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tv   Bloomberg Markets Middle East  Bloomberg  February 4, 2017 11:00pm-12:01am EST

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yousef: the chum administration moves to appeal an order blocking the travel ban -- the administration moves to appeal in order blocking the travel ban. iran with more missile tests in defiance of fresh u.s. sanctions. yousef: investors forced into pair bets on how fast the fed will hike rates this year. banking shares surged after the president moved ahead with his plan to review dodd-frank. yousef: it is 5 a.m. in london
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and midday in hong kong. tracy: this is bloomberg markets middle east. no shortage ofs things to talk about from last week. ofhad a smorgasbord political events, central bank meetings, and nonfarm payrolls on friday. what caught your eye? what islet's kick off happening with the u.s. dollar. drop.on its sixth weekly this chart really gives the additional context. this chart goes all the way back to february 2016. we got the jobs data and we did not get a lot of evidence though in terms of how much further it has to go. , of course, the issue of wage pressures that continues --are the report, but
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tomorrow the report, but it gives the dollar-yen trade a little bit of a floor, tracy. tracy: let's look at how the jobsts reacted to the growth. the s&p 500 closed within a point of an all-time high, but course,story was, of banking stocks. they showed up in the dow jones industrial average. that was up almost a percent, reclaiming 20,000 after trump signed his executive order asking for the review of dodd-frank, goldman sachs alone up 11 point or 6%. of three present. really the story of animal spirits returning to the u.s. markets. you to thiss return part of the world. we are two hours from the opening of the emirates markets in dubai and abu dhabi. we have a mixed picture. we are seeing quite a bit of downward pressure in dubai. the blue-chip stocks weighing on the index.
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have -- telecoms surging 10% after selling some of its -- network to saudi telecom. and also the commercial bank of kuwait rising 6.2% after it reported earnings. we saw the stuff exchange rebound after a slide of three sessions. i want to bring your attention to some of the currency pairs. it's important to point out what is happening with the turkish lira. it is leading gains after seven weeks of losses and finally, of course, the south african rand. we are looking at events including the cabinet reset, which could bring down side pressure to the top half of the currency. for southusy week africa. let's check in on the first word headlines. let's go to dudley humphrey. dud?
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dudley: the u.s. justice an appeal order against the judges order blocking president trump's immigration ban. slammed the federal judge to temporarily ended restrictions, vowing to reverse the decision in a case involving washington and minnesota. airlines have been caught up in the confusion over the trump ban , as passengers rush to airports to take advantage of windows to enter the u.s. that theeport immigrants from the seven countries affected by the van -- airways saidatar that it was a long passengers with visas or green cards to flight. urging passengers to
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fly before the judge's order is overturned. hasa's key safety systems emerged as the leading bidder for takata. company -- sweden's company that is key safety's main rival in the auction is only interested in purchasing parts of takata. china has urged the u.s. to stop making comments about the sovereignty of islands in the east china say. this came after the u.s. secretary of defense accused china of shredding the trust of his neighbors. after meeting japanese prime minister shinzo abe, james mattis reaffirmed that the islands are covered by the security treaty with japan. day,l news 24 hours a
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powered by more than 2600 morealists and analysts in than one at a 20 countries. i'm dudley humphrey. this is bloomberg. out a newan carried missile test on saturday, a day after president donald trump impost fresh sanctions in response to the missile test. we have to bear in mind that president has son rouhani is playing to a domestic audience as well, elections coming up in may. this latest test is hardly a surprise, is it? recall,: no, and as you we were talking last week about the possibility of the trump administration imposing sanctions. i just did not expect it fast. if you recall, the obama administration also imposed sanctions. what is making investors worried is the tone of the sanctions. that iran is playing with fire, putting iran on notice.
