tv Bloomberg Markets European Open Bloomberg July 17, 2017 2:30am-4:00am EDT
guy: monday morning. good morning. you are watching bloomberg markets. this is the european open. i am guy johnson in london. matt miller off this week. what are we watching? round two in brussels. davis and borneo going toe to tell. -- toe-to-toe. domestic demand drives pickup, beating expectations.
carolyn mccall this embarks and is now set for itv. excuse the ponds. a brexit-driven advertising slowdown. istainly a challenge she stepping into. let us talk about where we stands in terms of expectations this morning and show you the weei. not much progress being expected. we are getting into the thick of earnings. there is not much on day-to-day, but as we work our way, we have the ecb and boj on later on this week. japan is closed today. be aware of that. it has been closed. let us move on and show you what is happening around the world with the gmm. this is the picture around the world. the big caps came under pressure today. that is interesting. the data out of japan, out of china. expectations,eat matched what we had this time
around. as a result of which, it generally, there seems to be a sense of optimism this morning. excuse the cricketing story in asia this morning. the chinese equity markets fell, which is interesting as well. the s&p was up .5% friday. the banks were down despite some actually fairly good numbers from the likes of jpmorgan. the aussie dollar coming a little bit of pressure this morning. of ad been on something terribly. let us give you a picture of what is happening in the quantity space. there is a china effect. copper story.e there is copper as you can see trading up by 1.29%. we have already shown you the full value. do not need to do that. let us talk about what is happening around the world. here is juliette saly. guy, thank you. u.s. president donald trump is planning to evaluate options for his medications set up. according to a person familiar
with the president's thinking, a longtime attorney is likely to be eased into a less prominent role. he is the congressional investigator, with possible ties to russia. leadernate majority mitch mcconnell has delayed plans to overhaul a bill this week. that is after john mccain said he would be at home recovering from surgery, leaving republicans short of the vote they need to advance the legislation. meanwhile, the new york times say mccain's condition could be more serious than thought and may delay his return to washington by at least a week or two. the u.k. brexit secretary has urged negotiators to push for progress regarding saudi issues. david davis's comments, as the second round of divorce talks starts today in brussels. said companies are delaying investment because
of brexit. that is absolutely clear businesses, where they have discretion over investment and can hold off, are doing so. and you can understand why. they are waiting for more clarity about what the future relationship with europe will look like. is seen to beecb on track to unwind its stimulus program next year, but economists say it is unlikely to unwind the process. theirill hold fire at meeting this week and wait until september before slowing the pace of bond buying. the unwinding is starting in january and taking nine months from seven months previously forecast. said they will review exchanges with the north seekssident moon jae-in to follow through on campaign promises. the announcement came after north korea signaled a willingness to consider moon's overtures. has detained the brother of
rouhani over unspecified financial issues. according to the state-run news taken intowas custody and is eligible for bail. he served as an aid to the president during nuclear talks that led to the 2015 agreement between iran and world powers. local myth, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. guy. guy: thank you very much indeed. chinese economy maintained its momentum. gdp increased 6.9%. that is from a year earlier. it comes ahead of forecast. the forecast number, 68. -- six point percent. the forecasted number, 6.8%. our guest.now,
where exactly is that risk in this data? was a by all accounts, it pretty robust number. no doubt about it. the better global growth story is driving demand for chinese exports, helping chinese manufacturing turnaround better profits and boosting growth. the conception story in china is better than anticipated. we saw big growth of 11% in the month of june, indicating consumers are opening up their wallets. when you take it all together, china's growth story is holding up quite well, being driven by external drivers. deeperks are somewhere in the financial system and that is what they are worrying about. manus: let us talk about -- guy: let us talk about the sustainability of the numbers. presumably, the risks around
ebt,e we stand with d when does that story begin to manifest itself? the market has been fretting about this for some time. it is materializing. enda: exactly. as you know well, china's growth stories have relied heavily on sincewhich have increased 2008 from 160%. there is a feeling that the authorities are aware of this and want to reign it in. there are tough financial regulators which came together and president xi jinping spoke about financial risk and is determined to speak about national security. they do want the bad loans and excessive leverage tackle. they don't want to tackle it in a way that would choke the wider economy. it is a year of big political change in china. we have the 19th party congress e later this year.
