tv Bloomberg Daybreak Europe Bloomberg July 13, 2018 1:00am-2:30am EDT
this is bloomberg daybreak. europe. let's look at the risk radar. nosons to be cheerful, retaliation be listed. set out in detail by the chinese administration. the more sanguine markets seem to be about it. if you are donald, and are watching, perhaps not so cheerful about the monthly trade surplus statistics coming out of china. terrorists,if the n steel and aluminum, >> --
tarrifs. markets focused on the earnings season. asking what the concerns will mean. we focus on the forward-looking statements. how long can this recovery last? will the dollar remain the only haven? theill look ahead to earnings season. we have a famous visitor, the pound is weaker, president trump speaking about exit. sharing his thoughts. warning the current brexit plan will damage the ability of the u.s.. nejra: his opinion on who should be u.k. prime minister. let's get to this chart. this is a great one i have been into. treasury yields trading in a range for the past month. if bond traders are
struggling to find what we are seeing out of the u.s. economy. also, trade wars. in the risks. the copper-gold ratio. something highlighted. it has dropped at the fastest 2015 -- since 2015. we have seen a lot of commodities, in particular copper, hammered. . a bit of a stabilization. if we did see stabilization -- treasury yields follow, that might have implications. get how tight this correlation has been. anna: let's talk about what is coming up during programming. we will bring you our exclusive interview with the london mayor, around 9:30. we have heard president trump, he is not a fan of brexit.
he doesn't like this man very much. and seelk to sadiq khan how he responds to the latest salvo. let's go to the first word news update. >> thank you. donald trump has dealt a double blow to theresa may on the first day of his visit. he told the british son -- news her plan willer kill any future trade deal with the u.s.. he suggested boris johnson would make a better leader. britain's financial industry also slammed may's proposal. greeting president donald trump and his wife during their u.k. visit. hundreds lined the roads outside the palace.
the trumps dined with theresa may. it is unlikely they even saw the protests as they flew in a helicopter. they will meet the queen before spending the weekend in trump's golf resort in scotland. the u.s. and china have signaled they were open to resuming negotiations over trade. high-level discussions have stalled since last month. beijing mustn said commit to deeper economic reforms, and argued america is not a trade war. >> you not think we are in a trade war. we are in a situation, trade disputes. these are not trade wars. we are very focused on the nafta issue, which is renegotiating an old agreement.
we are focused on the china issue which is complicated. total trade with the u.s. increased with the first half of the year, even as the trade situation deteriorated. a group 13.1% during the first six months of the year. exports were up compared to 2017. imports rose 11.8%. all the data is in dollar terms. commerce secretary wilbur ross says he will unload equity holdings. he said his failure to sell off assets created the potential for a serious criminal violation. the ethics office says the failure to sell may have negatively affected public trust in the trump administration. presidentelphia fed's has defended the inflation
target. he said he would become double the 2.5%, 0.5% higher than official goal. he sees up to four interest-rate hikes this year. >> i had put in three for this year and next year. i have moved off of that. i am open to a fourth increase if we do see inflation start to accelerate. >> global news, 24 hours a day. powered by more than 2700 journalists and analysts. you can find more stories on the bloomberg. nejra: thank you so much. let's check in with the markets in asia. asian stocks, set to hold four weeks of the kleins. japan leading gains. the yen at a january low. chinese large caps maintaining their advance, despite the june
trade report showing chinese record.hit a let's look at stock movers. performersthe best in the mainland. tokyo, retailing, the most in six months on earnings thanks to success abroad. them by, rising ahead of earnings report. the asian software space has been a good space. pushing toward another fresh all-time high. of about 27%. -- up about the 7%. donald trump has dealt a double blow to theresa may on the first day of his visit. he has told britain's sun
newspaper her brexit plan will quote kill any future trade deal with the u.s. -- good morning. what else did trump had to say? >> good morning. he has dealt quite the blow. after what wakes up was known to be a chummy dinner. this is what british people will be waking up to. what president donald trump is saying if the soft brexit plan may has introduced which keeps close ties, there could be no separate deal with the united kingdom on trade. down the road. they first need to exit the european union, and then work on
a deal. it is harsh words and a political grenade as they are set to meet in checkers today. chequers today. criticized her at the nato summit. >> even before the nato summit, he said her country and politics is in turmoil. it might be easier to meet vladimir putin, the u.k. is dealing with a spat with them. he criticized nato again for the brexit negotiations. take a listen to what he had to say. president trump: i would say brexit is brexit. you use the term hard brexit, i assume that is what you mean. the people voted to break it up. i would imagine that is what they will do. maybe they are taking a different route.
