tv Bloomberg Daybreak Europe Bloomberg November 22, 2016 1:00am-2:31am EST
a warm welcome to daybreak in london. i am anna edwards. we are partying like it is 1999. 1999 was a year when oil was trading at $26 a barrel. returned 19.5%. >> this is the way to find the chart on bloomberg. fence --ese stock recordrks are going to highs and you can see the risk isradar and whether it
his transition to the white house and he says that he will withdraw from the transpacific partnership and cancel restrictions on energy and get rid of all regulations. >> i will formulate a rule that one that every -- for every new regulation, too old regulations must be eliminated. there is concern they are heading towards a hard brexit. idea is the hard brexit and it would be very damaging. >> mario draghi said that more urgent action from government is he spoke to the
>> trump said he is going to short up the -- the tpp. we have the details. >> we had a good session in asia. it is moving higher in record australia closed higher and there is a rally coming through. you can see the energy players leading the gains here with the three-week high and there will be a supply cut deal and we're ining the shanghai composite late trade and the nikkei has closed higher and we have had
the past nine consecutive sessions. in topics and the nikkei are bull market territory. you are seeing one of the best performers today against the dollar and we see a little bit of strength coming through earlier in the day after the fukushima and this has pared back in late trade and we are seeing it back. >> let's talk about trade. donald trump says that he intends to withdraw from the transpacific partnership agreement on his first day in office. he was outlining the list of executive actions that they can take.
trump criticized trade deals on the campaign trail. japan says that the tpp has no meaning without the united states. issue a notification to withdraw from the transpacific partnership. we will negotiate bilateral deals to bring jobs and industry to american shores. theet's welcome into conversation the global rates and asset strategy. this is the flow of trade between the united states and other countries and the biggest trading partner is china. how significant is this and what does it tell us about the president? >> it is not surprising. we know a big fame on the
campaign trail. this is a question about global trade, which has been a strong engine for growth. concern the trend negative and the near-term market has the worry andhe deflationary impact the fact that trump goes out the policy.ys doubt that this would be different from president trump would be mistaken on this front. are we going to see more of the
antitrade and anti-globalization? >> we know this area where the president has a lot of cold in theunited states and and it from congress and the quite clear theme is becoming more permanent . >> we have the oil prices the markets are intoring in the charts december and this has implications into next year. theve another chart with
-- higher and >> there is an implied rate hike and what happens with the dollar? picture going the into 2017? point, it will stop and there arefed the higher bond yields and the equity market is doing quite well and what we hear from the condition not stopping. if the inflation picks up, the fed could become more hawkish.
there are estimates of where the rates go in the fed policymakers. you think the bond rout has further to run. we talked to guess who said that 2.32% year yield is that and they think it will get to the high 2% mark and the bond market will start to cause. >> this is our forecast with 10 year bond yields rising and it growtho higher on think'tnce and this is coming in the way too much. you looke mistaken and
at the outright basis and if you ,orrect for the cost of hedging the treasury bonds are quite high. >> we actually brought up a treasuriesthe u.s. sincee bond yield spread 1989 and it doesn't mean anything, substantially. we might see a lot of appetite for the u.s. treasury. potentially, they can go out return onthe total funds. ensure and they have
to hedge with the currency risks. from europe to the u.s., it could cost 1.8% and that is a good chunk of the pickup here and you look at the spread on the corrected measure and i do not think this will stop the selling off. >> how much will they lose, if we see this extended into other trade arrangements. >> it has this substantial impact and we have questions andt international trade the rising u.s. race has not been very good for currency and you have this double pressure,
stays and wek, have seen the yen markets becoming less sensitive to the u.s. rates. i am not too alarmed. i would say that they are negative, overall. >> thank you very much. aheadhave a jampacked day . we have u.k. and public finances and rate decisions from hungary and the eurozone and consumer confidence. the existing wholesale numbers will give us a better indicator of the health of the economy and the central bank is scheduled for today. >> we will hear with the ecb has to say.
