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tv   Bloomberg Markets European Open  Bloomberg  July 10, 2017 2:30am-4:00am EDT

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delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver. welcome, everybody. this is the european open. let me tell you what we're thinking about this morning. president trump's son had a pre-election meeting a russian lawyer that said to have damaging information on hillary clinton. theresa may changes tactics, calling on opposition lawmakers to steer britain out of the eu.
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his chief simply running out of ideas? what does this mean for sterling? the central bank will probably wait for policies it has in place. we will hear from the bank of france governor. post payrolls performance. up for tense up fortunes of 1%, similar story around europe. the dax will open up more strongly. let's take a look at jim m. some interesting trade. india trading strongly this the yen japan is up 7%, is down by 3/10 of 1% against the dollar. pay attention to that story, as well. how thisink about
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policy goes forward. what happens when it runs out of steam? i want to highlight what is happening in the commodity complex. silver has been on the move. keep an eye on silver, it will be an interesting story. from oil to precious metals. there are lots of moving parts and plenty to focus on, particularly because inflation is an important part of discussion with janet yellen coming up this week of it -- this week. let's go to bloomberg first word news with juliette saly. juliette: donald trump's son met with a russian woman who offered to provide potentially damaging information on hillary clinton. according to a statement from him, the meeting took place in june 2016, after his father had secured the republican residential nomination. is investigating
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interference in the russian election and whether there is collusion between the trump campaign and moscow. steven mnuchin says the white house is committed to getting this -- his tax overhaul proposal through the house by the end of the year. but it will not include a 40% tax break for the rich. stephen bannon had been pushing tax break while steve mnuchin said the story was unfounded. the g-20 wrapped up in hamburg. home havingump flew on trade.n he had his first sit down with vladimir putin, with a a great to a cease-fire in syria. theresa may will call on opposition lawmakers to keep written out of the european month'ster last
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disastrous election. she is expected to say social and economic reform is needed to make a successful exit. in a side of her weakness, she will call for cross party corporation to deliver it. china's price gains held up in june with factory gates coming in at 5.5%. consumer prices gained 1.5%. despiteemains robust excessive borrowing. controls on building construction could soon way on on demand.weigh the launch of the first futures contract for the commodity since the middle of the 1980's. the london midland exchange for almost half the world's gold changes hands.
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sinceggest reduction 2016. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. guy? guy: to say that this is a busy week is something of an understatement. so much is going on. will it take us any further forward? this is being portrayed in the british newspapers as an sos. one of the papers are calling -- saying, i need help with it. janet yellen starts her monetary policy report on wednesday. weightay is where we get states out of the u.k.. donald trump meets emmanuel macron and attends bastille celebration. lots to think about, all caps in the united states dominating
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right now. we are joined on set. are we going to learn anything this week on the fed? how does janet yellen learn about reflation or the lack of it? guest: that's the big challenge. and that has been her biggest challenge her in her tenure. on-the-job side, things are going fine. but the wages component from friday's data was the disappointment. she needs to provide a little more clarity on what the feds position is on this because the idea that this is a transitory problem has been pushed back on by investors who have pared back there called for the number of rate rises this year and next. she really needs to pin this down and speak to investors about what the fed inflation is
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and what it means for monetary policy. what is the latest trump story ? we're waiting to price in some aussie updraft out of the white house and it seems to get further away. guest: it seems the latest in a long line of things the semester asian is focused on, the opposite of what steve mnuchin once them to focus on. it looks like it might be pushed further on. we are looking at other things other than legislative agenda. we are looking at the election and the investigations of their. investors would like to see the admission focus more on its legislative priorities and i don't think that looks any new work now that six months ago. guy: let's talk about british
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politics. we have a speech coming up that i cannot get my head around. theresa may is going to ask about the bigger issues facing britain. is that her saying, i ran out of ideas, or her saying, the labour party does not have any ideas they can coalesce on brexit and we are going to ask them and they are not going to have a single one and that's their lack of ability to coalesce. are the markets going to pay attention to this? guest: in the near-term, probably not. it's important to say politics will be crucial for the pound in the longer term, but near-term, the process is just getting going to terms of what the government's position will be and how the negotiations well pan out. it's still early as far as that goes, realistically, where we will see something important is in wage data that we will get on
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wednesday. we are expecting to see that fall below 2%. with inflation near 3%, that negative inflation adjustment in wage growth is a persistent problem. something the bank of england will have to address. they were saying they might want to start hiking rates sooner rather than later. as long as that dynamic persists, we are not going to get a rate rise, and it will weigh on sterling and yields. guy: richard has been writing on this subject on the blog this morning. smart analysis throughout the day on mliv . you what to look at the data out of the u.k. this week, see it here. , highlight the earnings, some of the more crucial pieces of data for the u.k. this week. you can highlight what we are seeing here on bloomberg in terms of video and radio and
