Transcripts For BLOOMBERG Bloomberg Surveillance 20240713

Lets look at these markets and our into the european trading day. Stoxx 600 in europe up by. 1 . And even start to the trading day. Evenly divided winners and losers on the European Equity markets. Lacking any direction. Into the u. S. , also lacking direction. We have seen a little bit above the flatline. Not getting a great bicker great bit of direction. A big focus on Central Banks and a u. S. And a focus on u. S. Policy. Titians, ay trade tensions, that coming up. Wrist bank leaves behind five years riksbank leaves behind five years. Is now what we are showing you. We were showing you the norwegian krone. Not to be confused with the riksbank. Bank, we scroll back to what they did there. That was as expected. See a to this picture, we number of Central Banks leaving policy unchanged. They were treated for negative Interest Rate hiking. They were moving in their own direction moving against the cutting cycle for many previous months. We continue to do that. Lets get a new lets get an update on bloomberg first word news. Viviana Prime Minister Boris Johnson laying out his government priorities at the heart of his legislative program. First. S to put brexit it will be a lowkey affair. The queen will arrive by car. Over to france, that is where micron has signaled a willingness to improve business to improve on his pension reform. They are entering their third week. The president to back down to the bank of england says an audio feed of its News Conference was misused despite a third partys supplier thirdparty supplier. The bank has referred the matter to the financial conduct authorities. Boeing has been downgraded one notch by moodys. And now sits at a three. This is due to uncertainty as when its jet will return to service. It has been grounded since the bankd half of deutsche cutting 6000 jobs according to german newspaper. The paper says the cuts are a part of the 18,000 job losses. Deutsches hasnt given detail. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am viviana hurtado. This is bloomberg. Anna donald trump has become the third u. S. President in history to be impeached. The u. S. House of representatives voted along partisan lines to impeach the president for abuse of power and the obstruction of congress. The article of impeachment will be turned over to senate for a trial. This lawless artisan impeachment is a political suicide march for the democrat party. Have you seen my polls . Says she willlosi not immediately name house managers to act as prosecutors in the senate trial. We cannot name managers. Hope that will be soon anything havent seen that looks fair to us. Anna for more, Derek Wallbank joins us. Process. Ext in this a little uncertainty in how quickly things moved to the senate. You start to wonder what the timing means for election 2020. You do. It is a really good point because nancy pelosi and Chuck Schumer are going to talk strategy in washington about the 11 00 hour. The thing they are going to be talking about is how they proceed. They have been a strain of thought on the democratic side that maybe you hold this back from getting over to the senate immediately. As some form of trying to build leverage over the future process. This would be like, who is going to get called as a witness . How many people does this side get . Mick mulvaney have to testify . If that happens, are republicans one to insist on calling hunter biden . Things of that nature. They are searching for point of leverage here. Theyve got it a little bit procedurally. There is a question about what is going to happen. When it gets over there, you play the clip of donald trump asking if you have seen is polls. His pulsesay he is say he is incredibly popular in the republican party. That is why everything is betting it is going to get to acquittal want to gets to the senate. Anna that is why we are not seeing much Market Reaction to this. Are there any voices questioning if President Trump is removed from office here . Is nobody talking about that as a possibility . Nobody is talking about it as a possibility which is interesting in washington because you rarely have bipartisan agreement. There is bipartisan agreement that there will not be bipartisan agreement to revoke donald trump. Onear guest after guest come and say, when youre looking at 2020, this is going to get discarded and then you move on. History gives us a different lesson. The two president s who were impeached were followed by somebody from another party and Richard Nixon who ended up resigning, he is followed up by gerald ford but when ford went to an election cycle, the other party one won. There is a political backlash here. You are seeing democrats trying to capitalize on it. The same sort of strategies i saw and the swing state of florida in 2000 where people , yourunning on the idea are seeing joe biden starting to already run ads of that very nature talking about how the world doesnt respect this and donald trump is a joke. You are already seeing democrats go at the same playbook that was used in the last post impeachment inquiry. This is very much setting up a political fight. People should look at this in the terms of the next political thing. Note, thete rightly general expectation is when this does get to the senate, that it is a big process. Anna thank you. Joining us therefrom singapore keeping his eyes on washington. Up next, we speak to the ceo of legal general, nigel wilson. Will get a take on the Global Economy where we have a Interest Rates right now. Where we have low Interest Rates right now. This is bloomberg. [speaking foreign language] anna putin is getting his national News Conference underway around Climate Change. They are addressing that climate that topic over in russia. 20 years in power. We will listen out for anything he has to say about russia or beyond. Lets focus on a big day for Central Banks. Japan, the boj left policy unchanged as a stemless package brightens the economic a stimulus package brightens the economic future. Within the last few minutes the norges bank has held Interest Rates. At 12 00 london time, the bank of england delivers its first decision after last weeks general election, in less then three hours time. The bank is expected to remain in its Current Holding pattern. Plenty to talk about from such a banks. We have decisions from indonesia and taiwan. Lets bring our guest into the conversation. We welcome to the set, the ceo of legal general, nigel wilson. Lets start with the specifics of your business, the u. K. Lets talk about this low Interest Rate environment we find ourselves in which is the big topic today. We have seen some Central Banks deciding Interest Rates were not delivering. What is your thoughts about what the low Interest Rate environment brings us . Nigel it is a reflection of political risk. We would like to see the end of negative Interest Rates. Not good consequences from that. We would like to move from excessive political rates into investment led growth. There is amazing opportunities to deliver Economic Growth which is what people want. Anna the danger is if you want to see an end to the negative Interest Rate environment, maybe that will discourage governments from doing some investing in fiscal spending. They have been later to grasp that money has been cheap. Nigel the entire opposite is going to happen. There are these amazing opportunities. We have had these deficit investments for many years across the world except in certain parts of asia. The rest of the world needs to catch up. It needs to spend a Long Investment period. Anna we have seen the bank of japan doing nothing today. Is that going to be a big seen . Nigel we have a lot more uncertainty in britain. The government is talking very big but not delivering very big. Science and technology is the most exciting. We have deficits in almost every area. All that needs wiping out from a huge point of demand. Now we need supply. Anna the negative Interest Rate upironment, has that throne opportunities for you to diversify the assets and get involved in real assets . Is not what caused it but that is what we are doing. Theres this opportunity to coin this i providing infrastructure pretty much everywhere. When you look at some of the airports, it is terrible. All of that needs upgrading. Almostey to invest cost next to nothing. Anna you are not the first guest to mention u. S. Airports. Where do you think this has had a negative impact on the Financial System more broadly . Turn things upside down a little bit. Nigel people do not know how to invest in a negative Interest Rate environment. It causes all sorts of confusion. Can we get normalcy back . Interest rates should be positive in an economy. People should be rewarded. They havent been sufficiently. Anna stay with us. Nigel wilson, the ceo of legal general. Etsy lets see the News Conference. It is underway from russia. 20 years in power for president putin at the end of this month. Most of that as president , some as Prime Minister. Next we get nigels statement on where the Global Economy is headed in 2020. This is bloomberg. To offer people that choice. We vote a coalition around this principle and know the election is over. I believe a broader coalition is being formed. The right to choose is not just a demand from me and Prime Minister or from the s p, it is based on the people of scotland to decide our own future. The Scottish Government leaves that rights should be exercised free from the state of legal challenge. In line with our values we acknowledge referendum must be legal and accepted as legitimate here in scotland as well as the rest of the u. K. And the European Union. We are calling on the u. K. Government to negotiate and agree the transfer of power that would put beyond doubt the scarlet the Scottish Parliament to legislate for the referendum on independence. Together with the constitutional , we are publishing the draft legislation that will give a state to that. I anticipate that we will hear a restatement of the u. K. Government opposition. They should be under no illusion that that will be an end of the matter. We will continue to pursue the democratic case for scotlands right to choose. We will do so in a reasonable and considered manner. We are setting out that case in detail because we believe the u. K. Government on this as an issue has a duty to respond in a similarly considered and reasonable manner. Westminsterdebate, anna coming to us from edinburgh. The leader setting for the case for another independence referendum to negotiate and parliamentcottish should have the right to legislate an independent vote. She is anticipating pushback from whitehall. Pushback. Ere has been. E will dip in again 2019 has been a bumpy year for stock markets. Sinces. Up more than 20 january. What will the next decade hold . Nigel wilson is still with us. We could talk