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tv   Bloomberg Surveillance  Bloomberg  April 9, 2018 4:00am-7:00am EDT

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ofncine: new man at the top deutsche . christian sewing takes over. investors welcomed the new executive. president'sse response to the this is bloomberg. ♪ -- to the tariffs threat. and we are live in budapest. ♪ good morning, everyone, and welcome to "bloomberg surveillance."
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i am francine lacqua here in london. these are your markets. european stocks gained 0.5%, lower than eur u.s. futures. euro-dollar unchanged. actually and up not being the full on trade war. you can see it in little bit of an impact in the u.s. debt yield 2.28%. coming up on "bloomberg surveillance," we get an georgia's --ke on 's choice, hans christoph, rupert harrison, and adair turner join us. mel is to check with nejra cehic. nejra: lenders should be faster at making decisions.
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deutsche lite version was previously head of the bank's arms, replacing john cryan. they have seen three top leadership appointments in six years amid pressure from investors to improve stability. election to become prime minister of hungary. the two thirds majority at won in the previous elections. the block between the u.s. and china could leverage the role between the largest markets, polled the role of national trade. he spoke to bloomberg at the workshop in chernobyl. it is involving ,nternationally agreed rules
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and that is within wt via. justin: japanese prime minister has apologize for a second scandal in a month, missing records about the deployment of troops in iraq. opposition lawmakers have said the failure to inform the defense minister about the documents show doubt over civilian control over the ministry. and almost ready for the saudi aramco ipo. the market is ready. now, the saudi exchanges, as they areanges, running the second half, it is about when this decision will be
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.ery nejra: most britons now support holding a vote. 44% say the public should have the final say on whether to accept a deal or remain in the eu. 36% say there should not be another vote. explosions have been reported at a military base in syria a day after president trump warned of a big price to pay of a report of the chemical attack outside damascus. rescue workers say dozens of men, women, and children were killed over the weekend in a chemical attack. the u.s. has called for immediate international response. moscow is warning against any military strikes and is calling chemical attacks "fabricated or ." global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. francine: thank you. changes at the top of deutsche
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bank. john cryan has been replaced as part of a sweeping overhaul of top management. christian sewing will take the reins. with stevenre now arons, who is in frankfurt. first of all, what we know about the man now in charge of deutsche? steven: this guy joined deutsche bank in 1989 when he was basically 19 years old. he had been with the bank all of his life, except the few years away he had spent with another german bank, so he is a lifer, which is a change from previous ceos, john cryan, ackerman, and it is a big step away from the international investment banker. as a retailis trade banker. he spent most of his career in audits and is not know much about the investment bank.
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it is a step change for deutsche bank, definitely. it is a clear signal that the bank is making farther progress on its promise to become more and as i said, he is the first german to lead the bank as co-ceo since the days more than a decade ago. he is a retail man. he is known to want to balance the bank. less retail business. he said in a message today that he is taking a deep look at the investment bank and wants to cut away those businesses that are unprofitable. francine: what do investors
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think? a new executive needs to complete the task that john cryan did by this much faster. steven: that is right. he has actually suggested that the strategy, strategic shift, they are asking for clarification, especially about the future strategy of the investment bank him about right now, his message today, he wants cost target ofhe costllion euros, adjusted in 2018. no matter what, that is really important to him. investors seem to give him the benefit of the doubt. the share price when up by almost as much as 5% this morning. it has come down a little since then. the question is -- what will be the new strategy for the investment bank, and people are waiting for clarification on that. arons, thankven
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you so much. you can follow his updates on deutsche bank wrote this morning. .ow let's get investors' takes a deutsche bank shareholder joins us now. hans christoph, when you look at deutsche bank, what do you think? much fornk you so being here. rumors,ve after so many it is a good thing that has come to an end, some clarity, and the appointment of a new ceo. this brings back to my when there were constant rumors about deutsche bank. theng said this, it is now third of leadership, new ceo under the chair, and we also believe from discussing a new ceo, there also needs to be a discussion about the role of the chair and the supervising board.
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francine: so you think the ?hairman should go gekk think there are questions. christian sewing knows the business. christian sewing is free and less associated to any of the businesses. francine: hans-christoph, what do you expect from mr. se wing? hans-christoph: first question -- why was it necessary to change leadership now?
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christian has been part of the management team for three years. he has been responsible for the strategy and the implementation, not just john cryan. he was an interval part of that management team. he was co-deputy ceo. francine: what is your second question? the point that everyone is speculating this morning about -- what are the meaningful strategies? we had calls + from the chair, and he said we needed a new execution dynamic and a new leadership in the bank, and it is not exactly clear what this means. we talked about investment banking. some of the other changes on the management board, marcus schenck left, the other deputy ceo. is this about the investment of membersing, get more
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who are in affiliated with it. these are questions we will ask mr. sewing but also the chair. we are concerned about the development of the supervisory board, so part of this outlier, there is one other member who has been on the board for more than five years, similarly to the management board, to the .xecutive skirt wit we have seen quite a number working with him. you have to think about what happens at the supervisory level, who could ultimately succeed right now. francine: hans-christoph collided at what to oversupply come of it in your mind, is this a one-time of changing chief executives, or is this necessary? hans-christoph: we have increasing conversations with deutsche bank. in may, we will make a decision,
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and depending on the answers we're getting from deutsche bank. francine: you might be adding more shares? would you add more shares to your portfolio? hans-christoph: it depends what they say about the agm, demanding relative to the role of the chair. francine: what would you ask of deutsche bank and the new chief executive? they may be watching right now. hans-christoph: he needs to clarify in particular in terms of the strategy. he talked about the role of the investment bank, what, if anything, has set back in the way of implementing the strategy , already made an announcement this morning that they will focus on trustees. these are all topics they need to address, and relatively quickly. clearly we need some time to settle in, but we expect some more clarity around the agm. francine: do you believe that deutsche bank can compete with
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the investment banks in the united states? hans-christoph: i am not really into speculating. this is a question for the supervisory board, for investors. judging from the outside, it is not something that is very advisable in my experience. we do rely on the supervisory board putting the right people in place and then making the right decisions rather than assuming and speculating. francine: how quickly do you think they will have a new chief executive? before theoph: shareholder meeting on the 24th of may. he will be reaching out to other investors. we will assume investor outreach very early on. francine: hans-christoph, thank you for much for joining us early on, hans-christoph hirt, hermes equity investor.
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coming up, balancing act. the chinese president reassuring investors that he is still committed to opening markets. japan's prime minister faces the music after a second scandal in a month. we will talk boj and shinzo abe. this is bloomberg. ♪
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francine: economics, finance, politics, this is "bloomberg surveillance." i am francine lacqua here in london. let's get to our other top story, the threat of the trade war, where president xi jinping will be speaking at china's boao forum.--
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good morning to you, tom. what is china's response likely to be? tom: francine, the rhetoric has sharpened in the last couple of days, of course, donald trump threatened to slap more tariffs on exports. to china is threatening fight until the end. we are expecting xi jinping to take a muscular stance, but he wants to balance that with a message that china is open for business and china continues to play a pivotal role in what he would say is a push for globalization. we have also been told leading up to this speech from those close to the government what we could expect is significant initiatives or announcements from president xi. investors who are used to looking at chinese markets are
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going to be looking at sales, because china needs to put its money where its mouth is in terms of opening up access to the markets, about how policies will be initiated. xiis a difficult speech for jinping as he tries to get some light to open up some of the sectors. tom, china is also said to be considering devaluing currency in light of the trade war. how likely are they to be taking this action? tom: it is interesting. sources told bloomberg about this today, and of course we have seen the yuan weaken. what they are apparently doing is considering studying a potential devaluation. one would be as a tool to use in this trade dispute. the other would be to alleviate exportersor china's
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should any trade tensions be exacerbated. of course there are risks, which would lead many to say it is not this point a likely scenario. china is very concerned about what this will be for further market volatility, and they have worked very hard. and of course it could impact the significant offshore debt holdings of some of china's corporate holdings. it does not come without risk. it was somewhat of a bump for him on the campaign trail. he may be reminded should he go ahead with this course. less thatg none the sources are telling us this is being considered at least. francine: tom, thank you so much lower china correspondent there tom mackenzie. ?hat is the trade dispute mean
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thank you both for joining us. and james, are you now expecting noto deescalate, or do we know where trade tensions go next? the wait and see mode. because we know the u.s. tariffs , we are looking at may 22 by the time we get to all of this, and we talked last week about june, but what the markets not want to poke and see is some sort of negotiations starting between china and america. isassumption we are making that it is not in anybody's full-blown go down a trade war, so some sort of deal will be done, but basically the stakes have been heightened. $50 billion, $100 billion on top, the rest has now escalated. ant makes the potential for era higher.
