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Speaker 1: This is Bloomberg Surveillance. Monetary policy at the near zero

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Speaker 1: lower bounds should be a symmetric They should be looking

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Speaker 1: to overshoot rather than undershoot the market. After many years

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Speaker 1: of his low rates and Q and he's has has

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Speaker 1: lost some of his calibration. We have the highest level

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Speaker 1: of inequality of any of the advanced countries. When you

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Speaker 1: start looking at these statistics, you have to be worried.

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Speaker 1: Bloomberg Surveillance your link to the world of economics, finance,

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Speaker 1: and investment on Bloomberg Radio. Good morning, everybody. This is

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Speaker 1: Bloomberg Surveillance on Bloomberg Radio. I'm Michael McKee along with

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Speaker 1: David Gerrow Tom Keen. Can you believe we're saying Tom

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Speaker 1: Keene is on vacation. He left me a very handy

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Speaker 1: packet of things due to prep for the show, fifty

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Speaker 1: pages of foundational texts. They actually just you know, they

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Speaker 1: took a steam shovel and UH and four team out

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Speaker 1: the door. We're playing where in the world is Tom Keen?

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Speaker 1: And we have mentioned that they accept dollars. Where he is.

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Speaker 1: He has sand between his toes and they drive on

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Speaker 1: the left hand side. Um. The primary agriculture product Maze

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Speaker 1: and fish. So h if I can help anybody figure

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Speaker 1: out where Tom Keen is, our our terrific executive preiser,

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Speaker 1: Rachel is running anywhere in the World's Tom Keen contestant?

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Speaker 1: I don't know. I think I'm ineligible, is um And

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Speaker 1: you can torture me and I'll probably tell you. All Right,

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Speaker 1: we have more breaking news. David Priceline says it's CEO

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Speaker 1: has resigned. And what's interesting about this is that they're

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Speaker 1: saying it is for a personal conduct issue. They are

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Speaker 1: not saying what it is, so leaving people to to

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Speaker 1: guess at that. Um, see if there's anything additional here.

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Speaker 1: Darren Houston has resigned. He apparently had a CEO relationship

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Speaker 1: with a non direct report. Interesting, you're not supposed to

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Speaker 1: do that, right, um. And so they have now appointed

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Speaker 1: Jeffrey Boyd, he's the chairman and former CEO, as the

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Speaker 1: interim CEO and president while the board conducts a search

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Speaker 1: for a successor. And let me see if we have

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Speaker 1: we don't have any trading in the early hours, and

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Speaker 1: they have put a halt on on trading that there

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Speaker 1: hadn't been any yet but right now, um, there's a

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Speaker 1: halt on price Line shares so um Darren Houston, the

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Speaker 1: CEO of Price Line Out, price Line of course, the

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Speaker 1: travel website owner of many travel websites including Kayak and

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Speaker 1: Booking dot Com and the like. It has been an

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Speaker 1: extraordinarily busy morning. We have this news, We have the

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Speaker 1: mergers out there, a Vy buying Stem Centrics and Abbott

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Speaker 1: buying the folks at St. Jude. We have a number

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Speaker 1: of earnings Ford sixty eight cents to share. The estimate

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Speaker 1: was for eighty four cents ups and dollar twenty seven.

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Speaker 1: The inestimate was for a dollar Bristol Myers seventy four.

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Speaker 1: The estimate was for sixty five cents. So you would

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Speaker 1: think we would be having an update in the market,

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Speaker 1: would you not? You would be incorrect. All right now,

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Speaker 1: SMP futures are down fifteen points down. Futures down a

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Speaker 1: hundred and forty two. Let me mention We're brought to

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Speaker 1: you by colne Resnick Accounting, Tax and Advisory Trust cone

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Speaker 1: Resnick for the strategy and insight your business needs to

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Speaker 1: move forward. Find out what cone Resnick thinks and sign

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Speaker 1: up for insights at colne Resnick dot com. It's there's

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Speaker 1: another one we've got more earnings out MasterCard first quarter

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Speaker 1: earnings for share eighty six cents. Eighty five cents was

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Speaker 1: the consensus for cast. So definitely, uh, we will top

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Speaker 1: that kind of learning releases. But David, it's oddly enough,

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Speaker 1: it's all about something that didn't happen last night. We

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Speaker 1: were all waiting with with bated breath, those of us

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Speaker 1: who were awake for the news out of the Bank

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Speaker 1: of Japan yesterday, the meeting there, two day meeting there

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Speaker 1: wrapping up in the middle of the night, and what

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Speaker 1: ended up happening here at the Bank of Japan deciding

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Speaker 1: not to do much of anything really continuing with the

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Speaker 1: rates that had said in place, opted for holding off

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Speaker 1: on expanding its monetary stimulus. Uh, sort of wait and

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Speaker 1: see approach, I guess you could say. And that, of

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Speaker 1: course came on the heels of other central bank news,

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Speaker 1: the FED Federal Reserve meeting in Washington concluding that meeting yesterday.

