1
00:00:00,600 --> 00:00:05,680
Speaker 1: Global business news twenty four hours a day at Bloomberg

2
00:00:05,720 --> 00:00:08,760
Speaker 1: dot com, the Radio plus Mobile Act and on your radio.

3
00:00:09,080 --> 00:00:12,880
Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow.

4
00:00:12,960 --> 00:00:15,680
Speaker 1: This updates brought to you by the Professional NBA at

5
00:00:15,720 --> 00:00:19,880
Speaker 1: Bentley University, offering streamlined admissions to working professionals like you

6
00:00:20,400 --> 00:00:22,640
Speaker 1: and the ability to set your own pace because your

7
00:00:22,680 --> 00:00:25,320
Speaker 1: experience matters. Learn more at Bentley dot e d U

8
00:00:25,440 --> 00:00:29,640
Speaker 1: slash p m B, a Senda Group of Singapore based

9
00:00:29,640 --> 00:00:32,279
Speaker 1: investment holding company agreed to buy a nine point nine

10
00:00:32,280 --> 00:00:36,120
Speaker 1: percent stake and money manager Leg Mason from activist investor

11
00:00:36,240 --> 00:00:39,800
Speaker 1: Tryan Fund Management. Stocks are rising with commodities while the

12
00:00:39,920 --> 00:00:42,800
Speaker 1: en slips and government bonds fell. As crude Oil's advance

13
00:00:42,840 --> 00:00:46,400
Speaker 1: about forty dollars a barrel boost economic optimism. To check

14
00:00:46,479 --> 00:00:49,080
Speaker 1: the markets every fifteen minutes throughout the trading day on

15
00:00:49,159 --> 00:00:52,520
Speaker 1: Bloomberg sn p Emity futures up five and a half points,

16
00:00:52,600 --> 00:00:55,040
Speaker 1: Dow E Many Future is up thirty and nasdaki Many

17
00:00:55,120 --> 00:00:58,080
Speaker 1: futures up eleven and a half. The tacks in Germany's

18
00:00:58,120 --> 00:00:59,959
Speaker 1: up a tenth of a percent in the cacin pay

19
00:01:00,040 --> 00:01:02,480
Speaker 1: R s and f T one hundred little change ten

20
00:01:02,520 --> 00:01:05,240
Speaker 1: your treasury down nine thirty seconds. The yield one point

21
00:01:05,280 --> 00:01:08,200
Speaker 1: seven five percent yield on the two year point seven

22
00:01:08,200 --> 00:01:10,919
Speaker 1: two percent nine x screw to yeal of one percent

23
00:01:11,040 --> 00:01:13,600
Speaker 1: or forty cents to forty dollar seventy seven cents of

24
00:01:13,760 --> 00:01:16,680
Speaker 1: arrel comex gold a four tenths percent or four dollar

25
00:01:16,760 --> 00:01:20,200
Speaker 1: sixty cents at twelve sixty two eighty announced the euro

26
00:01:20,280 --> 00:01:22,720
Speaker 1: at dollar fourteen oh nine the yen one oh eight

27
00:01:22,760 --> 00:01:26,039
Speaker 1: point three one. Juniper Networks is down more than nine

28
00:01:26,040 --> 00:01:28,360
Speaker 1: and a half percent this morning after its first quarter

29
00:01:28,480 --> 00:01:32,440
Speaker 1: profit and revenue fell short of projections amid sluggish demand.

30
00:01:32,800 --> 00:01:36,040
Speaker 1: Fastenal is down more than four percent after also posting

31
00:01:36,040 --> 00:01:38,880
Speaker 1: sales and earnings that missed the average analysts estimates, and

32
00:01:38,959 --> 00:01:41,240
Speaker 1: al CoA down three and a half percent after the

33
00:01:41,319 --> 00:01:45,520
Speaker 1: largest US aluminum producer cut its forecast for a global demand.

34
00:01:45,959 --> 00:01:49,880
Speaker 1: And that's a bloomberg business flash. Tom and Mike Karen, thanks,

35
00:01:50,120 --> 00:01:53,400
Speaker 1: excuse me, Michael, Oh, let's just gonna say thank you

36
00:01:53,480 --> 00:01:57,160
Speaker 1: very much. We both are being very polite this morning.

