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tv   Bloomberg Markets European Open  Bloomberg  June 14, 2018 2:30am-3:59am EDT

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guy: good morning, welcome to bloomberg markets, this is the european open. we're live from london. i am guy johnson alongside matt who is in riga today. latvia.am in it could be a very exciting meeting today. mario draghi and h governing council might announce the end of bond buying. the standoff over the latvian central bank governor who is not in the meeting because of a corruption scandal is likely to come up as well. the cash trade is less than 30 minutes away.
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guy: hikes and more hikes. there were -- the fed raises rates and signals to more. willario draghi signal a move toward the exit? outbidding the mouse. the cable giant is offering $65 billion in cash. how will disney respond? watch sky shares at the open. the world cup kicks off in moscow. who is your pick? give you cap go on your on yourw cut bloomberg. matt: we're less than half an hour away from the open. futures down across the board. we're looking at losses and -- in futures.
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mixed trade in asia. treasuries are being bought. even though the fed came out yesterday with a hike and a little bit more of a hawkish tone, at least one. rose in the plot. we still have yields that have come back down. they went up two or 3% and then came back down to two point 95 or thereabouts. what do you see on that jim m? guy: equities softer overnight. you can see that on the nikkei down by around 1%. brazil was down yesterday. the s&p and tech stocks rolled over. that is a significant story. with the exception of netflix. latestlook at goldman's call on netflix. it was the only one that had a positive into the day. the s&p rolled over. catch-up are playing
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germany was bid around .41%. the yen was bid this morning. the aussie dollar is rolling off but elsewhere, we have seen currencies trading against the dollar. we will talk to mark cudmore about this. let's show you what is going on terms of the commodity story. in some ways, the world cup is a little bit of a preview of some elements of that with russia playing saudi arabia, a meeting on the sidelines of that game. the lumber commodity index down. we are building up to that opec meeting. how much of a problem will venezuela be, how much of a problem with the rent relationship be with saudi arabia? there is plenty to think about. the main event is happening where you are. up there in riga. the latviansee central bank behind me. it is going to be exciting, the
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latvian governor will not be here because he is being probed for corruption, not allowed to sit in on the meeting, not allowed to leave his country either. he says that is a violation of the law and the ecb is challenging that but they have been fairly neutral publicly and i do not expect them to say much on that today. what we do want to hear about from mario draghi and company is inther or not they will set and day to quaitative easing. there are hawks on the governing council that have one of them to do that for some time. now that we see certain inflation indicators arriving, for example, wage inflation rising 1.9% in the first quarter over the same quarter last year, it seems my likely that is a possibility. they do want to keep their optionality open. mari wants to hold on to his app -- optionality at he has issues like italy to contend with. we will bring you the policy time.ion at 12:45 p.m. u.k.
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starts 45conference minutes later, and that will be the interesting part. guy: absolutely. you will be able to listen on the radio. plenty to talk about when it comes to the ecb. let's carry on the conversation, mark cudmore joins us from the bloomberg mliv team. how is the market positioned for the meeting, my long the euro in, short the euro out, how am i treating? mark: the market is long the euro in. the euro can rally on confirmation that qe tapering will commence this year. even though that is largely expected by the markets, even though it was scheduled to end ake it is aptate ofthe mke signal it has been confirmed. expect the euro to rally if we get that signal. the euro will rally for the session ahead. overall that rally is built on a
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weak framework. the idea that tapering qe is a luge seems tenuous to me. the whole point is yields will remain negative. look what happened to the dollar last year when there was tighteni by the fed. the dollar collapsed all year. i do not think this rally will lost long -- last long. or investors will shift that quickly. a few days rally perhaps. us an endhey give date and it is in september, do you see spreads being a problem? italy is trading at 2.8 and bunds are under 50 basis points. do think that will grow? i think that is going to be an issue for later on this year. whether it will be immediately, i do not know. you expect weakness in spreads. some of that nervousness will play out in the market.
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i do not think that will be dominant yet. the italian situation will play out over several months as we see which policies will be enacted and how that plays out. i do not think we will get raight back into italian crisis mode. guy: let's talk about a game. matt has got spain to win. my bracket has gots ill. you are keen on germany. tell us what you ang out. germany predicted as the favorite with germany and spain. i have gone for spain in my bracket. i did do that before they fired their coach but i will not change it. germanytoin because theyre a better draw. spain is a tough draw even though they have a good squad. is ill does not have a good squad is spain are germany, it should make it to the final and then it is a coin toss.
