tv Bloomberg Markets European Open Bloomberg November 22, 2018 2:30am-4:00am EST
anna: welcome to "bloomberg markets: the european open." from and edwards live european headquarters here in london. reasons to be thankful? asian stocks higher after a modest rebound on wall street. you are up point to a negative open. the u.k. prime minister plans a last-minute trip to finalize a brexitbr
balance. the world's biggest car alliance is under threat. less than half an hour to the start of european equity trading day. those pictures are a little old. she wasn't dancing in brussels. across the european equity futures right now, it is thanksgiving. happy thanksgiving to you. this is euro stoxx 50 futures, expected to be weaker at the start of trade. a volatile next session in asia. no big moves, volumes are down because of thanksgiving in the u.s., but a holiday coming. in the u.s. yesterday, we saw modest rebounds in technology and energy underpinning a floor in equity markets. equitygmm, this is the market picture. stronger, but mixed overall in the asian session.
in terms of currencies, the euro was stronger. the australian dollar, trading a little weaker this morning. on the other side of the gmm, in italy, both saying they will not change the budget deal. that is the latest rhetoric. that line coming from republica and we had italy featuring in the sovereign bonds gmm but not now carry on oil prices, no standout moves were -- in brent or wti. a first word news update with deadly hump in --desley humphrey. desley: brexit negotiators worked through the night in brussels after theresa may and jean-claude juncker said they have made progress in talks on the future post-brexit trade agreement. may unexpectedly announced she will return for talks on saturday just a day before eu leaders are said to sign off on the deal.
may warned the u.k. parliament that voting against her draft deal could mean brexit does not happen at all. >> the points being made by a number of my colleagues in relation to the vote that will come before this house on a meaningful vote on a deal from the european union is fairly -- very simple. if you look at the alternative to having that deal with the european union, it will either be more uncertainty, more division, or it could risk no brexit at all. desley: speaking to bloomberg economicn, the you's minister said the deal is the best one possible. >> we prefer it by far because we believe it is in the highest interest of the u.k. and europe that there is a deal and the deal on the table is the best possible. that is the scheme we are working on and we are dedicating
all our strength, all our forces to that. desley: nissan boss carlos ghosn may learn his fate later when the board meets to discuss his arrest for alleged financial misconduct. hiroto saikawa has said he will be dismissed but directors are split according to our sources. he is accused of misusing company funds. he has not been seen in public since his arrest. goldman sachs malaysia headache is intensifying with two abu dhabi investment funds claiming they suffered losses from the bank's role in the 1mdb case. international petroleum investment company have filed a lawsuit saying goldman bribed former officials to "manipulate and mislead the claimants" and to misuse information to further the criminal schemes and to benefit personally. goldman sachs' spokesperson said the company expects to contest the claim vigorously.
expanding american crude inventories are adding to negative sentiment in the oil market with the u.s. stocks increasing for a ninth week. further driving streaks since march of 2017. in a tweet, president trump thanks saudi arabia for falling oil prices but said let's go lower. crude entered a bear market earlier this month on concerns over potential supply glut. global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna: desley humphrey with your update in dubai. an update coming through from japan. governor kuroda at the bank of wean speaking is our saying will need to reduce the balance sheet once prices rise. prices have been improving, he says shouldn't take additional easing measures. we saw a little move in terms of
the yen, we saw a stronger yen as these liens drop but a lot of that has been retraced. perhaps nothing much to see here, but that was initial reaction we saw to those lines coming through from governor kuroda and also saying, need to continue current policy. oiln stocks are mixed and is below $65 a barrel. , but a hikepause could be on the cards for south africa. a host of topics to cover with mark cudmore, our markets strategist who joins us from singapore. let's start with the question of the day. with the various themes in mind, what do traders have to be think before? interpret that as you will. what have we can be thankful for this thanksgiving, mark? mark: market makers will be very
thankful. given the volatility, the wider sends us to ahat tougher year and looking back, not appreciative of the volatility we have seen. on a forward-looking basis, a lot less overpriced than they did a year ago today. on a forward-looking basis, there are opportunities, especially you are an active fund manager. you can see many passive funds have taken a hit. they may not be dominating the market and there is potential for active managers to outperform. anna: things could be worse, i guess is what we have to be thankful for in terms of valuations. let's talk about other things. oil, not escaping president trump's attention. prices,drop in oil slightly mixes up brent and wti. where this takes us is next in the conversation.
