highlights from the biggest stories this week in tech. more portfolios in africa start to diversify from oil, we take a closer look at the emerging. our deep dive into the bc climate on the continent and how it stacks up against the competition. first, to our lead. blackberry shares plummeting more than 11% in friday trading. the company getting a speedbump in its quarterly earnings report grea. the company missed analysts estimates for total revenue. before today, blackberry shares had risen this year. most of its revenue now comes from software. joining us in the studio, cory johnson. and from toronto, garrett did think. why is the stock down so sharply after what has been an ok year? >> they had a great year, 60%. good year from blackberry, of more than 50%. the reason they had such a great year is because people started finally treating them like the software company they've become. they have gotten rid of phones completely. they no longer have to handle that manufacturing risk. people aren't worried about that anymore. investors said, it's a software company. let's value it like a s

africa a day after the change in rules for mine ownership. it moved the markets. very interesting stuff. this is bloomberg. ♪ matt: welcome back to do bloomberg markets, the european open. let us check in on how the equity indexes are doing right now. the cac climbing 0.8%. the dac is up half of that. 0.4 percent.ning equity markets are up across the board right now. swap traders are starting to wonder how much further the federal reserve can go with interest rate hikes as janet yellen remains confident that labor market strength will eventually spur inflation despite a slew of economic data mrs.. expectations for the rates to be to multiple months from now. that is the forecast as the bloomberg u.s. market surprise index turned negative for the first time in a year. you can see that here in white. the white line is the surprise index. now dropping. strategist isket with us. what we are saying here is that is file -- is that the fed tightening and may be surprisingly hawkish in tone at the same time when the data is coming in a little soft in the u.s. how do you see that? to reiterate

taylor riggs. this is bloomberg. caroline: thank you. we get breaking news out of south africa, a country which is mired in political upheaval. important, gdpat figures much, much lower than expected. in fact, for the first quarter, its contracted 0.7% quarter over quarter when it was expecting a 1% growth. the second recession in eight years coupled with the political uncertainty with a president jacob zuma fighting for his rand iscy means the weakening. we are keeping an eye on south africa and we are keeping an eye on china. the move comes in the aftermath of the credit crisis where this type of short-term funding it is -- is seen as pivotal. meanwhile, a crackdown on leverage continues back home. use throughow is a trader and ruchir sharma. thank you for joining us. give us a sense of what it tells us. , it meanss me -- icbc there is an appetite to be in that space and shadow banking. >> i think it indicates the chinese themselves given with the domestic chinese market, they are looking at ways to grow the global market share and venture into the china europe and within the china spac

. it is wonderful. i want to talk about south africa, one of our favorite topics. the plan ministers as the country needs to protect the independence of its central bank. speaking in an exclusive interview with bloomberg's nejra cehic, he said he needs to study recommendations that suggest altering the reserve bank's multi-focus less on inflation and more on societal need. i am still studying the report to understand the full of the remedial action being proposed, the context in which it arises, and therefore, what the intended proposal of the constitutional amendment is. if used to be a conundrum in these regards. the context in which it arises is not quite clear to me. proposal of the amendment is not quite clear given the issues that were being investigated. thirdly, the procedure of affecting this remedial action leaves some gaps because the bank is the mandate of the national treasurer, yet the proposal is being made to the portfolio committee of justice, and not to the minister of finance, which means that we need to resolve these issues. now, having said that, i need to unders

propose being made -- the minister of finance. because innderstand south africa, the action protectory the public is binding unless by a court of law. go tomust, we need to court. >> regardless of the context, the central bank would call it unlawful. would it be unlawful to change the constitution in this way? --it would be unlawful but i'm sorry, it would not be unlawful. it would be unlawfully given these are different institutions. south africa prides itself in strong institutions. i think in that way, we take comfort in the fact that they are known to be independent themselves and therefore will provide us with a proper way forward. it seems to be a rebuke by the south african -- trading thisit issue and making the necessary determinations. minister -- finance the suggestion? moment, i'mesent interacting with the report to understand it in its full extent. determination but what i want to emphasize is the respect independence in the to make whatever recommendations, i also support fully the independence of the south african and i think we must not take any measure that will undermi

previous period. that is the bloomberg business flash. francine: we are awaiting south africa's top court's decision to hold a secret vote of no-confidence on president jacob zuma. the rand's zigzagging a little bit as they decide what the reading means. we have been hearing about the ruling for quite some time and -- southt headline is african court says some motions may warrant a secret ballot. this is as much a political domestic story as a wide emerging-market story. pau: the good thing for south argentina,h like markets are still extremely yield thirsty. these are two countries that do not have a good track record of delivering and political instability at the moment in south africa would suggest investors would be turned off by the investors and yet they were not. they were not because the rest of the world's offering pretty low expected yields and in an environment where from a demographic perspective, the baby boom generation is still very much in need of that yield, i think any sort of temporary weakness will be an opportunity for people to pile up, which maybe is not the r

