tv Bloomberg Markets Americas Bloomberg March 5, 2018 10:00am-11:00am EST
from london, i'm mark barton. welcome to "bloomberg markets." ♪ u.s. stocks are lower today now as the threat of global trade wars loom. a will be speaking with finance minister. first though, we have breaking economic data. >> indeed, we are looking at the imf nonmanufacturing composite for february and it's coming in higher than the survey, coming in 59.5. the survey has been going for a print of 15.9. anything above 50 signals expansion, so this is certainly expansion and it also follows the manufacturing print on friday that was the highest level of this business cycle. all of this signifies economic strength relative to the major averages. we were looking at the kleins before. we are still looking at modest
the kleins. -- we were looking at declines before. we are still looking at modest declines. investors contend not just with the idea the fed could be raising rates this year three times or more, but also the possibility of a trade war. and again around the trade war possibility let's look at movers including boeing, caterpillar, nike. what makes these shares stand out, i'll have foreign competitors should aid trade war it wrapped that -- should aid aade war it wrapped -- should trade war erupt that they might lose business. happened ont what the bloomberg. this is an interesting chart. this is coming to us from credit suisse. we are looking at the s&p 500 and the vix, credit suisse says
every time the vix has gone up of 25, three months later the s&p is up. there is the potential of a super spike on the table. if i blow this chart up to a long-term view, you will see the and the s&p vix 500, have a to does he to reconvert to after times of volatility. they suggest we could see the and the s&p come in. and there is finally one stuck to look at -- the 10-year rates, the 10-year yield over the last month. did not quite make it to 3%. pretty close today. down just a little bit. you can see over the last month, up 13 basis points represented in red. isseems, mark, everyone focused on reit's, less focused
on the value of, but more focused on rates. the repricing of risk seems to be causing all of this book hillary. , abigail.ks good to get a plug-in. stocks up, should i say, the first day of the back of the biggest weekly drop since february. we've all by 3.7%. investors are shrugging off the impact of the italian election, higher,european stocks italy stocks lower. italy giving up his gains for the years. before, it was one of the few european forces actually rising. this is euro/dollar on the intraday chart. you can see the overnight chart and we have been drifting lower. the early gains from did by these social democratic party
vote, a vote to forge of that coalition with angela merkel. that bloc restoring stability to largest economy. now voters punishing in italy -- italy, theshing, and mainstream parties. it casts doubt on the political future and the direction. the euro slipping since closing at that three-year high. have a look at the italian 10-year. this goes back a year. we are up right three basis points. we were up i seven basis points earlier. staying calm in the run-up to the italian elections. rose to 3.7% last february, the highest in 19 months. closed byr, the yield
one .56 percent. it's not all politics today. let's talk about axa. look at the shares. down to them percent. a bit of m&a on this monday. it has agreed to buy xl group, seeking to capture a bigger slice of the u.s. casualty property market. paying 57 insurer is 60 at a 30% premium from friday from close. it is the biggest insurance deal since 2015 and the largest ever of a u.s.urchase body insurer. vonnie? you mentioned to the election in italy and germany's moved toward coalition kicking up a busy week. joining us now to discuss all of
this, our guest, portfolio manager at oppenheimer funds. thank you for joining. what are the broader conclusions about europe or populism we can draw from the results of italy's general elections? elections confirmed that way for populism and the general dissatisfaction has not really receded. news from theood french elections on that front. popular vote,he it basically says that one into italians voted in that vein on the terms of lots of dissatisfaction with the status quo and against what the political landscape for europe has done. from the market perspective though, it does not seem to be as dramatic.
because of europe being in a very strong cyclical position and some of the rhetoric from these parties being obtained in the last two weeks, the markets are not seeing this as a systemic risk as we saw during the first rounds of the french elections last year. vonnie: a lot of what we see in italy is domestic investment. how much outside investment are we seeing. is it bullish italy or is that less likely? billy has suffered and has tried to raise foreign investment in the country, which we know -- italy has suffered in his try to raise foreign investment in the country, which we know has been sluggish because of red tape, a very rigid labor market. italy will have to continue to push on reforms europe has been asking. that process is going slowly. to be honest, the current little
spectrum as not without ambitious plans. as we see between qe and the global cyclical rebound, some of the pressure on the italian political reform process is taking a backseat. mark: going into the weekend, some of our guests last week suggesting it was the german folk, the spd delegate vote on the coming together between the two factions that was the bigger risk. the past without worry. italy has transpired to be the worst outcome of the two. because of the italy result, now aat merkel is chancellor for fourth term, do we see less integration? has a voice, if the league has a voice, will we see less european integration? answer really depends on which way the consultations go. at the moment, we will have a multi-month -- it will fall off the rudder string on that cents.