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interesting issues with the spanish management to make things more tricky for that route to the final. mark cudmore joining us from the and life teml team. if you want to put your calls in wcup .ld cup, we have a game kicking off later today. the main event for the markets will be happening on the sidelines. presidentlinton, crown prince meeting at the event. this is the prelude to what is happening with opec. this is the prelude to what is happening with so much erms of . our guest is here to talk about you call it soccer
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matt i will say soccer, with you i will say football. guy: there are a lot of americans in our newsroom. why do we care about this event? guest:hese werguys who got the deal done. there -- there face-to-face meetings is what pushed over the edge. the opec dealndmet face-to-face. they are the reason why we had this deal but putin told us in wou innever said we this deal forever. they are looking on ways to increase produth will tay will e saudis wantoo 500,000 to one million barrels a day, russians are looking back to o 2 levels before the deal was done. opec,a highly political eight days ahead of the meeting. we have trump tweeting again calling out opec.
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there is infighting within opec. you have venezuela, iran, iraq, saying no, we do not want to increase production. it is interesting. we will talk about the nafta world cup. cup anthe oil market hasends got to be paying close attention to the interactions between prudent and mbs at this match, right? guest: yeah. saudi and russia, no offense to them as football or soc teams, they are two of the worst ranked teams for this world cup. for the markets for sure, this is an historic meeting. we have alexander novak side and theyng will discuss this deal eight days way when opec meets and
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went opec plus meets. we are hearing different meats on what the saudi's one and with the russ its a highly political meeting. this was a huge deal ccessful deal. they want to strike a tone of they have to do something in terms of increasing production. sleep -said iran is umpi pn 30%o make , they output of their oil will have to do something. they want to keep this idea that they wereeter andf deal. guy: talking about the meeting taking place in moscow. yoplay it with your feet. guest: i have brazil winning. y: so do i you can put in all the groups, who is going to win, what the
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ous games look like, then you get on to what is happening with the knockout phases of that. come abrazil brazil-spain final a braa it of aoitoss wheyou get to that point. spain has got issues definitely with that. let's talk to juliette saly and find out what is going on around the world. china's central bank has heloff fodiately raising borrowing costs following the fed hike. --nomic data came in world's worse than expected. losing steam in may with an unexpected slowdown in factory outlook -- output and factory the ba of japan has cut bond purchases taking advantage of the recent stability in local yields. the central bank lowered by in the three to five-year segment to ¥100 billion.
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the n's reaction was needed while benchmark 10 year bonds held onto an earlier advance. u.s. president donald trump says he will confront china strongly over trade in the coming weeks as he prepo followhrough on tariffs threats. he told fox news that china could be "a little bit upset" tiship wit xi. his minister giuseppe conti may cancel a meeting with emmanuel macron as a row over a migrant rescue ship escalates. pulled finance of a meeting with his french part -- counterpart after paris recommended room over its refusal to grant access to the ship aquarius which is carrying around 600 people and was rescued in the mediterranean. they had been schedud to meet tomorrow.
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glal news 24 hours a day o air powered by more than 2700 journists and analysts in me than 120 countries. this is bloomberg. guy and matt. matt: thanks very much. it is repo that u.s. tariffs on billions of dollars of chinese goods could come as early as tomorrow. we will talk global trade. there is an interesting nafta world cup burrowing in north america -- brewing in north america. that is next. this is bloomberg. ♪
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matt: absolutely gorgeous day as usual in tokyo, looking at a live shot at the palace. gorgeous day in riga my latvia as well, where we are for the ecb meeting happening later on, 12:45 p.m. u.k. time you get the decision and press conference and we will be giving that to you live as it happens. the latest ont global trade story. donald trump says he will confront china over's -- very strongly as he appears to follow through on his tariffs threat. yesterday saw u.s. tech stocks fell off late in the day and some investors questioned whether the sector could be hit hard in the u.s. let's get more from our chief asia economics correspondent. what are the next steps in this
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process, donald trump carry through on the tariffs, i guess. enda: we are getting a formal decision on tariffs, we're waiting to see if they will go ahead. and which products will be targeted. we do not know the list of imports mr. trump will be critical and how they impact the wider economy. all the expectations are is we are heading in for protracted trade. declared thehin tariffs were off the table. indications are the tensions continue. negotiations have not made the progress the u.s. would have liked. guy: it is interesting what is happening with north korea story and how these tories interact.
