tv Bloomberg Markets European Open Bloomberg November 14, 2017 2:30am-4:00am EST
♪ good morning. this is the european open. cash equity about to open. first trade of the day coming up. i am guy johnson in london. matt miller is in frankfurt. proceed with caution. could european stocks be heading for a correction? brexit headwinds. it is starting to show in the economy. we will speak to the cfo in 10
minutes time. all taking to the stage in frankfurt. we will bring you live coverage a.m. u.k.ent at 10:00 time, 11:00 a.m. in frankfurt. right nows starting at the european central bank, that is where i am in frankfurt. we are seeing the big bmw's role in through the gates. as you mentioned the most important central bankers in the world will be meeting here with mario draghi. i want to take a look at futures. if there is an inequity selloff it does not showing futures. you see european index futures up across the board with the exception of ibex and the other minor markets. the cap, the dax, the ftse showing gains as far as features are concerned. significant in terms of this narrative and what
is happening around the world. yesterday we saw big selloffs in europe and we are seeing it overnight. greece got hit hard and the softer.rket traded the new zealand dollar cannot catch a break trading down .601%. ,e have seen the nikkei falling stabilization is significant. take a look at what is happening in the indian bond market. what is happening in the chinese bond market. both of those significant and the oil story to factor in. let's look at what is happening in the bond markets and commodity space. .9 of 1% but that is not what we are seeing elsewhere. the india five-year, a big move. take a look at the 10 year, it is a big move for and it gathers pace. what does that tell us about global cpi, growth, about the global effects that these two
major markets are going to have? we will discuss that shortly. let's get a bloomberg first word news update. ed: in the u.s. the chief house tax writer said he is confident the chamber has enough republican votes to pass the tax legislation. he does not anticipate major changes. the white house says president trump will speak about taxes at a full conference of house republicans on thursday morning. kevin brady joins us at 6:00 p.m. u.k. time. republican senate candidate roy moore is facing a fresh accusation of sexual assault. told a newselson conference in new york city the former alabama judge sexually assaulted her when she was 16. it comes as senate majority leader mitch mcconnell said he believes more -- the accusers. moore continues to deny
the accusations. >> mr. moore attacked me when i was a child. i did nothing to deserve this sexual attack. i was frightened by his position and his power. i am coming forward today to let mr. moore to know that he no longer has any power over me. toldheresa may has vladimir putin that britain was ready to fight back against the attempts to destabilize western democracy. the comets mark a division with donald trump who said on saturday he believes putin's denials of election meddling worsens here. >> we know what you are doing and you will not succeed. because you underestimate the resilience of our democracy, the injuring attraction of free and open societies, and the commitment of western nations to the alliances that bind us. he u.s. and she'll surge
will become the biggest oil and gas boom in history. agency said by 2025 the growth will equal that of saudi arabia at the height of its expansion. the executive director joins us at 9:30 a.m. u.k. time. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. european stocks have hit their lowest levels since late september. another decline would mark the longest losing streak since may. elsewhere, the nikkei's record run came to an end last week and the s&p 500 may be vulnerable to profit taking. thanksgiving and the debt ceiling issues lie ahead. do stocks have further to slide? let's bring in mark cudmore to talk about this. you have been warning about the
debt ceiling issue for a while. i we looking at possibly the global slide in stocks? we can get further weakness. we have seen weakness in the last few days. there is [indiscernible] since we have seen no major correction. the contrary is true. the longer we have gone without one, we will get reaction. this is not a structural errors argument. it is important to emphasize that the bullish case remains overall in terms of earnings growth in liquidity. that does not mean we cannot get a correction that lasts another few days, maybe a couple of weeks. it is spreading between markets and most markets are trading poorly. there is no major move, but it is that everything is trading poorly. lungs are saturated and there is more marginal sellers than
buyers. charts,ouple of quick this is the bloomberg berkeley high yield pushing on and we have the chinese bond markets. the 4% line.to what should we take away? mark: there is a warning sign, they add together. none is strong in isolation. high-yield market seems to be saturated. the market is backing up. we have the default in india. that might worry people. india seems to be the center of pain today. we have the same sex trading poorly -- semsex trading poorly. trading markets are poorly. it depends on whether you think
that oil led inflation. two large bond markets that are weakening. it is not a great dynamic. it shows the general position reduction. it trades poorly across these assets. att: i am looking ann-claude trichet, interesting blast from the past at the central bankers meeting. what do you expect from yellen, what do you expect from kuroda? and do agoing to talk q&a session. do you think they will be able to move markets? i am sure that is not something they want to do it is it something that could happen? mark: they have hyped up the risk of the big names, they are the most important names and policy setting globally. what yellen says has less
