Transcripts For BLOOMBERG The Pulse 20240622

The Italian Economy grew by. 2 . The estimate was. 3 . France is stagnating and germany missed. Francine has had a little bit of an impact on euro dollar. Breaking news from greece. The government there is to request a confidence vote after talks concluded with the countrys creditors. Anchor it will follow a pame. To the e. C. B. Lets get straight to mark barton at the breaking news desk. This is a series of events that we thought might happen. Who brought this confidence vote forward . Mark yes, the vote passed. A majority of more than 151. Big majority. Hence we have the confidence vote after august 20 which as we know is the day that greece owes the e. C. B. Money. It needs that money to pay the e. C. B. So were in the quite there yet. Thet is just another day on calendar on top of a lot of dates in the next few days starting with the euro area finance ministers meeting at 3 00 p. M. In brussels. Lets remind our viewers what happened. Lawmakers approving that bailout that may unlock as much as 86 billion euros. It paves the way to approve this threeyear aid program. Lawmakers were debate all night. The Prime Minister securing the backing of 151 lalmts in the 300seat parliament. This is what the greek government has now requested a confidence vote after august 20. Now august 20 is key not just because it is the day that money is due to the e. C. B. , but that is when talks end with creditors, as we all know greece needs the new loans to avoid default next week the make its payment to the e. C. B. The rescue deal approved includes sweep economic reforms, budget cuts mayne mandated by greeces institutions. The next big date is when euro area finance ministers meet in brussels to consider backing the deal will they back the deal . We had some good sound from you the finnish finance minister. If you remember at the height of the crisis a few months ago he argued it could be tied to plan before. He said he is confident they will be able to reach some sort of agreement. If we dont reach a deal on the bailout itself he said he remains confident that a bridging loan might be offered to greece. So we dont need this full bailout package. A bridging loan probably will be offered to greece so it will be able to pay the e. C. B. On thursday. As we know, we have a new date on thursday. A confidence vote by the greek parliament. It is never ending. Francine confidence votes. They can cause elections. Thanks. Anchor joining us is Morgan Stanley strategist. Andrew, very welcome to the pulse. Another day, another vote, another date looks like the greek majority wasnt as strong as temperatures would have liked for this bailout package. What does it say to you . Unfortunately this saga in greece will go on. It will continue to be an issue investors have to deal with through the end of the year. On the one hand, we have the risk that we could have a noconfidence vote and new elections. On the other hand, if things go theugh then i think towards end of the year you could look at greek government bonds becoming e. C. B. Eligible for q. E. If certain measures are made or granted. This is a story that will be with us through the rest of the year. Francine will snap elections really be that bad . If we go to snap elections he could some kind of majority with people that are more qualified and stable. That is possible. You could say that would certainly give european creditors more confidence that he has a mandate to execute. The markets have been moved around so much by election uncertainty the couple of years. We have to be concerned there is some kneejerk reaction that uncertainty is a bad thing. Anchor one of the saying that the i. M. F. Needs to be onboard and that hecht imagine greek debt extension to win over the i. M. F. It is come. It is just a it will come. Is that your scenario . It seems like middle road twheen issue where by greek debt is clearly on a longterm basis, very difficult for them to deal with. On the other hand, the i. M. F. s proposals or hinting that debt should be forgiven is a political nonstarter in certain eurozone countries. If you can extend the debt for a long period of time, you can have the same benefit, present value but you dont testimonyly write off the debt. Where that outcome is attractive is it is a bit of a middle path between the two competing arguments. Francine stay with us. We have plenty more to talk about. Anchor we have indeed. It is g. D. P. Day as we said at the start of show in europe. We had breaking news a few moments agoing that italy missed and we had french and german numbers as well. It has been a tough Second Quarter. Francine germany expanding but fell short of expectations. Well learn how euro area g. D. P. S a whole is faring. Lets bring in our bloomberg team. First to you greg. Big miss on that french g. D. P. Figure. Big miss, but after a big First Quarter, dont forget. Growth in the First Quarter revised up to 4. 7 . If you take the first half together, france actually grew the same as germany. German growth is disappointing too. It is motte stellar but it means the france did keep pace with germany in the first half of the year. Few things points to make about the Second Quarter. Some one off things like change in stocks have had an effect. More worryingly was a great slowdown in Consumer Spending. It has been what has kept the French Economy afloat, but barely the past few years. On the other hand, exports were up. More of a mixed bag and not quite as negative as that zero number would imply. Anchor paul, for germany, we also had a miss there as well. Is it temporary . What was behind the numbers . We dont have a detailed investment was a drag on growth. Germany is record low Interest Rates and unemployment. A weak euro. As i. N. G. Noted this morning, the economy is on steroids. There is a fundamental issue. There is a Reform Program put in place 10 years ago has run its course and nothing much has changed since then. The bigger concern that were given germany and france, the two biggest necessary the area, italy the third biggest is for the e. C. B. It said it is disappointed when they met in july with the pace to have the euro area recovery. The big question now is do they need to do more . Francine thank you, paul. Lets go to alexander. The plinalster trying do as much as he can. Thats right. Hello, francine. It was a miss. A big disappointment. But it is just enough, this 0. 2 for an economy as weak as italy was in its worst recession since warmed war ii, it is enough for government to reach its yearend target. It is not very much. 0. 2. The economy is on steroids. Will they be able to follow through with reforms and be able to deliver on promised tax cuts . He needs much more rope to achieve that and probably serious structural reforms. Up e will be a lot of chams the government. Manny thank you. Francine lets get more with Morgan Stanley strategist andrew. Look, g. D. P. Not doing great. What they do have to support, the weak euro, actually weaker oil prices. They do. Look, i think this cons to be a story of low and slow recovery. So i think these numbers are below consensus but i think the trend of growth is positive. It is also important to mention that while financial conditions like oil Interest Rates are on steroids, government public spending is still quite weak. You still have a large share of the g. D. P. Pie which is holding back these Growth Numbers. As we look into 2016 where economists look ahead, we see some of those fiscal headwinds abating a bit. The rest of the economy is growing a little bit better. Thats how we get better Growth Numbers as we sblook 2016. Manny we are still significantly above the median for where the euro will be the rest of the year. Were well above that. Were at 111. How