Transcripts For BLOOMBERG Countdown 20160526

prevails. And when push comes to shove people realize there would be an enormous damage, to both europe and Great Britain, should britain walk away. A warm welcome to countdown. I am an edward. Just past 6 00 in london. Manus will be joining us from dubai. Let us talk about what is happening in oil and stocks, a chart next to me that really encapsulates the relationship between these two asset classes, if you go back to the middle of last year. They have moved very much in synchrony. And of the oil price tending to move in lockstep, or least in the same step. Oil prices over 50 a barrel or the first time in six months. A oneweeks hitting high. But i should say that old has actually snapped its sixday losing streak. Not all good in the overnight trading environment. Lets talk about the risk radar. We have to feature the price of oil because we have gone on the brent price over 60, up high 7 10 of a percent. Theda, venezuela, nigeria disruption playing in here, as well as the drop we saw on those government figures in the United States. The u. S. Do year yield in here can see at the bottom of your screen there. That yield has fallen away a little bit in just the last 24 hours or so. Pausing seems to be one of the things going on in terms of the market. The work function on the bloomberg reading 53. 8 of a chance of a rate hike by july, factoring into the markets. Commentary from parker at the fed, as well. You have the best gain since january as these conversations continue to dominate markets around what the fed will do in june or july. Let us to the bloomberg first word news. Trillion Hedge Fund Industry may lose about a quarter of assets next year, that is according to tony, blackstones billionaire president. He is saying that they face a day of reckoning, and that will be pretty painful for awful lot of places. Alibaba shares fall after the ecommerce giant says it is being investigated by the sec accounting practices. Looking at data reported from the single day promotion. The biggest shopping day. And consolidating results from an affiliated company. Alibaba declined to cal comment. Henry clintons use of a private Hillary Clintons of a handingemail server, republicans an additional line of attack against the president ial frontrunner as the Campaign Election gets underway. Richard branson says he would be devastated if britain votes to leave the eu. Speaking exclusively to bloomberg, the billionaire founder of virgin groups in a brexit would be in normas began enormously dangerous. Devastatedwould be if we had to pull out of europe. I hope that sense prevails. And, you know, when push comes to shove, people realize that it would be enormously damaging, i think both to europe and Great Britain, should britain walk away. Businesses have warned of economic damage to protests continue. Strikes at the refineries and railroads will intensify today, at the government refused to back down on a labor law. The eight refineries all on strike, calling for elliptical workers to walk off the job today, and putting 19 nuclear plants. Meanwhile, the National Railroad is entering the eighth week of protest. , the 200 meters river, severed a round the area. People asked to leave their home. Break is not because of it falling away. Global news 24 hours a day. Powered by our 2400 journalists around than 150 bureaus the world. You can find more stories on the bloomberg at top. Back to you. Anna selina wang there. Thank you. Julia sally has details for us. More to gain coming through the asian session. Good morning to you. Yes, we have a pretty good session coming through in japan. Which is lifting the eac regional index. Nikkei 225 up to the gains from wednesday. That is on a rebound by the yen. Just to show you the best performer on the nikkei, by 6 . This is after it went to 174 million, relating to the fuel testing scandal. Investors seem appeased they are getting clarity on what this will cost the company. In shanghai, the market is down by 1 . That is actually a threemonth low. Reallyseeing crude price weigh on transportation companies, coming under pressure sending that market lower, hang seng coming after lunch break down one third of 1 . You can see the strong performer, up 2. 5 . That is of course as we saw brent hit 50 a barrel for the First Time Since november. Australia looking pretty good, up high one quarter of 1 . New zealand came through with a budget today, its stock index is up by 6 10 of 1 . We have seen the key we fall against the dollar, one third of 1 . You can see the regional index, weakness coming through from telcos, consumer, and tech stocks. The gas sector really supporting the overall half a percent gain as we see the crude price supporting. A lot of the Energy Players in the region also doing a lot of the heavy lifting today. You can see australia, looking very good. Kong,entioned in hong also very strong. And just quickly, mentioning the weakness in the kiwi. But i also want to show you the malaysian ringgit. It has sent emergingmarket currency higher. Ringgit the best performer in the region, up today. Anna . Julia sally in hong kong. Let us bring you uptodate with what is happening over in japan. Support,ing toccata seeking to take control. This is according to the nikkei. Be aware this is taking place. The daily , keeping limit. This is just in the last couple of minutes or so. The airbag crisis for a period of time, seeing forcefully rupturing and and metal parts at drivers and passengers. At least 30 deaths in the u. S. And malaysia have been linked. Automaker is led by honda, recalling at least 60 million airbags globally. So this is a real global story. As we were saying, the share jumping 24 on the nikkei report that the private equity group kkr could be offering support, seeking to take control. We will keep monitoring the story very clearly moving the market. Top of the agenda as g7 leaders top the summit today. Yvonne man joins us. Talk us through what is happening today. There is a host of global topics to discuss. That is right, anna. And those talks just started, underway after a brief session from the g7 leaders. This is the first time in eight years we have seen the g7 summit here in asia. It has been the perfect platform for the Prime Minister abe to deliver messages of growth. Coming off the minutes between the g7 finance chiefs, for there was not much incense is how to come up with this global response. Thearticular, japanese and economy, how they will come into the aid of the recovery. We did not get much love. There was friction between