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tv   Bloomberg Markets European Open  Bloomberg  March 13, 2019 2:30am-4:00am EDT

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westminster.e another day, under the defeat for theresa may. this time, theresa may lost as in2, so not as bad january, but they said no. this am a question is that house behind you is going to have to make some uncomfortable decisions. the bo's and the claps? those are just some of the
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decisions that could be there. i'm going to interrupt the brexit chat, i know you are bulking up that. guests -- adidas. the revenue is rising, guided up on the last time we had quarterly profits. in terms of actual delivery and profit, 5.23, a beat on the estimates of 5.17 on the operating side, it is a mess. million, quite9 a bit below the estimate of 141 million on net income. if you are a dividend or a stockholder, you get 3.35 euros, the estimate was for 3.18. into that deeper, we are joined by the ceo of adidas joining nejra and myself just
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after 7 a.m.. from one german company, you got a touch of utility. nejra: just a couple of lines coming through. 2018, coming in at 2.9 9 billion euros, a comfortable beat of the estimate. delivering strong ops, and that key line is the adjusted bit coming in 2.9 9 billion. but now let's check in on the markets, there has been a flight for safety. and in us from in dubai london. we are seeing weakness in the asian session. how is india doing? >> much better, good morning to you. much better than what the world is doing. as we speak, we are trading in the green haired if you look at the two benchmark indices, banks
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continue to par ahead. this banking index continues to rise and shine. i would reckon there are two factors to this. sessions, india has had quite strong foreign inflows. the bank space has about 36% waiting on the index on the market, some actually, we have seen a bulk of those flows moving into those stocks. that has led to the banking index doing well and lifted the currency. pullback.te a strong the rupee is doing well, the markets are doing well. i would say there's a bit of a catch up as well. india was not the best performing market for the better part of january. in february. i think march has seen a bit of
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de-escalation and the indian markets, the white line, is now beginning to catch up. manus: let's pick up with you and murray -- annemarie. you are focused in on some of the losses and how they are playing out. just a bit of a shift and they pause, is it? >> the bit of a back foot in terms of asian stock trading. japanese pan equities are taking the heaviest burden, down nearly 1%. they have some machine data out which says that it is possibly signaling there could be less spending coming out of japan. when we look at the pound, relatively flat as theresa may loses yet another vote in parliament, sending the country to a political standoff. the pound will be in focus today. , 66.87 is what you are trading.
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extending the rally after an unexpected drop. opec is still cutting production and weighing the fact they may cuts until the end of the year. looking at copper, i have a chart that shows the rsi for overbought time they , we saw a drop tremendously. copper has been on a rally hitting a seven-month high you can see where it is now, but has not dropped drastically. itself, isory repeat this where it is going to stay and hover around? manus: never far from a technical indicator. thank you very much crew, markets covered. let's get your first word news in hong kong. will vote's lawmakers today on whether to leave the
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european union without a deal in place and that is after theresa may's brexit plans were heavily defeated. with which on the irish backstop failing to win over lawmakers. if the house of commons rules out a no deal brexit, lawmakers will both tomorrow on whether to eu that you -- to ask the for more time. . let me be clear, voting without a deal and no extension does not solve the problem we face. know why wewant to have an extension, and this house will have to answer the question. >> india has become the latest nation to ban boeing 747 jet from their airspace. the global standoff over the airworthiness of the model is intensified as investigators try to understand why an ethiopian airlines plane crashed on sunday.
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the european union, new zealand, and uae join the list of territories excluding the plane. meanwhile, u.s. regulators reiterated their support, sandy 737 shows no systemic reform. parents, university coaches, and the columns of missions counselor are among dozens of people charged a criminal conspiracy that soft help applicants win admission to elite u.s. schools. while the parents paid bribes of up to $6.5 million each to help kids cheat on entrance exams. paid towere also designate would-be students as athletic recruits. 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. nejra: thank you so much. area industrial production
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numbers are due this morning and will provide clues on how the region is faring after a dire and to the year. prior week yield -- readings have kept yields depressed, now the so-called japan application -- japan-ification is gripping the market. we heard about this and that yields could stay long forever, what are you looking at? >> lower forever, that is the question. is what happened in japan what happening in europe? will the market suggests so. this options gauge fall to its lowest on record. over the past two years, it is followed from its eight your average. investors are really saying we don't think the rate will move from its ultralow great and of ecb seems unable to escape the negative interest rates.
