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tv   Bloomberg Markets European Open  Bloomberg  March 26, 2019 2:30am-4:00am EDT

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nejra: markets in asia bouncing back from their worst drop of the year. we saw the asia-pacific index drop 2%. on a headline level, seeing gains. under the surface, a mixed picture. japan outperforming to the upside. let's get into the details. joining us in mumbai is niraj shah. here in london is dani burger. raj, it's the last leak of the -- week of the financial year for india. why are we not seeing rebalancing moves? iraj: interesting question and
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good morning to you. the financial year, you would see some gyration. yet we are not seeing any big gyrations. green for smidge into the banking sector. the political dispensation seems to be what is working. is the only reason why the markets have not been to volatile and have been in an upward direction. while the markets have been steady, a lot of sectors within our top draw. draw. top the restructuring of jet airlines is interest -- is of
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interest. that is a bit of an impact. jet airways and the other particulars as well. very high-volume, strong price activity. it is great for the lenders. it is great for jet airways. it is not great for competition. i do not think people are complaining. in the market watcher, the last -- the top story has been jet airways. nejra: thank. ni, the msci asia-pacific index is up 1% and the standout is japanese equities. dani: it really is japan. theselook at wei, different indexes, we have the hang seng, china is down. there is this more than 2% gain coming from japan that is helping the index. a little bit of weakness from the yen from those risk off moves that might be helping out.
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in the futures market, we see some rallying as well as in the u.s. market. this idea that the drop in bonds is going to spill over to u.s. equities is not playing out. what the dovish central banks have done may end up being a boon to equities. i have a chart that shows the divergence between the u.s. stock market and the u.s. bond market. you look at the move index, we talked about this earlier, it had been stuck in this low volatility trap. over the past two days, this is the biggest gain in the move index since november 2016. at the same time, we are seeing equities not moving too much. that dovish fed helping out equities, but the bond market move might be overdone, which is why we are seeing that options arrive volatility gauge pickup from here. much, niraj you so shah and dani burger. what assets will rise on a hard
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brexit? you can join the debate, reach out to us, ib+tv on your bloomberg. my guest earlier in the show saying in the event of a hard exit, he would want to be buying 30 year buttons. -- bunds. >> the u.k. parliament has seized control of the process from theresa may. it will have to decide what happens next. last night, the house of commons opted to schedule votes on a series of alternative strategies . this potentially includes no deal, a customs union, a second referendum, even canceling brexit altogether. high-profile lawyer michael avenatti has been charged by federal prosecutors for trying to extort millions of dollars from nike. he also faces charges of defrauding a bank.
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he gained fame as the lawyer for stormy daniels in her lawsuit against president trump. he says he will fight the charges. the lights are coming back on after venezuela's second major power outage this month. to the nation's information minister. he blamed an opposition attack on the power grid. this is 10 days after venezuela managed to restore power following a week long outage. tore acrossat southern africa may have destroyed more than $1 billion of infrastructure. that is according to the united nations. the death toll from the storm has climbed to more than 700. the tropical cyclone also damaged roads, bridges, and dams. the u.n. says more than 100,000 houses have been partially or completely destroyed. 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.
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this is bloomberg. nejra: thank you. now let's get to our exclusive interview with the mizuho ceo. he says the fed decision to put interest rates on hold came sooner than he expected. >> my impression is global landscape has started changing. with a reversing of the yield curve symbolizing the trend. that happened in 2007. i think we have come to a time when we raise the level. there is a timeline. in 2007, the recession came about one and a half year later. i think it is a matter of how to view the situation. dollars have to be bought in crisis, but the same trend is the nguyen the yen.
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we are seeing yen buying when the situation gets uncertain. this is something we have to watch out for for a different trend from last year. pay close attention to the economic situation of china and others, especially because japan is affected by them. >> an up move for the economy as well as interest rates while boj is sticking to the price target. policy. easy monetary what do you think about the direction of policy? turns evene policy when the economy is silent. i think u.s. monetary policy changed to early as rates would have been normal to cut if they had been raised more.