japan and the u. S. When it came to affect policy. Jack lew, the u. S. Treasury secretary, said the recent moves in the yen were not overly disorderly, not all that volatile. Hasjapanese saying the yen a one side that is speculative. This discussion of intervention still remains to be seen and answered. On the flipside, you have a likes of the u. K. As well as germany not in favor of extra deficit spending. So how is japan going to bridge viewsap of competing . Here is what chair abe had to say. Determined to work closely with the United States, in addressing various challenges of the international community, based on our robust alliance, namely the alliance of hope between japan and the United States. I know that china is on the agenda. Even though no chinese delegates were invited of course, at least the leadership are not there. But that does stop them from talking about chinese growth and the steel situation there. Yvonne yeah, as well as the weakening yen, and the tensions mounting on the south chyna t. Una sea. That is an interesting dynamic we do see, does raise the question of the relevance of g7. And you do not have a country such as china, the second largest economy in the world, joining the discussion. You can actually throw in india as well for that matter, not in the g7. Thewe did hear a lot of south china sea. We have seen china flex military muscles even more. Just last week, washington talk about these two Chinese Military jets that carried out this unsafe intercept, through u. S. Military aircraft. And president obama urging that a peaceful resolution be made here. And the tensions between china and the vietnam, between china and philippines are not of our making he is pushing blame here and saying china is within the power to was all issues. When it comes as some kind of maritime agreement, the question is, are we going to see some kind of consensus here . We see the u. S. And japan relatively on the same page when it comes to those Maritime Security issues. But europe is another story. They may not be on board, given the strong economic ties with china. There are complex relationships there. But they are deepening. Anna yvonne, thank you very much. Tabs on theeeping g7. Chris watling, ceo and chief Market Strategist at longview joins us now. Thanks for coming in. Really fascinating conversation. Gompted by the g7 and other events. This time, a story we have in a bloomberg about how Angela Merkel has fewer pro austerity allies this time around, Justin Trudeau looking, as they say spending on investment for structure and the like. Where are we about how much global austerity should be the theme . How much government should be doing more spending to help Central Banks chris i think we are shifting. Clearly, the consensus three years ago was all austerity. We are now moving. The debate is changing. The feeling is not enough Global Demand in the world. And governments need to do something, terry policy is running out of bullets. Fiscal is the last alternative. Having said that, i dont think it is hard to see a consensus for fiscal stimulus. We did not get me from finance ministers or the Central Bank Government on consensus across the board. And really, germany is not going to take the bulk america is not in the right place. It is not going to take other things. Anna does it do the Global Economy any favors if we are all on the same page in the conversation anyway . I know the u. K. Delegation is going, making noises around Everybody Needs to have their own path on this. We dont need to be on the same page. Chris that is right. It obviously helps in Global Leaders are all pushing in the same direction. It helps deal with global problems. So if you think more fiscal policy is the answer, there are certainly a lot of people that do, that would be helpful. But no, clearly i think we would be very surprised if we had that. Anna are we running out of room in terms of Monetary Policy . Looking at ecb officials yesterday at a conference in madrid, talking about the need for structural change. Coming on and tell me there is been quite a lot of structural change coming on. For morestill a clamor structural change from the ecb. They see themselves as caring too much. Chris Monetary Policy has carried too much of a candle. We certainly need more reform. More dramatic reform, there is really too much debt in the world, too many zombie companies. Cheap money does not help. While you do Structural Reforms on the surface, i dont think Monetary Policy has reached the end of the line. There is more they can always do. I dont know if it is the best thing to do now. We need structural reform in a much more dramatic way. Anna i have a chart here talking about Global Equities rallying with global prices, we have gone over 50 for the first time in six months on a barrel of brent crude comedy you see that as sustainable . Chris i think oil will be raised now, between the high 20s and 55. Really stand back and think about oil, it is been in a boom and bubble for 10 years. And the other side of that is not nearly back to where you were before. You have to unwind still excessive applied. Anna we have the government warning a specific about 100 oil again. Chris watling, ceo and chief Market Strategist at longview, staying on the program longer. Here are highlights for your david at 9 30 u. K. Time, we get spurs quarter gdp data for the economy. And James Bullard delivers a presentation to the official Monetary Institution for him and singapore. That is at 10 past 11 00 u. K. Time. And we get u. S. Durable good nor numbers, suggesting they will be more interesting than normal giving the strength of the data coming out of the u. S. Right now. And half an hour later, we will get russia updating us on the gold and foreign exchange. Of next on the program, the recipe for a rate hike, as said president kaplan says the u. S. Job market and job growth are rising ingredient for the move. More on that. Anna welcome back. If you are watching countdown. Live from london, 6 19. 