does it affect equity markets, as well? mark: absolutely. remember, this collapsing oil has been driven by the supply-side. the facts those waivers were given out for sanctions meant the output was not taken off the market and then, u.s. supply to record levels, saudi arabia record levels and overall, an excess of oil in the world and there was an article yesterday pointing that the basin will continue to pump at a phenomenal rate. willdea that oil prices bounce back quickly seems to be completely shot down for now. it is not clear that opec could even do much. they need to cut their output by 1.5 million barrels a day to bring things into balance and that seems like a large cut. themel, the team will -- will be that oil prices stay low. we will not have a return to the highs anytime soon. anna: it was striking to me the bounce in oil price briefly
yesterday seemed at odds with the news flow about pumping more. let me ask you about where the fed goes next because there is debate about this. i don't know whether i listened goldman sachs who say the fed things get until worse or our colleagues who have been writing how the markets is the fed primed to pause in 2019 based on factors. who do you go with? mark: i think they could both be right. that pause may come if things get worse in six months. some are worried about global growth and feel the fed will think they are making a mistake by the first quarter of next year and will cause. -- pause. goldman is just saying the fed will continue persisting with hikes for as long as the market and economy let them get away with it. they want to raise rates. they want enough ammo for the next recession. they will push as far as they as there are is
no evidence they need to back off yet, it is likely to proceed in december and they will watch over the connie mack's your. -- next -- economy next year. i think the fed will keep up that narrative until the last moment when they change their mind. anna: another central bank, the south african central bank. you think they will go for a hawkish fold. why so -- hold. why so? will i don't think they hike rates. 11 out of 21 economists forecasted predicted a hike to 6.75% today. think thereend to is a hike and they are the experts. means there will be biased and not hike whenever they can get away with it and the recent collapse in oil prices has been so violent it is
genuinely a game changer for the inflation outlook and for the current account surplus. it is a massive energy importer, but metals exporter. the fact oil has come down these is the inflation pressures and the central bankers do not want to hike rates further when they have an unemployment rate above 27% and growth that languishes at one of the worst levels in the world. anna: lots to think about. mark cudmore, bloomberg and like strategist. you can join -- bloomberg mliv strategist. you can join in on the debate. what do you have to be thankful for? onch out to the mliv team your bloomberg to join the conversation. next, carlos ghosn's face hangs into the balance -- into balance. we are live outside the meeting. this is bloomberg. ♪
anna: welcome back to the european open. 16 minutes from the start of trading this thursday morning. let's look at what you should be watching out for today. in the united states, cash treasuries and equity markets are closed for the holiday. bond and equity futures will still trade. expect lower volumes than usual. the ecb publishes an account of
its october governing council meeting. what will it say about italy? watch out for a rate decision from the south african reserve bank. economists are divided as to whether the bank will hike. mark cudmore expects a hawkish hold because of lower oil prices and unemployment over 27%. let's get a business flash with desley humphrey in dubai. charteredandard shares in hong kong rose the most in three weeks after a report the bank is preparing a share buyback. according to "the financial times," the plan may be announced with full year results in february and any fine paid over alleged sanction violations over iran. amazon -- an internal memo seen by bloomberg suggests expenses will be cut by almost half next year,
reducing spending by over $3 billion. contract manufacturer said customer data with an identified third parties as the holiday season shifts into top gear. it reached out to customers to say he mails and names had been inadvertently shared due to a glitch that has been fixed. amazon said there is no need to change passwords. that is your bloomberg business flash. anna: a couple of lines coming through on nissan and carlos ghosn. this prosecutors saying -- case is more serious than insider trading. he is getting three meals and eight hours of sleep. a little insight into the conditions he is being held, perhaps.