i don't know if that is what they voted for. >> brexit is brexit. president trump making it clear he does not support theresa may's soft brexit plan. sunlso said in the interview he had given theresa may advice and she did not take it. joining us opposite parliament with the latest. asset set, the head of allocation and macro research. great to have you with us. this visit by president trump and what he said so far having any meaningful impact? puts pressure on the international trade, globally speaking. between continental europe. you want something in line with
what people expect after the referendum. guy who does what he says. apparently for all european politicians as well. potentially, yes, it will create turmoil in terms of negotiations between the u.k. and europe. it is difficult to ignore the biggest tradehe partners for the u.k. economy. needs it.conomy we are in an economic struggle in the u.k.. exports to the u.s. are essential. anna: clearly he was asked for his opinion by the sun newspaper. is there logic to what he has to say about the ability of the u.k. to do trade deals?
the future would have to be with the eu. that is not the case. therefore, there is room for conversation transatlantic. way -- the has some rest of europe, to make a deal for the brexit. reach going to probably an agreement in terms of international trade. paper, wethe white have a lot of leeway to go to achieve a swiss style agreement. probably it would take much longer and fewer months remaining. after the referendum to make the agreement. it will be probably a painful process. again, in the next month. maybe the first
time about the brexit, we were talking about brexit or nothing. we are on the same kind of process regarding the negotiation on the brexit. anna: hard brexit was the leeway. as you mentioned, it is essential. on goods but not on people. it will put pressure on surfaces -- services, especially financial services. products, to continental europe. it puts pressure on the u.k. economy. especially the city. he said, what we are heading for is a hard brexit on financial services. you have had business come out with concerns about the financial services site. you said we are heading for a hard brexit. >> no deal means a new
referendum. the economic cost, financial and social costs, and in a way the political costs are so high. we cannot put zero possibility of canceling of the brexit afterwards, if it is too painful for the u.k. economy. which is the case for the time being. anna: thank you very much. he stays with us here on the program. coming up, tensions or war. mnuchin downplays the dispute with china. he says it is not a trade war. ♪
the first weekly advance as trade tensions appearing to ease. let's get the visit -- business flash. at&t says the trump administration appeal against the merger with time warner does not change anything. the deal is closed. the justice department is challenging a decision allowing the takeover which allows i tell commissions giant -- a telecommunications giant was the first time in decades the court decided the merger of companies operating in different parts of the supply chain. johnson & johnson has been ordered to pay $4.69 billion who claim themen products caused them to develop ovarian cancer.
the us vista's cases are part of more than 9000 claims -- asbestos cases are more than 9000 claims. billionaire steven cohen has invested in a hedge fund focused on block chain. the hedge fund, autonomous partners, was started last year by arianna simpson. a representative declined to comment. twitter ceo jack dorsey says he has lost 200,000 followers in a purge of suspicious accounts. must accounts are those identified to have involved sudden, suspicious changes in activity. twitter says they are identifying 10 million accounts each week. that is your bloomberg business flash. steven mnuchin says u.s.