7 19 in frankfurt and paris. Here is selina wang. Takata surges in tokyo trading, at the nikkei newspaper reports that private equity firms may take control of the company. Earlier, they said they would retain investment in the firm. A spokeswoman for the embattled airbag maker said she cannot comment immediately. At t as made a bid for yahoo , intending to acquire the company for internet business. That is according to people familiar with the matter. It had previously been thought that the Telecom Giant had decided against making an offer. At ts fell 5 yesterday, was little changed. Profit recently lower estimates, the studio behind the hunger games so a 22 jump, as revenue disappoints and the box office. Orange is a new blacks and the acquisition of pilgrim studios also help with the result. However, lions gate took a hate from the poorly received divergent film and the gods of egypt. A billionaire said he is considering buying nonperforming loans in china. Speaking to bloomberg tv, he said there could be an opportunity in beijing followthrough with plans to sell the loans as assetbacked securities. Im getting really interested in china in terms of distressed loans. The government has announced they are trying to develop a program to securitize the distressed loans there. If they do that with transparency and with reasonable pricing, that would be a very banks,lp for the chinese and it will create an opportunity for people like ourselves. Investorhe billionaire and facebook board member peter feels secretly helped bankroll the defamation tsas against gawker media. He told the New York Times he made a financial contributing to the suit brought by hulk hogan. A tape showing him having sex with a friends wife. The publication inflicted emotional harm. That is your Bloomberg Business flash. Joining usa wang there with a Bloomberg Business flash. Let us get to the macro picture from the fed. Dallas fed resident Robert Kaplan said the u. S. Economy is moving to full i employment. Speaking in houston, he push the case for not raising rates. We should try to normalize as fast as we can. But the Secular Forces mean i think it will be slow, and gradual over a period of time. That is what i will be likely advocating. So that is what i think you will see happen over the next short period of time. Anna chris watling, ceo and chief Market Strategist at longview is still with us. Of thewhat do you make comments you have been getting from the fed recently . You would have to be under a rock really, in a market sense, to not have heard the fairly hawkish message coming through. Chris i think it is pretty clear they want to move rates up. It is understandable, given some of the data they have seen. Payroll, wage inflation, labor costs are rising a bit and so on. Had some good housing data earlier this week. I think it is pretty clear message, across the board i would say. And we have not really heard it from janet yellen, we heard from dudley, normally about as dovish as she is. Exactly, perhaps that will be the final tick in the box. The markets clearly heard. Anna i have a great chart here that looks at the other side of things, talking a lot about the chance of a rate hike and that takeat 32 or so actually the work function on the bloomberg. Sorry, 53. 8 for july is a number i was thinking of. This chart is actually the chart of fed easing this year. And the chances we see that plummet, eurozone options do not see a rate cut this year. And the chances drop below 5 . Position you how far we have come, the chance of that happening was a 35 in december. You know, a short memory, which can happen in this business. You forget how far we have come. Chris that is right. But i was certainly the labor market, plenty of panted when we thought the world was falling apart for the u. S. In recession. The markets do change dramatically since then. And i would not be surprised if we actually got back there later this year. Because i think the market is horrible to get back some of the gains later this year. Yeah, i mean we priced it out the Economic Data seemed a little bit steady. We had a bit more confidence. Anna when we hear people like Patrick Parker talking about how he sees two, maybe three hik you do not go along with thate chris it is built to much on cheap money. The more you take it away, the more it comes under pressure. To put in two or three, i would be very surprised if you got three. Absolutely. Anna talking about the fed taking it away. But other Central Banks not so much. The bank of japan, ecb still doing quantitative easing and other programs. Do you see them both on hold . Chris no, i think the bank of japan was to do something else. I expect something in the next oftings, one of the next two the several weeks. The question is, what they do. I will not be sure they go more negative, something more creative. But if you look at the japanese data, some of it is quite troubling. I think some of the looks really quite weak. You can almost make the argument that japan may be leading to a recession. They will do something, im sure they will. Anna monetarily, the gdp data, some of the details. Ecb on hold . Chris i think so, for now. The european recovery looks better than many other parts of the world. I think so. Anna we had all of those ecb voices in the last conversation, talking about the need for structural change. Does feel like a baton passing. Chris watling, ceo and chief Market Strategist at longview economics. Up next, joined by sir make rake, getting his thoughts on everything from brexit to telecom, to the middle east to banking. We will spend half an hour with mike rake, here on countdown. 6 26 here. We will take a short break. Anna welcome back. 6 30 in london. 7 30 in brussels. Let us get the bloomberg first word news. Here is selina wang. Ina the 2. 9 trillion Hedge Fund Industry may lose a quarter, according to tony james, blackstones billionaire president. He said the industry, having the worst start since the Global Financial crisis, faces a day of reckoning and shrinking that will be pretty painful for a lot of places. Alibaba shares have fallen the most in four months, after the ecommerce giant is being investigated by the sec over accounting practices, and whether they violate federal laws. Theyre looking at data reported by the single day promotion. Alibabas biggest shopping day, and how the consolidated results from affiliated companies. They declined to comment beyond the disclosure in the annual report. Use of alintons private email system while he was secretary of state did violate state department rules. That is the conclusion by the inspector general. It will hand republicans an attacknal line of him as the Election Campaign gets underway. Businesses have warned of economic damage as protests in france continue, as strikes at the refineries and railroads intensified today. After the government refused to back down on labor laws, and are ons eight refineries strike, electrical workers walking off the job today at 19 nuclear plants. They are entering the eighth week of protest. A leaky water main has caused part of the riverbank in florence to collapse. The