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tv   On the Move  Bloomberg  August 10, 2016 2:30am-4:01am EDT

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>> welcome to "on the move." i am guy johnson alongside caroline hyde. his is what we're watching. program stumbles on day two. what will mark carney have to say at 9 a.m.? meanwhile inco pushes its treasury holdings to a two-year-will european and up? ese buyers snatch them
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some see trump for market is an assassination threat to hillary .linton .5 of you're looking at the euro stoxx 50. we are keeping a close eye on some of the earnings coming through. a significant drop in that profit. we are seeing some big write-downs but we have to keep an eye on oil. that is pinpointing this risk aversion today. guy: the german dax is up 2.5%. the story is where it is happening with the dollar. you can see this on my gmm function. that is rippling through what is happening in the commodity complex.
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gold is reasonably well bid. good story continues to be what is happening in fixed income and what the bank will say it 9 a.m. -- at 9 a.m. in london. let's find out what is going on. trump is causing controversy yet again. the nominee told a rally that what he called second amendment people, those who back gun ownership could stop democratic rival hillary clinton from becoming president. he said she wants to abolish firearms and said maybe there is something they could do although that would be "a horrible day." critics attacked him for implying that clinton could be physically targeted by the gun lobby. disney third-quarter sales and profits topping estimates think's to strong results at the box office. helping offset a slowdown in consumer products. a million people have visited
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shanghai disney since it opened in june and expansion plans are already underway. iswe build something that really large, very complex, very unique in the sense that there is a lot of it, a lot of original product in shanghai disneyland. it opened flawlessly. the reaction has been great. interestingly enough, the visitation has come from all over china. it is taking great advantage of shanghai as a tourist destination particularly in the summer. >> the duke of westminster has died at age 64. afterd at lancashire suddenly falling l. ill.lling he and his family had a fortune of 9.4 billion pounds according to the bloomberg billionaires index.
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and increasing its stake in u.s. government debt. it loaded up on government debt for the third straight on. that as the u.k. vote in june spoke -- sparked a global rally. to an unprecedented low. the yield to bounce rock slightly following a stronger than accept -- expected u.s. employment report. this is bloomberg. you.thank the bank of england is making an announcement at 9 a.m. u.k. time -- since the central bank started easing. the bond buying scheme has seen the guilt curve giving flatter as long-term bonds hit record low yields. discuss best joining us to discuss this. , what happens at
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9 a.m., what are the going to say to us about what happened yesterday and whether or not the qe program needs to change? guest: it is anyone's guess. what some of the analysts told us is they might try to downplay it. it is really early on in the program, stick to what you are doing. there is also a chance that everythinghis took -- everyone by surprise. suddenly on tuesday you have an auction. they might [indiscernible] i think that would be too early to say. without really changing our program. >> is this something that had been expected across the markets? you are an equity focused layers -- player but there are ramifications about where that drives any into equities or not. is this something that has been
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factored in? guest: not specifically that bank of england having a problem but the idea of continuous buying is something that is impacting the equity market as well. thefrom yesterday that equity market has not reacted badly. it is more that they see this as an ongoing trend where bank will be trying to find more bonds to buy. proper global economies generate more inflation. that post is -- boost is supporting equities. is -- when as you say the previous day it went in the front and, it was -- they have a reasonably good supply. what are people saying about the sweet spot the bank could hit? is there a better place? the front end is the only option
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they will have for hunting. the bank of england has said that the are going to [indiscernible] maturity sectors. are they going to announce we found it difficult and we are going to now move. guy: they have a mismatch problem. guest: yesterday they said i am not giving my bonds. that is the only place he gets yield. guy: they said that after the break. when i look at what is happening in the equity markets and the fixed income markets, the only market that is a comparable performer in the equity space and developed market was the gilt market in terms of performance had been new zealand. are allocating cash at
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this point in time, do i follow pimco and hit the bond story? >> i think one is extraordinarily expensive and you are getting people saying i will not sell under any circumstances. andral banks are buying yields are low. they are at a historical low but we could have said that six months ago. it is not a new story, continuously be coming that way. things can be gas get to high valuations and stay there for a long time, going even higher. it is possible to go even lower. gilt yields used to be caught higher and that spread has come down a lot and i think that is the action of the bank of england most recently. >> you will be sticking with us to discuss the ramifications, what happened in the bond market, how that affects your equity market viewpoints.