about the next year. What excites you most . We look ahead to 2020, the start of the 2020, what is exciting . Nigel the science and technology that we have in the u. K. We have never capitalized. It is always been and set it by some American Company and taken. T back to the United States huge opportunity to create new industries. The Creative Industries are none of those industries we can build up. We are going to see a lot more of that here in the u. K. Infrastructure is going to be a big topic in 2020 and beyond. Anna tell me about your business. A lot of management change, new ceos coming in midway through 2019. Is there an issue with retaining people . Nigel it was about returning people. Cio, a frequent guest on bloomberg. There is a trend going on. We have a 5050 by 2020 goal. To make sure we have more than 50 of our senior people as women in 2020 and beyond. Also i notice lg i am talks about having a lens on all of its investment decisions. I wonder if you have enough information to be doing that . The European Union spent some time this week trying to define what is a green investment. This is still a bit of a wild west. Nigel theres development. We are going to invest more in Climate Change and onshore wind and solar. Are we going to build more ecofamily housing . The answer is yes. Housing for homeless people, for will housing, absolutely yes. And echo let me ask you about the dividend. Ish generation 2020, what the dividend policy for 2020 . Nigel it is a very progressive policy that we have, increased by 7 over the last few years. We had another record year. Pounds. Billion we had our best year ever and many of the areas of our business. Anna nigel, thank you. Nigel wilsons thoughts on business. More on the u. K. Boris johnsons landslide victory, his government will lay out his policy in a speech. This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone wifi up there . Uhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your local xfinity store today. Anna donald trump becomes only the third president in u. S. History to be impeached. Markets down. Despite evidence of a flowing economy, and five years of negative rates Boris Johnsons government outlines its agenda and another queens speech, at but this time he has a majority. We will preview his plan next. Good morning, everybody lets get to first word news. For that we go to viviana hurtado. Viviana donald trump come as you mentioned at the top of the block, is the third president in u. S. History to be impeached, but the process does not end there. Next is a trial in the u. S. Senate. He will almost certainly be acquitted there. Not a single republican in the house voted to impeach, donald trump attacking the move while at a rally in michigan, calling it political suicide for democrats. Europes topped court says a leader has parliamentary immunity. 2017is part in the independence referendum. It could have an impact on the spanish Prime Ministers attempt to form a government. Today the bank of england looks rates onkeep interest hold amid mounting speculation that policymakers will ease in 2020. Since the election bets on a cut next year have jumped before next december, money markets are pricing in around 80 chance of a reduction. Todays decision is admin day. Stemming the tide of global easing, the central bank easing almost five years of negative rates. The justification, an uptick in inflation. The risk bank says the benchmark rate will likely remain at zero for a few years. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i amthan 120 countries, viviana hurtado. This is bloomberg. Anna thank you very much. Lets focus in on the stories there in the u. K. Boris johnson will lay out his governments legislative plans today. You could be forgiven for thinking that the queen speeches come around more often these days. It is less than 10 weeks since her majesty outlined johnsons proposals. Today he will emphasize delivering brexit and Funding Health care. With us today, simon wells and nigel wilson. To you firstcome your expectations around the bank of england today i know that you expect to see a rate cut in 2020, and the market seems to be moving in that direction, doesnt it coming with increased expectation of a breakup. What are you looking out for with no change in Interest Rates . Of the two members that were voting for a cut thinks they have enough political clarity that they move. That is one thing to watch. Are thinking maybe they were right. Maybe we join them. Press conference there will be no new forecasts today. Tore is not a huge amount look at as the tone is set for next year. Anna and your thoughts, nigel, as of the bank of england Interest Rate decision and the tensions that we talked about. What are you looking for from the bank of england in 2020, or what are you expecting the bank of england to do in the u. K. . Nigel probably more of the same. 2020 has to be a discussion of investment. Whether they move up or down by a quarter of a percent is not mattering very much. Additional of investment is pretty easy for the private sector and the government to deliver. That is 1 of gdp. We could easily get that in 2020 and beyond if the conservative government deliver what they talk about. Is goingthat is what to be more interesting to you, investment Spending Plans that they have. Nigel absolutely. For the first time, the government will be allowed to speak about their investment plans in a positive and constructive way. Those will be regional plans as well. What we have heard the last 20 or 30 years is a lot of spending in london but not enough in the regions. That has to be corrected in 2020 and beyond. Anna simon, your thoughts on the fiscal leads here, just making note of the data in bloomberg. U. K. November retail sales excluding fuel, fell by 5. 06 . By 0. 6 . It is just one month of data, from food and Department Store sales. There is weak inflation data and weak manufacturing. It does not paint a good picture for the economy. Simon know, it doesnt. If there is going to be a postelection it will be pretty thick given the start. Black friday will be in this. Meaningrstand the true of christmas sometime after easter, but it is not a good sign. I am very interested in nigels comments on investment because the government said it could do up to 20 billion a year in Public Investment alone. Although so far 8 billion of that has been allocated per year. That is a big answer into the public borrowing, big uncertainty in growth as well. Borrowing money is easy now. Finding ways of spending it quickly in a good and efficient way, given the capacity constraints on planning and construction could still be a constraint. Has aim sure nigel good idea of where to spend that money. Projectll you need is a after inflation, positive returns. You must have plenty of those in mind. Nigel we spent 20 billion on our own in the last few years across the u. K. Come and we will spend another 20 billion in the next few years as well. Each of the towns and cities has their own agenda right now. Oxford, cambridge there is Huge Investment opportunity there. They are not constrained by instruments rates by Interest Rates or planning. It is about talking, doing in 2020. Anna 1wood also also maybe wonder if that is going to be a Planning Event one wood also maybe wonder if that is going to be plenty of an. Nigel when you go across the people want to make a difference to the lives that people live in the cities. We are seeing real leadership for the first time for my big towns and cities across the u. K. Anna we will have a new governor of the bank of england, simon come as well. What kind of guidance do you expect to see from the bank of england . When was saying that we need somebody who has a strategy, not some buddy whod will just twist and turn with the data. Would that be not just somebody who will just twist and turn with the data. Is that sensible or is it realistic . Simon targeting 2 inflation to two to three years ahead. Preferring downward pressure on inflation, against the backdrop of a forecast on constant race was barely getting back to 2 before. Whatever the strategy is, when you are in that position, we have got to act. Going tote roughly is stay the same. So, yes, people like andrew, who are very consistent in their views, may want higher Interest Rates. We all want to get back to a world where there are positive returns and high levels of investment, return on capital. Going to ignore the nearterm data. That is not possible. Anna nigel . Isel i think the world going to change in 2020. The new Prime Minister, boris, is a very ambitious man. He is not going to sit around and not do these immense projects that we need in the u. K. We are going to get on with this in 2020, regardless of Interest Rates. That does not figure in big investment decisions. Anna so we will look for infrastructure to be the watchword. Nigel, thank you for joining us. Wilson, ceo of legal general. Simon wells. More on the conversation from here. In russia, Vladimir Putin is holding his end of year marathon press conference right now. The end of this month will mark 20 years since he first took our. We will look back at his time in charge. That is later this hour. This is bloomberg. Anna you are watching bloomberg surveillance. Im anna edwards, in four Francine Lacqua in london this money lets get uptodate with annmarie hordern. Annmarie clarion, one of them, up 2 in the u. S. Inking this deal by their point 5 unit, four billion. For clarion it is part of a program to put the stock higher. Cutting the sale at deutsche bank. Its longrun run for their turnaround plan. 2 ,ow oil down more than cutting price targets because it is too expensive for a buyout. Had to gonna production be stopped due to a power outage. Ghana production had to be stopped due to a power outage. We are down premarket, flat on the company. There is a lot of momentum in this stock. Sisince october, it has been up 50 . They had to schedule a car plant as well as a new car. This week alone, we heard from ananalyst that actually has underperform rating on tesla stock. They say tesla will be leading the way in this industry. I have to point out, we are a far way off that 24 a share. Elon musk got in trouble about taking the company private. Annmarie hordern, thank you joining us there with the latest on the movers in europe and the tesla story. Lets focus on negative Interest Rates. Billionaire investor Stanley Druckenmiller give us his thoughts in an exclusive interview. Stanley we have negative real rates everywhere add negative asset rates a lot of places, so with that kind of unprecedented stimulus relative to the circumstances, it is hard to have anything other than a constructive view on the markets risk, economy in the mediumterm, so that is what i have. Ago, st over an hour hiked its repo rate by 25 basis points, ending almost five years of below zero. Where does that