we will have pruning at the edges, reining in of risks and continuing not into the fact that risks exist in the financial system, but unlikely we will see credit that will choke the wider economy. guy: when does the gray rhino stop becoming an issue? thank you. u.s. china economic dialogue on this week. where do we stand in terms of that relationship? are we going to see trade tensions starting to bubble up again? there was a sense they were calming down. we look at the political tea leaves and there is potential for a pick up again. enda: definitely. this is a story that vanished over the last few months. trade tensions have not really gone away. we have u.s. china economic dialogue happening and the conclusion of the 100 day trade review between both nations and we have president trump last raising thetly threat of putting tariffs on chinese steel. sort of the feeling that these tensions could flare yet again. 50 feeling that
trump could grant further time and for both sides to make a deal later in the year. there is a sense they could go sooner than expected. if they go hard on chinese deals, it is not that steel exports are a big part, but that it might ripple out to a wider trade relationship and the worries about what kind of damage it might do to wider trading, the relationship between the u.s., china, and the rest of the world is really concerning analysts. i think it will be an important week to get an update on where the trade tensions story is going to go and keep an eye on the u.s.-china dialogue for any disagreement that might come out of that. guy: always a pleasure. thank you very much indeed for your time this morning. enda curran joining us on the latest chinese data story. with the united states, the u.s. dollar could be poised for a rally based on hedge funds positioning. the latest data released at the back end of last week. it is with a lag, so you have to
appreciate that. these leverage positions doubling their net short positions. this level of bearishness has tended to precede and unwinding and a little bit of a bullish phase for the dollar, but janet yellen must week, a little perplexed about the inflation story, so what does that tell us about the future trajectory for rate rises? we saw the retail sales data story and the inflation data friday as well. joining us now for perspective cranfield -- mark cranfield. what are you guys thinking about, the story surrounding the dollar? the positioning getting a bit stretched. you can understand way considering the backdrop. nevertheless, when we have been at the level before, we have seen the dollar start to turn around a little bit. has the pendulum swung too far? mark: possibly. but it could swing even further.
it is not as stretched as it has been. there have been even more concerned cases than this before the dollar showed a rebound. we are getting into territory where people might be thinking it is a for now, but you can hardly blame them. janet yellen was trying to tell people, "do not worry, this inflation is something we should look past. these low numbers will not go on for much longer." here we were on friday with yet another inflation. people are getting skeptical about whether inflation is going to come back in the united date. the numbers keep pointing in the same direction, so the case to be bearish on the dollar is actually quite strong. you understand why speculators are building up their positions on top of that, and also if you compare the current space of politics between europe and the united states, it is more favorable to europe as well. the basic reasons for being bearish on the dollar are really quite big. guy: if draghi is dovish this
thursday, and the euro makes a sizable component of the dollar index, do you think that could be the catalyst for change? that definitely would be a good reason for getting back some of these positions. if the market is stretched any get someone like draghi saying that things have gone a bit too far, i'm sure the market would start to reverse past that. he is a very important voice spirit at the moment, his voice might be slightly more important than the other central banker in the market, so definitely, people will look very closely at what he has to say. guy: i know it is speculation, that i guess we are waiting to see what comes out of that, how much draghi is attending. how much attention will be paid to the brexit talks this week by those positioned in the pound, do you think? mark: they will. they will be watching it. they might be a bit more concerned about what they are hearing about the leadership struggle among the conservative party. this is quite damaging and is going to be very hard for the u.k. government to make a areied decision if they
fighting between themselves about who is going to take over. some of the stories circulating is that they might be close to going for a challenge even while the brexit is taking place. it is disconcerting for people. it increases the likelihood of a soft brexit. at the same time, it is very distracting for people trying to do brexit negotiation. guy: absolutely. could be an interesting week. the recess is looming large. we may not be done yet in the short term. mark, thank you very much indeed. mark cranfield. you can follow all the smart analysis throughout the day, every day. mliv. there is plenty of tliv, top life go -- top let go which will which will be throughout the week. another function worth looking at as well, always worth looking at, tv , a one-stop shop. you get the video screen that
you have got the smart sidebar here providing you with all the breaking news, breaking economic data, plus also the latest on the market. functionality and you can pop out the charts as well. there you go. there is the aussie dollar. take a look at the data and the aussie dollar. very interesting chart. that is certainly starting to get aggressive as well as that the goes parabolic on dollar. up next, we will carry on the conversation surrounding what is happening in brussels today. david davis gets back in the ring. progress on a deal on citizens right. we will take you to brussels, live, next. this is bloomberg, the market open, 15 minutes away. ♪
