tv Bloomberg Daybreak Europe Bloomberg November 21, 2016 1:00am-2:31am EST
director general right here on daybreak. a very warm welcome to bloomberg daybreak on our flagship morning show. i am anna edwards. manus cranny is with us in dubai. good morning. let's talk more about oil prices because as we have seen in many years gone by, the two have been negatively correlated, though that is not so right now. yousef: there is a clear correlation between the relationships and the has turnedtrade positive for the first time in a very long time. this has happened three times only in the last five years. we have seen the stronger dollar and oil prices. we did have data file from the
baker hughes index. that should traditionally, at least but downside pressure on the price of oil. that is currently not happening. the number of positions being taken in the futures market is the highest in nine years. on oile will th see bets prices. japanese equities are doing well today and partly, that is an energy story. matt: absolutely. as far as the dollar and oil relationship, the opec news flow will trump the u.s. trump dollar. asian equities are rising. for the iisx is set longest rally since 2011. the news this morning is iran and iraq will signal a deal could be on the way. putin says there is a great chance of an opec deal.
i am going to but copper in there. i love this phrase, it has gone parabolic. if you do not understand the parabolic means, it is up 20% within one month. hedges are up 19%. that is the largest holding by the hedge fund community+++ 2006. the analysts are trying to keep up with us. morgan stanley says the dollar will rip higher. the bank of america merrill lynch says the dollar will fall.
so, those are the markets. we're focusing in on oil. haidi lun is with us. haidi: hey, manus. donald trump has interviewed top investments executives for the role of treasury secretary. people attended meetings at the trump national golf club in new jersey over the weekend. ofmet with the global head real estate at blackstone group. meanwhile, president barack obama says he intends to give donald trump space to lead the u.s. and set his own agenda, but is reserving the right to reinsert himself. remains involved, it would market up recentfro a departure from his successes. mports plunged 16.5%. exports were down over 9%. the u.s. shipments fell more than 11%. u.k. prime minister theresa may will urge businesses to work with the government to ensure
the benefits of capitalism are shared more equally. may will underline her believes that the vote for brexit was the people's call for a fairer economy. the polish president has expressed his concern that remarks around brexit will lead to a looser cooperation between the u.k. and the european union. we want ties between europe and the u.k. to be kept, even if brexit does go into force. the u.k. is a strong economy and it would be a great loss for the eu it was cut from the economy. haidi: global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. you can find more stories on the
bloomberg at top . this is bloomberg. yousef: let's check in on the markets in asia. juliette saly has all the details. juliette: we have seen a pretty good start to the trading week here in asia led by this rally. we are continuing to see this in japanese equities. also, a very good day on the shanghai composite. the nikkei closes out the day up .8%. this is the eighth consecutive session that we has seen japanese equities higher. this is the longest running streak we have seen since august of last year. having a look at china, that is up by .7% today. we have seen some very sell it support for those state-owned companies come up by 10%. we have seen a lot of buying coming through from insurance
players today. elsewhere around the region, the rally is coming through with energy players with his likelihood of an all but opec supply cut. other major story is this weakness in the yen. it is down by .2% today. we are seeing it at a six month low against the dollar. we've seen some weakness as well coming to the offshore base.. the pboc weakening the yuan for a 12th consecutive session, the longest streak on record. in currencies. but generally, a positive start to the trading week for equities. anna: thank you very much. let's talk about european politics. angela merkel has announced she will run for a fourth term as german chancellor, ending months of speculation. breaking her silence yesterday,
merkel positioned herself as a force for stability in what she called exceptionally difficult and uncertain times. she said it was absurd to imagine that she alone could mend the world's ills. >> everything depends on me, especially after the elections in the u.s. back the same time, i find it very much grotesque and almost bizarre. no person come even with the biggest experience, tcan turn things in germany, europe, and the world to good. manus: meanwhile, francois hollande has become a new front runner in the 2017 election. he vaulted from third place to win the first round of the republican primaries with the most free market platform amongst the seven candidates. i have seen them all reference brexit. he has outlined his vision for a reformed europe. >> the brexit deal to europe
might be a deadly coup if we don't react. i was not surprised by that vote of rejection, because when we forget nations, nations always revenge themselves. the dream of federal europe, in which i never believed, is finished. the european communitarian system, as it is today, has had its day. we need a more political europe, a more efficient europe, a europe more focused on strategic prioriti that will give back everything else to state authorities. manus: caroline has more for us from paris. manage this quite spectacular comeback? musketeers. and i you have the brexit teer. >> absolutely. assistantstory of the becoming the new chief.
