tv Bloomberg Markets Americas Bloomberg January 16, 2017 7:00am-11:01am EST
"bloomberg markets." anarcho here is what we are watching -- anna: here is what we are watching. the prime minister's critical brexit speech tomorrow. davos takes center stage as leaders around the globe gather at the world economic forum in switzerland. deal.r some m&a action this monday. the ray-banbuy maker. chairs jumping on the news. a warm welcome to "bloomberg markets," for this special edition today. 12:00 noon in london. that is where we find mark barton, pouring of the details of the day's equity trading session in europe. mark: great to see you, too.
resources up by a quarter of 1%. the only gaming industry group today, the gauge to the stoxx majors.y are low on the jitters. may it is all about sterling today. it is all about the ftse. this is the ftse. is it going to be unlucky 15 for the pound through friday? the ftse 100 rose for 14 consecutive days, a record run. 12 of those days, it finished at a record high, which also is a record. at least 17 stocks have fallen .uring that 14-day winning run for 12 days it launched new highs. the big gainers during that were of course the mining industry. let's go to sterling. -- 1.1986.had 119
we are above 1.20. level beforeey october. to 1.19as much as 1.6% 86, as you can see there. intraday low to watch out for is 1.1841. significant if we finish below one point 2123, or if we finish below 1.20. we will tell you all about sterling in a few seconds' time. expectations of volatility for the pound-dollar exchange rate. in the coming week ahead of the may speech, tomorrow at the highest levels. --ce june, we are no letter
we are nowhere near the levels of all attila the before brexit mid-june, when implied volatility -- we are all counting down to may. anna: absolutely, counting down to may -- the woman, not the month. let's check in on the bloomberg first word news with sebastian salek. he has details from the newsroom. sebastian: president-elect donald trump is signaling a major shift in transatlantic relations. andalled nato obsolete floated the idea of lifting sanctions to russia. in a joints came interview with "the times of london" and a german paper. a boeing 747 was in a flight from hong kong. it belonged to a turkish unit of china's agent a group.
it crashed. dozens of people have been killed. market should be rebalance by the end of the first half of the year. musk's spacex has returned to the skies. wasspacex felt and 9 rocket launched over the weekend, deploying 10 satellites. global news 24 hours a day, powered by more than 2600 journalists and analysts in more i am120 countries, sebastian salek, and this is bloomberg. anna: prosecutors are seeking a lee forto arrest j allegations of bribery and embezzlement or he is accused of participating in payments that samsung made to a close friend of the south korean president in exchange for government support
in the company's succession planning. for more, peter joins us from the fascinating scene, coming to us from south korea. but this in context and tell us the background. this is an amazingly unfolding scandal that started with students at a prestigious university angry at the daughter of the president's longtime friend, getting into this university. they felt like she had some kind backing her into that university, and that unfolded into this amazing bribery scandal, in which the president has been impeached, and now one of the richest south air to be ismerate facing jail time. anna: how does this affect
the management of samsung? peter: it is in disarray. there was a management shuffle at the end of the year. that has been delayed. in outcome of the research which the smartphone that they introduced last fall was recalled because of reports of exploding batteries. the results of that investigation has been delayed. there is basically the fear of a leadership vacuum at korea's largest and the world's largest smartphone maker. that samsung has denied the company provided financial aid in return for favors. what else are they saying to explain the backstory? peter: today they issued a statement saying they can hardly understand how the prosecutors could seek the arrest of jay lee
because he has admitted that samsung did give money to the foundation run by the president's friend. however, they said they were basically extorted into doing so, that they did not do so to gain any political favor. they did so because they were asked to. so they have been characterizing themselves more as victims rather than accomplices in any kind of bribery allegations. anna: peter, thank you for the update. 12:07 in london. the u.k. should have a better idea of what brexit will look like after theresa may makes a speech in london tomorrow. the pound plummeted from a report that may is willing to quit the e.u. single market to regain control of britain's borders and laws. joins ust reporter here from london, and the bloomberg fx strategist.
thank you both for joining us. what do we know about what theresa may is going to talk about? there was much talk in the us over the weekend, and we see that the pound has reacted already. what we know -- >> what we know is a statement that she has made so far. she has said on a number of occasions that controlling immigration would take priority. we know that freedom of movement is the red line. the question is, will she entertain the possibility of paying in to the e.u. budget to regain or keep some kind of access. where do we go from here? anna: let's bring you in on the pound. manus cranny said last week, describing prime minister --resa may as a one-what
as a one-woman wrecking ball. she moved markets in recent months. what that has done to the pound that should we be surprised if we see that once again? ' turn of phrase is spot on. nothing really new in this whole idea of a hard brexit. where i think the market has paused and had a little bit of a cautious response is that this has been telegraphed in the weekend press by number 10. number 10 has distanced themselves from this. but investors got going in asia this morning and said that if there is some talk at the prime minister's office telegraphing this, there might be something new, and that is the reaction we have seen in the pound. training the pound is perhaps normal on these occasions. the government seized quite
clearly the impact theresa may has on the currency. they are prepared to actually brief banks after her -- on what the policy is. we saw the reactions after theresa may's conference speech in october suggesting that they were not quite used to -- they have learned a little. i think there is a plan in place to reassure investors. she will also be going to dollars and i would imagine have a number of conversations along with chancellor hammond on this to try and set out how they will deal with the fallout. anna: davos, you would think, from a brexit prime minister, might not be the place you would want to be seen. svenja: they have been telling investors one thing, and then we have heard much more populist lines, that immigration is key.
this fall in the middle? i would caution on expecting too much detail from her tomorrow. i very much doubt we will get a full blueprint on the main points to achieve a lot of it depends on how negotiations go, how much germany is willing to give way on, and we will not know that tomorrow. anna: we have to start -- we -- manyd the shorthand brexit fans recognize this. we have to distance between hard and hard, don't wait? if things are turning into a harder brexit, leaving the single market -- it is just how that is going to be done and over what time frame with the transition deal. that becomes important. richard: of the devil is always going to be in the details, but if there is not going to be
access to the single market, you can call it whatever you like. that has driven the negative reaction in the pound. i think svenja is right. i think the whole idea of a hard brexit, one that does not include u.k. access to the single market, is what investors are focused on. every time there is rhetoric pointed in that direction, the pound suffers. see her inver you front of the party faithful, you know what to expect. you know which version of the hard brexit we will hear. it came clear, didn't it? what is the intention of tomorrow? who is she looking to inform, just the british people? or is she talking to a wider audience? svenja: you have to run number she has been under -- you have to remember that she has been under a great deal of pressure from her own party to give some detail as to her planning. she has kept many people very close to her in the dark.
she was starting to get a lot of criticism for not having a plan, for floundering, for not giving a direction of travel. i think she has a very slim majority. this will be a reassurance, saying we are in control, this is what we intend to do, pre-approve any votes to trigger article 50 going forward. we will look for the results of that appeal. thank you very much for your insights. look at where we are on the market. the european premarket session looks week. we have the foreign exchange for you first up because that is where a lot of the reaction has been. there are certainly boosts around the dollar. the euro against the dollar, we 1.0592.
we dropped below 1.06 again. the pound against the dollar, we talked about that and what that meant for markets just in the last when he four hours, that consideration of how hard the brexit will be. and we have european stocks, by 0.7%.% -- german officials push back on donald trump's recent comments against nato and on the european union. this is bloomberg. ♪
anna: welcome back. this is "bloomberg markets." a german official is pushing the u.s. president-elect after donald trump spoke out against nato and the european union. ,n an hour-long discussion trump called nato obsolete and suggested others might follow the you k's decision to leave the european block. -- willerkel will make meet with the new zealand prime minister in a little over 15 minutes. and later she will deliver a speech on her refugee policy in cologne. to take us through the aftermath on the german political scene, let's bring in bloomberg's alan crawford. great to have you with us, from berlin. how are these anti-nato comments and anti-e.u. comments and anti-immigration policy comments -- how have they been received
in berlin? alan: there has been a somewhat muted reaction across europe. policymakers have been very careful not to leap to conclusions and respond rashly. and also italy. they are calling for more e.u. unity. confirming some of the worst fears in the european capital. trump to work together and to be a partner and to pursue a multilateral approach. how important is it to the e.u. to have the u.s. believe in the european project? the outgoing administration speaks very fondly of the european union and believing in it. not so much with donald trump. alan: that is the crux of the
matter. there are two different issues here. nato,is u.s. support of part of the postwar, transatlantic order, and support for the e.u. this is really uncharted waters here that we have a seeing the e.u. as a possible rival trading block, and therefore not supporting it. whether they can come together and resolve some of the ongoing and challenges. -- weis there any sense know that angela merkel has spoken many times on immigration . she will speak again today about that subject. any sense that she is thinking about changing her stance on that issue? alan: well, no, in a word. i think it is too late for her to change that. she has already said that there will be no repeat of the million
people who came into the country last year, and so she is not -- in theng to interest of the e.u., she may respond with some words for donald trump. , thank you very much for joining us. alan crawford joining us from berlin, with response to those comments from donald trump. potential hard brexit fears on financials ahead of theresa may up a speech. that is coming up next, and this is bloomberg. ♪
transaction combines the largest manufacturer and retailer in eyewear. both companies have developed smart glass technologies. the struggling german clothing company says last year's operating profit was at the upper end of its forecast range. facebook is taking steps to do with fake news in germany. the social network will cooperate with nonprofit organizations to check facts and post fake news warnings. angela merkel's government has warned that it plans to fine companies that do not filter fake news and hate speech. anna: prime minister may is to speak on tuesday, establishing
the reality of brexit and what it will look like for the u.k. here to take us through the effects of a potential hard exit and may speech is the bloomberg intelligence senior banks analyst or jonathan, great to have you on "bloomberg markets." theresa may will speak in london. suggesting that -- what does this tell us about what we can expect from may? jonathan: i think the hard brexit will certainly fire up europe as well. the same passporting you are talking about, you have to recognize that we have bank regulators delivering a lot of what you have seen on europe. we are seeing the ecb and europe stepping back. it is not as if europe is sorting itself out financially,
in terms of the banks. the u.k. is in a different place. hard brexit, passporting -- we may very well lose passports, but we do have a good regulatory system, and that will be the starting point. -- if youquivalency's an dimming to have equivalent regulatory environment, you can have access that way. but the danger there is that politically that is subject to european politics and it can be withdrawn at any time jonathan: it is a risk, but u.s. banks with u.k. business, it is cheaper at the moment to have your business here. certain businesses and u.k. banks are entrenched, as well. ubs and barclays -- it is the same problem it would have been years ago. sick they really smaller in europe -- significantly smaller in europe.
