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tv   Bloomberg Markets European Close  Bloomberg  March 17, 2017 12:00pm-1:01pm EDT

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vonnie quinn. this is the european close on bloomberg markets. mark: we are going to take you from new york to london with stories out of berlin, washington, and china. here are the top stories we are andowing on the bloomberg around the world. angela merkel for the first time with donald trump. the german warns of they may retaliate against any new u.s. import tariffs. a global rally spurned by the president and markets are beginning to lose momentum. emerging markets having their best week in a year. awaysa may could be days from triggering article 50.
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european officials are ruling out any discussion of trade until that happens. let's have a look at where european equities are trading. 30 minutes until the end of the friday session. we are up for the week. forex, mixed performance. the euro lower today. cds's.odities in light of the big event yesterday, the boe here in the u.k., i want to show you this chart that highlights various esters of inflation. ofvarious measures inflation. inflation climbing to 3.5%. that's the blue line. januaryive years from has annual rpi, 2.6 percent.
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nominal rates are being priced far lower. that gap shows investors may be getting a little bit ahead of themselves on the inflation outlook further out. it wasn't only kristin forbes who suggested it within the minutes, others might not be too far behind. we talked about volatility. against volatility is proving to be costly, especially in light of the dutch election and the surge of populism in the region. investors bought very expensive insurance. one analyst says there has been a bit of a miscalculation, which is exactly what this chart shows us. merkel, the german
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chancellor meets with donald trump. winner today. this essentially is the u.s. trade balance with the eu. you can see the trend, and this is the big issue that donald trump has, not only with the eu, but with germany. it could make today's discussions very interesting. julie: interesting indeed. not big moves here in the equity markets. second tightest range of the year on the s&p 500, given the it's the quarterly expiration of futures and options contracts, which can cause an uptick in volatility, but that's not happening today. it is causing an uptick in volume, running about 20% of the the 20 day average. financials the biggest slump in
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today's session. goldman sachs down. ceo lloyd blankfein getting less money than last year, his annual compensation going down 20% because of the elimination of a long-term incentive award, although the slump looks more to do with the treasury market, which we will get to in a moment. we are watching asset managers as well, also falling today. morgan stanley downgrading a number of these stocks to sell because they are seen as risks industrywide. there is something of a pricing war among the more electronic platforms. these stocks are trading lower. i mentioned with going on in the treasury market. let's take a look at the 10 year yield, which is added two week low today. ironically, in the wake of the fed raising rates, we are now down to .9 basis points. that's what it's weighing on -- down 2.49 basis points.
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that's what swaying on the financials. this was pointed out by a bloomberg reporter on the markets live blog. this looks at the fed's five-year forward breakeven inflation rate. what is the market pricing in for inflation? the university of michigan expects a change in prices. the consumer expected change has come down. the breakeven has bounced up. we are seeing agreement on inflation expectations at this point, mark. mark: great job. trade, of course, has been a -- sticking point in the communication so far. mike, any progress on this communique or not? mike: we don't know yet, mark. -- signator's are , seconding again
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meeting of the day. they will be coming out in about an hour and we will get a view of their faces and see if perhaps they did make some progress. this is a group of finance ministers and central bankers, most of whom are used to coming to this meeting and talking about cooperation, friendship, working together. that is not the language we have heard today. we have heard people talking about the difficulty of integrating new members, referring probably to the united states, and frank discussions about what is going to be in the communique. saw a few minutes ago, we the u.s. delegation having some words, janet yellen and steve mnuchin together as the delegation got underway. it didn't look as if they were discussing who should be the starting quarterback of the washington redskins this year. it looked like they went on to talk about trade and the dollar, but there is a lot of discussion about where they end up today. wille: this communique
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have been written in advance. who will have dictated what will be in there? the communique is usually finished in advance. this one is not. it has gone through many , and we havefts seen things come and go as each side tries to figure out who once what. the biggest sticking point is what does the u.s. one? the new trump administration has made a lot of heated comments about trade, about currency, that the rest of the group doesn't agree with. they are trying to find compromise language that will bring everybody together. the u.s. once a fair and open trading system. the rest of the world wants to fall back on the old language of an open and free trading system. where they go from here will be the subject of intense discussion. mike mckee, bloomberg
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international economics correspondent. in the u.s.,hile, donald trump and angela merkel are meeting for the first time in washington, d.c. top of the agenda, concerns about a u.s. shift toward protectionism. joining us is our chief washington correspondent. we understand the chancellor has arrived. do we know what her message will be? why extreme and chancellor angela merkel arriving at the white house. top of the discussion -- german chancellor angela merkel arriving at the white house. you could not have more opposite global leaders in regards to in the middle east than angela merkel and donald trump. they will be making public remarks. that is expected sometime in the next hour and a half to two hours, and they will receive some questions. this is a meeting that was delayed earlier this week because of the winter weather.