sarkozy called him his assistant and now it looks like he has just alienated his former boss. for months and months, we saw francois fillon being the favorite. a lot has changed in the last two weeks. you had the election of donald trump in the u.s., the candidacy, and fillon dominated the last debate on television last week. so, this is how we saw this impressive comeback of francois fillon. last night, nicolas sarkozy got two votes from his former prime minister. >> i have high regards for j upe, but the political choices of francois hollande are closer to mine. voters neverhe
to take the road of extremism. france deserves so much better. reporter: as we have seen with brexit, and the election of donald trump, you can also go wrong. this is happening again in france. manus: caroline, with the dollar r-trump we did not get much run out. what does the program of francois fillon offer? in favor of free markets and policies. on the diplomacy front, he is pro-russian. he is welcome to an alliance with russia and iran to defeat the islamic state. he calls this the shock therapy of france. he wants to extend the 35 hour and just public
spending by more than 100 billion euros, including eliminating many private sector jobs. he also wants to extend the retirement age to 65 and he wants to create 40 billion euros of tax cuts for companies. so, very pro-market policies that we are seeing here. jupe says he will continue the illon getsf the vote, it might be much harder now for him. thank you very much. let's talk about the european fortical theme with the cio international fixed income for jpmorgan asset-management. i hacvve pulled up a chart here. this is after the u.s. election. we saw a jump in french 10 year yields after a comparable german debt.
many are looking to europe now and all the politics on the agenda in the year ahead, working out where the next leads.ion that juppe wasr a favored up until only a few weeks ago. so, the message has been, expect the unexpected. we have just seen that in france. and as we look forward, another couple of flashpoints. we have the italian referendum on december 4 and on the same day, the austrian presidential election. ick, a very good morning to you from dubai. i have pulled up an additional sovereign yield, the italian butd, and that is rising, it looks as if the days of the bond vigilante, they are not getting as much bang for their
buck. the euros is under pressure. the look at the eu -- do you look at the euro as having this risk at the moment? itwhen we look at the euros, is less about europe and much more about trump and the u.s. what we liking to see is divergent central banks. agenda and gross agenda there puts the fed a much more assertive phase, and the e cb are very likely to be accommodative still. so, you will see an increasingly weaker euros, versus a much stronger dollar. manus: where does this leave the ecb, in more detail? you might be more aggressive interest rate hikes in the u.s. is this going to derail the plans of the u.s. going forward? >> i think when you listen to the ecb speakers, they are crystal clear. we look at one thing, inflation.