leave negative rates, more broadly . Simon wells, lets focus in on europe. In the euro zone we have negative Interest Rates, and we have a euro zone economy economy, economists that are watching what is going on in sweden. Seeing how that experiment is going for them and how they move away from Interest Rates. Does thisand expansion have any bearing on them at all . Simon if you look at the reasons behind what sweden has mittent is unique to siu to sweden. Or, thank weak crone officials have to travel with guards to many places. So that is unique, but i think the lessons are that inflation is rising in sweden. It has come very late in the day, and there has been a housing boom and correction in the meantime, and growth to the extent that it was boosted, largely a residential investment story, so not sustainable. The lesson could be, if you are not in negative rates already, maybe do not go there. For the ecb that is already there, we are going back to zero, that could cause quite a shock. When you there, you are there. The hurdle for any ecb movement is very high. Anna i dont know if german central bankers need to be traveling with guards, but it has become quite heated, hasnt it come in sweden. On thee your positions Interest Rates in germany now . Rateegative interest experiment has a negative impact rather than a positive impact on the economy in germany. What is your assessment . Simon the german labor market is extremely tight. No doubt about it. Savings behavior has been rather odd. What happens in germany is if you cut rates, people save more because they are targeting a return. It is no surprise that it is extremely important. It is not just across germany, it is across the government cap, where it is very divided. Why the major task this year is going to be to heal that risk and focus on the strategic review. Anna is that just going to be keeping a low profile for a while . And if so, for how long . To be fors it going Christine Lagarde and the ecb . Simon they certainly have to keep rates on hold, policy on hold for as long as possible. There is now increasing evidence that the Service Sector is proving very resilient to the manufacturing side. France proving very resilient to what is going on in germany, and todays state is surprising to the upside. There is some positive to be inspection the interest but every time you think it is starting to rise, it comes back down again. It flattened out, but manufacturing i is a long way from returning to growth. Anna chinau. S. Trade disagreement i suppose the danger for 2020 is that maybe the focus is more squarely on europe. If there is resolution between the trade in the trade tensions between the u. S. And china, is that something you factor in . Simon it certainly is one of the biggest risks. A shock is going to be that destabilizes, it is going to be external. The u. S. Administration is very clear, it is not going to fight the e. U. And china at the same time, so if things stall with situation willan come firmly into the crosshairs of the u. S. Administration. That is a massive risk to the european outlook. Anna you mentioned the Services Sector holding up and the French Economy not being contaminated by weakness in germany. Optimistice most area in europe . The roaring 20s, perhaps, where will they be roaring most in europe . Been i think france has resilient, and the story for them is a little bit of reduction in Household Savings if they get a bit more confident. We could see some upside. Very pleasantly surprised with how it performed last year. Thinkn the positive, i the german Service Sector gained in the positive. Europe. Growth is always going to be slow. Rend growth is at about 1. 2 growth is just going to be sluggish. Anna are we going to see germany jump on the green agenda, trying to push through more stimulus because that would give them some cover . I know there is a lot of politics and doing more fiscal investment. Simon this question comes up time and time again. The truth for anyone who wants fiscal expansion, the lack of zero commitment is not going anywhere. If we are going to see large fiscal stimulus in germany, it will require an election and a new government, given the opinion polls, probably including the greens, and, yes, we will probably get stimulus related to lima change. To Climate Change. Anna simon wells, chief economist at hsbc. Here with his thoughts on the euro zone economy. Lets get to viviana hurtado. Viviana next year in china, tiffany expects doubledigit growth. Benefiting from chinas move to boost domestic spending. We spoke with the tiffany ceo. Growing at a very positive rate. So at least doubledigit growth for you in 2020 . I think so. Viviana bloomberg has reported that selling less than a quarter of a price eight months ago. That is your Bloomberg Business flash. Anna thank you very much. Viviana hurtado joining us from new york. Vladimir putin came to power in russia 20 years ago. We will look back at his economic and political record over the last two decades. Most of that as president , some as Prime Minister. We will review 20 years of Vladimir Putin next. This is bloomberg. [speaking russian] anna Vladimir Putin there giving his annual press conference. This News Conference is underway at the moment. Later this month, he will be celebrating 20 years since he first came to power in russia. Lets discuss and look back at the 20 years and what we have learned so far from the press conference. Annmarie hordern is with us. A mix of questions for him. He has faced mostly domestic questions, but some on the climate. Annmarie that was the first question he faced. He said we cannot just do nothing about Climate Change, but for russia it is really just a doubleedged sword. The permafrost melting in russia is a huge deal, giving Companies Access to get to the oil much easier and quicker. But on the other hand, with the permafrost melting, it could destroy russias oil heartland. It could be billions of dollars of distraction. Putin knows that Climate Change is serious for russia. They could be why we see them opening up, ratifying the paris agreement. Issuesmostly domestic that he dealt with. This will go on for our. For hours. Anna what will he focus most on . Annmarie i think it will be on sanctions are Lindsey Graham call this bill the bill from hell, given the fact that it is very strict on russia in terms of new sovereign debt. Tensions on oligarchs close to him, and also the oil and gas companies. Anna thanks very much, annmarie hordern, with the latest on the russian story. Bloomberg surveillance continues in the next hour as sweden awaits five years of experimentation. This is bloomberg. Tom this morning, from the summer of 2007, a watershed event. Swedens central bank, they just say no to the negative Interest Rate experiment. Will other banks follow . Timening for the obtained for the umpteenth time can positive Interest Rates happen . And the president responds to the high crimes and misdemeanors of impeachment. Good morning, everyone. This is bloomberg surveillance , live from our World Headquarters in new york. London, annam edwards in for Francine Lacqua this money. How will the nation note or observe the queens speech today to the assembled . Anna it is going to be interesting because we get a new government, which means a new queens speech, but i think everyone in the country is saying, havent we had one of these . This will look quite similar. But there is more of a chance of getting brexit through this time. Now that we have that substantial majority. Tom in the next hour, we will be able to see some of the pageantry. Pageant, always a first word news with viviana hurtado. Viviana we begin with the impeachment drama in washington, d. C. Impeached the house President Trump on charges of the voteer and making mr. Donald trump only the third u. S. President to be impeached. He is expected to be equated acquitted in the Republicancontrolled Senate. Today Boris Johnson will lay out his legislative priorities. Speak. Lizabeth ii will the focus is expected to be delivering brexit and paying for health care. Also today, the bank of japan is easing leaving policy untouched. Packagebes stimulus brightened the economic outlook. Japans central bank no longer describes overseas risk as increasing. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i amthan 120 countries, viviana hurtado. This is bloomberg. Tom thanks so much. Let me do a data check right now. Actually some movement, and finally bonds begin to move away from the quiet of the last two weeks. This has been a grind we have seen i am going to call it indeterminate yesterday. But that is a key number. We will do a chart on this in a moment. The curve largest for steepening. The difference in yield between the 10year and the twoyear yield. That is a shift. We have a great chart to show that. Onto the next screen where we see fixed income, the vix 12. 49. Spread that the pros look at. The turkish lira, i am paying attention to that as well. Anna there might have been a shift in yield spreads with what is going on in European Equity markets. Lets look at the stoxx 600, pretty flat at this hour. , the weakh market spot. Oil and gas also the week sector here in europe. Tongue quite strong, as we build our way to a bank of england the pound quite strong, as we build our way to a bank of england split. Tom the difference in yield between the 10year and the twoyear yield, you could go four different ways. That is when you hear bull this, there that. Here we are for the president s election, steeping enthusiasm, then this long drawn out curve flattening, even to a negative yield on the negative spread. And then we have moved. Here is the latest 90 days of curve steepening. On this trend, we have broken nicely out above three standard deviations. Doubt ithart, no is a big day for central bank around the world. In japan, the policy has unchanged. In sweden, rate hike has been heightened to zero. And the bank of england later delivers its fed decision after last weeks election. Now, Bloomberg Opinion columnist marcus ashworth. Seemingly a lot in common with the Central Banks. Really interesting to focus on the bank moving away from this experiment, with negative Interest Rates. Is it the right time to be doing that, do you think . It is a gamble. Trying toates are squeeze a little more out. It is almost like a petri dish for japan, to look into what happens after they have boosted negative rates. Becomingpolicy is needlessly complicated as governments are trying to lift their economies out of the slump. You are going to penalize upping money out of the central bank. The makingat his address there, according to forecasts, briefing the press on their rates decision, they also investigated some guidance that they also provided some guidance, didnt they . Growth and their forecasts are pretty weak. That negative rates have not really done