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a lot of attention focused today on trade policy as well as immigration. and the president will be making some comments on health care, the american health care act. let's listen to some of the things he said. trump: all of these no's or are now yeses. every person in this room is now a yes. he convincedoes them? >> they are anticipating a vote in the house on march 23, next week. clearly, there are several divisions within the republican party. trump is clearly trying to play party unifier at this point. the sources i see on capitol hill, especially senior aides to house caucus, are
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increasingly polarized on this issue. rand paul and ted cruz have spoken out extensively against this proposal. whether republicans in the senate will be able to move forward on this remains to be seen. the list keeps growing of republican senators who have spoken out against it. if they are going to pass legislative reform, it will have to change significantly, and that will mean this administration as well as republican leadership is going to have to decide between the more moderate wing and the conservative wing of the republican party. he has to pick a side at some point. there is a lot of pressure coming from this white house to push health care reform through the congress simply because they cannot get to tax policy or deregulatory financial policy unless they pass health care. huge deadline coming up. it could even be tied to april 28, which of course, the
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government is going to have to pass some type of spending bill to avert a shutdown. has a spent been averted between the u.s. and u.k. over alleged spying? no. the back-and-forth continues between administration officials as well as leaders in the u.k. i can tell you the administration officials i speak with, those who are still aligned with the white house and those removed from the campaign, tell me privately that they are increasingly disappointed, to say the least, about how all of this has gone and been handled. ais white house was dealt devastating blow earlier this week rent top republicans in the house of representatives came -- when top republicans in the house of representatives came out publicly and said they had not found any evidence of spying as
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the president tweeted. this is going to continue to be a story line. next week, top officials will testify on capital hill. this lowers the political capital the president has in trying to craft policy moving forward. vonnie: thank you. we are going to bring new complete coverage live of the fbi directors hearing on monday. the spring you complete coverage wee of the fbi director's -- are going to bring you complete coverage of the fbi director's hearing on monday. also secretary tillerson left a military option on the table if the threat gets too large. hours later, president trump tweeted that north korea was
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"behaving very badly. they have been playing the united states for years. china has done little to help." heads to tillerson china tomorrow. more than 40 migrants in a vessel off yemen were killed they in an airstrike by saudi coalition. a spokesman for an international organization for migration confirmed at least 80 others were hospitalized. it's unclear where they were headed or what happened to the boat. british prime minister theresa may accuses the scottish national party of being excessive nationalist's. the prime minister said the scottish party has titled vision in trying to push a second vote on independence. in tryingnel vision to push a second vote on independence. meantime, she said a formal brexit process will be triggered in the next two weeks. it's a surprise new job for
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british chancellor of the exchequer, george osborne. named head of the evening standard. theresa may fired him last july. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. im mark upton. this is bloomberg. vonnie: a quick headline on the president and his meeting with angela merkel. with her at the white house and a spokesperson says the meeting is going very good. you are watching bloomberg. ♪
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vonnie: straight to the white house now for the meeting between angela merkel and donald trump. let's listen in. vonnie: mike pence there as well. donald trump meeting with the german chancellor, angela merkel. we did get one headline so far, donald trump saying the meeting is going "very good." has a 99.9%vernment thee in a bank since financial crisis.