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raise levels on the side of policy. 2% inflation target is not a goal. the goal is a stable growth. we have to consider whether the policy is appropriate against this goal. people knowboj these things very well and they are doing a very difficult job navigating monetary policy. that was the mizuho bank president and ceo. time, franceu.k. gives gdp for the fourth quarter. watch for weakness in the european economy. at 3:30 p.m. u.k. time, watch for an auction of $40 billion of two-year notes. in the u.s., the boston fed chief says he favors shortening the direction of the fed holdings as a way of preparing
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for the next recession. he says this would give the central bank room to stimulate the economy through quantitative easing without increasing the size of the balance sheet. knightly is still with us. let's start on the balance sheet. what would be the most effective way for the fed to manage the balance sheet? get a we could rebalancing of that portfolio to make them more ready. signalingarket is they are concerned about the slowdown risks. i still don't think that is necessary -- necessarily what is most likely to happen. we could get news that will lift sentiment. on trade, lots of negativity, but if you can get the deal, that can lift a lot of the global gloom. likewise, we saw that 20,000 figure.
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i did not think the 300 11 story in january and i don't believe the 20,000 story. the average is still consistent with a healthy u.s. growth story. the positives can still shine -- we won't need to see stimulus from the fed in the near term. nejra: that means you don't think we need to see a rate cut, but if the next move is a hike, how does the fed communicate that without causing extreme volatility? james: i do not think the next move is a hike. what we are looking for is a prolonged period. the fed is going to be very patient. there are a number of headwinds. the higher rates, the stronger dollar, fading support for fiscal stimulus, certainly that asian and european growth cap -- coupled with that. if we cannot get those trade
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andrtainties dissipating the underlying healthy u.s. economy, that will keep the growth story going. the fed did not really cut its growth forecast in a meaningful way. it actually left its inflation forecast unchanged. it's not as if the fed is simply -- jerome powell still talks about strong fundamentals. i think those will shine through. nejra: we have seen a strong reaction in markets. you have people like fidelity saying treasuries have gone too far. let's look at two yield curves. when we have talked about how it is different this time with the two tenths went -- this is happening in a different order this time. james: we have also got to look at it in different environment. the federal reserve has a much
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larger balance sheet. there are things that are different to previous cycles. it is a challenge. back,, a range of other things going on. we have just had the asian crisis. what we saw with the fed cutting rates aggressively. there was no recession at all. that was when the yield curve did give a false signal. glad you brought up 1998. we heard from charles evans saying we can see lessons from the 1998 rate cut for fed policy this year. 5.5%.hen, rates were at if we were to see cuts from the fed from here, which is what the market is pricing, would they be affected? -- effective? james: we talked about the self
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fulfilling processing. -- prophecy. slowdown.erate that it really hurts the banks. tighterds to a much financial conditions environment and big headwinds for growth. that is where charles evans is coming from. we find credit conditions tightening. thank you so much for joining me today. , chiefnightley international economist at ing. james will be continuing the conversation with us on bloomberg radio. apple unveils plans to take on netflix. will the move wow investors? we discuss that next. tune into bloomberg radio live on your mobile device or on dab digital radio in the london area.
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nejra:nejra: breaking news crossing the bloomberg. we are talking about a $3.1 billion deal. we have confirmation this morning. , the ceo largest deal buying competitor careem. pay $1.4oing to billion in cash and another 1.7 billion dollars in convertible notes when the deal closes. they are looking for regulatory approval in 15 countries where careem operates. bloomberg previously reported
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toails of the deal expected close in the first quarter of 2020. uber is preparing to file for an ipo. after years of chatter, apple finally reveals its future as a services company, but will let's shift get investors excited? it unveiled its new offerings. these include a news subscription for $10 a month, also a credit card tied to apple pay. one of the big headlines was apple's new video service featuring hollywood heavy hitters like steven spielberg as part of the tech giants plan to take on netflix and disney. joining us now is bloomberg's intelligence tech analyst. thanks for joining.
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>> tv, gaming, credit card, and the news service. not a very massive surprise. the question is going to be in the details. apple has got an incredible track record of high quality execution and certain points of differentiation. yesterday, we did not get enough specifics to make a clear judgment about how this could be. certainly questions over whether investors are going to be underwhelmed by this. pricems of share reaction, lower on this profit warning. is this concerning? are we expecting a bounceback? >> they put pressure last year.
