Skip to main content

tv   Bloomberg Markets European Open  Bloomberg  March 19, 2019 2:30am-4:00am EDT

2:30 am
shale continues to defy even the projections of the companies themselves area we breakinghird round of meetings with the companies. they continue to show some cautious optimism in their projections but looking in the last two years, we have seen that they have surpassed their own projections. and this has been attribute it to the sentiment and confidence in the market and the industry, following the sustained implementation of the supply and the declaration of operation that had held to bring back or to restore stability in terms of bringing supply and demand and balance by increasing stocks. appreciative much of the efforts, of the parties.
2:31 am
agreed that will continue this dialogue with them. >> it want to stay in the u.s. and ask you about trump and this nopec bill. twitter andough nopec legislation is lingering. mwhere does it weigh on your mind? mohammad: we are following developments in washington especially in regards to this legislation. -- what i gather is clear to thecoming parties involved, especially the
2:32 am
important stakeholders that such legislation would not serve the best interest of the u.s. nor will itself the interest of the mobil oil industry area therefore, we remain optimistic that reason will prevail. and the right thing will be done, it is not in our business delve into the legislative activities of any country little on the u.s. but we look forward to continuing to partner with the u.s., the u.s. is the biggest producer of harder carbons and the biggest consumer -- of hydrocarbons in the biggest consumer and hence we reach out not only to the bases which in the
2:33 am
we have established after of king negation, but we are also reaching out to other stakeholders in washington and elsewhere. >> maybe they will join the next meeting. thank you so much for your time this morning. that was the opec secretary-general speaking here at the monitoring committee meeting. stay with us and say hello to the secretary-general. let's bring it straight to you, the secretary-general says the yuan sanctions on opec would be counterproductive, that is the nopec legislation. threat and the a trump administration will keep it as a threat to keep opec in check area this is political or fair thing you stand if i want to be frank about it, it is creating a market for u.s. shale
2:34 am
and oil and gas exports. that is the prime objective of it. we were talking to a guest that was saying we are in since 2008, market is there any chance that opec plus could over tighten or is there no chance of that because president trump would step in? i don't think there can be any over tightening exit it depends on what will be happening with iran, are you going to be able to cut down the rainy and experts as the u.s. wants and is the secretary general, pointing down to zero. i think that is unlikely because of china, india, and iraqi which is dependent on irani and oil and gas. i don't think you will be able up pricese and bring as much as might have been
2:35 am
expected. manus: you have finished that conversation, i thought it was interesting that his excellency said that u.s. shale industry is defying almost itself and they the point,e in lies they cannot control anything to do with shale. >> i wanted to say, he sends his greetings to you in dubai. this is exactly what was being said the other night at this last-minute press conference. opec is surprised with the growth of u.s. shale. he said shale producers are surprised with the growth of u.s. shale, shale is on a tear, we have seen this building over the last three years and the numbers keep getting bigger. the u.s. is a mass exporter now and that is something that another one of these concerns,
2:36 am
something else that opec has to deal with. it was the third year of breaking bread so there is a dialogue opening between houston and vienna. nejra: great work. thank you so much. our guest is staying with us for the hour. joining us from our partner in and london. let's start with you, good day, goldman out with a new overweight on indian equities saying they will rally in the pre-election. to what extent is that playing out so far? good day to you as well. we have seen continued advances for the benchmark indices. quarter of aan a percent. thet of this has to do with strength in the banking index on a is leading gains
2:37 am
year-to-date basis. moving up as much as 9.5%. the reason here is as you suggested, goldman sachs is anticipating a rally, we have seen foreign investors put in money and after yesterday we had $3.4 billion and a chunk of this has gone into the banking index, specifically the private sector which is why we see so much strength concerning these names, a lot of -- in the industry as a whole. at a seven-month high against the u.s. dollar so that has been a lot of strength. manus: let's bring you into the conversation. have been in an out of positive and negative territory. even central banks have loomed large over the mood of the
2:38 am
market. between gains and losses, searching for direction. a big risk event on the horizon, the fed on wednesday and bank of england on thursday. tales expected. confidence slowing to a slew -- pointing to a slower economy. .his follows the benchmark rate the benchmark rate being 1.5%. we have come up to hit that again. the pound continuing its gains paring off the comments from the speaker of the house yesterday that theresa may cannot wring her meaningful vote for a third time without substantial changes. this is the best major performing currency in a month. the pound -- with the pound wants is no brexit, even a soft brexit brings regulations and hurdles area day in terms of
2:39 am
sterling strength it is this long transition that would translate into a better price. term,e jobs at the short but let me show you this chart. focusing back on chinese stocks, the world beating rally so far, by 28n see at the end, up percent. speculation a could go further at least if the technicals are to be believed. you have a golden cross, the 50 day moving up above the 200 day. we are moving about that based on the high in january of 2018. and the low in 20 -- genuine 2019. nejra: thank you so much. the bloomberg first word news with debra mao. the u.k. could be heading for a long brexit extension. the speaker of the house of commons says the prime minister