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event coverage. here are some of the most watched, recommended that he is on screen. talking about what is going on. there is the interview we had with the governor of the bank of france. ,ou can click on some of this click on most-watched, and that changes to bill gross talking about what we saw in the bond market in the last few days. it is in guys talking about these markets. we are going to see from the coo of france alm and what he calls unfair advantages. that's coming up. this is bloomberg. market open is 90 minutes away. ♪
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guy: let's get a bloomberg business flash here with juliette saly. juliette: the coo of french oil company total said he will travel to qatar next week to kick off a joint ventured a mug -- among international tensions. the contractbout total signed with iraq this week. >> we are expecting international loss. i considered what we have done is the same picture meeting market degrees for the
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and we are computing to the economic can element in iran. -- tohat the agreement try to contribute to the economic government. the pan-european stock exchange turned about 2.3 billion dollars available for acquisition as it seeks to double in size and diversify. the ceo told number that it operates in answer than, and paris and went to capitalize on the post-brexit world. >> i do not know how make jobs will come to the continent or paris. if you want to make money and to do business, with the companies and nine up savings, of them using the same currency,
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then you have to be located in that part of the world. that is your bloomberg business flash. the ceo of elle, france has lashed out over what he has called huge subsidies. speaking exclusively to , what he called fair competition. it's a freedom business because our goal is to carry goods to all the airline industries, roughly one third of all the goods exchange in the course we are a business of carrying people from one continent to another. so we are an actor of monetization. anare in favor of having open frontier.
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strategic industry for many countries, so is rather regulated, frequent competition. we are in favor of. we are working harder to persuade our government and the european commission to put together rules that allow us to work in these regulated environments and fight against unfair competition. is this something you are seeing in the middle east? >> more specifically in the gulf area, where we have multiple carriers. europe, 2000 here and 1000 in the gulf area. among the street.
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-- three carriers. they are not really operators. of foreignapons sovereignty for the government. the competition with them is not fair. that's the reason why with other carriers, what they have done recently, we are asking for our government and european condition to put together rules that will favor a fair competition. we had a crazy last june in the union. 18 flight destinations, is this something you are seeing evolving in the gulf region and is air france going to jump in to take some market share th
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ere? >> we need to give of our is this not to this kind of situation. it's a political situation which has nothing to do with what i was saying before. we do not want to take favor of this situation and forced the consequence of an unfavorable situation. to ape it will come back more normal relations between the states of the gulf area and between the airlines of this country. guy: a point to make, doesn't he? theme, staying with the emerging market investors will pay close attention to janet yellen's address to congress later this week.
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onking at the jobs data friday, it showed fairly concerning which developments. what will the emerging markets the making if this testimony delivers? let's find out. tracy alloway joins us from our dobby. what will investors be looking for here? the market doesn't believe the fed will deliver what it says it will deliver, so what will they do to change the disparity? tracy: good question. to some extent, emerging market investors will be looking at the same thing dm investors are looking at. that is yellen's views on hikes, a and future reduction of the balance sheet and whether or not yellen will stay on as chairman work chairwoman of the fed or a second term. this could be her last testimony as chairwoman. if there is one thing emerging
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market investors will be focused on, it's if she says anything about u.s. financial conditions. u.s. financial conditions have been relatively lose even though the fed has been hiking and that has been a huge tailwind for risk assets and in particular, emerging market assets. we have seen a host of fed speakers start to make noises about this. they talk about rocky evaluations in the equity market. the central bank was looking at financial conditions. if yellen says something about that on thursday of this week, it could be a big deal for emerging market investors who have grown used to a relatively illiquid and loose environment for their asset class. guy: closer to home, any expectation we will see movement on the qatari story this week? tracy: yes, what a headlines generally hand a stasis for the
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time being, we have seen visiting movements in the qatari market. stocks were down, the market cap is down to its lowest since january 2016, but the real action has been in the bond it. qatari debt was one of the worst performers in the conference last week and bond dollars are trading in line with triple be rated emerging market government debt despite the fact qatar is still rated at aa. it is on negative watch by all three agencies. you can see some stress there. bond curve flattening, generally that is not a good sign. it tends to tell you something about what the market is saying for the future of qatar's economy. we have seen investors starting to talk about relative value traits. theyt analysts are saying
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can sell saudi arabian debt. no one seems to be calling the bottom just yet. guy: thank you very much. putting going on in that part of the world. up next, powered down. -- power down. keep an eye on u.k. dispensed stocks today. keep an eye on mining stocks, particularly silver. open this prepares to morning, seven minutes away. this is bloomberg. ♪
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guy: five minutes into the market opens this monday morning. we think it will be a positive story. one area i want to pay attention to is silver. you can see it breaking below the twin line. the rsi is pointing to stretch. that is silver in euro terms. pay attention to the commodity stocks more broadly. let's talk about whether we think the markets are going to go this morning. we think it will be a positive story. it looks like the dax might outperform a little bit, half of 1%. there is a ruling coming out at 1030 in the high court about whether the u.k. can sell weapons to saudi arabia. it may turn out to be nothing, may turn out to be something.
