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tv   Bloomberg Markets Americas  BLOOMBERG  March 19, 2019 10:00am-11:00am EDT

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york, 2:00 p.m. in lon conand 30 minutes since the trading day in new york. gus: welcome to bloomberg markets. vonnie: we have breaking economic data now. high frequency data to add to the plethora of data the fed will be considering in its meeting. durable goods orders coming in slightly shy of the estimate of .3%. the estimate was for .4%. nondefense ex-air, said to be the important r important number .8%. factory orders disappointed, up .1%. survey was looking for .3%. unlikely to have a major impact on today's market moves. something for the fomc to consider. today we have higher markets. the s&p 500 about .3%. the k.p.w. banking index is higher by about .2%. banks are experiencing a little bounce today before the fomc meeting tomorrow.
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the i decks up about 1%. 3/4% crochip makers up, higher. the keynote speech yesterday at a conference by n video c.e.o. giving to the market that they have a way forward and the turn around is under way. they lost half of its market share in the fourth quarter of last year. boeing is up .8%. this after several down days in the last week or so. the odd bounce here and there. today's news is that china is considering taking boeing off the table when it comes to the list of all of those products that china had intended to buy to reduce its trade surplus with the united states. we'll dig into that story and more on boeing and on china in the next two hours. gus: we also have that statement last night, steve boeing's c.e.o., generally european stocks today are trading on light volume. one exception or major exception, that is the dacks. dax is trading strongly.
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we're seeing really decent performances coming through from a number of different carmakers. stocks up in europe, .8%. best performing sector is the also sector. this is chrysler. potentially we have the major shareholder to hide f.c.a. and p.s.a., effect thively backing the possibility of some sort of m.m.a. but you also got daimler trading high. and bmw. some of these trade focus stocks are moving higher today. it does seem to be mma as one of the key features of that. the dollar is back flat. earlier it was showing signs of weakness. this is where we await the fed. that's the cable rate trading back to flat. reasonably volatile over the last few days. we'll dig into that over the next -- actually three hours we'll talk about what's happening with the u.k.
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vonnie: kicking off its two-day policy meeting today. expected to hold rates steady and lower projection force the number of hikes in 2019. you title your recent note, tale of two phillips cars, which you say allows the fed to stay patient. >> the tradition of philips curve links the unemployment rate to inflation. that's remained -- that's what the fed is looking at. the other phillips curve i look is a the link between unemployment and wages. the direct transition from the tighter labor market to wage gains. that has accelerated. something we need to watch carefully. so far these higher wages have not translated into higher inflation rates. this is why the fed can say inflation pressure is muted. we remain on hold. vonnie: call that a partial victory. but it's not as if we don't want wage increases to contribute to inflation. we do, tip will i, -- typically,
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right? >> you can can see it's goldielocks for the consumer because purchasing power gas up. our concern for the cycle is the corporate sheet. earnings have been great over the last several quarters. we think that's coming to an end. earnings revisions are lower. if it's something like this, higher wages but not higher prices, that means companies are not able to pass this on to the consumer which eats into margins and make the financial situation of corporate weaker. gus: the fed is probably fairly happy with the low volume tillity environments we're facing at the moment in asset markets. if we get a spike in volatility around the fed meeting, is that a policy mistake for mr. powell? harm: i don't know. the market has been -- the market likes to throw some tantrums if it doesn't get what it wants. it's not necessarily the job of the central bank, e.c.b. or bank of england to o do exactly what
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markets want. i do think that the fed got spooked a little bit by the market reaction after the december meeting for sure. that was part of the reason why , saw the modest policy looking forward if the fed does something and stays on the course they have paced over the last several weeks, and the market is still unhappy, i don't necessarily think it's a policy mistake. gus: the stock market is up six out of the last seven sessions. how big factor in terms of the thinking around what the fed is doing right now is that? harm: i do think it has been the main driver to explain why the fed became so much more cautious over the last two or three months compared to the fourth quarter. since then numbers have weakened as well. and i think this gives us vindication or you can can say maybe the fed had the perfect foresight to know the numbers
