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tv   Street Signs  CNBC  August 2, 2016 4:00am-5:01am EDT

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. cnbc will be speaking exclusively to cfo steven an gels at 12:30 cet. the yen stlengt engines to the strongest point as the government approve as 28 trillion yen fiscal passage. warren buffet tells donald trump a monkey would have performed better in the market than he has. this as he slams the presidential candidate in a campaign event for rival hillary clinton. >> good morning and welcome to "street signs." v in anything, but a quiet august day here we have european markets broadly lower the, banking sector really the drag here. overall about 3%, but once again, the italian lenders in foal kuss just a day after the
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stress test results came in. we have seen shares of monte dei paschi traded after 5.6% drop. union any credit shares which really bore the brunt of the fall day two of trading just a bit earlier. some concerns here over the rescue plan at bank of monte dei paschi when it comes to npls will and what it could have on the broader sector. all this as renzi tells cnbc in an exclusive interview that only growth with solve the issue of a nonperforming loans in the italian banks. julia is in rome and has been speaking to the prime minster. julia, fantastic to see you. i wanted to get at the heart of what is behind this disconnect. very difference message than we're getting from the markets. >> i think that's his job, first
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of all. good morning. there's a broader question being asked about the validity of the stress test when you know things like negative rates, impact of brexit haven't been included so once again this push back and the challenge here to what the relglators are saying and doing. on the other hand we know the italian banks have the problems of their own. there was hope this private sector solution that was found for monte dei paschi was a viable solution. it's got a situation where we've got nonperforming loans being taken off the balance sheet. where there's going to be a recapitalization. remember as we've been saying the last couple of days. this has happened a couple of fie times before. a lot of investors questioning whether or not this was the final one. whether or not the solution where you're shifting off nonperforming loans in the balance sheet and asking a fund that's being provided cash for by other banks in this country is a viable solution too. so i think this is always going
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be the battle that the government and the central bank faced. when i spoke to prime minster renzi, i said to him, why is this the final solution for monte dei paschi when investors are clearly going to be skeptical given what's happened in the past. >> for the first time, we cut off the problem of nonperforming loss. let me be very clear, julia. we know italian economy suffered a lot for the problem in the last five years, maybe ten years. in the first 50 years after world war ii, italy was the biggest economy in the growth in europe, but after the parameter and testimony european union, italy became the problem of european institution, pl particularly in the last period
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for responsibility of italian politicians. didn't achieve the goal of reforms. italy became the worst place in terms of growth and employment. so in the la period, italian banks we doubt the public for mistakes. we doubt public support. italian banks some the level of nonperforming loans. it's normal if you have ten years of crisis, three years of recession, it's normal for it will italian banks have a lot of npls. now for the first time, monte dei paschi is without npl because the operation called atlanta cleaned every npl in the bank. this is the final. >> that is a fraction of the
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nonperforming loans you have more broadly in the banking sector. are you saying this could be a model for dealing with the nonperforming loans elsewhere in the banking sector. >> i think it is the best way to solve the prok of npl is the growth. this is my priority. my dream and my nightmare every day, i think about it. growth, growth, growth. i become prime minster after two years of recession. the first result is not jobs, cooperation, banks, the first priority and the first result for me is see italy come back to growth, but with this model, we can show clearly to international investors and to the markets the situation of npls is not the situations -- is not focused on the narrative the
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last month. >> it's not big enough. the concern is that it's not big enough for the problem. >> personally, i really concerned for the future of european institution, but not nor italian npl, but for the situation in other banks in other countries for the financial instruments of other banks. so i'm not. >> reporter: you're looking towards germany there. >> also germany banks. our economy is very, very close friend of germany economy, particularly in the northeast. unfortunately we have two italy, not one. there is the italy of north is absolute near to german economy. we have a problem in the south. this is our priority to give legality, to give transparency,
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to give very core presence against corruption and against problems inefficiency of public. so yes, i wanted for the other banks, but italian npl are more or less in this moment 8 billion with 20 times more. so, okay. we have a problem. we must reduce -- we have to reduce the timeline of justice. this is the priority for italian government and we akmooef tchie result for the future. we must also work for the present, for the backlog, but this is not a terrible problem. the private savings until italy, i gagree with the consideration of carlos. i think the public savings and the private savings -- i'm
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sorry. the private savings in italy are really a private saving of a quality incredible performance because italian savings are good. >> so some critical points here. inning growth in the italian economy to address some of the nonperforming loan issues. i think that's a very valid point. as he also mentioned, the bankruptcy law. what investor is going to look at a nonperforming loan as a potential investment if they don't believe they'll get the money back for seven, alt, nine years. he said we're working on that. then he mentioned retail investors and private investors. these are the people he's being trying to protect. this is why he's been searching for a private sector solution. not just financially, very dangerous for him, but potentially very politically dangerous ahead of the reform