2:40 am
cannot bring her divorce deal back to parliament for third time unless it is fundamentally different. this makes another vote on theresa may's deal likely before -- unlikely before the european summit on thursday worth the minister will have to ask for a delay. two airlines have pulled their forecast as they assess the impact of last week's grounding of the 737 max 8 following the the planedly crash of model in five months. analysts are expecting a short-term hit to flying capacity while owing resolves safety concerns and trains pilots. the sec says it is stunning that elon musk failed to get preapproval for any of his tesla tweets a sense of judge ordered him to do so. the settlement called for an attorney to pre-approve company related tweets but that person is monitoring the tweets in real time. itssec has reiterated request that the judge find musk in contempt of court. dutch police have arrested the
2:41 am
suspect of a shooting in the city of utrecht. he opened fire on a tram. the premise are said the motive of the shooter remains at-large unclear. police said they were considering a potential terrorist motive. 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. so much.ank you it is fed week and policymakers are expected to hold rates steady with inflation expectations stuck on the low side. that's for one hike in 2019 have sent volatility declining and equities trending higher. thinks dudley says he tightening could be back on the table later this year. >> if the economy picks up speed again which i think will happen and inflation drifts higher, the fed will be back in play as early as the second half of this year. ssera: still with us is na
2:42 am
saidi. given that quite a few people tell me it will be hard for the fed to out-dove the market, why not take the risk out for the year? e market is not just expecting lower rate increases but a rate cut. if you look at futures, they are toward thea rate cut end of the year with a 40% probability in the fourth quarter. more important is the other side , quantitative tightening. what we need to hear from the fed this week is when it's tightening is going to end. is it going to be a hard stop in june or perhaps more likely in september? chairmanfor fed powell's announcement this week because he is going to give
2:43 am
forward guidance saying we are likely to end june or september. june seems a bit unlikely. i think there is a wait and see attitude at the fed as well as --other central banks giving given the glowing -- growing weakness of the american economy and the china-u.s. trade deal is still not done. everybody is going to wait and see. the question is when does quantitative tightening and -- bigand you have a requirement from the u.s. treasury, that will run 1.6 trillion and the fed needs to take account of that when it takes the decision to stop quantitative tightening. it could be death by dots, they could give very heavy hints. the lowest since 1988, bonds are in this held ransom
2:44 am
bandwidth. the narrowest since the 19 justified. i want to take you back to 2013. that affected the taper tantrum. what event do you think could move this bandwidth in the bond market? : it will have to be the issue of quantitative tightening. the fed will be doing two things, it will announce quantitative tightening that the second it will shoot toward treasuries and away from mortgage-backed security. as it moves its portfolio toward treasuries, it will go for the longer term, treasuries, 10 years and less of the short-term area and you're going to get a that in the u-curve, and will move your bond market and treasuries. effects, one is the overall
2:45 am
size of quantitative tightening and a shift in the structure of the portfolio towards treasuries. as you talk about the shift in the yield curve from what you are saying, what i understand is we could see a further flattening of the yield curve but given what you have explained as the reason for that if we do see that, should we not be concerned that that is the same recession signal it was in the past? everything is pointing toward a recession as -- possibly as early as the fourth quarter. you look at the housing market and retail sales and the auto market, all of them are showing soft numbers. 'f you look at economists expectations versus macro indicators they have been negative surprises, economists and the u.s. and elsewhere have been over forecasting the
2:46 am
strength of the u.s. economy. everything is pointing in the negative south direction. the fed is looking at that and rightly so. expect a recession because it is on the cards. a lot will depend on global economic policy and the a majorna deal is change are in terms of the scenario. manus: you think you will get a u.s. recession toward the end of the year. a lot of people all suggesting it will get tougher but not a recession. you think yes. sser: heavy not a technical recession in terms of negative growth but much slower growth. manus: we talked about the s&p nine -- s&p 500. let's look at the chart. this could be an unloved rally. the net short in the s&p minis and turning more bearish as we at this rally underway. this is an unloved child, an
2:47 am
unloved rally, not for the retails, but what do you make of it? was when heything to a bear market. this is what has led to the fed stopping quantitative tightening and all the other indicators pointed in the same direction, increased softness and that is why the fed came out and said i'm going to stop, no more rate increases so that is consistent with that. the issue is going to be how do you design your portfolio? what you have right now is what economists call fiscal dominance. not only in the u.s. but elsewhere. central banks are having to deal with greater borrowing requirements of governments and that means they have to create space for government borrowing. that is going to dominate u.s. markets in 2019.
