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tv   Bloomberg Markets Americas  Bloomberg  January 23, 2017 10:00am-11:01am EST

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vonnie: we are going to take you from washington dc to paris and cover stories out of london, hong kong, and moscow. we aree stories following around the world. president donald trump is set to find executive orders on trade deal, including the transpacific partnership and nafta. that would fulfill a promise to rewrite policy during his first days in office. mark: u.k. prime minister theesa may unveiled industrial strategy for the country as it readies to exit the european union. vonnie: in markets stocks decline in europe. a little change in the u.s.. investor still looking for more
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clues for president trump's fiscal policy and tax cuts. we are 30 minutes into the trading day. abigail doolittle has what is going on beneath the surface. the dow s&p 500 and the nasdaq trading down ever so slightly around the open. this does follow weekly declines for the major averages. two weeks of decline. on pace for a third week down. worth noting that was the most since the middle of october. a little bit of bearishness. arequestion is whether we going to see a burst of intraday volatility. be seeing these bursts of volatility, but when we take a look at the #-- we are looking at a very tight range of the s&p 500. it has been 30 days since the s&p 500 has made a 1% move up or
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more. and it has been a record since 2006, a record of 70 days. we are seeing more volatility on the day, but on a closing basis not so much. it will be interesting to see if it does catch up. aroundthe movers here the open, we are looking at qualcomm. its worst drop since november 2015 since apple put out a lawsuit of qualcomm's licensing fees. we have two downgrades, we have halliburton trading lower. estimates by 2% weighing on the shares a little bit. finally taking a look at the bloomberg dollar index. this is a one month view. a pretty significant drop, the worst since april 2016.
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this could be some consolidation of last quarter, absolutely huge move. up 7%. we do have uncertainty around the administration. >> that uncertainty is driving the stocks lower today. first, that rhetoric is causing some doubts here in europe as well as other markets across the world. down by one third of 1%. telling us what sort of run we have had. an underappreciated market. if you look at the data performance and how it has improved, not too much on politics here in your up. says that creates an investment opportunity. you are talking about the flip side of this trade. this is sterling before breakfast.
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-- before brexit. a month after the first weekly gain in three. day tomorrow with the supreme court ruling on whether she can trigger article 50 without the backing of parliament. that is after on friday, we have the yield on the 10 year. highlighting the flight to safety. gold is rising for 10 out of 11 sessions. now it is on its track for its -- on track for its weekly gain. wondering what this trump presidency means. some think it means good things, some thinks it means bad things.
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>> we will seek others slater on. checking in on the first word news. lisa: president trump is underscoring the job creation at the top of his agenda. with an advisory panel on manufacturing and told members he would cut taxes massively. his administration could cut regulations by 75% and will impose what he calls a very major border tax. meanwhile the president plans to start for filling a campaign promise to rewrite america's trade policy. not long from now he will find an executive order pulling the u.s. out of the transpacific partnership trade deal, that is according to official with the plan. on capitol hill, key senate republicans have dropped their opposition to rex tillerson, becoming secretary of state. they will vote.
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-- they will vote for the former exxon mobil ceo. mccain and graham still have concerns about past dealings with russia. talk aimed at ending syria's civil war got to a rocky start in afghanistan. each described the other side is terrorist. the u.s. is attending as an observer. global news 24 hours per day powered by 2600 journalists and analysts in more than 120 countries. this is bloomberg. get back to washington dc where trump begins his first full week in office. for the latest on the president's agenda. we have business leaders meeting this morning. what emanated from that? >> donald trump made a clear message.
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he basically said he wants leaders to create jobs in the u.s.. he was to reduce taxes and reduce regulations. they decided to take their business to other countries and shift jobs back into the u.s.. a bit of a stick without the border tax. it will be very large for companies that want to shift jobs overseas. >> we are expecting executive orders on that subject at 10:30 eastern. >> off the bat donald trump is expected to sign an executive order after the tpp trade deal. the treaty a was negotiated by the obama administration. trump has said that deal is a disaster. he is also seeking to renegotiate the nafta deal. he is going to be meeting with leaders of mexico and canada.