37
00:01:57,320 --> 00:01:59,240
Speaker 1: We have all sorts of signals folks on our ears,

38
00:01:59,240 --> 00:02:01,160
Speaker 1: so we don't step on each other. So when we

39
00:02:01,200 --> 00:02:04,040
Speaker 1: do step on each other. It's a rare occurrence. Yeah, well,

40
00:02:04,080 --> 00:02:08,200
Speaker 1: I want to point out, Tom, it is on the

41
00:02:08,280 --> 00:02:12,080
Speaker 1: fight of the century, the New York Fed versus the

42
00:02:12,120 --> 00:02:15,760
Speaker 1: Atlanta Fed. We spent and you and I talked about

43
00:02:15,800 --> 00:02:18,680
Speaker 1: this yesterday. Uh, we spent a lot of time talking

44
00:02:18,680 --> 00:02:22,440
Speaker 1: about the Atlanta Fed GDP now tracker. The New York

45
00:02:22,440 --> 00:02:28,720
Speaker 1: Fed today introducing their own GDPs track, Mr Dudley, if

46
00:02:28,760 --> 00:02:34,320
Speaker 1: you're listening, come on, they need this. Atlanta Fed GDP

47
00:02:34,480 --> 00:02:38,120
Speaker 1: now says that first quarter growth has at the moment

48
00:02:38,240 --> 00:02:42,720
Speaker 1: measured one tenth of one percent. The Atlanta Fed that

49
00:02:42,840 --> 00:02:48,680
Speaker 1: New York Fed now cast is saying one point one percent.

50
00:02:50,040 --> 00:02:54,360
Speaker 1: So there is a dispersion of views on the economy

51
00:02:54,560 --> 00:02:57,200
Speaker 1: in the quarter. And part of this, folks has revisions.

52
00:02:57,440 --> 00:02:59,600
Speaker 1: M I think we're pretty good about this, Mike here,

53
00:02:59,639 --> 00:03:02,920
Speaker 1: of course, excellent about this. Wait for us, Mike, the

54
00:03:03,000 --> 00:03:06,800
Speaker 1: importance of the first, the second, and the third look

55
00:03:06,800 --> 00:03:10,560
Speaker 1: at g d P, I would say of the media

56
00:03:10,639 --> 00:03:14,040
Speaker 1: focus is on the first look, how would you wait?

57
00:03:14,160 --> 00:03:18,800
Speaker 1: The importance of those three gp Well, from any economics

58
00:03:18,800 --> 00:03:22,360
Speaker 1: point of view, you put of the third. Actually, there

59
00:03:22,440 --> 00:03:25,960
Speaker 1: is a fourth revision which comes almost a year later

60
00:03:26,040 --> 00:03:28,520
Speaker 1: when they go through the tax receipts and they come

61
00:03:28,600 --> 00:03:31,320
Speaker 1: up with an accurate number and revise the figures. That's

62
00:03:31,360 --> 00:03:34,200
Speaker 1: what we really saw, but you don't have that to

63
00:03:34,280 --> 00:03:37,440
Speaker 1: trade on. So the first one obviously gets the most attention.

64
00:03:37,480 --> 00:03:40,840
Speaker 1: Everybody trades on on what it is, and the Atlanta

65
00:03:40,920 --> 00:03:45,040
Speaker 1: fad does revise theirs as the GDP numbers get revised,

66
00:03:45,080 --> 00:03:47,240
Speaker 1: but nobody goes back and looks at the old ones. Yeah,

67
00:03:47,320 --> 00:03:49,440
Speaker 1: I want to point out, and it's given back a

68
00:03:49,480 --> 00:03:51,320
Speaker 1: little bit. The story is not what it was an

69
00:03:51,320 --> 00:03:54,119
Speaker 1: hour ago. One of the shifts in the last two

70
00:03:54,200 --> 00:03:57,560
Speaker 1: days it has been yen yen, yen, yuen yen, and

71
00:03:57,640 --> 00:04:01,240
Speaker 1: with a vengeance x amount of hours. Twelve hours ago,

72
00:04:02,480 --> 00:04:05,880
Speaker 1: the euro took over and we really had a buoyant euro.

