tv Bloomberg Markets European Open Bloomberg March 25, 2019 12:00pm-1:00pm EDT
european trading day. vonnie: this is the european close on bloomberg. let me update you on one story that broke a couple of minutes ago. abouttaris are concerned what is happening with the deutsche bank and commerzbank potential merger. that looks like it is progressing. doha does appear to have some concerns about this. the deutsche bank stock dropped and then popped back. the stock is down around 1% at the moment. a little bit of movement around on deutsche bank and the qataris having concerns. that remains a significant issue. let me take you back to the broader markets. europe is trending lower.
we are down around 0.5%. the bond market is where the action continues. massive move on friday. the german ten-year still in negative territory. slightly better investment census data came out earlier on. theresa may talking in the last half-hour, giving an indication she still does not have the votes to get her deal over the line. dup it does not seem are backing theresa may. we could see parliament take control of this process. the u.k. 10-year guilt is trading below 1%. the brexit story front and center. vonnie: we are going to go to the white house. president trump and israeli prime minister benjamin netanyahu. >> please, come. come.
please. moment, very important moment. it is my honor to welcome prime minister netanyahu to the white house. very special man. he has done a great job. i want to begin by expressing our condolences to the prime minister and the people of israel for the horrific hamas rocket attack on israeli homes this morning, which wounded seven civilians at least, including numerous children. our prayers are with our friends in israel as they carry out an incredible way of life in the face of great terror. israel'srecognizes
absolute right to defend itself. the despicable attack this morning demonstrates the significant security challenges that israel faces every single day. today, i am taking historic action to promote israel's ability to defend itself and to have a very powerful, strong national security, which they are entitled to have. in a moment, i will sign a presidential proclamation recognizing israel's sovereign rights over the golan heights. the state of israel took control of the golan heights in 1967 to safeguard its security from external threats. iran, aggressive action by and a groups in southern syria, --luding has the lot hezbollah continue to make the golan heights a launching ground
for attacks against israel. any possible future peace agreement must account for israel's need to defend itself from syria. we do not want to see another attack like the one suffer this morning north of tel aviv. in our meeting today, the prime minister and i will discuss these dangers as well as several mutual priorities in the middle east and beyond. we will be discussing other subjects, including trade. we will be mostly discussing his defense and perhaps offense. the unbreakable alliance between israel and the united states has never been stronger. people talk, but it is only talk. our relationship is powerful. at this moment, the american
embassy stands proudly in jerusalem, the capital the jewish people have established. they want to the embassy for many years. many decades. through many presidents. we got it done. built at a slight cost saving, about $1 billion cost saving. i want to thank ambassador david friedman for the job he has done, jared, everybody. i want to thank you all. thank you. are you enjoying it? and you love israel. >> and america. >> and america. i was waiting for him to say that. we have defeated the caliphate in syria. we have withdrawn from the oracle iran nuclear deal and imposed the toughest ever sanctions, and these are by far the toughest ever on the iranian regime.
effect.ving a big iran is not the same country it was when i took office, the day i took office. we had threats all over the middle east and beyond. iran is a much different place right now than it was. as i said during my state of the union address, we will not avert our eyes from the dictatorship that chance death to america, death to israel, and calls for genocide against the jewish people. we will not let them even consider that. the poison ofnt anti-semitism through our words and maybe even more importantly, our actions. in the last century, humanity witnessed the consequences of anti-semitism, and a world without a jewish homeland. in the wake of those unthinkable
horrors, the jewish people built a mighty nation in the holy land. something very powerful, something very special and important. today israel demonstrates that incredible possibilities when strong, sound, and independent nations chart their own destinies. there can be no better example of greatness than what israel has done starting from such a small speck of sand. israel is an inspiration, a trusted ally, and a cherished friend. the u.s. will always stand by your side. i would like to invite prime minister netanyahu to say a few words. we have known each other a long time. he is another one who truly loves israel. i think i can say he also loves the united states. before i signed the presidential proclamation recognizing
israel's sovereignty over the goal and heights, i would like to test golan heights, i would netanyahu toor mr. say a few words. thank you. [applause] president, my dear friend donald, you have shown consistently incredible support for israel, for our right to .elf-defense when we exercise that self-defense, you have never flinched. you have always been there, including today, and i thank you. yesterday, a rocket was fired from gaza deep inside of israel. it hit a home north of tel aviv and injured two small children. miraculously, no one was killed. not tolerate this.