anything, and therefore they are trying to say we are going to leave it on zero, we are going to leave it there, and hopefully the weakness of the kroner will be enough to keep the economy going. As i mentioned earlier, it is all about what happens with europe and the ecb. You can see already, what is essence ins well, in europe, you are seeing negative rates and the potential chance of a rate hike. This Time Next Year could be as much as 35 . In europe, that is fascinating. I hope they will listen to it. Thislly important may sound esoteric as we observed the leader of the Swedish National bank. We are thrilled that both of our guests could be with us today. Kallum, i love what you say about petri dish, and that brings me to zurich. It is really about can someone like the Swiss National bank shift from very negative rates and theoretical leadership on negative Interest Rates. For does this event mean Thomas Jordan and the Swiss National bank . Kallum for all central bankers that are considering whether or not negative rates are worth it, the key question is now how do markets digest this new event . It is mainly a communications challenge. If the markets can get on board with the fact that the central bank is not looking to hike Interest Rates, they are just looking to remove what is a penalty on the Financial System, and then other rates basically are remaining unchanged in line with economic fundamentals, then that is fine. If you see an episode of markets panicking, thinking this is the beginning of a tightening cycle, that is a different question. A smallre the swiss, central bank, if they can succeed, you can sort of say we will copy what they do if you decide to lift rates from negative territory. Tom lets look at societe generali. Color to gives a nice the significance of this. Is the age of fiscal policy set to begin, the side effect of negative rates are too high a price to pay . And then he goes on to say i wish santa would bring in easier fiscal policy. It just is not realistic. It is not going to be under the tree. Marcus, what is going to be the communication measure here . How do we signal how the experiment of the swedes is doing . I think the Swedish Krona is important to this. The swiss, the danes, the swedes, they have to keep up against this massive euro zone. They weaken the ekrona by more than a sufficient amount. Where the swiss cannot. This is the game that plays around europe, and we shall see what the ecb after a year of probably doing nothing with that skillful move from lagarde she just put a big review there the reality is as the market prices in, the next move might finally be the hike in rates. Anna thank you very much, both of you. So the ecb stalled perhaps. Marcus ashworth, and Kallum Pickering, staying with us on the program. Stay with us as well. The bank of englands they just policy rate decision, that is at 12 00 noon london time. 7 00 a. M. In new york. This is bloomberg. Tom this is bloomberg. Bloomberg surveillance. An historic day yesterday within the United States of america. Now,merica waking up right trumpnew york times impeached. Everybody is going for the big headlines. I dont have the Washington Post, it does not come up to new york that quickly. Here, we will feature that in the next hour. And then from this, you go to the idea of the history. Before we get to leslie of chatham house, we need to go back to just after lincoln and the first time around in the johnson impeachment. That is something every student learns in school, sort of, kind of like, and then to the huge emotion of the clinton speech, whatever your politics of 21 years ago. Then on to this moment yesterday of impeachment. As i explained to a young cherub last night asking me about this, i said, no, he will still be president. She was very concerned, will he stop being president . The answer clearly is, as im sure all of you know, no, he will still be president. Dr. Murray is with us this morning to provide perspective. Thoughts on what we need forward . What do we observe forward . Leslie well, it was a historic vote, and in the shortterm, there was a very strong expectation that the vote would go that it did, so it was not surprising it was partisan. You have to take two things into account, one the historical perspective, which matters to the president and the american public. I think it also matters to world leaders. It is one thing saying there is likely to be an impeachment, very different to be dealing with a president who for the rest of u. S. History will go as only therecord third president to ever have been impeached. So it is very significant in the bigger sense. Said, tom, shut up and do this as the morning must read. Anna those are my exact words, obviously. Important absolutely and pulls in the history of this event. Alexander hamilton. He is not the broadway play, folks, but interesting secretary of treasury and a founder of the nation. Secretary hamilton was acutely aware that his impeachment trial would that an impeachment trial would agitate the passions of the whole community or it his particular fear was that the deck the decision will be reg elated more by the comparative strength of parties than by the real demonstration of innocence or guilt. There is an essential lesson here for the democrats. How do democrats respond to the republican view that was put forth yesterday . This is tremendously difficult. If you listen to those argument on the floor of the house, they are two very different lines. To the republicans, it is that the democrats are seeking to undermine the American People and the legitimate vote that took place in 2016 that put President Trump in the white house. That was a very strong argument. They made it in multiple forms. For the democrats, this is about National Security and about protecting the integrity of the next u. S. Election. One thing to note is clearly this is divisive. We will wait to see how it plays out. There is a lot more still to come. But this is a firstterm president. If you go back to president clinton, he was impeached by the house, 1998. The second part of his second term. It is a very different political context. Anna let me ask you about support for President Trump. Looking ahead to 2020, what do you see as to this whole process and the outcome, as it is impacting americans and what they think about their president . Leslie right now if you look at the data, it is quite interesting. The majority is split along partisan lines, but there is one Interesting Data point that i looked up the other day. 64 of republicans would like to see a trial that takes place in the senate be one in which mrs. Were called, especially those that surround President Donald Trump that the house has wanted to see. Were which witnesses called, especially those that surround President Donald Trump that the house has wanted to see. They do want to see a certain process followthrough. That in and of itself gets to the heart of this, which is that impeachment is not just about is the president removed from office or is he not . It is about telling a story, it is about the historical record. It is about the legitimacy of the president. Kallum, the market seems to be kind of shrugging this off right now, probably because they are very mindful of what happens when we get to the senate. But the timing of when this gets to the senate, the choreography, what ares point the implications for 2020 and the votes . Kallum the assumption is that this will not go through the senate, which is fair. The markets are not pricing enough with Political Uncertainty in the u. S. The most dramatic way forward is lets consider the extreme view. From come on the one hand, who has probably at this point a better than 50 chance of what does that mean for markets . Take the european point of view. On the democrat side, there is more certainty for global trade. Even if you continue the process, it will be more predictable, and we will not be surprised by twitter, for example. On the u. S. Domestic side, you see the potential risks. Favor in europe equities versus the u. S. If it is trump, you continue the global uncertainty. With panic still in europe. On the u. S. Domestic side, it is probably positive. Depending which way the election goes, it is dramatically different consequences. Day,on this historic almost historic exhaustion as we go to the United Kingdom and all we observed there with anna edwards leadership. Someone has weighed in on the impeachment, and that would be the president s good friend Vladimir Putin. He does not mince any words about it. , thiss his annual talk annual event for mr. Putin. He says, the Trump Presidency is not over. Impeachment is spurious. Vladimir putin weighing in. Please continue with us. This is bloomberg. [speaking russian] tom one of the signals of the end of the year, the leader of russia, mr. Putin, at an annual conference. , someons from the people of it having to do with ukraine, of course, and also hydrocarbons, moving hydrocarbons, natural gas and such, east and west, to a little bit north and south. Turkey will come up as well. This with Kallum Pickering of maybe i misspoke that this was mr. Trumps good friend. Is mr. Putin mr. Trumps good friend . With what drives the seeming and during affinity between donald trump and Vladimir Putin, despite the very different politics with the United States and russia, we simply do not know. I think the response that you are talking about, it raises a broader question about how with the rest of the world react to the impeachment that we saw last night, and i think in some ways, the more interesting question is not so much the predictable reaction that you seem to have outlined from russia, but it is how will european leaders respond . When donald trump left london on the back of that video clip that went viral, when trudeau and macron and Boris Johnson were seemingly mocking the u. S. President , there are already a number of questions about the level of respect that he has. But i think there is a very specific question here, which is that it is now very clear that the United States congress, that the house and the american public, are attuned to. They are alert to questions, the u. S. President s willingness to play fast and loose with americas National Security priorities, attentional he with the allegedly and now confirmed through the house vote, with its conditionality of military aid for personal political purposes. I think it will make leaders very careful, that they are aboveboard in their dealing with the United States. Anna it will be very interesting to see how they will respond, and when he is asked about President Trump and viewers what about how quickly it moves from the house to the senate . That could have a bearing on the impact that this whole saga has. Leslie absolutely. What we are hearing now is the pelosi is saying she may withhold, what she needs to do, it