. we will be bringing you any breaking news. we had a little bit of breaking news over south africa, saying they must be 30% owned. assetstime, all local must be 26% black-owned. this is something that has been talked about because one of the main people in government was proposing that the minimum level for shareholding should be raised to 30%. -- they are taking a hit on the back of it. you can see currently the level 12.73. i'm not sure there's much of an impact. overall, what is your take on south africa? animosity tomuch get rid of the president that you got rid of the finance manager. is there anything that can put it back on track. >> i believe so. >> we are in a very important political transition. it is deftly higher than that. at the end of the year, we are going to have a very important combination over the next month or so. -- we know zuma is the front face and very strong section. it is not only about getting rid of the press. how long it will take for this wave to dominate and have the room. i think the same could be true for south africa. muchid they appreciate so ove

back of paying bribes all over the americas and into africa in order to get deals on contracts. >> was it just a party doing business? how did it get to the point where bribery was such a part of doing business? the heads ofse all the company have been arrested and they describe a history of the company where this was the way business was it done. in order to get contracts for government work in brazil, you have to spread money to the politicians and fund their campaigns. at least that's what they say. culture ofart of a oderbrecht in order to get the government deals and other construction companies. >> did they have to do bribes to get those contracts? without it with they not have gotten the business? >> that is what they say. culture, itf the always probably has been and the point is that they pay bribes but what they got in return work massive profits --return were massive profits. the contracts they got were way overvalued and it cost of the brazilian people in the country -- it cost the brazilian people in the country. company,ve for the positive for the political figures but pe

pass legislation in the commons is still ongoing. south africa must protect the independence of its central bank and must evaluate what effect the recommendations of the ombudsman to offer its mandate will have on the institution, according to the countries .inance minister speaking in an exclusive interview with bloomberg. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. stories on there .loomberg at top it's been all about the msci inclusion today. wishing a little bit of fluctuation coming through. up by .4%. hong kong is weaker and we've seen weakness coming through in a lot of the energy players asx 200, downhe by 1.4%. toshiba coming through in its board meeting today saying it has picked -- preferred bidders for its member chip business. toshiba down by 1.2% in late trade. bhp billiton and rio tinto not only in correlation with the energy space but iron ore and hase has been news that rio -- we had a little bit of weakness from qbe, falling the most in ten-month. fourth time lucky for the inclusion of a shares. s

prosecutor in south africa suggested we have a new mandate for your institution and that mandate has been socioeconomic well-being of the citizens. fact veryushed strongly against this. have seriously is your independence thing tested? well, there is always contests in society. when things are tough, institutions and decision-makers might think about the easiest thing to do is to fiddle with the independence of the central thes, and that is why independence of the central bank is enshrined in the constitution. to trigger with the independence and change the mandate will actually require a high threshold in parliament. you needed two thirds majority to change the mandate of the reserve bank. or any part of the constitution for that matter. having institutions constitutionally independent is one thing. is, dot important thing the people who are entrusted with this institution understand and respect the duties that are put on them by the constitution that they themselves act independently, they act without fear? gov. kganyago: that is what the south african constitution is asking of the

: we have some breaking news. movies has downgraded south africa's credit rating to baa 3. there is also a negative outlook. the ratings agency has assigned three key drivers for the downgrade, which is the weakening of south africa's institutional framework. a lot of the political stresses we talked about, reduced growth prospects, policy uncertainty. we talked about south africa slipping back into recession. there was more week data out of the rest of the week, and the continued erosion of fiscal strength, which follows from all of those other things. when you have weak growth, the debt becomes harder to sustain. for those reasons, moody's downgrading south africa's credit rating to baa 3. julia: fitch downgraded them to , and the s&p, after the finance minister was fired this year. joe: a good perspective on where they stand. the fda isng up, asking a pharmaceutical firm to pull a product because of abuse. we will look at the move and what it means for the wider context of the u.s. opioid epidemic. from new york, this is bloomberg. ♪ scarlet: it is time for the bloomberg busine