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japan in theror sense in the struggling to escape from flatlining growth, but those fears might be overdone. when we look at news mentions of the term itself, every time we get a spike up of this, we actually see bond prices peak. andaw that happen in 2016 2015. yields surge after this uptick. so that might be what is happening now as we see the term being used. could just be a sense of the sentiment being overrun in terms of bond yields. we also get data on friday of euro area cpi, so this picture might change. look for yields to go higher from here. manus: certainly something we've already have on the show. thank you very much. our guest host is interested in this. we have got the chart.
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this is the question, what would happen if a bond yields go below japanese yields? what would that signal to you? >> i don't worry. larry summers put it nicely a few years back, this theory of being in secular stagnation. it implies that in order for economies have full employment, interest rates would have to be suppressed for very long, if not forever. are a stronghere grounds of evidence to support that, especially in the european union. there might be some short-term respite, usually europeans and the united states we have seen comments from central-bank switchblade emergence factors for this activity. let me translate the factors. it is china. bead -- there has
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indeed been a significant slowdown. i think it will change in 2019 because the chinese are putting their foot on the accelerator of the economy. that could provide short-term relief, but it is not enough to allow the economy and us in the rest of the world to escape. there is much or for a sustainable move upwards. some commentary on bloomberg today talked about the fact that u.s. exceptionalism might be over when it comes to equities. we have seen u.s. equities underperform a little bit. not only that, but if you look at european equities, you but morgan stanley and bank of america backing cyclical stocks saying it is the ultimate contrarian trade.
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we have got for example bank of america. saying that any incremental improvement in the european backdrop could be good for european equities. d you see the euro zone and growth of their convergent up towards the u.s. in 2019? or the u.s. convergent down? we are more likely to see convergent down in the united states. quarter, leaving the annual meetings feeling very concerned. and does feel he because everyone was very optimistic, including policymakers. my concern was that although they are going above trend and europe is going above trend, it was not sustainable. once we see the sugar high of a fiscal stimulus of donald trump moving away from the united
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states, i think we will see a further deceleration. 2019 ormore of a late 2020 for myself. seere likely to convergence, but most of it will be the united states moving closer towards europe, rather than the other way around. nejra: hold that thought, some breaking lines. manus: just reactions from lisko vinci in a tally -- muscovici. she says they will not be new negotiations by the 29th of a hard brexit has substantially introduced the brexit risk. one of the headlines to get into is that hong kong is the temporarily ban boeing 737 max from its airspace following a litany of other jurisdictions
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banning the 737 from the airspace. the latest lines on to the main stories, let's return to our guest. what about moderate monetary theory? nejra loves it. others were visceral in lambasting of its last night. what do you make of it? and your heart as an economist, what do you make of it? marios: i am not a supporter at all. nejra: [laughter] marios: in this global environment where you have huge levels of debt throughout the world and interest rates stack in incredibly low ranges, i think the answer to the problems and challenges the world is facing will not come from monetary policy. it will have to come from the fiscal side of the equation, which faces is unconstrained, we cannot look for the answers and monetary polls. -- policy. nejra: i just want to make it
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clear, i don't love moderate monetary theory, i love discussions about it. and i am fascinated to know whether bond traders are factoring it is to forecast. that is one of the huge questions, deficits keep going higher, deficits stay low. so great to have you with us, chief economist in founding partner at creed governance. thank you for joining us. as hong kong and india join nations around the world manning three the -- ban ning the 737, what does it mean for boeing? and to in on a digital radio. i'll be johnny you there from westminster. this is bloomberg. ♪
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nejra: this is bloomberg daybreak: europe. i'm nejra cehic outside westminster. manus: i am manus cranny in dubai. -- americans regulars have ridden support for aftereing 373 -- 737 dozens of nations banned the jet after the second crash in months. emma, the very latest, hong kong joining nations banning the jet. this piles more pressure, or where does it put us?
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this is definitely places more pressure. it is looking isolated with the u.s. and canada, notably. the only major aviation markets that have not moved in this .autionary way seen the hong kong moved to block its airspace to the plane model. thisshows how quickly story is evolving and have decision-making is being made quickly. we spoke to them yesterday and there were no plans to do this, but since then come in singapore, australia, and of course europe and the u.k. overnight. the dominoes falling. really, barring this aircraft until he gets to the bottom of what happened here. nejra: in the meantime, there has certainly been some impact
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on boeing shares talk to us about the full impact so far. they have really been hit, have the? this is probably a nightmare getting dragged in the consumer crisis. worrying about the plane, inquiring about whether flights are about to go on, featuring displayed we've seen market value lose billions in just a couple of days, so it must be crisis territory in boeing. nejra: thank you so much, our global business managing editor. let's get back to the top story, theresa may's brexit deal has gone up in smoke is the crisis intensifies and the u.k. gears up for a no deal vote.