sinkhole appears close to the river arnu. Severed, ander was local people were asked to leave their home. Officials say the collapses due to a rake in the water pipes, and not because the riverbank is falling away. Global news 24 hours a day, powered by 2400 journalists in more than 150 euros around the world. You can find more stories on the bloomberg top. Anna selina wang joining us there with the business flash. This to bring you uptodate with breaking news, we told you are the top of the hour of the nikkei was reporting that kkr has offered takata support. About thelk to nejra drop their varied and do some of our own reporting, they will hold talks with potential buyers. There could be other names still in the fray. You will remember this is a business that has been suffering because of problems it had with airbags. Let us get to nejra. She has been monitoring what is going on. This is a big story. Nejra i just wanted to show you the stock move. Kata is actually surged by the daily limit in tokyo trading, after the nikkei newspaper report that it may be taking control of. Part of the biggest safety recall an Auto Industry history. You see that spiked up 21 , as of 2 p. M. Tokyo time. Now just in other asian markets, a lot going on today. I just have to switch the charts around quickly for you. The shanghai composite, i want to start on, chinese stocks are down for a third day. Shanghai composite has fallen level,he 2008 lowest in three months. Above 50 foris the First Time Since november, they are concerned falling fuel prices could hurt chinese transportation companies. Airline stocks have been slumping. Overall, a pretty strong session in asia. Heading for the biggest twoday gain in more than a month. We see the msci asiapacific index raising to a oneweek high today. This is on optimism that the Global Economy could actually withstand a rate rise from the fed. We havent seen that risk not just an asian stocks, but also in europe and the u. S. And another big story of course, with oil rallying, we have the norwegian ringgit, the malaysian out of 31 major currencies rallying with major oil. And finally, just want to show and goal. N the dollar approaching a resistance level, signaling it was overbought. We are seeing that pullback. Actually youning, can see it here. This is the dollar weakening 10 seconds,yen, lots of confusion over what caused that. Has a stronger. Gold up for the first time in seven days as well. Risen,rent crude as as nara was just saying, manus joins us from dubai. Good morning. You have a chart of the hour for us manus we have indeed. The question is, how will long above 50 . We go to opec, almost the giveandtake, what i have for you is u. S. Stockpiles coming down after 11 weeks. We have not seen a drop off like this since the start of the year. The lowest level since september 2014. Opec is drilling. What goes into the market, the u. S. Is taking out of the market. The question is, is 50 the new peak . This is all as we prepare for the opec meeting, just a couple of days. And of course0, you see a rush of notes now. If we get a freeze, it is not officially on the agenda, what is that due to prices . , no freeze does that take us back to 45 . The global conversation in play everywhere. Anna absolutely. We will talk about brexit. The billionaire founder of virgin group, Richard Branson, said he would be devastated if britain close to leave the eu. Speaking exquisitely to bloomberg, he said it would be enormously damaging both the u. K. And europe. Richard and i would be devastated if, you know, we were to pull out of europe. The, you know, it has been a wonderful thing for europe to have written as part of europe. And it would be wonderful for britain to be part of europe. You know, i am old enough to remember the days before we were part of europe. Exportw, if i wanted to my products to europe, i had to pay a 35 tax. If i wanted to import products from europe, i have to pay a 35 tax. And the bureaucracy of all of these things going on, we could not take employees from europe. He cannot go and work in europe. Cannot live in europe. You know, all of these barriers have been taken away. I just hope that sense prevails. And, you know, when push comes to shove, people will realize that it would be enormously damaging, i think both to europe and Great Britain, if britain was to walk away. Ke,a and sir mike ra chairman of bt group joins us. Great to have you on the program, as always. A lot of talk from Richard Branson, you agree with. You have been campaigning to stay in the eu. He talks about penalties to trade or tariffs on trade, if we were to leave. He quotes figures from history. Rules, we can trade with an average tariff of just over 4 . Is it a myth to say we will have huge barriers . Mike not just the Tariff Barriers to trade, to recognize it would take many, years to renegotiate all of these treaties including a basic wto deal. Really have to years to do that. The critical thing is nonvery to trade, making it easier. Companies cooperative early middle size companies, are able to export the market of 500 Million People using the same minimum the rocker see right across europe. And they will benefit from those nonTariff Barriers which are subcritical. Annamanus a very good morning o you. Manus down in dubai. I understand you have written, laying of the details that brexit, in terms of economic shock would be. A lot of people might think it is all finger in the air in terms of the shock that might come. Where do you stand on this . You would say that the brexiteers would be 4 bigger as an economy . How big a shock could it be . What is your estimate . Mike firstly, im not expecting any answer. Actually, quite a number of the brexiteers are saying there is absolutely no doubt there will be a short term shock. Some indicating quite clearly that what they indicate a shortterm is roughly 10 years. That is something we a put on the table. There will be a shock. Secondly, if you look at the overwhelmingly, every single independent review, whether it is the london stock exchange, every single one comes out saying there will be a shock not just to the United Kingdom economy, but to the european economy, possibly beyond. And it will have shortterm discussions on our growth. It is absolutely clear that will happen. As to the quantum, that is very difficult to judge. The only thing i would add is particularlyseen, as it comes closer and with the opinion polls looking slightly ambivalent, this is really holding back on investment, recruitment. Increasing concerns about what might happen. That is