about africa. countries in africa are growing at a very fast pace. they have a relatively low base, and a lot of people think about african countries as really being unstable, but the reality is that there are a lot of stable african countries and lots of opportunities in these countries because they are just offstage. julia: and a little while ago, there were as -- there was a lot of excitement about these countries like nigeria, and given what we have seen in the oil prices, they must be in dire straits at this moment but the economy is far broader than that, and the stock market is far broader. mark: exactly. julia: what is your favorite economy in africa? mark: i would have to say both south africa and nigeria. julie: even with the politics? wow. mark: because the consumer markets are doing very well. julie: i have to ask a quick question about argentina, because argentina was left out. there is enormous investor enthusiasm for argentina. does this do anything to put a dent in that? mark: it does in the sense that msci and other index providers are looking at argentina and thin

you will have the chinese building minds in africa. they will go to new frontiers where mining companies are not going. mindsll see chinese owned around the world. if you say in 10 years time, i think china will produce their own commodities in other parts of the world. mining companies may be sidelined. it will take time for that to occur. it takes five to seven years to build a mine. we could have a good run on commodities. producing a lot of their own commodities in new territories, i believe they will go to africa. they may have to come to russia where you have reserves. if the russians are not prepared you may have china trying to get in to make sure these mines are being developed. a reminder that the -- aman of bloomberg lp senior executive at glencore. let's go to erik schatzker, who is in st. petersburg. theesume you talked about -- in the company. erik: glencore approached the u.s. agricultural and wasies of bunge rubber up -- was rebuffed. there is a hole in glencore's portfolio. they want to be bigger in agricultural commodities. they don't consider themselves influ

. alix: great stuff. great to see you. daniel morris, b.n.p. paribas. and you have south africa, a recession, the second time in eight years. jonathan: south africa a risk, brazil a mess, what is going on in the middle east? everyone says long em. we will continue to work it out. coming up next, mark weinberger ceos are putting their cash to work in the second quarter. plus, more on the u.k. election man the cobra founder, a with the factory here in the u.k., and in belgium, and he sells to pretty much every country in the eu. he has a the sale brexit. from london in new york, you are watching bloomberg tv. ♪ emma: this is "bloomberg daybreak," and this is a hewlett-packard enterprise greenroom. we will be live from paris, eking to india's finance minister. now to your bloomberg business flash. the world's largest -- is getting closer to the brink. airbus is running out of orders for the superjumbo, and plans to cut output to below one play per month unless it finds more buyers. wasoduction cut last year widely regarded as the beginning of the end for the a3 80. a federal judge h

, basically on the back of paying bribes all over the americas, and even into africa, in order to get sweetheart deals on contracts. carol: was it just a part of doing business? how did it get to the point where bribery was such a part of doing business at this company? mike: in this case, all the top execs have been arrested, and they have agreed to testify in exchange for a plea agreement. they described a history of at least 30 years, this company is almost 100 years old, where this is basically the way business was done. in order to get contract or government work, you have to spread money around to the politicians, you have to do this or that with illegal money. at least that is what they say, so it became part of the culture of odebrecht, in order to get the government deals, and of construction companies in brazil, which was revealed in the broader case. carol: do they have to do bribes to get those contracts? without it, would they have not gotten the business? mike: that is what they say, but it is like what came first, the chicken or the egg? it is part of the culture. it pr

and africa. in exchange, they received business that delivered over $3 million in profits. you can see it is almost like a four to one margin they got investing in broad -- in bribes. the people who pay are in pretty poor countries. it sucked up money that could of been used for other things. carol: it sound like the money went all the way up to the political structure. it bankrolled campaigns. michael: correct. half dozen presidents in latin america, i think for five former president of brazil, made claims in their testimony that they were bankrolling campaigns under the table and paying bribes to the presidents. not sure about the presidents themselves. they basically put a lot of money up to get people elected, and once they were elected, they got a lot of contracts out of it. it was very calculated strategy that paid off until they were caught. carol: turning the graph machine into a cover image was the job of rob vargas. oliver: the cover story is a wide ranging story. how you represent such a dynamic story? rob: there was not a lot to shoot. we had to come up with a concept.

