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tv   Countdown  Bloomberg  August 22, 2016 1:00am-2:31am EDT

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anna: fisher feeling hawkish. the dollar strengthens as the federal reserve vice chairman signals a rate hike is still on the cards, saying the u.s. economy is close to meeting the central bank's goals. bank of japan governor kuroda says there is sufficient chance of more action at next month's policy meeting. crude falls after the longest run of gains in four years as iraq seeks to increase exports. and pfizer is said to be close to buying medivation for around $14 billion.
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welcome to "countdown." i'm anna edwards. just on 6:00 in london, bright and early, let's get to some of the latest market moves. the fed commentary driving that. i've got a chart that shows where the dollar has been. in the red boxes, can see the effects from the hawkish commentary we've been getting from the fed. i'll draw your attention to the comments we had over the weekend from the fed vice chairman stanley fischer saying that economic goals are close to being met and the market readjusting once again. little more chance of a fed rate hike perhaps being factored into the dollar. let's bring up the risk radar and show you currency markets. 94.89, ar index at lift of 0.4%. the work function on bloomberg
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suggesting a 22% chance of a rate hike in september. not much change versus friday. we've got dollar-yen in there as well. the yen under pressure. further chance of easing being flagged by governor kuroda. he talks about a sufficient chance of more policy easing. he talked about not doing helicopter money. down 1.3%..87, we had seen the longest run of games in four years. iraq seeking to increase their exports. that putting downward+++
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a lot of focus on the changing of the guard over at the reserve bank of india. the r.b.i. will be handing over the baton to urgent hotel. let's get the bloomberg first word news. here's shery ahn. shery: oil is falling after it longest run of gains in four years. the country says it will boost crude shipments by about 5% in the next few days. oil entered a bull market on thursday amid speculation of normal opec talks to stabilize the market. bank of japan governor kuroda says there is sufficient chance the central bank will add to its unprecedented easing at next month's policy meeting. kuroda said that the boj won't hesitate to act based on discussions of the results of a comprehensive review at a september board meeting. pfizer is said to be nearing a deal to buy medivation for $14 billion. people familiar with the situation say an agreement could be announced as early as today. pfizer is expected to pay about a 26% premium.
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a pfizer spokeswoman declined to comment. medivation representatives didn't immediately respond to phone calls and e-mails. india has swapped a financial a list or for a technocrat. deputy governor patel is to succeed rajan. hotel has spent the last three drive theing raja biggest reforms in r.b.i. history, including setting a target for inflation. rajan steps down on september 4. hundreds of flights have been canceled in japan thanks to a typhoon. the weather agency has issued heavy rain and flood warnings. the prime minister's office warned of possible landslides and damage from strong waves. the u.k. should avoid any drastic steps corporate taxes or similar measures as it prepares
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to start talks on leaving the european union, so says the swedish prime minister. he told bloomberg that such moves would make discussions more difficult. u.k. chancellor philip hammond has expressed readiness to reset fiscal policy through corporate tax cuts to support the economy. dayal news 24 hours a covered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . i'm shery ahn. this is bloomberg. thing -- anna: thank you very much. juliette saly is standing by in hong kong. good morning to you. nintendo has been getting a boost. shinzo abe dressed up as super mario at the closing ceremony for real. back on earth, what is happening this morning? juliette: super mario to the rescue perhaps because japan is such a different picture to what
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we are seeing today. asian investors taking those hawkish comments and stanley fischer over the weekend and we are seeing dollar strength, which means yen weakness. japanese export stocks go higher. the nikkei is outperforming the rest of the region today. nintendo not showing on that screen but it has been having a good run today. the stocks are looking good. toyota also leading the way in japan. kuroda also saying there is sufficient chance of further easing in september. you can see these big policy divergence between the boj and -- [indiscernible] we are seeing quite a lot of weakness. crude is falling. a lot of energy players are being sold off. you can see those in hong kong.
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that is a similar story over in australia. have a look at this company, apn outdoor down 35% after it cut its forecast. santos also weaker on that weaker oil price, earnings down about 7% today. a little weakness in the markets. the yuan also being sold off. it is at a two-week low. aboutllar story, down by 0.2%. anna: thank you very much, juliette saly in hong kong. back to the u.s. and federal reserve vice chairman stanley fischer has signaled that a 2016 rate hike is still under consideration. he says the u.s. economy is closed to meeting the fed's goals and that growth will gain momentum. the comments come ahead of janet yellen speech in jackson hole later this week. let's bring into the conversation geoffrey yu.
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good to see you this morning bright and early. let's talk about, as we head towards jackson hole, i was reminded about the consensus that was much talked about back in 2003, faith in the markets, monetary favored over fiscal stimulus, central banks rigidly independent. are we going to progress that conversation? geoffrey: i think using the phrase consensus is a bit dangerous in this day and age. economics andl consensus we've had over recent years, that is starting to break down. if we look at policy divergence is within the g7, carney attacking negative rates, the boe is probably not going to go negative. very dangerous to talk about consensus.