guy: 7:47 in london. let us catch up with what you need to know. here is a bloomberg business flash with juliette saly. juliette: thank you. easyjet has confirmed its ceo is stepping down from the budget carrier to take up the leadership of broadcaster itv. carolyn mccall will take up the on january 8.o you get that these for her successor has started. the barclays case picks up in four executives charged with fraud. the men are the most senior u.k. bankingxecutives to -- executives to face charges. hearing this month, the
four said they intended to plead not guilty. the bank may face fresh charges from the office. toshiba has agreed to hold off on the disposal of its memory chip unit until a court hearing on july 28. the sale is being contested by western digital. toshiba needs to raise cash to offset multibillion-dollar losses at its westinghouse nuclear armed. that is your bloomberg business flash. guy. very much indeed. you are up to speed. let us get to brexit, rounding to of the brexit -- two of the brexit negotiations. the british government faces internal pressure at cabinet members disagree on the duration of the brexit duration period. ian is ind is in -- brussels for us. week, david davis has
got a new briefcase. he is off to brussels to what can we expect them to achieve with mr. barneier this week? >> this is the second time they have met face-to-face. they are firing the starting gun and they really want to get together and sort of bridge this distance on citizens rights, the protection of systems in the u.k. after brexit, but also this brexit bill, the money, the financial obligations the u.k. has for the e.u.. michel barnier looked pretty exasperated when he spoke to the press last week, and he will be hoping they can find some common ground today and really get some consensus under their belt. guy: the big point of discussion over the weekend appears to have focus in the u.k. at least on the issue of a transition period. asuspect he talked about
short one. the chancellor was on television talking about a much longer one. my question to you, if you are michel barnier, how do you play the transition card? presumably, this is something you want to play later on. it has not been offered yet because as it gets closer to the wire, the transition period comes a more and more compelling factor for the u.k.. play this story because the u.k. is a test with this at this point. ian: to be fair, barnier has always said he is in favor of a transition period. he put some pretty strict conditions on that. anyaid "the time of transition period has to be well defined and short, and most crucially, with a view to something well thought about what comes after." than going the transition period. he said we cannot talk about a
transition period until we have everything else ordered out. much more inventive than to say let us sort out these citizens rights and the brexit bill and then we can look forward transition period and the trade agreement after that. much, ian you very wishart, joining us from there. we are minutes away now from the european market opened your it up next, we will take a look at the moves in today's trading, including easyjet, and itv, which is gaining a ceo. carolyn mccall will become its new ceo. the rumor was, she wanted to go into politics, so why itv? why is that the best choice for her? we will discuss. that is next. this is bloomberg. the market open, eight minutes away. ♪
guy: we are minutes away from the start of european trading. a bunch of things we need to talk about. smaller mid-caps. a bit of a selloff. the index in china down by 5%. this is coming through the back end of the tiny session, something worth paying attention to despite better-than-expected data. this is more of a regulatory issue we saw concerns around extending regulatory pressure over the weekend. elsewhere, your peanut equities on the fair value calculation on your bloomberg, probably telling you very little about where we are well within the plus or
.01%. up by less than the other thing to mention as well is easyjet and itv, confirming that we will see carolyn mccall switching from easyjet ceo. there is a picture of her recently taken. she joins us here at bloomberg and she will become the new ceo of itv. another company just to watch out for as well is where group group. specialty stuff you need if you are a big fracking company. it looks as if guidance is very positive. we are likely to see positive ass coming through from weir the stock opens up. the positive stock may go higher this morning. four minutes ago. european equities are not exactly driven with a sense of direction this morning. we will wait and see.
guy: we are not executive us to with a clear sense of direction. that is with the fair value technician on your bloomberg is telling you. we are going nowhere in a hurry permit it's interesting considering or is a lot of events coming up this week. brexit.not appear to be because it on that relates back into what is happening with the ftse 100. the weakness of the dollar is a factor as we come to this reporting season. that may do better stateside. easyjet and i tv
this morning, switching ceo's when it comes to what is happening with carolyn mccall. the other one to watch out for is where group as well. now.t is opening don't expect fireworks. this is what we are looking at. ftse 100 barely budging. we are absolutely flatlined. the market makers are waking up. i wouldp by 0.6 percent i would's not -- 0.6% argue it's not much to write home about. there are interesting individual names. and that is here to provide us with the details. did quite nice. .ot far from the all-time highs
better data coming out of china, one of the big factors are gdp coming in better than economists had expected. where does that leave us? deal of fireworks as you describe it, but this is where we are in the equity picture. technology stocks hitting the best of equity gains. some of those bond stocks like utilities to the low end of things. not much of a conclusion to be drawn about where we moved in the session. the chinese stocks are not playing all. some of the concerns perhaps around a stronger role for the pboc. talkingthing has been -- some of the smaller mid-caps as well. this is the gilt market.