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not a huge surprise. we have seen a slowdown in smartphone shipments in particular. the markets are expecting the oversupply in the memory market is going to shrink over the next two or three months. some people are expecting you will get a pickup in smartphone demand the second half of this year and the market will go to normal. these swings oversupply in the chip market are not a huge surprise to people. nejra: thanks so much for joining. there is a great column on the bloomberg this morning talking about samsung's warning being the tech industry's inverted yield curve. now let's get back to brexit. parliament has taken control and will decide the course of brexit. this leaves a number of options open, including a second referendum, staying in the customs union, and leaving without a deal. they could cancel brexit altogether. what does this mean for the
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u.k.'s trading relationship with the eu? our next guest says market equivalence is key. joining us now is kathy gibson at royal london asset management. great to have you with us. thank you for so much for joining. are goinging like we to get an equivalence that makes trading not disruptive. we will probably get a resolution. currently, we do not have one in place. the key for markets is liquidity, ensuring that is sustainable. the movement we have to share trading obligations. states we must rate the european economic area. available, or unless
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another venue has market equivalence. this presents an issue if we leave without a deal. means we will be erced to trade within the even if that ise not the primary listinga. nejra: if somebody wants to trade a stock listed at the moment in germany and the u.k., how could that actually work? have you seen challenges with clients who want to make that trade? yet.: not this is all to be seen post-brexit. if you have a german asset manager who wanted to trade u.k. listed security post-brexit forout a deal in place, example, on the london stock exchange and the french stock exchange, we will be forced to
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trade that security in the eea, or if that asset manager was , on the european stock exchange even if that is -- liquidity is less and pricing is poor. you are obviously talking to clients about this. i'm wondering what are the concerns and disruptions at the moment? this scenario has not happened ,et, you are hoping it won't but what kind of conversations are you having with clients? are -- we are not massively worried at this point. the fca quickly responded. they requested for more them and theetween
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regulator. i still see a solution presenting itself. it is in no one's best interest. nejra: in any case, what preparations are you making? >> we have adopted a common sense approach. we have had to re-paper some of our legal agreements as they have transitioned away from u.k. legal entities. this is a small undertaking. it requires legal resources, time, due diligence, so a lot of time, money, and effort has been spent ensuring we have a situation where we can continue to operate post-brexit. deal or no deal. nejra: how different could the city of london look post-brexit?
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cathy: london will probably remain unchanged. we have definitely seen transitioning of roles outside of the u.k.. contexts --ales contacts have already moved so they can continue to do that post-brexit. the human impact of those moves with modern technology and communication and the move toward electronic trading, that impact can be well absorbed. nejra: we talk about the risks post-brexit, the potential downside risks. if we get a deal, what is the potential upside from here for your industry and the way you work? could we see more of an influx of capital that has been held on the sidelines with all the uncertainty? cathy: i think you certainly can.
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obviously in a trading environment, uncertainty is never a good thing. once we get that behind us in whatever way that comes out, i think the markets will be able issuess on fundamental as opposed to political risks. nejra: great to have you with us cathy gibson, head of dealing at royal london asset management. speaking of brexit, the u.k. parliament takes charge of the brexit process from the prime minister. will it break the deadlock or just deepen the crisis? in terms of the reaction we have seen in cable, we see it higher when we heard these votes would be happening wednesday. we are struggling for direction now. more broadly, a risk-on tone. gains in asia. gains in u.s. futures after the s&p 500 closed flat yesterday. that 10 year yields dropping below 240 for the first time since december 2017.