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but if there's one thing central bankers would agree on, independence is still sacrosanct. whether they can claim that when they are putting so much in terms of government bonds on their balance sheet, that is a different story altogether. in practice, they wield some power, but they have to react to government concerns as well. anna: independence is sacrosanct, but coordination and cooperation, are they the same things as undermining independence? geoffrey: i don't think so. ultimately, they all want to achieve their inflation targets. if achieving their mandate will require some degree of coordination between governments and central banks as well, i think we will be happy to do that. once we actually get past that threshold, maybe it is a different story. 2%this point, to get to that magic number, whether that
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should remain consensus also, is a different debate. anna: how do you receive fischer 's comments over the weekend, a rate increase still be impossible, considering the u.s. economy close to its goals? geoffrey: i think they are trying to gently guide market toward the view that we are very close to full employment in the u.s. it is probably time to think about a rate hike. don't leave just because there's political uncertainty, because we have a very uncertain election. when the fed believes that market pricing of their policy trajectory has moved a bit to the dovish side, you tend to see them dragging back a bit. they start to talk up the probability of rate hikes and then they get cold feet. i think the fed will be as careful as possible in guiding markets. anna: should we view fed
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guidance on guidance where they think interest rates are going to go, or is it more about tweaking how strong the dollar has become, or how low bond yields have become? geoffrey: i think it is always relative. if markets have gone too far to the dovish side, they want to pull markets back a bit. this translates into where the dollar is going to be. manifestow markets expectations of pricing. theou look at euro-dollar, dollar against some other currencies, it hasn't exactly surged. in terms of dollar transmission, i don't worry too much. i think that divergence is still in play and something that we need to be careful about. if the dollar strengthens from here against g7 currencies, i think central banks would welcome that. against emerging-market
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currencies, that is one thing of interest, where there's a lot of external liabilities to worry about. that is not necessarily a good thing. anna: we will talk more about emerging markets in the euro growth story. sticking with the u.s. for a moment, this is a chart showing cheap borrowing costs help propel home sales to the highest since 2007. the home sales story would be one sign of strength in the u.s. economy. cher talks about being close to gold, what is he talking about? geoffrey: using the word gold is very interesting because that is different from mandate or target. is he talking about getting full unemployment? how do you define full employment in the u.s.? i think we have to look at it holistically. gold right now, the u.s. is close to achieving potential
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growth, but right now potential close -- growth is slightly lower compared to historic levels. it doesn't mean they are going to be super hawkish either. you have to think of it in the right context. overall, there's a good sign of demand in the u.s. that is one thing seriously lacking in europe. you can keep credit funding rates at zero as much as you want, but there's no end demand on the back of it, then the economy is still going to struggle. anna: thank you very much, geoffrey yu from ubs. here are some highlights of your week ahead. 5:00 p.m. u.k. time today, we get a joint news conference from angela merkel, francoise along, and matteo renzi. economic growth and migration will be speaking to the media. on wednesday, john kerry visits turkey to strengthen ties
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between the two countries following the failed military coup. on thursday, vw is due to provide an update on how it will fix 8.5 million diesel engines in the wake of its emissions cheating scandal. we will round of the week with janet yellen speaking at jackson hole. we mentioned it when we were speaking with geoffrey. coming up, the ceo of an italian oil firm speaks to bloomberg. that interview is next. then, could british holidaymakers be in store for some sterling suffering? we discussed the possibility of heritage. replacement. we have all you need to know about the reserve bank. stay with bloomberg. later today, we will ask the lead singer of iron maiden and well-known aviation entrepreneur
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bruce dickinson why he's launching an airline in one of africa's smallest countries. that is an interview on the pulse at 9:30 u.k. time. ♪
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anna: welcome back. this is "countdown." kong, a fairly beautiful afternoon. the hang seng down by 0.3%. let's get the bloomberg business flash in hong kong with shery ahn. shery: good to see you. pfizer is said to be nearing a deal to buy medivation for $14 billion. people familiar with the situation say an agreement could be announced as early as today. pfizer is expected to pay a premium of 26% on the company's friday close. a pfizer spokeswoman declined to comment.
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medivation representatives didn't respond to phone calls and e-mails. japan's biggest brokerage lands to hire bankers in the u.s., resuming a push to boost investment banking business. the ceo has been eliminating jobs in europe and the americas to save about $700 million and stem six years of losses abroad. the shift comes as nomura anticipates rising volumes and stock options in the u.s. taiwan is to investigate a bank whose compliance program was described by a regulator as hollow shell. mega international commercial was fined $180 million by the department of financial services for violating money laundering laws. it says the suspicious transactions flowed the tween the bank's branches and a substantial number of customers -- [indiscernible] uber has told investors it won't
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pay more than $2 billion for lyft according to people familiar with the matter. it has been reported that lyft sought a sale at $9 billion while gm valued it at $5.5 billion. that is your bloomberg business flash. anna: thank you. let's talk about the oil market. last week's bull market increment has slowed as iraq seeks to boost exports. yousef gamal el-din is here with the chart of the hour. good to see you. oil prices down 1.3% this morning. yousef: it ends the longest streak of games in four years. a lot of that has to do with the changing supply picture. we spoke about how opec members are starting to muscle up ahead of the informal talks in algiers. the latest culprit on this chart is iraq. they are increasing their exports by 5%. we are talking in the vicinity
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of 150,000 barrels per day after they came to an agreement as to how to export oil from three oilfields. these three oilfields, they go through the kurdish controlled area, so the new oil minister was able to get some traction and come to a consensus. what we've drawn up to you is where iraq stands in terms of oil production. 3.46 milliong barrels per day last month. the supplyloud in side of this equation is news out of nigeria that the militants appeared to commit to a cease-fire, or at least committing not to attack in multinational oil company or the facilities of these companies, to try to support talks with the government. bearing in mind that a lot of the supply disruption has come from nigeria in the last year or
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so, we will see what kind of traction comes off the back of that. anna: thank you. yousef gamal el-din joining us from dubai. the ceo of the italian oil firm eni hopes the informal opec meeting in out area will lead to an oil production freeze. claudio told bloomberg why he things a middle ground will be reached by the end of 2016. >> we are going through a possible stabilization of the imbalance. equilibrium of the imbalance between demand and supply. it is clear that we have still a huge -- [indiscernible] i hope really that they can find a decision to have a stabilization in production.
