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tv   Bloomberg Markets European Open  Bloomberg  March 11, 2019 2:30am-5:00am EDT

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nejra: asian stocks recovering index, you are seeing games and a bit of a mixed picture. australian in the red. bad week for global growth last week and we saw forward, a lot to look to in terms of economic data and a trade discussion. actually, the covering of the latest from the mpc. when it comes to putting a floor under the growth of 6%, the
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chinese is there. maybe not as magnificent as 2018. a lovely line, lowering the interest rate, the policy interest rate given to the support factors from the chinese. natural bank we look at the -- anda: we look at the yuan it could be capped. they did talk currencies and you didn't get a bed of pushback from the tone of china not only on the backs of containing a but enforcement on both issues. is two-way and equal. this puts us back in the spotlight of what is fair and equal. there -- what does it mean in reality? we will discuss it surely for we have the team. getting ready for elections and in london, annamarie.
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, the rest ofing asia, the largest democracy, a day for elections for you is it playing out for you? good morning to you. the summit of traction and you could argue it is handling -- happening because india is playing along. nothing unusual today. we have been doing that for the last few days and have not quite been able to do that and i want ofleave it in the city calcutta. everybody is talking about elections and nobody wants to talk about fight wishes or anything else that was the election of what it could be. we look back from what time of
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the election dates. is out. it and the charts i have for you, one is 2014 and one is two thousand nine. both of the chart show the moments that have happened and .hat nifty when you look at the nifty which is want a benchmark, from the time the election was announced, to the right of your screen to the top, the market about 39%. not as strong as 13% of but a good rally before the time the election was announced to the election verdict. everybody was saying we hold on to our horses. history suggests, the rally happens before the verdict is out for let us see if this is different. back to you. nejra: thank you. you're looking at the wider stock story. it looks like chinese is leaving
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in the asian equity spaces. we look at a lot more data. reporter: they are appearing of the losses on friday where chinese equities were under pressure. leading the way, the 300 up. the syntax is also higher. under the service, australia is a bit lower. foreign exchanges him about the british pound an falling for 8th day. the bonds, their two-year trading at 2.473. we heard from the fed chair saying fed policy is appropriate and no need to hurry. ion or rich reading as we saw ore would-- iron g as we sawretreatin last week. what we see with the pound.
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on the bottom, the pound struggling against the u.s. a dollar. it is falling. we have volatility spiking. mid-january,nce sterling may struggle to get some clarity. the votes as we await tomorrow in parliament. another big key brexit day for theresa may. manus: yelp, tomorrow is in theory a meaningful bond. -- meaningful vote. and, great to see you as well as the team and mumbai. we have touched on this. how much does the data really matter for stocks? you can join the debate. .e are on the team blog plus tv . first word news with annabel. annabelle: thank you. china has ordered carriers to ground all bowling just after
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crash in ethiopia -- boeing after a crash in ethiopia they killed all on board. they will have time to cease using the 737 max inject. involvede best model in those fatal line air crash in malaysia. u.s. cabinet met -- cabinet members have called for a brexit deal to go through parliament for ministers have warned brexit would -- at danger brexit has stalled altogether. speaking to bloomberg, the head of the house of commons called adult one b -- called at the one bloc. >> we are focused on trying to win this.
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that is why the government is absolutely 100% determined to seek the changes of the parliament wanted to see. fed chairman has repeated that interest rates can remain on hold of evolving economic conditions for he said inflation is minted and policy is in an appropriate place. looking at the fed is at growth, job numbers and inflations as it considers its next move in keeping an eye on china, europe and risk events like a brexit permit -- brexit. >> would do not feel any hurry to change our interest rate policy. what happened in the past 90 or so days, we have seen the global economy sliding down although our own is performing well. annabelle: president trump is expected to present his 2020 budget today. the proposal will see the budget
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deficit below him. the fiscal blueprint is expected to ask congress for a next her a $2 billion to pay for the border wall. it faces rejection by democrats who control the u.s. out. $8ask congress for an extra billion to pay for the border wall. this is bloomberg. , thankannabelle droulers you. what you should be watching this week. on monday, finance ministers to discuss at the taxing of internet companies. tuesday, the key vote on theresa may's brexit deal. it could end to no deal of brexit the day after one leaders are expected to meet in brussels. asus: what might as they ask the price for an extension? that is what i want to ask very
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on thursday, elon musk says a new model. why it will be unveiled. the end of the week, the end of china's national people congress. a news covers and a beijing. we wait for bated breath. let us stay with the chinese story. he said his country in agreement on many of the crucial issues and the trade talks with the u.s. she has been part of the negotiation team and he describes them as "very, very meaningful," addressing concerns of the yuan. as set of that exchange rate would never be used for competitive purposes. kudlow said he is optimistic about the deal and that is making "headway." good news one might say. the rhetoric versus the data, the data first of all because you had this
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invention when lending and that has abated. lots of different opinions saying it is seasonal and good that it had -- do think the stimulus hasn't yet to burst through in terms of creating a floor in china? is that stimulus takes on more -- takes a while to work, the financial system and the liquidity flows through the banking system and eventually into the real economy. we see it coming through several months later. stimulusy is it is the to the second or third or fourth quarter and you will see it through the economic data. the chinese are able to do this. that,b, you contrast of over the weekend, that is at the best of they can do. the best they can do is not raising rates.
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the chinese can create some liquidity. the key thing for china is a those structure and bring down the overall interest rate of the economy through the measures they have enabling the housing market and restructuring of what is at a dangerous and perhaps a default environment. restructureinue to domestically, i think that they can see the fruits of their labor. nothing like what we saw in 2015. nejra: we talked about location to emerging markets. it's a china includes -- is china included? : not right now because of concerns of the currency. we are not sure what they want to do and what they would be forced to do. something we are looking at and the bond market should be supported by the declining interest rates. income point fixed
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of view. manus: guess what plasma i do not play in high quality. i played down in the jump. let us look at this chart -- i played down in the junk. -- let us look at this chart. chinese versus the u.s. and that high use in china. junk in the u.s. : like you said before, you will get a cut -- a rate cut and i think you do need to restructure what does a difficult environment and china and you need to do that as we have seen in other polls crisis environments. you move to lower interest rates . the yield curve and you allow
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some defaults. and also pretty of liquidity for your banking system to weather the storm. ofould expect the same sort thing to happen in the next two years. nejra: that results story about slowing global growth to convince the fed to stop raising interest rates in southeast asia. and also in the bond market. the charts i have shows it against the indonesian to yield of the bloomberg intelligence policy rate. when you talk about being selective in emerging markets, would you buy bonds elsewhere of expectations of easing the prompted by the fed or rates falling in china? : it has to be a bit of both. that kind of relationship is the dollar and that u.s. interest rate structure is most important. we have seen the fed is on pause.