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it is finalizing plans to sell a quarter of its holdings in an ipo. aile there has not been formal announcement just yet, the finance minister has indicated it could take place in may or june. ib's ceo.s now is a you do not have equities to offer, but you are out and about talking about the bank and what a good investment it would be. what are you hearing from potential investors? >> the government obviously hasn't made the formal decision at this point in time. potential investors are interested in the story, understanding the franchise and how efficient the franchise is in generating capital. vonnie: give us a little detail. you pulled through with a dividend and pretty strong profits. see that continuing as europe looks like it might be slowing down?
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into aand obviously went deeper crisis than most markets in europe, but probably took a greater action and is coming out stronger. the underlying economy is growing very well. last year was 5% growth. unemployment is falling very strongly. so the irish economy is doing well, probably growing at twice the european average. the bank capital is attractive to investors. vonnie: we are looking for may be, maybe june. who knows who will lead the irish government by then? >> they have not made a formal this stage.sell at 2017 is potentially an attractive year for them. most recently, as you indicated, the minister has said q2 is possible. decision?y no formal
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why is it taking so long? >> well, that's politics in terms of how those decisions get made. there is a combination of factors. want to makeey sure they get it right. the first sale is a big decision. most of the ipo will be institutional investors, i understand. there's a $10,000 minimum to keep some of the less sophisticated investors out. how much control will you have and how much will you have to listen to the state? positione always had a that under the framework agreed by the irish state and the eu troika, the board have autonomy on how the bank operates on a day-to-day basis. our objective is to maximize value to whoever the shareholder is. of concern here and globally about different
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.lections a lot of uncertainty about the uss well. how are you preparing to whether any storms that might come -- you and as well. how are you preparing to whether u.s.torms -- about the as well. her are you preparing to weat any storms? >> we operate the business to get good returns in a low interest rate environment. there are obviously headwinds out there. brexit being another one. the last formal price that the government got on the valuation was in february and it put the value of the stake at 11.3 billion. that was an independent evaluation. end of thethis the banking crisis in ireland, the
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final sign? >> i think it's a really important step as far a's putting an end to the crisis and showing that aib is back on the market. vonnie: it's not the same in italy. they are trying to fend off a possibility. areirish people still -- irish people still angry at the banks and the bankers? >> there was a lot of discontent that the banks had to be rescued in 2010 and 2011, and the size of the check written to the banks was significant. i think people are beginning to see that recovery, and the expectation that that money can come back. the market is strong at this stage and getting stronger. the core segments are housing and residential mortgages, and both have experienced strong growth. brexit, do you
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expect competition coming into ireland? >> we will have to see how it plays out. vonnie: later today, we will be speaking to the prime minister of ireland. that's today. at 3:00. this is bloomberg. ♪
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vonnie: live from new york, i'm vonnie quinn. mark: and live from london, i'm mark barton. --s is european markets bloomberg markets, european close. neil cash carry -- neil gorsuch economic data has not
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changed much. he says the fed is still coming up short of its inflation targets. monday, he will be on bloomberg daybreak beginning at 9:00 a.m. wall street time. do not miss that. in an attempt to address antitrust concerns, bayer will put some key assets up for sale. the process could start as soon as next week. manchester city is now the first team in britain's premier league -- to showcase a logo on jersey sleeves. no financial terms were disclosed. the english league created a new .evenue stream
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the competition already has the biggest tv deal. that is the latest bloomberg business flash. take a look at where european equity markets are trading. we are four minutes away from the end of the friday session. stocks are up by .1%. let's look at the currency board, quiet day on the data front today, sterling is up though against the dollar. are yields, cory-year-olds lower as our peripheral yields. this -- core yields are lower as are peripheral yields. this is the number. ♪ -- this is bloomberg. ♪
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mark: live from london and new york, this is the european close. .1%.ts up about
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we are trading in a narrow trading range today. still up for the week. we have been alternating on a weekly basis for the last five weeks. the euro little changed against the dollar. the big move came yesterday following comments from an ecb policymaker. he said rates could rise before the end of qe. move awaye ecb might from monetary policy in a different way. he said the u.s. model was to finish bond purchases first, but this model might not. ,he euro at the highest level third weekly rise, best run in two months. angela merkel and donald trump meet in the white house as pressure m&a it's from the u.s. to germany over the deficit, the trip -- emanates from the u.s. to germany over the trade deficit. bars. the blue line, the