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it may be an interesting story, one worth paying attention to later on. we have lots of stocks we need to be looking at. the golden story is interesting, as well. the market open is four minutes away. this is bloomberg. ♪
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>> we think it will be a positive start to the morning. the french utilities, the nuclear stocks, one to watch out for. watch at what is happening with the u.k. defense stocks. stocks, something to pay attention to as well. we've a bunch of macro stuff happening this week and a lot of politics happening this week, as well as a lot of data. the ftse 100, putting much in line with the stock 50. the german market will outperform come up by 0.6%. these are not big moves. the european equity markets have
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not been the greatest guide to how the rest of the trading day is going to go, at least at the start of trading. that is what we see this morning. kemember, it is a packed wee with janet yellen testifying later this week, plus, other central things, like candidate, to pay attention to. the ftse 100 up, 73.51. manus will have the details in a moment. .2%. up by the s stoxx 600 opening. the aex, opening up as well. let's find out what is happening with the gilt market. manus: thanks for the vote of confidence. if you that china would be the vanguard of the reflationary trade, you might have difficulty. the marketr than
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estimated, but by the end of the 5.2% andwill drop to that will dissipate to an anemic 2%. for the moment though, the money has been flown into etf's. it has flown into europe. financials are up .4%. but take a look at this. where is the money shifting? they saw a rapid rise in government bond yields. you can see this chart from the bloomberg first word team. citigroup says come up .60%. that yield story, it was not really a rush, according to bill gross. that you saw an underlying subliminal move in terms of value stocks. that's where the money flowed in. the msci european value index had its best two weeks run in the number of months last week. financials make up 37% of that
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value stocks. let's have a look at the gilt market open because we see a shift in terms of equities, shifting a little bit this morning. lost $868 billion last week, the worst week in investing in bonds and equities. but but a country mile, it was the barclays aggregate bonds that wiped the $151 billion of value. the stocks lost $186 billion. do you agree with bill gross? it was a minor movement of movement in terms of repricing. in his view, the volatility levels did not triple. they did not ratchet higher with that move. i'm off to bloomberg radio and leave it in your capable hands. guy: let's take a look at the grr. to be honest, not that much moving around europe this morning. you go to the sector story,
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you can see the rotation happening. pretty much everything is in positive territory and banks are leading the charge. money care is where the is rotating into. the market is up by 0.5%. banks, oil, gas, technology and chemicals are outperforming the market this morning. that's where the flow is. it does not seem to be that dynamic at this point. we will keep an eye on it to see what happens. talking of the changing picture, theresa may will call on opposition lawmakers to help steer britain out of the european union, as she seeks to reset. the u.k. prime minister is to focus on social and economic reform during the speech she will deliver on tuesday. where and when, we are still waiting for. but in a sign of weakness, she will call for cross party cooperation. i wonder if this is weakness, or
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if she is simply trying to expose the differences that exist within the labour party and burst the bubble that is currently being enjoyed within that party. certainly on the front foot at the moment, judging by the conversation i had with jeremy corbyn last week. joining us now, mark cudmore, joining us out of singapore. along with him, jordan rochester joins us on set. good morning. you are positive on the pound. do you see anything in the near term that changes that view? >> it is down to this week's jobs data. number, wea weak don't expect that, but if that were to happen, it could put a pause on the near-term rate hike that is on the way at some point. when that will be -- will it be this year or august as we expect some or some time in november, or even 2018. guy: you expect a 2017 hike from the bank of england? >> the bank of england made it quite clear.
