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tv   Countdown  Bloomberg  April 15, 2016 1:00am-2:31am EDT

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anna: giving credit to the property sector, china stabilizes in the first quarter but a housing rebound raises questions over the debt expansion. on alert, no one are married the alarm. christine lagarde says it is in repair. christine: the current responses we are seeing need to be deeper. is said toan sachs be embarking on the biggest cost-cutting push in years, weathering a slump in deal making.
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♪ welcome to the program. this is countdown. friday morning, live from london. i am anna edwards. 6:00 in the morning here in london. let us start this morning with the data out of china, stabilization seems to be the watchword. , inave fourth-quarter gdp line with estimates at 6.7%. but we saw stocks and the chinese currency both dipping on the back of the data. credit,a data dump, industrial output, investment, retail sales -- all moving in the right direction would argue. but the real sustainability is the story of the rebound in the property market. what does that mean for debt levels? a quick reminder here on the terminal of the bloomberg about the importance of the china economy driving markets, particularly in the asia-pacific region. in blue, the chinese composited in white, with other evaluation
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of the currency. and we saw that selloff in january in chinese stocks. all of that had an impact on chinese stocks. and a wider impact on the region, the regional equity markets. how is the data overnight playing in markets? let's check in on the foreign exchange markets. on the risk radar, a couple of positive responses. even though we have seen selling them as a result we saw a bit of a bounce coming through in the korean currency. a bounce on the new zealand dollar. optimism, i guess that is the on the back of that chinese data. we have the japanese currency in for good measure. that is weakening after the earthquake struck just overnight. the strongest earthquake since 2011. so far, nine confirmed fatalities as a result. checking in on the price of oil, we had a very important meeting on sunday. this is where we are, firmer but
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not by much. let us to the bloomberg first word news. yvonne man joins us. good to see you. sachs isoldman embarking on the biggest cost-cutting push in years, trying to whether a slump in trading and deal making. according to people with knowledge of the effort, the ceo is calling for a push on curbs for travel and entertainment expenses. ony report quarterly results june 5. high-yield bonds in the midst of the worst selloffs in 2014. investors say they have yet to fully price in the results as the economy slows. the governor said the corporate debt burden is having a leverage compared with high saving rates is not very high. federal reserve bank of atlanta president says he will no longer put for a rate increase this
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month, in light of weakening growth and still low inflation. speaking to bloomberg, the fed officials said there are still opportunities ahead to make a move. simply, if you look at the calendar, there are enough meetings remaining this year, that if the data were to suggest it is the appropriate policy to have three moves -- i do not know, two or three, both are possible at this stage. it will depend a lot on how the economy balls. and at least nine people were killed when a magnitude 6.5 earthquake in southern japan calls and the 2011 disaster. the earthquake yesterday also injured more than 750 people. there were no reports of damages to the only operating nuclear reactor in a neighboring town. global news 24 hours a day bureaus, more use
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stories on the bloomberg on top . anna: let us stay in the age-related and get to a look at how the markets are performing at this early hour. juliette saly is standing by, not early where you are. 1:00 in the afternoon of course. let us talk about where the markets are going. equity markets to not get a boost from the chinese data. tte: good afternoon. it is certainly afternoon here, almost homecoming. we are seeing a bit of a switch out coming through an asian equities. we do have to remember that the chinese data that came through at 6.7% first-quarter gdp number was bang on the estimate. widely factored into the market sentiment and also we had the regional index up for the past seven sessions in a row. but the pullback was always on the cards eagerly as we round out the end of the week. we are seeing the regional index lost about 4% over the course of the week. in shanghai we are seeing the
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markets down by one third of 1%. interestingly though, credit suisse says they still see a rally for another 1-2 months, really favoring cyclicals there. the earthquake there and the stronger yen weighing on the nikkei. pretty flat at the moment. we have seen a good rebound coming through in the us trillion market, which is leading the gains in the region, up by 4/10 of 1%. in terms of individual movers we have an watching a lot of those industries that are in the vicinity of where the japanese earthquake was. toyota and bridgestone in the automotive industry both falling today. and sydney under pressure as said after ceo sam walsh the run-up in the iron ore price is overdone. it could in fact fizzle out. looking at currency, the china data gives us a boost to the all aussie dollar.
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levels we have not seen since june of last year. and we see good movements coming through an emerging market currencies as well. the korean currency is stronger by about half of 1%. but a little bit of pullback in terms of equities, after a pretty solid week so far. : anna thank you very much. have a good weekend when you finally get there. of china shows the world's second-largest economy stabilized in the first quarter. gdpathered pace in march, is 6.7% in the first three months of the year that is in line with expectations. industrial outputs, investment in retail sales -- all picked up last month for beating the forecast. we are joined by our beijing bureau chief, nick wadhams. good to see you. have the concerns about growth from the past several months, are they really abated? what can we glean from the latest data? nick: well, i think they're a
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couple of things going on here. one is that the last sort of several sets of data we have seen have consistently beaten estimates. that would suggest that the economy is doing well, certainly sort of outpacing sentiment. so there is a whole period over last year when the numbers would come in and they were consistently worse than the estimates. now we are seeing the reverse happening, which does suggest indeed picking up speed and doing better than people forecasted. on the other hand, we do have very strong signs of the government is basically stepping on the gas, in terms of stimulus, encouraging new lending. really pumping new money into the market. there is a question about whether that is sustainable over the long term because it gets back to some of the underlying issues, which are issues of course surrounding debt and government and company ability to pay that off in the long-term. and how do we expect the chinese government than to react in terms of the stimulus plan?
