1 00:00:03,440 --> 00:00:06,800 Speaker 1: This is Bloomberg Surveillance. We want to give that credit. 2 00:00:06,880 --> 00:00:09,080 Speaker 1: They have come a long way from where they were 3 00:00:09,119 --> 00:00:11,400 Speaker 1: in the yearly nineties when they didn't even communicate anything 4 00:00:11,440 --> 00:00:15,480 Speaker 1: to the market. Begin remains the most important single occasion currency, 5 00:00:15,680 --> 00:00:18,800 Speaker 1: that together with Aussie which I think is the proxy 6 00:00:18,960 --> 00:00:21,880 Speaker 1: for all of Asia's growth ultimately, and we still are 7 00:00:21,880 --> 00:00:23,680 Speaker 1: going to have a crisis at some point. It'll be 8 00:00:23,720 --> 00:00:25,480 Speaker 1: a big one. And that's where the new tools and 9 00:00:25,520 --> 00:00:28,000 Speaker 1: dot Frank the title to the Resolution Authority, that's where 10 00:00:28,040 --> 00:00:31,240 Speaker 1: they come in. Bloomberg Surveillance your link to the world 11 00:00:31,280 --> 00:00:36,000 Speaker 1: of economics, finance, and investment on Bloomberg Radio. Good morning everyone, 12 00:00:36,080 --> 00:00:39,559 Speaker 1: Marrow Draggy shakes markets. He moves markets and it is 13 00:00:39,760 --> 00:00:43,920 Speaker 1: risk on. Futures up twenty JABB futures up one sixty three, 14 00:00:43,960 --> 00:00:47,400 Speaker 1: the Euro weaker. What good coverage this morning. Will continue 15 00:00:47,400 --> 00:00:51,279 Speaker 1: that into this eight o'clock our bonus round, joining us 16 00:00:51,280 --> 00:00:53,880 Speaker 1: Dennis Gartment, who has a few opinions on as we 17 00:00:53,960 --> 00:00:56,200 Speaker 1: love to have Dennis Gartment on the the hate me. 18 00:00:56,320 --> 00:00:58,880 Speaker 1: The hate mail meter lights up like a like a 19 00:00:59,000 --> 00:01:03,600 Speaker 1: candle when we have Gartment on this is well, they 20 00:01:03,640 --> 00:01:06,360 Speaker 1: love Dennis, they hate me, right we'll get Dennis Gartman 21 00:01:06,440 --> 00:01:10,560 Speaker 1: here in a moment. Bloomberg Surveillance this morning marched by 22 00:01:10,640 --> 00:01:16,039 Speaker 1: cone Resnick Accounting, Tax Advisory. As economic policy changes, so 23 00:01:16,160 --> 00:01:20,480 Speaker 1: do business decisions. Speak to the experts at cone RESNUC 24 00:01:20,560 --> 00:01:23,880 Speaker 1: for the forward thinking advice you need. Find out more 25 00:01:23,880 --> 00:01:27,280 Speaker 1: at cone Resnick dot com. O h n R e 26 00:01:27,480 --> 00:01:31,120 Speaker 1: zy n I c K cone Resnick dot com. Dennis 27 00:01:31,120 --> 00:01:33,200 Speaker 1: Gartman joins us out. Dennis, I want to put this 28 00:01:33,680 --> 00:01:37,759 Speaker 1: in the in the context of the title of Larry 29 00:01:37,760 --> 00:01:40,360 Speaker 1: Lindsay's new book, You Give It a Massive Rave Review, 30 00:01:40,760 --> 00:01:45,600 Speaker 1: Conspiracies of the ruling Class. Mario Draggy is part of 31 00:01:45,600 --> 00:01:51,160 Speaker 1: the ruling class. What's his conspiracy to jump start his Europe? 32 00:01:53,120 --> 00:01:57,160 Speaker 1: He has leaked full hog into into the market this morning. 33 00:01:57,640 --> 00:02:00,320 Speaker 1: In case people haven't heard yet, what they have done 34 00:02:00,400 --> 00:02:03,760 Speaker 1: in Europe this morning is cut all three of the 35 00:02:03,760 --> 00:02:07,560 Speaker 1: base rates in UH by the ECB. More importantly, have 36 00:02:07,760 --> 00:02:14,080 Speaker 1: raised the sixty billion euro uh quantitative easing each month 37 00:02:14,120 --> 00:02:17,920 Speaker 1: to eighty billion, And I think probably most importantly, have 38 00:02:18,320 --> 00:02:21,880 Speaker 1: allowed the purchases of corporate debt for the simple reason 39 00:02:21,880 --> 00:02:24,519 Speaker 1: that they're running out of sovereign debt that they can buy, 40 00:02:24,600 --> 00:02:27,240 Speaker 1: and they have no choice but to expand reserves by 41 00:02:27,280 --> 00:02:30,840 Speaker 1: buying corporate debt. The Euro is getting slammed as we talk, 42 00:02:31,280 --> 00:02:35,040 Speaker 1: treadty five right now, down from one o nine actually 43 00:02:35,080 --> 00:02:37,959 Speaker 1: trading one tena one time earlier. This found a bid, 44 00:02:38,040 --> 00:02:40,840 Speaker 1: I mean, is where we're going to? Dennis and Mike 45 00:02:40,919 --> 00:02:43,360 Speaker 1: McKee might jump in here with Mr Gartman. Neil Dutta 46 00:02:43,480 --> 00:02:46,960 Speaker 1: just publishes March and April are a no go for 47 00:02:47,040 --> 00:02:50,480 Speaker 1: the US Central Bank, while June is a live possibility. 48 00:02:50,560 --> 00:02:55,200 Speaker 1: Michael Dennis. The real question is obviously Mario dragging went 49 00:02:55,639 --> 00:02:59,080 Speaker 1: uh full Monty as Brunelo Rosa said, or kitchen sink 50 00:02:59,160 --> 00:03:02,080 Speaker 1: as Jamie McGee or and Jeff Black have both tweeted 51 00:03:02,120 --> 00:03:05,240 Speaker 1: this morning. So you get this reaction in the markets, 52 00:03:05,280 --> 00:03:07,560 Speaker 1: But does it last? Is there going to be enough 53 00:03:07,600 --> 00:03:09,680 Speaker 1: stimulus so the market is going to see enough in 54 00:03:09,720 --> 00:03:13,639 Speaker 1: the package over the next couple of weeks to continue 55 00:03:13,680 --> 00:03:17,120 Speaker 1: pushing down on the Euro. Yes, of course they will. 56 00:03:17,360 --> 00:03:19,359 Speaker 1: I think Joggy has made it abundantly clear if this 57 00:03:19,440 --> 00:03:21,960 Speaker 1: is not the last move he's going to make. He 58 00:03:22,040 --> 00:03:25,440 Speaker 1: has thrown in completely with those who are expansionary, I 59 00:03:25,480 --> 00:03:30,000 Speaker 1: think justifiably. So you still have unemployment rates among youths 60 00:03:30,040 --> 00:03:33,280 Speaker 1: in Spain, Italy, across all of Europe. I don't think 61 00:03:33,280 --> 00:03:35,080 Speaker 1: he had any choice. I think he's done exactly what 62 00:03:35,120 --> 00:03:37,560 Speaker 1: he needed to do. It will be, or should be, 63 00:03:37,680 --> 00:03:41,000 Speaker 1: highly inflationary over a period of time, but the deflationary 64 00:03:41,040 --> 00:03:43,680 Speaker 1: forces are still so extant that he had no choice 65 00:03:43,960 --> 00:03:46,080 Speaker 1: other than to go full monthy. I think he's done 66 00:03:46,080 --> 00:03:48,880 Speaker 1: the right thing, as others may argue, but it will 67 00:03:48,920 --> 00:03:51,720 Speaker 1: continue to be I think manifestly bears of the euro 68 00:03:52,240 --> 00:03:56,560 Speaker 1: par is on its way. Do we see contraction in 69 00:03:56,720 --> 00:04:00,280 Speaker 1: spreads among the Eurozone countries? Is this going to reach 70 00:04:00,280 --> 00:04:05,880 Speaker 1: out to the periphery? As to that that question, I'm 71 00:04:05,880 --> 00:04:09,200 Speaker 1: not quite sure. I understand, well, a lot of what 72 00:04:09,240 --> 00:04:12,640 Speaker 1: the ECB has done hasn't helped the peripheral countries in 73 00:04:12,680 --> 00:04:17,119 Speaker 1: the year Zone as much because their rates are higher. Yes, okay, 74 00:04:17,120 --> 00:04:19,880 Speaker 1: I understand. Yeah, of course it should narrow those spreads. 