much of a drag is a stronger euro going to be and is it a challenge to your model . It is certainly a challenge and will deduct from growth where our base case is. It is based on the euro forecast that has the euro weaker. This is one of the interesting maybe unintended consequences of the news out of china over this last couple of days whereby if that if those changes affect the speed at which and the speed of u. S. Growth then you will have an affect on the euro. It could stay stronger than ourselves and many other people would have expected it to be over the the next six months. Francine thanks so much for no. We will of course be staying with andrew and talking about some of the commodities next. Manny what else is on our radar this friday morning. Chinese yuan has halted a threeday slide after the bank raised its reference rated for the First Time Since tuesdays evaluation. Francine oil is heading for its longest run of weekly declines since january. No end in sight to what has driven prices to their lowest in six years. Opec production last month was to be the high m. S. In more than three years. Manus . Manipulated markets in 2008. Federal Energy Regulatory that b. P. Said officially lowered the price of gas at a houston harbor for financial game. Ancine lerpsd are hsbc, goldman sachs, b. N. P. Paribas and r. B. S. The fx of course more than 2 billion across nine firms. Well have more on this after the break. Francine welcome back to the pulse live on bloomberg tv and radio and streaming on bloomberg. Com, your tablet and phone. Manus hsbc and barclays along with three other major banks have reached a settlement along with u. S. Investigators on the claim they conspired to rig the market. Were talking about 2 billion. Where does that fit . Why . Who is involved . Is it really that big of a deal . In terms of the overall money, it sounds like a lot of money, a lot to you and me. It is all relative. It has been 108 billion worth of settlements. Yesterdays claim involving hsbc, barclays, goldman sachs, b. N. P. Paribas and royal bank of scotland, i suppose it works out at 1. 2 billion of settlement for them. They now have to cooperate with the lawyers who are investigating seven other banks who remain defendants in this case alleging that they helped to rig Foreign Exchange markets. Im not going to list all of those banks but we can get them up on the screen. European banks included in those. Manipulation of Foreign Exchange benchmark rates. Fixing prices and exchanging confidential customer information as well and of course this is part of the broader crackdown that we have seen against banks for a number of infractions and allegations. Many of the situations, most of them in fact, they preferred to settle rather than take these things to court. Francine this wont likely be the end of the claims, right . Very unlikely. You these seven banks in this particular case. The judge has to approve. Then there are seven other banks who are accused and there may be additional banks who fall into his dragnet as well. The lawyers have saying is it just the u. S. Investors . What if we include asian investors and european investors. They could net many times that amount. All of these banks, many of these banks, often it is the same usual suspects. Libor rigging alone, many are potentially on the hook for 135 billion in terms of the lawsuits that are outstand. Staggering amounts of money. From the share prices of hsbc and others, they are barely budging this morning. It is a small insignificant amount that investors are brushing it off, more focusing on things like china. Francine thank you. Elliott gotkine with the very latest. Manus coming up next, the yuan stabilized ar a threeday slide. Well be back on the weekor turmoil. The chinese currency. Stay with the pulse. Francine welcome back to the pulse live on bloomberg tv and radio and streaming on your , phone and of course bloomberg. Com. Manus raised the reference rate for the First Time Since tuesdays evaluation. Lets get quickly to our asia crorpt. At the end of the week, it has been a long, hard slog for yuan. Is the slide over . Well, i guess what happened reform. At it is it is joining the dots between dedely government set and where the market puts the yuan and they told us dont expect an openended depreciation. It fits that narrative. Ls this is an old school deevaluation dressed up and the timing of the movement, what they did this week cant will surprise separated. It is on this sliding export front. Only time will tell which is going to come out on top but for now, today, by stabilizing the yuan, it backed up what they told us yesterday. Francine it is unlikely actually that the depreciation is enough to spur growth. China i dont in think considered efficient to boost their economy on such a scale they need to rev up growth now. 3 is a modest move on their part. It would require mump more. According to some analysts, 10 to really make an impact. Unless they go down that road, i think we will probably hold off the famous currency war that everyone talks about but it is causing a Ripple Effect in asia and that cannot be denied. Francine thank you so much. Manus lets bring back into the conversation, Morgan Stanley stadgist. You have looked at the yuan. What does it mean to you so far . Sure. Well, look, after a major change like this, it is always temperaturing. There is always pressure to draw immediate conclusions from it one way or another. This is an instance where we really do need to wait and see. Is this an ax on the currency and isolation or part of a broader stimulus package . I think that broader stimulus matters. If it is isolation, then it is a challenge. It is probably a negative m it increases uncertainty. China has been at the frontor focus all year. You take one currency regime and replaced it with something that looks different. Volatility on the yuan and look at what markets are expecting and that has jumped and markets are still very uncertain moving from one regime to another. On the other hand, markets have been concerned about chinese growth all year. If markets see this complemented by further monetary stimulus, then it could feel better about chinese growth ricks. At the same time, if we look at the u. S. Rate market, this has pushed back Market Expectations of fed rate hikes in terms over the pace that they will take. O you can have lower tail risk to growth. It could be seen as a better thing. Francine youre right in that we have to wait until the next policy decision. Why do you think they did something this week . Is it fighting the fed or trying to address growth . That is a very good point. The best explanation or the explanation that seems best to us is tied to the fed. That the markets are still pricing in almost a 40 chance that the fed hikes in september. You have a strong linkage to the dollar and the that hiking decision was widely believed to cause even further Dollar Strength after we have seen a lot of Dollar Strength. That is what potentially drove them to do it this week. Now we have to see what the fed does and if that changes their path. Francine andrew, thank you so much for that. Manus coming up next, were going to speak to another cruncher who beat the pollsters in mays election and is predicting a loss for corbin to beat the u. K. s labour party. Francine what should the markets be focusing on . Tweet us at flacqua and manus cranny. This is a great place to work. Not because they have yoga meetings and a juice bar. Because theyre getting comcast business internet. Comcast business offers convenient installation appointments that work around your schedule. And it takes done. About an hour. Get reliable internet thats up to five times faster than dsl from the phone company. Call 8005016000 to switch today. Perks are nice. But the best thing you can give your business is comcast business. Comcast business. Built for business. Welcome back to the pulse. We are live from bloombergs European Headquarters in london. Manus here are some of our top headlines. Five banks have reached a settlement with u. S. Investors over claims they conspired to rick global currency markets. The lenders are hsbc, barclays, goldman sachs, bnp paribas, and rbs. It brings the total fx rigging accord to 2 billion across nine greek mps have backed a bailout deal. The government says it will call a confidence vote after august 20. That is the day of the ecb payment. Manus chinese yuan has halted a threebaseline after the central bank raised its reference right. The pboc also said it would intervene to prevent excess of swings in the currency. Francine lets check in on the markets. Mark barton has the latest. We are getting portugal gdp expanding 1. 