and when you look at core inflation in the eurozone, it is 0.8%. it is way beneath target. so, they are pretty clear that on march 2017 they will be extending quantitative easing. t a, it might be a at slightly slower rate. anna: what is a little talk of tapering from the ecb? > >> remember, when the ecb started qe, they actually started at 60. they were from 60 to 80. maybe they go back to 60. the ultimately, thank you's policy very loose. -- but ultimately, that keeps policy very loose. manus: i wonder, when you look at all the market moves, there is something inside me that says, get ready for some kind of policy backlash at a much bigger level because these markets are moving, is currency markets are
moving aggressively. it i am assuming it could be a g-20 response. g-20ere may very well be a response, but the key is the effectiveness of those responses at times. so, market moves are likely to continue. let's face it. the market in the eye of the storm i know is the bond market. and you look at 10 year treasuries zoomed all the way up to 2.75. it is likely that bonds is still take the string if we go in much more expansionary policy from the u.s. is a 10 year treasury at the right yield level? probably not. anna: we will talk more about this in just a moment. no, thank you very much for your thoughts so far. here is what i like for your week ahead. maria draghi presents the ecb's
annual report. edal ofw, the middle freedom ceremony. on wednesday, the u.k. chancellor philip hammond makes his statement. and the u.s. equity and bond market are closed for they've given. then, friday is the start of the holiday shopping season. manus: trading places after the election of donald trump in the united states. is china now positioning itself for the champion of free trade? whippinwe bring you all the mov. chancellor philip hammond delivers his first statement. we get the views of britain's biggest lobby group. and finally, building a team. u.s. president-elect donald trump met with candidates for the roles of treasury and defense secretary this weekend. we take a closer look at his
manus: it is just 10:20 in two dubai. in hong kong, it is 1:20. now, let's get to the business flash with juliette saly, standing by. juliette: manus, pretty dull in hong kong. cyber security giant symantec is purchasing lifelock for $2.3 billion. lifelock is also being pursued by premiera and evergreen coast capital. chairs about 45% this year, giving it --the shares are about 45% this year, giving it an income of about $2 billion.
nbc that the senate's democratic minority would get help from republicans. donald trump has said he will scrap the head, which attempts to legislate new rules which fee ofrevent a the financial crisis. two people have been formally arrested according to the australian financial review. 13 china-based staff are also in custody. staff have been held over alleged gambling related october. since and that is your bloomberg business flash. anna: thank you very much. trade, top of the agenda at the summit in peru this weekend. as questions hangover global relations in the wake of donald
trump's election victory. china's president says he wants even greater incorporation with the united states. >> we meet at a hinge moment in the china-u.s. relationship. sides will the two work together to focus on corporation, manage our differences, and make sure there is a smooth transition in a relationship and that it will continue to grow going forward. both china and the united states are important member economies. china stands ready to have more coordination with the u.s. and the work alongside others to perusure the meeting in is a success, and to inject new momentum into the regional economic corporations, and the growth of the asia-pacific economy. anna: let's talk about trade, then.
we were speaking with nick cartwright from j.p. morgan asset management. it is interesting to see how markets are reacting to the trade story. but i have got this chart here, if you want to find it on your bloomberg. we had think commodities bouncing as a result of trump's victory. we have seen the index bouncing, not to the levels it was in 2013, but still bouncing. the market seems to be focusing on a pending construction doom in the u.s. yousef: it is a brilliant chart and actually, it is a great barometer for global trade. and we are starting from a very low point. so, if you think of where global trade expectations are come around 2.5% that is the lowest. exit patients are about 2.5%, and that is the lowest. generatewill need to
it all internally. theit is realistic increasing crist. it probably goes further. anna: are there any indications that global trade will be threatened, then? >> very much in the short order is increased economic activity continues. then, there may or may not be a protectionist agenda that comes forward. manus: you said big spending boom and a lot of that should be reflected in the treasury yields. in the u.s. we are seeing treasury yields at an all time high. how far have they prized in that sical spending. -- how far have they priced in that fiscal spending? >> with this 50 basis point repricing, when you look at the .5%.ear note 2 in the longer term, he could get
up to 3%. 3.5% by 2018, is that when it will occur? >> know, much sooner than that. people are fighting this selloff in bond yields and it keeps going. manus: what does that do to the dollar? the dollar marches higher on the wrist radar. the analysts are catching up on the dollar-dollar. big strong dollar, what does that do to your yen? >> when you look at dollar-yen, 1.20 is a realistic target. when we look at euro-dollar, it goes straight through those. you are sticking around and there is still plenty to get through. statements of intent. philip hammond prepares to deliver his first statement this
merkel will run for a fourth term. difficult and uncertain times. story is the news that theresa may will urge businesses to work with the government. , she may underline her belief that the vote for brexit was a call for a more fair economy. extending gains and iran will -- new proposals to help bolster unity before they meet next week in vienna.