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let's talk about the response we will get from china. how does china respond to the tariff story and does it try to link it with the north korea story? i is difficult to know how china will react. to -- ald expect retrieve. the language does not indicate that. what they have made ea is there willing to respond and will respond to tariffs the u.s. puts on their goods and they will target u.s. exports which the agrultural sector. they have made clear that whatever concessions they put on the table, there willing to take them back off the table if mr. trump goes ahead with these tariffs. we could be in for a delicate few days. thank you for your time,
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bloomberg's chief asia economics correspondent, joining us on that brewing trade war. we are minutes away from the open of stock trading in rope. we will take a look at the stocks you need to watch at the open including volkswagen after a big fine and rolls-roy firing a lot of people. the open is 10 minutes away. this is bloomberg. ♪
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guy: seven its to the start of trade in europe. .5 of 1%es dropping but let's look at the vidual namewhere watching. out of tokyo we are talking sky and disney. in many ways the announcement was already in the price, we knew there was a job losses. do we have to wait till tomorrow until we get serious details on what the targets are going forward or do we have enough to understand the broad parameters of what they are doing? that theid reiterate free cash flow targets which is what the markets have been focused on definitely since war and easter took over, the ceo. they reiterated that their
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guidance for this year is unchanged. we are not clear of what happens , the years following, and with the indications wealthy for their when billion cap -- one billion pound free cash flow targets. the numbers that came out this morning, figures were in line with what we were expecting. about00 savings, of million is higher than what analysts were estimating and something that bloomberg news reported last.ysts anticipated 0 million. a significant jump there. we need to get more details. k you. let's talk about vw. in terms ofne what the market was anticipating? >> i think so. the fine is one billion euros with regard to the diesel rigging. it comes on top of provisions the company has made about 25.8
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billion euros. the fine is not too much in that context. shares are not moving a lot above 0.2%. up this morning in the german premarket. one analyst said while paying is a painful thing, the number is not a material thing. guy: let's talk about what is going on with the media bidding story. it did not take long for comcast thatwould have to thinkpond? bob iger is cooking up a plan for a counter bid. they need ts asset. there is a buying frenzy going on for media properties and this is something that disney is going to need going further. it looks like it will be offering espn on its own the same withnd
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its programming, offering separately to subscribers. the name of the game is amassing content. they have a formidable opponent in comcast. guy: absolutely. it will be interesting to see what impact this has on sky in europe.
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a minute to go until the start of cash trading in europe. 134.01.ing exactly at a little bit of down strength despite the political turbulence we see in westminster. we get ready for the opec meeting. offer,, 76.41, tech gets
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caught up in the china story with trade. tflirly ralled into the down by circa half of 1% in europe this morning. let's take a look at the numbers. 77.03, ftse right now. it will fall down by three tenths of one percent. going to see similar numbers being posted elsewhere around the continents this morning -- continent this morning. spain seems to be a lot of people's favorites for the world cup. we are going to be seeing more on trade. let's turn our attention to the imac function on your bloomberg
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and look at what is happening. map function on your bloomberg and look at what is happening. an awful lot of red out there. we are seeing a few hot spots in the health care sector this i.t. is beginning to turn a little bit more red despite that selloff that we sa let's take a look at some of the move on my screen. persimmon has gone ex dividend today. is one of the stocks showing up at the end of the stoxx 600. another one, exdivident. -- ex-divident. you are seeing a bunche stocks that are going to be well represented to the bottom end of the market. in terms of gains this morning,
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let's turn our attention to what we are getting there. 4600 jobs, the bulk of those going to derby at rolls-royce's main plant. the downside is dominated by the ex-dividents. -- ex-dividends. the ecb is on the road, which means matt miller is on the road. ecb needs a year, the outside of frankfurt. lat year they planned on via. that was before the governor got embroiled in a corruption scandal. and isot allowed to leave the country.
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the one thing we are going to about isbout -- hear the discussion over the end of qe. it is set to run out in september. there is only one meeting between now and then to talk about it. name a schedule for getting out of this large-scale bond purchase program? that is what we're going to find out. we will have the press conference. there are bound to be questions as to whether the mocha -- whether or not we will getn end date. let's bring in richard to talk about this. what is the expectation? there clearly wants to be some optionality in case there are flareups from italy.