tariffs and china's retaliatory actions have not been to the economy in the u.s.. terroristamerica's moderate in size and argued the u.s. is not in a trade war -- andfs moderate in size argued the u.s. is not in a trade war. research is still with us. are you trying to find places to hide from a trade war or do you agree to this is not a trade war? do you find no reason to hide? trumptially, remember, was supposed to import tariffs on imports to the u.s.. $50 milliong on to $250om $50 billion to
billion. my concern, economic growth for the rest of the year, is about the design of the economic policy. benefit fromsed to supply-side economics. to booste supposed growth. we have protectionism rising everywhere, especially in the u.s.. is adverse to a progrowth and pro-business measure. we are adding, this is the key question. aroundpolicies organize supplied side economics, we could expect the best for the rest of the world. since a few months, we are in
deep trouble. u.s. secretaries have held up well. is what is needed to encourage president trump to pull black on his rhetoric a more meaningful correction? -- pullback? now a bear market, it could be a good reason for trump to increase the pressure he puts on protectionism. that is for sure. said, the trump president hes to do what he said promised under his campaign. he did tax cuts. now he is doing protectionism,
tariffs on europe on china. nna: the size and scale of the tariff impact. correlateschart that the shanghai composite with the chinese currency. how these are intertwined. the most correlated they have ever been. does this story continue for you? do you stay away from china or reasons this has been overdone? reboundwe expect is a in matching equities. especially asian equities. it is to the advantage to the chinese authority to put a downward pressure on the run and be -- currency. it could create a huge outflow. this is why we expect a consolidation for the currency versus the u.s. dollar. it could trigger a rebound in
the chinese equity markets. is absolutelye disappointing, -25%, for asian markets. we have growth, economic growth. also earnings growth. nejra: is there a concern any sort of slow down mean the government starts to prioritize growth over reform? >> absolutely. createffs or a trade war slow down in the chinese economy -- if we have tariffs on $250 impact of exports, the on the chinese economy could be 0.4%. the chinese government could respond to that. demand injections through the economic policy. to achieve the target in terms of growth.
6.5%.rget is clear, they have leeway to act. the head of -- asset allocation stays with us. this is what she should be watching. president trump is in the u k to meet with theresa may and has been invited to an audience with the queen. if he is aware of any protests happening, he will see them from quite high up. anna: we noticed he was arrived. a new risk factor for the u.k. currency. we are going to get earnings season kicking off. the relief for banks in the u.s. nejra: we have seen that continue to flatten relentlessly. close, we getpean
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everybody.morning, 6:30 in london. not the haven it was. looking at the function on the bloomberg. it has lost ground against the dollar. the nikkei, up just over 2% in a rising asia-pacific. let's check in on the markets. sophie kamaruddin has an update. >> as you pointed out, with the yen trading at january lows, that is helping to provide a boost to stocks. asian stocks, they are gaining ground.
we do have chinese large caps maintaining their advance. a happy friday so far for asian stocks. this despite the june trade report indicating chinese exports hit a record along with a trade balance. exports, they rose 11 point 2%. imports posted double-digit growth. coming in much lower than forecasted. look at the export data. china shipped out a record volume of the metal. aluminum prices, a seven-year high. a blue line on this chart. this follows sanctions. said, that may be receiving as prices have fallen
from the peak they hit in april. its pricechs, cutting for base metal. thank you. u.s. president donald trump has dealt a double blow to theresa may. he told britain's newspaper her futureplan will kill any trade deal with the u.s.. he suggested boris johnson will make a better leader. financial industry also slammed the may. some are even calling it the worst outcome possible. greeted president trump and his wife during the first official visit of their -- official u.k. visit. the road.ined
it is unlikely they even saw the protests as they flew in by helicopter. they will meet the queen. before spending the weekend in trump's golf resort. even as the trade dispute deteriorated. in dollar terms, total trade group 13.1%. exports to america were up 13.6% compared to 2017. rose 11.8%. all the data is in dollar terms. says he will offload his remaining equity holdings after the government's top ethics watchdog said there could be a conflict of interest, creating a potential for a criminal violation. the violation may have negatively affected public trust in the trump administration. global news, 24 hours a day.