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firm,g as the data holds then we do think august is more likely than not. guy: mark cudmore, you are in no way convinced of this. >> absolutely not. i think there is a chance of a hike in august. i would agree that the jobs data is really key. i think it is very much about the earnings data. but if the earnings fall below t2%, it shows the widening gap. i know inflation is getting out of control. 's argumentd jordan as to why the bank of england will want to tighten, but i think it will stall a little further. even if they do hike in august, it will only create short-term respite. the growth reductions are starting to fall again. >> it is a good point, but the wage data is very volatile and we have to smooth it. then we do it year on year.
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within the details themselves, the last two months seem positive. better get zero or even month-to-month this time around. it is quite a solid number for the bank of england to be more confident. on your point, you're right. what's going on in a cyclical upturn. it is hard for the u.k. not to be involved in that. brexit has not it happened. when it comes to theresa may's repeal bill, the market is starting to see more of a chance of a transitional brexit, or a softer to no brexit. i'm still positive on the pound for most of those reasons. >> but you think politics play a factor? we are not getting any further clarity on brexit. i'm not sure we will get any major clarity on what the path of brexit is any time for the next couple of months. i think politics is noise and it
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is all about the data. i know you pointed at the jobs data, but do think that brexit will provide a positive boost for sterling in the next couple months? >> growth will be somewhere 0.6% quarter on quarter. this is survey data. that is inflationary, if anything. and then we have the inves tment data picture. we talk about the politics a lot on this show. it is falling. when uncertainty falls, investment rises. thiss what we see in sector as well. the u.k. is not just about the eu. it is a positive recipient of the spi. and the legal system too. but we still have yet to see that big turnaround. for a year now we have been waiting for brexit. it has not yet gone down to a recession or slowdown. guy: let's talk about the
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politics briefly. theresa may will make her speech tomorrow and ostensibly, what she will call for his cross party cooperation, but i would expect that the subtext to it is "labour party, what is your position on brexit?" jimmy carbon thinks he has a defined position on brexit, but there are many mp's out there that would vote for a soft brexit. is there a danger this week that we try to price in a softer brexit because we think cross party cooperation will yield a softer brexit, or will this heighten the political tension because neither party is clear on what they are going to be doing? >> i don't think it will heighten political tension. it will unleash a can of worms, in terms of debate. we don't follow every debate in terms of the market. a lot of it is just noise. we will look at will she ruled out the jurisdiction over english law again. if she keeps that red line, and me she is not budging on her
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core position. if she's offense it, and she -- if she softens it, it would be positive news. it would mean slowly her redline is being eroded away, which is what the market is looking for. guy: let's wrap it up there. mark cudmore joining us out of singapore throughout the day. jordan rochester is going to stick with us, fx strategist at nomura. coming up, a puzzling picture. wage growth in june's u.s. jobs report. we discussed numbers and how the fed will respond. this week we get yellen's testimony on the hill. what exactly is she going to say and will it moved the market? that is coming up and this is bloomberg. ♪ guy: welcome back.
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12 into the cash session in europe. the markets are trading higher. we need to look at some of the midcap moves. here's nejra. nerja: some of the most ending moves are on the downside here. i am starting with the u.k. construction company, down 35% right now, hitting the lowest levels since 2003. the ceo hasn't stepped step down and they suspended dividend payments after missing the profit goal for the first half as cash flow from some projects do.
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-- from some projects deteriorated. all options will be considered as they look for a fix, but the markets are reacting negatively today. investors had already been skeptical about the company's prospects and the shares have fallen 19% this year. the only that, but it is the most shorted stock in the u.k., according to nhs. i'm looking at almirall, a spanish pharmaceuticals company, dropping the most since 2010, hitting the lowest levels since 2014. there was a regulatory filing, in which it commented that it cut its net revenue sales. that looks to be why that stock is falling today. and centamin, this is a little bit surprising. i put this in because it was pulled higher at the open following some of its numbers, remaining on course to meet the full year 2017 projections, a 40% increase on the prior quarter. perhaps it has caught up a bit
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in the sentiment surrounding gold. gold fallingrand today for example, with gold weaker with five straight losses and hedge funds growing pretty increasingly negative. guy: interesting. let's get back to the jobs data. we saw this friday out of the united states, a fairly mixed picture that will continue to puzzle policymakers. non pharm payrolls, beating 170,000 estimate. wage growth came in below the forecasts. this could make a future rate hike more risky. >> the risk of course, is they are cementing inflation expectations below target. inflation expectations, whether you look at surveys or market-based measures, like breakeven inflation rates, they are very low.