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day, sane of the heads prevail, and we think they will get china to back down. francine: it is interesting to of globalization now turning into a stif distractor. guest: it does not mean significant damage to the u.s. consumer, but i agree with james. it is not time for back channels to try to work and negotiate a solution. aroundt couple of weeks, here, the breakdown of the comparative advantage with models,o trade president trump trying to make his threat credible to bring the chinese to the table and therefore a lot of the rhetoric is reinforcing the question at the official level, whether they can make a breakthrough to avert
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ramping up, which would be damaging for the u.s. consumers. francine: what is the likelihood, james, china coming to the table, saying we will give you what you want? james: i think it is quite high. look, the chinese are going to to that approach, they stick $50 billion worth of goods, the current pros are going to be in effect, what do you want? clearly americans want the chinese to open certain markets. they want to stop the joint ownership of anything they start in china. there are areas where the chinese can concede on. the question is how far the chinese are willing to go. the $100 billion in
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reduction in the trade with china. francine: will president xi give in to demands? about this is negotiations. the slight we have had the bellicose response. what the chinese -- this is why we have had the bellicose response. what the chinese can do is say we planned on deregulation, we planned on opening markets, yes, we planned on going this way anyway. do you want a $100 billion disruption of a trade deficit? maybe we can target be $100 billion over the next 12 years. one simon: of the problems for investors is two strong men are facing off with each other. they have a fight within the al.t of media go when a confession will be made, they will be made behind the scenes -- francine: put a president that tweets -- will we not find out on twitter within 20 minutes? simon: you may find out on
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twitter, but the question is whether it resembles the kind of confession content with your crucially, the chinese, how will tha they manage that internally? i think that is a huge part of what is behind it. president xi needs to be mindful of how it will proceed and how ,t will mirror his own agenda some of that with the economy will not be consistent with what his broader aims are. francine: if there is an actual grievance with the u.s. economy, i imagine we do quite well. james: for me, the u.s. consumer paying these tariffs would be the key element. a key negative -- francine: taken away. simon: taken off the table should we get a de-escalation. but that will be taken with or without trump on twitter.
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francine: do you agree? james: what he is getting up at the end of the day is a victory, and that ends up with negotiation. i am absolutely convinced that president trump will go on twitter, if there is an agreement, and say "yes, we won." to be fair, if you look at the u.s. deficit in china, there will have to be some concessions. in terms of the economic impact, i absolutely agree. what we do not want to do is have a full-blown trade war. that will have a direct impact but also an indirect impact on business confidence, supply chains. and you get markets for the last year, 18 months. we put that at risk. francine: do you worry about a mistake from the fed? we saw a little bit of movement in the markets. i am looking at the forward curve. is that diversion? the fed for the moment is
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saying we do not know what the outcome is, so we will base policy on what we could see is definitely going to happen, and at the moment, it is a pretty robust economy. inflation is dropping out. the fed has told us they want to go more quickly, and i think that is what they are going to do. francine: guys, thank you so much. james barty of merrill lynch and simon french of panmure gordon both stay with us. and japan, a scandal this month. will it hurt the chances of party leadership election? we will look at what that means for the yen. we will be right back. this is bloomberg. ♪
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francine: economics, finance, politics, this is "bloomberg surveillance." i am francine lacqua here in london. let's get straight to the bloomberg business flash. . nejra cehic. nejra: deutsche bank's
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supervisory board they've a new ceo to replace john cryan. go deputy ceo christian sewing, a deutsche life who heads the bankr's private and commercial arm, will take over immediately. garth ritchie is promoted to head of securities unit and what we come code at pdc oh. the bank -- co-deputy ceo. novartis has agreed to acquire avexis to expand its position in to explorey treatment for a rare disease that affects infants. it represents a premium of 88%. she closing price of avexi shares on friday. the transaction has been unanimously approved by both companies' boards. plunging moscow trading.
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potential that the fault and adverse prices. aluminum has dropped. investors bet on supply disruptions. the trade dress between china and the u.s. are potentially damaging for the global economy. speaking exclusively to prays thetv, he authoritarian leadership of xi jinping and says it is wonderful for u.k. business. imstone: china has become a beacon, and the fact that xi is able to give such guidanceuthoritarian within the market economy is great for companies such as mine. nejra: moving headquarters to hong kong to pursue
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the controversial restructuring of more than $3 billion of debt. the group says the move could take effect over the weekend. noble has seen its value since research began to question its business and accounting. that is your bloomberg business flash. francine. francine: thank you. japanese prime minister shinzo abe has apologized for the second scandal in a month. say ition lawmakers casts doubt on the government control of japan's armed forces. opinion polls have shown the controversy has led to public dissatisfaction. is it enough to actually shake investor confidence in japan? james barty, head of global cross asset strategy at merrill lynch, and simon french, chief economist at panmure gordon, are still with us. global tough the
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satisfaction for markets in a second and what it means politically, but when you look at the economy, what do we know? e, and he recommended qq that pace has slowed markedly. we have seen no real constraint. yes, we hear about the markets now owned by the bank of japan, but actual guidance toward yield curve management has proven quite effective. i think the issue for the bank of japan is what happens regarding the yen getting caught in the doors between a potentially weakening seller and a potentially weakening yuan. that is a difficult environment to generate, the kind of pressure. francine: what happens to the yen here? james: a lot depends on how much we are in risk-off mode and how
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the dollar response to that. safety, but flight it has also been up against a weak dollar. that is what you have the dollar-yen at these levels. it makes the boj's job more difficult. the rise of inflation, they mark to shift their-year-old curve controls of a little bit higher. the stronger the yen is, the more likely they will be to push that out. the boj wants to run very loose monetary policy. they want to continue to stimulate the economy. i do not think they will change much. francine: how do you look at politics? do you see the satisfaction that will actually impact your investment strategy in japan? can ride this out, t doesn't. if abe becomes a victim come autumn, it will make investors
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worried in japan, because it has been the eight-kuroda -- abe-kuroda show, which has been positive. nominal gdp growth in japan in a decade which nobody thought was possible. francine: when do we find out? visit july, august? once again, i am asking economists to look into the crystal ball of politics, where politicians do not even know. simon: i do not see any material weakness in the abe-kuroda axis. what is far more concerning if you're looking at investing in japan as they are in line and markets as far as the u.s., but highly sensitive to if we are seeing a plateau in that coordinated global expansion, and march pmi's globally were
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very weak, and that cannot all be blamed on weather. weak on the good side. if that is starting to pastor a stronger yen into reduced performance, that is when you pare back your purchases of japanese equities. that will come into sharper relief, the longer and longer this trade rhetoric between the world two economic superpowers. francine: japanese investors into u.s. bonds for the fifth straight month in february, and sales for the second highest on record. this is all about hedging costs but also a weaker dollar. does that just continue? thing, a is one strategy of a point has been making, when it comes to hedging ies are not treasury' attractive to foreign investors. markersgoing to other
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-- we have to go into other markets in order to do that. buy -- iah, i mean, to struggle a little bit with the idea that the u.s. rate policy is going to be forced higher. i see the fed -- to go back to your earlier comments of a few minutes ago, fran -- there is no real core inflationary pressures, there is no real pressure on the market at this stage. we have to be clear in terms of treasury. we accept more than two and a half times covered. i do not see a buyers' strike. in that environment, the fed remains on path because it does not have to move from a position where we have rate hikes. it has been that, and it is not moving. francine: simon and james, thank you so much. simon french and james barty both stay with us. balance landslide.
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another majority paving the way for a sixth term. we're live in budapest. and coalition talks take a turn for the worst. this is bloomberg. ♪
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francine: this is "bloomberg surveillance." i am francine lacqua here in london. let's get straight to the bloomberg first word news with nejra cehic. nejra: deutsche bank's new chief executive says the lender's should be faster at making decisions. christian sewing, a deutsche lifer, became ceo yesterday,
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replacing john cryan. the investment bank has seen three top leadership appointments and six years amid pressure from investors to increase stability. minister shinzo abe has apologized for the second scandal in a month, this time for a failure to report the discovery of missing records regarding deploying troops in iraq. he called it "extremely regrettable." the failure to disclose throws --lts over control of the those doubts over the control of the military. one person we spoke to said he could help the traits that between the u.s. and china. atainen: we have it replacing, and this is always the reverse scenario. to -- when the eu tries
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stabilize the current situation. almost ready for the saudi arabia ipo. on ao is ready to go listing, whether this year or the next. khalid: the saudi park exchanges making all necessary exchanges this year by actually the beginning of the second half. regardless of when the decision will be. nejra: a new survey suggests most britons now support holding a vote on any final brexit deal. according to a new poll, 44% say the public should have the final say on whether to accept a deal or remain in the eu. 36% say there should not be another vote. russian defense ministry says is really aircraft were responsible
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for attack on an airbase in syria early this morning. after rescue comes workers and activists say dozens of men, women come and children were killed over the weekend chemical assaults. called for an has immediate international response, moscow is warning against any strike and calls the chemical warfare "fabricated." global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i am nejra cehic. this is bloomberg. francine? francine: thank you so much. let's get more on that story .rom dubai we have andrew, bloomberg's government editor. what is the latest on the situation in syria? andrew: good morning. it is the missile attack that nobody wants to claim. t-4now that overnight, military base in syria was hit by missiles. this is near palmyra, east of damascus.