it's at this hour as well, the yield on the 10 year 1.305 right now. the ongoing debate is just how life is that meeting? investors tell bloomberg they like guilt despite the underperformance they have seen. be aware that brexit round to get underway, we seem to be drowning in brexit related sound effects right now. we have whistling from boris johnson. is what we find ourselves engulfed in this week in russell. let's move on to easyjet and i tv. chart these together in a with the ceo shuffle taking place as carolyn mccall flies off easyjet and lance at itv. itv.is rising in advertising spend.
production. both those productions in a fitting, not looking great more recently and here is that brexit fallout. a lot to watch out for as we see those stocks opening. you can see that at the bottom of your screen. guy: let's look at some of the other stocks. about nice story talking one of the big stories come up the market desperate for any information about what is happening with that business. storyis a nice bloomberg and it seems to be having an effect on the stock. it's trading at 1.25%, in terms of index point, one of the biggest gainers. some of the other stocks are rising as well.
we are now sessions higher and we are seeing oil names benefit from that. both doing better. let's show you where the downside is. remedy is a big both stock heavy affected by the tracking mopeds. these are the big losers in the story. saidritish broadcast itv carolyn mccall is leaving easyjet to become the next ceo. she will remain with the airline until it finds a successor. let's join the bloomberg managing editor. why is she leaving? wasn't she pushed, did she jump? there were rumors she wanted to go to politics.
why did she landed at itv? >> it does seem slightly strange. in her case, it's less because that is where she comes from initially. she was an advertising executive and the tone is very amicable from easyjet, everyone thank full and congratulatory for the work she has done her it is not seem to be a sense she was pushed. she is probably at a point in her career where she wants to try something new again, to some degree, something old. in the what happened advertising and media industry since she left. that will be a challenge for her to come back to an industry that she knows but in many ways an industry that has changed fundamentally. the advertising market is different. the players are different. itv is trying to reinvent itself.
more on production, less on advertising buying her it doesn't she still have -- advertising buying. doesn't she still have that touch? guy: let's talk about who will succeed her and what the challenge is? we had news the operating license will go to austria. that's where they will base the business post-brexit. the leading contender i thought was the netherlands, but they went with austria. what is the challenge for whoever succeeds? >> there are not really names so far. whoever gets the job needs to have the aura of two people. the other is the political elite. he or she needs to keep a very close here to that part of the
has to manage the relationship well. brexit is the big changing factor here. you saw just now how big a hit they took when the brexit vote came through. there are a lot of concerns a still, will they be able to keep the maneuverability they have had over the years? their flights will operate within the dental europe. half of them are not continental europe. they have to keep open those lines and open the borders. guy: you talk about half the customers coming from continental europe, have their shareholders come from continental europe. how do you handle selloffs? he's a big major shareholder with a lot of interest, that in the last years we have seen him
complain and moan about things he did not like, like the upgrade in the fleet when it bought the new light it up they should do things differently. they did it regardless. she has managed to separate herself and the business decisions from selling off to some degree. that will not be that different and i tv where a loan is enforced. it will be interesting to see how she can carry over that big,egy working with a belligerent shareholder. will she be able to navigate the way she is now? thinkwice seconds, do you the successor will go -- 20 seconds, do you think the successor will go the long haul? they want to see whether the region can make a success of it. will that be a challenge for the successor? can i make it work? >> it's certainly an industry
happening now. you mentioned norwegian, euro links. the question was often, if you ask people like michael o'leary, there are no planes i can buy at a cutthroat rate. that has changed. these planes are becoming available now. i think in the next two or three years, we will see the likes of easyjet look at that and maybe we will see them move into that part of the world. they have moved to tel aviv, moscow, but ultra long-haul will become a component of that business. guy: thank you very much indeed. on the latest spreading easyjet and i tv. if you are a bloomberg customer, you can watch this show using tv . you can watch the video screen, you get to also use this sidebar here. with breaking news, all the
latest market information. and also you get bios on the guests we are talking to. you can also ask the guests a question. and you up a channel can get involved in the conversation as well. useful optionality on your bloomberg. the dollar is in the doldrums after disappointing. does it have further to fall or is market positioning starting to get extreme on the downside? we check it numbers on friday. analysis is next. this is bloomberg. ♪
guy: we are 12 minutes into the market session. let's take a look at where we sit in terms of index levels and individual stock stories. european equities are bouncing back from a fairly insipid start of it in terms of names -- insipid start. in terms of names, the fracking industry act on the front and doing well. that triples down to the supply chain. where is the big component of that supply chain? it makes pipeline pumps and it seems to be well welcomed by the market. the stock is trading just shy of 20, nearly 7%. that is the story there.
