tv Bloomberg Markets Middle East Bloomberg October 31, 2017 12:00am-1:00am EDT
secession may be unraveling. is 8:00 a.m. across the emirates. this is bloomberg markets -- this is " bloomberg markets: middle east." we are in the latter part of the session in markets like new zealand and australia. have a look at the broader picture in the region. there is not really much to latch onto. markets are flat on the benchmark. we are mixed when you look across of these -- across a lot of these markets. there's been the emergence of these individual benchmarks. pulling korea up. japan is being pulled down by banks. or 130 companies are set to report earnings in the next few hours.
in currency markets, the dollar has been up. the boj is a big story for us in asia/pacific. it's about 12 noon. in about two and a half hours, a thatrence gets underway coincides with a flurry of growth numbers out of europe. that will be a very busy time. not just asia but what has been happening in the eurozone. >> yeah. other asset classes that are high on the radar. since the highest level february. look, if your coffee isn't getting you up to gear this morning, downside pressure there is down 6/10 of 1%. hedge funds have never been this
negative on the prices of our beaker coffee. -- arabic coffee. the gulf bond indexes widening a notch. comments from the u.s. treasury secretary saying there is much demand for u.s. maturity. that helps flatten the u.s. yield curve. bloomberg dollar focus, little bit of strength. it helps us understand better what is going on in these markets. we are under two hours away from the opening of the emirates market. it kicks off at 10 a.m. -- 10:00 a.m. local time. mixed set. upbeat on the net income fronts but a miss on the revenue front.
back to the function here. how the other indices fared. a negative picture. especially negative, energy and computer -- consumer staples. we did have some positive news from telco. let's get the first word headlines from around the world. china's official factory gates fell this month as beijing increasingly prioritize the campaign to clamp down on polluting industries and rein in debt. andmanufacturing purchasing managers index fell to 51.6 in october compared to the 52 figure forecast in a bloomberg survey. that's compared with a five-year high of 52.4 in september. the nonmanufacturing pmi was also slightly down. samsung electronics have hit a
record high after third-quarter net profit in a record. abouteat estimates by $200 million. the company cites strong demand for high-end chips. expects high supply and demand in flash memory. it is buying back $1.7 billion worth of shares and paid a dividend of $6.22. production will be extended to help crude retained its rally to a two-year high. counteracts the disruption in the kurdish region. oil maybe overbought. and catalonia, separatist movements are unraveling with reports that the separatist
leader has fled to belgium. he left without telling anyone or leaving anyone instructions for the way ahead. he was said to have gone as spain took control of catalonia. he posted a message on social media. a picture of the regional government building saying, good day. steven mnuchin wraps up a middle east trip in delhi. delhi -- doha. he says that the two nations have a shared understanding. the u.s. has been trying to find a way to break a month-long saudie in which the .egime has cut ties with doha this is bloomberg. >> thank you for that update. federal investigation into whether the trump cap lane --
campaign colluded. three people not been charged. paul manafort and former business partner rick gates are accused of conspiracy, money laundering, lying, and other crimes. george papadopoulos is also facing charges. this follows months long investigation into the possible crimes including possible instruction of justice by his associates. we are joined by jodi schneider. the first question i had, how much do these developments threaten the president? here is robert mueller making a case. we are seeing what is playbook is going to be. he is trying to get a lot of information, get a lot of data, and send the signal through
these indictments and through releasing the guilty plea from saying we wills go after a lot of people, a lot of information to get to the bottom of this to prove collusion. it's going to be very hard to prove collusion with the russian government. that the russian government work for the campaign and the white house to affect the election. but by doing this, by showing that they are trying to prove collusion, by getting all this information, and mr. papadopoulos is -- mr. papadopoulos'plea agreement, he has every reason to help with prosecutors. back at prove damaging. give us a sense of the
upcoming testimony of technology giants to congress about the russian impact. >> that's an interesting development in this hall russia be involved. while we have seen is some stunning figures from the upcoming testimony. facebook is saying when you look at not only the information that tiedurchased by kremlin operatives but also the number of times it was shared in light and have got to the whole social media sharing exercise, 40% of the u.s. population had seen some of that material. most people didn't know it was backed by some of these russian involved firms. that shows the reach of this.