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>> reporting there from the white house. i want to welcome the -- welcome the economic professor -- he joins us from chicago. let's start with headlines from this morning's meeting. a very major border tax, we had an idea. plus or minus is for the u.s. economy? >> we don't know what form that would take. the republicans have been talking about a border adjustment tax. trump previously last this one sounds like a regular tariff.
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a lot of people are hoping they are starting with tax cutting and tax reform and more protection tendencies would come later if at all. andinaugural address actions that he is moving that to the front. >> there is a lot of talk of merck & co. is some. could it not again work for the u.s.? >> it hasn't been working for china. you raise it in a good way in the sense that mercantilism and protectionism, economic isolationist thinking has been tried hundreds of times around the world. and it doesn't work. it works the wrong way. it doesn't make you poor, it makes you rich.
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this goes beyond a political argument. i think the markets are going to react badly if the new administration makes that the major focus. hopefully they have announced they will renegotiate nafta. maybe they have some kind of modernization that would enhance the world economy. if they accidentally start a series of trade to butte -- ,rade disputes or trade wars investors will be on a bumpy ride. mark: does that have been initiative -- have the initiative to china? does it become the big player in asia, implementing its own type of trade deal? guest: this is what the chinese government has wanted all along.
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theirre trying to sign own versions of the tpp that advantage china. of the major reasons the united states on a bipartisan basis was trying to sort out the tpp. to try to put some kind of oppositional -- some kind of to the chinese grafting of the initiative in asia. likely to seee china move forward and sign their own big trade deals with most of the large countries after this. >> talk to me about the first 100 days. president trump has a massive to do list. what is realistically achievable? you look at his vision on the white house website. jobs, with 5 million new returned 4% annual growth.
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what is achievable when it comes to the economy in 100 days? askhat is a great way to it. i saw the first three days. run of 72d quite a hours. i think what everyone thought he was going to do was start with cutting taxes and tax reform and getting rid of various regulations. i do think he's going to do the regulation obamacare stuff. andooks like the tax reform tax cutting is going to get delayed. he's going to move these protectionist trade items to the agenda. i fear the first 100 days will not be growth enhancing and will be moving the other way.
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there could be benefits to is 23tiating a deal that years old for things like intellectual property rights. what about that argument? cliques i agree with that. that is why we stay at the outset. this, whichirony in is the tpp was a renegotiation of nafta. we are going to be parties to the tpp. thatf the modernization took place was going to supersede what was in nafta. if you blowup the tpp, there is a seriesg, there are of things on intellectual property and others, where modernization could be good. they have inat mind, then i think we of the
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markets would probably applaud that. know if that is what they had in mind. the council of economic advisers, they're going to have more charms admit -- on trump's agenda. there will be a resurgence in manufacturing on america. this is bloomberg.
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>> live from london in new york. >> this is bloomberg markets. meetingt trump has been with business leaders at the white house in an effort to show that u.s. job creation is at the chop -- at the top of his agenda.
