tv Bloomberg Daybreak Australia Bloomberg June 11, 2017 6:00pm-7:01pm EDT
♪ haidi: theresa may forced to , losingck at arrivals half of u.k. voters. betty: problems roommate -- emmanuel macron, heading for a landslide in france. marketsolatility in the with gold hitting $1400 this year. betty: rick perry decision to abandon paris. he said climate critics are not focusing on reality. haidi: hello from a very hazy
sydney behind me, just past 8:00 a.m. i'm haidi lun. we are two hours away from the open of asia. betty: you look like you are in a spooky or movie. in new york, i am betty liu. we will look at the action of wall street into the asia-pacific trading day. the equity markets in sydney are closed. we will not get early action -- reaction to what happened friday tech stocks,the apple, netflix, facebook that took a huge tumble for various reasons. no one is able to pinpoint what happened, but look at the nasdaq , down 113 points, the sharpest drop since 2008, down 1.8%. we ended for the much unchanged on the s&p, the dow also higher,
0.4%. investors are still digesting the results. theresa may, that hit the pound. we have a lot of different banks meeting, including the fed in the boe. haidi: that is right. the fed widely expected to go for the hike and leading the central bank pack. they are inching towards modernization normalization. the bank of japan will be under pressure alongside janet yellen, trying to explain the brexit. rebalancing. in asia, it is a trading start that is quiet. we are closed for the cap -- the queen's birthday. expectations of strength when it .omes to aussie sterling one thing we are seeing, new zealand stocks up 0.1%, kiwi
dollar. commodities, we are watching gold intently. safe haven, down 0.2%. crude holding about $65 a barrel. dissent, we are going into a week where we get supply support -- reports from the u.s. we are looking at other commodities, iron or down 0.7%. let's get you in with first word news and tom mackenzie. paul: french president emmanuel macron heading for a landslide in elections as voters rally around their new leader. party will take a
third of the vote, 450 seats in the 570-seat national assembly. he needs a healthy majority push -- to push through tax reform. donald trump has renewed his attacks on james comey, saying -- attacks are commonly cowardly. attorney jeff sessions will speak on capitol hill about russia meddling in the election. he said is important in the light of comey's testimony last week. germany is saying the isolation of qatar could lead to war. this could deteriorate stuff, but there is a chance for resolution. turkey is pushing ahead with a military base in qatar hoping for security of the gulf, not one country. they say this must be resolved in the end of ramadan.
russia is ready to work with the u.s. for resolving the qatar crisis. spoke about this on saturday, and he agreed to negotiations being the way forward. the president has said he supports the isolation of qatar while tillerson called on saudi arabia to step back. north korea moving closer to firing an intercontinental ballistic missile with the potential of hitting the united states mainland. they see the military is not far away with the weapons, despite president trump's pledge to stop that. the u.s. has not intercepted or mobile icbm over the pacific. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ ok, thank you so much. the u.k. election, there will be
no change in monetary policy when the bank of england meets this week. policy editor kathleen hays here with more of the stunning failure for theresa may. mark carney might not do anything. kathleen: they would not hold anyway, but this creates so much uncertainty over the economy, financial markets. they will sit back and watch and see what happens because it is not just the economy. it is what theresa may -- betty: setback. kathleen: tumble from power. she has been called the walking dead, many say she will be done by the end of the year. 19.it talks on june she said we will go ahead, i will have a minority government. that is what people want me to do. she said she will move ahead, but the u.k. economy is already pretty tepid.
let's look at a bar chart that defects this very well. you can see how growth tumbled in the first quarter. the estimate before theresa may's election failure was looking also pretty tepid, but after this they could get more so. we don't know. hard brexit, theresa may pushing hard for it. she does not have the power to push that through. said inn at citibank substance, the worst risks cap diminished now, because you can't do hard brexit. maybe they can negotiate with what more people can live with, not what theresa may and her team wanted. s and p rating agency said they have had no major impact. not count herd
out yet. she said she has had a big setback, but she is tough. maybe brexit backs -- talk go well. she is not as much of a lame dock as we thought. a toughhe has got to be lady given the situation. but once again you have politics weighing on central-bank policy. what about the boe? kathleen: they will hold policy study. they are increasing inflation. this will be the first public remarks from the bank of england and mark carney since the election. he will be taking questions from the press. it will be interesting to hear what he says. they are upping the forecast. let's look at inflation. this is a dramatic development. inflation already accelerating looking at this chart, looking at the core for the headline. mark carney said it would lease
this, 2.8%, 2.9%. higher import prices. but what are the downsides? if inflation is rising, what about the consumer? your paycheck doesn't go as far. and this other chart, you will see what is happening to wages as inflation rises. inflation is white, wages are blue, not going anywhere. this is what is facing the u.k. economy, one reason why mark carney will step back. what happens with theresa may is probably one of the biggest questions in the economy, political system -- not just theresa may but the government system. a lot for the markets. we will have more on the u.k. it means for the economy and fx markets with
daybreak asia. we will ask that question of nomura. also we are looking at the asia-pacific region. ushave an analyst at joining past 10:00 a.m. in sydney. stay tuned or that conversation. a quieter start to the trading week when it comes to australia of course, but looking at the rest of the region, -- happy birthday to the queen. that is why markets are off. that brings up one of our favorite data points. we are expecting that to hold steady at 5.7%, but we were expecting that last month and it came off two points. the other thing we saw last month was a big bump in the number of jobs created. mostly the full-time jobs declined.
