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tv   Bloomberg Markets Middle East  Bloomberg  February 21, 2017 11:00pm-12:01am EST

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>> opec will need to for a long output just to eliminate the glut. we speak exclusively to patrick -- >> saudi prices fall for the first time in a decade. ousef: it is all in the timing. the central bank should not wait too late to hike. prepares version two of his travel ban trump
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discusses mass deportations of immigrants. welcome to bloomberg markets. it has just gotten to midday. taking a look at the markets and asia, they are in the green. the exuberance we felt and wall street is not caring to asia. take a look at the nikkei. it is in a downward pressure from a stronger japanese yen. we are seeing the dollar index reversing that earlier rally. gaining ground 2/10 of 1%, you can not just fight that rally in hong kong, the highest since 2015. increasingly the focus has been on commodities. we do have oil gaining ground. take a look at the bloomberg.
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you can see this chart. that as we see this correlation, going into the green after being in the negative, you are not seeing that anymore. breaking news out of malaysia. moment, you at the are seeing the dollar oil correlation now. we have commodity prices filtering in to the inflation story. beating expectations. one countryking where we are not seeing those price gains. yousef: definitely a bit of a surprise here. the latest coming out of saudi official terms of statistics. deflation. take a look at this chart to tell you the story here.
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i have highlighted this for you with the circle in yellow. that white line is the bloomberg dollar index. the saudi re-l, we have seen terms of recreation and coulter. were there any further dollar strengths to way into that given the source markets for food and beverages are linked to the u.s. dollar? you in break it down for terms of forecasts. it was staying around in this part of the world. in dubai, abu dhabi. what a trading day we have had. some big companies under pressure. shares up 6/10 of 1%.
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losing tremendous ground over five percent. in terms of what is happening, we are seeing downside pressure. energy among the notable exceptions. take a look at that rebound. up 1.7%. >> will be talking about the egyptian pound later. >> thank you. the bank of england governor is not providing specific guidance of rates beyond february's inflation report. he said rate hikes could be faster or slower than the market expects. he expressed frustration about policy response to the brexit referendum. >> success is an orphan on this. the bank did take some serious steps to mitigate those. therehad not done that
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would have been macroeconomic consequences. it is important that we did it. we have to accept that we are never going to get credit for it. thelet: a new poll shows french president candidate is back on track to qualify for a run-up raise. three points to 21%. he was forced to apologize for hiring his wife and children on public salary. marine le pen remains a front runner. sheldon adelson says japan is the ultimate business opportunity and could spend $10 billion on a casino there. he envisions an integrated result boasting a record number of slot machines focusing on convention terrorism. have expressed interest in japan after
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legalized casinos in december. wells fargo has sacked managers at its -- as it's boring content dashboard continues to investigate its scandal. how more than 2 million towns are open without customer information. by 2600ews powered journalists and analysts in 100 and 20 countries. this is bloomberg. yousef: the ceo of european oil giant has been encouraged by the commons from the u.s. secretary of state on the iranian nuclear deal. exclusively and asked if he has changed his plans for an investment in an iranian gas field.
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>> i have been encouraged by statements by the defense minister mattis. within theng to work framework of the treaty, the nuclear treaty. up ours the case we will investments. we are a public company. we obey international rules. it is our business to be board. if the contract is good we will move on. >> have you talked to the u.s. administration about that? >> of course. we talked about that to the last administration. the state department is aware. having said that we are also in what isor invest good for our shareholders. and i ran we have a long history. we have been able to stretch our
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contract, which is a good contract and we are willing to move forward. to what the listen u.s. a administration will decide. listening is very important. >> have you talked to rex tillerson about that? >> i have just congratulated him. not since the state department. >> how do you read the administration and russia? is the an area of risk or opportunity? to bringcan find ways back a dialogue between russia and the u.s., it is good for everybody. we are facing plenty of uncertainty, in the middle east, so what is the most important thing? it will be good if we have more stability. i know it is not easy. each u.s. president when they
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, to have a dialogue with russia. you need to find a good fit. we have a lot of investments with russia. prefer less sanctions than sanctions. i think it is more important for the world. >> have you changed your investment strategy in the u.s.? do you think it could be tough on climate change? how has he altered that? -- americaorced first policy is good for the u.s.. i'm willing to develop gas in particular. you have a huge abundance of gas. we can transform it into natural gas. we are the number three world's largest company in the energy business. we are willing to develop it.