-- on that cents. really, it would reach out to the center right coalition. the leading figure would be the northern league, which is an anti-european, a europe skeptic party, but that party will need a broader center-right coalition. so, if they managed to put together a coalition, however slim, however unstable, it will still very much depend on a pro-european stance. the northern league days of cannot set the agenda. it will need the support of the center-right and probably some of the members of renzi from party. what is key over the next few days is whether renzi well resign -- will resign or not. a question whether italy will pursue a pro-european agenda, and therefore more of a
compromise. the future was once of italian politics. incredible how things change. i want to move forward. the february meeting was deemed to be the meeting where we might get some inkling of the indication. that seems to of been pushed back a little. is that wise? would say it is wise in that we have had a recent dip in inflation data in europe. somone of the lowest in many months. rush is not a compelling for the ecb to signal anything at this stage. they could prayer -- they could prepare something for the next few meetings. but the change for the forecast can happen outside one of the quarterly meetings where they get the projections on the economic statistics. so, no rush. i think it is a close call the. vonnie: earlier in the crisis
stage, mario draghi said the first thing he would look at in the morning were the stock indices. what should he be looking at now? what should he be happy about? what should he be concerned about? io: i think it is important to focus on the spreads. that is the most important metric to watch. the ecb is telling back on its asset purchases. but the euro, they have not made that very explicit. they have referred repeatedly to fx developments rather than fx volatility in the last few months, which i take actually as a step up in their worry on the strength of the euro appreciation, so making sure that the euro -- the euro as a general dollar move, the euro on the other side of that has appreciated quite dramatically. that could have repercussions on growth, repercussions on inflation, and therefore leaving the ecb to step down the rhetoric. vonnie: well we have you here,
what is the oppenheimer funds position on the trade war at this point? how it will impact italy and generally europe and how it will impact your position? the trade war rhetoric -- it certainly does not help. we have a a -- pro-risk portfolio in the sense that we are pro--- we are heavyweight in equities. the equity components in the currency component is, there could be risky to that trade. however, what we've done in the last few weeks is to do some rotations in our hedges, primarily from the fx side and currencies like the japanese and reduced our exposures in the canadian dollar. at this point, tariffs are mostly a risk for currency
markets. if they were too -- if this rhetoric were to go far more into a negative territory, it could begin to affect equities as well. mexicancertainly the peso is headed to 19 and the canadian dollar headed toward 1.30. to first word news. taylor riggs is here with that. taylor: president trump stepped up his campaign to impose tariffs on imported steel and aluminum today. he said that canada and mexico will be subject to these duties unless a new and fair nafta agreement aside. he says that nafta has been a bad deal for the u.s. kimfirst meeting between l says heials in seou took power in 2011.
and it is the first time an -- then aircraft carrier uss carl benson arrived today. the u.s. and vietnam are trying to stem expansionism in the south china sea. ihs markets as the region was revised downward to its lowest level in four months. aill, growth is running at quarterly rate close to 1%. global news 24 hours a day powered by journalists and analysts in more than 120 countries. this is bloomberg. i'm taylor riggs. vonnie: a meeting due to take place tomorrow has been definitely postponed, with broadcom having a hostile bid
for qualcomm. vote on sixders broadcom nominees to the board is scheduled friday, and then we found that the committee on foreign investment in the u.s. is investigating. it is a split committee. it's a very, very interesting story. now it looks like that vote -- shareholder vote has been due, probably, to the investigation. broadcom had been fighting to relocate to the united states in may anyway. that shareholder is -- that shareholder meeting is now delayed. this is bloomberg. ♪
mark: live from london, i am mark barton. vonnie: and i am vonnie quinn. this is "bloomberg markets." the latest wrap up round of nafta talks being overshadowed by president donald trump's plans to impose tariffs on steel and aluminum. cityel mckee is in mexico now. michael, negotiators are hard at work. they have six chapters written out of 30. does the work continue in the face of these tweets and this language about trade and trade wars? well, we will find out this afternoon, vonnie. at negotiators have arrived the talks. they began rotating bilateral meetings about an hour ago. the question is all across the country whether they will
continue, and that is because of the steel tariffs. u.s. trade representative robert lighthizer say about whether canada and mexico are included in the terra for regime question mark u.s. officials have said they are and the president tweeted this morning that steel and aluminum tariffs will not be lifted unless there is a new and fair nafta negotiated the review could take that as somewhat good news, because it is suggesting they could continue to negotiate, but shortly after that the mexico economy minister said that this is no way to incentivize new talks or negotiation, to threaten us, and both countries have threatened to retaliate if they are included. statemenththizer's could indicate whether these talks continue at all. theie: what are possibilities here? can the teams negotiate and leave out the chapter in steel and iron, for example?