they are all different problems with different solutions. anna: what are we looking for when we get results from european banks? jonathan: hopefully they will continue to make headway with market share gains and things like fixed income. as long as we get these in equity and fixed income trading, i think people will be reasonably happy. anna: thank you very much per jonathan tice will be with us again later on the program. still ahead, we will take you to davos, switzerland, well we will hear that where we will hear about president-elect donald trump. as a previewo come of the events set to take place in davos this week in switzerland. this is bloomberg. ♪
vietnam. he says japan will continue to flak for free trade. he says he has agreed on mr. to aim to bring tpp, into effect one of the concerns the vietnamese have at the moment. concerns on where the tpp will go under president- donald trump. he wants to hold a summit with trump as soon as possible. that relationship will be closely watched. thathinese and japanese, relationship will be crucial to watch, certainly given what trump has said. in on first word news. sebastian: president-elect trump is offering the u.k. a quick and fair trade deal. he expects to meet the latest prime ministers shortly after taking office. those comments came in an interview with the times of london. he says he thinks the u.k.'s exit from the eu will be successful. unbelievable.was
i said, because people do not want to have other people coming in and destroying their country. this country, we are going to go very strong borders from the day i get in, one of the first orders i am going to sign, day one. the bastion: he says he's fairly indifferent as to whether the eu states together. the british government making plans to reassure investors after the prime minister's speech on brexit tomorrow. the treasury is preparing to speak to major banks in london to try to smooth reaction. the pound fell against the dollar after reports that may well outline moves for a hard clean break from the eu. and mexico, several people reported that after shots are fired in a nightclub. it was the closing night of a music festival that is popular with american and british tourists. russia is denying allegations
that its warplanes fly to close to u.s. jets in the skies over syria. a u.s. air force commander has told the wall street journal that his pilots were having close calls with russian fighters despite a-year-old safety agreement. russia says this is the first time it has heard such claims. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. anna: thank you. the world economic forum kicks off in davos, switzerland, tomorrow. erik schatzker had a chance to sit down with the founder and chairman ahead of the meeting and asked him what he thinks of u.s. president-elect donald trump, who rejects a most everything the world economic forum stands for, globalism, multiculturalism, free-trade, and the fight against climate change. here is what he had to say. know whatwe have to the state of the union message,
what the policies of the united states will be. i think at the end, we are living in a global community in a global world, which is interrelated, interconnected, interdependent. so we will not just move out of globalization. we will have to maintain a mode.n, may more fair, let's first see what is coming out of the whole development, which we have seen not only in the united states but in the u.k. and other countries. have given what you supported for over four decades, are you concerned, frightened, worried by what mr. trump has said? >> no, not at all, because we always advocate that there has to be economic development, but the economic development should be coupled with social
responsibility. we should not have people who are left out. , we join some of the arguments for which president trump was elected four. erik: you met with members of trump's staff last months. what was the purpose of that meeting, and what came of it? >> i think it is very clear that is world economy form calculated calculations with all governments around the world. we always wanted to be totally global, so it is very natural that we go in contact the new u.s. administration, particularly since many of our members and partners and regulars of davos now isn't important positions inside the new u.s. administration. erik: were you hoping to see mr. trump of himself, and did you extend and invitation and hopes
he might be here before inauguration? , but it was quickly illusory. i'm not a dreamer to ask them to try this now. of the nextin one years, he says. that was erik schatzker speaking to the world economic forum week.an from davos this now we want to take you live to devos, where the chief energy correspondent has a preview of what is likely to be discussed regarding oil and climate change this week. there it is, our first glimpse of the snow behind you. great to see you. tell us about the oil conversations in davos this week. >> everyone here at davos will be tracking two men, the saudi oil minister and the ceo of a saudi company. ipo that potential
will probably be the largest ever ipo in the world, and it would make of the world's largest company with massive capitalization. there will be a lot of interest from bankers seeking to participate with that ipo as potential investors. they will try to understand what is going on with the ipo scheduled for 2018. that will be a highlight. of course, trying to get a better view of where oil prices will be. ago, it was doom and gloom. today the situation has improved substantially. prices are $50 to $55 a barrel. tople have seem to learn live with relatively low prices. anna: the saudi's are so optimistic about the deal, they say there is no need to extend the opec deal belong desk the
aunts the six month that is already in place. will prices rebalance in the first half or will the shell activity in the united states get in the way of that? >> i think what the saudis indicated is they do not want to take much oil from the market because they do not want to create extra room for the shale producers in the united states to seek opportunity. there will be an opportunity later this week to see what the saudi oil minister says, and i expect he will be speaking about opec. the other thing that will be of a lot of interest year will be climate change, and that will be interesting to see where businesses stand the twin climate change, from the davos view and from the trump administration of view anna: what is your take so far since the victory of president-elect trump? have global oil executive started to change their tune on
climate change or are they still singing from the same hymn sheet that was concerned about climate change? >> they are staying with the same argument they said previously. they are concerned, and oil executives will be here in davos. , and they bp, shell have been very concerned and have viewed support about the paris agreement. when the be a time organization is devoting the most up-to-date issue of climate change and clean energy. obviously, the chinese are driving a lot of that agenda. they are interested in renewal bowls and clean energy. there will be 60 executives in a closed-door session discussing climate change, a record, never in davos history have they had 60 ceo's of international oil companies meeting behind closed change. discuss climate
anna: that rubs up against the presidency of donald trump. is taken.ek how that let's look at the markets. market.f news in the fx dollar against yen. andn bids around the yen the dollar to some extent, but particularly around the yen. the yen up for a six-day against the dollar. the euro at a1.05 handle. we have rallied a little bit with the pound. a move up more than 1%. ?ow hard will brexit the across europe, the u.s. is closed today for martin luther king day, but we have stocks in europe down by .7%. .3%,il price is down by $52.22.
anna: welcome back. this is bloomberg markets. time for your bloomberg business flash, a look at some of the biggest business stories in the news. a hong kong billionaire has agreed to buy an australian energy company. personthird richest boosted in earlier bid. expanding infrastructure assets in australia and divesting away from europe. honda is forecasting increasing global sales in the upcoming fiscal year. they are counting on rising demand in the u.s. and china. honda sold a record number of missiles and the two countries last year. warned ofs chief politics could be a threat to global growth. he told a conference in hong kong that 2017 could be more of the same as last year, but el-erian says if usn titrate efforts intensified and a surge of nationalism around the world, the economy could be hurt.
bloomberg business flash. let's have a look at the latest moves in the market. we have many of the currencies on the move, and particular third on the list, the pound against the dollar, 1.2060. down by 1% for the pound against the dollar right now. a lot of questions this week. we will hear from theresa may tomorrow, tuesday, in london hours. we will hear about a little more detail around brexit. she has said for months and wants to keep her cards close to her chest. what will she tell us about how hard that brexit will be? markets positioning for a harder looking brexit. movement in the euro against the pound on that. 0.8782 is where euro traits against the pound. of the bigo one corporate stories. french eyewear maker has agreed to buy its italian rival for
about $24 billion. it combines the largest manufacturer and retailer in eyewear. joining us from milan is bloomberg's senior italian reporter. great to have you on the program. how out of the blue is this deal? has this been talked about for a long time. this grief they really well-balanced company around lenses, eyeglasses and retail. has this made sense for a long time? yeah, in the last two years, this has been seen as a deal that would make much sense. you have the lens producer and the frame producer, the manufacturer in the one who owns the biggest retail network in the world. so it is a deal that makes a lot of sense. uxottica becomes the biggest
shareholder of the combined entity. the italian billionaire will have a 31% stake in terms of voting rights in the new company, which will be based in france. combination, but clearly, the news came out of the blue last night. is a 81 years old, so it way to give a stable future for his company. anna: he is the founder of luxottica, del vecchio. he is a key player. talk about the italian side of this deal. is 81. he he has said that i do not want my children to take management role in the company.
he said you can fire a manager but not one of your kids. in the last couple of years, in 2014, luxottica had a couple of ccio can backl ve into power in the company. he was looking for a solution to save and safeguard the company in the long run, and clearly, merging looks like the perfect fit. actually, you see shares of both companies going up today. so it looks like that investors thing this deal makes a lot of desk think this deal makes a lot of sense. anna: interesting to see that both share prices have moved up on the back of this. i know the synergy is part of it, but that cannot be the whole story. what are we talking about here? these two businesses will have 27% of the lenses and eyewear market.
you are combining two important and crucial parts of the same business, the one who makes the frame and the one who makes the lens. luxottica is the world's biggest retailer in eyewear sector. so it looks like a perfect match. they will not have any antitrust issues. it is a deal which makes synergies of about 500 million euros. analysts say the synergies may increase. at the moment, it is seen as a deal which somehow was in line plan.el vecchio's he says the future of his company is real important for him. on his website, he said a few years ago that he does not want to leave any issue for the workers and with his company.
