Skip to main content

tv   Bloomberg Surveillance  Bloomberg  January 4, 2017 4:00am-7:01am EST

4:00 am
francine: london's thinking needs to be challenged. that is the message from that of parting british ambassador to the e.u. is a hard brexit more likely? contingency planning in china. on ford and wins. the u.s. automaker is ditching plans for mexican expansion and will add products and jobs in michigan. good morning. this is "bloomberg surveillance ." lacqua in london. joining me here in london is
4:01 am
mark burgess, who helps manage more than 400 billion euros as emea chief investment officer at columbia threadneedle. first, we're just getting some pmi data out of the euro area. this is for the month of december. pmi falling to 53.7. it is still a touch above what economists expected. the pmi figures for germany and france came out in the last couple of minutes. pmiany, december services above expectations as well. france, they are a touch above expectations. falling from the month earlier, but above what we saw economists thinking they would come in. global stocks climbing. u.s. outlook is probably what investors want to focus on. traders,ok at equity they seem to be focusing on the possibility of donald trump relating the u.s. economy. if you look at the all world
4:02 am
index, it is headed for a three-week high. oil recouping some of the day's slump, that was yesterday. we also have some stockpile data. aluminum and nickel on the high. we will get plenty more. irst let's get the bloomberg first word news. sebastian: turkey has said the authorities now know the identity of the gunman who build eve.e on new year's that came after the government extended emergency rule by three months. turkey declared the state of emergency following a failed coup in july. britain's prime minister needs to be told the uncomfortable truth about the difficulties of negotiating brexit. that is according to theresa may's former envoy to the european union. he quit and urged british officials working in brussels to keep challenging colleagues in london.
4:03 am
china has studied possible scenarios for the yuan and capital outflows and is preparing contingency plans. that is according to people familiar with the matter. this comes amid increasing pressure on the currency from the dollar and concern that donald trump may take punitive measures on china's exports. a bank run by steven mnuchin, donald trump's pick for treasury secretary, may have engaged in widespread misconduct involving foreclosing on homeowners. that is according to "the intercept." hin saidwoman for mnuc the attorney general's office made no finding of any violation and took no action. global news 24 hours a day powered by more than 2600 journalists and analysts in more
4:04 am
than 120 countries. francine: thank you so much. we get eurozone inflation data in just under an hour. it will give the european central bank something to think about. consumer price growth is predicted to have accelerated to 1% in december. this islation, and where i want to bring you to my terminal chart, core inflation was probably unchanged at 0.8%. core inflation in white. blue is normal inflation. it hasn't budged since august, signaling that beyond a resurgent oil market, the ecb is seeking won't be arriving anytime soon. slightly different story in the u.s. the fomc sees three rate hikes in 2017. we would like to welcome our guest host, mark burgess, cio for the emea region and global head of equities for columbia threadneedle, where the company manages more than 400 billion
4:05 am
euros in assets. thank you for coming on. if you look at risks around the world, how do you view inflation? onre seems to be a full bet that we are away from deflation and inflation will start creeping up. think we are looking at a two-dear world. in north america, the labor market is much tighter. there appears to be some inflation pressures building up. outside of that, as you highlighted, with the exception of rising oil prices and the impact of a weak euro, inflation appears to be pretty modest. i think you've got north america, inflation probably picking up a bit, and the rest of the world, full-blown quantitative easing still in place, loose monetary conditions, and debt deflation fears. i think those are scenarios we are looking at. north america looks to be a different case. francine: who has the most
4:06 am
difficult job? if you are mario draghi, you are looking at inflation, looking at whether markets -- markets are questioning whether he's tapering, but overall, how do you deal with political risk? mark: we've got three very big elections looming this year. at least two of the parties that are going to be running with a realistic chance of having a decent outcome will have out mandates from the eurozone. that will place a significant amount of pressure on the european financial system. we've seen with the italian banks that some of the peripheral banks remain undercapitalized and the european financial system is at risk of an unwanted election outcome. francine: what is the one thing that the markets are mispricing? i want to bring you to the dot plot. if there is one thing that seems to be different, we went into 2016 with the fed saying they
4:07 am
would hike three times, and they didn't. this time, it feels like the market is a little more aligned. mark: i think that is right. i guess if there's one thing that we think the market is slightly missing at the moment, that would suggest to us that the dollar is going to have a decent year. if we get strong dollar appreciation, that historically has not been good for risk assets. if we see three rate rises in north america, it is difficult to see the dollar doing anything other than appreciating quite a lot. francine: emerging markets? mark: particularly emerging markets, but generally not great for the global financial system. francine: even if it rises very gradually? mark: certainly a gradual rise would be better than an aggressive rise. if we end the year with the dollar much higher than today, i think we will have a volatile period in markets. francine: would you say that the
4:08 am
only safe play would be to buy vix? mark: certainly, volatility, we would expect to rise from here. francine: equities and currencies? mark: markets are relatively complacent most places. a entered the year in positive frame of mind. a lot of investors were short risk assets in 2016. one of the reasons we've seen equities do so well, there's been a lot of short recovering, optimism about u.s. growth maybe leading the world forward, so i think there's a lot of positive momentum at the moment, which has the potential to be unsettled. francine: is the market going to be more sophisticated? asking youry year by the same question. are we going to have a market that is less binary? mark: i think the risks are many and complex. whether it is positive or negative on the one hand or the other hand, we've got european elections, chinese debt
4:09 am
continuing to rise, uncertainties about chinese currency, brexit, we've yet to see what trumponomics really means for the u.s. economy, rising dollar, all of those things. francine: you could argue the last six months were very complex and yet equities kept on rising at record highs. if you are a teacher in a classroom, how do you explain that? mark: i think it is the market saying, we've seen a looser fiscal regime potentially coming in with trump. we've got better growth in north america. that is positive for corporate profits and equities. francine: all right, mark, thank you so much for now. mark burgess from columbia threadneedle stays with us. sunday coming up. ford cancels a mask mexican expansion. we will look ahead to donald trump's operation. plus, did a bank run by steven in "widespread
4:10 am
misconduct?" bring you that story and the uncomfortable truth about brexit. strong words from the u.k. ambassador to the e.u. as he quits his job. this is bloomberg. ♪
4:11 am
4:12 am
francine: "bloomberg surveillance." i'm francine lacqua. here's sebastian salek. sebastian: shares have slumped after the u.k. clothing retailer cut costs and predicted a difficult 2017. it says pretax profits will be 792 million pounds, below a 800 5us projection of
4:13 am
million pounds. investors pulled $3.5 billion from jeffrey gundlach's bond fund last month. according to bloomberg estimates, his annual performance trail benchmark estimates. the fund which invests predominantly in mortgage backed securities returned 2.2% in 2016, compared with 2.7% for the aggregate index. tesla shares fell after fourth-quarter deliveries fell short of its own forecast. the maker of electric cars delivered about 22,000 vehicles in the final three months of last year. it had been aiming for 80,000. the pressure on tesla has risen following its merger with solar city, as both reported losses and burned cash. british airways is facing strike action next week after staff rejected a pay offer. cabin crew will stage a walkout from january 10, threatening widespread disruption.
4:14 am
union accuses ba of forcing recently hired staff to live on poverty pay. today. has slumped that is as investors speculate the company is nearing a settlement with the u.s. department of justice to resolve allegations of criminal wrongdoing related to faulty airbags. representatives didn't immediately comment. that is the bloomberg business flash. francine: president-elect donald trump is claiming another jobs victory as forward says it will scrap its expansion in mexico. the carmaker was targeted during trump's campaign. the ceo spoke to bloomberg following the decision. >> we would make the same decision. the main reason for canceling the plant is our next generation focus was going to be built in that plant. what we've seen is a marked decline in demand for small
4:15 am
vehicles in north america. we don't need that capacity. clearly we see a more positive u.s. manufacturing business environment under trump. we see the progrowth policies that he's outlining and the tax and regulatory reforms. this is a vote of confidence that he can deliver on those things. francine: political uncertainty, rising populism, and policy divergence will dominate in 2017, according to mark burgess. cio for emea at columbia threadneedle. when you look at trumponomics, the market is pricing in a lot. unless donald trump exceeds expectations, the market will go through some kind of correction. mark: we think the market is placing a fairly benign outlook on trump.
4:16 am
clearly, domestic u.s. equities have performed well. particularly small and mid-cap's. if you take a step back from that and look at some of the things he said in the run-up to the election, if you take into account putting in place migration restrictions, trade barriers, that is not progrowth. i think the market is saying, we are giving him the benefit of the doubt that he's going to do the good things and maybe not the bad things for the economy. we have yet to see how much he follows through on. many things he said in the election campaign, he backed down from. francine: what do you make of this forward story? his communications through twitter, if you are managing a portfolio, does that make you nervous because you can't figure out what he means, or that his tweets are sometimes so in your face that you don't understand the consequences? mark: i think if you follow and
4:17 am
manage portfolios in line with what donald trump is tweeting, down that path lies madness. francine: you just ignore them? mark: i think you have to take a longer-term view. what is the likely outcome? he appears to be very pro-business. the cabinet that he's put in place appears to be pro-business. it is quite right wing. the republicans feel they've got a mandate to get stuff done. regulation, lower taxes, make the u.s. a more business-conducive environment. all that is positive and the has responded accordingly. if you look at some of the other policy measures he was talking ,bout when he was campaigning trade wars and curbing migration, that is not positive for economic growth. if that does come through, i would expect a pullback in u.s. equities.