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the white line is the current account surplus, 7%. the blue line is the trade balance, trade deficit. and the demographics housing boom are the two things that will drive the account balance to its lowest .evel in seven years one man called the emerging markets the trade of the decade last year. he said the emerging markets run has further to go. he is the cio of research at affiliates. emerging markets mean equities cost more now. a do remain, he calls it an enormous bargain. measure is the schiller p/e ratio. he said stocks are the most expensive since the.com bubble
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-- since the tech bubble of the 1990's. the yellow line is emerging markets. the white line is eu stocks, 19 times. there you go. what a wonderful chart. what are you looking at? i am looking at global macro movers in the g10 space. a mixed picture when it comes to stocks. taking a bit of a pause in scandinavian countries. the dollar index really down to 100.03 after the yellen decision. of course, you see the bloomberg dollar index is down as well. that's not to the benefit of the euro so much as to the benefit of the yen. some other countries we are looking at, united kingdom, one point 81. let's get to abigail doolittle
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who has a deeper look at what's in emerging markets today. abigail: we have christopher adviser to pimco saying he considers emerging-market equities to still be attractive. he said it's the trade of the decade. he has been pretty successful so far. in blue, we have the s&p 500 up since january of last year during all of that macro volatility. we have the emerging market index up 37% during that time. emerging markets have outperformed the s&p 500. he also thinks valuation is attractive and that weakness in the dollar could help. let's look at the technicals on the emerging market index on an does from a long-term perspective. ais is a monthly -- from the
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long-term perspective. for the last 10 years, we have .assive trading volatility the emerging markets crash. the on and off their markets are markets are really not able to recover. not able to are recover. it does appear there's a little more upside for the emerging market equity markets. the real trade of the decade would be if this area of congestion broke to the upside. it's not clear if that will happen. it could go back down, as has been happening for the last 10 years or so. time will tell. a great chart. the eu is getting firm with the u.k. saying it won't discuss trade deals.
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teresa may indicating she is ready to enter the next phase of process.t >> during the next two weeks, we will trigger article 50 and begin negotiations to secure the united kingdom departure from the european union. [applause] mark: is this akin to settling your bar tab? you hear two things. you hear from people in brussels, the head of the european commission making just that point. you had a nice night out, and at the end of the night, you need even if yourp friends are going to keep drinking. the u.k. is saying it's more like a golf membership and you don't know anything more once you're done golfing -- oh e anythingore -- ow
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more once you're done golfing. you have to discuss the money and you have to pay the money before we talk about trade. mark: is our chance of walking away from these talks without a deal? wake's absolutely. one person said this could take until early next year in the best scenario. she only has two years, less than that already. pressure onintense may. she has to mastic problems as well. she has a very small majority -- she has to mastic problems as well. she has a very small -- has as well.problems she is a very small majority. if she is seen as giving away too much, that could intensify pressure on her. vonnie: we are already hearing
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about jobs moving and plans for jobs to move. she really needs to get something tied down, particularly with the european union, as opposed to other bilateral trade deals where she might not mind if they take a little longer. european union comply with her request to speeds things up? >> she can't actually negotiate with anyone else until she is outside of the european union, so that is going to be the main issue, but the european union is saying we are not willing to talk about trade. you have to work this any out and commit to paying what could be 60 billion euros. might be less, might be more, but we are going to spend a lot of time discussing the divorce payment before we begin talking about future trading. vonnie: so they are going to be
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obstructionist. >> we will have to see. there is an interest in both sides on finding a compromise. but the european union does not want this to be cost free. there has to be a cost for leaving. othersse, it would leave in the block to look at the exit door themselves. i threw out my copy of the standard. it's an enjoyable read. now i will be thinking of the editor. ?ill it become pro-european tell us about the new editor. >> it's the former chancellor of the exchequer. there are some suggestions that he is spreading himself too thinly. doing one job in journalism, we
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thought we were busy enough, but apparently not. he has a power base now, a newspaper to discuss the great affairs of the government. the standard was already anti-brexit, as is george osborne, or was george osborne. editor simon kennedy. at his press conference he added thatanother -- added further stimulus measures were unlikely. >> market based inflation expectations have increased noticeably. this language comes on the heels of increased activity in the global economy. with more on central-bank movements and market reaction, let's bring in bloomberg's richard jones.