he founded a company in 19 six 1962, and he is really a self-made man. inhas about $20 billion wealth. anna: remind us how this will be run after the merger. remains one of the biggest shareholders, but the listing will be in france, right? >> yes, he will be the biggest shareholder of the new company, which will be called essilor lu xottica. it will be a tender offer for the minority shareholders, but del vecchio will also be ceo and chairman of the new company. he is a key feature in this deal. anna: thank you so much for joining us this morning from milan. still ahead, an exclusive
back to bloomberg markets. investing to meet the world's sustainable develop my goals will create at least $12 2030.on in returns by that is according to a research report by a group, including unilever's paul polman and jack ma of alibaba. all pohlman sent done with francine lacqua for an exclusive interview. paul: at a time that the political environment is difficult a global government is lacking to some extent, it is more reason for the private sector to step up and more and
more businesses have discovered is somethingearly than its be done about it. looked at ait is less sympathetic view for climate change. paul: i don't know that. how do you create economic growth? increasingly, people are understanding that you have to tackle climate change if you actually want to have job creation and economic growth. u.s.ine: even the new administration would understand that? paul: i think they were talking about 2020 and clean energy, and they see the energy moving rapidly to green energy in the u.s. they see people like elon musk doing extremely well with the electric car. the u.s. aren inclined in the green energy sector than the fossil fuel sector. so the market is already moving
spirit the movement for david just are -- the movement for divestiture, the market, there is an internal price on carbon now. there are signals in the marketplace since paris, especially, when the global world said we will decolonize this economy you we have seen an enormous acceleration as people understand it is an increase in the economic sense. i think the current administration will talk more thet climate change, and new administration might talk more about the economic story of it, but i think there is a lot of common ground. francine: does deregulation go hand-in-hand with it? frameworkepends the is very important. it will help if you have a price on carbon. we might not see that directly in the u.s. right now. but many places in the world have this agenda without the price environment. one of the major talks in the u.s. is to invest in
infrastructure to bring the u.s. up to standard. that is not a bad idea for job creation and economic growth. say, whygly, you can not do that sustainably? you can benefit without having the negative economic externalities we currently have two the language might change, but a lot of the things we do might not. you take coal. it has become economically in viable. you see the coal industry going down, and no new coal plans are being built in the u.s., which is a function of economic forces, more so than climate change. anna: that was francine lacqua speaking with unilever's ceo paul polman. what we'reyou hearing from angela merkel, the german chancellor. she is speaking to reporters in berlin. she says she discussed brexit with new zealand's leadership.
she is meeting with the leader of new zealand in berlin. you talk about refugees. she talks about her exit, saying her position has not changed. she will listen to may's speech tomorrow. what counts is what the u.k. reposes to the eu. she says the u.k. needs to come forward with what it wants to achieve from brexit. she says we are waiting, and then we will take a look on trump. trump has been critical on her refugee policy. she says she will work with him. slides as sterling there's concern that theresa may britain out of the european single market. this is bloomberg. ♪
anna: here is what we're watching on bloomberg markets. the pound gets humbled as concern grows that the u.k. prime minister is prepared to leave britain out of the european union's single market. davos takes center stage as leaders from around the globe gather at the world economic forum in switzerland here at we hear from the event's founder. m&aa clear deal from action. essilorord agreeing -- agreeing to purchase luxottica. shares jumping on the news. welcome to bloomberg markets. about 19 minutes to the close of european trading. here is a look at the equity markets right now. mark barton has the details. ,ark: great report today by ubs
saying value has beaten growth by 19% over 183 days. value can still be found in the region. investors want more evidence. still waiting to see if earnings growth will turn positive for europe after a decade of false promises and for more political cut 30. that is ubs. we're down today because of political uncertainty. percentage moves in sterling to it to brexit. day after brexit, you know what happened. an 8% fall. that is when mae took power in july, reaction to her conference speech. speeches two are the she gave to sky. we will talk more to your guest in a few seconds about this. we came below 1.20.
we are not as low as we were on the flash crash day in october when sterling fell as much as 6%. up by 30 print -- 13%. luxottica up by 9%. making buying luxottica, the largest manufacturer and retailer in eyewear, creating a brand and goods giant, rivaling the second-biggest luxury company in the world. they expect revenue and cost synergies of 400 million euros to six in an million euros in the medium-term. hugo boss not too far behind in share price, of when i present -- up by 9%. the german clothing company said profits in the operating costs where the upper end of the forecast, providing an needed boost for this company. there is an anticipated drop in
clothier operating profit. 23%, which was set back in august. hugo boss up by 8.9%. anna: thank you very much. we are not an hour and half from the public european equity trade. it is just 1:00 here in london. i need some help telling the time, it seems. let's check in on first word news. sebastien: president-elect trump is signaling a major shift in transatlantic relations, calling neutral obsolete. he floated the idea of listings engines against russia in return for making a nuclear arms deal. he predicts more eu members will leave the bloc. germany's foreign minister said trump's comments are causing astonishment and agitation across the eu. nato's concern at
headquarters. the alliance is looking forward to working with trump, and nato spokesperson said. a cargo plane crashed while attending to land, killing at least 37 people. it was on a flight from hong kong and blunt to a turkish unit group. the crash killed people on the plane as well as those living in a residential area near the airport. a stunning turn of events for south korea's riches family. prosecutors seeking a weren't to arrest a member of samsung, accused of a scandal. he has been gripped to take over samsung from his father. global news 24 hours a day powered by more than 2600 , journalists and analysts in more than 120 countries. is bloomberg. anna: thanks very much. turning to brexit. the pound tumbled to its lows level since the october flash crash after u.k. newspaper reports that prime minister
theresa may is prepared to withdraw from the eu single market in return to freedom to curb immigration. options contracts signaled there could be more turmoil ahead with one-month volatility at a three-month high before theresa may's speech tomorrow on her brexit plans. and we are waiting on a supreme court ruling on whether the british leader or parliament has the power to trigger the exit process here at our next guest says that it is opposable to see any other scenario then britain leaving the single market. we're joined by the unicredit strategy.bile fx and our very own richard jones joins us on set, as well. what are your expectations, given everything we have been reading over the weekend in the press? what are your expectations for tomorrow and what this means, bigger picture, for the pound? is difficult to make a call about the exact tone of the
speech. it is quite likely we may get some sort of a conciliatory tone from may and the possibility she will release try to seek a transitional agreement. that could provide some short-term rays to sterling. bigger picture, fundamentally, i think the bias remains to the downside. as you said, as long as the control on immigration is the anchoring point of the u.k. government, it is virtually impossible to consider anything fullas the end result, a exit from the single market. spoke to our bloomberg news reporter on the politics earlier on today, and people have been telling her that the u.k. government is getting ready to speak to banks after may speaks to try and explain policy, trying to cushion any fall in the pound. they expect further pressure,
and national surprise anybody who watches how the pound has reacted to her previous speeches. seems to fallound every time the prime minister speaks, so this could be trying to cushion the blow. but the point he made is very important. to thee is no access single market, and that appears to be the way we're headed, it looks like we will get a hard brexit to but how hard will it be? the alternative of a softer brexit is something that shows a little bit of leeway on both sides. anna: we have talked about how to define the hard brexit or the clean brexit. depending on what flavor that hard brexit takes, that really dictates, gets should and will react. there is a difference between leaving the single market, leaving the union, in a well-planned transitional arrangement,full way, and crashing out in chaos.
>> absolutely. it is not just the flavor of brexit. it is also the cost. it is one thing to leave orderly with a well thought plan and it is another to leave in a disorderly fashion. my concern is we have seen a lot of confusion and contradictory statements. so i think that we are heading towards a hard brexit with some sort of a disorderly process. sense, i remain quite verizon sterling. anna: what liens you toward disorderly? look at theke a view of the world and see the u.k., the negotiating process with back and forth but maintaining the position about controlling immigration, it at the same time i see the eu having a consistent view on how
they will negotiate brexit. principles, and germany believes in them, stands by them, and there is no incentive for them not to. it becomes extremely difficult to see how this thing could resolve in a manner that will be beneficial for the u.k. in the medium-term. anna: will it be to the u.k.'s advantage to try and divide the eu? that could be a way to try and get around it, perhaps using their military might in the eastern part of europe. >> well, i think this is really quite a stretch scenario. no, i do not see that. anna: richard, the pound has been under pressure today. we have seen a flight into the yen. japan's currency rises as the pound tumbles and brexit concern. gold benefits,
back to the same old haven. richard: you have the dollar rising against every currency, most against the pound, but the yen is the one beneficiary in the jeter and space. 10 space.- in the g i think you are right, this is given that uncertainty. and there is a big event in the united states, as well. you can see where the safety of the yen would be of some interest this week given some of the geopolitical risk. anna: and we have davos taking place, as well, so there is a lot of news flow in high-profile voices. talked about the pound being one of the trades of the week, sell the pound against the ruble. >> it is very difficult because of the drivers seat. we do not have economics. we have politics. you do not know exactly the tone that may will have tomorrow.
you have no idea what tripod will on friday in the inauguration beach. last week, it could have -- you have no idea what trump will say on friday in the inauguration speech. last week, we had a massive selloff in the dollar. nowshort-term trading right is definitely not sending on my radar screen. it is very difficult because of politics. anna: we will see whether trump makes america great again. there has certainly been volatility. thank you for joining us. and richard jones is also with us. nextg up, mario draghi's move, how late will ecb wait till it starts to rain it's --rain in its bond buying program? this is bloomberg. ♪
anna: this is bloomberg markets. the ecb will hold its first policy meeting of 2017 on thursday. two-thirds of analyst surveyed expect monthly purchases to be extended or they save the ecb will move to slow the rate at which they buy. still with us is the head of unicredit fx strategy. what are your expectations for the ecb and is busy we? >> i think the ecb is the least of our concerns for this week. is likely to strike a
constructive tone for short-term developments, but equally, i think he will be quite cautious for the meeting as far as core inflation is concerned. this is the most important thing with the ecb right now. unless we see some filtering through from the headline and to our core inflation, we have to be sure the says will maintain a cautious stance. anna: they closely watch the inflationary impulse the comes through. there is chinese factory inflation or donald trump's fiscal policy. >> there is a broad-based improvement of the high-frequency activity data. pmi has hit a three-your-. but it is broad-based improvement in inflation and inflation equitation's.
i am pretty sure the ecb would like to get more information and start seeing an upward dynamic in the core inflation. so far, the messages that we're heading towards a period of high inflation. anna: where do we go with euro-dollar and that regard? the dollar is fairly difficult to predict at the moment. >> fundamentally, our view has been with the dollar is overvalued. what you are actually seeing in the u.s. right now is a pickup in inflation expectations, but nominal views are not at the same place. they are not seeing to with inflation expectations. so u.s. real rates are actually falling right now. i think euro-dollar will be subject to plenty of volatility, but on a medium-term basis, i
still stand by my view that it is biased for upside. anna: euro-dollar dropping to a 1.05 handle this morning. byour forecast is for 1.10 the end of the year. nothing has changed in that regard. the uncertainty remains very big. it is not economic concerns, it is politics. we simply do not know how things are going to pan out. if i am right in what i think will come in the u.s., like the fiscal stimulus, which is likely to boost inflation higher but unlikely to boost productivity, i would expect that over the medium-term we will see a further decline in u.s. real rates and it will not bode well for the dollar. historically, this is what we find. i am fundamentally bearish on
the dollar, but there has been momentum towards the end of the year. anna: and there has certainly been volatility. this is euro-dollar one-week volatility. there is the press conference at donald trump gave and other factors. volatility on the rise whenever donald trump speaks. how does that set us up into the inauguration? will we see volatility? >> yes, i think so. i think volatility will rise. a lot of people we talked to seem to think we will see volatility, implied volatility, run higher through 2017. again, this is because we have no prior. we know donald trump says a lot. he tweets a lot. he has outlined very broadly what he plans to do on the fiscal side of the economy, but we do not know any details.
