tv Bloomberg Markets European Open Bloomberg May 11, 2018 2:30am-4:00am EDT
♪welcome to friday morning. guy: this is the "european open." we are live up from our european headquarters in london. cash trade is less than 30 minutes away. ♪ guy: mario draghi on home turf. he speaks in florida this afternoon. will he give crews on winding down stimulus. oil is heading for its second weekly gain. bank of america says we could have $100 a barrel next year. what is happening in italy?
--the deadline to perform form a government in the country is pushed back, arguing over who gets the key roles. will take you live to rome on that story. from a corporate point of view, it is a much quieter morning this morning. there are some really stand out stories we are going to dig into a little bit later. take a look at what is happening with the italian banks today, for one. the markets do seem a little bit , and an index level at the moment. the story very much focused on what is happening below the surface. let's take a look at what we are seeing and treasuries. we have is incredibly flat curve. what does the market know that maybe jay powell does not? we wonder what that is regarding.
we continue to see this flattening of the curve. this is where the story is this morning. trading is up 3%. let's say the gm and. the focus on what is happening in emerging markets. argentina's market bottomed out wednesday. ever since then, it has been climbing back. yesterday, we saw some really big gains coming back. philippines rising. malaysia does not reopen until monday. and it is the ndf bouncing back after a big loss yesterday. with all the philippine story yesterday. the peso is down and the equity market trading higher. let's go to bloomberg first word news. u.s. president donald trump
says he will meet north korean leader kim -- kim jong-un in singapore on june 12. he tweeted that they both try to make a special moment for world peace. has a security partnership with the united states, a north korean embassy, and a strong ties with china. trump made the announcement after north korea released three detainees. is good andionship hopefully something a very good is going to happen and they understand it is very important for them. it is important for everybody. china,south korea, everybody, i think it is going to be a very big success. prime minister is accusing of iran by -- of crossing a redline.
in response, the military conducted its biggest raid inside syria in at least 30 years, targeting what it says were iranian military infrastructure. iran says the israeli claims are ally. -- a lie. malaysia's new prime minister says he will lead a business friendly administration. being first remarks after sworn in, he said he focuses on going the economy and reducing debt adding that some terms may need to be renegotiated. he also says most of the money can be recovered and those responsible must be punished. [indiscernible]
global news 24 hours a day, powered by more than 2700 journalists and anaylsts in more than 120 countries. this is bloomberg. guy: thank you very much. then stocks rallying after latest reading on u.s. inflation. to be honest, it was a pretty tight call. there were a couple of elements that disappointed. the dollar is studying after dropping the most since march. joining us now from singapore, mark. what do i make of this increasing and flat curve? obviously, the people in a long end of the bond market are much less worried about inflation than what we hear from some of the analysts. if you look at the pc deflator which the fed like themselves,
it is only running at 2% a year. it won't be long before fed funds are actually about that. the fed's carry on the path they are thinking about 42019, they will be well above the pc level. is a good reason for affecting the curve because it means the fed are probably overdoing it on the rate hikes. there is a serious threat if the fed continues on this path, that they will make it easier for people to threaten the curve. you want to be in the long end of the curve and not the short end. it makes absolute sense for it to be flattening. for the time being, they seem pretty comfortable with three hikes this year and a couple more next year. guy: we will wait to see what next year's look like. three looks like it is a pretty solid story at the moment for the fed and jay powell. draghi is going to speak later on today, do you think he's
going to give any emphasis to the upside to the euro? you think he would want to do that? mark: he will be china not to give away anything. the ecb have got themselves in quite a spot. they don't want to let the market know of any fixed date when they are going to be removing the qe. they want to leave them guessing for now. they would really like to push it further back into the future. he'll be working very hard not to leave anything on the table for the markets to digest. if the euro is unchanged today, he will be very happy. the market will certainly be looking for any hint that he is going to commit to september as the beginning of the exit date. he will try very hard not to give them away. guy: bank of america seems to be heading to $100 a barrel for oil, is the market ready?