2:48 am
nejra: i hope you can answer our question today, i thought of the -- started the conversation by asking whether the fed dots should go to zero. the bond market is not pricing any hikes. how low must the dots to please stocks? >> they are not only looking at the fed and dots, they are looking at earnings. if you look at earnings growth, we have seen a strong slowdown in earnings growth of u.s. major corporations and the tech sector. i think increasing uncertainty do with potential legislation to regulate the tech google andnissan and the rest. that will put a damper on the market unless you get big liquidity from the fed, are not getting much of a movement in
2:49 am
the bull market or the u.s. equity market. manus: thank you so much, great erntribution, that is nass saidi. a bigs shaping up to be year for sovereign bond issuance, we will look at what it means for investors. that is next. this is bloomberg. ♪ . ♪
2:50 am
2:51 am
2:52 am
manus: i am manus cranny in dubai. inra: i am nejra cehic london. africa's strong start to the year in the eurobond market shows a sign of abating. a number of countries are selling bonds to raise capital. of $10 billion, it is set for its first-ever sale of eurobonds. bena is looking to raise to
2:53 am
in dollars to finance its budget. it is also looking to sell an additional $1 billion bonds at a lower rate than it is paying and ivory coast, plans a billion dollar bond sale as it reviews its financing needs against rising borrowing costs. what makes african nations so attractive to bond investors? kevin daly joins us. great to have you with us. a lot of supply coming to the market but if you take a look at my chart, we can see the yield have compressed so far this year. still above the 10 year average. does that make them attractive? kevin: it does. we are in a market environment where investors are looking for yields so if you look at the hasormance this year, it been very strong with the exception of mozambique which has got its own country specific risk issues that are going on. if you look across the board, you have seen pretty much strong gains amongst the euro bond
2:54 am
issuers. ghana is one of those pieces of paper that will come to the market. there is a roadshow to get international investors. so muchency under pressure, one of the worst-performing in the benchmark that we monitor. how much does that play in to the international investors' offer a, it make compelling entry point, are they lower on the currency? kevin: we might have seen the low last week, certainly for now. when i met with the delegation yesterday, specific questions for the rank of ghana governor to say what is the plan because what investors are looking for is clarity. what we have seen so far this year is very little in the way of intervention by the central bank. they have rolled out some new changes to the fx regime which they are hopeful will converge the onshore tank of ghana rate
2:55 am
and the interbank rate. and thirdly, you have had coupon repatriations by offshore investors. one of the questions i had yesterday is what is your estimate of further coupon and theyrepatriation estimated 800 million so there is significant amount of pressure which could build this year but the market is saying 3 billion of issuance coming and so that creates more firepower for the central bank to offset any currency weakness. that is why you have seen a strong rebound in currency this week. nejra: with yields coming down you have to distinguish between different sovereigns so where are you looking to add exposure, where are you neutral, where are you producing exposure? kevin: we are overweight the west africa low beta countries.
2:56 am
africa -- west africa and senegal. we are still overweight on ghana. some value.be we will exchange the bonds that wheel, 20 -- the 20 30's are the rest ofand africa, we are flat, we do not that -- andia, angola we have added two more recently. manus: let's see what the risk is for south africa. they have their election out of the way. a great conversation, come back and join us very soon, kevin daly, aberdeen asset management portfolio manager. coming up, we will dig the -- dig deep. gives us his first
2:57 am
interview of the day. you don't want to miss it, joining us. this is bloomberg. ♪ this isn't just any moving day.
2:58 am
2:59 am
this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today.