4:18 am
francine: you could argue that in very simplistic terms, the way donald trump delivers on what he's promised is getting ceo's to invest. a lot of u.s. companies are sitting on cash. they just don't have the confidence. will they either, because they think the prospects are better, or because they get intimidated, that they don't want to be named and shamed on twitter? mark: i think there are two reasons we haven't seen investment. one is a lack of confidence. second is buying back your equity in a zero interest rate is an easier way to get your stock price up. i think if we see interest rates start to rise and we see confidence building in the u.s. economy, there is a prospect for increase in u.s.. francine: the problem is the dollar. if the dollar is too high, it has a repercussion on treasuries, which makes it difficult for donald trump to
4:19 am
fund the infrastructure projects. it is almost a catch-22. mark: we were talking about this before. the pace of change of dollar appreciation is something we are placing a focus on. that will affect government brave your, consumer behavior, company behavior. francine: mark burgess from columbia threadneedle stays with us. run by steven mnuchin in gauging widespread misconduct? we will bring you the story next. this is bloomberg. ♪
4:20 am
4:21 am
4:22 am
4:23 am
francine: this is "bloomberg surveillance." a bank run by steven mnuchin, donald trump's it to be treasury secretary, may have in gauged in widespread misconduct while foreclosing on homeowners. that is according to a leaked 2013 memo. the memo doesn't same a niche in took part in or knew about alleged misconduct. let's get more with stephanie baker, mark burgess also still with us. stephanie, how bad does this look? is it something that looks bad but isn't that bad or does it really hurt his chances of being confirmed? >> i think it hurts his chances. it mortallyr if wounds his chances. i think what could be more damaging is more people coming out of the woodwork in the
4:24 am
withg weeks and months stories of how they were foreclosed on by one west. that could be an ongoing story that could damage him going forward. new stories coming out, very personalized, of people losing their homes and steven mnuchin being the one to blame. francine: and this was when he was working at goldman sachs? a foreclosedover bank in 2009, renamed it one west, and sold it in 2015. he personally made, according to bloomberg calculations, as much as $830 million. that does not look good, a former goldman sachs partner pocketing $380 million, individual people losing their homes. if you believe what the california i attorney general's office is alleging, he was backdating mortgage
4:25 am
documents to ease foreclosures. this doesn't look good. i saw a tweet from elizabeth warren urging people to come forward with stories. francine: do we know why the investigation was dropped? >> according to mnuchin's spokeswoman, the state attorney general's don't have jurisdiction over a federally regulated bank. whether or not there's more to the story, we don't know at this stage. francine: i saw some polls. do americans care about this stuff? >> i think they would care insofar as, if you can onsonalize it with joe blow main street or whatever losing his house. i think that story could play out for a while and do some real damage. like i said, is the republican ,arty willing to take chances delay a treasury secretary from coming in? that remains to be seen.
4:26 am
francine: mark, if it does take a bit of time for the cabinet to be confirmed, what does it mean for volatility or how you see the markets? mark: i don't see it as a huge deal for markets. if your first choice treasury secretary doesn't get -- it is not great. it is not a great first move. francine: thank you so much, mark and stephanie. cio atrgess, emea columbia threadneedle. the u.k. prime minister needs to be told the uncomfortable truth about the difficulties of brexit, very strong words from ambassador as he quits his job. this is bloomberg. ♪
4:27 am
4:28 am
4:29 am
francine: this is "bloomberg surveillance." i'm francine lacqua in london. let's get to the bloomberg first word news. sebastian: the euro area economy finished 2016 with the strongest
4:30 am
momentum in one in more than 5.5 years. the compass o composite purchasing managers index rose the most in months. we will bring you that eurozone inflation data at 10:00 a.m. u.k. time. turkey's prime minister has said authorities know the identity of the gunman who killed 39 people on new year's eve. that comes after the government extended emergency will buy three months. arkey originally declared state of emergency following a failed coup in july. china has studied possible scenarios for the yuan and capital outflows and is preparing contingency plans. this comes amid increasing pressure on the currency from a resurgent dollar, rising capital outflows, and concern that donald trump may take punitive measures on china's exports. the state administration of foreign exchange in reply to a request for comment. donald trump is claiming another
4:31 am
jobs victory with ford scrapping a planned car plant in mexico. plug onany pulled the the project, saying it would --nd one of the dollar some of the $1.6 million saved in michigan. >> clearly, we see a more positive u.s. manufacturing business environment under president-elect trump. we see the progrowth policies that he's outlining and the tax and regulatory reforms. this is a vote of confidence that he can deliver on those things. sebastian: global news 24 at was a day powered by more than 2600 journalists and analysts in more than 120 countries. francine: we are getting data out of the u.k. mortgage approvals short of expectations. construction far better than what economists had been expecting. let's go through the mortgage approvals for november.
4:32 am
67,505.e to november, remember, is quite volatile. we know that house prices overall in the u.k. have remained stable. maybe people are putting it off for a little bit because they don't know what brexit will bring. one thing that we know brexit has not dented is retail sales and construction. we are getting u.k. december construction pmi figures. that rises to 54.2. economists we spoke to were forecasting 52.5. that coupled with what we know or don't know about brexit, when you come down and boil it down, the u.k. prime minister theresa may needs to be told the uncomfortable truth about the difficulties of negotiation. that is the warning from her former envoy to the e.u., who quit yesterday. his departure is seen as increasing the prospects of a
4:33 am
hard brexit. let's welcome steven barrow, head of fx strategy at standard advisory london. thank you so much for joining us. mark, thank you for sticking around. when you look at pound, we are expecting a lot of volatility. pound weakens further from here or is it priced in? steven: a good deal is priced in. sterling-dollar is concerned, i'm bullish on the dollar, so i think sterling will fall further as a consequence of that continued dollar strength, rather than independent sterling weakness. i think we've seen double boko independent sterling weakness as a result of the brexit decision and concerns about the hard brexit issue. brexit,: is it a hard which means that we sever all ties with the e.u.? steven: i suspect that the market is priced somewhere between that and the soft brexit.
4:34 am
like most of us, we're unsure what sort of brexit will occur. we are also unsure about at what point we might get some inclination of what sort of brexit might happen as well. everyone talks about this as being a crucial year in terms of negotiations. but we've learned so little so far. who is to say that we will learn a lot more about what sort of brexit we're likely to get? my view on sterling is that sterling-dollar will fall to 1.15, 1.20 range. a little lower than now, but not a replication of the collapse we saw in june. francine: mark, how do you model brexit? mark: i think we are getting a big sense of security at the moment. we've had a shot forward in sterling which has boosted the economy. we've got accommodative monetary policy. we've extended the qe program. but we are still part of the
4:35 am
e.u. thomas so we are able to trade freely with our largest trading partner. until we start to see more clarity, it is very difficult to start making long-term plans. certainly i would say that we think sterling is beginning to look quite cheap. en, ild agree with stev would expect the dollar and sterling to depreciate against the dollar, but maybe not against other currencies. francine: let me bring you to my terminal. this is the pound index. you can see the big drop on june 23, the early morning of june 24, and this is what we're seeing in terms of gdp forecast. would you own anything in the u.k.? do you still by the ftse? how do you position your portfolio given that we don't know where we will be? steven: in terms of the
4:36 am
portfolios we manage, the international exporters, as well as energy companies, perform very well. we think they increase the value in the cyclicals and companies that have underperformed the ftse by quite some margin. some of the more domestic names are beginning to look quite cheap. francine: what happens if the eurozone implodes? i'm not saying it will, but 2017 is quite volatile. what does it mean for euro? steven: in terms of euro against the dollar, the target that we have is $.95. we are looking for the euro to fall quite a bit further than many analysts are looking for. as far as euro-sterling is concerned, i think the outlook is for some degree of -- i ay stability, but the forecast is for 85 pence. maybe that kind of range.
4:37 am
the problem is that around that range, we could see quite a bit of volatility, depending not just on the brexit negotiations, but the political events in europe this year. are you: how long expecting brexit negotiations to go on? we can't really start anything before we have a new french president. do we need the confirmation also of the german chancellor? mark: i would think that is pretty important. i would expect negotiations to star in earnest in autumn. it is going to be very difficult. clearly, and i think one of the things that e.u. resignation has highlighted, is the e.u. has an army of negotiators. we are in a difficult position. francine: so yesterday we had the news of the u.k. ambassador
4:38 am
resigning with a memo that was pretty brutal in terms of intimating or insinuating the reasons why he left. do you look at that and change your portfolio or take a longer-term view? otherwise every week you would be changing your exposure. mark: i think you have to take a long-term view. it highlights that we are ill-prepared for what is likely to be a seismic event for the u.k. economy. francine: when do you see negotiations -- we know they will start in march. where do you see them ending, steven? steven: white some period of time. the problem with the exit negotiations is the timetable is on the e u's side, as well as the manpower argument has just highlighted as well. i think the key issue for the u.k. would be to try and make sure that the talks are elongated sufficiently over time in terms of the new relationships between the u.k.