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there were casualties, we are hearing as many as 14 people were killed, including iranian soldier, but it is not clear who carried it out. the u.s. has said it was not them, france has said that it was not them, and russia, most helpfully, came out is that it was carried out by israelis. israel, as is his custom, is making no comment on it. israel has carried out attacks in the past when it felt that its security was at risk, so we will have to see what is coming out. i think what is most important for me here is trump and macron have spoken. they promised to respond. the security council this meeting today, and i suspect we will see some sort of u.s. or french reaction to the chemical attack independently of what happened overnight. have we seen an international response yet, andrew, apart from the u.s.? --rew: no, we have not seen
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i mean, the images that came out from over the weekend of the can look at that were horrific. we had reaction to that. we have not seen anything in terms of a response to that. the un security council will meet today. are goingthat people to -- the steps before any sort of reaction. obviously, you remember the u.s. killed 200 mercenaries a few air when their base came under attack. it is a very crowded battlefield. you have iran there, turkey, russia, syria, so any action carries high risk, but we have not heard the last from the u.s. and france in response to the chemical attack that will come in hours after the security council meeting today. thecine: m i right in
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number that the last time we talked about a chemical attack in syria was in 2013? what was the international response that? -- then? well, it was almost a year ago today that we had a chemical attack in syria. trump ordered 69 tomahawk cruise missiles into syria. that was really the first moment that people started using the word "presidential" around trump. he was very decisive in that action and it won him some credit. having said that, he has also drawn some clear red lines, some of the is in a position of if he does not act, what does that mean for your policy objectives? message that he says he wants to get out of command every time he tries to pull himself out, it becomes more and more clear how difficult that is. because if you are not there, you cannot stabilize, you cannot
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reconstruct, and then iran, russia, turkey get to come in and claim their spoils from the war. francine: andrew, thank you so much, andrew barden, middle east and africa politics. hungry's prime minister viktor or bond has scored -- viktor orban has scored a landslide victory. 2/3 majority at won in the elections, allowing it to change any law without opponent support. unapologetically anti-mostly -- he has an unapologetically anti-muslim stance. james barty and simon french are still with us. does it have an effect on populism, stocks, or will the margins actually make a difference? it is a more sort
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of general phenomenon that we have to think about. when we think about brexit, with nick about italy, trump 's election in the u.s. the globalization trend, which has been powerful for global markets over the last couple of decades, we talked about trade war's earlier, the u.k. leaving the european union. -- obviously, if there is a five star government, what does that mean? what it doess -- is increases uncertainty, it reduces the pace at which we become more global here it at the moment, most of this is the margin. does it really change your investment thesis? the more it happens, the more unpredictable it becomes. hold that thought. i want to go back to the hungarian story.
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we have bloomberg's budapest correspondent. how does this victory panned out? what we were: surprised about was the margin of victory, he managed to win a super majority in parliament for notird consecutive term, even the ruling party. they overruled out the chances that they could dominate in such a fashion. offering,what was he and what we expect mr. orban to do next? oltan: basically, his campaign was almost as close as we focus on his anti-immigration rhetoric. the threat ofces mass immigration, mostly from muslim immigrants, which he said this endanger security in
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eastern european country, which, oddly, does not have a significant muslim community to speak of. managed to strike fear into the electorate, and they responded to that. what is expected next? powermore of orban's consolidation, so he will continue to crack down on society, what remains of independent media, and there are some people who say that now is another super majority. he may target the judiciary as well, which has remained largely independent. zoltan, what does that mean for the economy? reading about hungary over the weekend, and people are trying to leave hungary. does that show up in the numbers? zoltan: it basically shows up in the numbers in the sense of it that there is a severe labor shortage which has left a spike in wages.
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so many people have complained that it is not enough, that there is too wide it got really with western europe, so it will continue to be an issue in terms of continuing this brain drain from hungary. in terms of the market, really investors have already priced in orban victory. they said policy continuity would be overall good for them, even though there have been concerns within the business community as well as the aresition that there widespread claims of corruption. but really investors have been looking for continuity in the budget discipline, fiscal prudence that orban had demonstrated since 2010. francine: zoltan simon, thank you so much, bloomberg's budapest correspondent.
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when you look at poland and the rule of law and you see it impacting the economy, do we see something bigger happening? simon: i do not think you can leave it one-sided, not in isolation but in terms of what it does. hungary, poland, italy, other parts of eastern europe, potentially being a counterweight to the reform program led by macron. we are talking about banking union, fiscal union, the time has been spoken about in the second half of last year has gone cold, and to a degree they have gone cold because european leaders do not feel that there is a majority of support. in europe,almakers the germans and the french, ignoring the purple country, the ase of the u.k. about three years ago, they wanted to introduce the european union. they were ignored. it triggered some of the backdrop to brexit.
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hungary, italy, poland are ignored again, and some of those reforms are pushed through against their well, that could trigger a much more serious move in the next few months. francine: what we know so far, governments in italy have taken worse.for the the five-star movement has broken up talks. a central right alliance with the brothers of italy. now the former prime minister's involvement in the government has long been a redline for the five-star movement. what does this mean? do we stay away from italy until they do have a government? or is it almost better off without a government, because exports are continuing, as long as the euro is not too high. is it something that in time will take care of itself? james: we have had a lot of experience in italy not
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having a functioning government or changing government, and that any rate, for the market, the most concerning thing would have been a five-star coalition to run italy. so in some ways, that looks like it is not going to happen, you may like that,ts because the idea of the parties coming together, potentially, not to the extent of greece, but going down that route of having a populist government poses challenges. potentially unwinding some of the fiscal measures undertaken by the government in the last few years. francine: we are at a crossroads because the ecb is looking to unwind from the qe, which supports the italian economy. simon: yes, and there are three key features for mario draghi ecb week, which tees up the governing council meeting toward the end of april. i think that, being such an underpinning of the economy, is more relevant than a lack of government.
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if you look at the data, italy is not alone here. spain, belgium, look at there are countries in europe -- actually, countries around the world -- that is not have a government but are not impacting growth. in fact, growth may be higher in those apartments because political uncertainty just simply does not pass through to consumption decisions. francine: james comey if you look at the spread between -- james, if you look at the spread between the owned and the spanish 10-year, where do you put it? james: i look at the bund. i think it is because people are assuming that whoever comes into power will make it stronger, even if we were looking at a five-star northern league coalition, there was talk of a very sort of respective finance minister being part of the. for the markets, are we going a newhe route of
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government in italy? if the answer is no, then it is contained. francine:? do you agree with that? simon: i do. the only game in town is driving spreads. the answer is whether come september the ecb can afford to take its foot off the pedal the way it desperately wants to. i think italy asked to the idea into 2019. francine: thank you so much. if you want see our charts, go to tv . head of global cross asset strategy at merrill lynch, and simon french, panmure gordon, thank you. toing up, we will be talking rupert harrison at blackrock. this is bloomberg. ♪
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francine: new man. a new man takes over as john cryan is pushed down. executives welcome the new chief executive and a rise in share prices. k balancing act. we with the chinese president's response. -- we await the chinese president's response. wins big in hungary. i'm francine lacqua in london. tom keene is in new york. bigre following two stories, one is deutsche bank. and the other is the economy. tom: international relations are front and center. not only the international relations of deutsche bank, andon new york, but front a center in washington, the israeli attack we saw on syria a few hours ago. francine: methodist or to the bloomberg first word news. syria, starting with
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president trump warned there would be a big price to pay for a chemical weapons attack. russia says two israeli warplanes carried out the assault. not say anything.xz a suspected poison gas attacks on the rebel stronghold near damascus. deutsche bank has turned one of the veteran employees to revive its fortune. christian sewing's appointment was part of a broader reorganization to restore revenue growth. hungaryentioned, in orban has given a boost to populism. he is clinching a fourth term and his authoritarian approach
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has made him a hero from italy to poland. china is looking at its options in the trade dispute with president trump. one of them might be a gradual depreciation of the yuan. officials are studying the effect of using the currency as a tool in trade talks and they are looking at preceding the -- looking at depreciating the yuan to offset the impact of a trade deal. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. i'm taylor riggs. this is bloomberg. tom: let me get a data check. equities, bonds, currencies and commodities. a lift to the market. i do not know what that means, the volatility recently. the futures are up 20. the rest of the market, it could be typical after an american jobs day to see a quieter data board. francine: quieter because there is the sense in the market
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de-escalate,ould especially when it comes to the trade war. -- u.s. features are on the way up and treasuries are falling with the dollar studying. i'm looking at oil, and it's up a touch. tom: manus: add two scoops of french vanilla in the morning. nothing fancy here with the moving averages and a well contained downtrend for john cryan's agony. we have seen a little bit of pickup in shares in the last h our. still, it's a bounce off the cryan bottom. francine: i also have a deutsche bank char -- it is almost likely we spoke to each other before.
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it shows the difference between bondholders -- tom: very good. francine: the bank is being run to help with bond holders. christian sewing will take the reins. we are joined from munich, an r for portfolio management. than k you for joining us. first of all, what do we know about the new man in charge? what we know is, the language is interesting. we need to be, you know, leaner and meaner, but he's also pointing to more discipline.
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equally, signaling that the massive bank is still an area where the bank needs to trim the edges. francine: are you worried about the timing of this? are you worried that they could have waited, they should have waited, or they should have done this before? actually, i think the decision has been long overdue. deutsche bank has been landing these deals for quite some time and there is no silverlight on the horizon. i believe, and therefore, it is reflected in today's share price move, the uncertainty about cryan is now over. we are going to take a fresh look at this strategy. i am a bit concerned that the focus is on corporate banking. most of the profitability should
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occur there. tom: this is the heart of the matter, elisa, there's no question. let me bring up one of your ena, whoes in crime, l always goes straight to the heart of the matter. time a retail banker took over a big investment brand in europe it did not end well. mr. jenkins was ousted after three years at barclays and mr. staley came back in. the the parallels are stunning. ansaving -- is sewing equivalent to anthony jenkins? eliza: we will have to wait and see. sewing is obviously a veteran, and has had experience managing risk. -- cryan wasis
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seen potentially when he came on as a figure. he was brought in to put out the fires, which he did successfully. i think sewing's appointment needs to be seen in that light. behindat is the politics this selection? there has got to be a story to go with the german -- as you mentioned, someone in retail banking. what's the back story, city to city, town to town, for deutsche bank in germany? afterl: my impression is of investment banking trouble there was a clear desire to put deutsche bank on a more solid footing. so, the measures today are a lot more sound than they used to be. at the same time, retail banking more focused on let's
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volatility. inmany is overbanked, corporate and retail banking. even if they have small losses and retail banking only, which is most of the time, single-digit base points risk, there's a low level profitability. ,estructuring comes at the cost which are mostly up front. my question is, where should revenues come from cover these restructuring costs. that's my major concern. francine: are we worried, or will there be tough questions on the advisory board with how they handle this? elisa: absolutely. for two weeks, there were talks about candidates. talk had to come out and about his job and the big chairman was nowhere to be seen.