we do not know about conversations with congress. we do not know what the end result will be. having said all that, the dollar, in anticipation of that, seemed to have priced in a lot of that. anna: are you hearing that you should assume on old from is the same guy that he was on the campaign trail? when he was elected, people said, let's see who he turns up as president. will he be the same? he had shades of the campaigning donald trump during the press conference. >> i think that still remains to be seen. for example, there were rumors over the weekend that he will name china a currency manipulator from day one. -- itll back in december is all that uncertainty. i think he has provided both. he has showed some colors in lin
e with his campaign, but he has also made some small returns. whether this will continue or not, i don't know. anna: we will track the divide. thank you very much for joining head of global fx strategy. coming up, we look at the impact the you k's predigital hard brexit fears of european financial ahead of theresa may's speech on tuesday in london. this is bloomberg. ♪
rise.ll face a 35% bmw replied by noting its factory in south carolina is its biggest worldwide, and they set a new factory in mexico will make cars for all its global customers. french eyewear maker essilor has agreed to buy blue socks desk o buy out to cut -- tw look socks to. the woman who is previously the largest shareholder in disney has that her stake in half. she reduced her stake to about $7 million. she now has a 4% stake in disney. the widow of steve jobs traces her holdings back to the stake her husband received when he sold pixar animation to disney. that is the business flash. anna: prime minister theresa may was big tomorrow in london,
setting up her plans for what the reality of brexit will look like it we will get some detail. of the take us through effects of a potential hard brexit is jonathan tyce. good to have you back. give us more thoughts on passporting. is it a big deal if we are the single market? why doesn't not matter maybe as much as feared? jonathan: you have about 15,000 passports, and about 50% of boom over the entrance broking business. you have nine different single directives. for banks, lloyds or rbs, let's say, they have sold out of a lot of the european business. they have contingencies that have talked about. jobs. picture is 100,000 you have the lse merger at the moment.
there is talk about deutsche boorse and moving part of the business to germany. it is a big issue. it is fair to assume there are pretty good odds we do not retain passporting rights, but we have a good regime under the pra. equivalent's, and business is being done across the u.s., europe, asia, the u.k. because of that approach. mentioned a land grab that is possible. it will be down to the politicians. you referred to a corporate story. what the ecbe decides it will or will not allow. jonathan: the bank of england has already won one case a few years back. this would be political. i think it will be transitional.
we will be talking about this again and again. we started talking about brexit a year and half ago. this will be similar. mean, 60% ofes it passports to the insurance sector? >> it pans on the business. this is a piecemeal approach. it depends what sort of business and where you want your business. hsbc is a massive business and france. it is about figuring out when the pound has fallen and work in the u.k. is cheaper. anna: thank you so much, jonathan. coming up, talking climate change and davos. ♪
the pound is under pressure by under 1% -- just over 1% compared to the dollar. it avoided going below the october levels. let's check on first word news. president-elect donald trump is offering the u.k. a quick and fair trade deal. he expects to meet british prime minister theresa may after taking office. the uk's exitnks from the eu will be successful. >> i think brexit will end up being a great thing. they took was unbelievable. people don't want to have other people coming in and destroying their country. go withcountry, we will strong borders from the day i get in. says he is indifferent
whether the eu stays together. he is firing back at the out going director of the cia. john brennan calls trump's comments outrageous and says he has an incomplete understanding of the u.s. relationship with russia. trump said he may be the leaker of fake news. mexico, several people are dead after shots were fired in a nightclub. it was the closing night of a music festival. sees no need to extend the opec production cuts beyond six months. energy market says the market should beat rebalanced by the first half of the year. global news, 24 hours a day, powered by more than 2400 journalists and analysts in more than 120 countries. anna: thanks very much.
let's talk about the oil prices. -- our to data vos reporter will be on the ground in switzerland and get clues to where the oil story goes from here. now we will talk about the oil prices. on wti right now. futures andhows wti shows that son lower producers increasing their bet on lower wti crude prices. it's the highest level since 2007 so why is so many people so bearish? >> shale. the battle in the oil market has shalletween opec and they producers and opec made its move last year by agreeing to cut production. we are seeing nervousness on their part about how quickly
shale comes back at these prices above $50 a barrel. there are indications the industry is more efficient and they are pumping oil quickly. anna: and the timing is really important here. they said it was always going to be a matter of time before the opec actions. actions ofinst the the shale producers. >> the interesting story is the saudi arabians saying they see the opec deal only last six months which is interesting to say. it's too early to tell what the impact will be. it may be they are trying to send a message to their partners that their participation is not guaranteed or they may realize that trying to take on shale for too long will mean they will see market shares below where it is. anna: it's interesting when you see these comments from them
that they won't need to extend the deal. the level of compliance is one of the reasons because everyone is doing what they said they would. >> the saudi's have made a point of going beyond by go -- by cutting production even more. iraq says it's complying and we will see. we have seen russian production go down a little as well. whether that rebalance is the inket as quickly as they say the face of reckless stockpiles, it's too early to say. anna: what are the expectations around the price? the consensus has been that shale will fall to the bottom and stick to the top and we will float around. it's based on what happens with shale.
when you get toward $60 per barrel, the concern about shale production coming back and their ability to hedge could be a ceiling. anna: it encourages more of those shale guys. this is an industry that each time we go through a cycle, we learn more about the efficiency and the breakeven prices. >> that's exactly right. yes, production has fallen in the u.s. but the number of wells that much.crease each of those wells is producing more oil than it was years ago. the industry wants to become much more efficient and today's market with higher prices will test how that efficiency will translate into production. comes back more
strongly than we expect, opec could have a problem. >> aren't the saudi's supposed to make with other members later in the spring? is that we get the next prediction? >> there is a meeting this week where the five countries charged with overseeing the opec deal russiancludes oman and and algeria will report on progress so far and explain monitoring the deal. there will be a lot of comments on how things are going. last year, russia's participation into actual cuts was a big surprise. early indications are that production will fall this year and we want to see if that will continue because of the cold weather. we will continue to monitor that an russian compliance will be very important. as we get toward the next opec meeting in late may, there will be discussion about whether the
deal continues and whether people need to cut more and we will probably see opec divide with the saudi's on one side saying they don't want to cut back too much and other countries saying they want to keep prices higher. anna: thank you so much for your insight. donald trump's in awe days away and mark halperin and john a look attake financial regulation and the repeal of dodd-frank. >> on regulation, i will formulate a role which says that for every one new regulation, 2 old regulations must be illuminated. it's so important. trump has vowed that if elected, he would dismantle the complex a lot known as dodd-frank. street.med wall
president obama signed in the wake of the financial crisis. we asked our financial regulations reporter to give us a quick rundown on what it will take to repair. -- to repeal dodd-frank this year? for wall street and financial regulation, donald trump continues to be the ultimate wildcard. he has called for cutting regulations across the board and that includes dodd-frank. that is what the industry would like to see but on the campaign trail as part of the message he ran on, he has also called for reinstating the glass-steagall act which would force the biggest banks to break up. not is something that is consistent with what republicans in congress would like to see and what the biggest banks at much of wall street would like to see. on the house financial services ammittee, jeb answer link is key player and has already proposed legislation that would
overhaul dodd-frank. for is seen as a blueprint what the house will propose. the big wildcard is getting support from democrats in the senate. in order to avoid filibuster rules, they will need eight democratic senators to agree to pass legislation unless republicans decide to take a are aggressive stance through miller -- mandatory spending bill. we are waiting to hear what republicans in the senate craft but this is a long conversation. this will play out over many months. >> elizabeth joins us now to talk about repealing dodd-frank and also our legal editor. are there divisions within the republican party on capitol hill about what should be done with dodd-frank? if so, what are they? >> there are not that many divisions. the key thing to watch in the coming months is what the senate
does. you alluded to that in that clip just now. republican previous efforts have not gone as far on dodd-frank as the jeb hensarling approach. now you have a new senate banking committee chairman and he likes to do things in a bipartisan way whenever possible. there may be tension there but the senate is pretty much a wildcard on what republicans want to do with dodd-frank. there areth, contradictions in donald trump and what he talks about. you would think that allowing wall street to have more power would be against a populist image. do republican members of congress fear a backlash in repealing or fundamentally scaling back dodd-frank? >> it's definitely a long-term political risk. as you said, trump ran on this
populist economic message that included bashing big banks and criticizing hillary clinton's ties to goldman sachs. that theomething optics of this debate and whether or not republicans are being seen as helping and giving a hand to wall street is something that could backfire in the long-term. who is going to be the voice for this argument? it's a tricky argument. trump wants to deregulate and businesses probably for it and people don't like red tape. wall street is not super popular so who in the administration will become the public voice for this as the argument unfolds? >> it's a great question. trump is still filling in these economic positions. he is looking at the fed and that will help dictate who is
taking the lead on this. most likely, the administration will look to congress for an example of sorts as to how to move forward. right now, it's jeb hensarling in the house. he is close to mike pence and was an early supporter of donald trump and has the legislation ready to go. it passed in the previous congress and he is expected to roll out a new version of that in the coming weeks. quite frankly, it remains to be seen. there are a lot of questions. >> what are the things that could cause this to come undone? what are the biggest hurdles? >> the first one that comes to mind is threshold in the senate. under the ordinary legislative process, you need 60 votes to overcome that filibuster. while there is a possibility that some of dodd-frank can get on done through this
reconciliation process, that only works with things that affect spending and dodd-frank is huge. different areas of financial legislation that only some of it can be done with that 51 majority that reconciliation nays. you will need 60 votes in the senate unless there is a huge change in how the majority runs things. look for maybe some red state democrats up for reelection in 2018, maybe they will go a long with some of this. you have heard chuck schumer, the incoming leader of senate democrats say they will fight tooth and now to stop dodd-frank changes and he's got the votes to stop it. that's the biggest hurdle. >> thank you both. mark helper in and john heilemann will look at key issues facing the incoming
anna: welcome back, this is bloomberg markets. the world economic forum kicks off in dallas in switzerland tomorrow. here to take us through what we can look for is erik schatzker who was already on the ground in devil's -- davos. you spoke to the chairman i had of this week's meeting. what did he have to say? economic forum annual meeting convenes under a blanket of snow but also a cloud of skepticism. what theworld care mandarins of data most have to say? davos have to say? it's not the first time the form has been accused of elitism. perhaps more than ever, the nature and lucidity of this event seem out of touch with the politics of the day and the mood
of the people. down to talking about this very question, the relevancy of the world economic forum and what it can accomplish coming years with the chairman said. ,> i think our business model our concept is more needed than ever before because the big issues in the world cannot be alone,ed by governments by business alone, by civil sites he alone. you need a global platform for cooperation and that's what the forum stands for. heard him say this farm is more needed than ever before. if you wanted to, you could find many people who disagree with that. the question for the ofticipants, because many them are multinational ceos, is proposesoming to davos a risk? will it be a scarlet letter that can do reputational damage to ?our brand