mark: i think nowadays, with the shale outfit, $100 is going to be a chiefly -- extremely difficult to achieve. the saudi's have done a great job of keeping the opec to group together, but $70 is already a very attractive label to start increasing your oil output. $100, i don't know how the saudi's could keep the group together, plus the excess supply. i could be proved wrong, but i just don't see $100 coming. of what kind of needs to happen around that, are we even at $70? just to bring it back to the inflation story, if we stick around for $80, what are the inflationary expects of that? that an inflationary story or a disinflationary story? i'm just kind of wondering how
$70 or $80 oil impacts of the economy. certainly, if we stay in the $70 or $80 range, fairly end of this year and into the early part of next year, i think they will revise their inflation numbers slightly and there will be a slight drag. good, butth is pretty if you keep oil at this level, it will take away about it. to get oil to $100, you would need more growth to really accelerate, and demand have to go up so much.that this does not seem possible . the world growth is pretty much as good as it is going to get for a very long time. we are going to peak this year anyway. that is not going to justify the kind of numbers that are being talked about. if anything, economies will be going slightly on the downtrend into next year. or other justify oil commodities at superhigh levels. guy: thank you very much, indeed
$60 billion. strategic dealmaking is driven by disruption across industries meaning this year will be an extraordinary time for dealmaking. -- m and a team. >> must there has a glaring antitrust issue, i think companies are willing to take it back because the environment is as good as it is going to get. that is your bloomberg business flash. guy: thank you very much. let's focus on some of this morning's corporate stories. passenger traffic at klm is down after eight days of strikes in france. more details are certain to
emerge of the volvo car ipo. air france, in some ways, i would argue these numbers don't look too bad relative to the aggressiveness of the strikes in the problems this business is facing right now. >> it could have been probably worse. we are looking at eight days of strikes that are feeding into the numbers. it really also shows the dysfunction at the heart of the company. if you look at the numbers broken down between klm and air france, you see very diverging fortunes here. to see air france numbers down substantially, traffic numbers are down 8%. caleb up 5%. -- klm up 5%. the ceo will formally design -- resign next week. he will formally resigned next week and the question is how will they break out of this weblog. we saw more -- deadlock.
with some more strikes this week. we certainly have not seen the end of the line here. guy: we have an indication of what forward bookings look like? >> not this point. the summer bookings seem to be holding up so far. the question really is can they somehow contain these strikes? if they can move beyond now and go on with the new management team, and somehow get back into the good books of workers, that probably they can contain this. if it drags out, we will really see ford bookings go down. there are other companies out there, particularly on the short hold that can absolve this kind of traffic. people might have second via klm,and go by -- four air france in particular, this is a real risk. guy: doing know what kind of person would be required to lead
this company? names being floated around? >> there are some names. is from airbus. he knows the industry fairly well, so he would be one person. it is not so much a person who does the industry, a person who can talk to the different constituencies, who can talk to the governments and workers, klm and air france and hold it all together. the ceo who quit last week try to do that. we see where that got him. that hasn't helped really. the question is will they go with somebody who is very different in my even go with a female ceo for the first time, which would be a first four air france. names,e there are other
it is not the most popular of jobs right now if you look at what happened to the last two ceos. guy: absolutely. other companies are doing the same. there is an advantage since gail. why would investors look to the volvo ipo and why is it being ipoed? bought, thereere were some real doubts as to whether this would be a winning strategy. there was really no track record there. although was in a very difficult situation at the time. the story of volvo has been one of great revival and rebirth. if you look at the product portfolio now, incredibly strong. i would argue it is one of the strongest in the industry. very fresh and good-looking cars. a lot of demand out there.
the electric strategy is to a comprehensive. they want to go all electric in the next couple of years. there are a number of reasons to buy into them. guy: great stuff. thank you very much, indeed. we are minutes away from the start of cash trade this friday morning. some of the stocks we are paying attention to, daily mail owner, within the last hour has reached 2.2 billion pound deal. we will talk about the next. the market open is 10 minutes away. this is bloomberg. ♪
♪ guy: 10 minutes to the start of trading here in europe. joining us now our team of reporters here in london. sam, we have this hoopla on the block. it is being bought. sam: a ripple effect into the rest of the market. you could see right moves a little bit today. purple brexit is a small company here but they do online agencies as well, they could move today. the other big mover on the back of this deal is dirty mail.