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thanks for bringing us that story. we will be keeping an eye on that 9:00 a.m. announcement from the boe. the bond yields are bad news. we will discuss that next and bring you our exclusive interview with the former italian prime minister mario monti. and does the story of relations signal of buying equity -- opportunity for turkish equities ? find out next. this is bloomberg. ♪
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>> there is a bit of a cloudy start. we are down .1 of 1%. .oming off of that record we have been ramping up higher. we are enabled market much 22% higher than february lows. let's get some business news from david england. at first loss. -- [indiscernible] on the frankfurt stock exchange. it is one of the most radical responses to germany's shift toward wind and solar power generation. entertainment one says it has rejected a takeover for a 236
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share. they said the offer was too low and not identifying a bitter. shares have soared 37% since bloomberg news reported that the british broadcaster via tv was pursuing a takeover. and shares of bridgestone fell the most in -- after it cut its for your forecast. net income is cnet 2.5 billion dollars down 17% with revenue expected to fall 11% to 32.5 billion. analysts are claiming stronger currencies and run material costs. william hill has rejected a 2.2 billion pound cash and stock offer. 45% was shared.
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said the proposal substantially undervalues the company. and days against guns. that was formed after the june massacre, targeting blackrock to cap -- kick off a campaign. the group chose rock rock because some of the funds are run by the world's biggest asset manager. guns used in previous mass shootings. guy: u.s. stocks continue to rally and positions on the fix are up -- vix. earlier, goldman sachs downgraded stocks. so, what happens next?
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from talk to sharon bell goldman sachs. is a senior equity strategist. but struck about equities and where they go from here. we live in rarefied times as the elevation we now have. this is a great chart. it is the vix. the highest we have seen since 2013. know if it is believed there is nothing else to buy. that is what this is signaling. guest: i think there is an element [indiscernible] where can you get some yield? equities look cheap versus bonds versus cash, versus corporate bonds and for that reason they are doing relatively well. i think although we would be bearish short-term i think more medium term it is better to be
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very bearish. we have had such a strong rally as you say. we are in a bull market now. we have had an extremely strong rally. we have had some earnings data. the earnings season was not too bad but it was not too bad on a quite low forecast. topation never was in the end of their range although they are stretching beyond that for bonds create maybe that is not enough of a catalyst. you have a very dovish view of the fed. when the pushing out interest raise will be. triggerld [indiscernible] we are being a little bit cautious because of the rally we have seen. inwhere our volumes going all of this? there is a great piece saying the dax is technically a bull market with 22% higher than we were back in february low but i am do not seem to be there.
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they are 14% some of the peaks we saw in april last year and people are getting out of the exchange traded runs to back german stocks. is there no much conviction in some of these rallies we have seen to mark -- we have seen? argue thatcould markets are levitating. there is another -- a lack of assets to buy. europe, you have had negative flows every week this year. u.s. investors getting concerned about europe for lots of reasons. the brexit, the vote, terrorism, the lack of earnings growth, the , the lack of qe general growth in europe and concerns about the banks. investors particularly have become worried about european investments in equities. you have seen outflows. you have seen inflows into emerging markets. they are more excited about
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emerging market street you have a stimulus package from china. risk to emerging markets. perhaps you had to 2015 and you have seen a lot of u.s. ambassadors the to emerging markets for growth rather than europe. surprised not seeing high volumes and that increases the vulnerability of these markets. are piling money into u.s. equities. tell me why they cannot go higher. we are throwing out the rules on an almost daily basis at the moment. people are genuinely discussing why multiples cannot be high. >> it is not a view that i hold but 10% or 20% of the clients i speak to say why can't he multiples a much higher. what is pinning them at historically average levels.