that is a question we will try to answer all week long by talking to these ceos and political leaders who gather at the world economic forum. , it's aose tomorrow who's who of ceos around the globe -- from the united states, arnie sorenson, the ceo of marriott, peter rubenstein of the carlyle group, andrew liver it's of dow chemical. the only representative donald's transition team is anthony scaramouche. he is in the midst of selling his stakes on not sure we can label him with that affiliation. i will talk to him this afternoon and later this week, you will see randy stephenson from at&t and the ceo of hilton. you will see steve schwarzman from blackstone and ray delly
bridgwater. of edgewater -- a bridgwater. we hope this edition of the farm can resolve and get some things done. guest earlierone today say globalization is dead and that's what they have concluded from the victory of donald trump. it's hard to say but the fight against -- before globalization has to start somewhere. it's great to see they have a new model of globalization out there. there is no question that trump stands for everything the world economic forum does not stand for. globalism, multiculturalism, -- progressivism so how do the people redefined
fit because you are combining on one side the world's biggest with brands like armani and ray-ban. side, you have the world leader in [indiscernible] so you combine two sides of the business and it makes sense. of founder and owner luxottica owns 62%. dream het's a lifetime is achieving today. they have been discussing the deal for about four years. solve ao a way to succession issue. he has said he wants to see the company strengthen in the long-term. there were a couple of issues with several ceos changing in
the last few years. said he does not want to get involved in the country -- and the company. you can fire a manager but you cannot fire your children. instrumental in bringing this big deal together, the founder? yes, he is the central figure and will be the biggest shareholder and the new company. 31% of the writing 31% of the will own shares of the new company. he will likely be the central figure for the deal together with the ceo of essilor. have discussed this deal which was announced before the market opened today. today even rose
minority shareholders for luxottica, the closing price was lower. the shares surged. analysts see a high potential of synergy. thank you very much. coming up, sterling slides as concerns grow that theresa may is prepared to lead britain out of the european market and more on those moves from the weekend into this monday. we will have more on that next. this is bloomberg. ♪
here is what we are watching this hour -- the pound is getting pummeled after theresa may is prepared to leave deadly britain out of the european single market. takes the-- davos stage in switzerland and we hear from the event founder this hour. some m&a action this monday as essiolor agrees to buy luxottica. shares in both companies jumping on the news. welcome to the program. 2:00 here in london. european equity markets are up u.s.ading even if the equity market is not what it is.
let's look at what's happening in europe. ofk: we are down by 6/10 1%. the basic resources group is up at every other group is lower. investors are nervous i had of the big theresa may speech tomorrow. as you can see, stocks are lower which leads me to the big event tomorrow. level ofow you the sterling against the dollar which goes back until january of last year. brexit, we went down to $1.19, breaking below $1.20. that was the previous october low. another key intraday level is $118 which was on october 7 which was the flash crash day.
december 20, it was a wait and see a wait and see ahead of the theresa may speech tomorrow whatever time it will be. she told us last week that investors volatility is creeping up. we are no where dear -- we are nowhere near the levels we were pre-brexit. we are at levels we have not seen since those days after brexit, june 27. the end of the run for sterling? 14 days was the end of the run on friday, the ftse closing high. unlucky.be 15 times that would be a record.
that will be a record closing high which is a record. a lot of records there. if it's 15, it's a record. anna: absolutely, we will look from further day tales -- further details from the theresa may speech tomorrow. let's check out the first word news. president-elect donald trump is signaling a major shift in transatlantic relations. he called nato obsolete and floated the idea of lifting sanctions against russia in return for making a nuclear arms deal and predicted more eu members would leave nato. the german foreign minister said the donald trump comments are causing agitation across the eu. said he is concerned about nato and they say the alliance
is looking forward to working with donald trump. killingplane crashed seven -- 37 people. it was on a flight from hong kong and belong to a turkish airline. the crash kill people on the plane as well as those living in a residential area near the airport. prosecutors in seoul, south of -- arested one member of south korea's richest families. he took over samsung from his father. global news, 24 hours a day come up howard by more than 2600 journalists and analysts in more than 120 countries. anna: we are getting breaking news from the imf -- it's giving us updates from the world economic outlook.
one of the bigger moves is around saudi arabia. --y said the gdp fourth growth forecast for saudi arabia is 0.4% as the kingdom seeks to overhaul its economy. these details are coming through in the world economic outlook. they are looking at a number of economies and brazil is in the mix as the imf cuts their growth outlet to 0.2%. some sizable moves in the forecast. the imf raised the u.k. growth forecast, reversing previous cuts. washington-based group expects a 1.5 percent expansion this year and that had previously been at 1.1% and that would compare with their growth of 1% in 2016. they said the latest move was mostly unaccounted stronger than
expected performance of last year. sticking with the imf story, coming up at 11:00 a.m. eastern time, we will speak to the economic counselor and director of imf. he will join us a little later on this morning. -- or rather this afternoon. the focus this morning. it fell and equities slid on concerns that theresa may is prepared to lead britain out of the european market. here to talk about the ,mplications of a hard brexit richard good to see you. we have seen the pound weaker. we understand that even during new zealand hours of trading, there was more than expected volume on the pound. this is to be expected given the weekends it news? >> it's not dissimilar to other
reactions when we hear from the prime minister. the one thing that spooked investors this time was that there were many reports from the weekend press in the united kingdom that number 10 was saying this could be a speech that would have downward pressure on the pound. ran that out in front a little bit. this is unprecedented that we get a warning from number 10 which has been denied in the cold light of day. it's the warning that got investors a little excited. asiaows that we saw in have not been revisited in london. it's lower at than it was friday but the pound is off its weakest levels. anna: we dropped down to $1.20 and then went below today but not the 1985 levels. tested the october flash crash levels. $1.18 whicharound
was the lowest level in 30 years. we did not quite get there. we have now bounced back above that level which is a psychological level. $1.19 today will be an intermediate support should the pound against the dollar actually get downward momentum as we get into the speech tomorrow. anna: it will be interesting to theif people have front run speech and that fear of how the pound will react when she speaks. we don't know what she is going to say so we don't really know. we don't know if the extent of the reporting is accurate. >> the idea that the prime minister favors a hard rex it and prioritizes -- a hard brexit and prioritizes less immigration is nothing new. investors have been divesting this soviets along the same
lines we have heard already, it's a classic sell the rumor, ay the fact and you'll get decent rebound of the pound over the next 24 hours. if the details are further down the road with more details that investors had not considered, then we could see additional downside. anna: the tone of the speech could be interesting as well as to we have seen to reset may speak in the past and the pound has reacted negatively. she is in a different setting with a different audience. >> it will be interesting to watch her speech in davos. the prime minister has said has been directed at a domestic audience. some of the things the chancellor has been saying has been directed at an international audience and those messages have more nuance. it will be interesting to see what the prime and mr. says when -- whatesses a broader
the prime minister says when she addresses a broader audience. anna: thank you so much. is get more insight from david riley, the head of credit at blue bay asset management. very good to have you on the program. what are your expectations around theresa mays speech? i think richard made a good point in saying that a lot of aspects about the uk's approach to brexit were well signaled. the u.k. is going to leave the single european market. they want to gain control over the borders. anna: she has not said that yet. a lot of people have inferred it. extent, i think some investors in the market have
been a little bit tone deaf. the message has been quite clear about the european market. that isr aspect becoming increasingly clear is that the u.k. seems less likely to go for a customs union. one aspect in terms of her speech would be whether she sets out more explicitly and gives guidance into the kind of transition. will it be substantially of? ofl it be over a long period time or be short-lived? what we are seeing at the moment, the market is waking up to the notion that the political driving in the u.k. are toward brexit. against that backdrop, arguably, sterling has further to fall.
that being said, from our point we think sterling has some room to go but it has moved along way. anna: if she says the things that we were led to believe over the weekend like leaving the single market, are we done with selling the pound on those details? it would depend on the town. in the short term, if that's all she communicates and there is a chance we get a bit of a bounce. the short sterling trade is becoming quite a popular and crowded one. there is always the potential there for some kind of correction. potential forthe starting to move weaker. anna: when do we get back to the economics and let that lead to the u.k. assets? it's interesting the imf upgraded the forecast for
britain. many people have been astonished by the resilience of the british economy. what are your expectations for the economics here? where do rates go in the u.k.? >> we still think they will get a slowdown in the u.k. economy because of this year. inflation is clearly going to be moving higher and that will eat into low incomes. where we think there is a real why we thinkand the risk reward is attractive in terms of relative to sterling is to be short gilt. the bank of england will stay pats with rates through 2019. the bank of england is right at itselfit of what it set
in terms of its own inflation mandate. if the u.k. economy per is more resilient because of the great british consumer continues to up debthey will run and reduce savings then there is a greater likelihood. that,we will revisit thank you very much. up, the ecb will hold its policy meeting on thursday. come out withghi something new? this is bloomberg. ♪
this is bloomberg markets. anna: this is bloomberg markets. areeuropean central bankers unlikely to make any changes when they meet thursday. connieggest the european -- economy is on fairly solid footing. still with us is david riley from blue bay asset management. when you look at the ecb, what is your outlook? meetinge near-term, the is going to be pretty much a nonevent. initial forecast from their december meeting so it's more of the same and mario draghi will be relatively dovish. they need to think harder about the ecb as we get through the rest of the first half of this
year. the ecb may turn out to be more hawkish. the backdrop at the moment for the european economy and european inflation is ultimately the strongest it's been for quite a few years. anna: does that mean investors have put too much faith in the ecb buying bonds? the ecb from the middle of this year will start tapering that they will their approach above and beyond what goes into effect in april but the market is anticipating a very gradual glide path beyond that. it should be a bigger volume in asset purchases. they could signal sooner rather
than later a much sharper withdrawal of some of that extraordinary monetary stimulus which was put in place to head off the inflation risk. the inflation risks have largely gone from the european economy. anna: will they call that a taper? i think they want to have a tapering policy. it will not be a complete hard stop but it could be much sharper than the market is anticipating. impact inhave an terms of fixed income and get steeper yield curves on the back of that. way we look at that is that we prefer to be in the segments which have been underperforming during the corporate bond buying by the ecb like corporate hybrids and the high yields. and the u.s. economy does
what will the banks be looking for after we hear from theresa may question mark >>. debate details and the is about whether we retain the passport system inbound and outbound so it's not just that u.k. banks, it's japanese insurers, u.s. asset managers, etc.. likely that asly long as it's a hard brexit, we some banks moving people to other facilities. mentioned the other day what their plans are. in terms of financial stability, what are the banks watching for? mark carney has been talking about the dangers to the eurozone and financial instability around brexit.