his fate will likely be decided today. board members sat down to discuss the future of the company's leadership. there is division among the directors with some saying there is not enough information about his alleged misconduct. renault stopped short of firing him. could nissan stick by its leader? let's get to stephen engle in japan. good to have you with us. what are we expecting from the board today? there are so many angles to this story. the immediate impact of carlos hesn at nissan and whether will stay on as chairman and then, the bigger question is, since he has been the glue holding together this global alliance with renault and mitsubishi, what is the future nissan alliance and will
wants the same equity partnership or same structure with renault? there are already indications they don't think it is equitable with renault owning 43% of nissan with voting rights while nissan has 15% of renault with no voting rights. they want a more equitable relationship and don't necessarily agree with carlos ghosn's push to have the companies merge down the road. the fate is going to be sealed, perhaps in the building behind me but the board meeting was supposed to start a few minutes ago and there will be seven board members to be in attendance tonight minus the two others that are in detention. carlos ghosn and greg kelly. he will come down to a simple majority. if the ceo has a simple majority of four votes out of seven, he
could get his way and have carlos ghosn removed as chairman. he can't remove him from the board, but right now as chairman. aboutthere has been talk this being a palace coup at nissan. what has been the local reaction? the japanese establishment, the japanese media saying about all this? stephen: it is looking increasingly likely that was a probable cause for this action the ceo indicated monday that too much power had been accumulated at the top in one there was and inability at the company to have proper transparency and oversight of one man with so much power. that led to what he said was this financial crimes at the company. going forward, there will probably have to be a lot of changes at nissan and what is
very interesting is we are said too muche power was in one individual. he is the ceo and india -- media reports suggest he would become the interim chairman. he would become the one man with lots of power. pause stephen engle in japan, thank you for joining us. minutes from the open of european equity trading this thursday. next, a look at the stocks we are watching. we will focus in on renault as part of that drama in the auto space. beats estimates. this is bloomberg. ♪
anna: welcome back. this is "bloomberg markets: the european open." we are seven minutes from the equity trading day. stocks we are watching. and the remy cointreau, banking sector and standard chartered. all eyes are on renault again for the fourth day. trade for ambled in record on monday. it stabilized since, but with the nissan board meeting coming tokyo, the future of the
lines between mitsubishi, nissan, and renault. investors are probably expected the stock will trade at a narrow band until some clarity emerges about the future of the alliance. remy?the latest on >> from the cointreau released its first half results, but first half beat consensus estimates. that is good news. analysts are pouring over the results. the company missed expectations, so there will be questions about that at the conference call that is about to start. on workingions capital movement but more importantly, questions on the outlook for china. the company just a few weeks ago said things are going well in china. in commentary on the outlook
such a key market could impact the share price reaction. ,ot only that of remy cointreau but other beverage makers and luxury stocks suc. we are all over it and will keep you posted. in focus.ult and remy standard chartered? >> in hong kong, the london market will take its cue from there. and thisg kong trading report saying the bank is preparing to buy back shares. there are reports this could happen in february. the proposal is still in infancy and would depend on the size of any fine the bank must pay to settle allegations it breached sanctions in iran, but it looks like we are going to have quite a jump for standard chartered at 8:00 a.m. anna: thank you to all of us -- to you. go is the function on your
anna: less than a minute to go until the start of trading. let's get a look at markets. the euro is a little stronger against the dollar, the dollar in general a little weaker. the euro is a little stronger againsta lot of conversation abt where the fed goes in 2019. ecb minutes release later. is fairly flat this morning, a big drop in prices over recent weeks. we saw a decent mouse in oil prices. a little underwater in the asian session, the general mood in the asian session was a little lackluster, a little mixed.
they are low volumes, because it is thanksgiving, the pound is fairly stable as theresa may aims to make another mad --. some of theng up on weakness we saw, but as we say, the asian session was pretty mixed. but this is what we look like at the start. expecting a little weaker. terms of the fed conversation, we're seeing the market weighing on sentiment over at the fed. goldman sachs and others suggest that this market chaos we saw in october was not enough to put the fed on pause. certainly, the market has raised back expectations. without a mind, this is the reaction we are seeing. down 2/10 of 1%.
gentle moves to the downside for these markets. let's have a look at the sector. not quite as clear cut as we saw yesterday, but we do seem generally red across the screen. consumer discretionary is one of the more standout performers, moving a little higher in this morning's trading session. health care is mixed, function and keep track of some of the stocks on the move. this is how the stoxx 600 is being driven by individual
movers. let's have a look at the upside, that is the biggest gainer in the early hours. standard in there, shy of 1.9%. annamarie was bring us that story that there had been reports, planning a buyback of shares. let's move to the downside. we see kingfisher in there once again, that is a story from yesterday, where we talked about their sales outlook, in particular the french part of the business. interesting to see elliott down. we heard about the third-quarter adjusted mta, little weaker than had been anticipated. there are a number of other french names and their. act core down -- accor down. mixed bag in terms of individual names, but overall, we do see a bit of weakness coming through after a mixed session in asia and tech stocks facing a must rebound -- modest rebound. jay powell and his colleagues are likely to become wary of raising rates after delivering a percentage point increase. that is what the market is pricing in. let's talk to the global macro strategist at rbc.