that's more voters than voted in the last election. it shows how pervasive this is. to see be interesting what facebook's testimony is on that. so far they have been cooperating and are concerned. this shows just how much of this their wives in the last election. it does feel like we're just getting started here. thank you jodi. the other top story we may want to talk about is that the boj came out with their latest policy division -- decision. they are maintaining a policy rate. also the target for 10 year bond yields. there may be some concerns remaining on inflation. let's bring in kathleen hays. kathleen, i look at the headlines. why is this important? it's the boj, it's one of the
three largest central banks of the world, and what they have indicated is there going to continue what they have been doing. aggressive monetary stimulus. they trimmed their forecast a bit, that was expected. forecast 20.8% year-over-year from 1%. 0.8%recast from year-over-year from 1%. people are also waiting to see if one of the newest members of the policy board, mr. kataoka would be said. he did. they said that when they issued the last monetary report this should be noted of a policy statement.
he also wants the boj to start targeting the yield curve control that is not just a 10 year. that's buying more bonds. is considered more of an outlier on policy right now. some interesting comments from a former boj board member saying the 2% inflation target is too high. he thinks it will create financial stability. if -- if it best nominated to be chair again, he may turn down. kathleen, our team has done a bold move. what is going on the united
states in terms of the u.s. dollar index and they have also charted the approval rating for president donald trump. you could make the argument that at times it tends to live together. i wouldn't call it correlation just yet. of what the president does next and a possible announcement of the next fed chair, when can it happen? housest of all, the white , according to bloomberg news, has pretty much confirmed it is thursday. will it be powell? many major news industries reporting that is where donald trump is leaving. it probably will be. he's a consensus builder. he represents continuity of janet yellen's policy area -- policy. republican, he has experience in washington, he is
well respected. would be surprising to see trump after all of this guidance coming up the wash -- the white house choose anyone but jay powell. thank goodness it's only a couple more days of who will be the next fed chair. don't you think? we will. thank you so much. you will be on top of that story when it breaks. they will continue the talks on central banks in the fed does release its decision. check our special. that's 2 a.m. if you're watching in hong kong. still to come, a company is set to miss payment dates with an investor.
♪ we live on bloomberg tv and radio. i'm in dubai. >> we are here in hong kong. china released its latest factory gates. we are coming off a five-year high. bonds have been stalled off. let's get more on the pmi story. we are joined by malcolm scott. what is behind this drop in should i be worried? there are some antipollution
measures that have been taking effect. that's part of the reason behind this moderation. also, there is a weeklong holiday in october. that plays a part. should you be worried? just not -- not just yet. we are still above 50. we are in expansionary territory. were underperforming the right areas. the smokestack industries, some of the polluting industries, back below 50. the newer industries that china is looking to to accelerate, they are doing pretty well. we don't have the date all the terminal but with they told us that. there's a silver lining. >> in terms of the bigger
picture here, these numbers are really going to steer this government and in a different direction when it comes to reform, is it? >> know, this is just one month's report. we had a pattern where we have seen the last month of each quarter have very strong pmi numbers and the subsequent months dialback a little bit. a highest september in your photo here. signs it. no signs of it yet. it fell the most since mid-2012. if that continues, it could tell you a little bit about next year. the other thing we saw is summary moderation in the inflation picture. the china reflation story
started about a year ago from now. might be less of a boost to some of these numbers. overall, the economy is performing well. growth above 10%. we're looking at 6.8% full-year growth. were at a pause at worst. we have 6.7% last year. that might continue into next year. the good times may roll on for a while. >> thank you very much for joining us. let's stay with emerging markets. mark mobius has underscored that are attractive
targets as investors grapple with political risks in the u.s. and europe. he sees emerging could -- emerging currencies continue to strengthen. u.s. growth coming back up because of the floods and all the rest of that. emerging markets are still powering ahead. china and india growing at 607%. we didn't expect -- six or 7%. we didn't expect that. -- rate hikeake cycle. this is the msci emerging markets index. it's going higher as race go higher as well. trying to tell people, don't depend on interest rates to determine what will happen to the market.
