Transcripts For BLOOMBERG Bloomberg Daybreak Europe 20171129

BLOOMBERG Bloomberg Daybreak Europe November 29, 2017

Obstacle. 10,000 asoin tops the bubble warnings multiply. Anna good morning, everybody. Bloomberg daybreak europe. Our minds back to what happened in the United States yesterday. We are perhaps drawing a line in the sand in todays trading. U. S. Stocks touching new highs. Its the everything is awesome rally. Focus on the things that are good. Tax progress. Positive data. The Senate Budget committee has advanced the republican tax bill. See the index is pretty flat. We had powell testifying in front of the committee. He talked about the december hike. He also signaled he was on the same page as janet yellen. The pound is up again. Could we have a deal in brussels . It looks as if we have a preliminary agreement on the financials. Its a long way to go into actually get to brexit. Youve mention whats happening in north korea. Japan aims to get north korea to abandon the Nuclear Weapons and recognizing north Koreas Nuclear state would be a mistake , but what is the issue for markets . Basically the market, every time you have a Missile Launch from , this chart says, yeah, who is bothered . Everything is awesome. It sounds a little bit like donald trump. Is on target for its 11th straight month of gains. The global momentum, as you look the best day. S. , was had by the s p yesterday. December has never been a poor month for the s p since the beginning of 1928. Lets get your bloomberg first word news. Bitcoin has passed 10,000 for the first time, taking this years price surge to more than 10 fold even as warnings multiply that the largest Digital Currency is in an asset bubble. This was set about the coin. This is a bubble and theres a lot of fraud mixed in. Theres a lot of froth and fraud in anything as exciting as this. I think this will be the biggest bubble of our lifetime by a longshot. That the records say i didnt say that. The u. K. And European Union have reached an outline bill on the divorce. While governments have not , they have reached a preliminary agreement. Eu leaders will have the final say of whether the offers high enough. U. S. , the outlook for republicans to deliver a tax overall by the end of the year brightened after President Trump addressed gop senate holdouts in a closed session. He said, they want to see it happen. Seecommittee has voted to send the bill to the senate floor as early as tomorrow. President trump has won a legal fight over who gets to run the Consumer Protection bureau for now. Mick mulvaney can remain as acting agency head. To blank a move block the move by leander english. In saudi arabia, one of the Corruption Cases of been released. Prince abdullah was freed it wasnt immediately possible to reach him before comment. News 24 hours a day. You can find more stories on the bloomberg at top. We are seeing asian markets fairly resilient. The nikkei on the close up by. 5 . Still seeing a bit of week is coming through in hong kong. It was down at this level yesterday and then turned around on the close. We saw a rebound and material players. You are still seeing a rich treat from a lot of these tech players in the region. Chipmaker, an led is down by about 5 . Six to 7 billion of capital still needed in the god see within demands. Galaxy lithium demands. Manus, anna . Manus thank you very much. Omprehensive roundup north Korean Leader kim jongil and has said it has completed its Nuclear Program after successfully firing a new intercontinental Ballistic Missile. He says the weapon puts the entire u. S. And range. Donald trump, quotes, we will take care of that situation. What do we make of these claims . The statement from north what basically confirmed the south korean and u. S. Officials are you know. It went as far as they claimed, it went as high as they claimed. Not explained is whether they had a dummy warhead and whether that survived reentry into the atmosphere which are two key technologies to have a workable holistic missile. Regardless, the fact that they did claim that they reach their goal is a significant statement because it signals, to some analysts, that maybe north korea is ready to talk. Aloneave said all national along, and despite the sanctions, their goal is to have a nuclear force. Today they declared they do. Will they stop testing . Work on deployments . Get to the negotiating table . I think that is what analysts are looking at. Anna we will see with the end goal is. From members of the japanese of ministration abe all they and trump scotts didot not discuss nuclear options. What has the response been in seoul . In terms of the market, it has been muted. Words start the used are fatigue, desensitized. From the Financial Markets there was no reaction. What worried them the most was what is happening in washington. Donald trump had a very muted reaction and i think that relieved the markets and as such it did not remark react as negatively as some would have thought. Anna thank you very much. Atemy cook, chief economist jeremy cook at world first uk joins us now. The lack of reaction we have seen in asian markets and even the yen doesnt always react. Context, isnt it . This is the new reality. Jeremy markets have gotten used to it which is sad if you get to the charts of the nikkei or other markets, you would not be happens inw things the peninsula. We are getting into the winter and we know the government has difficulty feeding the people. This may be a measure to up the aid. This may come down to triangulation and you read the headlines that say we should not recognize north korea as a nicholls state. Power. As a nuclear this is a trying relation between china, japan, and the u. S. Trump kind of rolled back on the rocket man sentiment. Almost a performance at the towards north korea has become more professional. Testing the metal of your neighbors. It has risk and reward. Us. My cook stays with if youre traveling to work, you know what to do. He will go to digital radio. To byre about to speak the judge. To body judge bobby judge. The