powered by more than 2700 journalists. you can find more stories. thank you very much. the philadelphia fed defended the inflation target, saying he is comfortable with increases. he said he would support a fourth hike if inflation picks up beyond that. at the rocky mountain economic summit. >> the dominant part of the u.s. economy is services. service inflation is what i watch most closely. the favorite method of calculating inflation. maybe we are -- that is not to
percent -- 2%. >> the target is symmetric. moving to 2.5 percent, staying there, i would become double with. i think it is a question of acceleration. -- become double with. i think it is a question of acceleration. if we accelerate past 2.5%, i think we have an issue. we have to look past those numbers. betweenreaking it down the goods sector and the services sector. services are driven by primarily labor. if we are seeing large increases in service inflation, he will see these wage increases as well. orif we get those increases, even if we do not, 3% or better the most recent quarter, does that change review
view of how many interest-rate moves you need to make? >> i had put in three for this year and three for next year. a fourth increase if we do see inflation start to accelerate. >> that raises the question of where you stop. three this year and you do four, does that mean only two next year? >> we need to let the market play out. we need to let the economy play out and see where we are. >> there is an interesting story today. the spread between 2019 and 2020. this will be a little wonky. what that suggests to the market, the market is done and there is a chance you will have to be cutting rates. >> microsoft ball is not that good. i -- my crystal ball is not that good. the term we have used, and i am strongly supportive of, is
gradual increases. that doesn't mean i couldn't support a fourth if the data of all in a way that would support such a move. just take theuld slow and steady, as we have done. >> the guy on the trading desk hand.sing his what is that fourth move dependent on? >> i think it is inflation. ishink we have to act if it above 2%. there are a lot of good reasons to hold off. >> there are new economic forecasts. can you give us what your forecast is? how fast do you see the economy growing? there is unemployment going and inflation? >> we see growth around 3%. kicking down to 2% over the next couple of years. unemployment we see as coming down a little more.
we see more people entering the market. the evidence is pretty clear, current economists have done a lot of work. we are going to look at labor force registration his asian going down two percentage points because of the demographics of us, the boomers. although it is good news more people are coming up the sideline, i don't take we can bet on that. we will see unemployment come down a little bit and then kick back up. exclusively with our international correspondent. creptionary pressures higher this week. headlines, the fastest year over increases for 2012. jay powell gave an upbeat assessment, but warned a sustained time of imports could be harmful. , still with us.
i want to show you this chart. you referred to this in your interview. showing euro-dollar trade not pricing in any more fed policy tightening. it has implications for how you allocate. basis points, largely to what has happened at the front end. affect how you position around the curve? >> the first thing, we were expecting rising long-term interest rates. it is now done. we stay invested in treasuries. when you are in trouble, you have to -- you don't have so
many assets to diversify your portfolios and products. u.s. treasuries, along with bonds, remain one of the best parts of portfolios. we still remain invested. anna: we are talking about the trade dispute. talking about the impact it could have. warning sustained time of tariffs could have a big impact. we are not there yet, are we? suggest you take trump at his word. those things could come. >> regarding the impact of a trade war on tariffs, you have a double impact which is a positive in terms of monetary
policy action. higher inflation. you could create additional inflation versus what is expected. without tariffs, first. the impact on growth. the impact could be 0.4%. the impact could be much higher and tougher. fed tol expect the continue to tighten its monetary policy. we expect interest rate hikes this year. the middle of next year. the fed should make a pose. , before tosituation go further. in terms of a trade war, maybe
the fed could stop at the end of this year. we could keep talking about this, but i want to ask you nkout big earnings -- ba earnings. youroes this factor into portfolio allocation? are you positive on u.s. banks? >> yes, we are positive. oour position depends more on macroeconomic factors. they are probably the main drivers of equity markets. we have trouble coming. we decided to reduce our equity in our diversified portfolios. we did it into bank steps. steps.wo
we will use our stance on equity markets as well. we are less bullish in the next few months compared to the position we had in the past. anna: thank you for joining us. we will be continuing the conversation with him on bloomberg radio. remember, if you are bloomberg customer, you could interact with all the charts on the show. browse on the charts featured on bloomberg tv. the u.s. justice department says it is appealing the decision allowing at&t's takeover of time warner. that is next. this is bloomberg. ♪
it is six: 46 in london. 1:46 in the morning in new york. u.s. equities closed at the highest level in a long time. s&pould see a day of gains, 500 futures almost 0.3%. anna: the trump administration says an appeal against the deal with time warner does not change anything. why does the u.s. justice department appeal against the decision matter? the report. -- we report. to gois unprecedented after a merger that has already closed. toe warner stocks ceased trade. holders moved on.