i will not tolerate this. is respondingrael forcefully to this aggression. have a simple message to israel's enemies. we will do whatever we must do to defend our people and defend our state. after this meeting, i will return home ahead of schedule to lead the people of israel and the soldiers of israel. , it was so kind of you to invite me here, and it was so important for me to come here to the white house and to thank you. over the years, israel has been blessed to have many friends who have sat in the oval office. but israel has never had a better friend than you.
again.w this time and you show this when he withdrew from the disastrous nuclear deal with iran. i remember in one of our first meetings, you said this is a horrible deal. i will leave it. you said it. you did it. you showed it when you restored sanctions against a genocidal regime that seeks to destroy the one and only jewish state. you said, i will restore those sanctions. you said it, and you did it. you showed that when he recognized through slump as israel's capital and moved the american embassy. you said it. you did it. you have shown it once again today with your official proclamation recognizing israel's sovereignty over the golan heights. mr. president, ladies and gentlemen, this is truly a historic day. 1948 todecades, from
fire syria trained deadly from the golan heights. in june 1967,days the brave soldiers of israel scaled those daunting heights and liberated the go land. this has profound meanings for all israelis and the personally. one of those brave soldiers was my brother, who was wounded in battle three hours before the end of the war. a few years later as an officer, i let my soldier into syria, and as we came back to israel, we nearly froze to death in a blinding snowstorm. i am still here. point in 1967, israel
seized the high ground, which has proven invaluable to our defense because in 1973, syria launched his present act against israel, and the same heights able to absorb the initial attack. theessfully attacked invading syrian forces. outmanned and outgunned, our brave soldiers trying after one of the hardest fought take battles in our history. on those wars, we would have to wait nearly half a century until this moment in this room to translate our military victory into a diplomatic victory. that is why, mr. president, your decision to recognize israel's sovereignty on the golan heights is so historic. --r recognition is too full
is a twofold act of historic justice. the golan heights in a just war of self-defense, and israel's roots in the golan heights go back thousands of years. there been a handful of proclamations by non-jewish leaders on behalf of our people in their lands. balfour, great, lord president harry s truman, and president donald j. trump. mr. president, you have done it not once but twice. with your bold proclamation on jerusalem and your bold proclamation today on the go lan. golan isat a time when
more important than ever. from across the border in syria, iran has launched drones into our airspace, missiles into our territory. israel stood tall in 1967, just as it stood tall in 1973, israel stands tall today. we hold the high ground, and we shall never give it up. we have a saying in israel. i will say it in hebrew. it means the people are with the n.al line heights -- gola we now know there are two people golan, thewith the
people of israel and the people of america. thank you for your leadership, thank you for your friendship, and thank you for all you have done to make the alliance between america and israel stronger and greater than ever. thank you. [applause] vonnie: highly symbolic moment as president donald trump and prime minister benjamin netanyahu meet at the white house. the president signing a proclamation that recognizes israel's sovereign right over the golan heights. the golan heights of course lost by syria in a 1967 war. syria is saying the u.s. president's comments contravene
international law and show america's blind bias toward the jewish state. benjamin netanyahu praising president trump on this move. t all happens as palestinian sources say an israeli attack has started in retaliation for a second rocket attack on israel in less than two weeks. president trump formally recognizing israel's control over the golan heights. let's listen in to questions. i brought you a case of the finest wine from israel. i understand you are not a great wine drinker. hopefully you can give it your staff. [crosstalk] >> the president leaving the room, not answering any particular questions.
the u.s. recognizes israel's sovereign rights over the golan heights. let's bring in kevin cirilli, chief washington correspondent. benjamin netanyahu facing the prospect of reelection or no. this is more than a symbolic gesture on the part of president trump. it changes the calculus in the middle east. what do we know? u.s.-israeli relations at the forefront here. president trump formally signing that proclamation, which recognizes israeli sovereignty over the golan heights. they comes at a time when the israeli prime minister is facing an intense domestic issue in israel and probes regarding corruption in his administration. israelis are set to head to the polls and just more than a week.