4:39 am
and the e.u. once the u.k. has to have allow the u.k. a relatively strong position. i share the view that the odds are very much against the u.k. in this, and hence the resignation perhaps wasn't surprising, that we saw yesterday. francine: steven, thank you so much. steven barrow and mark burgess from columbia threadneedle oath stay with us. plenty coming up including contingency plans in china. we look at the options being considered to back the yuan. plus, eurozone inflation data. those figures are out. later, as trump leans toward russia, could europe lose an important ally? we will talk to local risks for 2017. this is bloomberg. ♪
4:40 am
4:41 am
4:42 am
francine: this is "bloomberg surveillance." let's check in on the markets right now. here's nejra cehic. nejra: let's start looking at the gmm function on the bloomberg. you are seeing a mixed picture in equity markets. the dax a little weaker. portugal up a little. euro up 0.3%. stronger sterling up 0.3%. little bit of downward pressure on the front end of the european yields. if we look at commodities, you are seeing brent crude rebounding after closing down more than 2% yesterday. what is interesting with european stocks, if you look at the stoxx 600, we saw gains in asia off the back of that data in the u.s., and generally asia has been performing well, but
4:43 am
that hasn't really fed through the european stocks. they are halting the new year rally. as you can see, the stoxx 600 was pretty languid and delayed at even entering that bull market. the ftse 100 went into that bull market back in july. the msci all country world index did it in november. if we dig into various sectors on the stoxx 600, the overall benchmark a little weaker today, it is the consumer discretionary that is under performing, and in particular retail. it is multi-line retail, and among that, next as the worst performer, very much having negative reverberations through the u.k. retail sector after it cut its annual forecast and predicted a difficult year. it is often seen as the bellwether for u.k. retail. by the way, dropped
4:44 am
as much as 14% for next, the most since the brexit vote. ono keeping a close eye dollar-yen. we were seeing the yen we can for a fourth day. you are seeing the yen a little stronger. if you are a dollar bowl and you are fretting about the steepest gains in 20 years, you might want to check out this chart. it is showing the real yield cap between the u.s. and japan has widened to the most in a year as the correlation has also strengthened. that might signal the best is yet to come for the greenback. francine: thank you so much. china is considering options to back the yuan and curb currency outflows according to people familiar with the matter. the reported plans come amid increased pressure on the yuan from the dollar and concerns that, trump could crackdown on imports from china. let's speak to our asia emerging
4:45 am
markets editor. robin, how unusual is this move by china? fact that they are preparing a contingency plan, we've had the pboc and others devalue their currency, create a sort of market uproar in 2016, and throughout the year they have been doing pretty much suited them in the currency were not veryhey concerned about what happened elsewhere. but the very fact that at this time, what is different is they are looking to kind of react to overseas movements in the dollar, etc., that is slightly ominous from my point of view. the fact that they have to go to such lengths makes betting on currency,cy, for the slightly problematic. if you look at it from the market's point of view, when we put out the story this morning, we had an immediate reaction in
4:46 am
the offshore and the onshore yuan. the onshore yuan was the best performance in asia. the market is seeing that as a slight positive, expecting the pboc will not let go of the currency completely. this time, this contingency word , makes it seem slightly more ominous. the problem, robin, is we talk about this trinity, which is not the yuan itself. can the pboc control it? you also have outflows and reserves. >> that is the problem. inve seen the pboc step several times over the past year, year and a half or so. what they have succeeded in doing, even if they intervened a little bit, they succeeded in guiding the market. we've seen in december, november, the pboc officials, chinese officials, talking up
4:47 am
the currency. we've seen support for the currency here and there. handled widespread ethics on the markets so to speak. this time, there is a lot of weakening against the yuan. the pboc cannot control what the dollar does. at this time, it is more a dollar story. if trump does make good on his threats to do whatever he's said he will do, brand china a currency manipulator, impose tariffs on chinese exports to the u.s., that could spell a lot of trouble. i think people are concerned about what will happen after he takes over. francine: thank you so much, robin ganguly, asia emerging markets editor. let's get more with steven barrow and mark burgess. i'm not sure whether it is a trade war story or whether it is all about the yuan.
4:48 am
can the pboc stem the decline? it can, if push comes to shove. we've got a lot of reserves. we get data for december this week or perhaps next week. it looks like china will shed another $50 billion worth of reserves. these reserves are coming down sharply. they are still about $3 trillion. there's a lot to go through before problems emerge. year, istage of the think the market has been anticipating that there could be quite a lot of pressure on the renminbi, partly because we saw pressure this time last year. everyone is aware of the resetting of individual limits on how much foreign-currency individuals can hold. may have beenre some anticipation in the market that there would be some pressure at this stage. maybe the fact that we haven't seen it yet helps explain a
4:49 am
little about why the renminbi improved overnight. generally speaking, our view is the renminbi is going to weaken the target for dollar-renminbi. francine: mark, if you look at china, and china could possibly be the biggest risk in terms of the economy and trade wars, what are you more worried about, the huge economy that you need to shift, and it will be volatile and messy along the way, especially when you talk about this trinity, or is it a possible trade war? mark: i think it is more how they affect the rebalancing of the economy. we've seen growth continue to come through as a result of investment in infrastructure. debt to gdp in china continues to rise toward all-time highs. how they rebalance away from inward investment towards a more consumer-based economy without seeing growth fall very sharply,
4:50 am
and how that might impact the world, i think that is the biggest risk now. francine: it will take what, 5, 10 years? mark: who knows? certainly not in the next five months. getting the economy shifting away from the traditional investing is going to take some time. they cannot continue to expand at the pace it has been rising without some financial accident happening at some stage. francine: which would be on the banks? mark: some of the banks look very undercapitalized. there's a looming bad loan problem which they are endeavoring to cover up. they have so far succeeded. the near-term risks don't appear to be huge, but the pressures are building. at some stage, the rebalancing has to occur. francine: mark burgess from columbia threadneedle. ," weg up on "surveillance
4:51 am
will break those crucial eurozone inflation numbers for december. we are also talking about pound and euro. this is bloomberg. ♪
4:52 am
4:53 am
francine: this is "bloomberg
4:54 am
surveillance." let's talk banks. as the 18 industry groups on the july, banks,nce the best-performing up some 50% from the july low. let me bring you to the bloomberg terminal. in white, this is the white line, the sickly the europe 600 banks prices ratio, going up a touch, especially when you bring it back to that low in july. this is not the share price. it is the price-to-book ratio. this is the credit for a lot of these banks in europe. it is the blue line. it is going a touchdown. mark, when you look at this picture, the base is very low. it is as much a problem with business models as with interest rates. where do you see financials in europe going? mark: i think they struggle from here. to thesponded positively prospect of better growth in
4:55 am
north america. they've got the yield curve back as we see bond markets so off. but i think in terms of credit formation, their ability to generate profits, i think it is still a challenging environment for the european banks. many of them require more capital still. we have to get through that. seeing banks make headway from here is difficult to see. francine: will we see new business models or do they automatically suffer because wall street gets deregulated by donald trump? mark: the u.s. banks appear to be getting an improved competitive advantage from the policies of the new government in north america. in europe, you've got the double headwind of needing to retain earnings to boost capital, not being able to extend credit into the real economy, weak economic growth, and a difficult outlook for profits more broadly. if you compare that with north
4:56 am
america, much better capitalized growth is clearly much greater. it looks to be a much better environment. regulation appears to be looser in north america. francine: thank you so much for all your time this morning. what a great way to start the year. mark burgess from columbia threadneedle. "bloomberg surveillance" continues in the next hour. tom keene joins me out of new york. we will kick off the conversation with jeremy stretch and christian schulz. we will be talking more about political risk, about where they see euro going, where they see dollar going, the reflation of trumponomics, and steven mnuchin. this is bloomberg. ♪
4:57 am
.