western australia. a spokesman for the company says that the outlook looks challenging for the division and would not say how many divisions will be touched. it was reported 500 jobs would go. abigail johnson has been ceo since 2014 and will retain the role. the move comes as the money intensent giant faces competitions for assets. removed the executive from his position after a car parts dispute with a resident in beijing. they apologized after there were critical commentaries in chinese state media. that is your bloomberg business
flash. >> thank you for joining us from hong kong. the ecb president says that the election win will have a long-term impact and he presented the report in strasburg, saying that the fiscal policies should support the economic recovery. >> the monetary policy support has to be accompanied by decisive action in other areas and we continue to face a number of structural challenges that hold back the dynamic expansion of the euro area economy. what do you make of these comments, as we race towards the december 8 meetings and what can we expect with the asset
purchase program and how they protect the inflation? the program stays until march and the question is what happens before that. andprogram will be extended will he discuss the size? i am not sure. i do not think that he wants to rock the bond market. we have had had a large bond selloff and i don't think he wants to rub the market too much. and ave a weaker euro rally in financial stocks, which should be good for london -- lending. i don't think he wants to come
with another shot and say, listen, we are going to reduce and i think i don't see a hurry for the economic data. 106 .27re currently at -- 106.27 and how week -- you say the ecb will be happy. ?ow do you see this going >> we think it will go to parity and below that, we do not think so. >> we plan this to happen in the next 3-6 months and it will be seen as the first steps towards the removal of the accommodation and the euro will get some support. months andhe next
not much below that. >> what about sterling and specific views on how you will hold up? resilientbeen quite i see thistion and to a large extent with positioning and the massive shorts out there with discussions around the high concerns with the and there isays and strengthening the euro i don't think it will go very far. brexit will have an impact on the economy with the uncertainty
materials is heading for the biggest gain in six months with confidence in the global economy going. knowledged -- go to the surrounding opec deal with the agreement possible after iran said that this is possible and vladimir putin said that he does not see obstacles and russian is willing to freeze the output at current levels. >> daybreak focuses on mario draghi, who is going to leave this unchanged and the future of the program will be made. toe urgent action is needed
a structural weaknesses in the eurozone. in the is happening asian equity sections? there is optimism outweighing concerns about global trade. equityave where the markets are looking to go and .5% and we'reup looking at the picture for the equity markets right now and we are walking through other charts. you will see a lot of these and dowu.s. stocks with the the dow jones and industrial average and s&p is coming through on highs and we are talking a little bit about where we think this is going to go.
market and the swaps probability with the federal reserve. the other thing to mention is brent and the equity markets look good with the mining and the oil stocks. is trading on 50 andnd it is shy of looking positive. tied lifts allil ships. the business and trade union leaders are concerned about the prospect of the hard brexit.
asking if it was beneficial for business. i will make it clear that i did for the comments you make with regards to women, minorities, and a hard-working mexicans throughout the country for the economic ills that anybody suffers. and the grotesque level is not a way forward. i want to live in a world where we are dedicated to sustaining the environment and the economy. have the great lake regions
corporation tax to get better quality training and getting working-class youngsters for universities, the whole society benefits. this, there will be a question on whether they can contribute to the economy by working. >> that was jeremy corbyn speaking to bloomberg. we will have another great conversation coming up. >> that will be on the market share. you,ing these lines to on thes a statement
that willback options be submitted to the ag with the the minimumout and dividend in the 2017 results. this andcoming out of we will get back to our conversation around the u.k.. also joining us around the thereak desk is garcia, trade lawyer, who has previously negotiated trade deals on behalf of mexico. it is great to have your thoughts. we are picking up on the conversation with the u.k. and corbyn.ents from jeremy
she said that she wanted to go out into the world and do the trade deals to the benefits of britain and it doesn't sound like -- >> they want to be a leader and world trade and have flexibility. that means they will have to leave the custom union. this gives the freedom to do other deals. >> you would have to be outside of the customs union. >> how realistic would it be to negotiate this? >> it is highly unlikely they will be able to negotiate the comprehensive trade agreement articlehe two years of
50 and it is likely that we will probably have the interim thengement and comprehensive free-trade with 3-4 years and in the eu. latest is the expectation of what that looks and the plus with the financial services and other things that are not normally included. be between almost complete free trade area and the imperfect single market.
other sectors are going to be hit a bit more and there will be a hard exit for one sector. soft brexit and the sectorre about that might be hurt and it really depends. the ea and there could be a new model that applies and manages its way through brexit. >> there is no one single trade have the free
what, it takes uncertainty. staying with us, thank you. you inuld like to thank advance. don trump is the next story and he said that you will issue a notification to withdraw from the transpacific partnership agreement. he made the comment when he was outlining a list of executive actions his administration would take. >> i will issue a notification of intense to withdraw from the , anspacific partnership potential disaster for the country. we will bring jobs and industry back onto american shores. worldbecame the first leader to meet trump since the
election. what would a u.s. withdrawal mean? this would be a real shock. he was just at trump tower. election, a lot of people have seen this coming, given the rhetoric during the campaign. in peru and they were pleading to keep the tpp alive and to keep the commitment to the free trade in the region. it looks like they have what everyone thought would happen. been a part of tpp
they bring in a different set of countries. there are southeast asian the cpp went further than this and had a geopolitical aspect to this. the china deals are with tariffs and avoided more sensitive areas, lake labor laws. we are seeing china move into this and we're seeing the collapse, which is good for china. >> thank you for joining us. daniel joined us there. let's get back to the panel around the desk.