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they were much talked about the start of the year, what they plan to do to stimulate the chinese economy. not expected to rest on their laurels, but we have seen equity markets little bit equally. what you make of it? economists dog forecast to interest rate cuts this year. we are expecting more stability this year. what we have seen our behind-the-scenes roles, or the government is looking to ease that debt burden. that is expected to be where the focus will live. helping companies swap out there bad debt, so the bank can perhaps take equity shares in them. that is a highly controversial program but one that is on the books. another one is allowing local governments to sort of trade in debt at high interest rates that at lower interest rates. there is indication that the government is both looking at stimulus, but also looking to address the debt burden which may come at a greater focus as the year progresses. anna: certainly the strength in
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the property market and the most recent data raise the questions about that. nick wadhams joining us from beijing. christine lagarde said the economic transition of china is manageable and added that she was delighted by the country's medication efforts. christine: when it comes particularly to the exchange rate regime, i just clarified the situation for the better. nobody likes uncertainties, markets in particular. speaking in washington, christine lagarde made clear that the global economy is not in crisis. but there is still downside risk. said,ine: but as i have and has been repeated several times, we are on alert. not alarm. because we believe the global economy can actually repair egacies, can regain the
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vigor, and become more inclusive. but the current responses we are seeing need to be faster and he to go deeper. anna: let us bring into the conversation gabriel stein, asset management director at oxford. great to see you. this friday morning, let us talk about this big picture. that kristi was referring to their, plenty to worry about. they are on alert, not alarm grade with that sound appropriate? gabriel: i think that is fine. we have had a lot of clients at oxford economics think there is would be a world recession. and our view is that more or less this. light, most early not going to be a recession. but some of alarming, some signs, but we need to follow them and see what is happening. anna: she was referring to the policy response, suggesting anything go further and be quicker. aere need to be new actors, broader range of actors in the
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policy response that we hear so much from central banks, maybe not as much as someone hope from other players. gabriel: it is certainly true that when the consequences of easing central-bank policy in particular the negative interest rate policy is that governments, as usual, feel that they can set back and do very little or nothing. it is much easier to let central banks do things than governments. and there is always a need for governments to government structural reforms. are they going to do so? thank you so in a crisis, and if we are not in a crisis it is less likely to happen. and is there anything in particular that would be needed now? that is more difficult to say. you are saying about infrastructure spending, yes that is good. how do you know it is right and so on? all things considered, a little nudge might be considered good. but the world economy should continue its slow, below par -- anna: recovery nonetheless.
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what about china? the global economy, not a red one, how does that flash of on your radar?the numbers this morning for the first quarter matching the estimates. but a lot of the growth drivers, debt recovery and the property market for example? gabriel: yes, that is true. let me say we disagree with nick, who we just heard from. we believe there will be targeted easing. but on the monetary policy side they have been quite successful. if you were to go back two years ago, i'm sorry one year ago, chinese broad money was growing slower than america on a six-month annualized basis. the growth of credit is "around. and as we heard, china does have a bad debt problem. study was is the needed now. what they need to do is move further towards consumption,
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household spending. they are doing that. we saw very strong retail sales. -- we have seen the service sector in china actually quite strong. so all of this is good news. is it enough? there is likely to be more fiscal stimulus. anna: gabriel stein stays with us for the rest of this hour. up next, we will talk exquisitely to the international trade minister of canada. freeland will be talking to us about the current negotiations she is undertaking with the eu. she is joining us from berlin, that is next. ♪
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anna: welcome back. 6:17 in london. let us get the bloomberg business flash. here is yvonne man. sachs isoldman embarking on the biggest cost-cutting clash in years, a slump in trading and deal
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making. they're calling for the push, which includes firings and curbing interstate meant expenses. pricing the ipl at the end of the market arranged with about you and the company is $1.8 billion. million, as50 shares were sold at $19 million each. they are looking to the bats deal for the ipo market, hammered by stock market volatility. goneiles stock firms have this year, the slowest for the recession. pharmaceuticals working with investment banks to review options after receiving interests in a number of the businesses. according to a reuters report, the drugmaker has grievously assets,t the non-core seeking to pay down more than $32 billion in debt.
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the company is working to return to a stable footing after a disastrous eight-month run, dancing stocks lose almost none percent of the value. says the rally from the record low is not sustainable. speaking of the general shareholder meeting in london, he said that prices may fall in the second half, as new supply offsets demand in china. the second-biggest exporter of iron ore is set to report first-quarter production results on tuesday. that is your bloomberg business flash. anna: thank you very much. canada and t eu have stuck a free-trade agreement, yet to be ratified of course. the european union wants all the members to be able to travel without restrictions. but that could prove a bit of a stumbling block. joining us now exclusively to discuss this is chrystia freel and. canada's international minister of trade. she is live from berlin. great to have you.