73
00:04:06,320 --> 00:04:09,840
Speaker 1: H this morning, a stronger year. I'm gonna get that

74
00:04:09,920 --> 00:04:13,000
Speaker 1: g i P chart up and give you the number

75
00:04:13,360 --> 00:04:17,760
Speaker 1: we got, the one fourteen sixty five. And I just

76
00:04:17,800 --> 00:04:20,240
Speaker 1: think there's got to be a lot of attention paid

77
00:04:20,279 --> 00:04:24,799
Speaker 1: to the y Mike behind stronger euro calls, weaker dollar,

78
00:04:25,680 --> 00:04:28,839
Speaker 1: uh Causer, Steve say Well, a BNP parry by erk Nielsen,

79
00:04:29,440 --> 00:04:35,200
Speaker 1: UniCredit and others really beginning to commit to a stronger euro,

80
00:04:35,360 --> 00:04:38,840
Speaker 1: weaker dollar world. That changes a lot of the dynamics

81
00:04:39,120 --> 00:04:41,400
Speaker 1: of the things we talked about. The change is kind

82
00:04:41,440 --> 00:04:46,240
Speaker 1: of what Mario drags options are going forward. If he

83
00:04:46,279 --> 00:04:49,720
Speaker 1: can't do the same thing for um Huko Kuroda, if

84
00:04:49,720 --> 00:04:54,200
Speaker 1: they can't lower their currencies value through monetary policy, they're

85
00:04:54,240 --> 00:04:58,960
Speaker 1: kind of out of looking here at and I m

86
00:04:59,000 --> 00:05:03,080
Speaker 1: F on the A screen. We don't have the outlookout

87
00:05:03,160 --> 00:05:07,880
Speaker 1: yet at Washington time, but we'll get that later today.

88
00:05:07,880 --> 00:05:11,600
Speaker 1: And Mike, as you mentioned earlier, it's a presumed reset

89
00:05:11,720 --> 00:05:16,440
Speaker 1: and recalibration down to me, it's really a victory lab

90
00:05:16,520 --> 00:05:20,440
Speaker 1: from Madame le Garden her theme of new mediocre. She

91
00:05:20,560 --> 00:05:25,200
Speaker 1: gave that speech at Georgetown University, and it's not the

92
00:05:25,279 --> 00:05:28,240
Speaker 1: people laughed at her. They just said, you know, there

93
00:05:28,240 --> 00:05:31,640
Speaker 1: goes the I m F again, gloomy again, And in

94
00:05:31,760 --> 00:05:35,360
Speaker 1: hindsight she looks pretty smart. Well, the I m F

95
00:05:36,279 --> 00:05:40,640
Speaker 1: has been out front, along with some very prescient people

96
00:05:40,640 --> 00:05:42,839
Speaker 1: in the markets and saying we weren't going to see

97
00:05:42,839 --> 00:05:46,360
Speaker 1: a lot of growth here. The question is, you know,

98
00:05:47,279 --> 00:05:51,560
Speaker 1: is is what they say catching up to what the

99
00:05:51,560 --> 00:05:54,320
Speaker 1: markets already think. We want to give you the perspective

100
00:05:54,360 --> 00:05:58,159
Speaker 1: on why Robert stinches with amorous Pierre Punt Bob, Bob,

101
00:05:58,320 --> 00:06:00,960
Speaker 1: good morning. Why is the year all of a sudden

102
00:06:01,040 --> 00:06:04,720
Speaker 1: strength and leading what I'll call currency dynamics now versus

103
00:06:04,800 --> 00:06:07,320
Speaker 1: the yen over the last two weeks? What happened with

104
00:06:07,360 --> 00:06:11,440
Speaker 1: the euro? You know, Tom, I think, uh, I think

105
00:06:11,440 --> 00:06:14,360
Speaker 1: there's some interesting developments going on with all the sort

106
00:06:14,400 --> 00:06:18,080
Speaker 1: of non dollar exchange rates here dollar a lot weaker

107
00:06:18,120 --> 00:06:23,280
Speaker 1: than normal cyclical relationships, things like interest rate differentials, risk appetite,

108
00:06:23,279 --> 00:06:26,680
Speaker 1: et cetera would suggest. And you know, we have to

109
00:06:26,680 --> 00:06:29,159
Speaker 1: go back to the last G twenty meeting when China

110
00:06:30,360 --> 00:06:35,320
Speaker 1: UM express their concern that while the Chinese exchange rate

111
00:06:35,360 --> 00:06:39,160
Speaker 1: had stabilized versus the dollar, it obviously rode the dollars

112
00:06:39,520 --> 00:06:42,960
Speaker 1: coattails higher against all these other currencies. You have to