75 00:04:19,880 --> 00:04:21,960 Speaker 1: It has to, and it it really would be mathematically 76 00:04:22,000 --> 00:04:25,240 Speaker 1: impossible to do otherwise. So the answer is, yes, it will. 77 00:04:25,720 --> 00:04:27,680 Speaker 1: I think it is going to be highly inflationary. I 78 00:04:27,760 --> 00:04:29,880 Speaker 1: think is what he should have done. I'm I'm I'm 79 00:04:29,920 --> 00:04:32,040 Speaker 1: full in with what he's done today. They those on 80 00:04:32,120 --> 00:04:34,240 Speaker 1: the far light may take me to tap board, but 81 00:04:34,360 --> 00:04:36,080 Speaker 1: I don't think you had any Okay, So Dennis, you 82 00:04:36,120 --> 00:04:38,280 Speaker 1: go down to your North Carolina state, you speak to 83 00:04:38,320 --> 00:04:41,760 Speaker 1: their economics honors program at the Pool Management Hall and 84 00:04:41,800 --> 00:04:44,720 Speaker 1: all that. None of this is in the textbooks you are, 85 00:04:44,800 --> 00:04:49,520 Speaker 1: Michael McKee, study none of it. It is que I'm sorry, folks, 86 00:04:49,640 --> 00:04:53,320 Speaker 1: Rubini absolutely nailed this. And I'm not even gonna pretend 87 00:04:53,320 --> 00:04:56,920 Speaker 1: to fake. Is a wonderful accent. Quee one, que two? 88 00:04:57,200 --> 00:05:00,760 Speaker 1: Where the hell are we in the count of Quee's this? 89 00:05:00,760 --> 00:05:03,080 Speaker 1: This is three. We're going to four, We'll go to twelve, 90 00:05:03,120 --> 00:05:05,880 Speaker 1: We'll go to fourteen. What is the price of that? 91 00:05:05,920 --> 00:05:07,760 Speaker 1: I knew you were gonna say that. What's the price 92 00:05:07,800 --> 00:05:11,040 Speaker 1: of that? Mr? I'm not sure. I don't know. They 93 00:05:11,120 --> 00:05:14,520 Speaker 1: hope it shall be an inflation. Everybody wants to see 94 00:05:14,760 --> 00:05:17,800 Speaker 1: an inflation of two or more, whether it's the ECB, 95 00:05:17,960 --> 00:05:22,599 Speaker 1: whether it's the Bank of Japan, whether it's the nobody's 96 00:05:22,640 --> 00:05:25,120 Speaker 1: getting in Dennis. I got Olivia Blanchard on the program 97 00:05:25,120 --> 00:05:27,880 Speaker 1: this morning saying, look, there's no fire in house. There 98 00:05:28,120 --> 00:05:32,120 Speaker 1: is economic growth. There is there is real economy, signs 99 00:05:32,120 --> 00:05:35,640 Speaker 1: of good in the US and in Europe. What's the 100 00:05:36,080 --> 00:05:40,400 Speaker 1: y here to jump start the macro position other than 101 00:05:40,440 --> 00:05:44,400 Speaker 1: the jump started for the conspiracy of the ruling class. Well, 102 00:05:44,440 --> 00:05:46,440 Speaker 1: I'm not sure that I agree that there that there 103 00:05:46,480 --> 00:05:49,120 Speaker 1: are signs in Europe of economic strength. There are signs 104 00:05:49,120 --> 00:05:54,240 Speaker 1: in the United States, perhaps of modest, slow, laborious one 105 00:05:54,320 --> 00:05:56,800 Speaker 1: to two GDP growth, But I'm not sure that I 106 00:05:56,800 --> 00:05:59,080 Speaker 1: see the same things in Europe. And I think that 107 00:05:59,200 --> 00:06:02,159 Speaker 1: drug has Actus really done the correct thing. If you 108 00:06:02,200 --> 00:06:04,919 Speaker 1: look at the unemployment rates that exist, especially among the 109 00:06:04,960 --> 00:06:08,960 Speaker 1: youth in in in in Europe, there is an ample 110 00:06:09,040 --> 00:06:12,000 Speaker 1: supply of of of labor to be gotten. There is 111 00:06:12,120 --> 00:06:16,680 Speaker 1: no inflation to be found. I think he had no choice. Now, 112 00:06:17,279 --> 00:06:20,039 Speaker 1: he had no choice. He did the right thing. It 113 00:06:20,200 --> 00:06:24,160 Speaker 1: is affecting markets, but is it going to produce growth 114 00:06:24,240 --> 00:06:28,920 Speaker 1: and inflation? Will it work? That's another question for another time. 115 00:06:28,960 --> 00:06:31,839 Speaker 1: Hasn't it diet? Who one would hope that it works? Certainly, 116 00:06:31,880 --> 00:06:35,000 Speaker 1: he hopes that it works. Certainly everybody expects that it 117 00:06:35,040 --> 00:06:38,320 Speaker 1: should engender in inflation at some point in the future. Certainly, 118 00:06:38,440 --> 00:06:42,240 Speaker 1: most certainly most economists would suspect that that kind of 119 00:06:42,279 --> 00:06:45,400 Speaker 1: helicopter drop of money will result in some sort of 120 00:06:45,400 --> 00:06:48,960 Speaker 1: economic growth. Time only shall tell. But could he should he? 121 00:06:49,440 --> 00:06:52,080 Speaker 1: Let's let's do what the lawyers say and go reductive 122 00:06:52,120 --> 00:06:54,479 Speaker 1: out absurdum, let's go the other direction. Should he have 123 00:06:54,560 --> 00:06:57,840 Speaker 1: tightened monetary policy? Well, of course not. His only course 124 00:06:57,880 --> 00:06:59,840 Speaker 1: of action was to do what he's done today. And 125 00:07:00,040 --> 00:07:02,800 Speaker 1: this is just this is que three on its way 126 00:07:02,839 --> 00:07:05,400 Speaker 1: to QUEI fourteen. Whether we like it or not, that's 127 00:07:05,440 --> 00:07:07,680 Speaker 1: the reality, and as traders, that's how we have to deal. 128 00:07:07,920 --> 00:07:12,640 Speaker 1: Does this make you long of stocks? You really have 129 00:07:12,760 --> 00:07:14,800 Speaker 1: no choice. This this this should have to make you 130 00:07:14,840 --> 00:07:17,000 Speaker 1: long of stocks. What it does make me is short 131 00:07:17,040 --> 00:07:20,040 Speaker 1: of the euro and long of gold. That that that I, 132 00:07:21,000 --> 00:07:23,520 Speaker 1: without equivocation, is where I wish to be. Should it 133 00:07:23,640 --> 00:07:26,280 Speaker 1: make you long of stocks, you really do. Clearly you 134 00:07:26,360 --> 00:07:28,520 Speaker 1: don't wish to be short of them in this environment, 135 00:07:28,840 --> 00:07:33,120 Speaker 1: and probably you should be long with them. I can't 136 00:07:33,120 --> 00:07:36,080 Speaker 1: imagine doing Gartman's job or anybody like Gartman right now. 137 00:07:36,280 --> 00:07:40,600 Speaker 1: I'm figuring out so quickly what it means. Um at 138 00:07:40,600 --> 00:07:43,800 Speaker 1: this point, what does it mean in other parts of 139 00:07:43,840 --> 00:07:46,840 Speaker 1: the world. I think it means that the bank in 140 00:07:46,960 --> 00:07:49,200 Speaker 1: Japan has has no choice but to follow up the 141 00:07:49,200 --> 00:07:52,120 Speaker 1: bank exactly he has has done. They don't have any choice. 142 00:07:52,200 --> 00:07:54,600 Speaker 1: I mean, it's a quey war almost. I mean, what 143 00:07:55,000 --> 00:07:57,480 Speaker 1: is the correlation of our banks right now? They've all 144 00:07:57,480 --> 00:08:00,600 Speaker 1: they're all I'm sorry, every bank is reacting off every 145 00:08:00,600 --> 00:08:04,240 Speaker 1: other one. Right, Yes, maybe maybe it is a problem 146 00:08:04,280 --> 00:08:08,920 Speaker 1: of great communications. In the twenty five years ago when 147 00:08:08,960 --> 00:08:12,480 Speaker 1: I first, when I had begun to get somewhat smart 148 00:08:12,520 --> 00:08:15,440 Speaker 1: in this business, having started forty years ago, even then 149 00:08:15,640 --> 00:08:17,880 Speaker 1: you would not have known what the ECB had done 150 00:08:17,880 --> 00:08:20,880 Speaker 1: for several days. Now we have to make decisions as 151 00:08:20,880 --> 00:08:22,600 Speaker 1: to what the ECB has done in the course of 152 00:08:22,680 --> 00:08:24,760 Speaker 1: ten minutes and decide what it means for the next 153 00:08:24,840 --> 00:08:27,960 Speaker 1: four months. The best I can say is drawing upon history. 154 00:08:28,360 --> 00:08:31,280 Speaker 1: What they've done today is just the first another step 155 00:08:31,320 --> 00:08:33,920 Speaker 1: in a long step of pot processes. Just joining us 156 00:08:33,920 --> 00:08:36,120 Speaker 1: Tennis Gartment the garment letter, Dennis, you've only got you 157 00:08:36,200 --> 00:08:38,920 Speaker 1: for two blocks today, not three. Let me get to gold, 158 00:08:38,920 --> 00:08:41,920 Speaker 1: which is so important. You keep your gold view in 159 00:08:42,120 --> 00:08:46,000 Speaker 1: those currencies I mean Euro moving to parody that gives 160 00:08:46,000 --> 00:08:49,040 Speaker 1: you some support. Here update us on the Gartment gold call. 161 00:08:50,360 --> 00:08:52,959 Speaker 1: I have been long of gold and yen denominated terms 162 00:08:53,280 --> 00:08:55,800 Speaker 1: for over two years and it's been a wonderful trade. 163 00:08:56,160 --> 00:08:58,440 Speaker 1: If you have been long of golden dollar terms for 164 00:08:58,520 --> 00:09:01,920 Speaker 1: two years, uh year in the poorhouse, you don't feel 165 00:09:01,920 --> 00:09:04,720 Speaker 1: all that good. I've been long of gold in euro 166 00:09:04,800 --> 00:09:08,400 Speaker 1: denominated terms for about almost a year. That feels great. 