moree meantime, let's get on the news. >> good morning. upare seeing shares holding well and broad-based gains across equity markets. you can see groups heading stockstoday and energy are of. ande are extended gains there are some comments from rallying moreare and we are keeping a yieldsye on the treasury and it is something i was watching closely last week with a chart of premiums and the 10
saw hirokid and we and notoldout a bazooka the to fire and it pulled yield's towards zero on the announcement. the strategists are racing at the fastest pace in more than a year because the movement is closely linked to this yield seen thed we have dollars build and we have seen this against the yen and we have and we have seen the nikkei going to a bowl the february blow
gamehis is the longest since 2015. help is needed to ensure the benefits of capitalism. executives play by the rules, in terms of tax and behavior. the first statement is expected to announce the package. carolyn is there now from central london. thank you for giving us your time. it is a busy day for you. it seems that the conversation does not move on and what
reassurances his government giving to business behind the scenes? speech is ae aemendous step forward and with productivity growth across the country. should be leading the world and innovation and he is putting some policy behind that and business is behind that. >> we will get some of that. brexit, we see announcements about investments
and do they do that because they do not care much about the future, orp into the are they getting assurances about what that will look like in the future? it is a tremendous testament and theconomy principles that guide the union, thes with the government talks about the and wence of the market are hoping that we have more and thearound the plan principles are beginning to be spoken about within the government and we welcome that.
>> it seems that theresa may will try to build the business around workers and consulting on these types of policies. are you an enthusiastic supporter of this? examination ofhe withesses delivering and thered consumers is not a single model and we are setting out a range of different employees andith consumers and we are working in partnership's with government and we welcome that. it is a part of prosperity.
>> theresa may called on sell theirto businesses and see if there is something from it. >> i think this is an important role of business, arguing for and theys of markets are active in communities and anding to bring people improve mobility. it is a subject of our conference here today. they will work to make this change work for everybody in the country. around immigration or
statements around immigration, ont kind of policy immigration do you want see? >> i think it is interesting to see the ambition with innovation for the world and we have been a magnet for talent in the area for a year -- for years and we and we andntain that businesses will make the case to make sure we can be an exciting center that the prime minister is talking about today. >> we understand that she is talking to people at the moment. who is she getting the views of?
across the country, or the things that comes across is that she wants to work in partnership's with business and one of the things they can do is a trade-off around brexit and is goingthe impact forward and we hope that will continue. >> thank you very much for we will be at the cbi conference later on today. >> i know you have strong views on this conversation. what is your take on the conversation?
it sounds great, on paper. >> you look at brexit, where people have voted, but it does not start until the article is triggered and we do not know. beil then, there will not clarity and we will not have economic impact. >> the deficit in the u.k. could hit 7.5 billion pounds. i have the u.k. curve here and it is coming all the way up here. do we go higher on yields? do they run in confluence with the global fame that we have seen, or do we wait? the u.s. is likely to
increase the size of the deficit and the curve will steepen because of -- it is somewhere between 4% and push thist will higher. >> always a pleasure to have you on the program. all right. give you did of a preview of what is coming. european politics is in focus brock.will speak to stay tuned. his bloomberg.
there could be a collision against mrs. merkel. >> to what extent has the election of trump expedited the urgency that merkel should stick around for stability and normalcy? the election is not decisive, and it wasthe impact it is european union and logical merkel stays for another four years. what will the migration
policy look like, with merkel standing for this election? >> you will continue the policy and there should be a fixed andt for social union costs this is a problem, but not a the declared for candidacy. same andmore of the that is what we are getting from the market. what can we look forward to, in terms of shifts in policy? isthe most important part
and they must have a much higher quality. >> how concerned are you about the possibility that marine le pen wins the election in france? reason to believe that marine le pen will not become the president. will be ableives center-right and the left and marine le pen will have no chance. >> ok. thank you for joining us. much for joining us.