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help us out here. how far have you got with finalizing the details of this deal? are there still sticking points? or is everything done? tted.tia: every i is do crossed.s trade agreements take a long time, this is no exception. this is an exceptionally deep and comprehensive trade deal that canada has entered into since nafta. we believe it is the biggest trade deal the european union has ever done. it is a great deal. onfinalize the legals february 29. because we are canadian, we are undertaking part of the translation. we did our bit, the french translation, by march 31. we will meet next week in brussels and we have committed to getting this deal signed this year. and that it should come into force next year. anna: the translation going on in the eu as well chrystia --
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chrystia: they have a lot more languages than we do. anna: has the regional issue been dealt with? visa arrangements for all european countries? chrystia: the visa issue is quite separate from the trade deal. we are aware of the issue with romanian and bulgarian issues. this is an issue the u.s. has as well. we are working very hard with romania and bulgaria, as well as with the eu. anna: what if some european countries do not ratify the deal. l? well, what still needs to be decided, and this is an eu decision, and mixed agreement or not. to be event, it needs ratified by the european parliament. that will be the first step. then the decision has not been
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taken to determine whether it will need additional ratification at the national level. in any event, as with other trade deals, after ratification by the european parliament, the agreement can go into provisional force immediately. and that provisional force covers well over 95% of the deal. anna: let's talk about another trade deal that you have been working on. and your predecessor was working on of course as well, tpp. my understanding is that you signed it. you are not in any great hurry to ratify that. with that be true? are you waiting on others to ratify it first? chrystia: situation in canada is very analogous to tpp, we signed the agreement. it is very important for us, particular reasons we were not the government that negotiated this particular agreement, it is very important for us to make sure that we have broad consultation. in particular, we have a new parliament. we had the system in canada much
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like the british one, a cross party parliamentary subcommittee. and our committee has asked to undertake a national consultation of tpp. that is what they're doing now, very important process. can i say one thing about trade overall that connects with some of the earlier interviews you have been doing today? anna: yes, go ahead. so, i was really interested in the discussion to having earlier about global growth. and the global economy, perhaps i think one of your interviewees said there is an amber light flashing. i think is very important when thinking about trade to understand that this is a level we have that cost the treasury absolutely nothing to get global growth going. it is really, really important. i think that the slowdown in global growth is one of the biggest problems the world is facing. and the is an essential part of the answer. our own estimates, we did a
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study together with the eu, which we think is on the low side, is that this deal will increase european and canadian trade by 23%. the impact on the canadian oneomy will be nearly percentage point of gdp increase. that is really powerful. is ahat message of trade driver of growth. i think it is sometimes lost in the current debate. anna: one of the big questions around trade, sitting here in london, surrounding the brexit debate. your trade deal with europe has been drawn into this as an example of how countries outside of europe can do deals with the eu. if britain did vote to leave the eu in june, how long do you think you have -- you have a lot of experience doing these deals of course --how long would it take for canada to do a deal with the u.k. for example? there is so much speculation about how long trade deals take to negotiate right now. give us your thoughts. chrystia: look, when it comes to
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the canada-u.k. relationship, i think it important for us to all remember that this is an incredibly close family relationship. sameare the same queen. she is on our currency, too. my husband is english. one of my three children was worn in london at st. thomas hospital. that is very characteristic of canadians. this is family. and we believe very strongly in a strong written, and in a strong europe. trade deals, as i think the british people and leaders they'rend very well, really, it agreed and they do take a very long time both to negotiate and to get ratified. that is just the reality of the modern world and of democracy. anna: if we wake up and brexit has been voted for on june 20, what rules apply to international trade?
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is everything as it was into a new deal is put into place? anna, it ismean, not really my specialty or really my job to comment on what would happen with britain. concerned,anada is you know, as i said we believe very strongly in a strong europe and a close relationship with europe. and really strong written and a strong relationship with great britain. i would also say overall, when it comes to my perspective as canada's trade minister, we believe that for canada, our economy flourishes and our people have better jobs and higher incomes the more closely we can be integrated into the entire world economy. that is surly true for canadians. and i would suggest to people from outside of canada that it is probably true for everybody in the world. anna: thank you very much for finding time in berlin. chrystia freeland. it is 6:26 in london.
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up next, rolling with a big guy. find out why chrysler's chairman wants to merge. that is up next. ♪
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thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business. anna: welcome back. this is countdown. 6:30 in london. let us get the first word news. economychina's stabilized, meeting expectations. gathering pace in march, as a surge in new credit helps the property sector rebound will also raising fresh questions about debt expansion. industrial output and retail sales also picked up last month. and it beat analysts forecast. goldman sachs is embarking on the biggest cost-cutting push in years, trying to whether a slump in trading and deal making.