is this a shock? this is something he was talking about and many are looking for the clues on how much he will stick to the rhetoric. on this issue, he is sticking. >> it is shocking and it is with tradeed relations and it is a shock and with more of a .essage of looking at it again they are strong words and
are in the asian-pacific area. what about the work on tpp? >> many countries spent a lot of time and resources in the negotiations. many years spent, expecting the access to the u.s. market. now, countries are going to look havethe agreement they can with themselves and you are seeing signs of like-minded , wherees in the region they announced they are likely to have their own agreement. -- bloomberg
an alternative for tpp. be too likely to say. >> you see it taking a bigger role and a leading role. countries get involved with the agreement with china and there are open markets, transparent markets, and we will seek the same from china. it is interesting to think about it revolves and i think they want access to the u.s. market. >> plenty to talk about.
this is generic. i'm not sure the future. we will move towards oil, which is on the rise again. opec members have made progress they are bullish on the agreement. at 55 barrels -- $55 a barrel and you are looking and thepec production's white line with a shaded blue this is what we're theing at and you can see expectations have moved for the whatment and we are seeing
unicredit -- it is as simple as this. deal or no deal? it drives oil and commodity trade and the inflation for the past couple of weeks. i think the market may be getting a bit ahead of itself, the swings that we go along and i think the commodity prices will remain. chart that exposes and there areseen
other factors in their, trump anon makes being one of them. largely on the back we arestrong dollar and coming out with a theme for the past couple of weeks with the andation trade in the u.s. i think it is the wrong way to look at this. currencies commodity isheavily undervalued and it going to be supportive further down the line. if i was to take a 3-6 month --
>> welcome to bloomberg daybreak. in london. edwards.ed by anna internet: lots of breaking news. president-elect donald trump saying he will ditch the transpacific partnership his first day in office. trumponomics having an impact in market. for big indices in the united states going to record highs. breaking news. kingfisher. you to third-quarter sales coming up on 3 billion pounds. total 6.9 billion pounds. sales.on the total solid third-quarter performance. uping the u.k. pumped sales 3.5% yesterday. remember, this is a stock that has risen 12.2% so far this
year. index.ormed the retail we talked to 23 analysts. five have a by 11 hold. confident inmains the ability to deliver the plan. bear in mind a lot of the analysts have voiced their concerns about pressure coming through from france in terms of sales. again, kingfisher confident they will be able to deliver the plan. third-quarter trading conditions theowed a similar trend to first half. and a: interesting. very.k. has been resilient. more breaking news. the catering business, saying their numbers coming in the above estimates. four-year organic sales 5%. underlying operating margin 7.2
percent. full-year sales, adjusted at about the estimate. aboveing a pretax profit or shade above. estimates,de above 1.45 billion, better than the 1.42 that had been estimated. 2017 isview for positive, sees growth waited for the second half of the year. we spoke to richard cousins who is the ceo of compass group and he was saying he was not that worried about the exit vote. he will be joining us in 15 minutes or so here on daybreak. the ceo of compass group. >> the futures are on my mind. broadly positive open as it stands. percent higher.
similar picture across. also, u.s. futures set to expand record highs. that the excitement is right word around trumponomics? lifting global equities. over in the u.s. we talked about rallying like it is 1999. all the indices moving higher. asian rallying around. global rally around trumponomics and what we have seen from u.s. season.e in the earning looks as if it will be stronger at the start of the u.s. trading up.as well with the futures >> meanwhile, up 1/5 of 1%. rebounding from earlier quake. u.s.-japan yield. oil trading at $49.38, up 1%. this does not tell the story over the last few hours.
moves in excess of 4%. goldman sachs says oil is a short-term buy. $50-50 five dollars if an agreement is reached. news.bloomberg first word president-elect donald trump has released a video to update the american people. you will cancel restrictions on american managing and withdraw from the transpacific partnership. mr. trump: on trade, i am going to issue a notification of intent to withdraw from the transpacific partnership, a potential disaster for our country. we will negotiate bilateral trade deals to bring american jobs back to american shores. jeremy corbyn says business leaders and trade unions have exprsed concern that brightness headed for a quote hard brexit.