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referendum we're doing in october. the question is timing. can he put off the capitalization in the deal until after the vote or are they going to have to prove this is a viable solution before that time. >> julia, certainly the leaders in brussels, fellow eu leaders standing by and watching and you have to wonder whether or not that gives them an additional incentive to wave the bail in rules. when you talked about the possibility, did that seem like something renzi would welcome? >> you know, i know brussels well enough to know you don't wave these rules, but there are ways around it. they found one. we'll there v to see if this works. a private sector solution. there isn't anything stopping them bailing in investors and going, you know what, in certain cases these were police sold products. these aren't savings that weaver ba
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we're bailing in. if people wl missold products they're due their money back. you have to separate out those two things which is very important here. it's a tough job, not only for monte dei paschi to sort out their nonperforming issue. as you heard in the interview, theirs is just shy. even as he said 80 billion euros. it's a big number and it's a challenge and the work is going to continue. he told me. a big challenge for these guy, nancy, back to you. >> thank you for that one, julia and so much more to see from your full interview. you can catch that where you know with testimony italian prime minster. brexit and testimony italian referendum that julia was just touching on. all out of that will be airing tonight on the cnbc conversation from 2300 cet. now moving over to another troubled european bank, andrea
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caught up with the chief executive of mobt depash. the lender who took the wooden spoon in the most recent stress test. andrea asked him what's different this time in the bank's latest turn around plan. >> monte dei paschi has been the worst nk in the stress test. i don't want to comment the results and methodology because eba asked the banks not to go in more deeply on this matter. i think the new plan we issued last friday, it's in order to solve the main problems the bank had and the main problems that caused the result, the negative result on the stress test. first of all, the npl size which will be
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significantly reduced throughout the transaction and second improvement on the net interest income through the improvement of the rating of the bank. >> and we just want to bring you some breaking lines coming from the japanese finance minister. this is off the back of the announcements that the government has approved this massive fiscal stimulus passage everyone was waiteding on. the finance minister confirming he is working in cooperation with the bank of japan. they're going to work policy cooperation with boj governor. deflationary pressures remain a key headache in japan. finance minister also saying they discussed the contents, scale, affect of the economic stimulus steps with the bank of japan. he's also confirmed the boj will
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monitor closely. working together also saying they will not increase the total amount of the plan to debt issuance and once again, they have reconfirmed policy cooperation to defeat deflation. we just want to give you a check there of the dollar yen trade because we have seen the dollar movie ing lower against the japanese currency. at one touch we did see the yen hit a three-week high. this will cause confusion for many who were expecting stimulus to bring the stimulus lower. hi. >> reporter: appreciations clearly not what the japanese authorities want at this juncture. the big question really in relation to stimulus passage, 28 trillion yen, we will get more details from prime minster abe later on today, is the extent of new money. how much thof is fresh money. how much of this is direct spending because the chatter has been in the region of around 7
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trillion yen. if that does materialize, if that is indeed the components of new spending, that is pretty underwell ming because the talk in the market was at least around 13 trillion. so the disappointment associated with this and arguably with the boj's relative nonmove last week is yen appreciation. that really seems to be the path of least resistance right now. as your chart showed. we're standing at levels just above 101 so 100 is looking close and if we see that level, if we see it punch beneath 100 on dollar yen, that could really raise the hack els at the mof and we could have again intervention. i wanted to talk about australia. we saw a 25 basis point cut by the reserve bank of australia today in the immediate after math. we did see the aussie dollar dip
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below.75. it's up again. have wanted to lean on the currency. not really have the desired effect and spooked the market as well basis in some corners of the market in australia, they believe this rate cut signals that the economy is in a more precarious state and needs more policy support than previously anticipated. yes, we are seeing the late sensitive under some pressure today, but this is an economy and a central bank that wants to draw a line under inflation pressures to the downside and we could very well see another rate cut by the end of the week. friday, nancy, is going to be quite important for the policy. that is when we get the statement of monetary policy for the next three months or so in aus trail dwra. that's where we stand, back to you know. >> thanks, friday as we await
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the latest nonpayrolls number. still to come on "street signs," high rollers and off roaders. bmw and limo 4 by 4 driving sells helping get a second quarter beat. we'll have more analysis right after this break. hey look, it's those guys. [music] jess: are you good to drive? shawn: i'm fine. jess: how many did you have? shawn: i should be fine. jess: you should be? officer: go on and step out of the vehicle for me. bud: see ya, buddy. good luck! so, it turns out buzzed driving and drunk driving, they're the same thing and it costs around $10,000. so not worth it.