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will follow the lead from the market. i'm not quite sure. certainly it is still in the back of the heads of most federal officials. that market did not like the more hawkish stance. i think it will take some really much better numbers for the fed to ignore that experience again. we don't expect any further moves from the fed. the stock market played a role. vonnie: we're seeing the 10-year yield back up. we got as low as 2.54. can we anticipate a range that's wider than this one? are we in these changes rakse for now? harm: -- ranges for now? harm: the 10-year yield f. are you coming to the end of the a cycle, it tops out where the short-term interest rate tops out. there is overshooting and that's what we have seen in late 2018. but given our outlook that the fed is not going to hike anymore, the short-term rate
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peaks at essentially 27 .50, which means 10-year yields are more or less where they should be. vonnie: what about the dollar? we have had six or seven straight sessions now of weakness. does it continue to weaken or is it at the mercy of other forces? harm: short-term, yes. it's the trade war story. monetary policy has had an impact. we thought we will reach a bottom between 110 and 112. then gradually move higher. we still think the europe dollar exchange rate, the sale value is higher than it is. if we leave out all the short-term disturbances we should go back to the value. gus: can we talk about the inflation target. how symmetrical is symmetrical? harm: i think it is symmetrical which means the fed is happy to see some overshooting. we have not figured out in real
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time because the core inflator has not been above % for quite some time on a sustained basis. but i think the fed is serious it will not overreact to let's say, a core p.c.e. hitting 2%, 2.2%. which is what i said before. we need decent surprises on the data and inflation front to force the fed's hand again and tighten policy more. gus: just trying to understand how long they can can run the economy. the struggle clearly is disinflation rather than inflation at the moment. that seems to be the chief concern. if we took average inflation targets, how long does that apply over? how long would the fed be comfortable running the u.s. economy in an above inflation target level before it decides we start to -- do we need to start to put the brakes on?
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that's the bit i don't understand. harm: it's a work in progress. the fed has never done it. there was talk about price level targeting which is the same what you said. we had extended period of inflation undershooting. in order to get the inflation level, the price level back to trend, we need several years of overshooting. it sounds fine but the fed has never tried it before. i think the one indicator he we need to watch is inflation expectations. assuming the fed is you can sessful in inflation to overshoot the 2% target, to bring it back to the trend, then i would expect inflation expectations to go higher and that is one of these ugly side effects that i think the fed is concerned about. if inflation expectations move too high, they will probably steel against it. vonnie: harm is the chief u.s. economist. let's get a check on the first story news.
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>> there could be another blow for boeing. bloomberg has learned that china may exclude boeing's troubled 737 max jet from a list of u.s. exports it would buy as part of the trade deal. it could be the key to china reducing its trade surplus to the u.s. the 737 could be replaced by other boeing models. brazil's president wants to show his government is friendlier to the u.s. than in the past. they are expected to discuss trade. yesterday both praised the president. last night he met with conservative leaders. european union leaders want to give u.k. prime minister may one more chance. bloomberg has learned they plan to offer the u.k. a conditional brexit extension at think week's summit. that will give her another opportunity to give parliament to approve the divorce plan. she can't bring back her twice defeated proposal unless it has
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changed. the leader for life of kazakhstan is stepping down. he's taken the decision to end his powers as president of the asia's energy producer. he's been president since it was created in 1990. he'll remain of the security council. global news 24 hours a day. powered by more than 2700 jurnle journalists and analyst in more than 100 countries. this is bloomberg. gus: thank you very much. coming up, the u.k. speaker shuts down prime minister theresa may's plan for another brexit vote. this as the german chancellor, angela merkel, says she'll continue to fide fight to the end for an orderly brexit. next. the pound a little better today. this is bloomberg.
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gus: breaking news over the last couple minutes. a cyber attack has affected one of the world's largest aluminum companies over the last couple minutes. we have had confirmation of this ransom wear attack coming through from the c.f.o. the c.f.o. saying the situation is severe. indicating the company does have good backup solutions for events like this. it does seem as if the company has managed to isolate its production from the ransomware attack currently under way at the moment. nevertheless, one of those examples of the disenfranchiseyity of the i.t. systems -- of the fra gillities of the i.t. systems. that they have been able -- they have been able to kind of use their backup systems to isolate what has been going on.