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philip hammond delivers his spring statement today. will there be measures to cushion the economy? great to have you with us this morning. thank you for braving the wind and cold. , a lot ofthe results uncertainty ahead. there has been a lot of stuff on the bloomberg talking about the impact on the u.k. economy. if we do get any sort of delay, how quickly could the u.k. economy bounce back? >> the first thing that happens is the currency moves higher, and reduces inflation. it would help consumer spending, and the big question is does the downtrend we have seen in business investment to go into reverse? of course, business investment is down year on year and the latest reading, there clearly has to be some relationship with the political uncertainty. the open question is if you take that uncertainty away, to be
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have years of investment that suddenly comes into play? or actually, have we moved too far, are we too far into the cycle? the global economy turns out a little bit and has the u.k. had to pay a permanent price? i think it is probably somewhere in the middle. we do get a rebound, but also we are in a difficult place globally. manus: do you think that is a generational shift? banks don't turn on a dime to bring 200 people back from frankfurt or amsterdam. it is relatively generational, isn't it? some of the decisions taken will be permanent, but that is not to say there are not a lot of businesses in the u.k. that have just been waiting to see what happens. they have a bit of vulnerability and uncertainty. but if we get a delay, that does
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not answer the final questions. what can we expect from the spring statement today? >> the spring statement is just a mechanical update, but we know from the office budget and latest numbers is that the u.k. public finances have been doing extremely well. despite the slowdown in activity and the weaker economy, in terms of revenues, the government is doing very well. massively,ve shrunk down at around 4-7%. so it is looking quite good. we are not really expecting any measures, this is just an update of the forecast rather than the full budget, but there is a chance to hit an additional loosening further on. there has been this outperformance you could talk we heardt behind towns
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about funding a couple of weeks ago. the auto sector and high street retailers. can i ask you, i get excited about gdp, a river of a pmi, whicht is the was truly disparaging. you see the pmi in terms of holding the horses back from any hike. mean, the pmi is a forward-looking indicator and has been, as you say, quite disparaging. the number we had yesterday was genuine gdp and was very strong, made up for the downside. the same time, only one month safe year. as a whole, the economy as a thing as such, the other mark carney looks with great interest is the labor market. and we have that coming out.
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growth.xpecting wage that is a very important expectation. nejra: it is surprising how much real wage growth has held up. >> it is kind of a global trend. we are seeing wage growth finally start to push up. you do have unemployment very low. it is not a relationship we have seen very well in the last two years, but it is coming into play. the big drop have in migration, which might be playing into wage growth. that is another positive for the u.k.. there is some wage growth, which can really support consumption. thank you very much. ofning the numbers, a delay three months would be .2% of gdp. well done, we will see you soon on the other side of brexit senior economist at hsbc.
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up in smoke, the u.k. stares down the barrel of a no deal brexit after parliament rejects theresa may's plan. we talk brexit from westminster and dubai.
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manus: good morning from dubai. this is "bloomberg daybreak: europe." live from westminster in london, i'm nejra cehic. these are today's top stories. u.k. stares down the barrel of a no deal brexit after parliament rejects theresa may's plan. lawmakers votes to day on whether to tear britain out of the eu with no agreement. the faa backs of boeing. u.s. aviation regulators double down on not rounding the 737, despite nations across the globe taking planes out of service.
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boeing stock suffers the worst drop in a decade. hell, jeffrey gundlach criticized president trump on what he calls the shocking growth in u.s. debt burdens. ♪ manus: a warm welcome to the show. some breaking headlines coming through on brexit. is are coming through as we have had that defeat last night. a temporary brexit tariff regime for a no deal scenario. vinci --get, moscow moscovici also spoke on the plan. the u.k. would impose temporary tariffs on carpark and the u.k.
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with a set new import checks on chemicals and endangered species. obviously, the government guiding for what some would say is the worst-case scenario. depends on which side of the house in which bench you sitting as to whether you think hard brexit rising would be the worst-case scenario. nejra: yeah, these tariffs would apply on goods headed into the u.k.. as you say, everything seems to be on the table. theresa may defeated again, not by as wide a margin, a record for her defeat in january, but still, the house said no to the new deal she brought back. today, lawmakers will vote on the prospect of a new deal. the expectation is that, generally, we moved to an extension of the march deadline.