that is one to watch very closely. tied into that is the consumer confidence survey out on tuesday. that is what we are watching with the casualization of the workforce. we will have business confidence tomorrow. betty: and also on tuesday we will then more about the fate of the struggling broadcasters pen network. what are we going to learn? paul: in april, announcing it could not go forward. there is growing concern after announcing a huge loss of $200 million. people familiar with the matter say the backers want to guarantee $250 million loan to keep it going, but we are expecting an announcement tuesday. there are reports james peck is not interested in maintaining as long. -- loan. itself, you can see
fortunes have slid over the past 12 months, and is making no comments on the current negotiations. betty: we will certainly and out more later this week. paul allen. can't get over how cocky -- foggy it is that there. united states focus on russia. we will see what the week ahead brings. haidi: investors have been selling out recently, but why australia's top oil producers will produce $1400 by the end of the year. this is bloomberg. ♪
drop in eight months. our next guest thinks it could reach $14,000 per ounce on the end of 2017 because of global volatility. let's go to him. great to have you on this public holiday. i want to show you a quick chart to illustrate something interesting, looking at what is happening with the gold price. we have had three weeks of a as we hadoff, isn't -- even as we have had risks around comey and trump. clearly that election result from the u.k. -- is it really politics that is dominating the safe haven that? you are kind of backing it. >> i think both brexit, all those things, they impact gold.
gold is in the long-term uptrend. we are seeing volatility running -2% or 3%d, plus or on a weekly or monthly basis. we are 30% off the high from a few years ago, we have had a double top on gold. it is struggling to break through 1300, and there will be volatility, but we are on a long-term track. haidi: are you concerned about the potential for a hawkish fed, what that does to the u.s. dollar and clearly the correlation that has to gold price? peter: i have some short-term concerns that certainly that is driving sentiment, driving sentiment in the gold market, but there is turmoil in the world and our currencies and the way we exit this money printing we have been doing recently.
so we have short-term volatility. you know, it is interesting because gold's rise is more nuanced. it is not like every piece of bad news makes gold rise. you clearly saw some concerns after the results in the u.k., but as haidi had mentioned before, the comey hearings, not having a huge impact on people rushing to safe havens. you have people going to treasuries are instance as a safe haven. does that affect the appeal of gold? peter: i don't think so. there is thee short-term volatility that it creates. simple domestic issues that are pulling it either way. we think gold is rejecting to
all negative things in international markets. certainly not as much as it used to. the reaction -- betty: what is gold reacting to? peter: gold is reacting to a safe haven. what are you saying, what are people going into gold for that? peter: people are going into gold as a long-term hedge against inflation. it is a trend to security. the drivers of the gold market, the volatility in the trading and the nonphysical trading, etf trading going on, they thrive on this model. we are in a time of stronger reactionsrom negative
, but up and down over long-term. betty: but if you look at all the inflation numbers around the there ispan, and hardly any inflation. you look at the fed, the u.s., peter, you can hardly see anyone saying more than one rate hike because of the lack of inflation. boeoes not look like the will be raising rates anytime is there that much certainty on inflation? where is that inflation? if people are buying gold as an inflation hedge, where is it exactly? peter: that specifically just inflation, but a hedge against stability. notare right about there is a massive amount of inflation, but the fear of inflation is moving forward. the contrary investors are still on gold because they are concerned about overall
stability in general market and the economies in the world. i am curious, what do you make of demand going forward coming off the markets in china and india? in those see demand countries for gold, which is --zling to india is still which is puzzling. india is still like a malignant tumor linked to investment on a smaller individual scale. and the demand side of gold is really driven by individuals. betty: before we go, you mentioned facility as well. isn't a concern for those in gold? looking at the u.s. and the measure of volatility, we are among the lowest levels in
years. you might say the same for other asset classes like treasuries. where is that volatility? it depends on individual markets. the opportunity is where gold producers don't produce in the u.s. dollar. we seem opportunity for equity investors. in australia we are in a similar situation where the main commodities, iron ore, coal, natural gas, they are all at lows. we have the australian exchange rate which is substantially will behan i expect it in the future. and the short-term volatility is really outweighed by volatility in the currencies, and the opportunity is for buying australian stocks and canadian