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in sanctionsnce and new projects to create jobs. we made an agreement. the policy will be maintained. it is very important. yousef: plenty more to look -- from thatthat yo interview. we will get additional analysis. we do have another exclusive interview. the feds will write that the central bank should not wait too long to hike but doesn't want to surprise the markets. we get you the details. this is bloomberg. ♪
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sign is measured to deflate the housing bubble may be paying off. the fewest in a year. this, can we say the curves areproperty succeeding or are we getting ahead of themselves? >> we are seeing a coup and that is what they wanted. capital needed to go somewhere and they did not want to go to the stock market. it was in the housing market. cities,those high tier
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it is not uniform. let's be clear. where they had problems they stepped in. that is what the data showed off. yousef: when we look at the data, we've seen signs of that stabilization the that's a far cry from what is needed to take their foot off of the brakes in terms of cooling measures. >> totally. point,ay they made the there are 16 cities identified around china on the property front. the challenges they need to rein in access -- excess liquidity. that witheed to do wider economic recovery. we know it is likely to be the narrative. a big part of the chinese
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growth the story. it needs to balance and rain in those prizes without attributing to the wider economy. that's going to be difficult ahead. about the broader economy for 2017. >> it was an interesting speech. how tackling the impact of the economy is going to be there core problem during the year. are quite they serious about reining in excess liquidating -- liquidity. targeted a series of things in his own words. , know we have heard it before at the very least he acknowledged risk and it shows helping.seriously
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it is a question on if they are delivering on those words or not. stories, our other top cautioned against the u.s. central bank waiting too long to raise rates. bloomberg tv spoke to her asking what she needs to see before she is comfortable with movement? if the economy continues progressing along the forecast i've been saying i think the data has come in. no one thinking that we have to raise rates. if you look at the seminary -- summary, we are going to give another set in march. that is consistent with where we are progressing on our goals. in my view we are basically at
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full employment from monetary policy in the labor markets. inflation has been moving up toward our 2% goal. my forecast is we are going to move that up over time. comfortable with interest rates moving up. i want to hear the discussion at the meeting. we are going to get data between now and march. i like to hear the discussion at the meeting. different participants have different views of the economy. >> is there a concern that we are seeing some odd season, through? you might want to wait longer particularly as the followthrough from the pickup in sentiment since the election hasn't played out yet? even despite the sentiment, if you look at where we are relative to our goal, the
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economy is moving closer on inflation. i like to look at the media run outlook. i have a gradual path of interest rates over time. the timing isn't that important from a macro perspective. we have beeny making a lot of progress. you don't want to delay too long. then you will be behind. i do think if we continue to make progress and keep delaying we would get behind. it is important because we want the expansion to last. we don't want to do something that if we delay too long and pressures build up, we want to be -- we doubt want to feel we have to raise interest rates that could put at risk the expansion. with adual path ins up
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better outcome overall in terms of the length of the expansion. >> how many rate hikes were you penciling in? considering any part of the rejections? -- projections. >> we are going to be going to the meeting to put in a new forecast. growth is a bit above trend, my trend rate is 2%, which is higher than the median. my inflation forecast has inflation moving up back to 2% over the next year and a half. is 5%.ployment rate i have unemployment rates going
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down from here. basicallyast is similar to what i see going forward. there is uncertainty around all forecasts. forecastingnk about that are things that could happen. shocks could happen to the economy. there are risks. i think this is a time where there are uncertainties about the fiscal side of policy. we have in what we can to wait to see how things play out. always keeping focus on our goals. >> i would like to pick up on what you said. there is a layer of uncertainty, what is going to come through with the new administration in terms of policy. are you uncomfortable looking at why we are seeing this rally?