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drop, rebounding just a touch today. but really, all options are on the table. we get an extension of a second referendum, and what does it mean for theresa may? manus: we have breaking news from standard life. i'll get to the numbers in just one moment. but they -- there is a dissolution of the current structure, just trying to grapple with exactly what that means. effective from march, they merely approve the dissolution of the chief coexecutive. . . martin gilbert, friend of the show becomes vice chairman of standard life. this is incredibly important, because this is the co-ceo structure put in place when standard life got together with aberdeen asset management. there is a fundamental change at
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the top, we will have to ask martin what it means. , they areife aberdeen saying that in terms of those numbers and maintain dividends gross outflows, full year, 75.2. ceo. is a soul by right reckoning on the consensus, that is a little bit of slippage on what the market had anticipated. big structural changes. nejra, good morning. nejra: yes, and outflows to contend with. of risk offg a bit come through today, a big difference. taking a look at futures, we're seeing them on the back foot. yesterday, the s&p 500 did close higher by .3%. u.s.question whether
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exceptionalism is over, we have actually seen them underperformed the rest of the closedesterday, europe flat, you can see fairly firm to the downside. the cpi came in and the yield dropped below to 60. that is key for the markets as well. let's check in on markets in asia. futures anduropean u.s. futures, we are seeing asia lower today as well. we certainly are and we can see that reflected with money going into the yen. a real risk off day here. asia-pacific index down. closing out, weaker by 8/10. money coming out of the strong rally. that yen strength saw the nikkei weaker by 1%, also weak machinery orders coming through. australia's market hit by week data.
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but have a look at india, still holding very well after hitting a five-month high. can see momentum coming into indian assets as we await the elections coming through, starting with voting next month let's have a look at other assets we are watching. hong kong has joined in, saying it will ban all boeing max 737's in and out of hong kong. that is in three hours. you can see the bloomberg index of airlines lower today high .4%. .4%. i mentioned of the weak consumer data coming through, that is a reflection of what you are seeing in the property markets. it was the weakest read. the rupee is a little bit stronger against the dollar, up by .1%. indian inflation coming through yesterday evening. , such asan the r.b.i.
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adding to those calls that we could see another rate. nejra: thank you. that may recap some of the headlines we had with brexit. the u.k. is announcing a temporary brexit tariff regime. of course, we are looking at the worst case hard brexit scenario the u.k. temporary tariffs would apply for up to 12 months setting new checks on chemicals and endangered species and the tariffs would apply to turkey percent of good imported to the u.k.. tariffs onuld put some agricultural goods and would protect local industry and farmers in the case of a no deal. this is according to the government.
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this member is with me outside westminster. the deals voted down, another vote scheduled for today and for tomorrow. what is your base case for where we end up, and therefore, where sterling and some -- ends up? . high probability the vote will go against the u.k. crashing out without a deal. that will give some certainty, and likewise, there is a high probability parliament will vote and it'llbrexit probably be agreed by the eu 27. those of the two points of certainty and supports sterling. just above 1.30 on cable. of what happens thereafter, we have a raft of uncertainties. we don't know whether there will be a second referendum or when
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it will happen. we don't know how long the extension will be for. what happens at the end of the extension. so there is some talk in even beter that it may she tries to bring back her deal after the significant failure. i think what will happen after the next couple of days is probably a further increase in sterling volatility. within that concept of volatility, i do think that 1.3 is forming a floor. the outside risk is obviously vote today today -- for crashing out, then we come out hard. one assumes that the house behind you might vote to donald tusk said a vote to the late needs to be justified.