. south africa must protect the independence of its central bank and must evaluate the recommendations to alter its mandate. that is according to the country's finance minister, malusi gigaba, speaking exclusively with bloomberg. >> the independence of the south african reserve, we must not seek any nature that will undermine the independence. whatever decision we arrive at must not end it undermine the independence. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. i'm sebastian salek. this is bloomberg. francine: theresa may will today published a program for her minority government that is expected to be heavy on brexit, but light on domestic under receive. the plans will be met out in parliament by the queen, unusually, this year's queen speech will cover a two year program. anna is in westchester. what are we likely to hear about brexit? anna: we are going to hear about brexit. it will depend on how much detail we get, or at least the level of interest of investors will depend on how much detail we get

connected to what matters most. ♪ this is "surveillance" and we have breaking news out of south africa. the appointed director of national treasury and that appointment is effective immediately. he has acted in that position since may 15 of this year, but this has been a prove. -- approved. 1285.40 nine. at a little volatility with political comings and goings over the past months. is this significant? when you look at stabilization of south africa, what do you need? he got one, but he didn't get two. this news is neutral but there are big concerns in south africa. -- within the domestic economy, there are issues of fiscal sustainability and in terms of the savings rate and competitiveness. dollar-rand and what has been priced in bond markets is a benign picture of the world. if commodity prices turned on aom here, they don't have competitive leg to stand on and that is why the risks are higher than what the market is accounting for. a lot of their fiscal in this case comes from they believe growth will be better. we're going into a recession. francine: we will get back to bhanu and al

was in the middle east or in africa, but it gave them -- they are building it with their money and their labor. that gives them political -- a geopolitical advantage. mr. burns: and there is this big new one belt, one road strategy that the chinese launched with a lot of fanfare two months ago. part of it is straightforward and economic. there is a huge need for infrastructure construction across eurasia. the chinese have a lot of underutilized capacity for that. but another part of it is strategic. this is about extending chinese influence across eurasia. that's not to suggest that is a threat to american interests, but it's something you've got to recognize. it is a strategy. charlie: their strategy has not then hegemonic or imperialistic, has it? mr. burns: no. there has always been a sense in china historically, that its region revolves around china, the imperial kingdom. and that they ought to be surrounded by deferential players. that is different from aspiring to a global hegemonic role. china has benefited from the kind of order that the united states led the way in shaping

million shares of barclays africa equal to a 33.7% stake create it has plan to sell a 22% stake as part of a plan to shrink operations and bolster capital. and agreeing to sell nonperforming loans with a value of 2 million euros. according to two people with knowledge, the sale was in line with the net assets and has no significant impact on the italian banks capital ratios. mitsubishi motors may have to abandon one of its best-known models as it tries to recover scandal.el economy speaking as closely to bloomberg, the carmakers ceo says he plans to increase spending on r&d well considering whether to keep making the likes of the pajero suv. >> whether we continue with the model depends on whether there is a market for such a vehicle. we need to decide if it is worth investing a huge amount of money and human resources to prioritize its development. sophie: apple has started manufacturing a competitor to echo and google home speakers. could see theer speaker later but it will not be ready to ship until later in the year. it will have virtual surround integration with apple's produc

her africa trip, albeit temporarily. what will be in it? versiona slimmed down of some of the stuff we had in the manifesto. at the moment the government has to get engaged. it could not stay in limbo forever. not really formalized the deal. the talks are ongoing. at the moment it is daylight a. mark: -- it is day by day. mark: think you very much. vonnie: let's check on the first word news. courtney donohoe is here with more. horny: the american college student released fight north korea in a, suffered a severe neurologic of industry according to a spokesperson at the university of cincinnati medical center. he arrived at the hospital two days ago. he was serving a 15 year prison term after trying to steal a propaganda innerm -- banner of visiting north korea. president trump reacted on twitter after a word that special prosecutor robert miller now appears to be examining whether the president trying to abstract justice. according to people familiar muellere matter, sm about theview people president trying to get people to back up the investigation into michael flynn. the british lead

who have not staged the past two events. south africa recouped just 1/10 of its outlay for the 2010 event. here is the argument, critics -- the solution is a farce selection is a farce. critics also question whether reforms can be carried out by officials who have been part of the system. of thehose were some corporate sponsors, including coca-cola, visa, and mcdonald's. toy and aididas pressed fifa investigate corruption allegations. you can read more about this topic and all of our quick takes on the bloomberg. walmart sharing the spotlight with amazon at its annual shareholder meeting. the world's biggest retailer charting its course of action to , announcing a program that sends store employees to deliver online orders at the end of their ships. let's get more from emma chandra at the walmart shareholder meeting. his former putting up a fight against amazon right now? how is it progressing in this battle? you fromd to talk to fayetteville, arkansas. amazon is the big competitor for walmart as it has ramped up its e-commerce offerings. new programed a yesterday which will try to