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anna: let's talk more about oil and commodities. geoffrey yu still with us in the studio. any chance of what is happening to oil prices over the last few weeks, risks under playing the amount of volatility we've seen in the very short term? we went from a bull to a bear market in less than three weeks in oil prices. on a longer-term chart, that doesn't necessarily show up as such a big event, but that is quite phenomenal. geoffrey: i think the news from iraq shows how oil is sensitive to even the smallest changes in supply dynamics. we talk about rig counts. now i see it in our chats, when are the rig count numbers coming be, whether that is going to demand or supply side. it is a transmission.
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oil price directly feeds back to the inflation outlook. it is headline inflation and most central bankers trying to dismiss it, but if you look at how the unemployment rate has fallen, and normally this should tighten labor markets and generate inflation ingles, it hasn't really happened. u.s. is the best option. it is really depressing prices. there probably is some structural change in the commodity impulse feeding back into weaker inflation. this is why all this matters. going back to the smallest amounts of news with regard to supply, it shows you how central bankers are at the mercy of this. anna: u.s. oil and gas producers increased drilling activity for the eighth week. everyone obsessed by rig counts. oil rigs up by 10. talk about the structural change
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that is pulling down pvi. what are we looking for? does that have to come out of china? geoffrey: china and asia in general. south korea, japan, taiwan, they've been negative for the longest time. there are tentative signs of stabilization, but not enough to call the end to this downward drift in producer prices. if the dollar starts to strengthen against these emerging-market currencies, against asia currencies, where the biggest source of disinflation is, this could turn the cycles south again. anna: just to underline the headache this causes central banks, commodities underscoring attended outlook for price gains. in yellow, or is it orange, we've got the bloomberg commodities index. we've got expectations overlaid on white. really showing how
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expectations in the u.s. have been tracking the commodities spectrum lower. geoffrey: if you look at the ecb, draghi mentioned inflation expectations, metrics, and markets. that seems to be persistently below 2%. if that is a sign of entrenched disinflation expectations, that is really hard to pull away from. sometimes you see central bankers desperately trying harsha: to move away, -- desperately trying to move away, trying to shift expectations. we have to see if this can actually happen. anna: we're going to get some japan inflation data this week. are you expecting more easing? geoffrey: it is probably necessary. i wonder if shinzo abe was trying to send a message dressed as super mario because the last super mario was mario draghi in 2012. he's sending a message. anna: we will see.
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geoffrey yu from ubs stays with us. up next, pfizer is said to be in talks to acquire the maker of a blockbuster prostate cancer drug. the full details next. this is bloomberg. ♪ . .
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♪ anna: welcome back. this is "countdown," at 6:30 in london. a new edition of daybreak is available in your bloomberg and on your mobile. let's look at the top stories making this morning's edition. this is the front cover picture, illustrating our top stories. bloomberg daybreak, with this nice graphic illustrating what perhaps fed officials are trying to do. we had recent comments from federal reserve vice chairman stanley fischer, indicating a 2016 rate hike is still under consideration. he says the u.s. economy is our to close to meeting fed goals and growth will gain momentum, so these comments are talking up the dollar.
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we had a host of fed officials last week talking dollar up -- talking up the dollar. the next tory, the boj -- story, the boj governor haruhiko kuroda, saying there is a "sufficient chance" the central bank will add to easing at next month's policy easing. should we look at governor kuroda to deliver the next round of stimulus in september? what should we be looking at, with shinzo abe and what the fiscal team might deliver for the japanese? finally, folk and in -- focusing beon news that pfizer might zeroing in to buy u.s. biotech company medicavation. we talked about central banks, but not what's going on in india right now. india swapped a financial a list or for a trusty technocrat. deputy governor urjit patel will
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replace rajan at a time when monetary decision-making is being overhauled. we are joined by harsha subarmaniam from mumbai. how are they reacting to dr. patel? he has been shaping things with rajan, but he is said to have a very different character. harsha: you are right. narendra modi's government has chosen continually -- continuity over change by promoting patel. he comes with a lot of credibility. the market knows him very well. he is seen a bit is an inflation hawk. part of the inflation targeting regime put in place. today's equity market opening has not been extremely strong, but given the fact that most investors expect, bond investors
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expect yields to be push lower patel's stated objective is to keep inflation under control. therefore, he will be keen on keeping interest rates at the status quo, or perhaps marginally higher, pushing yields lower. anna: i was having a conversation with geoffrey yu of ubs in the studio, talking about the importance of central bank independence. iill the new governor at the r u play ball with what the government wants and cut rates? harsha: cutting rates is difficult, anna. two important factors have come into play in the last six months in india. consumer prices have risen, and oil prices are moving up. governor the previous had extremely low oil prices, giving him room to cut interest rates, so patel will look at
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headline cpi prices and inflation numbers to make a call. his relationship with new delhi will be extremely important, because as you mentioned, the the interest moves to a monetary policy committee, of which the governor will be a member, so the interest rate will not be one man's call any longer. secondly, it's not just about the monetary policy. patel as a personality is extremely conservative, not outspoken like governor rajan was, so his interactions with delhi are likely to be less controversial because he has been known to keep a low profile, only speaking within the ambits of what central bankers traditionally do. anna: thank you very much for joining us. harsha subarmaniam, bloomberg executive producer joining us from india on the changing of the guard over at rbi.