167 00:09:08,600 --> 00:09:11,120 Speaker 1: It feels better this morning than it did before. But 168 00:09:11,200 --> 00:09:14,360 Speaker 1: it's making new highs. I see no reason to change. 169 00:09:14,520 --> 00:09:17,320 Speaker 1: The fundamentals have gotten stronger, not weaker, in the course 170 00:09:17,320 --> 00:09:20,040 Speaker 1: of the last ten minutes. The technicals are getting stronger, 171 00:09:20,120 --> 00:09:21,840 Speaker 1: not weaker, in the course of the last ten minutes. 172 00:09:22,040 --> 00:09:24,160 Speaker 1: And what I find interesting is few people wish to 173 00:09:24,240 --> 00:09:27,480 Speaker 1: join me on the same trade. What's the best trade 174 00:09:27,559 --> 00:09:32,360 Speaker 1: right now for you long gold in euro terms? As 175 00:09:32,400 --> 00:09:34,719 Speaker 1: of what's especially with what's happened in the last ten 176 00:09:34,720 --> 00:09:36,920 Speaker 1: minutes with the e c B, it's been a great position. 177 00:09:36,960 --> 00:09:39,120 Speaker 1: I see no reason to change. And the only thing 178 00:09:39,160 --> 00:09:41,360 Speaker 1: I wish to do is by is to do more. 179 00:09:41,920 --> 00:09:43,760 Speaker 1: I'll pay a lot more attention to what gold is 180 00:09:43,800 --> 00:09:47,119 Speaker 1: doing in dollar terms, uh perhaps in the next several 181 00:09:47,200 --> 00:09:49,000 Speaker 1: days and a half. In the past and if you 182 00:09:49,040 --> 00:09:51,640 Speaker 1: were able to get gold back about twelve fifty five 183 00:09:51,720 --> 00:09:54,560 Speaker 1: or so in dollars, my propensity to add to my 184 00:09:54,800 --> 00:09:58,160 Speaker 1: euro gold trade and my end gold trade becomes even stronger. 185 00:09:58,480 --> 00:10:00,600 Speaker 1: Let's come back with Dennis Garban right up, as we 186 00:10:00,640 --> 00:10:03,720 Speaker 1: are over market reaction off of major Mike. Did you 187 00:10:03,760 --> 00:10:07,880 Speaker 1: expect this? Uh, nobody expected him to do as much 188 00:10:07,920 --> 00:10:12,720 Speaker 1: as he did. Lots of kitchens sinc photographs out on 189 00:10:12,760 --> 00:10:15,360 Speaker 1: Twitter this morning. Yeah. Some people thought one, some people 190 00:10:15,360 --> 00:10:18,680 Speaker 1: thought the other. But instead he chooses the kitchen sink. 191 00:10:19,040 --> 00:10:21,520 Speaker 1: This is important, whether you agree or disagree. Dennis Gartman 192 00:10:21,600 --> 00:10:24,479 Speaker 1: will continue with us. We will have a spirited conversation 193 00:10:25,160 --> 00:10:28,679 Speaker 1: on the US market. Maybe will also touch on politics 194 00:10:28,800 --> 00:10:31,240 Speaker 1: as well once in a while. Mr Gartman writes about 195 00:10:31,360 --> 00:10:35,360 Speaker 1: US politics on the back end of his coveted note. 196 00:10:35,480 --> 00:10:40,160 Speaker 1: Futures up, seventeen down, futures up. One Gartman's euro linked 197 00:10:40,160 --> 00:10:43,120 Speaker 1: to gold one O eight sixty two one O eight 198 00:10:43,240 --> 00:10:46,120 Speaker 1: sixty two in a good hundred and thirty eight pips 199 00:10:46,160 --> 00:10:52,760 Speaker 1: as well. West Texas intermediat thirty three time not to 200 00:10:52,840 --> 00:10:54,480 Speaker 1: check in with Michael Barr and get the latest world 201 00:10:54,480 --> 00:10:57,080 Speaker 1: in national headlines. Michael, Mike, Tom, thank you very much. 202 00:10:57,240 --> 00:10:59,640 Speaker 1: It's a memory stick that is believed to contain the 203 00:10:59,679 --> 00:11:04,160 Speaker 1: real names and telephone numbers of Islamic state fighters. Germany's 204 00:11:04,160 --> 00:11:07,880 Speaker 1: federal police say they are evaluating files containing personal data 205 00:11:07,920 --> 00:11:11,360 Speaker 1: on members of the Islamic State group. Britain Sky News 206 00:11:11,400 --> 00:11:15,479 Speaker 1: reports that obtained about twenty two thousand Islamic State files 207 00:11:15,520 --> 00:11:18,800 Speaker 1: on the stick stolen from the head of Islamic States 208 00:11:18,800 --> 00:11:23,640 Speaker 1: Internal Security Police by a disillusioned former fighter. Hillary Clinton 209 00:11:23,679 --> 00:11:25,840 Speaker 1: and Bernie Sanders have been trying to make the case 210 00:11:25,880 --> 00:11:29,880 Speaker 1: that they would be better presidential choices for American Hispanics. 211 00:11:30,440 --> 00:11:34,800 Speaker 1: The two Democratic presidential candidates on voting records, on immigration. 212 00:11:35,200 --> 00:11:37,720 Speaker 1: We're a major focus of last night's debate in Miami. 213 00:11:37,880 --> 00:11:41,640 Speaker 1: The Republican presidential candidates will debate tonights in Miami as well. 214 00:11:41,920 --> 00:11:44,840 Speaker 1: Global News twenty four hours a day, powered by our 215 00:11:44,920 --> 00:11:47,920 Speaker 1: twenty four hundred journalists more than a hundred fifty news 216 00:11:47,960 --> 00:11:51,440 Speaker 1: bureaus from around the world. Now Michael Barr, Mike to Michael, 217 00:11:51,440 --> 00:11:54,320 Speaker 1: thanks so much, stay with us in twenty minutes. What 218 00:11:54,559 --> 00:11:59,359 Speaker 1: was to be important is now of global impact drugs 219 00:11:59,480 --> 00:12:02,360 Speaker 1: press kind friends, we'll have that an interpretation for you. 220 00:12:02,600 --> 00:12:07,240 Speaker 1: I'm Bloomberg Surveillance. This news update brought to you by 221 00:12:07,280 --> 00:12:09,520 Speaker 1: Tito Computing, a new kind of I T solutions company 222 00:12:09,520 --> 00:12:12,199 Speaker 1: for workflow, mobility and infrastructure. Let them explain how their 223 00:12:12,200 --> 00:12:14,559 Speaker 1: expertise can help you gain greater business value. Because the 224 00:12:14,600 --> 00:12:23,480 Speaker 1: t too computing dot com for more information global business 225 00:12:23,520 --> 00:12:26,480 Speaker 1: news twenty four hours a day. If Bloomberg dot com 226 00:12:26,720 --> 00:12:29,559 Speaker 1: the radio plus mobile lap and on your radio. This 227 00:12:29,960 --> 00:12:33,679 Speaker 1: is a Bloomberg business flash and I'm Karen Moscow. US 228 00:12:33,760 --> 00:12:36,400 Speaker 1: dot index Future has jumped after the European Central Bank 229 00:12:36,440 --> 00:12:39,559 Speaker 1: delivered a bigger than expected boost to its monetary stimulus. 230 00:12:39,640 --> 00:12:41,720 Speaker 1: Let's go to the first Word breaking news desk for 231 00:12:41,800 --> 00:12:46,080 Speaker 1: today's morning call. Here's Bill Maloney. Bill, good morning, Karen. 232 00:12:46,120 --> 00:12:49,800 Speaker 1: That's right. US futures have extended their gains. ECB cut 233 00:12:49,880 --> 00:12:53,120 Speaker 1: all rates and Kelley was boosted to eighty billion euros 234 00:12:53,160 --> 00:12:55,520 Speaker 1: a month. If youre just currently hired by a hundred 235 00:12:55,520 --> 00:12:58,360 Speaker 1: and twenty three points. Sup's gained seventeen and as the 236 00:12:58,480 --> 00:13:01,600 Speaker 1: futures rise by forty one and US tendial at one 237 00:13:01,640 --> 00:13:04,800 Speaker 1: point eight eight percent, and up markets are extending their 238 00:13:04,840 --> 00:13:08,440 Speaker 1: games as well. Italy rises three point two percent on 239 00:13:08,480 --> 00:13:11,120 Speaker 1: the Economic Fund eight thirty. Dragg holds his press conference 240 00:13:11,240 --> 00:13:14,320 Speaker 1: and US initial jobs claims and it's on thirty natural 241 00:13:14,320 --> 00:13:18,000 Speaker 1: gas storage change. In dealing news, NAZAC buys Deutsche Bors's 242 00:13:18,240 --> 00:13:21,640 Speaker 1: options market for one point one billion, and regarding Earns 243 00:13:21,720 --> 00:13:25,040 Speaker 1: this morning, Dollar General beat shares a higher pre market 244 00:13:25,080 --> 00:13:29,960 Speaker 1: and United Technologies reaffirmed sixteen and Q one forecasts. Finally, 245 00:13:30,000 --> 00:13:33,160 Speaker 1: some of your Walshet upgrades and downgrades, Expedia raised, overweighted, 246 00:13:33,200 --> 00:13:36,160 Speaker 1: Piper and facts set cut the cell over at ubs 247 00:13:36,520 --> 00:13:38,840 Speaker 1: live from the first Breaking news desk Gone, Bill Maloney, Karen, 248 00:13:39,679 --> 00:13:42,319 Speaker 1: thanks billan to hear live breaking news of your Bloomberg 249 00:13:42,360 --> 00:13:45,000 Speaker 1: type squaw go on your terminal. Let's ask you a 250 00:13:45,200 --> 00:13:48,160 Speaker 1: wuk go and that's a Bloomberg business flash. Tom and 251 00:13:48,240 --> 00:13:51,480 Speaker 1: Mike Karn, thanks so much Bloomberg Surveillance this morning. Rush 252 00:13:51,480 --> 00:13:56,240 Speaker 1: you Bay Investco. Have you considered all of your investment alternatives? 