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i'm going to start with the ecb and the euro because that was the sound bite. , and there you all were talking about a certain member of the ecb. the euro of boost yesterday evening. ,t pretty much settled today that the conversation has moved on since last thursday. >> mario draghi sounded cautiously optimistic. one of the more hawkish members of the council is talking about ok, we want to start to actually before qe ends, which is not the european commission's intention, and --re has been pushed back pushback from other council members. the talk between the hawks and -- doves, which we will have
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we have had for some time, will continue in earnest now. mark: this was meant to be dull, fed,t it, relative to the but it's now front and center of everyone's lips. where are we when it comes to the boe and the possible next move in rates? has she put down her marker where others could, should, may follow, or not? >> we have two dissenters, which doesn't necessarily mean a change in policy. the interesting thing to know about ford's is she is only on the committee for three more forbesand then she is -- is that she is only on the committee for three more months
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and then she is leaving. the wage data is much weaker than markets were expecting. if you and just wage increases for inflation, we are actually wage to -- adjust increases for inflation, we're actually going to go negative. i could see the bank of your could see the-- i boe being on hold at least through the end of this year. vonnie: the ruble is strengthening. standard & poor's just upgraded the outlook to positive from stable. if you look on the bloomberg, go to russia and type in risk profile and you will see that the outlook is positive and stable. what does that mean for russia and the ruble? >> it has to be a positive development for them.
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with oil prices finding a little bit of the stability after having dropped recently, that could also be a positive. i think there are still a lot of challenges ahead, but these development's are the types of things investors are looking for. final word of the week on the fed? >> no big changes. hikes we are getting remain the same. .here was not a big shift i think we were expecting more and we didn't get much. let's check in on bloomberg first word news with mark crumpton. mark: german chancellor angela merkel is meeting with president trump at the white house at this hour. trade and climate are expected to top the agenda. they will hold a press conference following the meeting and we will bring you that live on bloomberg television and
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bloomberg radio. the german finance minister says protectionism has not been a topic of discussion as world finance leaders and central bankers gather for the g-20 conference. he spoke earlier today. >> iamb am confident we will publish a communique, presumably by the end of tomorrow afternoon, so before the weekend. i'm very confident about that. i don't know the exact content yet, the protectionism was not mentioned by anyone so far. i don't think we will have to deal with that so much. it's about the right wording, how we can formulate global trade openness in the communique . there are sensitive positions by various delegations. the white house has assured british officials it won't repeat allegations that british intelligence was involved in spying on president trump before the u.s. election. the u.k. complained after a
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white house spokesperson cited a foxnews report that british intelligence helped obama spy on mr. trump. the british government called the report utterly ridiculous. buying a second home will now have to put down at least 60% of the purchase price in beijing, a 10 percent increase. beijing homes now cost an average of about $6,000 per square meter. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. vonnie: thanks. , mark dimon is making a splashy return to u.k. banking. this is bloomberg. ♪
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live from london and new york, i am vonnie quinn. this is european close on bloomberg markets. bob diamond is making a big splash in u.k. banking. joining us now for more is bluebirds richard parker. everyone is saying this is berkeley 2.0. >> absolutely not. this is a small splash by a big man in the banking industry. they are a tiny firm worth a tiny amount. reported a profit of just 300,000 pounds. this is a miniscule company for a manus big as all diamond. -- a man as big as bob diamond. lack in revenue,