the other story i want to mention before we move on, astrazeneca. stay atbe going to astra. the market really kind of drifting a little bit waiting for a sense of direction. let's show you what is happening in terms of the u.s. dollar story. this is what we need to watch out for. u.s. dollar held at a 12 month low. investors are waiting for further economic data this week. to gauge the pace of federal reserve rate rises. let's talk about the dollar positioning. out,is effectively a week but it operates the same. this chart here shows you increasing shorting position hedge fund.
shorted onits most the dollar in three years. the other thing worth mentioning is if you look at the work function on your bloomberg, you this, the market is less than 50% in terms of pricing in the september rate hikes. the market price out a lot. janet yellen, a slight concern about why she explained inflation where it was at the moment. is the dollar getting stretched on the downside? guest: i think so. maybe this time it will be the time. the key thing about that wirp chart is that if you look further out to december, you look further out. the market has been doubting the fed throughout the last year and a half. and it is really doubting the
fed at the moment. i think when you couple it with a positioning chart, which looks like the canadian dollar vision, it doesn't look like that anymore. these are often very contrarian indicators and when you couple the positioning dynamic with the rate dynamic with the fact the place,in a decent in a the consensus was they were not going to hike until december and that gives us five months of data to recover. that is a big if. those big things suggest the dollar is overdone. guy: but the pendulum could swing a little bit more. what is it going to take to turn that around? is it something coming out of the united states in terms of data or mario draghi being more dovish than the market anticipated? the fact he's going to jackson hole and effectively running out of bonds to buy.
expectationto be being held into the euro side when it comes to euro-dollar. but you can track that to the euro dollar index as well. guest: draghi is a variable, the u.s.politics is -- political situation is a variable. near-term, it's going to be driven by draghi because there is this approaching sense that the ecb has imitations on what it can do. they probably do have to rain purchases in two centigrade because of the high country traditions they have -- high concentrations they have on their balance sheet. there is so much that news priced into terraform and what that means for tax reform. and what that means for the u.s. yield curves. they have been arranging for a long time and have not able to break out.
in large part due to the politics in the last few months. if you do get a few shifts there, -- guy: there is an idea floating around that yellen will be comfortable not delivering aggressively on the rate hike side of the equation. it does not raise quite as much here, but what i do is use the rolloff on the balance sheet. we end up at a situation where the dollar does not go up much, but i can keep the u.s. economy humming is long-term rates are lower than where they should be. thet: let's talk about how third mandate became the natural condition. and not certain whether that's the case or not, but they have talked a lot. i do not think they will target assetmarkets, the fact markets are performing well is that comfort if they want to shrink the balance sheet soon. even doing so in gradual fashion, they should feel comfortable as the fed is in a
decent place. the data doesn't look great and they don't support further rate hikes in the next two months, but financial conditions the so easy, they do about the dots she to roll up easily. guy: we want to get to brussels now. , four days of talks in brussels this week. at the centerg stage of this meeting. let's have a listen in to what michel barnier had to say for himself this morning. >> it's good to be back in brussels to open the next formal round of negotiations. we made a good start last month but as michelle says, we are getting into the substance of the matter. as you heard, it's four categories. the issue of citizens rights, finance, separation issues, and
separation of northern island. it's important we make good -- northern ireland. it's important we make good progress and identify differences so we can deal with them and identify similarities so we can reinforcement. it's time to get -- reinforce them. now it's time to get to work. i will take some questions. thank you very much. guy: a little bit of humor as we start this process. thursday,conference michel cartier has made clear he will make himself as transparent as possible and we will get some answers by the end of the week. some progress will be made. where are we? i can't make out whether we should watch brussels or the turbulence in british politics
because both will probably give us a sense of direction here. but which direction is it? best: transparency would great because of some of the turmoil, you are not sure what you will consider progress in negotiations in brussels. i do not think that is a helpful variable. all this back fighting we have been seeing in the cabinet. it leaves me wondering if sterling can hold on to these recent gains. guy: is that a bit high for you? is and that is where i consider myself the top to be. the euroy against given the relative on an of the two economies. you have european data's and u.k. data which is starting to wobble at the wrong time. a lot of these negotiations are beginning and you have infighting, have it influences the negotiating stance. will there be a move to a softer
brexit? the latter has been responsible for a sterling's strength. the notion that we will not be heading toward a hard brexit. the longer the negotiations dragged on without progress, the more volatile conditions could become and that could be for the pound detriment. i think the talk of it was predicated on inflation data. we have inflation gauges rolling over in the u.k.. we are seeing the consumer look weaker. we have confirmation of that last week. the retail trade -- guy: is the day that you have sayd a strong starting -- that you have a strong sterling now? guest: i think last year's inflation is it rolling off. guy: plenty more still to discuss. we need to talk about the ecb in more detail.
