tv Bloomberg Markets European Close Bloomberg July 6, 2017 11:00am-12:00pm EDT
on bloomberg markets. ♪ vonnie: we are in a holiday week, which means inventories move a day. we went to break u.s. oil inventories now with abigail doolittle. abigail: we are looking a bullish activity for this department of inventory energy information. drop thanbigger expected. six .3 million barrels on oil. 1.7 was the drop expected, set a much bigger draw down on crude inventories and a bigger draw down on gasoline. we have seen the effect on crude that it is in fact popping higher. let's take a look at what that pop looks like. we see this hike up on a much better than expected department of energy report, perhaps
providing relief for investors on the idea that u.s. inventories are not going to keep building in the way they have. we are seeing a bullish reaction for oil, up 2.5%. let's take a look at what this looks like on the week. this is a great chart we have, although it is an updated but this is a weekly bart chart in terms of the inventories, the bills and drawdowns. we will have a relatively large draw down here, going right below that line. one of the bigger drawdowns we have seen. a bullish report for oil. let's take a look at the majors. , let'sllish oil report see if it has had a positive effect on stocks. not so much. , the00, the dow and nasdaq nasdaq down nearly .9.
the tech pullback that started june 9, the last time the nasdaq put in an all-time high, continues, with the nasdaq down nearly 4% from that record high. piece oftant technology, facebook, amazon, alphabet, all the big internet ames, yesterday, we saw relief rally. the sector is down 7% since then i stuck with the day high on june 9. we are seeing more of that selling today. it isn't clear what is behind this. it could lead that the sector has gone so far and fast this year, and earnings season is around the corner. netflix will be the first to report on july 17. a list of all of this is together on g #btv 620 and we see in white, technology is the best sector on the year. since this tech pullback, we are seeing declines. health care is almost caught up. the s&p 500 up 8% on the year.
look at oil and energy. the energy sector down 14%. one of the worst this year, helping to explain despite technology being down today, nasdaq is the best of all the indices. yields creep higher. we have stocks declining because of luxembourg mucks, down by 2.4%. all of these industry groups and international indices are falling today. look at the yield we are seeing. a are rising across the european bond space today, and we will talk about the bond space in a few minutes. this is a great chart in the wake of donald trump's visit to poland. he is now in hamburg. he received a warm welcome the for he hit the g-20 road. it is one of the few nato members, poland, that meets the alliances defense spending
target of 2%. like a number of western european governments that are critical of terms stands on climate, authorities in warsaw do see the president as a kindred spirit through seeking to revitalize politics and get ordinary people more say. this is the trade between the two countries, the trade deficit and balance. there is a trade deficit between the u.s. and poland. this is global trade according to the imf. in historic chart going back to 1980. international trade is having its best performance in years as global growth enjoys its strongest synchronized upswing since 2010 and it has shown trump's resilience in america first agenda, a key reason receipt central banks adopting a more hawkish tone or more upbeat after years of pumping cheap money into their economies. this is a chart on gold, top
gold forecast. it has a stance on gold and it says it is up against a clear and present danger, that danger is the federal reserve. they plan to raise rates this year while reducing its balance sheets. goldpped bloomberg's rankings in the second quarter. ouncel drop to $1165 an in the fourth quarter, compared to 1230 median projection of analysts. we are up today. .onnie: great the european central banks are out with the minutes of its latest meeting. the headline, policymakers discuss are moving a pledge to increase their bond buying program, if needed, when they met last month and the economy showed signs of improvement. joining us to discuss is
citigroup senior economist. how do you best encourage good downtrendse tracking that might be a little bit too good for the european economy? trick the ecb has to do. what they are acknowledging is the economy is doing better than the beginning of the year. in international comparison, the eurozone economy is doing quite well at the moment it isn't just in the headlines doing well but a very broad recovery, where a lot of focus has been on today. said inf economist has 20 years, we have seen little divergence entering growth rates in various countries as we have at the moment and that makes it resilient because it is a broad-based recovery. the ecb is in talks about what