113
00:06:43,040 --> 00:06:46,679
Speaker 1: wonder who's been buying these currencies now? Obviously negative interest

114
00:06:46,760 --> 00:06:49,560
Speaker 1: rates in Japan and the Eurozone, what's the what's the

115
00:06:49,600 --> 00:06:52,080
Speaker 1: reason for people to go out and start buying in

116
00:06:52,440 --> 00:06:55,359
Speaker 1: and euros? And one thing that could be going on

117
00:06:55,400 --> 00:06:59,400
Speaker 1: in the background is that China could be quietly, uh

118
00:06:59,440 --> 00:07:02,240
Speaker 1: you know, re allocating some of their reserve positions into

119
00:07:02,320 --> 00:07:05,920
Speaker 1: those currencies as a way of of strengthening those currencies

120
00:07:06,000 --> 00:07:08,839
Speaker 1: versus the Chinese. You want, Michael McKee led the world

121
00:07:08,920 --> 00:07:12,400
Speaker 1: yesterday in the importance of Jack lose comments. Were you

122
00:07:12,440 --> 00:07:17,160
Speaker 1: taking them back by the Secretary of the Treasury saying

123
00:07:17,200 --> 00:07:19,880
Speaker 1: to the I m F just do something? Was that

124
00:07:19,920 --> 00:07:23,800
Speaker 1: a bit odd? Yeah? I think it was a bit odd,

125
00:07:23,840 --> 00:07:27,520
Speaker 1: And I think that that, um, a lot of policymakers

126
00:07:28,160 --> 00:07:31,640
Speaker 1: are maybe looking to the I m F for a

127
00:07:31,680 --> 00:07:35,000
Speaker 1: bit of a green light to move forward on fiscal policy.

128
00:07:35,400 --> 00:07:38,240
Speaker 1: You know, exchange rate policy kind of a zero sum game,

129
00:07:38,280 --> 00:07:41,200
Speaker 1: and we're seeing that battle go on and and and

130
00:07:41,400 --> 00:07:44,200
Speaker 1: the Chinese currencies it oncen't truly been weakening up here.

131
00:07:44,720 --> 00:07:47,320
Speaker 1: Um in the last couple of a couple of months

132
00:07:47,440 --> 00:07:49,520
Speaker 1: against the end we just noted this morning the end

133
00:07:49,600 --> 00:07:53,280
Speaker 1: is is up over fient against the Chinese currency in

134
00:07:53,360 --> 00:07:56,880
Speaker 1: less than a year. So the currency game goes on,

135
00:07:57,080 --> 00:07:59,640
Speaker 1: but it's kind of a zero sum game monetary policy

136
00:07:59,680 --> 00:08:04,840
Speaker 1: and CREA singly tapped out around the world. So what's

137
00:08:04,920 --> 00:08:07,600
Speaker 1: left is fiscal policy? Now. You know, the I m

138
00:08:07,720 --> 00:08:10,480
Speaker 1: F has has been one of those guardians of fiscal

139
00:08:10,560 --> 00:08:13,040
Speaker 1: restraint around the world, and you wonder whether there's now

140
00:08:13,080 --> 00:08:16,080
Speaker 1: a case beginning to be built to say we need

141
00:08:16,160 --> 00:08:19,239
Speaker 1: fiscal stimulus around the world, and maybe the IMAM should

142
00:08:19,240 --> 00:08:23,240
Speaker 1: begin to help that process. You look at the Chinese

143
00:08:23,520 --> 00:08:26,000
Speaker 1: U N versus the dollar, and then you look at

144
00:08:26,080 --> 00:08:29,880
Speaker 1: the Chinese UN versus the basket of currencies, and the

145
00:08:29,920 --> 00:08:35,800
Speaker 1: basket has shown an enormous deterioration, a real weakening, much

146
00:08:35,840 --> 00:08:38,840
Speaker 1: more so than the dollar. So are we paying attention

147
00:08:38,880 --> 00:08:41,800
Speaker 1: to the wrong thing when we quote the UN against

148
00:08:41,880 --> 00:08:45,839
Speaker 1: the dollar. I think increasingly we are. UM. I think

149
00:08:45,880 --> 00:08:48,440
Speaker 1: the Chinese are certainly looked at it on a trade

150
00:08:48,440 --> 00:08:53,280
Speaker 1: weighted basis. UM. The other interesting thing is that that