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some countries have backed away from raising interest rates to protect their own currency. the dollar, if it continues to creep higher, one of our forecast at the moment, i think other countries will still struggled because they do not want to see their currencies too weak it is a trade-off between the two. it has to support of the countries. and perhaps restructure and move forward. if the dollars to stroke, unfortunately, we are back to ,here we are -- too strong unfortunately, we are back to where we will are. want to weigh fair and ayual when it comes -- two-w fair and equal when it comes to the mechanism. it is not a done deal, is it? paul brain: it it doesn't look like it.
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yeah, these are difficult problems to solve and they will not be solved overnight. it is a difficult relation between the u.s. and china and they are coming at it from different perspectives. even other administrations had different ideas. there will be continued dialogue. it seems to be the market needs this. balanced on the story of the fed and ecb and monetary policy. we need something else to get the momentum going and that risk asset moving higher. there is only too much time you can trade in the positive outcome if you do not get it eventually, you run out. indusind like we are seeing that in the momentum from january, february is starting to dwindle a little bit. nejra: you see futures picking up.
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we will see when european markets open. you mentioned brexit. let us bring you lines. and negotiating team to continue to talk. this is according to a spokesman, brexit talks remain deadlocked said the spokesman. as theresa may prepares to broker-deal back to parliament. stays with us. manus, more headlines coming out on the boeing story. manus: this is from china eased and china eastern is part of the airlines that has grounded there are 737 max airplanes. they talked to boeing on losses accumulated by the flight suspension. the chairman says in a beijing. through a line coming from -- a little bit earlier where they say china eastern has asked from a safety promise from
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boeing on the 737. a number of different factors at play. we will keep an eye on those breaking headlines. more to come. a grim outlook on in europe. necessary action. we discussed the implications. that is next. never bank tune in to bloomberg -- nejra: tune into bloomberg radio and the london area. this is bloomberg. ♪
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manus: it is "bloomberg daybreak." nejra: a look of what is trending. firstl'salk,
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solo female film rakes in the bucks for the biggest opening weekend so far in 2019. medicine they do not get any ideas. you are not going to marvel. new york democrat alexandria capitalism is unsustainable. nejra: all about trade. hedge funds use an unknown data guru to make millions on nintendo. all the latest news and analysis on the 12 -- 727 max airplane crash in ethiopia puts the spotlight back on boeing. into annabelle droulers. annabelle: thanks. mitsubishi is planning to set a single board. according to bloomberg, the new structure will replace 2
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separate entities. the likely reorganization called as of the carmakers attempt to streamline their business making. the lecture carmaker said after evaluating retail locations, it will raise a vehicle prices by 3% on average worldwide. the global week to place orders -- users will have a week. the perimeter could've analyst later today with a value of just under $6 billion. the takeover would help the u.s. company require -- acquired technology. is waving goodbye to a tradition that dates back to the 1800s. ankara ready to abandon -- banks are ready to abandon --
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increasingly allow customers to transfer money or make payments with a smart phone or tablet instead of pressing wood to ink and paper. medicine think -- manus: thank you. this is deutsche bank. dropping opposition to the bank's merger and we have this ongoing by christian and we know if -- we know he has been opposed the 20 commerzbank and deutsche bank. onknow we had the story friday. it looks like christian sewing has given up his resistance to doing a deal. that is on the ft. let us see how the stocks react on the headline. -- nejra: writing on
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the bloomberg after lines broke worth reading the column. let us focus on europe where a gloomy picture for the euro area , raising fears of a recession. the ecb announced long-term bank funding after lowering growth outlook. the central bank officials have described at the stimulus action as a preemptive date meant for the slow down. paul brain is still with us. take a look at my chart and it is showing bonds. you are in the fixed income space. cyclical underperform again as yields have been falling on the tenure german bunds. you have moved from underweight, the call, to mutual. was it after the ecb or preemptive? paul brain: it was preemptive. funding positions elsewhere and not necessarily in the extreme periphery of europe and places
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like austria, which is a good spread over the core rate. the italian which was a few weeks ago when it came out. having been -- to go in there. we have been building positions in spain. ands taking off the short of the call was the ecb was stuck with the interest rate policy. you are not going to make a lot of money out of that so you might as well use the capital on something else. like what was said over the weekend, the ecb has seen panic and staying ahead of the her. what does it mean -- ahead of the curve. -- what does it mean? paul brain: i guess it is good for the periphery because they need a stable interest rate, negative interest rate structure to force investors to buy their bones.
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a lot of bond issues. that was the fear of the periphery that they issue more and should have some kind of spread. if you get no interest rate or it isve interest rate, forced out. the trend has been in place for some time unless we get some political risk which we saw last year. that trade works. we basing some of it of the spanish election. -- we may see some of it like the spanish election. and we need the same sort of populist as aggressively as the italians tried to do. essentially, they are controlled by the budget deficit story. if you are going to get a spread as an investor, you have to look for it. there is no risk of a change in the near term. nejra: thank you so much. paul brain with us for the hour. will continue the
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conversation on bloomberg radio at 7:30 a.m. european time. the latest out of china as grounds is a boeing 737 airplanes. this is bloomberg. ♪
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manus: good morning from dubai. i am manus cranny. daybreak.oomberg grounded, china and ethiopian airlines ground all boeing 737 max-b planes after the second fatal incident involving the aircraft in five months. -- jay powell. the fed chair indicates he is in no hurry. policymakers are watching economic conditions at home and abroad. no deal. theresa may is trying to get her brexit plan through parliament. in 18n leaves the block
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days. nejra: good morning, everyone and welcome to daybreak europe. it has just gone 7:00 a.m. in london. i want to break to use some german january industrial output data. the estimate was for an increase of 0.5 percent and what we actually have is a drop of 0.8% month on month. another weaker -- another data point showing weakness in europe. friday, factory output. around global growth. global equities last week had their worst week since december. dropping every day last week dropping more than 2%. we could get a bit of a bounce back today.
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deck futures up 0.25%. cap futures up higher as well -- cac 40 futures up higher as well. the boeing story -- boeing is a big component of the doubt index. dow an eye on the transportation index. friday, 11 straight days of decline, the longest losing streak in 47 years. could tell you something about the concern around global growth. and the bond markets can tell us a lot about that as well. manus: a line or two coming through. we will do the bond toward in just a moment. the turkish lira to climbing this morning. falling into its first recession. another blow to president erdogan. gdp, 2.4%. this was on the last quarter on a seasonably adjusted basis.