u. K. And the eu are said to have reached initial deal on the divorce bill. This is bloomberg. Manus here is a live shot of singapore. We look at the msci asiapacific. Nothing can keep a good index down not even the risk from north korea saying it has completed its assent to a Nuclear State. Up a quarter of 1 this morning. Deputy Prime Minister substituted for theresa may. The outgoing fed chair, janet yellen, testifies on capitol hill. Jerome powell has told lawmakers the case for raising Interest Rates next month is coming together. He said while unemployment is low, the economy does appear to be overheating. We dont see wages signifying the tightness in the labor market. Is no sense in an overheating economy or particular tight labor market. Manus jody joins us anna jody joins us from hong kong. What will be the big takeaway . He sounded quite a lot like yellen on quite a lot of subjects. He resulted in not a lot of reaction. He did sound a lot like her in that dovish wing saying there is still room to keep it unemployment rates low and not have too much of a problem with inflation. The possibility of the rate hike in december. Talked about the labor market and how there is room to grow their without affecting inflation too much. There not seem to be werent any particular huge headlines that came out of anything. He had a little bit of stuff questioning but basically seem to sail through. Sailing through in politics in the United States of america is a relatively interesting combination. The Senate Budget committee has approved the tax bill. Where do we stand on that . They did approve it on a partyline vote, 1211. No democrats are likely to vote for this bill. So the Republican Leaders can afford to lose only a few votes. Placate somee to of the republican members of the committee, including ron johnson. That corporations corporationse treated better than pastor businesses. He still has some problems with the bill. They were able to deal with senator corkers issues. But there seemed to be some republicans that are still very concerned about the cost of the bill. It may add 1. 5 trillion to the deficit over a decade. Have a lot of amendments flying fast and furious and then a final vote. If it fat if it does pass their, in there are still other hurdles. Thank you for that. Jeremy cook is our guest. World first. St at donald trump said, we had a lovefest. There are still issues. This is the prospect that we are looking at. These are the deficit that obama , bush, clinton, and reagan. We are headed towards a 1. 5 trillion dollar deficit. Concerning . It is concerning. There has been some word there has been some backdoor way of repealing obamacare if this tax bill passed but right now they are splurging on the tax without making the savings. As far as deficit dynamics go, they look pretty terrible. How much of a buddhist will the tax changes give to the u. S. Economy. Surging, they are pricing in some affects from tax, if you look at the bond market with the flat yield curve , there is no expectation of a macro boost. The stock market is excited about buybacks and that is where well go. It may not actually deliver growth. Buybacks, wey see may see moving in the housing but the bond market situation does tend to suggest that markets are pretty ambivalent about the trickledown effects of these tax cuts moving forward. Is either ahis symbol that the tax cuts are not being expressed the way they or, its a massive disappointment. The debate on the dollar, its a fairly asymmetric outcome. You get a tax deal and you get a tax agreement, have a look at this dollar chart. Down goes the dollar. Is the market more obsessed about a flattening yield curve versus the tax agreement . Jeremy i think they are more focused on the yield curve at the moment. Quickave become quit to price in an price out movements due to the trump administration. 11 months into it and nothing has really happened. Are we going to get a bill . Lets focus on something we can legitimately put money behind and that is the yield curve. We know everything. Its only going to get more water down. The senate bill has to merge with the house bill. And itsmes together going to be a bit of a fudge. If it doesnt happen, thats another kick in the eyes to the trump administration. Anna talking about Jerome Powell and what he has what powell this is has been saying about the labor market. He says there is signs of overheating or a tight labor market. Statistic. Ed this he suggests there are still pools of labor that could come in. This is painting palas quite the dove. Jeremy that line was probably the most important in his testimony. It could have been janet yellen with that same line. The Participation Rate is almost a forgotten statistic. Rate stration Participation Rate was something were focused on in 2011, 2012. That has stagnated. Its a good thing for markets that you get this continuity between yemen and powell. They are saying the same kind of thing. Theres no sense of an overheating economy. You look back at the lines from the daily profit. Look at an overall upbeat mood in the United States of america. This is one of the longest expansions on history. Youre going to need something to keep it going. You need this momentum to continue. The fed is not pinning all its hopes on the tax plan coming through. As low asep rates they are for little bit longer, slower to raise the opening salvo of the powell said plan. For somebody who doesnt have a phd, he did a good job of sounded like an economist. The one hand and on the other. Jeremy a very straight back to congress. No bells and whistles. Central bankers are not rock stars. You cant see mario and mark and janet shaking their shakingian mark their booty . Anna thank you for staying with us. Up next, bitcoin. 