do they stop negotiating if there are tariffs in place question mark does someone have to order them to stop negotiating? michael: in this case, it would be the president who would pull the united states out of the and mexicocanada could stop if they are unhappy. they have close to five chapters and have done a lot of work on the rest of the 30 chapters are. there are still issues of contention on automobile content that they hope to look at on the sidelines in between sessions. there is the hope that eventually they may come to an agreement. run up against an electoral deadline july 1, the boat in president,a new november, u.s. midterms. they could suspend the talks and , but it depends on the relationship between the three countries and that depends on donald trump and steel tariffs.
mike, i know you are in mexico, i know we are talking nafta, but i know i can throw anything at you. this is another trump tweet. if i could just read it out -- if the eu already wants to increase their massive tariffs on u.s. companies doing business there, we will simply apply a tax on their cars that really poor into the u.s. they make it impossible for our cars and more to sell there. ! does theimbalance president really want to get into a trade spat with the european union which accounts for more than a third of global trade? that is the open question. he talked about it during the campaign. withemember he was angry germany about manipulating its currency even though germany does not have its own currency. you wonder what he knows. aret of european cars
imported to the united states. bmw's plant in south carolina makes more bmw's there than in europe and they ship them mostly back to europe. they could have negotiated this in the transpacific partnership. for loweringalled those tariffs. whether he can come to understandings with the europeans in the meantime, that is an open question. mark: mike, great job there. a busy day for mike. busy day for those nafta talks. still to come, the back and forth over the irish border a major sticking point for brexit. what is the republic of ireland's view on the issue? we will speak with the irish finance minister. this is bloomberg. ♪
vonnie: this is "bloomberg markets." i'm vonnie quinn in new york. and i mark barton here in london. time to look of the biggest stories in the news right now. fortis going to lay off 2000 workers for almost six months this year. they will use the time to build a michigan plant to build a new range of the cups and suv's. in may.ffs will start has interest from kkr. the company has a market value of $3.8 billion. health care services to the elderly. largerinsurer axa once a share of the u.s. casualty market. excelill buy a portion of
group --xl group. natural disasters last year pushed prices for coverage higher. that's your latest bloomberg business flash. vonnie? vonnie: still ahead, we will speak with a senior adviser aimed at an initiative navigating u.s.-china relations. the market jumping around a little bit, the s&p 500 down .4%, broadcom down 2.5 percent after a qualcomm shareholder meeting was postponed. this is bloomberg. ♪ mom you called?
reporting following ticktock streaming live on twitter. live from bloomberg world headquarters in new york, i'm vonnie quinn. mark: and here in london, i'm mark s have aen. let's check in on bloomberg first world news. taylor riggs has more in new ork. >> mateo is going to fall short. leader of the anti-migrants league says he's won the right to govern. the head of the anti-establishment five star movement says he is ready to leave. five star movement won a third of the votes. israel's prime minister meets with president trump at the white house today. that will give him a chance to divert attention from an expanding corruption investigation. the u.s. wants to get
support across israel's border with syria. and in germany, angela merkel's real work starts now. the social democratic party agree to join merkel for another coalition government. merkel says the strong german voice is needed. and cutting the gender pay gap in the world's biggest economy could boost growth by $6 trillion, by a study. the study says the gains would come from more women working, entrepreneurship and women moving into higher paying jobs. global news 24 hours a day powered by more than 2,700 journalists and analysises and more than 2,700 countries. bonnie? vonnie: taylor, thank you. president trump is showing no signs on changing course on his campaign on importing steel and aluminum and that's raising concern between the u.s. and
china. >> now, you're launching the new u.s.-china coalition. tell us about it. >> it's the china exchange group. we've been working on it for about a month knowing that tariffs are a part of the president's agenda. he wants to eke tell playing field with trade. and so our focus is going to be hooking up u.s. companies with their chinese counterparts and vice versa to even off the trade imbalances. >> when you look at the news flow coming out right now, you've good senior economic minister of china saying this is idea.e-unquote stupid republicans in congress are saying this is not what they want. this is a bad idea. no? >> no, not at all.