john -- what they have withdrawn with lower interest rates. they had taken that away. they have said the economy is talents. the next thing to talk about is what to do about the acid purchase program. -- the acid part -- asset purchase program. that includes interest rates and so on. if they move too fast, that could dampen growth quickly. they have to be patient. that is what we are focusing on today. vonnie: if they decided to take that wouldnguage increase bond buying if necessary, if that were to go an, would that give you equivalence of tightening? christian: a good question. i think we could have a long debate about this. theyonthly purchases, are the stimulus or is it the level of purchases that the ecb has
accumulated, which is the stimulus? the question on whether you have to hike them even more or not these into the same debate. i think markets would see the withdrawal of that language as another small, hawkish signal. i think markets are moving to in next step, which is january 2018, it will be less is, 60 billion and question how much longer is the ecb going to buy it all? we think purchases will be over by next year. mark: look at the german 10 year yield, which broke through 56 basis points for the first time since january 2016. what level the bond yields constitutes uncomfortable making the reader across the financial divisions? christian: the question in the eurozone is which do you look
at? was applicable to all european countries, it would not make anyone uncomfortable, but i think one of the key figures to look at is the italian bond because there you get to the questions of sustainability if the 10 year yield goes up to high and you make it up into trouble of bringing down the italian debt in the long run. that is probably the key one to look at. with getthink the bund anyone worried. we have had up ticks before to these levels and they were quickly followed by a downtick. we believe at the moment the bun d yield will not go much higher. we think it will go lower. mark: as you speak, i bring up quickly the italy-german 10 year
yield and expose that. there we go. ignore that. it is all wrong. in all chart. want too move on -- i move on. it shows italy and germany are but the 2015 level. christian: and has come down. mark: since earlier this year. the u.k., it is a fascinating debate. to without guest it before that fomc meeting? we have had three pieces of pmi data this week, which would leave many to think they should not even consider raising interest rates but inflation rate is well above the bank of england target. one? side are you are you a hawk or dv? -- dove? christian: i think i agree with
mike curtis us are that they can't -- with my -- with my predecessor given what has happened. consumption is weaker, but there are signs of investment in we should be helping experts. all of that together should stabilize a u.k. growth. i am on the dovish side because there is uncertainty in the system. ,ot just because of brexit where the deadline is approaching and you had that conversation with the irish foreign minister, which i think is interesting, but the political uncertainty in the u.k., we do not know how long this prime minister will be in place and if there were be another election and who then will take place of policies that follow. it is another sort of uncertainty that would come from the fact that higher bank rates could those in the u.k. who have
mortgages, even though at the same time, i do not think that uncertainty is called for at the moment. mark: kristin schulz -- kristin -- christian schulz, thank you. we are committed to securing your access to alternate sources of energy, so poland and its neighbors are never again held hostage to a single supplier of energy. outussia has sometimes cut guys shipments overpricing disputes. trump said western nations must stand up to the evils of terrorism and government bureaucracy. he argued the west can prevail
but only if people cling tight to bodies of faith, family and freedom. the manhunt is not over in the bombing of the area on a grand concert. rande concert. it happened on may 22, killing 22 people. more than 200 others were wounded. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney donohoe. this is bloomberg. mark: thank you. coming up on the european close, how rough old the roads get for the u.k. when it comes to brexit ? we spoke to the the region prime minister. -- we spoke to the norwegian prime minister. this is bloomberg. ♪
world headquarters in new york city, i am vonnie quinn. mark: live from london, i am down toan, closing it the european close in 15 minutes. the g 20 summit is getting underway in hamburg, trade likely to be amongst leaders. the miller spoke with norwegian prime minister erna solberg in an exclusive interview. the think you have entered leadership of angela merkel -- i think europe under the leadership of angela merkel shows steps we need to go further. i hope you will get more countries produce a fading. globalizedng in a world. there is no corner to hide in anymore. a disease or conflict, it will affect the rest of the world.