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the treasury yield is moving higher today. bloomberg users can interact with all the charts shown. this is bloomberg. ♪
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good morning from bloomberg's european headquarters in the city of london. this is "bloomberg daybreak: europe" and these are today's top stories. the u.k. parliament takes charge of the brexit process from theresa may. will it break the deadlock or deepen the crisis? buying in bulk. china's president makes another big statement in europe. and uber makes its mark in the middle east. it is the ride hailing giant's biggest deal ever. ♪
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nejra: good morning come everyone and welcome to daybreak year. we are just under an hour from the start of cash acquitting trading here in europe. european equities closed lower yesterday along with global equities. the u.s. did not do so badly as the rest of the world. in terms of futures, we are seeing more of a risk on tone in markets. the future is in europe more subdued. struggling.ures hovering around 0.2%. up a bit.tures nothing too aggressive. 0.7%.quities up bond markets -- yesterday, the treasury yields dipped below
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7114. the inversion of the 10 year yield curve. today, we have been seeking by aboutving higher three or four basis points on the 10 year treasury yield. you can see that in the 10 year yield futures. europe, the poland -- the 10 year owned yield staying negative since yesterday. not a lot of directionality. perhaps, it will be unchanged of for a lot of the session. let us check in with juliette saly in singapore. great to see you. it is risk on from the headline level but there is diverge nce. >> in the chinese market, you have the cfi 500 closing lower by one -- by 1%. zeroang seng off by about
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-- 0.1%. yesterday comes the asian equities dropped about 2% on the msci asia-pacific index. a little bit of yen weakness pushing the nikkei higher. a estoril you was pretty flat today and india continuing to gain out by another 0.1%. i want to show you some stocks because samsung has been in focus along with other chipmakers. a surprise warning ahead of its results next week. samsung closing the session in day, off the lows of the off 0.6%. also in india, one of the big indian airlines after the chairman and founder resigned bowing to board pressure leaving the company. two-day gain for
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that stock since january. watching yields -- the australian and new zealand yield falling to records. another record low in new zealand though it has rebounded five basis points to 1.83%. nejra: it is all about the bond yields. thank you, juliette saly in singapore. another big defeat for the prime minister. theent has taken control of brexit process from theresa may and will put forward its own plan on how the u.k. will exit the european union. jeremy corbyn called the brexit plan and abject failure. >> i would like to congratulate the house for taking control. the approach of the government has been an abject failure. nejra: where does parliament go from here? openberg's european anchor, and a edwards joins us. -- anna edwards, joins us now.
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talk us through what happens. >> to resume -- theresa may the minister is in the process and disappointment in the government brings talking about how this upends the balance between the democratic institutions and setting a dangerous and unprecedented situation. we wait to hear exactly the details of how this will work but it seems the mps will begin been a pisa of paper essentially and asked to vote on the options that they consider palatable. they may be able to rank those for example. of ted clark.ea in terms of the options on the paper, that seems to be still to be decided. something around a second referendum or will it be more of a con -- confirmatory referendum on theresa may's deal.
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the is on although we know the commons is not in favor of that. or could the cancellation or the rebuilding of article 50 be options. government does not have to be bound by what parliament decides. theresa may says she cannot be bound by something in that she does not know where the vote will go. there still seems to be a disconnect between parliament and the executive. joining usk you for from westminster, anna edwards. joining us now from frankfurt is ann-katrin petersen. from allianz global industries. we have heard there are still so many options on the table in terms of where we go from here. you have laid out various scenarios for your clients. which of those is most likely in your view? ann-katrin: another interesting turn in the brexit saga.
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is thats clearly shows there is a wide range of possibilities still on the table. there will be a third meaningful vote on the deal. on the other hand, we may go the route to of a second referendum or no deal at all. all of this would then imply a longer extension of article 50. and also what i would advise is to not leave out the no deal scenario. default for the time being. when it comes to our positioning , i think for the time being, given the lack of clarity that we still see, we would await more clarity on the brexit outcome to take a more active position.