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elon musk of tesla and lockheed martin -- still with us economics professor at the university of chicago, and former chairman of the council of economic advisers under president obama. some of the headlines that came out of that meeting were we think we can cut regulations by 75%, and we will talk -- and we will cut taxes massively. we are already seeing sentiment get better. >> it depends on what you mean by animal spirits. i think the argument that massively cutting taxes at the top end of the income distribution or corporation is going to pay for itself by generating gdp growth. that has been disproven many times in the past. i'm sure if you give enough tax subsidy or cut taxes enough, you
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could induce some more investment. that would potentially be a positive. at the same time we are announcing things like tariffs and anything that is going to shift products in the u.s. that may have to pay a huge border tax. if you do that the biggest opponents are the very manufacturing companies themselves that donald trump is meeting with. most of the large u.s. manufacturers have integrated supply chains around the world. it is still getting a bunch of parts and plant's around the world. having ang to end up negative manufacturing. say the argument has been disproven that tax cuts do
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promote economic growth. if we can just bring up a full screen of what he says, fundamentally the common goal of -- the primary differences trump is expected to play greater emphasis on deregulation and corporate rather than personal income taxes. why shouldn't this time be more like the reagan era? >> i think it is very similar to the bush era. literally the same people that are saying this is going to unleash economic growth, those same people said the exact same thing about the bush policies. i doubt it will work this time. reagan --ence between
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you have a massive tailwind helping you of population growth. we were a younger country and the population was growing. we see it on the deregulatory side. i am rooting for them. i hope we can increase the growth rate. of the bushlessons what they areid talking about doing, it did not have the outcome they are promising. i think it should be a little sobering. reversing the decline of manufacturing, is it reversible or not? >> hard to say.
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countries --vanced mostly it is service sectors greatest been the expanders. manufacturing has been trending down and all of the countries for 50 straight years. you are going against a tough trend. and i don't think putting a huge tariff on the supply chain for u.s. manufacturing is going to prove to be good. if they can find some hidden secret regulations that increase manufacturing that would be great. given the last 72 hours of the chump administration in which they seem to be announcing things directly contradictory to what they promised in the campaign. i would not count on the -- count on the fact that the much of increased manufacturing jobs.
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>> thanks for taking time out with us today. former chairman of the council of economic advisers. still ahead we are going to look at some of the biggest market movers in the early u.s. session. the stockchs says will see reasonable growth under president trump. this is bloomberg. ♪
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mark: live in london, this is bloomberg. >> a look at some early market movers early here in the u.s.. we are looking at some weakness for the aftermarket auto part company. onk on sharp -- autozone is
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pace for its worst decline since february last year. this weakness of the auto-parts companies, and is on -- companies, amazon is entering the market. amazon must see a pretty attractive market. shares are a little changed up slightly on this, gaining a little bit more. we do see a nice rise. amazon could be one company that could see reasonable growth under the trump administration. when we take a look at the great chart -- at a great chart, this is the average age. $50 billion that keep them on the road. >> 20 years.
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abigail doolittle, thank you for that. mark, who hasto some market movers in europe. >> let's look at what is happening to the stoxx 600. down for a third consecutive day, which is the worst run since early november. still ahead, what have we got here? demo we are going to be looking at the french election. looking at the new french runner -- the new front-runner. interruption to the french election process? this is bloomberg. ♪
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vonnie: you are watching bloomberg, i'm vonnie quinn. mark: mark barton, this is your global business report. the turkish president take steps
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to greatly expand his power. we hear from the deputy prime minister. suppliersen, apple may send $7 billion -- more on that later. that $7 billion payment in the u.s. first, to the first word news in new york. trump told a group of business leaders he is planning a massive tax cut. he believes this immigration can/relations by 75% and impose what he calls a very major tax that's going to affect border trade. he is taking aim at a trade deal he says would hurt american workers. he is signing an executive order pulling the u.s. out of the transpacific partnership trade deal, according to an official familiar with the plan. congress never formally authorize the agreement. meanwhile, the president will sign an order to renegotiate the
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north american free trade agreement with mexico and canada . british prime mr. theresa may has outlined her new industrial strategy today. she has offered to deal with u.k. business sector by sector, while preparing the economy to leave the european union. the government will back areas it thinks the u.k. can excel, including artificial intelligence and mobile networking. the president of chile is putting a post-brexit trade deal with u.k. on hold for now. instead, she says her government wants to update the current radio with the european -- trade deal with the european union. the eu is chile's largest trade partner. they say there's plenty of time does he have a country continues his relationship with the u.k. global news 24 hours a day, , powered by more than 2600 journalists and analysts in more than 120 countries. annalisa parenti, this is bloomberg. sark: let's get more may'
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industrial strategy. tomorrow comes of record is due to rule on whether parliament must approve the u.k. exit from the eu. i am here with the former deputy leader of the liberal democrats, who served in parliament from 1997 to 2015. of its cable's in today's industrial strategy? introduce an industrial strategy, why was in the coalition. there is a certain amount of reinventing the wheel going on, things have been announced today that are already going on. i don't begrudge that. -- i'm delighted she is putting emphasis on skill training. mark: doesn't get the whole economy firing? -- does it get the whole economy firing? how achievable is it?
