WEBVTT - Foley: attacks create uncertainty and hinder growth

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<v Speaker 1>Global business news twenty four hours a day at Bloomberg

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<v Speaker 1>this is a Bloomberg Business Flash and I'm Karin Moscown.

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<v Speaker 1>There's updates brought to you by Eisner Emperor. When entrepreneurs

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<v Speaker 1>face challenges like choosing a business structure or access to capital,

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<v Speaker 1>they call the accountants and advisors at Eisner Emper connect

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<v Speaker 1>with them Eisner Emper dot com slash tech. European stocks

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<v Speaker 1>were lower for much of the morning, while German government

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<v Speaker 1>bonds rise with gold and a yen after explosions rocked

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<v Speaker 1>of Russell's airport departure hall and a downtown subway station.

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<v Speaker 1>Right now, the decks in Germany, though is little changed,

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<v Speaker 1>are racing its declines. CAC in Paris and f T

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<v Speaker 1>one hundred are both down about three tenths per cent.

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<v Speaker 1>They're well off their lows in the morning as well.

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<v Speaker 1>Futures are lower. SNP EVENY futures down six points, Dow

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<v Speaker 1>e Many futures down thirty two, and nasdack emny futures

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<v Speaker 1>down thirteen ten. Your treasury up three thirty seconds, The

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<v Speaker 1>yeld one point nine zero percent, NIMEX s crude oil

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<v Speaker 1>down half per cent or twenty cents to forty barrel.

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<v Speaker 1>Comex gold up seven ten percent or eight dollars twenty

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<v Speaker 1>cents to twelve fifty two forty anounced. That's a Bloomberg

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<v Speaker 1>business flash, Tom and Mike Karn, Thanks so much, Michael

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<v Speaker 1>McKee before we go on to international relations and market impacts,

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<v Speaker 1>and that there's always certainly headlines that get your attention

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<v Speaker 1>in a tragedy. Belgian Red Cross appeals to oh and

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<v Speaker 1>aid blood donors and Wallonia, which is one half of

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<v Speaker 1>Belgium not in the cultural certainly not a surprise. The

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<v Speaker 1>latest from the subway system, the Belgian subway system which

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<v Speaker 1>is by the way completely shut down, all transit in

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<v Speaker 1>bustles is and Eurostar shutdown fifteen victims, fifty five wounded

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<v Speaker 1>according to the officials. There. Biggest reaction we're getting in

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<v Speaker 1>the markets is in the currency markets. As we mentioned earlier,

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<v Speaker 1>the euro at one twelve oh nine uh. The swissy

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<v Speaker 1>at the moment is also trading higher as the great

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<v Speaker 1>the British pound falls to one two seventy four. Japanese

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<v Speaker 1>yen is gaining one eleven. The haven trade. Jane Foley

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<v Speaker 1>is a senior currency strategist at Rubble Bank in London

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<v Speaker 1>and Jane this is really a reflection not just of

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<v Speaker 1>Haven demand, but you can almost see the political aspect

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<v Speaker 1>to this happening. You certainly can, because I mean this

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<v Speaker 1>is two twofold. Rely, I'm sitting in London. We have

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<v Speaker 1>the referendum and the EU coming up, so it does

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<v Speaker 1>it does figure into that debate, but I think more widely,

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<v Speaker 1>of course in Europe, there has been concerns about immigration,

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<v Speaker 1>there's been concerns about terrorism. That the two are separate,

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<v Speaker 1>that they are at LinkedIn in some way, and already

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<v Speaker 1>we have some compromises in the Shenang agreement and Shangan

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<v Speaker 1>is very very important for the EU. What it means

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<v Speaker 1>is that there's there's visa free travel for the different

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<v Speaker 1>citizens of your round the region, and we've already seen

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<v Speaker 1>some of that breaking down as a function of the

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<v Speaker 1>immigration crisis, and these sorts of terror attacks do put

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<v Speaker 1>fear into people's mind. What you probably will also have

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<v Speaker 1>as as a movement towards, of course, the far right.

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<v Speaker 1>We've seen that really since two thousand and fourteen, particular

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<v Speaker 1>countries like France, far right people have just frightened of

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<v Speaker 1>terrorism and perhaps confusing that with with with with immigration too.

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<v Speaker 1>So that is an aspect in the UK at the

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<v Speaker 1>UK courses an island, there's an island mentality that a

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<v Speaker 1>lot of people already isolated isolationist in that form. But

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<v Speaker 1>again this could it could potentially bolster that they leaves

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<v Speaker 1>campaign ahead of the June referendum on EU membership, and

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<v Speaker 1>that is why Sterling really had fallen hard this morning.