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they make up for in longevity. >> exactly. they have been around for 141 years. david cameron's father worked for the company. they do a lot of small deals. a competitive market, isn't it? >> absolutely. read reported recently on a chinese firm, a competitor in the space. firms who have disappeared. visionhat is diamond's for it? >> to build a boutique ,nvestment bank, grow the firm higher bankers, equities trading staff, build it out. how far that will go, we will have to see, but it's an interesting acquisition for bob to make. there was an issue with africa. but that to bed. been acquiring
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sub-saharan african businesses through his listed vehicle. this is his private equity capital vehicle. he bought a brokerage in new york. he also bought a greek consumer finance business in recent weeks. now he is adding to his portfolio of investments in the with a storied english stockbroker. tell us anything, the timing, about where we are in the cycle or value? >> potentially. we are seeing a cyclical upturn for investment banks. certainly, from current phase and commodities we have seen an increase in profitability from those firms. we have exchange volatility with frexit. however, the equity markets are gradually coming back -- with
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brexit. however, the equity markets are gradually coming back. mark: great story. thanks, richard. vonnie: fabulous stuff. thanks to you both. ceo on whether his company is a takeover target. we will hear from him next. this is bloomberg. ♪
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vonnie: this is bloomberg markets. i'm vonnie quinn. >> actually, we are very surprised -- were very surprised when we heard the first noise, confident that in the end nothing serious will happen. we never thought there would be in the company.
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>> you have never spoken to tesla's ceo about it? thee did not have technology. , do you getmeeting asked who you are going to merge ?ith >> we are not going to merge with anybody. we are not a takeover target. we are creating value for shareholders. what our 2016 results show. the model is something that has been talked about my entire career. very few cases of it working well. is it a possibility? we are mainly selling
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.nsurance products it's what most of the banks are trying to do. some of them are doing it successfully. >> why not take it one step further? >> no use. for us, entering the banking business as an insurance company does not make any sense. .e are profitable we are a business that seems to be very attractive. >> the market seems to be testing you. >> the market contest. the answer is clear. we don't need capital. our capital position is strong. 2016 was very good, so we don't need capital. , for hise point , -- aicant acquisition
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significant acquisition, we would need capital, we would discuss it with our shareholders. vonnie: that was earlier today. mark: coming up, donald trump and angela merkel are set to do at eight -- to speak at a joint news conference. let's take a look at the close of the friday session. it was again and record high for the ftse in london. i will leave you with the currencies for the day. the euro looking like this against the dollar, down by fifth of 1%. this is bloomberg. ♪
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>> you are looking at a live shot of the white house where president donald trump and german chancellor angela merkel will be holding a news conference about 20 minutes from right now. we will bring you those are marked by when they happen.
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edition ofa special bloomberg markets where we focus on politics and policy during the first hundred days of the trump administration. i'm david westin. our focus will be on the trump local summit where the two leaders discussed a wide range of issues from trade, to currency, to innovation. we will be joined by a man who served as a u.s. ambassador, john emerson. he knows what is going on with germany and how they are reacting to president trump. but first, we are joined by tony cuchka.ut -- we have the first meeting between angela merkel and donald trump. have never met face-to-face that they have exchanged words at long-distance. they have not a was been flattering words. trump said her immigration was catastrophic. she ctize

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