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the visibility on supplying orders varies between plants. there may be an affect of this in the aluminum markets which has been so volatile over the last few months. the stock trading down. catch up on what other market events we need to focus on. here with the details, abigail doolittle. abigail: we're looking at a rally for global stocks on tuesday ahead of the fed decision tomorrow. at its highest level since october 9 before the heart of the big selloff in the fourth quarter happened. we have the dax outperforming, up 1.4% on the comments from the german chancellor saying she wants to do anything to make an orderly precks brexit happen. china down slightly. that weighing on the emerging markets. the emerging markets up slightly. on the year a big rally. look at the emerging markets. we see this big rally in
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january. then of fed pivot at the end of january. overall up 11% at this point. really helping the s&p 500 on the day achieve that best level since october 9, some of the big movers include some of the tech movers. chip stocks along with some technology names. the company's c.e.o. did speak at a conference yesterday ahead of the analyst day today, investor day. some seeing that as a positive sign. news on atarry. my he crow soft higher, another record high. the most valuable company in the world. facebook upfor the first time in four days. let's look at an interesting chart in bloomberg. it's a divergence growing. this is from the s&p 500's all time high last january ahead of the volatility. yellow the s&p 500, and white
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microsoft. microsoft through all that volatility has outperformed. up 28% over that time period as investors are seeking the safety of the old school software company. more remarkable perhaps is through all that volatility, look at the s&p 500, dead flat. down into a bear market. facebook, money is lagging. down 14%. one question could be, is microsoft or the facebook the tell on the s&p 500 direction? vonnie: abigail, thank you. more breaking news now. the u.s. treasury has imposed sanctions on venezuela's state's gold mining company. the treasury saying that they propped up the regime of the president ma curea. we're getting more heavy-handed here in the u.s. venezuela with u.s. treasury imposing sanctions on venezuela's state gold mining company. the president and company
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are designated under the office of foreign assets control. meaning their property and assets in the u.s. are blocked. gus: vonnie, the german chancellor, angela merkel, sat down a little earlier today with bloomberg's editor in chief at the global solutions summit in berlin. she said she will fight to the end to ensure an orderly brexit. >> till the very last hour of the 29th of march i will fight for an orderly brexit, an orderly leaving of britain of the european union. we don't have that much time left. a few days. gus: angela merkel talking about brexit. continue that conversation from a different angle. harm is still with us. slightly out of your bailiwick, but nevertheless the bank of england meets on thursday. you were telling me earlier that
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you just removed a bank of england rate hike. if there is a long delay for the brexit process, the lay bour market in the u.k. is strong and has remained strong through this whole process. is there any chance the bank may seize its opportunity and hike rates? harm: i still think it is unlikely. as you pointed out the numbers are forward looking. they look strong. our general outlook for the global economy and of course the u.k. won't be able to decupple, we're heading for more pronounced slowdowns the second half of the year. we think the wind heo of opportunity just from that perspective is closing. also even if you get an extended delay of article 50 of the brexit, there is still this uncertainty what it brings. that's why i do think in this case you just lined out, it is unlikely the bank of england will hike rates.
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gus: can i relate this story to the conversation we were having just a few moments ago. that was on the fed. the fed in the past had cited brexit uncertainty as something that it pays a great deal of attention to. i struggle to see any meaningful impact into the u.s. economy. can you find any? harm: from brexit? not much. maybe some of the corporate -- credit corporate stories at this point. some more meaningful presence in the u.k. from a macroperspective, i don't think there is much that affects the u.s. economy at this point. first of all the u.s., if you want the poster charge for large, close economy, less affected by global disturbances, it's not totally immune against it. the bigger issue and concern are certainly china and the broader european union than brexit itself. vonnie: harm, trade is dragging on and on and on. speaking of things dragging on.