253 00:13:56,600 --> 00:14:00,280 Speaker 1: Non traditional st classes and strategies may help you achieve 254 00:14:00,320 --> 00:14:05,439 Speaker 1: your goals? Find out more at investco dot com slash alternatives. 255 00:14:05,480 --> 00:14:07,600 Speaker 1: Denis Gartment with it. One of the great things about 256 00:14:07,640 --> 00:14:10,040 Speaker 1: Dennis Gartment. I've said this before. He's one of the 257 00:14:10,080 --> 00:14:14,640 Speaker 1: few people with the courage to actually publish his successes 258 00:14:14,679 --> 00:14:17,439 Speaker 1: and failures in the back of his newsletter. I love 259 00:14:17,440 --> 00:14:19,960 Speaker 1: to say that, Dennis, to bust your chops. But but 260 00:14:20,160 --> 00:14:24,040 Speaker 1: the thing that's cool here is you link technical with 261 00:14:24,200 --> 00:14:28,640 Speaker 1: fundamental with your economics as well. The arch question now 262 00:14:29,200 --> 00:14:33,440 Speaker 1: is commodity and oil bottom. Jeff de Graf was brilliant 263 00:14:33,520 --> 00:14:37,520 Speaker 1: yesterday talking about the search for catharsis I haven't seen it. 264 00:14:37,720 --> 00:14:41,280 Speaker 1: Do I need a cathartic event to scream oil bottom? 265 00:14:41,960 --> 00:14:45,520 Speaker 1: I think more than that, you need a non cathartic event. 266 00:14:45,560 --> 00:14:47,440 Speaker 1: I think you need the most boring thing of all. 267 00:14:47,720 --> 00:14:51,040 Speaker 1: I pay attention. I was taught years ago when I 268 00:14:51,080 --> 00:14:53,960 Speaker 1: began my career in the early seventies in the cotton market, 269 00:14:54,000 --> 00:14:58,320 Speaker 1: to watch the term watch now one commodity future trades 270 00:14:58,400 --> 00:15:01,680 Speaker 1: relative to another, and that knowledge of the term structure 271 00:15:01,720 --> 00:15:04,280 Speaker 1: really has carried over into the energy market. We have 272 00:15:04,480 --> 00:15:07,800 Speaker 1: watched as the carrying charge the contango. I hate to 273 00:15:07,800 --> 00:15:11,320 Speaker 1: get to esoteric, but the contango for the one year 274 00:15:11,360 --> 00:15:13,760 Speaker 1: had gone out as far as nine dollars per barrel 275 00:15:14,080 --> 00:15:16,680 Speaker 1: when spot w T I was trading around twenty six. 276 00:15:17,160 --> 00:15:20,960 Speaker 1: That contango has narrowed into about five dollars. Crude, for 277 00:15:21,040 --> 00:15:23,640 Speaker 1: lack of a better term, is less aggressive in bidding 278 00:15:23,680 --> 00:15:27,239 Speaker 1: to go into storage. It's telling you that informed money 279 00:15:27,360 --> 00:15:30,040 Speaker 1: has really said the lows have been put into crude. 280 00:15:30,400 --> 00:15:32,240 Speaker 1: Twenty six is not going to be taken out on 281 00:15:32,280 --> 00:15:34,960 Speaker 1: the down side. But at the same point, it's gonna 282 00:15:34,960 --> 00:15:37,600 Speaker 1: be very difficult to get the w t I SPOT 283 00:15:37,720 --> 00:15:41,479 Speaker 1: w t I above forty dollars because if the contango continues, 284 00:15:41,880 --> 00:15:44,720 Speaker 1: forty dollars in SPOT gives you about forty five dollars 285 00:15:44,720 --> 00:15:47,600 Speaker 1: out one year. And I'm telling you, at forty five dollars, 286 00:15:48,000 --> 00:15:50,080 Speaker 1: those down in the those up in the back, and 287 00:15:50,080 --> 00:15:52,800 Speaker 1: those down in Midland, Texas are making a lot of money. 288 00:15:52,800 --> 00:15:55,120 Speaker 1: They can hedge and be profitable. So it's gonna be 289 00:15:55,160 --> 00:15:58,360 Speaker 1: difficult to get SPOT crewede about forty dollars because I 290 00:15:58,400 --> 00:16:00,360 Speaker 1: got like eight ways to go with this, and we 291 00:16:00,400 --> 00:16:02,640 Speaker 1: don't have the time this morning. Who's our next guest? 292 00:16:02,680 --> 00:16:08,400 Speaker 1: Mario dragging Mario the press conference? A number of things 293 00:16:08,400 --> 00:16:10,680 Speaker 1: we've talked about a minute that he that have not 294 00:16:10,880 --> 00:16:13,760 Speaker 1: have been answered yet. Uh, Dennis, as long as we 295 00:16:13,800 --> 00:16:15,520 Speaker 1: have just a few moments with you, let me hit 296 00:16:15,560 --> 00:16:19,280 Speaker 1: on what you were saying about soft commodities El Nino fading. 297 00:16:19,400 --> 00:16:23,720 Speaker 1: There's talk of La Nina coming in, which seems to 298 00:16:24,520 --> 00:16:28,520 Speaker 1: historically raise the price of those commodities. Is it time 299 00:16:28,600 --> 00:16:31,720 Speaker 1: to invest? What do you want to do? I think 300 00:16:31,800 --> 00:16:35,200 Speaker 1: that the lows have been seen in the commodity markets generally, 301 00:16:35,200 --> 00:16:37,960 Speaker 1: whether it's in the soft whether it's in the grains, 302 00:16:38,360 --> 00:16:42,640 Speaker 1: whether it's in crude oil, um, and and perhaps maybe 303 00:16:42,720 --> 00:16:45,920 Speaker 1: even sort of kind of gently, maybe even in the 304 00:16:45,920 --> 00:16:49,320 Speaker 1: most barrish of all commodities, that gas. The era of 305 00:16:49,400 --> 00:16:51,680 Speaker 1: being or the age or the year or the two 306 00:16:51,760 --> 00:16:54,560 Speaker 1: years of being short of commodities is probably behind us. 307 00:16:54,960 --> 00:16:56,960 Speaker 1: And I think that the actions taken by the e 308 00:16:57,040 --> 00:17:01,120 Speaker 1: c B this morning simply promote the notion that commodity 309 00:17:01,120 --> 00:17:03,320 Speaker 1: prices are likely to be stronger and not weaker going 310 00:17:03,360 --> 00:17:05,879 Speaker 1: forward in the final time we've got with you. And 311 00:17:05,920 --> 00:17:08,760 Speaker 1: I say this with immense respect for Martin's wage. We 312 00:17:08,880 --> 00:17:14,160 Speaker 1: lost him weight man. You know Marty's wag. Don't fight 313 00:17:14,200 --> 00:17:17,440 Speaker 1: the Fed, don't fight the e c B, don't fight 314 00:17:17,480 --> 00:17:21,600 Speaker 1: the bles. Forget about the esoteric net gas short. What's 315 00:17:21,640 --> 00:17:27,159 Speaker 1: the gartment advice for people, basic people out there to 316 00:17:27,400 --> 00:17:32,880 Speaker 1: invest with these central banks as Marty's wage titans, as 317 00:17:32,920 --> 00:17:35,800 Speaker 1: long as the as long as the central bank wind 318 00:17:35,920 --> 00:17:38,040 Speaker 1: is at your back, and it is and they're not 319 00:17:38,080 --> 00:17:41,080 Speaker 1: going to stop anytime soon. You're better off being long 320 00:17:41,119 --> 00:17:43,320 Speaker 1: than you are being short. You're better off erring on 321 00:17:43,359 --> 00:17:45,399 Speaker 1: the side of being bullish than you are on the 322 00:17:45,440 --> 00:17:47,600 Speaker 1: side of being barished, and you're probably going to be 323 00:17:47,600 --> 00:17:51,560 Speaker 1: better off owning basic commodities. My my old mine is 324 00:17:51,600 --> 00:17:53,560 Speaker 1: I'd like to buy the things that if I dropped 325 00:17:53,600 --> 00:17:58,280 Speaker 1: them on my foot will hurt I e. Aluminum steel, iron, ore, 326 00:17:58,960 --> 00:18:03,040 Speaker 1: trains hips, big things, easy things, the things that go 327 00:18:03,080 --> 00:18:05,680 Speaker 1: along with economic growth. Those are the things that I 328 00:18:05,720 --> 00:18:09,119 Speaker 1: think would make sense. Plus there's dividends to be gotten 329 00:18:09,119 --> 00:18:12,200 Speaker 1: from them. So if you're going with the military authorities 330 00:18:12,240 --> 00:18:15,080 Speaker 1: giving you winded your back, oh those things right, Dennis, 331 00:18:15,119 --> 00:18:18,480 Speaker 1: one minute left. You're a victim of the South. You 332 00:18:18,560 --> 00:18:22,120 Speaker 1: live somewhere near a glorious golf course. I get that. 333 00:18:22,920 --> 00:18:25,800 Speaker 1: As we go to Florida, and as you write about politics, 334 00:18:25,880 --> 00:18:28,600 Speaker 1: I don't want your opinion on this talent. Does Mr 335 00:18:28,640 --> 00:18:35,560 Speaker 1: Trump have an economic policy you've discerned, Yes, protectionism, yes, lunacy. 