it was a difficult decision in the first place for the justice department to go after a vertical merger. you don't know much about why they have done it. what we do know is when the original ruling came out, they slept down the doj. they were told there was no grounds for it. there were also told at the time, i do not want you to appeal this. highly unexpected. the real knock is what it does for the mood music. comcast making a move. we know disney and comcast competing for the assets coming out of fox. sprint and t-mobile trying to merge. the deals indicated on the fact
that justice department lost their case. the environment was supposed the improving. this changes that. more information will come out is planninghat doj to appeal. it will be a rocky time between now and then. in sun valley idaho, at hammond. ed hammond. anna: president trump has warned theresa may the soft exit brexit will kill any deal with the u.s. ignored advice on brexit. he did not like a soft brexit, he liked a hard brexit. he liked boris johnson very much. he did not think very much of sadiq khan's handling of london as mayor. some of the pages, how they
picked up on this story. comments on domestic u.k. policy. both leaders due to meet at the countrynister's he is nowpermit crucially managing partner at the advisory business flynn global. he joins us on set. how unprecedented is this for a sitting president to criticize the policies of the u.k. prime minister? let me start by saying andica is a great country -- it is an intervention in domestic politics. the patronizing criticism is something which will alienate a lot of people. >> is his intervention actually about u.k. u.s. trade, or is it
more he is concerned about the direction brexit is going in having an impact on the sort of populist views of some of his electorate? >> i think it is a bit of both. as we know, he originally said he was in favor of brexit and supported a harder form of brexit. his position to take a view on that. on the trade point, it is true if the u.k. remains closely aligned with europe, it is or difficult to do trade deals with countries including america. what is the deal america has been offering the u.k.? during trade negotiations, with america, they are very difficult to do. it is not clear what he was offering. clark's does he have a point? if the white paper were to be accepted by brussels, if it was the basis of the trading relationship, the u.s. would have to talk to the eu?
that is a small part of the u.k. economy. >> it is right. the white paper is focused on goods. under the white paper, we remained closely allied with the eu. it says less about services. therefore, it is possible we could do service deals with other countries around the world. first of all, free trade deals on services are thin. secondly, if you can't do trade-offs, your leverage is reduced. you have to be realistic about that prospect. a we have heard that eu is whitely to reject the paper straight off because they hand being may's weekend. how do you see negotiations involving? sideu are right, the eu
will not reject the white paper out of hand. there are things they will have concerns about. they will consider it to be another form of cherry picking. with a viewme back on it, try to get a negotiation going on it. >> what you think trump treats allies in the way he does? speaking out against germany. of domestic,atters trans channel politics. >> i am not sure. helpful.hink it is a lot of things he is trying to do in the world, take a tougher position on trade practices, is something a lot of us think needs to be addressed. the way he goes about it, alienating his friends and on goods,riffs
undermines the collaboration between allies. >> it might work for him in some areas? >> what is the evidence it has worked so far? >> he will say, look at what nato has done. they are spending more. they made ade -- commitment to increase defense spending. he has a point on burden sharing. he has not succeeded in further increasing that. it was not as bad as many of us have feared. >> when you mentioned china, i know you have a lot of experience with negotiations, what would be the outcome that would allow from here both the u.s. and china to save face? >> they have to get together and , get into a negotiation about issues. china is reciprocating the measures president trump is imposing. it is not escalating. the chinese do not want to go to
a trade war. they would rather stabilize this. there is scope for negotiation at the american side once to do this -- wants to do this. >> porch of the approach be? the chinese want europeans in their camp. >> in my view, the united states and europe should be working together to deal with some of the abuses of the trade system that come from china. as a consequence of what the president is doing, he is forcing the europeans to reciprocate measures. he is dividing us. i think there's a bigger point here. it is important for us, the democracies of the west, to fit together in the changing geopolitics. >> is trump misjudging china's resolve? >> i don't think so. he is right to test them and call them out. they will be resolved. we know chinese power is growing. >> it is important to give the
impression to people in china they have that power. >> it is important on both sides. both countries demonstrate they have power. it is important, the objectives should be to find wherever possible a negotiated way through this every the last is a bareknuckle fistfight over trade. >> your thoughts ahead of the food meeting. >> -- putin meeting. >> hope he remembers the things that happen in crimea. the poison of people in this country. the intervention of russia and the u.s., and is not fail to hold president trump -- putin accountable. >> at the foreign and commonwealth office. later this morning, i will be speaking to the london mayor, sadiq khan.