what i suppose ,ould be called a hard brexit the terror between britain and europe. much more of half of our trade is with europe, it would be indeed.ry damaging anna: mario draghi said more is needed to address the structural weaknesses in the euro area. he spoke to the european parliament. ♪ >> and the story in japan where allhe country has lifted the tsunami alerts after a magnitude 7.4 earthquake. residents were urged to flee to hire around. five people injured. some services suspended. but plants were operating as normal. anna: u.s. national football team fired coach.
came under pressure after two painful losses in the opening qualifying matches for the 2018 world cup. growth of the team, up to this point, let them convince they needed to go in a different direction. news 24 hours a day powered by more dense eccentric journalists and allison more than 120 countries. reminder you can find work stores on the bloomberg. this is bloomberg. anna: let market action. in asia. session seen to markets were close higher. up 9/10 of 1%. 10 month highs. a good rally coming through in 1.6 kong in late trade of percent. energy players. crude oil a three-way tie. speculation there will be a supply cut deal arranged by opec
members and players rally strongly at me region. similarly, our strike closed at 1.2 percent. most markets higher as well. rallyandout has been this in japanese equities particularly on the topics of been higher for nine consecutive sessions. territory. a fluctuating day of trade. closed higher, up by one third of 1%. trade as of late yousef was mentioning. no fallout from the earthquake the worry hast of flowed through and back into the yen weakening by 2/10 of 1%, 111 against the dollar. yuan fix for the first time in 13 sessions. you are seeing a little bit of
weakness. down 2/10 of one percent. 9147. fairly unchanged against the dollar. anna and yusuf. use of: thank you with the latest from the market action in agent. sally fisher has elected president -- urged president elect donald trump to make american workers more effective. reiterating janet yellen's advice that fiscal stimulus should be used to give the economy short-term bursts. said torio draghi has maintain the monetary stimulus and again called for more urgent action from government to address the structural weaknesses in the euro area. he spoke to the parliament. >> the return of inflation towards our objective still relies on the continuation of the current and unprecedented
level of monetary support in spite of the gradual closing of the output gap. isglobal head of the bank with us. the four we finished our conversation in the last hour you are talking about the dollar. remind us of your expectations. you think it is overvalued. fall two, then? >> right. ok. let me make it clear that our view on the dollar does not rely from the fed. it relies that we have seen a surge especially during the first half of 2016, the dollar has floated way ahead of what financials would suggest. so on a pure evaluation basis, the dollar is probably on a trade-weighted basis about 10%. 115-120.uation between
the reason we are likely to keep the euro-dollar undervalued at in the 6-9 months is largely because of the political arena. the a friend perspective, islar weakness we have seen a reality we have seen it for the first 7-8 months of this year. >> this is gone contrary to what you are predicting. you said hillary clinton is going to win. you set of trump wins it would lead to a weaker dollar. it went into the other direction. anna: it went briefly weaker. >> then through the roof. ?sk how to share outlook change how do you approach the markets question mark this must be a shock. >> not just for me. for everyone, a real shock. five-six hours a
risible market reaction based on the outcome and then everything completely turned. in order to approach this we need to understand what is driving it. the market has been entirely focused on the positives that donald trump is bringing with him. the fiscal boost. the deregulation. >> is any of it actually based on policy? it is all speculative. maybe of, probably, then maybe, we could. >> that brings me to the big risk the market is facing in the sense of the market right now is politicalen by perception is post a fundamentals and as you said, probability based on political development so i think the risk we are going to get at this point is for the market a disappointment. anna: for anybody with a [indiscernible]
-- as yousef rightly pointed out. but anyway on the subject of the fed hike. >> right. i think the market has currently priced in almost 100% probability. a rate hike in december, i think will happen. i think the fed will do more harm if they do not hike. the end as opposed to hiking because of they do not, that will probably signal to the market they know something over and above what the rest of us now and that is not good. so i do not think they are going to go down this road. at the end of the day, the data are not going to show any deterioration. i think what is interesting, i and what ismonitor happening to nominal rates, i am also monitoring what is happening to break even and real rates. with 2015 whent we had a sharp tightening of
real rates back then. right now, really rates have been fairly stable which tells you a lot of what is happening with the inflationary story i think leads to something that will be very important. i does the two-year treasury yield. to much further is is going go into 2017? >> we had the conversation earlier and the point was made it was not getting a lot out of fear. it goes back to, is fiscal stimulus going to happen or not? are semi-things you mentioned, so many moving parts. first of all, the speed of the move we have seen and u.s. 10-year nominal rates is not [indiscernible] -- what
levels we're going to see in 2017, it is hard to say right now largely because a lot depends upon the political decisions that will be taken. will we get a physical boost? we are likely to. will it be the right fiscal boost? anna: what impact will this have on emerging markets? you do not think this is quite like tantrums we have seen any past. i have a chart that shows again oil. you can look for inspiration anywhere. ofs is dropping as a result donald trump. >> actually, the performance of industrial and mental prices relative to the rest of -- metal prices relative to the rest, you see the gap would be much weaker than the one you are showing right there. i think the elements for a very fundamental weakness in emerging markets is not there based on
what is happening in the market right now because as i said what matters historically is real rates. and real rates have not moved by rates.as much as nominal having said all that, again, i would go back to the previous closing taking the driver's seat. if donald trump is down the road to production of them, is down the road of sharp restrictions in emigration that are going to have impact on the u.s. gdp and therefore on a global scale, then this is not going to go very well. remarks, stillis focused on the positive trumponomics. thank you so much. >> all right. compass group ceo richard cozens is standing by to talk to us about his company's latest results. stay tuned for that exclusive interview.