relevance going forward. the december hike is expected in the u.s. so it does not matter too much on this we get real change in the data. we know that draghi has been clear and we know what kuroda wants as well. it will be very hard to move markets. people are being slightly distracted. it is a where it won for markets. on the surface, things are but under the surface there is poor price action. looking -- trading individually. iea is talking about shale. isr view is the story gaining omentum -- momentum. up we have seen in oil may be coming to a conclusion. mark: the expectation for an in thet is priced
market. we were not seeing shale producers increase their production with the rising price. we have seen the largest jump in the u.s. since late june and that might -- they tend to change and they continue taking up. we may have seen the top in oil and we have seen the curve come out. thatweek we highlighted and that had been supporting the market. that is another reason to think we have seen the peak in oil last week except for a couple of weeks to trade weaker. guy: thank you. a lot of ground covered. you can get the team on your bloomberg, at mliv . markets are interesting at the moment. we're going to get another take on oil. director of the iaea will be
the world's most powerful central bankers gathered behind me. let's get the bloomberg business flash. ed: at&t will dig into whether the white house influenced the justice department's review of its land takeover of time warner. if the government seems -- sues to block the deal, in the event of a trial over the deal, at&t intends to seek court permission to access to committee case is white house and the doj. both declined to comment while the justice department referred to earlier statements by the department and the white house. credit suisse will pay $135 million to resolve currency manipulation allegations by new york's banking regulator. bankrs at the zurich-based shared information about clients currency orders and talked to traders from other banks. in some instances, tranders --
traders front rank orders to boost profits. e's market regulator will give financial [indiscernible] some wiggle room. the amf chairman made the remarks. monitorve to [indiscernible] point for is the key the beginning of the implementation of the new rules. enforcement will come later. we have to be sure the rules are a clearare applied on querent basis. lansec reported a loss of 3 million pounds.
the company said the headwinds are starting to show in the u.k.'s economy. joining us now, the cfo for the company. can you be more detailed on what you mean by that, headwinds are starting to emerge, what exactly are we talking about? martin: you can see it in business uncertainty. there is very little clarity at the moment on what the outcome of the negotiations might be. you can see the headwinds beginning to evidence themselves in retailer sales, input prices are up, and there is a general slowing in the retail economy. guy: in terms of the deadlock we see in negotiations, do you get a sense that december is going to prove pivotal if we do not move forward in these negotiations in a meaningful way onto the trade side of things, do you get a feeling that many companies are going to start to
exercise contingency planning and put that into operation? well exerciseay they havey plans but a huge amount of employees in london. it is not just the financial ysrvices sector that buo london. there is a huge amount of technology companies looking for talent and there is a huge amount of talent in london. we have seen great levels of activity of leasing from people. there is uncertainty around brexit but there is also a healthy economy within london. london, youe of have launched the biggest retail .pening in the u.k. this year westgate, oxford, i believe it is. what is the retail situation looking like? the concern economically has
been a lack of rising wages which would indicate that people do not want to spend is -- as much more money. how do you see that playing through? martin: yes, if we look at retailer sailors -- sales generally through stores and those that are down across the u.k., if you look up the figures in our centers, they are up i went percent. that is because we think we have amongst the best destinations. for landlords it is about curating great experiences and getting people to come to our centers area westgate oxford is another example. it was a very undersupplied historic city. it needed a center like westgate added has proved to be very successful. -- and it has proved to be very successful. the retail level it is the experience as well as the
product. martin: it is about the experience and the location people are going to, some of these destination centers, they are going less often so you see football going but when they go they stay longer and they expect rate experiences, good food, and a great lineup of retailers. guy: would you do it again in another location if it is the last of the big retail operations, do you think you will create, and the background to this is more people are shopping online. the amazon effect is clear to see in the market and the numbers that we see coming out in terms of the u.k. data. while the experience is good in oxford, do you think it is something we will see another cities or do you think that is it? large-scale development of shopping centers is challenging, unless you have
very specific factors such as we had in oxford. what you are more likely to see is people taking existing centers and extending them, adding more food and beverage, adding a cinema to making it more of an experience-led excursion to compete with the convenience that online represents. guy: we were running the numbers, we do this every time we see her figures come through. the share price. those that are watching will be able to see this. shareue line is the price. there is a significant spread between the two. how does this resolve itself, which one of those numbers moves? martin: you're asking me to -- it isn whether the the share price or the nav.