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it is time to say the bar is closing. richard: a great way to put it. the data does speak in favor of getting a detailed timetable for the end of qe, normalization by the ecp, and perhaps a rate hike sometime in the middle of next year. the thing we need to focus on today is the ecb forecast for inflation. last march, euro-dollar was at 123. 124.year, it is a lot lower now. inflation forecast will be ratcheted higher and that should support the normalization narrative that draw people advanced today. -- draghi will advance today.
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guy: judging by some of the foreign indicators, things will worse.t i appreciate the window of opportunity to make that move. but will it look like ay mistake in a few months? icrd: the data right now does not look great because it looked so amazing last year. we are getting moderation. about wageing gains starting to take hold, more inflation starting to break up. this messaging is what we need to focus on. the ecb is looking at inflation and heading in the right direction. it is still going to be a slow process. we are not talking about rate hikes and time next year at the earliest. but we need to start normalizing
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policy, in a slow way. ny people use bar analogy for quantitative easing. one of the other things that was totioned is the ecb wants see convergence with inflation targets and be confident that it can see resilience. is there anything that makes you doubt the ecb sees those three things with regard to inflation? : i think this convergence is is starting to happen. spanish and french and germany were stronger. spain outgrew germany last year and in the first quarter of this year, more broad-based than what we have been used to. as a result of that, members of the governing council will look
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at the convergence play happening. it is not just germany anymore, extending out of italy is the big concern and it will not go away. deterring ecbat from stepping slightly forward. guy: richard, thank you for joining us. he joins us a little bit later on re action to come next wednesday at the ecb forum in portugal. draghi speaking alongside his counterparts from the fed. that panel will be modered by our head of economicat bloomberg. you can get it on the radio and on live go. ♪ matt: more on the move so r this morning, including the ceo of rolls-royce. he is speaking on the call with
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reporters, saying the company is at a critical moment, which is why he is firing 4600 people. ♪ guy: welcome back.
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year.b on the road once a --s time it is unlocked via in latvia, interesting considering what is happening with the central bank governor. the stock story out of europe. >> thank you. looking at rolls-royce cutting 8% of its workforce, 4600 jobs by the end of the year. it is looking to save 400 million pounds by the end of 2020. radio whether on this will be enough to assuage investors because rolls-royce is facing pressure from activist investors and durability issues. investors seem to have taken this positively for the moment. the ceo has been on call with
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reporters saying the company is epic critical moment -- at a critical moment. adyen, europe's biggest yesterday, a 90% climb in t trading debut. up 3.8% on the second day. sky is up here. comcast made that billion dollars bid for 21st century fox's entertainment assets. and we have been watching disney being brought into sharp focus. ttyou for at. after rallying to a three-year crude oil -- saudi arabia and rsisignaledhey may raise output. president trump slammed opec on
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twitter for inflating prices. he tweeted -- joining us in london is our bloomberg managing editor for energy, and the global strategist at allion global investors. trumpdoes president understand what opec is and what it does? >> i think so. he has had a be in his bonnet about opec for many years. one of the reasons oil prices here climbed is because has been the decision to reimpose sanctions on iran. markets toto tie crude for the second half of this year. guy: what are the implications of oil where it is now?
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willaudi's and russns align with opec-plus to stabilize levels year-round. what does that mean for the economy? u.s. shale is strulio tems. out of the ground. venezuela, the middle east and angola are struggling. we are now more in balance. we have been talking about $75 oil as where the price needs to be. whether it is higher or not depends on the health of the global economy, and factors in the east that may surprise the markets in a couple of months. capacityre could be a to bring supply back online. will it be quick enough to stabilize prices? >> yes. the uae,bia, russia, and kuwait could bring back the
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capacity in the cond half of the year. the first three will decide to do that, but the question is whether they can bring other opec countries with them to put on a unified show. the crown prince of saudi arabia and vladimir putin will meet today. some portfolios with unilever and it will be benchmarks against the ftse. presentation from uni lever is on the website, saying it is unlikely it will continue to be included in the ftse 100. at will annoy a lot of investors. many will have already priced
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this and. -- this in. you are going to see a lot of u.k.-based funds potentially being forced to sellout of unilever. seeg ch movement in the stock on the back of that. half of 1% across much of europe is being represented by the company. neil, we have a bunch of things going on. oil, come up reasonably quickly to the level we are at. with the ecbuation and the fed restoring stimulus, potentially three or four rate hikes this year. what are the term -- is the tu these factors will have? these are headwinds that could end that story, relatively soon. >> i don't know if they will end it.