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and iran is obviously reacting quickly and carrying out further missile test in order, you know, not to look weak domestically for the presidential election, but overall, it's hardly a surprise. u.s.: let's talk about the side. what is the u.s. trying to achieve here? what is the in game? if they achieve whatever that goal is, what is the possibility they could dial back this rhetoric? --a: during the presidential aa: during the presidential election, trump said he wanted to renegotiate. and this also ways into the position of israel, which wants influence in the region. we could see more action to achieve this goal. you have proxy competitions -- iran is involved in syria, in yemen, in iraq, in lebanon, and this is disturbing traditional
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u.s. allies like saudi arabia and the uae. yousef: we have just come off the back of improving relations, the détente between iran and the united states. you look at the trade flows for iran. you say the -- you see the .iggest trading partners what should investors worry about in particular? alaa: if you look at this chart, or if you look also at the oil market, any substantial change to this requires genetic escalation. more sanctions targeting iran's exports or trade. what you see now is a return on some aspects of geopolitical trade, geopolitical risk trade that does not reflect a change in fundamentals, but reflects more anxiety. in that's interesting. if you look at the oil market, it is a trade that the market has shrugged off time and again the last two years, focusing on supply and demand. but now whenever people see
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headlines come up, they react immediately. marketse will see if respond. alla shaheen, thank you for joining us. later in the show, we will be joined by our guest, talking about top market picks in the middle east. yousef: and we will look at the economic outlook for the region in the era of president trump. stay tuned for that. this is bloomberg. ♪
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tracy: welcome back. you're watching bloomberg markets middle east. live from dubai. the new administration sets its sights on overhauling the dodd-frank law.
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former number two its goldman sachs is leading the present's economic council. can the administration get a lot congress'sr without support? >> we can do quite a bit. obviously we will work with congress. i met with jeb hensarling and his committee. the house was to be very active financialhat we do in service regulation. we are going to engage the house. we are going to engage the senate. there equally interested in performing some of the regulatory processes as well. we can do quite a bit without them, but the more hope we get from congress, the better off we the job creation vehicle be more effective. not just and financial services. we are talking regulation in every industry group. when the automobile manufacturers were in your, they were talking about what they have to do with the epa and the other regulators. when the manufacturers were in
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here, they were talking about regulators. we will need help from the house. we will meet help from the senate. -- we will give them help from the white house. >> as he said, there is a wide panoply of issues. you know dodd-frank as well as anybody in the country, given your experience at goldman sachs. as you look at dodd-frank, what are the specific areas you think need to be really changed? gary cohn: let's look at the overarching issue. we want to get the banks working again. we want thanks to be back in the lending business. dodd-frank has done is it has stopped banks from lending to small and medium-sized businesses, it has stopped the banks from lending to entrepreneurs. we know the real job creators are entrepreneurs and small to
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medium businesses. banks have been forced to ward capital. they have not been allowed to lend money. we need to get them back into the lending business. that's our number one priority. to get capital flowing back into the small and medium-sized business. is your number one priority, does that suggest changing and repealing the volcker rule is not that important? place a bankery needs to hold capital and they need to retain capital, prohibits them from lending. so, we are going to attack all aspects of dodd-frank. the volcker rule, we also care , transparent,quid and orderly market. the united states has a huge competitive advantage. we want to preserve that competitive advantage. we are going to be looking at the volcker role as well. what we are trying to do is free up capital. all of the banks in this country have been hugely burdened by
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enormous regulatory costs. tracy: that was former goldman oo, turned economic council member gary cohn. this talk about how deregulatory push is likely to affect the markets. john paul, let's stay with a dodd-frank story for a second. we have seen investors sour little bit on trump trades, the idea he was going to be able to introduce fiscal stimulus and promote business interests by rolling back regulation. now that we have this executive order that came out on friday, are we going to see those animal spirits and optimism return? >> great question. i know he likes to think he cannot work with congress to push his agenda through. in some of the cases, that's true. in the case of dodd-frank and
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financial regulation, i think he is going to have to work with lawmakers. i'm not entirely sure he will get the support to push this through. through. i think really for the market outlook, you can put as many charts as you want on the screen, but the most important image in my mind is trump's twitter feed. that is what is moving markets now, and it's really economic fundamentals. tracy: can i just say five years ago, who would have thought trump's twitter feed would be the thing moving markets? jean-paul: absolutely. you really need to look at it on a really basis because you do not know what is going to come out of there. the perspective -- our perspective has been quite strong, quite bullish. the u.s. dollar is being driven almost 100% by trump's twitter feed. yousef: let's dig into the jobs
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report. the other factor driving a lot of trading the last trading sessions. specifically, the report shows no additional pressure on the fed to move beyond this indication of gradual rate hikes. interesting commentary around how the fed is going to move with its balance sheet. what is your read about what came out from the fomc? saw onul: the report we friday was interesting. 227,000 jobs was a quite strong number. but when you're looking at the employment factor, how that will affect the fomc fell thinking, you need to look into things. number one among my does the participation rate. obviously, that is still quite low by historical standards. as people become more encouraged to enter the workforce, he identified a lot more slack in the u.s. labor market. wage growth. that was the big surprise for us. that went from 2.9% to 2.5%.