thatcomfortable that valuation is broadly right? yes, i am. we buy and sell loss of -- lots of assets. we made 84 million pounds profit on disposals. that tells you that those assets market.k to the book value was slightly below the price we got in the market. i am comfortable with the valuation. of 30s a metric as september. the share price has a forward-looking element to it. it is signaling that values are going to,. -- come off. a historicalis one. that explains the spread difference between them. thank you for your time. minutes away from the
market open. eight minutes to go. plenty to talk about. vodafone is one to watch, boosting its earnings forecast after growth in the second quarter story. we will deal with the market open when we come back. assets around the world are softening up overnight. will we see that in the european get go? we will find out shortly. the open is seven minutes away. this is bloomberg. ♪
guy: five minutes to go before we see the start of stock trading. we are expecting a positive start. bucking the recent trend. yesterday was not a great day for european equities. seems to be3% to 5% the calls we are seeing on the back of the revenue line. soften up a infineon little bit this morning. we need to clarify exactly, the net income line, the estimate to 64. the other thing is italy did not make the world cup.
you can see to american cars behind me. aboard and a cadillac. very unusual to see a cadillac in germany. that is janet yellen's car. all the important central bankers in the world are behind me. they will start speaking in two hours. was more excited about the cars than janet yellen arriving. we are starting often reasonably positive form. london is struggling to find direction. up, down, up, down. 7424 is where we are trading right now. we are seeing an insipid start.
yesterday in europe a little traction maybe being found. will it persist? nejra: we sell the 10-year gilts drop. we are unchanged now. if anything, going up ever so slightly. , not0 year treasury yield a huge amount of movement. the tenured gilt yield, 1.34% at the open. it is fairly subdued here. we are unchanged. a mixed picture when it comes to the industry groups. telecom leading the gains. utilities up .03%. -- utilities up .3%.
we have a five days of decline, the longest losing streak for the stoxx 600 since may. heading toward the 100 day moving average. investors face a conundrum. do they scale back a long risk? i'm showing you some more fundamental data. lagging area real gdp the u.s.. thank you. let's take a look at some of the movers this morning.
i'm looking for an infineon line. i'm going to slip this over to index. it is up by 4%. that is a big chunk of change. individual stocks stories are moving these around. vodafone is one of those, trading up by over 4%. a strong start. that will help out the london market. i'm standing in front of the ecb.
bank, thet central most powerful central bankers in the world are here. janet yellen went in a moment ago. mario draghi is already in there. kuroda, carney, and the rest of about,ll be talking communication is the topic of the day. in two hours will give a seven minute speech, and take two or three questions from the public. medecin.ing you expect them to have affect some markets today? and you're, you were more
excited by the cars than the gatherings, we do not expect any significant announcement from this gathering for the good isson that what we have now a global synchronized recovery. the big chunk of the job needed by central bankers, delivered the results and the outcome they were looking for. take a bank policies little bit of a backstage compared to what is happening in terms of what is driving the markets right now. an hour ago we had german we were expecting 0.6 percent gdp growth and the third quarter. we got 0.8%. much better than expected. draghi's make mario job a lot easier?