we are going to get the we have am france and surprise front-runner in the election. great to see you. you have a special guest break this down for us. ministerrmer prime under sarkozy is now the new front runner in the republican primaries and has eliminated nicolas sarkozy. i am joined by a supporter of sarkozy. are you disappointed? >> the most important thing is >> do yought leader
>> a runoff for next sunday. >> thank you carol and conan. plenty more to come in the program with concerns over global trade in a trump presidency. china calls on the u.s. to keep the links strong's. >> there is a lot to talk about in china. quick look at the risk rates and the gains in energy usage. >> we have a higher rate count out of the united states and there is a rally with the dollar. >> we are seeing a breakdown in the relationship between the negative and the positive with the dollar and it is 2.5%, despite the rally and it goes
>> power of merkel ending the expense and announcing to run for a fourth term as chancellor. last-minute search for the french prime minister has sarkozy coming back. places, the chinese president says they will boost -- withrade will concerns over the protectionist event of donald trump. theresa may urges business citizens --
this is the biggest backdrop since 1988 and the dollar is going to rip higher. look at the bonds. and it willover yet move the yields on the market and the 10 year government bond yields in germany. wereonths ago, they negative. >> let's check in on the first word news. topld trump has interviewed executives and members from wall street attended the meeting in new jersey.
the global head of real estate is at blackstone group. >> barack obama says that he willgive trump space, but reserve the right to reinsert himself into the debate, if he thinks core american values are jeopardized. japanese exports fell further than expected and it dropped from a year earlier against estimates of a .5%. trade surplus of $4.5 billion. they were down in the shipments 11%.more than working with the government
to ensure that this is shared more equally. it may well underlie the belief that the vote for brexit was a call for a fairer economy. should -- inflammatory remarks over blacks it will lead theore tension between european union and u.k., which could her both sides. >> we want the ties between europe and the u.k. to be kept. the u.k. is a strong economy and it would be a loss, if it was if the ties between the two were severed. global ties our power by journalists and analysts.
the lifecheck in on market action. >> it is a great day. we knew seen equities up on the nikkei and it is in bowl market territory and there is the story minutes says the biggest stock rally come back is not over yet. weakening the yen and pushing up the export stocks. week up bystart the 8/10 of a percent and we are reducing the weakness and seeing chinese stocks doing quite well playerssee the energy quotes lowerwith
an exceptionally difficult and uncertain time. she said that she alone could mend the ills of the world. it all depends on the, especial after the elections honored me. i find it grotesque and almost bizarre. nothing can turn things more or less to the good, especially not the chancellor of germany. hollande became the new front runner and he won the first round of the primaries. vision of ahis reform to europe. may be aexit deal deadly to, if we do not react.
i was not surprised by this and the nations always revenge themselves. a dream of federal europe that i never believed in is finished and the communitarian system had its day. we need the political europe, efficient europe, focused on strategic priories that will give everything else back to state authority. >> let's bring in our guest. thank you for being with us. there was a line that riveted our mind, the dream of the federal europe is dead, which oft be music to the ears those in the brexit camp. >> think that we have to make
over-readwe do not some of the political the elements. this has a lot things that could this should be accountable to the populist right and there is a huge amount agree that we must not be negative and tried to read these things to negatively. >> we look at the detailed goods and it is not a proxy indicator. it is positive for europe and the downsidee on
and the 2% yields. at the 10 year and it is not discounting a lot of risk. ande is room for it to work you have to remember the and it is a bit of a reversal. >> it was pointed out last week that there was a dangerous situation and we need the clouding -- >> the problem is that it is they the other way and tried to make the biggest bond marketing.