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especially a more active position regarding the pounds hurling. this may be the catalyst for another letdown of the sterling or for a measurable recovery of the sterling. nejra: does that mean that at the moment, you are sort of sitting on the sidelines and waiting to put that capital to work? and if so, would your preference therefore be in sterling or gilt? you, that is ank great question. in a market context, we would rather be on the sideline at the moment. it ist comes to equities, an interesting case. a classic example for beginning selective in u.k. equities. since the brexit vote, u.k. equities has been underway trade when you look at the ftse 100,
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given the weakness of the sterling and the competitiveness of the u.k. exporters, we still saw a decent performance in the u.k. equities. this is also the way how we handle things going forward. we think that there are attractive opportunities in the u.k. equity markets. toecially when it comes domestics as well as international earnings. they will become even more active once the visibility has increased at the conclusion of brexit. nejra: we are talking about assets that could rally if it becomes more visible. ishave a question which which asset will rise on a hard brexit? people's is not many base case that we will get a hard brexit but if we were to, what asset could rise? brexitrin: well, a hard
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would clearly be the worst case from an economic standpoint. thatwe could see then in scenario is the flight to save haven assets such as government bunds for example. when we look at the u.k. market as such, what we may see is that given the potential then for a further letdown in sterling, price competitiveness of international organizations could rise leading to international competitiveness. we also have to look at the disruption, potential disruptions to the supply chains which could also affect the u.k. -- you so so preempt elegantly preempted the chart i want to show. we had the european cash bond markets opening up and the bund
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is staying in negative territory. my guests yesterday said do not focus on this -- on what will happen, because there are technical factors. bearing all of that in mind, how difficult is it going to be for the 10-year bund yield to go back above zero and stay there? long asin: i think as outral banks manage to even the markets, and become even more dovish, this would exert downward pressure on long-term yields. in the eurozone, and in the u.s., we have seen that. what we would need to see is a convincing improvement in eurozone economic data as index mightgerman have been the first sign that
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there are some contain just leaves. contagion all of this in combination with major political risks and concerns being lessened would exert outward pressure. ann-katrin petersen, willnz global analyst stay with us. president trump's ally, senator lindsey graham has called for a new special counsel investigation this time to look into barack obama's government a probe into election meddling in 2016. towants the investigation
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determine whether this was just an effort to spy on the donald trump campaign. airstrikes across the gaza strip. it started a 10 stay with a rocket attack. sovereigntyisraeli over the golan heights. a toughu is facing election battle. apple has announced its new tv service at a star-studded event in california. it originated -- it introduced servicenal content called apple plus. apple says pricing and availability for the tv service will be announced later this year. tore acrosse that southern africa may have destroyed more than $100 billion of infrastructure according to the united nations. the death toll from the storm
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has climbed to more than 700. it also damaged roads, bridges, and dams. than onesays more enter thousand houses have been partially or completely destroyed. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. nejra: thank you so much. he kicks off a day of speeches from some of the presidents.s' when you are traveling to work, tune into bloomberg radio. this is bloomberg. ♪
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7:17 a.m. in london and way are 42 minutes from the equity market open in europe. global yields have driven the narrative. let us take a check on the 10 year treasury yields. up a few basis points. after dipping below to 40 for the first time since december 2017. dollar-yen on the front foot. as is the oil, bouncing back after it least today's of decline. some concerns around venezuela as well feeding into the bounce bounce back of the oil price. cable struggling for direction. questions on where we go from here on brexit. the indicative votes on wednesday. 1.3re at around the 130 -- to handle. not getting a lot of direction or european equity futures. a strong risk on in asia which
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may not carry through to the european session. uber has confirmed it is .urchasing a dubai-based rival joining us now is matthew martin. matthew, great to have you with us. will this get past the regulators? matthew: one of the things we are seeing from the regulators hashe region is that careem been so far ahead of the regulators' understanding. well have hadr as a good reputation and so the regulators are playing catch-up. the way that regular dinners verge -- regulators view the merger is that they are struggling to catch up. they say they will keep the brand's operational in parallel
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for now which may reassure the ereulators that thei may still be competition. it is only rational to think that that will move away. they are looking at the cost efficiencies which is obviously the rationale of the deal. from: we are hearing people familiar with the matter that deutsche bank is facing resist since from top qatari shareholders regarding its merger plan with commerzbank. matthew: what we are hearing from people familiar with the ,atter is the qatari investors significant shareholders in deutsche bank are opposed to the deal worried about the dilutive effect it will have. worried about losing their power in the company.