after 2008 in the financial market, we saw that. we saw that when we had the ebola crisis. we need to be prepared for handling these things, but you have to create enough jobs in the world so young people are susceptible to terrorist or migrating from their home countries. matt: nonetheless, we see large economies exiting europe. i mean britain, especially, is the one that comes to mind. do you see norway as a model with the u.k. in this? >> i think it will be difficult for the u.k. to settle with these agreements with the internal market because we are aligning to the freedoms. when they were pointing to norway, i said there are two things to keep in mind, we have these freedoms and we have a big
influx of money from that sector, so you cannot just look and say we manage well. we manage well because we have sorted out the economic part to accept those freedoms. there are regulations in the eu that affect the single market. matt: have you spoken to theresa may are given advice to how she should proceed? >> i think the rest of us are something that would britain was to do themselves and how they find a good agreement. it is important that in this globalized world, having, understanding that there is in alance betweenl the goods you get and what you make always comes together. we are eager on an international agenda, so i hope they will manage to get the brexit deal
that does not make britain shifting too far away from the rest of europe. matt: you mentioned oil. you have the world's largest sovereign wealth fund and a lot of oil money. what is the best outcome from this g-20 for norway in regards to a recovery in the oil market and energy policy that needs to be seen going forward? >> i think it is important to understand that norway is a large oil country but we are going to have that slowly declining production. we are in a transformational situation in our economy. we will get our growth from different sectors, so to us, it is as important that we had stable economic development for the world. the demand in germany and sweden is kept up, so that is why we will give traditional norwegian companies, who are exporters in
oil, so that is more important for us now they just the price of oil. we have breached a new level of willar up the oil price go. there will be a transformation with the us oil and gas in the future, so we have to adapt to a new energy balance and situation. mark: norwegian prime minister erna solberg in that interview with matt miller. ahead, as we head toward the european close, a quick cross asset check, look at crude oil rising after inventories up about 25 cents, 2.5%, and that euro above a dollar -- $1.14. germany's 10 year yield is up 57 basis points. that is roughly in line with the two-year yield at minus 57 basis
live from london, i am mark barton. the european close minutes away. vonnie: live from new york, i am vonnie quinn. still seemsreserve it is not leading to many many opportunities for some traders. a hedge fund suffered its fourth straight monthly loss in june at about 1.5%. the decline pushed the macro hedge fund down this year. the worst loss for its first cap since brevan howard again trading in 2000 day. our reporter joins us now with more. not a great performance for brevan howard, but the other partners might say, weights, are trades will play out as planned. >> macro managers have been
saying that for years, just wait, the timing is wrong, but one day we will have our moment. alan howard has been fundraising for specific alan howard funds to take advantage of his forrience in rate trading when the opportunity arises, but it is not here yet and those opportunities that have been, they have not been playing them well. a lot of micromanagers had been caught in this very crowded trade that did not go their way. it has been tough for these micromanagers that have been focus on the developed market. those opportunities have not been there and they got caught with short european rates. mark: not all macro funds are falling, are they? how is it bearing versus its peers? katia: it is worse than the average macro funds through may. we have data. the average macro fund was down about 1.2% in may, so brevan
howard is underperforming its peers. correct, in broadly the macro fund industry, it has not been doing great again. it is continued poor performance. for brevan howard, they continue this way and that will be three out of four years they have produced losses. they were up last year but just in the nick of time. vonnie: it is not all global macro funds doing badly. fund wherey about a they invested money that is up 17% in the first half, despite not having the best beginning. katia: glenn point is a $2 billion fund and they specialize in an emerging market. it has been a huge rally in emerging markets and if you have played that correctly, you have been doing great. oint is up 13% this year.
if you dabble in emerging markets, you are doing great. there are a lot of micromanagers that do not to emerging markets. macroa large part of the economy of the world, so for those able to dabble, they had done well. vonnie: a lesson from our bloomberg hedge fund reporter. mark: good stuff. take a look at the way european markets are trading. four minutes away from the third day trading sessions. thocks down for the six day. i will leave you with stocks as we approach the close. this is bloomberg. ♪
thursday session is low, not as much as they were. the biggest fall in a while. we have had some falls in the region of 1%. the lowest close since april 21 when we were down 1.2%. most industry groups down today. thursday session is low, not as much as they were. the ninth day 30. this company cutting their sales forecast after that cyber attack disrupting manufacturing and distribution. this company is one of the first to quantify the effect of the incident. 2%, versus an earlier forecast of 3%. sales down by 6%. this is the german tenure bond, but by 50 basis points today. 57 is where we are. the highest level since january 2016. soft demand of the french auction.
minutes of thest last ecb meeting. on the matter of central banks, this is a great chart showing the probability of a rate hike here in the u.k.. faster than the ecb. the probability over the coming year. there is a 50% chance that the bank of england will raise interest rates. this comes after the hawkish comments by mark carney this last week. hawkish comments when he basically reversed his earlier comments. shifted expectations. arney is worth -- carney has history of not following through
rates.threats of hiked it is believed the bank of england will raise rates within the next year. vonnie: the central bank tendencies into be bearish u.s. dollar and bearish u.s. bonds. 0.4% good forut the euro and the yen. steeper yield curve. almost 97 basis points. this is that the first page of our emerging markets. reversing some of those trends you have seen up past the election with the pace of trading at 18.32 and the ruble was just under 60. it was above 60 at one point.