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according to people with knowledge of the matter, the ceo is calling for the push, which includes firing and curbing travel and entertainment. they publish fourth-quarter results on tuesday. the federal reserve bank of atlanta president said he will no longer push for a rate increase this month, and light of weakening growth and still low inflation. speaking to bloomberg, the fed official said there are still opportunities ahead to make a move. >> there is, simply look at the calendar, enough meetings remaining this year, that if the data were suggesting that it were appropriate policy to have three moves, i do not know, two or three. both are possible at this stage. it is going to depend a lot on how the economy evolves. ne: at least nine people were killed when a magnitude 6.2 earthquake in southern japan caused the strongest shaking since 2011 disaster.
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it struck yesterday, also injuring more than 750 people. there were no reports of damage to japan's only operating nuclear reactors in the neighboring town. darling is set to criticize what he calls a project being promoted by campaigners for the u.k. to leave the european union. in a speech later today, he warned that the country could see commerce declined by 92 the eu pounds the left and negotiated a new trade deal in the mold of canada. global news 24 hours a day around the world, find more stories on the bloomberg at top . goldman sachs is embarking on the deepest cost-cutting push in years. that is according to people familiar with the matter. nejra has more details for us. good morning. what are we talking about? nejra: some pretty very measures.
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telling us knowledge they are cutting back on more support staff. goldman sachs also stopping employees increasingly sort of rejecting their spending on airfare, on entertainment, on hotels. unless it directly serves clients. employees in europe are stopping routine trips to other parts of the region. this comes on top of the fact that since about 2012, goldman relying onrtie been bankers. and what it has managed to do is decrease the cost on compensation, while increasing the workforce. the goldman ceo is trying to ride out a bond trading slump that lasted for years. and it has been compounded by market swings and increasing regulation. now this latest push to reduce expenses will probably amount to the biggest since 2011. but the question is, is it going to be enough to satisfy
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investors? of course goldman sachs reports on tuesday, quarterly earnings on tuesday. and analysts are estimating, as you can see on the chart there, revenue and expenses may be the lowest of any first quarter in a decade. the thing is, some are saying look, even if expenses drop, revenue could drop even further. goldman sachs is not alone in the cost-cutting exercise in the banking sector. nejra: jpmorgan, bank of america, they reported earlier this week. they counted their own revenue declines with cost cuts that actually went deeper than analysts had expected. so bank of america ceo brian ts there toward analys was more to do. that mirrors what lloyd blank said back in february, that investors are keeping an eagle eye on expenses. he also said the firm had more for its ability to reduce, so we could do a lot more on the cost side if we have to. he said we can always do more. anna: thank you very much.
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details on goldman sachs there. the imf has raised doubts about move's guyshe johnson joins us now with the start of the hour. good morning. guy: look at this chart. tell me if you should be excited about. i do not know. you are starting to see concern creeping back into the market again about what is happening with greece. this is the greek 10-year. as the to 9.3, as high last few weeks, but nevertheless, keep an eye on the spring meeting. later on, jack lew will meet with the germans, so we have an interesting correlation there. we have the imf fighting. we have madame christine lagarde talking the big we need to rip up the entire package be put together and renegotiate the whole thing.
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that would honestly because a lot of concerns. we have an editorial piece this morning from alexis tsipras in the financial times, people may question that. but it is now down to the imf. i highlight that because it is one of the stories you look at the timeframe through june and july, the brexit, was happening in big greek payments due in that period as well, just wanting to maybe an interesting little summer. anna: no shortage of things for europe to worry about. the migrant crisis continues. does it look to you that the greek crisis is going to rear its head over the summer? gabriel: whether it will do so over the summer, we are having discussions over last year's deal, if it was enough. it certainly is causing a worry. and from what i know, it might play a role in our referendum here. everything is likely to. and long-term, it is still the case that it is not sustainable.
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how sustainable is a euro with all the current members? it has survived so far. that is amazing. will it survive another 10 years? who knows? anna: jack lew is having a number of fascinating meetings. must be a firewall in those meetings. guy johnson will be back with on the move of course. gabriel stein state with us. the g-20 communicated this week that panama should more actively share information about taxes. that is according to people familiar with the draft documents. u.k. chancellor george osborne contends that the shell companies recently brought to light about the panama papers. >> today can we get another hammer blow against those who would illegally hide their wealth in the dark corners of the financial system. britain will work with major european partners to find out who really owns the secretive
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shell companies and the trusts, that haven't used as conduits for evading tax and laundering money, and benefiting froma corruption. britain,k in great his predecessor is campaigning the fantasy of the u.k. leaving the european union. let us welcome back gabriel stein, asset management director at oxford economics. what are the concerns when you look at the brexit question? what is it about this? we have the imf and the world bank, lots of international bodies warning about possible global applications. gabriel: the implications for europe are pretty minimal actually. we have done a fairly extensive report at oxford economics, looking at economic consequences on brexit. the consequences are for great britain. and whatever happens,
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economically, the consequences are negative. there may be negative to a very small degree, they may be very negative to a large degree, the pendulum it all up and agreement we negotiate and what policies we pursue here. but they are negative. even brexit spokesman, people who want to leave, acknowledged that economically it doesn't make sense to leave. and they built their case on other factors. but for the rest of the world, a bit of uncertainty. eu, sterling, and for the the big issue is how to the related to britain that leaves? it should be an amicable divorce. or do they say really need to be nasty so that nobody else leaves? anna: absolutely. setting some kind of precedent. we have seen governor mark carney talking about being the biggest risk to the u.k.