ancks where we are getting amount of the accuracy of deflation against u.s. dollar, much higher gold price and gold margin. betty: thank you so much, peter cook. the managing director on the gold market. much more ahead, talking about energy market. rick perry defends president trump's decision to leave the paris climate accord, saying they are not focusing on reality. this is bloomberg. ♪
record. rick perry said they are wrong and said it is political. he spoke exclusively to tom mackenzie about the paris decision and the cooperation between the u.s. and china as well. justperry: it is not energy but economic development, energy being at the heart of china is an into extraordinary opportunity for both sides i might add. the show has changed in our landscape of energy. lng will play a very important role. tom: did you get any closer to china finding a contract? rick perry: but we were able to do with share with the vice our ability to deliver lng was very
substantial. our desire to be a participant in this party is very strong. the will is there, and i think both governments will come together. we are working with the private sector to find great opportunities for american energy companies into china. tom: on paris climate change, you were right to stay away, because it has reduced american jobs. we are seeing that avoid. you whory: those of were, you must stay in positions , don't have a bit of reality to your view, which i could argue around the square where i said, you could stay in, but at the end of the day, the administration made the decision, and i agree. when you look at cost versus
benefit from the paris agreement, it wasn't working. fordjerry -- j.p. morgan, -- they are wrong? rick perry: i think so because they are coming at it from the imaginative side. i say we will be leaders in clean energy. that will happen. betty: in agreement with the president, that was rick perry tomking with bloomberg's mackenzie. a look at the business flash toshiba's memory chip unit is heating up. they plan to raise the bid to $18 million and will table the offer by thursday. bennett said it will announce the preferred bidder. developer ever granted wants to sell 14% stake ofarrival, ending their plan the bitter ownership row.
haidi: we are counting down to the asian market open, the start of the brand-new trading week. with the absence of australia, they are closed for the queen's birthday today. japan, governor kuroda is expected to be under pressure to keep them from under winding -- unwinding the executive policy. we will look ahead to the fed areas and this is holding at 110.11. inty: looks pretty calm tokyo. it is 6:30 in new york. you are watching daybreak australia. left to the markets. -- let's go to the markets.
tom: political drama in the u.k. meant losses for one of the biggest men. the infrastructure that here was among the biggest losers in hong kong with the value cat of the u.k. earnings. sterling went to percent up as conservatives lost the majority in parliament. the bank of japan governor is seen as increasingly likely to win a second term ahead of a policy meeting this week. bloomberg survey economist says he is the only possible contender after his current term runs out next april. they see a change of policy this week and the vast majority don't expect any change until after corona's current term -- governor kuroda's current term ends. shinzo abe may have xi jinping
for a state visit later next year. she is they may go to china earlier to lay the groundwork. it will be the first -- first visit since 2008. the first met with shinzo abe went to china in september last year. asahi news says the half-brother of kim jong-un was carrying $120,000 when he was killed and kuala lumpur. -- yen kuala lumpur. he was supposed to meet an american with suspected links to intelligence. he may have been paid for information. there is no record of any bank withdrawal around that time. lunch brought's in $2.6 million. they've got to remain anonymous. winner may invite seven
friends to dine with buffett at a new york restaurant. to a charitygiven for the homeless. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ thanks for that. let's get a quick update on the market. trading is underway, pretty tepid. we are seeing minor moves. kiwi equally flat with the dollar, 72.11. we had strong gains on the greenback in the g10, but the japanese yen holding at 110. we are expecting the japanese central bank to be holding when it comes to policy sterling. .27 is the most the u.s. yield is 2%. looking at how the s&p closed at
