutes. the airline has lost more than a third of the value since the brexit vote at the end of june. and the written decision to leave the eu causing uncertainty. anna: four look ahead at what we might be expecting from the company, we are joined in frankfurt from richard. what can we expect them from easyjet? there has been a confluence of negatives around brexit, around the terror threat, the pilot strike at least moving off the agenda. richard: that is right. there are a bunch of things that hit the company in the fiscal year that ended last week. brexit of course the most obvious one. although the impact is hard to gauge still at the moment, the one thing apart from the uncertainty over the airline industry is we know the slot of the british pound.and if you are short the british pound, like a producer in the u.k., things you purchase abroad like kerosene get more expensive.
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the cost in continental europe is more expensive, so all that will ease into the balance sheet. we will not get a full report, just key figures probably getting guidance for earnings with the full year, probably profits fell. and if that happens the first time since 2009. manus: richard, thank you very much. richard our aviation reporter in frankfurt. those numbers breaking on bloomberg at 7:00 a.m. we will bring those to you philip hammond is off to wall street. anna: he will tell representatives from banks stanleyg morgan and goldman sachs that they want full access. manus: the trip comes amid mounting concerns of britain leaving the eu could cost banks to lose jobs and operations out of the u.k. and you can watch our sitdown interview with philip hammond. that is a little bit later today. our editor-in-chief, john mikel
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will speak to him. anna: jeremy stretch still with us in the studio. weigh in with your thoughts and the pound. i was fascinated with these bloomberg story when they had the full redline brexit talks, according to the brexit department. david davis'department. submitting to eu lawmaking and allowing the eu judges to have jurisdiction. nothing to do with business. jeremy: and i think that we the interesting challenge for philip hammond today. he can said he wants to provide as good a deal for as possible for banks, but he does not have that. he can do his best, but of course we, also have the negotiations forthcoming between the eu and u.k. so i think his reassurance not only go so far, of course you have three member theresa may was only in new york a week or so ago also having these meetings with wall street officials. again, trying to reassure them. i am not entirely sure he will go that far.
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manus: they have to prepare themselves. listen to them on other, pound for pound traders boning up on european politics. what i mean by that, if you look at this you have the british pound. this is not the prime minister. this is not a leader of a country. this is the czech republic, who is the lead negotiator, saying there is zero chance that britain would clinch a deal both on immigration and free market access. i think the interesting thing is that every time we see a harder brexit scenario, dirtier brexit scenario rise, the pound gets crushed. so my question to you is, is the pound fully priced for brexit? anna: even though theresa may said he has fallen into a false economy, which he has told us many times, the market season as a trade-off. jeremy: the market season as boundary risk, bad news for the u.k., or we get something which is rather better, which seems
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increasingly realistic in the way the rhetoric has been firm. i argue that we are currently conducting what i call mega phone diplomacy, where they shout the position we are not going to change. well, maybe they will change, but it is very much a maybe. until we get that scenario and any realization of that, it is very difficult to be buying or selling. i think it will be a case of investigators selling rallies. very really and terms of the near term. anna: despite the fact reducing to be in something of an economic sweet spot, in the sense that the pound has fallen. that stabilizer has come into being if you like for the you can't economy, and yet we have not brexited. we have not left anything yet. jeremy: that is true. if you look at pmi, they rebounded.perhaps 3, not the sort of
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doomsday scenario. even looking at the pmi reading yesterday, number was ok. but if you look at prices charged, that moves up dramatically. that will be the variable that will impact the consumer in 2017, the lack of purchasing power. talking about easyjet, they will be buying products overseas, but exactly the same for the u.k. consumer. they will suddenly find the pound is not go as far. anna: talking about how the pound goes down the escalator and of the stairs, but goes of the stairs with a wooden leg. manus: a lovely line. talking about the status, 31 year on cable, mark carney has to make this in 90 days. he has been very busy with brexit he told us, not to even think of the future.90 days to run , before he tells the u.k. to say he stays the rest of the term. that could ship that i mentioned in terms of the contract the monetary policy. jeremy: absolutely.