4:58 am
4:59 am
inflating expectations, stronger euro zone
5:00 am
cpi could give the ecb room. we break the data as it crosses. currency works on, china set to consider options to back the following you on adding to concerns over a wider capital controls. -- negotiating expertise is in short supply, the possibility of a so-called hard brexit. welcome, this is bloomberg "surveillance." tom keene is back in new york. i hope you are well. we need to get to work because we have some inflation figures in the eurozone. thantle bit better estimated, euro area december inflation rate writing to 1.1%, median estimate was 0.1%. it is a touch above expectations. this is probably what we need to look at, euro pouch check or euro-dollar check. draghi's job mario
5:01 am
easier. tom: a theme is, there is a little bit of good news out of europe, good guess over the past couple of days, we have underscored that europe is doing a lot better in a business sense that all the political uncertainty out there now. francine: a problem, looking to inflation, important for the eurozone compared we were almost lothe brink of deflation, a of the expectations for future inflation depends on the price and oil surging and we note they probably will not do anymore from january onwards if opec does not sheet. -- cheat. let's get to the first word news first. militantshas arrested believed to be involved in the nightclub shooting and -- the turkish media have aired new video of a man believed to be the attacker, a selfie video as he walks through istanbul most
5:02 am
famous square. in turkey, parliament has extended emergency rule for another three months, they oppose the state of emergency after failed coup in july that led to a crackdown of supporters and u.s. based muslim clerics. since then the government has arrested 41,000 people. rebels and syria have suspended talks about plans these negotiation, they city syrian government has been breaking the cease-fire, the truce was negotiated last month by russia and turkey, designed to lead to talks later this month and syria -- to finish syria's civil war. donald trump says his intelligence briefing on allegations the russian government packed democratic campaign you males has been delayed. he wrote on twitter that the intelligence briefing on so-called russian hacking was perhapsuntil friday, more time needed to build a case, very strange. one official said the
5:03 am
intelligence briefing was set for the next few days and had been scheduled for yesterday. by -- i am powered taylor riggs, this is bloomberg. tom: let's get to one data board, the markets are so quiet, why screw around with a second data board, futures advance again, a little bit of risk on but nothing like the jump condition yesterday, the euro 1.03. oil, i put up there because i am bored. francine: similar to what i look at, if you look at stocks overall are climbing and oil is rising. 52.69, we are looking at yen. tom: francine and i never talk about what we will do on our data screens. , that isverlay things important where she shows the euro and i show it as well, the parity watch is out there through january and into
5:04 am
february. carmen reinhart has been fabulous. pieced a fabulous opinion over the holiday on the dollar and is different -- and it is different, this is japan gdp back to ronald reagan, 1980, here is the plaza accord peak, 6%, iten, japan gdp was ain't there now. gdp downation from 6% to next to no economic growth 2017 is strong dollar in different than the strong dollar in the time of ronald reagan. that is important insight. francine: it is an something we need to watch very closely. this is my chart, a simple inflation chart for the eurozone that we broke it down for core inflation and just normal
5:05 am
inflation, core inflation if you strip out food and energy prices, that is the white line. this is the blue line, for the month of december, above expectations, 1.1%, core inflation, at 0.9% which means it will give the ecb something to think about when policymakers meet later this month. the price pressures the ecb is seeking do not seem to be arriving soon because this better than expected figure seems to be led by energy prices. joining me is the director of european research at citigroup will markets. -- global markets. thank you for joining us. it is important because mario draghi needs to be short we are not in deflationary pressure, are we still in the danger zone? >> the ecb in december decided to reduce the monthly purchases from $80 billion a month to $60 billion a month onwards. until the end of this year, they
5:06 am
have pretty much locked in, they have said what they will do this year and will not change interest rates and purchase at the rates they have announced. but they said that if the economic picture and price deflation picture is disappointing, they could ramp up purchases back to $80 billion or even more. of the earlynce date of this year, rising inflation, strong confidence indicators, it would seem the by decision is a validated that and the ecb would not need to raise asset purchases again but they are buying a lot and keeping interest rates low. francine: if we have a populist movement, marine le pen, president of france, or something maybe less violent but dot as big, does that -- inflation expectations in europe go higher? >> we could see that scenario playing out but it is certainly not our best a scenario, the rise of populism pass or
5:07 am
increasingly getting near its high water mark, i am not expecting that scenario to play out through the course of this year. we could see a deviation in terms of the macro economic policy if we did see much more populist set of governments across the eurozone. inflation expectations are obviously important, clearly those will be dynamic in terms of the ecb outlook but i think it will be the case that through the course of this year, we may well see the euro testing the lows in the nearer term, probably towards the backend we will see the euro in a much stronger position, still cheap but much stronger than current levels. tom: thrilled you are both with us, worldwide, i want to introduce something i will be talking about a lot this year, that is bringing our charts directly to you if you are with the bloomberg terminal. jeremy, let me go to you, this will be out t atd go -- at
5:08 am
tdgo, this is euro swissie, a historic date where the swiss give up their bombarded with money coming in, jeremy, and christian to you, i am intrigued by this rollover in swiss franc strength. what does that signal, that with all the dynamics of the swiss national bank, we got a strong swissie, near a tipping point. what does it signal? >> the swiss franc is at levels that the swiss national bank would be relatively uncomfortable with. we look at the continued ramping up of foreign exchange reserves that underline the fact that the swiss authorities are still trying to alleviate some of that strengthened the currency and i think it underlines some of the risk factors we are seeing, investors seeking some degree of safety within the european target. that is inevitable in the
5:09 am
context of the uncertainty we are seen as we start this year, particularly from the political dynamics in europe. with how me christian and control mario draghi is here if i have eurasia group talking about european risk, jeremy talked about the underlying indicator, the swiss franc, how in control is mr. draghi? >> that is a good question. his narrow mandate is to keep prices stable and that means, any definition of the ecb over the medium-term to get inflation around 2%, the german figure for december 4 inflation was 1.7% would suggest that mr. draghi's policies are paying off. as we have highlighted, and a lot of that is because of erratic factors, energy and food prices, holidays, mr. draghi need much more evidence of underlying inflation coming up and francine highlighted core
5:10 am
inflation is only .9%, to really show that he has succeeded and what he is trying to do but the other component, the role of the ecb in keeping the eurozone together, that worked very well draghi put inario place a safety zone for the eurozone but that depends upon governments wanting to stay in the euro. if that changes this year and there are political risks around the netherlands, france, many other countries in the eurozone, mr. draghi is much more powerless. tom: christian scholz is with us stretch, and our next hour on the u.s. bull market, everybody missed the stock market except one of the -- tony dwyer will join us, a perfect time to recalibrate on the mother of all stock markets. this is bloomberg. ♪
5:11 am
5:12 am
5:13 am
francine: welcome to bloomberg "surveillance." tom and francine from new york and london. let's get to the bloomberg business flash. >> the euro area i one measure that is the year with the strongest momentum and more than five years. a composite purchasing manager index climbed to its highest level in 67 months according to the analytics firm. they said strengthen manufacturing and services was due in part to the weaker euro. the outlook may be turning bleak for british retailers, shares of closing chain next plunged after they cut its annual profit forecast and predicted a difficult year ahead. hurt by weaker growth online and a slump in the pound makes overseas production more expensive. a federal judge has/they billion dollars verdict against johnson
5:14 am
& johnson over artificial hips, the judge said the jury's unitive damage award to six patients were excessive, that wipes out almost $500 million johnson & johnson would have to pay for the faulty implants. that is your bloomberg business flash. francine: thank you. china considering option to back the you one and currency outflows, according to people familiar with the matter, he reported comes over increasing pressure from a resurgent dollar and concerns that donald trump will crackdown on imports from china. we are back with christian scholz and jeremy stretch. if you look at yuan, first of all, how much of an unusual move by china is this? >> i would not say it is necessary unusual, we have seen concerns about foreign outflows over the course of recent months. we have seen foreign exchange
5:15 am
reserves gradually diminishing so in a sense it is unsurprising in that context. we have seen the chinese having this annual quota to translate money into foreign currency but there will be increased scrutiny of those flows going forward and that is important, particularly for certain real estate markets and vancouver and particular in relation to our own bank in terms of the canadian real estate market. there will be increased 20 of lows and the chinese are mindful of and on flow -- a torrent of outflows and applications that would have for the underlying dynamic. francine: will it work, can they manage that? we talk about the unholy trinity. yuan,ng reserves, weak and the outflow continuing? indeed, that will be the difficult point, a trifecta of concerns which the previous attempted to manage, i think they will not necessarily stem
5:16 am
the outflow, we will continue to see the chinese currency depreciated against the u.s. dollar, certainly through the first half of this year but you could turn that around and say that it is the u.s. dollar appreciating against china. if you look at the currency basket, you get a different perception, the changes in the currency basket over the new year time were noted in that currencies,r emerging-market currencies will perhaps have an effect on the basket. i wanted to where go, the classic cliché, canaries in the coal mine, let's bring up ringgit, what you need to know is that the malaysian ringgit is weaker than it was in 1997. in 1998. that is one tea leaf and it speaks to the adjacency that beijing face and see that faces,
5:17 am
how important are these weakening smaller currencies to china? >> there will be an obvious correlation between some of the pressure, these emerging currencies, as the dollar appreciates, that has an impact on the dollar liability, a lot of the em countries which have ramped up dramatically in the post crisis world. there are uncertainties in that regard, you can argue that we have seen changes in the structural position since the asian crisis in the late 1990's would suggest that they are not in the same position they were during that time but clearly there will be pressure points which will continue to be seen and i suspect we will continue to see the dollar making gains, certainly in the first half of this year against those em currencies. tom: an important statement, the dichotomy that is out there, let's bring up this chart, this is on the bloomberg terminal for
5:18 am
our global wall street audience, you can copy directly my log. this is way cool, this is log malaysian ringgit back one million years. very cool and new service we cap, thanks to evan newman for really making this a smart function, tvgo. we will come back and talk finance, economic, we talked brexit, we will speak with david blanchflower of dartmouth. looking forward to speaking with the professor today about his wales and england. this is bloomberg. ♪
5:19 am
5:20 am
5:21 am
5:22 am
francine: the turkish president talking in ankara. this is one of his first addresses to parliament since the istanbul nightclub attack. he has and is saying that the assembled nightclub attack aims to set turks against each other and fall line something he says his country will not fall for this game, he says the lifestyle is under threat in turkey and that turkey will not surrender to terror. they are calling for terror support. he said he never used his position to intervene in anyone's life, a personal
5:23 am
address of current to the nation which has been deeply divided by the latest terrorist attack. the morning must-read. brexit in a bloomberg view, a political risk for the u.k. come he says yes that brexit will not -- will be painful. on theicle is based article is based on sterling depreciation, he said brexit will be painful but the ultra-gloomy prognosis that formed the economic backdrop to sterling's initial slump has been replaced with a more nuanced analysis. christian, how do you view this? the weekend pound helps the economy, outstanding figures today, will we get a big shock from brexit or does it mean we are stronger to weather the storm? >> the party post-brexit, because of weak sterling,
5:24 am
especially for exporters, things look quite right. we have not had the hangover which will come next year, which is weak sterling driving up import prices which is ultimately going to hit consumers whose wages are rising i about 2% per year, inflation will be at 3% per year so real income and purchasing power will decline next year and most of the strength in the u.k. is the resilience of the u.k. economy has so far come from the consumer, if the consumer comes under pressure, the going will get much tougher. the other big problem is that we still have no idea what the brexit will look like. talk about hard brexit, soft brexit, we will not know what it will be before 2019 even if the government sticks to its time plan. there will be uncertainty and perhaps growing uncertainty as the process begins next year. about what will it be, more
5:25 am
volatility in the currency. francine: tom keene showed up and went straight to paris, the count -- >> thank you for supporting the economy. francine: how long can this last? >> the u.k. economy cannot count in,verseas consumers coming there will be a hangover, faced by the domestic consumer as we go through calendar year 2017. before i left the office this morning, we had consumer credit numbers for november and credit card borrowing is the highest doom andce 2005, the depression pervading in the immediate aftermath of brexit has been at least pushed aside temporarily but how long can consumers maintain that momentum? how keen are the monetary authorities, the bank of england, to foster their relationship because they are mindful of the risk to the macro environment. there will be those concerns
5:26 am
that will continue to bill through the course of this year and i agreed that we do not know about the political dynamics and some comments from the outgoing ut eu ambassador -- u.k. eu it ambassador -- brusselsng over from that to the united kingdom, coming up, we will speak with michael of jpmorgan on the new post donald trump terminal value. that is an important interview. theof our church now on terminal, you can copy our charts in real-time. tvgo. the beautiful new york. ♪
5:27 am
5:28 am
5:29 am
tom: worldwide in london and new york, it is bloomberg "surveillance." francine lacqua and myself back together, we were apart for four weeks or five weeks or six weeks, good to be back.