5 . weve got the eurozone gdp in roughly 29 minutes. The forecast is for a gain of 0. 4 because of the mrs. From three big economies. If we get a positive number, it is going to be the ninth consecutive orderly increase. We will bring it to you live here on bloomberg television. It is not just the eurozone today. I want to talk about the asian currencies. It is not going to be the dollaryuan. What a week it has been for asian currencies. Weve had the yuan devaluation, weve had vietnam widen its currency band, the Malaysian Ringgit up there in the controversy. Look at the movement in the dollar against malaysias currency. Earlier today at about 4 00 a. M. Local time in london. 2. 9 ollar rose as much as against the ringgit. That is the most since may 6, 1998. This week, the dollar has risen 4 against the ringgit, the most since 2010. The ringgit is at it lowest level in 17 years. The theory is, Market Participants think the nation is running out of ammunition to defend its currency. There is a threepronged issue in malaysia. We got the political scandal, the yuan devaluation, and slumping oil prices. The ringgit leading a retreat a month asian currencies. The governor of the central bank in malaysia saying yesterday the bank will need to rebuild foreignexchange reserves that have fallen below 100 million for the First Time Since 2010. Even better than expected gdp figures havent dispelled the gloom that seems to be overshadowing the malaysian currency market, the bond market, and stock market as well. Keep an eye on Malaysian Ringgit. The second thing, crude oil. Seventh consecutive week of declines. Get in here close. Over the last five days, crude oil is down 4. 5 . Oil now lowest level since 2009. The fear is the global glut that has driven prices low will be prolonged. The markets are plus will last through 2016. That was the view of the iea earlier this week. Eurodollar, this week 1. 5 . This is interesting. The best week for the euro against the dollar since may. Watch out for those gdp figures in 25 minutes time. Will it be 0. 4 . Unlikely. Francine unlikely. Revising everything downwards. Thank you, mark barton. Manus lets move to the u. K. Now. Papers are being mailed out to support for the labour party today. This is for a leadership contest that will determine the future of the party. Francine for more, we are joined by Svenja Odonnell and the man who beat the pollsters in mays general election when he predicted a conservative win and is now saying that Jeremy Corbyn will lose this labor vote. Thank you so much for joining us. This is huge. This is important because this gives labor a chance to actually beat the conservatives next time around. Svenja absolutely. This decides the next general election. That is why you had big labor figures such as tony blair say, if you but Jeremy Corbyn, labor is dead for 100 years. This is no accident. People feel labor has lost its way. Yn are like jeremy corb seen as a voice of real people, real policies. Whether that translates in government is different issue. Manus matt, you are one of the men that predicted the conservatives would win. What is telling you that Jeremy Corbyn is going to lose . Matt i predicted he would win. Francine all right, our pollsters got it wrong. Matt weve had these polls that put him substantially i had, over 50 of the vote in the most recent one. 30 points ahead of the nearest challenger. What is striking about this is how broad the support is within the party. Areas, butstronger across demographics, regions, types of supporters, quite strong. Francine what you say exactly for himJeremy Corbyn, to lose, it would require a polling error of three times the magnitude of the general election. Was athis election itself polling failure or a very implausible swing in opinion. Manus the whole party, not just corbyn seems to have moved to the left. Otherurnham, one of the big protagonists in this race, is also dillydallying. Byn wrote a piece on cor this morning. Svenja hes not advocating renationalization on the scale that corbyn is. Yn takes it a step further. He is talking about renationalizing the big six power companies. And also bringing back this industryt by labor to owned by the state. That is a big thing because that is what tony blair got rid of. Thats what made labor electable in the 90s. It was seen as leading to labors defeat. It was one of the cornerstones of new labor, bringing labor into the modern world. What we are looking at now is bringing labor back. Quite a few people are moving to the left. Between them at all. Francine matt, looking at the polls, last time around when it was the two brothers against each other, i thought it was a done deal. Is there not a possibility . Willay that jeremy corgabyn win because he doesnt have a strong opponent. Matt it doesnt look as if hes quite got ahead. The polls last time did point towards they were suggesting a close result. Obviously, theres going to be some skepticism given what happened in may. The crucial difference now is that, where as in may, you had the top lines saying one thing , thell of the internals labour party is reviewed on the economy and other issues, and other data such as local election results, contradicting what the top line results were saying. This time, theres limited data available, but the dale of that the data that is available, i cant see anything in that to state the polls wildly overstating its importance. Manus you talk about the demographic and the data. Is it a younger demographic . Or is it the people that have read the open letter by tony blair, which regardless of what you think of me, dont vote for him . Support is broadbased. He does have a stronger area. Among younger people certainly. Among union members. Very much among people who have joined up recently. And in particular, the ones that joined up, theres been a huge late surge, which is one of the reasons why the risk is being understated. Hes slightly better among women as well. Yes, he has stronger areas for sure but it is also not exclusive to those. Francine thank you so much for that. Matt and Svenja Odonnell. Usus that does bring officially to our twitter question. Should markets be worried about corbynomics . Join us on that question. Francine next, oil heads for his longest run of weekly declines since january. Manus welcome back. This is the pulse. Francine oil is heading for its longest run of weekly declines since january. Manus the International Energy agency says the market surplus will last through next year. Opec production last month was the highest in more than three years. Lets bring in our bloomberg chief energy correspondent. As you stepped down and Caroline Hyde is over there as well, as you sat down, you said the driving season in the united states, may through september, has never seen as much of a drop. This is pretty extraordinary. Prices