just a foretaste of what will happen. Stirling is under pressure, coming under further pressure. Anna do you see that on the boards you sit on . You sit on boards globally, our Investors Holding back noninvestment . Some of that data lag is hard to tell. Mike it is hard to see. Common sense would prevail. People have been worried that such a critical time, as you are discussing earlier in the Global Economy, where are we going . Oil prices down, up, uncertainty, volatility. This is the last thing anyone wants to see. The primary concern this could lead to a further level of uncertainty. There is absolutely no doubt this will damage our economy in the short term. The question is, how long is a shortterm . And what are people willing to accept in the offset . Manus mike, one thing that shocked me was just, i know this campaign is heavy. I know we are going into the closing moments. To have the head of the bank of england, goa before a committee and asking if he was being influenced by goldman sachs, this just shows you how desperate some people are in terms of throwing that around in the argument. Mike well, i just personally find it deeply depressing. I mean, this is important to the future of our country. As Richard Branson said, we were in 1965. Man all of our growth and productivity has occurred since that time. This is critical for our children and grandchildren, and the young people who want to stay in the market, therefore i do think that trying to undermine reputable individuals, reputable institutions for sibley trying to get the facts about the economy across the british people in a critical referendum, critical moment in time is disappointing. Anna isnt one of the biggest things on the to do list, if we do vote to stay in the eu, is one of the big things on the list about opening up, making sure we have a Single Market service . I know you said that before. And if it is, doesnt that mean we will ever be comfortable. Well really have u. K. Insurance Companies Selling freely around europe . Remaining controlled on national, along National Lines . Manus European Union is perfect. It does need reform. You see the Current Commission really reducing unnecessary bureaucracy, subsidiary, to really recognize we need constructive the at the council of ministers, at the commission to really lobby for those things which most of our fellow members of the European Union want. Deregulation, where it is important. Opening up of the Single Market, the digital market. Introducing competitiveness. I think there is an overwhelming support across europe, and people want the u. K. To be the voice of common sense. Helping to sort of developed those policies. Anna you mentioned taking out red tape. The latest report from the campaign overnight, others saying that we would save 1. 7 billion pounds a year if we do not have to abide by eu procurement rules. One of many facts that they produce mike picking up a single figure in isolation and trying to broadcast the general ideas s, they continue to say it cost 300 million a week to be there. It is not clear that it is not 300 million. It is about 100 million. All of the net benefits to trade our massive in the region, 3050,000,000,000. Taking one element of it is really rather factious. And i think if you look at companies that have spoken, how easy they can do business, anson,g about richard bresna to me particularly, that is important. Manus new zealand has just done a trade deal with china. And they are a colossus. They have an economy that everybody. Feeds off. It is a rhetorical to you, why would anybody do this with United Kingdom . Why would europe make it easier for us, if we do not have that same kind of heft on a global basis . Manus i was in china last week, beijing, hong kong. There is absolutely no doubt, figures theyre really want the United Kingdom staying in the European Union for the influence we can bring, to ensure the eu and japan treaty stand. You know some of these trade treaties globally work. The chinese look to the british now to act as sort of an influence within the union, to really encourage the things china wants to dissipate in, properly in the world economy, moving from a consumer to our producer. These are all to our advantage. Rake stays with us. We continue our conversation, discussing consolidation in the telecom industry. That is coming up, next. Just 9 49 in dubai. It is 1 49 in the morning in new york, a city that never sleeps. Indicating down one third of 1 , around 2084. Let us to the Bloomberg Business flash. Selina wang is with us. Selina thank you. Embattled airbag maker takakta has talked to a private equity firm, according to persons familiar with the matter. Aslier, the shares rose, indicating potential first emerged. A spokesperson said she could not comment. Recall the bound 60 million airbags, ordering the replacement of as many as 40 million more. Yahoo s made a bid for and is a contender to acquire the core internet business. That is according to people familiar with the matter. It had previously been thought of the Telecom Giant had decided against making an offer. Shares in yahoo fell 5 yesterday. At t was little changed. Lions gate has surged in extended trading after profits recently lowered estimates. The studio behind the hunger games so a 22 jump as revenue offset disappointment at the box office. A new global deal for netflixs acquisition of pilgrim studios also help. However, lions gate took a hit from the poorly received divergent films and gods of egypt. Philipaire board member fields helped gawker media. He told the New York Times he made a financial contribution to the suit brought by former wrestler hulk hogan. In 2012,he website over the publication of a tape showing him having sex with a friends wife. Claiming the publication cost him endorsements and inflicted emotional harm. That is your Bloomberg Business flash. Anna, manus anna selina wang with the latest news. Mike rake still with us in the studio. Let us talk about some of businesses youre involved in. I have to start with your plan for the future around bt. Lots of reports that the hunt is on for your successor as chairman at bt. Mike i think the hunt is not on. Frighteningly, i have been years. N nine reviewing that position, they asked me to stay on at least until september 2017, just completing the acquisition. We have a new finance director coming in, a lot happening with our review. And so forth. Until to agree to stay september 2017, we will see how things are. Manus let us talk about dodging the bullet, so to speak, in terms of full separation. What next