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i was reading the note today if you rn out of land you build more land at this point. that's what's happening with the trade negotiations. where do they end up? at what point does it harm business confidence and business spending here in the us us? harm: it's already not helping. for sure in my view. we just published a chart last week where you saw that u.s. exports to china are down by double-digit percentage points. whereas u.s. imports from china have been flat. all the talk that china is being hurt by all this trade wars is not quite reflected in the numbers that we have so far. there was yesterday an interesting article in the financial times, they looked at u.s. export to japan. all these unintended consequence of trade wars is affected by the u.s. withdrawing from t.p.p. coming back to the question, the president tweeted a year ago that trade wars are good and easy to o win. well, they are not. and i think the u.s. is seeing it left and right and it's popping up in areas where people may not have's -- have expected
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it. at the end of the day that forces the u.s. administration to make deals just to make deals. it would have been more promising to stay in t.p.p. and the issues you may have with china maybe on the intellectual property right to tackle it together with europe, japan, korea. those countries in this he respect have all similar problems. but the u.s. decided to start a trade war with japan, with europe, and with china. at the end of the day i think it has not strengthened the u.s., america's hand. vonnie: we're not finish with usmca. that's not still through congress. there is a lot of work on the one that's supposedly done. what happens if we put tariffs on europe? harm: it will hurt europe, no doubt. it will retaliate. we have as i mentioned before, we have seen the u.s. being hurt from a trade war that hasn't escalated at this point.
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if the u.s. -- i think certainly there is no reason for doing this because one thing you must not forget, yes, europe charges 10% import duty for u.s. cars, where the u.s. only charges 2.5% import duty for european cars. there is a 25% import duty in the u.s. for pickup trucks, mini advance, and s.u.v.'s. which now accounts for 70% of u.s. car sales. i think if you look at this actually the tariff burn for european cars to the u.s. is higher than the tariff burn for u.s. cars going to europe. that does not rule out that the u.s. will do something. my impression is that nobody in europe, nobody in the u.s., not in congress, not the u.s. auto industry wants to go ahead. vonnie: thank you for visiting us here. this is bloomberg. ♪
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gus: vonnie, let's talk about what's going on with the cyber attack taking place in norway. north hydrois one of the biggest suppliers of aluminum in the world. the c.f.o. briefing saying the cyber attack started in the united states, interesting. also indicating, this goes into the insurance phase, do they have cyber insurance? vonnie: if you look at the supply chain and the bloomberg value you'll see they supply everybody from bold corporations to a.b.v. volkswagen. even tesl a a is in there. this has potentially very wide consequences. we'll continue to update everybody. this is bloomberg. to update everybody. this is bloomberg. this isn't just any moving day.
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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. ♪ vonnie: live from new york i'm vonnie quinn. gus: from london i'm gus johnson. this is bloomberg markets. a first news update. >> newly released documents give
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more insight into the f.b.i. investigation of president trump's former lawyer, michael cohen. that he was being investigated for nearly a year before federal agents raided his home and office last april. he's pleaded fwilty to tax he evasion and making hush money payments to two women who alleged they had affairs with president trump. he'll start serving a three year prison sentence in may. there is word u.s. officials began exploring a an investigation into how the boge 737 max was certified to fly before the latest crash. bloomberg has learned the probe was prompted by information obtained after indonesian crash in october. boeing engineers cleared the equipment at the center of the crash investigation. hundreds are dead, many more missing, and thousands at risk from massive flooding in mow zam being, malawi and zimbab yea ause canned by a -- zimbabwe caused by a sigh loan. that rainfall is rushing back through mozambique, further
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inundating the already flooded countryside. record flooding has swamped the midwestern united states. no place has been harder hit than nebraska. the missouri and other rivers across the state has reached record heights and still rising. a state of emergency has been declared in more than 50 counties. almost 700 nebraskans have been forced from their home. global news 24 hours a day. powered by more than 2700 journalists and analysts. gus: thank you very much. chancellor merkel says her government shouldn't get involved in the possible merger talks between deutsche bank and commerce bank. she spoke to bloomberg's editor in chief from the global solution summit in berlin earlier today. >> that is a decision best left to private business. i would very much argue along the lines of the federal government not in any way making