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it is making them opposed to the deal. that is some expectation negotiations will be ongoing. for the qataris they are looking at an investment that in the last few years, deutsche bank shares have dropped two thirds since they invested. it is not looking like a great deal for qatar. they are worried about that. nejra: bloomberg middle east reporter, matthew martin, thank you for your insights. let us get the bloomberg business flash. airbus has secured a $35 billion jet deal from china during the chinese president's state visit it to france dealing a fresh blow to boeing. almostl's value is
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doubled that promised by the french president. apple and goldman sachs have joined forces and the consumer credit business launching applecart for iphones which is tied to the app -- to the apple pay service. on alludes 2% cash back apple purchases made with the card. tos is a major advancement the payment services. nintendo shares have climbed the most in almost eight months after a wall street journal reported the plans to introduce console with of a a switch. experienced gamers and the other is for more casual gamers. the rays to decipher the bond market message is on. u.s. 10 year yield briefly touched the lowest level since
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december 2017 dropping below the 2.40 handle. the 1950'ssion since followed an inversion. investors are left assessing which way the global economy will go this time. ann-katrin petersen, allianz global industries analyst is still with us. what will happen next with this inversion? i have a chart showing that what is different this time is the last four times, use all the two first.vert is something different this time? absolutely, a great question. i do think something is different at this time. this time, it is the case that we are seeing more of a flattening from the long term
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which is unusual. and this is also why investors are on high alert because they pasthis inversion in the happening before a recession. usually, the -- the recession has been triggered by the short end of the curve and not the long end of the car. tighter monetary and financial conditions. while at the moment, we see a financialmodative condition. what is interesting here though see thewhile investors inversion as different, we might still and up in a situation where the fed is unwillingly triggering a self-fulfilling prophecy in the sense that markets are fearing a recession will loom sometime soon. a self-fulfilling prophecy in terms of the economic sentiment
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and tightening conditions are being realized. nejra: interesting that you point to the bowl tightening. -- bull tightening. policymakers are unlikely to turn away from normalization. the markets are not pricing that in but they are pricing in the fed plans for a cut. how are you advising investors to position right now? that, whilewe think we might not see any rate hike soon from the fed, we think it is not yet done with its rate hiking cycle and there may be another rate hike which the markets are not pricing at the moment. the way we are positioned at the moment is we think the market has had a very good run. since are the lowest
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december 2017. more than 80 basis points lower. a very good run. with the fed being patient for the time being, we remain on the sideline and neutral. we think u.s. treasury yields could be raised between 2% and 4%, 50 basis points. ok, range bound on treasury. petersen. ann-katrin a pleasure to have you on the show with us this morning. thailand'sws -- prime minister is holding a news conference in pink -- in bangkok after partial results show no majority of the seats in the first election in the country since the military to. -- military coup. you can stay up-to-date on that story on tv . that is it for "bloomberg
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daybreak: europe." in global equities yesterday with futures dead flat. this is bloomberg. ♪
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anna: good morning. we are live from westminster. i am anna edwards. cash day is less than 30 minutes away. ♪ anna: theresa may loses control. the u.k. parliament votes to take more control of what happens next in the brexit process. will this lead to a longer delay? buying in bulk. the chinese president makes a state visit to paris. and uber makes its mark in the
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middle east with a $3 billion deal for careem. a very good morning, everyone. 30 minutes to go until the start day.e cash equity trading a significant vote in the house of commons, another one. i might hear you say that. the government defeated once again. they called for members of their theparty to vote against process. 30 members of the party of the ruling conservative party ignored the call and voted against at the government lost essentially and lost three ministers in the process. the government is disappointed saying that it sets a dangerous precedent. the big question that remains is we now move through indicative votes tomorrow. will they tell us the path forward?
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will it be that straightforward or will they be used to beat the parties into line to try to get them to come around. theresa still believes her plan has a future to it. a lot to discuss in the markets as asian equities rebound from yesterday's losses. with that in mind, let us get to mark cudmore who is with us from singapore. mark, give us your thoughts on the rebound in the equity markets and the significance of it given the selloff that we saw yesterday. mark: a lot of noise. i do not think the macro environment has changed that much. the fed that was super dovish overall. dativesome really poor out of europe -- data out of europe.
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emphasizing that european assets will continue to lag. the third one everyone is talking about is the curve inversion. that an arbitrary signal does not imply much. if anything, it implies you should be polish equities. bullish equities. leading to the end of the growth cycle. not to the start of a recession imminently. overall, the implications are generally supportive of the broadly constructive picture. couple of weeks will remain rocky. we have brexit uncertainty and we still do not know where we will end up with the u.s.-china trade deal. we still do not have any solid news surrounding the trade deal. another 24 hours to contemplate what the yield curve really means. the yield curve it inversion. interesting analysis suggesting
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that normally we see the two tens invert before the three-year. this time it appears to be different. how significant is this yield curve? greatthat was a observation made by my colleague last night. i think it is another emphasis about how we should not be taking this as a particularly balanced signal. it is not always a valid signal. i think particularly this time given the strength of the labor market and the signals we are getting from the credit market and how supportive policy makers are, i think it is less likely to be a valid signal here. it used to be a terminal level for growth but now it is much more about regulation and money being pumped into the system. all of this cash, there is too
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much cash in the system, parked in these assets. negativeion of yielding bonds. appeal --r treasuries up here appealing by comparison ear appealing by comparison. i do not know what the catalyst will be but overall, it should be taken as a positive signal and not a negative one. the inversion story different because of the role we have seen played by central banks? let me talk to you about what is going on here in the u.k. in westminster because of the latest political developments. we are channeling brexit but it does not just relate to u.k. assets. if we see all rise hard brexit if we go down that path?