>> good morning from bloomberg's european headquarters in london. i am nejra pitch a hitch. anna: i am -- nejra cehic. hammering the u.k., trump last theresa may. her soft brexit plan would kill hopes for a u.s. trade deal. sterling slips to a one-week low. the fed flags concerns over trade policy, yet china's surplus hits a record since june. nejra: the trump administration restarts its at&t-time warner antitrust fight. could the appeal impact other media mergers?
good morning, everyone. we are an hour from the equity open. let's see how that might look. the stoxx 600 closed by .8% up. we could see another day of gains in europe when it comes to equities. ftse 100 futures, cac futures pointing higher when it comes to europe and globally. a little relief in equity markets as the angst over the trade war seems to be ebbing slightly. anna: we are focusing on the trade war, but it is not really it has been put aside for one day and this is what we see on the msci asia-pacific right now. the picture is positive, reason to be chair phil -- cheerful, no
retaliation. markets toough for put aside concerns about trade in the immediate future. data fromade surplus china coming in at a record. perhaps that won't make president trump cheerful. .3%, but lots of questions into earning season. lots of questions about how that goes. how do the earnings stories change the conversation? with look back or forward forward-looking statements from ceos and listen to their concerns about global trade? jpmorgan, citi reporting today. we hit a record on the nasdaq yesterday. how long can we see this divergence between u.s. and other local stocks? here, the pound is weaker on the comments of the
president, down .25%, casting doubt as to whether a trade deal can be done with the u.k. and the u.s. if the brexit plan looks like the white papers. we are seeing sterling impacted to read across assets and markets, we're seeing risk on in the session. -- european markets, the cash is opening up right about now. looksg at futures, it like we could see the 10-year bund yield inch higher. the btp future inch lower. bond futures, signaling if anything, the directionality of the tenure treasury yield is edging slightly higher. unchanged, on the treasury yield and it is as if treasury traders don't know where to go. they have the push and pull on the one hand, u.s. economic
growth, inflation data out yesterday. they are weighing out inflation on one hand with what trade war's could do to the yield. at 10-year has been trading a 14 basis point range over the last month. a word on later on in programming at bloomberg tv, i will be speaking to her -- to the london mayor after 9:00 a.m. u.k. time. we heard from president trump that he likes a hard brexit, like spores johnson, doesn't think much of theresa may's plan khan's reaction. let's get a first word update. deborah: donald trump has dealt a double blow to u.k. prime minister theresa may. on the first day of his visit. he told britain's newspaper her brexit plan would "kill any future trade deal with the u.s.."
he suggested boris johnson would make a better leader, saying may ignored his advice. written's financial industry slammed may's latest proposal, some calling it the worst possible outcome. trumpts greeted president and his wife during the first official event of the your take visit -- they're u.k. visit. hundreds lined up where the trump's dined with theresa may. it is unlikely they even saw the protest as they flew in by helicopter from london. they will meet the queen today before spending the weekend at trump's friend sort in scotland. the u.s. and china have signaled they were open to resuming negotiations over trade after days of exchanging threats. high-level trade discussions between the economies have stalled since last month. steve mnuchin said beijing must commit to deeper economic reforms and downplayed the severity of the trade dispute.