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the third one is a stronger dollar. >> and oil. that is why we think the global economy is ok. than $75, theher stronger dollar and rising oil prices tax on the rest of the world. >> is this late cycle? see oil in the latter part of the cycle as well. >> is. it is hopefully going to remain at that level. this is simply because the bps of this worldnow they cannot spend as much money, such as when we had higher oil prices. the supply constrained .o remain supportive for the oil guy: i believe it there. thank you. it could be a fascinating opec meeting and we will be there. neil will stay with us and with
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the oil subject. going chief economist is to join us exclusively after 9 a.m. u.k. time to talk about what is happening exclusively in the oil market and what it will mean for the global economy. xt, it has been another week of drama in the u.k. house of commons. we will focus on brexit and what all these politics mean, if anything, for investors. this is bloomberg. ♪
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matt: welcome back to "bloomberg markets." this is the european open. about 20 minutes into the trading day. na says if trade talks progress, the progress they have made so far will be lost if the u.s.ute riffs into action. that was a negative yesterday for markets around the world and a negative today for europe. if you look at the world map on access a picture of global markets and how they are trading. it is a sea of red across
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europe. all of the equity indexes are down except for ukraine, which is keeping its head above water. y: let's talk a bit about what has been happening in the u.k.. a lot of people are confused. british lawmakers have rejected propals to put the u.k. into customs union and single market after brexit. there have been substantial defections from the labour party. in some ways this is a victory for theresa may, and reverse changes made for the upper house, it is a confusing process. confusion is important. but is rebellion on the vote. followingkers are not
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the labour party's orders and abstaining.they are suppo incredibly confusing. neil -- what do you -- >> i am confused as well. thehere is a sense of markets we could be heading towards a soft brexit. that has me scratching my head. the more there seems to be confusion within the parties of the u.k., the scots and the rest, the possibility of hard brexit must go up and that scenario -- in that scenario. >> the market has taken a want of optimism from the fact we make it a transition and won't just drop dead in 2021, which gives politicians more room. divided this how
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country is and how every party is on this issue. going toexit is not happen, i conclude. there is a priority where we get brexit, will he leave the wto, which would require a new prime minister and all the underlying uncertainty we have in that position. i would have expected sterling to weaken more than it has. att: don't you need a new prime minister anyway? it seems her biggest scale is staying in office and not achieving much for the country. >> i agree. some of her adjustment -- judgment over the last 12 to 15
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months has not been good. she does not look like she has a strong team around her that understands theam we need to play into the confusion guy is referencing in the house of parliament demonstrates that. international investors are saying,. relativel cheap not as cheap as you would suggest it could become. an the government is not going to get as involved if we go in and buy these assets. assets desirable or undesirable right now because of the potential for confusion? >> the u.k. assets look cheap. long-term shareholders are looking to buy into the ftse or ftse 250. sterling looks cheap on a longer-term basis.
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having spent the last two weeks in asia, a lot of asians with property in london, and they would have me if the property market in london gave them the opportunity to add. matt: do you see the london property market continue to decline oracle brexit bibi -- or the trough for that? >> the affordability of the london property market is low. of international money has gotten trapped because of the high action costs. i don't see that changing in the short term. for people who are looking 10 to 20 years out, property has always been a good store of value. with interim eight straight -- remaining low, a strategic longerm goa professionally
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u.k. property market.e in stay withdwane will us. up next, quants are pulling money out of stocks. this is bloomberg. ♪ matt: the fed raises rates for
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the second time this year, two more to come. draghi signal in move toward the exit? and comcast officially bids for $6521st century fox assets, billion in cash. and the world cup kicks off in moscow. who is your pick? set up your brackets on the bloomberg terminal. markets,"g
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i am here with guy johnson in our european headquarters in london. guy: let's talk about what is going on in terms of the heat in the markets. 30 minutes into the trading day. this stock trading up 11.22%. the market likes what it aring om rolls-roycethmarket se. the numbers in terms of the redundancies look a little higher. for --ket was looking 4600 job losses to go and the bulk of those will be in darby, the engine maker. 600, dominated by ex-dividend stocks today.