3:00 am
this is "bloomberg daybreak: europe." side, theresa may's plan is torpedoed. will the eu grant her a lengthy delay? we speak to the german chancellor angela merkel. reinforce expected to its dovish stance, but former new york fed president says tightening could be back in play later this year. oil mayor to cuts, 2019 highs after opec and partners pledge to continue
3:01 am
curbs. the market is responding positively. impossibleactically to bring down exports to zero. nejra: good morning, welcome to "bloomberg daybreak: europe." one hour to cash equity trading. we have seen four days of gains, best quarter since 2015. there could be a pause to that rally. futures unchanged. u.s. features have taken a little bit of a pause. global equities getting to the five month high.
3:02 am
headlines are hitting the tape now. ever so slight miss on the four year. $4.73our revenue comes at billion, a little light on the four-year revenue. the final dividends shared coming in at $.37. manus: a little breaking news, retail sales up 11.2%, 104 million pounds for the first quarter. they will update in terms of the andover impact very shortly. up-to-date with those. a tight range for the bond
3:03 am
market. about q3, what the fed announces in regards to the balance sheet. u.s. treasury futures at the bottom of your screen, rising slightly. that is the tightest since 1965. see what angela merkel says today. it will be a fascinating conversation. a range of issues will be touched on. juliette saly has the market wrap in singapore. juliette: a little more cautious in asia after two sessions of solid gains. the cfi 300 across that golden cross today. the nikkei flat amid some yen strength. india continued to rise for a seventh session, boosted by a
3:04 am
call from goldman sachs, they weightgraded from market to overweight, expecting this rally to continue. the fed and other central market bank meetings coming through from tomorrow, there has been a more subdued time for equities. as we have been talking about, we have seen a big drop in yields in australia, particularly the three-year note. it followed below 1.5%, after disappointing data on housing securities thinks you could see this fall to 1.25% as they expect the rate cuts to increase. they can is stronger against the dollar. yen is stronger against
3:05 am
the dollar. the bank of thailand expected to keep its benchmark interest rate on hold at 1.75%. nejra: juliette saly in singapore, thank you. let's get to a ceo interview. the minor says it expects 2019 to be another record-setting year. joining us now is ivan arriagada herrera, ceo, atofagasta. great to have you here, thank you for joining. au expect 2019 to be record-setting year. you are reaffirming your guidance as previously announced. what is your outlook on copper demand this year, and eu expects softer demand in europe? ivan: we had a record year of production last year, and we are expecting another record in 2019 . our prospect for copper is positive.
3:06 am
we see demand and emerging markets continue to grow, and the trade war which was one of the concerns around copper, we see it does not have a direct impact on copper demand. we see demand in emerging markets continuing to grow. there could be an indirect impact from slower growth in emerging markets, if the trade war were to continue or escalate . what we are seeing is most of the copper going into those markets stays there, and therefore we are saying a good policy response especially from the chinese government, which means those concerns are starting to ease. the copper price is starting to trade upwards, and that reflects the fundamental of the copper market which is positive. it is supply constrained. manus: we will get a copper price in a moment. great to have you on the show,
3:07 am
thank you for joining us. when i look at the market, people will say you are prime of a you have the likes cash pile that is enviable. ,o you think your risk of a bid have you had anybody approach you? ivan: no. extent, we are attractive, we are a single copper producer, and therefore we get exposure to copper as no other company does. we have a good operating we seeance, and ourselves as attractive but we haven't seen any trading. this is a family controlled company, so that is a key feature of our corporation. we remain an attractive investment, but we have not seen something beyond demand for our stocks in the way we have seen before.