5:30 am
on economics, finance, investment, international relations, all -- we will get to that in a moment. give us taylor riggs. covering avy smog third of the cities in china, the concentration of the most dangerous types of pollution 20 times the recommended limit your tiananmen square today. hundreds of flights delayed or canceled. ambassador totish the european union has a warning for prime minister theresa may, ivan rodriguez says that she needs to be told what is the uncomfortable truth about brexit, he warns that she lacked experience negotiators and told her to challenge model the thinking coming his resignations is seen as increasing the chance from a disruptive exit from the eu and the canadian prime minister justin trudeau has stressed his country's strong ties to the u.s. in a video message to america lawmakers. canada isress that
5:31 am
the biggest international customer for goods and services made in the u.s., and offered to open talks on the north american free trade agreement which president-elect donald trump has criticized it the fight over obamacare begins today in the new congress, president obama goes to the capital to give democratic lawmakers advice on how to i the republican effort against the affordable care act. mike pence will discuss a strategy with republicans who plan to repeal obama care but what -- have not said what they will replace it with. local news powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. taylor, thank you, 2017 could be the year active fund management strategies make a comeback, a big opportunity for unconstrained bond funds which had one of their better years in 2016 and could fare better under a higher interest rate environment and the leadership of donald trump. joining us is christian scholz,
5:32 am
director of european research at citigroup and jeremy stretch, head of -- of cibc capital. the million dollar question, can donald trump deliver his promise of creating jobs, relating the economy, and giving the ceos a lot more -- confidence to invest the cash files, can he under deliver because so much is priced in? >> that is a increasing concern, one of the reason we are seeing market performing relatively well postelection is the presumption we would see reduced regulation in the financial sector and reductions in tax. and potentially investment flow from some of the corporates when sensing massive's holdings of u.s. dollars offshore. there has been a great deal of optimism which is a realistic concern. cuts, the income
5:33 am
of multiplies, relatively low, not the drive in dynamic in terms of growth we might have hoped for. i think the ability of the fiscal expansion in the u.s. and the impact that will have immediately in the u.s. economy will be overstated. francine: what does that mean on currency? -- significantly strong dollar not something the u.s. economy can withstand up this point. campaigned onp the idea that he wants to bring back jobs to the u.s. and having a strengthening u.s. dollar is not necessarily consistent with that message, if we look at it currency. that has moved dramatically in the last few weeks and terms of dollar-yen has provided exports competitive advantage for the japanese economy which is the opposite to the message he would like to proceed, that will be the interesting juxtaposition of the policy agreement that his
5:34 am
policies theoretically could be implying a stronger dollar but that makes it more difficult to translate that into his policy platform. the i like how you go to strong dollar, extraordinary interviews to start the year with abby joseph cohen wing, nouriel roubini, none has been more interesting, lawrence summers, the fourth u.s. treasury secretary, the professor at harvard, larry summers was scathing yesterday on bloomberg "surveillance." here he is on the president-elect and uncertainty. >> a moment of a extraordinary thertainty to extend markets not to appreciate, there are prospects that things could work out well at least for some but there are enormous risks to the global economy. tom: we thank professor summers
5:35 am
for joining us, that was from jamaica where he was vacationing and we really thank him for his effort to join us to start the new year. christian scholz, the point of professor summers comest donald trump economics in the textbooks you studied? stimulus, plus protectionism, them together are not usual but not unheard of. i think the interesting thing and i think jeremy hinted toward that, the timing of these things, it will take time for the fiscal stimulus to come through to parliament and to affect the economy, the positive boost which is already priced into the exchange rate and interest rates, has only -- will only help the economy from 2018 onwards if things go well in the short run, higher dollar and higher interest rates are negative for the economy. the going will be more difficult in 2017.
5:36 am
what could make things more complicated, that is what professor summers said, anti-globalization and protectionism policy mix coming through could hit us quite quickly and quickly be bad for the global economy, especially for some parts of emerging markets in particular. i agree there is enormous risks and the timing does not look favorable. tom: jeremy, help me, going to the chart, copy this chart, help me with the amount of dollar move which destabilizes the global system. here is the bloomberg dollar index, great mathematics, a legitimate index, what concerns me is if i get a 10% move, that is different than a 5% move. p or is unimaginable, what is the level of move you would forecast for a blended u.s. dollar?
5:37 am
>> we are getting to the levels which are becoming increasingly troublesome or problematic for the u.s. letuld not expect a 5% alone a 10%, i do not think it would be catastrophic but very challenging for both the u.s. and or the global system. i would identify with some of the comments christian just made about the risks of protectionism and particularly in particular with the global growth scenario. from a dollar perspective, i do not expect we would see the 5% appreciation in the same way i would not expect a substantial run through parity in euro-dollar. 101, the idea of china exporting deflation, if i get a strong dollar, weaker currencies, do you buy the idea that we will enjoy deflation or disinflation from these currency dynamics? >> we have seen it before. tom: yes. >> emerging markets currencies
5:38 am
going down, exporting deflation helpe economies, that may at times when advanced economies are rising as we have talked about in europe. that may be a bit of a positive counterbalance in a sense. francine: trade wars, do they mean a possible recession globally? if you have a proper trade war, what is the endgame? >> not a zero-sum game where there is winners and losers, everybody loses in the end if we are doing things in the wrong laces and distribute resources in the wrong way across the globe. the u.s. will be losing just as emerging markets and europe will be losing. eventually this would be bad. we are still at the beginning and once donald trump is in power and once he starts negotiating some of these trade deals, perhaps with nafta, he will have hopefully that reality shock and things will be more
5:39 am
drawn out at least. we will have more time to adjust. tom: this has been superb on economics and the international ramifications of a president-elect, the inauguration january 20, we will turn to the equity markets in the next hour, we have undercover this, my fault, we have to get on board with an equity analysis. we will do that with anthony dwyer. who has takenbull a little bit of the chips off the table. and i were next hour, worldwide, 20 dwyer. this is bloomberg. ♪
5:40 am
5:41 am
♪ :00 ine: i am president london and tom keene -- i am a francine lacqua in london and tom keene is in new york. lower,es of tesla motors
5:42 am
the electric carmaker reported fourth-quarter deliveries that fell short of its own forecasts, they blame short-term production issues, it has a history of setting ambitious goals and missing them. ford and toyota are among the automakers for me ill at -- developing industry standards, they are try to prevent apple and google from controlling how drivers connect smartphones to their cars. carmaker is concerned that take giants may control in car infotainment. attendance at british airways plan a two-day strike next week, union members projected the latest pay offer does rejected the latest playoff, the airline said it was 7% over three years, the first strike by british airways flight attendants since 2010. that is your bloomberg's nest/. -- business flash. francine: vonnie: the turkish vonnie: parliament extended an emergency rule three months.
5:43 am
joining us is our news reporter from abu dhabi, the president of turkey talking at the moment, quite unusual for a president to talk about fx, asking state banks to lower interest rates. to sell fx, not to buy fx, stock picture, president erdogan. yes, it is not unusual for them to talk about fx in particular, just late last year he was instructing the entire domestic population to go out and support the lira and to sell foreign currencies. this is sort of par for the course. the interesting thing is that strategy has not been working, the vera dropped to a fresh record low yesterday off the back of the horrific terrorist attack in his double but off the back of deflation that came in
5:44 am
much hotter than expected, we had annual inflation coming in at 8.5% in december versus expectations of 7.6%. that's all the lira depreciate further -- saw the lira depreciate further, normally with inflation hotter than expected, the currency may be appreciates on expectations the cut -- the central banks could raise rates to do something about it but given the intertwining of politics and monetary policy in turkey now, the consensus is that the central bank will not move to raise rates or definite dampenon anytime soon -- inflation anytime soon at the risk of upsetting politicians. francine: is there a concern that the lira continues to selloff on discouraging news and does not appreciate when sentiment is more supportive? yes, this is the million-dollar question at the moment in turkish markets.