opla.wner owns 30% of zoo guy: looking out for all of those stocks. and ray, let's talk about what is happening with -- what we are seeing here is this deal market getting better and better. >> they posted their best quarter in six years, earning estimates at $2.5 billion. up from $2.2 billion the same time a year earlier. their the world's largest and dealmaker so this really shows what is happening in the industry's. the industry continuing to improve. the 2018 outlook has recovered. behind this recovery, a sharp decline and chinese exports and giving the extra boost, especially from march is the to increase protection i measures and this idea and sort of tariffs out of the u.s. definitely giving
slower moves. guy: had to read the story twice, dan, i read it correctly? dan: you did. there is a ray of light at the end of the tunnel. a big surprise profit in the first corner from the anti-and bank that was rescued by the government last year. the ceo strategy reducing costs, plus lower bad debt provisions seems to be working. obviously, analysts want to see what his plans are for boosting revenue, but it should be a very positive day. all of this on top of the announcement late yesterday that the company pulled off its 24 euro of bad loans. it is one of the biggest type inions of that
europe. he said the equity market performance so far indicates that investors are not worried yet. the corporate customers say that they are seeing quite a bit of investment. for now, i think markets want to see who the players are going to be in with their policies are going to be like. guy: great stuff. thank you ray much, indeed. thank you all of us for joining us. greatn pick up all of the comfort news for the recovery here on your bloomberg first go. at the moment, european futures already pointing in a clear direction. the italian story is interesting. they continue to outperform. the euro unlikely to be affected by the italian story.
♪ guy: minutes to go until the start of cash trade this friday here in europe. let's talk about what is going on in the currency world. euro-dollar is beginning to fade. we have seen a little bit of dollar strength over the last hour. turf as we watch a time politics very carefully. i think it was a dovish whole yesterday from the bank of england. 29.trading 77.
the s&p yesterday finishing up around .9%. not that performance. the inflation data was actually recently muted. futures i think is the word of the morning when it comes to what is happening here. stocks, individual names increasing. 77 even is where the ftse 100 comes in this morning. is up a touch. to be honest, these levels are not telling us a great deal because what you need to do is take a look at the week. equities have actually had a really solid week. definitely moving to the upside. today, not getting much of that. nevertheless, equities have had a decent week this week.
increasingly, people are looking for individual names. we will talk about that later. let's take a look at the heat map and say what is going on here in terms of the sector story. this is what it looks like this morning. that big area of green is the financials. they look reasonably well this morning.we are watching italian banks particularly. health care looks a little softer. once again talking about drug pricing in the united states. that is something you want to pay attention to. he is warming up on that subject again, it seems. energy is trading a little warm as well. we are seeing is some positive news coming for. let's talk about what we are seeing in terms of the movers screen and give you an idea of what is going on there. let's refresh this and say he was going on. we have a downside move in the drug stocks.
i have ing under a little bit of pressure. unilever and some other big names trading on the downside as well. by --take a look at zika sanofi. nokia, anheuser-busch all trading to the upside this morning. as the markets hub the flatline, i think the story and the push away from all of this is the fact that we have seen a very solid week. asian stocks also delivering similar performances as well. we have seen some really decent performance is coming throughout this week out of asia despite some of the market being closed.
we have obviously got the malaysia story to factor into all of this as well. stocks generally having a pretty solid time right now. let's bring in our guests to talk a little bit about all of this. office, head of the u.k. at wealth management. stocks are doing well. are investors comfortable with where they are in terms of the cycle? >> there are probably two words we should ban. story isthe earnings coming to the forefront. people are stopping to look for the positives. had a goode have run, you're going to leave a little bit more on the negative and looking for reasons to sell. now, i think that is exhausted. we have gone through a relatively neutral. -- neutral period.