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it should be more like 12 or 13. you are at quite high valuation levels. we have lots of vulnerability. we have had a lack of flows from investors and skepticism about onurns on businesses is -- businesses. central banks are doing all they can to lift growth but there's a question of how much more they can do. i think there are vulnerabilities but for that goson i would not expect to up to those high levels. equity still looking expensive. i can see why people are looking at the ftse 100. it is trading at 4% on the dividend yield. they areittle bit vulnerable. those dividends are not guaranteed. some of them are scripted dividends. there always paid to you in cash -- they are always paid to you in cash.
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we do not get very much. >> we are getting this breaking news coming out of france in terms of its manufacturing industrial production falling 0.8%. that is worse than expected. we thought they would be a 0.1 percent increase in june. this was in its the brexit concerns. slumpingring also 1.2%. we had expected a gain of 0.2%. we are seeing vulnerability in france will be digging and much more as to how these data specific points are feeding into investor appetite for bonds and stocks. we are talking with more with sharon from goldman sachs. we are minutes away from the open. we look at the corporate movers in today's trading. e.on said it posted a loss this of its on write-downs power plants. this is bloomberg. ♪
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>> 8:53 a.m. if you are on the continent. let's start with a german stock. is front and center. can see the stock slip slightly month this on the back of more write-downs to germany's biggest utility. 3.8 billion euros in charge for the first half. that triggers a net loss for the
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first half of the year. this is a company that has taken 14 billion in terms of write-downs because of the concern surrounding nuclear retrenchment. the pain continues. this is a company taking dramatic steps to sell part of the older business. e1 says no. the management team has decided it does not fulfill the full value of this company. it is a 200 $.36 per share offered stockett trading. it is fundamentally undervalued. the other thing is whether i.t. becomes back. -- itv comes back.
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be with us atl 9:30 a.m. and we will be talking to that company. am -- that may be them wrong prudential. imc really scratching my head about why we are seeing this numbers in that moment. our guest is still with us. is the u.k. on offer, would you be looking at u.k. assets? are others going to follow? using that you had a bit of -- a big fall in the pound. therek it is clear that are discussions about certain ones, even not necessarily international investors but mergers in the u.k. the bank of england is happy to buy bonds. it would love to have more bonds to buy. the cash on their
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balance sheets internationally and in the u.k., sterling has come down so for international investors, it is cheaper. click the market open his next. this is bloomberg. -- of market open is next.
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guy: good morning and welcome to "on the move." we are here in the city of london, alongside caroline hyde in berlin. clear what was away from the start of equity trading. caroline has the morning brief. caroline: the boe bonds problem. the expanded qe program stumbles on day two. the bank fails to find enough long to buy. what will mark carney have to say at 9:00 a.m.? meanwhile, pimco pushes treasuries to a two-year high. will european and japanese buyers back them up? and causing controversy. donald trump hits the headlines again with the gun-control
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comment some see as an assassination threat. times, but overall, futures lower. guy: it is interesting to see how the futures work their magic, to see if they are the predictor of where things are going. let's walk our way through it. the dax at a solid session yesterday, the ftse beginning to go negative. it has sold off since the close yesterday while others didn't. the ftse is trading down, not a massive move, but we are seeing the stocks down this morning and you can see how it does after such a terrible performance. the cap is at similar levels as let's find out going on with manus cranny. manus: you can see the
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dollar-yen, and we haven't seen this kind of today rally in yen's the end of july. there is a slight risk of sentiment there with temperatures pumping pretty much at record lows oil is going to be one of the weighty effects on the market. this is the opening of european equities. we have financials off by one half of 1%, so we are definitely seeing this in energy and materials also on the downs on, the laggards. these are three individual names keeping an eye on -- , a little bit of enzyme breakdown.