>> don't think we are in a trade war. we are in a situation of trade disputesw. these are not trade wars and we naftary focused on the issue, which is renegotiating an old agreement. we are very focused on the china issue, which is very complicated. china's trade with the u.s. increased in the first half of it year even as a trade dispute deteriorated. in dollar terms, total trade grew 13.1% in the first six months of the year, exports were up 13.6% compared to 2017. imports rose 11.8%. all the data is in dollar terms. the philadelphia fed president has cemented the inflation target. he would be comfortable with price increases at 2.5%, half a percentage point higher than the official goal. he sees up to four interest-rate
hikes this year. >> at the beginning of the year, i had put in three for this year, three for next year. i have not moved off fat, though i am open to a fourth if we see increased -- inflation start to accelerate. deborah: global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in .ore than 120 countries you can find more stories on the bloomberg at top . get to the markets now in asia. sophie kamaruddin in hong kong has the update. like a it is looking happy friday for asian markets, set for the first weekly rise in five. japan leading gains with the yen trading near a january low and large caps have eased as banks drag on the index but seeing is higher by 1/10 of a percent. investors have priced in
the latest trade skirmish. checking in on stock movers, i want to highlight -- which is rising as much as 13% on friday the 13th, a stark difference from its dismal monday debut and what could be behind the surge? perhaps confirmation they will be launching the next iphone -- smartphone. beat andiling earnings , gainingye on infosys with other sophomore stock this year. nejra: sophie kamaruddin, thank you. donald trump has dealt a double blow to u.k. prime minister theresa may on the first they of his visit. his comments on brexit and her premiership are dominating the uk's front pages. sun," and youhe can see a number of headlines on
papers focusing on trump and his view on brexit. i thought you brits wanted brexit is a headline. -- great tothanks see you again. what did trump say in this interview? it seems we have a problem with getting to anne-marie. in the senseaging it covered a whole host of hot button topics. he had spoken out in favor of brexit in the past, president trump and in favor of a hard brexit. he doesn't like what he calls the soft brexit he sees in the white paper published this week. he spoke quite favorably about boris johnson as the potential prime minister. hera: how surprising that gave his opinion on that, but he did, saying he backs boris johnson as future prime minister. we do have a guest from zurich. anna: we will try to reestablish
our connection what annemarie, but let's go to zero. the head of strategy and research at credit suisse joins us now. visit fromsed on the president trump this morning and his statements around brexit. give us your thoughts on the latest on the brexit conversation and how much that is influencing your asset allocation to the u.k. when we look at u.k. assets, whether these are or pound, weilts, have to say a lot of these assets have been depressed by the political risk and the whole political discussion around brexit. the fact that the u.k. is now moving, apparently, in a more clear way to a soft brexit means that the u.k. economy is likely to see less headwinds and for
example, with respect to the pound, which is one of the most undervalued g10 currencies of the moment, that would be .ositive for the pound when you look at interest rates in the u.k., they are so low end because of all the risk premium, because what is being priced in in terms of negative impact of brexit on the economy, should that alleviate u.k. yields areld move higher and we also positive on the u.k. equity market, which has defensive qualities. i just want to pick up on your sterling comments because bloomberg spoke to some strategists ahead of the plan being released and one of them said we could see sterling moving to 134 in the event that theresa may managed to get her plan through. she has got a plan together. whether that gets accepted by
the eu is another question, but we are on 131.68, so how much upside is there? i mean, there is significant upside and in some sense, it may well be that some of the recent comments from the u.s. president made the discussion with the eu a little more easy. that could be a catalyst for the pound to recover. anna: that will be an instrument -- interesting dimension. talking about the european growth story, i have a graphic that shows how the european commission has reduced estimates for eurozone growth for the year and into next. trade tensions being cited. they brought down the estimates compared to two months ago. are you increasingly reducing estimates for growth in europe because of trade concerns? nannette: i mean, one
observation is clear. we are six months into the year and a looking, the first quarter has been weaker than what most analysts would have expected. there is a little backward looking downgrades in the whole estimate for 2019 in terms of growth. i think it is pretty normal and to be expected. however, looking forward, i think it is noteworthy that labor markets have improved in europe on trend, that consumer sentiment is at a multitier high in the eurozone. consumption onte a good footing and if we look at corporate expenditures, no one is talking about capital expenditure at the moment incorporations. you were mentioning how software, for example, is seeing a really good earnings and good trends -- it is because many corporations, including in the eurozone, are investing heavily
in these expenses and trade despite all tensions that have happened. thinkd-looking, we look -- think eurozone growth is on a good footing. nejra: nannette hechler-fayd'herbe, head of strategy and research at credit suisse. we will talk more on trade with you, but joining us is bloomberg's annmarie hordern. we've got you back. great to see you. to theto go back comments from president trump to the u.k. media, most notably "the sun." what exactly did the president say? annmarie: let's start with the headline. "may has wrecked brexit. u.s. deal is off." trump was tweeting months ago saying it would be great and bring on jobs, now he is saying isce the soft brexit deal