we haven't had a trade surplus since 1975. he's bringing everyone to the table to renegotiate. he wants to renegotiate it bilaterally to create american jobs. right now, we're exporting american jobs. >> could we potentially have carved out for some businesses or is this actually what he's going to follow through with? >> i mean, i can't speculate on that, right? i'm not a political fortune teller. right now what, this does is it opens up the table for not only countries to renegotiate with the u.s. and president trump, but also for corporations. so that's where our company comes into play because we are whispers who can break down this barrier. >> when you look at the different sectors that this is going to impact, we saw some negative market reaction from last week and in the agriculture
industry, a lot of questions swirling around on this. >> well i think everyone is speculating at the moment because they have to reposition in the playing field. they don't know what's coming. however, you know, market hysteria, that's overhyped. the markets have skyrocketed under this president. i'm lying my 4 -- liking my 401k and most americans are. he's keeping his promises to the voters and it's working. >> the energy sector, they're saying this new energy infrastructure, if these tariffs go up significantly, it's going to skyrocket the cost of pipelines, the cost of steel, to build these pipelines and these are the same workers, haley, that you know that the president formed a coalition with during the campaign. >> listen, you can't have your cake and eat it too. president trump has given fossil fuels industry historic deregulation which has made them more competitive in the global market. they have a responsibility to
work with him in order to help job creation. that's going to help everybody long term. >> what are some of the key areas in terms of where you think this policy, which sectors are you looking at in particular with u.s. relations with china? >> i think the first two major ones are business energy. those will be our first two trade missions to china with the private sector companies in order to break down those barriers and give u.s. companies market certainty into the china market. >> i want to bring it back to politics. the trump political orbit, you know that well. >> pretty well. >> and the folks that you're talking with right now, headlines dominating outside of the news flow, outside of the business world has been that this is an administration in chaos, this is a president that's isolated. what do you make of that? >> we've had negative headlines from day one. i don't pay any attention to it. we are the heritage foundation just said that this president has been more effective for
change, positive change than ronald reagan within his first year of the presidency. so i think that's liberal media hype. >> so president trump when he heads to southwestern away this weekend -- pennsylvania that is going to be impacted. should these tariffs go up the way he's hoping for, and i have to double down on this when the speaker of the house, paul ryan is saying this is a bad idea that this could actually end up hurting folks, your response. >> establishment republican, no disrespect to the speaker but he's also one of the people who are voting against us during the president and i the fact of the matter is president trump is the one who's been implementing change from day one and congress has followed his lead. it's the art of the deal. come to the negotiation table. it's on. >> all right. we're going to have to leave it there. healey, thank you for your time. a former senior adviser on the president's candidate then donald trump campaign trail. thank you. vonnie, back to you in new york.
vonnie: thanks, kevin. mark? mark: coming up, the back and forth over the irish border continues. it's a major sticking point over brexit. what is the republic of ireland's latest view of the issue if we will speak with the finance minister. theresa may is speaking to parliament right now talking about brexit negotiations and she says we're close to an agreement. we will continue to affect us. this is bloomberg. ♪ >> which will impress our dear and loyal canadian friends and indeed for that matter, the british people. the continuous -- ♪
barton. >> in new york, i'm vonnie quinn. it is time now for our stop of the hour on "bloomberg markets." exile groups surge after competitor axa agree to buy x.l. this acquisition will make it the top coverage. joining us to explain more and how the stocks are moving, we have taylor riggs. >> 30%. not bad. like you say, this really sets up axa to expand in the p.n.c. arket. but on the other hand, analysts re saying they are overpaid. a.i.g. had made a purchase for $5 billion. top bank bought a stake.
and so insurance companies are expecting to come back after decade low interest rates. premiums are starting to rise after all of the hurricanes and fires of last year sorment of makes them prime from what we've been seeing this year. mark: and, taylor, given everything you've said, restocks are responding. there is the possibility of further m.n.a. in the industry? taylor: they're higher. we are also looking at the b.i. reinsurance, p.n.c. index and an analyst came out and said he does see that there are primed for more consolidation going forward. some of the stocks that we're looking at are axa capital, everest and renaissance. all those as well, trading higher. this makes for other consolidation more interesting. vonnie: all right. taylor riggs, thank you for that
stock of the hour. she will be back in the next hour. mark? mark: time for the bloomberg business flash. a look at some of the biggest business stories in the news right now. struggling ihop media has won another great period from lenders. the broadcast of the $20 billion in debt has another two days to run up support for a support for reorganization. it be spin out its outdoor assets and give senior lenders more control. amazon wants to create a checking account like product aimed to younger customers. the world's largest online retailer is in talks with big banks including chase. the initiative doesn't involve amazon becoming a bank. capital planning to move into the high ends of the headphone market. the makers of those airport ear phones will now take on market leaders such as bose with noise anceling overear headphones.