336 00:18:35,680 --> 00:18:39,120 Speaker 1: Yes he's wrong, and I'm I'm I'm of the hope 337 00:18:39,160 --> 00:18:41,480 Speaker 1: that he is not the nominee and the Republican Party, 338 00:18:41,560 --> 00:18:44,119 Speaker 1: But at this point I'm about to give up that hope. 339 00:18:44,680 --> 00:18:51,840 Speaker 1: The only move to Canada. Oh, of course, very hard 340 00:18:51,880 --> 00:18:56,320 Speaker 1: to play all excepting Vancouver, Dennis, thank you so much, tennis, 341 00:18:56,440 --> 00:19:01,600 Speaker 1: gartment golf. Here's the surveillance breaks to listen today. Chapman 342 00:19:01,720 --> 00:19:06,280 Speaker 1: will not move Togeada, all right, Samaro, Draggy throws the 343 00:19:06,440 --> 00:19:09,320 Speaker 1: kitchen sink at financial markets, and Tom look at what 344 00:19:09,520 --> 00:19:13,520 Speaker 1: is happening to European banks. Deutsche Bank up four and 345 00:19:13,560 --> 00:19:17,480 Speaker 1: a half percent, Associated General up five percent, BNP Parabout 346 00:19:17,840 --> 00:19:21,359 Speaker 1: up four point four percent, the Italian bank UniCredit up 347 00:19:21,520 --> 00:19:27,120 Speaker 1: seven point two percent. Even Bonco Detach, the troubled Italian bank, 348 00:19:27,280 --> 00:19:30,000 Speaker 1: is up four point seven percent. Now, the movement that 349 00:19:30,080 --> 00:19:32,159 Speaker 1: we see, we knew it would be important, but it 350 00:19:32,359 --> 00:19:36,080 Speaker 1: always can surprise. We got the full surprise this morning, 351 00:19:36,119 --> 00:19:38,720 Speaker 1: and there will be headlines. What we will do for you, 352 00:19:38,920 --> 00:19:41,879 Speaker 1: We will give you the headlines. We will then go 353 00:19:42,080 --> 00:19:44,840 Speaker 1: into the next phase of headlines, which will be difficult 354 00:19:44,960 --> 00:19:49,320 Speaker 1: questions and is considered answers. They always in every case 355 00:19:49,440 --> 00:19:53,920 Speaker 1: move markets. The yen starkly weaker this morning one nineteen 356 00:19:54,000 --> 00:19:57,320 Speaker 1: as well. US futures up sixteen, Town futures one two. 357 00:19:57,520 --> 00:20:06,399 Speaker 1: Next the Draggy press conference coming up there with all 358 00:20:06,480 --> 00:20:08,360 Speaker 1: due respect, highlight brought you by land Rover. If it's 359 00:20:08,359 --> 00:20:09,680 Speaker 1: in your nature to cast off the every Day and 360 00:20:09,680 --> 00:20:11,920 Speaker 1: Seek adventure. The discovery support was built to help your search. 361 00:20:12,000 --> 00:20:14,320 Speaker 1: Visit land Rover twice d dot com for special offers 362 00:20:14,400 --> 00:20:16,760 Speaker 1: during the only Adventure Sales event. Land Romer above and 363 00:20:16,800 --> 00:20:27,760 Speaker 1: Beyond broadcasting live to New York, Gloomberg eleventh, Ryo to Washington, 364 00:20:27,840 --> 00:20:32,840 Speaker 1: d C, Bloomberg to Boston, Bloomberg twelve Honors to San Francisco, 365 00:20:33,000 --> 00:20:37,000 Speaker 1: Bloomberg nine, to the Country series Exam Channel one nine 366 00:20:37,359 --> 00:20:40,800 Speaker 1: and around the globe the Bloomberg Radio Plus Appen Bloomberg 367 00:20:40,880 --> 00:20:45,520 Speaker 1: dot com. This is Bloomberg Surveillance. Good morning again, Say thirty. 368 00:20:45,520 --> 00:20:48,280 Speaker 1: I'm Michael McKee along with Tom Keen. Our economic indicators 369 00:20:48,280 --> 00:20:50,480 Speaker 1: are brought to you by Commonwealth Financial Network. When it's 370 00:20:50,480 --> 00:20:52,560 Speaker 1: time to change the conversation, talk with a broker deal 371 00:20:52,680 --> 00:20:54,560 Speaker 1: r R I A that's ready to listen, call eight 372 00:20:54,640 --> 00:20:57,920 Speaker 1: six two three six three eight or visit Commonwealth dot 373 00:20:58,000 --> 00:21:01,120 Speaker 1: com to learn more. Here's an incredible number of Annie 374 00:21:01,119 --> 00:21:03,560 Speaker 1: del Juday said the first Word desk with the jobless 375 00:21:03,560 --> 00:21:08,080 Speaker 1: claims figures. Michael jobless claims just above a four decade low, 376 00:21:08,160 --> 00:21:10,800 Speaker 1: close to a four decade low, falling last week by 377 00:21:10,880 --> 00:21:14,000 Speaker 1: eighteen thousand and two hundred fifty nine thousand, more than 378 00:21:14,119 --> 00:21:17,480 Speaker 1: Wall Street forecast. Again, jobless claims last week close to 379 00:21:17,560 --> 00:21:20,920 Speaker 1: a four decade low two hundred fifty nine thousand. Let's 380 00:21:20,960 --> 00:21:23,400 Speaker 1: go back to New York, all right, Vinnie del Judais, 381 00:21:23,520 --> 00:21:26,480 Speaker 1: jobless claims in the US near a four decade low. 382 00:21:27,000 --> 00:21:29,879 Speaker 1: Tell me the news is all good for markets. This 383 00:21:30,000 --> 00:21:34,200 Speaker 1: morning Olive Blonchard was heated. He's never heated, but within 384 00:21:34,280 --> 00:21:39,359 Speaker 1: the grace. Professor Blanchard states that things are better than 385 00:21:39,440 --> 00:21:42,840 Speaker 1: good in some of these economies. There is exact quote, 386 00:21:43,200 --> 00:21:46,359 Speaker 1: there is no fire in the house, not at the moment, 387 00:21:46,720 --> 00:21:52,680 Speaker 1: not like the world is exploding with growth, but it 388 00:21:52,840 --> 00:21:56,600 Speaker 1: is certainly better then maybe a lot of people in 389 00:21:56,640 --> 00:21:59,880 Speaker 1: the markets think. As I mentioned, we're watching European Bank 390 00:22:00,400 --> 00:22:02,840 Speaker 1: really really move. The stock six centered is up seven 391 00:22:02,880 --> 00:22:05,800 Speaker 1: points now more than two percent, Deutsche Bank up six 392 00:22:05,880 --> 00:22:09,719 Speaker 1: point two percent, sock Gen six point two percent, uh 393 00:22:10,080 --> 00:22:13,440 Speaker 1: Un Credit eight and a half percent. And that is 394 00:22:13,520 --> 00:22:16,960 Speaker 1: on the back of the ECB's action to not only 395 00:22:17,520 --> 00:22:20,600 Speaker 1: cut all three of its major rates, the deposit rate 396 00:22:20,640 --> 00:22:23,760 Speaker 1: down to negative forty basis points, but also increase q 397 00:22:24,000 --> 00:22:27,000 Speaker 1: E by another twenty billion euros to eight billion. We're 398 00:22:27,040 --> 00:22:29,399 Speaker 1: waiting for Mario drug He Brendan Brown with us, Honored 399 00:22:29,440 --> 00:22:31,200 Speaker 1: to have him with us. He has thought long and 400 00:22:31,400 --> 00:22:36,840 Speaker 1: hard um about eurodynamics. In Global Dynamics of Banking two 401 00:22:36,920 --> 00:22:40,159 Speaker 1: thousand thirteen, the Global Curse of the Fellow Reserve is 402 00:22:40,240 --> 00:22:43,600 Speaker 1: the rewrite the global curse of the European Central Bank. 403 00:22:44,200 --> 00:22:47,000 Speaker 1: That's a very appropriate title, I think. And I see 404 00:22:47,040 --> 00:22:50,400 Speaker 1: today's Mike, could you pull the microphone closer to Dr Brown? 