tailwinds are emerging in various places, investment is starting to pick up. i think people can focus more on the positives right now and focus on growth, the macro is pretty solid. companiesstocks and deliver differently, we will go back to late cycle, but in the u.s., the market feels more late cycle. europe, getting a much better reaction. >> again, i think this goes back to positioning and where people were treating the u.s. equities as almost a safe haven. that needed to rotate. there's a lot of u.s. equities help. it went on to u.s. equities
starting from late january and february. that story in terms of the gap of the positive news flow starts to narrow somewhat now. europe just has not really performed to expectations. without europe was going to do better last year. -- datat rolling over is not rolling over, but momentum has stopped of it. guy: would interesting as well is that people are focusing on individual names rather than -- i'm actually going to focus on bottom-up analysis to make my decision. it, are we actually going to see a tailwind? >> it is a better environment.
in markets where everybody is trying to do the same thing, by definition, markets might fall through a bit. areas, we always like actors. guy: can you ever see retail going back to individual? if you can't, it is basically hedge fund. probably too early to tell. when it comes to retail, there when bull is of depressed and high. been's pleased to has beennt as well --
squeezed to some extent as well. if people get their data and information, all sides can perform. guy: great stuff. around.to stick up next, we are going to bring you the move so far this morning. the operating environment for the still sector seems to be getting better. the stock is trading nearly 4%. this is bloomberg. ♪
♪ guy: 10 minutes into the market session this morning. industries going nowhere. stocks, that is a very different story. >> some interesting stories this morning. the world largest dealmaker posted its largest poorly profit in six years. two pointstimates -- $2.5 billion. behind this recovery is the decline in chinese exports. that boost donald trump is giving as the u.s. turns to a more protectionist policy and the threat of steel tariffs that
has certainly boosted still prices. prices. of a court battle has finally ended today. sika ending a few. -- fued. here.nteresting story sika is up more than 10%. think the market is finally relieved that three years of court battles are over. morgan stanley put out that it is definitely a positive. guy: thank you very much, indeed. commission, and the president of the ecb both speaking and florence. i would like to be in florence today. angela merkel making an address on how to deal with public zones
and aggressive regimes. interesting to see her stepping into that place. factors,of interesting politics and italy is going to be something you want to think about. geoffrey is still with us. and to topple a little about the euro. -- i want to talk a little bit about the euro. last year, if you are a dollar investor, you have an advantage. that has now completely flipped. if i am a dollar investor, i am only up by 1.5%. where is the euro going? >> the risk is clearly to the upside right now. today might not be the right forum for draghi, but the
clincher right now for also told banks -- theral ecb can be more mechanical. economists are across the street looking and crunching the numbers. if we actually do get a higher number than that, it is a fairly upside risk. then, the debate goes are they going to treat it as a short-term shock? on thesectually count to be that flexible? if you suddenly have an upward expectation, if it bounce up by 2025 basis points? it becomes a bit more complicated.
the risk is to the upside. guy: talk to me a little about how, how do i play the inflation story? it is something that continues to promise but isn't there. how do i position my portfolio in a world where i am going to get 3% inflation? how different is that for a 1% inflation world from a portfolio point of the? >> with central banks are trying to tell you is try to ignore as much as you can the headline numbers and focus on core. where our wages going, whether there are underlying inflation gauges. you want to own the core inflation. -- core your portfolios inflation picks up. if it is headline inflation, that is another matter.
that is where energy comes into focus. it is that a stellar run of the last a few weeks or so. 6.5% of the s&p is not energy. are we actually going to see some rebalancing their? guy: one with european companies stop? every ceo i have spoken to has been a euro question. at what level are european countries going to go, we can work with this? not want 25. where can europe continue on its growth trajectory where the euro works at levels required? >> it is going to be on a forward-looking basis. if you can look at japan has calibrated this, they supposedly
have come to 120 or so. they will say be careful what you wish for, it is definitely time for the finance department to think about it. guy: looking a little busier. geoffrey is going to stay around. we are going to be talking a little bit of a italy next. david bloom is going to be joining both bloomberg radio and bloomberg television on surveillance a little bit later. remember, you'll be able to watch him.