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jeffrey -- geoffrey is still with us. focusing on the indian story, we talked about rajan as if he was some sort of central banking rockstar, and that seems to be how he was welcomed at the time of his appointment. india now going for some indifferent, stylistically at least. geoffrey: stylistically, but it is the substance that matters, and this will be an appointment that will reassure investors, looking for continuity and credibility, the technocratic element is still there, something people appreciate. independent of whatever policy will come through, the earnings outlook has improved in the short-term. corporates, for example. that might give them more marginal pricing power. longer-term, structurally people ask questions. probably, most investors would on, preferred rajan stay of there being some degree
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political interference, people in the indian establishment that did not like his style. but longer-term, whatever the central bank does should be independent of personality, but we should see a positive story coming out of this. anna: if india is one of your goals, if you like india at the moment, is that based on the central bank, a safe pair of hands, a technocrat in charge of the r.b.i., or based on the reforms of modi? geoffrey: face on a combination of structural packages over the last few years, but also on the ground the earnings outlook is improved on a structural level. so once that turns, it's one of the leaders within emerging markets. so in the last few weeks or so, we have seen emerging markets rallying. it was a bit too much of a return chase in the past. markets, -- we do think that the india story is more sustainable. anna: when we talk about emerging markets, you artie mentioned the role of the dollar, and that crucial emerging markets story. i pulled up this chart we were talking about at the start of
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the program. just a one-week chart, but it shows how elements of the fed, talking, and as a result the dollar moving higher. how does dollar strength play out for the emerging markets? which have the most to lose from that? geoffrey: we need to look at differentiation right now, and see whether there's any contagion effect. the first thing you want to identify in the emerging markets, exposed to dollar debt, so high hard currency debt levels. now you have political uncertainty factoring in. brazil was mentioned as a bit of a wobbly case, and things are starting to turn around somewhat. but dollar cny will be the elephant in the room. nothing to see here, that seems to be coming out of beijing. but if they lose control of that, no matter how low the risk, that could put emerging markets into a tailspin by fx. that's when fx the comes a bad
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thing instead of a good thing. many emerging markets have warned the fed, please be mindful of our situation when you do this, and that remains the case. anna: we have until august 22. so far, a little less eventful in terms of the emerging market dollar story than last year, so perhaps we should be grateful. thank you very much. geoffrey yu stays with us on the program. some experts picked sterling will reach parity with the euro by the end of 2017. for many british travelers, the pain of a one-for-one exchange rate has artie come close to a reality this -- already come close to a reality this summer. we haven't just invited yuan spent 10 days in spain feeling the pain, spending pounds. we want to talk about where the pound is going. tell us about the official forecast, what banks say will happen to the pound against the euro. john: the parity forecast was made by a couple banks, ubs and hsbc. most banks of economists forecast the pound might even
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strengthened by the end of 2017, so these forecasts are perhaps a little bit of an outlier. if we go with those forecasts, 30% chance, something like that by the end of 2017 that the pound will reach parity with the euro, but a lot depends on how britain's negotiation with the european union goes next year. we seem to think at the moment, theresa may will trigger it sometime in april, somewhere around than, so a lot depends on what she's able to negotiate and whether that scares off investors, or whether they will keep their money within the u.k. anna: a lot of unknowns there, in terms of where the story goes. what is the outlook for the pound, then, over the next couple years? difficult to say given all the uncertainty you mentioned, and the fact that a lot of the data, while some has been strong, when you talk about the strength in the u k data story, economists point to, well, you can't really say yet. john: some investors don't seem to be buying the strength in the data so far. and we are seeing probably, by the end of the year, euro worth
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around same as it is now, according to most economists, 86 pence per euro. and the median estimate of economists by the end of 2017 is the pound strengthening, perhaps, to 83 per euro. but there is a big divide among economists, and there's a lot still yet to be seen, and it could be that the euro will reach parity with the pound by 2017. anna: could be. holidays to europe could get even more expensive. geoffrey, bringing you in on the u.k. data story. datae the u.k. economic exceeding expectations by the most in three years. surprisingly, data a strong wrote to expectations. although, at the same time, i heard some economists described this as sort of a cartoon character running off a cliff, in the legs keep moving even though they have not plummeted to the floor yet. which do you buy? geoffrey: firstly, there was a massive downgrade of u.k. data in general after the break is it
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-- brexit vote. people thought every bit of data would come out bad, but most of the data we have had so far has been from before the brexit, so it may take a while. secondly, some numbers have come out covering the post-brexit p eriod. the speed with which theresa may's administration formed took some by surprise, stabilizing expectations. they were reports some bigger ticket items have been withdrawn, and there's concern over investment. one issue is a huge difference, right, between data weakening aggressively versus not being as strong as it could have been, had we voted remain. that's what i try to stress to our clients. is note cost of brexit how much the u.k. economy will contract, but how much in terms of growth we could have had but now are going to lose. anna: what has been foregone.