david's said it would pose a financial risk. what are we watching for? and prae saying the ecb backtracked after last year. the targets for the eurozone lower. is a split between guidance and requirements. from a capital position, we are not worried. it should affect liquidity. near't think we are worrying about financial stability. it's how this hands out over two or three years and who is impacted most and who stands to lose and who stands to gain. the: the backdrop for banking sector has improved on several levels.
me toward this price grab of share performance for various banks over the last three months. >> it's interesting if you look at the last three-month scum of banks we were most concerned , ratess far as capital have ticked up and trading potentially stronger. there is quite a lot in the price that banks need to deliver through results and solid revenues. they've got to talk about margins and margin stability. and thefrench, mortgage mystic retail has been crippling them for years. it's definitely a bank by bank approach. we will need some fairly
positive news and some solid delivery otherwise those numbers will definitely go down. anna: what a difference a few months make. thank you very much. up, we will take you to davos in switzerland will we will hear from they had of the world economic forum ahead of tomorrow's world economic forum and what he says about donald trump. ♪
i've spent my life planting a size-six, non-slip shoe into that door. on this side, i want my customers to relax and enjoy themselves. but these days it's phones before forks. they want wifi out here. but behind that door, i need a private connection for my business. wifi pro from comcast business. public wifi for your customers.
private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. anything with a screen is a tv. stream 130 live channels, plus 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today. >> welcome to bloomberg markets p or time anna edwards live from london.
>> president-elect donald trump is offering the u.k. a quick and fair trade deal. shortlyect theresa may after taking office, those comments came in an interview. the u.k. cannot strike trade deals as they leave the european union. the british government shoring is according to people familiar with the situation. the dollar fell after a hard clean break from the eu. according to the country's energy minister. russia is denying allegations the warplane flow to close to the jet in syria. told wall street journal pilots were having close calls despite
a safety agreement. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 150 countries. this is bloomberg. we want to take you to switzerland where the world economic forum starts tomorrow. eric is there and joins us now. >> donald trump is not here with us in dallas. he's getting ready for the inauguration in washington this friday. as you would imagine, looms large in just about every conversation being held here and will be held over the course of the week, though he has sent only one member of his team. the hedge fund manager coming over. i spoke to the executive chairman of the world economic
forum to talk about the wave of populism that's what trump to victory. i asked him what does he expect of the trump era and what does it mean for the world economic forum? >> we have to know and we look forward to the state of the union message, what actually are the policies of the united states. at the end, i think we are living in a global world which is interconnected and interdependent. we will not just move out of globalization. a will have to maintain certain more mode of global trade. coming out oft is these developments, which we have seen not only with the
united states, but the u.k. and other countries. >> given everything you have advocated for more than four decades, are you concerned, frightened, worried by what mr. trump has said? >> not all. we always advocated, since it has to be economic development, that the economic development should be with social responsibility. we should not have people who are left out. way, we join in some of whichguments for president trump was elected. >> you mentioned members of trump'staff here at what was the purpose of the meeting and what came of it? clear wek it is cultivated relations with all governments, we always want to
be global. naturally contact the u.s. administration, particularly since many partners now or in important decisions inside the administration. >> were you hoping to see mr. trump himself and did you extend a -- an invitation hoping he would be here? >> it would have been completely illusory to ask him to join us now. >> many companies from ford to carrier to soft bank, alibaba to amazon, are answering trump's's to create jobs in the united states and donald trump is taking credit for a lot of that. you can count the road economic forum in that group because he
told me he would convene a special meeting in washington dc at some point in 2017. , butate has not been set it is so he can engage the members of multinationals around the world in a conversation about how to create more jobs in the united states. i said to him why would the world economic forum want to bend to trump's will and he said because we have to be responsive. anna: we have to find the part works forzation that economic forum and also brought or elect it -- electorate. >> they say this year's world economic forum annual meeting is all about responsiveness and responsibility.
the constituents need to find a way to accelerate global growth. that will heal a lot of wounds. members need to find a way to make markets more inclusive so people do not feel left out and he says members have to be aware and perhaps even feel -- perhaps even .earful smart manufacturing because it so many factory jobs. these are calls being made. let's not confuse the less with the elitism. they do some good work. whether they will heed the advice remains to be seen. how weresting to see will see trump respond to the new wave of automation yet to come. thank you. joining us there from the snowy slopes in switzerland.
the topic will be sustainability. to check mark, investing to meet the sustainable development goals will create at least 12 for dollars in return by 2017. francine lacqua's down with an exclusive interview. >> the total assets in the world are about 300 jillion dollars. global economy is about $100 trillion. we see far more money than we know what to do with. a result is that interest rates are zero. what we are saying is here is a great roadmap where we can put the money to good use and it makes a lot of sense. the cost of implementing sustainable development goals would be $200 billion a year, relatively minor on the scale of globally -- accountability with the returns are enormous. toe people would estimate up $30 trillion. why don't we do this? some need to change to make it
possible. anyone individually cannot do this. at a time when the clinical it isnment is difficult, even more reason for the private sector to step up more and more businesses discovered -- let's do something about it. >> on climate change, the a muchn means clearly less synthetic view toward climate change. >> i do not know that. create economic growth? increasingly, people are understanding you have to tackle climate change if you want to have job creation. >> to you think the new administration understands that? they werennounced investing $350 million between now and then in green energy. the industry moving rapidly.
elon musk doing extremely well with the electric car. more people in the u.s. are pointed in the energy sector than the fossil fuel sector. the market is moving. the movement in the financial sector, the market for green bonds, the number of companies that have the internal price on carbon, there are signals on the marketplace since paris , the world said we would decolonize this economy. people understand it makes enough economic sense. the current administration might have talked more about climate change in the new administration might talk more about the economic story of it but i think there is a lot of ground there. dallas francine lacqua speaking exclusively ahead of the meeting. coming up, a look at the markets for you right now.
this is what is happening with foreign-exchange markets. in to some havens. the yen up for a six day against the dollar and the euro against the dollar. boosting the dollar in many form even if the yen got the of her hand. the pound against the dollar, we have seen a substantial move. we drop the low 120 earlier today. questions about how hard a hard exit will be for the u.k.. urine equity -- european equity markets at this stage of the trading day. futures are actually open, suggesting weakness in trading. this being a holiday in the united states. upd futures reflecting that .6%. up, eyewear makers join
basic resources, on the back -- investors beginning to focus on the week's policy in the policy meeting in the european central bank. be, ashow that exit will a result, the u.k. market a little more resilient and other european at the markets. so. 100 down 1/10 or market, nong the seen,that pound we have you typically see the ftse 100 outperforming the rest of the european equity markets. let's talk about one of the big m&a stories of the day. agree to buy the time rival for about one point. billion dollars. the number one manufacturer and
in eyewear. good to have you on this program. remind us. building for been some time. it is a union between some countries analyst -- analysts have put together in their wildest dreams. click yes. it is something analysts today believe makes a lot of sense. we understood a few hours ago at starting in 2013, it has been four years of those. the main reason is those are really complementary. you have the world leader -- you clearly bring together two parts and also doing the deal now, those companies
will stop fighting against each other. few years, getting to one side and getting the business on the other. the deal makes a lot of sense and also,o of them the largest shareholder in the eeo, co-ceo, and chairman. a major role in becoming the biggest shareholder of the group . >> the founder clearly crucial but he will not be the only one. the biggest shareholder binoculars one running the company. >> no. the two biggest features of the deal, the ceo will run the company.
at 81 years old, he has had issues in the last three to four years. andaw leaving the company they came back to the company, running the company with some changing over time. clearly looking for a successor. he said several times he does not want to be involved in the company. he told me you can fire an executive, you can fire -- you cannot fire you kids. company, ad a bigger way to have a good platform for his company. >> interesting about not being able to fire his children.
>> they're talking about 600 million seniors per year to the next 3-4 years. group synergies for the because clearly, we're creating the leader in the industry. she -- we see shares going up . ,f you look at the terms shareholders or given an exchange ratio lower than the closing price on friday. share this one up more than 10% today. still up 8-9%. it looks like good news for investors so far. withank you for joining us the details on that. 3:48 if you are in paris or
deliver a speech from lancaster house here in london. what she says about membership of the customs union, of any transition arrangements. all of that will be washed leslie by the market. the euro and the pound also on the move as a result of what we heard over the weekend with regards to brexit. we could get some clues tomorrow depending on the tone comments. generally speaking across assets, we saw move into the end and the dollar as a result. the equity market down by .7% right now. one sector, the basic resources center or, one recently see the london market outperforming a bit, linked to the weakness of the pound story.
german officials pushing back on the president-elect after donald trump spoke -- spoke out. trump called nato obsolete and projected others might follow the u.k.'s pretty -- decision to leave that. comments to reporters in berlin saying she will stay the course and continue to strive for a strong europe. she has been delivering a speech where she talked about trump and immigration. can go to berlin. a little earlier today, pushing back to the comments -- by donald trump who is critical, saying she will stay the course.
saying we have the best of the in our hands. merkel saying she would not comment on trump's emerging agenda. germany will seek to work with his administration on all levels. he has now set out his positions they have been known for a while she says that she says her positions are also known. from herot step away commitment to everything she said in her remarks earlier today. we heard us simply from the , who executive officer spoke with matt miller about how missions are handled, the challenges of grexit and outlook of the market in 2017.