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across the board. off now almost 1 bnt 2%. we are seeing negative sentiment. basic resources again we saw that wti weakness overnight. a little bit back on the rebound there, but still now we're looking at crude prices negative once again. we'll give you a shot there of
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the individual one by one. you have the ftse off by eight tenths of one percent. the main french market however dipping lower by 1.4% and the ftse mib the main italian market there off in the red and the banks there once again the real negative spot. this is the picture of commodities, as i said. dipping below that $40 a barrel level. similar story with brent crude, but holding just around $42. this was a big drag on the dow yesterday which should have its sixth negative session. spot gold which continues to push higher. now by about half of a percent and silver higher as well. gold was the commodities picture overnight as well posting a consecutive winning streak there. back to the banks however in europe continue to really dominate commerce bank among the losers this morning. shares hitting are record le off almost 9% after the germany bank
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warned it will drop this year due to the impact of negative interest rates and hesitant customers. let's get out to anetta in frankfurt. the negative interest rates. not a huge surprise. we did get some indications a few weeks ago so what has investors worried now. >> reporter: i think the fact the profit machine is doing all the operations with the small and medium size enterprise sector. here in germany is doing so badly has actually shocked investors. i have to say here operating profit and that segments is down 35% compared to last year. and the middle bank was or is actually as i said, a profit machine. they are concentrating hugely on operations with that segment of the industry, but here clients
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are very about the go political risks out there and also the negative interest rate environment eating the profits here. that is one of the big drags for the shares today. the other big drag is of course the profit guidance. it's no longer valid for this year. previously commencement was aiming at reaching a profit of 1 billion or more than 1 billion like last year. this is off the table now. they officially said it will be lower than last year. this is also weighing big time on the shares. of course this also has a little bit of a rational component. this has been a performer in the stress test coming out, i think 46 or 44th out of 50 bank in the adverse scenario. which is of course a blow as well for the bank being positioned in germany one of the strongest economies in the euro zone and having such a weak capital position is not good
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news. of course, we later will talk to the cfo of the bank, stephen angers. bring that to you a little bit later. probably 11:30 uk time. we are going to tackle all the questions with him. what he's going to do about the negative interest rate environment because this is not going to go away very soon. what they are planning on doing about the sort of shy customers, but they are planning on doing a new cost saving program some people are speculating about that that even might be a new round of restructuring coming up for the bank as soon as september. remember there's a new ceo in place. we are still waiting for his road map yet to be presented. there are insiders closer that are saying that might be as soon
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as september. so overall, the results are a problem for the bank, also going forward, the guidance is a problem for the bank and the big question is how are they planning on increasing their capital position without a capital increase because at that level, current share price level, this is not an attractive proposition for management to actually implement a new round of capital hike this year. so a lot of questions as i said. exclusive interview coming up, 11:30 uk time. >> thanks we will be standing by waiting for that interview with the commerce bank cfo. meanwhile, let's give you a check on credit suisse because both that and deutsche bank are at the bottom of the stock. that will take place next monday. the two banks will be replaced by technology firm asml and
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construction firm, vin which i. shares have slumped more than 3445 h 45% this year. i want to bring you some comments from the bank of japan. saying that the two will work together when it comes to defeating deflation. also saying that the japanese economy is on a moderate roimpl trend. he does see uncertainties surrounding the global economy, something we heard coming from the bank before, but once again, saying that he expects monetary fiscal policies to produce synergies. it really appears give it some time is the message. government stimulus will have sinner apologizing affects on the economy. again, shri was walking us through some of the messages. saying that will produce
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energies, give it some time. the dollar off against the japanese currency by some.8%. meanwhile shares in chrysler have been suspended this morning due to accessive volatility after a 4.8% fall. stock is down by 57% so far this year. volkswagon on the on the other hand says it may take legal action on a sales band in north korea. cancelled the registration of 83,000 and will imposed a sales ban on thousands of models. vw says it will reply for certification. on the earnings front, bmw was up 1.5%. this after they beat on second quarter operating profit. the german auto maker says demand for luxury vehicle especially offroad models boosted performance.