domestically, it comes at a time when aipac, a significant israeli lobbying group inside of washington, d.c., is hosting its annual conference. democratic president of candidates have decided not to attend. earlier this morning, mike pence attending that conference and reiterating much of what president trump just said. israeli prime mr. benjamin netanyahu cutting short his trip to washington to go back to israel in order to address the increasing tensions between israel and palestine. vonnie: thanks to kevin cirilli. the chinese leadership is in france. macroning meeting mr. earlier today. we were always going to get deals from this. in the last few minutes, we have learned a long-awaited transaction between china and airbus has taken place.
we don't know what the details of the deal are at the moment. certainly very good news for airbus, which has been ordersing in terms of lately. getting a significant order from the chinese will help out. we don't know what the structure of the deal will look like. we don't know how much it is going to be for. in deal was first touted january, 2018. from an airbus point of view. i think it is hard to make a read across from the 737 next maxy -- boeing 737 story. get more on this. by the seniornow
economist at peak day wealth management. representatives from the u.s. going to beijing to try to get the trade narrative further on. in terms of the importance that has on your models at the moment , the global economy we are seeing in the slowdown, how important is that? >> i think it is important to see a deal between the u.s. and china in april. our worry is that will be terrorists be -- tariffs be removed? this is a complicated deal. we are worried whether it will hold in the longer run. there are complicated issues around inflectional property. it is more than just trade. guy: the trade narrative also
represented in europe there is some concern that the president is going to europe and european cars next. the dismal numbers, way below expectation. how much of that fear is already in the numbers? how much lower do you think that pmi fear could go? friday,the week pmi on it is true that germany is sensitive to what is going on in the car industry. globally, the car industry is not doing so well. we think germany could actually rebound in the second quarter and beyond. we think domestic demand in europe is strong. we are quite constructive on europe even though we have this week data on friday. vonnie: after hearing theresa may say that unless the house
agrees to no deal, it will not happen, what do you think is now the base case scenario in brexit? >> there is a lot of brinksmanship around brexit. our base case scenario is that we will extend into early april. that does not mean no deal brexit is off the table. it is probably a little underpriced in the market. our view is we will have a smooth exit out of the u.k.. that probably means a long extension. the path to get there is still complex. it probably means we will have some leadership change in the u.k.. it also probably means we need a wake-up call in parliament in the u.k., and in the meantime, if we don't have that, the risk of no deal brexit is still on the table. if it is not in march, it could be in april. guy: we will have to leave it there.
thank you very much indeed. vonnie: president trump's political fortunes changed instantly after robert mueller's findings of no collusion. joining, partially the focus switches to the southern district of new york. from your expense, how long will it take before we have any results? it is hard to tell. federal prosecutors are ready when they are ready to announce their findings and an indictment if that is dictated by their finding. the point to this is the president's potential legal end with thes not mueller investigation. there are other potential
investigations ongoing. vonnie: what are the primary concerns the president and his team should be focused on now? >> one concern would be to not overlook these other investigations that are still out there and ongoing. the president and his team have not seen the mueller report. it may be that there are details in that report that are potentially very damaging, very negative, although not quite rising to the level of criminal charges. unless that report gives the president a clean bill of health, they should not be too confident. and we know from the letters from the attorney general to congress yesterday that there is some reference in the mueller report to the president not been exonerated. we don't know exactly what that means. it was a quote taken out of context. all eyes on capitol hill will be
on the report in terms of what context that quote was taken from and what it means. how easy would it have been for the attorney general to make a decision on obstruction when the special counsel would not? >> that is one of the significant questions that comes out of yesterday's letter. the special counsel was appointed to make the decisions in this investigation, effectively taking those decisions away from trump appointees at the department of justice. what appears to be the case here is that mr. mueller deferred to the attorney general to make the ultimate call on potential instruction charges is confusing to many observers. we will have to wait to see the report and sheer the explanation as to why that was the case. our thanks to greg
bauer. guy: a quick look at the markets, we are prepared to wrap up the session in europe. and much more stable session. particularstocks in are giving back some ground. a more stable session has been generated. we still have negative rates on the german ten-year and the u.k. 10-year moving below 1%. we continue to watch develop in the british parliament. theresa may struggling to get her deal across the line once again. this is bloomberg. ♪ so with xfinity mobile
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is movehave seen today sideways after the moves friday. the bond market is slightly more interesting. we have round-trip on the german 10-year. yields are pushing higher early on. bidbond markets caught a early on. this is a better number coming out early on in the session. we still have negative yields on the german 10-year. an indication of how difficult the story is right now economically at the heart of your. we are seeing a modest move down. i don't think you can ignore that. the ftse 100 down a little more than most. there are some interesting moves happening elsewhere in terms of the banking sector, and we brought you airbus a couple minutes ago. let's give you an idea of what is going on. understand isi
pointing towards this. people are not overly concerned about it. there was going to be some resistance to the steel being done, potentially at an elevated shareholder level. others may benefit from what is happening here. deutsche bank and commerzbank trading negative today. airbus still negative. todayping in paris finding deals is certainly good news for airbus. it is not enough to reverse the overall story at the moment. we have a negative equity market outlook, but the bond market remains the big thing. that is the market. s&p 500 in the u.s. is unchanged. the banking index is down another 3%.