the lowest since the Global Financial crisis. Periodk at that driving where they usually see the strongest races of the year strongest prices of the year, you look at what the price was in may, and where we are heading today, we have never seen a decline as long as we have seen at the moment. Francine talk to us a little bit about when the route will end. Chart, itk at the doesnt look like it is going up anytime soon. If you look at the current situation, let me put it on simple terms. In the Second Quarter of the year, we have 3 Million Barrels a day of extra production that the market didnt need. There was no demand for that. That is equal to all production from the north sea. You it disconnected could have disconnected all the Oil Platforms in the north sea. That is going to require a lot of Economic Growth to go through it. The International Energy agency is thinking that prices will start to rebound at some point next year. Production is very resilient. Thatis not giving any sign it is about to reduce production. Nonopec production is also very strong. The north sea was a highcost area. Production is increasing. It increased last year. That is the first time in 15 years it happened. Last a few mark waters. Manus certainly not going to run according to plan. The terminal talks about the forecast. This time last year, 100. This quarter, down around 80. Here we are, sub 50, and still they are optimistic. They say we will be back at 60 by the end of the year. Francine lets also talk about bp. It is facing penalties. Manipulated the Natural Gas Market in houston. U. S. Regulators could impose a penalty of almost 50 million. This is not a final ruling. The u. S. Regulator will consider this and a couple weeks. Bp is disputing this potential penalty and whether it really manipulated the market. It is quite embarrassing for the oil company. 2003, theyorget, in allegedly also manipulated the propane market in the united states. At that point, they paid a big penalty. U. S. Regulators are really thattic on their statement this is the second time. The penalty could be higher because of that. Francine thank you so much. Some more of our top headlines this friday. Japans commitment to reconciliation with its former enemies will be tested today when Prime Minister shinzo abbe delivers a statement. Tomorrow marks the 70th anniversary of japans world war ii surrender, and neighboring nations want to see if the grandson of a wartime cabinet minister can bring himself to apologize. Francine china has detained the owners of a dangerous chemical store in tianjin following the violent explosions that killed as many as three people. It is not known what caused the disaster. Tengion is a major port. Shipments of oil have been disrupted. Hundreds of new cars were destroyed. Manus apple is delaying a live tv show for next year. People familiar with the plan say that talks to license programming are progressing slowly. Apple also does not have the Computer Network capacity to ensure a good viewing experience. Francine now lets talk tech. After the galaxy s 6 failed to lure buyers and sales were hindered by production problems, samsung is unleashing its next set of devices. Manus Caroline Hyde is onset now. She got a sneak preview. Tell us a little bit about it. To manipulate a daft punk song, it is harder, better, faster, stronger. It is bigger though. Francine harder not being a compliment. Caroline cant break it so easily. The aluminum is stronger. Maybe theres not too many compliments about this phone. It is bigger. This is samsung going back to what it knows. It was the one that first brought in bigger phones. Apple copied them. Youve got better multimedia, facial recognition, you can even live stream video from your Samsung Phone and send the link via youtube and friends can see what you are doing. Theres faster elements. You can charge it faster, even wirelessly. And the stronger, black and gold are your colors, and the aluminum is that much harder. It is a goodlooking phone. You can use the edge to contact your favorite people. Crucially, the delays that upset enoughes of s6 edge, not Production Capacity, i spoke with one of the Senior Executive at samsung. He said, look, this isnt going to be a problem this time around. S6 edge was so successful that we couldnt produce as much as demand was expecting. We suffered a little bit from Production Capacity because the demand was better than we could supply. Since the Third Quarter of this year, the demand the supply issue is solved totally and we can now supply everything that is needed by the market for both the s6 and the plus. Caroline this is more about productivity. This is the device you can use with a little pen. That has gone on sale. No price point so we have yet to find that out. It wont come out in europe as soon as it does in south korea or the u. S. We have to wait until september. Samsung pay is being unveiled. Apple pay. Me too to samsung is really bringing in executives. They go live in south korea on the 20th, then it comes in september to the united states. Unlike apple pay, they are recognized by a wider group of restaurants and shops. Magnetic strip cards. This will be wider used, and no charge if you are the card provider. Francine looks like a great deal. My interest also perked up at the great imo gees emojis. What is all this enough to lure back customers . Caroline this doesnt have enough weight in is. I thought it looks nice, but i didnt come away thinking, look at the phenomenal new attributes. These are just improving what they already had. Bloomberg intelligence analysts seem to agree. They say this does not pack enough punch to stem the market share erosion. End to alosing higher quite significant extent. First half, they lost 30 in terms of units sold. They fell to the highend market. Apple up 52 . Apple now has two thirds of the highend market. They are starting to hemorrhage in that respect. What about the slowdown in smartphone demand . Should you be focusing on your lowend . Lowend is growing faster than highend. I asked that to the executive president of mobile in europe. Have a listen. Theres been a slowdown in growth of the total smartphone industry recently because this is a major market. We are very confident when we look at the behavior of consumers around the world that there is still a lot of demand for innovation, for new technologies, for anything that can enrich peoples lives. This is what we do believe in samsung. Our role is to bring meaningful innovation to all people around the world at every level. Phenomenalhey spend amounts, millions every day, on research and development at samsung. They are so proud of this product. Theyve actually brought it in a month in advance to get it out there quicker, to jump the gun from apple. I think they feel that apple stole their thunder when it came to the larger phones. There was a teaser at this event in new york. What is left us with was a smart watch. The deer. Theyve teased that there is another smart watch coming. Francine we want a sneak preview, caroline. Get in there. Manus football is back across europe this weekend. It is better than ever. Tom gibson takes a look at the European League. Tom it is that time of year again. Europes football season kicks off and so does the business around it. European leagues have seen record revenues in three successive years. But which is the richest . It is england versus spain versus germany. All three have huge tv deals. To real madrid and barcelona, they expect to make another 600 Million Euros selling rights globally. The English Premier League has the biggest tv deal. Eurosb paid 1. 7 billion for three seasons. Teamsis cash allows the to pay their players extraordinary amounts in wages. English clubs spent the most at 2. 