apple wants to launch the device although there could be delays. that's the latest bloomberg business flash. right. ming right up, ireland's finance minister discusses the latest in brexit and trade between the e.u. and the u.s. and prime minister may speaking right pow in parliament. she says the u.k. and the e.u. are close to an agreement on a brexit transition. this is bloomberg. ♪ >> nor would i allow anything that would damage the integrity of our precious union. and the u.k. and irish government and the european commission will be working together to ensure we fulfill these commitments. this approach to trading goods is important for agriculture, food and drinks, but there are other considerations apply. we are leaving the common
agricultural policy and the common fisheries policy and we want to take the opportunity to reform our agriculture and fishery as management and regain control of access to our waters. i fully expect that our standards will remain at least as high as the e.u.'s but it will be particularly important to -- ♪
vonnie: live from new york, i'm vonnie quinn. >> and from london, i'm mark barton. this is "bloomberg markets." let's cross over to prime minister theresa may. she's speaking to parliament right now. >> i am the sexeerk my message to my friends in europe are clear. you asked us to sit out and we want more details. we have done that. we have shown we understand your principle. we have a shared interest in getting this right. so let's get on with it and i commend this statement to the house.
>> i would like to thank the prime minister for the advanced copy of this statement. 20 months have passed since the referendum, a year has passed since the triggering of article 50. 21 wasted months in which the arrogance of some of the cabinet who said it would be the easiest deal in history has turned into debilitating infighting. we've seen set piece speech after set piece speech, yet the prime minister still cannot bring clarity to these negotiations and still cannot bring certainty to british businesses or workers. the prime minister's speech on friday promised to unite the nation yet it barely papered the cracks in her own party. even her own minister with the cabinet office said it was only
n ambitious opening bid. the european union published a speech and despite the criticisms rightly made for across this house where is anything comparable in terms of detail and focus from the u.k. government? this speech failed to deliver any clearer and credible solution to the problems we face. this government's approach to brexit risks taking us down a dangerous road. this government record strategy is putting our jobs and manufacturing industries at risk. the prime minister's only clear priority seem to be to tie the u.k. permanently to e.u. rules which have been used to enforce privatization and block support for industry.
the prime minister -- the prime minister now seems to be saying -- the prime minister seems to now be saying we will lose some access to european markets and britain will be worse off. so -- order, order. i said that the prime minister must not be subjected to orchestrated heckling and an attempt to shout down. >> the same goes for the opposition. and let me give notice now to some of the people shouting loudly. if you want to persist in that behavior, don't then be surprised if you do not catch my eye in the questioningings. if you want to be called, behave. if you wish to persist with misbehavior, you might as well leave the chamber now. jeremy corbin. >> does the prime minister now agree that the brexit sector was wrong when he told the house of
commons in january last year that a brexit deal will deliver the exact same benefits of the single market and customs union? and if so, why has it taken her so long to say so? the speech, the prime minister said she wanted good access. can she today, be clear whether this means tariff-free access? the prime minister said she wanted a customs arrangement but does this cover all sectors of industry or just some? and which will be excluded with what consequences in terms of tariffs and other barriers? does the prime minister still think a good trade deal can easily be reached with the trump presidency? mark: jeremy corbyn there and prime minister terter -- theresa may.