very good to see you, nice to have you with us, peter i want to talk about the fed and the markets. the stocks have the forecast for the s&p at the end of next year saying recession will be looming. what is your expectation for where we go here? first of all, i want to say is upfront, we do not see a recession, or a material slowdown either. i think that is important. what we are currently seeing is not necessarily fears about topline growth for u.s. corporations, what we are rather seeing is whether the bottom line can hold up and whether the valuations we are currently seeing can hold up. that is one of the main reasons we see the market come down. we don't think we are headed into a bear market, we will stabilize around current levels and probably have a not bad here. -- year. anna: if this is not driven by
weakness, it is interesting to me the 2000 has also picked on the selling street. are there reasons to be selling up those kind of stocks? global growth is under pressure, that is a different story, and it has something to do with asia and emerging-market. the u.s. economy, broadly, we think will do fine, primarily because the consumer will be fine. sector,orate particularly the corporate and the basis for stock valuations, that is slightly different. that is under some pressure. matt: -- anna: one of our colleagues was saying that, even detectors with technology, they
will see gross corporate earnings. is it just that it will not be as stellar as it was in the past? peter: partly that. second, wages are on the rise. which is good for consumption, but there's somebody who has to pay these wages. that is eating into their margins. also interest rates are going up, and as they go up, interest costs are going up. what we are very likely going to see is some form of margin pressure on corporate america. as long as that is the case, that is not going to be helping the equity markets unless we had absolutely rampant topline growth, probably not the case. anna: how much pressure on corporate america? there are idiosyncratic stories in credit and then take a picture rate rises and affordable debt.
so how much pressure? spreads have widened on high yields and investments, but we are not talking about levels from 2008. peter: first of all, let's separate very clearly the corporate as a whole. that is a totally different .tory the back end we are starting is extremely healthy. if we come down from the margin side and earnings growth side, and the valuations, of course, as the discount factors are going up. if that is the case, there is going to be some pressure, but it's not devastated -- devastating. this is something the fed is keeping in mind, of course. i've got a chart that shows expectations of fed hikes, and the market seems to be bringing
down its forecast. do you think that is warranted? i also got some research saying the fed will not cause until financial conditions get a lot tougher. peter: that is certainly the camp we are in. we are probably one of the most optimistic as bottom line growth is concerned. when you look at what the fed has currently been saying, yes, a few people are saying once we get towards neutral, weekend cause, but those people tend to be known doves anyway. so the core center around the fed board has yet to make a material shift in their rhetoric, and we have not seen. -- that. anna: quite a range. we have some going for 2-4. there is quite a range of options, even amongst the board that makes the decision. peter: absolutely.
and if i can drop another comparison with the past, the markets so far in this entire cycle have been underestimating the fed. and the market has continuously moved their own expectations higher. it is quite likely, understandable at this environment. as long as the equity market wobbles, it is clear the market is pricing less fed action forward. however, going forward, i'm pretty certain that it is not what will ultimately be delivered. matt: and powell will continue to take on trump quarter after quarter. peter: i don't think he is taking him on, i think he is more ignoring him. [laughter] anna: ok, important caveat. peter stays with us. we will bring you some of the stocks that are individually on the move, including standard charter, the british frank -- well,-- bank performing
we could be a little light on volume. of course, we rely on volumes over in the united states. we have some movers for you. off withkick it standard charter, up 7/10 of 1%, off the back of a huge gain. reports saying they may be buying back shares and it could announce that in february. some softness in italian banking sectors, the latest on the political situation. while there saying that matteo so they need at the wiki demaio say they will go ahead without making any concessions. they will not change a, -- comma, that is what they are saying. down .4%.r, well, see copper lower as some of the precious metals. they have rebounded a bit, but
it will be a very big week because of these escalating trade tensions and potentially .he's in pain and trump meeting negotiators worked through the next hammer out the brexit deal. theresa may is now planning a last-minute -- to brussels on saturday. eu leaders are good to sign off. the global strategist is still with us. everybody is trying to stay one step ahead with regards to brexit, and twists and turns continue. what is your base case for brexit? peter: that is the best question. i don't think there is. when you look at the distribution, what is typically in most markets is this bell shaped distribution where you have a central outcome, and, you know, some kind of tale.