in ♪ >> you are looking at a live shot of berlin. it is 7:19 a.m. here in london. trading at a quarter. here is a story for you. central bank have and are italy and germany make more as the ecb president 86,000 euros according to data compiled by bloomberg. that is one hell of a payday. anna: let's get to the business flash. lufthansa set to strike tomorrow in the long-running dispute over pay. it will affect short and long haul services. it will, after today's action by flight attendants at the groups euro wings division.
concern there will be job businesss across the in western australia. a spokesman said the outlook remains challenging for the division but would not say how many positions would be cut. the comments came after a report 500 jobs would go. abigail johnson is to succeed her father's chairman at fidelity investments as early as next month. she has been ceo since 2014 and will maintain that role. edward johnson is retiring and will become chairman emeritus. intense competition for assets and clients including vanguard and blackrock. executive removed from a position after a dispute with a resident in beijing. the company apologized after the spout aroused critical
commentaries and chinese estate media. anna: thank you. compass group, the largest contract caterer, expects 2017 to be positive. joining us is the ceo richard cousins. a warm welcome to daybreak. upbeat 2017en an expectations. positive. last time, you are not too worried about the brexit. wish we're staying and buy from a business point of view, it encompasses remarkably well-placed. only 10% of our business is in the u.k.. we are a very low risk business and we think we will do well in most circumstances. we do not believe there is a sign it will threaten us.
>> we have the autumn statement coming up, what you expect? humble chefs. we will do well whatever the circumstance. anna: fiscal spending of any kind, do these kinds have an impact on your business? >> in the short-term, no. in the long-term, who can measure? our business is to get into the business of our clients, business, education, sports, produce great food service. we are not too concerned about the clinical environment. trump: how does donald fit into your outlook going forward question marked as i anything? rides we don't believe so. we are a low-risk business. market leaders in the united states. we employ almost a quarter of a mayan people there, i think we are the ninth or 10th biggest of
lower the united states. we are not overly concerned. anna: when you look at how your business does revenue or profit, is it all about gdp? that bear level of growth in the u.s. economy? outsourcingvel of and what we are seeing from clients right across these extra is they want to our quality, our service. and they wanted at a sensible cost. our low-cost infrastructure means we can deliver that. yousef: all of the conversations around increased fiscal stimulus with donald trump or in continental europe, that is good news for you, isn't it? more contracts across the board. >> at the margin, yes. i won a one again carried away. we are a low risk business. for the down risk, the upside potential he is finite. what drives our business is sourcing trends and the ability to drive like her like revenue
growth by producing better food. inflation a concern? would price inflation? are you seeing it on the horizon? >> if you take a global view, food price inflation is modest at the moment. we brits are obsessed because of the weakness of sterling. once again, only 10% of our business so we are not overly concerned. yousef: anything on your radar about acquisitions? >> we continue small deals. not a glamorous ones, not right for our business. we spent just over to a debate pounds in the year just finish. we will continue to spend 100-200,000,000,000 pounds a year but nothing big. a you talked about it being big risk. just ahead of estimates. you had buybacks in the past.
>> we are very keen to return any cash to shareholders. in line with earnings every year. we do regular share buybacks and have been doing that for some years. a couple years ago we did a one billion pound special dividend. we want an efficient balance sheet. don't want to overdo it. anything spare, we give back. anna: richard cousins, ceo of compass group. ; 26 here in london. that will do it for bloomberg daybreak. european markets up next. futures looking positive. yousef: a tense of 1% for most markets. >> picking up from the asian session. asia pacific up by 7/10 of a percent. partying like it's 1999 in the u.s. equity market.