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john, back to the conversation about parity, putting it into complex -- context. the pound is not near parity with the moment. it would need to fall another 13%, another substantial sort of would related shock that drive it down that far. john: the economists forecasting parity say, look at the current account deficit. the u.k. has been running this current account deficit for a number of years now, and brexit has damaged investor confidence. a lot of the way current accounts are funded. if investors are scaling back expectations a little bit, this could throw the current account deficit under the spotlight and leave the pound to pick up the slack. a bit like geoffrey says, a lot is still to be decided, and a lot depends on what investors and companies think about the brexit vote. anna: we talked about what hsbc
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and ubs are talking about. what are your expectations around the pound and the euro and how weak the currency gets? geoffrey: you mentioned that is the ubs investment bank. in wealth management, we are a little more sanguine. in cable, we forecast 12 months to get back to 1.3, significantly above expectations. going back to the current accounts, that is working with a very weak income balance, but u.k. rates have fallen and exchange rate factors are coming through, security council start to turn around. a lot of uncertainty. the risk certainly skewed to the downside, and the uk's really transitioning from an export driven economy, which they tried in the post crisis environment and it didn't really work. when you see them trying to chase that numbers, it's a sign things have gone too far. the: you have said that
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stream of rebalancing toward exports, the long-term goal that many governments have tried to generate in the u.k. and have come up short. the key for you is focusing on productivity. geoffrey: absolutely. higher added value, higher productivity. all of this is necessary if the u.k. would want to rebalance. we had a productivity cap for a long time -- gap for a long time. strong investment is needed to plug those gaps, and let's see what the statement delivers. anna: they have to reinvent policy a little bit. thank you very much. geoffrey yu stays with us. john, thanks for bringing us that story. pfizer is said to be nearing a deal to buy u.s. biotech company medivation for $14 billion. people familiar say an agreement could be announced today. anne-marieing --
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joins us with details. >> many in the industry say a takeover of medivation is inevitable. we could get the announcement today. $14 billion is what people close to the matter are saying. if you look at where medivation closed on friday, it closed up $67.16, giving the company a market value of just over $11 billion, so pfizer is clearly paying a premium of 30% for medivation, $87 per share. now, medivation has been a hot target in the biotech industry for some time, and this really started earlier this year, with a european company, be french drugmaker sanofi, courting and then pressuring medivation for a takeover agreement. medivation had rejected the $58 a share bid. so this morning, not such good news for synovial, a big blow for them -- sanofi, a big blow for them. in the past five months, sanofi
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pressure medivation for a deal has just made medivation even hotter, even more of a target. you can see the share prices increasing drastically since april, and also increased the bidding pressure as well, so it was really good news for medivation, but sad news for europe's sanofi this morning. anna: medivation is clearly a hot property, with all these drug companies going after their assets. what makes them so hot? onearie: some call it a trick pony, but they are after a prostate drug. in terms of annual sales, last year it topped one billion u.s. dollars in annual sales, making it a blockbuster drug. by 2020, analysts say annual sales could come to $1.33 billion, and then it could hit the $2 billion mark by 2024. so this is the darling of medivation, what pfizer is after. but there are two other experimental drugs that pfizer
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will be acquiring, one for breast cancer and one also for blood cancer, lymphoma, which is really helpful to pfizer, which is trying to grow its oncology unit. but the prostate cancer drug is really the darling, which makes medivation so hot. anna: thanks so much. coming up on the program, the state of the european union. renzi meetlande, and in italy today. we preview the summit. and, september signals. the fed's fischer says a hike is still in play. we discuss his comments ahead of the jackson hole summit. in the programming on "the pulse," highflying heavy-metal. bloomberg speaks to singer turned airline entrepreneurs bruce dickinson, 9:40 u.k. time. he is someone with a long-standing interest in
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aviation. we will find out about his plans. this is bloomberg. ♪
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anna: welcome back. this is "countdown," live from london, but here's new york for you. 1:50 in the morning in new york, sunday night into monday morning. it is 6:51 here in london this morning. let's focus in on the business side with shery ahn. ery: pfizer is said to be nearing a deal to buy u.s. biotech company medivation for $14 billion. people familiar with the situation say that an agreement pfizere announced, and is expected to pay a premium of 26% on the company's friday close. a pfizer spokeswoman declined to comment and medivation did not immediately respond to phone calls and e-mails. japan's biggest brokerage,
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nomura, plans to rehire bankers in the u.s., pledging to boost its investment business. the ceo has been shutting down jobs in europe and the americas to save $700 million and stem losses abroad. the shift comes as nomura anticipates rising volumes of mergers and stock offerings in the u.s. uber told investors it will not pay more than $2 billion for its accordingrival, lyft, to people familiar with the matter. it was reported lyft unsuccessfully sought a sale at $9 billion. an investment from tn this year valued it at $5.5 billion. anna: shery ahn in hong kong. the leaders of germany, france, and italy meet later today to discuss the future of europe after britain's decision to leave the eu. angela merkel, france for a long, and matteo renzi --
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francois hollande, and matteo renzi will hold talks on an italian aircraft carrier. angela merkel has accepted that it will take some time to decide britain's relationship with the eu. throw your thoughts in on time in terms of this brexit conversation. what many leaders will be talking about. migration and turkey is also on the agenda. about the timing of the triggering of article 50, we had a story over the weekend that actually the first six months of next year, or the summer of next year might be where we go, instead of later in 2017. what is your take? geoffrey: that sounds like the optimal time. unofficial talk going on behind the scenes.
