Transcripts For BLOOMBERG Bloomberg Markets European Open 20

BLOOMBERG Bloomberg Markets European Open August 21, 2017

Reset his presidency after controversial advisors after bannons ouster. How much has changed at 1600 pennsylvania avenue . Juncker Martin Schulz steps up his campaign to unseat her. Challenger Martin Schulz steps up his campaign to unseat her. In the u. S. , he saw the s p and of dow futures starting to turn around. We have green arrows on european futures. If you take a look at the bond trade, we have a threeday chart of the german debt. You can see we have come down in a yield that we are now headed back up. This is the end of fridays trade into today. ,he yield heading back up investors starting to sell a little bit more of the debt and that twitches that pushes the yield higher. We will get some direction in about 28 minutes as we get the market open. What kind of direction do you see from that jim and screen . Screen . Creen gmm manus these are the equity markets across asia. We have more risk coming in terms of political theater. We have a reset on afghanistan this evening and south korea having military droves. What risk does bannon post outside the white house . Housese outside the white pose outside the white house . In terms of linguistic nuances from mario draghi, more from jackson hole a little bit later. Steve, i note you like a little. It of steel 7 higher, commodities are up. Get to singapore and a Juliette Saly is standing by with your first word news. Juliette u. S. President donald trump will make a primetime speech later about afghanistan and south asia that comes as he looked to get his presidency back on track after the departure of chief strategist stephen bannon. Desk steve bannon. The president returns to washington after his working vacation spent at his golf resort in new jersey. He will speak at 2 00 a. M. U. K. Time. 10 sailors are missing and five injured after a u. S. Warship collided with a tanker. Search efforts are underway after the uss john mccain collided with another ship. They are investigating the extent of damages. Involthe second crash ving an American Naval vessel in a matter of. Matter of months. It follows weeks of hot intentions including kim jonguns attempt to attack guam. Watchter said he would washingtons actions for deciding whether to act. U. S. , mexico, and canada have ed a first round of trucks round of talks on a trade agreement. The next round is scheduled for the start of next month and mexico. They moved to canada in september and back to the u. S. In october. Additional rounds are planned for the reader of the year. Is telling its banks to Cap International investors to raise financing instead of relying on government funding is the impact of the saudi led boycott puts pressure on liquidity. The central bank is Holding Regular Meetings with lenders to gauge how the standoff is affecting liquidity. It is encouraging banks to borrow internationally through bonds and loans to prevent Credit Rating downgrades. Retail has returned to up provocative foster a week before brexit talks return. Prime minister theresa may will publish five new position papers this week after declaring it is stepping up pressure on the block to shift negotiations await from separation. Big ben will fall silent at noon u. K. Time as parliaments tower is set to do major work. They will witness the bells gs after the tower goes silent. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Manus thanks very much for that. Matt the world top Central Banks gather in jackson hole. The economy could be tempered by a growing unease of stubbornly low inflation. Janet yellen will be discussing the summit on friday. This is a moment for which we were getting revved up until we heard mario draghi was not going to drop policy bombs on us. Is janet yellen going to tell us Something Special . Probably not either. Its quite funny we are focused on jackson hole this week. Markets are quite today and will probably quite for the rest of this week. The whole world waits from something from jackson hole, not because we expect something, but we have a history that is surprising. Another janet yellen nor mario draghi will announce anything new. The markets might be priced in about the euro. Thats where we will see the real price action. Manus cracking piece on the bloomberg this weekend. This is the language he used. Volatility. We are a ways away. In talking about the euro . I doubt that very much. Financial stability could be a bigger conversation that yellen puts to the marketplace. Perhaps we are underpricing that. That is a fair point to make. The most recent bed mentioned they were pushing back against deregulation in the financial industry, which weighed on bank industries. Now she says they will fight the administrations attempt to roll back the doddfrank, etc. Most likely scenario is that she will reiterate what has been said before in terms of the fed supporting financial regulation. Nothing to definitive either way. Matt what do you expect from trumps speech tonight . And that the market moving or are traitors trying to take politics out of their daily work . I dont know how anyone can know what to work out from chumps speech ever come up but it is making people nervous. The ministrations the administrations making markets nervous. There is not any specific expectation. It is Holding People back from adding to risk and certainly the markets have a bearish bent. We are in riskaverse mode. Sellers have more control than buyers at the moment. Matt what about the dollar right now . There is a lot of talk on mliv right now about how trade is short the dollar. We have been hearing that for a couple weeks. I see hedge funds are making fewer bets on getting along in the euro. Where do you see that . The euro has had an incredible run, the dollar is shorted. What is going to happen . The euro dollar having its best start ever. It is interesting hedge funds have rolled back there positions on the euro. That is going into jackson hole and betting on the chance draghi might try to talk down the euro. People havent looking for dollar banks for a couple of weeks. I think it risk aversion gets worse, you might see the other side of the dollar slide. The longterm structural dollar bearish trade probably remains in place. More get a bank, there are nothing more than a couple of percents. Market is part of our and life team, doing a great job setting up the trading day of it trading day. If you are aer, bloomberg customer, not only do you get it on tv, you also get to join the conversation, follow the charts and functions and pop a message in that. In there. You have the qatar story that we will touch on later. Matt . Will talk about the hot new sheet in qatar. More to come on what is going on in germany. Dont miss our 30 minute germany decides program. We bring you the latest clinical and Market Analysis and the runoff to the election. London, buta. M. In lets get to singapore with Juliette Saly. Juliette Sempra Energy is nearing an agreement to buy on court for 9. 