we must keep an eye on those as crude oil rises. here is taylor riggs. >> oil has been the story. when you start with an intraday chart here. you can see this big spite after oil and then tories were released. there has been a larger than expected drop in inventory. it is pushing the price of oil up. this is good news but it is not necessarily translating some of those large-cap oil companies. are down.conoco ,n the case of chevron estimates are just too optimistic. take a step back and see where this puts us.
we noted that yesterday was the first down day in nine and today, those gains are recovering some of those losses. where does this leave us? but steinman into the terminal here. those oiled some of companies that were seeing losses today. that might not necessarily translate to a big trouble for the s&p energy index. there's a lighter effect that those oil companies are having on the s&p energy index. i would love to talk about tesla. but i will rapid and send it to you. mark: all eyes on president trump who received a warm welcome in hamburg ahead of the anticipated g-20 summit.
with as going tension in north korea, defense may have a renewed urgency. nina, thank you for joining us. angela merkel has gone into this g-20 pledging to avoid this split that we saw in italy at the g7. six on one side and president trump on the other. there be a similar sort of divide? how do you best prepare against that if you are john -- chancellor merkel? chancellor merkel is known for her cool and calm style. she has been in office for 10 years and knows how to handle difficult situations. a lot of the changing global political dynamics and alliances is to see how the chips fall. eul there the chinese
entente? what is interesting is that you will see a lot of western liberal european leaders trying to align with japan and perhaps china on issues like trade and climate change where you might increasingly see trump isolated and standing with more of the strawmen of the world. mark: where can trump find common ground? it is clear whether there will be issues or differences of opinion, where can he find common ground? it from theok at view of the western european countries, it might he a repeat of the g7. you can make a statement saying we have agreed on this and that and it will be interesting to
are,hat the conclusions but i don't think there will be much of a difference when it comes to the g7 in terms of moving towards it. the only thing where there might become an ground is on the issue of defense. when you see what has been happening with north korea, that has been alarming to the united states. areais probably the one weather is the onus of common ground -- where there is the onus of common ground. vonnie: he is arriving from brussels post up he signed a massive agreement on trade, 30% of the world's trade. what can we expect from shinzo hammeringms of and himself toenamoring donald trump terms of having done this trade deal. >> the chinese trade deal almost
got blocked by the regional tournament in belgium. though the eu is turning away from free trade. since the election of donald trump, it is particularly protectionist and isolationist. you have seen a lot of the other agreements expedited. this japanese deal with the eu is huge up to 3% in global trade. and has been expedited by the election of donald trump. you might see that happening with china. we are a long way off, but the eu is talking to china. again, shinzo abe, along with merkel and mccrone -- macron, are trying to put four free trade around the world at a time when america has become protectionist. vonnie: shinzo abe arriving momentarily for those meetings.
and thelk about asia china-japan access when it comes to the u.s.. there are two powers. is the euro being represented by angela merkel? and the u.s. where does china fall with what it promises? what does it say to vladimir putin? >> when you look at the leaders at the summit, you have three contenders to lead the discussion. one will be donald trump, because he is the president of the united states. the second is angela merkel, who stands for that democratic, liberal, western values. she has been in office for 10 years and may when a fourth term in december. and it will be the chinese president. it will be interesting to see if
there is an entente new relationship. china and germany have already said they will work on things like climate change and pushing the free trade globalization agenda. when it comes to those photos let's see if the chinese president will be standing next to donald trump or if he will be in the more european circles. that interesting to see putin and trump will meet for the first time face-to-face tomorrow but that relationship seems to have become more strained. earlier today he was quite critical of russia. the one to watch out for is to see how china positions itself. mark: with regards to north korea, trump has been critical of the inability of china to put
pressure on north korea to stop its missile testing program. byt actions might be taken the g-20 given the events of the last few days. >> i think you might see more commitment and spending on defense but the g-20 doesn't have any power or international law. leaders makinge commitments to step up. be -- think there will mark: a discussion between xi jinping and trump on this issue alone will be fascinating. even what he said, given what they said. that dynamic, xi
jinping is a little bit wary of donald trump. he's not sure if he can negotiate with this man. it will be an interesting summit. mark: thank you for joining us. >> let's check in on the first word news. >> in may, american companies grew the most in almost two years. u.s. made cars and consumer goods were the big sellers overseas. north korea's test of a long-range missile has put new pressure on the system. in may the u.s. -- they said that the u.s. call -- experts call that a choreographed event. financial firms want flexible immigration rules to ease the pain of brexit. theges that would help
finance industry higher foreign nationals and other measures. those changes won't bring many benefits like staying in the eu. global news to four hours a day powered by more the 12 400 journalists and analysts. i am courtney donohoe. mark: coming up on the european close, the u.k. labour party labor -- leader says he is ready for another snap election that could make him prime minister. this is bloomberg.