3:08 am
attracted and having a participation. it is putting off bids, and that begs me to ask if you think the family would sell. this is a mining company that has a long history with the development of operations in chile. i do not foresee ownership structures at this moment, but it is for the family to consider. i am concerned with running the business well, and we have had a good strong operating performance in the last year. we have good momentum into next year, and i think we want to take advantage of that. operations are running well, and we think our commodity is a great one to be in. manus: how tight is the market? you managed to gracefully not give me the price where it could
3:09 am
get to. how would you describe the market? where can prices get to over 2019? are seeing a we tight market, in 2018 it was fairly balanced. there were little disruptions. unusually low, so going into 2019 we see it getting tighter, we think a deficit on the supply side will manifest itself over the year. therefore, we see the price trading upwards as we move into the year. some of that we have already seen. that is the direction trading and prices will go. nejra: then the question becomes if you see broader m&a. if we have a supply deficit, it might widen longer-term because of demand for electric vehicles. are you considering buying the smaller minors? ivan: that is an important
3:10 am
feature of the copper demand. beyond the traditional uses and emerging markets, there is clean energy and transport which will be key features were copper plays well. going into the future, copper is used in electric mobility and we see growing demand in that space to read when it comes to m&a, we are looking at options, but what we find in the copper space, that are few companies come up for sale because it is an attractive commodity. we are focused on being disciplined and how we deploy capital, and rigorous how we analyze opportunities. we are not seeing anything attractive at this moment. targetse have some which our colleagues at bloomberg intelligence have written up on your company. you set a target of 900,000 metric tons by 2022. today's announcement, i wonder
3:11 am
if you could upgrade that target. is that a reasonable risk to put into the price? i think we do not have a volume target going into the future. we like to think of pursuing morection, so this is about profit and the value over volume. that we are seeing underlying growth in production, and that is good news. we are not targeting a specific number by a certain date. we will increase production, but this is more about value than volume. we do not have a certain date. can i ask about your 2019 capex? does your numbers stay the same? ivan: we are keeping our
3:12 am
guidance, our capital expenditure of 1.2. also, we are contemplating , butdering the possibility those plans are further down the road. nejra: an important question we need task -- manus: where are you with membership on the board for women. ivan: we have two women on our board, and they have an active and important role. womeneen on pursuing representation on our executive committee. we have promoted women to all of our senior boards in our operating companies.
3:13 am
their inclusion is fundamental for the future of the company. we are keen on continuing to develop women and move them into senior positions. that is one of our key strategic targets. the mining company will stay for 20 years, and there is no way we can think of developing into the future if we do not have more women representation. when those ladies are ready to talk to us, let's bring them in and have that conversation about what it is like to work with you. ivan arriagada herrera, ceo, atofagasta, thank you for being our guest. news, debra mao in hong kong. debra: u.s. federal authorities began exploring a criminal probe was certified before the latest crash in ethiopia. the investigation was prompted airnformation from the lion
3:14 am
crash in october. the justice department is gathering information including .hrough a grand jury subpoena the u.k. could be heading for a long brexit extension. the prime minister cannot bring her divorce deal back to parliament a third time unless it is fundamentally different. this makes another vote unlikely europeanursday's summit when the prime minister will have to ask for a delay. asia's richest man has helped his brother avoid jail. paymentan $80 million for his sibling. they are struggling with debt. he thanked his brother and sister-in-law for the payment. it was for maintenance services are to his business. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg.
3:15 am
debra mao in hong kong. coming up, german chancellor angela merkel will be in conversation, do not miss that exclusive conversation at 10:00 a.m. u.k. time. nejra: that will be one to settle in and listen to. if you are traveling to work, bloomberg is available on your mobile device and dab digital radio in the london area. this is bloomberg. ♪
3:16 am
3:17 am
3:18 am
3:19 am
manus: welcome back to "bloomberg daybreak: europe." is in london, i am in dubai. outflows totaled $120 billion, the worst of any region. calling for a turnaround in fortunes. with more is dani burger. dani: for the past 52 weeks european equity funds have seen outflows, that is what this shows. this is the worst run we have seen in a decade.
3:20 am
as investors flee toward cash and bonds, in europe the growth story puts them in that safety trade. strategists are calling for a rebound. we have had some fresh calls from goldman and morgan stanley. morgan stanley's case has to do with china, they say you can see anda pmi's in the blue track each other closely. this rebound we have seen in china, they say should continue, and europe should follow close behind. i mentioned bank of america coming with a call. to do with these extremes we are seeing in the market, one being valuations looking attractive for european equities. if we look at the spread between the dividend yield and 10 year yields on different european bonds, that is reaching an extreme.
3:21 am
bank of america data, they say this is the biggest spread and about a hundred years meaning we should see investors move back to equities to get that income play. a lot of voices coming out and why those extremes might reverse. manus: thank you very much. stocks, interesting today. traders are standing by for a busy week. expected a more dovish tilt. the mliv question, how low must the fed doves go? be one of the options to reinforce the dovish message. let's bring in shanti kelemen, senior portfolio manager, coutts & company. let's put that question to you, how low must the doves go?