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things are rising despite the referendum, and income rose. brexit doesn't see any material impact in the u.k. 325 is where we finished yesterday. biotech, missing. also got eon. they have taken a real hit in terms of utilities and germany. it's the gilt market we will take a look at. low 30's yesterday, that bump caroline referred to his government bond yields, down we went. the whole world wants gilt. the bank of england has a 33% foothold in that market. what happens next -- they didn't get the business they wanted yesterday, and they had that fall. anomalous stumble, pension funds desperate to
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hold onto it. but there was record low yields -- does that perpetuate, or with the hammond recess upset this applecart? we will see. gilt record lows yesterday. will that persist? back to you. bloomberg,n see your so let me tell you the number we have on the tape now, the u.k. 10 year, hitting fresh record lows. 0.544%. gilt continues to be bid. we will see statements at 9:00 a.m. this morning. will they tweak the qe program? good at the front end, less good further out. the market does not want to sell. sharon bell, from goldman sachs's director of european
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strategies, still with us. if i'm selling my gilt to the bank, one of my buying? >> that is a good question, and that is part of the reason why equity markets are doing ok. you have to buy something so perhaps you are buying corporate bonds or even international bonds. you can still get 1% or more yield on u.s. treasuries or perhaps you are buying emerging-market bonds with a lot of flows into emerging-market equities. all asset prices have been rising. give us a sense of what you industry groups you should looking at if you are seeking to get into equities. you don't want to get into the expensive bond market but you are saying be cautious -- you don't see it's going that much higher. valuation can see the . where do you go? >> good question. there are certain equities that are more bonds like and they
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reflect better on the aspirations of people moving for the bond market. those perspectives have done well but i think they will continue to do ok so things like food and beverages and tobacco companies are offering reasonably good deal, though perhaps not stunning compared to their history. they are much better than what you can get on a coupon which as we were talking about can be negative. those types of sectors will do ok, and maybe telecom, which is seeing pricing power come back. also an industry which has had reasonable dividend yield. then maybe have a look at the industries that have been debt, org -- there they can take advantage of central banks buying corporate bonds. they can all be interesting areas. guy: what will it take for them to reengage with europe?
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>> good question. one thing i would say is global reflation trade would definitely benefit. the markets that have seen the most cyclical are japan and -- what wouldhink cause that? we have had a lot of monetary spent and that has really turned around inflation and economic growth, so there is a lot of suspicion there that more monetary policy won't help it is also seen as self-defeating. a bit more confidence in the perhaps more capital i think aould help little more fiscal spending, a little more easiness in policy terms with spain and italy being seen as improving growth prospects which is one of the damaging things having the banks
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. maybe even in the u.k. this year , given that we are more likely to see weaker growth. easier policy could certainly help investors look back at europe again and it's similar in japan, easier policies. they are certainly skeptical about europe. game sos all relative if you saw china rise perhaps if people start becoming more hawkish, the dollar starts rising, people look at other markets and saying it is falling now, the policy is working. all those things will push u.s. investors back to your but at the moment they are right skeptical. guy: thank you very much. sights higher eaa certainty the oil market. we have a look at that story within opec report. you the exclusive interview with
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mario monti. interesting in terms of the way the italian spanish gone story is working now. relations seeing a buying opportunity for turkish equities. this is bloomberg. we will talk a little bit about e1. i want to show you what is happening when we come back. ♪
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caroline: welcome back. 10 minutes into the trading day; let's have a look at the markets. the stoxx 600 overall is lower 3/10 of 1%. the only industry group pete gas,is insurance, oil and ftse down, cac 40 is the underperformer. let's dig into the individual movers -- you can see the key laggards and leaders today and as he did and you can see the downside to the two of 9%. the biotech company is downgrading their outlook, worried about uncertainty in every industry in which they operate, second-quarter earnings miss. the biggest utility here in germany posting yet another write-down in excess of and the pain is
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still there for utility companies here in germany as a reorientation away from the overall person energies from nuclear and into renewables g4sp beat, and alsogs keep an eye on one particular -- entertainment one seems to be falling but we are keeping an eye on that stock as we see it up 60% as they reject a takeover bid from itv. but they will have to eventually be snapped up elsewhere. remember, let's get over to the first word with david ingles. david: thanks, caroline. let's talk about turkey and russia. they moved toward repairing relations broken in november and putin said the downing of a russian warplane had passed over
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traditionally close areas. they disclosed a long contemplated launch. disney third-quarter sales and profits topped estimates thanks to strong sales at the box office. "finding dory" and "captain america" helped offset a slowdown. million people have visited shanghai disney since june, and expansion plans are already underway. >> we've built on this really large, complex, unique product in shanghai disneyland. it opened flawlessly. the reaction has been great and interestingly enough the visitation has come from all over china and they are taking great advantage of shanghai as a tourist destination. westminster,ke of
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who is in central london property holdings made him the wealthiest nativeborn person, has died at 64. carol cavendish: are suddenly fell ill at his estate with an inheritance she has owned since 1677. he and his family had a fortune of 4 billion pounds. is said to have told opec that it hit a record high last month. according to two people with with knowledge of the matter, they said they pumped 10.6 7 million barrels a day back in the head of their money oil market reports and the gathering of members of the end of next month. global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. this is bloomberg. guy: thanks.