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if wage growth does not pick up, that will not feed through to inflation, so that will not leave be fed to take a more aggressive stance. yousef: this is a fabulous function. i love it. ump the spirit it gives you a rundown on the different tweets. this one saying very bad dangerous people can come through. you can click and show the tweet. terrible decision right there. and two or three rate hikes this year. what is your call? jean-paul: we are in the camp of 2, 3 rate hikes was ugly. i don't think they will move in march. i think the mfp report is one factor, but also the uncertainty related to the trump administration's economic policy. there is still a lot of talk about a stimulus plan this year, but we still have no idea what
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kind of form that stimulus will take and when it will be implemented. i think one factor people need to keep an eye on right now is the strength of the u.s. dollar. the strength of the u.s. dollar has come off quite a bit. that's not reflective of fundamentals. that's reflective. we of rhetoric coming out of the administration -- that's reflective purely of rhetoric coming out of the administration. and if the dollar continues to come back and clawback off of this, you will see inflation start to take up as well. all of these factors -- it's a really uncertain time right now. tracy: speaking of uncertainty, we did get federal reserve officials speaking last week, one saying he thought the fed could raise rates in march, and the other saying that the fed balance theow and
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effect of having to go back on itself if it raised rates too soon. how big a problem is that or is that more problem of their own credibility? the risks are very asymmetric. the fed is an institution has shown itself to be very cautious the past couple years. there is no reason to think they will take a more hawkish stance. we don't know the outlook, 12 to 18 months down the line is. if something were to happen to cause a recession, the fed does not have a lot of room to cut rates, right? there is no point going overly aggressive at this point. i think they might be able to tolerate inflation overshooting their 2% target for little bit. yousef: all right, jean-paul pigat, you are sticking around. we have to get into the meat of this and we have pmi numbers to better understand economies in this part of the world. make sure you stay tuned for that discussion. this is bloomberg. ♪
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tracy: welcome back. you're watching bloomberg markets middle east, live from dubai. yousef: let's get back to our discussion from the senior economist jean-paul pigat. a good data is complement to the earnings we have in terms of understanding these economies. we had unprecedented austerity measures. what has caught your attention? pmi-paul: i think the numbers from the gcc and the uae and saudi arabia are structurally higher than the pmi fell you see from a lot of emerging markets are the headline pmi number is one part of the survey. it's broken down into 12 separate components. what we continue to see in australia and uae, new orders
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and output growth. also, if you dig meet the numbers, you're seeing a bit of, weakness or not strong growth in components like employment. companies are still doing relatively well, but they are not expanding their payrolls. if you look at the charges the companies in this region have been able to get, those are declining as well. it's a very competitive environment, but the pmi's continue to suggest the nonoil sectors in this economy, despite the fiscal consolidation have still helped -- held up relatively well. tracy: we were speaking of the dollar a few moments ago. if we do see some weakness in the dollar, if we see that trend keep going and we have oil prices that have recovered reasonably well, will that provide a boost to local economies? 100 percent. particularly to a place like to buy that has an actual nonoil
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sector. the dollar was a big factor weighing on growth for things like the tourism industry and oil prices. consumerers a lot for and business sentiment in this region. but ultimately, it will depend on fiscal consolidation. on the regionew is you are going to see higher headline growth, higher growth in the nonoil sector, but we are still talking about growth around 2.5% here, so well below what we saw. does this lead egypt? we saw a lot of investors put money back to work in egyptian stocks. we see a lot of money in it just in government bonds as well. is he just going to be of the outperform or in the next six months? tracy: but the pmi was quite disappointing. yousef: it was, it was. great question.