this one is completely opposite, because it appears that the two extremes have the highest probability and something down the middle is very unlikely. one of the things we are currently looking at is in markets, if you look at what is priced for the bank of england, which is not a lot. we think it will probably be very binary, but i do we get something that leads to a transition, in which the bank will hike twice, or we won't, in which case they probably won't-all. anna: i've got a chart that shows the pound, implying volatility heading levels not seen since 2016, which is interesting, of course. but picking up, the bank of england question will be working in, and if we do get a deal, you have to not just factor in the deal but the implications for what the bank of england will send it, because a lot of what they have said has been based on a smooth transition. peter: absolutely.
and i would single out, i think the most important bit is a transition, because that will mean for the corporate's in the u.k. that, currently, the status quo remains in place. obviously, there will be some changes, but the highs they could continue to invest. case, not only is the economy going to do reasonably well, but we are going to see investments going up which should give the bank a lot of cover. to italy,me diverge another topic that is talked about. is speaking, saying he demands respect for the italian talking on italian broadcasting saying he will talk to muska vinci and juncker saying he does not want to fight with anyone. he also says he will not go back on the budget. he is concerned about the spread
, they talked about the spread, previously, having thing? that happened they? will that be the thing that, in the end, changes the course in rome? ofer: there are loads questions, so let me start with the basic premise. currently, we're talking about whether or not they have imposed an excessive deficit procedure, but at the end of the day, the real mechanism in european markets or in europe in general that sort of brings government to heal is the market.
their potentially years away, so the process is long and drawnout , and so far, never have they can implement it. anna: and it would just generate negative headlines. peter: exactly. at the end of the day, what can the government implement? having said all of that, are we there yet? i don't think so. you see the comments, which , i'mly speak of confidence not there is a reason behind the madness. when you look at the overall funding cost, they are still moderate. when you look at the short end of the curve, there is no reason to be worried, and therefore, they will have plenty of opportunity. . . anna: could the italian economy do with more fiscal stimulus? would be good for them to break the budget rules? is a very loaded question, if you don't mind me saying. the end of the day, every economy will benefit in the short run from some kind of fiscal stimulus. certainly, in the european , this environment has not been at the top of the agenda. clearly, there would be a boost,
but every fiscal boost eventually is followed by some form of austerity or some other means to bring the deficit down. is, in a country like italy, would this be the time to do it? i personally of the opinion that what they tried to do before would be more beneficial. matt: peter, thank you very much. peter stays with us. , theg up, let's go lower u.s. president five set a tweet of gratitude to saudi arabia as crude slides. let's talk oil, this is bloomberg. ♪
anna: welcome back. we're 21 minutes into your trading day, and happy thanksgiving if you're celebrating, wherever you are. this is the picture along the european equity space. down by 4/10 of a percent, the ftse 100 down. the ftse mid down a little more, it's often more volatile, down by three quarters of 1%. let's talk about oil prices, little weaker this morning. crude has dipped for the second time this week, expanding u.s. inventories and its bear sentiment. this follows a record surge in saudi arabian have put 11 million barrels a day.
us.r is still with let's start with the basics. where do you see oil heading? we were marched right up and mark streit down, weren't we? peter: we look for current stabilization. but if i may make the point, we have to separate, very clearly, whether it is a supply or demand issue. asking the earlier about a slowdown, and i was saying we do not necessarily see a slowdown, but there is one on the planet. that is typically one of the key considerations for commodity prices, particularly oil. anna: we saw oil prices heading higher. we seeing a lot about production in the basin, in saudi, ramping up. president trump clearly thinking the saudi's. so what points to stabilization for you? peter: one of the things we will
be watching out for is going to come out of the next opec meeting. they probably don't have the same kind of market they used to have, but there certainly not a relevant either. go for more cuts, that will definitely have an impact on oil. peter: president trump, very -- anna: president trump, very conscious of his base, calls on the saudis to cut more. where is the right level for oil for the u.s. economy? too long agot not saying that because of the amount of production coming out of that area, it is not clear-cut whether oil prices are good for the u.s. economy as a whole. peter: generally speaking, we do think so, because the price of oil ultimately defines the price for the consumer them at the end of the day.