korea. >> i want to move to south africa. the embattled president jacob zuma is staying put for now. he is survived a bit by some to remove him from office. is he safe for the moment? >> he is certainly. he is keeping control of the country. the vote of no-confidence is something that he said he never wanted to hear of again. the constitutional court is currently debating whether or not to allow a secret ballot on a no-confidence vote in parliament later this year. whether that will happen or not is certainly to be seen, but it does deal a blow to that move. >> fresh off of nato and the group of seven summit, emmanuel macron welcomed vladimir putin to paris for their first one-on-one meeting. the two leaders found common ground over fighting terrorism, but that may be where the agreement -- but that is where the agreement may have ended. they traded barbs over sanctions. the ukraine, where macron accused putin of invasion. how is this being played out in russian media? what is their take on this budding relationship? >> the interpretation is that putin and macron did not really mana

bloomberg middle ast and africa managing editor reha. what's going tonight impact of these measures? >> i think the main economic impact will be on qatar itself. it is being cut off by its immediate neighbors. probably immediate impact will be on the airlines themselves. we have already seen the beginning of conservation. especially at qatar airways. some tomorrow. egyptair will also start canceling their flights, frequent flights to doha. doha is an important transit point. part of the big three global air lines -- gulf airlines that use the location as an important transit hub. second, if it does last longer, you might see an impact on the banking sector in doha which is reliant, or relies more than the moneycountries on foreign to fund its lending. in particular in view of the world cup in 2022. mark: riad, the market reaction, especially for the stock market, is being quite severe today. saying? investors have we seen the worst of the market reaction or not? >> it's the uncertainty of it. investors really don't know. that's why you're seeing the severe market reaction. i think i

administration as to how to engage north korea. , it is still>> i want to move toh africa. jacob zuma is staying put for now. he served raved -- he survived by some in office. is he say for the moment? >> he is certainly. he is keeping control of the country. is vote of no-confidence something that he said he never wanted to hear of again. the constitutional court is debating whether or not to allow a secret ballot on a no-confidence vote in parliament later this year. whether that will happen or not is to be seen but it does deal a blow to that move. nato and theof group of seven summit, emmanuel macron welcome vladimir putin to paris for their first one-on-one meeting. they found common ground over fighting terrorism but that is where the agreement may have ended. they traded barbs over sanctions. micron in accused -- emmanuel macron accused putin of invasion. what is their take? >> the interpretation is that put in an micron did not really managed to establish a rapport. you have to remember this is not a candidate moscow wanted. wall,favorite was france who was defeated in the fir

africa's largest carrier and wants to extend its reach across the continent. it has an order for 12 a350s's and is looking at the boeing triple seven. -- 777. haidi: winglets and other air refinements. it will raise fuel efficiency by 4%. airbus so they will change the cabin layout allows passengers morsi room. i will be getting more on the information. the boeing ceo will join us from the paris air show. 10:50 in hong kong. and daybreak america, we are hearing from the airbus ceo. stay tuned for those anversations are you betty: lot ahead. brexit negotiations are finally due to start, investors looking for clues how the u.k. will work with the european union as talks begin in brussels. anna edwards is a preview. angie: almost a year after the -- key events on the brexit timeline, talks day-to-day with the brexit minister and the chief negotiator staff starting this week. the session will focus on how the talks will be structured and moving on to the right of do you citizens living in the u.k. after brexit and those britons living on the continent. and the queen's speech on wednesda

, watching what is going on with saudi arabia and qatar. alisa, latin america, africa. -- obviously, latin america, africa. you probably went long leveraged on the mexican peso. coming up, speaking of the trump administration, the secretary of commerce wilbur ross. look for that it daybreak this morning at 8:00. worldwide television and radio. this is bloomberg. ♪ francine: theresa may is due to speak after this attack in north london. she met with her cobra. crowdplowed into a outside a mosque in north london. wait, let's go to a morning must listen right now. here is an equity investor. in conversation with our reporter, here is bruce berkowitz on fannie mae and freddie mac. when you think about it, there are issues of breach of contract. there are constitutional issues. how you create an agency that oversees fannie mae and freddie mac that does not answer to any branch of government. how did you lead an active director run the place for three years and then decide on a net worth sweep and the person was supposed to be appointed by the president and approved by the senate and it never