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let's pick up on our conversation with our guest host . cautious on u.k. domestic expansion -- still joining us on set, karen bell let's talk about what has been going on because it is interesting to look at this from a number of angles. we like to take a look at it in different currencies. -- it's up nearly 10% in house, but in dollars it is down nearly 10%. horrible. >> if you are an international investor but if you are domestic you have found it went back to where it was. that has surprised us as well. i would expect in sterling terms given how much has come down to do ok, and i think there's a lot of data that the u.k. has
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slowed, even before the think it hasd i about half its sales to the u.k. quite a lot of domestic u.k. exposure and if that is flowing and risky than i would expect it a little bit less good performance but sterling has come down and that is a great cushion and every day on the news we are talking about m&a with mid-cap sized companies, and a lot of the companies are in good industries, they are growing. okhink that makes has done if you are sterling investor. caroline: where next? how far can we follow? and indeed what is needed to keep on? what would you want to terms of policy mix to see it become more appetizing or not be vulnerable?
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thinkrobably would first of the ftse 250 versus 100 because i think it gains so much more from sterling and that is clearly one of the games of the bank of england, to keep sterling relatively weak through interest rate cuts and a asset purchase programs. i think the ftse gains more from that given its international exposure. 250 less so. clearly, moref -- easing policy is aimed at things ,ike that lending scheme offering banks chief finance, clearly that has kept him more exposed company and i think corporate bond buying will help haveto as many of them
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helped the economy overall which i think will be good so there is support for u.k. domestic growth which i think would be helpful to. guy: do you think it's affected by the currency working against them? >> i don't think that's the reason. reason it's the mentioned earlier, concerns about the banks, potency of qe, etc. when we go back to when i first started, the euro had fallen quite a lot and u.s. investors were loving europe. they saw it as an opportunity, as easing policy. they wanted to buy hedged ets, and it was just the currency depreciating, reducing the dollar returns, i think they would be hedging but still investing. but i think it is more concerns about capital adequacy of the banks, growth in general.
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caroline: i think was interesting -- if you dig into your notes from goldman sachs, you can see that yields are falling, you would think it would eject people out of bounds, but falling yields don't always tend to help the ftse 254 100. how much do you think people will be rotating and going into helping the bull run have seen from u.k. investors? -- the funding lending scheme, the support of the banks, the corporate bond, that is all 250 because of imports domestic growth and finance. but if you are just talking about buying guilt, pushing bond investors to look outside of bonds, then they will probably go for the very safest, the largest companies the ones that offer them the dividend yield.
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what we found is that the valuations tends to go down relatively large companies when all that is happening in bond is going down. guy: thank you for spending your morning with us. sharon bell from goldman sachs. up next, italy's economy is a growing concern for the eu, with its banks and government carrying crippling levels of debt. we will speak to mario monti, who says he has no regrets. that is next. this is bloomberg. ♪
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guy: london looking gloomy this morning. and the markets are looking a little softer. roll, 68.38 isa where we have been. entertainment one is one of those stocks you need to watch, really rallying on the back of the numbers this morning. the stock is up 7.72 and the market believes there will be more to come. eon in german are a little softer but while to the dax have a good day, back into bull market territory, down $.36. let's go to italy.