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the fact that these three heads of government are speaking today, that's a sign they want to determine their own negotiating as well, trying to avoid the political calendar in france next year, which will be quite disruptive to markets. i think both sides want to find the optimal solution, but also it's important not to track the things out to much, and also try not to test people's patience. in thereported, long-term you probably want to cut corporate tax breaks in the u.k. to make yourself more competitive, but that's when you have a stronger hand. you don't antagonize when you want to find an amicable solution right now, so that will pay into -- play into the strategy as well, in terms of the timing. people also want this out of the way as soon as possible. anna: you mentioned what the autumn statement might bring from the u.k. chancellor, if we see further cuts to corporate taxes, short-term cuts, you
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think that would be seen antagonistic we buy the rest of europe? geoffrey: europe will see that, but also from the u.k.'s individual point of view, any fiscal stimulus, you want the right combination, and funding is not an issue right now. banks are well-capitalized. it is demand. tax cuts do not generate demand as quickly as spending injection. so we are in a 10 year gilt yield touching 50 basis points, so it's that situation that they have to worry about, not borrowing costs right now. the market would like to see more of a spending boost, more of a demand injection, so with tax rates, on the business side, business rates for example, may be shy a little away from corporate taxation, which would be seen as hostile by the eurozone. but also spending would be a much larger component, and needs to be. anna: as the eurozone leaders meet today off the coast of italy, talking about the domestic, economic agenda. in italy, that could be on the
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agenda. i have a chart showing italy trailing behind spain, the widest bond yield spread in 18 months, reflecting political divergence. even the fact they don't have a government in spain is not enough to take on the strength of the yield story we see in italy, based around the weak growth story, the challenges to matteo renzi, the weakness in the banking sector. geoffrey: in the short-term, they are fixated on the referendum. it appears renzi has thrown it all in, so you know, with this vote, he sees this as paramount to changing the political process to make decisions much easier. we had brexit, and we have to take into account that this might not go through. and then we would have to change all our assumptions about what happens to these three and the eurozone growth as a whole. anna: 2016 is certainly a year of political surprises. we will see if that continues into the autumn, not just italy, but elsewhere.
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geoffrey yu, thank you very much, joining us in the studio over the last hour. september signals. the fed says a hike is still in play at the next meeting. we discussed the comments ahead of jackson hole. this is bloomberg. ♪
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anna: fisher feeling hawkish. the dollar strength says the federal reserve stands for a 2016 rate hike on the cards. easy does it. the bank of japan governor says there is "sufficient chance of more action" at next month's policy meeting. crude falls after the longest run of games in four years as iraq seeks to increase exports. and a drugmaker deal. pfizer is close to buying another rival for around $40 billion.
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welcome to the program. just gone 7:00 in london, i'm anna edwards. better idea bit of of where european equity markets might head. the asian session was lackluster. how does that feed into european equity markets? and move on to the futures, we are expecting it to be a little bit weaker at the start of the trading day. the cac will do a little better, but essentially we are expecting something weaker. not drastically, but a little, across european equity markets. let's bring up the risk radar and show you what we are seeing in the currency market. that is where we are seeing a lot of the action overnight. the asian equities session is a little bit weaker overnight, and the msci asia-pacific is down. but on the dollar index we are up. the vice-chairman of fischer
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talking about how the u.s. economy is close to its goals, boosting the dollar. just as the fed officials spoke, it seems to be something we are running with into the week. conversely, weakness in the end. it's down by 7/10 of 1% against the dollar. floating theda possibility of increasing stimulus in september, talking about "sufficient chance" of war policy using in japan. nymex is down by 1.4%. oil prices are 47.8. we've seen the longest run of gains in the oil price in four years, but now iraq is seeking which isxports, putting downward pressure on the oil price, as is the latest developments coming out of the delta. quiet on the indian rupee.
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there will berse, a new governor on september 4. let's move on to show you where we are on the bull markets as we start on trading. the 10 year in the u.s. there, but we are seeing moves higher in the bond yields in germany and in the japanese session as well. let's get the bloomberg first word news with shery ahn. shery: thank you. oil is falling after its longest run of gains in four years as iraq looks to increase its exports amid a glut. they say they will boost crude shipments by 5% in the next few days. on into a bull market thursday amid speculation that the informal opec talks next month may lead to action to stabilize the market. in the last three weeks, nymex gated 20%. how do you do kuroda says -- in anruhiko kuroda said
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interview that the boj won't hesitate to act after discussions of a comprehensive review. pfizer is said to be nearing a deal to buy a biotech company for $14 billion. people familiar with the situation say an agreement could be announced as early as today, and pfizer is expected to pay a premium of 26% on the close. a spokeswoman declined to comment. a representative did not immediately respond to phone calls and e-mails. india has swapped a financial a list or a trusted technocrat. governor aseed the they seek international investors. he has spent the past four years driving the biggest reforms in the r.b.i.'s 81 year history, including targets for inflation and cleaning of the banking system. rajan steps downs of temper for.