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turkey is entering recession. -- the central bank left rates unchanged last week and they came out with all of the right news to try to defend the currency. it is a red headline. turkey is in recession for attracting 2.4%. some pretty tough times last week. there it-- you can see is weakening in the dollar is higher. let me bring you to the bond markets. rough and tumble for the bond markets. and theail sales treasury after mr. powell reaffirming the proclivity for patients. going on cbs and talking to america -- i am lower for longer. spreads going through on treasuries for the
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last part of last week. benigne inflation -- inflation. treasury, just a lake lower in terms of price hiring yield. bund is a. grappling with a variety of issues this morning. equities are a little bit higher across the board in europe and beyond. still in negative territory. let us get to juliette saly with your asia rally. a bigare seeing turnaround coming through on chinese stocks on the close. 2% but it0 rising fell by 4% on friday. same stocks in shenzhen, more tech heavy stocks. gaining 4%. at the close. india looking good because we have seen the dates announced
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for the elections for voters going to the polls on april 11. australia was way down by the somewhat mixed data coming out from china over the weekend especially the growing credit growth number. and some weakness coming through from some of the e.m.'s today. looking at the other factors in the region. watching closely what is been happening with airline stocks in asia. a bloomberg index of airline stocks listed in the asia-pacific is higher. only a few stocks are lower including china southern which has 16 of those boeing 737 max-b still on order but china has announced it will ground all of those planes. oney going into the rupee the back of high inflows expected at the announcement of the election days. hong kong dollar, no change. the dollar is pegged. the hong kong monetary authority
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has tied into liquidity 190 $2 million in its currency defense. the first such defense we have seen since august. nejra: juliette saly in you.pore, thank china has grounded its fleet of boeing 737 max-b coming after all 107 -- 157ng people on board. joining us now for more is bloomberg opinion columnist kris bryant. good to have you with us. you have already written a column on this pointing out that it is too soon to say what caused the death faster or if it disastert caused the including whether it was similar to the lion air disaster. >> there are clearly some similarities between the crash that happened in ethiopia and
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the one that happened last year in indonesia. two brand-new planes of the same type crashing shortly after takeoff. the pressure is on the manufacturer to show that the aircraft is safe but it is too soon to say that there is a link. clearly something concerning investors this morning. manus: your opinion piece was a go to for me this morning. when we cover the stories, it is hard to connect the tragedy of a gift 57 people dying along with 157 peopletragedy of dying along with the repercussions in the markets. give us the context. is: this plane was developed in response to the development by airbus of its a320. this is a reengineered version of boeing's work for -- were
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course plane. a huge component of profit and cash flow. look at boeing's share price in the last three years. .ecreased by about 300% up 30% this year. to know that investors had a lot of confidence in this plane. and the confidence may be well-placed. we don't know yet whether there is some sort of a problem. there were questions asked in the wake of the indonesian crash. were pilots properly informed of the nature of the new automated system on the aircraft helping it to keep stable in certain circumstances. boeing had promised a software update in the wake of that. with the airlines grounding the plane, clearly boeing will have some explaining to do on whether indeed the aircraft is safe. that: yes, you point out it is important to get the
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communication through as quickly as possible. thank you so much. bloomberg opinion columnist. fed chairman jay powell has repeated that interest rates can remain on hold as policy makers watch evolving economic conditions. inflation ishat muted and the fmoc thinks inflation is in its proper place. he reiterated his patients mantra. he also said that he is watching china, europe, and brexit. do notent means that we feel any hurry to change our interest rate policy. 90t has happened in the last or so days is that we have seen increasing evidence of the global economy slowing down although our own economy has continued to perform well. nejra: joining us now from paris is evelyn hammond from merrill lynch. thank you for joining us. in the summary and the soundbite from kabul, it comes across that he is watching everything both
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domestically and outside of the u.s. in terms of the economic indicators we had last week and we're looking forward to this week, what are you watching most closely when it comes to the u.s.? well, we are watching every day to point at the moment ,ecause for us in the euro area the traction we get from the u.s. is extremely important. we need more data to put our manufacturing sector around. any data that would suggest that the economy is not doing quite as well as the data flow would suggest would be very good news. look at in particular anything on the manufacturing side because that is where the goods cycle is from and that is where we are in the euro area, most exposed. we are following the entire segment at the moment. manus: evelyn, good to see you
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this morning. wages running at the hottest level year on year since 2009 and yet bpi is currently expected to come to 1.6%. i am trying to put together -- at what point does the hottest wages in 10 years manifest in cpi or if at all? that very much depends on the strength of your domestic demand. relatively high wage growth. absorbed by margins. if the demand is sensitive to the pricing mechanism, the strengthening and not running at full throttle yet, then maybe you just absorb the pressure from higher wages. that is one point. he other point is that nominal
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wages in the u.s. -- if you assume productivity growth is not as high as it suggest. you can absorb that for quite some time in your margins without transmitting it to the end consumer. that is what we may be looking at at the moment. nejra: if we continue to see the delay, what is your expectation for what the fed does next beyond the pause? evelyn: for now, we have a pause from the fed and then a continuation of hikes. we still have two hikes in our forecast. i think everyone is waiting for q2 so we can get more clarity on where the global economy is and
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where the u.s. economy is when all of these other factors we have seen over the last few months are fading and dropping out of the comparison. that is when we think uncertainty for everyone should disappear a little bit and we should have a much clearer view. and then the patient fed can continue to hike rates berry gradually. manus: powell on cbs last night making the point -- i am paraphrasing -- he is prepared not overreact.o beinglation modestly above 2%. does that make an economist like you shudder? or do you view the fed as being pragmatic? evelyn: that is one of the points that we have been making in our research. perspective, there is
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a case from the symmetric target. have 2% on to average over the long-term, there must be episodes in. slightlylation runs above that. if you are a central bank that -- iting out as many are does make sense for some time to run the economy in which inflation is above expectations to where you want them to be. perspective, it does make sense for the fed to be extremely patient and gradually shift in terms of communications explicit.hat you can under shoot inflation and always overshoot inflation for a certain amount of time. nejra: evelyn hammond come european economist bank of
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america from merrill lynch. let us get the bloomberg first word news. ordered china has carriers to ground all boeing 737 max-b jets after a crash in ethiopia yesterday that killed all 157 people on board. the chinese airlines have until 6:00 p.m. local time to cease using the jets. the best-selling boeing was the same model involved in a fatal lion air accident off the coast of malaysia in october. u.k. cabinet members calling for last-minute concessions by the eu so theresa may can get her brexit deal through parliament this week. ministers have warned brexit supporting lawmakers that if the deal is defeated tomorrow, there is a danger that exit is stalled altogether. the leader of the house of heaves calls for one last
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by negotiators. >> in the event that we can get the changes that parliament wants, parliament will be given opportunities to support the deal. we are focused on trying to win the vote on tuesday. that is why the government is 100% determined to seek the changes that parliament wants to say. -- to see. annabel: china has delivered a subtle pushback on trade demands requested from washington. delivering its own interpretation. the pboc governor says the sides have reached consensus on many crucial issues. previousdevaluation -- comments made by g20 nations were discussed as well as respecting the autonomy of each country regarding fiscal policy. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. manus? manus: thank you very much.
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coming up on the show, theresa may heads into a potentially defining week for brexit. reports saying she has lost the backing of all but two of her cabinet. the so-called meaningful vote is tomorrow. we are discussing what the issue is. ♪
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a.m. in london, four minutes away from the european open. i am manus cranny in dubai. a quick snapshot of the markets. a lot to grapple with. boeing is going to face some real tough times today. the biggest component in the dow
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industrial average. weighting. the dollar slightly higher. pushback from the chinese in regard to their trade deal. what is a -- what does a fair and equal trade deal mean? in ethiopiaincident is indeed the single biggest issue for boeing. nejra? what is putting pressure on dow futures. cable coming in for the longest streak in 10 months. is a may is losing support for her brexit deal but possibly her own position as well. 129 point 91 is where we are. a bad week last week for global equities. the worst since mid-december. central banks including the ecb suggesting global growth is at risk.