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public comments on this once the partners have come to agreement, result. obviously we have an interest to then analyze it and evaluate it because we still retain a 15% state in commerzbank. it's a decision of private business. with all of the challenges, all of the opportunities and risks and only the players themselves can can only the stakeholders themselves can value that. that we have sometimes government banking sector invested there. it's not something that -- i'm waiting for the players, stakeholders to give their final say. >> multilateralism in europe, there appear to be a deal between yourself and president macron where france would reform and then germany would help integrate your oop in a way -- europe in a way that would push
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sort of deeper integrated europe you might have hinted at in your speech. what seems to happen. there hasn't been much integration. do you think that's a fair criticism? >> no. each and every one of us has different ideas where one ought to reform. that has always been the case in frank heo-german history. in the end -- in franco-german history. in the end, they see if they can persuade all the other european member states. that's not something new. what you look, for example, how was created. euro the way germany argued, the way france argued has always been -- france has always said or made a point for this ability path not being so strictly adhered to or -- look interpreted to
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more at the impact and impact on jobs and we have always said be strict with the vaw to the financial sector. we would do so when we look at the capital market union. when we look at the bunt of the european union. and -- bunt of the european union. and all of the other -- budget of the european union. and all the other we'll have to persuade them. >> looking at germany first attitude towards the european union. >> no. no, i don't think so. i'm actually always opening up for compromise. example, we have been heavily and france very much attach importance to also protect the start-ups and their intellectual property rights. that has in a way also brought us in conflict with our agreement where we said after
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eight years, after 10 years we now finally have a legislation on copyright and intellectual property we have to make a compromise. i see a lot of young people out there demonstrating against it. but we have to strike a compromise. gus: that was cherman chancellor angela merkel in conversation with bloomberg's editor in chief. vonnie: coming up, boeing backlash. china considering leaving the company 737 max plane out of any trade deal with the united states. details next. this is bloomberg. ♪
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gus: live from london i'm gus johnson. vonnie: new york, vonnie quinn. this is bloomberg markets. boeing's crisis is expanding once again. china now considering excluding the company's 737 max jet from a list of american exports it pledged to buy as part after trade deal with the united states. we're joined by bloomberg's u.s. economic policy team leader, sarah mcgregor. is this something that u.s. negotiators might have expected? after all regulators around the world have been saying as have airlines, u.s. airlines, and others. sarah: even still it would throw a wrench in the talks. one of the issues that the u.s. and china have been able to sort of agree upon broadly in these talks so far have been chinese
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increase -- china increasing its purchases of u.s. goods. that hasn't been a really big sore point. china has readily agreed to buy more soybeans, planes has been on the list. planes are such an expensive product it's an easy way to ease that trade deficit with the u.s. i think this will -- just kind of opens up a new area for the u.s. and china to make an agreement upon. of course our reporting shows that china is considering perhaps canceling plans for those purchases. it also may just agree to buy different types of boeing aircraft. gus: can can i draw a line, , ybe -- can i draw a line dotted line, china was the first to ground the max and potentially it may be pulling them out of the trade negotiation. is that a mitt machiavellian? -- is that a bit machiavellian? sarah: in these negotiations
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there are so high stakes you think you would use every lever at your grip to try and get an edge in these talks. of course china has its own plans to develop planes and models that are similar to challenge airbus and boeing. i think there's a lot of talk about china looking for a way to sort of realize those ambitions. at the same time the reality is that these two companies are really the only ones in the business right now making these types of aircrafts. i think china might just be trying to buy some time and gain a little bit of leverage in the talks. vonnie: how much can the u.s. speak for a company. how much can the u.s. come on behalf of boeing or another company for that matter? china southern aircraft another 34 on order. other chinese airlines have bought them including air china. with 14. can the u.s. talk about individual u.s. companies and promise some things?