their deals. in a south africa, the head of the central bank said he will defend any attack on his independence. the prosecutor instructed the centralo remove bank focus on containing inflation. bloomberg's woke with a reserve banker. -- bloomberg spoke with a reserve banker. ,> when i read you must export welcome back, inflation targeting money to prove the welfare of the south african. when you say improve the welfare of the south african, we are going to have to bring inflation lower to serve the economic well-being. taylor: he said he would not consider resigning. in the u.s., renewed attacks on the effort to repeal obamacare and he calls it the relief for the rich act is that it would've cut his recent bill by $800,000. the senate's version is on hold. formersident trump's campaign manager revealed he was paid for his work with the ukrainian political party. paul manafort's work took place in 2012 and 2013 and he was forced to resign in at the trump campaign. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries, i am taylor riggs

. south africa has a strong constitution. i am saying that on my own the half. if it was not for the south african constitution, zuma would have done and even worse job than he has already done, because the constitution would keep him in check. it is also the investigation pursued by the constitution of course. the huge differences they have a classic constitutional framework that supports the democracy. guy: and independent central bank. steen: absolutely. aboute need to talk plenty more. the emerging markets story is fascinating, but the u.s. and said our front and center. , what is happening in the states today. the comey countdown. we will preview the live event. a testimony, six hours and 33 minutes a day. 33 minutes away. this is bloomberg. ♪ talk.paper talk -- taper will the ecb start its march towards the exit? election day in the u.k.. the polls have been open for 90 minutes in the second general election in two years. they will close at 10:00 p.m. plus, countdown to comey. will the fired fbi director's testimony move the markets? good morning, and welcome to "bloomberg ma

counterterrorism. they are going to talk about sharing security. back the tide of immigration from north africa. andill address the group give them her plan for dealing with he uses. non-british eu citizens living and working in great britain. 4.5 million citizens in one country or another. in the european union. the free movement of people has been one of the red lines for envelope merkel?? -- angela merkel. anna: what are the difficulty she faces in trying to find common ground? matt: one of the difficulties is is insisting she not be concerned, the u.k. not concern itself with who has papers and to is registered now. for people deadline who say european citizens are allowed to declare themselves and then stay there beyond that. theresa may has to guarantee the rights of europeans living and working beyond brexit. that would give them probably more protections than british citizens will face if they want to come and work in the eu. unless he agrees to a free movement of people, she is going to have trouble with eurosceptics at home. she is going to have to let the european court involve itsel

because of the president's decision. and south africa is falling into its second recession in eight years. what it means for emerging markets coming up. we are one hour from the close of trading let's check on markets with julie hyman. mixed bag? joe: it is turning -- julie: it is turning to the next. not much lower, not much changed. nasdaq could be touching a record. i will have to update you. not seeing a lot of range. the trend today has been risk-off. generally it has been more risk-on. this is risk-on, risk-off index. and the bloomberg financial conditions index as well. both of them have broadly been trending up. said, the risk-off attitude is substantial enough to be holding back at least the dow and s&p. consumer discretionary stocks are one example of the cyclical groups trading lev -- trading lower goo the compan spoke at an investor meeting and said it can expand the gross margin on -- on the apparel side of the sayness overtime but cannot when the margins will grow. other retailers -- kohl's for example -- are down. automakers are falling today. advance auto parts and o

: thanks, abigail. what'd you miss? south africa's economy fell into a recession for the first time since 2009. gdp contracted 0.7% in the first quarter, surprising economists estimated as much as a 1% expansion. joining us from london, gabriel sterne, head of global macro research at oxford economics. gabriel, weakness in these emerging economies notwithstanding, you are out with provocative claims recently arguing that emerging-market hard currency debt, the borrowing that sovereigns do in currency not their own, typically dollars, is structurally undervalued. explain to us the are -- the argument. gabriel: that's right, joe. what i'm doing is trying to find a little bit of alpha, which is not so easy these days. but there is alpha in an unfashionable place -- this dollar-denominated debt. the reason is as follows -- in the phase now, when original sin is kind of over -- by that i mean it used to be the case that veryvernments found it difficult to issue in their local currency and out the markets are very tolerant. the local currency issues come even a decade or so ago, just 15,