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and yesterday in the release of the bank of england, they were citing a recent survey done by ceo's deloitte which shows increasing concern within the sort of finance community. what is your worry about how thatrate behavior, international businesses will not invest to the same degree in great britain? for the everybody puts things on hold until june? gabriel: i think it is the latter. everybody puts things on hold. there is project fantasy and projects fear. i would also say there is project intimidation, if you want, where companies, where brexit spokesman are implicitly attempting to scare companies from saying that they would like to stay inside the eu. no doubt, i will be good size for saying this. forthere is a concern
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companies saying that privately, we want to stay in, but we are not going to say anything publicly because we will all be attacked. and so on. and of course that will affect what they do. and we might see some apprehension and therefore some debate in the spring. the real issue is what happens afterwards. anna: in june, we be looking at the polls? gabriel: i think the betting odds are far more reliable than the polls. what we have seen recently a number of countries cannot just great britain, polls seem to suffer partly, i think, from the prevalence of mobile phones. anna: it does seem to depend on you get the data. gabriel stein state with us on the program. let us talk about cars. chrysler chairman has a new to merge the chairman with one of the big guys. $10 billion a year. that is that fiat chrysler and ferrari both hold meetings today.
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tomasso joins us from answered every great to have you on the program. on theerrari's first, car front, what can we expect from all of these big guys in the auto sector descending on the city? mean, today isi the first ever general meeting for ferrari, since it became an independent public company. ferrari,aly to discuss because they are already registered in the netherlands. it is quite important for ferrari. the head is nearing retirement. we are told that after today's new board is elected, he may step down. and ferrari has to renew the ambition to expand beyond the car business. the new board will include several figures, experts and the luxury business, like renauld.
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and ferrari was sold in the deal last week. usedhis has actually been by some companies today here. we are expecting the chairman coming from italy, quite soon. anna: fascinating to see how far they can push that ferrari brand. into the luxury space, they can really convincingly move into. on the subject, any progress on the megadeal that fiat's chairman is talking about? one yearyeah, i mean, ago in this governmental confession, they are essentially saying that the auto industry should consolidate. there is massive saving to do. as of yesterday, we can save $10 billion a year with the megadeal. be able towe have to
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dance the tango. but it is not clear who wants to tango with fiat chrysler. arrives,e opportunity we are here. it is not clear anymore who is the real partner for them. clearly, they want to merge with someone. but someone does not want to combine with them. anna: you do need a partner to do the tango. tomasso, thank you. joining us from amsterdam, very much in focus for this story. up next, dohar output. oil is poised for a second weekly advance. we will discuss that. ♪
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anna: welcome back. 1:47 in new york. bright and early in the morning here in london. now the founder of cyber
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burstyy fuirm test says he expects more. amidst the russian ruble exchange route, he spoke especially to ryan chilcote, who joins us now great tell us the details. ryan: russian banks have become pretty accustomed to the fact that the ruble is volatile. time last year when it moved by 50% in four minutes. one russian bank said something is strange. and we think we are involved. they contacted a cyber security country. said, yes, you were hacked. and they placed half $1 billion worth of trades on your system. what caused the ruble to move. what we are seeing is a real rise and i think cyber crimes committed extent that one the biggest experts says that it
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is now getting the point where cybercrime, on occasion, equates to cyber terrorism. have a listen. i am afraid that this will be leading to more wars. they are criminals. they understood that they are able to attack even very well protected networks. i am afraid that the next step is the attack. availableology is because the criminals, they work for money. i'm afraid about the bad guys, that they will employ professional criminals to hack financial systems. not to profit from that but to prioritize it. since thesay that attack on the stock market, that we have all heard of them of the incident of hacking into the
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malaysian stock market, well documented, there's another one that you know about. it has not been in the public space yet. eugene: that is under investigation right now. i am not able to talk about that. i am sorry. very soon, i'm afraid that we will have more news about the attacks. russian attacks behind morgan stanley in the banks last year? eugene: unfortunately, they are. and they are very professional. in the cyber crime, it speaks mostly chinese. andish, portuguese, russian. but we are talking about the most complicated, sophisticated attacks. most of them are russians. ryan: we were talking about that fx attack. but there have been interesting attacks on cash machines, including one where the hackers were able to draw down money from their accounts, without
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actually having any money taken out of the account. and even more geniusly perhaps, they were able to program machines were they would spit out money at the prescribed time. it would go to the machine, it would just -- you do not have to touch it -- it would just spitting out money. recently, near the romania border, they found hackers who assembled a couple packing machine so the practice. clearly, there's a big going on here. eugene says it is gathering steam. anna: i will never look at a cash machine in quite the same light. ryan: i am waiting for it to spit it out. gabriel: one reason to abolish caste. h. anna: ryan chilcote, thank you. to suppliers meet on sunday