that ultimately gives them more purchasing power. considere elements to is the production costs in the u.s. is certainly going to be lower than other places, for instance canada. so obvious a, there is a u.s. self-interest. relatively speaking, it gives them a competitive advantage. anna: what does this do to the inflation story? a lot of it is wages, not oil. peter: we have to clearly differentiate between intrinsically generated inflation and everything put on top. by the way, that's not only story for the u.s., that's true for the u.k., what have you. what we are currently seeing is that the gap between headline and court will be coming down. a intoll be a quick for
europe, i also think that's another reason why the ecb will take the forecast down. but the underlying intrinsic core part of the inflation story that is still driven by how strong the hiring intention and how tight is the labor, we are relatively confident that this will continue. anna: does that give the ecb room to pause on its exit from extraordinary monetary policy? peter: we don't think so. it would certainly give them cover if they were so inclined. but when we see the glacial pace at which they are moving, we can have a debate about whether september or october is the right call. thewe are certainly of opinion that this is currently not going to derail the 2019 start a small interest rate increases. and it is thanks giving,
so i cannot let you go without asking you our question of the day. what do traders have to be thankful for this things getting? you can call them investors if you prefer. peter: i think there is a difference. four traders are not some volatility is helpful. we can be grateful for some, although you don't want to overdo it. anna: very nice. thank you very much for joining us, global macro strategist at rbc europe. peter will be joining us on bloomberg radio at the top of the next hour. i will be hosting that hour on bloomberg radio from 9 a.m. london time, so join us there. coming up next, we speak with mike rake from the international chamber of commerce u.k.. beens come in the past, very critical of the brexit process, we will get his update. he has been calling for a people's boat just recently. what does he make of the late -- to brussels? -- dash to brussels?
anna: 30 minutes into your trading day. europe feels less impressive with stocks sliding. spain, italy, and turkey are amongst the biggest movers. theresa may plans last-minute trip to finalize the deal. nissan's divided board meets to decide the future of its chairman. good morning, everybody, welcome back. i'm anna edwards at bloomberg's european headquarters. let's have a look, 30 minutes into the trading day.
delivery hero is the biggest 2.7 five of 1%. also rising, and better than estimated numbers from the drinks maker over in france. at theave a look downside at what is dragging on these markets. a number of interesting u.k. stories the eps numbers look to be a little bit light, no change in their cash flow forecast. r.o.e. talk, which is down a few percent, also disappointing. it is the orders number that seems to be
news for you. >> brexit negotiators worked through the night in brussels after theresa may and jean-claude juncker said they made progress on last-minute talks. may unexpectedly announced she would return for last-minute talks on saturday just a day before eu leaders are due to sign off. she earlier warned the u.k. parliament that voting against her draft deal could mean brexit does not happen at all. >> the points that has been made by a number of my colleagues, in relation to the boats that will, before this house on a deal from the european union, is very simple. if you look at the alternative to having that deal, it will either be more uncertainty, more division, or it could it risked no brexit at all. speaking to bloomberg
television, the eu monetary commissioner said the deal is .he best one possible >> we believe it is in the highest interest, and we also believe that the deal which is on the table is the best possible. we are dedicating all of our strengths, all of our forces to that. knee sends a board is meeting to decide the future of the chairman. he has already said he will be dismissed, but bloomberg sources say directors are split over what to do following allegations of financial misconduct. he is accused of underreporting compensation and misusing company funds. he has not commented on the allegations or been seen in public.
says they are very concerned after a report accusing its of intellectual property theft. speaking in beijing, a ministry of commerce spokesperson also urged the u.s. to take constructive attitudes to create an environment for talks. president trump and president season thing -- xi jin ping are set to meet. global news, 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna: thank you very much. back to brexit. u.k. and european negotiators worked with a nice to hammer out the final part of brexit, with focuses on future trading relationships. theresa may now planning a last-minute trip for talks, just a day before eu leaders are due to sign off. thevery pleased to say that chairman of the international chamber of commerce u.k. joins us here in the studio. great to have you with us, thank you very much. let's dive into your latest thoughts.