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could it triggered a third meaningful vote, maybe worse. that comes back to my earlier comments, that after the next few days we have a raft of uncertain. it is impossible to sit here outside westminster and say with any conviction where we will be the currents time discussion is that any extension may be time limited to the end of may, then you must ask the question for what happens. we still don't know. itus: it is heart -- nejra: is hard cap conviction, but the have conviction about equities? >> i have conviction about the data if the economic you look at the confidence index washe recent
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very weak. i do think the economic outlook remains poor at least the next 3-6 months. that in turn means that u.k. equities will do badly. cheaper, 1.3. in that context, i think the export sector will do well in the domestic sector needs a convincing deal for the domestic sectors to improve. if you were as: global ceo and looks across the landscape, do you think it is getting harder to justify huge? -- capex? or is that just the doomsayers version of where we are? >> if you look at investment spending data, obviously, it has been trending down for the last
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six month. you look at fixed capital formation data, it is weak. so the data is very clear indeed. and if you are making long-term investments, obviously you need a high degree of certainty over what the political outcome will be. about thisproblems drawnout of brexit process is you are introducing a degree of uncertainty, which in turn depresses investment. parker, stays wit h us. coming up, we speak to the ceo of activists -- adidas. nejra: if you are traveling to work, hop on the radio. bloomberg radio is live on your mobile device. this is bloomberg. ♪
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nejra: this is "bloomberg daybreak: europe." i'm in nejra cehic outside westminster in london. nejra: -- manus: i'm manus cranny in dubai. let's focus on at the best, -- adidas, seeing slowing growth in the new year. bywth last year was driven categories and running.
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let's get straight to the ceo who joins nejra and i. great to see this morning. a bit of a warning. where are weged, going to see the biggest material slowdown in 2019? overall, we had a record year, grew the top line. hit the highest in the history of our company. growth driver in 18 was north america and china and he will continue to see those. ,nline came out with 36% growth in north america 17%. while we are seeing a slight slowdown due to supply issues, we will still see a very solid growth. but the same growth as a team, but still very solid. used -- nejra: you said
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the 2019 will see your return to high growth. is that part of a gloomy consumer picture at how much of it is down to your product mix? >> i think it is a be careful of blaming everybody else. there is no doubt the european market has slowed down, but there's also no doubt that we need to do a better job in europe. we believe we can turn around, we believe it is in our own destiny. the european market economy has years,5 the past many so it be inappropriate to do so. we believe we have a strong product line that will help us grow in the european market. be thewhat is going to biggest new megatrend? iso know whether it disingenuous, but we have written that you are in the twilight of retro footwear. if you are in the twilight zone, how do you get me into the light? >> we don't think we are in the
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twilight zone. sports are a market that will continue to grow closely and casual wear will continue to grow. we don't think there is a single solution we think there is a opportunity. business inled our two years, double the north american business at three years and double china over four. we think we have an attractive market. the sport being two thirds and what we call our retail business, sport inspired being one third. it will be a in interesting, attractive market for us. nejra: you say sports being two thirds of your business. do you see more of a move into sports performance and away from fashion? or is the mix going to stay in the same? -- we think it will say overall the same. the sports business is core to who we are.
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the move to casual wear as a balance will continue if you were not aware, people want to wear cool sneakers when they go to work and we're seeing that trend and the transaction vehicle is going to be more and more online. than 7loaded more million times, tremendous assets for our company. . we believe that that will continue to the growth. manus: on to bring you back to one of these issues. the producers here, they undoubtedly hold the attention of the captive audiences. aey had a hit song with referred to checks over stripes, i.e., nike over adidas. that is a direct swipe it you. this is one of your brand ambassadors. are you going to refuse the kanye west deal?
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is this something that is building up perhaps a headwind? veryt at all, we have been happy with the relationship we have and will continue to do so. when we have done is to introduce more and more footwear to the market there we will continue to do so in 2019 and on. we believe that the current relationship we had with kanye is very successful. we are happy and he is happy. right now, we're just trying to make sure you keep bringing enough to the market. they are predominantly around the issue. nejra: on that point, what sort of growth are you expecting in 2019? know,: as uncertain you we don't disclose the growth of a single product line, but the
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kanye business is less than double digits. kanye is not an american brand, he is a global brand. we're looking at this is a very driver. that will be the case also. we are very happy with the cognitive relationship. a be into our own topic bring into this interview is that summit we are working on has been reebok, bringing it back to profitability. by 2018.d to do that we have millions of profit improvement of the last two years. tremendous progress at reebok, and now we are trying to get into growth mode will continuing to expand the profitability of the brand. tilted, done picture slate with the ceo that you are -- done dextrously like the ceo you are. what is the brexit risk to you?