151
00:08:53,559 --> 00:08:57,640
Speaker 1: when the Chinese currency moves one to three against the

152
00:08:57,720 --> 00:09:00,880
Speaker 1: dollar UM, the world gets in a tizzy. You know,

153
00:09:00,920 --> 00:09:03,720
Speaker 1: we saw that last August. We saw that in January

154
00:09:03,840 --> 00:09:09,160
Speaker 1: with movements in dollar yuan creating tremendous risk aversion in

155
00:09:09,240 --> 00:09:13,640
Speaker 1: global markets. And you wonder whether the Chinese have said, Okay,

156
00:09:13,720 --> 00:09:16,280
Speaker 1: we won't move color yuan, but we might move some

157
00:09:16,360 --> 00:09:20,120
Speaker 1: money into euros and yen push those currencies up. And

158
00:09:20,120 --> 00:09:22,320
Speaker 1: and here we've had this big move in the in

159
00:09:22,360 --> 00:09:25,160
Speaker 1: the end versus the yuan, and nobody's paid any attention.

160
00:09:25,280 --> 00:09:29,720
Speaker 1: Risk capitized fine global markets are moving right along, and

161
00:09:29,720 --> 00:09:32,559
Speaker 1: and it's it's kind of ironic because these cross rates

162
00:09:32,600 --> 00:09:36,160
Speaker 1: matter just as much. But the market is so focused

163
00:09:36,240 --> 00:09:39,960
Speaker 1: on the exchange rate versus the dollar and all the

164
00:09:40,000 --> 00:09:44,120
Speaker 1: political and economic implications of that, that they completely ignore

165
00:09:44,200 --> 00:09:48,720
Speaker 1: the movements in the Chinese currency against others and movement

166
00:09:49,080 --> 00:09:51,760
Speaker 1: um of the yuan versus the yen, and the last

167
00:09:52,040 --> 00:09:54,560
Speaker 1: nine months or so, I think it's one of those

168
00:09:54,600 --> 00:09:58,200
Speaker 1: factors that's pushing the Japanese economy back into recession. We

169
00:09:58,320 --> 00:10:01,560
Speaker 1: have to leave st Thank you so much for being

170
00:10:01,600 --> 00:10:03,640
Speaker 1: with us this morning. I'm gonna put out on Bloomberg

171
00:10:04,240 --> 00:10:07,280
Speaker 1: Radio plus that huge move. It's something we can do

172
00:10:07,320 --> 00:10:10,560
Speaker 1: with Bloomberg. It's not just dollar yen or euro dollar

173
00:10:11,040 --> 00:10:16,079
Speaker 1: looking at yen, renminbi, and it is a massive move

174
00:10:16,720 --> 00:10:21,000
Speaker 1: that we have seen from September in late August here

175
00:10:21,120 --> 00:10:26,200
Speaker 1: of strong yen, weak Chinese currency. And again you heard

176
00:10:26,679 --> 00:10:29,600
Speaker 1: Mr Since just say that that may affect the real

177
00:10:29,640 --> 00:10:33,000
Speaker 1: economy of Japan um as well. What we've got is

178
00:10:33,040 --> 00:10:37,200
Speaker 1: two days of a risk on uh feel led by weeker.

179
00:10:37,280 --> 00:10:39,240
Speaker 1: Dollar not as weak as it was two hours ago,

180
00:10:39,679 --> 00:10:42,679
Speaker 1: but ninety three point eight nine on that blended d

181
00:10:42,840 --> 00:10:46,040
Speaker 1: X Y is important. Let me give you those waitings

182
00:10:46,160 --> 00:10:48,920
Speaker 1: right now. D X Y, go on the Bloomberg will

183
00:10:48,920 --> 00:10:52,640
Speaker 1: make you smarter. Fifty eight percent Euro, fourteen percent, Yen

184
00:10:53,120 --> 00:10:58,360
Speaker 1: twelve percent, Pound, Canada nine percent, Sweden four and Swiss

185
00:10:58,400 --> 00:11:02,400
Speaker 1: frank four. So the d I why old trading partners

186
00:11:02,400 --> 00:11:06,960
Speaker 1: and indicating excuse me, all of strong euro and strong

187
00:11:07,080 --> 00:11:13,079
Speaker 1: Sterling on a weaker dollar. Another hour of Bloomberg surveillance