Transcripts For BLOOMBERG Bloomberg Surveillance 20240712 :

BLOOMBERG Bloomberg Surveillance July 12, 2024

In dubai. F quite the riskon rally along these markets. Let me give you a rundown with stocks in the u. S. , with futures up. 7 as we speak, and this is given thee impressive climate. Monetary currencies are powering forward. Eurodollar trade at the highest since march 10. In terms of the bank space, we have the german10 year the german 10year, again, a lot of these haven bids. Barrel, you are looking at counterbalancing forces that are kicking in, even though they are revising their forecast to the plus side. Lets get to the first word news now and cross assets with leighann gerrans. Hi, leighann. Leighann good morning, yousef. Beijing is in a new position that drew a rebuke from china and added fresh uncertainty for businesses in the Financial Hub. Legislation,gned saying u. S. Officials responsible for cracking down on dissent in the city. Italy has set a course to nationalize controversial tollroad operator auto strata after all night talks on the politicallycharged issue. Taking the company of atlantia, owned by the billionaire family. A national tragedy, though the Company Maintains its safety tracks triggered no alarms. U. S. Supreme Court Justice Ruth Bader Ginsburg has been hospitalized for a few days after being admitted to treat a possible infection. The 87yearold liberal is of course the oldest justice and a fourtime cancer survivor. In the bank of japan has left monetary stimulus untouched while painting a global picture. The boj, the worlds thirdlargest economy, is facing a different 2020 but a slightly faster pick up in the following years. Global news, 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am leighann gerrans. This is bloomberg. Yousef . Yousef thank you very much for that. Lets get to our top story. A covid19 vaccine has safetysted in an initial trial, though some did see a side effect. The hurdle, bringing to market quickly, as more were recognized in the united states. Had fidelitys, to top it off in florida, the fed governor they are painting a somber picture of the economy, calling on the central bank to. Pivot a longerterm accommodation. Joining us now is stephen gallo, dear pn head of ethics strategy at bmo Capital Markets stephen gallo. Strategy at bmo Capital Markets. In generalty complex are not as high as we have seen. How sustainable are these moves . Stephen well, for the time being, they look pretty real, like the real thing. Rather than just a fx markets are also trading. The drew june trade line in china, picked it up, meaning there are less likely to be dollar shortages. We are moving toward an excess of dollars, but is somewhat likely to happen with. The treasury is now over the coming weeks. And. That of course fiscal policy is because it looks increasingly like that will not be additional fiscal stimulus in the u. S. On this side of the election, and that, too, leaves more dollars sloshing around and doing nothing. The vaccine headline, as you rightly pointed out, is not hurting things, but this is a reflation trade and a liquidity trade more than anything else. Yousef yeah. Stephen, so weakness in the greenback, that makes sense for the most part, but when we look at other key benchmarks when it comes to implications of the chinau. S. Tensions, there were quite a few set of developments. You cannot tell me they were insignificant, but i am also not seeing the Market Reaction at tells me that this is really a source of concern for the Capital Markets. At the moment,t and it may be the case that Global Investors have simply said, look, you know, theres enough Political Uncertainty in the u. S. Right now. Maybe there will be just bluster and rhetoric this side of the election, and then the ,. S. China trade relationship the decoupling theme and so on, that will be more a story for after the election and 2021, of course depending on the outcome of the u. S. Election. So that may be why the rhetoric so far, you are not seeing it reflected to a significant lar forwardhe dol points, not to a significant degree in the dollar cnh upside, but it is still a lingering risk, which is why i would if i were to put a position right now, i would not shortsighted aggressively, i would want to be buying downside optionality, like one year forward puts or low delta deep out of the money ats in dollar cnh, just as hedge, or just to be on the saver side. Yousef right. I mean, lets of flesh that out. The next big data point is going to be what we get from chinese. Has this on the perspective. A Bloomberg Survey analyst is suggesting, or would you say you are a little more on the conservative side . Stephen [laughs] well, it is chinese data, and, c, the powers cp that be are very imageconscious, and they are very concerned about optics. So if i had to make a judgment call, i would say that that data comes out in line or maybe even a bit better than expected. Dont forget, this equity market rally, you cannot always say with full certainty that it is free Market Forces that are forcing asset prices to move around in china. So the fact that those things have moved in advance of the mostlyggests to me that the data are going to show a chinese economy that is on the mend. , you have toem is remember that this is not a fully free market economy, so if you are buying into the china system, you always have to keep that into the back of your mind. Yousef what kind of tactical changes are you making to the Asset Allocation model . The u. K. As well has been nothing short of, well, inspiring, i mean, if you are looking to trade this. Where are you telling clients to lock in some trade . Hadhen well, i mean, if i to put trade right now, looking at the major players, i might buy euro dollars with a stop underneath 112 and try to hold it until it gets to 120. But on that trade, i would be closing my eyes at the same time. You are to remember, buying