africa. we are building in china. building x one and x two models in germany. demand and stuff growing. and we are responding. joe: that was a bmw board member. up, what you need to know to guerra up for tomorrow's trading day ahead. this is bloomberg. ♪ scarlet: a mix to day in equities, but tech ways on the nasdaq. england'sthe bank of mark carney makes a statement on financial stability. joe: and i will be watching janet yellen speaking in london tomorrow afternoon at 1:00, where she is expected to answer questions about monetary policy. thea: and we get a gauge of health of a u.s. economy with economic data. scarlet: that does it for us. julia: bloomberg technology is up next. joe: have a great evening. this is bloomberg. ♪ whoooo. you're searching for something. like the perfect deal... ...on the perfect hotel. so wouldn't it be perfect if there was a single site where you could find the right hotel for you at the best price? there is. because tripadvisor now compares prices from over 200 booking sites... ...to save you up to 30%... ...on the hotel you want. trust this

and higher to now 62% are made up by asian countries, with the rest in europe, africa, and others, south america. some are saying this is perhaps becoming very asia-focused, maybe too concentrated now. what you say to that? henry: it reflects the realities of the weights and market capitalization in various regions of the world. aia has been very prosperous, lot of economic growth, great companies. particularly the technology companies coming out of china and hong kong and new york. the taiwanese companies are in technology as well. on the flip side, many emerging markets, particularly in south america and russia, they are commodity exporters and some are oil exporters. there is been some declines in equity values in those places, itd therefore reduction in wa for a lot of asian countries. itty: before we had to break, am curious -- described to me that decision and a meeting to the extent that you can. was it one of the most intense meetings, was there a lot of debate? described to me because this decision was not made lightly by any means. the entire world was watching. henry: w

to south africa in a few days. it is true what they say. >> i don't consider it murder. it is a regional dance of man and beast. the struggle for survival. >> are you for real? i don't think it's funny. i think it's sick. >> you think this is hard, try healing. >> sounds like you have a pretty tough job. >> i think that fate brought us together. >> for what? >> i don't know. revenge, maybe. you think you can hide behind these gates and everything will be all right? >> the world doesn't need your feelings. it needs jobs. he needs money. it needs what i do. >> the world doesn't need you. >> doug is a great philanthropist. >> shut up. >> you are done. >> thank you very much. >> what were you thinking? my relationship with that guy paid for this house. >> i kind of feel like i don't even know you. >> you don't know me. ♪ >> this can't possibly end well. [ end video clip] charlie: joining me now, the two stars of the film, salma hayek lithgow.nd john john, what do we have here? john: it's the story of a dinner. a dinner for six very wealthy people. by a couple turns the plot there'

focused on europe. the main focus is on asia and africa. brexit will not affect free much our business for sure. we are our own european infrastructure. in frankfurt and [inaudible] we will have to strengthen it because of brexit. we do not see much negative affect. eric: heading into the brexit vote last year you placed a personal bit on sterling and lost. guest: and lost. eric: all you positioned in sterling now? >> no. if you do not know about politics you should not play with it. eric: gary cohn has ruled out any easing of u.s. sanctions on russia and said as you probably noted that the g7 meeting in italy over the weekend that if anything, though sanctions will be toughened. how would that affect your company? guest: i know him quite well from his years of involvement in goldman sachs. he is a great banker and a good advisor for mr. trump. what we see is that russia is sometimes the playing card in domestic policy. when the [inaudible] who opposes trump he is preventing him from performing his duty as a president. this relationship is a hostage of all those. used to live with sanction

markets into real assets, but not in the areas where it will not add to protect kitt product. asia, africa, central asia, there are areas where money can be deployed. the equivalent of a marshall plan requires not investment, but giving money away in order to enable those countries to pick up productivity. right now it is china, one belt, one road program. relativelyllish selfish but nevertheless enlightened marshall plan for those areas. angie: these countries do need to pay it back at some point. >> they will never pay it back, and china knows this. just like the marshall plan was never supposed to be paid back and was not paid back. this money will not come back to china. to overt is do you want invest in your domestic economy and see further collapse of returns within china, or would you rather invest in areas that potentially have higher returns? the other issue is the geopolitical and social risks. if you don't build out those areas, they will come home at some stage. ,hrough immigration, terrorism all sorts of stuff will happen. there are two incentives, better allocation of capital

away as africa. these are things that the global leaders need to contend with, the fact that we've seen this changing naval force in china have politicalto implications reverberating right across the region, yvonne. mentioned about north korea as well, joining the and imploring china to reign in north korea. where do you think the prime minister stands on that trump? because we have heard the rhetoric from president trump, saying military options are on the table. where does turnbull stand? think you're absolutely right. what we're seeing from australia turnbull is this commitment to what he describes rock-solid alliance. in doing so, you actually hear very much the same policies coming out of turnbull, certainly when it's talking about how to deal with north korea. let's listen. >> north korea's conduct is reckless, dangerous and becoming more so. leverage the greatest over north korea. and with the greatest leverage greatest responsibility. so we will do our part with sanctions, of course, but we look to beijing to bring the to bear on the regime to itsngyang to bring it senses,