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sales returned from 8.4 percent a year ago. off now about 2.5 percent. against dax move in a neighborhood of 1.5% lower. this does raise the question of what investors don't like about the results. to help us answer that one, i bring in george from auto analyst. really a great round of results from european union autos when you look at beating consensus. similar story we're seeing this morning, shares are selling off, why. >> looking at the bmw result there wasn't much not to like. it was a strong performance in the auto and margin at bmw probably would have been 10% if they hasn't voted to include a recall. cash generation very strong. the sector seems under pressure this morning. i think the one thing we would highlight is sales numbers from france, spain, and italy. both saw growth.
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what we're seeing is the star stepping down subsequently. >> when you look at the likes of bmw and other players, the u.s. continues to be the crucial market. we're expecting u.s. sales a bit later today. what do you forecast. >> we're forecasting 17.4 million for the u.s. today. the focus is going to be on incentives, particularly in light of comments from ford where they commented. the other piece that's critical is the retail side and that really speaks to the quality of the sales. >> you've also got the brexit headwinds as well. do you think some of the share price reaction is getting that fear this is as good as it gets for volumes. are we approaching peak volumes? >> that's certainly a the consensus of the u.s. market. many of the european union
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markets weren't talking about the slowdown. interestingly both ford and gm did silent te it as a second ha headwind. >> after the bmw results what is your top pick. >> top pick is volkswagon. target price is 160 euros. you cheerily have a large restructuring story. >> george, so much to touch on here, but sadly we have to hit this break. thank you for joining us. auto analyst at auto core. we have to get to this break. uk data coming up very soon, but in the meantime you can check out our world markets live blog which runs throughout the european uni european trade day. we'll be right back.
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the italian lenders back in the red, but prime minster renzi tells cnbc the loan problem is manageable. >> personally, i really concerned for the future of european union institution, but not for italian npl, but for the situation of other banks. commerce bank shares plummet as the germany lender blames profit rates. cnbc will be speaking exclusively to the cfo at 12:30 cet. the yen stregthens its strongest point. government approves a 28 trillion yen fiscal passage. warren buffett tells donald trump a monkey would have
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performed better in the market than he has. this as he slams the presidential candidate in a kpa campaign event for hillary clinton. >> good morning and welcome back to "street signs." let's give you a view of how u.s. markets are set to open in what has been a bit of a down day so far for european union equities. we are looking at softness in the key markets intel. s&p lower by 6 points. and the nasdaq called lower by 13. again the dow joan was weak spot overnight closing lower for 6th negative session. this was largely due to the energy stocks. we did see wti slipping below $40 a barrel level and that continues to be the trend this morning. ftse 100 is off. the seth have a dax lower x. the french cac 40.
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and the might be in the range of 1.6 to 1.9. i want to bring you uk data coming out now on the july figures. so farp we're getting that in july the construction pmi fell to 45.9 of that compares to the june reading of 46. that is the lowest reading since june 2009. i had seen some analysts were predicting a fall as low as 44. not altogether terrible. we saw pmi numbers compared to the reuters poll, they were looking for 43.8. overall that figure is coming in above forecast. shrinking at fastest pace in seven years. that will certainly come to the attention of policymakers meeting for the latest decision on thursday. meanwhile, italian lenders continue to share the limelight. back in the red quite firmly.