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china's individual companies are the ones on the line. sarah: absolutely. as much as -- one of the concerns that some u.s. experts and observers have had is how can the u.s. promise to increase the purchases. first of all do the companies, farmers who grow soybeans, they have the capacity to ramp up their production to the point that the u.s. is promising, it's trying to get china to increase purchases of a bunch of types of goods to $1.2 trillion over six years, will those companies and production in the u.s. be able to ramp up. the u.s. can't promise that companies, it's own companies will sell to china. i think that's one of the bridges that needs to be crossed in these talks. gus: sarah, if other countries decide they are going to withdraw from purchasing the 737 max, do you think that the administration is going to have an issue with that? sarah: a lot of the talk since this latest accident with ethiopian airlines with the
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boeing plane is sort of the relationship between big companies and government. so i think we'll see a lot more discussion about that and where that's headed. vonnie: what happens next in the talks, sarah? we know there are some sticking points still and that potentially now any meeting is pushed off to june. do we know if there is any way potentially that might come back to april or may? sarah: right now officials are using videoconference rather than shuttling back and forth between the capitals. we know that light hies her, mnuchin they are speaking with their counterpart. it's not that the talks with stalled. really this lack of face-to-face meetings gives the impression that things are at a simmer as opposed to a sort of last dash to get a deal done right now. the earlest we're hearing is late april for the two presidents to meet. what seems clear is that no deal would be agreed to until they can see each other face-to-face
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and sign some sort of document and have that photo-op for both their countries. gus: one of the reasons why there was some speculation the chinese were pushing back was they were forcing -- seemed to suggest the president was desperate to get this trade deal done. one of the reasons he was desperate was he was worried the stock market wasn't exactly reacting well. the stock market's back on, does that take the pressure off the president? sarah: it's interesting because the stock market responds to the headlines, daily trade headlines. we have not had a terrible day for trade headlines in a couple weeks now. we see stocks leveling out. i think trump is very receptive to that. he knows -- even if it's priced in that they do sort of eventually get a deal, which seems to be the median estimate right now, it will probably give a little bit of a bump. also i think trump's under a little pressure to get a deal because these elections are
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coming up in 2020. he'll want to site tangible process. maybe the trade deficit narrowing. farmers benefiting when he hits the campaign trails heading up to that election. vonnie: going to leave it there. thanks to you. gus: time for a bloomberg business look. a look at some of the biggest business stories in the news. let's kick off with the news that's coming out of north. one of the world's largest aluminum producers fighting off a cyber attack that's affected operations across europe and the united states. it's switching to manual production process when is possible. hydroprovides highly specialized a aluminum parts to customers including aerospace and auto industries. citigroup will work with deutsche bank on that possible merger with commerzbank. they have received a mandate to advise germany's largest learned.
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commerzbank is being advised by goldman sachs. the secretary general spoke to bloomberg after the opec plus meeting which took place in azerbaijan. >> it is practically impossible bring down the exports to zero. the waivers, the extension of the waivers continue to be one market growing in the because of the importance and size. gus: that is your bloomberg business flash. vonnie. vonnie: still ahead, fures "in focus." we'll speak about the dollar before the focm decision tomorrow. little more softness today. that's another session, several sessions, half a dozen or more of softness for the dollar. today one of the currencies that's benefiting from that
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softness, the brazilian real is up about a quarter of a percentage point. we know that president trump will be meeting with their president later on. having a bilateral meeting with him. we'll bring you that live as well. this is bloomberg. ♪ ♪
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two-month extension, perhaps something beyond. >> we have to wait until march 20 to find out whether theresa may brings forward her plan a third time. whether it could pass. vonnie: this is a bloomberg special. the fed decides. gus: live from london i'm gus
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johnson. vonnie: new york, i'm vonnie quinn. this is bloomberg's markets. check those markets now. we're seeing a little bounce today as the fed heads into the two day focmc meeting. the dow is up almost half a percent. the mass dak is up .3%. chip stocks doing well. nvidia holding investor day. we got comments from the c.e.o. last night. account company has turned itself around after a disastrous fourth quarter. talk about having its chips in gaming, online gaming. up 4.2%. other chip makers experiencing a halo effect, including advanced my devices. my kron is up as well. -- micron is up as well. we're seeing some stocks drag on the s&p 500. as for other asset, the 10-year ield is 2.6177%.