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up 0.4%. oil bouncing back as well after a 1% drop on friday. today, we are asking the doesion on mliv, how much word data matter for stocks? now, let us get the bloomberg business flash with annabel in hong kong. annabel: nissan, renault, and mitsubishi are going to form a single board to oversee their alliance. according to a bloomberg source, the new structure will replace two separate entities. the reorganization comes as the carmakers attempt to streamline their decision-making following the arrest of carlos ghosn. to close only have as many stores as previously announced. after evaluating retail -- raise, it will rate vehicle prices by 3% on average. tochasers will have one week
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purchase the vehicles before the races will come in. rise willthe price come in. fcc.musk faults the ments areer com roger marshall. japan is waving goodbye to a financial tradition dating back to the 1800s. stepsning the permit all required to validate all transactions for more than 100 years. increasingly allowing customers to transfer money with a smart phone. or a tablet. that is your bloomberg business flash. manus: we just have some breaking data at the top of the hour. 7:00 a.m. in london. german industrial numbers. 0.8%. expected, 0.5%.
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factory orders on friday, 2.6%. although december was revised up. they have not reversed course on policy with let us ask of ltro. evelyn hammond. the ecb is not reversing course on policy and he does not see the need for qe. did they hit the panic button too soon at the ecb? evelyn: i do not think the panic was too soon. data has been arguably week. where part of the world chances are it is still open. abovedo not grow at or production, our inflation or a -- will notre not
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continue to rise. perspective, for the ecb it makes sense to be more careful with their policy. you could argue that ending qe in december at the moment things were turning very wobbly is a bit of it -- is a bit of a challenging decision to make. it does make sense for the european central bank to take a they willand say that wait to see how the economy is going forward. it does not look brilliant at the moment. of the commentary coming through on friday were saying that you can stimulate as much as you want by providing cheap loans to banks but if there is no demand, the mechanism will be broken. there is also a thought that the banks will just use the cheap loans to buy bonds. at low yield. evelyn: on your second point on
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banks purchasing bonds with money, draghi was fairly clear in his message at the press conference last year. saidncentive structure are get banks to really to lend money to the economy rather than go out and buy government bonds. we do not know exactly the technical details yet. it is too early to argue whether or not it might be worse or better for banks to do but from neededperspective, they an economic case. if you look at recent data flow, the economic case is there. the economy is weaker and we do have uncertainty so you do want to stimulate. manus: evelyn, thank you so much. evelyn herrman from bank of america merrill lynch. theo says the risk is
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personification of european markets. the european market open is next with anna. if you are traveling to work, you know what to do. we are with you all the way. ♪ this isn't just any moving day.
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good morning and welcome to bloomberg markets: the european open. we are live from our bloomberg headquarters here in the city of london. i am in a matt miller in berlin. >> time to turn the tide. stocks gain after the worst week in global equities for the year. derailing the rebound. the cash trade is less than 30 minutes away. matt: grounding the fleet. china holds all of its boeing
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737 max-b jets. the stock trades down 8% in germany. lisa may look set for a second defeat in parliament this week. sterling drops. and central bankers -- stocks rise as jay powell says there is no rush to hike rates and pb -- and the pboc governor says china will not weaponize the yuan. matt: good morning. check out my terminal. i have the csi 300 so we can see what happened in the broader chinese index overnight. it has risen by 2% into the close. if you had questions about the progress that has been made so far on the china-u.s. trade deal, equity traders believe that it is not completely scuttled now by the negative comments out of beijing. take a look if futures this
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morning. we also have a positive trade in european equity index futures with the dax up one third of a percent. gaining 0.6%. same in germany and paris. u.s. futures taking a hit on the boeing news. anna: seeing a bit of the ivergence.- td the boeing story -- we will talk a lot about that this morning. let us look at the gmm functions. equity and fx -- on this side, equities and china making up ground. a substantial part of the ground that it lost in friday's session. futures look like they will pick up on positive trade trends. what have we learned around the
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trade story from the chinese people's congress over the weekend as we will talk about that as well because there seems to be some pushback from the chinese. we will talk about that. flat given weirly have had some week data coming dataf germany -- weak coming out of germany. annabelle from hong kong. annabel: china has ordered carriers to ground all boeing in max-b jets after a crash ethiopia yesterday that killed all 10257 people on board. the chinese airlines have until 6:00 p.m. local time to cease using the boeing 737 max-b. the best-selling boeing was the same model used in the fatal lion accident in october off the coast of malaysia.
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by thenute concessions eu so theresa may can get her brexit deal through parliament this week. they are warning lawmakers that if the deal is defeated tomorrow, there is a danger that the deal will be stalled forever. one lawmaker is calling for one last heave from negotiators. want to get the changes that parliament wants and parliament will be given opportunities to vote on the deal. we are focused on tuesday. that is why the government is 100 -- 100% determined to seek the changes that parliament wants to see. annabel: fed chairman jay powell has repeated that interest rates can remain on hold as policymakers watch evolving economic conditions. he told cbs that inflation is muted and the fo's -- episode be sayse alsof
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he is keeping an eye on china, europe, and brexit. we do not feels any hurry to change our interest rate policy. what happens in the last 90 or so days is we have seen increasing evidence of the global economy slowing down although our own economy has continued to form well. -- has continued to perform well. president is proposing deep spending cuts but his proposal says the deficit will continue for 15 years. the plume part -- the blueprint is expected to ask congress for an extra $8.6 billion to build the border wall. the plan faces certain rejection from the democrats. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. matt: thank you very much.
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chinese shores outperformed their peers in the region following the worst week for global equities since mid-december. treasury yields at their lowest in two months as jay powell says he is in no hurry to change rates. let us get into the markets. mark cudmore, our bloomberg strategist is not in singapore as usual but here on set in london. let us a -- let me ask you about the rally we are seeing. shanghai composite making up a few percentage points it lost on friday. have we learned anything about the chinese growth story that justifies going higher in stocks in the asian sex -- asian session? >> i think it is just a consolidation of the weakness that we saw on friday. this is not the start of a sustainable rebound. i say that as someone that is a list for the year ahead.