does this make the extension of qe a lot less likely? jean: i think he has been clear that he wanted to be prudent and persistent. if you listen to what he has said, there is no reason for him despite the stronger german number. economic has been the emergence of the euro. we feel vindicated. the economic momentum is creating a strong macroeconomic backdrop. is howger for investors do you match? how you combine a good macroeconomic backdrop with market sentiment, which has turned pessimistic at the start .f the year
combination which is to september. up the message was clear, by risky assets. now you deep -- now you need to buy more selectively to find value for money. curvee are seeing a flat in the united states. should i be concerned that it continues to flatten? jean: if it continues to flatten, that historically has been a worrying signal. we could see some element of a stiffening of the curve. we could also see the market reassess a little bit the prospect for short term rates. we might see that the economy is
not accelerating is strongly as people were expecting. we can see the fed be a bit more pedestrian and raising rates. this brings the big issue, the tax plan in the u.s. this will be, in my view, what will guide whether we see an increasing long-term rates, or less increasing short-term rates. it is actually calling for a stiffening of the curve. at the moment, the market is under where it is next year for expectations. you expect that spread will get bigger? the fed is not going to deliver next year? the fact we have broken some interesting levels some are signaling
that we can get closer. jean: when you look at the markets, you have to be clear that we are not talking about the same thing. depending on the tax reform in the u.s., we might see the long end of the curve going higher. that will have a inflation reduced. or the fed could be more on the dovish side. case, i would say it is good for the curve to steepen. matt: congress may have the votes to pass the tax reform bill. how does that affect the rates situation?
if it induces growth, does it mean we will get closer to the feds goals for next year? jean: there are two elements to consider. passed, willlan is you produce a stimulus are not? and what hastly, been miss appreciation -- miss appreciated, are we talking tax cuts like george bush, or tax reforms like reagan. this seems to have different implications. toward tax is geared cuts rather than tax reform, this is more inflationary. if the plan is geared toward tax reform, then we might have a best of the two worlds. the details are a lot more important than the sheer number and the absolute number that
matt: good morning. i'm matt miller in frankfurt. this is "bloomberg markets european open." 15 minutes and of the trading day, we are seeing european again. a little less in london. across the board on the continental indexes, you are seeing stocks rise. it looks like we do not have a global downturn in equities. it is not coming to today. as far as investors pulling the trigger on sales. guy: the day is still young. we will see what happens later
when the u.s. kicks into gear. jean medecin, carmignac gestion, still with us. view was with the steepening yield curve you get it on the cyclicals. think that cyclicals are forwarding, and going it is calling for reducing exposure to cyclicals. not in a rush, but gradually. you have a big disconnection from what you see on the equity market. this kind of performance of polluted bylittle
background factors like disruption, technology disruption. sometimes they have been polluted by that. out of the cyclical sector, some of them like mining are disrupted by technology. media, has, like tough time. guy: the last few years generally are pretty punchy. forward, is that what you expect? the market does not feel euphoric. it feels good about itself, but snapnot have thatpre-2000 about it. when you look at the last when you had in china,
see the market reaction to earnings announcements, it is very recent, it was not the case back in september or early october this year. but what we start to see is a little bit more euphoria. we have got time. it is calling to be a bit more cynical. what you think about volatility at these low levels? is that indicative of a bull run that is long in the tooth? low for ans been extended. of time, but what is clear is the market valuation is very dependent from this global volatility. intoe not necessarily expensive territory. we are in a territory where
toditions are important support the valuation of the equity market. we have an opportunity to factor , any kind of normalization or pickup of volatility will be dangerous. i can help being concerned by the big success about volatility reallocate equity in the bonds. this is not best -- you worry about central-bank policy and its affect on equities? if this is the last extension of qe?