and othersly, you have been campaigning for another referendum. is that still your wish? >> try to put this into context. firstly, understand that the proposition is a lot better than no deal. is no businessman or economist who does not believe that a hard brexit could be hugely damaging to our economy and to the european economies. that is not desirable. having said that, this deal is clearly suboptimal. i think the majority of businesses believe the best option for the united kingdom, for its economy, for its investment and employment would have been to remain in the european union. so that has not changed. anna: are you in danger of fighting the 2016 battle? michael: we are in danger of that sometimes. but the only thing i would say about the referendum, i don't think anyone believes, other
than the fact that those things were said, the proposition to leave, those opportunities don't exist. it is clear there is no dividend, trade has not been immediately renegotiated, it will take time. but the really important thing is to look at what that has selected. we have a situation where the country is completely divided. both parties are divided. the brexiteers are completely divided as to where we are. andhose circumstances, particularly if it is possible and parliament rejects the thatsition, it seems to me the only sensible solution is to go to the people and to give them a vote on whether or not they accept what the government has come up with, or stay in the eu. it is a danger, and i appreciate this is a broader sociocultural question, but doesn't this also indicate a divided country cannot solve the division? michael: that is a danger, but
let's not forget, 74% of the young people voted to remain. there are a lot more young people today. let's not forget, we could talk about 17 million people who voted to leave, there are 30 million people who did not. i think it is the best chance you have to try to get clarity about what is exactly on offer that was not in front of the people in 2016. the prime minister has worked hard to put something on offer. we can choose between that and remain. i think parliament, it is quite clear, they will never vote for a hard deal. anna: this is interesting. i was at ecb i conference of the beginning of this week, and they have backed theresa may. but it isbacked it, very much in the context you have set out. this deal is better than no deal. if that is what it comes down to, can you understand why
business has decided to back may? cai has a very important role to play. hown completely understand they have come out and said this is suboptimal, but a lot better than the opposite. in the circumstances, we should get behind it. and i think it ecb has an important role -- the cbi has an important role. there are still a loss of business people who do believe, actually, that there should be a second vote. the percentage is less than those who voted to remain, but there are still a lot to increasingly believe that it is important we have a second vote. that is some of the messaging you got word. michael: as usual, with things
that are complex, most of our many who, there are think let's just get on with it, because it is creating uncertainty. it is probably the biggest a single decision we will make, impacting hugely on the young people who do not want to leave. anna: so what we are talking about now, obviously, we've gotten a withdrawal deal. then we have the political declaration, that is not legally binding. did you divide up your thoughts as to what you think of withdrawal? i'm guessing most of your focus is on the thing that is not legally binding and has not been settled. think, onost of us one hand, thinking as a businessperson, on the other, as a citizen. think it is, i incredibly important we have close relationships, open, liberal relationships as a
businessman, we need to understand that we need europe. 98% of the people we have we absolutely need, they keep our economy going, whether it is leisure, tourism. i am chairman of a major hospital, 27% of our people come from the european union. 46% come from europe. our leisure and hospitality industries are there. these are people important to our country, so we have to keep an openness. anna: there are some brexit business voices like tim martin who think that hard brexit would not be that awful. he clearly works in the hospitality industry. michael: all i can say is all of my engagement, that is not the view. of the visions of the political declaration, do you think a free trade area with a common rulebook, is that the future? if you cannot have staying in.
michael: you and i discussed this before. my personal position was very clear. of european union legislation, with 50 plus trade treaties, 30 plus regulatory agreements, huge complexity at every level of society, we needed a 5-10 year transition. in my view, we should stay in the customs union, absolute. and stay as close to the single market as we can to ensure we benefit from these trade treaties. there is a lot of mythology. the fact is the trade treaties we already have our hugely germany exports to-three times will be due to china, and thanks to the korean trade treatment family have doubled our trade. there's nothing to stop us trading. i'm ever you saying after
the vote that 5-10 years would be what we need. thank you very much. let's get to our stock of the hour, shall we? let's show you what is happening but it is certainly been under pressure. they came out with results a little earlier on. 8.4% of us look at me most in a year. set toce cap is sent -- cut profits as the u.k. utility says it expects adjusting profits to drop by 70 million as the initial impact of the government's caps on santarus fell -- standard tariffs fell. it has led to lower production from expiration and production. so these are the latest headlines coming through on that particular business. up next on the european market open program, we bring you some of the other stocks that are on the move, including remy
and used to be on the board of barclays. financial services looks like it might get a mention in this feature political declaration around the future trading relationship, but equivalence seems to be where we have landed . michael: there are still a lot of concern about the initial draft document. financial services is one of the most important industries we had terms of tax revenue and gdp growth, so it is critical. i have always said, london will still remain an important center that it is already losing ground. the jobs won't come back, even if we were to remain, but think a lot of the leaders of the financial services industry are concerned. we should understand, a lot more jobs should still go, and if we have a hard brexit, a very significant number of jobs could go. is it about banking?