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he was very closely aligned, released the perception was very closely aligned with remain campaign. there has been some discussion of markets about whether he is interested in maintaining his stance? and indeed if theresa may will be keen? that is going to be an interesting exposition of variables, because of course perhaps she would be much happier to have her own appointee. of course, mark carney was very much close with george osborne. i think that it is another variable. anna: is there a level to which sterling can drop, where we start -- something changes for the u.k. government and a change tactics? what they're doing at the moment, the indications of hard brexit are waiting on the pound. that is ok? manus: hitting jeremy in the pocket, being so, much more expense of a holiday to buy stuff. i will tell you what -- jeremy: that is an interesting
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point. what we go past the year-end, the average person looking for holiday in 2017, much more expensive in the pound is not go as far, that will have an impact. it was fascinating that theresa may earlier in the week was saints did not seem to want to talk about sterling against the u.s. dollar. did not seem particularly perturbed by it. if you get the scenario in the pocketbook, we always tend to react where it hurts, in the wallet. and i think that will be the scenario where perhaps the government will suddenly become a little bit more reflective of westerly actually is. anna: jeremy stretch, head of strategy at cibc. manus: governor kuroda, fx trading is the finance possibility, and do not think depletion of bond buying is the coming problem. of course, this is what they wanted to they wanted to target 0% rate on the government bond. and the ability to decide how much more or less to buy in terms of bonds?
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he does nothing bond buying will be a problem. japan for in more on the coming days, we will talk about deutsche bank. we are live in frankfurt. this is bloomberg. ♪
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manus: local growth and focus. the fed said central banks need fiscal help. dimethyl raises concerns as worldwide debt it's a record $152 trillion. -- reassure banks of a brexit. we speak to hammond later today. --res hit a fresh high elliott singer calls for the company to restructure and mobilize. ♪
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you are very welcome to countdown. i am manus cranny. anna: i am anna edwards. manus is pouring over the details. manus: easyjet, a decline in sterling it's the shareholders -- hits the shareholders in the pockets. passengers come in at 73.1 million, up from 68 .6 last year. that's 68.6 last year. -- 68.6 last year. so in terms of easyjet's overall numbers, the cost dropped by 1.1%. that is the line which is the price of sterling and the bottom line numbers. these airlines have been hit. the pound back at 1985 lows.
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versus inboundm tourism. we have had terror attacks. pretax profit, this is the critical number. full-year pretax profit 490 to forge 95 million. to bloomberg consensus -- 495 million. >> they're committed to paying and declaring a full-year dividend. it didn't ever so slightly. the pretax profit guidance for to 95 million. the estimate was for 516 million. .hey are taking -- down by 1.1% anna: that guidance looks a little light. we will she guess we will see how this year's response to that. -- e will see how these
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manus: the consensus estimates on -- are dropping. anna: let's talk about german manufacturing orders. they surged as domestic demand rebounds. seasonal swings and inflation grew by 1% from july when they climbed. it is better than the july number. increases the biggest since march. the median forecast of 140.4 cent -- 0.4% gain. a broad base domestic demand is driving this according to figures released by the economy ministry in berlin. in terms of features, and where we are positioned to open up in these markets, we had the ems a pulled had the msci up a little bit.
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manus: i wonder how deutsche bank is going to open. there is a new element in that story. the tailwind for equities is shown in the risk radar. .sci asia-pacific, anna, is up where had a nice strong number in u.s. services. the monthly jump that we have had wasn't the biggest in 20 years. it is all about -- had was the biggest in 20 years. it is all about the economy. anna: it is not moving much compared to last night's close but it has been dropping. begin has been dropping for the last seven days. -- the yen has been dropping for the last seven days. manus: let's have a look at the bond board. global bonds over all in retreat . that is the top line of our story. stimulus outlook is up.
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the ecb, are they considering their position? we heard from kuroda telling us things are fine. you are seeing that rise in yields. yields,government bond 1.7. that is the critical point for markets when or if we make it just is -- make it to 0% yields. anna: a couple of stories we're been running. let's get to bloomberg first word news. here is david ingles. david: deutsche bank has been indicted for colluding to conceal of the italian lenders losses. this according to an audit commission by german regulators. in addition to the german lender adjusted back in 2013, a part of hundreds of similar deals. it's a spokesman says there is
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no connection. goldman sachs retirement plan is pulling $300 million from the firm. they informed employees of the decision yesterday. that is according to a person with knowledge. cooperman has been accused of insider trading which he denies. it is the second time this year that goldman has cut ties with the former employee. now the u.k. chancellor, philip hammond, will meet with a wall street executive today. he wants a brexit deal that secures good asset for financial service companies. the chip comes amid mounting concerns that leaving the eu could prompt banks to move jobs out of the u.k.. you can watch our sitdown
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interview with philip hammond later today. -- securityarrested agency for allegedly stealing classified documents. the company also employed edward snowden who fled the u.s. back in 2013 after leaking thousands of classified documents. fell.and hamilton shares hurricane matthew is headed for the united states southeast. seen.ial losses are the national hurricane center described matthew as a category three, life-threatening storm. now, shares have hit a threshold -- a fresh record high.