with that ruling . What does it change to what position does it put bt in . Mike firstly, hopefully, us being able to include forced separation will demonstrate what bt has done, when no one else is willing to do it in 2009, we started major investment programs in broadband optic fiber. Rolling out one year ahead of time, 25 million homes. But of course people want more speed, and they want it now. And we are fully committed in the next two years, another 2 billion invested in very much higher average speed to the u. K. Frankly, the function of separation has worked. We are the most competitive marketplace. We have the lowest prices. It is only logical we will continue to do something that makes sense for the United Kingdom. Lobbying talking about for separate legal entities on the board in which they will sit . Mike look, we are absolutely happy to look at some of the increase transparency, having equal access, ensuring the overage has provided the same service to everyone. We have made all of the targets. But we need to do more. Look, our Customer Service it has not been what it should be. And we are determined to improve that. You know, i think some competitors, they did not think we need to invest in fiber and 2009, when we did. I understand the reaction. But we will continue to work to come to a sensible review, to make sure as much transparency as possible, that we continue to invest and improve our service to all of our customers, including our competitors. Manus mike, you have a pretty hefty shareholder, Deutsche Telekom. Have they asked you for a seat on the board . Would you welcome a representative from Deutsche Telekom on the board . Mike not only would we welcome it, we had it. It was part of the deal. Tim is the chief executive of Deutsche Telekom, on our board now for two or three months. It is very interesting to have him there. He has great depth and experience in telecoms, and he is a very constructive and helpful number of our board. Anna in terms of consolidation in the mobile story now, we know not going to be merging, do you care what happens to o2 now . Some reports suggest the various private equities could be involved . Would you welcome sky . Manus competition is good. Mike we will increase competition through doing that. Clearly, brussels is decided that four is necessary for competition. We want to see a vibrant sector. We wish they do well. Manus mike, i know you are the board down here in the middle east. Sortave huge entertainment of holdings with that company. Im just curious to know, oil price under pressure. Saudi is opening up. What is the biggest risk and reward in the region here . Mike as you know, it is dubai. The geopolitical situation to the north of dubai, so the whole syria, libya, iran situation is critical. Personally, from a business point of view, the reformist and iran get aboard and we begin to see it opening up of that marketplace. I think that would be good. I think it is very important, i was in riyadh just a couple of moments ago, that we really see saudi determinedly moving to you know a different economy, that is not entirely oilbased. It is really important. And you buy continue to do really well. But there is less luxury buying coming, lets chinese visitors coming in. And they are precious. Anna you used to be of course on the barclays board, stepping away from that role now. But you are fairly involved around the discussion of africa. Can you see a situation where barclays cells africa . Someone at the forefront of the business . Mike i stepped down at the end of december. I think the barclays as my the right decision, given the overall sort of capital requirements, management focus. Barclays is a great business. It was to focus on a u. K. U. S. Investment bank with a big retail bank year, presence in the far east. I think frankly speaking, there is a voice in which you can do in todays world. As to who purchases it, i think south africa will want to see a potential South African solution. I am not privy to those. Anna great to have you on the program. On a range of subjects. Mike rake. Up next will talk about the g7. We will be live in japan. Manus brent bought this back. Rising for the first time in with the six months as u. S. Stockpiles to klein. China troubles top the agenda as World Leaders gather for the g7 summit. Will live we are live at japan. This sending shares surging. Branson talks brexit. The billionaire businessman says he would be devastated if britain votes to leave the eu. Prevails,that sense and when push comes to shove, people will realize that it would be damaging both to europe and Great Britain should britain walk away. Manus you are welcome to countdown. I am manus cranny. Anna i am anna edwards. Lets have a look at where the futures are suggesting we will open this trading day. It has been a decent 20 day decent point for hours and trading day. Brent going over 50 a barrel, one of the key headlines. European stocks, look at the desk looking to draw a line in the sand. Maybe a little bit more outside the lending market london market with a slight move higher. We will see how they develop over the next hour. An hour to go until we start European Equity trade. Lets get to the risk radar. Brent above 50. Manus we have indeed. 50 herel above we go, oil above 50. Eia data has been down for the 11th week in the row in a row. Dollar index down for a second in a row. Just readjusting. We have had just a cracking run on the dollar. It has been the best month since january 2015. Traders are fairly neutral. 2year note, perhaps the most thrown most prone to indication that mean that we may see a june and july hike from the fed. That seems to be of late. Can wewo punch take a look at the bond markets. Take it away, and a anna. Anna the u. S. , german, and the japanese bonds. The yield either unchanged or come down just a fraction. Taking a pause for breath to rethink but to consider all of the hawkish talk we have been getting from the fed, june and july, that is the conversation at the moment. Parker at the fed talking about the possibility of two, possibly three rate hikes. That is what he is sticking to. Lets get to bloomberg first word news. Thank you. Takataled airbag maker has had talks with kkr. Shares the company surged after reports of kkrs dental interest potential interest. Carmakers have recalled at least 60 million airbags globally before they ordered the replacement of 40 million more. Made age Fund Industry quarter of its assets and the next year on a slump. That is according to tony james. He says the industry which is having