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they have moved down recently and are below target. the risk is the fed, in their attempt to look at financial stability, that they cemented inflation expectations below target and that could come back to haunt them once we get the next downturn. guy: yeah, interesting maybe that the fed started to change gears a little bit on what it cares about. janet yellen delivering her semiannual monetary policy report to congress last wednesday. something to think about. donald trump's eldest son met with a russian woman who promised to provide damaging information on hillary clinton. she was a russian lawyer and they met in june of 2016, after his father secured the presidential nomination. that is important because it seems the white house is struggling to deliver on policy, particularly tax policy. we have to get health care done first. let's turn to what janet yellen will say this week. jordan rochester is still with
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us. how to shakes when why she is raising rates? -- how does she explain why she is raising rates? >> it is quite simple, really. the fed is saying, we have full employment now. if we are not hiking now, when will we? what the dead on friday set is yes, wages are weak and jobs growth is still in play. we are waiting until the end of the cycle in that tells me we are more midway because we still have jobs growth. we are not yet at a place where jobs growth is stagnant. guy: historically, this kind of level of employment should have produced more wage growth already. >> it is something else, the structural factor. when you have these big technical giants changing the that affects
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wages. but in the fed's mind, they ask, are we going into an inflation environment where there are no more people to employ? the command says equation should push up prices anyway, even if the labor market is in a mid pause. guy: you are still confident the fed is thinking about the labor market as one of the primary areers of why the dots significantly farther away from where the market is positioned? or is it that she is starting to change the reaction function? >> the fed is saying, we need to start hiking. guy: what does the market believe? >> the market has this attachment to the old era. you don't have inflation now, but these guys are looking at the next two to three years. markets can be a bit short
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term. once you start getting that data in, it will start to change the fed's mind. guy: central banks around the world keep lowering. they have no idea when we start to hit the oint -- at the point where the labor market is in balance. >> when the bank of england is guilty of this, there are plenty of other central banks around the world that are guilty as well. guy: why should i believe that they have any more of a clue than i do? >> that is a pretty tough question. [laughter] guy: don't answer that question. the market's consensus is, they will not -- and historically the market has been right -- the view is that they will not deliver and they will not deliver again because we are not going to see this inflationary story coming through. >> we have got just growth. it has not puasepaused yet. the economy is not falling over.
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becould be 4%, it could 3.5% or 4.%. -- or 4.5%. guy: john is going to stick around. we will talk about the bank of canada and what is happening with the ecb. we give interview with the bank of an are and will play that, get a sense of how in line he is with draghi's thinking. reporter: the ceo of total confirmed he will travel to qatar next week to kick off a joint venture. speaking to bloomberg, he talks about the recent $4.8 billion contract with iran earlier this week. internationalcial rules. those rules are changing and we will have to adapt ourselves. i consider that what we have done is the same idea of
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contribution. we are contributing to the economic government in iran. this is in the spirit of what the agreement was that we signed in january of 2016. and a 50% stake for $3.2 billion, giving a full ownership of the global leader. hydro says it will finance the region and in the markets. theirand auto combined aluminum outfits in 2014. guy: a bit of breaking news . raising their offer. we will continue to monitor this story. a bunch of little mma stories floating around at the moment.
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let's talk more about what is happening with the central bank stories. the bank of france governor and ecb governing member has indicated the european central bank will begin adjusting its stimulus settings in the auto. bloombergrview with over the weekend, villeroy says the ecb has begin to adapt the intensity of a monetary policy as it adjusts for the inflation target. >> are monetary policy is efficient. as you just mentioned, we had negative inflation a bit more than one year ago. it was 0.2%. we expect this year the average inflation of 1.5%. it is partly due to the energy crisis, but also the progress of implementation of our commitment to monetary policy. it tive -- it gives results.
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our target is the midterm inflation, so sustained, of around 2%. close to 2%. we will implement the macroeconomic monetary policy. but for what we have to do and what we started to do is to a dapt the intensity of this accommodative monetary policy through the progress to help our inflation target and to create economic recovery in europe. it is important to remember for what we did for the last part when we reduced the qe from 80 to 60 billion, and we announced one month ago that clearly, we would not reduce our interest rates. in the future, and this will be a decision next fall, we will go on adapting the intensity of this accommodative monetary policy. reporter: do you think the discussions should move quicker?