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downside of the market, a mechanical process. let's get a bloomberg first word news update. jerome powell has signaled growing optimism in the emailer can economy. -- american economy. america can sustain its expansion by aggressively tightening monetary policy. inell announced starting january he will take a questions from the media every meeting. i hope to foster a public conversation about what the fed is doing to support a strong economy. one step in doing so is to have ess conference like this after eve meeting. we will do that beginning in january. they will give us more opportunities to explain actions and answer questions. >> we will bring you the ecb
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policy decision like era at 12:45 p.m. u.k. time -- live here at 1245 u.k. time. he willt trump says confront china very strongly over trade in the coming weeks. he told fox news that china could be a little bit upset, whprsingisnal relationship with president xi. said one of its died above thely ocean because of trouble with its engine. feet apartwere 1000 in altitude when one plane was affected earlier this week. global news on air, 24 hours a day and at tic toc otwitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. guy: thank you.
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a record spike in equity volatility. talking about things that make things go bump this year. hidden below the surface has spurred them to offload. of the 18 month streak to buying stocks. let's talk about what lies beneath. danny and neil are with us. walk through the details of why the quantum are selling stocks. dani: it is all about under the surface volility. what matters more for these folks, they are more complicated than saying, i am going to sell. rotationsing the under the surface between sectors, regions, rate of return of these different
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segments of the markets are becoming more volatile. look at the chart of tech stocks. tech looks fine year to date. when we do the volatility of the stocks, it reached a high, the highest since 201 if you are a quandt, this would cause you tol. is be selling likely to continue from here? or is this a blip? : the figures we have so far say they have mostly held pass. when we think of the diverging policy between china and the united states, we are more than likely to get these rotations. these are kind of under the surface things that affect the volatility gauges. when you look at the
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decisions you guys are making, volatility from a simplistic point of view has stabilized, d that can encourage you to take more risk. my perspective would be to go back to the volatility shock we had in february. we eimate the is going to be $2 trillion of risk parity type strategies out there. the deleveraging process had to kick in. the cost of that leverage is rising. this turning is going to urning is going to continue, but we do not know how much money is in these types of strategies. nadal uh oficker, sectors are at an all-time high -- the valuation of stock
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sectors are at an all-time high. if i ask you to put aside markets for a second, and talk to me about soccer, i wonder if you have filled out your brackets on the bloomberg yet. a lot of people the markets are interested in sports. it is the same kind of game. who do you tip as your favorite in the world cup? our gas byconfusing lkg about ccer. -- guests by talking about soccer. >> [laughter] >> i would probably be picking the old enemy, france. i think that is the best economy in europe. -- isis up their spirit up there. turkeys in disarray and
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has fallen apart. the world cup will be a nice distraction from everything else. >> i have brazil. >> i do not fancy brazil. >> we believe that one there. >> [laughter] >> enter your bracket on the bloomberg. you start off with groups, pick them, figure out who will get kicked out, who will proceed, a knockout. i think spain's route to the final is much more tricky. findder what a quandt would do with this. withant fund would do this. thank you very much indeed. joining the radio team to carry on the conversation shortly. next, some of the stock
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movers this morning, including aviva group, higher after reporting full-year numbers. this is bloomberg. ♪ matt: we are about 45 minutes
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into the trading day. the equity index is down in europe for the most part on concerns about trade, and after the fed raised rates yesterday, it iicated it will do it again twice this year. investors are bracing for a o when quantitative easing will be phased out. you are looking at the central bank here. meetingaghi holds their for e ecb once a year. into the press conference 45 minutes after lunch. guy: i was there after the central bank scandal broke, and everything was frozen. matt, you get the right end of the stick on this one.
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in ter of heading to the exit on the atp program, -- app program, what are we going to get from draghi today? there seems to be a split to whether the ecb will end qe today or next month. >> absolutely. there has been some slowdown in the european data. a sentiment. maybe the ecb will want to buy some tim the chief economist has indicated this is very much a live meeting. it is quite civil -- quite poible they will indicate the actions after the current program runs in september.