405 00:22:50,480 --> 00:22:53,080 Speaker 1: It's his first time he's ever been with us, And 406 00:22:53,400 --> 00:22:55,879 Speaker 1: I see today's announcements from the e c B is 407 00:22:56,040 --> 00:23:01,040 Speaker 1: Act three in currency wool um plus a massive operation 408 00:23:01,359 --> 00:23:03,800 Speaker 1: to share up the weak European banks, most of all 409 00:23:03,840 --> 00:23:06,760 Speaker 1: in Italy. You already left worrying whether ECP President Dragging 410 00:23:06,880 --> 00:23:10,960 Speaker 1: is actually president of the Italian Central Bank. Well, he's 411 00:23:11,080 --> 00:23:13,320 Speaker 1: a president of the e c B. If it's a 412 00:23:13,480 --> 00:23:16,200 Speaker 1: currency ward, is the b O J joined in there 413 00:23:16,240 --> 00:23:18,200 Speaker 1: next on the calendar? Well, I think the question is 414 00:23:18,240 --> 00:23:20,639 Speaker 1: on the U S side. We we We've had a 415 00:23:20,840 --> 00:23:23,320 Speaker 1: very lively election campaign to save at least in in 416 00:23:23,480 --> 00:23:25,600 Speaker 1: in the United States, and a lot of concern about 417 00:23:25,640 --> 00:23:29,200 Speaker 1: currency manipulation in Japan and China. But it's about time 418 00:23:29,280 --> 00:23:33,000 Speaker 1: that the politicians here focused on the currency manipulation in Europe. 419 00:23:33,840 --> 00:23:36,720 Speaker 1: We are watching Mario dragging move towards the press conference. 420 00:23:37,520 --> 00:23:40,800 Speaker 1: You see this entourage is balance between Hansie and and 421 00:23:40,880 --> 00:23:43,760 Speaker 1: neo classics. Do you see how he does that? There's 422 00:23:43,760 --> 00:23:46,320 Speaker 1: no Austrians in Santrage. He has walked in and now 423 00:23:46,359 --> 00:23:48,560 Speaker 1: we get the obligatory photo up where all of the 424 00:23:49,240 --> 00:23:52,280 Speaker 1: cameras in Europe are trained upon the men of the hour, 425 00:23:52,920 --> 00:23:56,320 Speaker 1: Mario dragging up on the diet with him, vidor Constantio. 426 00:23:56,880 --> 00:23:59,879 Speaker 1: Everybody does it different of the ECB. You'll begin to 427 00:24:00,000 --> 00:24:03,760 Speaker 1: press covers at the moment and we'll have I want 428 00:24:03,800 --> 00:24:07,040 Speaker 1: to ask Brendon, does does it mean the FED is 429 00:24:07,840 --> 00:24:11,000 Speaker 1: I'll hold longer. No, I don't see that. I think 430 00:24:11,040 --> 00:24:13,680 Speaker 1: we have to see beyond five minutes what the reaction 431 00:24:13,880 --> 00:24:16,800 Speaker 1: is in the US markets and US economy. But I 432 00:24:16,840 --> 00:24:20,600 Speaker 1: don't see today's event is a huge market mover economy move. 433 00:24:20,640 --> 00:24:22,600 Speaker 1: I would just I would just make one final comment, 434 00:24:22,680 --> 00:24:25,320 Speaker 1: but it's been a complete failure I think of political 435 00:24:25,400 --> 00:24:28,719 Speaker 1: leadership in Germany to to hold this latest assault from track. Well, 436 00:24:28,720 --> 00:24:30,960 Speaker 1: we'll see if Mario dragging talks about that, he's beginning 437 00:24:31,000 --> 00:24:33,520 Speaker 1: his news conference now in Frankfurt. Let's go to the 438 00:24:33,600 --> 00:24:46,400 Speaker 1: President the European Central Bank. Ladies and gentlemen, The Vice 439 00:24:46,480 --> 00:24:48,840 Speaker 1: President and I are very pleased to welcome you to 440 00:24:48,920 --> 00:24:52,480 Speaker 1: our press conference. We will now a report on the 441 00:24:52,560 --> 00:24:57,280 Speaker 1: outcome of today's meeting of the Governing Council, which was 442 00:24:57,359 --> 00:25:01,280 Speaker 1: also attended by the Commission Vice President is that dombrovskis 443 00:25:03,280 --> 00:25:08,000 Speaker 1: based on our regular economic and monetary policy monitory analysis. 444 00:25:08,560 --> 00:25:13,159 Speaker 1: We have conducted a thorough review of the monetary policy stance, 445 00:25:14,119 --> 00:25:18,600 Speaker 1: in which we also took into account the new microeconomic 446 00:25:18,680 --> 00:25:23,960 Speaker 1: projections by our staff extending into the year two thousand eighteen. 447 00:25:26,320 --> 00:25:30,720 Speaker 1: As a result, the Governing Council has the decided has 448 00:25:30,800 --> 00:25:33,920 Speaker 1: decided on a set of measures in the pursuit of 449 00:25:34,000 --> 00:25:41,240 Speaker 1: its price stability objective. This comprehensive package will exploit the 450 00:25:41,480 --> 00:25:47,359 Speaker 1: synergies between the different instruments and has been calibrated to 451 00:25:47,680 --> 00:25:54,840 Speaker 1: further ease financing conditions, stimulate new credit provision and thereby 452 00:25:55,200 --> 00:26:00,359 Speaker 1: reinforced the momentum of the Euro Area's economic recovery and 453 00:26:00,520 --> 00:26:04,919 Speaker 1: accelerate the return of inflation to levels below but close 454 00:26:05,000 --> 00:26:11,639 Speaker 1: to two First as regomards the key E C D 455 00:26:11,880 --> 00:26:16,320 Speaker 1: interest rates. We decided to lower the interest rate on 456 00:26:16,440 --> 00:26:21,360 Speaker 1: the main refinancing operations of the eurosystem by five basis 457 00:26:21,440 --> 00:26:26,040 Speaker 1: points to zero and the rate on the marginal lending 458 00:26:26,119 --> 00:26:30,760 Speaker 1: facility by five basis points to zero point twenty five. 459 00:26:32,880 --> 00:26:36,240 Speaker 1: The rate on the deposit facility was lowered by ten 460 00:26:36,359 --> 00:26:43,960 Speaker 1: basis points two mins zero point four percent. Second, we 461 00:26:44,119 --> 00:26:50,000 Speaker 1: decided to expand the monthly purchases under our asset purchase 462 00:26:50,119 --> 00:26:55,920 Speaker 1: program from sixty billion euros to at present to eighty 463 00:26:56,240 --> 00:27:01,359 Speaker 1: billion euros. They are intended to run until the end 464 00:27:01,440 --> 00:27:05,840 Speaker 1: of March two thousand and seventeen, or beyond if necessary, 465 00:27:06,600 --> 00:27:09,720 Speaker 1: and in any case, until the Governing Council sees a 466 00:27:09,840 --> 00:27:15,280 Speaker 1: sustained adjustment in the path of inflation consistent with its 467 00:27:15,440 --> 00:27:19,560 Speaker 1: aim of achieving inflation rates below but close to cent 468 00:27:20,000 --> 00:27:27,360 Speaker 1: over the media term. To ensure the continued smooth implementation 469 00:27:27,560 --> 00:27:32,600 Speaker 1: of our asset purchases, we also decided to increase the 470 00:27:32,840 --> 00:27:37,520 Speaker 1: issuer and issue share limits for the purchases of securities 471 00:27:37,960 --> 00:27:44,880 Speaker 1: issued by eligible international organizations and multilateral development banks from 472 00:27:44,960 --> 00:27:52,119 Speaker 1: thirty three percent to fifty percent. Third, we decided to 473 00:27:52,720 --> 00:27:58,440 Speaker 1: include investment grade Euro denominated bonds issued by non bank 474 00:27:58,680 --> 00:28:02,800 Speaker 1: corporations established in the Euro Area in the list of 475 00:28:02,880 --> 00:28:08,040 Speaker 1: assets that are eligible for regular purchases under a new 476 00:28:08,160 --> 00:28:14,200 Speaker 1: corporate sector purchase program. This will further strengthen the pass 477 00:28:14,280 --> 00:28:18,200 Speaker 1: through over ours purchases to the financing conditions of the 478 00:28:18,320 --> 00:28:24,040 Speaker 1: real economy. Purchased under the new program will start towards 479 00:28:24,119 --> 00:28:28,840 Speaker 1: the end of the second quarter of this year. Fourth, 480 00:28:29,840 --> 00:28:34,639 Speaker 1: we decided to launch a new series of four targeted 481 00:28:34,920 --> 00:28:41,400 Speaker 1: longer term refinancing operations tel TROW two starting in June 482 00:28:41,560 --> 00:28:46,600 Speaker 1: two thousand and sixteen, each with a maturity of four years. 483 00:28:48,200 --> 00:28:53,360 Speaker 1: These new operations will reinforce the ecb is a commodative 484 00:28:53,440 --> 00:28:59,080 Speaker 1: monetary policy stands and will strengthen the transmission of monetary 485 00:28:59,160 --> 00:29:04,920 Speaker 1: policy by further incentivizing bank lending to the real economy. 