is it around insurance. some other ecosystem is just not going to be knocked down overnight. anna: there are two issues. michael: people want to be here. on the other hand, this is creating an opportunity to attract other centers, and some of the major banks are looking, saying we have to have people for legal reasons within the eu, hence a lot of expansion in dublin, a loss in paris, and we have seen numerous examples of people, so far, small numbers. there are huge issues about euro denominated clearance, there is only one attempt to bring that back to the eurozone countries. we were actually productive by , is there of justice
a significant risk, still, that relates to financial services overtime? as we talk about the bereft of financial services, i just wonder if you thoughts on something that has developed, although it has been a long rumbling stories. the whistleblower is talking about u.k. shale companies and the use of those, talk about that is a crucial part of this laundromat story. is it something that they have been looking into it and talk about as though it is well known? what are your initial thoughts? michael: limited liability has been with us for years, most of our incorporators gives them the advantage of maintaining a partnership culture. it works very well. there is a lot of disclosure by these firms, so i think it is whether you use say, shall vehicles.
there might be a limited company. , and, is a on for vehicle if that is being used for inappropriate purchases, will that is obviously inappropriate. anna: no doubt. the national crime agency says investigations ongoing. given your role on international trade and commerce, let me ask you. we seem to decide where global equity markets were in turmoil, and become of concerns about global trade, maybe a lack of ongoing fiscal stimulus and other things, what are your thoughts? ago, we a few months were talking about the goldilocks economy, there was hope common sense would prevail. the economy was picking up, but what we see now is a real and deep concern about the move away from a rules-based system, to move away from free trade. there are lots of issues behind this and think the trade war is
beginning to worry people. president trump's attitude towards china, towards the wto, it is much broader than just trade. we have to understand that a lot of people fear they have been left behind. globalization is not for everyone, same with technology. so it is critically important that we were make the case for a rules-based system and it is particularly important, really, because this rules-based system is written and introduced by the u.s. and the u.k., cinelli got them in a very difficult situation where it needs to reform, but hundreds and millions have been taken out and we have to find a way to balance that in terms of politics. anna: big things to think about, thank you for joining us, mike rate, chairman of the international chamber of commerce u.k.. let's take a look at the mid-cap
movers. >> let's kick it off with the u.k. utility center dot -- ce ntrica, down almost 9%. people expected to drop by 70 million pounds in the first quarter of next year as the initial impact of tariff caps on felt. 4%, and it almost could be news that foxconn is signaling deep cuts. as an opinion letter from bloomberg tells it, when foxconn signals, you listen. and remy cointreau to the upside. the spirit maker, famous for its cognac, earnings as the ship for higher and spirits fuels growth. also, you can see come party -- compari also up, maybe in time for the holidays.
are 50 four minutes into your trading day, european equities on the back foot. goldman's malaysia headache is intensifying, with two different funds saying they suffered losses. in a court filing, the funds alleged goldman paid bribes to former fund officials who quote agreed to manipulate and misled them and to misuse become companies name, network, and infrastructure to further their criminal schemes and personally benefit. goldman sachs responded to the allegations saying the company expects to contest the claim vigorously. joining us now is our asian news editor in singapore. what is the abu dhabi connection to singapore and goldman? the old saying, it never rains, it pours, will it is really cory right now. -- pouring right now.
they went for those bonds, and that is why it is coming back to bite them. given that they were probably taking bribes, or at least one partner admitted to using bribes. let me get some more details from you on what goldman is saying. they are saying they are looking to include their claims and, in the past, they have said they were unaware what proceeds from the bonds were used for. clearly, it has been siphoned and embezzled. so all of those details are coming out right now. anna: thanks very much shaman adam, the latest. from singapore. . that's it from the bloomberg european market open. coming up next, bloomberg: surveillance.
francine: the u.s. market will not open to the iliad in europe, traders gain banks more volatility in riyadh and japan come of our board of nissan deliberates as the three in the balance. plus, theresa may fights to keep her crunch summit on track. ♪ >> good morning, everyone, happy thanksgiving if you are tuning in from the u.s.. markets, look at your markets are closed in the u.s..