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cabel: you can't turn these things around in a year or two years. the whole point about the industrial strategy is you are working with a long-term framework, trying to help investment to proceed. and in a partnership basis with business. what is new is brexit. is isoblem with brexit creating a lot of short-term uncertainty. the industrial strategy she unveiled today is partly designed to overcome that. mark: does it? mr. cable: in part. the problem you have in the supply chain industry is they don't know into or three years time whether there is going to be an interest, which will radically affect the way supply chains operate. that will be hanging over them. if the governments, in the meantime, can give them some support -- financial or otherwise -- that is clearly
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desirable. mark: the payoff takes years. are there other measures for just taxation? is that an option? mr. cable: if you bring down business rates, you have to raise the revenue some other way. what i find it ironic and surprising is by leaving european union" taking back -- and quote taking back control, there are things the british government will be able to do in the future that he is not able to do with the moment. industrial assistance, government procurement in a more british way, and stopping the takeover of high-tech companies. it is interesting she didn't mention any of these in her industrial strategy. t made itsment had no mind up whether they want to be completely outward looking in the free market, or whether they want to take advantage of the new freedoms of brexit. ,ark: your blocking takeovers
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is that jar with free and open? is there another schizophrenic view in the british government? they want to intervene, but they are worried it will send the wrong signals about openness. the classic case we had was the pfizer attempt to take over astrazeneca.-- we discouraged it and they went away. had a million aggressive takeover, we could not of stopped them. andould have been damaging, it would be good if we had action to protect industries which have a strong science base from hostile takeovers. i think theresa may's instincts are to do that. but it hasn't gotten past this paper. mark: can we look ahead to tomorrow and the supreme court ruling? it the supreme court says theresa may has to go to parliament for two triggers
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article 50, could that delay the triggering of article 50 by the end of the first quarter? mr. cable: it's unlikely for political reasons. a substantial number of labour mp's are going to vote for article 50 anyways. if the supreme court does uphold the ruling, that is a good thing. i'm all in favor of parliamentary solvency. it's establishing very clearly that these decisions should be made in parliament. be broughtwill not article 50, it will be about reform legislation and the kind of qualifications that mp's will want to put on that. greens -- dems, mark: what are we talking about? mr. cable: things that will effectively try to find the government into a union or key aspects of the single market,
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key aspects of social and environmental regulation. that could make it quite tricky. mark: but it still won't delay the triggering of it? mr. cable: there is one subsidiary issue in the court ruling, which is to do with the devolved powers of scotland and wales. if the supreme court go into that issue, the so-called civil convention, which would give enhanced role to scotland's particularly -- not having a veto, but a much greater -- it would make it trickier. mark: on may president president trump on friday, what's the best she can hope for? mr. cable: it's a terrible idea, i think she is making a dreadful mistake. trump is a highly unprintable character. we don't know how it would turn out. it may turn out for the best, for all i know, but very unpredictable. extremely nationalistic, which is not what theresa may wants. offering us a bilateral deal.
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boost in exports and stop imports from elsewhere. we do have a trade surplus with here to, really going t american food, or enhanced beef, and have british exports excluded? what is the purpose of this? we would be much better adopting the kind of position that it'sellor merkel -- polite, respectful of the american presidency, not responding to his barbs, by keeping a distance. something with a long spoon. i think theresa may is making a big mistake rushing in. mark: vince cable, thanks for joining us today. vonnie: thank you, mark. still ahead, the french socialist party has a new front runner in the race. can the socialist party in france stage a huge comeback? we're live in paris, next.