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talk about the freeze. i of those talks is the international agency shifting the outlook saying that now sees the global glut falling in the second half of the year. will discover what we can expect in this meeting a moment. but fascinating chart here on bloomberg, that shows what happening the last time we saw opec and non-opec members back in 2002. take your mind back for the start. the title on it is the chart deficit. should you trust it? these are the lessons from 2002. when the oil freeze is applied, you see the output numbers, too. we actually saw some countries, including russia, ramping up production. others are indeed dropping it. whether that will be a precursor to what happens this time, we'll have to get that first. let us discuss this with mohammed ramady. gabriel stein, asset management
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at oxford, is still with us. great to have you on the program, mohammed. what are your expectaons about this meeting in doha that are happening on sunday? will we get some sort of agreement? mohammed: i think he used the word trust. this time, it is more elevated than before. the fact that only one country, saudi arabia has this capacity of sorts to have a freeze, it is pretty meaningless when everybody is producing at the maximum. you can only have a freeze if there is a lower, and you move up from that. so i think, unless, revises are made especially on iran -- anna: the politics around this try to come up with some kind of freeze that is loosely worded butgh that it is a freeze, maybe give some people some wiggle room. mohammed: absolutely. the stakes are very high for everybody. for me, when i look at who is
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attending opec and non-opec, opec has been suspended. it only works when there is a quota system. until iran comes up with a quota system that everybody agrees on, probably by the a beer whenever they meet, then all of these tensions will continue to remain. anna: gabriel, do you think the risk of oil is down, because we are seeing disappointment. we have seen a run-up in prices to this meeting? gabriel: going to jump a little bit. but in terms of opec, and what it can do, i agree entirely with professor ramady. they only have pricing downwards, they can push down the price. if they try to push upwards, eventually you did a level when start producing even more. and eventually the canadians and so on. plus, there is the fact that russia wasuntries --
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to freeze. of course they do. 11 and a half million barrels a day, the most they've ever produced. i do not believe in the freeze. and oil prices are not going to surge. there will be supply and demand what opec doest is almost irrelevant. anna: it depends on who signs it, ineasing production anyway. professor ramaday, talk about the domestic reduction in saudi arabia. what is happening? is there a reason they don't to the price get that high? it goes backhink to several decades, even in the history of saudi arabia, that if andhave too high oil prices this factor, you will be able to push through economic reforms. this is not only for saudi arabia but the whole gulg. at the same time, you have the population and expectations have risen, yet we very careful how far down the oil prices come. when i hear that the kuwaiti
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workers in the trade unions are thinking about having a total strike in the oil sector of is a very fundamental and disturbing. because of all the cuts and changes that are happening, is affecting the backyard. while saudi arabia i think feels, and the government they feel that they need oil prices to push these huge generational reforms that are going on, i think we have to play into safety. the local constituencies, the domestic market, we will again see a huge selloff in the local stock markets the very few next day. anna: that can happen on sunday? mohammed: probably sunday afternoon, depending on if the agreement is a few hours, it means it is a failure. they continue and come up with a face-saving formula of let us go into iran and talk to them. i like to point out that the iranians have nothing to lose if they send the oil minister to the meeting to hear how they do
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it. and by sending the governor from opec over there, it is a slap in the face. anna: thank you very much. professor joining us. thanks to gabriel stein. ♪
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>> giving credits to the property sector. china's gdp stabilizes. it raises questions over this stability. on alert no alarm. christine lagarde says no need to worry about the global economy. it is in repairs. it needs to go faster and go deeper. begoldman sachs is said to embarking -- the bank weathers the slump in trading and dealmaking. ♪
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>> welcome to countdown, i am anna edwards. 2:00 in the afternoon if you're watching in hong kong. let's talk about eu car registration. .t is not good reading for vw volkswagen's first-quarter market share reached a five-year low. snubbing the german carmaker as it tries to results -- tries to resolve its issues. they were turning to models like bmw, chrysler in place of vw. audi, they accounted for 23.4% of registrations ending in march. that is volkswagen's first showing since 2011. industrywide, demand it rose by
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1.7 4 million cars. -- 1.7 4 million cars. it included 15% ago for bmw. chrysler. for fiat where the european equity markets are positioning themselves. half-hour to go into the european start. it is a pretty flat mixed picture that we are seeing. perhaps a little bit of positive fire for european stocks. -- it's starts -- it starts trading in an hour. the handover from the u.s. was not to entirely convincing. the mixed cpi numbers as well as other leading numbers, leading the u.s. market on a dance. the asian session was muted. we have the chinese data.