africa. turkey is double-digit inflation. in russia we have new phases of growth. the is why money goes into -- we might expect a decision with the capital flows will be much better. erik: if it was $15 billion outflow last year what do you expect for 2017? >> much stronger inflows. russian campaign might start investing abroad. the structure will be totally different. your government wants the russian economy to be more investment driven. the constant borrowing is down. they aren't making investments. what can you do to change that? >> they are making investments. if you look at the recent data. what we will be trying to do to diminish as much as possible stems from the predictability grading and the predictable environment. erik: president trump's top economic adviser warned over the weekend that it's possible the u.s. will toughen sanctions on russia. is that now the probable scenario? that much.'t matter we are concentrating on what is happening in our economy. happening inside russia is much more important for us than what is happening outside. erik: it may be more important b

sub-saharan africa's largest carrier and wants new plans to expand its reach across the continent. 777 looking at the boeing . haidi: let's get straight to the weekly real yield segment. the bond market continuing to defy wall street consensus after the hike to rate. joining us to take a look at what's going on is the executive vice president and head of portfolio management for emerging equities. great to have you. that sayst all, dsn't it? the bonmarket continues to defy wall street consensus and seems to have serious doubts about what it is going to do. >> very through. -- true. the key thing to point out is that inflation expectations have come down a lot, and at the same time the fed is still on course to hike rates and taper. there seems to be a dislocation between these things. do?i: what does the market they can sort of control the front end of the curve, but they seem to have a lot of difficulty moving the other end. is there a sense that, even as you do get potentially a more hawkish trajectory from the fed, that the market is going to continue? the end of the day, is it

u.s. if you look at africa, asia, it is better to bring the energy here man watching it get produced overseas without regulation. national security. as a former seal i do not want to see our kids or your kids go overseas and have to fight for energy that we have here. making sure that we have national security assets here where we are not held hostage by foreign entities. lastly, it drives the economy and it will lower the fuel prices, make sure our manufacturing base is competitive. there is a social cost to not having a job and there is a great opportunity to be energy dominant and have the ability to put pressure on foreign countries, iran being one of them. we have two options, military or economic. it is better to have the position to plan if we choose. alix: let's start with oil and gas for a second. when is your expectation that we become a net exporter of petroleum? >> infrastructure is a big piece of it. the market signal this year on onshore, i think we are wanted to $46 million in leases, compared to last year under the different administration where we were at $11.5 milli

middle east and africa executive. great to have you on the program. at? is the u.s. playing we have a slightly contradictory statements. slightlyad contradictory statements. tweetsissue is the trump came in between the u.s. saying they want to the escalate, calling on everyone to stay calm and work this out among friends. if you're sitting in qatar, the trump tweet is exactly what you did not want to hear from the u.s., coming out in support of the saudi actions. even taking some responsibility for it. francine: the question is, does this escalate, or does this state what? -- stay put? >> that is what everybody is asking. how long will this last? will this finish sooner, which is what a lot of people are hoping. we just talked to a minister is inhat says qatar denial if they don't understand they have to give in to the groupingjoin the gcc and their policies as regards iran and the muslim brotherhood. some additional measures are being clarified right now. will not be qatar able to travel to the eu and get a visa on arrival. francine: you have shopping malls full of empty shelves beca

the nations of africa to jump over the fossil age because we believe this is responsible policy. francine: commissioner, how much will this withdrawal cost businesses and industries? can you put a figure on it? mr. sefcovic: i think it is very difficult to put a figure on it because it is very difficult to impact onow much such regulatory stability could push down the investment in the new technology, in renewables. at the same time, i hope that american cities which are very progressive and lots of creative --inesses in united states [indiscernible] investors how the will change if you simply do not want to keep your promises. slowdown inauses investment. this is what we will also see in united states until we see how the cities, the corporate alliances, can figure out what to do next in the united states, in this very important economic scope of the future. francine: thank you so much. e.u. energy minister maros sefcovic speaking to us this morning. it is also jobs day. it is about climate change but also jobs. nonfarm payrolls do this lunchtime for the u.s. expected to show 1