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i do not think anybody comes out looking stronger as a result. would you agree with that, michael? if you had the chief executive -- i don't know when you are expected to meet the chief executive, but what is your number one top question to them? your question goes directly to the point. this is not just about deutsche bank. deutsche bank is a systemically will run bank. the uncertainty and the confusion at the top management of deutsche bank go way beyond the single institution. and therefore, the need for a quick solution was more than pressing. is an internal candidate probably did not matter that much. at the end, it was more about getting some continuity and a lso, solving the mitigation about who was finally at the helm of deutsche bank.
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which is a lot more troubling than just the institution itself. huenseler, well said. is the chairman's job threatened as well? elisa: this still remains to be seen. over the last couple weeks, we heard there was a lot of investor unhappiness about how the situation precipitated. and they were thinking about changing the ceo, and then he should be held partially accountable for them, given that he has been charged of those appointments for the last six years. the announcement came very late yesterday. as a shareholder, what are you expecting -- what are your top two questions that need to be answered before the agm? michael: the first question is,
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how about a strategy. expect anything about the decisions being making lately? the merger seems to be a solution which is based on the low price for postbank. if they trusted in what exactly deutsche bank is intending to the $23 billion in cost savings is clearly not enough. that is the first question. the second question regards investment banking. how does the management want to make sure there is no loss of market share? and that deutsche bank is getting competitive again? so, plans for investment banking are probably the most urgent questions going forward. francine: do you think they could be part of a consolidation phase in germany? sayael: i'm sorry, can you
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again please? francine: will they buy commerzbank? michael: i'm sorry? francine: michael, given the changes at the top do you think they can buy commerzbank? michael: well, i think for the time being, deutsche bank is on track for the execution of the current plan. i would expect more details over the next three to six months time. of course, the new management is not new to the bank. again, some continuity is probably warranted. francine: thank you sxo much michael, joining us from aberdeen asset management. from our bloomberg commentary and analysis on deutsche bank, be sure to follow tliv .
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it's our blog. it's pretty awesome. ♪
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taylor: this is bloomberg surveillance and i am taylor riggs. novartis is expanding its position in gene therapy, agreeing to purchase avexis. that represents an 88% premium. avevis is involved in studies
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for the treatment of neuro degenerative disease caused by a degenerative defect. you might find out soon, starting today, that you were a data hack.he all 2.2 billion facebook users will get a message on how to protect their privacy on the social matnetwork. shares plunged today in moscow. new u.s. sanctions cap doubt on the banking and trading relationship. the sanctions make it almost impossible for the empire to see dollars.in u.s. francine: now to china and president xi jinping is showing he is ready to retaliate against u.s. trade threats, while donald trump has said he is committed to opening up.
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bloomberg'sow, chief asian economic correspondent from hong kong. the move is dependent upon what china does next. two they give the u.s. -- do they give the u.s. what they full on tradea war, or do they fight back? reporter: there is a sense that the ball is now in china's court. we will see what mr. xi has to say tomorrow to an audience of global investors and executives. will have to deliver this message. on the one hand, it says that china is open to foreign competition, but they will have to push back against mr. trump's hawkish rhetoric on trade as well. he cannot be seen to be taking this lying down. it's a difficult balancing act. above all tomorrow there will be an expectation for xi jinping to
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deliver on some details, if china is opening, he must deliver on when and where. there's investor fatigue for china to open up its economy. francine: are we right in thinking that president trump is here to negotiate? if the chinese were to say, we are already doing the things you are asking, but we will accelerate them a bit more, will that be enough for cooler heads to prevail? enda: i think that is right, francine. there has been a sense from the chinese side that part of their frustration is they don't quite know what the u.s. wants. and i think there is a calculation amongst many people saying ultimately, it is part of mr. trump's negotiating tactic. we side with the steel and aluminum tariffs a few weeks ago. the feeling is he is going hard
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on china in terms of the pronouncement, but ultimately, then when he negotiate, he will settle on the middle ground. china has said they want to avoid a trade war. tom: the most important announcement for china over the weekend was american airlines. and dropped a bombshell, they will cancel airbus and buy american, buy boeing. is that what we will see between china and america? for this implement tough decisions, like american airlines, made on friday? risk, tom.is the big that china goes beyond terror -- goes beyond tariffs. they put restrictions on orders for u.s. goods, such as the boeing aircraft, for example, and restrictions on chinese investment into the u.s., which is small, but growing under the material employer.
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you only have to look in virginia. there are many channels china could strike back on beyond tariffs. tom: i was bouncing around here the idea of this enda, the idea of what america should do. a few years ago we had the secretary of the treasury who was the go-between with these different emotions. where you sit in china, is there anybody in assisting mr. trump that could actually talk and have a discourse with the leadership of the party in china? main news, all the we are hearing from both sides, and especially friday night, when they give a press thatrence at 8:00 p.m., the negotiation is not actually flourishing at the moment, despite the fact that mr. could are open said they to talking this through, the message from china is they are not talking this through and
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there is a breakdown in dialogue. it does not feel like the same relationship that existed in previous of ministrations exists with the current two. in washington a couple weeks ies were not made to be gelling with each other. francine: joining us now-ish on west, the eurasia group's deputy chief executive and the chiefock deputy. is the market more reassured than it was last week? causing still volatility. you will still get more noise as this process develops. i think expectations that these tariffs might not go ahead, because he will see a different outcome in a number of weeks, that is way too optimistic. out will be a long, drawn
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process. if it is a trade war, it will be a cold war. there are many objectives that will not change anytime soon. at the same time, i think markets are getting a little calmer because people are beginning to realize the scale of these tariffs and barriers relative to the uncertainties around global growth are relatively small. do you agree with that? >> i do. you have to ask yourself, what is trump trying to do here? you have got to get technocratic wins from china, he is trying the grandest ready approach of shifting the landscape in the u.s., negotiations such that the u.s. is not perceived of losing and china is no longer perceived as cheating. everybody who voted for him can feel that he stuck it to
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him. china will have to retaliate and the risk they end up running is that trump thinks he is bringing them to the table to get a great deal and really he is bringing them to the table for a game of tit-for-tat escalation, which he is not prepared for, because he thinks he is the best negotiator in the world. francine: sean, it comes down to your expertise when you are teaching at georgetown, this word, negotiating. it was negotiating for america, versus china. i think this is a public negotiation. the president's negotiating publicly because they are not looking for micro-wins. if this was the last administration or the one before it, you have deputies winning issue by issue and you take weeks and weeks to chalk up win-win compromise is that both sides to point to. that is not what hiis happening here, this is a global struggle playing out with politics. i do not think there are any backroom talks we do not know about here. see any ideanot
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that china wants a visible struggle. there is no evidence in what, 1500 or 1800 years that this is the way they do business. what do you anticipate will be the chinese most philosophical response? will i think xi jinping want to operate the moral high ground he started to occupy with his davos speech. he will want to appear reasonable, a defender of free trade. he will not want to give up that division, but he is constrained in terms of what he can deliver, in terms of the chinese industrial strategy. and i think he will be looking for small concessions to keep the u.s. at the table without us getting out of hand and that is one of the strange things about this negotiation. neither side can really afford a big escalation of the trade war.
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both are actually very vulnerable to a significant slowdown. that is why i think low-level cold trade war for some years is what we are looking at. francine: what is the market pricing in? i have a lot of market participants telling me they are not worried about this because donald trump is a dealmaker. they are largely ignoring the fact that the greater of globalization is now becoming its main destructor. sean: i think the market has a very wide range of views, which is why we see this volatility. and we see this newsflow now. so, there are very wide ranging views. when you do the bottom up analysis, the direct impact of be very small.l this is about sentiment and this is coming at the same time as we are seeing concerns about a rolling over of global growth. and that is probably more important than market direction.
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over the next three to six months. francine: thank you for joining us, sean west and rupert harrison stay with us. coming up, bloomberg daybreak: america will be live in georgia with exclusive interviews. look for that interview at 8:00 a.m. in the ark and 1:00 p.m. we want to get to the bottom of what is happening with hungary, and whether it could impact some of the european markets. we also talk italy. a beautiful london picture for our radio listeners. at least it is not raining. this is bloomberg. ♪
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tom: "bloomberg surveillance." francine lacqua in london. i am tom keene in new york or let's get to our first word news on syria. here is taylor riggs. taylor: israel carried out a
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missile attack on an airbase in syria the day after president trump warned of a big rise to pay following reports of a chemical assault third israel is not commenting. people were killed and a suspected poison gas attack that took place on a rebel stronghold outside damascus. kimu.s. has confirmed that jong-un is willing to talk about nuclear grade weapons. the president expected kim jong-un for a summit before learning that the offer was genuine. he time and place of the meeting has not that set. a majority of britons say the public should have the final say a final brexit deal or stay in the european union. that is according to the group us for britain, which wants to remain in the eu. prime minister theresa may hopes to finalized the divorce with the eu in the fall.