3 billion. The spanish spent 1. 2 billion. German teams spent the least, 1. 1 billion. While germanys league may have the lowest pay, more people turn up to watch it. Average attendance is around 43,000. Germany does have the cheapest tickets. But there can only be one winner. The leak making the most money is the epl, 3. 9 billion euros. That is up 32 thanks to that massive tv deal. One way or another, the game is getting bigger. Francine there you go. The beautiful game getting even bigger. Doesnt say anything about getting more beautiful though. Manus no it doesnt. Weve got a roundup of gdp. The whole of europe. Stagnation in france. Germany has missed. Their number three partner is china. Francine i have a tweet of the day. It is from brenda kelly. The problem with all of these gdp forecast is that they keep on missing so they are always below estimates. She says, the problem is that it is the estimates that miss the reality. I think it wraps up what we are looking at. For our beavers, a second hour we will bese and talking about that, gdp, china, greece. They are looking at a confidence vote. Will there be snap elections . Manus and of course our question of the day is about corbynomics. How worried should the markets be . Should the markets be worried at all about corbynomics . Manus greek mps vote through a third bailout package. The government will request a government vote confidence vote. Francine growth in france stagnates. We get eurozone gdp now. Manus paying up. Five banks agreed to settle u. S. Bank lawsuits tied to currency u. S. Government lawsuits tied to currency rigging scandal. Good morning to our viewers in europe. Good evening to those in asia. Cranny. S francine im Francine Lacqua. Germany disappointed, france disappointed. Overall, that figure is disappointing. Manus eurodollar is virtually on mood. Stagnation in france. Spain had the fastest growth in eight years. Italy missed as well. Francine it is all about the global outlook. It is probably not greece. It is about china and possibly the fed. We are now joined by our guest. A little bit lower than expected gdp growth. It is no big deal, right . We all assess about these quarters. We have a weaker euro. The others were fine. Manus we are going to come back to you. We are going to take a trip around europe. Lets move to our reporters and break down the numbers. Paris,in rome, frankfurt. Lets go to frankfurt first. This was a big miss for the french. Break it down in france. Miss. Was a big it was not with the economist were expecting in the Second Quarter. The First Quarter did look better. You have zero in the Second Quarter. It means france grew the same as germany did. Germany did not do that well either, but germany is the par. If france is doing well as germany, that is some kind of success for the french government. The worrying thing is that Consumer Spending grew much, much less than it has in previous quarters. That is what has kept the french government afloat. There was a change in stocks. That is something that could be repaired in the next quarter. Exports did a bit better than they had in the past. That is kind of a good sign. I would not fret too much about this. The government has set a conservative target of 1 growth for the year and they are almost there. A mixed bag. Francine greg, thank you. Lets go to paul. Are we disappointed with the germany figures because the euro should have help this economy farther . A little bit disappointing, but not an ambitious growth target, anyway. Germany has record low unemployment, record low borrowing costs, and a weak euro. It did help exports. Consumption contributed as well. Nvestment was a drag ecb policymakers said in july that they were disappointed with the pace of euro area recovery. These figures dont help matters. Turbulence in china does not help matters. The need for stimulus might finally arise. Manus italy also missed as well. What did you make of the numbers . Thats right. 0. 2 instead of the expected 0. 3 . It is not a huge deal. The government will still be able to meet its end of the year targets. The problem is that you have the weak euro, you have ecb policy everything is there to help the economy and yet you are seeing the weak growth. Will the government be able to , especially needed the tax cuts they wanted to do for corporate, for firstround . Mes . Or first ho if the government cannot go through with the cut, what will happen to political stability . The number itself is not too bad. A reminder that italy is coming out of its worst recession since world war ii. The number is not the problem. It is looking forward about what will happen. Francine thank you very much. Lets bring our guest back into the conversation. We all assess about these numbers obsess about these numbers. You have qe, a lower euro, Oil Prices Dropping some people are referring to this about boosts on steroids and still euro falls short. We started the euro 1 gdp year at 1 gdp. It is a fairly muted recovery. It has been a fairly muted recovery in the u. S. As well. If you look at forward indicators, some of them in europe are quite good. Money supplied out of the banking volume. Companies are seeing pickup in certain areas, like france on the industrial side, germany and is still strong germany is still strong. It is not a bad look for equities. You have qe. You have low Interest Rates. Is going to raise them in the u. S. , but i cannot see it going away dramatically. We have excessive bouts of timber or december obsess about september or december. She has said it is going to happen. Can i ask you about oil . Oil is a positive for lots of companies. Oil is plunging by so much and there is no end in sight. Is there something worrying . We are all falling over ourselves to be bears on oil. Oil, if you look at the ,onsumption data in the u. S. Miles driven, consumption of oil including gasoline that is a positive. Supply, i do wonder if iran is going to be a big supplier. I cannot see that coming on. Shale production peaked in march, april in the united states. We feel that the glut is not as biggest people perceive. As big as people perceive. We are optimistic on the oil price. I do feel there was a crescendo of noise to be bearish on the oil price. The second aspect is positive. People were talking about this a lot at the beginning of the year. You look at where Raw Materials are and you have got the positive aspect for corporate margins, in the sense that the import costs. Costs,o, the oil import import costs for the metals combined with the fact that you have a weaker euro think we have forgotten the positives of the situation. Manus where is the biggest opportunity for you . We are very overweight health care. What i am trying to think of is are there things in Industrial Areas that are beginning to offer values with currency being low . You are paying high ratings for defense. We are looking at cyclical industrials and the consumer side, as well. Francine thank you very much. Manus okay. We are going to bring you live pictures. This is shinzo abe. He is referring to the world war legacy. He is making a statement to the commitment of reconciliation of japan and its former enemies. The test is whether he can bring himself to apologize. Francine he is taking a position articulated by previous governments. It is the first time he used the word apologize. He is saying that japan has repeatedly expressed deep remorse and heartfelt apology for its action. He is saying those words in a statement on the 70th anniversary of japans surrender. Yuan hase chinese halted a threeday slide. It raised its reference rate for the First Time Since tuesday cost evaluation tuesdays devaluation. Francine oil is heading for its longest run with no sign of an end of the supply that has driven prices