lots of economic data coming out this week as well giving us clues about inflation and wealth. i want to point to the yen as well. we are seeing just a little weakness to the yen. generally that has been there and is still there. the philadelphia gold and silver index is up. the price of gold is up. people looking for safety in gold. let's get to global macro movers. we have our g20 movers. in asia lowerocks a couple of percentage points overnight. we have some of the emerging market currencies bouncing back after a pretty disastrous day. they are bouncing back a little bit today. guy: let's get back to the brexit story. more than a million people marched through london this weekend, protesting brexit.
theresa may has been speaking in the house of commons this afternoon. the indications are that she does not have the numbers to get her boats across the line. we do have an amendment that could allow parliament to take control of the process and point towards the possibility of diffident those. it is confusing as to what happens now. i think it is hard to get any clarity at the moment. let's try. politics andof something of a polling expert joins us now on set. clear as mud. >> clear as mud because on the one hand the prime minister has a knowledge she still doesn't have the votes to get her deal through, but she seems to be clear that she does not want the u.k. to leave without a deal, even on the 12th of april. equally, she has said that if
mps this evening vote in favor and that process is rediscovered, and there is a majority in the house of commons in favor of a softer brexit, then the government will not necessarily accept the result of those votes. that does leave one wondering what will be the nature of the letter that theresa may will be writing to the european union between now and the 12th of april. she is have to get her deal through in order to get that extension to the 22nd of may. if she is not going to be willing to move in terms of the softer brexit, and to indicate a longer process by which we might manage to find something that will go through the house of commons, it is not clear what she will have something to say the european union that is going to persuade them to a longer extension. at the moment, she seems keen on
a set of incompatible objectives. is she going to be prime minister for much longer? is that the reason we find ourselves here? >> it is not clear as yet she has accepted the possibility she will not be. we have been anticipating for some considerable time that she will not be allowed to be prime minister for much longer. is thethe issues challenge to the conservative party in december and has continued to fuel criticism since. we are getting public criticism suggesting that tory mps do not trust her to negotiate the second phase of the brexit negotiations that would take place if eventually her withdrawal treaty actually goes through. they think she has made a mess of the first run. against that backdrop, i think
mps will be keen for her to go sooner rather than later. that is why some have suggested she's got have to be clear. whether that would or would not help take mps in her favor of a meaningful vote, we will have to see. so far, no signs of her accepting that signal. not enough signs that signal would be sufficient to get the boat through. vonnie: if there is another no-confidence vote,, which did not actually hold last time, she stayed on as prime minister, is there any reason to think it would be different this time, and even if she does go, who is qualified to take her place and >>iver something different one needs to understand that the ultimate weapon the house of
commons has in order to make the government sit up and take notice is the threat of bringing it down with a vote of no-confidence. it has been clear for some considerable time that if this government were to attempt no deal, there would be enough conservative mps who would be willing to bring the government down because they think the prospect of no deal is so bad that they would prefer to bring their government down. she also potentially faces the same risk if she goes for softer brexit, which is one of the reasons she does not want to embrace it. mayainly as well as theresa on downing street looking pretty tenuous, there have to be? about how much longer this government can keep going if it cannot get its deal through. who is capable of doing the job? there are lots of arguments. the membership of the conservative party would fancy boris johnson as prime minister.