jean: if central banks were paying more attention to financial stability as opposed to economic momentum, there would have been some impact on the market. i do not think we are there yet. seeing -- you keep saying these things like, yet. when does it yet,? if they yet point comes and these market get into your -- areas, do i go into
bonds? that does not sound like an advantageous position. the name of the game is to find value for money. nothing we are seeing is that expensive. i wouldn't say you have some dirt cheap assets. and emerging markets, or on equity side, you have a lot of value for your money. when you look at mid capitalization stocks from , you havech companies a lot more value for money. don't get me wrong. if things get ugly, everything will be impacted. guy: you are clearly thinking about this stuff, aren't you?
if push comes to shove, where do we go? are you actively out there looking at this point in time for the uncorrelated assets? where do we go next? jean: we are looking for value. obviously something that is difficult to find. you can find in different places. you have some value in the emerging world. you have in some segments of the fixed income market. they might not be huge value, but when you look at italian bonds versus credit or german bonds, there is definitely an argument to be there. you need to be more nimble. to be more relative in your portfolio construction.
you need to manage your liquidity and your portfolio. value is going to ensure your medium returns. but if we have some disruption and market dislocation, you have to be liquid to handle it. guy: jean medecin, carmignac gestion is going to stay with us. italianun-up to the election, where going to take a look at what is happening in italy next. this is bloomberg. ♪
guy: welcome back. i want to take you straight to this chart. up.s tightening are trading just shy of 150. we have moved down quite considerably. let's get back to jean medecin, carmignac gestion. is this going to tighten up further? jean: i think it can. ofre still far from the lows 2016. which inrade particular with german bund's,
make a lot of sense. definitively, you have a lot more value for your money with this kind of trade. you did not like the credit story. walk me through the mechanics of that. jean: we are not on the verge of a default cycle. for --ely, when you look don't forget that the composition of the market when you look at the relative ways of aa versus triple be rating. it has been turned upside down. if you look at this kind of market, with the kind of standardized stable quality, you could argue they are lower. jean is going to continue
matt: europe shrugs off the global selloff in commodities. shouldn't investors proceed with caution? sec sayseadwinds land the decision to leave is showing and the economy. a central banker bonanza. it, johnny, take the stage. we'll bring you live coverage 10:00 a.m. u.k. time. good morning. "bloomberg markets european open ." talk about the markets and what is going on and
the trading session. it we are seeing europe stabilize a little bit. we will see how we get him through the rest of the session. at the moment this is where the money is moving. text doing well. telecoms doing well. also.als those sectors are all significantly outperforming periods there are some heavyweights underperforming. the oil and gas sector is weakening. beverage showing signs of weakness. you are seeing the bulk of sectors and positive territories. the market is flat. bloomberg update. they are confident they can pass the tax legislation this week.
the white house says president trump will speak about taxes to the republicans thursday morning. house waiting committee chair joins us at 6:00 p.m. u.k. time. republican send it -- republican senate candidate is facing fresh assaults. judgermer alabama assaulted a woman. said he calledll home him to drop out of the re denieseven as moo the allegation. attacked me when i was a child. i was frightened by him and his power. i am coming forward to let mr. ore no heat a longer has any power over me. >> theresa may has told vladimir
putin that britain is ready to fight back. he believesump said denials in election meddling were sincere. >> we know what you are doing, and you will not succeed. you underestimate the resilience of our democracy. and the commitment of western nations to the alliances that bind us. economic expansion dialed back in october. industrial output rose from the ear -- from a year earlier. retail sales rose 10%, missing forecasts. the international energy agency says u.s. shale surge will be the biggest oil and gas been and a hit in -- in history. the growth in oil production
will equal saudi arabia. global news powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. guy: thank you. i want to give you a flavor of what is going on in japan. we saw mitsubishi's numbers earlier. that is significantly ahead of forecasts. it's interesting to see how the market is playing the story to year end. the numbers are ahead of expectations. live at the here
european central bank. this meeting of the most powerful central bankers in the world kicks off. i'm here with one of germany's wise men. he is an advisor to angela merkel. it is great to get a chance to speak with you. you are an expert in monetary policy. today, the focus will be on communication. is there enough transparency? where do you stand on this? there should be more transparency. look at the swedish banks, the norwegian banks. they publish their own forecasts . doing that for quite a while. the ecb should do the same. then we wouldn't have to ask
what they mean with an extended. of time -- we have to ask what they mean to do with an extended period of time. the market does not believe that the feds dot plot is right. isn't that a concern? volker: neither are the norwegian and swedish banks lost credibility over this. more transparency with more information, based on current information, the market does not have to agree. but then the market knows what .s the feds view then you can make some sense out of why they have a different view of interest rates than the market. what is it like if you are
in a different kind of world. you worked for the greenspan that. that was the least transparent. juxtapose those different federal reserve's? the market was worried of greenspan was carrying his back on the left side are right side, and infer policymaking from that. more transparency, as long as it is choose -- chewed full and honest is helpful for markets. what do you make of the flat curve in the u.s.? it has not been this flat in over a decade. flat, it tendses to mean we are headed for a recession.