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majors. has won its first title. jordan's be held off ricky fowler. eith held off ricky fowler but fell short. patrick reed ones. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries.. i am taylor riggs. this is bloomberg. francine: turning to a landslide victory for hungarian prime minister viktor orban. meanwhile come over in italy, the five-star movement has said theparty will not back government if berlusconi has a part of it. and west of eurasia group rupert harrison of blackrock is with us. him?o people vote for
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sean: he has a clear public message that voters support. they show up and cast votes in favor of this populist narrative that he has had come a sort of anti-immigrant, in line of everything he has delivered. he has tightened control as long as he has been there. we want to normalize the narrative of populism. like it is raining. here is a clear resounding victory where the populist narrative delivered, and the government can act on it. a tightening on the rules of the media, continuing crush on the judiciary. we will continue to seek conflict with the eu as well. this is a beginning of a new phase with a tougher decade. francine: does that spillover -- we have similar measures in poland dovish does it -- in
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poland, does it spillover? rupert: clearly -- clearly there is a similar story third visit as a model or i'm not concerned that this model will be replicated britt large across europe. you have a lefty business populism. you have all different kinds of populism. i look at poland as unique cases, but they are a test for the eu, and the eu will have to decide what they mean when they say they're going to stand against democratic 71 activity when politicians are elected democratically. rupert: last year, we had an election, and there was a scenario that the five-star movement and the league might be able to get together. at the time, that seems like a market calle apocalypse. now that that is over discussion, the markets are calm.
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toitaly, they have come back policies, but it is also the macro peas, that markets are more focused on strong growth in europe, on corporate earnings. some of these underlying populist governments, populist movements pose a significant challenge. you get to a period where government is under pressure fiscally, and they are willing to break the rules, not abide by the rules. francine: on markets now largely fearing brexit? rupert: largely, yes. sterling and guild are still quite driven by news flow, but i think the market is taking a while, but learning this lulects whereby in the everything looks difficult, but there are overriding momentum'sl,, and you saw that in march. i think the market is thinking
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ok, now, very likely we will get it is likelyand being pushed out until january of 2021. francine: i do not know if it is hope or relief in the market since it does not happen, we are getting polled. sean: there should not be any belief left on that. francine: it is not priced in. rupert: i think we will get a solution on the irish border between now and october. i think the u.k. will concede on things like the ongoing membership. this process is going to be orderly. that is the overwhelming likelihood. this is a fascinating history on syria, the french, i am particularly thinking this morning of the french response, going back to the mandate of
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1922. if you read the mandate of 1922, as you have, and move forward, it is a complete artificial construct. what is the french position as they look to respond to these chemical attacks? has been out in front, macron has been out in front, saying they will take the response, but friendly the u.s. and israel already did. you have got israeli strikes rumored, you-- have russia verifying. you have trump saying the u.s. will have a pretty magnified response with the u.s., potentially also withdrawing at the same time. you have to think about what the overall dynamic is here, as part of it is the u.s. wants to get its troops out of there so that when it needs to launch strikes, it has less folks on the ground, whereas a potential sort of retaliations from those on the ground as well. you have got a pretty nasty dynamic here. the french are trying to play a
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role in here, but i do not see them as a driving force in the potential outcome. tom: yet we saw from mr. macron over the weekend that they may not want to be a driving force but at least do something. how surgical can airstrikes be? sean: the technology is there to be surgical. the question is what message you are actually trying to send when you are doing it. you have got a lot of military machinery in this theater, and you have a lot of people, so the office that you are thinking you're doing some insertable -- you do not have the target right, but the wrong people are in the wrong place, they are intercepted -- there is so much going on. yourself when you don't need to or taking steps that you don't need to sort of show that you are taking action is a pretty fraught path to take. francine: it seems to be across russia. and russia, choosing the u.s. and china over korea. rupert: the market at the moment
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is watching this as a news story, but i think the issue is if you have u.s. or european operations in close proximity to ofsian operations, the risk some kind of escalation of hostility as a result of that i think is underappreciated. we have seen that happen before. in the current environment, it may be more difficult to contain a kind of escalation. francine: i want to get your thoughts, sean come on the turkish lira or turkey in general. also have a chart, though as i will get it in a second, but the turkish lira has weakened to a new record. sean, talk to us about turkey. are we just going to see more of those currencies and the political risks? sean: you have a government that is pretty clearly not interested in containing inflation of the country. you have a permanent campaign through economic populist, and all these rumors he will still be in the government.
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the one thing we know is that ogan is going to be there. for me, i do not think this is a façade, i think it is a structural issue. if erdogan is going to be there, turkey will be there for a long time. ofncine: this is much heart the turkish lira. do you look at all at the turkish lira? rupert: yes. it is underappreciated. there is simply not the willingness in the government, until you get a central bank that is willing to seriously hike rates, i think this will continue. and i look at this, sean, all i think is you need adults in the room flying around on the airplane. how critical is it for the secretary of state pompeo to become secretary of state pompeo? sean: i think it is absolutely
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crucial that the nominated secretary of state he confirmed, that he isot clear going to be more proactive, frankly. at the end of the day, this is trump's guy. the foreign policy of this white by thes being driven president. this is about not having competing for policymaking institutions within the government. of course it is important to have a confirmed secretary of state so that the other side into come who they are negotiating with, but at the end of the day, it is about every country in the world looking to get wherever trump is trying to achieve, and all they are trying to think about is whether the president is going to accept whatever the president of the state is going to accept. know, on thell other side of the scum of the division of the middle east, south of turkey, years and years of this, are we playing to these agreements made 100 years ago,
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or can we actually say we have moved on? i am not quite sure what the borders of syria mean. rupert: you look at the map of syria now, in terms of who controls what -- tom: exactly. rupert: it is not really but the reality on the ground. however, we are not majorly active, increasingly, the europe and u.s. in general are not involved. of prettya series consequential decisions over the last few years not to intervene. we have less space open to russia and others to dominate. airstrikes, but this is now not major for the west, frankly. much,ne: thank you so sean west of eurasia group, and rupert harrison of black rock both stay with us. on radio, and "bloomberg daybreak" can be heard across the u.s. on sirius xm.
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this is bloomberg. ♪
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taylor: this is "bloomberg surveillance." i am taylor riggs. it was good to the bloomberg business flash. it is a major blow to the canada oil sands industry. the project could have helped e ased shipping bottlenecks from the opposition in the british columbia. inder will talk to try to get
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the project restarted. in saudi arabia, a finance bonanza along the u.s. gold coast. expanddi wants to chemical production in the region. they may double the size of north america's largest oil refinery. european central bank is considering a proposal that will help banks being rescued from insolvency. the plan -- the ecb injects cash into viable parts that are off the fan -- failing financial institutions or that is according to confidential document obtained by bloomberg news. that is your bloomberg business flash. francine, tom? tom: taylor riggs, thank you so much. francine lacqua in london. i am tom keene in new york. overnight, and air attack from israel on syria. to best, it was thought the united states with us, rupert harrison of black rock and sean west with us of ian
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bremmer's eurasia group. out this week talking about the immediacy and the choice that the president had. what i find fascinating is almost a president alone, where any other discussion we would had since at least 1951, if not before, would involve the nato. involved in the ending syria bombing organization? i think it is incredibly difficult to take a nato level decision you have diverted issues between the u.s., europe, thaturkey, and the theater no one really wants to be engaged in at this stage. it really is, as you said, a president alone making this decision. that is not new on this story. obama chasing the white house, trying to decide whether or not to follow through on strikes that he had thomas during his administration -- promised
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during his administration on chemical weapons. you have got a president who has concurrently promised to get out of there. he is supposed to get out of there. is actually using chemical, and now the u.s. is thrust back into it. tom: the cliché here is lines in the sand. i get that. robert kaplan and his new book -- and we will have him on when i am in washington next week -- he is showing the basic idea ise is you are right, there no good answer, but there has to be a best lousy answer. what is that for president trump? what is that for mr. macron? sean: i think it is reluctant engagement, reluctant continued low-level engagement. try and get people out of there, clear that you are able to get out, do not see the entire political ground, but you do not want to be in there a few are this president. that is his least good option.
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that is not a good option. tom: you just mentioned the monday morning answer, which is we have got to get people out of their. doe mr. trump needs to john mr. putin he has got to get the russians out of there for their own safety? sean: i think that would reveal mr. trump's weakness, but i do no because i do not think he is going there, and the long-term engagement is there to back up this regime, to try to win some stake in the future. i think russia come in its spoiler role round the world, has selected syria as one of the places it is willing to be a spoiler, and they are committed to that strategy. they are there longer than the u.s., frankly. sean, thank you so much. let's go to the "washington post," the eurasia group with a different perspective on these international affairs. the international fair that matters is central banks. rupert harrison with us of blackrock off of a mixed jobs report.
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mr. harrison, which central bank are you watching right now? rupert: actually, it is probably not the fedrupert:. i think we had a clear signal from the chair last week. the fed is on a clearly signaled path. they are watching market developments. the u.s. economy is growing pretty strongly. inflation is actually rising. i think the market may not be ready for the above 2% headline in the next two months, but that is pretty simple. fromeaction is probably the ecb and that they can japan where the market has gotten a little bit ahead of itself in terms of economic momentum and in terms of expectations for inflation. where i think the ecb will find itself yet again having to respond to inflation disappointment and possibly falling economic development in the eurozone without much of a plan b. the challenge is going to be to push out expectations for rate hikes even further. there are interesting ideas for sovereign asset purchases come september but actual purchases of private credit.