0.1% down, but tech stocks kind of created volatility and concern that this could be the top of what we are seeing after record high in the u.s. theresa may is clinging to power despite almost half of the voters saying she should go. this will be reflected in the markets. ours look at this with reporter in singapore. if you put together all the stocks in wall street and the political uncertainty still up before, is it created -- still at home for -- at the fore, are we getting more volatility? reporter: we definitely are. we will not suddenly jump into a crazy market, but it will be elevated uncertainty, volatility, and the low level we have seen this year. tech stock will be the main
thing, causing nervousness for traders in asia. already seen quite a few analysts saying is this the start of the end to the u.s. equity bubble? i think it is too early for conclusions, but volatility will be elevated. and you have theresa may. the election.fter there is no final coalition agreement with the gop party. cabinet has previous rivals, and that is seen as negative. powerfuls stable, less the year ahead. want to point out a chart talking about the u.k. i want to bring up a bloomberg terminal chart, btv 9234 that shows you where the pound is heading. we saw it going down after the
election results. this chart shows if you show that yellow line, the pound is -- this is pound-yen by the way, heading for the 200-day moving average, a key technical point. if it does, current traders say watch of the low, we will see a much softer, weaker sterling. we may beny sense in theo see the rout currency market, the floor coming out from under it? .ark: not any sudden rout we have gotten through the event risk on friday. but traders are looking for any excuse they can to sell the pound. the backdrop is the fundamentals of the pound are negative. they are released before the election. the election did not change much . the pound is a negative yield, the uk's structural, and we have
brexit negotiations. so that means traders are looking for any excuse to sell the pound. now political uncertainty has given them that excuse. rallies will be sold into, and the trend is for pound weakness, but there won't be a sudden panic. betty: thank you so much, something we will be watching over the next few days. mark cudmore, strategist at bloomberg. you can follow more on this story and the day's trading on the bloomberg at mliv go. you can watch this, commentary and analysis from bloomberg's expert editors so you can find out what is affecting your investment right now. the federal reserve expects a high rate. we are talking about in one of the most widely public best -- telegraph moves.
china said beijing may be planning to make its own tightening in response. -- he isg hot encouraging capital outflows. >> i think the impact on china is china's exchange rate could --e down what pressure downward pressure. secondly this could encourage further capital outflows to seek higher returns outside of china. and the u.s.ina also need to synchronize by -- withdrawing monetary stimulus from the economy. >> this was a pattern. people on bloomberg were saying, see how long it takes the people's bank of china to take the steps. >> china from the beginning of this year has already taken some
steps by lifting the short-term market rate. bankbrc, the chinese relative commission, and also the relatively death relative oversight. relative her death tightening -- served as relative tightening. >> [indiscernible] >> that does. that is a good question. months, thefew chinese market has not been that well compared to the u.s. are compared to hong kong. the asian market is weak. that is a side effect of monetary tightening. >> i want to ask you also about a strange rate policy. proponent for china
moving to a system where the market controls the exchange rate. now they are wondering what about a new formula, something fixing? we know policies are looking at the offshore bond market and capital controls have been hardened. that help with the freely floating market desk? >> i think you really think about what was happening years ago. china should have learned the lesson. when china's renminbi face the upward appreciation pressure to present that from taking -- prevent that from taking place, we saw property price bubble skyrocketing in china. rapid --ession was to too rapid.
that could be a major financial risk going forward. the lesson from 10 years ago is when the market force goes up in one direction, just let it move to that direction. don't intervene it. sometimes policymakers like to make the policy accommodate the political needs for monetary policy. that is a mistake. optimistic to are reforms. play a decisive role with a policy trying to party's 18thunist congress. haidi: that was our interview with the investment vice chairman, jin ming hot. we will look into russia's alleged meddling.
♪ betty: good morning, i am betty liu new york. haidi: i'm haidi lun in sydney. on wall street will bring a fresh round of incoming data including consumer prices and retail sales. su keenan is here with the details. the headlines of these events will be the fed, but looking at more data to benefit how strong or not strong the economy is looking and how it is mixed what the fed might do. retail sales and consumer prices will come wednesday, and that will be where the fed is expected to raise benchmark interest rates. it would be the second race this week.