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the vix is very calm today. below 13. gus: we'll talk about what's happening with the dollar. time now for futures in he focus. joining us, larry, the c.i.o. of efficient advisors. larry, the doll's been going down, down, down. to be ish does it have see? >> given the lessons they learned from december and january, it's going to have to be incredibly dovish. i don't see that happening. the first thing you have to do is put the brakes on the brakes with regards to the balance sheet. when you look at effective funds rates of 2.4 and three-year yield below that, there is tension. it's going to have to be a doosey for the dollar to continue to drop. gus: let's say it's not. kind of how much of a coiled spring is the dollar to the
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upside? larry: that's my feeling all along. i think how much fed depricing is left? you have to think of that. also the u.s. dollar remains the highest yielding currency in g-10. the biggest thing is all relative. we saw the trifecta of australia , the e.c.b., and japan easing policy there. it's relative. it's going to continue to be relative to the rest of the globe. until we see something really good happen overseas, i think the dollar will continue to reign. gus: the difference between real yield and inflation expect'ses in the states moving completely in the opposite direction. the other thing that stands out in the foreign exchange markets is the complete lack of volatility anywhere. what is it going to take to bring that to an end? larry: a billion dollar question. you hit the nail on the head. ven g-7, ex-british pound,
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lowest level in decades. i think it's going to require something out of the ordinary. not something that's already priced into the market. the odds of the fed doing this or that. it's going to be something much bigger than that. something we're not expecting for everything to incoil. when it does, look out. gus: give us a sense of the order of magnitude of what we'll see. as you say, we're in this incredibly tight range at the moment. volatility is incredibly compressed. when it breaks out, what are we going to see? i kind of read -- i read analyst reports talking about a big spike in volatility here. larry: at some point it always happens. as we have seen over and over again, the longer volatility compresses. that spring when it comes out is worse than ever. we saw that back in december. it might he remain like this for a long time. the move index that looks at treasury yields, the lowest it's been, all ma crow are low.
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it will have to be a fundamental shift in thinking with regards to central banks or economic data continuing to worsen overseas. not to mention brexit, french uprising, etc. it will be something out of the blue but changes the whole shift of thinking with raiding and investing. gus: french uprising. larry shover, thanks so much. vonnie: our stock of the hour. shares in the company rising 2.8% right now. the most in a month. outcome. liking the in >> this is the copper mine that focuses mainly in chile. they came out mostly in line with consensus. investors analysts like the outlook saying next year or this year will be another record year
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for the company. their c.e.o. telling bloomberg television earlier that benefiting from demand growth in meerging markets and also from a tight copper market. we know prices have been rising. we're looking at a great chart here which illustrates how good things have been. it shows the cost of mining copper per pound was $1.29. the cost when they were selling copper, the price of copper selling per pound was $2.87. and the company also raised that dividend by more than had been expected. calling it the statement of confidence in the company. remember the company is 65% owned by the founding family. a lot of benefit of that. gus: larry was telling us he expects the dollar to go up. that's not good news. emma: no. the dollar falling a bit today has been helpful to the miners. a little weaker ahead of the fed. we see base metals rising.
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palladium topping and setting a new high f you look at the bloomberg, we have the group being europe's second top performer today. this is actually looking at the for resources sector here the stocks 600. you can can see them rising 2.5% at the moment. we have also got the likes of b.h.p. rising today. you were mentioning this earlier in the show, guy, we're looking at north hydro, one of the world's biggest producers of aluminum suffering that big cyber attack. they don't know where it originated. they do know it perhaps originated in the u.s. they took another low. recovering a little bit the company has insurance and ealing with the problem. vonnie: our stock of the hour. thank you. gus: vonnie, check on the european markets. talk about what's been going on. emma laying out the fact that
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the mining sector is doing well. that's a benefit for the london market which is stock full of some of those mining stocks. she mentions we're also seeing north hydroweighing on some of the nordic markets. specifically the oslo markets. the dollar continues to weaken. we watch that quite carefully in advance of the fomc. overnight we desee weakness coming through from the chinese marker. the c.s.i. 300 trading down by around a half of 1%. trade story absolutely front and center once again. balance of power is coming up next. we'll be back in an hour to close the european markets. this is bloomberg. ♪
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david: phloem bloomberg world
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headquarters, i'm david westin. welcome to "balance of power." soros brief today, kevin and the white house. from brussels on that you's next andnd present -- eu's brexit. let's start with kevin at the white house. we have president bolsonaro coming. what does he want and what does president trump want? >> stylistically, they are similar to global leaders. the brazilian president crafting his image in the mold of president trump. but on substance, this is where things get interesting. president trump looking up some type of support, particularly in the region as he tries to get some support in the region for his border wall and the issue of immigration. from the standpoint of trade policy, this is where becomes a global chess game. the brazilians, they have that relationship


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