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they .7% growth in the first quarter of how that played out -- 3.7 percent growth in the first quarter. it was better than expected and did not do much to push up equities in asia. question about stimulus there. responding to china but also to the terrible news of that earthquake, the largest quake since 2011 in japan. let's get to first word news with eve on man. -- with yvonne man. yvonne: tries to whether a slump in trading and dealmaking. according to people with knowledge, the ceo is calling for the push which includes firing -- putting a curve on travel and entertainment expenses. federal reserve's bank of atlanta president says he will
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no longer push for a rate hike this month in light of weakening growth. speaking to kathleen hays, he said there are still opportunities ahead to make a move. a there is, if you look at calendar, there are enough meetings remaining this year that if the data were to suggest the appropriate policy, it would have three months. -- three moves. both are possible. it will depend a lot on how the economy evolves. yvonne: at least nine people were killed when a japanese earthquake caused the strongest shaking since the 2011 disaster. it injured more than 750 people. there were no reports of damage to japan's only operating nuclear reactor. formal u.k. chancellor is set to criticize what he calls the
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"project fantasy" being promoted to leave thes european union. he says the country could see commerce declined by 92 billion pounds if it left the eu and trade -- and negotiated a new trade deal. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the bloomberg at top . anna. anna: thank you very much, eve on. let's stay in hong kong. juliette saly has all of the latest market reaction. we have a number from the chinese. a slew of other data that suggests a stabilization in the chinese economy. for anybody who was worried onto chinese growth, you might find it good news. that did not push equities higher, dated? juliette: it didn't. concern.en
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does that mean stimulus efforts are going to slow down? a pretty flat station -- flat session. still an hour to go there and credit suisse has come through saying they see these shares rebound -- these share rebounds should last for another one to two months. they are favoring cyclicals. the hang seng index also pretty flat. elsewhere there has been a mixed picture in southeast asia. the earthquake having impact on japanese equities, sending the nikkei down for the first time in four sessions. it is closed down .4%. .t had a solid week there was industrial production numbers coming out of japan as well today. they were weaker than expected. a better day in australia. the afx up. there was buying in new zealand. as we mentioned, the gdp number
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out of china very much affected in. in.ery much factored paring the weekly gain that we had seen from that index. stocks up 4.3% on the week. today was the story of switching out of those oil and gas claims which have been so strong, and back into the telcos and the health care sector. the currency is in focus today. 77.ar back above that with the gdt -- the gdp number out of china. the aussie dollar up .3%. we have seen some good movement coming through in the korean won today. the japanese yen has been the story of the week. a little bit weaker there against the greenback.
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..s. dollar strength, 109 what is been interesting week for the japanese yen. that is played a lot into equities in this part of the region. anna. anna: juliette saly joining us from hong kong. , very goodrinov morning to you. let's pick up on the theme that we were discussing. we were hearing from juliette saly around the chinese growth story. what kind of market assumption do you think would price in? this number was in line with the 6.7 percent -- 6.7%. valentin: part of the expedition is all of that has been in the price already we started the year -- china is out there growing. giving details to the release of some of those details were quite
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positive. the positive news is in the price. there was some concerning aspects that may have relieved sustained rally. it has remained a debt. given the pile of private debt in china, presumably that is the scene of hindrance of sustained growth. the group -- the commendation of those two elements could explain the response. refuelstion is what will the rally from here? anna: the gdp points to the number -- the data we got overnight it -- overnight. positive or negative whether you are looking for growth in old china or new china. we got industrial output higher. chinas supposed to be a
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-- we did get higher retail sales as well. how do you rate reorientation of the chinese economy? valentin: it is not supporting the case that the chinese authorities were successful in encouraging rise toward rebalancing. it has to fall back onto the old economy to sustain the recovery. really quite interesting and what is concerning is early in the week, the export data was quite strong. it is difficult to reconcile of the data. its main trading partner. the old economy matters for a lot. the question is for how long can that recovery be sustained? pick -- how long do we wait for the new economy to take the baton?
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-- this is the new economy in china. the relative sizes are out of kilter at the moment. valentin: that is what the release is confirming. marketsplaining why the are not enthusiastic about the release of the chinese economy. stilltely the slowdown is going to continue from here. anna: balentine, stay with us. we're getting an update on beijing. tom orlik is standing by. give us your thoughts on this data dump we got from china overnight. any good news on the chinese economy? stabilization and a number of data points. i'm sure you have concerns. tom: the headline numbers were good. gdp came in comfortably inside the government's 6.6 -- 6.5% to
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6.7%. the march numbers surprised on the upside good -- on the upside. economy shouldhe have some momentum heading further into the year. the concern as your guest mentioned is where it is this growth coming from? , the revival in growth is being driven by the old engines of china's economy. which is now cuts striving stronger credit growth. it is underpinning proxy investment. anna: if growth is back on track, what is the price the government has paid for that? does that go back to the investment in properties? , theownside relationship
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way the bank inflates concerned about debt. valentin: that is the price that china is going to pay for this. china does have policy space. they've got policy space to cut interest rates. they can continue going lending. they also have fiscal had room. they are not maxed out. -- maxed out on government debt. -- i do think china is got to face the consequent is in 2016, 2017. on the current trajectory, you're looking at serious risk on the medium-term horizon. said we need to see more fiscal stimulus from china.
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tom orlik in beijing. up next, the challenges facing is -- haschs as ceo said he is demanding cuts. we will discuss how extreme those measures may be. ♪
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anna: welcome back. 17 minutes past the hour here in london. it is a: 17 if you're listening in frankfurt. let's get to hong kong. juliette saly has the bloomberg business flash. volkswagen's european market share has reached a five-year low. the company's brands including mass-market and audi fell to 23.4% near registrations in march. -- new registrations in march. it turned to models made by bmw.