turning the impeachment articles over to the senate. It is not clear to her that the trial is going to be fair. She would like to use it as leverage over mr. Mcconnell to set out how he intends to conduct the trial. He has said he does not consider himself to be an impartial juror. There is a lot of controversy over that, whether she actually has leverage is unclear. But she could well delay that beyond tomorrow, and then we have the holidays, and this creates uncertainty. Potentially for several. Tom thank you so much, Leslie Vinjamuri with chatham house. Kallum pickering as well, we have much more to talk about in our next 30 minutes. In the next hour, the annual visit that we have with the vm p pere riba with bmp very bought with bmp very bought. There is a lot to talk about, with European Banks in america. This is bloomberg. I am anna edwards in london with tom keene in new york. Still with us in london is Leslie Vinjamuri and callum pickering. We have not talked much about trade developments, because there has not been an enormous amount of news, but we have rallied on stocks on the expectation of a phase one deal and the market got excited last week, yet we still do not have a date. How much is still to be learned about what can be done on trade . Callum all we need for a rebound in global trade is for tensions not to escalate further , and we seem to be on track. If we get a phase one deal, that is a bonus into 2020. Trade uncertainty has been the reason why Global Production screeched to a halt and has tipped into recession. Is Global Economy recovery of trade goes the right way. Have you started to see manufacturing bottom out in some parts of the world . Is that your view, or are there risks . Kallum the most trade oriented economies in europe, you see seepage into services and domestic consumption, but for isolateds is an problem that is very acute in the export oriented sectors. The good news is we are not ready for a recession yet. The expression of Services Still holding up shows there are no systemic risks in the economy which can lead to a downturn. You cannot go on long with a recession in one part of your economy without seeing it in another part, so 20 20 is the moment of truth. If industry stays soft, we worry about recession. Get how do you study that, out front and understand the lead leakage of manufacturing agony into other parts of gdp . Kallum the transmission mechanism is as follows. Manufacturers see this will be a protected program problem and we need to cut back on staffing, which shows up in the unemployment data and wages and domestic consumption, and then Services Experience the same problem. We are not yet seeing that. Industrial producers are holding onto their staff because they think there will be a partial resolution between the u. S. And china. Tom in europe i think we have a good handle of this in the u. S. In europe, are they holding onto their capex or is everyone going to zero Investment Strategy next year . Kallum investment has slumped and you still have Spare Capacity in the labor market, so if orders recover next year we will likely see hiring pickup before firms commit to capital investment. It is easier in europe and labor markets are flexible in the u. K. And germany. You can hire and fire easily, but to make a commitment to capex, that takes more confidence than we have, and it might be the middle of next year before we see a rebound and investment. Anna we hear about the logic of doing a phase one deal into 2020, President Trump aching the assumption that will play well for him to make peace with china. How does it play out, this trade spat he has started . This is just phase one. Does he have to keep it going . Leslie it is hard to put the genie back in the bottle when it comes to opening up the question of china, chinas fair play and domestic economy. Donald trump is going for a bandaid measure, a plaster measure as they say in the u. K. , elections,up to the but it makes him vulnerable to the progressive democrats who will take this on as a big issue. You have not gotten the fundamental reform on technology transfer, intellectual property, and the wto rules, which is the system. R anna is there more bipartisan support for things that could come up in phase two and three than for the tariff battle, which is what phase one has been about . Tackling intellectual property and state owned enterprises, that sort of thing, we have support on both sides of the aisle taking on china. Leslie there is support and i think you are right. At the superficial level there has been bipartisan support, but behind the scenes, business is putting more pressure on the white house, saying this is hurting us, and asking for a different strategy. Those concerns are clearly important and have resonance, but there is a question of how you pursue them. Critical is americas relationship with its european partners. I am not convinced there will be support for taking on both of those challenges, europe and china at the same time. A lot of americans would like to same see stability at the time as china is taken more seriously. Tom it is important what you observed, this is 20 minutes ago , you cited a Washington Post study over the simple question of the last 24 hours on impeachment which goes to policy. Do people care about this . Clearly the republicans are spinning they dont and the democrats are spinning they do, but i see studies america is transfixed by this. Leslie people are absolutely watching. They watched the impeachment hearings and investigations in the intelligence and judiciary committees, watched the vote. There are amazing images on airplanes of everybody tuned in. Tom this has been wonderful. Thank you so much. Greatly appreciate your effort with bloomberg surveillance, and especially this day. Right now in new york city with our first word news, here is viviana hurtado. Viviana committed political suicide by voting to impeach him, that morning by President Trump to democrats last night. Democrats approved two articles of impeachment, the votes winning the support of almost every democrat and not a single democrat. The next step is a trial in the Republicancontrolled Senate where the president is expected to be acquitted. The fate of obama care has been judge back into limbo, a ruling atps has been a key. Iece is unconstitutional the case pits President Trump and a texas Led Coalition against democratic controlled states. The phase i one china deal, china has returned to the market to buy more soybeans. Beijing issuing waivers that let buyers purchase soybeans without retaliatory tariffs. Tomorrow, nasa faces a major test, planning to launch boeings rocket into space to meet with the International Space station. If all goes well, they could resume manned flights. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Tom in the last 24 hours, we gained the perspective of those looking at impeachment who are part of global wall street. Here is Stanley Druckenmiller. This administration, with wondering about where the hell the next bomb is coming from, just doesnt allow me to take some of the positions i have taken historically where i thought it was a one way bet. This was always binary and a two way bet. Anna welcome back. I am anna edwards with tom keene in new york. Live aerial pictures of london, of westminster, the houses of parliament. Soon we will see the queen at the houses of parliament, in the house of lords, and these pictures coming from inside the house of lords. We see the british establishment gathering to hear from the queen , but it is not her words. She reads the words of the government, the u. K. Governments agenda. Tom fascinating. Tim ross is late to cs us today, because wasnt he down below parliament, looking for the gunpowder and the customary glass of port . Anna you never know. , our bloomberg editor. We learned more about what will be in the queens speech because a few weeks ago we had a speech and we will get more of the same. Tim i can tell you, tom was saying something about gunpowder. Anna he wondered if you were looking for the gunpowder. Tim a lot of things will come up on brexit. Johnson is determined to get his first vote on brexit through before we break for christmas. It is about setting out domestic priorities that deliver johnson the quite unexpected big majority, health services, transport, cutting down on crime, and what kind of a post brexit immigration deal we will get. Anna apparently, the queen will not be in the normal carriage. Some of the pomp and ceremony has been ditched, given that it is not that long since we have done this, but they have shown the house of lords. In terms of what this means for markets, this will be much more predictable than last time and given that he has an 80 seat jordi, it will be. Majority, it will be. Not since David Cameron has that coalition with the liberal democrats, could a Government Lie on getting its legislative agenda through parliament. To getld not be hard brexit or anything else done over the next five years. Tom an honor to see the queens robing room with lord tsai, and in it is the death warrant for charles the first. How is the death warrant on Jeremy Corbyn going . It has been a rough couple of days. Will he observe the queens speech . Tim Jeremy Corbyn will be in the house of lords alongside Boris Johnson to witness the queens speech. Queens speech. The labour party will have to respond to the agenda. They are in enormous trouble and will have to figure out who will lead them. They have a lot of ground to make up and they need a massive reform. Tom explained to our global audience the power of Boris Johnson, particularly those waking up in america. Is he unfettered . Can he basically do anything he wants almost as a dictator . Tim i am not sure he would enjoy that description. Anna he did want to be king once. His as a child, he told family his ambition was to be world king. His ambition is world politics. There is not much you cant do. People are expecting changes in the way the u. K. Is run after january. The market quickly adjusted its thinking around brexit and how quickly that thed happen, and remarks on calendar through the end of january, but then a period of uncertainty when the trade agreement is negotiation. We heard Boris Johnson trying to legislate when we come off the transition arrangements. Could he legislate back in another direction . How seriously do we need to take that commitment to legislate . Tim i think it does two things. At shows to all of the brexit fans that voted johnson reluctantly, that he is seriously about getting the u. K. Out of the European Unions orbit. It puts the squeeze on the European Union and negotiators to get to that deal agreed in that short timeframe. If it doesnt happen and if johnson is not happy with the deal, he can change the law again. Tom it is wonderful to speak to tim ross with gunpowder on his shoulder. Your