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egypt has gone through a difficult time. they are in the middle of a balance of payments crisis, yousef, and that rebalancing of the economy will take time to basically unwind. we are optimistic on egypt over the long-term, but i think it's too early to say they will outperform in 2017. if you look at the pmi numbers, companies on the ground are struggling. consumers are also struggling as well. and that's the largest part of the economy. from my perspective, when i look at egypt's outlook, one thing i am looking at our ebbs and flows. is happeningf what in saudi arabia's nonoil economy, particularly the weakness in employment growth, which is important for a lot of egyptians, that's going to be a onative outlook, i dragged egyptian growth through 2017. hopefully not 2018 though. tracy: another trend is geopolitical risk. we were just talking about the
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iranian missile test. we have trump's travel ban. they're all sorts of things going on. what impact will that have? take your pick. it's the middle east. geopolitical risk is nothing new to this region. we have been able to grow other times of heightened volatility. when i look out to 2017 and 2018, i'm not oh concerned about geopolitical risk stemming from donald trump. i don't think that matters as much to the outlook here as oil prices and the outlook for government spending. remember, the structure of the regional economy is quite simply are. government spending driven by higher oil prices. those of the factors you need to look at more than geopolitics. tracy: all right, we want to leave it there. that is senior economist jean-paul pigat. coming up, we will have more on why week wage growth may not
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dampen the fed's appetite for a rate hike. this is bloomberg. ♪
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>> the first word headlines from around the world. out more missile tests during an annual military exercise. the test's came a day after president donald trump imposed forcing jens on several individuals and companies a response to the country testfiring a ballistic rocket last week. a commander of the country's guard said that iran will use its missiles if it feels it is under threat. the president of donald trump's economic council has taken a at
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the dodd-frank law, saying that they have stopped banks from lending. the former number two at goldman sachs has stepped into the controversial discussion of a administrationhe waits to seek its new treasury secretary. says that the trump administration will attack all aspects of dodd-frank. bey cohn: we want banks to working again. we want banks back in the lending business. what we think dodd-frank has done is stopped engstrom lending to small to medium-sized businesses. it stops them from lending to watch for yours. >> -- from lending to entrepreneurs. turkey's cpi rose to 9.2%, higher than the 8.6% economists had forecast. they blamed the country's
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weakness. meanwhile the imf urged turkey to boost the lira, warning about the risks of flattening. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm doubly humphrey -- i'm doubly humphrey. this is bloomberg. yousef: speaking to bloomberg after the release of nonfarm payroll data, williams said that despite low wage growth, that does not mean that the next fed meeting -- >> it is consistent with what we have seen. good job growth, steady economy. >> the other received wisdom is you cannot move in march because you don't know enough about the fiscal policies coming out of washington. john: i disagree with that, t a while. i look at where we are today.