into a relatively high regulation regime. I think fiscal dynamism will be on the lower end of the spectrum. Also, you have to remember there are 19 different mouth to feed, and that is just in the eurozone. And in the eu, there are 27. So it is a socialized economy, and, you know, i think this is why brussels will be pursuing Member States on the individual Corporate Tax regimes. That britain is gone from the bloc, and that means the rest will be left to their own devices, for lack of a better term. The more exciting trade to me is aussie. If we could get a break out above 70, and Commodity Prices follow suit, aussie dollar can get to 72 quite easily, i think. Yousef stephen, we are going to have to leave it there. Thank you so much for sharing some of those key calls. That is stephen gallo, head of european fx try to jihad bmo Capital Markets. Coming up next, we will talk to former u. K. Culture secretary nicky morgan. That is up next. This is bloomberg. Yousef economics, finance, politics. This is bloomberg surveillance. I am yousef gamal eldin in dubai. Lets get you the Bloomberg Business flash headlines with leighann gerrans. Leighann thank you, yousef. Producing antibodies to the coronavirus. A numbers clearing side effects, some of which were severe. The vaccine will now move to a much larger late stage trial this month to determine whether it will be approved by u. S. Regulators. A smi holdinger beat analyst expectations for the quarter that the chip equipment maker says operational capabilities are now largely back to normal, forecast that 2020 will be a growth year. Atlantic has finalized a rescue deal that could save thousands of dollars. Jobs. Raising money from space venture virgin galactic. U. S. Hedge fund Capital Management will also provide a loan secured against aircraft and landing the slump. And that is your Bloomberg Business, yousef . Yousef thank you so much. Let schedule while wa now lets get to huawei. Out of thest be u. K. By 2021. The delayed 5g rollout and businesses with billions of pounds in extra costs. Morgan,us now is nicky former u. K. Secretary of state for digital, culture, media, and sports. Thank you very much for joining us on the program. You are closely involved with the decision back in january in terms of allowing huawei to participate in the u. K. 5g buildout. Do you think, given the changed circumstances, and looking back with the benefit of hindsight, that may not have been the right decision . Well, i think youre right to say that service answers have changed anonymously in january enormously since january. I think the u. K. Position on 5g and the opportunities offered by 5g are enormous, and we want to be one of the Global Leaders on that, but inevitably, once the u. S. Sanction regime changed, and therefore the advice of the u. K. National private Security Center changed, i think it was inevitable that the decision that was announced yesterday was going to be taken. And i think, obviously, there are a number of reasons for that, but also just the geopolitical change. With the pandemic, i think the view of china and the concerns raised in westminster, all of that contributed to the decision. The real challenge now is how do you find new suppliers . Diversification . A Global Market failure and relying too heavily on a small number of companies. We need more companies in this space. Yousef yeah. This has been a very precarious time for both people who are running telcos and people invested in telcos. What would you say would be that key challenges for u. K. Telecommunications companies . Malcom well ms morgan well, i do think it is about the diversification strategy. It is about finding a new supplier to replace huawei. It is also about making sure that, as i say, they maintain their lead in that 5g rollout. And, of course, although the decision yesterday does not fulldiately affect huaweis broadband rollout, i think and inevitably the pressure will, that, too. For telecom companies, it is going to be, obviously, about making sure, as they replace equip me, they will be shifting , and we know that huawei will be several years now. Yousef we have heard time and time again that the bigger plan is to improve productivity across the u. K. Is that going to get set back a little bit now, would you say . Think whatwell, i has been remarkable, and even now, we have seen that the u. K. Connectivity has seen enormous demand because of the pandemic, because people working from home, being educated from home, and it has held up remarkably well. But that does not mean there is not a long way to go. That does not mean there are not people in the u. K. In europe need faster broadband who are not able to get it at the moment. Would ncement made in terms of the 5g rollout by two years to three years. Of course, it may well be that the telcos are able to do things more quickly, at that time period does come down, but that is to say we have broadband rollout as well. The prime ministers target of 2025, that is ambitious anyway. But the more you change the players, obviously that target date will be strained. Yousef nicky, talk to me about the u. K. s relationship with china, because i look at the development, tensions have been building and mounting. This is not going to hell, is it . Ms morgan no, help, is it . No, this is not going to help, in part because of the Global Pandemic that everyone has been suffering from i think has really contributed to a feeling both in westminster but actually out in the country as well that we need to be very clear come excited about our relationship with china. But i think in westminster what we see our three clear groups. First, a much stronger relationship with the u. S. The u. S. , as we know, has a very clear view about china, and very clear demand of its allies in terms of lessening their links and things like that with china. Then you have got people who generally are just suspicious of china. Last