so we are probably looking to see if the data support that as previous data has. u.s. retail will probably cool in may from the month earlier. it has a lot to do with weaker motor vehicle sales, now that auto sales have slowed from last year's record pace. that is affecting retail. that data will be out wednesday. consumer prices will be in focus . there probably little changed according to the forecast. cheaperecause of the court rate of inflation likely will increase. that will be out early wednesday. another focus for the market is commodities in particular and the bloomberg #btv 502. looking at gold, and gold is seeing three weeks of selloff,
even with the disruptions, trump, the u.k., have been rolling through the markets. we did see gold prices split a bit. this is counter to the trend we have seen in play. betty: a little bit odd. su: trump has been good for gold. betty: it will be another busy week for the president. we saw the comey hearing. we are waiting for this hearing now apparently on tuesday with jeff sessions. haidi: it seems every sunday the president takes to twitter and tweets out his remarks. he had a lot to say about the .obe testimony in his tweets on sunday he said he believed james comey, the x head of the lease willieves the be far more a problem then comey admitted. waslso said very cowardly
the way he would describe the testimony. he has also said he is 100% willing to testify he did not demand a pledge of personal loyalty from comey. he is anxious to do that. we know jeff sessions had volunteered to testify tuesday. many say trump wants it because he wants more ratings. this was a widely watched event over wall street and main street. one other issue that comes is relation,nd u.s. whether president trump will be meeting were taking a meeting in the u.k. this year. according to the white house, there has been no actual discussion with the two leaders when that will take place. betty: thank you so much, su keenan on the look ahead. let's bring in our next guest. the hearings coming up and what we saw last week, we have a
professor from boston. how important is sessions' hearing that will focus on russian meddling? >> he will focus on a number of issues. one indication is a closed session. keep in mind when he did initially today was he canceled what was an open session with the appropriations committee. seems clear he appropriately canceled the open session, but he did not take advantage of the intelligence community's likelihood of the enclosed. itdon't know, but we learned is more voluntary he will attend to this. it is an opportunity for him to address a lot of new questions that exploded last week. betty: you make a great point, but how much power does the attorney general have public or private? >> he has the cooperation.
the senate leadership, the republicans who chaired the senate intelligence committee, might be more comfortable asking tough questions if it is closed. there is a lot of backlash over it being closed. as long as it is eventually made public, it may be better for senate republicans to start with closed sessions, get all the information out. last week, there was an enormously important hearing director ofts, the national intelligence, and mike rogers of the nsa. because it was open, they punted all the questions and dodged. it was frustrating. but we know they will meet in a closed session. there is more information that could be helpful. betty: we knew this would not be the final word on any of this. it will continue. for the democrats, do they have enough to begin construction of justice steps, or what do they
have? to have as enough basis for instruction of justice. say,e take a step back and impeachment is not based upon violating the statute. high crimesent for and misdemeanors goes back to 18th-century english practice. you don't have to have a direct violation of a statute to be high crime. it is political abuse of power. but they do have enough. held that ite applies to fbi investigations. there is nothing in comey's testimony itself that i think is the obstruction charge. i think all of his testimony with background to give the public and congress a sense of the intent. it was the context of the firing. ofmy view, the key moment obstruction was the firing of
jim comey. we have enough information from comey's testimony and trump himself -- in an interview with nbc he said he fired coming because of the russia investigation. he said to the man in the oval office that he fired comey because it would take pressure off of the investigation. that is the obstruction case. but you need more consensus, and it is too early. it is like reverse watergate. they knew of the break-in and the crime, but it took months and years to figure out the of structured of justice to connect to next and. -- richard nixon. for the have enough crime. because of the impeachment through congress, we need more time to investigate and find out more from the different actors. haidi: last week was meant to be infrastructure week.
that is not what we or anyone else was focusing on. we have expectations they can progress the policy agenda, or is this political misadventuring still going to go on and prevent legislative efforts from being made? >> right, and is a huge issue that might push impeachment forward. piece, they have to take a step back and ask if they are better off getting the agenda with dodd-frank or repealing obamacare and replacing it or anything else like tax reform, whether they are better off trying to avoid huge losses in 2018. they may generally privately prefer president pence right now. public is becoming more outraged, then they will see their own political careers
at stake. attempto you expect an to move forward with health care this week so they can get to tax at some point? peter: no -- >> i think the conservatives in the senate are fighting with moderates over compromise. they will need every vote in the senate to get through. at this point there is no sense done anything regardless of russia. i can only imagine -- also polling data, only 70% of 17%icans approved of the -- of the americans approved of the health care and it was. enormous headwinds that will push back against health care repeal, did ask reform, dodd-frank, and the entire reform. betty: we will leave it there. comingly a lot will be
♪ that is almost it for daybreak australia on this very soggy sydney morning. and betty are up next for the daybreak asia. really unfortunate gdp number out of japan, looking at more data points to paint a picture before the bank of japan meets. fading in thee background, but looking at machine orders out of japan for the month of april, there could be a slump in that month. we saw last months data --
month's data, companies tapping orders by 60%. -- camping orders by 60%. not all signs are pointing to weakness. we did see the first quarter corporate profits jumping, not enough to raise. we will see what happens. betty: we will see what happens. and we have an analyst joining us. he has called on the market the fed. we all think it will hike interest rates later this week. also says he likes banking shares. we will get more on his calls and where he sees the market. we saw a huge stumble in tech last friday. haidi: we will continue to follow the market follow from that calamitous u.k. election result.