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-- on september 4. a suicide bombing that killed at least 51 people at a wedding in turkey was killed by a child. is president says the bomber believed to have been between 12 and 14 years old. islamic state for the explosion on saturday night. it's the deadliest attack in the country this year. hundreds of flights have been canceled in japan ranks to a typhoon. the country's weather agency has issued heavy rain and flood warning for all 23 wards of central tokyo, while the prime minister's office warns of possible landslides and damage from strong waves. japan's prime minister has made an unusual appearance at the closing of the real olympics. shinzo abe hyped out of the green pipe in the middle of the stadium dressed as the video came character mario. one of his country's biggest
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cultural exports to highlight the 2020 tokyo olympic games. global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the bloomberg at top . i'm shery ahn. this is bloomberg. anna: thank you. shery ahn with the latest. juliette saly is standing by with the latest market action in asia. i want to pick up with what she was saying; i think nintendo is up by 3.1%, perhaps in connection with shinzo abe appearing as super mario. but that is not the only store you are focusing on. juliette: no, that's right. it is probably worth pointing out -- i hate to burst your bubble -- but nintendo is rising because it has finally completed the sale of the seattle mariners, the sports team it was holding on to. that is the reason behind its gain, not so much shinzo abe's
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impressive performance. nikkei closing higher by one third of 1% today, as we see the yen weakness pushing exports stocks higher. it's all about the dollar strength and those hawkish comments from stanley fischer over the weekend. we also have those comments from kuroda, saying that they could have a chance of easing in september. very divergent policies coming through from the boj and also the fed. elsewhere in asia, it is pretty weak, and the commodity story is playing into this as well. the crude price continuing to fall after its recent run-up. we are seeing quite a bit of weakness in the energy players in hong kong. story in australia where the asx 200 has closed down by one third of 1%. santos had a pretty bad day. there has been a fair bit of
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equity around not just nintendo, but other -- a japanese semiconductor maker. it is falling today, fortis you metals down by two point -- four rtescue metals. we saw an initial spike coming through, apn down in sydney. this is a company that cut its forecast as well. disappointing earnings, overall asian markets weaker. anna: juliette, thank you. juliette saly with the latest in japan. the federal reserve vice chair stanley fischer has signaled for the 2016 rate hike still being under consideration. he says the u.s. economy is already close to meeting the fed's goals and that growth will gain momentum. this comes ahead of janet yellen's speech in jackson hole later this week. joining us now on set, the chief
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international economist at ing. great to see you. thank you so much for coming in. let's -- looking ahead to jackson hole, and the symposium we will be taking place, i talked to jeffrey yu, and we were reflecting on the jackson hole consensus that seemed to exist in 2003. theeems that a lot of consensus around central banking is being questioned, certainly in terms of the bonnet balance. >> absolutely. you mentioned earlier that the boj will have a whole look at how it does its policy, and the fed will also be doing something fairly similar. we have had quite a lot of interesting conjecture from fed officials. bollard is saying we are stuck in the low growth equilibrium, and quite a few fed officials seem to be coming behind this
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idea that there is a secular thing going on, that we aren't going to be moving much higher for a long period. on the other hand, you have things like fisher saying, you know, this 2016 rate hike, perhaps one or two. and the market is going, really? anna: if you pull of the functional the bloomberg, you see a 22% chance of a rate hike in september. it was 16% last week, so it is moving up, but not odds-on. >> not exactly going for. anna: but it does serve to move the dollar around. this is a chart of what the dollar did. we had doubly speaking, williams speaking. all as theyer, and talked or in the wake of their comments saw a move upwards in the dollar. what is this commentary designed
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to do? it highlights is that there isn't total consensus within the fed, and that is clear. i think there are a number of fed officials who have said we should hike rates now -- fair enough. fischer is suggesting the economy is near the goal. we could argue that the u.s. has been year's goals for quite some time. not just enough for a rate hike. when you look at september, inflation is a big missing factor. the labor market, wages absent. yes, we keep on getting labor market gains, but let's look at gdp, barely scraping 1%. we have another revision this week. the previous quarter wasn't much better than that. the underlying trend is undoubtedly better, but it doesn't scream, yes, we need rate hikes. anna: i know many people watching this program at 7:00 london time will look more strongly, but if they need a
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workout, monetary policy seems to be the place. you are referencing the san francisco fed, publishing that note recently. remind us, this is an inflation-adjusted rate. neither stimulating or contracting the economy. >> i think what he was trying to say, if everything was normal, inflation is where it should be, and interest rates, real interest rates, where they should be, right now, they would be very low. consequently, that would suggest that the fed doesn't have much work to do. they might be higher than they are today, but it doesn't have to push rates up to four and it doesn't have to rush to get there. there is not a yawning gap they have to fill. anna: do you think this is a view janet yellen has some sympathy with? does she think we are not far from a lower rate? >> well, a number of fed
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officials are taking this view. it wouldn't surprise me in the slightest. san francisco is yellen's old stamping ground. she keeps in very close contact with the officials. i wouldn't be surprised, but let's not forget -- this is the vice chair, saying the hawkish stuff, and yellen comes out on friday with the message which is in that dissimilar from john williams, and i think markets will go -- where are they going? is september on? i don't know. anna: it will be hashed over many times i jackson hole. u.s., focusing in on specific u.s. policy. little clues from janet yellen. what about the global debate around monetary policy? is there such thing as a global debate these days, a consensus? >> i think what is beginning to
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emerge out of this world commentary is central banks -- we have done what we have been able to do, we have cut interest rates, qe, negative interest rates, it is not all about us. we cannot generate demand with monetary policy. we can make conditions available should demand appear, but this is down to the fiscal policy sector. and that is where we are beginning to see emergence. the u.k. has that reset in autumn, band japan will embark on yet another big splurge a fiscal spending. it will be interesting to see what the u.s. does. of course, we have an election to get out of the way. anna: the japanese prime minister, dressed in super mario -- appropriate? end, with all of these economies, you want the monetary policy to support fiscal policy, and that is where japan is going. waiting in the wings to be able
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to sop up the bonds that the japanese bonds will have to do, it's not quite helicopter money. i still think the inevitable conclusion -- said over the weekend in an interview that they can't do helicopter money because -- >> we can always change the law. anna: that's true. with us next, the state of the european union -- merkel, hollande, renzy said to meet. we preview it, next. this is bloomberg. ♪
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anna: welcome back. 7:18 in london. a gloomy start to your monday, the pound down by 2/10 of 1%.