there is no correlation over a long. of time. riods, if a great hike is coming and people get scared, they sell, but it doesn't happen all the time. are going uprates that markets are going to be in trouble, don't think that. u.s. dollar has been weaker when many expected to be stronger. said hikes seem to be a's side story. be sideikes seem to story. you are going to see much stronger emerging-market currencies. we've seen a lot of movement up from the bottom. we think is going to continue. >> that was mark mobius. let's try and flesh out the key things.
we bring in design. guest.ring in our we have to talk about the bigger fed story. what would be your first trade if you hear that powell gets the nod and if taylor gets the nod? the dollar in the case that how will gets the nod. they are very different. continuity oft what yellen has been doing. a margin more hawkish than yellen. clear hawkish move. contrast in the way
monetary policy is managed. that has toel base be hawkish and the other one is more macro-based. the market is trying to get its head around the direction for 10 year u.s. yields. bloomberg tells the story little bit. the question being, whether these treasuries are topping out. we've hit a high mark twice. the folks at bml capital markets say this double top is open to a recess. more downside then? >> that's a very short chart. chart, therelonger 2.42, and of 2.45,
people are talking at the next target of 2.65. in my view, tax reform could push yields higher. fed isin charge of the more relevant for the short end of the care. in the case of taylor, the curve will flatten. the dollar may strengthen across the board. that,se of powell, given the dollar will weaken again. it's a veritas up. -- it's a bit of a tossup. >> is it possible that as yields go up with so get a bid? >> why not.
if you think yields can only go , the simplistic view that when rates are being raised stocks will fall, i think .hat's the -- to simplistic in the aerospace attack in the u.s., there's still room to appreciate. what are your top conviction traits. what are you passionate about? >> it's a bit tricky. there is uncertainty and policy uncertainty. ishink for emerging markets that are to trade in relative terms. sing dollar.t the
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the market open. we saw a little bit of a stronger dollar. that includes the commodities space. let's check in now with debra mao. china's official factory gates fell this month. they have increasingly prioritize the campaign to clamp down on polluting industries. to 51.6.ell that is compared with a 52 forecast.
in five year i was 52.4 september. the nonmanufacturing pmi was also slightly down. to boj board has voted eight one to retain its policy. japan can hit its 2% inflation market during the 2019 fiscal year. dissenting member kataoka says the boj should target a 15 year -0.2%.d -- yield of high.g has hit a record profit was 9.8 billion dollars. it expects high supply and demand conditions in flash memory in the fourth quarter. it is buying back $1.7 billion
worth of shares and pain interim dividend of $6.22. three people have been charged in the investigation into collusion with russia. campaign manager and a policy advisor have been accused of multiple crimes. manafort and gates denied the charges but authorities say george papadopoulos pleaded guilty weeks ago and has been cooperating. the responses came thick and fast. president trump tweeted erroneously that the events surrounding the indictment predated the campaign. he also asked why hillary clinton and the democrats were not being investigated. the white house has tried to distance the president from the inquiry. there is no intention our
plan to make any changes in regards to the special counsel. today's announcement has nothing to do with the president or his campaign or campaign activity. hasreal collusion scandal everything to do with the clinton campaign, fusion gps, and russia. from opec and russia that oil production costs will be extended help extend the rally to a two-year high. at into the mix, instability in the kurdish region. was disrupted after iraq captured fields. global news 24 hours a day. i'm debra mao. this is bloomberg. away fromtwo hours the announcement by the bmj.