things will be going the other way. >> we're seeing the movement over the german debt and this marks the markets casting their month -- casting where populism could rear its head. it says they can't have europe andg on a different page will the ecb taper the bond buying? factorissue is the trump and what it will do to the market. there is no choice. spread is an open we have to expect this
and'sare >> picked take in bond markets and none of this holds true for europe and the european case. bondhances are that these markets will force the ecb to carry on and this should widen further. the other point is the trade restrictions that may be u.s.pted without of the being more negative and it is europe that is linked to the emerging markets and, in terms ,f the first round impact europe is more vulnerable to differential. keyword is asset allocation and how you are moving the money.
>> a lot of what is happening is a correction of the earlier overshoot and there will be a point that the bond market is growth friendly and we have some improvements in the growth expectations. this bond rally will have a we get thent and u.s. treasury reels -- yields and we see something of that equities and you can take it from me. it is general that stocks would be vulnerable.
and the incoming senate minority leader, chuck says that he has the votes to prevent him from repealing dodd-frank. three australian employees who -- detained in china and inhe fourth us try custody. staff have been held for and the-related crimes minister says that her department is try to get official confirmation on the status of the crown employees. that is your business flash.
>> thank you. trade was at the top of the agenda in the meeting in peru this weekend and questions hang over the global relations with the trumpet victory. wantsinese president greater cooperation with the united states. meet at a tense moment in the relationship and i hope they will work together to focus on cooperation, manage differences, and make sure there is a smooth transition in the relationship and that it will continue to grow going forward. china and the united states are important and china stands ready to have more coordination with the u.s. and work alongside the meetingke sure
is a success and to inject momentum into the growth of the asian pacific economy. >> i caught up with martin himert and we chatted about . >> he is a good businessman and he i pragmatic and he will deal with the issues and, to a certain degree, i agree with saying and that the office will make him adapt and i think that he will. >> he went on to say that he thought that the rhetoric was thoughtful and he was going into sit down with trump in december and let me bring you back into this conversation here.
has therump expectations ratcheting higher. have we overstretched the in thetions of delivery details where we know nothing? >> there is something to this up we have seen a big back in the inflation expectations and they move in the yields and we have to see what is and the added spending has little capacity there to do this. the modest stimulus is not necessarily consistent with what we have seen and we have to remember the yields are low and the policy interest rates are
rising. there is not that much disagreement and the trend in the yields is up. >> the stimulus that you pointed out is far from certain. how big does the stimulus have to be to make a dent in the u.s. economy? the spending numbers have been floated. >> i would not worry about it. it takes a lot of time for this to hit the ground and the infrastructure spending, you get it and it hits the ground in 2018, rather than next year. the tax cuts are potentially easier to implement and it still and it is a stimulus probably right to expect some growth impact and it will go
back to issues around the trade restrictions. remember, he promised tariffs and, even if he does a fraction of this, at a time where the global economy is so weak, it would be very damaging to business and it would threaten to undo th threats -- the impact on this stimulus. >> we have seen the commodity prices going higher, even if you play down the significance. index ande baltic dry it is on the talk of this infrastructure spending. why is the market buying into this story on infrastructure? to hoping goes back
that the good trump prevails and that positive stimulus effects over the restrictions and you have to think something has to be delivered to the core supporters. >> will good trump prevail? the worst aspects of the platform will not be implemented, but i would be surprised if the rhetoric around ratcheted up to a point where damage still comes through. >> thank you for joining us here . equity markets open up and let's have a look at where the futures are. >> we are still at 1/10 of a
♪ >> willem buiter -- welcome to bloomberg markets. we bring you the first trade of the day. we are alongside matt miller. in with the old. the former prime minister leads the field in france and angela merkel will run for chancellor. does the establishment have a chance? trump recruit from wall street?