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this is bloomberg. ♪
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vonnie: you are watching bloomberg, i'm vonnie quinn. mark: i am mark barton. this is the global business report for it the turkish president take steps to greatly expand his powers. we hear from surveys -- turkey's deputy prime minister about why parliament is advancing the move. vonnie: apple supplier foxconn may spend $7 billion to build a factory in the u.s. is president trump influencing the decision? mark: will congressional republicans fight back against resident trumps plan to spend -- president trump's plan to spend
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on every structure. we talk about the battle of the u.s. deficit. turkey's president is one step away from concentrating his power. hisiament has approved campaign to secure sweeping executive authority, voters have the final decision in april. we spoke with turkey's deputy prime minister on power at the top. >> having state of emergency doesn't help, but there is no too much power at the top. turkey still, despite the occasional issues, is still a democracy. let's face it. had any other country been subjected to the type of shock that turkey has been subject to, and you have a lot more draconian stuff. mark: wsdl services -- oilfield services kickoff a year and recovery at north america,
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customers in the u.s. and canada increase the number of oil and gas drilling 19% in the last three months of the year. mcdonald's posted fourth-quarter earnings that beat estimates. the world's largest restaurant chain was helped by technology upgrades and new foods. two point 47% globally, almost twice as much as estimates. the biggest manufacturer of apple devices may build a u.s. billion, that's a major investment for foxconn technology that may create tens of thousands of jobs in president trump's first year in office. considering a deal with one of the largest private employers in china. vonnie: time now for the bloomberg couldn't take, providing context and background on issues of interest. president donald ramotar's he wants to rebuild america's
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infrastructure and its band -- expand its military. will congressional republicans go along? mitch mcconnell has warned against the so-called trillion dollars stimulus and kevin mccarthy has said he would oppose any plan that adds to the deficit. from -- trump is trying to reassure you will take deficit concerns seriously. former president barack obama signed an $830 billion stimulus package, this triggered explosive growth in the budget deficit. in 2011, the republican-controlled house used the fact the government was about to hit the debt ceiling to threaten a debt default. the resulting budget control act put limits on spending. this was combined with a tax increase on the wealthiest earners to help shrink the annual deficit to $439 billion in 2015.
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has reached about 75% of gdp, the highest in u.s. history after world war ii. at the heart of the budget debate is the trade-off between current economic growth and the expense of debt interest payments over the longer term. waywinky costs down -- one to keep costs down might be an interest cut with tax credits. opponents say it was subsidized projects that will be billed anyways, while less profitable projects would get no help. another proposal is lowering the corporate tax rate, however, that would reduce future revenue. it all adds up to big budget battles ahead. read more about the u.s. budget fight on the bloomberg. that is your global news report. had to for more stories. mark: to the presidential election in france. iot hamonnd, ben
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advanced. will does for the socialist party reeling from the unpopular presidency of francois hollande? is carolyn conan. >> i'm very happy to be joined by senator, good afternoon. just like we saw during the republican primaries is going to be the third man who is now the front runner in the socialist primaries. what happened. ? >> may be colder not to be relied upon. that's the first lesson we have to draw. we have an outsider, someone who is in the minority of the socialist party, represent a minority group. forwards hisng
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with the other candidate who is the outsider for the republican party. though neithern of them are new faces. they have both been ministers before. they were able to present a new program, new ideas, and i think that's partly was attractive. he's a reminder of bernie sanders in the u.s. he's been nicknamed the jeremy corbyn of france. is that true? greg c on the left of the socialist party. therefore, he would share some twohe values that these politicians share in their own countries. >> did you think that former prime minister actually had almost no chance, given that he had to defend the policies of
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president hollande? >> not an impossible task in as far as the five years of francois hollande's presidency have not been so bad, even though, unfortunately, it's only the mistakes and errors that were made that are always concentrated on and put forward. i think with time, one will be able to look back and see there were a lot of advances in these five years. but it's not the dynamic where the communication that was lacking from the palace, with regards to what the presidency wanted, what he managed to put in place, and what was good for the country. these social issues and political issues, we were attacked and there were terrorist attacks on french territory for the first time. and yes, country was united.