3:22 am
it looks like people are fairly happy since the start of the year, we have seen a good rally in market. as long as we do not see signs that rates will go up further, that will keep people happy, and with inflation where it is, it is hard to see the fed changing its stance over the next few days. that: i was reading a note talked about the fact that when we have had wage growth in the 4%, youthe past exceed still have gains in equity market and good returns. we are a long way from getting in inflation shock to the upside, if we were to, is that a reason for equity bulls to become frightened? shanti: it depends if it is good inflation are bad inflation. if it is inflation because the economy is growing and wages are
3:23 am
growing and productivity is growing, we should not worry about that. if you have inflation because of supply shortages and the economy losing strength, that is what we are afraid of. what is the pulse from china? is it good disinflation or bad? with china, you could them making cheaper goods has brought down the cost of products and inflation over the years, but things are not as cheap as it used to be. a lot of that production has shifted to other places in asia where it is cheaper. the big influence, you think about technology and how that has taken out cost, and you do not need labor for a lot of tasks we used to use labor for. you can bring in demographics. nejra: one of the things i love
3:24 am
about the charts earlier was the clear connection between china and europe. it was one you made yourself, and why you underweight europe. but you also underweight china. whitey you underweight -- why do you underweight, it is a market you have to participate in? shanti: we have some exposure to emerging markets. china puts massive stimulus into their economy, they reduced taxes and reserve requirements, and it is not showing up. the rate of change of credit provision, those are not showing any uplift. the trend is downward. we are waiting to see a clear reversal in that trend before we start adding to china or europe. manus: you overweight sterling
3:25 am
and the u.k. equities. is that on the 100 or 250? for cable, we have assets that we head into are not inen they sterling, and that is how we get our overweight position. for the u.k. we are overweight across the board's, but our changes we increased exposure to mid-caps and domestically oriented u.k. equities, we did that a couple weeks ago. we may early, but we think it will come through in the long run. and we think we will not have a hard separation economic disaster people have been talking about. nejra: let's circle back to the fed, the big event in the next couple days, and how you allocated treasuries in u.s. corporate debt, and how much is based on your fed expectations? like u.s. treasuries,
3:26 am
we own them in all of our portfolios. we think there is more potential for capital appreciation may just rate expectations going down with europe and the u.k., limited room there. we are not a fan of corporate debt at the moment. we reduce that in the previous months because we think there is not much room for spreads to compress. that is the difference between what it corporation pays and the federal government pays. nejra: thank you so much, shanti kelemen, senior portfolio manager, coutts & company, great to have you with us. coming up, german chancellor angela be in conversation with our editor-in-chief, john micklethwait. do not miss that conversation at 10:00 a.m. u.k. time. that is it for "bloomberg daybreak: europe." the european open is up next.
3:27 am
equities in a five-month high. when you travel to work, tune radio.oomberg this is bloomberg. ♪
3:28 am
3:29 am
3:30 am
anna: good morning welcome to "bloomberg markets: european open." we are live from our european headquarters in london. i am with matt miller who is in berlin. matt: good morning, the market say patients please -- patience please. asia fails to pick up on wall street's late rally. the cash trade is 30 minutes away. anna: brexit blind side, theresa
3:31 am
may's plan is torpedoed. she refuses to put her deal to a third vote. will the eu grant a lengthy delay? oil holds near 2019 highs after opec and partners pledge to continue to curb. u.s. sanctions would be counterproductive. >> it is practically impossible to bring down the export 20. ahead ofcks hold court the fed meeting tomorrow. the central bank is expected to but wills dot plot that be enough to reignite the rally. here at the european school of management, this is the global solutions summit. we are expecting angela merkel to join us in a few hours around
3:32 am
here.gmt, 11:00 john micklethwait will have a conversation with the chancellor . what an interesting day to talk to her after the surprise move by theresa may's plans thrown into disarray, and her in need of a short-term solution or a long-term delay. we will hear what chancellor have to say about that, and much more. anna: plenty more on brexit through the program. let's look at how futures are shaping up. we are not expecting big moves. almost entirely flat this morning. pausing for breath, taking a breather, that is what we see in the asian session. casting around for direction after some strength coming through in asian markets in
3:33 am
recent weeks, and in the u.s. we have seen the s&p at a five-month high yesterday. we have had strength at the start of this year i'm a especially after the weakness in december. difficult to look at q1 without looking at q4. you mention the brexit conversation, a bloated theresa may as she casts around for a solution, the pound casts around for direction. it is flat. that is the picture for you, a mixed picture. oil at four month highs. nigerianpeak to the opec delegation. let's get deeper into the brexit conversation. outlook for the pound now?