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has it happened because of the election or in spite of it? you are uncomfortable making these assumptions when it comes to the policies. >> the devil is in the details and fiscal policy in terms of timing of the impact and size of the impact. that is uncertainty around package. uncertainties. there is a lot of geopolitical uncertainties. a forecastto make and think about what is appropriate policy. in an environment like this we may see more changes in our have overhan we might
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the past couple of years. coming up, it is not just a travel ban that president trump has in his arsenal. his moves on immigration, next. this is bloomberg. ♪
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yousef: welcome back. 'sery: president trump administration will as soon release a new version of the banding of arrivals from the seven muslim majority countries. the president will have a vast legal arsenal at his disposal. . gary larson has more on this. how much authority does a sitting u.s. president have over immigration?
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>> he has quite a lot of authority actually. he has the last word on saying how many refugees can come in. that number is indisputable. when it comes to dealing with the 11 million undocumented his executive order on generate 25 is pretty widespread. virtually most of the 11 million people. yousef: when the donald trump administration put through the travel ban it was challenged by a series of legal claims. to what extent does the administration open it's up -- open itself up again to legal complaints? i spoke with several
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immigration lawyers and they all said that this other executive order, more for domestic enforcement is going to trigger a wave of lawsuits by individuals and groups representing them including the aclu and immigration rights groups. it could be some time beforeinds representing there is a final outcome. it is still very early. the executive order has not even started to be implemented yet. homeland security just said what a directive as for this order and they have not begun. this is the beginning. how does the trump administration focus on immigration differ from obama's administration? there are key differences here. focused ont obama
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ramping up deportations of illegal immigrants, undocumented immigrants who had committed crimes. millionted over 2.5 such people which was far more than the presidents before him. experts were not happy with president obama in that time. he focused on people convicted of crimes. president trump through his executive order, homeland security is going to begin implementing, anyone of those immigrants who happen to come into contact with authorities, local, state, federal are at risk it being deported even if they have not committed any crimes. yousef: thank you. all right. a preview of what is still to
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come on the program. extending the cut for our exclusive interview as he calls for restraints from oil producers to clear the global glut. this is bloomberg. ♪
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shery: it's 12:30 and hong kong. 8:30 in dubai. the trump administration has issued memos on undocumented immigrants. it would allow swift deportation of many more people without court hearings. or even those segway thought to be dangerous. verizon is getting a discount on its acquisition of yahoos internet properties after security breaches. is expected to close in
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the second quarter. will share yahoo! ongoing legal responsibility related to the breaches. chung became the first of hong kong leader convicted in a criminal trial. he failed to disclose a conflict of interest when he was negotiating rents with a landlord. his defense team says he may appeal. china's measure to deflate a potential housing bubble may be paying off. home prices rose and 45 out of 70 cities in january. policymakers have extended home purchases. some banks in beijing have also
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raised market rates for the first time buyers. shares are rising after data. >> we have not been seeing a lot of conviction in the trading session. >> a weaker start to the morning. most markets will gain outside of japan. we did have yen strength coming back online. we had the fed president telling us she would be comfortable with higher rates. putting the outlook ahead of the meeting out tonight. onare seeing that away exporters in japan. sheba climbing almost
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19% as it sells its medical financial stake to canon in a deal worth ¥4 billion. to sheba's chip unit will rise ¥2 trillion. it is surging on that share buyback which was seen as a positive surprise. we do have the housing leading gains up a 10th of a percent. given theup 3.3% price gains in a few cities in china. in shanghai we have banks following a stocks 10th of a percent. a quick note, coming into the material stocks are following.