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3%,ployment around essentially full employment. 2%.ation is moving back to given the progress we expect to make this year and economy, we can make decisions without knowing what happens in terms of fiscal and other policies. mike: the medium forecast is three rate increases this year, something you have called a reasonable expectation. if you don't move in march, do you run out of time? is there an advantage to going sooner rather than later? there areink that arguments for, and of course, against, moving earlier rather than later. i do think -- i would not want to be too timid or delayed too -- or delay too long. i think this is a gradual pulling back on monetary accommodation, if you will. let's take our foot gradually off the gas. i think this economy is proving
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they can reach our inflation goal without as much monetary stimulus as we have been giving. december isor copper -- in her december news compass, janet yellen warned that the economy does not need too much fiscal stimulus right now. do you think we could get too much? of thingse's a lot that affect that and we will be watching those in analyzing those in terms of the economic outlook. my view is the fiscal policy in general really should be focused primarily at this juncture on long-term issues like productivity growth, in terms of infrastructure or other things that can really affect real longer-term outlook of the economy. but whatever happens in terms of the economy in the u.s., policy developments around the world, we are going to be focused on achieving our goals, and moving monetary policy to do that. mike: there is wisdom in wall
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street and elsewhere that you should not raise rates because the economy still needs additional stimulus and they look at the history of the phillips curve model the fed uses, and they say, you kept rates at 0% for seven years and got no inflation. high inflation and employment coexisted in the 1970's. that basically the phillips curve does not work. has: the phillips curve risen at other times. my view is if we push the economy to our for too long, inflation pressures will build up. we are seeing some of those pressures building up in parts of the economy. i think we are in a good place there. we know from history if the economy runs too hot for to long, you will see imbalances. you will see inflation pickup. we don't want that to happen. we know from the past that high inflation is damaging. we want to avoid that. tracy: that was san francisco williamsdent john speaking to bloomberg's mike mckee. let's stick with the u.s.,
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because bloomberg view columnist mohamed el-erian thinks that trump's policies will be the main drivers of the market and not the fed. mohamed: what will be driving the market for the next few weeks is what we are from the white house and the balance the tween the program of elements and the ones the markets worry about, which is protectionism. that will be key, not only in determining where the market goes overall, but also the underlying volatility. a let's get more on how is it trump's policies play out. joining us, a strategist -- on theo have you program. i put together this lovely, lovely chart our clients can look on their bloomberg. it shows the net inflows into the qatar exchange and that white line, that is your p/e ratio. you can see the amount of enthusiasm, especially the
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second half of 2016. you are saying this is a market you should be overweight in, and you are forecasting, what? additional inflows? why are you so thrilled about the market? basically, given the outlook that the fed is going to be increasing rates in 2017 and the dollar will be stronger, we are looking ankara latest stories. one of them is qatar. regardless what happens with emerging markets flows, you have emerging markets upgrades and inflowsl lead to regardless of what happens, and we are looking at an overweight, over the short-term for guitar, because we think this will be supported for the market. this backdrop is very supportive for this trade, and throughuyers of qnb march, basically. right, looking for
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uncorrelated returns. another place where we have the us and craddick in events like a pop-up is, of course, saudi arabia. up inarabia going to pop major benchmark indices this year. do you expect that to happen? if so, how big an impact with that be? saudi arabia is the biggest on top equity market in the world. is very it is broad. you have a lot of sectors represented. saudi arabia opened up the -- opened up to foreigners in 2017. they have the last remaining hurdle before they clear the major market indices. we think given the precedent, ftse will happen in 2018 with a decision happening in september. if you follow the normal cycle, in decision could happen
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2019, but it could happen in 29th team -- in 2018. that arabia at 3%, and will lead to $11 billion of positive inflows and on top of that, you have more active -- calls: you made specific when it comes to qatar. any specific calls when comes to saudi arabia, or sectors that sin to gain in this new age of austerity driven government in saudi arabia -- that stand to gain in this new age of austerity driven government in saudi arabia? it is away from the tradition, making money a completely different way. mohamad: we're still concerned about what is good for the economy is not necessarily good for earnings in the equity market. government reforms are very positive in terms of sustainability, but for earnings growth in the short-term, that will not be very good for some of the sectors. however, having said that, we still like health care are.