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ipo --market prices valuing the company. the deal race $253 million after 13.3 million shares were sold at $19 each. the company's bankers and investors are looking to and libel -- to enliven the market. only 10 companies all biotech firms have gone public this year marking the slowest start to the year since the last recession. valeant pharmaceuticals is working with investment banks after receiving interest and a number of businesses including -- according to people with knowledge. it might sell non-core assets. the company is working to return to a stable -- after a disastrous eight-month run. rio tinto ceo says iron ores rally from a record low is not
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sustainable making it -- not sustainable. speaking at an annual meeting in london -- improving demand from china. reportcheduled to results on tuesday. microsoft has sued the u.s. justice department to block authorities from taking customers e-mails and other data stored by the company without ever having to let them know. apple is said to continue its fight to keep the government out , a drug dealerne and a brooklyn case. it comes weeks after the fbi dropped its effort to force apple to help it break into a cell phone used by a terrorist. that is your bloomberg business flash. anna. anna: thank you very much good goldman sachs is evoking deepest cost-cutting push in years.
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let's get more with caroline hyde. she joins us this morning. what sort of measures are being discussed? caroline: pretty dramatic. if you're looking to travel, perhaps you should wing off to your local other officers. those routine travel expenses are starting to be rejected. you have to be traveling if it is likely related to a client, meals, entertainment, travel, they are starting to be rejected. jobs are starting to go, particularly support staff, technology staff are being laid off. starting to dismiss some jobs. this could be the most dramatic amount of cost-cutting we have seen since 2011. we saw 1000 jobs go at goldman sachs. we saw $1 billion wiped off of operating expenses. we are expecting it to work. expenses to be driven down by 29%. they are going to be at 4.7
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billion for this particular quarter, the lowest we have seen in a decade. below -- the problem is revenue is also going to be the lowest we have seen at the start of the year in a decade. it is going to be above $6 billion. down 37%. we are estimating to come out on tuesday, revenue being hit that much more by the trading issues that we have in seeing, the m&a slump. -- more junior staff who are a lot cheaper. overall this seems to be a theme. jpmorgan cut costs. bank of america, they have laid off large swathes of people. anna: what are we looking for? >> we are looking for revenue to slump some 37%.
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we are expecting earnings-per-share to drop or than 16%. there is going to be brutal hit from a bank very focused on investment banking. trading on the downside and of course bond market issue is on the lower side did it is going to hit goldman sachs hard. a dramatic step toward really curbing -- further could be done. we are seeing costs have been rising. some dramatic steps being taken. want to be traveling as luxurious as you once did at goldman sachs, that is no longer the case. anna: caroline, thank you so much. christine lagarde said china's economic transitioning is manageable and she is delighted by the countries can indication. >> when it comes to the exchange rate regime, it does clarify the
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situation for the better. because nobody likes uncertainties, markets in particular. anna: that was christine lagarde speaking in washington. she may clear the global economy is not in a crisis, but there are still downside risks. >> there is plenty to worry about. what has been repeated several times, we are on alert, not alarm. we believe the global economy legacies, -- repair. legacies can regain its bigger. regaint regain its -- its vigor. valentin, at these meetings, they do like to talk about currencies. competitiveness and what you should use your currency for. i've got a great chart that
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shows the yen is heading for its worst weeks as we get the negative rate announcement from the boj. worse for the currency but best for the boj perhaps. valentin: it is the case since the shanghai g-20 meeting. the yen was the best performing currency out there. japan was the biggest loser. -- inflation expectations are down to growth is weakening. -- down. growth is weakening. the fact that the yen has depreciated so much against the nikkei. we saw other stock market in this is. it is a relief for the boj to see a weakening. we expect that maybe the beginning of longer-term development which could see weakening further from here. anna: will depend on what --
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will it depend on what they do? if they see further week -- if we see further weakening in japan -- many in washington won't want them to do that. valentin: what we are seeing at the moment in terms of yen depreciation was a response. the boj has run out of options to ease further. part of that was clearly the response we saw in shanghai again, further aggressive easing. interesting comments last night minister, butance also kuroda suggesting commitment to further easing that could receive endorsement by their main trading partners. the boj is not necessarily out of options to ease further did we expect -- further. we expect aggressive easing in the form of stock market purchases.
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the key reason there, it is going to restore boj's credibility when they say we want to boost money and expand our balance sheets for the quarter. there is only one asset left if it is liquid enough to allow them that. anna: how would that go down with the broader market in terms of risk appetite? with alarm? or relief? investors, and that is the case that boj has little choice. by adopting more unconventional easing. or the fact that they failed. the policy approach failed. don't dois if they anything, the consequent is could be quite disastrous. they don't have much of a choice but continue doing what they are doing. anna: balentine, thank you very much. -- valentin man off joining us
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just valentin marinov joining us. -- valentin marinov joining us. that doesn't for countdown. -- that does it for countdown. have a good weekend everybody. ♪
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guy: talking to on the move. over in berlin,. i am guy johnson. here is what we are watching. the chinese credit. gdp hits the target but should investors worry. the debt continues to climb good brazil's biggest weekend is too close to call ahead of sunday's impeachment called -- sunday's impeachment meeting. the new revenue growth. as jpmorgan and bank of america's stocks surge.

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