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do you think the markets are expecting the sessions to move more quickly? >> i think we have been extremely clear about the predictability of our monetary specialty. if you can remember, as far as last december, we announced our monetary policy for the year to come, so in december of 2017. we will see what happens after that. we will clarify next fall with no impatience, please. i don't say this especially for the financial market. i say this because we are independent and as an independent being, we need to be independent from political pressure but also from market inflation and short-term pressure. reporter: you mentioned in your letter that protectionism affects global growth.
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this is also where the governing council is waiting. has the political risk evolved for the rest of this year? >> this is an important characteristic of the european institutions. political risks have expanded with the eurozone. if your memory what was that one year ago after brexit, 2017 was supposed to be a very dangerous year for the eurozone with much turmoil expected and a weak recovery, etc. we have seen the contrary. our recovery is solid because and it istic center this way. the brexit negotiation is a real challenge. there are uncertainties about the new american policies. what we have do, and this is a very important stake of the g-20 summit just happening now as we policy,s to go on with
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with international rules. thse are -- these are the best solutions for global growth. and also, this is the best solution against inequalities. guy: the governor of the bank of france speaking. still with us, jordan rochester. jordan, this is a nice chart, 1929, the markets pricing in a rate hike for 2018. too aggressive? >> we will have probably one during the second half of 2018. we have two there. so, what is happening here is, it is still quite a few months away. that's what it is. really, really yields europe need to head higher. is there taper potential from the ecb? probably not, but what it is is high yields.
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it is normalization of policy. when you stop qe, that really does have a big impact on the market. guy: can the ecb talk his way out of a problem, the problem bring it does not have enough bonds to buy? >> well, it is tapering anyway. when we reach the end of the by this point, we think they have intentions to taper. the market will handle that. no, i think the ecb is on a set course. september, we talk about tapering. guy: what does that do to the euro? >> higher. guy: were you surprised? >> we are at 1.114 now. guy: is that a problem for the ecb? >> i don't think so. it is a lot different for the u.k. and the u.s. actually. guy: thank you for your time
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this morning, jordan rochester from nomura. up next, we digest the g-20, or g-19, depending on your point of view. that's next. this is bloomberg. ♪
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guy: russian revolution. donald trump's son confirmed to meet with the russian official who claimed to have hillary clinton information. break pre-brexit, theresa may change of tactics. is she trying to expose labour party discord, or is she running out of ideas? what does it mean for sterling? the ecb tells bloomberg the central bank will probably wait to reset stimulus policies. we will hear exclusively from the bank of france governor. good morning, welcome. this is "bloomberg markets: european open." i'm guy johnson in london.
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30 minutes into the trading day, this is what we are looking at. as you can see, nowhere in a hurry. .2%, numbers by being posted around europe, dax outperforming, cac underperforming. in terms of the movers, keep an eye on the golden. silvernd certainly in focus. g20 in focus, president trump flew home, lectured on trade by china and france, receiving attitude will little more when it comes to north korea. the big story may have been his meeting with the russian president, vladimir putin. joining us is the managing deputy director of research at
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pennio. what did you make of this weekend? >> i think they managed to limit the damage of the national leaders getting to the meeting with many divisions. there was a fear that it would be a complete disaster. the final communique has a little bit of something for everyone. from the point of view of selling back at home, everybody came back with something they can sell to the electorate. guy: what was clear this weekend was the multilateralism is dead. >> to a certain extent, yeah. announcement the of the free trade agreement -- it was very clearly designed to send a message, we want to keep but ifteralism alive, the u.s. doesn't want to be part
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of the conversation, the world will keep turning. guy: that is japan's story, but still, trade deals aren't done until they are done. there's a long way to go. the fact that they announced it earlier on was clearly designed to send a message. the question is, is the person it was designed to be a message for care? >> it is hard to say. probably he cares, especially his staff around him. e rest of theay th countries want to isolate the u.s., you cannot isolate the most powerful country in the world. it needs to be part of the conversation on certain topics -- guy: can you get stuff done without the united states? >> certain things, no. you can't get syria done, you can't do north korea. on trade issues, you can't do multilateral trade deals. on certain issues you need the
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u.s., on others the world will keep turning. guy: where does it leave on the merkel?-- leave angel a elections are coming up. >> i think she saved face. she limited the damage. she is still seen as a powerful leader, she got what she wanted, -- from the point of view of electoral politics, she did well. guy: where do we go from here? 0 --ilateralism at the g 22-0 the bills up to g67 and these has been the story of the last 50 years. have we reached the peak or are we in a dip? is it a four year dip, or is
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something structurally changing in terms of the nature of international discourse? >> one thing that has been going on for a while, the u.s. electorate wants to be less engaged. sure that will change. g20 was time the useful, i would argue, was during the crisis. you had concerted action. the g20 -- it is useful to shape the debate around certain things. you keep the debate on trade alive, the debate on security, on a range of issues alive, and that's important. the trade issue -- those watching this program will he interested in energy markets. does global trade evil? -- evolve?