we are 20 minutes into the session this morning. let's talk about what is happening and italy. efforts to build a coalition floundered this week. the president gave the two parties until sunday to reach an agreement to possibly form a government. joining us from rome, our government reporter. what is the latest? .> lots of optimism from both officials are saying they are program,n the party but obviously behind the scenes, there got to find the right people for the jobs. they're looking for a premier he -- a person who
have to be authoritative, have international experience. head -- a name is the former head of the intelligence service and has international experience. guy: in terms of getting this done, is that what we are down to? it is done to arguing about who gets the key role? of these the final hurdles or or do more ideological issues have to be ironed out? both.course, it is the right people for the job and also the program. both sides are saying that they are working and have teams of experts that they're going to find convergence, including on aspects which are contradictory. tax and thelat other ones as citizens income. the trouble on all of that is where to find the funds and also
persuaded the president that they have the right team for the job. and that they want jeopardize italy's treaties or with state finances. guy: is sunday a hard deadline? here.deadline is hard we have had so many push backs. the president has remained very then and patient -- zen and patient. possibly tuesday, the president could decide the next move. one lawmaker is saying that perhaps the new government, if all goes to plan, could be sworn in next week. guy: looking forward to continuing coverage. why are italian stocks of 10%?
>> accommodation of positioning, and since the election, within -- u.k. guy: you have outperformed the european open. is our politics and issue for them to not invest in italy? absolutely not. they have been under position the last year. given a flat line, if we do believe we are in an environment where investors are no longer , icerned about the noise would not call it a mistake. try to position yourself buying insurance all the time. it is knowing to invest. thinking that nothing is why do happen to the extent that you are not even asking questions, i think that maybe --
guy: it doesn't show up in stocks or the euro. we definitely learned that last time around. visit only really show up in bcp's spreads? >> that is what the focus will be. with the ecb showing no sign of really accelerating or even just don't think anyone will stand in the way of any liquidity value. guy: have that an argument today be between brussels and rome? >> it could get really quite ferocious. these are parties that don't like brussels. russells is not going to cut them any slack. guy: it could get quite tense quite quickly. was listening to our coverage , megan was talking it is notfact that sustainable without the pension reform. that can go quite quickly.
in some ways you could argue that germany is threatening them now by running the other way. >> ultimately, if you look at how brussels is dealing with someone from a populist government point of view, have a really actually started to squeeze things? probably not yet. as much as there are individual given thethe eu, broader external environment with the u.s. and elsewhere with china, any tensions are behind the scenes, but they will present a united front. guy: thank you very much. geoffrey is going to stay with us. i want to focus on the world map. again, the story i .hink is in individual names this is again, a narrative we are hearing more and more.
the focus is becoming increasingly bottom-up with focus on individual names. there is a lot of gray out there. europe is not really doing a great deal today from a headline level. you have ftse 100 flat, germany flat, spain flat. france is down a touch, but not that much. there's a lot of individual names that are moving today, and yet the headline story is doing absolutely nothing. that is interesting in itself. you have got a number of very well-known voices in the market. acquire --growing choir. a growing chorus of voices within the markets, within the hedge fund community that is talking about what is happening in this market.
♪ minutes into the trading day, let's talk about the headlines. mario draghi at home. the ecb president speaks at home. oil is heading for its second week of gain. bank of america says it can be heading for $100 a barrel next year. shares in daily mail and general trust soaring on the news. the whole sector is actually generating some sort of story around this. you are watching "bloomberg markets: european open." i am guy johnson of numbers european headquarters.