let's bring in paschal donohoe, finance minister of ireland. thank you very much, medicines minister, for joining us today. how did the meeting with angela merkel go? >> it went well. we review where had we are with the brexit negotiations overall. we have met on many, many occasions over the last number of months and he continues to take a very constructive approach to the negotiations underway while clearly looking for the very best possible outcome for the british people as the member of their government. mark: any progress with the irish border with you today? >> the prime minister may and her speech at the end of last week placed a very large amount of value on not only the achievement of frictionless border but there was also a very
large number of references to northern ireland, and the unique responsibility that she has as prime minister to respond back to the consequences of the brexit vote for northern ireland. to he wasn't looking to take aim of prime minister may in any way. what he was doing was emphasizing the need that we have to continue to see evolution and clarity from the u.k. in terms of their future customs policy. because customs policy overall is indispensable for understanding how we will deal, with many of the challenges there in ireland. vonnie: do you have any idea how it gets done? lots of references in prime minister may's speech but no concrete details. how does a hard border get avoided? >> the agreement that we made with the united kingdom through the european union in december lays out the different frame works in which that can take
place. what we want war, the british government want is we want these issues to be resolved. in the context of an agreement between the european union and the u.k. and prime minister may did outline some further thinking on this at the end of last week. obviously, we want show that go further now in the negotiations that will take place across 2018. but we've also agree add with the u.k., the european union have agreed with the u.k. how if those negotiations don't yield to defy the outcome, the yield of contingency that are in place. the second contingency being the vote of northern ireland in the league empowers their institution and the final one then being a backstop agreement wean the u.k. and the e.u. about that hard border will be avoided . vonnie: who is closer to reality right now? which blueprint? the e.u.'s or what theresa may outlined on friday which wasn't exactly a blueprint. it was just a list of five
wishes. >> well, look, there's a negotiation underway at the hotel and i guess it will be earer to what views become reality. from the point of view of ireland, we are members of the e.u. 27. we support actively all the work that's underway from them at the moment. mark: clearly, may wants to leave the customs market and she did say on friday that she wants to stay aligned in many areas, keeping e.u. regulations. is that the source of language you wanted to hear? >> well i think the approach that prime minister may outlined across many different goods is it's helpful to have that clarified at this point.
it was also important to hear her talk about associate membership of a number of different european agencies. and while she outlined while canada on a norwegian approach will not work, she did re-emphasize two customs policies that they rated last summer. from our point of view is that integrity of the single -- aintained. mark: may speaking in parliament saying confidence, to use other word of reaching an agreement with the e.u. she's talking about the transition agreement. march was set with an initial beacon of deadline, essentially. can a transition deal be reached by the end of this month or not? >> i believe it is possible. and clearly what march, the entirety of everything that needs to be agreed and what is continues to be critical for
ireland is that the guarantees that we need regarding how a hard border to be void and those guarantees be maintained because we believe that's just indispensable to maintaining the kind of progress that both the british and irish government have now achieved over two decades. vonnie: talk to us a little bit, minister, about the jobs that are going to ireland. where do you stand there and will more jobs get attracted to ireland's financial services and why? paschal donohoe: yes. across what will be many difficult economic consequences can generate by brexit will be what will happen in financial services. and we are seeing that happening. we have seen an announcement over the last number of months from j.p. morgan, more from barclays. we've seen other companies indicate that they want to streamline their existing
arrangements and local them out of dublin. so we believe across the coming period, it would continue to be evident that ireland has benefited from some of the financial services opportunities that are generated by brexit taking place. vonnie: trade has become a huge issue here in the united states. how concerned are you that ireland might get caught up in an international trade war? paschal donohoe: well any change at all in the geopolitical environment around trade, across, is -- of course, is something that is a concern whether you be small or big. but i do hope in the coming days and weeks that a consensus can be reached and can be maintained on the value of global trade. and some of the issues that will becoming particularly important at the moment that can find a way to deal with them. because any deterioration into global trade environment will be bad news for any trading nation
big or small. we are confident in the progress that we have made in ireland over in terms of broadly balancing our international finance and seeing our economy return to employment growth. all of these things develop, have to live with a buffer that we will need to deal with shots that have developed and we wish those shocks would not develop across the coming periods. mark: i want to ask you about the apple tax collection we've got studio. chat to you about. we're going to move swiftly through the topic. you're making progress in the second quarter. you will start to collect this money, this revenue. when will you receive the entire amount? what progress are you making right now? paschal donohoe: i'm absolutely committed at putting into place the right kind of procedures and processes to collect this money and put it into an escrow account. we disagreed profoundly with the assessment that european commission have made in relation to our tax policy. but while we are contesting that in court, we will be meeting the requirements that we have on the
european union law. to answer your question, we're now in the final days of a cooling off period which is at the end of a procurement process for elements of how the escrow account will be managed and we would expect that across a quarter or two. the money will begin to flow into this escrow account that will be set up and obviously by appear until ireland regarding when it will all come in, i'm confident it will all be positive. but the time of that is a question that we will continue to work on. mark: given everything you've just said -- paschal donohoe: that is a master for a commission and while we disagree with the assessment that they have made, of course, we recognize there are policy role and the league role in trolls all of this. i've met with the commissioner on two occasions now and over the last few months.