5:45 am
you would expect with the inflation dynamics currently happening that the central bank might step in and do something. instead, notes from goldman sachs this morning saying that they do not expect the central bank to do anything unless the market action starts to get very disorderly. in the meantime, the effects of the weaker lire is feeding into some other turkish assets, sovereign bond selling, turkish stock selling off as well. you mentioned in the state of emergency being extended, that was something introduced off the up and hase july co allowed the early one regime come in with antibusiness from the practices that have also impacted sentiment towards turkish assets. tom: russia to the north, here you can steal this chart, i stole it from tracy, you can steal it from tracy as
5:46 am
well, this is turkish lira, russian ruble, the challenge of and theen -- putin massive surge of ruble strength, a huge move, give us an update on the relationship of ankara with moscow. remember, we left the year with the dramatic assassination of the russian ambassador in turkey, there was some speculation at the time it could perhaps push the two countries closer together, at least when it comes to agenda of fighting against terrorism. , it looks more on the table now in the wake of the istanbul attack. russia and turkey could maybe come around this one's been of a shared interest in fighting terrorism. it is early days, everyone was off on holidays, we will see how that plays out but i am guessing you are right in the it could be
5:47 am
a big thing for markets and 2017. tom: thank you very much, that chart out at tv go. money offn i make turkish lira? can i actually make money off the em trouble spot like turkey? >> in the current environment, looking at em currencies, look for those two short which a structural problems and risks. current account shortfalls and uncertainties. clearly turkey falls into that wheelhouse. if you want to look at a currency too short, the turkish lira is in office one in that scenario. an opportunity to look at what you will be selling it against and the like russia is an obvious candidate. you have seen oil prices continue to provide support for the russian economy. caseately, it will be the
5:48 am
that investors will continue to play the turkish lira from the short side. listening to that piece from abu dhabi, thinking of with the central bank doing nothing on inflation but weakening currency pushing up prices and price pressures is that stagflation is another headache for the economy. francine: this is turkey and therefore the turkish lira, the currency you worry about the most in the emerging market landscape, are there ones you buy into? >> there are others which are looking to be in better shape. in the em space, where there is a much better underlying backdrop and better opportunities, somewhere like india, not necessarily a direct counterpart but there are pockets of stability or at least that are opportunities in the em space, a case of looking for structural environments against those that have a better underlying dynamic and a central banks in a rail which is perhaps
5:49 am
slightly more understandable and forecast double. -- forecastable. tom: coming up later, an , thetant conversation donald trump reflation, the junk condition in the bond market, how has he survived since november 8. this is bloomberg. ♪
5:50 am
5:51 am
5:52 am
gives up on the euro allies, you have russia becoming more aggressive in. at a time were europe and the eurozone -- my biggest worry is that marine le pen will come to power in france. tom: nouriel roubini with ian bremmer at eurasia group, extra ordinary how he shifted us to france. i see his comments on marine le pen, the wall street journal the tiltking about towards the catholic church which has its own chemistry within france. let me ask you, is this feasible
5:53 am
pen?could be president le something unthinkable months ago, let's leave brexit and donald trump aside, if you have marine le pen, highly likely she will get to the second round, depending on what candidate she faces, it is unlikely he can muster support from the left because he is reformist. she could have a window of opportunity trying to get the votes. i would never say never to anything at this point. christian shulz and jeremy stretch. she has a chance like donald trump has a chance -- had a chance. probability% somebody was talking about and
5:54 am
donald trump had a similar proposition, where we have seen the surprising election referendum results and 2016, you cannot rule out that she could become the president, the second quarter. it is not our central case scenario but a risk she does get through that first round. that is potentially where there could be a difference for her to maintain the momentum to get through the first round and there are a number of candidates which can or potentially split the vote. francine: what is the probability of her becoming president? she does not have an opponent that automatically we say, yes, he or she could become president. >> a big difference between donald trump and marine le pen because she may not be part of the establishment but she has been around for a long time, not a new face. we have a long history of surveys saying that she has a glass ceiling at about 30% support which is not enough to get her into the palace in the
5:55 am
second round. calls which have her against candidates show that mr. will have a 60-40 majority. the probability of her winning the presidency is very low but i would not put a number to it but even if she wins, we also have parliamentary elections. so she would probably not have a parliamentary majority to go with a digital presidential mandate which would mean that the most extreme outcomes of her presidency would still be limited. many safeguards are in place. tom: can good economic growth temper the populist tone within europe? can you predict that? >> absolutely, we have seen over the history of the euro crisis, the impose the big reforms at went through crisis in spain and
5:56 am
portugal, once growth kicked in and unemployment came down, they recovered and closely in some cases, and in spain made it over the line and won the elections. for francois hollande, the current economic strength comes too late but for the establishment in general, the recovery, the economic growth at the moment and unemployment may come in time. tom: this has been fabulous. smart, smart, smart, thank you for joining us. , not going allr set until we hit doubt 20,000, anthony dwyer will join us from canaccord genuity. the guarantees 20,000 by 9:30 this morning. ♪
5:57 am
5:58 am
5:59 am
tom: call it the trump milled up. 22% of managers have underperformed in 2009.
6:00 am
onthis hour, anthony dwyer this most unloved stock market. we count the canaries in the coal mine. we consider how the -- on the edge of inauguration countdown, the commander on twitter. he keeps on tweeting. good morning, everyone. this is "bloomberg surveillance ," live from our world headquarters in new york and our world headquarters in london. francine, just too much to talk about. give me a prime minister may update. does she enter 2017 with the wind behind her back? francine: i would say that if she were to read the papers, she would worry about the fact that the british ambassador to the e.u. abruptly terminated his contract yesterday, and in a leaked memo was not mincing his words. he talked about london not
6:01 am
having the capacity to negotiate. i would worry about that. january is the month where we find out whether the supreme court will force theresa may to trigger article 50. that is significant. tom: that is a great update on the continuing saga of brexit. here is taylor riggs. turkey has arrested five suspected islamic militants believed to be linked to the deadly nightclub shooting, according to the turkish state run news agency. video of a man believed to be the attacker has been aired, a selfie video of the suspect as he walks through istanbul's most famous square. the parliament has extended emergency rule for another three months. turkey imposed a state of emergency in july, leading to a crackdown on supporters of muslim clerics. the government has arrested
6:02 am
41,000 people since then. rebels in syria have suspended talks about planned peace negotiations. they say the syrian government has been breaking the cease-fire. the truce was negotiated last month by russia and turkey. trumpent-elect donald says the intelligence briefing on allegations that the russian government hacked democratic emails has been delayed. twitter, he said it was delayed until friday, perhaps more time needed to build a case. very strange. one u.s. official said the intelligence briefing was set for the next few days and had not been scheduled for yesterday. global news 24 hours a day, powered by more than 2600 journalists and analysts in more i am taylorntries, riggs. this is bloomberg. francine? tom? tom: now to the data boards.
6:03 am
we pride ourselves on a lot of data for you. the markets are quiet. oil is still elevated. what do you have, francine? francine: this is what i have overall. i did not bother looking at the euro stoxx 600. 1.04.ollar oil is back up the touch, and -- is probably the month probably the one that will lose the most in 2017. tom: i don't know if you saw project syndicate carmen reinhart, saying strong dollar, probably not as strong as it used to be. this is the end of the plaza , a wicked they say strong dollar. come down here, we have a trump strong dollar with a radically different framework
6:04 am
for world economic growth, particularly japan, migrating from 6 to call it 1% collegially. it is a different time. francine: this is what i am looking at. i wish i could doodle on my terminal soon. tom: make a note of that, rachel. terms of european inflation, there was a huge difference between core withtion and what we see inflation. stripnflation is when you out energy prices. we had a better than expected inflation figure at 1.1%. this gives the ecb something to think about when policymakers meet later this month. tom: this is an important interview. .e do a lot of stuff we have mark gilbert coming out on brexit. all that stuff is great. except you missed this bull
6:05 am
market. but tony dwyer did not. he has been a clarion call, a clarity of vision about why you need to stay in this market. except right now he is a little bit neutral and saying enter the chill zone. what is the chill zone? tony: we are always famous for coming out and making prognostication. i turned neutral on december 18 that means if you have a lot of in individual investors and court precedent funds, maybe you -- tom: do i adjust my 401(k)? not do that. the only time you ever want to sell the stock market is when we expect a recession, and we are nowhere near that. tom: they did not put 20 dwyer -- they did not put tony dwyer in this article but they should have. on barton was optimistic yesterday. are you?
6:06 am
tony: i am very optimistic. of theu look back, one arguments against the bull market throughout this entire time has been that margins are at peak. history has shown that the only peak for amargins cycle is when the yield curve inverts. we are nowhere near that. probably one of the biggest contrary and calls i am making is that i think margin history shows that margins should go back up not only to the high but exceed the recent high, suggesting that profit expectations are too low. tom: francine has been fully invested since 1722. i am in the triple-leverage, all-cash fund. francine: if you look at trade wars, what is the profitability of a trade war? what does that du jour indices? tony: this is one of those
6:07 am
things where we have to be careful, making an investment decision off something that is totally unquantifiable. it is sort of like a black swan event. how do you invest in a black swan event? i'm not advising institutional investors to make any changes based on a possible trade war because i have no data to make sure it is going to happen. so far the rhetoric, other than the mexican currency and a couple of emerging currencies, has not had that big an impact. monetarye about policy, the impact of monetary policy, and the growth outlook because of monetary policy. last year when we were on, we talked about what could go right when everybody was getting so negative about global growth, coming off the january and february low last year, the kind of stimulus in the global central banks was extraordinary to the point where the ecb and boe, are.k., the
6:08 am
actually buying corporate debt. that injects money directly into the private sector. that is not at 10 basis points, hoping that somebody will borrow money because it is a little bit cheaper. that directly goes into the economy. year are an multi-hitting highs. wrong?e: what could go that since donald trump got elected there is all this expectation and the money has flown back into these indices, and therefore he could only disappoint. tony: i do not want to sound like one of those guys who comes on and says, "like i was saying." i would love to say it was smart because i knew donald trump was going to win, but that is ridiculous. i had no idea. i did it because the economic growth outlook was better.
6:09 am
i do not necessarily believe that this is all about the trump rally. i think this was all about what was happening economically anyway. interview yesterday when francine was using my vacation day. she was not there. here is a terrific summary of where we are with our international and economic relations. -- this is acclaimed our guest from yesterday. >> my guess is that we are in an eclipse, but how fast it will be will depend on the united states , what forces a new if theyration brings, need to move faster or slower based on what the administration proposes. tom: we appreciate professor rajan coming in. his acclaimed book is "fault lines."