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not that what we have found but to push out chitosan rate hikes. francine: how does the ecb get a handle on it? rupert: that is the only thing it has left is forward guidance. qe is now unexhausted twill for them in terms of large-scale qe, it down.need to push we are seeing in fact some of the core good prices weighing down, which i think is the lack of depreciation we have seen. i think they will try to do that by trying to push it. francine: tom asked you actually what central bank you're looking at, you said not so much the fed. what would positivity for the fed look like? the interesting thing about the u.s. economy as they have a wide range, slightly that broader range of macro uncertainty is one of the things market.n the on the one hand, we see a
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rolling over a momentum in the rest of the world. ,hat is a normal midcycle probably the former. yet in the u.s., you have the fiscal stimulus dumped onto a already pretty hot economy. it is a risk on both sides. the risk of the u.s. economy generally overheating is generating sustained target inflation in the way that the fed is behind the curve. to me, that risk looks less likely than a fed that is on autopilot and maybe realizes too late, maybe into 2019. tom: rupert, when you are serving the public of the united you lived austerity, austerity in 28 flavors. i do not want to pretend to be an expert on yesterday you had to live each and everyday. i guess america right now is doing anti-austerity. is that how you see it? is mr. trump us far away from rupert harrison as possible? rupert: it is very striking, actually. path for then the
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deficit and on the planet growth and employment in the u.k., the u.s. in 2010 when i was in government in the u.k., you saw the deficit coming down, unemployment coming down, until 2017 onwards. then the u.s. had a screech of rakes, you see deficits rising in the u.s. while continuing in the u.k. they had a sugar rusk of the fiscal stimulus waning in the 2019 and 2020. it may be china, it may be elsewhere, you have got to have the u.s. with a very large deficit, and i think that is a dangerous place to be for the u.s. tom: francine, i am sure you missed it on friday when you are with georgeitzer clooney on lake cuomo, but francine, bill gross was stunning. he twice said we are not going to give more rate increases, and he finally said we should have 0% to 1%. people are in a, as you
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correctly brought up before, is remarkable. francine: that is merkel. -- remarkable. or is a thing calling mobile phone, tom --
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commodity not think you will see it on the u.s.
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that is what the u.k. desperately needs to maintain that special relationship with a more., having skeptical view of the opportunities in china than it used to. tom: rupert, thank you so much. ,e is of course with blackrock public service in the united kingdom years ago. we have the conversation updates from the news in syria, the courts are coming to early from washington. in addition, we have the turner joiningir us on regulation, of course on his united kingdom and the options of president trump. stay with us. this is bloomberg. ♪
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tom: this morning, politicians place lines in the syrian sand. president trump will retaliate. president macron says france will do its bidding. of chemical weapons a defining moment you're the senator of arizona says mr. assad should pay a price for his brutality. john cryan, he is paying the schenck, and marcus they have been shown the door. good morning. this is "bloomberg surveillance ," live from our world headquarters in new york. i am tom keene. francine lacqua -- well, what are you focused on this morning? of the focusetter here is of course on deutsche bank. there are a couple of questions. we're trying to get to the bottom of what shareholders will be asking deutsche bank. three main questions are -- first of all, does deutsche bank commerzbank?
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secondly, the way this is done, there were two weeks of speculation that john cryan would be out. number three, how quickly can do the person in charge plans that john cryan put in place but accelerate them. right now syria with our first word news, here is taylor riggs. taylor: tom, francine, and airbase has been hit after that theytrump warned were be a big price to pay for it over the weekend, activists and russian workers said at least worry people were killed in asus acted poison gas attack on a rebel stronghold near damascus. deutsche bank has turned to one of its veteran employees to revive its fortune. retail banking executive christian sewing has been named to replace ceo john cryan.
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deutsche bank must clear it on needed bureaucracy and the faster at making decisions. the appointment was part of a broader reorganization to restore growth. has scored a crush and election victory and hungry to clinch a fourth term. his authoritarian approach has made him a role model from italy to poland. at itsna is looking options in the trade dispute with president trump. according to people familiar with the matter, one of them idea gradual depreciation of the one. -- yuan. officials are studying the effects of using the currency for trade talks. journalists and analysts in over 120 countries. global news 24 hours a day, powered by more than 2700 -- global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i am taylor riggs. this is bloomberg. francine, tom? tom: taylor, thank you so much.
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week,tastream this friday, jim o'sullivan will join us here, futures of 15, dow futures up 158. not much else going on, churning. francine, we know the turkish lira out for new weakness. francine: that is the one we need to keep an eye on, tom. at portfolio lot managers, they are looking at turkey tactically. toures in the u.s. pointing a higher open. it looks like the u.s. markets are not expecting china's xi jinping to contract disputes between the two largest. treasury falling and the dollar saving, tom. tom: very good. one of the low marks of the trump presidency is it has not been a good shot. maybe that happened over the weekend with the horrific chemical weapons attacks and those images from syria.
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we can go back to the deutsche bank chart, too. joining us now in washington, our chief washington correspondent kevin cirilli on the immediacy of syria. kevin, i waited last night, i knew it would happen, and there it was. the senator from arizona, grievously ill, saying this is what happens. how does the white house response to this stern allegation by admiral mccain? kevin: good morning, tom. president isu the fully focusing on what type of response should be given to syria. absolutely right -- senator mccain as well as other republicans calling on the president to do more, to take a more aggressive stance. you will remember back in the early part of last year when president trump was in mar-a-lago with japanese prime minister shinzo abe, and they issued a strike against syria for a result of their chemical attack against and the horrific images that followed, the
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president earned bipartisan praise for that particular moment. how the response to this remains to be seen. tom: you turn to generals or maybe you turn to admirals coming off of aircraft decks. i believe he is not getting along with general kelly. i guess general mattis is front and center. watch?bolton the want to who are you watching, kevin's really, as america develops an attack plan on syria? kevin: today is john bolton's first day in office, so this could be literally his first day that he arrives at the white house, and he was spotted at the white house over the past couple of days, but today he starts officially with the administration. he is someone like a senator mccain really likes, tom. he is perceived as a hawk. he has an aggressive stance against pressure, against -- ininst russia, against assad syria.
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you have seen against president for that chemical attack in syria. president trump placing the blame solely on russia for this as well as the thought, and today is mr. bolton's first day. talk about a first day to start on the job. kevin, the president tweeting seconds ago on tariffs in china, saying went there is a terrorist to be paid of -- tariff to be paid of 2%, won a chorus into china, there is a tariff to be paid of 25%. satisfiedresident be with china saying look, we will give you something, we will just accelerate the reforms? does he really want what he is asking for? kevin: no, i do not think he will be satisfied at all. i am really watching the wto, because china is a developing nation, and that is something the administration has
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aggressively said hey, why is china perceived as a developing nation? they get qualifications with a result of that designation which is well beyond what they qualify for. i am also watching the time with it, because on bloomberg television, secretary ross noting in an interview just a couple of weeks ago that it days at least for a comment period. for thement period straight proposals that the president is speaking about, tweeting about, it takes quite some time. you cannot automatically slap something on your you have got to the comment period. it is aggressive rhetoric. once you remember aluminum, steel trade tariffs, this will be every piece no policy of limitation. tom: bring up the tweet again. kevin, this is the heart of the matter for the american public, whether they agree or disagree with the president. the heart think it is of the matter for the president and the republic of france. here is the tweet francine
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just mentioned of the president. he has a major foreign-policy moment. kevin cirilli, he is putting this week out. -- this tweet out. what is president macron, prime bolton, what do they think about this distraction? kevin: i think it shows, his opponents would say, th that he can walk into, the same time. this critical say there is an issue going on in syria. you're right, tom, that there is an international response that it warrants, so i will leave it to the viewers to decide. tom: kevin cirilli, that was extremely carefully stated. kevin: [laughs] tomi tried, tom, i tried. tom: kevin cirilli, have a productive day, our chief washington correspondent,
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looking for a productive jobs report. jim o'sullivan of high frequency wonderful to have you with us. we are doing international relations today. francine mentioned, an important election in hungary, and it speaks to populist tensions. we clearly have some form of populist president. this president, when you look at his economics, is he making america great again? jim: [laughs] would not say that. the biggest influence over the economy over the last couple of years in terms of bringing about from the recession, there is no question it is accommodative monetary policy come as a policy put in place by the fed. that has contributed to the unemployment rate dropping down to 4.1% now. chances are, it will keep on falling. on top of that, there is no question that the tax bill last year plus the increase in the spending caps is going to produce more fiscal stimulus of a more growth as well, so that
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will power the economy. tom: you the first person i've asked this to come over the weekend, mr. kudlow going further on friday, talked about pulling back on some of that spending in that broad legislation. does that move the needle on our fiscal analysis little? i would say no, but what is the answer. jim: we will see what comes out of it. i would be surprised if there is a major reversal. there was a big increase in nondefense as well as defense spending. it, but some talk about i will believe it when i see it. i do not think this will be a reversal, no. francine: if there is no reversal, what happens -- escalation? jim: the budget specifically here and the deficit is soaring. we will get the march deficit numbers this week, on wednesday, and it is pretty clear that the deficit is already starting to blow up again, and before the tax bill and the spending increase. the deficit numbers are going up pretty sharply.