coverage has been so outstanding. I would love and our audience would love your perspective on what to look for the first weeks of the johnson government. What will you be looking for . Anna the market was quite surprised by what we have already seen. We saw the pound reacting quite substantially to this move this week by Boris Johnson to put into legislation the data to come out of transition, because there had been some thinking that if he has this big majority, will he be quite beholden to the party, to the erg . Will he be moving in that direction or go to something softer . The words coming out of number 10 suggest no. Will that change after january is one thing we will need to watch for. When brexit is done, does he pivot the talk . He tea leaves do not suggest is pivoting much from a hard brexit. Tom team ross, thank you so ross, thank you so much for being with us. We will give you all of the pageantry for this moment for the United Kingdom, the queens speech coming up. Kallem pickering patient with us this morning. We are looking at the consequences of the ecb and the norwegian bank. Day, the swedish bank pushing against negative Interest Rates. This is bloomberg. Watchingyou are bloomberg surveillance. Next year in china, you can expect double digit growth despite a weaker economy. Luxury spending, but they are spending more and home. Ceopoke with tiffanys about what that means. In this industry, the real value comes from the increase in sales in the expansion of the brand. This is really the way tiffany has been. Tiffany just doubled the size of its Flagship Store in shanghai. Amazon is getting prepared for brexit. Onlinelds largest retailer is looking to ireland. Amazon would have a problem at the u. K. Does not agree on a trade deal that ensures the smooth movement of goods across the irish sea. Anna thank you very much. Pickering. Us, kallum we had an interesting conversation about the u. K. Political backdrop. How confident do you think csuites have become about the prospect of the country . Pushed Jeremy Corbyn to the sidelines politically. We have a little certainty on brexit, but not the full picture, so what does the investment environment look like . Kallum it likes looks better. Hade years, you uncertainty, what will turn out good and bad. Now you can say brexit at the end of january is likely to happen. Fiscal stimulus in february comes through. The flipside of the election is that Jeremy Corbyn loses the election. He and his policies present a risk to the u. K. Outlook, and theres the risk of a hard brexit at the end of 2020. Net net, that is a good thing and we should get 2. 5 annualized growth next year. Tom how do you perceive the strength of the city of the United Kingdom, the city of london, given all these events . Will london reigned supreme as global wall street . Kallum Jeremy Corbyn and a biggerpolicies were risk for the outlook of the city of london. I worry how much business goes from the u. K. To the continental market to satisfy the regulators as the u. K. Leaves, but how much kong, andrk, hong other big financials steel from london steal from london. Tom thank you very much. It is an interesting time, all this pageantry of the queen. I think there is a hostage mp held at Buckingham Palace to make sure the queen has safe return from the evils of parliament. Any idea who the hostage mp would be this year . Anna i dont know. I am sure there will be many people on both sides of the u. K. Who would offer a suggestion. Tom the pageantry of the queen and the queens speech. Please stay with us, another hour of bloomberg surveillance. Good morning, everyone, bloomberg surveillance. Tom keene in new york, anna edwards in london. The queen on her way to the christmas holiday. On the way, she must give the queens speech. And lets remind International Audiences this is not the word of the queen. This is scripted for her by the government, them setting out their agenda. Boris johnson and company hope they have no problem getting this legislative agenda through the commons and get support for the queens speech. Tom 93 years old, and Prince Philip by all reports very fragile. As we have always seen in the United Kingdom, state the position of the public of the United Kingdom with prince charles. That is a mystery. Perceivednce charles by the greater United Kingdom . Anna maybe i will defer to the rural royal correspondence. Queen elizabeth, who we seen palace,ing buckingham making her way to the house of lords where this takes place, she commands a great deal of respect, not just because of the role she holds as queen of england and the commonwealth, but because of longevity that she has held that role and the diligence with which she has done this job. She has done all but two since she came through. This is somebody that has a special place in many peoples hearts, although not everybody. If Jeremy Corbyn made Prime Minister, we might be having a different conversation. 67 years in her rain reign. She will be graded at lords by a changed parliament. Greeted at lords by a changed parliament. What happens after, for the politicians . Anna tomorrow we get a very important day. The government wants to try to bring its Withdrawal Agreement will. Will it get bill. Will it get through . Probably, because all of the voters mps voted with the conservative party promised they would go with Boris Johnson. A lot of supporting legislation gets through, and brexit happens in a transition phase at the end of january. Tom our chief royal correspondent, anna edwards. We will continue to monitor this. Our studios for parliament are just up the road from where they are now going to Queen Victoria tower. Right now, back to the reality of quiet american politics. Viviana from that pomp and act intance to the next the impeachment drama in washington, d. C. , there will be a trial in the u. S. Senate next year. The house impeached donald trump on abuse of power and obstructing congress. The vote made mr. Trump only the third president in u. S. History to be impeached. He is expected to be acquitted in the Republicancontrolled Senate. The bank of england looks to keep Interest Rates on hold. Adding to bets on a move on the fears of no deal brexit. The bank of japan leaving all untouched. U. S. China trade talks, the bank no longer sees these as increasing. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Tom let me do the data right now, it fixed income look. Fixed income has been quiet. Curve steepening up to 30 basis points, difference in yield for the 10 year and the twoyear, we are beginning to see substantial curve steepening with a bit of a lift. Anna i like how you found action in the bond market, because there is not much in the equity market. The stoxx 600 completely flat. The dax down to tents of 1 . 2 10 of 1 . Tom in the last hour, Leslie Vinjamuri was with us. Trenches,into the Emily Wilkins with Bloomberg Government which barely describes in the grind of the white marble palace known as the capital. What was the body language last night . , speaker the capital nancy pelosi has tried to make it very clear to her members, democrats, that this needs to be a somber process, a prayer full process. There was an interesting moment where just after the final article of impeachment was voted on that a couple of members tried to start cheering and clapping and she shot them a look. Tom that look, i saw that look. Let me go to a couple emotions, everybody writing this up this morning and for our national and global audience, John Bernstein writing for bloomberg. A little bit on the republicans as well is the way forward. The republican case against impeachment was, they threw a bunch of stuff against the wall. Republicans also claimed there is no direct evidence and only hearsay, but the call record is direct evidence. Impeachment isnt anything like a coup. It does not reverse a 2016 election. That is sort of what the president said last night as well. Did anything change politically yesterday . Emily i mean, the president being impeached, now everything goes to the senate and donald trump is still president. The senate needs to hold their trial and because of the republican majority, it is likely donald trump will be acquitted and will continue being president , and will be able to run in 2020. Tom Emily Wilkins, thank you so much for your coverage. We are thrilled to bring you now by phone greg valliere. Writingeen wonderful about this and linking it to markets. I want to go right to a wonderful essay by karl rove in the wall street journal. He is the ultimate gop operator. Many would say he founded the grind of the modern republican party. If the house wanted to question the white house it should have gone to court to compel testimony. The house did not, Speaker Pelosi did not. When the senate votes in mid to late january to close this drama , the white house should pivot to issues Americans Care about. Greg valliere, can the president do that . Greg i think he can. A good sign in that regard is that the education department, betsy devos is looking at proposals to ease student debt burdens. If they are going to move on issues like that, that would help their prospects. Anna how much do you think global wall street should care about this . Look at theyou narrow lens, the markets just seem to shrug. What is the master for the markets . Greg for now, it is the same old story that in many have said for the last year, the senate will acquit. There is a new twist, significant new twist after last night, and that is pelosi may hold back. She may not send the impeachment case to the Senate Unless she gets assurances there will be witnesses and testimony. If that happens, this could drag on and on. Tom you have been very good reading the tea leaves. The biggest mystery is the debate over does america care. New york times study about six days ago that was exceptionally sophisticated, that both democrats and republicans are riveted by impeachment. Are they . Greg the parties are, but the average voter would tell you a 3. 5 Unemployment Rate is more important than impeachment. Tom what is the difference between that of bill clinton . I know you were on the watch as forild in New Hampshire president johnson in 1868, but what are the parallels to bill clinton . Greg bill clinton was popular, easily won. Trump comes out with his popularity slightly higher, but it is a mistake for wall street and others to assume an easy victory. It looks like it could be a tough race. Tom greg valliere, thank you so much for being here. Greatly appreciate it. We have much more to move forward on, particularly the view for 2020 and the state of European Banks in america on wall street. Jeanyves fillion with bnp paribas joins us. Futures up two. This is bloomberg. Surveillance, anna edwards in london, tom keene and new york. As we monitor the queens speech, we look to the views of 2020. One of them is from the august french bank bnp paribas. You dont hear about them much in america, there is so much trauma in europe. Bmp has less trauma. Jeanyves fillion is the ceo. Did bnp paribas have a good year . Jeanyves thank you for having me. 2019ank had a good year in and it is really around running a diversified Business Model geographically in terms of products. We have a fairly diversified client base as well around the world. It is about navigating the cycles. Been morearibas has cautious, havent you . Jeanyves we have. Worldwide, there is no question the economy will slow down, however based in new york, the u. S. Economy remains very strong. Look at gdp, consumer confidence, Consumer Spending. It remains robust. 