its worst start two years since the Global Financial crisis faces a day of reckoning that will be pretty painful. Hillary clinton use of a private animal system while she was secretary state did violate state department rules. That is the conclusion of report by the agency of the inspector general. It gives republicans an additional line of attack as the Election Campaigning gets underway. Richard branson says he would be devastated if britain votes to leave the eu. Speaking exclusively to bloomberg, the founder of virgin group says a brexit would be damaging to both u. K. And europe. To both the u. K. And europe. I would be devastated if we vote to pull out of the europe. I hope that since pull out of your. I hope since pull out of the europe. I hope sense prevails. It would be damaging to britain and to europe. Businesses have warned of economic damage as protests in france continue. They are set to intensify after the government refused to back down on a labor law. Six of frances eight refineries have called for electrical workers to walk off the job the National Railroad is entering its eighth week of protests. A leaking water main has caused part of the riverbank in florence to collapse. Powered Water Supplies were severed in the surrounding areas could local people were asked to leave their homes. Officials say the collapse is due to a break in the water pipe and not because the water bank is falling away. Global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. You can find more stores on the bloomberg top. Anna . Manus . Manus thank you very that roundup of the headlines. Lets look at the markets. We got Juliette Saly standing by. We got the g7 on the roster. Look at dollar yen. Dayuld call this a volatile. How is the equity side looking . Juliette a very volatile day. We saw that rebound coming through in the yen. 1 . Closing higher by certainly the jets share market was up by 1 today. A weaker finish certainly the japanese share market was up by 1 . A weaker finish. We are seeing crude contracting near 50 a barrel, breaking through for the First Time Since november. Solid support coming through from a lot of Energy Players. Here in hong kong, still a little bit of weakness on the hang seng. It is down by. 1 . The asian market has been. Olding near threemonth lows the former crude price weighing into transportation companies. That market lower. Southeast asia pretty mixed as you can see. Oil and gas players led the region high higher. The daily limit on this confirmation that kkr will help to cut a out to help will out. Takata investors seem that he that they are putting a price on that. In australia, not only that rally coming through on the oil price, its price target increased by 50 from credit suisse. A good pick up their. Of yen. Quick check up. 5 . Certainly a lot of strength coming through. Goldman sachs is pretty bearish on the yen, saying it will fall by 13 over the next 12 months. [no audio] manus, japanese market, and pretty positive session for the regional index today. Anna Juliette Saly there. G7 leaders start their threeday summit in japan today. Yvonne man joins us from issa shema. Good to see on the program. Talk us through the agenda. European leaders there in force trying to lead trying to leave domestic troubles behind. Right to theis growth seems to be the theme that the Prime Minister is going to be delivering. The next couple of days during the g7, that is going to be the big question. We are coming off of a dive. How frustratedaw the japanese were when he came to coming up with a shared strategy to target and . To target and takcckle this slow growth and we saw the friction between the u. S. And japan. The recent moves in the yen are not overly volatile at the moment. Not showing support when it comes intervening on the end. On the flipside, yet the u. K. And the likes of germany not too spending. Tra deficit that is the challenge come through for the chair abe. How is he going to push these issues through. Here is what he had to say. Determined to work closely with the United States and addressing various challenges of International Committee based on our robust alliance. An alliance of hope between japan and the United States. Manus that is a sign of u. S. Relations. Your leaders europe leaders have trouble back home in terms of extreme politics, havent they . Yvonne we talked about the hot items on the agenda, youve got exit, you got terrorism. You got tax evasion issues. Those things are europe related. Those challenges piling up at home while leaders are here in japan. Talk about these leaders and international summits, they are supposed to be the dealmakers for the world, but at home, they are dealing with brexit, migration crisis, this refugee crisis in europe, as well it as well as when it comes to homegrown terrorism. Europe in need of some more help back at home. David cameron traveled 28 hours from u. K. To japan, probably a good 28 hours he wished he had to rally more support for the remain camp as the Eu Referendum gets closer. The german chancellor trying to put a lid on this refugee crisis which, to be frank, has really hurt her support from her own party. It does make you wonder why some of these european leaders came all the way to japan. Anna thank you very much, event man yvonne man, joining us. Now. Rd de meo joins us good to have you on the program. G7 meeting taking place in right intoal growth the spotlight. Where are you shining your torch . Where do you find concerns about mobile growth . Concerns about Global Growth . Is that the center of your worries . Richard the location of the g7 meeting tract that back into focus. Japan try to bring that tried to bring that to the table. Looking at japan actually the currency was there, will be some concerns of their part. Ofaggressive move in terms dollar yen. 18 month highs for the yen. That will be a source of good news at the moment. Manus richard, a very good morning. Do you think moving further away from fiscal stimulus . There seems to be a divided g7 between canada you have the ability to do fiscal stimulus. Fiscalsaxon axis ease. We are not seeing evidence that new measures being introduced are taking effect. We are seeing things stabilize and equity markets are recovering and stabilizing. That would be a source of confidence. The concern would be growth and they are trying to take started. Trying to kickstart it. Changese if that opinion on what they are allowed to do it and go about what happened with the yen. To do. Anna about what happened with the yen. What caused this sudden spike in the yen . Lack of liquidity in markets . This just todays move. The bigger story as you point out is around just how much yen strength we see. Richard export led, so it is important for the other currencies to be other currencies to not be too strong. Expectations are is related to liquidity. It points the finger that someone is going to be in trouble today. The answer is will the market returns that level and fill the gap . I dont believe it has done, but certainly. 