markets in sydney are almost shot. the midway point or the lunch break in hong kong. let's look at markets. >> thank you. we're seeing a pretty flat movement on the asia-pacific index today. november to those 2007 highs. at a record high face to samsung hitting a record high. apple suppliers in taiwan are rallying. apple on friday said demand for the new phone was off the charts. you're still seeing weakness in consumer stocks. we had a good run up last week. the brent price holding around $60 a barrel.
that is wayne of asx 200. the asx 200.n a little bit of mixed movement coming through in asian currency. gold holding steady as well. when you look at the movement of the region, look at softbank. off by 5%. its biggest drop since november of last year. of a tiehe reports between sprint and t-mobile. the talks have apparently hit a snag. you're seeing a bit of weakness coming through. the last trading day of the this is what we look at the heat map. gains upr, the monthly by 4.4%. that is the best month since january.
also a 10th straight month of gains. this rally continuing in global equity markets, particularly here in asia. the heat map function is one of my favorites. let's take it back to the region. fors keep a lookout treasury secretary billy -- aeven mnuchin wrapping up discussion in qatar. to the traditions have a quote shared understanding? rex tillerson visited the region last week. the more marketing part of the a unit of properties are set to end the ipo draw. they are expected to offer
shares at a 10 to 20% premium. estimating emaar's value at 9 billion u.s. dollars. our guest joins us now. good to have you. what i'm trying to get my head around is how much value is currently trapped because of this golf crisis. resolutionndoff unlock a new inflow? see that welearly have seen a decoupling of equity markets from the on price. price. the oil something more has to be more
economic reform in the region. i think the focus in this regard is on saudi arabia. we had a lot of talk about the new city on the red sea and with ideas for the investment funds to invest more broad -- more a broad. what has weighed in the markets is the talks about the ipo and the quality. it's going to be completely different. all eyes on this subsidiary of emaar. how much demand do you expect? is it going to price at the top
end of the range? >> that is difficult to say. dubai is a special case. , the good oil price has not been good for the region but dubai is not in oils lori. -- an oil story. the economic indicators have been doing rather than other countries in the region. as far as emaar is concerned, i would be optimistic. i think they could do rather well. >> this is david hong kong. you seem to be mentioning the oil price a lot. oil price are at a two-year high. what does that do for this
reform agenda? when you need to change the structure of the economy or the call for change comes with times are not good. but with oil at these levels, has the appetite for reform been taken down a notch or two? it could be different this time. i think the oil price is increasingly determined by supply rather than demand. i think that is a long trade that started 2014 and will remain there. there is an awareness that supply will determine price. that is something the producers are aware of. they need to reform too. they cannot depend on global demand. that, structurally,
the oil price depends mainly on supply nowadays. that is a structural issue that the producers have sorted. they are continuing to affirm cuts in production. now how are we going to reform the economy because it doesn't depend anymore on the global economy continuing to grow. demand is not going to be the long-term driver of oil. >> i want to know when you are telling clients in terms on how to invest in this part of the world. we put fixed income and equities on the bloomberg. in terms of the performance of golf bonds versus golf stocks, fixed income has outperformed.
it would have lost money if you put your money is not. what you telling clients? we are quite cautious on equities. equities have not profited from a stronger oral price. i would say that the oil prices are going to stabilize. so if you don't profit from that environment, we need to the more progress domestically. that's what i was saying to them ago. we need to remain cautious on local equities. and we need to monitor saudi arabia in terms of reforms. it's not about how much money you raise, it's how transparent are you going to be. what does that mean about what you are going to reveal about the long-term perspective of your economy.
that's why this is important it will be done in the u.k. or u.s. instead of locally. >> your sticking around. let's widen the conversation as well. the gas company is said to have no plans to repay the $700 million worth of debts. be the second time in five years that the company failed to sell the bonds at maturity. rarely does a we go by without some new twists. most of this year, we have seen a lot of noise around dana gas and what will happen with these bonds. they been dragged into court.