to their lowest in six years. Opec production last month was the highest in more than three years. Manus bp is facing millions of dollars in penalties and surrendered profits after a judge ruled that natural gas users manipulated markets in texas. The federal Energy Commission thee said that they altered price of gas at the houston hub for financial gain. Francine lawmakers approved a third bailout in greece, but the government is now asking for confidence. We will break that down next. Manus welcome back to the pulse. Live from london. After an allnight session of debating, greek legislators approved a third bailout package. The government has requested a confidence vote after next weeks payment to the ecb. Members opposed tsipras legislation. Another 11 abstained. He had to rely on the Opposition Vote to secure his backing of the legislation, which is required to receive the third bailout. We are one step further to receiving the bailout, which could be as much as 86 billion euros. We have another event on the calendar to look forward to. The greek government under tsipras has requested a confidence vote after august 20. That is a very important date. That is the date that the greek government has to pay the ecb 3. 2 billion euros. According to an official who asked not to be named, tsipras called the vote after he suffered multiple defections from his syriza party. That is the explanation. He makes the calendar even more chockablock. Will finance ministers rubberstamped the deal in brussels . We had some optimistic comments from finlands finance minister yesterday. Deal should be struck between finance ministers. Muchould not fret too because germany and finland have said if a deal is not struck, a bridge loan will be forthcoming to greece. Greece needs the money. We know how much it needs the money. Because it needs to pay the ecb and it has got this huge debt 205 ofwhich equates to gdp this year. 150 of gdp by 2020. Frances finance minister said those maturities need to be pushed way out and the Interest Rate needs to be pushed lower. That wont be dealt with until october. A further hurdle has been overcome today. Manus thank you very much. What matters to you most about greece . It is a tiny market. It is 0. 15 of the index. We dont have any greek exposure. The consequences have two issues. Do the germans give them a haircut . I dont think so. How do they execute . How to the exit . I dont think there is any mechanism for them to exit. The message it sends to other parties. We have spanish elections later this year. Will they say, look what the antiausterity achieved in greece, vote for us in spain . The qe is in place. Drug you made the statement two draghi made the statement two years ago. It. Ecb is behind francine you would not play it at all . We dont own greek banks. We have very few peripheral banks. We are aware of it and we have to be, we have to think about the consequences of the currency if they do and it, we dont think they will. We think there are enough measures in place. Francine what is your biggest concern for europe . It is always the same. Lets have a look at the data. Growth. Companies in europe have cut a lot of capacity, ey have cut a lot of cost. They have the positive effects of the currency and they have the input cost issue, but they would like topline growth. Companies are in pretty good shape on their balance sheets. They have good dividend growth. Lets have a bit of growth. Those are the issues we grapple with. The other thing is the reforms. Renzi is doing a lot in italy. Spain has come out with a lot of activity improvements. Productivity improvements. France is slowly doing things. It is not all bad news. I think we can be more confident. Francine thank you very much. Manus ok. Coming up, five banks settled with u. S. Investors over fx rigging scandals. We will break down the charges coming up next on the pulse. Francine welcome back to the pulse live on bloomberg tv. Manus lets talk about banks. Five big banks have reached a settlement with u. S. Investors over claims they conspired to rig the global Foreign Exchange market. Elliott gotkine has been following the story. Before this, there was an 808 million settlement. The banks involved in yesterdays agreement are hsbc, barclays, goldman sachs, bnp paribas, royal bank of scotland. It is worth remembering that there are seven others still outstanding. The banks that made the settlement yesterday have agreed dirtlp the lawyers to find against the other banks. Banks are on the screen. They are all accused of manipulating benchmarks and exchanging confidential customer information. Francine the problem is there anno other there is never end to it. The lawyers leading the classaction suit are saying there may be investors in asia and europe who would like to sue, as well. You have these other issues going on, whether it is libel rigging and the libor rigging and the like. It really does seem like a Bottomless Pit that the banks have in order to pay off, via settlement or court cases. They usually settle. They still need to be approved by a judge. Manus thank you very much. Elliott gotkine on the banks. Francine the chinese run has halted a threeday slide. Manus that follows a turbulent week for the currency. Lets bring in our bureau chief in beijing. Looksu want looks yuan as if it has halted its slide. Hais it done and dusted for now . This is the first time they have raised the reference rate since that depreciation on tuesday. If you look at trading through the day, what you see in the last 30 minutes or so, the yuan has been a bit lower all day and then it has pulled back up right at the end of the day. People are telling us that is the government intervening. They have made it clear that they felt depreciation of 3 y realigned theuan with the market realigned the yuan with the market. Francine is it enough to spur growth . A 3 depreciation, the verdict is obviously still out. Our calculations have suggested that to give a good pop to exports, it would need to be about a 10 devaluation. They are a long way off for that. You look at the numbers in recent weeks. Bloomberg has its own gdp tracker that shows gdp had fallen to 6. 6 . Still a pretty good number. The government had a growth theet of 7 by the end of year. There is still quite a bit of work to do. Manus in terms of contagion around the region, what is the impact . I think the main message here is one of soothing or quieting of panic. Yuanchina really gave the a depreciation of 2 , there were fears that china was starting a currency war to reignite exports after the data on exports was so bad last weekend. This would seem to suggest that that is not the case and they see this as a onetime thing and the government is going to maintain its hand in the market. That is sending a very clear signal that they are keeping their grip and they are not going to let the market take total control. Francine thank you so much. Coming up, crude gets crushed again. Sixyear its fresh low. How far can it go . That is coming up next. Manus join us on twitter. Are debating the merits of corbynomics. Tell us what you think. Francine welcome back to the se coim Francine Lacqua welcome back to the pulse. Im Francine Lacqua. Cranny. m manus five banks have reached settlements with u. S. Investors fxer admitting to rigging markets. Greek mps have backed a third bailout deal after an allnight parliamentary session. The government says [no audio] yuan hase chinese halted a threeday slide after the government raised reference rate for the First Time Since devaluation. Ferro gives us a quick update on the markets. Jonathan thank you very much, manus cranny. Im not sure many economists saw it coming. The biggest question as far as is, is theowth recovery starting to stumble . Gdp numbers coming in below estimates. In the session 2. 