he will stay with us. let's catch up on what we need to know. here is a business with juliette saly. easyjet has confirmed its ceo is stepping down from the budget carrier to take up leadership of itv. thelyn mccall will take up ceo january 8. the search for her successor has already's artist. the barclays case picked up in london with xe a john valley and three other ceo's charged with fraud. they face the biggest criminal charges since the financial crisis. it relates to loans to qatar. they intended to pleaded not guilty. the bank may say fresh charges from the qatar office. the flashlds off on memory chip until a court hearing. with aen contested
company seeking an injunction. set offng to multibillion-dollar losses. track toecb is on unwind its stimulus program year. economists say it is likely to drag the process down. some interesting policymakers will hold meetings before september. the unwinding is a starting in january and going to take nine months up from seven months as was previously forecast. why deal think he is going to jackson hole? are we overplaying that inasmuch as history tells us that he goes there to make policy? guest: they sort of head at one meeting and then they do the next meeting and that meeting gives you a time frame of what
policy might look like in three months time. this meeting already might be potential for talking about tapering aspect purchases. -- asset purchases. they are running up against the limits of the current term of the program. maybe using these features to talk about the current program. they are getting close to the limits they set for themselves. the data doesn't justify having such an easy exposure. when the fed started tapering back in 2013, the inflation profile looked similar, a little higher. but that is europe versus u.s.. i think the time is right now for these nonstandard measures to roll off. guy: a very big output gap. guest: in certain parts. the average it eurozone before the crisis was a .5%, 8.8%.
it's about 9% now. and wage pressures are certainly nonexistent right now and reflect that. at the same time, he was labor market was in a similar state. you did not have a wage pressures than. you saw need to unwind fixed ordinary measures. rate hikes are still a long way off for the ecb is inflation is so far away. guy: the u.s. is pausing to think about whether or not it was to deliver further rate rises when it has lower on a clement then when it was hiking. unemployment then when it was hiking. guest: i think it is tricky given what inflation is doing. they are running into this problem where court measures are rolling over at the wrong time. guy: we will talk more about this in a moment. up next, a hurdle for health care. the controversial u.s. bill
guy: routed to in brussels. -- round two in brussels. the press conference may be pushing the point where it we get a press conference on thursday about how much progress will be made this week. china domestic demand dries gdp take up. easyjet ceo carolyn mccall is embarking to itv and returning to the media sector of which she came. brexit-driven advertising slowdown, turning a little higher. you are watching bloomberg
markets, i'm guy johnson. i'm from european headquarters in london. matt miller is not here this week. normally we go to berlin at this point. this is what we are looking at. the market is a little bit that are then what we first saw, but not by much. that is exactly what we are seeing. we are one of the prime reasons -- ftse 100100 is is doing better. let's talk about health care. mentioning astrazeneca. mitch mcconnell said he is postponing the bill as john mccain recovers from unsuspected -- unexpected surgery. even before the delight, the
no'sed version drew two from republicans. that means it cannot lose an additional republican in the senate to pass. what could be the latest delays and how problematic could maybe? -- could they be? guest: when we can john mccain was not available to vote this week, that provided a method problem for mitch mcconnell. he has a 52 seat majority, which means he can only lose to senators -- two senators. already dropped out, so he cannot afford to lose another one. we have another one of these stocks and starts with the health care bill. false starts
because they had difficulty doing the starts -- the votes they need. this is a good thing for mitch mcconnell because he can shore up getting the additional votes he needs because there are four or five other senators on the fence and had notthis is a goodh mcconnell because he said whethr they are for this bill or not every this gives him a way to pull back and say we are not canceling this book because we do not have enough support. we are canceling this we are waiting for our colleagues to get back to work. the president is back in town as well. week,ms of politics this what progress are we going to get? how does it work and what should we look for? guest: it's been interesting to watch trump through this process because he has kind of taken to different tasks depending on