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-- health care. we still like insurance. the banking sector will be a beneficiary of fed rate increases. and we let the government and the private sector take the lead role in investment bank spending. we think that they will fit in a year or two. we are also buyers of banks. for the inclusion story, you need to focus on the heavyweights. speaking, we like health care, insurance, and also supermarket. they will benefit from consolidation in that sector. tracy: you mentioned saudi aramco. we are getting a steady stream of headlines before this listing. how excited are you about that ipo, and are you a buyer, depending on where it actually gets listed? mohamad: it's hard to say
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whether we are buyers are not because that will depend on the oil market at the time of listing. we are excited. it would be one of the biggest theings in the case of meaner markets and possibly the world. that will also mean more inflow into the region. it's definitely positive for equity markets. you are staying with us. we have plenty to get to. and we will get to egypt and other markets as well. join us for that conversation. this is bloomberg. ♪
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tracy: well, let's get back to mohammed alsop -- mohammed ajj.ize -- mohammed al ho what are these stories has been the stunning rally in kuwait.
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the stock exchange index is still up 19%, i think, but down from its highs. is that the sign of something more to come, or are investors pausing for breath after what has been an epic rally? mohamad: we have them waiting for a pullback in the market for some time and it's very interesting to see if that pullback in liquidity is sustainable. usually if it continues, that is a good sign. that is the case for the kuwaiti stock exchange. investorsen local come back. i think you have had a lot of positive news flows, also some of the reforms kuwait is doing. ventsso have a couple of on the frontier and the seaside where pakistan is getting them -- getting upgraded to emerging markets. led to allocation with
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foreign investors. kuwait tends to have an underweight position. they have been increasing that location recently. tracy: i'm sensing a theme in this conversation. it's all about the benchmarks, right? is about the benchmarks. i have pulled up this chart here. 48 05. which is the net purchases of egyptian stocks. blue, dubai, and the red, the downside pressures on egyptian stocks. what are you seeing in those trends off the back of that circled area there, which was the devaluation in november? egypt is increasing foreign inflows into the market. the currency has overshot. we think that there is hope for that currency to slightly appreciate. on the economic side, obviously the reform is very positive, but
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usually reforms take time to materialize. what the stock market is telling us, the rally you have seen in egypt is around 20% in plus and dollar terms. that's positive. we are buyers of financials. consumers, i think, will take more time to materialize. theou look at the banks, r.o.e. is about 30%. for the industrials, they are coming back from a very low rate . we think there is more scope for the egyptian story. over the years to come, they should be able to continue. tracy: when it comes to egypt, we are also expecting an update from ftse. is that right? investors are still worried about their ability to get money out of the country. mohamad: last thursday night basically, they said that they are removing the restrictions on egypt last year, because the reports are they have been able
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--rip patriots money repatriate money in the market since the float. and that is the feedback we have been getting from a couple investors as well. so, we think there are positive developments there as well. thatf: the other big story traders are watching into the trading day as well is the ongoing speculation around the size and scope of some of the strategy updates from the bank of of a fgb as well. twoaw the earnings from the banks as well. what is the expectation of earnings going forward from this new entity? they had prepared a new slate of layoffs for the business. i still don't know all of the details of the synergies. that conversation has to be had with the banks analysts. but we are positive about the merger. we think the merged entity will be more profitable and r.o.e.'s will take up, we think. potentially you could have a
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higher dividend yield, and with the reaction of investor's, it seems there have been a lot of inflows into the national bank as much asi and not expected from fgb. it seems that investors are warming up to the synergies that could be created by this move. that going to be the major index event for uae stocks this year or is there something else that could happen? mohamad: we think given the laptop developments on the foreign ownership side, this is potentially be biggest event that will happen in the uae this year on the index i. inflows continue. stronger dollar and that could potentially come to an end. where is the dubai-ivo dobby story going to and? there seems to be a laptop conviction. -- where is the dubai-of who dobby story going to in?