5 hours in, we are starting to roll over. The biggest weekly drop since april. Unchanged on the periphery. Here in london, the big Energy Majors f. They are pulling the ftse back. Ollaryuan is big you wakeup, this is what you reach for on your bloomberg terminal. What did the peoples bank of china do overnight . They did something a little bit different this time. They raise to the reference rate for the yuan. Stabilization for the chinese currency, a little bit of encouragement after an ugly week. For malaysia. On it has sparked a route for the region. It is time to take a deep breath and pause and look back at the week that was. 42 per barrel. ,his is a march 2009 low heading for a seventh straight week of decline. The Global Supply glut continues. The concerns about crude rage on. Who is concerned . Should it matter to me . Maybe not, but for the big oil majors, that is what is holding back the ftse this afternoon. Francine we sometimes forget that it is also positive for industrials. Tom keene joins us with a preview of surveillance. Oil, oil, it is a crescendo for the bears . Dead on. Is that is exactly where i want to go. Where is the catharsis . I thought jons dated check was data check was brilliant. Weakness, all of the oil driven, we dont see the catharsis. We will talk to Gary Shilling about this. Quincy crosby joining us, as well. Our special guest is one hans nichols joining us from berlin. We will talk to him at length for our entire two hours. I was taken back by the netherlands stagnation, versus what we saw in france. A most interesting mix in europe this morning. Manus thank you very much. Tom keene in new york. Coming up in 25 minutes. Lets turn back to oil. The longest run of declines with no sign of an end. The lowest level of prices in six years. It will last through until next year and opec production last month it was the highest in more than three years. The phrase we have used, a crescendo of noise on the downside. The oil industry is talking lower for longer. The lower is getting even lower and the longer when you Start Talking to the analysts, the recovery was supposed to happen in 2015. Now we are talking about 2016. It is getting even longer. Francine what does it mean for the bears . Is it a done deal . We spoke to andrea williams. Since there is such a crescendo, we know you had some great stats, but there are so many people talking. That is what we are going to begin to hear from some of the traders. It is difficult to say that there is much downside. We are at 42. Can it go a lot lower . We could have a selloff, a oneday selloff. I dont think there is much downside from current levels. To go low, is that a big upside for the market . Probably not. It is upside for the market if you are betting very long on the , and of the 2016, and of 2017 contracts. Some people are saying you could buy oil today for 50, that is probably a good bet that is going to go up. It is so uncertain. We dont really know how shale is going to play. It has been more resilient than we expected. Manus talk to us a little about bp. It is an interesting story. It looks like they have a bit of an issue in the u. S. Is very important. The trading operation in bp was one of the saviors of the quarter. What has happened overnight is that regulators allegedly are saying that bp manipulated the natural gas marmot market. The manipulation was to drive prices down rather than to increase prices. U. S. Regulators allege that bp was doing a scheme to drive prices down. Manus it is about the profiteering. It was profiteering from thatng and doing a scheme was illegal according to regulators. Time that bpecond has been accused of trying to manipulate a natural gasrelated or Energy Market in the united states. In 2003, they were accused of manipulating the market. It was a record fine at that 300 million dollars. The penalty today could be about 50 million. Time if it iscond true and bp should pay a higher fine, they say. Francine thank you very much for that. Manus u. K. Politics. Ballot papers are being made to the supporters of u. K. s labor opposition today. For a Leadership Conference to determine the future of the party and help shape the outcome of the 2020 general election. Francine socialist hardliner Jeremy Corbyn is expected to sweep the victory. Great to have you on the program. You wrote a great piece on the website. Put into context what exactly corbynomics is. It is a return to old labor. It is a return to a commitment to state ownership of industry. One of the things Jeremy Corbyn is hinting he will advocate is renationalizing the railways. It is also a return to the oldfashioned activist campaign politics. Blair. Or pretony this was the labor many thought was unelectable in the 1980s. That is the debate. Manus lets talk a little bit about his popularity. The demographics are interesting. He is really the dark horse that has come forward. Where is the appeal coming from . What you have got to look at is why did ed miliband lose so badly in the election . This is a party that has lost its way. Many of his supporters do not know what Labour Party Stands for anymore. They dont feel there is a strong leader in waiting of the more conventional candidates. They are looking for someone who does not wear suits, who expresses opinions freely, who speaks from the heart, who is the antipolitician. This is also someone who has consistently rebel against his own party. This is not a labour party man per se. He is not a party politician. He is the antipolitician and that is what appeals. Francine he is also very charismatic. If he does get elected, it almost gives the election winner to the conservatives because he is so left wing . Yes, not just because he is so left wing. If he wins this, labour party will be busy stabbing itself in the back for the next year because there are a lot of mps from the labour party who really do not want to see Jeremy Corbyn. This is not someone who sided with them on previous votes. They will be like, well, why should we back him now . Dont like this united party. That is what they really fear. Francine thank you so much. Manus still to come, as competition comes up among the apps for video streaming services, we will check out why one focus is a little bit different than the rest. Manus welcome back to the pulse. Francine yep. Time to talk tech. Have you ever wanted to broadcast yourself . Well, we have. Myeye has raised over 2 Million Pounds so far. Manus one of the founders has joined us in studio. That we are all a little excited. What is the difference between you and periscope . Why should i opt for myeye . I think our approach is approaching the family and the friends and the fun. When we conceived the idea of Live Streaming a couple of years ago, there were three things we wanted to achieve. . He first was could we build it it is challenging. Having done that, secondly, can we make it fun . We have brought the fun aspect to it. This is about the family and the friends and following great content. Once we have developed it, how do we let the world know about it . That is where david comes in. Francine there is a videogame background. Hans absolutely. Anybody who has a slightly longer memory in video games kong e, donkey they have brought something quite refreshing to the market. That young, compelling, fun aspect. Manus there is a great line last week. Really cares about anything until it is a billion users. There is a bit of a way to go. Where are you relative to periscope . What is your trajectory and your uplift . We have literally just launched. It is over the course of the next few months that we will be looking to share the data. The key for us is not about accumulating large number of users. It is about having