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the overall growth picture is better than many people think. not brilliant but solid. there is a lot of liquidity. central banks are providing stimulus. in the short-term, we have priced in all of the good news. there was a around china last week. in fed has already priced patients and dovishness. we arethe trade front, pricing in full optimism on that front. i feel we will get more negative news them positive news in the short term. overall, 2019 is still a good picture. a senioras speaking to global strategist on bloomberg radio this morning and he is concerned that the trade deal is in jeopardy. move to leaves the summit in vietnam has left
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the chinese disgruntled. make an't think we can conclusive decision that we know that trump will sign the trade deal or not. there is a lot of reason for optimism because we know that both sides would like to get a deal. i will say that it looks like there will be some time before the deal is signed. and the pattern of trump a policyons has been of shattering expectations and then slowly building them up over time making himself look like the dealmaker. conclusion, he shatters expectations again. walks away. and ultimately signed a deal. i feel we are approaching the stage where he threatens to pull out of all of the stock -- all of the talks. let me ask you our question of the day -- this is interesting in the context of
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the data that we saw on friday. mean?ch does core data there are many parts to the data picture we got on friday. >> the poor data matters but it is not a simple equation that says bad data means sell stocks. it has been disappointing. the other part that is more important is where is the data relative to government policy reaction. the central banks are ahead of the data. banks are very easy policy at the moment. that is a positive bent. as for the friday data, it is more nuanced. the headline number was poor. but the wage growth was also very positive. overall, the data on friday was nuanced and it came on the back of it exceptional month of job
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data. matt: goldman sachs giving up on call but at the same time saying tactically go short on the dollar. occasions withll them. i am a long-term, bearish the dollar but short-term there is quite a bit of upside. as i said on valentine's day, it was more of a fling for me with the dollar than a long-term relationship. i think it still has a lot of upside in the short term. i am permanently on the opposite side of goldman sachs. the demo -- the demographics in the country with the central bank determined to target inflation. a shrinking population. as long as the central bank there focuses on inflation, there is pressure on the yen to weekend.
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-- to weaken. short dollar-yen may work in the short term. tally with my short-term risk averse view. it is not a view i'm fundamentally attracted to. matt: thank you, mark cudmore. bloomberg analyst in the city of london. join the debate on today's question of the day on the blog. -- question was -- how does how much does poor data matter to stocks? reach out to us. up next, china grounds its fleet of boeing 737 max-b planes after a second deadly accident in five months. we will look at what this means for the plane maker and the u.s.-chinas for a trade deal and remember, bloomberg radio is live on your mobile device or on
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the visual radio in the london area. you can see the whole team there. hard at work. this is bloomberg. ♪
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anna: welcome back to the european market open. we are 16 minutes away from the start of the trading equity day
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here in europe. cap futures. 50 futures. looks like we will go higher which may be in contrast to what we expect to see in the u.s. based on the bowling story. elsewhere, u.s. futures look more positive. bloomberg business flash. nissan, renault, and mitsubishi are planning to form a single board to oversee their alliance. according to bloomberg sources, the new structure will replace two separate entities. this comes as a carmakers attempt to streamline their decision-making find -- following the arrest of carlos ghosn. close onlyset to half of the previous stores announced. after evaluating retail vehicles, it will raise prices by 3% on average
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worldwide. buyers will have one week to place orders to before the price rise kicks in. elon musk faces a deadline later today to explain why he should not be held in contempt. fccas fallen foul of the over his comments on twitter. nvidia is said to be nearing a deal to purchase the israeli chipmaker. a value of just under $6 billion. the takeover would help the u.s. company acquired technology used to accelerate the flow of information around centers. japan is waving goodbye to a financial tradition dating back to the 1800s. banks are ready to abandon the personal system required to validate financial transactions
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for more than 100 years. customers can transfer money or make payments with a smart phone or tablets. instead of pushing would to paper. boeing's best-selling plane is coming under increased scrutiny after another deadly accident. china has grounded its fleet of boeing 737 max-b jets after a model operated by ethiopian area lot -- ethiopian airlines crashed killing all on board. is the latest on the -- it was this crash and the lion crash in the spread of five months. >> this does not happen in the airline industry. have annd airbus incredible record of safety. the fact that two aircraft of
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downame model have gone shortly after takeoff in five months is concerning. so far, the u.s. has not andnded the aircraft airlines have generally expressed confidence in the plane as you would imagine. anna: good morning. we don't have the details. how damaging is this to boeing? that will depend on whether there are links between this crash and the lion air disaster. >> the shares are indicating down about 70 -- about 7% this morning. boeing has been one of the best-performing u.s. stocks over the last few years. about $100 has billion in revenue estimated to $15 billion in free cash flow and a big chunk of
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that is expected to come from this plane. it was boeings answer to the airbus workhorse. high volume. 5000 orders on the books. for boeing, it is essential this plane remains in the air and customers have the utmost confidence in it. matt: the shares in boeing are still up more than 20% year to date. we will see how much they followed the open. overhave had a great run the last five years in will he up 31%. how much -- or what do we know so far about the causes for these crashes? >> we don't know enough. there is an investigation ongoing. the boeing 737 max-b have new efficient engines.
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it has an automated pilot system that prevents the nose from moving unexpectedly. that seems to have caused the pilot to be caught unaware in indonesia. there was a similar problem in ethiopia -- not clear at all. what is clear is the pilot should of known about that issue in the system especially after the previous accident. brand-new planes. shortly after takeoff. it sparks concern for the airlines and for passengers. anna: thank you very much. columnisterg opinion joining matt in berlin. the stood, this is guard exchange, listing it down 7%. exchange, listing
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it down 7%. we will talk about the stocks to watch at the opening. to much of a boost is this vendi's attempt to reassert its influence? this is bloomberg. ♪
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to theelcome back
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european open. just under six minutes to go to the start of the equity trading day. let us get you the stocks to watch. murray, let -- anne marie, let us come to you first. >> merger potential looming. friday that the toxic between deutsche bank and weres bank -- commerzbank intensifying. the bloomberg reporter on friday said that the talks were not only intensifying but the ceo had given up his resistance to doing a deal this year. that very closely indeed. i may have to hop on a jet at any point and fly back to frankfurt. joe, let us get you on charter core. >> this is interesting at the
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moment. remember last year, virgin money was taken up. now, there is a deal where osb and charter core will combine. the deal is worth around $2 billion. it calms amidst greater competition in the sector. comes amidst greater competition and the sector. anna: telecom italia. auditors said over the weekend that they had concerns over the corporate governance structure. the good news is for vivendi. those do not have significant independence to take over those seats. matt: i'm going to pick it up from there. thank you to you all for joining
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us. get all of the stock stories from our equities team. type first go. to go untilnutes the opening of cash trading in europe. this is bloomberg. ♪ you.
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anna: a minute to go into the start of the cash equity day. welcome. , lete minute that remains us tell you where we are on various markets. the euro against at the dollar -- a 112 handle. gloomy data out of germany once again but the euro manages to go higher this morning. it may be more of a dollar weakness story. the pound going higher. the brent price is 66.16. recovery coming through from chinese equities and hong kong equities after the extensive selling that we saw on the friday session.
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concerns about global growth and chinese growth specifically. him him let's get to the starting equity trading. things are picking up this morning. it's going to be a busy week here in the u k in terms of the political story. interesting to see the pound was weaker this morning. .ooks safer right now we will see. this is how european a getting markets are at this morning. slick positivity and asia pulling into the equity space. --three tens of a person 3/10 of a percent. this will necessarily be the case with u.s. trading. we could see some of the index is doing quite well but look at boeing, -- the dow and
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with the crash in ethiopia, look for any impact this is having. can say materials, energy, health care, industrials, financials all seem pretty positive. they are fairly broad-based. >> we see that as well if you look at the mov screen. only 92 losers. as far as the companies putting points up on the stoxx 600 this morning. you do see that defensive play. you also say till towel as well bp-- totale as well as rising this morning. , its rising.