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especially when you look at the likes of mps that was suspended after an initial six percent drop. unicredit continues to see some selling pressure off now around 4%. concern there is about its own capital position and what the impact of the npl rescue plan may have for the broader sector. meanwhile italy's prime minster told cnbc exclusively although he doesn't agree with the current bout on legislation, he does respect it. >> i fought for these and also for the to avoid the risk of institutional investors because i think it's time to open the doors of italy to market and give the currency for the people, but also for for international investors. >> so no bail in. >> no.
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personally, i don't agree with the new legislation in europe, but obviously i respect that. i don't agree because i believe the priority in this moment is give confidence though the citizens and if we continue with the terror of baili in, this isa problem for the confidence of european citizens. so for me, this is a mistake. i respect the law. i don't agree with the law of os terrety in europe, but i'm president of council of prime minster and ordered this level of deficit. i respect the law. i'm not agreeing, but i respect it. my view is if we want to be
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present in international markets as our competitors in america and asia, we need any sent of confidence by european citizens. i don't know what happened, but i know for me, italy is totally fighting for avoid bail in because also soft bail in could be a disaster for the credibility for the confidence. this is the reason for the fault for market solution and there is also one thing more: and this the my priority is cancel the power of politician in the banks. let me be very clear. until italy, for a lot of times for a lot of years, politicians arrive everywhere. politicians decide the career of
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the university. decide the roll of thebank. decide everything. perfo personally i believe in a different democracy. we are the government. . we attend to the law to respect the prosigs of democracy, but banks are in ants of markets. the local politician s this is the reason we change the legislation about comparative banks. >> the japanese government has approved a large scale economic stimulus passage in hopes of overcoming deflation and boosting economic growth. in tokyo with more. mow key co- when you look at the market reaction, there seems to be some
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sense of disappointment. >> reporter: yes. let me go into details. the abenomics have not brought about the desires results and this is yet another effort to stimulate demand. total passage is worth 28 trillion yen or more than $270 billion, but only a quarter of that will be additional direct spending. the rest will come from accelerating existing infrastructure project such as constructing the high speed tan system. of the additional 7.5 trillion yen, more than half will be spent on building facilities to boost tourism and agricultural. efforts to raise incomes from the younger generation include lower the cost of employment insurance and allowing employees to receive a pension after working ten years, less than half the 25 years that was mandatory until now. now to pay for all of this the government avoided issuing
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deficit bonds. now, meanwhile, finance men center has just had a meeting with bank of japan governor. such one-on-ones are rare. the meeting aimed to present a united front in supporting the economic policies to work effectively. the boj decides on additional easing measure at the policy board meeting last friday and finance minister said in a press conference following the meeting that the government intends to extend abenomics by incorporating the bank of japan. saying that maintaining a loose monetary environment will generate synergy where the government's efforts and give a boost to the economy. that is all from it will nikkei, back to you. >> thank you for walking us through the details of that stimulus passage. here with us around the set for more analysis is a senior
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analyst. try to dissect exactly what is in this highly anticipated fiscal stimulus passage. when you look at the portion that's actually going to direct spending is it enough to get the job done. >> i think it will certainly boost gdp. government has estimated the impact around 1.3 or 1.5. so the passage is around 7 so just over one that makes sense. assuming that all goes on to things directly related to spending, i think it's maybe some of it may be, some of the subsidies going towards private sectors. the individuals may save the cash and spend the government the cash they're getting. it may not have the full impact, but i would guess the impact would be lower and also the time period as well you have to look at. this is a supplementary budget until it will autumn. some of the spending takes a few
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months to kick in. most of the impact will be in the first start in the first quarter next year. so relatively limited impact on the current fiscal year's growth. and probably most impact will be next year. >> the time lag affect saying we will get major synergies to stay with us, give us some patience here because they want to see the programs kick in. does that suggest they may not come out with additional monetary stimulus. >> well, i think the boj obviously on friday announced it was going to review the qe policy and obviously the yields have sold off sharply. the inference is they're talking about the time frame, two-year time frame. if you don't have a time frame, the 2% target becomes an aspiration with no concrete effort to get there. that's what is worrying the jgp