mark: the u.k. labour party leader jeremy corbyn will meet with the european commission chief negotiator next week to outline his brexit agenda. is ready for another snap election which could make him prime minister. thee did very well in election. we did not win the geordie of seats but we put on a large number of votes. this government does not have a majority. that outlook to me to be very stable. i think -- that don't look to me to be very stable. i thinki think that things coule quite quickly. i am very ready for it. unknowns in many british politics. >> are you going to tell me
about the known unknowns? [laughter] no, but one of the great things is where jeremy corbyn stands on brexit. i'm curious why you are being as vague as you are and when you will provide us transparency? we want totally, make sure there is free trade access to the european market. that is crucial. we want to make sure that we do havenme in offshore tax on the shores of europe. hence the response i gave to the chamber of commerce, i give questions to the levels of taxation. and that european nationals are guaranteed unilaterally the rights to remain in europe with rights of full citizenship. maintain university connections across europe and
that we maintain a broadly similar level of regulation, of regulation of consumer products. it would be a partnership with europe, but not membership with the union. we accept the results of the referendum. single market compatible with brexit? >> the single market is the concept that it requires membership of the european union. team has had many discussions with eu officials, members of the european parliament and we have a good relationship with socialist parties across europe who want to work with us in the future having an extended meeting with ourelle bonnier to outline goals.
>> would you be prepared to pay for access? >> i cannot give you a commitment to that. >> when would you be able to say that? >> we will set a general objective and it has to be the access to the european market. think of bmw and rolls-royce and to a lesser extent of rolls-royce. those companies all have supply chains on both sides of the channel. a lot of manufacturing relies on the supply chain from europe. he cannot break all of that up without a massive dislocation and job loss. bmw decided not to invest further. what is the effect on the local economy? it is massive. airbus in north wales, a massive
employer in that area. ity don't actually make plain. they have things like the wings in the taken over for assembly. guy: you would not rule it out? >> we went to make sure. the priority is to get access to that market. >> you have not decided how to achieve that? >> we will press for that and that is our objective. plan.a jobs first >> do you think financial services should be prioritized? >> financial services are also large employers and an important part of the economy, particularly in london and edinburgh. be access to european financial markets. i sit -- >> it's not a priority?
be a grand slam of a chart, which takes in one of the biggest market stories of the year. the moves in the currency market and how they have impacted the value of the 2.2 million pound winners per. #btv 1021. seeds still in competition on the mend''s side. poundve djokovic, and sterling for andy murray. it has been pretty choppy for all involved, but the pound has suffered the most and is worthless should murray win. the greatest value lies with the serbian dinar. it plunged with the pound but is now writing -- riding high. if you were to pick a winner base in the currency market, djokovic would be your man.
vonnie: you are saying it is not worth it for andy murray to win? >> even though i still want him to. vonnie: brilliantly done. nobody throw anything at me. i'm handing it over to mark. with synonymous world and -- synonymous wimbledon with murray mound, and a bit of tennis as well. five stats to knock your socks off. let's start with number one. the number of seats on centre court. 14,979. the right axis is percentages of one million. number two, thanks that. 39,000. the number of balls used during the championship, 54,250. this one is for emma. the number of strawberries sold. 140,000.
the final one for the umpire. vonnie quinn, number of glasses of pims sold. 320,000. five stats to blow your socks off. vonnie: the only pims i'm partial to is pimm fox our own bloomberg anchor. i am partial to strawberries and cream as well. i was reading that the hungry and strawberries that are used may have to be imported if brexit doesn't go correctly. that would entail tariffs. mark.0,
from bloomberg world headquarters in new york here are the top stories on the bloomberg and around the world. president donald trump and the first lady have arrived in hamburg before the g 20. we will get a life report in minutes. during up for tomorrow's jobs report. we will look across the nation with michael mckee. the road ahead for electric cars. we will tell you about a new forecast from bloomberg's new energy finance. we are halfway into the thursday trading day. abigail doolittle is with us now with the latest. >> pretty clearly the sellers are in control. clearly the