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what would a hard brexit mean for you, and what are you planning to do? of course, we have already taken a precautionary measures in distribution and infrastructure. there are two elements of hard brexit. is economic impact, and it will also have an impact on the overall already slow economy in europe. we don't believe there will be any impact on our guidance, but there is no doubt it will impact the long-term growth opportunity in the european economy. manufacturer the of sneakers and t-shirts, we are not in the biggest limelight, and we believe people still want to buy cool sporting products and casual wear. the top of my agenda, it is driving the agenda within adidas company. nejra: one final question to
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circle back to europe. what more do you need to do to improve your growth in europe? toper: very simply, we need drive a stronger sports channel to make sure we drive interest. two thirds of our global business is sports products and one third in europe. one third is casual related, in europe, is 50-50. we need a stronger presence in the sporting goods part, and that is why we are heavily investing into sporting. we signed arsenal as one of the premier leading clubs, as well as manchester. we continue to invest heavily into sports in europe to make sure we have a two thirds one third scenario in europe. manus: great conversation. taking the questions as they come. thank you for joining nejra and me this morning. that is kasper moore said -- k
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asper rorstead. we've got an mliv question. yields, let's make that productivity. japanification, what does that mean for global assets? only one man can answer that question, and he's on the great -- the green. good morning. seen a sharp slowdown in the eurozone economy at the end of last year and, so far, the first quarter of this year. long way to explain back up by the easing of monetary policy we have had and this trend decline in bund yields. we have now got 10 year bond yields of less than six basis points. the yield curve
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is obviously in negative territory. as we go into the second quarter of this year, late second, not early, i do think the eurozone economic activity will slowly improve. consequently, i think bond yields will trend higher, though not much higher in the second quarter japanese bond yields will likely the trending higher and probably highly correlated together. nejra: briefly, if you see that bond yields will trail higher, do believe morgan stanley that they are the ultimate contrarian trade? >> yes, but eventually. these forecasts are too early. i would rather have a conversation in may and june when they might be right. manus: we will have you back in may in june. joininger, than you for us. let's get you up to speed. nejra: they have announced --
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the u.k. government has announced a temporary tariff regime and would apply for 13% of goods imported to the u.k.. parliament votes on no deal today. this is bloomberg. ♪ this isn't just any moving day.
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we are live from westminster this morning. i'm anna edwards alongside matt miller in for you -- in berlin. market say no news is bad news, market slip as positive sentiment fades. europe is set to post losses and cash rate is less than 30 minutes away. less than 30 ms inutes away. anna: up in smoke, the u.k.
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stares down the barrel of a no deal brexit after parliament rejects theresa may's plan. lawmakers vote today on whether to tear britain out of the eu with no agreement. the u.k. announces a temporary tariff regime. taras and agricultural products are in the crosshairs. china and the eu in grounding the boeing 737, despite assurances from u.s. regulators that the plane is safe. matt: let's take a look, just 30 minutes to go at what is going on with the pound. yesterday, monday, we saw the pound rise up to 1.3250 and then come down. after yesterday, we're looking at another positive trade up
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over 1.31. what you have to wonder, is this the market saying they are happy will see a delay, or how would a delay be for the u.k. economy. we will be asking these questions a lot throughout the program and, possibly covet the next two years. is take a look at futures. let's take a look at futures. we are seeing losses on asian cash trade and u.s. equity futures. looks like it could be a risk off today, although investors are selling treasuries in the u.s. and the 10-year is rising. what do you see down there from westminster? indeed. ever since we heard from geoffrey cox, he was not able to change his legal advice on brexit. the rest unfold and a scary sense of inevitability. will it go the same way?
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theresa may limps along with little voice, we will listening to her speaking quietly because she seems to have lost her voice. 60 days to go until brexit, and she will of course be back in the house. today, a vote on no deal. of course, that is not an end to itself. we still face many questions from whether this process ends up to the u.k.. there is talk of revoking article 50, we delay, and we so, howr a delay? if long? will the price of a delay be longer? many questions to ask. we got details this morning on tariffs charged to protect domestic industry if there were to be a no deal. but get market perspective on what is happening. let's go to our mliv strategist in london. good to have you with us. , we saw a and turns
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drop substantially on comments and then it drops a mirror, sort of installing. we think that direction comes and we will have to wait. i don't think we will get massive direction. will probably get more relief rally once we know it is confirmed. we note as is a base case in the market. still morethere's appreciation to price in is because there is a tale risk we don't get the extension. bit ofs a little appreciation to come. i'm not sure an extension is going to fix anything, especially with only a short-term one. of course, if we get a harder brexit, it is a bad scenario. the long-term fundamentals of sterling are negative.