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-- it is rising. it is one of the biggest examples of discretionary stocks. take a look at the losers. pandora, experian is leading the losers as far as point reduction. there aren't very many stocks down right now. only about 94. we have some breaking news stories. -- renault.oanoke they thought the alliance was still going well and still strong as evidenced. confirmingrenault is it is in talks with a new alliance agreement. talks have not led to a definitive back -- pact.
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we are also getting a headline out room the international energy. -- energy agency. it is saying oil capacity from opec will be 400,000 barrels a which iser by 2024, like 100 years from now. forecasting up pretty far on sanctions that oil capacity growth is going to be done -- down. mention theuld just engine maker. it is the engine maker that supplies the 737 max jet that crashed this weekend. we will certainly keep an eye on the engine manufacturer, and boeing. european markets are opening higher. this, after u.s. stocks dipped on friday amid --
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stocks dipped on friday. give us your big picture thoughts on where we are on global equities, if you could. we saw markets getting a mixed set of data from the u.s. and comforting words from jay powell about how long they might pause or how comfortable he is with the pols over the weekend. what are your thoughts? -- with the pause over the weekend. what are your thoughts? >> the concerns over china i think will fit a little bit. maybe we'll get to china later on. i think that the concerns will fit off a little bit and we get more growth from china. the u.s. is in a pretty robust state of growth at the moment. it's not huge, but continuing at a reasonably good place. we are seeing a decline in margins.
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but we can live with that for now. i am pretty ok with equities here, i think. it is not an inciting point -- an exciting point to be entering a neck what a pretty reasonable year. >> i am not pleased you are in a number of. -- in edinburgh. i thought you were going to be with me here in berlin. there is a throng of people waiting for you outside the office that will be disappointed. the question of the day to you, much does for how data matter for stocks? data,st a weak european but also the horribly disappointing jobs number from the u.s. on friday. even if you take that just a one-off, you're still getting so many data points from the global economy.
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does that matter? >> and has matter. -- it has mattered. i will be with you on the third of april, you can relax. a third midcycle slowdown. really, we have seen the depressing economic data. and the jobs did a will look great on friday, but the revisions were pretty high to previously already high data. and there's been so much to disrupt. i really can't take it too seriously. in the meantime, we are going through this trough. in terms of economic surprises being bad, or the market at least not being aware of them
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coming, there's a good chance we might get some things coming through that surprise a little bit more helping markets to recover a little bit. concrete move on trade, it has managed to move higher but significantly overnight. anna: the msci asia index is up. we will return to the conversation about data in just a moment. i want to bring everybody's attention to the oil price going higher this morning. saudi arabia set to extend deep oil output cuts into april. saudi arabia will supply significantly less oil than they requested in april, extending deeper than agreed oil production into a second month. the move is just the latest sign that suggests regaining control of oil markets. pressure on oil
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prices in the very short term. my next question is around inflation. i want to show a chart that shows the wages story from friday. the fastest u.s. wage growth in a decade. prices going higher at the moment up by 1%. how nervous are you about an inflation story building? luke? it does sing like we have lost -- seem like we have lost luke. onwill be in berlin with me april, but hopefully we can get them back on camera by a satellite for you within the next couple of minutes. up next, but -- we bring you the stocks. deutsche bank on more reports of a tie up between the two biggest
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german banks. big story this week here in germany. this is bloomberg. ♪
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anna: good morning, everybody. we are 11 minutes into your trading day. your market is looking fairly positive picking up the lead.
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let's get your top individual stop stores for the morning. >> a bit of a sink this morning. commerzbank is up more than 3%. financial times reported over the weekend it seems we have a momentum regarding the merger of commerzbank in deutsche bank -- and deutsche bank taking place. they confirmed talks that they are talking about a merger. this would be an all share merger. that stock is soaring this morning, up nearly six and a half percent -- 6.5%. ins is a real estate company germany. lots of gainers on the move. >> thank you very much for that. movers, including
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commerzbank, we will keep you up-to-date on that developing story. i want to get back to china. defining the yuan. -- un. they vowed not to use the exchange rate for competitive purposes. what country would do such a thing? the white house economic adviser also said he is optimistic about a deal being made. the senior manager at aberdeen is back with us from edinburgh. no country would ever use its currency for competitive purposes, but china has been accused of that in the past. should we believe that they will , trump being the most important issue here, that the chinese are going to hold the yuan steady? -- u.n. study? -- steady? if the stimulus is about
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getting consumer press coming back into china, then maybe it does avoid some competitive devaluation scenario or revaluation. i think that is really difficult to convince trump that they have taken it seriously, that commitment to g20, about not being competitive on the currency site. they need to import more, and the big question right now, technology, will be the thing that skeptic -- that is a sense -- that is essentially the top. -- the talk. i think that whole point about currencies is not going to go away. it is really hard for china to convince anybody that their actions in the past haven't been very much against what they said they do. anna: interesting, isn't it?
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in terms of the volatility we have seen in the chinese currency. maybe not that much compared to other currencies, but that does not mean you don't intervene in the currency. let's leave the currency story there for a moment and talk about the credit expansion. this makes you something of an optimist on the china growth story. this chart on china credit expansion, in particular the local fx loans, what is exciting about this? a gtb chart. i just got off the phone this morning with a singapore office talking around what china is doing, will it make enough of an impact, will we see a six percent to 6.5% growth, i think we will get there with this. this is the start of this. we are starting to see this come through and apply for lending as well. in the consumer sector, they are
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starting to stabilize as well. as we go through q2, we could get a rough patch before we get towards the end of q2. there could be a good opportunity to enter new loans. from the duration perspective, it's been a great trade for a while. that might be the opportunity to take some of that off. towardsquity type risk you get to the end of q2. >> we will keep you with us for a little bit longer if the satellite connection holds up. coming up, another big week for brexit with just 18 days to go until the u.k. is officially scheduled to leave the european union. theresa may has another try at her meaningful vote. but doesn't have any chance at all of passing? this is bloomberg. ♪ it have any chance
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at all of passing? this is bloomberg. ♪
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>> welcome back. 20s is the european open minutes into the trading day right now. crude is up more than 1% after headlines out of saudi arabia that they want to cut production and the iea, is the opec
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capacity -- they see opec capacity following. the index is across europe are gaining as well. europe areacross gaining as well. a positive start to the week for stocks from asia to europe. let's get the latest on brexit. theresa may is back on the u.k. parliament attempting to reverse the record defeat that her eu deal suffered in january. what is next? we're looking at the timeline. reporter: under theresa may's current plan, lawmakers get a meaningful vote tomorrow. this would seek to overturn the house of commons record defeat of the prime minister's deal in january. if the government does when the vote, the u.k. is expected to have an orderly exit. this would be more or less on schedule. keep in mind tomorrow could also be a disaster for theresa may.