that would cause a degree of disquiet among some conservative mps who do not think the quality of his management matches the quality of his rhetoric. some are suggesting michael cara mund the possibility. germany has voted remain. i think at the moment, i suspect there is a feeling that virtually any of these characters would not do a worse job than the current prime minister. at the end of the day, she has struggled with the job. it is not clear she has the ability to leave her party in a way that continues to instill confidence in her mps. how much patience is left among the electorate? >> the electric have long since come to the conclusion that the u.k. government has been making a mess of the brexit negotiations.
vonnie: or i do have to. the prime minister's of israel l there are a lot of people out there that have done evil things, bad things, treasonous things. hopefully the people that have done such harm to our country, we have gone through really bad things happening. those people will certainly be looked at. i have been looking at them for a long time. i am saying why haven't they been looked at. they lied to congress. you know who they are. they have done so many evil things. i will tell you, i love this country.
i love this country is much as i can love anything. , it was a false narrative. it was a terrible thing. we can never let this happen to another president again. i can tell you that. i say very strongly. know few people i could handle it. we could never let this happen to another president again. thank you all, very much. thank you, very much. thank you very much. [indiscernible]
>> up to the attorney general. it would not bother me at all. it would not bother me at all. vonnie: there you have it. the president and prime minister of israel following a proclamation signed by the u.s. recognizing the sovereignty of israel over the golan heights. the president talking about the mueller investigation and saying something like that should never happen to the president of the u.s. again. ensure thatshould is so.
he also said people behind the mueller probe would be looked at and he would not have any problems if he were to be made public. guy: let's return to what is happening with brexit right now. we are back with professor curtis joining us from the university of strathclyde. we were talking before we are listening to the president of the united states. theresa may departing. if theresa may departs, would you anticipate another general election? >> i don't think theresa may leaving will necessarily trigger another general election. the truth is there will be a case of once bitten, twice shy in that given that theresa may's premiership did not get anywhere, i don't think any
voters want to do it. theyer succeeds may find have to call a general election. for the purposes of argument, if it were boris johnson, i know one conservative mp who has publicly said they would not be willing to live with boris johnson as prime minister. there must be a question. guy: is the conservative party going to split? party is inrvative serious risk of splitting. risk of bringing down its own government because of the brexiteers or the remainders are unhappy about the directions taking over brexit, that risk exists. given there is not any other alternative administration that is capable of being sustained, if the government were to lose a vote of no confidence, we would an election.
vonnie: prime minister theresa may saying she would not like the idea of the public voting on her deal. it has to remain in parliament, and it is up to parliament to switch brexit options today. we got nowhere. maybe today saying ireland and the u.k. can work something out on the border bilaterally. is that how this comes to a conclusion? there is a piece of this that is broken off between ireland and britain? it would be difficult to imagine ireland willing to negotiate in bilateral negotiations with the u.k. given that the european union has stood behind ireland in the brexit negotiations. the truth is the strength has come from the fact that he has had the eu behind him. i don't think you would be wise
to break that link. arehe end of the day, we going to have to sort this out with the european union. we can ask questions. we can certainly ask questions of whether or not the european union was wise to try and deal with the northern ireland situation in advance of having negotiated a trade deal with the u.k.. i understand the argument. the european union cannot negotiate with a country that is currently a member. anyoneitics of this is that knows about british politics knows ireland is potentially the most divisive issue that exists. it has split our parties more than once. the easiest way of solving the issue is to have much greater clarity about what a long-term relationship with the eu would be such that everybody agrees there does not need to be a backstop because we would be negotiating a trade relationship
that is significantly close with the european union that the eu would not be concerned of having an open border. vonnie: will history judge recently as having done anything wrong? >> i think history will judge that she did not handle the brexit negotiations that well. allowing the negotiations to be structured the way they were, something her secretary at the time was opposed to. that was certainly a mistake. since mid-november, the truth is trustility to maintain has been eroded by her continue reluctance to give a straight answer to a straight question. politicians understand why politicians will want to circle the coop. she has reached the point where she needs to be up front about what she is willing to do and
they had planned to vote today on legalizing marijuana. they will not do so. i want to bring you up-to-date with the situation in the middle east because we know president trump just signed a declaration recognizing the sovereignty of israel. we are getting foreign reaction from that. russia and syria both sending out messages that they are not pleased that this happened. that the u.s. is recognizing the golan heights as sovereign to israel. stephen lighthizer, steven mnuchin heading to beijing was again this week as critical trade talks continue. a news conference do shortly. in search a new deal of a chinese customer. we will come back to that in just a moment. macro strategist in
london today joining us on set. it afternoon. think heg in paris, i is good to be meeting the german chancellor tomorrow. terms of how the relationship between europe and china is working at the moment, how much of that is characterized by what is going on between the u.s. and china with its trade talks ongoing. it cannot be an accident that china is going to europe and signing good deals. >> it is a good question. about the european and chinese relationship. it is clearly a strong relationship on the export side. there is also concern from europe on what chinese investment is doing. have a. would like to better trade deal with china. it does not need europe to help it.