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how bad is this? i was talking with mark cranfield this morning and have never heard him so grim and glue. there looking so great about the u.k. economy. or gettinga delay mired in this process for years to come? very negative.s no matter your political view, there is no reason for this to be a particularly bad scenario if handled quickly. we have got a situation with prolonged uncertainty. did i want to take out another mortgage, move jobs? as long as this uncertainty continues, it will continue to weigh on businesses that will delay project and decide will
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not start the project. the longer this goes on, the more permanent damage we see. what is happening to the rest of markets? i'm suffering some kind of brexit myopia. help me why did my perspective. raise it is something that weighs on markets mentally, if not materially. what is it that is taking the edge off in the last 24 hours? brexit is a big driver for global equities, i think it is like we discussed on monday. we don't have any positive catalyst on the horizon. the trade deals will be a positive catalyst, but is likely to be a couple weeks away. now, there is no good news coming out until the deal is actually signed. on that front, we have got a fed that is patient, policy support from the china pboc, meaning we
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are pricing in positive drivers of the market is saying about you know what, we got a lot of optimism. the fed turning more hawkish, it means that there is less risk reward in buying equities. negate theot long-term constructive story that can exist if a trade deal is signed. the next weeks will be a choppy market for equities that won't go anywhere directionally and might have more downside to go first. matt: i want to give you the question of the day and ask you what kind of responses you are hearing. it is not about brexit. there is the rest of the world out there. here it is. what will bond yields below japan's signal for global assets? so the yield you land to the german government is less than the yield to the japanese
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government. what are you hearing? >> on a superficial level, it signifies it is a problem for the european economy. but it is already well-known. what we have to decide is that if the sustained below, that is worried. --t likely, as i pointed out as was pointed out earlier, normally when you get the excitement of japan education -- japanification, that is when you see an extreme low. as long as they stay here, there will not be more panic. it is when they sustained down here that we are in a shift and the market really is going towards japanification, as they say. matt: thank you very much for joining us. , in the city of london for all of the brexit action. remember, you can join the debate for today's question of
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the day. what will bund yields below japanese yields mean for us? assets.lobal let's get first word news with debra mao in hong kong. will vote's lawmakers today on whether to leave the european union without a deal in place. that is after theresa may's brexit plans were heavily defeated with new language on the irish backstop failing to win over lawmakers. if the house of commons rules out a note yield brexit, lawmakers will vote tomorrow on whether to ask the eu for more time. votingme be clear, against leaving without a deal, and for an extension, does not solve the problem we face. will want to know what we
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need to make such an extension, and we will have to answer that question. >> hong kong and india have become the latest jurisdictions to ban a boeing 737 jets from the airspace. the global standoff over the airworthiness is intensifying as lawmakers try to understand why an ethiopian airlines lane crashed on sunday. zealand,ean union, new and the uae joined the list of territories excluding the jet. meanwhile, u.s. regulators reiterated their support, saying it shows no systemic performance issues. parents about university coaches, and a column's admissions counselor are among dozens charged in a criminal conspiracy that soft to help applicants win at to elite u.s. schools including yelp and stanford. stanford.d
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coaches were allegedly paid to designate students as of let it recruits and some parents paid up to $6.5 million. sierra leone is counting on its program to attract investment and stimulate the economy. to bringthey are key series investors as they look to recover from the worst ever outbreak of ebola. >> by the end of the year, we should have results, the data to know. we will use that as a basis to .ork with banks >> 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.
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anna and matt. anna: debra mao in hong kong, thank you. bp's ceo says the oil market could be in for a volatile year. we bring you our interview. and remember, bloomberg radio is live on your mobile device or digital radio, broadcasting live this hour from westminster. this is bloomberg. ♪
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matt: welcome back, this is "bloomberg markets: europe." 15 minutes away from the start of cash equities trading. let's take a look at futures, pointing to a risk off day on the continent and over in the u.k.. bp ceo bob dudley says geopolitical uncertainty around countries including venezuela, libya, and iran is the biggest threats to the oil market. speaking to bloomberg in houston , dudley also discussed his company's plans for the permian basin. assetsade a purchase of in the u.s. for the party. -- permian.
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we will focus first on the eagle ford and there are good properties. we will be investing in the permian, but will get the bottlenecks going and then really setting it. we have got big plans, but not anywhere near to make a projection. do you feel the numbers chevron and exxon are throwing out there, one million barrels of oil a day, does that sound right? >> maybe not in size, because their investments are bigger, but it sounds right and the right price of oil and cost structure. if things were to stay where they are coming i would say that is very possible. if the price of oil really drops, that is a different matter. i have no reason to think either one could happen, some sure they sharpened the really -- sharpened their pencils really well.