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if that happens, members of parliament are likely to vote on wednesday to remove the possibility of a deal. that is also likely that we will see a second vote on another referendum either tomorrow or on wednesday. thursdaythey vote on to agree the government needs to ask the eu for an extension? this is likely, but not inevitable. in either case, we would have to wait until the 21st or the 22nd of march when either a final deal or delay will be signed off by the eu. anna: thank you. those are the things i could happen on the brexit watch. let's get the brussels side of things with our reporter. we have seen lots of reports. theresa may is confirming this morning that things are deadlocked. it is a revision this time. are we likely to see anything
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today that could wreck the deadlock? -- break the deadlock? . technically, theresa may could so make it to brussels, but the hope and expectation around it died out over the weekend. friday was not a good day between the u.k. and the eu negotiations. concessions suggested the backdrop would only apply to northern ireland. it is an idea that was floated in the past that simply won't fly in the u.k. the prime minister may have said it many times. she cannot accept anything that treats the u.k. is different units. they made progress last week. interestingly enough, and brussels, there's a lot of speculation that the vote may get pulled. the chains us -- that changes the time sequence from now on. >> what do they see in brussels
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as most likely to happen if the deal gets rejected? are they assuming it will be an extension of article 50? in that case, what kind of timeline does the eu want to see? a three months extension? a two-year extension? euorter: i think by now, the has made it clear that they do think a delay is more likely than a no deal. it really does concern people here in brussels. in terms of the extension, there's a real debate given the lack of progress. we should go for a lengthy. -- a lengthy period. not, who say absolutely the u.k. should not run in the selection, they simply should not lead or participated in the election. anna: thank you very much. luke,get the thoughts of who is still with us.
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give us your thoughts on where the pound and's and the various -- ends and the various scenarios and how much exposure you have to it. >> i think we get a deal. let's be honest, it looks pretty unlikely tomorrow. and that an extension, extension ends before the may wections, if it goes past, will have to be part of. it is 120. that --ges so big instead, we are short on the expectation that we do actually get a deal. puttinghinking about some protection in on credit just in case we don't get a deal. it is that kind of environment
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that you have to protect against to really quite opposing poles at the moment. poles as wellg from brexit papers that the british public would be happy with a no deal than a delay. do you think that is really likely? is that because you think it is actually a possibility? bit onjust put a little the moment i think, because the probability of it happening has got to be low, but it is not zero. if we get to the point where parliament says we want an extension, it really depends on what the eu comes back with. i suppose if you are europe and you look at it, and you say what is the point of giving you an
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toension, actually trying get an agreement across parliament if you give you an extension. if that doesn't look likely, i'd say the risk of a hard deal brexit are still there. it is worth having a little bit of protection. anna: one happens if you get the deal through? what if a harder brexit leader emerges? transitionget the period being very uncertain. the currency can suffer under that scenario. where it settles is a really difficult question. >> thank you very much for your investment --nior senior investor at aberdeen. have a chart from look that is fascinating. up next, china grounds its fleet
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of boeing planes after a second deadly accident in five months. we will talk about what this means for the plane maker and the implications for the u.s.-china trade deal. this is bloomberg. ♪
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>> he are your top headlines. -- here are your top headlines. china halts flights of all boeing maxed jets after a deadly crash in ethiopia. the stock traded down a percent. -- tradedy looks like down 8%. to a brexitlooks defeat. central bankers sue the market. there is no rush to hike rates, and pboc governor says china won't weaponize the yuan. good morning and welcome to bloomberg markets.
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i'm matt miller in berlin alongside anna edwards at european -- the european headquarters in london. anna: we are seeing pretty broad-based gains across european a cutie markets this morning. -- equity markets this morning. picture.he the two biggest gainers and the german banking sector. this is my percentage. commerzbank and deutsche bank both traded higher. other reports suggest over the weekend that this is a story that continues to build. let's have a look at the downside. pandora is one of the biggest losing stocks. that's not getting a downgrade this morning.
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it is down by 6.4%. the 737 maxaker, jet that went down in ethiopia this weekend, very tragically, killing all aboard. they are down by 1.3%. let's get an update in hong kong. carriershas grounded -- ordered carriers to ground al boeing 737 max jets after crash in ethiopia yesterday that killed all 157 people on board. the chinese airline has until 6 p.m. local time to halt all jets in operation. the government has the cleared brexit talks a deadlock after they urged the eu to make a
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last-minute concession. the u.k. spoke to commission president but telephone late yesterday, but did not plan to travel to russell's today due to lack of progress. the leader of the house of keyons called for one last by negotiators. >> in the event we can get the changes to parliament once, parliament will be given opportunities. we are focused on trying to win this vote on tuesday. the government is absolutely, 100% determined to seek the changes that parliament wants to see. anna: turkey has slumped into a third recession in a decade. 2.4% quarter on quarter -- shrank 2.4% order on quarter. they revise a 6% drop in the recent three months. it brings to an end uninterrupted expansions that
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lifted an economy of 7% a year every quarter since 2009. china has delivered a subtle push back against trade the man's been my washington that will bring -- trade the man's made by washington. trade demands made by washington. previous comments made by g20 nations say they need to respect each other's monetary policy. global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. boeing's best-selling plane is coming under increased scrutiny. joining us now is the director
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of jl s consulting. good to having with us. we don't know what brought down this aircraft. so tragically in ethiopia. we don't know what impact this is going to have on the project. is the secondthis incident involving a max in the number of months. the common factors are the aircraft type, the newness of the aircraft in the phase of flight was appears to have happened. aircrafts has so many myriad of components that could lead to tragic circumstances. that is duenspire to something completely different. a thing at the same time the industry was to show an abundance of caution.
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manufacturers want to be sure that they keep the confidence of their customers. matt: the reason airline crashes of fiveuch coverage from human tragedy is that thankfully they are so rare. commercial airliners rarely crash. tot are the chances that have the exact same make planes crash within a five month period ? josh: it is certainly not anything i can recall happening in recent times. manysaid, there are so factors that can come into this. 77. aircraft was a it has been around around 50
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years. it is been a very tried and tested aircraft around the world. the new version is much dust has much better payload. safety is paramount. we have seen other aircraft grounded for periods of time where there has been a legitimate reason to do so. even if it causes disruption to airline manufacturers and airlines. one that theres would be no flinching if decided that would be the right thing to do to protect safety. what do you think about -- aside from this crash, obviously this is a very serious incident for shareholders to consider.
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well. has done incredibly stock is up over the past five years. almost tripled over the last five years, doing much better than airbus. how is this company positioned compared to its competitors? josh: since boeing and airbus are the two leading manufacturers in the world, they both have product portfolios that are very interesting. they have had different models, which have been more or less excessive. address recently announcede announc- airbus just ed the ending of its jets. shortfall aircraft have widened their reach because aircraft
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have not got the technology to fly longer-range. that has added interest from airlines who want to take a test in some markets with smaller capacity. that has actually boosted the auto books. difficult decisions have to be taken, i'm sure those will be taken. get answershope we with a quickly. thank you so much. up next, we will bring you some of the stocks on the move this morning, including pandora. it is slumping after downgrade by carnegie. we will get you that in other stocks we watching on the move this morning. this is bloomberg. ♪ ♪
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matt: welcome back. this is the european open. we're looking at gains across equity indexes in europe and the u.k. after gains in asia. it looks like we could get positive trait in the u.s. as well. let's get to our top individual stock stories. bank,ie: deutsche higher up 3%.