sika moving today on this story. 10.33%. by we are going to be talking about that hopefully a little bit later. tried to work on an interview for you there. daily mail trading. look at what is happening with right move. in light of the valuation being described, we are getting a rewrite around right move. it is trading up by around 5.2% today. are seeing an effect coming off this daily mail story. if you look at the downside, i would say that it is dominated by dividend stocks. the ex-dividend story is dominating what we are seeing in the bottom of the market. meetnald trump set to
north korean leader kim jong-il and on june 12 in singapore. he tweeted that both try to make it a special moment for world peace. trump made the announcement after greeting three u.s. citizens free by north korea, praising their release as a conciliatory gesture by kim. >> the relationship is good and hopefully something very good is going to happen, and they understand it is very important for them. it is important for everybody. japan, south korea, china, everybody, i think it is going to be a very big success. >> israeli prime minister is accusing iran of crossing a rockets.y shooting in response, the military conducted its biggest raid inside syria and at least 30 years, targeting what it says were iranian military
infrastructure. the iranians a say the israeli claim is a lie. donald said to have paid trump's lawyer up to $600,000 for insights. that is according to a person family with the matter. the figure is about $400,000 than the person who revealed the payment to michael: -- from michael cohen. government officials declined to give a recent account of the may.ng of theresa space x has postponed the planned launch of a satellite
aboard a new generation. the reasonable rocket is designed to be capable of 10 or more flights with limited refurbishment. it boasts more powerful engines, a stronger heatshield and new retractable landing legs. yesterday's planned launch was just the second to go. malaysia's prime minister says he will lead a business friendly administration and seek to boost the country's a stock market. he said his focus on growing the economy and reducing debt, adding that some terms may need to be renegotiated. he says much of the money anding can be recovered those responsible must be punished. [indiscernible]
>> global news 24 hours a day, powered by more than 2700 journalists and anaylsts in more than 120 countries. bloomberg. guy: thank you very much. a growing choir, i'm not sure you can call, i'm trying to put hedge fund managers and acquire and the angelic thing that would go on around that. a growing chorus of hedge fund managers are sounding the alarm calling for increased volatility and higher bond yields. they have positioned themselves to profit from it. what are they doing? >> this comes on a conference click yesterday and this is all about making sure that. shortusly, it was a long
and is off that with index options are futures. instead what he is doing is making very concentrated short bets, and not just shorting the entire market. this is him essentially saying things are overvalued, money is going to be made off of negative bets. guy: he is one of many people that are saying this. is this a bets on economic momentum because companies have struggled in the good times and are definitely going to struggle. is ability to pick those out maybe a reflection of what is happening more broadly at the macro level. he said he is looking possibly for a recession. he said we might have a recession and 2019. he did say that economic momentum looks like it is at a top-down and probably rolling over. guy: are they making money off this? >> this is the interesting
thing. they are saying we are going to make money on the short side, but look what volatility did. it is back down now. it is not necessarily look as bearish as it did in february. maybe they are a little late on making the bed. --et -- bet. guy: these guys are making money. >> one made 4% in the first four months of the year. about 4.3%.e fund, it looks like whatever they did make money and they have mostly covered those short by this point. about an 80% reduction from $22 billion a had built up in european shorts. guy: let's talk a little about what is going on here. when you talk to clients, how
does what she is saying for into the narrative? >> i think there is a difference between going long and short. if we look back at what happened unwoundry, that trade without going too much on the fundamental. we are not outright adding to risk, it is more about managing risk. insurance,ind good we have added a position on i s&p portfolios. these are the positions you want to own. guy: have we been through a transition? the beginning of the year did feeling a transition. -- transition period.
>> the data does not bear that out yet. was a recession in the post qe world? guy: when the recession comes -- what you are saying is -- >> we need to redefine things. measure, momentum is going to soften somewhat. i think these definitions need to be calibrated to some extent. you talk about the confidence of what they are saying, how confident did they feel when they are making these calls? >> i feel like in a recession, everybody is scared to actually call a recession coming.
in terms of short bets, there are putting their money where their mouth is. you look at something like that insane record treasury short, that is not budging. no matter what happens, typically when we get this extreme, we are in for a short squeeze. guy: the market got the dollar wrong. really badly. it was totally the wrong way, and get three that has been partly squeezed. gotrtheless, the market that story really badly wrong only a couple of months ago. just a dollar. we keep seeing this over and over again. really crowded positions keep getting and pain. perhaps, you should look at -- these hedge fund managers are not doing that. we have these big treasury options, we have fed raising rates. maybe we say short treasury. question, do we see
buy the property platform for almost 2.2 billion pounds. more than 30% of shareholders have agreed to back the deal. daily mail owns just over 30% of zpg. gaining on rightmove this move. we are seeing more of these types of deals.private equity firms looking to buy these analytic firms. want to leave you with the entire and bank with airports -- reports -- they had annual losses the last two years, cost-cutting and lower debt revisions rate will to swing them to profit. they posted profit of 188 million euros this quarter. they are up more than 10% as well.