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market. over the course of the last few days, looks like we're going to get less rather than more stimulus certainly in terms of the way the boj is -- certainly that's what people are possibly thinking. i feel actually the boj is likely to have to continue to provide more stimulus. i think the worry there is exactly how it does it. i think if you look at how it moved on friday, it didn't lower spres rates. lowered interests rates back in january. proved very popular. had a good rally since not lowering interest rates. and no more limits so there maybe the boj has to get more creative and look at different assets. possibly government bonds and continue to buy more equities. >> possibly helicopter money or that remains off the table for mow. >> that remains off the table. one of the reasons there's a slight disappointment today. slightly bigger than the consensus of 7. there doesn't seem to be much
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additional fiscal monetary coordination. i mean, obviously the government and the boj have been morgs more or less on the same page. i didn't really come into this meeting. i didn't see any cracks. i think the meeting today was a bit of a surprise. it hasn't generated any additional move forward in terms of the cooperation. there's no making monetization of the government debt explicit and no move towards helicopter money. >> not a big difference. you wou you mentioned something interesting about jgbs being the most influenced by the actions we've seen. we talk about the yen hitting three-week high. does it hit at the problem the government has both in the fiscal side and monetary side to what affect that can have on the yen when so many other factors are in play. this is a series problem for corporate japan, is it not. >> i think it's the level they're concerned if it goes in
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lower, obviously when it was 1.20, 1.25 in the autumn last year. they thought it went a little bit too far. the sweet spot is 1.10 to 1.20. below 1.10, they're probably okay. the worry is if it goes lower. we're at the lower end of that range. of course not just two sides to that we're have a weak gdp data in the u.s. on friday which is obviously helped lower u.s. interest rate expectations. my personal view is the u.s. economy is doing all right. third quarter probably see all bounceback. fed rate remain tons table. >> of course we have get another indication of the inflation with the pc out in the u.s. today. when we talk about direct payouts to families we've had an experience before with vouchers they used in the late 90s.
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>> i think they conduct add number of surveys in the wake of the experiment and people generally tended to spend the government cash and save their own cash and the multiply early effect is low. i would imagine possibly it's likely to be the same this time around. >> all right. collin, thank you so much for that perspective. colin asher. still parenty to come on "street signs." coming up after the break, it's a billionaire smack down. warren buffett takes aim at donald trump saying a monkey could have made more money than the republican nominee. we'll bring you the latest on the presidential race coming up.
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good morning and welcome back to "street signs."
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as we told you before the break, the yen has been trading at three-week highs after the japanese government approved a 28 trillion yen fiscal passage. the dollar off against the currency. at 101.62. joining us now for more analysis is head of research at credit. weaver having an interesting confers off camera here talking about the reaction in the yen. not exactly what you would expect when stimulus is on the way. what are you seeing. >> indeed. investors come in skeptical that abe or abenomics will this time around be successful after all these misfires we had in recent years. if anything another school of thought is that aggressive fiscal stimulus. there's no doubt the stimulus will be aggressive from here. could deposit from both japanese stocks. the investors calling for a breakdown between the
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correlation of dollar yen and nikkei. my personal view here is what more nuance if anything i think the measures implemented to be implemented in japan could indeed support the japanese stock market. that could continue to weigh on the japanese yen. >> what measures specifically make the nikkei attractive here when you talk about the latest proposal sgls the activity measures to support domestic demand have an impact especially on names in the index that are more geared towards the domestic economy. certainly heavy manufacturing could benefit from the infa structure projects that the government had lined up and indeed the new projects that are being announced. in addition the overall stimulus could have a positive sentiment impact which could boost the market. our one important argument in favor of the nikkei here is the
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fact it's the cheapest g 10 stock market out there. low yield rates search for carry is still prevailing. i think investors -- it looks quite attractive. to extend that part of that demand comes from abroad. that is the demand for the nikkei. accompanied by selling the yen. indeed dollar yen could start moving higher. >> just getting weaker today. the overall index was off. i just want to switch focus if we can to the uk. we had data on construction pmi breaking just at the top of this half here and the data not as bad as some had feerd. yes there is a slow down in construction, but something we know has been coming for quite some time. is there any chance we get a surprise out of the boe tomorrow. >> first of all the market highlights a lot of negatives. we see our position indicators