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Speaker 1: There was no news conference to follow that. We got

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Speaker 1: a statement from the Fed. Uh, people were parsing that,

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Speaker 1: you were parsing that, and they meet it aftermat there

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Speaker 1: for uh, some language there in the balance of risk,

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Speaker 1: and we found that that was that was absent. Yeah, well,

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Speaker 1: you know, the FED reaction was kind of as expected

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Speaker 1: because people didn't think anything would happen. But there are

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Speaker 1: a lot of people long going into the Bank of Japan,

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Speaker 1: meaning or in terms of the yen, extremely short, and

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Speaker 1: no matter which one of those two sides of the

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Speaker 1: trade you had, you lose Yen one O eight seventeen

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Speaker 1: gaining three percent. One of the most rapid appreciations the

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Speaker 1: end seen in the last decade. Jane folio as a

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Speaker 1: senior currency strategist at Rabble Bank, Jane, people really seem

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Speaker 1: to have been caught wrong footed in the currency market

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Speaker 1: by the Bank of Japan lack of action. Indeed, a

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Speaker 1: really big movement we sawing on the back of the

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Speaker 1: the non movement and non policy decision from the Bank

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Speaker 1: of Japan. Now, of course, I suppose if we look

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Speaker 1: through the statements of from the Bank of Japan, if

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Speaker 1: we look really through the minutes that we've had from

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Speaker 1: the the Jaluary the twenty ninth meeting, we do find

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Speaker 1: conclusive to their inaction. And of course this is what

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Speaker 1: we picked up more by economist into yesterday's meeting, more

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Speaker 1: by the market, because what's the market clearly was very shocked.

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Speaker 1: If you look at some surveys of economists, well it

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Speaker 1: was only just about a consensus view and favor. Further,

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Speaker 1: actually many economists out there thinking that they would stand

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Speaker 1: pat in the course of this stuff. Go back to

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Speaker 1: the fact that last January or in January, there was

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Speaker 1: no strong consensus in favor of the interst rate move.

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Speaker 1: Four out of the nine members of the committee dissented.

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Speaker 1: They were worried about that negative interest rate move. And

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Speaker 1: again in the meetings this week, the statement that we

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Speaker 1: saw this morning to two members really didn't monst that

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Speaker 1: negative interest rate to remain. So given that the level

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Speaker 1: of dissent, I think perhaps some of the economists did

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Speaker 1: pick up on the fact that the Bank of Japan

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Speaker 1: was going to sit back and stay pad and really

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Speaker 1: wait for the dust to settle as a lot of

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Speaker 1: criticism over the implications of that negative interstrate decision in January.

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Speaker 1: And let's talk a bit about that two percent inflation target.

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Speaker 1: I think this was the fourth time in about a

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Speaker 1: year that the Bank of Japan delayed the time frame

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Speaker 1: for reaching that target. The Bank of Japan now saying

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Speaker 1: they're going to hit at some point in fiscal year

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Speaker 1: or two thousand seventeen. How big a deal was that. Well, again,

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Speaker 1: it is a big deal, but again it's not particularly shocking.

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Speaker 1: As you say, this is a round about the full

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Speaker 1: time in a short period of time. For twenty five

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Speaker 1: years or so, the Bank of Japan has find it

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Speaker 1: really difficult to try and engage some price movement upwards.

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Speaker 1: Its from that point of view, not a surprise, but

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Speaker 1: it is a worry. But of course we won't much

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Speaker 1: focus on the level of dollar yet, and we said, well,

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Speaker 1: how are they going to how are they going to

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Speaker 1: do this with with dollar year at these sorts of level,

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Speaker 1: surely move one twenty would be more conducive to this

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Speaker 1: inflation target. And that's true. But we've got to remember

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Speaker 1: that the yend was weakening really quite significantly in recent years,

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Speaker 1: and that means that on many measures that the yen

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Speaker 1: is still undervalued. It's still a cheap currency, meaning that

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Speaker 1: it should still be doing some work and trying to

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Speaker 1: push price is higher. But the fact of the matter

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Speaker 1: is is that it isn't just Japan that has seen

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Speaker 1: some slower growth pressures. We're seeing this, of course an

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Speaker 1: in many economies, and with China it's still a concern

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Speaker 1: and really for Japan, but they are going to find

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Speaker 1: it difficult to really push inflation up towards their target.

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Speaker 1: We see euro young gapping also, so this is going

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Speaker 1: to be bad news for Japan in many different currencies.