chinese side, they obviously do not want to be left by themselves with the u.s. and europe ganging up on china. they're are trying to find a middle path. what i think will happen this week and what is important for the markets is that if we get a constructive visit from president she europe, it will when theycial markets go to china, they were better discussions, and that will set up a more receptive trip when he goes to washington. it is important what happens this week. i think it as to the positive sentiment markets have in china at the moment. guy: what we did see on friday was very weak german manufacturing data. it is not hard to draw the line between what is happening with that data and what is going on in terms of the domestic chinese economy in terms of the import story. if you are in control of german
manufacturing at the moment, give us your experience of what you are seeing in china, what you are learning about the chinese economy, and how that is meant feet into the german data. >> i think you are right to link germany and china. i'm surprised by the pmi data. i want to china last month. clients have good links with the corporate particular. they are telling us that their corporate clients are becoming more constructive. they did not think the u.s. would impose high tariffs. pboc in terms of its deleveraging was softening. for those reasons, the client base in china felt the economy would begin to slowly pick up, and the one that had already
strengthened was reflecting that. thatt pmi data in germany reflected the sentiment. it could not be a lagging indicator. maybe people in china have become too optimistic to quickly. how in unit is china to flu.ng prices we get swine individualithstand black swan events like that while negotiating new trade help it clearly does not china's outlook at this stage. the economy is a lot more resilient than people realize. it has become much more of an economy dependent on the domestic demand. the current account surplus has shrunk dramatically in the last 10 years. even if we do keep on getting these external shocks, the
policymakers in beijing still have scope with which to withstand a shocks. the concern is if president trump chooses to shift to an aggressive strategy. we would see the trump administration pushing for tariffs to increase to 25%. known in the markets is prepared for that scenario. >> i have to ask you your favorite currency trade these days. >> i was in australia couple days ago couple weeks ago. if i were to correct china's outlook, we also feel that the reserve bank of australia is unwilling in the short term to cut rates. you will probably get a combination of a squeeze that pushes the australian dollar higher. i am bullish on the dollar in the short term. i don't want to sell against u.s. dollar.
vonnie: absolute pleasure. we will hopefully have more time in the near future. speaking of markets, let's have a quick look at where we stand. the s&p 500 is down about 0.2%. a choppy day. the dow is down about 0.10%. below 17. still yields are where they were at the end of last week. the 10-year at 2.41%. the dollar index about 96. we're waiting for all the economic data this week. this is bloomberg. ♪ mberg. ♪
israeli prime minister benjamin netanyahu visited the white house. israel captured the golan heights from syria in the 1967 middle east war when it salvatore -- and it sovereign tour is not recognized by the international community. president trump's actions gives him a political boost weeks before what is expected to be a close israel election. today i'm taking historic action to promote israel's ability to defend itself, and really do have a very powerful, very strong national security, which they are entitled to have. mark: serious as president trump's recognition of israeli sovereignty over the golan heights makes washington the main enemy of arabs. a close ally of the president says that mr. trump felt a sense of relief after learning special counsel robert mueller's report had cleared him of conspiring