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>> what kind of prices do you like? >> breakeven costs will come down, $40 a barrel for those who have the scale of operations. itself, it is not all a perfect place. less are good spots and good spots and thicker spots and it depends on where your acreage is as well. as long as prices stay in that window, for bp, we plan 50-60 .ive dollars a barrel we'll keep that is applicable we have lots do but will remain disciplined. next up for us, $10 billion is a big step. >> not to put more pressure, but are you scaling even more? do you want to be? >> we will remain within the discipline. sure it isre, i'm
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all checkerboard with acreage and we have every other one in some places. predict that there will be consolidation swapping and more efficiency put into it, and certainly, we want to be part of that. question, what is the biggest risk for the oil market today? >> there is obvious geopolitical uncertainty. that is well it is a human tragedy, production is often libya. -- off in libya. the u.s. has to make decisions on whether to extend sanctions were not heard all of that could make it a volatile year. if things stay, we will end up in this fairway of 60-65, it might be 50-70 this year, and that is healthy for the oil industry. you can never predict the price of oil. ceo bob dudleybp speaking to my colleague alix steel in houston.
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let's get the bloomberg business flash in hong kong. uber is said to have added several banks. underwriters that will help with its anticipated ipo. bloomberg understand the barclays, bank of america, and citi are on the listing. the offering is expected to be the biggest this year. it also be one of the five largest of all time in the u.s.. insurance shares have jumped in hong kong after announcing a share buyback and full-year profit that beat estimates. china's largest insurer said , announcing a% near $1.5 billion u.s. share buyback of its mainland traded stocks. ping an described outlook as strong. the maker of budweiser and stella artois is turning the
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leftovers into salty snacks. anheuser-busch is backing a food startup, working to turn the protein into edible bar treats. the grain is currently recycled into animal feed, but new technology will let the company turned it into a higher grade product. that is your bloomberg business flash, maps and anna -- matt and anna. matt: we are minutes away from the open. up next, stocks to watch, including adidas is the sports maker -- sportswear maker warns growth will be lower. this is bloomberg. ♪
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>> there is no doubt the market has slowed down, but we need to do a better job in europe. we believe we can turn it around. the european market economy has been 1.5 plus or minus for the
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it would bears so inappropriate to do so, and we believe we have a strong product line coming up cool launches that will help us grow. matt: that was i need us ceo kasperg -- adidas ceo rorsted. patrick, let's are with you, what is the story with adidas. the company is saying they expect the lower growth, a bit of a downer for the market. we see shares dropping. adidas which saw the stock rising 300% in the last four years was mainly based off of their re-live of old products. they saw the need to get some of the new product up and running. about what ise
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happening with the closing brand? >> earnings slowed the most in five years. they had some pressure, but they are proposing to boost dividend 50%, it looksom like that will not do enough to boost stocks. the calls i'm seeing are down between 1-3% at the open. matt: aberdeen, what have we got there? >> the company is simple find the menu -- managing structure. stepping down to become vice chairman of standard life aberdeen. some negatives as well, they saw outflows that were more than estimated and that could weigh on stock, even with this newly simplified ceo structure. anna: thank you very much. jp., annemarie, and
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you can get all of the stock stories from our equity team. keep an eye on the big picture, moves to the downside, what we are expecting to see at the start of equity trading. annmarie hordern takes you through the opening, that is up next. this is bloomberg. ♪
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>> good morning, everybody. fair as u.k. markets the day after one vote? here is annmarie. >> let's take a look at what is going on across assets. euro-dollar dumping head of the open. stocks closed lower today. the week started on a positive foot. oil up for the third day in a row. we had a report out that showed an unexpected drop in u.s. stocks. the pound in focus as we have the vote today in parliament of
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whether to exit without a deal. here is where futures are lining up ahead of the open. ftse 100 is down nearly 0.5%. cac 40 futures down. london will take center stage again for all of europe today as we have the crucial vote. now, the markets are beginning to open. ftse 100 is opening to the downside. we had the momentum coming from asia off the back foot. even though they started the week why positive, still waiting on the rest of the continent to open. spain opening to the downside. weighing heavily on the spanish benchmark there. they had earnings sales growi -- growth really slowing. the cac 40, as well, down. let's sic a look at what is going on in the sector picture. you can see it is a sea of red.


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