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wants -- into an operating company and a holding company. shareholders and special dividends and improved governance by adding members. he is arguing that would make samsung -- and provide tax benefits. twitter plunged in extended trade after it reported the website said that google doesn't have plans -- apple is unlikely to be interested. working within advisory on essential offer. a representative for google declined to comment. global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. i'm david ingles. this is bloomberg. manus: david, thank you. let's get to juliette saly.
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she standing by with the asian markets. it looks like dollar yen has shifted again. the economy in the u.s. -- go on the u.s. juliette: manus, i think as they always say when wall street pleases, we fill -- we feel well as well. we have seen good moves coming through in asian stocks. there has been some upside coming through. the yen was holding at that one month low against the dollar. that is given a boost to japanese exports stocks. the nikkei closing higher by .5%. that movement and commodities helping out the australian market, up by .5%. mainline -- mainland china still closed. those energy players really the front runner on that rebound in crude. we are seeing some good pickup
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in consumer related stocks like casinos. --have seen some downtime downside from new zealand for a third consecutive session. big movers aside from samsung, with seen the novo group move quite highly in tokyo. this is on reports they could be merging their pc businesses. also a rebound coming through in the korean won which has been weaker against the dollar for five consecutive sessions. by .2% against the dollar. .30 -- 1001 at 11 .30 -- anna: suffering from a debt hangover of unprecedented proportions. manus: it reached $152 trillion last year and it is still rising.
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excessive present debt -- excessive private debt is a major headwind. anna: the federal reserve chairman says central banks need physical help to spur growth. that echoes a group -- that echoes previous comments from mario draghi. interest rates are not necessarily here to stay. manus: i am continuing the central bank game, we get the preview for the ecb december meeting. the bloomberg scoop suggesting central banks could be planning so cold tapering of its qe program. toogood, great to get you with your with us -- great to get you here with us. $152 trillion. stanley fischer says it has a
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little bit of monetary policy. peter: we will monetize it. it has been the same thing for ages. there is no region -- no reason so the next phase which will bank will monetize. they'll have to -- call it for structure or a new people's bank. monetary policy has been in a long time. it has traded a low productivity environment. japan has had low unemployment for 20 years. the stock market is half where it was 26 years ago. that is just the number. it doesn't work in that sense. you need proper reform. the problem is [indiscernible] it is the germans who has lots of money's -- lots of money to spend. the people who are most against areal are the ones who
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[indiscernible] there is only one option left. andreal interest rates applications for equities are quite significant if this is somewhere near the low point for bonds. anna: if you are a policymaker in looking at what can we do to stimulate global growth. how do we play our parts? the temptation is to use the low interest rate to increase your debt load and do some info infrastructureme . peter: i don't know what choice they have. what are you going to do? look at the rhetoric from u.s. going to gosingly that way. it is the only next logical step. we already have $152 trillion in debt. it is always a political cycle.
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it is all very exciting. in the next phase of this, which is will do this now. it will be seamless and find. yields won't rise, yes they would arise which is why the central banks will have to do something different. call it in for structure bank, call it whatever you want. make of this is the services data from the u.s., the biggest jump in 20 years. given every thing that you have said, if the fed hikes rates in december and goes for another hike next year, policy misstep? toer: they are so obsessed the concept of what do we do when we have the next downturn. they can do something for the next downturn. we have done that with japan so good luck with that one for the next decade. they would like to move the interest rate to have fuel in the tank. if we did have another serious .ownturn -- it is very exciting
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manus: that is the biggest move in 20 years. i am going forward. go i am not, i am just putting out the point. the little -- the nominal gdp rate is very low. that is primary -- that is the primary problem. we're going on a fiscal spending binge. we're not in a great place. they are approaching 80%. this is the point for debt mound, it is a challenge. you have monetary policy exhausted. anna: let me guess, you are buying gold? peter: inflation is not the automatic cuts points of this, but they are implications for bond yields in which equities you own. anna: peter, thank you very much. he stays with us. i am just about giving up with all of the various thoughts. up next, on the program.