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the latest focus of concerns for the euro zone economy. its banks are buckling under billions of act debt while the government is the second most indebted with only greece behind monti refusedrio a bailout with formerly struggling spain. in an exclusive interview, we spoke with mario monti about the trouble facing italy. he joins us on set. does he have any regrets about not taking the bailout? >> no. he looks back that period as difficult for the sovereign debt crisis, but at that time italy's commercial banks were not weighed down by that real estate debt, the toxic debt we saw hit spain and ireland. the commercial banks were in fairly good shape compared with their peers and what they have
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is a sovereign debt crisis, facing the possibility that he would be able to roll over the debt. when he looks back, but he told me was that taking a bailout, trying to take a bailout, could have made matters worse and it could have exacerbated sovereign debt holdings, leading to a political crisis inside italy. he looks back and says the bailout could have backfired and made the situation worse. caroline: if we are now analyzing the bond markets, you look at the bloomberg and you see just around brexit what we saw as the unforeseen consequences that shone the light on italy's woes. this is the spain borrowing costs and then you can see spain outperforming but that is not should we look-
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at spain's relative strength? >> that is the question we wanted to address. with all the headlines in italy this year and pressure building, why didn't they deal with this issue? that is what we wanted to explore. i think it might reflects the political reality. matteo renzi is facing a referendum, which is critical to streamlining and bolstering confidence in the state and the banks, that he can seek a bailout now, so even if you really wanted the state finance one,e the way spain got new eu rules preclude that type of bailout in most circumstances. the market is looking at him and saying wow, he doesn't have the option now the and perhaps that
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is what we see reflected. guy: thank you for joining us. sees output eia rising in 2017, but still fully short of consumption. this is bloomberg. ♪
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caroline: welcome back. 30 minutes into the trading day -- let's have a look at how the markets are shaping up. it has been a day of route across the board, coming off lows of the ftse 100, almost breaching into the neutral territory. the cac 40 is still the laggard today. one key stock on the rise is g4 s, outperforming on the back of its numbers as they seem to be showing that numbers are doing better than anticipated. they continue to see their business prosper and we see profit of 10%. -- the phenomenally
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successful cartoon, up 8.6%. offer and if the they rejected the offer could go higher. since they reported the international investment shares rocketed. germany's biggest utility is on the downside as we see yet another right off -- had that's what they have already taken. guy: yeah. it's an amazing story how much the industry has changed. the eia has projected the global oil output is rising in 2017. that is saudi arabia, said to have hit a production record. good morning. the saudi's are pumping and pumping and pumping and the
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signal is we aren't going to stop. >> true. you have to look at the point of view from the saudi's. and it ist hot something that we see every year. you can argue that they has increased their production more than a 2015 levels, but year on year the other levels have been rising. it is a timehat, when you are still seeing the stockpile going up, and at that point, if they reach such high levels, it will only do one thing to the market. they will have to scale back, especially in the face of iran bringing more oil into the market. caroline: we have been anticipating the meeting in september and so much control as hell in saudi arabia and iran. where do you expect supply cuts,
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holds, agreements to be made come september, or is that delusional? say,'s difficult to because we know what led to the anticipation and expectation eventually in doha, a deadlock between the iranians and the saudi's -- will it change completely? i doubt it. at the end of the day, iranians have increased production and they are closed to 3.6 million barrels per day but that is not a target to reach. they wanted to be much more than that -- are they going to achieve back to the next few months? that is doubtful. because of that they are unlikely to agree to any freeze, even in september or november, which is a biannual meeting. i doubt there will be any concrete agreement and that is
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always the case. as soon as oil prices fall, they talk about it, and i give support oil prices. guy: oil actually picked up, and there were a number of different reasons for that. the individual stories came together as a whole. was that a blip? was that the anomaly rather than the norm? we seem to be talking about huge supply and low demand, and that was the story a few months back. >> you are seeing some kind of a .ront running believe that they are ahead of the game. the amount of long positions that got built into the market in the first six months is tremendous, and we could see this as a computational risk if
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the oil markets are not to be truly balanced. what happened in the second half of the year is we see the outage is being resolved. we did not see the drop in oil prices again, mainly in the united states. because of that, a lot of these talks around market balancing were not observed. on top of that, financial investment got to scared about these long positions and they have grown short. that has exacerbated the drop. guy: talk to me about where demand is. what the demand story is going to look like. the first six months of the year there demand was going to be picking back up, it was going to be the swing. you are not convinced. >> i am not convinced.