today for $700 , theon of their bonds company is not going to be making a payment of that. surprisingly, we saw the bonds selloff yesterday. now investors will be waiting to see what the next stages. danaill ongoing around gas. from where i am sitting, you hit it right on the head. every week this seems to be a new twist or turn. something to watch out for next, what would that be? if you had to pick one factor. the next key date is
mid-november when the hearing in the u.k.. then to settle an injunction in the uae. determine whether dana gas gets involved in the case. the bondholders are saying is ludicrous of the company is that is asay non-islamic debt sufficient have to pay it. so they shouldn't have to pay it. it's not a is saying systemic issue for the islamic finance industry. it's an equity like instruments
-- instrument so you would expect equity like returns. italy of the u.k. judge to proceed. >> matthew martin, our finance reporter. the latest on this twisting turning tail. you can find our interactive tv function at tv . if you miss that conversation or the previous conversations, just scroll back on your tv and watch those. fixed income against equities. how you would've lost money putting it into equities. is also you becoming part of the conversation. send us messages. get the questions in. for bloomberg subscribers only.
♪ up on somet caught of the latest headlines. is weakening because of a snack between t-mobile and sprint. someone close to the companies say they cannot solve differences on valuation. told thathas been several softbank board members are unhappy about relinquishing control in the u.s.. in japan, nissan is planning to extend the hall in domestic vehicle production because of the quality scandal. find enough staff to carry out quality checks. the ceo said a production positive last two weeks or less.
they admitted to allowing uncertified checks for several decades. told that it been planned chinese takeover is facing increased scrutiny. it's potentially putting the deal in breast. the worry is over personal data of blood plasma donors and receivers. >> let's talk about catalonia. the separatist drive there may be unraveling with reports that the catalonia president has led to belgium. withoutdia say he left telling anyone. spain took physical control of catalonia. he did take a picture of the
regional government and posted on social media saying, good day. let's get more with our guest. luciano, annette to climactic way of unraveling this crisis. spanish markets are returning to normal. geopolitics has a very short shelf life. fundamentals in europe. >> i'm not sure about what has a short life were not but the fact particularonia in this was known to be a red herring for quite some time because the region is extremely split between independent this and unionist's. last ditch desperate act.
it's a very difficult situation. tos difficult for catalonia exceed with more than 50% of the people or around 50% of the people are not convinced about it. it's a very wealthy region and wealthy people don't want to put too much at risk. we don't see violence, we don't see major shocks, that is good for market. would you consider this -- wouldrussian mark you consider this resolved? will have a runoff election in december so for these next couple of months this will not determine anything. to put it into the geopolitical is a threats
through this whole story that indicates geopolitical instability. are in favorntists of the european union. nobody wants to get out of the european union. geopolitically, i think it never was a threat. it was not a geopolitical issue. >> speaking of the broader economy in europe, the currency markets, i'm looking at euro-dollar. it seems to me there are two major forces on a collision course. what is the improving picture we are seeing across the broader european economy. the other side is the changes that the fed. does the latter the rally strengthen the euro?
does the latter derail the strength in the euro? i do not think the federal reserve policy will be significantly affect it. what i do see is a very throughative to policy 2021. eventually there will be tightening or hiking rates. right now, the positivism about europe is determined by the fact the euro rally has probably petered out. fiscal stimulus could come from glue keeping the
coalition of mrs. merkel together. i'm that abandons austerity is exactly what the european periphery and the u.s. have been asking. i think monetary policy is going and still predictable quite accommodative across the globe, particularly in europe. thank you very much are coming on the show. very passionate viewpoints. we are happy to hear those. some ideas as you head into your trading day. upgrading their recommendation on first abu dhabi bank. target price has been raised.
cut a schulz has been named president. they say the ceo changes effective november 1. they are the largest maker of generic drugs in israel. a seven-month search for a new leader. that stock has been down 65% this year. >> lots of things to watch out for. we are moving into 1 p.m. here in hong kong. we are looking at 90 minutes until the boj conference. we have a flurry of growth numbers coming out. all of that comes to fruition within the next 90 minutes or so. it's going to be a very busy night. we also had upgrades and the crew forecast. in the crew debt -- crude forecast.