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guy: what is the gap between signaling the end to the atp program and hiking rates? >> there is a bit of uncertainty. it could be closed for six months or nine months. the ecb cod signaln end to coulddecember and rates rise in the second half of next year. chances mario the aghi is ing to want to keep his options open, in case there is a flare up in italy again? it is quite likely mario draghi will keep his options open. understandable given the delicate situation in italy and
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the slow down in data. keep buyingot assets at the rate it has been,s doing ok. the soft touch is a bit more anticipated, but the underlying demand is decent. side, the ecb is hitting its limits in terms of how many assets it keeps buying. the more important decisions will be very politically sensitive. draghi likes to keep his options he would nwant to e an increasn volatility and higher risk premium. at the same time, he will have to put an end to qe sooner
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rather than later. 118 allow the euro at him to be more hawkish? help the ecb move towards the exit. the euro is back to the level it was the start of the year. to term limits and it combines with higher oil prices. you take into account the wage growth, the negotiated wages, at the highest level in six years. point these moving parts towards a more hawkish stance by the ecb, but it is still relative, because the ecb is not as dovish as you imanehe central bank to be. guy: what do you think the ecb has learned from ng the
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fed, the bank of england exit its qe program? banks struggled with the communication strategy around this. >> mario draghi is a great communicator. thate thing that is working in the favor of the ecb. it was very explicit in terms of forward guidance. they announce a date for the qe to shiftand will thinking to interest rates, maintaining the dovish stance while tapering. one thing mario draghi has learned is that you have to maintain a very explicit forward guidance in the markets, drag them with you rather than let them dictate your policy. to what extent that is likely a question.
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weakness in the euro is not something that the ecb likes. alianract stors from that. there is only so much the ecb can do and they will keep emphasizing forward guidance, so as not to shock the market. singh, managing director for global macro at tm lombardo, than trning. wednesday, the european central bank its annual forum in portugal. mario draghi will speak alongside his counterparts from the fed, the, and rba. our bloomberg head of economics will moderate that.
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you can watch live on bloomberg television or on your bloomberg using the command live go. let's get your mid-capovers. aviva, oneart with of the best performers on the stoxx 600 in the session. up in double digits. -- it really seems to be moving largely. these are the first four-year results since the completion of the deal with schneider electric. shares have hit a record high in this session, raising its 2018 financial forecast. the stock is getting a left even though all of the other guidance remained unchanged. onally, rathbone brothers, the downside, which has agreed to buy a scottish wealth manager for 104 million pounds.
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higherck was called ahead of the open and initially gained about 2% but dropped as much as 1%. those shares are dropping in the direction by about 2/10 of a percent. guy: comcast has been for much of 21st century fox. the largest you pay-tv provider -- u.k.v prover topped the bid from disney and sets up a bidding war for rupert murdoch's media empire. represents a 19% premium over disney. , has to come back, read back at -- rebecca? >> this comes down to how much disney wants fox. both can afford it. it is how badly they want to challenge netflix and amazon.
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doesn't disney need the assets more than comcast? they are clearly in the same business. isore of a cable provider. rebecca: what you are seeing in media and telecom deals is this push toward owning distribution and content. space, companies are looking for available assets. guy: sky? rebecca: a good question. kys stl la comcast has to still bid for it guy: comcast is bidding against itself. it was bidding for sky, but also there was a 39% stake murdoch
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has. it's got very confusing. rebecca: it is. sky shares have been sinking the past couple of days. no one knows what this means. fox and has a bid on the table for sky. maybe that is the way out. if comcast doesn't win in the it can still buy sky and get a ropean tv company with more than 20 million subscrers. matt: the money is getting bigger and bigger. it will be a busy summer. bloomberg users can interact with all the charts on bloomberg television. you can get the recent charts,
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use the on charts for future reference. coming up, the stock of the hour. this is oombg. ♪ guy: welcome back to the open.
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they say in the aviation industry, you build a plane onto engine, not the other way around.
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the market is paying atntion to rolls-royce. jobs,l cut around 4600 the bulk in darby. up the is trying to step action that is being taken for investors. they are looking to save around 400 million a year. the stock is up 2.78%. we will get more details of how the numbers continue to react. we are trading up on decent volume. seven sells, eleven holds, four buys. matt: you want to watch the euro, as well as rates, as we get the ecb decision.
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policy will likely stay unchanged. will we get an end date for quantitative easing for the bond purchase program? time we get the policy decision and the press conference 45 minutes later. ♪ ♪ francine: jay powell strikes an
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optimistic tone about the u.s. economy, while raising rates for the second time this year and signals more are on the way. , and couldext announce an end state to asset purchasing. but how specific will they be? and comcast gets back in the ring, offering $65 billion for 21 century fox. inwait for disney to respond the fight for rupert murdoch's empire.

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