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the market is super short. the pound we are seeing record shorts in the markets unless you see a continuation of those disappointments right in the data, i don't think the investors will have the courage to already extend the sterling short that or preemptive and aggressive bank of england on thursday. this is where i cannot disagree with the markets. if anything the rate cut is in the price. the scope of them doing more has 20 be contrasted to the expected positive impact say from policies like qe. the fact it is no longer 2009. we are in 2016 and yields are much lower than they were five years ago by implication. if you think of all the how likely is boe to be more aggressive. the chances for that may be less than currently priced by the market. so the real surprise here would be the boe may underwell m the
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already dubbish market expectation. >> what's your sterling dollar target. >> sterling dollar right after the meeting cou ing could go as 1.35. still some cautiousness may be warranted. >> just finally we have the pce data due today. do you think the fed hikes this year. >> we expect the rate hike in december. we think the markets may be a top place when i comes to that. >> fantastic. thank you for joining us. that is valuen teen managing director and head of research at credit ab core. >> sticking with the u.s. focus, j.p. morgan cfo sees positive signs. in an exclusive interview with cnbc says gdp could rise as much
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4% in f the next president pr sovidestable reforms. he also warned on the dangerous of focusing on short term data. >> see the books grow and need to build a new plan. sit a little disappointing, but they have the money, they have the wherewithal, profits are down, huge capability. markets are wide open. i wouldn't overreact to short-term data. >> for more from the banking chief including why he thinking j.p. morgan makes the world a better place, you can head online to cnbc.com. meanwhile, warren buffett has attacked donald trump while on the campaign trail with the democratic presidential nominee, hillary clinton. the oracle of omaha said a monkey throwing a dart at a stock could have generated greater returns than some of the
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hotel ventures. review the criticism of the muslim american parents of an army officer that was killed in airk. >> no member of the buffet family has gone to iraq or afghanistan. no member of the trump family has gone to iraq or afghanistan. we've both done extremely well during this period and our families have sacrificed anything and donald trump and i haven't sacrificed anything, but how in the world can you stand up to a couple of parents who have lost a son and talk about sacrificing because you were billeding a bunch of buildings? >> joining us now is nbc news edward lawrence standing by in washington. great to see you. we were listening to warren buffett comparing donald trump's business decision saying a monkey could outperform, i have to wonder how much does this hurt often doubting his own
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business record. then you have warren buffett taking him down on it. >> reporter: he went further in invoking a phrase that was used during that era saying you taught to be ashamed of yourself. talking about attacking the kahn family. as he serve instead iraq. he was killed by a suicide bomber. this could hurt him. polls showed donald trump is slipping a little bit. hillary clinton gained about 4 points nationally here in the united states. so it remains to see the long-term affects of this. donald trump tried to change the subject. he talked about jobs, the donations he got. he also hit hillary on the donations she received saying she received in excess of $46 million from hedge funds to groups that are proclinton. now donald trump only received $19,000 for those groups that
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are pro-trump so he tried to change the subject in this case and move forward with his campaign. back to you, nancy. >> edward, thank you for bringing us that update. that's edward lawrence from nbc newsstanding by in washington. let's give you an update. commerce bank among them. shares hitting a record low after warnings it will drop this year due to the impact of negative interest rates and hesitant customers. we're also taking a look at the yen trading around three-week highs after the much anticipated stimulus plan. that's it for today's show. i'm nancy hungerford, "world wide exchange" is next. they told me a bottle couldn't dream. that i would never become a superhero. [singing indistinctly] but i learned how to fly. just to come back in a new disguise,
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and be the hero i've always wanted to be.
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good morning. break overnight. japan approves a $274 billion stimulus passage. the yen jumping to a three-week high. a live report from tokyo coming up. crude realities, oil hovers near $40 a barrel right now. we're going to discuss the factors at play straight ahead. >> plus a cnbc exclusive. italy's prime minster backing the nation's bank. we'll hear from renzi in his own words. it's tuesday, august 2, 2016 and "world wide exchange" begins right now. ♪ ♪

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