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first of all, i want to explain that demand is driven not mainly by the price, but elasticity, which is tremendous in the u.s., europe, india, and china. the demand growth when significantly from india and the u.s. agencies started becoming very bullish, however the recent indicators since the middle of the year toward august, you are seeing car sales have been softening, particularly in the united states and india. a lot ofr example, agencies have remained bullish in china, buffer 67 months of the year, the demand hasn't slacked. even if it rises, it's not going to rise so much to give you that 500,000 barrels per growth year on year.
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we never increased demand projections because of that strong growth -- we maintain at one million barrels per day. indicators of demand are slowing down in terms of growth and they might have to look at -- the prices will start adjusting to that. caroline: today is a day of oil down and dollar down. give us a sense of where this correlation goes. >> this is a very interesting correlation -- a lot of people argue why it should be correlated. i would say that there are two answers to that -- commodities are priced in dollars but i think the dollar has a very interesting first because of its decisions and the way we have seen it move has led to moves in brexit we but post
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saw the correlations really 74%,e negative, close to for the daily returns. short lists a very as a lot of people went into what you call the safe haven. if you look at the correlation now, you don't see any strong correlation between dollar and oil, but that could change toward the end of the year as the fed could once again decide that they want to raise rates, and that could -- on the other hand, if dollar was to weaken and they keep pushing the rate hike behind, if they were to enter into an agreement of the that would go straight to
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pound and there would probably be some weakness as investors come back to sterling and that could also lead to some support for oil prices. guy: that make sense. great to see you. the lead energy analyst. up next, ancora, moscow, relations in this reboot for turkish stocks. we will take a closer look affect. ♪
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caroline: this is "on the move." let's get you up to date with the bloomberg business flash. david: thanks. eon has posted a first-half net loss of just over 3 billion euros after writing down the value of its natural gas storage asset. this comes before a listing of the fossil fuel. position is unit per unit, listed on the stock exchange as unprecedentedt -- shift in solar power generation. atertainment one has rejected $1.1 billion case, the company that owns the rights to the cartoon character peppa pig has said the offer was too low. again, jumping
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almost 15% since bloomberg reported that the u.k. broadcaster itv was pursuing a takeover. --s the third-quarter sales disney says third-quarter sales are due to the success of "finding dory" and "captain america." 8 million people have visited shanghai disney and expansion plans are already underway. >> we build something that is very large and complex and a lot of it is original product. it opened flawlessly. -- reaction in china interestingly, the visitation has come from all over and has taken great advantage of shanghai as a tourist destination. david: shares of bridgestone fell the most in almost seven
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weeks after a full-year forecast. net income is at $2.5 billion, 11%.17% following analysts are planning a stronger currency and higher raw material costs. and that is your bloomberg business flash. guy: thank you, david. erdogan president or t and putin have agreed to deepen cooperation. we are joined now with the chart of the hour, picking up on the turkish stocks. >> absolutely. last timeement, the you have seen a turnaround this quickly in a political climate, tense as it was, the wtwo heads of state sitting down and saying they have big plans for the future. they plan to set up a joint fund
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to invest in both countries, and by the looks of it turkish stocks are liking it. this chart shows you the percentages of signals. the blue lines are based on the moving average convergence/divergence metric, and only two weeks ago, the bars in red were pretty much zero. whencircle in purple is the coup happened; stocks tumbled and recovered almost all the way since. as we go forward, there is a rally in aviation, the turkish lira has been rallying, but in terms of how far this have to go , what we will be watching is what movies comes out with, in terms of whether or not he will pursue a downgrade of the credit rating of 30. caroline: joining us from dubai,
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let's get the political side of this meeting. for more we are joined by alan corson. in germany, so much attention is being focused on this particular meeting. is it detrimental to merkel that we are seeing are one this isolated? isolation --his it's interesting that he chose russia as his first overseas visit since the attempted coup. it has been a fabulous few weeks for putin, even the fact that there was the brexit vote weakening the eu, the return of refugees issue in germany that we can to merkel, and then his meeting -- all of these issues would suggest further instability and that was a theme
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that was brought out in the newspaper today, asking is there a new russian-turkish empire? guy: what was the answer to that? questionand have a mark at the end, and with putin that means no. went on to point out in an editorial that, yes, germany should be concerned, but at the same time, turkey and russia remain economically fragile, and there is a key statistic that i just looked up earlier that highlights -- eu-turkey trade is something like $150 billion. this turkey-russia trade was $25 billion. that could put it into
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perspective, that he doesn't hold all the cards here in the relationship of the eu. caroline: that is something merkel will want to think about as they are once again embroiled with what happens with the visa situation. it is low jean-claude yunker was discussing, high on many germans mines. will we see that deal unravel? say, anddifficult to it is difficult to cut through the bluster that we are hearing, particularly during the summer months. but i think that we are some way off. the introduction of the death penalty, i think that would be the break to bring turkey into the eu. at the same time, this refugee deal says there is more at stake off -- we are a long way from that collapsing it. caroline: thank you very much.