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and assets or german bunds the like? german bu will do well asds will well as the other safe havens. yen will appreciate and we might also see the yuan do well as well. a hard no deal brexit does not mean that europe is undermined or the con -- continental is undermined. it could mean we go into currencies such as the yuan. a medium-term play. i guess a no deal could also relate to brexit because the houses not in favor of a no
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deal. they voted to express that view in previous amendments but it could still happen. an outside chance. , thank you. you can join the debate and get involved in the question of the day -- which assets will rise if we go down the path of a hard brexit? let us debt the bloomberg first word news. -- let us get the bloomberg first word news. president trump's ally, senator lindsey graham has called for a new special counsel investigation this time to look into the barack obama government and why it decided to open a probe into election meddling in 2016. he wants answered was it just an excuse to spy on the donald trump campaign. the russian probe will be looked at. israel has carried out dozens of airstrikes across the gaza strip this follows a tense day that
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began with a rocket attack on a home in the center of the country. this overshadows president trump's decision to recognize the israeli authority over the golan heights. this move could prove risky for prime minister netanyahu. the lights are coming back on after venezuela's second major power outage this month. minister of the country blamed the blackout on an opposition attack on the power grid of the country. a week long outage earlier. the cyclone that tore across southern africa may have destroyed over one billion dollars in infrastructure according to the united nations. the debt toll has climbed to more than 700. it also damaged roads, bridges, and dams. more than one hundred thousand houses have
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been partially or completely destroyed. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. anna? much.thank you very live or us from hong kong. we continue coverage in westminster. coming up on the program, landing a massive deal as the chinese president pays a state visit to the french capital. airbus secures a massive deal from china. we bring you the latest from paris. bloomberg radio is live on your mobile device. this is bloomberg. ♪
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anna: welcome back to the european open. to go to the start of tuesday's cash equity trading. we are expecting to see, as you can see on your screen, a move to the upwards -- to the upside.
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blend yields in germany -- bund yields in germany. are we seeing some interesting moves here? stocksationships between and bonds and appetites for both. heavy selling in monday session. talking about m&a. uber has announced a $3.1 billion deal to c acquirea -- to acquire careem. it is one of the most valuable technology startup in the middle east. it has more than a million drivers. and is operating in more than 19 cities. matthew, give us the details of the deal. the transaction we're been following for some time finally reaching a conclusion.
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at $3.1s valued billion. inr will be paying for it cash as well as options on uber stock. this is coming ahead of uber's ipo later this year. iss deal, the context of it it is an attempt by bloomberg to stop some of the cash burn in the middle east where the rivalry between uber and careem has been in of across the middle east. techis a very young, savvy, deep penetration of mobile phones and the services. uber wants to be on top of this market and be the dominant player here before it goes ahead with its ipo expected in a few months time. at a busy time
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for uber. why is this deal so important to the business? at the: if you look intense rivalry that has been between these two companies, the middle east -- people often talk about it as one help -- as one homogeneous block but the reality is it is quite a few different countries. both is this rivalry means are burning through millions of dollars in cash trying to subsidize rides to try to do that market share play, grabbing market share from each other and starting to invest in launching other business lines as well like food, packaged delivery -- package delivery and using your careem wallets. moving into semtech as well.