2020, i would watch Business Investment in terms of strength for the first quarter. I would Pay Attention on Consumer Spending and Pay Attention as well to sustainable finance. It is a growing dimension of the world of finance. Tom bnp paribas has a unique commitment to china going back decades and decades, absolutely original commitment. What do your experts in china see about china Economic Growth in this trade war . Jeanyves the world is slowing down in terms of the economy and china is no exception, even though it remains an important pillar. You mentioned the u. S. Trade discussions. Trade will be a driver of the Global Economy and china will be no exception. I have to say that being pretty close hopefully to a u. S. China discussion close to phase one, that might left some of the uncertainties which have been impacting Economic Growth around the world. Anna good morning to you. As we head into 2020, the start of a new decade, what do we need to bear in mind for Business Investment . We you mention it as a key driver. Every seen enough of the clouds lifted around trade and brexit to see a push into investments . Andyves hopefully, yes, less concerned about the status of the economy, even though it will slow down. What you just alluded to is important. What might be the main drivers of volatility might be around geopolitics, politics, and social tension. That is what i believe will be the drivers of 2020. Anna as a result of that tension, a bifurcation, continued bifurcation of the world, do we continue to see china leading one pack and the United States leading another pack, or is that something we can leave behind this decade . Jeanyves that has been the case. Withve gone through cycles connectivity, less connectivity. Global economies are interconnected it. Interconnected. The Global Economy is relatively good. Central banks are doing a good job at monitoring and you will see more quantitative easing. If trade discussions get to a better place, we speak about u. S. China, but the usmca, hopefully good discussions between europe and the rest of the world as well as brexit plays out, could still provide a good Playing Field for 2020. Have to ask about the place of European Banking in new york city. You are not in the newspaper as much as your good competitors. What is the strategy bnp paribas has to signal to your clients in france and around europe that you are in new york and will stay in new york . How are you going to do that . Jeanyves just like we say, staying the course. The platform in the United States, the group is very diversified. We have retail, wholesale, a multibilliondollar platform. We have 14,000 people in the United States. Tom this is critical, perfect example. I am supposed to know what im talking about and i had no idea you had 14,000 people in the United States. Jeanyves serving a broad scope of clients from individuals to entrepreneurs to smallcap and largecap. That is one signal of resilience. To your point, a European Bank in the United States, you have to be targeted, focused. You have to protect your critical mass, but we offer Complementary Services to other banks. Tom look at the chart. It looks like apple computer. Anna thank you very much, jeanyves fillion of bnp paribas teaching us a little bit about the french banking in new york. We will bring you interviews with a couple of europes big central banking names, norways ingves,olsen and stefan buzz joining the conversation very shortly. We have negative real rates everywhere. Unprecedented of monetary stimulus relative to the circumstances, it is hard to have anything other than a constructive view on the markets risk. Anna that is billionaire investors Stanley Druckenmiller speaking about a negative Interest Rate environment, the low Interest Rate environment. Jeanyves fillion is still with us, and the experiment in negative rates is still underway in the euro zone even if the riksbank has decided to bring it to a close. Do you hope the ecb follows the riksbank and we end negative Interest Rates . Jeanyves two comments on this. Lets make sure we realize negative Interest Rates have been productive. It has prevented europe from going into recession and is providing the stimulus that shows today the gdp expansion. Going forward, it is probably not sustainable and under the new leadership of the ecb, i believe the European Administration starts reflecting on fiscal policy. It works well in the United States. For fiscalallenge policy in the European Union is to have it more coordinated and a mixed policy will probably be part of the solution. Anna how much difference has it made for the ecb with negative Interest Rates, for them to cushion the blow for the business sector . Jeanyves it is huge. The main difference between u. S. And European Banks, they are wellcapitalized, wellmanaged, and well regulated, but negative Interest Rates weigh very heavily on the banks Balance Sheets. The difference between europe and here is the Capital Markets. There is a vibrant capital banks recycled their Balance Sheet at a faster rate. This is lacking in europe today. I hear reflections about a Capital Market union, which can be productive. Sailoru are an acclaimed of the Atlantic Ocean and the channel as well. How is madame lagarde sailing . We talked to jon klein trichet the jeanclaude trichet the other day and then there is lagarde front and center. How will she do . Jeanyves it is a matter of adapting to the conditions, a matter of adapting to changing weather. That design for 2020, there will be a lot of wind shifting and see changes. Tom this is not bermuda. The ship she is on does not have a keel, or the keel is uncertain. Give us a ballast update on the ecb from where you sit. Jeanyves Christine Lagarde has done a wonderful job with the imf and i think an ability to federate and convince different parties and Different Countries two words the same goal will be towards the same goal will be needed in 2020. Tom we want to show you these images from the lords. My lords and members of house of commons, the queen will give the prepared speech. They are steeped in history in this course, this 67th year. She has only missed twice . Anna yes, she missed twice when she was pregnant and the other times she has always been there. Government tohe set out the legislative agenda, focus on brexit, and domestic policy around policing. Tom i will bring this to you from the house of lords. It is a very changed United Kingdom. We are thrilled, jeanyves fillion of bnp paribas with us. Futures churning. The big shift for those of you in the market, higher yields and a slightly steeper yield curve. Stay with us, from new york and london, this is bloomberg. Good morning, everyone, bloomberg surveillance, from new york and anna edwards london. An important moment for the queen of england. Anna the state opening of parliament where she sets out what the government wants to achieve, reads out the words of her government. She did say a few weeks ago, we listened to the queen starting her speech. She will set out what the government wants to do, a number of bills surrounding brexit, trying to get the Withdrawal Agreement through. It is not just about the Withdrawal Agreement will. Bill. Issues, theher separation, the impact going further, and other more domestic matters, taxes, infrastructure spending. A lot of talk about the need to spend on infrastructure. Tom what is remarkable here unlike america is this is done in silence. I believe 21 years ago there was an upper about a brief comment about the audience of lords and commoners got comments. It is done in silence. Anna in contrast of what you see day today in the house of commons, anyone who has watched the combative and aggressive robust those being very arguments that take place in the house of commons, this is a different tone, a period of taking stock of what lies ahead. Obvious,me state the members of the house of commons, including the Prime Minister will be in attendance, correct . Anna we have the house of commons parade or procession from the commons into the lords. You see the lords dressed in their robes and other guests as well. Well see those in the house of commons will come through to listen. The speaker leads the procession from the commons, asa billick part of the proceedings. We are a symbolic part of the proceedings. We are looking at both houses of commons. Still taken quite seriously, they inspect the basement of parliament. We will revisit Prime Minister johnson and Jeremy Corbyn moving together from commons to lords, huge symbolism, much like the United States state of the union, the queen giving the address. As we watch this pageantry, in new york, our first word news. Viviana from that ritual to the impeachment drama in washington, d. C. , and this morning committed political suicide by voting for impeachment, this coming from President Trump. The house approving two articles of impeachment, abuse of power and obstructing congress. Winning the support of every single democrat and not a single republican. The president is expected to be acquitted in the senate trial. Bloomberg has learned china returned to the u. S. Market to buy soybeans. American exporters have sold at least five cargoes to chinese waiversbeijing issuing without retaliatory tariffs. Test, set to major launch boeings capsule into orbit and rendezvous with the International Space station before it returns to earth. If all goes well, nasa could resume manned flights. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Tom thank you so much. Jeanyves fillion with us of bnp paribas. He travels with an entourage larger than macron, and one member said find someone brave on equities. She is Gina Martin Adams with bloomberg intelligence. What is so important is Gina Martin Adams had the courage to stay in the markets through thick and thin of this great bull market. How go it for 2020 . Are we going to cash . Gina i think we are overbought. Sentiment is positive at the end of the year, suggesting we are set up for some degree of disappointment early in the year. The longterm secular outlook remains the same. There is tremendous underinvestment in equities, a tremendous preference for bonds. The wall of worry is as high as it has ever been with respect to impeachment, the election. In europe, the predominant sentiment is, we dont want to take on that much risk, despite the fact that we have a broadening bull market break in this quarter. Internationally, there is a lot of hesitancy. In the u. S. Domestically, we got a little overbought in the short run but longerterm tom i know a small french bank with a yield of 5. 