486 00:29:07,320 --> 00:29:12,000 Speaker 1: Counterparties will be entitled to borrow up to of the 487 00:29:12,160 --> 00:29:17,240 Speaker 1: stock of eligible loans as of the thirty as as 488 00:29:17,360 --> 00:29:23,240 Speaker 1: at the thirty one January two thousand sixteen, The interest 489 00:29:23,320 --> 00:29:27,000 Speaker 1: rate under TELTRO tool will be fixed over the life 490 00:29:27,680 --> 00:29:33,000 Speaker 1: of each operation at the rate on the eurosystems may 491 00:29:33,120 --> 00:29:40,360 Speaker 1: refinancing operations prevailing at the time of take up for 492 00:29:40,560 --> 00:29:45,360 Speaker 1: banks whose net landing exceeds a benchmark. The rate applied 493 00:29:45,440 --> 00:29:49,480 Speaker 1: to the Teltro tool will be lower and can be 494 00:29:49,760 --> 00:29:53,800 Speaker 1: as low as the interest rate on the deposit facility 495 00:29:54,120 --> 00:29:59,120 Speaker 1: prevailing at the time of the take up. There will 496 00:29:59,160 --> 00:30:03,640 Speaker 1: be no require arement for mandatory earlier payments under Teltro tool, 497 00:30:05,000 --> 00:30:12,719 Speaker 1: and switches from Teltro one will be allowed. Finally, looking ahead, 498 00:30:13,360 --> 00:30:17,400 Speaker 1: taken into account the current outlook for price stability, the 499 00:30:17,480 --> 00:30:22,160 Speaker 1: Governing Council expects the key ECB interest rates to remain 500 00:30:22,280 --> 00:30:27,040 Speaker 1: at present or lower levels for an extended period of 501 00:30:27,160 --> 00:30:32,800 Speaker 1: time and well past the horizon of our net asset purchases. 502 00:30:35,160 --> 00:30:39,360 Speaker 1: Separate press releases with further details of the measures taken 503 00:30:39,440 --> 00:30:44,240 Speaker 1: by the Governing Council will be published this afternoon at 504 00:30:44,520 --> 00:30:51,000 Speaker 1: three thirty Adding to the measures taken since June two 505 00:30:51,080 --> 00:30:57,040 Speaker 1: thousand fourteen, with today's comprehensive package of monetary policy decisions, 506 00:30:58,080 --> 00:31:04,040 Speaker 1: we are providing substantial monetary stimulus to counteract heightened risks 507 00:31:04,200 --> 00:31:10,200 Speaker 1: to the e CBS price stability objective with the While 508 00:31:10,440 --> 00:31:15,720 Speaker 1: very low or even negative inflation rates are unavoidable over 509 00:31:15,800 --> 00:31:18,640 Speaker 1: the next few months as a result of movements in 510 00:31:18,760 --> 00:31:24,040 Speaker 1: oil prices, it is crucial to avoid second round effects 511 00:31:24,320 --> 00:31:28,520 Speaker 1: by securing the return of inflation to levels below but 512 00:31:28,760 --> 00:31:36,120 Speaker 1: close to without undue delay, be going to an annual 513 00:31:36,320 --> 00:31:40,000 Speaker 1: rate of ten point five percent in January after ten 514 00:31:41,040 --> 00:31:48,600 Speaker 1: in December. Loan dynamics continued the path of gradual recovery 515 00:31:48,680 --> 00:31:53,880 Speaker 1: observed since the beginning of two thousand fourteen. The annual 516 00:31:54,120 --> 00:31:59,160 Speaker 1: rate of change of loans to non financial corporations increased 517 00:31:59,280 --> 00:32:02,920 Speaker 1: to zero point six percent in January two thousand sixteen, 518 00:32:03,720 --> 00:32:08,320 Speaker 1: up from zero point one in December two thousand fifteen. 519 00:32:10,160 --> 00:32:15,640 Speaker 1: Developments in loans to enterprises continue to reflect the lack 520 00:32:15,680 --> 00:32:21,040 Speaker 1: of relationship with the business cycle, credit risk, and the 521 00:32:21,240 --> 00:32:26,440 Speaker 1: ongoing adjustment of financial and non financial sector balance sheets. 522 00:32:29,160 --> 00:32:34,000 Speaker 1: The annual growth rate of loans two households remained stable 523 00:32:34,360 --> 00:32:40,840 Speaker 1: at one point four percent in January two thousand sixteen. Overall, 524 00:32:41,400 --> 00:32:45,440 Speaker 1: the monetary policy measures in place since June two fourteen 525 00:32:46,240 --> 00:32:50,720 Speaker 1: have clearly improved borrowing conditions for firms and households, as 526 00:32:50,800 --> 00:32:55,680 Speaker 1: well as credit flows across the Euro Area. To sum 527 00:32:55,880 --> 00:32:59,720 Speaker 1: up across check of the outcome of the economic and 528 00:33:00,200 --> 00:33:04,880 Speaker 1: just with the signals coming from the monetary analysis confirmed 529 00:33:05,120 --> 00:33:09,240 Speaker 1: the need for further monetary stimulus in order to secure 530 00:33:09,920 --> 00:33:13,160 Speaker 1: the return of inflation race towards levels that are below 531 00:33:13,360 --> 00:33:20,360 Speaker 1: but close to two without undue delay. Monetary policy is 532 00:33:20,440 --> 00:33:24,440 Speaker 1: focused on maintaining price stability over the medium term, and 533 00:33:24,800 --> 00:33:31,400 Speaker 1: it's accommolative stance supports economic activity. However, in order to 534 00:33:31,600 --> 00:33:36,160 Speaker 1: rip the full benefits from our monetary policy measures are 535 00:33:36,200 --> 00:33:43,040 Speaker 1: the policy areas must contribute decisively. Given continued high structural 536 00:33:43,160 --> 00:33:46,960 Speaker 1: unemployment and low potential output growth in the EU Area, 537 00:33:47,600 --> 00:33:55,760 Speaker 1: the ongoing cyclical recovery should be supported by effective structural policies. Inarticular, 538 00:33:56,240 --> 00:34:02,080 Speaker 1: actions to raise productivity and improve the this environment, including 539 00:34:02,240 --> 00:34:06,560 Speaker 1: the provision of an adequate public infrastructure, are vital to 540 00:34:06,680 --> 00:34:13,520 Speaker 1: increase investment and boost job creation. The swift and effective 541 00:34:13,560 --> 00:34:17,880 Speaker 1: implementation of structural reforms in an environment of accommodative monetary 542 00:34:17,960 --> 00:34:22,399 Speaker 1: policy will not only lead to higher sustainable economic growth 543 00:34:22,480 --> 00:34:25,439 Speaker 1: in the euro Area, but will also make the euro 544 00:34:25,520 --> 00:34:30,880 Speaker 1: Area more resilient to global shocks. As indicated by the 545 00:34:30,960 --> 00:34:36,800 Speaker 1: European Commission, the implementation of country specific recommendations continued to 546 00:34:36,920 --> 00:34:43,279 Speaker 1: be fairly limited into thousand fifteen. Reform efforts thus need 547 00:34:43,400 --> 00:34:47,040 Speaker 1: to be stepped up. In the majority of Euro Area countries. 548 00:34:48,480 --> 00:34:53,600 Speaker 1: Fiscal policies should support the economic recovery while remaining in 549 00:34:53,719 --> 00:34:58,800 Speaker 1: compliance with the fiscal rules of the European Union. Full 550 00:34:59,080 --> 00:35:04,239 Speaker 1: and consistent implementation of the Stability and Growth Pact is 551 00:35:04,320 --> 00:35:09,239 Speaker 1: crucial to maintain confidence in the fiscal framework. At the 552 00:35:09,360 --> 00:35:14,280 Speaker 1: same time, all countries should strive for a more growth 553 00:35:14,400 --> 00:35:19,480 Speaker 1: friendly composition of fiscal policies. We are now at your 554 00:35:19,520 --> 00:35:31,719 Speaker 1: disposal for questions, Mr President Alexandro, especially from Bloomer News. UM. 555 00:35:32,360 --> 00:35:37,600 Speaker 1: My first question is about UM the forward guidance that 556 00:35:37,719 --> 00:35:41,400 Speaker 1: you have given that rates will be lower for a 557 00:35:41,520 --> 00:35:45,759 Speaker 1: long time. Also after the end of asset purchases. Is 558 00:35:45,880 --> 00:35:48,880 Speaker 1: the duration of the new THA tr row to be 559 00:35:49,360 --> 00:35:54,000 Speaker 1: looked at in this respect and this will also extend 560 00:35:54,280 --> 00:35:57,640 Speaker 1: to past the end of your mandate if I'm not 561 00:35:57,760 --> 00:36:03,160 Speaker 1: mistaken or almost And um, And my second question would 562 00:36:03,200 --> 00:36:09,040 Speaker 1: be when you say lower, UM, how low can this be? 563 00:36:09,360 --> 00:36:13,400 Speaker 1: I know that this has changed a lot in the 564 00:36:13,480 --> 00:36:17,800 Speaker 1: past few years as new horizons have open firm monetary policy. 