marketo your reporter, the guy you are interviewing saying china is not a normal market economy, and we need to remember that, for example. But very common in the house of lords in particular, very concerned about human rights abuses going on in china. You put all that together, and it becomes i think a mix where people are very skeptical about whether we can carry on with a relationship with china. Yousef sure. Strong views there, nicky. I appreciate the time you made. Nicky morgan, a conservative member of the house of lords. Still to come, trump and hong kongs special status. Sanction chinese officials response will for cracking down in the city. We will be live in hong kong next. This is bloomberg. Is bloomberg. Yousef you are watching bloomberg surveillance. I am yousef gamal eldin in dubai. The u. S. And china the tit for tat continues. Donald trump has ordered an end to the Hong Kong Special status in the united states. Joining us now is bloombergs caringly, the china executive editor. Bloombergs china executive editor. Treats hong kong differently on commerce and trade and the other important areas. They have revoked several important provisions, including hong kong, does not include eliminating passport holders, certain experts, da and eve neither trump nor his administration have specifically set how it will impact certain sectors here, including the financial industry, and that has a lot of people wondering what the Material Impact will be. Karen, what was this theme for the city itself . Confronting the geopolitics but also having to deal with the new tax code from china for expats. That is a double whammy, isnt it . Karen yeah, the white house has not specified which chinese officials would be sanctioned, but it raises deep questions about the citys future as a Financial Hub that have already been swirling for a few weeks as china imposed a sweeping National Security law on hong kong. It is increasing worries about a hong kong brain drain if china moves to tax its citizens global income. I could appeal and keep bankers and white collar workers from china there are people facing a tax break, 45 in a city that usually taxes expats at 15 . Chinese workers are going home in order to avoid getting squeezed or seeing their savings disappear. Yousef yeah, karen, thank you so much. Bloomberg china government reporter karen leigh. Coming up, we will get into some Consumer Confidence trends with fresh ideas. This is bloomberg. G. Yousef economics, finance, politics. This is bloomberg surveillance. Time to do first word news with leighann gerrans. Leighann italy has set a course to nationalize controversial operator autostrade after all my talks on the politically charged issue. The proposer could see a state lender take control of the company from atlantia, owned by the billionaire benetton family. The collapse of the bridge in genoa remains a national tragedy. However, the Company Maintains safety checks triggered no alarms. President trump has ordered an end to hong kongs special status with the u. S. The move and the wave of a sweeping National Security law in hong kong. Uncertainty to business in the financial help. Trump signed legislation sanctioning chinese officials responsible for cracking down on dissent in the city. A covid19 vaccine by u. S. Drug company mike darda produced antibodies drug Company Moderna produced antibodies. However, a number experienced side effects, some of which were severe. Vaccine will move to a larger late stage trial this month to determine whether it will be approved by u. S. Regulars. Ruthsupreme Court Justice Bader Ginsburg has been hospitalized for a few days after being admitted to treat a possible infection the 87yearold liberal is of course the oldest justice and a fourtime cancer survivor. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im 120 countries, leighann gerrans. This is bloomberg. Yousef . Yousef thank you very much. Lets get into some of the corporates in a bit more detail. Nissan is looking to turn the page with its latest relief and electric. We spoke with the carmakers president. First, it is a new chapter. I will say that nissan has a great experience because we have lot ofs, we have run a the voice of the customer, which has reflected this car as a new electrical Vehicle Platform and which also has a lot of the ,issan Good Technology connected, and of course those are all in this car, and it is something we can open a new chapter, and provide the customer the excitement of the car. Excitementiven the of the car to the customer, that can make our employees happy. That makes me most happy. Ourselvesr us to make to allow the new creation to the provide growth to nissan. How will consumers respond to the car . What will be the most attractive price, range . I would say everything. Look at this car over there. Dont you think the color is beautiful . We have a lot of the new technology put on this color on this card to be very attractive. So this car, even when you are driving, the car can be connected with you. Driving, itnot could be a battery. We would like this card to be a part of the customers life, and that is what we are providing. That is real, and i hope the customer would really, really love what we are trying to provide the customer. As this is coming from 10 year experience, this is one of the strengths about nissan. What is the main competition going to be when it comes to other vehicles in the market already . This as theoviding most competitive crossover. Itself has the strength in a crossover or suv segment, so that combines our essence, and i think we would like to give good value on that segment at nissan. That is why we are saying it opens a new chapter with the new value of the electrified vehicle to the customer. Be launchingwill aria. s after the what is the strategy . This is part of our mobility strategy. Forave a dedicated platf

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