4 . Do i want to buy europes higher dividend yield or go growthiness in 2020 . Gina i think you can do both. You have had a break out in europe and a tremendous amount of hesitancy adopting that breakout. You are starting to see breakouts occur in emergingmarket says well. A break out canada, australia. The u. S. Is obviously still on fire, so we have a broadening and deepening bull market that really starts to grow bigger horns into 2020 globally. Does that mean u. S. Stocks keep bleeding . The u. S. Stocks are mainly about sentiment so the u. S. Takes a backseat to some players, europe being one of them, in 2020. Anna listening to the words of the queen delivering the state opening of the parliament and the government agenda. We are keeping across that. We just want to make sure that we note she is speaking and will bring you any headlines, but sticking with global equities, you are sitting next to jeanyves fillion from bnp paribas. Is it time to get involved with European Banks . We have had a whole year talking about the cheapness of this sector. Do you see a catalyst to buy . Gina the catalyst has been an improvement in the outlook for Interest Rates, an improvement in the yield curve globally, has started to gather momentum. The preference has to be u. S. Financials versus european financials given margins and costcutting that has to occur in european financials, but i am optimistic you could see this trade broaden over the year given that the yield curves comply, given that lagarde and the ecb comply with expectations, and that you continue to see improvements in Economic Growth. European financials have been underappreciated because of the state of Interest Rates as well as much lower margins than the u. S. These are the two categories that need to continue to gather momentum ahead to see the trade persist in favor of europe. Tom gina Martin Edwards Gina Martin Adams. We will continue with jeanyves fillion of bnp paribas. The queen reading this statement , on this sensitive topic of immigration and the government to enshrine nhs spending boosts in the United Kingdom. This is bloomberg. My ministers will increase levels of funding for every school. Measures will be brought forward to encourage flexible working, to introduce the entitlement, leave economic developments in this country have been good for quite a number of years. Growth numbers have been high for a number of years. It was possible by going negative, for us to get our inflation rate up close to our target of 2 . We are not hawkish and have not signaled any future increase. Path true if you take the and evaluate the possible changes, it is correct that the an increase is slightly higher than the opposite, to lower the rate. The Central Bank Governors of sweden and norway speaking to bloomberg. The swedes hiking rates out of negative territory, the norwegians not doing that, but they have a history of going their own way on Interest Rate policy. Tom let us continue with Gina Martin Adams and jeanyves paribas. F bnp i want to bring up a chart showing some american banks struggling, some doing better than good. I do not have on here unicredit and other banks. This is a small german bank, and your stunning outperformance off of 2012. How do you drive forward as a global bank the bnp paribas excellence versus challenged e. U. Banking . Doing toou do or avoid continue shareholder return . Jeanyves as bankers, we serve clients and continue to put the client at the center of what we do, and to serve them well. Most of our clients are international. We make sure our Business Model works in europe, asia, and the United States. Tom i am going to hear that from every other banker as well. Tot does bnp paribas not that has led to your stunning shareholder return versus a lot of other basket cases in europe . Jeanyves this is really working very hard on diversification. This is the new normal. The word is complex. As gina said, they are interconnected. Keeping the international Business Model diversified is the way to navigate this new normal. Tom this is a chart. I am not smart enough to put this together. This is stunning relative performance, and i would suggest , it is not what you do but it is what you dont do that matters. Gina when you look at the winners versus losers not just in banks, but over u. S. Equities , it has been about persistence of sales growth and rationalization of costs. It is about margin growth and making sure that that increase in sales growth falls down to the bottom line, not spending too much, keeping costs campaigned, taking advantage of technology and productivity gains to drive through stronger earnings has been key to performance. Within financials specifically, it has been more about sales because of the new normal slow growth environment. Shareable to grow market and press through with sales growth are outperforming, but it is about the combination of persistence of sales growth with cost rationalization. Anna when you talk to clients in the u. S. , and we look ahead to 2020, what are they telling you they are thinking about their requirements for you next year . To do you expect things change for bnp paribas in the u. S. . Jeanyves clients are focused on the next quarter. Show realhem confidence in the shortterm economy in terms of gdp and what they do in terms of Business Investment. I think their concern as we discussed earlier, it is more like uncertainty with the geopolitics and politics and social tension. They are expecting an ability to continue to provide funding when needed and the ability to advise them domestically and around the world. For the last few months, we have taken a significant number of u. S. Corporates the euro bond market. There management are capitalizing on the low rates environment, Investor Base diversification, as well as longer maturity and steeper funding. That is what they are looking for in terms of being supported by a u. S. Bank with international scope. Thank you very much. Adams,ou to gina martin and to jeanyves fillion of bnp paribas, usa ceo. There minutes away from bank of england decision. We are expecting no change in Interest Rates. The queen has just finished delivering her speech. M a, theyg for future say security is threatened and a whole host of things are coming through as the queen reads the agenda in the house of lords. This is bloomberg. Viviana you are watching bloomberg surveillance, next year in china, tiffany expects doubledigit growth despite a weaker economy. Are curbingumers their overseas luxury purchases but are spending at home. Forany was acquired by lvmh 16 billion. We spoke with the tiffany ceo. The deal value comes from the increase in sales and the expansion of the brand. I think this is the way for allany, as it has been for successful luxury brands. Doubled thefany size of its Flagship Store in shanghai. And pray market shares, premarket shares micron higher. It is telling investors it is through the worst slump in the industry. Micron is the biggest maker of memory chips. A wonderful annual visit with the president of the cfa institute. I am a member and have helped with their college programs. Margaret franklin, we are thrilled you could join us. I have to show margaret one of my treasured keepsakes, my hpc calculator. Means ilow sticker dot survived in a room with 800 others sorry souls losing our marriages over memorial day weekend as we suffered through the exam. It is as tough as it ever was. Margaret we are clear to make it standard and consistent across time and it is probably tougher than when you and i wrote it. Tom i used to kid we should have level 1, 2, 3, and level r for the math and core quant. How do you handle that . Margaret quant techniques have been around for 25 years and they are becoming more pervasive in Investment Management industries, so it is in our curriculum and our professional learning and continuing education. Tom esg is all the rage. Lpis a big deal at bloomberg led by our chairman. All my radar is up because everyone is saying this is great. You guys are great at showing both sides of any compare and contrast issue. What is the caution that we need for esg . Twothings margaret things, one how it is being marketed. We have launched a Standard Working Group and that will really do for esg what our Global Investment performance standards did for performance presentations, present preventing cherry picking and allowing Investment Managers to clearly convey the characteristics of their fund and investors to evaluate the fund. Interestingly enough, we sought Research Pieces and spent a lot of time thinking about how managers can implement that into portfolios. We have 33 case studies tom there we go, and you have done it. Levelthis wont help in three. Case studies means your first grade errors. Anna i was listening to what you were saying about esg investing. Weekve had the e. U. This continuing this conversation around the taxonomy of esg investing, so what is green and what is not in terms i understand. There must be room for global coordination around esg, defining what qualifies as an esg investment. Otherwise, it carries on like the wild west. Margaret interestingly enough, you will see different aspects that relate to Investment Management such as Financial Disclosures getting on the bandwagon to make sure we have a tax economy, and how they are used. We are focused on the Investment Management industry, how we use the language, the nature, and characteristics of the funds to achieve what investors think they are buying. Tom i am pleased to announce Abby Joseph Cohen will be our year end programming. That at the cfa institute. Margaret big deal. Abby joseph cohen has an amazing reputation. I had the opportunity to work with her a number of times. Tom can we make this more than an annual visit . Margaret franklin what the cfa institute. This is bloomberg. Alix the world after rates. The central bank heights rates to zero. Trumpy is made, donald becomes the third president to become impeached. Global bonds selloff, the u. S. Curve tops the highest this year as equities flirt with record. Daybreak. We get the boe decision, keeping the Interest Rate that 3 10 of 1 . The vote is 72. They say limited room for cuts of the early move. No surprise if three people have come out and dissented. They do see inflation slowing and keep bond purchases unchanged. They say it is too early to judge the impact of the election and trade war. Joining us as Stephanie Flanders from london, and