3:34 am
we saw it selling off that may may not get a deal through. maybe that means something longer-term, what is the thought process in the asian session? >> good morning. i have given up trying to forecast the pound over the next hour or two. over the past month it is up 1.5%, which is the best of the big currencies. they must see something they like, and what they like most about brexit is that it is not happening at all. happen,t were to whether it is a hard or soft divorce, businesses would be faced with new rules and uncertainties. now it looks like the next step will be a lengthy delay.
3:35 am
the newspaper was reporting the delay may be nine to 12 months. kicking the can down the road seems to be one of the best outcomes for the pound that we can expect. matt: it is the european modus operandi. let me ask you about the s&p 500, 4% away from the record high. >> only 4% away from the high is pretty good. december it was rising bond yields and treasury yields that sent stocks tumbling. now we have a fed on hold, some are saying the next move might be a rate cut. we have bond yields that are not rising.
3:36 am
can give the u.s. economy a little breathing room, give it room to grow and be a supportive background for stocks. can make ac on hold run at the record high. the dollar fell almost 1% last week, the biggest this year. , what influence will the fed have on the dollar? thing, it the whole is the influence of the fed. again, unlike in earlier days, yields are not rising, they are falling. the 10 year treasury yield is 2.6%, which is not in crisis compared to other countries. if investors want to shop for higher yields in other nations, that would suggest -- and especially in emergency markets -- that would suggest those
3:37 am
currencies should rise and the dollar should continue to fall. anna: thank you for joining us. if you want to get involved, contact the team on your bloomberg. us.k you for joining news, thereaking victims of a cyber attack impacting operations. they do not know the extent of the situation, but i.t. systems in most business areas have been impacted. we will bring you more details as this story develops. let's get the bloomberg first word news with debra mao in hong kong. authoritiesfederal reportedly began exploring a criminal probe into how boeing themax was certified before
3:38 am
latest crash in ethiopia. the investigation was prompted by information from the lion air crash in october. the justice department is gathering information including through a grand jury subpoena. china could triple its purchases of american farm goods, according to agricultural secretary sonny perdue. beckett matchup with beijing's ofposal to buy $30 billion u.s. agricultural products a year. trade talks are also progressing. it is moving along rapidly, but these are complicated and you want to get the details right. sec says it is stunning that elon musk get preapproval for his tesla tweets.
3:39 am
the regulator calls for an attorney to pre-approve company related tweets, and that person is monitoring tweets in real time. it reiterated finding musk in contempt of court. asia's richest man has helped his brother avoid jail. they will make an $80 million payment for his sibling. billionaire thanked his brother and sister-in-law for the payments for a maintenance service divided to his business. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. thank you very much, debra mao in hong kong. as the commons speaker rejects a third vote on theresa may's deal, the prime
3:40 am
minister is set to ask for extension from brussels. how long will it be? more on that, next. remember, bloomberg radio is live on your mobile device or dab digital radio in the london area. tuning. -- tune in. this is bloomberg. ♪
3:41 am
3:42 am
3:43 am
anna: welcome back to "bloomberg markets: european open." 17 minutes until the start of cash equities trading. we look to be undecided, fairly flat, and that reflects the session in asia. the msci asia pacific flat. there is plenty of brexit news. there is a lot of brexit news. we will do that throughout the program. here to look at the other things
3:44 am
you should be watching for today, french prime minister edward phillippe is expected his plan with the yellow vests road tests. after 10:00 a.m. angela merkel gives a speech here at the global solution summit in berlin area half an hour later she will sit down with a conversation with john mickelthwait. theresa may tries to push her deal over the line. she needs a compromise from the eu or she will have to ask for a longer delay. minister's vote on her deal has been scuttled. may could not bring the same motion back to parliament again. the u.k. prime minister is set to speak a longer extension.