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donald trump, pushing back against globalization, really casting a shadow over dubai? mohamad: dubai is the most diversified economy and has links to trade, aviation, and tourism. there is a shadow on the dubai story are the stronger dollar could potentially means slower inflows intoss emerging markets and a buy is the most correlated market to emerging markets in general. that is why -- on the macro story, we think it is still solid. we like it from a fundamental perspective. we think the stock market might decouple this year from the strong economy and there is no -- on investors. the uae is the most owned market, by far, for investors. great to have you on the program. let's look at some of the other stories where looking up this morning, starting up with european union. renew assetto
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freezes on key allies of russian president vladimir putin. are looking to prolong sanctions already 2014 annexation of crimea. the biggestlist, of --older in bankruptcy biggest shareholder in bank rossiya. peoplemore than 300,000 protested on saturday for a fifth consecutive evening against laws that used fines for officials who abuse their positions. scrapping the changes may not be enough to end the protest, with many calling for the government to resign, citing lacked of trust -- lack of trust. says an external look ate spearheaded to
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his murder as recommended key safety. rival in themain auction is only interested in purchasing parts of takata. coming up -- china prepares for his first full week of trading since the new year holiday. we will look at what is ahead, next. this is bloomberg. ♪
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tracy: you are watching bloomberg markets: middle east. live from dubai, i am tracy alloway. yousef: all right, let's cross over to a story from the imf. turkish central bank to boost the lira, warning off political uncertainty. inflation jumped into
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a five-year high. now it is a question of what the central bank will do that is substantial, and for the most part, it has not been a lot of policy changes. right? in: that's correct. they have been nibbling at the edges in recent weeks. they have had swap auctions where they are trying to offer lira at a higher rate to the banks through other measures, and they have raised interest rates a little bit in the past few months. the next meeting is in march. but the backdrop here is, of er4doganre to one -- is trying-- erdogan to centralize power. he wants to keep the economy growing. he wants to keep rates low.
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notwithstanding this spike in inflation, which the imf is pointing out. let's was over the currency markets. always a big deal in emerging markets, right? we saw something interesting last week. and we saw trump and his advisers going after the euro and the yen. they didn't go after the yuan, for once. is that going to resume, or is that going to have much of an effect on the chinese authority? justin: i think at the moment we are in kind of a holding pattern. is very difficult to read mr. trump's mind, but it looks like he is almost using mexico as a testing ground for the reaction to his policies. we are seeing a kind of working through with mexico now as far as trade is concerned. the trumpe u.s. and administration will learn there is probably quite a lot to lose as well in terms of u.s. jobs
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and what have you, and for example, mexico is one of the export destinations for the state of california. there are all of these kind of considerations that will come into play, and i think once that settles out, you may go after china, because he certainly has been fairly swift and carrying out some of his election pledges . and we shall probably see something like that, i would expect, over the next few weeks. tracy: yeah, it's hard to believe it has been less than two weeks. on a wider note, if we look at the fed decision last week, they decided not to do anything. we also had economic data that was pretty good. the nonfarm payrolls was pretty good, even if people were debating around the edges. that seems like a pretty good mix for emerging markets. there is good economic growth, but no potential for a rate rise anytime soon at least. justin: yes, but that can only
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go on for a certain period. as long as the u.s. data continues to improve, the likelihood of raising interest rates will come back in, which drives up u.s. bond rates, and ultimately would be good for the anything that is good for u.s. growth, yes, is likely to click on into emerging markets and be good for global growth, quite inevitably. yousef: thank you. giving you a preview of the stocks we are watching for you. earningscap tar's missed estimate, coming in with ofet profit the equivalent 3.6 4 -- rather, that is the stock price. rielswas 6.3 billion make sure those numbers are correct. company operating industrial complexes.
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also what joel for earnings from, of course, bp world. that's all we have for this edition of bloomberg markets: middle east. tracy: we will be live from the region the same time tomorrow. this is bloomberg. ♪
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