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have we reached the peak of globalization, and if so, what does that mean for an economy based in europe, in asia? you talk about regional structures, and that is how this is going to stay alive and evolve? is that the picture i am looking at here? if i look at the baltic drive, it is fading. if i look at trade patterns, they are beginning to fragment. is that the picture we are looking at? >> i think it looks less expensive than the past, that's for sure. also because politically, you have more fragmented electorates, and people think - trade's not an issue in france, but it is. even people in the centerleft are critical of greece. the party recently abstained in the vote -- hand, politics is
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becoming more difficult in terms of trade. at the same time, you have the willingness to push for deals, and i think that's the way it's going to go. guy: the big feature this week will be wages. janet yellen will be talking about wages, it will continue to stagnate. we are waiting for wages to pick up, and i'm trying to draw a line between these stories. what are the factors that has kept wages low over the last 20 years has been the rise of globalization. are wee is in retreat, going to start to see that rippling back -- is this a positive for wages? >> maybe -- no. if leaders want to keep trade open, they need to include reformation. i think that's precisely the moment we are in. france is a reaction, to a large
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extent, to the negative consequences of globalization. i think the debate is shaping up in a way that people are realizing that they have to do something about it. i think if they want to keep globalization going, they need to put it on the citizen. there needs to be a compensator he factor --compensatory factor. >> can they do that regionally? >> in the eu. although they move very slow, but they are very accomplished, economies have talked about how it include growth -- in the case of the u.s., it's politicians in the political system that need to
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have confidence in tory mechanisms. guy: one question, where do you see the u.k.? a country that feels it should compete on the global stage when it is looking difficult? the u.k. continues the path that it has decided to follow politically, i think the country is in a difficult situation. what's going on shows that the world is turning. the u.s. is going to push the agreement with japan. you are going to be out of the i think itul -- and saying over the weekend, we were soft. there's no way you will be better off outside the eu. weekendises over the
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about the quick and powerful trade agreement, we know you need to be out of the eu to negotiate. time.es a lo long guy: thanks very much. the managing director and deputy director of research at penny ien. he'll be joining the daybreak team shortly. looking forward to continuing that conversation. if you are a bloomberg customer, hit tv on your bloomberg, and you get a bunch of things you can choose from. the radio, event coverage coming up, all kinds of things. yellen, and janet the best videos we can give you. there's the bank of france governor. you can click into any of these individual pages, the watch tv function, and functions to contact us. coming up, the hunt for
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acquisitions. we will hear from i.t. ceo and his plan, next. this is bloomberg. ♪
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guy: 23 minutes into the trading day. here's nejra cehic. nejra: we are having some stocks moving on m&a. i know you broke this earlier,
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but less update you on the headlines. 1.3% up on the stock, raising their offer to 66 euros per share. they are saying they applied for the win here take over exemption, and they say the renewed offer is improved with regard to material aspects, in the new offer price enhances transactional security. aveva gaining. a couple days ago, the ceo steps down after the schneider potential purchase fell through for the second time. reports in u.k. newspapers, schneider electric is set to mull a new bid, aveva rising off the back of that. finally, air france gaining as well after passenger numbers came through, not gaining as much as earlier, but still .5%. we spoke to the ceo over the weekend. he struck a positive note about
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the number of people traveling to france. >> i think what we feel is good about the business in france. there is optimism, and we do feel it for our business, because we see it in the summer, people coming from overseas. janaillac under pressure to improve after years of losses. guy: thank you. met last yearp with a russian woman who offered potentially damaging information on hillary and 10. according to a statement, it took place in june, 2016 after his father secured the nomination. congressional committees are investigating russian interference in the election and whether there was any collusion. mnuchin secretary steve
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says the white house is "absolutely committed" to getting his proposal through congress by the end of the year. he says the plan will not include a 40% tax rate for the richest americans. steve bannon have been pushing for that tax rate, while mnuchin said the story was unfounded. the g20 wrapped up over the weekend, with the u.s. more out of step with national peers. trump was lectured on trade by china and france. meanwhile, he had his first sitdown with the russian president, vladimir putin, in which they agree to a cease-fire in syria. however his concerns on iran and ukraine were barely touched upon. theresa may will call on opposition lawmakers to help get out of the european union as she seeks a reset after last month's disastrous general election. she is expected to face social and economic harm to make a