3 billion according to people another with the matter, it could be announced today. It could scoop up the Texas Utility being pursued like healthwaysett and energy unit to client to comment. Fortescue metals has jumped in trade after the the fourth biggest iron or trade. It returns further as it is rewarding investors with higher payouts. A new ceo of uber. Jordi of the right hailing company is coalescing around emails. T says a board of directors is likely to talk about it in the next few weeks. According to two people familiar with the matter, 600,000 gallons of oil was unloaded on saturday. A shell spokesperson declined to comment on the shipment. Chinas great wall motor is reportedly interested in buying chryslers Jeep Division according to automotive news, setting in the mail from the general manager. It intend to buy cheap and want to begin negotiations with chrysler. That is your Bloomberg Business flash and you can find more stories on top. We are checking the asian markets as we near the close in shanghai. A lot of support coming in from Energy Players in hong kong and in china today. Billion outcome sale has boosted economy in the regions. It was a different story, the yen playing into things on the nikkei, closing for the second consecutive session. We saw mixed earnings coming in there. In terms of what stocks are watching, sold off after the 9. 5 drop after friday, after the ceo decided to skip aside. Blue scale falling 22 , the most in six years after the earnings was a miss, but fortescue doing very well on the rebound we found in iron ore rices. We look at it on btv. Industriesng china getting to record highs as we see a rebound in the contract. This is important because we are them repay investors because of this rebound you saw and iron ore. , analysts suggest the profit could have rebounded sixfold and there will be a lot of pressure to see whether or not the income has derived from assets including iron ore businesses, will be paid back in terms of hired dividend payments. Matt, manus. Matt Juliette Saly in singapore. A search is underway for 10 american sailors missing off the coast of singapore, disappearing after their worship, the was is is john mccain collided with a patrol in the uss john mccain collided with a petroleum tanker. Lets go to jason could sake who joins us from singapore. Jason, what else do we know about what has happened so far . Uss mccain is the docked in singapore. It was able to get here under its own steam and power and the intensive search involving three other countries, indonesia, singapore, and malaysia, is still underway to look those 10 missing sailors. That search and rescue is still ongoing that this is the second incident involving a u. S. Navy in the area and that is why this is one of the most read stories on the agenda. What was the fallout on the very first incident . Jason two months ago, a navy ship collided with another merchant ship off the coast of japan in a tragic incident where seven u. S. Sailors were drowned and april a very investigation by the u. S. Navy has found fault with three of the commanders of the navy ship and they are being relieved of their command. We are awaiting a final report but certainly, the u. S. Navy has found fault with its own commanders in that first incident off the coast of japan. Hearing a lotbeen about the military exercises in the area. Is that why the uss mccain is there or what is the worship doing there . Jason the uss mccain was on its way for a routine port visit to singapore, quite a long way from those drills in korea. That the mccain had been involved in routine freedom navigation operations in the south china sea. It was reported last week to be sailing off the coast of a these artificial islands the chinese have up. That is where the mccain was spotted just a week ago and it was coming into port here in singapore just for a routine visit. It is a long way from those operations in korea. The merchant ship that mccain allied with was also on its way to singapore. It is unclear how these two ships collided very early this morning here just off the coast of singapore. Manus jason, thank you very much. The q for joining us. Minutes away from the start of the european trading day, just under 10 minutes. We will take a look at some of the potential movers. Those details coming up. This is bloomberg. Welcome him back to the european open, im matt miller here in berlin. Manus cranny alongside me. Filling in, thank you manus, for guy johnson in london. We are minutes away from the open, six and a half to be exact. Red stickyg headline, maersk oil is being a 74 5tal for billiondeal 7. 4 deal. 2. 5 will assume debt for billion, a total of 7. 5 billion in what is turning out to be in m a monday because we got the on court news as well, the battle between Warren Buffett and paul stinger looks to be won by a third party. Manus it has been rattling around europe between act and nobel, certainly an active participant. I think the miners could be in play. Juliette has been telling you that. This is the commodity board deal seo if you want to understand this is the Community Board glco if you want to understand what is affecting the market. Are up 1 . These flat, ray dalio basically saying, by gold. Buy gold. You have copper, iron ore, upures are up 5. 