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some of that is spilling look over to economic growth. francine: sorry, jim, i was talking about the tariffs. do you expect the u.s. to agree on something, or do you expect it to escalate? jim: i am expecting in the end it will not turn into something collated. as right now, what has been proposed, $50 billion on the u.s. side, and china immediately has come out and talked about reciprocating, but those are pretty small numbers in the context of the $20 trillion u.s. economy, and these are pretty tiny. you throw in the extra $100 billion that the president threatened on friday, the numbers are still not huge. if they were to stop there, it is still not a huge macro effect. it is for a small in the context of everything else going on in the economy. obviously the question here is does it continue to escalate, does retaliation lead to retaliation lead to retaliation, etc.? i believe sense will prevail to
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some degree. you go back to the underlying economy, in terms of what we have been seeing already, which is pretty strong. tom: the micro plays into the macro analysis. that american is going to go all boeing, pull away from an airbus order, and hiding boeing -- buy boeing. the fact is, there is a lot of micro-movement now among companies. what do you make of that micro-movement? jim: i think that is always the case in the terms of a $100 trillion economy, it is not as if we are seeing major macro shifts from that perspective. u.s. exports are growing pretty solidly, i think, not dramatically different from what global trade has been doing recently. see those things suddenly changing from a big macro perspective. francine: all right, jim, thank
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you so much, jim o'sullivan there with high frequency economics staying with us. what do you think of the japanese yen movement? we talk about the yield curve, how he is want to target that, and will there be any fluctuations in yen? if you are a bloomberg serves driver, -- a bloomberg subscriber, which we hope you are, you can follow that by typing live go. this is bloomberg. ♪
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taylor: this is "bloomberg surveillance." i am taylor riggs. let's get to the bloomberg business flash. itsrtis is expanding venture into gene therapy, looking into purchasing avexis. avexis is involved in studying treatment for a neurodegenerative disease caused by a genetic defect. if your information was given to cambridge analytica, you may know soon. post messages on the new streets of people whose data was swept up in the scandal. plus, all 2.2 billion facebook users will get a message on how to protect the privacy on the social media network.
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shares of a company owned by plunged.ill o billionaire distinctions make it almost impossible for the empire to do business in u.s. dollars. that is your bloomberg business flash. tom, francine. francine: taylor, thank you so much. christian sewing is taking over at deutsche bank. with more of a shakeup on the top, we are joined by matt miller, bloomberg tv anchor. what do we know about mr. sewing? is it more visas from what we had from john cryan but just much quicker? sense, there is a very different person here running deutsche bank now. rossve had bankers since
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royer back in the 1990's. christian sewing is a retail banker. he is also a german who started working for this bank as a teenager as an apprentice, so he has been there for well over 30 years. he served roles in singapore and tokyo around the world. he has a great view of the bank globally, but he is three much a german retail banker, and that is what this board, at least this is how they are spending it, that is what this board wants to have running the bank right now. interestingm had an note but one of our guys like people. there seem to be a lot of parallels, they put a retail person in charge that went back to global investment bankers. is there a danger that this is not a good fit for those banks? matt: that comparison is great. the piece by lionel laurent for
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bloomberg gadfly, you can get but thatyping gadf, was a while back. the hope was that john cryan -- shakeup up the the retail bank in germany ball turnaround investment picture in , and it for deutsche just has not happened. they have lost 35% over the last three years. ashink they are realizing, you were told on friday in italy, that they are no goldman sachs. they are not going to be able to go up against an investment bank of that caliber. davide's, i heard interview with francine and italy, absolutely superb. you are 100% right about that. help me with the major investors in deutsche bank -- which one supports the chairman? which was supported mr. cryan? do any of them support a retail banking expert trying to salvage investment banking? , we do not know how
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much support there is yet for mr. act lightner. we will find that out when he at a to explain this mess shareholder meeting in may. bloomberg only spoke with one major investor who was still behind the british ceo as of yesterday, so that is why he is out. sewing ischristian concerned, you can tell by the stock price action today that investors are at least happy that the mess is over and they found someone to run deutsche bank, and the investors that i've spoken to said they will see exactlyhance to what kind of strategy he puts in place here. we'll think we know because he is a retail thinker and he said in his first note out today that he will look at the investment bank and try to cut back on mthe but we aree areas,
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not sure where he will take this bank and how different it will be from what john cryan was doing. francine: matt, thank you, bloomberg's matt miller in frankfurt. jim o'sullivan from high frequency economics is still with us. adair turner is joining us on the phone. when you have the changes of the top at deutsche bank, what are your top three questions to management right now? turner: my question is, first of all, when will we see the first positive results? -- mr. klaus: my question is, first of all, when will we see the first as a result? to twost one and a half years, what is the strategy of the bank, where will be synchronous money in the next three years, and all of these questions have to be answered as tonow, and mr. sewing
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have the right answers, and he has to have the answers there a fast. does he need to have the answers in two weeks, three weeks -- what would you tell him? does he get away from the investment of deutsche bank in the u.s.? klaus: first of all, we have the annual shareholders meeting at deutsche bank on may 24. i am convinced we will get sewing to ther. shareholders meeting. i am happy with him as new ceo, because i know him as a person who is very strict, who is very concentrated, who is refocused, will execute all the management proposals of the last, let's say, 12 months, in a
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very short time after the main problem of john cryan was the acceptance in the bank was very low. for him, he was an outsider in the bank. he was not a deutsche banker, as mr. sewing. start of his career back at the bank in 1989 as an apprentice, and he has made a great career of the bank. he knows the bank very emphatically, and i'm very convinced about that, but he is the right man tom: on the position. -- man on the position. tom: so you want deutsche bank to pull back on new york, and you want deutsche bank to be that domestic bank? klaus: no, i do not want deutsche bank to pull back from new york, to pullback from u.s., and to shut down the investment banking. that is a misunderstanding. i convinced that deutsche bank has a chance to be in the top five or top 10 global investment banks -- only if they re-concentrate on these very strong german market.
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deutsche bank, in history, deutsche bank was founded 150 ,ears ago as the deutsche bank financing german industry in germany and as well as in projects in other countries. ultimate strength of deutsche bank, and they have to re-concentrate on tha, focusing on the german market to become one of the top worldwide investment banks again. buycine: klaus, should they commerzbank? i you wantf them to focus on germany, should they be buying a rival in germany? klaus: no, no, no. to the honest, commerzbank and deutsche bank, a merger would cost synergies, would cost working places, but there fantasy in it.
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i see a cooperation in special business areas, the special business park, much more better than the merger. you have seen the commerzbank merge with another bank, and we had nearly 10 years of problems with the different cultures together. i do not think that a merger of deutsche bank and commerzbank will be a benefit for the shareholders. francine: of it, so, k laus, what do you want to see for the next 20 days from mr. sewing that he is the right pick? is it more cost-cutting, and does that need to come immediately? klaus: it is a bundle of measures. i think mr. sewing, first, he will list out his strategy and will say where the bank will
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earn money in the next three years to five years, and i am very convinced that he will present us a clear strategy and reach all ofgo to the amc has. -- aims he has. tom: mr. nieding, thank you. niedingeting -- klause of deutsche bank. the backdrop of this is technology. this is bloomberg. ♪
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tom: "bloomberg surveillance" from london, francine lacqua, and i am tom keene in new york. stunning images from paris, france. president macron greatly
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distracted by syria will meet with the young leader of saudi arabia, prince mohammad bin salman. this is an important meeting that has become ever more important today with religious tensions across the middle east. we have lord koerner here in a minute. right now with a morning briefing in first word news, taylor riggs. taylor: russia says israeli has -- is really warplanes have attacked an airbase in syria. this after president trump said syria would have a big price to pay after chemical gas attacks. the gas attacks took place on a rebel stronghold outside damascus. the u.s. has confirmed willing to talk to president trump about getting rid of nuclear weapons according to administration
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official. the u.s. had confirmed that its offer on nuclear weapons was legitimate. the majority of britons say the public should have a final say on whether to accept a brazen deal or stay in the -- a brexit deal or stay in the european union. by a poll conducted by best of britain, which wants to remain in the eu. theresa may will finalize a divorce deal with the eu in the fall. patrick reed has one thing his first major title. the won the masters by one shot. spieth was on the comeback inajor history, but he felt to shots short. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i am taylor riggs. this is bloomberg. francine, tom. tom: taylor, thank you. jim o'sullivan is with us.
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his optimism on the american economy is growing. now joining us for an extensive discussion this morning, adair lord turner. slow this morning, perhaps we hearken back to his study of history and economics from a few years ago. international relations is part of the fabric of dealing this morning with the crown prince of saudi arabia, meeting with mr. macron. syria again front and center. what part can the united kingdom play as mr. trump and mr. macron figure out what to do with modern chemical weapons? obviously, we will be talking with president macron, also with the u.s. administration, but for instance, if there is any talk of military intervention, the
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british parliament after various false steps in the past will not accept a you cable role, a significant -- a u.k. role, a significant role in the military intervention. i am afraid we are a bit of bystanders in what has become an unbelievably complicated syrian situation. there are about four or five different parties there -- the trips, the kurds, the opposition, the remainder of isis, etc. i bluntly do not know who is going to support out of this. tom: in studies, you and i have peterd over the years, o'toole and lawrence of arabia with his hand across the map when he learned about the mandate of 1922, nothing has changed. mr. turner: i think if you go tok to the period of 1916 1922, the british and the french together did three things, which were completely incompatible. arabiaas the lawrence of promise to the sheriff mecca
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about essentially a jordanian -palestinian state. there was a homeland for the jewish people, as if you look at the totality of that, they were completely incompatible promises to different groups of people, artificial lines on the map, and yes, i am afraid, we are partly ,till living with the aftermath a completely hypocritical set of promises that we made to different people at that time. tom: francine? francine: adair turner, good morning, first of all. mr. turner: good morning. francine: if we take a step that, those who say this is a proxy war between the u.s. and russia, the u.s. is fighting on many fronts -- fighting trade with china, also dealing with korea. shifts intectonic geopolitics that the market is just not quite grasping yet? michael: -- mr. turner: i think that is right. the big tectonic shift is the relative weight of america versus china. that has been played out in this
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trade war, cold war so far -- relatively small war so far, and we hope it stays that way. but the core of that is the fact that america has woken up, somewhat belatedly, i think, to the huge technological progress being made in china. china has very effectively used opening up to achieve a technological chance for and is becoming a high technology-based economy very rapidly. i actually think that is unstoppable. you could never have stopped it. i think that is the big tectonic shift, that the acceptance in america that china, by the late 20 20's, will be a bigger economy than america even in market exchange rate terms. that if the biggest one. russia is a different situation. russia is not a successful economy at all.