5 move raises the question. Manus lets talk about one other market, oil at 50 is where we yard. Nifty at 50. We have seen inventories come down. U. S. Stockpiles down for the 11th week in a row. The lowest since september 2014. Where oil goes, all sentiment follows. Are we fairly valued at 50 . What are the risks around the market going into this opec meeting . Ishard what surprised me the variation of predictions that we are seeing. We have seen a shift in supplies on the fundamental. Stockse stoxx figure figure the key there. Others expected to floor at 50. There are no calls for aggressive moves from here. People have lost confidence in the ability of opec and courtney the action. It does come down to the stock figures. Anna richard, thank you very much. He stays with us on the program up next, the recipe for a rate hike. The u. S. Jobs market and Economic Growth on the right ingredients for a move. More on the u. S. Central bank any minute. In a minute. Manus youre looking at a live shot, a beautiful sunny day in london. You got della stirling dollar sterling trading. It is 10 19 a. M. In the by and the by. Haslinda amin is with us. Haslinda all good here. Akata has held talks of possible buyers including kkr. Aompanys share spokeswoman for takata said she could not immediately comment. At least 50 million airbags globally before u. S. Regulators ordered the replacement of 40 million more. That is according to people familiar with the matter. It had peevishly previously been thought that the Telecom Giant had against an offer. At t was little changed it live day shares have expanded in sharing after talks lowered estimates. The studio behind the hunger games so i 22 jump in sales as globalnue as a new deal for orange is the new black and its acquisition of degrom studios, however lions gate took a hit. Billionaire wilbur ross says he is considering buying nonperforming loans in china. Speak to bluebird tv, he said there could be an opportunity if beijing follows through with plans to sell the loads of assetbacked securities. In terms of distressed loans. The government has announced they are trying to develop a program to securitize the distressed loans there. If they do that, with transparency, it would and with reasonable pricing, that would be very good help for the chinese banks. It would create an opportunity for people like ourselves here it ourselves. The billionaire investor secretly helped bankroll the Defamation Case that resulted in a verdict against gawker media. He told the New York Times that he made a financial conservation to the suit financial contribution to the suit brought by hulk hogan. The location cost him endorsements claiming the publication cost him endorsements. Anna Haslinda Amin joining us. U. S. Economy is moving toward full employment and continues to target 10 target 2 growth this year. My own view is we should try to normalize as fast as we can, mean i Secular Forces think it is going to be slow and gradual over a period of time. That is what i will be likely abdicating. That is what likely abdicating advocating. U. S. Let of the us talk about the u. S. [indiscernible] he is talking about how the dollar of trend remains in play. That has been highlighted since the end of april. Have you reevaluated where the fed goes echo d. C. The dollar higher fed goes . Do you see the dollar higher . Richard use the word reevaluating and that is the right way to use it. It lacked the fed. Those two views have converged. That is why we have seen the big move in the dollar higher. I think there is a fair value at the moment. 36 to 37 chance of age and move. Anna overnight, 44 for june. 53. 8 . Y, richard interesting to see that. Since yesterday, we have seen june drop and july increase. There is a huge amount more in a very short time. Manus richard, theres some constrained going on in the bond market. Demand is roaring. The we got here is in yellow, ive got the primary dealers, they have been given the least since 2003. It is the nonprimary dealers that are picking up these bonds. In the face of a hiking fed, what do you make of that . Are we storing up a little bit of trouble are we stirring up a little bit of trouble on them on market . Trouble in the bond market . Richard i dont think so. A genetic shift in Market Expectations a dramatic shift in rocket expectations. We just found it went up to 37 chance. That is the big adjustment. That is why we have seen a little bit and what seemed like a shaking market. The fed is doing a good job of communicating. Focusing on u. S. Economy, and that is why we are seeing a direct response in the dollar the u. S. Cyclical data. Anna weve got a great story, talks about companies and currency traders who are hedging their risks around euro sterling or cable as we approach the unit the Eu Referendum. It is holidaymakers, everybody who was thinking about whether they should by their euros now or not. Do you have experience of customers zoning in on the 23rd of june and trying to hedge themselves ahead of time . Richard we do. That happened to a lot of people who are concerned. Talk about how the money. We have seen people stepping in and concerned that while there is a small chance, as markets now see, if we do the move and people do not want to take the risk. Euros,een people buying but also people buying property in europe. They dont want their house to get infinitely more expensive. Anna they may want to get ahead of that. Great to see you on the program you to thank you for coming in. Richard de meo, that will do it for countdown. On the move is up next. A look at the futures. A draw and the line between a positive session in asia. It could be a little bit negative at the start. From manus and i, have a good day. Well see you tomorrow. Guy welcome to on the move. Were counting you down to the european open. I am guy johnson im alongside matt miller. Brent bounces back. Crude rises to 50 a barrel for the first time in more than six months as u. S. Got piles decline. How will opec react . To conduct the company that is responsible for the largest recall in history. Trimming the hedge funds. About to lo 2