>> a natural move for us irrespective of the brexit referendum. we used to be an asset owned and controlled in 2003 and bear in line,epresenting the top 50% of them from false. was a natural move irrespective of the dynamic of the brexit. generated byed but the potential merger and the willingness of the party to facilitate the removal of the transaction by the european commission. for sure in the post-brexit with lsc, mosted
are integrated with houses, a natural move. for sure, there will be opportunities arising from brexit into europe and the eurozone in particular. anna: that was the ceo's eq with my colleagues earlier today. that is it for this edition of bloomberg markets. more to come on bloomberg television or feeling sluggish today, we'll get more on the pound ahead. speakow, theresa may will , one of the big events of the day. ♪
>> we will take you from washington to switzerland and cover stories today out of china, france, and the u.k. in the next hour. sterling for the first time since october after theresa may says she is prepared to leave written out of the eu single market us we anticipate more details and speak -- in the speech tomorrow. agreeing to exotic cut in a $24 billion acquisition. in thers now resulting largest manufacturer and retailer in eyewear. financiers and politicians made their way to the world economic forum. we will examine whether there is
any disconnect. u.s. markets closed for the martin luther king junior holiday. -- have a look at where equities are trading. u.k., tomorrow, tuesday, theresa may's the brexit speech. all 18 other industry groups are lower today. best run since november 25. is the ftse's winning run about to come to an end? days, a record stretch of games for the ftse come friday, 12 of those games were record finishes, a record in it self, a big part in due to
weakness in the sterling. will the 14 day record ran -- record run come to an end? earlier, 11986, that is important. maye's concern now theresa will have high rhetoric tomorrow. what -- to watch out reached11841, the level october 7, the day of the flash crash were sterling fell by as much as 6.1%. we are at 12067. the close on the 11th was the lowest close since may 8.
just -- positions on sterling, double the amount on the week ending the 20th. everything you need to know since brexit. implied volatility rising. one week volatility, one month volatility. expectations in the pound on exchange rates in the next week have risen to the highest level since june 27.15. investors do not even know what time theresa may's speech will be. no one near the levels we have been just before brexit. we are keeping a close eye on sterling today.
more from the newsroom. >> president-elect donald trump is signaling a major shift in transatlantic relations. andp called nato obsolete is lifting sanctions against russia. he predicted more eu members -- the comments came in a joint interview. germany passes foreign minister says trump's's causing astonishment across the eu. hade is concern that nato -- headquarters and looked -- looking forward to working with trump and his national security team. in kurdistan, a cargo plane crashed while attempting to land, killing at least 37 people on board. the boeing dirty 747 was on a toght to hong kong and want
a turkish unit at china's and the day group. it killed people as well as people living near the airport. ims/it's growth forecast. saudi and gdp will increase 1/10 of 1% this year, stepping down from october's forecast of 2%. have arabia is trying to investor confidence to rely less on oil revenues. global news 24 hours a date however i more than twice as hundred journalists and analysts in more than 120 countries. this is bloomberg. mark: thank you for joining us. germany passes by mr. theresa may could signal ammunition -- plummeting after u.k.'s newspapers willing to quit the eu single market to regain ,ontrol of britain's borders
signaling there could be more turmoil ahead with one month volatility on a three-month high before she outlines for big brexit plans tomorrow. -- expect another pound correction. jeremy joins us now. we do not know what time it the lows of october. crash into that tomorrow? clearly invels are the market focus. you look at the beginning of october and that is when theresa , a signaled a deadline selloff that triggered a discussion about immigration.
investors will continue to vote and we will see those positions filled again back to the levels we're seeing october. that apply sterling coming out pressure. mark: we went down as low as one of five -- 105. give me some trading numbers if it is as gloomy. >> we have discounted the loss. in that context, we should be below 118,- we get we will see a crack below the u.s. dollar and look at other process because the japanese yen will be interesting as well.
there will be a perception of how week will it be under a clean brexit. mark: they clean brexit, so many different ways to describe it. you mentioned other process. sterling?best play gives me other ones where maybe investors can make some money? >> sterling and is an obvious one. it looks like it might come to an end. it may be the case that as we look toward the inauguration of the president, -- i think sterling and is one way to play it.
in the traditional world, you may look at switzerland. mark: inauguration friday, dpi uptick in api year on year. you have got yellen another fed speakers as well. >> investors got their fingers a little bit burned, to find they cannot get the message they really wanted to hear about fiscal stimulus and tax cuts. will investors put on long dollar friday? i suspect they might.
it will be fascinating to see the canadian central-bank haveify shifts and yields been overblown in terms of economic is vicious. it might's -- provides some support. mark: good to see you. thanks so much. coming up, u.s. president-elect donald trump already embroiled and war of words with china mexico has come out swinging against the eu and nato interviews. more coming up. this is bloomberg. ♪
mark: this is bloomberg markets. donald trump has taken his strongest swipe yet at the eu. in a discussion with germany, trump called nato obsolete and suggested others may follow the u.k.'s's decision to leave the eu. said his chest for angela merkel may not last long alongside vladimir putin as problematic. saying i personally will wait for the inauguration of the american president and then we at allrk with him levels. he set out his physicians once again. once again. --
reporting to reports live from berlin. on germany, the eu, and nato. >> the line we have seen from europeans as they have questions in the garage of comments file at the same time trying to not take they and not have panic, because these are leaders of major economic powers in europe. said we europeans have our destiny in our own hands. in other words, this is coming in from the outside but we still hold the cards here and we will by trump, notund at this juncture, anyway. despite fighting back, it
poses a bigger question. a massive shift in transatlantic relations. >> that is something the europeans have to deal with and it is something on their mind spear the french foreign minister said europe cannot i do notslide back, care if the eu holds together were not, which was basically trump has his message. they have to wait and see what trouble do when he's in the white house less than a week from now. mark: it is quite old. there will be nerves across firstlynato is obsolete
because it was designed many years ago and secondly, there are other reasons. he is repeating themes he has already turned out pre-election. >> absolutely. a growing observation that what you see is what you get with trump. statements by his cabinet picks notwithstanding, this is most likely a four -- a taste of what you will get. the german foreign minister, we heard in brussels today, eu foreign ministers, he said there was a move of agitation that all of the officials were quite agitated reading these comments by trump in the morning newspapers and online.
that is what has happened and ,here is no immediate concept other than that the eu and nato were upholding them. usk: thank you for joining live from berlin today. still ahead, investing to meet the world posse sustainable development goals. 12 trillion dollars in return by 2030. we will hear from the chief executive. this is bloomberg. ♪
assets in the world are 300 trillion dollars. the global economy is about $100 trillion. we are sitting on far more money than we know what to do with an a result is interest rates are zero. we are basically saying here is a great road cap and we can put that money to good use and it makes a lot of sense. the cost of implementing sustainable development goals will be 2.2 -- $2.3 trillion a year, relatively minor but the returns are in or miss. this?n't we do the challenge is something's need to change to make it possible. at a time when the political environment and -- lyrical environment is very difficult, it is even more reason for the private sector to step up and more and more businesses have discovered there clearly is not a business in that property so
let's do something about it. >> the election of donald trump means you have much less duty toward climate change. >> i do not know that here the linkage my question -- might have changed but the election is still the same. people are increasingly tackleanding you have to climate change if you want to have job creation. announced they were investing another 300 $20 million in green energy. they see the industry moving like elonnd people musk doing extremely well with the electric car anymore people in the u.s. are appointed in the energy sector so the market is already moving. movement in the financial sector, the markets to green
bonds, and internal price on carbon, clearly there are .ignals in the marketplace the role said he will decolonize the economy to have seen enormous celebration because people understand it makes enough economic sense and the current administration might talk more about climate change than your administration might talk about more the economic story and it. a lot of economic ground there. >> does deregulation and sustainability go hand-to-hand -- hand-in-hand? collects some things you need policy frameworks, very important. it would help to have a price on carbon. many places in the world have moved forward on this agenda. one of the major talk in the u.s. is to -- invest 1.3 chilean dollars in infrastructure to bring the u.s. up to standard. it is not a bad idea for job
creation and economic growth. why not do that sustainably to benefit long-term without having the negative economic externalities we currently deal with. the language might change but a lot of the things we might do might not. coal has become economically unviable in the u.s. you see the coal industry going down, and no new coal plants are being built in the u.s., it is really a function of economic forces more than climate change. >> it takes time. is there an appetite to take more time or are you afraid there will be a return to quick fixes? >> your question is right and we have no time to lose. it puts us on a church rectory of 2.7 from before. it is not that that we need to stay 1.5 degrees if you want to
be honest in any time we wait, the cost goes up. christine lagarde and people estimate the externality of climate change costs us $5.3 trillion per year right now. the risk in the u.s. is that we might slow down, in which case we have the second-biggest in this world not fully participating. it is hard to unwind the paris agreement in such a short time. it is difficult to refer the economic trends that are playing. while i am not belittling the challenge ahead of us, i think a lot of people have a lot of energy to deal with them. you make sure you deal with sustainability? >> the first and foremost should be to guarantee the company itself. many have tried to put that into quarterly profits. in the lastas been
50 or 60 years, the average length of the life of the public traded company is to 70 years. people start to realize their responsibilities are to ensure these companies cater to multiple stakeholders and do so in a way that chairman overtime will benefit. chief executive paul palm and there. right. security and rising inequality. the world economic forum has an idea. this is bloomberg. ♪ . .
i've spent my life planting a size-six, non-slip shoe into that door. on this side, i want my customers to relax and enjoy themselves. but these days it's phones before forks. they want wifi out here. but behind that door, i need a private connection for my business. wifi pro from comcast business. public wifi for your customers.
private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. anything with a screen is a tv. stream 130 live channels, plus 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today. from london, i mark barton and this is bloomberg markets. let's check in on the bloomberg first word news.