whether it looks like the bill is making progress are not. he has definitely pulled back at times when there has been issues with legislation having the support to pass. he has basically said, we will see what happens but this is congress'deal. then when the house did pass the bill, he was very much, trying to take credit for that. was makingnd he phone calls to the hilt trying to elicit support, but it will be interesting to watch. he is a barometer of the prospect of the bill overall. we start seeing him tweeting a lot about the needs for this bill and the potential success for this bill. that's a sign things are going well. guy: in terms of the timeframe this, it took a
long time to pass obamacare. are we being overly critical over the fact the republicans have not done this in the short order we anticipated because it may be the starting point was more difficult and as a result we should have had a more realistic timeframe? it is going to take a while to get this done. guest: i think it's true. one caveat i would add is that if we have a collective we, that is the timeframe we need to react to. republicansional sent out during the campaign and immediately afterward. it was not that there was a timetable the media came up with on its own. they have to repeal obamacare by february or it's a failure. this is the timeframe that trump and republicans set out and they are finding, as trump said famously, nobody knew it would be discomfited to do health care. becoming a harsh reality
for the white house. law,one thing to repeal a but to find a viable replacement is a much more competition task. their own timetable might have been really ambitious. guy: let's discuss this. the market got sucked into that as well. they decided they need to get health care done so they can move on to other things. it may be more pleasing to the market's i. eye. it may take us toward midterms and leave us with political ambiguity. do i read which way the wind is blowing from the markets plan view? -- markets point of view? it more realistic and i should assume it will take half of the first term to get this done. how do i play it?
i'm coming back to the dollar story, have i put too much negativity into the u.s. story because the republicans told me a bit of a white light on the timeframe? it's toodon't think much negativity now, but it is taking out of positive gains. trump certainly was a key variable but the senate majority , maybe it is not a surprise, innocence that you thought you knew the house would be republican. that was maybe not 100% certain before the election. that gave you that legislative mandate that things like repealing and potentially replacing obamacare would be easier. that we are seeing it's difficult as was just noted, actually putting something new in place is difficult even if you have a majority. the market response has been to acknowledge the fact that even
though you have a majority, it's still difficult to get work done in washington. i would not say it's taken a negative, it's taken us to where we were before the election. we are at the says quote and there is potential for upside. you have a third voice or a group of republican senators to oppose it. you take a massive career risk in doing that. you lose your seat ultimately. or at some point in the next couple years. as the midterms approach, it gets more and more fraught this process. it will be interesting to see if we get breakaway on that. he talked about the political story in the united states. you think the politics is investments? if jamie dimon is embarrassed, he's a pretty high-profile type.
does this say something about the ceo decision-making process? that just, i'm a little embarrassed about what is happening? guest: i'm not certain that the case. i think there is more upside risk than downside risk. ceo's got a nice surprise. and what that might mean for deregulation and stimulus. at this point, i do not think they are looking at reducing investment spending. it's already pretty weak. the upside risk is a lot more dominant. guy: we will leave it there. tim joining us from state street. we have a very interesting story unfolding in washington. if you are a bloomberg customer, you can watch the show using tv . the landing page looks a little bit like this. i will maximize it so you can
see it. there is the radio function. tim and i will be joining their very shortly. then you get some of the best and most watched video clips. i highlight this because the most watched video clip we have is from friday, jamie dimon almost an embarrassment as an american abroad. up next, rounded to its underweight in brussels. four days of talks scheduled. we had an opening press conference from these two gentlemen. we will stick to russell's life next. next.ssels live this is bloomberg. ♪
guy: a: 43 in london, this is the open. london, this is the open. from an individual level, we see stocks worth focusing on. this is a company that makes pumping equipment, pumping valves, a lot of that is used in the pipeline industry when it comes to fracking in that market seems to be on a tear this morning. you can see we have the stock up by 6.41. balfour beatty in the construction sector up 2.71.