linking them closer to the eu, he would not want to do a trade deal. this could mean no coordinated chicken or agriculture coding -- coming in. in the article, he gives another double blow, saying boris johnson would make a great leader. he mentioned this before ,oarding air force one to nato saying he loves boris johnson, but what a blow to the prime minister as boris johnson left her government this week. it is looking likely to be a awkward meeting when they meet at theresa may's countryside estate this afternoon. president trump has also criticized theresa may at the nato summit. they spent a lot of time together because of the way the alphabet falls. annmarie: that's right. sittingnt the dinner
next to each other, along with turkey's erdogan. he has criticized her time and in the united states before coming to europe. he said her country is in brexit isd he said brexit and questioning why she hasn't taken a harder approach, even in the article, he says i gave her advice and she did not take it. the question is how much will this strain the relationship the u.s. and u.k. have? it was popularized by winston churchill in the famous iron curtain speech in missouri. could we see a similar situation where he came out bashing germany at nato, but said they all work together and nato is stronger than ever? could we see him come out and talk more? glowingly about theresa may? right now, it looks a bit
anything because the deal is closed. the justice department is challenging a decision allowing the 85 billion dollar takeover which created the telecommunications giant. the transaction june 14, two days after the earlier decision and it was the first time in decades the court decided on companies operating on different parts of a supply chain. johnson & johnson ordered to pay $4.69 billion to women who claimed asbestos in health products caused over very and cancer. the punitive damages are on top of the $550 million awarded to comments eight each of 20 -- compensate women for their losses. the us fest this are part of more than 9000 claims alleging talk products cause cancer. stephen cohen has invested in the hedge fund focusing on cryptocurrencies and blockchain-based companies. the investment was made during
his private ventures. the hedge fund, autonomous partners, was started last year by arianna simpson. a representative of the firm declined to comment. that is your bloomberg business flash. thank you, debra mao in hong kong. steve mnuchin says u.s. tariffs and china's retaliatory actions haven't dented the u.s. economy. called of the tariffs moderate in size and also argued washington did not -- is not in a trade war. these comments as he tried to calm concerns among republicans -- theress it is hurting dispute is hurting american consumers and companies. nannette hechler-fayd'herbe is with us. we have got seven weeks or something around that before the latest round of tariffs is due to come into effect, if it does. in the meantime, do you sit on the sidelines or act tactically?
annette: at the moment, it is game of keeping one's nerve because when you look at fundamentals on equities, and we have been overweight equities in our strategy. the world economy is growing, earnings are on a good path. all of that is actually speaking for assets benefiting from growth like equities. time, the disruption and uncertainty created around 200 billion of trade tariffs is something else and it has been s so far, it has been introducing disparity regionally as well as across sectors. the way we have been trying to navigate through these times is take preferences -- in other ands, from other strategies
retaining our general bias toward growth beneficiary assets. anna: what do you see as the endgame here? we saw jerome powell talking about if we saw extensive tariffs, this could be damaging for the economy but he thought trump's friend game was to reduce tariffs globally. do you buy into that endgame? do you keep your nerve until that happens? think it i certainly is in nobody's interest, whether the u.s. or china, to put growth into jeopardy. to we probably do not have there are midterm elections and already a campaign going on. we are trying to look through thatand focus on "endgame"
is attempting to preserve global trade, but is trying to change trade terms in a more favorable way for the u.s. at the moment from their perspective. ally, what we do look toward is still negotiations going on. therethat we see our if is a period of escalation such as the one we may be seeing over the next few weeks, there is a bit of risk that in this time, the renminbi continues to weaken , but we are trying to assess the risks in that time. nejra: speaking of all the risks, the yen is this week's first -- worst-performing g10 currencies. not only that, this chart says it is in a generally bearish signal. is the yen still a good way to hedge against risk, to offset
your preference for growth assets and risky assets? we had thismean, preference in the first half and we have been very sensitive to the fact that in this period of escalation of words and indeed of threats, the yen was not having its usual and traditional role as a safe haven in those instances. , isof the reasons, we think that the japanese yen and the most exposed to exports, in particular, to the u.s. anything that is jeopardizing the prospect of growth in japan is also meaning that the bank of japan will be very expensive and that is certainly one support less for the yen. that is one reason possibly. anna: thank you so much for your time. nannette hechler-fayd'herbe, credit suisse international wealth management head of investment strategy.
matt: welcome to the european open. we are live on our european headquarters in london. i am matt miller. the cash trade is less than 30 minutes away. undiplomatic visit. president trump warns theresa may's exit plan is likely to end hopes of a trade deal. he said boris johnson would make a great leader. as china'nt