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power.nuclear it has certain technologies in , a crypto process, cyber process, etc., intelligence, which are very significant. it has not managed to turn those into an economic improvement. testingnificant telogen's and military capabilities, but in a sense, it is a declining power and economic terms. but i think it is more dangerous than china, and the big thing that is missing, i think my personally, is an intelligent american engagement with china based on the acceptance that they will be co-equal powers in the future, because i think that is unstoppable. francine: what is the future? turner,eantime, adair do we need a new plaza accord? a new plazamichael: accord on currencies? francine: on currencies. mr. turner: the plaza accord was
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dealing with a very specific set of huge and balances, like what they were doing in the 1980's. we are not actually seeing swings as big as we saw them. i remember that the first am i lived in new york in 1981, as a young man, i was very much enjoying my sterling salary on $ 2.47 dollars to the pound, and only four years later, it was $1.05. tom: when you have to pay your rent, those get taxed. carl weinbergand on the ambiguity of the dollar? it has been one of the major themes. you have lord turner you're on a high-frequency call of what the dollar actually does. jim: i do not have a definitive view on a clear call up or down.
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certainly from the perspective of the cycle, interest rates, to be finished hiking by more than the markets are pricing in, that should be dollar positive. critics get that a year ago as well, and the dollar is down. there is a lot going on obviously in terms of the turmoil with trade negotiations, in terms of what is going on with risk appetite in the markets. at the end of the day, i cannot say we have a strong column the dollar one way or the other. the are you petitioning domestic economy from net exports and the dynamic of all of this trade discussion? jim: that is certainly part of the story, and to the extent that the economy has to improve from two years ago, we go back to years ago when the oil sector was plunging and was much weaker, that was related to the commodity in oil prices. relative to that, u.s. economies picked up. part of that is the manufacturing sector coming back and asked her to coming back.
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certainly if the trade sector plunging,ddenly start that would be good for the economy. right now, we are seeing high numbers well above the neutral 60 mark for export orders. right now, things look pretty solid. would you say the danger at the moment is a u.s. army that overheats? jim: -- economy that overheats? jim: the turmoil on the one side is the trade negotiations and the tariffs, and that is obviously a threat on the negative side of the economy. to thely if it escalates point where equity markets are truly tumbling, not just volatile, that spills over into consumer and business confidence. pulls back the economy but we are obviously assuming it does not get that, and it remains certainly a distraction and volatility in the market, but also a major negative from a macro perspective. in the meantime, you have got an economy that is generated close
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to 200,000 jobs a month, which is way over what is needed to stop it from trending down. ultimately, this is going to cause the economy to overheat if we stay on this track. this is president summers of harvard university, a small college up in boston, china global surpluses are far beyond past u.s. negotiating a few years ago. china spent $1 trillion propping ip protections are far better enforce then a few years ago for major u.s. software and video producers. of course major issues remain, but the view that multilateral pressure without bluster is ineffective is belied by experience. this is from larry summers on blockism., maybe even is unilateral debt? mr. turner: we still have multilateral institutions in the
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world. the storm of wto. we have lots -- we still have wto. countriesave lots of and institutions compatible with the wto rules -- or exceptions to it. clearly the whole tone of the trump interventionist bilateral, unilateralaking yo action, and it is focused on the bilateral trade deficit with china, which is not entirely a terrible thing to focus on pierce certainly if tariffs are relatively small and trade measures are relatively small, all you get is displacement within the multilateral system. china does not buy soybeans from the u.s., but it buys him from brazil, somewhere else, and the system rebalances with a certain frictional cost, a certain hit to growth. at the end of the day, it is still there. the other thing, i daresay, going back to the u.s. economy, the u.s. trade deficit is going to widen, because the u.s. budget deficit is going to
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widen. if you have hidden a big stimulus to the economy through your fiscal deficit, the only thing that is going to happen. jim: i actually wrote that in my latest weekly. tom: did you steal it from him? [laughter] mr. turner: no,no, it is not economics. jim: no to the extent, that the budget is going up, that will put pressure, effectively, some of this will leak out. right now, the deficit is 2.5% of gdp. 147 percentage points about is china, for what it is worth, but china, for what it is worth, but 2.5% is gdp. us, and ofurner with course jim o'sullivan. i morning briefing needed on this monday, coast-to-coast worldwide, and lord turner
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always listening on radio one. this is bloomberg. ♪
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taylor: this is "bloomberg surveillance." i am taylor riggs. let's get to bloomberg business flash. a major blow to canada's oilsands industry. er's project could have
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helped shipping bottlenecks, but it faces opposition from the british: be a puritan kander says it will face negotiators and try to get the project restarted. -- british columbia. inder says it will face negotiators and try to get the project started. the european central bank is considering a proposal that would make it easier to help banks being rescued from insolvency. the plan would let the ecb inject cash and buy the parts of a letter that are spread off of a failing financial institution. that is according to a confidential document obtained by bloomberg. that is your bloomberg business flash. tom, francine. francine: thank you, taylor. a new survey suggests that most britons now support holding votes on any final runs a deal. according to a new poll, 44% say
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the public should have a final say in whether to accept a deal that remains in the eu. adair turner from the institute for new economic thinking and jim o'sullivan of high frequency economics join us. adair turner, will it go ahead, or is that something the u.k. will pay for? mr. turner: i think the most likely result is definitely going ahead but staying in form of some sort of customs union. i voted to remain, and i would love it to be reversed, but i cannot see the dynamics that would lead to a referendum to reverse it. i think if there was a referendum, i would not be able to predict which way it would go. i think we had a vote, people voted by narrow margins to leave the european union. what they really voted our more two things -- one, budgetary contributions and the other was immigration. neither of us require us to leave the customs union.
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leaving the customs union is a remarkably silly thing to do economically. it is impossible to deal with the problems of the northern ireland border if we leave the customs union. unfortunately, theresa may completely unnecessarily, and i think weekly, said we are going to leave the customs union. i think what we will now and up with is a sort of compromised deal where we stay in a sort of customs union of customs union to sort of cover face and pretend that we have left the customs union, but i think that is the revolution of it, and i think that is undoubtedly where is majority in parliament formed. it is relatively unlikely that we will end up with a referendum that reverses the whole idea completely. plus, you know, politics is unpredictable, so you cannot completely rule it out. adair turner, what
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does it mean for the future of theresa may? is sheot in charge? -- not in charge? mr. turner: of coursemr. turner: [laughs] george osborne famously called her a dead woman walking. she is not in a strong position. if she were a strong premise or, she would have fired our foreign secretary, boris johnson, on several occasions. hasshe cannot, because she a power compromise within her cabinet, and she cannot accept upset by getting rid of one person, but her strength assert weakness and a sense. because the party is split, because -- weakness is her strength, is what i meant to say. because the party is split, she is not to be gotten rid of. the party quite likes the idea that there is a relatively weak prime minister where different side to get away with saying things under a different environment you would get fired
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or so the very weakness of the position, the fact that she is not a strong leader in the party substantialf stability. my guess is she will be prime minister right through 2021. that i do not know that. i am curious about the distinction between the custom union on immigration and the rest. basically britain wants independence from brussels. it is that simple. how do they keep up the economic ties if they want independence? mr. turner: the answer is you can stay in the customs union without upsetting free movement of people and without being a budgetary contributor to a large common budget. tom: how? mr. turner: turkey is in a customs union. custom unions do not require that you are part of a political entity. in the interesting referendum campaign -- a lot of those who are arguing for us to leave said of course, no, we are staying in the customs union.
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some of them said, and this is more of a problem, of course we are staying in a single market. but you can have an environment where you are upset and you do not have internal tariffs -- you can do that without making budgetary contributions and without accepting free movement of people. that is completely doable. all right, adair institute for new economic thinking and jim o'sullivan of high frequency economics are staying with us. today, bloomberg holds its annual feature on energy summit. users in the energy, business, and finance role. hit the live go for full summit coverage. this is bloomberg. ♪
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tom: "bloomberg surveillance." thank you for joining us today. single best chart now. we do it with jim o'sullivan of high frequency economics gerdau want to go to the optimism of your call. 0% on real gdp. let me get the official number.
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4% may be the rhetoric of the president, but 3% has been pretty damn good. he is doing it, isn't he? jim: well, again, how much of it is because of the administration's policies, and how much of it is in the accumulation of the fed easing over the years? there is no question that the stock markets took off, the confidence went up. i think it is hard because ultimately, the key is unemployment is falling. it is not clear that the potential growth got to 2% or higher. if we get 3% growth this year, which i think we will, with the help of fiscal stimulus, unemployment keeps on falling, that puts pressure on the fed to keep tightening, bond yields keep rising. there are conflicts ultimately. tom: if we had another hour, i would go to adair turner and austerity. thank you so much for joining us
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this morning. of course what we have seen in syria this morning. this is very interesting. atlanta.g daybreak" important issues in atlanta particularly looking forward to ceocontinental exchange jeffrey sprecher. also an important and timely conversation, the great success story of american retail, and that would be the home depot chief executive officer as well. please stay with us through the day, news from washington on syria, this is bloomberg. ♪
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♪ >> hunger games, the bank must
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regain its hunger for the business. president trump the only thing between u.s. and china is stupid trade. by the depth or earnings season is on deck. "bloombergome to daybreak" today. we are in the heart of atlanta, the square on fifth tower. technologyub of innovation for atlanta. we will be here all day long. this is headquarters for some big companies. home depot, the ceo will be here. david: isn't there a golf game in georgia? alix:

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