is it different this time? as ar: i would not take it sign of that. i do not see that in the hard data. the u.s. has been growing more slowly, so there is a question about potential. it is about 2%, i do not think that is particularly high. theould be a reflection of changing trends spoken inflation and growth. we seeing convergence amongst the european economies? we certainly see that they are all growing. there are still big differences. there are convergences among some. we have seen for a number of years of fascinating development in spain that is catching up. 2007.re at the level of
they are growing faster than germany. there is convergence. in italy it is a different story. they are way below 2007 levels. they have a little growth now. spain, portugal, and italy, portugal and skate -- spain has been gaining, but not italy. do you think a common bond between germany and france is a realistic prospect? is it a good idea? what do you mean by a common bond? issuing german bonds? i do not think that would be a good idea. that would be a bad idea. if you think of a common initiative for strengthen european institutions, i agree there is a time for that. we think that european stability mechanism should be enhanced and given a supervision role, just
like the imf has. it should be given an orderly mechanism for sovereign debt restructuring. crisis comes, we should be able to do that more orderly that currently. coalitionare the talks going? will the liberals and the greens be on board with this integration momentum as well? volker: i think they say they want more europe. just outlined the debt resolution or restructuring mechanism, adding that to the stability mechanism. that is a view of the free democrats, it is the view of the finance ministry. i hope the greens will come on board for that. it will make europe more stable. the questions the markets have is who is going to be the next finance minister.
is there any visibility on that? volker: there is speculation. leavingteresting that and becoming speaker of parliament, the second-highest position in the state, nevertheless this opens up forgetting the ministry to the other parties. there is speculation the free democrats will get that slot. it is by no means sure at this point. it is very important for the question of how to structure institutions of the euro area, move forward on the banking union. the finance ministry has been the driver's seat. yesterday i was talking to deutsche bank, and they were pointing out how important it is to the progress of banking and --ope to get things past
passed like a common guarantee for deposits. the third leg of a banking union. and to get regulations, as far ,s integration is concerned moving forward. how it optimism the you have that we will see that? volker: we have a slightly different assessment. we still have very high nonperforming loans, legacy debts which are not dealt with. they have be dealt with before you move that far. the other reason is national governments have influence on the loans. if you think of resolution law, it differs across countries. we need harmonization. otherwise, you have a lot of home loans on the balance sheet of spanish banks.
the governments can make it so it is impossible for banks to recoup anything from those loans. then taxpayers of other countries step in. that would be a hazard. that would be instability. matt: what is stopping us from getting that harmonization? volker: national governments want to keep some responsibility and control. that is fine. if they want to keep control they also have to take part in viability. for european deposit insurance, you do not want to let them out of that. it could be useful at some point. matt: thank you so much for your time. we have covered a lot of ground.