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let's get the bloomberg business flash with juliette saly. juliette: thank you. pfizer is it to be nearing a deal to buy a biotech company for $14 billion. people familiar with the situation say the agreement could be announced as early as today, and pfizer is expected to pay a premium of about 26% on the company's friday close. a spokeswoman declined to comment. japan's biggest brokerage in europe plans to hire bankers in the u.s., resuming a push to boost investment banking business there. the ceo has been eliminated jobs and shoving businesses in europe and the americas to save about 1700 millio $70 million. it comes as they anticipate stock offerings in the u.s. taiwan is investigating a bank
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whose compliance program was described as "a hollow shell." million for $180 violating money laundering laws in new york. transactionicious flows between the new york and canada branches, and a large number of entities were formed by the law firm at the center of the panama papers scandal. uber has told investors that it will pay more than $2 billion for its main u.s. rival, lyf, according to people familiar with the matter. previouslyen unsuccessfully sold, while investments from gm valued it at $5.5 billion. that your bloomberg business flash. anna: thank you. juliette saly with the business flash. italy's matteo renzi is hosting the german chancellor and french president for talks on the future of europe following
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britain's decision to leave the eu. their meeting takes place on board the italian aircraft carrier named after the general who helped unify the italian state of the 19th century. let's get more from bloomberg's ian wishart, the joins us live from brussels, perhaps hoping, then, that this aircraft carrier will have the same effect in bringing unity. what's on the agenda for these three leaders in italy today? well, if you think of all the challenges facing europe at the moment, they are pretty much all on the agenda today, from migration to turkey to terrorism to economic growth, and of course what happens after brexit. there are all these things to think about. is brexit go to the u.k. pretty much a wake-up call for the rest of the 27 liters of europe to say, what is it we are doing? what is the eu about? what do people think about what we are doing? there is a very real sense that this brand, post second world
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war project, is in the balance. leaders are really keen to discuss where they go from here, how the eu shapes up in the years to come. there are some real questions to be asked. anna: it might be in the balance; the agenda is a long one in terms of jobs that need to be done. what happens from here? big summitthere's a in the middle of september, when all the 27 liters of the eu, all the leaders from theresa may, get together to discuss what they should do after brexit. where does europe go from here? no one is really sure. economic growth is really slow. there is more than one million refugees coming from the middle east and africa, and there is a chance that the referendum could take place in other countries to move to brexit. there's a lot to be done between now and next month, and of
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course the thing they can't really talk about is what the u.k. is doing. when will the u.k. trigger article 50 to get out of the eu? that is up to the u.k.. but by talking, they can put the pressure on the u.k. to say, hey, you are doing something, but we are doing stuff as well, we are moving forward without you. anna: ian wishart, joining us from brussels, looking ahead to that meeting and others to come later on this year. still with us, rob carnell from ing. give us your thoughts on the existential crisis that perhaps is tempting to fall into in the eu or eurozone project in the wake of the brexit vote. >> yeah, i'm not sure i would put it as strongly as crisis. i think before we had the brexit vote, most of us just scrapes through and voted remain, which we didn't. but from eurozone, it wasn't looking all that bad. if you are generous, you could say the eurozone was the only
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one with upward momentum. the u.k. was beginning to slow, the u.s. was slowing. the eurozone was beginning to nudge higher rather than nudging lower, and the eurozone often does that; it takes its time when it follows the rest of the world. i don't think an awful lot has changed. there is an accommodative credit metric -- anna: but from the geopolitical perspective, it's incredibly long. when these leaders meet -- >> a a lot of countries, and all of them have slightly different things on their agendas. and you have an awful lot of things and they will all be slightly different, which is why i think it is going to be hard for them to come up with any conclusive, this is what we need to do. they are all going to disagree, which is part of the eurozone's problem. they can't agree on anything and not a lot gets done. tremendously hopeful that we will see a great news project bring forward, because the
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french will want something completely different from the dutch, etc. anna: any strong points or weak points you would like to flag? in terms of performance against gold, the italian government has a tough hill to climb. i know that according to bloomberg calculations the italian gdp number would have to expand by 1.3% in six months up to december to deliver the growth target matteo renzi has been talking about. >> if we take greece out of the picture, which is a bit of an it is the only one that stands out with significant problems. there are other ones that aren't particularly impressive. france hasn't done an awful lot. of course, some of the old, peripheral countries -- ireland is too strong, if anything. spain looking quite impressive. two countries that undertook fairly significant economic reforms are reaping the benefits. it would be nice to see italy
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having some things similar in october. but that is more about politics. anna: some of the growth numbers are quite startling, aren't they? they are distorted. italy is trading behind spain, this chart showing the widest bond yields in 18 months. this is the concern; some of the strength in spain is being reflected here, the weakness in italy, the extra premium investors are demanding for italian investments over spanish ahs resulted in these challenges. >> yeah. if you look at some of the italian papers right now, one that was brought to my attention a couple days ago, 50 reasons italy should leave the eurozone. it is beginning to bubble. you've got a political calendar in the netherlands which is being troubling, france as well, germany less so, although merkel is getting challenged by new extremist parties. there's an awful lot of this pushback against the
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establishment going on across the world. anna: indeed. rob, thank you very much. rob carnell, ing. that's it for "countdown." "on the move" is up next, they will talk to a senior economic adviser and hsbc. ♪
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move."welcome to "on the 7:30 a.m. in london. we are counting down to the european market open. i'm manus cranny. caroline hyde is in berlin. fischer feeling hawkish. the dollar strengthens as the federal reserve's vice-chairman says at 2016 rate hike is on the cards. rajan's replacement. india gets a new central banker in ujin patel, but will his policies be more of the same at the r.b.


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