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commerzbank also up higher this hour. it was reported talks were getting closer to a merger. renault to the upside as well. this hour, they confirmed talks with a new structure for the nissan renault mitsubishi alliance. this could mean a new board that oversees governance of all three. pandora on the downside. it was downgraded to sell the carnegie. anna: thank you very much. let's get to the banking sector. bank and commerzbank arriving this morning after new reports of merger talks. let's take a closer look at this story and other deals driving markets in europe. bill, partner of hogan levels and ruth, bloomberg deals senior reporter.
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again, we wake up to headlines about german banks considering consolidation. we had a story about this on friday as well. does it make sense to you that we will see big m&a in german banking because we have been talking about it for so long? bill: i think you will see more consolidation at a national level. i think we see it here in the united kingdom, and i think we not surprised to see it back in the news in germany. the elephant in the room is whether we are quick to have more european consolidation and pan-european. there is political pressure, policy initiatives that are facilitating international approach to stronger banks. anna: and big german banks have not been thriving recently. does it make sense something stronger or does it just emphasize the weaknesses? bill: we know the leadership at deutsche bank has wanted to hold
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back its strength on their balance sheet before being propelled into what they have described as distraction. the challenges are bringing banks together. ideally, you move into those positions from a place of strength. thereunder so much political pressure, the german finance minister has come out and said he would like to see stronger national german banks. there is a lot of fragmentation in that sector. it does seem like there is going to be a lot of movement. the next step will be what happens with the european banking reform. --a: other things we have been talking about is india's agreement to buy -- deals in there big semiconductor industry given the dynamics between china and the u.s.? bill: again, we have the
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intersection of dealmaking with policy and politics. here we have nvidia reportedly edging out intel formula knocks, and israeli being company where the largest consumer is in china and largest producer is in the united states. to have this intersection amidst in theiff tensions background of two businesses that want to come together. more.k we will see i think the inexorable push and pull is such that it will move ahead, notwithstanding some of the political noise, the tariff tensions and the like, and even some of the policy questions around foreign investment, what technologies are protected as critical i nfrastructures. you about m&ask volumes and size and scale and
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scope. i have pulled up the m&a function on the bloomberg. just looking at where we are seeing still taking place, north america, all of them down year on year. north america looking much bigger in size than europe in terms of the deal we have seen. what do you see line have for europe in terms of mma -- m&a? bill: i think your needs to take some of the fundamental steps to facilitate larger scale transactions. a transaction in the rail space that could have created the pan-european champion. andas blocked by brussels, it was blocked to the dismay of leadership in france and germany. out of that moment of impeding pan-european transactional championing, there is now an opportunity. the french and german governments have come together and said when you to have a wiser regulatory framework and
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massively invest in animation. -- innovation. the principles and ceo were saying we need to compete with the people for the republic of china. they are pretty significant players. when you look at the regulatory framework, wasn't right to look at the competitive landscape across europe or more globally with the chinese becoming such an important actor across europe? think the u.s. regulatory market is making it easier to do this they consolidation deals as opposed to europe where they are looking backward and saying there isn't a chinese threat or threat from foreign inquirers? bill: look at at&t and time warner, vertical merger. it was challenged at the lower courts and the lower courts rejected the challenge. it was repealed in the u.s. an it.llate court rejected
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you look at a very large disney transaction that has gone forward with some concessions, but i think the u.s. policy and political climate is facilitating these very large scale transactions. i think it would begin for european lawmakers and regulators to do the same. anna: quick word on the u.k. market and what you are seeing there a moment. it is the busiest m&a market in europe, the u.k. is that surprising to you or is that what you get when a pound is 1.29 against the dollar? i think london still remains an economic centerpiece to the global economy. and scope ofe size companies that emanate from the united kingdom. i will look for that to continue. i'm one of those folks who thinks that brexit is a significant event, but i don't think it is an outcome determinative event. i think the united kingdom
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economy itself is too strong of a global level to receive from the m&a marketplace -- recede from the m&a marketplace. anna: you can check out the latest mma news on the go function on your bloomberg terminal. next, tesla'sp reversal, we will look at what drove this about turn from tesla. that is coming up next. this is bloomberg. ♪
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matt: welcome back to. bloomberg markets this is the european open. gains across european equity indexes. stock, the u.s., u.s. tesla has announced it will close fewer stores than previously planned, but it will raise the average prices of its cars by 3%, not including the model three, which it famously dropped back down to the $35,000 price range for american buyers. the increases will affect more expensive cars such as the model x and model s, possibly the model y, to be unveiled soon. joining us now is benedikt kammel.
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thisuch of a reversal is on the plants that were announced last month? benedikt: never idle moment for tesla. they announced last month but they would close their entire physical network of stores. currently job cuts associated with that. -- there would be job cuts associated with that, and that did not go down well with employees or investors who questioned the logic of closing down the physical network. it seems to have had some reversal. they are keeping about half of the stores they previously planned to close open. they will raise prices rather than cut prices on some of the models, because previously some of the logic have been if we close stores, we save money, and that money can go into cheaper cars. but now it is going the other way. anna: this is quite a stunning reversal. intesa scale -- could be investor response, or is it the
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employee pushback? benedikt: we don't quite know where it is coming from. investors did question having touch with the basically pulling out the entire physical network didn't seem like a good idea. he saw it in the stock. there is an announcement later this week with the model y. that will be unveiled. as i said, it is one way one week and the other way the next. it is quite a tumultuous time i tesla. matt: renault just came out and said they are in talks on the alliance, but they haven't got a final deal. where does it stand right now? one thing in the was that we need
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to simplify this. they want to unify the whole thing so that there will be talks on this. the somewhat delicate part of this is carlos ghon, is still a board member. somecould make for interesting -- matt: have are the prosecutors say he is not allowed to go? it would make interesting theater if he did. matt: i think there are a lot of restrictions on his bail. he has cameras set up inside his house. talking tommel there us about some of the big stories. so much going on today, including the continuation of the deutsche bank commerzbank story. commerzbank, one of the biggest gainers in the stoxx 600. anna: absolutely.
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that is it for the european open. surveillance." this is bloomberg. ♪
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francine: china and africa's largest carrier best characters suspending aircraft after aircraft is in ethiopia. during no hurry to hike. saysed chair since -- interest-rate policy is in an appropriate pace. feeltient means we don't in any hurry to change our interest-rate policy. francine: good morning. "bloomberg surveillance." this is"bloomberg surveillance." -- this is "bloomberg surveillance." for our european audience, tom start an hour early because we change the clocks in u.s. tom: the ft on the cover today


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