6:10 am
how do you respond on a saturday over the beverage of your choice to somebody who goes, "oh, my god, the fault lines." of this cycle, of how many things we have had that are supposed to create a recession. we had much worse growth in the u.s. we had a european debt crisis, a chinese real estate crisis. we had a brexit. ultimately what it comes down to , is money available? ultimately driving that is the yield curve, and the yield curve is saying money is still available. we have other diversions and distractions through the hour. later this morning on bloomberg radio, my interview with david --a, danny flange flour danny blanchflower. this is bloomberg. ♪
6:11 am
6:12 am
6:13 am
francine: this is this is bloomberg. -- this is "bloomberg surveillance." taylor: china is considering options to support the yuan in curbed capital outflows. authorities have you stress tests and model research. some businesses have sold foreign-currency. there is increasing rusher on the yuan on capital outflows and the stronger u.s. dollar. rex tillerson will give up control of $240 million in company stocks if he is confirmed as secretary of state, according to a statement. he would also give up his rights
6:14 am
to $4 million in cash bonuses over the next three years. has slashed ae billion dollars verdict against johnson & johnson over artificial hips. the judge ruled that the jury's punitive damage awards 26 were excessive. that is your "bloomberg business flash." tom: thank you so much. we speak with tony dwyer. up latereroli coming on bloomberg television. none of it matters. he most important discussion this morning is with kevin cirilli, our washington correspondent. good morning. i do not want to go through the twitter malarkey. i want you to tell me the level of panic in the gop over the day to day, hour to hour behavior of the president-elect. are they saying this is fine, or
6:15 am
is there a level of concern? kevin: i do not think there is that much of a level of concern. the sources i am speaking with at the rnc and the trump transition office have come to accept that this is the mode of operation for the president-elect. they think that the way he communicates, whether it is through twitter or a tv appearance, that that is something that is a direct line of communication to the american people. tom: there is a wide body of americans of all political persuasions looking for selected adults in the room to guide the president-elect toward some form of appropriate behavior. is that the national security advisor, the secretary of defense? who is going to be the one to talk to him about this one idea, badmouthing our intelligence community? kevin: i think that is where we are going to have to wait and see. the meeting that was delayed regarding the russian hacking and cyber security issue, that has been delayed until friday.
6:16 am
when i was with the president-elect and mar-a-lago over the weekend, with the rest of the press, he has said he knew more perhaps than the intelligence community. obviously that sparked some conversation and controversy about what exactly he knows that other people do not know regarding the rushing hacking -- regarding the russian hacking. +++ he continues to put pressure on
6:17 am
u.s. intelligence officials. francine: talk to me about donald trump's picked to be treasury secretary. steven mnuchin -- there is a controversy according to elites memo, that there may be widespread misconduct. does that mean he will be investigated, or is he less likely to become treasury secretary? kevin: the thing with steven mnuchin is that this was a story that he thought was put to bed years ago. of course now that he has been appointed to become the treasury secretary, all of that is resurfacing. i think that you are going to see a concerted effort from democrats on capitol hill to try to portray him as someone who is out of touch and more with wall street and large financial institutions and risky financial lending, as opposed to being someone who is more in line with the middle class. i think this is a concerted effort coming from his political opponents, but i will tell you that i speak with people here in washington who are organizing an effort to defend him. you have to remember that the way the senate confirmation --ks, it would be difficult it would be a difficult road for democrats to block him. in this leaked memo, it does not say that steven mnuchin knew about it or took part in it. how long did it take for an appointment to be passed through ?he senate
6:18 am
kevin: i would anticipate the confirmations are going to happen immediately, within the first week or three weeks since following the inauguration. the second point i would raise, i am anticipating according to sources i'm speaking with inside the transition team that we are ofng to see a bevy of repeal obama executive orders and actions. look for that as well. tom: thank you so much. washington correspondent, kevin cirilli. tony dwyer, do you care about any of this? you were looking at the green bay packers, new york giants analysis. what it creates, and this is what iron people to look at. when you get a dislocation in the market, volatility in the market associate with a tweet, that offers an opportunity until the yield curve inverts and credit shuts down.
6:19 am
any meaningful weakness that comes from an event, a tweet, you want to use it not to accumulate stocks. when we talk about the upper-class versus the middle and lower classes, the consumer confidence numbers have been off the charts lately. the biggest uptake is happening to $50,00024,000 earners. we have to not forget that capitalism is creating capital. if you do not create capital -- to make the case that you do not want a friendly wall street guy means that you do not want capitalism. what has been so bad about the last eight years in terms of economic growth is that regulatory backdrop and the fighting of capitalism has really hurt creating jobs for the middle class. tom: tony dwyer with us here. we will get back to the equity markets. we have a great single best chart for you this morning. coming up tomorrow on "bloomberg surveillance," jason trennert
6:20 am
will join us from strategic us s research. this is bloomberg. ♪
6:21 am
6:22 am
6:23 am
tom: francine lacqua and i believe we need to bring you the best writing we can find every day. megan mcardle kills it at "bloomberg view."
6:24 am
tom: i brought this up with anthony dwyer because he has so many kids. count them. this is the heart of your world. we desperately need to get our retirement plans going, and they are not. going tois basically be impossible. you cannot get there from here. that is what the baby boomers are having. with low fixed-income yields, it is impossible turn in of to drawdown capital. with private investment, market timing became a problem. is: your world, 100% equity
6:25 am
way out on the front year everybody is supposed to have a nice diversified work portfolio. do you agree on that? or would you load the boat on equities? on 40's.d the boat the yields are so small and the price depreciation you might experience by investing in fixed income may be -- tom: yield up, prices down. would say something interesting about the productivity comment. if you go back to 1993 to 1995, right below -- right before the greatest productivity boom in our history, i went back and i read them -- scary, i did it -- is that productivity was nearing a historic low. there was no outlook for improved productivity going forward. boom before the dot-calm in productivity. tom: -- francine: what can donald trump
6:26 am
due to address this? tony: to address productivity? you are going to have to extend age to retirees because you do not have enough money to get there. you cannot retire based on pensions. so i believe you have to -- what has happened in the market is you have gone higher risk throughout this cycle as yields come down. you cannot get the return. tom: we are going to come back with tony dwyer. this is an important scene for us this year. alicia monell of boston college will join us. thrilled to have her with us. worldwide coast-to-coast, this is bloomberg. ♪
6:27 am
6:28 am
6:29 am
tom: "bloomberg surveillance." francine lacqua is in london. i am tom keene in new york. we take pride in getting news from all of the resources at
6:30 am
bloomberg news. here is taylor riggs. taylor: heavy fog is covering a third of the cities in china, the most dangerous type of pollution with almost 20 times the recommended limit near beijing's tiananmen square today. hundreds of flights have been delayed or canceled. the former british ambassador to the european union has a warning for theresa may. ivan rodriguez says she needs to be told what he calls the uncomfortable truth about exit. he warns that may last he warns that may -- he ones that may relax experience. has a videoau message to american lawmakers, telling, is that canada is the biggest international customer for goods and services made in the u.s. he has offered to open talks on the north american free trade agreement, which president-elect donald trump has criticized. the fight over obamacare begins
6:31 am
today in the new congress. president obama goes to capital -- goes to the capital to give democratic lawmakers on how to revise the republican effort against the affordable care act. mike pence will discuss the strategy with republicans. global news 24 hours a day, powered by more than 2600 journalists and analysts in more i am taylorntries, riggs. this is bloomberg. francine? tom? tom: thanks so much. every year we help ian bremmer launch his top risks for 2017. it was a really interesting set , anith america leading independent america. down the that was china and asia. we have the director of asia for eurasia group joining us from washington. congratulations on your report. what do we need to know about the domestic politics of beijing
6:32 am
as they address the president-elect of the united states? >> the key risk we see for china is a china on edge in 2016-2017 because of the leadership transition and the potential for a china to overreact. because xi jinping is so focused , they big party congress will be on edge to any kind of external activity or action, whether it is u.s.-china relations or north korea, that could either pose a distraction to xi jinping or some kind of activity that could -- that he would have to respond forcefully to so he does not use -- so did he -- so he does not lose credibility at home. tom: there is a compare and contrast of the present beijing with mao of another time and place. is that an accurate comparison, or is that unfounded? evan: i do not think xi jinping
6:33 am
tse tung. mouse a dun he has embraced populist tactics and techniques to expand his power based, and i think that is where the comparison is. in terms of the number of actors, the number of special in makinginvolved government decisions on economic policy, foreign policy, is far more diversified and decentralized than in mao's days. francine: do they kick out u.s. companies? suppress theng to
6:34 am
u.s. dollar as a reserve currency? depends on the provocation. if the tribe administrations tradea series of heavy actions against the chinese, one way the chinese could retaliate is by going after american companies. there are all sorts of formal ways they can harass american companies as a way to retaliate. a different scenario is a scenario in which the chinese come if they feel they are pushed around on maritime disputes, with a potential chinese reaction, it is growing naval or -- naval activities in the east or south china sea with southeast asian companies. byncine: can they be booked a tweet, or is it something uglier? evan: it would be something more than that. it would be a behavior or activity. the chinese are well aware that there is a difference between tweets and actual behavior.