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manus: i am keeping up with anna. i have had a rest. we are going to talk about for --e bank indicated indicted for mismarking dozens of transactions. where live in frankfurt with the details -- we are live in frankfurt with the details. this is bloomberg. ♪
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anna: welcome back. this is "countdown." manus: did know which show you on. anna: juliette saly is in hong kong. juliet. juliette: anna, thank you. searching in tokyo on news that it may be merging its pc business with lenovo's.
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.hares have traded higher a person with knowledge of the matter says it would take -- says lenovo would take a majority in the venture. credit suisse has agreed to pay $90 million for claims that he did not -- to reclassify assets with private banks. the banking regulator said within $1 billion were relabeled as being managed by the bank which generally generates higher -- credit suisse admitted wrongdoing. agreed to pay penalties by paying employees to misrepresent the assets. kfc and it's not -- and pizza hut -- because of anti-western sentiment after an international court rejected claims in the south china sea.
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yum plans to create the spinoff by the end of this month. manus: juliette, thank you very much. concern about the complexity of deutsche bank is rising. bloomberg has learned that the german bank has missed marked -- mismarked dozens of traits. usa: caroline hyde joins from fight for it. you have been in the city for a week or so picking up everything that you can around this is a bank story. just --: i think it is i think it just aggravates an extensive the frustration surrounding deutsche bank. isa time when the bank having to cut thousands of jobs and scale back in terms of thousands of assets. this isn't new news. it is an amazing scoop. they got hold of an audited --
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an audit conducted back in 2014 that shed light on some of the activity that deutsche bank was doing. the complexity as it expanded its fixed on this its fixed income -- as it expanded its fixed income empire. helps make it look a little bit less riskier, basically makes it boosts capital ratios. it helps clients not have to mark the market. --rounded bank commodities at the moment they are embroiled in accusations that they helped that can italian lender concealed certain loan losses. they didn't end there. they used this enhanced repo and 103 cases with 30 other clients. the other fact here is they had to change the way in which they accounted for it. they were minimizing the amount of capital they were using up.
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they had to change them into derivatives to reflect the actual sign of the deals. the concern that this is a bank that was expanding to quickly, not taking account of its risk realm hase was at the a lot to answer to. manus: caroline, thank you very much. peter toogood is with us from citifinancial. when he hit a bank story, again, i think caroline made this point that this is another debt mismarking whatever they have been accused of doing in terms of corporate exposures. add to the woes for john cryan. it is another historical wound which has been ripped apart. peter: yes. manus: where our value managers? -- where our value managers?
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peter cook it didn't take an ax to the test peter: it didn't take an ax to the bloomberg. it is being stuck specific. there is a differentiating fact. there are things to different. if you look at as a set aggregate value managers, and it is an interest rate play. there is not a good idea -- if your value managing it through retailers, energy mining banks. it's a value in that tradition, assets cheap kind of thing. it is stocks to civic. -- a stock specific. suisse, thecredit numbers of held because of the investment banking activity. they have been staying somewhat popular. it is an aggregate comment. banks have been not popular in
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asia. anna: if you're looking for value stocks, you are a part of the group that is questioning getting into the bond/stocks seen. peter: people last summer. the noise -- manus: these are the defenses. it spiked higher. why -- that is a vertical. it ago summer of 2015 -- peter: summer of 2015, it is over ownership and it is a bleak and bond proxies [indiscernible] it is that whole stagnation theory playing vividly. me less than give 3% dividend yield. i will be happy in a world where there is no growth. that is what people are continuing to believe. politics say no. we have not got a recovery in
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that secular trend. numbers are still too low. that is because emerging markets are still low cyclically. the rest of the world is aging. will need reflation. it is very crowded. the staples, tobacco, promises goals -- manus: there is more -- peter: there is more volatility. it is the biggest thing for investors to challenge. anna: peter, thank you very much. manus: that is it from anna and i. you've got "on the move" up next. futures are ahead a little bit higher. anna: will be higher on the south european equity trading today. the end is a little bit stronger -- the yen is a little bit stronger.
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youking euro dollar yen for as you see the dollar index .aining ground, up by .2% there is a shot of london for you. next.e move" is ♪
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guy: welcome to "on the move." we are counting you down to the european open. i am alongside caroline hyde who is in frankfurt. here is what we are watching. a bad time for the pound. we approach the crucial moments of trade for sterling. later we're going to speak to the could chancellor just to the chancellor, philip hammond. -- its first profit decline since 2009. is it

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