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resultsspite stronger provided. it is making you wonder and speculate whether or not the upside in the commodities space has been baked in two shares. a last note, the largest ever bond sale, $11 billion worth. the ceo says opec and russia will need to prolong their deal to cut oil output if they are going to have an impact on the market. right now it is the highest level since july of 2015. in an exclusive interview he says the cubs will be extended beyond may. >> i am convinced we will have to do it. it is not only opec. it is also russia.
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the driving force was russia. history,irst time in they will need to make some cut, which was the driver, which is the argument for the policy. opec. opec and non- an impact onto the market, it will be to have expanded beyond may. quite good for the industry. >> what about shale? the industry is dynamic. $55. you see money coming back in these industries.
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if you want to acquire a position, i need to guess $80 per hour. it is a matter of a step to invest. it is a business where the -- ers it is expensive. >> you increased your dividends. you have described how it looks like opec will probably continue beyond may. forou think the bad times the oil industry are over? >> i think it is a volatile market. libya coming back to the market. compliant,untry be
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the strategy is to continue to lower the regular. my job is to be sure we are profitable. the answer is being disciplined. let's widen the conversation and bring in simon. great to have you on the program. in's jump in to the comments terms of the risk the u.s. shale rebound is posing to this agreement based struck at the end of last year. >> it is positive for the oil market now that we have them at the $50 low barrier. we should remember getting oil prices too high from here, oil
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has had a cap on the market. we should remember we do have an infinite supply line. shale oil producers are more efficient now. we see more producers coming online. the oil supply will continue to be there. >> let's talk about the compliance coming from the opec side. thatst heard from opec they are optimistic about compliance. take a listen. >> we are going to go for much higher levels of compliance because of the high level of brought.t we have shery: should we take him at his word? is pretty serious this
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time around. is a good thing for all participants that we have this strict compliancy. going forward we will still have supply but also what are we trying to achieve is to close this supply glut. that would take 3-6 months in our view. yousef: i pull out this chart which has a lot of what we discussed. you can see the reduction in opec output. that is the line in blue. take a look at that. then you have the reference price. not moving off of the back of that. we are looking at $60 a barrel on average in 2017. what is your call? >> we will have opec on the down
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to support the $50 below. then we will have supply from the shale oil producers to cap the markets. shery: given that we solve this rapid record build up of bullish bets on oil is there a risk of long liquidation early? they have -- the risk is there. we have seen this major positioning, now above one billion barrels. speculation.jor the speculation is the combination of higher global with more demand for oil out of china and asia
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should bring -- the world supply into balance with demand. on that background there are speculations we could see spikes the other way around in oil. yousef: we have plenty to get through. i know you said we have to talk about the latest comments from the fed officials. stick around for that conversation. ♪
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yousef: welcome back. you are watching bloomberg. consumer price inflation hitting saudi arabia and january for the first time in over a decade. , a weakness of the economy lot to do with low oil prices.
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>> it is a combination of factors. hikes6 the energy price domestically really put upward pressure on costs. that turned the corner because in january deflation for the first time in a decade. i want to take you. bullet up on the bloomberg. i love this function. this is the overview in terms of the economy. see thepens is you can breakdown in terms of how analysts are feeling in terms of what is going to happen. you would be able to see cpi. you can click that and get a breakdown for last year in terms of where different analysts stands. a lot of it is driven by food and beverages.