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Speaker 1: Do you think the Bank of Japan needs to address

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Speaker 1: the currencies level or is this going to be short

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Speaker 1: lived enough that they can focus on their waiting game. Well.

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Speaker 1: Of course, often for a central bank, it's it's it's

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Speaker 1: it's the stability that they really want, and if they

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Speaker 1: have a relative stable or a period of stability in

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Speaker 1: the currency, it's easier to deal with. Now, if we

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Speaker 1: look at the Bank of Japan's measure of the trade

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Speaker 1: weighted index for for the Japanese economy last year, that

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Speaker 1: hits its lowest level since three Now that we know

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Speaker 1: that it's pushed higher since last year and it is firmer,

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Speaker 1: but from that perspective, it's still relatively cheap. Now, they

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Speaker 1: don't like the volatility, and we've seen a lot of

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Speaker 1: volatility this here, but if it were to be more stable,

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Speaker 1: it is better for investment, it's better for h companies

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Speaker 1: setting wages, etcetera. So I think some stability is what

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Speaker 1: they want to Clearly, yes, a weekly end would be very,

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Speaker 1: very useful, but of course the back of japan Ministry

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Speaker 1: of Finance, they don't have or control over their currency

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Speaker 1: because it is a safe haven currency. It is it's

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Speaker 1: something that the market buyers when when they are worried.

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Speaker 1: And if we do have another bout of risk aversion

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Speaker 1: this year, it is likely that the end will remain

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Speaker 1: on a firm footing. It was just lastly here in

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Speaker 1: these last few seconds, I wonder how well the Bank

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Speaker 1: of Japan is telegraphing what it intends to do. We

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Speaker 1: we saw this balloon floated here of you know, working

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Speaker 1: with the banks to encourage them to lend. That did

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Speaker 1: not happen. But how would you assess it's it's communication

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Speaker 1: abilities here? Well, certainly since Friday really not good. I mean,

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Speaker 1: the market clear the anticipated that they would be something

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Speaker 1: that was on that message that we saw on Friday,

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Speaker 1: that they could be a negative interest rate applied to

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Speaker 1: some bank loans and try and take the pressure of

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Speaker 1: banks stanitsies. Japanese banks do appear to be under pressure.

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Speaker 1: They haven't recovered in the stock market since Genuate negative

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Speaker 1: interest rate decision. And many people are concerned that if

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Speaker 1: if banks come under pressure, then then access to chief

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Speaker 1: credit could also be stressed. So there are big concerns

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Speaker 1: over the banking set right now, and the Bank of

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Speaker 1: Japan doesn't need to reassure participants. Jane Folly's senior currency

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Speaker 1: strategist had Ravel Bank, thanks for joining us this morning.

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Speaker 1: The Abbot St jude call is underway and Abbott officials

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Speaker 1: are saying the St JUDEAI will yield five million dollars

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Speaker 1: half a billion dollars in synergies by twenty twenty. That's

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Speaker 1: the first headline out of that call. And let's check

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Speaker 1: in with Michael Barr and get the latest world in

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Speaker 1: national headlines like Brank David. Thank you very much, Bernie Sanders,

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Speaker 1: as you will be laying off hundreds of paid staffers

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Speaker 1: with his presidential campaign. Sanders told The New York Times,

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Speaker 1: our resources will be allocated to the fourteen contests that remain.

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Speaker 1: Sanders spokesman says the campaign would continue to have a

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Speaker 1: staff from one thousand to more than three hundred. Syrian

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Speaker 1: Monitoring Group and and the First Responders Team say new

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Speaker 1: air strikes on the rebel held part of the city

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Speaker 1: of Aleppo have killed twenty people. That brings the death

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Speaker 1: toll in Aleppo in the past twenty four hours to

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Speaker 1: at least sixty one. South Korea says North Korea apparently

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Speaker 1: fired an intermediate range missile today, but that missile crashed

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Speaker 1: moments after liftoff. Global News twenty four hours a day,

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Speaker 1: powered by our twenty four hundred journalists and more than

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Speaker 1: a hundred fifty news bureaus from around the world. On

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Speaker 1: Michael bar Mike David, Thank you, Michael. We're keeping an

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Speaker 1: eye on Abbot and St. Jude Chairs twenty five billion

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Speaker 1: dollar merging today. Abbott seems to be losing ground down

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Speaker 1: nine percent right now, but St Jude Chairs up twenty

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Speaker 1: five it much more. Coming up here on Bloomberg Surveillance,

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Speaker 1: will continue to chew over that news from the Bank

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Speaker 1: of Japan with John Vale, currency strategist at NICO. Will

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Speaker 1: also be talking about the latest GDP numbers coming out

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Speaker 1: here at eight thirty Wall Street time. That's coming up

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Speaker 1: on Bloomberg Surveillance