giving them a boost ahead of monday's political drama. guy: we all had to do a double take on that one. let's focus on what is happening this morning with crude. there is a little bit of weakness coming through, but nevertheless doing incredibly well. bank of america and merrill lynch's say crude could hit $100 a barrel next year. let's speak to our managing editor for crude. >> it is probably not that likely, but it is possible that the real mix of factors making people feel bullish about oil right now, clearly iran is the big certainty. also, venezuela where we continue to see production collapse, is also weighing -- investor's
minds. the saudi's are going to come under huge pressure to increase production. guy: i've got the break curve with the curve up and showing us what is going on here. is green line, the bottom highlighting how big the move has been. that six-month curve and then urve currently how it is now. the curve slopes down incredibly quickly now. what does that tell us about how the market is managing this story? the curve really speaks to opec's success in draining global stockpiles. not only has it moved, but you have to give the board -- broader context to become --vily back with a did
people really want oil now and that really speaks to the market tightness and success in draining what was a huge flat in oil fears ago. to: we go back to the charts where we were a year ago in terms of the second curve and completely pointed in a different direction. -- aoes the iran story barrel of oil gets broken down into its constituent parts. good.n crude is quite how did the different components of that oil barrel get broken down and how does the iranian story effect that differently? will havef refineries to read jake -- rejig a little bit. all of the extra supply is now coming from the u.s.
say, it is going to be fun, you have all of this shale oil, but shale oil is not suitable for every refinery. there will be the difficulty in trying to replace barrels out of the middle east as more middle east barrels are drawn towards because of the following iranian exports. saudi wantink the oil to go down from your? $70 -- $80 kind of works for everybody. of all ofe mentality the deals being done to get us here? talk about the kind of pressures. >> it is really striking how bullish the tones from saudi officials have been in recent months. there has not been any pushback on prices going higher. we know that we reported a few weeks ago that they wanted $80
and were almost there. there was no sense of they would not mind it going higher still. clearly, it is good for the saudi budget and aramco. trump last tweet a few years ago saying they were not happy with opec is very important. there will be a lot of pressure from washington on we had -- rih ad. guy: thank you very much, indeed. bloomberg users can interact with some of the charts here. a lot of great work goes into tracing some of these charts. in fact, a lot of great work goes into creating all of these charts and he can find on your bloomberg. up next, our stock of the hour. that is next. this is bloomberg. ♪
according to a persons and labor the matter, goldman sachs is an arrangement with the iphone maker. they said the two companies are still formulating the product. has recorded top quarterly sales. $289hipmaker generates million in the first quarter, it's at the revenue may fall two thirds in the current. -- current period. shares declined in extended trading. guy: thank you very much, indeed. let's take a look at what is happening with our stock of the hour. if steel stocks are having a better time as of
late. brazil doing pretty well. have also seen europe actually doing recently well. stocks trading with the market absolutely flat. this is a decent performance being generated. this is reflecting some of the reality the markets had already anticipated, but not fully priced in terms of the number of buys. we have 19 buys on it. the volume looks pretty good as well. you can find all of these things on your tv function. when you can do is rearrange the tiles to suit your desired level of information of an individual business. that is our stock of the hour. want to talk a little bit about what is happening here on bloomberg tv. bloomberg surveillance is coming up next.
byy're going to be joined the global head of currency strategy over at hsbc. if you want to access the ability to ask mr. bloom some questions, you can do so using the tv function. i have just highlighted down in the left-hand corner with my very poor handwriting. it is an iv function. onto theet directly screen and ask questions to david bloom a little bit later. crack, you an early can do that as well. coming up a little bit later on today, we have bank conversations. monday, we have a lot coming out of paris. we will have an exclusive
♪ francine: narrowing the spread. the u.s. it yield curve is the flattest since august of 2007. we have recent unexpected innovation, dutch inflation, but an unexpected bond auction. president trump and kim jong-un will be meeting in singapore. the ecb president speaks in florence this afternoon. give -- about winding down stimulus? ♪ and morning, everyone "bloomberg surveillance." welcome to