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the head of fixed income is still with us. what do you make of these numbers? it's a milestone for a country that always had to deal with high inflation. >> what we see is the result of the contraction in the saudi economy due to the low oil price. this could be a brief phenomenon. if we go globally we can see inflation picking up all over the place. iat broad-based inflation, would rather focus on that. this is contraction because budget deficits need to be kept up. things inown a lot of the saudi economy. yousef: in terms of what this means for fixed income across dcc, the performance has converged together with the equity space. for somellar looks
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sort of direction upwards or downwards. , we willk that the gcc definitely see more. that classhave before. we have emerging markets. abilities in the portfolio. especially towards european bonds where people are careful right now. >> definitely. those european bonds, especially
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when it comes to french bonds , between the thech and german yields, widest since 2012 or so. >> exactly. some tensions in the european bond market. not only france but italy and is under some pressure. the election is coming up. when thediscussions on european central bank. the qe. that discussion is ongoing. well, strong numbers as inflationary. slide andkind of down
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upside. i don't think we have any opportunities in the european space yet. hand fromd a helping the ecb for some time which brought ecb down to artificially lower levels. what we see is a normalization of the investors taking into account what we are going to house and one or two years. i think there are too many risk factors in the european space to -- nto betting on i would be careful there. i would rather go elsewhere. shery: would you also still be careful in the u.s.? or me talk about the inflationary pressures, i wonder if the u.s. is vulnerable to the wrong kind of inflation for you
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would see prices rising because of fiscal policy. it could rise above real growth. the u.s. treasuries will be affected by what is going on in the u.s. and also globally. the story will put pressure on u.s. treasuries. look at what has happened the last couple of weeks. at the or less stuck below 10 year. this is what it addresses. and certainty in the comments we saw after yesterday. yousef: we will get a new perspective on that when the fed releases minutes. thank you for joining us on the program. let's show you one feature on the bloomberg that is amazing.
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you can find it at tv . and on thech is live right panel, you see all of the key functions and figures. key things that you need to know. let's get you now the key stories we're watching for you. business headlines, banks have overted a telecom proposal a miss loan repayment at a turkish unit. the lenders turned down the plan because it involved taking a billion loan..7 also buying a direct stake in the business.
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shery: expanding its book parent in the middle east, striking new deals with iraq's kurdish region. producerlargest oil agreed to buy without specifying the amount. they may also invest in exploration and production in the north african country. it is also buying kurdish oil until 2019. yousef: the world's biggest producer of white pigment used in paints and plastics. they agreed to buy the titanium dioxide business for $1.7 billion. the acquisition would enable them to triple production as prices and a five-year slump. it is 79% owned by saudi
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arabia's industrialization -- any, shery: coming up, is the honeymoon over for egypt? and just afrom cairo moment. this is bloomberg. ♪
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yousef: welcome back. you are watching bloomberg. we are taking a live look at asian markets. mostly in the green. take a look at the gm go function. groundanese yen gaining about a quarter of a percent. trading weodities are seeing base metals leading the decline, steel down one and half percent.
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when it comes to sovereign bonds you want to watch the 10 year yield. sale ofave that record bonds in australia. that went for 11 billion australian dollars. something to keep an eye out looking at the markets in asia. what are you watching? yousef: we are gearing up to a busy trading day. including earnings announcements from the commercial bank in qatar. -- stocks made marginal improvement. 2016, the estimate was 318 million. we have also got qatar islamic
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bank increasing the limit on the tier one to 7.5 billion euros. world. dp , that couldribunal see movement on the stock. global telecom holdings, that is your stock in egypt, one of the bigger ones, global telecom is to pay for iraq. that will be a key one to watch. the legal development for that business. we have additional comments from goldman sachs. chart.ring up an oil , markets need to see opec cut's bring inventory draw. how they aret
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seeing prices developed in 2017. updateshave additional from several key research houses. some adjustments and inventory will be a key one to watch. seeing the action at the highest level since july trading above 60 dollars a barrel. as we are talking about the commodity price with the theelation with the dollar, dollar index, a little bit of pressure. emerging-market -- that is all we have for this edition of bloomberg markets. what a show it has been.
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>> we will continue to watch the markets. join us at the top of the hour. what have a breakdown of the markets. thank you for watching. this is bloomberg. ♪
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>> you are taking a look at live pictures, that would be five -- vice of samsung chairman of samsung being taken to the prosecutor's office to be questioned. he was handcuffed as he was walking to the office from jail. involved in the bribery and corruption scandal ongoing in south korea. live pictures out of seoul. australia has sold $8.5 billion -- debtyears of dealt notes. rampingrnment has been up issuance and trying to rein in the budget deficit

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