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it is absorbing quite a bit of capital. it wants to demonstrate to toestors that it is going returning profitable. stopping the cash burn in the middle east will be helpful for that. anna: matthew, thank you so much for that update. a few martin joining us for that fascinating ride-hailing m&a story out of dubai. -- the chinese president continues his european charm offensive. he has announced a $35 billion order for airbus planes. it is a boost for emmanuel macron. almost double the deal promised in 2018. joining us from paris is maria, our reporter. macron wanted a more balanced
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approach to trade with china which it seems he got yesterday with this airbus order. how political is this deal? it can be nothing but political, i suppose. political justry from a technical point of view. $35 billion, twice the amount macron had promised but it also goes down well for the french president because he spent the whole day yesterday in paris as in for a two-way trade with china. he does not think europe should just be a takeover target for china. come -- companies in europe shut have more access to the chinese market which is what he got yesterday. chinese have the perhaps sending a message to the united states. well forot bode bubbling already under pressure. you could argue that the chinese
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are saying that if you want to lessen the controversy, you have to play nice. know that we were both in brussels last week and european leaders were talking about the extent to which it they need to be concerned about chinese investment in european companies as well as the role of wei and how concerned they have to be about that equipment. has the mood shifted? maria: it has. if you look at the amount of chinese money that entered during the european financial crisis, we now have the european commission active. that is why angela merkel and inn-claude juncker will be paris today. the european commission came out with a very tough report on the chinese where it said we see
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to thes a systemic rival european union and we are not naive. we know they do not play according to the rules when it comes to fair competition and climate change. wei is sparking concerns about cyber as being nice. the perception has shifted. we believe that merkel, juncker, and emmanuel macron will stress that when they meet with the chinese president today. anna: maria, thank you very much. live on the ground for us from paris. keeping an eye on the stocks. 10 minutes to go. opening ofpean trade. its turnaround efforts. more details ahead. and we are also watching other stocks and you can see that on the first go function of your
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bloomberg. this is bloomberg. ♪
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anna: welcome back to european market open and we are live in westminster as the u.k. parliament voted to take more
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control of the brexit process. we are expecting to see a bounce at the start of the european equity trading day. let us get a bloomberg business flash for you. >> thank you. apple has announced its new tv service at a star-studded event in california. the tech giant unveiled an original content service called apple tv plus. it will also revamp the app and provide access to outside channels including hbo and showtime. theing and availability for tv plus service will be announced later this year. is reportedly facing resistance to its merger plans with comber's bank. sure -- commerzbank. shareholders are worried that the deal would dilute its strength and its holdings.
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shares have climbed the most in almost eight months this after the wall street journal reported plans to introduce two new models of this which feared they could come as early as this summer and one model has enhanced features for gamers and the other version is expected to be a cheap alternative for casual players. that is your bloomberg business flash. anna? anna: thank you very much. let us talk about stocks we are this morning. six minutes to go until the start of the equity trading session. by joined they are covering chipmakers. let us go to you for the luxury sound systems. g and olufsen.
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>> they have said that third quarter sales have fell by 13% and they of cut their guidance a third time in four months. and they have also said that they are going to stop the share that had been supporting the shares. so, it seems a slowdown in tv's them unguarded. they are trying to catch up with the new demand. anna: one to watch. jp, chipmakers, what is the story? >> we had something overnight say they may fall short of expectations for the one quarter results. that is the bad news but they do expect some recovery in the chipmaker prices. we will see what the chipmakers will do today. , thank you to you both
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for joining us. you can get the latest stock stories on your bloomberg. back with more from westminster and the european market open. this is bloomberg. ♪
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♪ >> good morning, everybody. just a few minutes to go until the open. nejra cehic is standing by in our london studio. >> good morning. equity markets in the past couple days have been taking their cue from bond yields. yesterday we saw it did below 2.40 for the first time since. 2017 how much of that is short covering and is also filling prophecy? 10 year yields moved higher in today's session, 2.43 also moving away from that. we are seeing a risk on tone and markets today, wti and brent have bounced back, with concerns around venezuela.
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cable moving higher. there has been a risk on tone for markets in asia, with japan equities leading gains. chinese equities are a little lower. a mixed picture -- could we see a mixed picture in europe as well? futures are pointing to green across the screen. u.s. futures have also been in positive territory after the s&p 500 closed flat yesterday. as we open up, we see the ftse 100 opening in positive territory, not hugely to the upside, just by one or 2/10 of a percent. at the moment we are seeing moves higher in terms of equities, just waiting for an opening price. it can sometimes take a little way to get going. we are seeing green across the screen on a headline level in terms of these regional equity markets.


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