10,000 now. It hit another record. What is driving the surge . That is next. This is bloomberg. Erga this is bloomb daybreak europe. We have reaction from japan about north korea. In parliament that recognizing north korea as a Nuclear State would be a mistake. Japan wants to get north korea to abandon its Nuclear Weapons. Manus lets get across to nejra cehic. Everything is awesome. What do you make of it . Nejra i dont know about awesome but certainly unfazed. We look across the asian equity markets and its flat. The heinz saying is pretty much flat. Everyone shrugging off those risks. The nikkei is up. 5 . We have reached at least an outline of a divorce settlement between the u. K. And eu. The pound jumping on reports. Taking a look at the dollar. The index fairly steady. We did see it hit a session high yesterday based on the progress of the senate tax bill. Relentless a pretty flattening on the curve. It has usually been a bit more sensitive to the front end of the rate curve. Little bit of negativity coming through on the longterm prospects of the u. S. Economy even as to get the incremental good news. Finally, talking about where there might be euphoria, everything being great, bitcoin mania past the 10,000 mark. More than tenfold increase on bitcoin this year. People asking when its time to take those profits. The u. K. And eu are set to have reached a preliminary agreement to the amount britain will play pay when it leaves the block. That just leaves the issues of the irish border until talks can progress to the next phase. ,oining us now from brussels what exactly has been agreed . Seem to have an outline of a on the financial commitment that the u. K. Is going to pay as a result of brexit when it leaves the eu. The main point is the uks seeing to have said, this is the overall financial commitment that we have to the eu. They have agreed on a methodology of breaking that down and coming up with a final figure of what they will pay. This figure is going to be about 30 billion euros about 40 billion euros. We dont have a definitive number. Theresa may doesnt want a lump sum payment. Its going to be some kind of staged payments reaching out into the future. She is going to avoid having to say what the final figure is. The speculation, anywhere from 40 to 100 billion. How does she sell that to boris politiciansother with aggressive language . How does she sell that because they will lambaste her. Its a difficult thing because i think she has the eu on board in terms of doing the optics. If they focus on the methodology and not on the final some, i think they will be able to sell it back to their party constituents in london. You dont just have to sell this to the other eu countries that you have to sell it back in the u. K. That is what they are trying to come up with here. It looks like they have something they can take back to london and make. Manus thank you very much. Cook. Turn to jeremy be at cross two of the major hurdles. The irish order is far from agreed. Border is far from agreed. Look at the gilt market. Down she went. The gilt market says we have a deal. Says we havearket a deal but we havent. To be honest, even if we do get an agreement, it doesnt change the grand scheme of things. Manus is that not good . Jeremy good in that it has progress but in the grand scheme of things its another political maneuver that starts off just as starts to ostracize theresa may within her party. Hardline brexit tears brexiteers would not send 100 pounds to your. Its not going to tell. If this is a pressure play on , we are getting somewhere, dont trip this up now manus anna thats an interesting one. I have a chart here of the pound. You talked about the guilt moves. The pound moving. Are we a little ahead of ourselves . What is the fallout that is possible in the currency there how much tired we go russian mark how much higher do we go . Jeremy the European Commission on the 14th and lifting of december, there has to be sufficient progress. Then trade talks beginning and businesses here are the u. K. Coming up and saying our members are happy so we can start 2018 and 2019. Hats been the news businesses worried about how to do business with the European Union. What does this do for the bank of england . Guilt space losses at the open. There is a repricing showing that u. K. Investors are starting position brexit. The door for the bank of england to adjust its policies next year. If you do get the beginnings of a trade deal, it could give mark carney the latitude to go for more aggressive height. Agree or disagree . Think he will do it. I feel 2018 will be a lot like the end of 2000 havent seen. A lot of focus on Consumer Credit and real wages and the retail sector. The u. K. Is a consumer. Gdp is a consumption is a factor of consumption, investment, and trade. Trade is poor. Investment is in coming. Government spending this week. And consumption is for. So where does growth come up the bank of anna england is worried about the consumer reddit side of. Are you worried about political change in the united them russian mark it looks dowdy. Political change in the United Kingdom . It looks cloudy. Comments citing the risk to u. K. Assets that they see. The question is do we get a second referendum if we get Jeremy Corbyn in . I dont know what the impetus is for us to have an election yet. 2022. L think we get to i dont see it the position where Jeremy Corbyn goodwin the premiership. Win they corbyn could premiership. Anna maybe we will see what happens at that crucial lunch and what progress has been made. Thank you so very much. Bitcoin has passed 10,000 for the first time. The largest digital cryptocurrencies has risen by more than 50 six october since october. Many warned that bitcoins are a bubble. This was at an event in new york. This is a bubble and theres a lot of fraud and froth mixed in. I think this is going to become the biggest bubble of our lifetime by a long shot. I want the record to show i did not say that. Its because its so global. I think this ismanus its goin. Lets go to hong kong. Busted 10,000. This is spectacular. What is driving the price . Are we seeing mark dissidents more participants . Give me the side of this market. Heard allase i have day long is foam oh fomo fear of missing out. The higher the prices go th

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