6:35 am
the chinese foreign ministry just yesterday released a statement that hinted at the fact that they are not going to be provoked by tweets, but those tweets are a source of concern and they increase the density for china to be on edge and potentially for china to overreact because they see those tweets as an indication of the , the strategic intention of the next president of the united states. increasingly intense dynamic between the u.s. and china. tom: let's put this under i did not know this. that is a slowdown in economic growth in south korea. if you believe economic growth is a backdrop for a lot of politics, and here is the korean boom that we know, up 7% per year. korean gdp has migrated out. this chart -- you can get an exact copy of this chart on the bloomberg terminal. as, help me with the
6:36 am
slowdown in growth. is it chronic? evan: absolutely. we see a series of chronic long-term challenges that have to do with the fact that korea is an export-driven growth market. down in a variety of south korean sectors, like shipbuilding. we see a whole variety of long-term systemic challenges. the fact that korea has entered into a political crisis compounds systemic challenges with cyclical challenges. -- the current president may face a full and final impeachment. there may be a new election. that kind of volatility does not look good. amid all of that, there's growing domestic political criticism within south korea, of the big south korean companies
6:37 am
that are the backbone of the economy. tom cole let's go to michael hanlon at brookings institution. you know his work on hard power and soft power. is north korea a soft powered threat, or a hard powered threat? evan: north korea absolutely is a hard power threat. its nuclear capability and its missile capability pose a direct threat to u.s. allies and potentially eventually to the u.s. homeland. it is a classic hard power threat. francine: a hard power threat to what extent? the president of north korea keeps saying they will have strong missile capabilities. when do we start believing them? they already have short-range and medium-range missile capabilities which could threaten u.s. allies like south korea and japan. they are continually working on a long-range missile capability,
6:38 am
which eventually over time could threaten the u.s. homeland. the question for the next u.s. president is, what will they do to stop the materialization of that threat? it is something they have been working on for a while, and they kick getting closer and closer. it will be one of president trump's top security challenges. evan, thank you so much. we will get back to tony dwyer on the equity markets in a moment. coming up later on bloomberg television, a mark -- a conversation with mark easel of pimco. after the conjunction of higher yields, now what? from london and new york worldwide, this is bloomberg. ♪
6:39 am
6:40 am
francine: this is "bloomberg surveillance."
6:41 am
i am francine lacqua in london. tom keene is in new york. that get straight to the "bloomberg business flash." taylor: shares of tesla motors are lower on premarket trading. deliveries fell short of its own forecast. --rt-term production issues there is a history of setting goals for tesla and then missing them. the company's are trying to prevent apple and google from controlling how drivers connect smartphones to their cars three carmakers are concerned that tech giants may control in-car info payment. union members rejected the latest pay offer. the airline says it offered to pay 7% over three years. this would be the first strike i british airways flight attendants since 2010. that is the "bloomberg business flash." francine: thank you so much.
6:42 am
initially this was meant to be on christmas day and boxing day. so people were not affected. let's bring it back to brexit. mark gilbert writes one of the best pieces today -- talking about the pound and the pound's fall in value and the correlation with brexit. this, he says -- francine: we are back with mark gilbert, and we still have tony dwyer with us. a great piece. congratulations. we do not really know what brexit will look like, so you can have a more nuanced analysis because you have strong economic data, but we do not have anything to model it on. mark: if all you knew was the economic backdrop and outlook from a year ago, and i said,
6:43 am
where do you think the pound is, you would not guess. to me that there is something psychosomatic about the pound at the moment because it is not just the body and what is happening, it is the head, the sentiment that happened in june. i do not think that has been offset by the actual outcome. the economy has not fallen off a cliff. all of the evidence is pretty decent. economists who slashed their forecasts are now inching them higher and higher. it seems to me that the pessimism is overdone. let's talk about strategizing. fromve this leaked memo the ambassador to the e.u., who abruptly resigned yesterday. this is the leaked memo that he sent to staff.
6:44 am
concern is that this was such a divided referendum that you are either pre-brexit or against brexit. our people coming together now, or are the pre-brexit still there a pre-brexit and the anti-brexit are still anti-brexit? theresa may inherited ivan rodriguez. she now gets to -- inherited ogers.odr toryu look at where the party is in the polls, this is about as stable as you ok policy gets. tom: mark gilbert, let me show you trade-weighted united kingdom. this chart, you can get the actual chart off the bloomberg
6:45 am
terminal. let's call it the gilbert bounce. the bounce is right here off the gloom we have seen. the gloom crew thinks sterling will weaken way past where we were in 1992. help me, mark gilbert, with your reading of the literature. how likely is a weaker pound-sterling? mark: i think that is still a handover effect from the surprised that was the june referendum. if you look at what everyone was saying the economy would do in the weight of that, it has not come to pass. it is still the main reason the pound is where it is, i suspect. u.s. policies are going to be more perfectionistic. the u.s. will have a trade deal -- i think that is far-fetched, frankly. it will take much more than two
6:46 am
years to reach an agreement with e.u. tom: are we there new bilateral trading partner, mark? will it be about the united kingdom and the united states? are we on the edge of 1948? mark: i think the optimism in the government that trade carries on as long as no one gets in the ray -- as long as no one gets in the way -- as ambassador has said, that is not what happens. you need agreements. thee is a dedication on part of the government team that they will forge these new operations outside the e.u. if you look at the pound's value over the past year, it does not reflect the new reality is not known and is better than it looked. mark gilbert, thank you so much. tomorrow on the show, jane foley will be with us. we will get an update from the rabobank group daesch on what the currency minutia means.
6:47 am
back with tony dwyer on your 201 k. this is bloomberg. ♪
6:48 am
6:49 am
dwyer on stocks in a
6:50 am
minute. right now, foreign exchange. euro-swissie i am watching carefully. strong swiss over the last month. francine: coming up shortly, it is bloomberg daybreak: americas with david westin and jonathan ferro. david, what do you have on the show today at go david: we have some great people. mark kiesel of pimco will be here, talking about how he is hedging against risk going into 2017. health care is a big topic. we heard yesterday congress moving forward with a reversal on obamacare. we have an interesting new tech approach to this. a big new deal today will be announced on the air about how they will help regular patients save. that and a lot more, tom. westin, thank you so much. this is about your wallet, your pocketbook, and your moldy
6:51 am
equity account. tony dwyer is with us. this is on stock selection. the trite answer is, where is the next apple? but do you care about stock selection versus etf's fidelity in the news today, that they will go into the etf business very late? do you really care about stock selection? tony: bloomberg has a great story about black rock and the money -- about blackrock and the money that has gone from active management to passive management. you want sustainable outperformance am a but you want to be a to buy macro events as long as credit is still available. what i think i have a little bit more of an edge in is when credit is still flowing in the u.s., in a domestic, service-based economy. you want to buy weakness. tom: this is an unfair chart. you can get these -- you can get a copy of this.
6:52 am
500, upnormalized s&p 58% over a decade. not bad, ok. this is the juggernaut of apple, up 800% as well. tony, i know you loaded the boat right here on apple. how do you find the next apple? tony: i am a macro strategist because i am not so good at it. i think it is very difficult -- let's say i did buy what you suggest that i did. the odds of me holding it up as much as it is is absolutely insane. , it had this one stock five letters, coming out of bankruptcy. i sold it, thinking i was smart. it went to 70. tom: we are going to cut you off. you need to buy in french franc spirit francine? -- you need to buy in french franc's. francine? reporters,peak to
6:53 am
madame le pen said there should be a new french currency. she is talking a little bit about the dynamics. this is a presidential candidate that many times has come under people saye a lot of her economic policy is not up to scratch. but this new french currency would be a new currency. she says she would seek to denominate french government new frenchs currency. this means it would probably automatically reduce the government debt. there you go -- she earlier tweeted that to win the presidency, she will go to every french person and speak to them personally to convince them that she is their candidate. tom: i promise you, francine, i will make a deutsche mark/french franc chart for tomorrow. i cannot figure out how to do it because we have not had that chart in 40 years. you were a toddler.
6:54 am
there is another idea of currency at litmus paper. can tony dwyer buy multinational? are you all domestic during 2017? --y: when you look at back when you look back at the history of the strong dollar, it typically happens when the world is getting worse. the world is getting better. you have multiyear highs in the european, the u.k. tom: which ones do you like? a.m. -- e.m. tom: donald trump helps e.m.? tony: he does not help e.m. i want to go back to some of your calls on the indices. if donald trump gets his way and re-patriots a lot of money from
6:55 am
a lot of these big american companies that are sitting on cash, does he force off the ceo -- the ceo's not to buy back shares? will that not hurt the short-term profitability of a lot of these companies? it is a great question. a significant portion of the money that would probably be repatriated comes out of the information technology and health care space. , theajority of the money cash use that they have, is for increaseds for dividend, it returned to shareholders. the one thing i would say is that donald trump is going to do in terms of fiscal stimulus, which is lowering tax and repatriation, it will offset the tightening of monetary policy. you are actually going to see more capital investment then you s in stocks.k
6:56 am
tom: at the end of the day, they will do what they always do. tony dwyer, congratulations optimismthe 2009-2017 on the american equity markets. we have a lot to talk about tomorrow. before that, david blanchflower. that is later today. we will do that on bloomberg radio, "bloomberg surveillance." more than anything, danny blanchflower on the economic storm of this early 2017. thank for being with us. we will continue on "bloomberg surveillance." it was pouring rain yesterday. this is bloomberg. ♪
6:57 am
6:58 am
6:59 am
♪ jonathan: from the u.s.
7:00 am
worldwide, a font warm and welcome to "bloomberg daybreak." futures and equities across europe are unchanged and stable. the bond market was a little choppy yesterday at the treasury. economic data is decent. the treasury is stable this morning in the u.s., as well. euro, welook at the are changing on -- trading on the cable rate. tries to slow down the flight of capital as the dollar continues to climb. it affects everything from chinese company debt payments to the value of a bitcoin. european economic data shows encouraging signs of growth raising questions about possible tightening policy from hocks in 2017. donald trump gets his way. mexico andbout gm, ford abandons a

21 Views

info Stream Only

Uploaded by TV Archive on