3 , real was 4. 5 in australian trade. Matt i am watching gold to see if they can break through the 1300 level. And close above it, as well. Im also watching bitcoin come down on little today, still above 4000 however. More to come on germany, dont miss our threeminute germany decide 30 minute germany decide show. We will bring you the latest political and Market Analysis and the runup to the september 24 election, Angela Merkel leading by 15 points right now over her opponent. Down, this isg bloomberg. 7 59 a. M. In london. Get your boots on because these markets are inching lower in a post been in the as we wait for jackson hole. Will it be an action less jackson hole on august 24 or 25th . Matt, a very good morning to you. Its a pleasure to be on your show. Matt its a pleasure to have you with us, manus. I want to point out something surely you have seen already. Its the great chart of the bloomberg. You can access it by typing in this. It shows Hedge Fund Positioning in the dollar at the beginning of the last 12 month. , they were long u. S. Dollars, the most crowded trades that turned around and now it is short. The question is, will it bounce back . By the power of tv, we just flashed up on to the monitor equities slightly lower opening. Michaels view on the fed was that there would not be another rate hike this year that sterling is not priced fully. It is not priced fully for a risk of a downside. These equity markets are lower. The markets are skittish because there are lots to play for in terms of, will donald trump stick to the street that stick to the script this morning. Nejra cehic is standing by. Nejra we know the 10 year treasury yield was whipped forward with all the news out of the u. S. But it ended where it started around 2. 2 . The 10year gilt yield is pretty much unchanged, closing at 1. 09 on friday and we are there now. Very unchanged. Equities meanwhile, we are seeing a shift to the downside, third day of losses for the stoxx 600, the overall bank up 3 10 of a percent. Most of the Industry Groups are heading lower, financial, health care, and tech stocks are the biggest underperformers. Energy getting out a tiny gain on energy stocks, but pretty much a flat gain. Most Industry Groups are heading lower. To jackson hole, one question is whether mario draghi will push back on military strength at all. We will talking about positioning on the dollar, this is cftc data showing positioning on the euro. We turned it bullish on the euro for the first time this year since 2014, but those bullish that have been pulled back a little bit. If we head into bearish territory on that positioning, that could pose much bigger questions than sustainability of the euro rally. We are softer around the 117 handle. Im looking at oil and gas stocks here, we have a technical meeting of opec in vienna happening today, so stoxx 600 oil and gas index is near its lowest since november. Manus lets check in on some of the moves we got on here. What matt and i were talking about. Commodities are moving, iron ore is staying in the 70 range, that is a question for the market. The preview we have got. Idc says iron ore will hold in bhp70s as we go in, expecting earnings, rebound, that is one of the messages coming through. The miners at the top of your screen, aluminium trading , zinc islevate prices trading up 1 . Nickel is up 1. 91 . Glencore all pacing on the upside. It is land on the countryside is down by 1. 2 . You have that skittishness overall in regards to the value of any property. Anybody got a bid for any property in london . That is the question you ask yourself. The stock is down this morning, the readership is spiked on that, british has downgraded by hsbc to 678 pounds. Matt miller. Base very much. Chief white house strategist steve bannon was ousted in the white house friday. He had been on shaky ground for weeks amid the fallout of the violence in virginia. What next for trump in the post been an era . Era . St bannon he looks to get his presidency back on track but he does not always stick to the script and has definitely the ability to move markets. With us is the Senior Investment manager at asset management. Let me first ask you what you think traders do in reaction to donald trump. Thatu try to take completely out of the decisions you make because it is so incalculable . Definitely from our perspective, that is what we try to do with the political side of things. Trump has been heavy on rhetoric and that has been volatile throughout the campaign and since the campaign we have seen his tone at and flow and it really does speak to different audiences with different tones and content. I think we can observe for markets the trade certainly does not ignore trump but we are certainly looking for a mediumterm horizon and trying to filter out the signal from the noise. And that respect, a lot of the things are distractions at the moment. What we care about is his agenda and the economic agenda specifically. Tax reform still is probably the most important aspect of the agenda, not just because of the impact on the economy but because it is one of the more achievable. Not necessarily achievable in the magnitude we were expecting potentially at the start of his term, but certainly because it is possible popular with the electorate. Manus we have an open ivy chat from here and frankfurt. Some spectacular distinction between traders and investors. But investors turned to traders quickly when the bottom falls out of the market. Lets talk about the bond market. Trump is blaming both sides in charles phil, a significant moment in a geopolitical spective charles phil charlottesville, a significant moment in a geopolitical perspective. These bond markets started at 2. 2 and ended at 2. 2 . What made the bond market die . Is it the discussion from janet yellen today . Is it more important than we are pricing in the bond . Id rather talk about that than trump because trump is so difficult to price. It is an adjusting russian you raise. We were told last week, im not sure if it has been confirmed, but

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