3:45 am
officials say a vote is unlikely because sheday's will not get concessions from brussels. but she is headed they are now. extension to article 50 inevitable given the impasse? is what we know, that decision has changed the game plan here. the head of the european council is on a tour across europe trying to come up with a joint session ahead of the summit thursday. he did not say how long an extension could be, a year or maybe two. eu leaders will have to agree to this unanimously. they may have to divide and
3:46 am
contribute, that is a big deal in brussels. this is a big decision eu leaders will have to take. they are faced with a choice of no deal and push the u.k. out, or an extension and give prime minister may the time she needs. anna: talking about those elections reminds me of nigel farage saying the parliament does not want more at him. as if the eu would lean toward granting some extension. people have suggested a longer extension could be something to consider. a long extension. what euot say how long,
3:47 am
leaders have said is that the summit will be about the extension. if prime minister wants to use this as a concession summit, that is not going to work. they think it is up to the prime minister to kill her deal or drop the redline. a lot of possibilities if she decides to drop the freedom of movement pledge, or decide to stay in the single market. but the prime minister has said this will not be the case. .att: thank you very much our reporter will be on the story all day. let's get the bloomberg business flash from debra mao in hong kong. warner bros. chief executive is ousted over allegations he had sexual relationships with an actress he helped promote. he has entered the list of
3:48 am
moguls toppled by sex scandals. the 54-year-old had an affair with an actress and helped her get roles in movies. netflix will not be participating in apples streaming platform. it will be introduced on march 25, reflecting new competition between the silicon valley giants. apple will aggregate video content from several providers. -- abu dhabi looks to distance itself from the money laundering scandal. the firm has invited bids of $5 billion of asset management. the bank had unsuccessful talks with buyers last year. that is your bloomberg business flash. anna: thank you, debra mao in hong kong. in the asian session, unmoved.
3:49 am
the msci asia-pacific is entirely flat. the chinese market is the only one down, so we are not getting much direction. asia is set for its biggest gains since 2012 if you take the first quarter in isolation and 4 last year. 11 minutes to the trading session. we will look at the stocks to watch. extensive of an cyberattack, more on that next. this is bloomberg. ♪
3:50 am
3:51 am
3:52 am
anna: welcome back. this is "bloomberg markets: european open." to cashnutes to go trading and equities. is covering team the retail space. >> a busy day for british
3:53 am
consumers. earnings reported earlier this morning. revenue for the first quarter down 11%. a fire at one of its main sites. sales missedr estimates which may be taken negatively by the market, analysts are saying. let me get this story on antofagasta. dani: the four-year came in at $3.2 billion which is in line. the real story is they see record profits for 2019. the price of copper will be important if they can meet that. speak with nejra
3:54 am
cehic and manus cranny. here is what he had to say. anna: it looks like we do not have that sound. detail on what was said this morning. they are not aware of the challenge they are facing. it is a major aluminum producer in this region. they are saying they have had an extensive cyberattack in the early hours this morning, it affected operations. most business areas are impacted, forcing them to switch to manual operations as far as they can do. they do not know the full extent of it. thisve a president for
3:55 am
kind of attack, a shipping company in 2017 was also hit by a cyberattack that cost them $300 million over several days of trying to repair the damage. back then they said it was a russian attack. anna: we will keep an i on how that trades at the open. you can get the latest stock stories with our equities team. first go is the function on your bloomberg. matt, you are at the global solutions summit. matt: it is a time when the globe needs solutions. if you're a fan of multilateralism as angela merkel is, she will give a speech about that at 10:00 a.m. gmt. bloomberg'slater,
3:56 am
editor-in-chief john micklethwait will sit down and talk to angela merkel. it is a bloomberg interview you do not want to miss. this is bloomberg. ♪
3:57 am
3:58 am
3:59 am
one minutes ago until the start of cash equity trading. let's have a look at how the markets are positioned towards the start of the equity day. this is the euro-dollar at the moment. pretty stable for the euro against the dollar. the fed meets this week. just how dovish will they be but could they add hawkishness given how much recovery we have seen since december? exclusive conversations with the nigerian oil minister. more sound from him coming up. the chinese equity market down a fraction. asian equity markets in a holding pattern, fairly flat overnight. the pound a little bit stronger
4:00 am
this morning. as we wait for the next part of this brexit drama that was stopped in its tracks by the speaker of the house of commons last night. we don't see a great deal of convention of where these equity markets will pull into the start of tuesday's trade. waking up these equity markets, looking for a fairly flat start to the trading day. love to talk about as we go through the week. the fed meeting looms large on the horizon and we see the bank of england meeting as well, even if no changes are expected from either of them in terms of interest rates. will they bring down those stocks to one hike in 2019 and will that be seen as dovish or catching up with the markets? let's have a look at where we opened up. the ibex a little more strength coming through from spain. the dax and little stronger. either side of the flat line on these european equity markets this morning. let's have a

19 Views

info Stream Only

Uploaded by TV Archive on