let's talk about gold and silver. listed many which operates in russia and america is described as having one of the best development projects in the world. joining us, volker wieland, professor, frankfurt institute for monetary and financial stability -- the goal story makes a lot of sense. this is u.s. tips. they have an inverse relationship. if you start climbing, and inflation has to come back, you expect that to happen? i am definitely and
inflation bowl. i expect that to pick up in a few years to come. and by the general price pressure coming for many years. that will be positive for gold. another chart to look at would be the relationship he twinkled price and nominal interest rates. , the higher that the nominal interest rate, the higher the price of gold. my bet would be as the nominal interest rates rise, and the real interest rates keep steady, gold will benefit. guy: gold is on an upward trajectory? vitaly: in my opinion, yes. guy: is it significantly mispriced now? vitaly: i don't think it is mispriced now.
there is uncertainty in the market. the most likely scenario, we should seek gold rising toward $1500 per ounce. we seek gold stuck in this range. every time i look, it is trading around $1300. what you need to see to get it out of that range? what could move the significantly the gold price? first: i think we should see the return of significant inflation. most importantly to the u.s. economy. that is likely to be triggered by the increase in crude oil prices. as soon as the increase in oil prices filters through to increase inflation, we should seek gold regain its footing and get out of the range.
historically, you have seen people in countries whose currencies are week using gold -- whose currencies are weak using gold. and venezuela, for example, or argentina. you also see people in countries like china use gold to get their money out of the yuan were offshore. lately you see people use bitcoin for those purposes. do you think digital currencies take a little bit of the shine off of gold? vitaly: i believe the primary purpose of investing in gold by the citizens of countries with problematic monetary systems is not to get money out of the country, it is more to provide them with the security of the means of payment in the event of
an unforeseen and significant disruption to the country's financial system. bitcoin is pretty useless for this purpose. you cannot and those countries use bitcoin the paper bread or clothes. you cannot use bitcoin to buy a new car. butoin has a bright future, it is not a competitor to gold. asd will retain its control the insurance currency which is useful in the event of a general breakdown of the monetary system. i do not think competition with bitcoin, which is currently a topic du jour in some circles will impact gold prices in the long-term. guy: we have been talking about this over the past few weeks. polly metals stocks seem up sharply this morning. polymetal stocks seem up
sharply this morning. cyprus is a relatively unique jurisdiction in that it of a taxthe qualities friendly jurisdiction with the quality of not being on the blacklist of the international against money trafficking. this is a destination for a lot of russian companies. we are looking at this opportunity, but a position has not been taken. we are thinking not only about the taxation issues, but perception issues.
this is a step we will not take lightly. a decision has not been made. guy: let's wrap it up a little bit. one of the things i spoke to the governor of the russian central concerning is it what happened with the bank? you had dealings with the bank, and you have a diversified exposure to the banking system in russia. there are other institutions that may fall under similar situations. how are you managing your banking relationship in russia? vitaly: the way the russian central bank handled this is exemplary. they prevented the banks meltdown.
and there were not collateral damage to the banking clients. the same story has repeated itself. there trying to monitor risk of our banking counterparties. before theed away trouble started. our internal risk management policies in sure we are not exposed to any banking counterparty which may fall prey to internal problems. rublethe weakening of the wasn't credible -- was incredible after crimea, but gain strength over the past few weeks.ntil the last few is it stable now, and how does that affect your operating costs? vitaly: we were beneficiaries of the ruble weakening. a lot of our costs are in
domestic currency. with the current stability of the domestic currency we are also beneficial. ensures a stable operating environment, and the ability to plan for the longer term. i'm looking forward to continued stability of domestic currency, and victories in domestic interest rates because that will help our contractors and suppliers who in turn will be able to pass those savings to us. the stocks of very strongly this morning. -- the stock is up very strongly this morning. .italy nesis: ceo, polymetal thank you for joining us. i'm starting with one of the biggest winners. , group total assets of
inflationthe u.k.'s problems. mark carney pens a letter to the chancellor. the iea says the proceeds from the u.s. shales will be the biggest in history. carney, kuroda, draghi, and yellen, all together. this is "bloomberg surveillance" and i'm francine lacqua in london. we have the best-selling author michael lewis with us.