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heelys are european government coverage here. guy: up next, as though european bond buying scheme is in its second day, we will discuss the challenges facing the u.k. ahead of a special announcement from the bank at 9:00 a.m. and as we head to break, check out rio, where the olympics are taking place. it looks lovely now. it seems to be going a little green. this is bloomberg. ♪
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guy: welcome back. you are watching "on the move." let's get to our top stock stories, starting with the markets. a really solid session yesterday for a number of continental markets. things are backing off today. dax yesterday was really solid, today down. a considerable gains still being made. ftse off. some of the stocks are pounding ahead, trading up 13.8%. the market really likes the results. says the management stock is up by 7.13%, itv wants the business, but they say that it is too limited. they may becoming around this. eon, a lost proposed dropping the stock down 5%.
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those are the stocks that are on the move. let's talk about what will be happening for the rest of the day in seven minutes. the bank of england is due to issue a statement on the bond buying shortfall. half an hour later, the results from the insurer prudential, followed by our interview with its ceo. then at 11:00, the opec monthly oil market report. that is the story we will have to watch for the rest of the summer. let's talk about what has been happening in seven minutes, six minutes. down the road at the bank of england. the first were strategist richard jones joins us. the bank struggled yesterday on the long into the market. it's august, we will put that in there, but nevertheless, date to of the qe program and it is already struggling. richard: tha you do have to put that august proviso in there,
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an since this is the most liquid time of the year. what we should say is that has proved to be a struggle, and you have to think that investors would put themselves on the longer end of the curve. there has been very significant capital appreciation, so they might want to sell but they will have to wait. you think ok, maybe try to take profit, but they look at the beginning of this and say this has room to run. caroline: in terms of better prices, how much do we see yields crunch in and whether we do start to see attention with --nt caroline: there has been a lot
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priced in, and on the short and we have a fairly high probability of the medicinal rate cut coming by the end of the year. that extends out to the five-year part of the gilt curve. how far can we go? if i had told you at the beginning of the year that we would be down 10 basis points out of they can anyone would have believed that. you can put a floor on those yields and i think we could go further -- you just have to look at what the corresponding europeans have done. guy: why not? let's take you to the u.k. gilt curve function. out, wehs, two years are trading below the .25 bank rate and you have to wonder whether that further cut could push it negative. why couldn't that happened? richard: it could. i guess we take the bank of
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england governor at face value and that the short and will not go up. but events happen and things have changed and you never would have thought the ecb would go negative a few years ago and look at the state of that curve. i don't pick it is likely yet. greatne: fascinating, a piece. maybe the monetary transmission mechanism is working more efficiently. richard jones, great to get your view. up next is "the pulse," the important view coming from the bank of england. francine lacqua will bring you an exclusive interview with prudential ceo mike wells, coming up at 9:40 u.k. time. then we will be heading out after the break to check out rio, where feel ethics are taking place. u.s. swimmer michael phelps won his 21st gold medal, extending his phenomenal legacy. we will keep an eye on swimmers
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and how the momentum continues, not only of the olympics, but also in the u.k., yields down 3%. what will the bank of england say? this is bloomberg. ♪
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rental the banks of bond buying problem. the boe cannot find enough sellers to meet its debt seller target. we find out now. july hike could pimco -- the most in two years -- following the brexit vote pushed deals to an all-time low. donald trump hits the headlines again. is it a joke? or will it cost him? ♪ francine: welcome to "the pulse."


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