itv down there, carolyn mccall will be the new ceo training at 9.1%. here is a look at the losers. under pressure as well, some concern about industrial relations that may be a factor around that. first word bloomberg news update with juliette saly. juliette: china's economy maintain its momentum last quarter as global trade and a mystic grand picked up in factories. gdp increased 6.9%. industrial output was up to 7.6% from a year earlier also beating expectations. investment also beat forecasts. is planning to shake up his legal team and is also evaluating options to his communications set up according
to a person familiar with this thinking. his paternity is unlikely eased to a less prominent role of it that comes -- his attorney is likely to be eased in a less prominent role. the ecb is seen to be on track to unwind its stimulus plan next year but economists say it will drag out the process. willberg stimulus say it hold fire this week and until september before slowing the pace of bond buying. months up frome seven months previous the forecast. south korea has proposed resuming military and manager in exchanges with the north. the president seeks to follow through on campaign pledges to seek a dialogue with kim jong-un. despite voicing skepticism about the prospects for a breakthrough. global news 24 hours a day,
powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. the second round of exit talks have started in brussels. inbrexit talks have started brussels. how much progress should we expect this week? berlin.us now from what can we look for? we heard that from michel barnier. he will be answering questions. how much questions do you think he and david davis will be able to report? >> it will be limited. this is not a function mainly of the atmosphere in brussels. it boils down to the message of u.k. politics if you look at news over the weekend. open warfare on the u.k. cabinet
when it comes to the future relationship that remains totally in the dark and against that backdrop, it's unlikely we see material progress today. guy: where does that leak michel barnier? he has expressed his frustration about the lack of progress the make. -- being made. >> it's a frustrating position for him to be in. it's a frustrating position for the european union as a whole. it's a question of u.k. politics. the fundamental questions in this divorce talks have not been sorted out. think about the divorce issue and it relates to the question of the customs union, which is the question of future relationship. unless we see progress here, i'm afraid we will see little progress in brussels. to: who are they listening
when it comes to the voices that they are paying attention to back in london? theresa may, david davis, philip hammond who are you listening to? guest: all of that. potentially what you have to take into account is the back benches into account. question was the problem of domestic polarization. with the election results, we see this translated into cabinet politics. that's what makes it difficult for the eu side. theneed to keep an eye on broad perspective and you might end up in a position like we find ourselves in monday morning where we do not know where the u.k. falls when it comes to key questions of the relationship. guy: there is still a
possibility of getting stuff done. it might get them quickly. but nevertheless, time is of massive factor here. when it does the times story become a compelling factor for you? guest: it is already one. after this round of negotiations, we go to a continental summer break so it will not resume until early september. then we look at the october counsel where the eu 27 will assess whether efficient progress will be made on divorce issues. i'm skeptical as to the uk's ability to sort out these big questions. in theo factor conferences and in the u.k., as of autumn, it is getting tricky. you need to sort this out by the end of the year. guy: stick around.
angela merkel has given an interview before the national election in germany. she said if reelected, it would extend her chancellorship 16 years. announced i would run again, i made it clear that i am running for four more years. we have limited control over our lives in terms of being able to give guarantees. but i fully intend to do exactly what i told the people. that is a parcel of trust. guy: she just returned from paris where she put on a united front for the french president, emmanuel macron. how much faith should investors have in this?
in this increasingly positive european story emerging? the chancellor talking about , everyone yous asked about the election says she is going to win. maybe it needs to be more nuanced than that. who will she be empowered -- in power with? what kind of coalition are we heading for because that could have a huge influence on the future of europe and which direction it takes? guest: i couldn't agree more with that. all the attention is focused on her and people forget that in the german system, the coalition question is important. if you are looking at a new edition of the current coalition with the social democrats, that is something i would not discard get. that would be positive for the european institutional buildout
with france. with the liberals, it could be more difficult. we had one such coalition 2013 and009 and governance was not easy with these guys. guy: have would you handicap those two possibilities? guest: the key thing to watch is how is the social party going to do over the next couple weeks of campaigning over the summer. if we are looking at a result not much better than what they achieved last time around, it could be difficult to garner enough support for another collision with merkel. if they are doing better, it might be better serving another four years as a junior partner then replace merkel once she is done. that will be a key thing to watch. guy: should we also watch what is happening in spain right now?
that doesn't seem to be on the radar screen. it's not official, but isn't that not a risk we should be factoring in? guest: the whole story is something to watch permanently, but it is a continuing game of chicken going on there. they think the story is basically referring this issue possibly to the courts in a bid to depoliticize this. it's a long game of chicken. within barcelona, the governing islition of the nationals fragmented from the far left to the far right. keeping that together is something to keep an eye on. it does not translate into immediate risk. guy: thank you very much indeed. carson nickel joining us out of berlin. that are politics
♪ francine: china charges on. the world's second-largest economy grows faster than expected, spurred by global trade and investment demand. the latest cpi reading suggest a downturn could be more than just a glitch. the fed might want to go, but the data says no. david davis is back in brussels for a week of negotiations. we are now getting down to the nitty-gritty. this is "bloomberg surveillance ." i'm nejra cehic in london. let's get a quick check on your markets will step european