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he was united behind its president. i think a lot of things were shortbut the time is too to look back. the the good news for only candidate who stands a chance to eliminate madeleine le pen? >> you sent polls are not to be relied upon. at the moment, he has never run , but he has a pose that is popular. veterans enough. we consider the people who turned up on sunday were not in large numbers, but when you have over one million people turning up, and it's very cold in france. conditions are you that are not the best. the motivation is not there. people do not really know where they stand today.
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pen --ou think marine le marine le pen has any chance of winning this election? >> in the left is not capable of pulling itself together, and they can't find a solution that only one of them will run in the end, of course, they will be limited. hollande andancois marine le pen. do 10% each.will so the left is out. >> it seems difficult for the left wing to qualify for the second round. [indiscernible] interview, iting give her joining us on what's going to be a massive year for french and eu politics. this is bloomberg.
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mark: live from london and new york, on mark barton. vonnie: this is bloomberg markets. turkey's bank meets tomorrow, and it's likely seen as a credibility test over the turkish lira, it's fallen versus the u.s. dollar is much as a percent so far this year. francine lacqua talks to turkey's deputy minister in dallas, switzerland last friday. -- davos, switzerland last friday. a cause for concern, even though we don't have a level target, clearly we are not indifferent to what's happening. we are taking measures to see if we could stabilize and because clearly, the reason for volatility has been excessive. we're watching very closely. francine: how much of an impact
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does it have on the turkish corporate sector? and your fx position? >> its $213 billion, but the short-term component, meaning after one year maturities is only $1.5 million. much of the corporate you have x debt have a natural hedge. some of it we have financial , we are but still looking at the corporate sector. we are thinking about macro protection measures going forward. banned consumers from borrowing in fx, and that was a great decision. now we are looking at ways -- india has done some things along these lines. we're looking at global best practices. that pathill go down
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of introducing macro protection efforts. francine: you will do everything it takes to avoid a hike in interest rates. >> know, there's a hike already happened. francine: why not do that hike? i as a matter of principle, don't comment much on the central bank. i generally believe central-bank credibility matters, independence matters. --refore, i tend to shy away not because i do have an opinion, but simply because i think it doesn't help politicians like me, talking about what central banks should do or not do. let's face it -- the economy, following the failed coup attempt, has taken sort of a downturn. we had shrinkage in gdp in the third quarter. fourth quarter is so-so.
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clearly, the economy is weak. therefore, you have that dilemma. but still, it's a decision that central-bank needs to be making ,n the basis of price stability as well as other macro financial stability considerations. mark: turkey's deputy prime .inister from davos, european stocks 30 performance away from the end of the monday session. stocks are lower for the third consecutive week after falling for the first week in four. but closes next. this is bloomberg. ♪
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mark: it's midnight in hong kong, 30 minutes left of the trading day in europe. i am mark barton. vonnie: in new york, i'm vonnie quinn. this is the european close on "bloomberg markets."
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♪ mark: we take you from washington to paris, with a couple of stories out of london, hong kong, and moscow in the next hour. here's what we are following on bloomberg and around the world. in u.s. politics, president donald ramotar design executive orders on trade deals -- donald is design executive orders on trade deals, filling a campaign promise to rewrite american trade policy in his first days in office. vonnie: u.k. prime minister theresa may unveiled the 10 pillar industrial strategy for the country as it readies to exit the european union. this ahead of the key supreme court ruling on brexit set for tomorrow. , stocks declining onot


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