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<v Speaker 1>Jane with him the years you have had at Rabble Bank,

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<v Speaker 1>coming from a set of agricultural banks over a hundred

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<v Speaker 1>years ago into a leading Dutch bank, and obviously, Jane,

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<v Speaker 1>with the international exposure that you give us every day

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<v Speaker 1>from London, how do you see business decision making will

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<v Speaker 1>be after the sequence of these attacks and moving from

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<v Speaker 1>Paris of November now on Belgium of this March, business

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<v Speaker 1>decisions get made. How do you perceive where you use

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<v Speaker 1>it they will be made? Well again, it makes things

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<v Speaker 1>more difficult on a day to day basis. If you

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<v Speaker 1>have Sengan under pressure, then trucks just take longer to

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<v Speaker 1>get through borders. That increased costs. It can be detrimental

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<v Speaker 1>to growth in terms of investment, which is probably more

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<v Speaker 1>the question that you're asking again, it can have an

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<v Speaker 1>effect um volatility markets we know that can have a

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<v Speaker 1>detrimental impact on investment. These sorts of events have the

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<v Speaker 1>same effect create create volatility, create uncertainty, can hinder investment,

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<v Speaker 1>and that could cause can hinder growth. And this all

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<v Speaker 1>at the time where the Eurozone economy has been really

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<v Speaker 1>very slow to recover and we need growth desperately. So

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<v Speaker 1>from a clearly at processor reactions to an events that

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<v Speaker 1>this is really the human aspect and in the pain.

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<v Speaker 1>But it does of course have a quite a significant

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<v Speaker 1>secondary impact on growth potential. We have very poor economic

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<v Speaker 1>data in Japan today, the March p m IE one,

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<v Speaker 1>the Lowesson's February of two thousand thirteen. But the money

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<v Speaker 1>is flowing into Japan, into the Japanese yen. Is is

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<v Speaker 1>that likely to continue? Well? Again, it really depends on

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<v Speaker 1>what the fallout of these attacks are, whether or not

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<v Speaker 1>that your remains on high alert, has to remain on

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<v Speaker 1>high alert, and of course on other events, other geo

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<v Speaker 1>political and growth events around the world. But I think

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<v Speaker 1>what we've seen this YERI is the end is in

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<v Speaker 1>demand and and people are very reluctant to give up

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<v Speaker 1>the end. I mean, over the last few weeks, market

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<v Speaker 1>politility has actually been dropping back. But even though we've

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<v Speaker 1>seen a better tone of some of the commodity currencies

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<v Speaker 1>on the back of that, people are still being very

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<v Speaker 1>reluctant to relinquish their hold on the end. And that

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<v Speaker 1>suggests that there is an underlying fear still in the market,

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<v Speaker 1>perhaps about growth, but now perhaps about your political events.

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<v Speaker 1>Where do your phenomenal g d P in Europe? I mean,

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<v Speaker 1>are we sub three? Now? Is that possible? Quite? Quite possibly.

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<v Speaker 1>There has been a better data really this morning from

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<v Speaker 1>from Germany, which is a little bit encouraging, but we

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<v Speaker 1>still see very slow growth. Now. Of course this cannot

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<v Speaker 1>all be pinned on terrorism um and is related to that.

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<v Speaker 1>Of course, a large part of this is is is

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<v Speaker 1>structural Beneath the structural forms, more structural measures low productivity,

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<v Speaker 1>which is called something in the UK and in the

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<v Speaker 1>US to demographics. Various reasons that we've we've got slow growth,

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<v Speaker 1>but certainly the breakdown or the or the question marks

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<v Speaker 1>favor free movement and terrorism or certainly go the wrong

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<v Speaker 1>way as far as bolts in the economy is concerns

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<v Speaker 1>and James save travels on particularly to all of your

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<v Speaker 1>Rebble Bank personnel and Antwerp and in Russells as well,

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<v Speaker 1>and fully is with robo Bank this morning. On the

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<v Speaker 1>financial reactions, Mike, I would say it's we've got a

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<v Speaker 1>dampening the last few days on news and just further

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<v Speaker 1>damp in this morning. We Mike and I have in

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<v Speaker 1>front of his folks the Bloomberg terminal and you can

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<v Speaker 1>see from the pulse of the screen Mic, the red

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<v Speaker 1>and the green what's moving and there's just not much

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<v Speaker 1>pulse right now. Surprisingly contained reaction compared to some of

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<v Speaker 1>the terrorist attacks we've seen before. But as Tony Dwyer

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<v Speaker 1>from Chanically put it on Bloomberg Surveillance earlier today, unfortunately

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<v Speaker 1>markets getting a little bit used to this kind of action.

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<v Speaker 1>I would say that is true. What is also true

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<v Speaker 1>is we've got any number of guests coming up, including

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<v Speaker 1>Hoder's Core on the international relations after terrorist attacks in Brussels.

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