trumpsident-elect donald is firing back at the outgoing director of the cia. he called trump's comments about the intelligence community outrageous. he says trump has an incomplete understanding about russia's intentions. trump asked in a tweet whether brennan was the leader of fake news and said the cia couldn't do much worse. keeps shrinking the population at the detention facility once promised to close. he has agreed to accept 10 -- the first plane load of prisoners arrived in 2002 and the u.s. was criticized for holding prisoners there indefinitely. most without charge. in mexico, police say five people were killed and nine wounded at a shooting at a nightclub. in shooting took place playa. carmen. it was the closing night of festival- of a music
popular with american and british tourists. and a stunning turn of events for a member of south korea's regis family. prosecutors are seeking a warrant to arrest j wiley on bribery and embezzlement allegations. he's accused in the scandal that led to the impeachment of south korea's president. he had been groomed to take over samsung from his father. global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. this is bloomberg. mark: let's get to davos where the world economic forum has just released a report for a new framework designed to respond more effectively to growing global inequality. to talk more about this policy rick salmons who joins us now. thank you for joining us. dallaswe care less about ? nobody predicted trump would
win the election. is it less relevant this year? guest: i don't think so. given the intense focus on some big issues, failings of governance and slow growth and poor social inclusion, if anything, leaders from around the world need to have a much more concrete focus on solutions and many people come here for exactly those kinds of discussions, whether in public or private. does this bring forward the point that there's a disconnect between davos and the real world? tebow's has a vision of globalization but clearly, that vision has not included everyone. elite part of the problem? think the premise of your question is off. the world economic forum is a forum for public-private
operation and has for years been trying to engage different stakeholders in solving some of the social problems that relate to our model of integration and growth. moreover, here you see not only not only a few hundred ministers and about a thousand plus business leaders, but one third of the meetings are neither government nor business. labor -- theree are more labor leaders and central-bank governors. religious leaders, academics and scientists. it is a cross-section of leadership of institutions and thought leaders from different regions and what we try to do in the meetings is engage them in cooperation on real problems. is aimed at one of the central conundrums facing societies around the world. more aboutou tell us
this framework to respond more effectively to growing global inequality? hast: inclusive growth become a mantra. everyone is for it but it's more directional and aspirational. we try to take a hard look at if we were serious about trying to get a better, socially inclusive model, what would it look like? look like andhift how would we measure it? in a nutshell, what we are finding is for quite a long time, major economies, economists have been missing a big part of the puzzle. for a business person, we are familiar thinking about the topline and bottom-line. you have to do both for sustained prosperity and it's the same thing for an economy. we have far too low growth and
it has been decelerating for the last couple of years but there are things you can do and strategies that would help growth in way that emulates purchasing power and boosts living standards, which is the bottom line way societies evaluate the economic performance and if you do that well, you get a positive feedback loop between broader social inclusion and growth on the other. we've been missing that focus for a couple of decades in much of economic policymaking and establishment. we've identified 15 different areas where you can get a win-win between growth and equity. give us a few of those areas. if there are 15, give us a couple. there are a couple of the usual suspects, to improve your education system, but it's not enough to improve your universities. you have to rot access and you
have to go through the life cycles of a person. gender parity is critical. some countries in the far east are missing opportunities for growth because they have relatively low levels of female labor force participants. there are other areas related to business. ownership and the regulatory environment, how well your financial system moves capital toward real economy business. infrastructure is a familiar area but social and systems, are they modernizing and adapting? there's a whole spectrum of areas that are win wins and the inequality is what an economist would call an endogenous situation.
there's no iron law of capitalism that suggests inequality is inevitable. ifis something you can work you place the emphasis on institutional strength. is there an appetite for adopting all or part of this dream work for those you have been speaking to? we have been testing this over the last year or so and we've had some very positive response. modelot only a new growth , but it's a different model of globalization or global economic globalization. we spelled out changes for economic governance and one of the big wins is to get a better blending of public and private finance for economic infrastructure which represents between 70% and 80% of the incremental investment needed to
achieve the sustainable goals your previous segment discussed. back to the opening gambit which you vigorously contested, to early to call the death of the dallas consensus? there wason't know if a davos consensus, but the washington consensus, those drivers are still important. fiscal andund monetary policy, opening your economy to trade, reducing sclerosis in the regulatory environment, but that's just one half of the puzzle. we've been missing the other half and that's the consensus that needs to be established. this would be a start and there's a big market demand for a new model that can try to fire on all cylinders to boost our
deal will create an eye where giant. and in today's quick pick, a historical look at the price of will and how the deal in november could influence prices going forward. a lot has happened since last ,ear's world economic forum populists were probably not at the top of the invite list, but the executive chairman of the world economic forum says populist leaders will be listened to this year. what of the leading persons of the movement here, we want to listen. how doe the concerns and leaders respond? mark: a french i wear maker
agreeing to buy its italian rival in an all stock transaction and combines the largest rat -- largest manufacturer and retailer of eyewear. both companies have been developing smart glasses technologies. electricity prices in europe have soared to their highest level in almost a decade. a cold snap has restrained supplies because of power plaut outages. temperatures in northern europe are forecast to drop as much as five degrees celsius below average this week. alliance of visor, mohamed el-erian warns politics could be a threat to global growth. it could be more of the same last year, but as the trade intensifies and a surge of nationalism around the world, the economy could be hurt.
mark halperin and john heilemann will be taking a look at president-elect donald trump's policies in the lead up to his inauguration on friday. here is part of tonight's special on financial regulation and the repeal of the dodd-frank. >> for wall street and financial regulation, donald trump continues to be the ultimate wildcard. he's called for cutting regulation across the board that includes dodd-frank. that is something the industry would like to see, but it -- he has also called for reinstating the law that separates investment banking and would force the big banks to break up, not consistent with what a lot of republicans in congress would like to see. in the house, on the house financial services committee, key player and a
has proposed legislation that would overhaul dodd-frank. that's largely a blueprint for what the house would propose. the big wild card is getting support from democrats in the senate to avoid filibuster rules. they will need at least eight democratic senators to agree to pass legislation unless republicans take a more aggressive stance. going to see a bill introduced in the house and are waiting to hear what the republicans in the senate craft. >> also with us is our bloomberg editor. let me ask you are their divisions in the republican party on capitol hill about what should be done with dodd-frank? if so, what are they? many: there are not that
positions. the key thing is to watch with the senate does. the previous republican legislative efforts have not gone as far on dodd-frank as the jeb hensarling approach. now you have a new senate banking committee chairman and he likes to do things in a bipartisan way whenever possible. there may be some tension there but the senate bill is a wildcard on what republicans want to do with dodd-frank. mark: there are a lot of contradictions in donald trump and what he talks about. you would think allowing wall street to have more power would be against a populist image. numbers of congress fear a backlash in repealing or scaling back dodd-frank? it is definitely a
long-term political risk. trump ran on this populist economic message that included bashing big banks and criticizing hillary clinton's ties to goldman sachs. andoptics of this debate whether or not republicans are being seen as helping and given -- giving a hand to wall street is something that could in the long-term backfire. john: who's going to be the voice for this argument? a lot of cases were trump wants to deregulate, businesses are probably for it and people don't like red tape. wall street is not super popular. who in the administration becomes the public voice for this as the argument unfolds on the trump side? guest: that's a great question. trump is still filling in a lot
of these economic positions, particularly looking at the fed will help to dictate who's taking the lead. most likely, the administration will look to congress for an example on how to move forward with this. isht now, jeb hensarling close to mike pence and was an early supporter of donald trump. he has the legislation ready to go. he's expected to roll out a new version of that in the coming weeks, but quite frankly, it remains to be seen. john: what are the things that could cause this to come undone? the biggest hurdles republicans will have to overcome to enact an unwinding of dodd-frank? guest: the first one that comes to mind is rush holt in the senate. you would need 60 votes to
overcome the filibuster. while there's a possibility it could get done through this reconciliation process, that only works with things that and dodd-frank affects so many areas that only some of it could be done with that 51 majority reconciliation needs. you need 60 votes unless there's a huge change in how the majority runs things over there. state, for what some red kratz who are up for election, maybe they will go along with some of the changing but you heard chuck schumer, the incoming leader of senate democrats say they are going to fight tooth and nail and he's got the votes to stop it. mark halperin and john heilemann will look at what is trump the incoming
mark: this is bloomberg markets from london. i'm mark barton. a new m&a deal in eyewear with eyewearch i maker -- maker announcing it would buy an italian company, creating the largest manufacturer and retailer in eyewear. our reporter has more on the deal. this was four years in the making. judging from stock
reaction, it's a very good thing. stocks for both companies are up, it took quite a while to stitch together. it brings together the lens manufacturing and i frame andfacturing and retailing brings it into a seamless business. they would have a huge part of the market, so the regulation thing, they are wobbly hoping it will go through, but what it does for the italian side for the owner of luxottica is he will manage to overcome succession issues. he said he never wanted his family to run the business. that helps him overcome his issue and eventually handover to the french side or to management. but issues remain,
antitrust issues remain, how are those factors going to be overcome? the question about regulation is for the longer term. see them try to control the entire value chain. management, he will be the strong man in the company with a 31% voting stake. he's already italy's second and will probably be richer after today's move. in terms of management with the current ceo, they have not really set how that would lay out over time, but it is arguable that over time they would phase out management from the italian side, bring in more french managers and the company would be based in paris. a lot of the operations will be
executed from that side of the operation. italy?s it a sad day for it's losing another multinational corporation. guest: that's a good point. we've seen a lot of companies leave italy. and smallerg names ,rands that are well known primarily, the tire manufacturer, it is really a shrinking market, but the question is how much control will the italian side be able to retain and does it strengthen them? it's not all over for italy at this point. be demand fors to eyewear, particularly in the emerging markets. give us an idea of what the market is like right now. it's a huge market and a
lot of people in emerging markets don't wear glasses and they have to. glasses are becoming increasingly a fashion accessory, and there's deftly a lot of untapped growth in that market. mark: the managing editor for global business. thank you. coming up, the imf chief economist joins us to talk about the latest global economic report. a cautious stance for the policies of donald trump. 30 minutes away from the close and in the winning run for the ftse coming to an end. ♪
the imf releasing its latest world economic outlook. the imf expects only a modest boost from a trump stimulus for now. it's also maintaining its overall growth forecast. mexicorabia, india, among them. joining us now is lawrence of spelled, imf chief economist. you are talking about the pace inglobal economic activity 2017 and 2018. what's behind that? 2016 was a weak growth year in the world economy. we are happy to see this uptick in growth. part of it is very stressed but