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successful brexit speech. however in a sign of weakness, she will call for cross party cooperation. china's producer price gains held up in june, with factory gate inflation coming in bang on estimates. consumer prices gained 1.5%, just below forecast. demand remains robust, even in the face of regulatory changes. analysts think controls on building construction could give way to more material. flasglobal news, 24 hours a day, powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. guy? guy: thanks. s seeking to grow as the u.k.'s exit from the european union is set to redraw the financial i landscape. the ceo spoke with caroline connan in an exclusive interview. take a listen. >> one thing is absolutely
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part of a significant europe was consolidated in london. there will be going forward rigid financial center -- not one rigid financial center, but many. and where you have a very intense network of global companies and very successful financial institution. financial centers will be distributed amongst various cities with different competitive advantages . some of the business alone to dublin, to amsterdam, to luxembourg, frankfurt, to paris. they are cities of different
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sizes, class types, regulatory environments, but they are all sitting in very intense financial communities. caroline: i guess i have to follow-up -- one, when is this starting? we have been talking about moving, relocating to the continental for a year now. have these already started? and as a follow-up, in terms of vab said brexit will bring 5000 jobs to and for. how many in paris? >> by the know how many jobs will come to the continent, for especially to paris. i think a trade is starting. if you want to make money and do youness of the company's, have to pull from this group of 27 countries.
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you have to be located in that part of the world. , i don't know. forthe trend is certain those who depend on various companies, specifically in business. the decision is being delayed we remember the noise --ut the netherlands, etc. clearly over the past 18 months, we have the austrian elections in spanish elections, the french elections, the stability is on this side of the water. we are waiting for stabilization of the political landscape in the u.k. and it seems like there
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is more volatility in the short-term. that the summer will and i believe -- [indiscernible] september 17 to september 18. guy: euronext, and what happens next. up next on this program, oil. what happens with nigeria, with libya. market after ahe seven-month high. we will talk crude, oil, silver, commodities. that's coming up next. this is bloomberg.
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guy: london. a busy week for brexit this week. plenty to think about, the politics heating up through the week. a big speech delivered tomorrow by theresa may, for cross party cooperation. 7370 is where the ftse is trading.
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a big portion of that market is worth paying attention to. our executive energy editor joins us on set. what is happening in the oil market? have aboutou guys libya and nigeria seems to be the main factor. they are going to be asked to cap output, but they must be thinking -- >> yeah. i think that story has completely changed over the weekend. loss,e another weekly relentlessly bearish in terms of inventory, demand not jumping as much as you would expect this time of year. that story highlights a big withnt in the bearishness, a massive rise in production. opec, they're at least asking the question of, at what point do we cap that? the point you made is valid, if you are in
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nigeria, you could say we need the cash. our production is not back to where it has been. >> everyone else raised their output and said we will cap it's here. >> this may be the scenario. opec turns around and says you can raise it a little bit more, rather like iran. the key is giving the market a degree of certainty about what's going to be coming, and in the market has something to work with. at the moment, it is anyone's guess. that it doesn't help when you are thinking about the forward curve. guy: doing we need more futures when it comes to precious metals? theyey haven't only go, did it in the 1980's with the london metal exchange. silver at least a couple times. now may be the moment, and i am always cautious, because it's always a bit of a gamble.
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but when they introduce aluminium contracts, it is now their largest one. it can work. right market, right time. guy: thank you. this is bloomberg. ♪
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>> global stocks rise following the strongest u.s. payrolls. markets now look to janice yellen's congressional testimony. russian revelation. president trump tells his son he did have a pre-election meeting with a russian lawyer who claims to have damaging information on hillary clinton. we have the latest. and unease as policymakers argue over whether to rein in villeroy. an

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