565 00:36:18,400 --> 00:36:21,640 Speaker 1: But do you have any idea are you approaching a 566 00:36:21,760 --> 00:36:25,279 Speaker 1: limit or you still have an EMBL room to go? 567 00:36:26,120 --> 00:36:31,960 Speaker 1: And and that's two castance ready, Yeah, well on on 568 00:36:32,120 --> 00:36:36,560 Speaker 1: the UM on the teltor I just can't give you 569 00:36:36,719 --> 00:36:40,840 Speaker 1: a sort of a brief overview of what this operation is, 570 00:36:41,640 --> 00:36:43,560 Speaker 1: keeping in mind that there's going to be a press 571 00:36:43,640 --> 00:36:49,840 Speaker 1: briefing at four today UH for today for all the 572 00:36:50,000 --> 00:36:55,799 Speaker 1: further technical details that you may may be interested now. 573 00:36:56,400 --> 00:37:00,680 Speaker 1: The teltors are refinancing operations that provide lows two banks 574 00:37:01,040 --> 00:37:05,640 Speaker 1: with a long maturity, and banks are given additional incentives 575 00:37:05,680 --> 00:37:10,360 Speaker 1: to land on the funds received. The key features of 576 00:37:10,440 --> 00:37:17,040 Speaker 1: our Teltro program are the following. We will offer four operations, 577 00:37:18,080 --> 00:37:23,120 Speaker 1: one each quarter starting June two thousand and sixteen until 578 00:37:23,360 --> 00:37:29,239 Speaker 1: March two thousand seventeen. The maturity of the operations will 579 00:37:29,280 --> 00:37:33,359 Speaker 1: be four years each, so that the last Teltro two 580 00:37:34,120 --> 00:37:41,440 Speaker 1: will mature in March two thousand twenty one. Banks will 581 00:37:41,520 --> 00:37:45,880 Speaker 1: pay the MR rate at the time of bidding, so 582 00:37:46,760 --> 00:37:51,920 Speaker 1: right now at zero, and they may even get a 583 00:37:52,040 --> 00:37:56,480 Speaker 1: reduction on that rate, which increases with the amount of 584 00:37:56,640 --> 00:38:02,239 Speaker 1: loans they grant. Yeah, so the maximum reduction will bring 585 00:38:02,360 --> 00:38:06,840 Speaker 1: the rate on the Teltro tool to the level of 586 00:38:07,000 --> 00:38:13,960 Speaker 1: the deposit facility rate at the time of bidding. The 587 00:38:14,040 --> 00:38:17,800 Speaker 1: amount that banks can borrow is linked to the amount 588 00:38:17,880 --> 00:38:23,360 Speaker 1: of loans they have on their balance sheet, so a 589 00:38:23,480 --> 00:38:26,239 Speaker 1: bank that's very active in granting loans to the real 590 00:38:26,320 --> 00:38:31,440 Speaker 1: economy can borrow more than a bank that concentrates on 591 00:38:31,680 --> 00:38:37,920 Speaker 1: other activities. So the full list of features is in 592 00:38:38,520 --> 00:38:42,680 Speaker 1: the press release that will be published after this press conference. 593 00:38:44,400 --> 00:38:49,000 Speaker 1: So why did we decide to have another series of 594 00:38:49,040 --> 00:38:53,800 Speaker 1: teltros Well, some of the main reasons are long growth 595 00:38:53,880 --> 00:38:56,640 Speaker 1: in the EU area is being recovering now for quite 596 00:38:56,680 --> 00:39:02,839 Speaker 1: a time, but it's still too low. Also, teltro too well, 597 00:39:03,160 --> 00:39:07,239 Speaker 1: and we had actually a pretty successful experience with the 598 00:39:07,320 --> 00:39:11,040 Speaker 1: first tel throw, so we expect the Teltro too will 599 00:39:11,120 --> 00:39:15,160 Speaker 1: offer attractive long term funding conditions to banks to further 600 00:39:15,400 --> 00:39:19,640 Speaker 1: ease private sector credit conditions and to stimulate credit creation. 601 00:39:19,920 --> 00:39:24,200 Speaker 1: I think this is quite important now. Also it provides 602 00:39:24,280 --> 00:39:30,440 Speaker 1: funding certainty. Let's not forget it's four years operation at 603 00:39:30,480 --> 00:39:36,960 Speaker 1: an attractive price in an environment of increasing volatility and 604 00:39:37,960 --> 00:39:44,680 Speaker 1: also an environment of large upcoming bond redemptions bank bond redemptions, 605 00:39:46,080 --> 00:39:51,279 Speaker 1: so banks face sizeable forthcoming funding needs. And so this 606 00:39:51,400 --> 00:39:53,839 Speaker 1: occurs in an environment where the price you know, bank 607 00:39:53,960 --> 00:40:00,279 Speaker 1: debt is volatile and uncertain. So we with think that, 608 00:40:01,000 --> 00:40:04,200 Speaker 1: in conjunction with all the other measures standard and non 609 00:40:04,280 --> 00:40:07,680 Speaker 1: standard in place, the startro two will contribute to a 610 00:40:07,800 --> 00:40:11,279 Speaker 1: return of inflation rates to an objective of close but 611 00:40:11,360 --> 00:40:27,279 Speaker 1: below two percent over the medium term. Thank you, I'm sorry. Well, 612 00:40:27,719 --> 00:40:31,520 Speaker 1: I yes, Well, that's how low can we go? That's 613 00:40:31,560 --> 00:40:34,960 Speaker 1: on the um. Let me say that the rates will 614 00:40:35,040 --> 00:40:39,600 Speaker 1: stay low, very low, for a long period of time 615 00:40:40,600 --> 00:40:46,480 Speaker 1: and well past the horizon of our purchases. From today's 616 00:40:46,560 --> 00:40:51,480 Speaker 1: perspective and taking into account the support of our measures 617 00:40:51,600 --> 00:40:56,560 Speaker 1: to growth and inflation, we don't anticipate that it will 618 00:40:56,640 --> 00:41:03,279 Speaker 1: be necessary to reduce rates for there. Of course, new 619 00:41:03,440 --> 00:41:09,000 Speaker 1: facts can change the situation and the outlook. I mean 620 00:41:09,080 --> 00:41:12,160 Speaker 1: also add that the experience we had with negative rates 621 00:41:12,960 --> 00:41:16,640 Speaker 1: in our case, at least, it's been very positive in 622 00:41:16,800 --> 00:41:21,480 Speaker 1: easing financing conditions and in the transmission of this better 623 00:41:21,600 --> 00:41:29,360 Speaker 1: financing conditions to the real economy. We're also aware that, 624 00:41:31,040 --> 00:41:33,400 Speaker 1: by the way here, there are different views about whether 625 00:41:33,760 --> 00:41:37,680 Speaker 1: negative rates have affected or how they affect the profitability 626 00:41:37,719 --> 00:41:42,840 Speaker 1: of the banking system. We can discuss this later, but 627 00:41:45,280 --> 00:41:48,160 Speaker 1: let me ask you, I mean doesn't mean that any 628 00:41:48,280 --> 00:41:52,200 Speaker 1: negative rate will be positive. Doesn't mean that we can 629 00:41:52,280 --> 00:41:56,560 Speaker 1: go as negative as we want without having any consequence 630 00:41:56,600 --> 00:42:00,200 Speaker 1: on the banking system. Yes, it is now and um, 631 00:42:00,960 --> 00:42:04,560 Speaker 1: you probably know that we've discussed for some time the 632 00:42:04,640 --> 00:42:08,640 Speaker 1: possibility of having a tearing system, so an exemption system 633 00:42:08,800 --> 00:42:12,560 Speaker 1: from for this operation. And in the end the Going 634 00:42:12,680 --> 00:42:18,680 Speaker 1: Council decided not to exactly for the purpose of not 635 00:42:19,000 --> 00:42:21,880 Speaker 1: signaling that we can go as low as we want 636 00:42:22,320 --> 00:42:29,480 Speaker 1: on this. So the Going Council is basically, although it 637 00:42:29,560 --> 00:42:32,880 Speaker 1: gives a positive judgment about the past experience, is increasingly 638 00:42:32,880 --> 00:42:39,400 Speaker 1: aware of the complexities that this measure entails. Uh As 639 00:42:39,600 --> 00:42:43,480 Speaker 1: as I said before, we think and we have numbers. 640 00:42:43,600 --> 00:42:47,680 Speaker 1: The Show and the Vice Presidence particularly well documented on 641 00:42:47,840 --> 00:42:50,399 Speaker 1: this that the aggregate profitability