users that understand engagement. Take the ability not just to broadcast to the world, but you may want to just broadcast to an individual or broadcast to a family or group of friends. It is a much more protected situation where you find relevant content for groups of individuals. What we want to see over the course of the coming weeks is high engagement. Francine is that why it is not really linked to a specific social app . You want to keep it open . Right. I think controlling who you antribute your content to is critical factor of myeye. If it is relevant to your twitter audience, you can show it to them. Tois if it is relevant , you canor instagram do that. The independence of platform is critical for us. Manus eventually, the advertisers will love you for creating communities and bringing communities specifically together. Forgive my gaucheness, but is that what it is about in terms of monetizing . Where i would agree with Mark Zuckerberg is the real early stages is to keep it as clean from any forms of advertising. It has got to be free and clean and about the content. Then driving numbers up. Francine how do you make money . There are three aspects that make Live Streaming a relative medium in the longer term. You are dealing with an individual in a location at a particular point in time who is streaming an area of content. Those location points are relevant to an advertising community. The sort of data that you can accumulate from that. Absolutely, longer term, it will be the case of thinking through the monetizing options. Our total focus and our funders are focused on driving the user growth experience. Francine you want to get market share for the next two or three years and then try to monetize . Absolutely. It is about building communities. Theill learn a lot over next few weeks. Dont think we have all of the answers. Even though competitors are out there, the penetration of Live Streaming has a long way to go. I think it is going to become a very relevant medium. Manus David Beckham . David beckham is investing time with us. We have reached out we wanted to let the world know about our app. I went out to think about who would be the best Brand Ambassador for us. Not only is david british and we pp, but he hasa genuine global reach. He does work very hard for his brands. Over the course of the last year, where he has been working with us, he has been generating content and that has helped us enormously through the stages of testing. What is the big excitement about this type of product . Francine thank you for joining us. We will have you come back very soon. Founder of myeye. Manus japan is marking the 70th anniversary of its surrender in world war ii. Be saidinister a japan has repeatedly expressed feelings of deep remorse and heartfelt apology for its actions during the war. He added the country must learn with him from the lessons of history. Francine china has detained the owners of a dangerous chemical store following the violent explosions that killed as many as 50 people. It is not known exactly what caused the explosion. Of oil and iron ore have been disrupted. Manus apple is said to be delaying a Live Tv Service until next year. Talks to license programming from Television Networks are progressing slowly. Apple does not have the Network Capacity in place to ensure good viewing experience. Francine after the galaxy s6 failed to lou are buyers from lure buyers away from apple, samsung is unleashing its new set of devices to try to win back market share. Manus Caroline Hyde joins us now. She got a new preview of the s6 edge . Was he tempting you with chocolate . What do you make of this . Caroline i thought it was a goodlooking phone and there are nice feature upgrades. It is bigger, it is better in terms of multimedia. It is faster in terms of charging. Im terrible at throwing away my phone. Im always dropping it. It is less scratch a bowl. But there is nothing breakout. The upside is the samsung pay. They were testing out how easy samsung pay. It is going to be more widely usable than apple pay. You will be able to use the magnetic strip card readers, which are prevalent in restaurants, shops. They want to be used by everyone. They dont get charged transaction fees. You have this great enormous event in new york are they unveiled these. I do think they are beautiful, i just dont think there is a killer new feature. You can live stream videos. I did not think it was a standout versus the apple iphone 6. They have also got to build themselves back up after production got hit. These have got curved screens. This is a whole new way of making phones. I asked if they would be able to keep up with production this time. We were so successful we could not produce as much as demand was expecting. As you know, we suffered a little bit from Production Capacity. Now, since the Third Quarter of this year, the demand the supply issue is solved and we are very concerned that we can now supply everything that is immediately demanded. Caroline he is Deputy President of Samsung Mobile europe. Speaking very passionately. Francine if this is not enough to lure customers, what will be enough . Caroline they are hinting at a new smart watch. I think they are really very passionate talking about their level of innovation. 40 million per day they spend on r d. They are trying to push the envelope. When you look at the stats, they have sold 32 less highend phones. They are now just a quarter of the highend phone market. Apple is two thirds of the market. They have a lot of catching up to do. Manus thank you very much. Lovely to see the new phone. Francine football season is back across europe this weekend and it is financially better than ever. Bloombergs tom gibson looks at which European League is the richest. It is that time of year again. Latest figures show that European Leagues have seen record revenues in three successive years. Which is the richest . It is england versus spain versus germany. All three leagues have huge tv deals. Aga soldot la le rights. The English Premier League has the biggest tv deal. 7. 1 billion euros for three seasons. Andof this cash coming allows the teams to pay their players extraordinary wages. English clubs spent 2. 3 billion. Spanish side spent 2. 1 billion. German teams spend 1. 1 billion. Have germanys leagues may the lowest paid, more people turn out to watch it. Average attendance is around 43,000. Although germany does have the cheapest tickets. But there can only be one winner in the league making the most money is the epl. 3. 9 billion euros. That is up 32 thanks to that massive tv deal. The game is getting bigger. One way or another. Francine what can we say, apart from have a great football weekend . That is it for the pulse. Coming up next, it is the surveillance team. Follow both of us on twitter. On monday, we will be talking about china. Follow surveillance for the rest of the day because they will be focusing on oil. Week forbit of a tough stocks. Lets see what monday morning brings. Francine have a great weekend and keep watching bloomberg. This is bloomberg surveillance tom greece in crisis. Does stagnation in paris signal recession . Oil continues a dissent. The russian ruble may weaken ever further. In this hour, Gary Shilling and the coming collapse in oil. His call on lower Interest Rates as well. Good morning, everyone. This is bloomberg surveillance headquarters world in new york. Friday, friday, i say, august 14. I am time king. With me hans nichols. A moment of silence. Olivia sterns joins us wounded. Is your rib broken . Olivia you cannot make me laugh. Tom a memo worldwide. Hans you have to be careful on those polo pitches. Aivia i fell off paddleboard. Not because it was difficult rapids. About six inches. [laughter] tom hold my hand. Hans