1 00:00:03,120 --> 00:00:07,520 Speaker 1: This is Bloomberg Surveillance. Most American manufacturers who are dealing 2 00:00:07,560 --> 00:00:10,520 Speaker 1: with a stronger currency and are losing market share in 3 00:00:10,600 --> 00:00:13,240 Speaker 1: export trade will have no choice but to get better. 4 00:00:13,400 --> 00:00:16,360 Speaker 1: You've got a labor market that's being remarkably strong for 5 00:00:16,400 --> 00:00:19,360 Speaker 1: a long time. It has continued to be remarkably and strong. China. 6 00:00:19,400 --> 00:00:21,520 Speaker 1: They are the largest economy on Earth, and what people 7 00:00:21,560 --> 00:00:23,840 Speaker 1: aren't focusing on is that they're the only economy on 8 00:00:23,880 --> 00:00:26,120 Speaker 1: Earth that's really growing at a decent pace right now. 9 00:00:26,200 --> 00:00:30,480 Speaker 1: Bloomberg Surveillance your link to the world of economics, finance, 10 00:00:30,560 --> 00:00:34,320 Speaker 1: and investment on Bloomberg Radio. Good running everyone, Michael McKee 11 00:00:34,320 --> 00:00:39,000 Speaker 1: and Tom Keane Bloomberg Surveillance. Mr McKee is off today. 12 00:00:39,320 --> 00:00:43,640 Speaker 1: Peyton taking a trophy. McKee demanded to be off. There's 13 00:00:43,640 --> 00:00:46,640 Speaker 1: a diehard Denver Broncles family said good morning to Michael McKee. 14 00:00:46,880 --> 00:00:50,120 Speaker 1: No doubt not listening. We're glad you're listening worldwide. I'm 15 00:00:50,120 --> 00:00:55,240 Speaker 1: Bloomberg Radio Plus of course across this nation. FM in Washington. 16 00:00:55,320 --> 00:00:59,200 Speaker 1: Maybe the Redskins next year. Bloomberg twelve hundred in Boston 17 00:00:59,800 --> 00:01:03,800 Speaker 1: to Tom Brady without a tie yesterday the scandal Brady 18 00:01:04,080 --> 00:01:07,200 Speaker 1: booed by the hundred two hundred thousand people at the 19 00:01:07,240 --> 00:01:11,319 Speaker 1: Super Bowl in San Francisco. What a wonderful show you 20 00:01:11,360 --> 00:01:13,600 Speaker 1: put on, not only in San Francisco, but in Santa 21 00:01:13,640 --> 00:01:17,880 Speaker 1: Clara is well. Good morning the Bay Area, and of 22 00:01:17,880 --> 00:01:21,440 Speaker 1: course here in New York Bloomberg eleven UH cRIO uh 23 00:01:21,480 --> 00:01:26,240 Speaker 1: and all across this nation. UH, we say good morning. 24 00:01:26,240 --> 00:01:28,960 Speaker 1: The markets negative twenty two on futures. It was good. 25 00:01:29,480 --> 00:01:32,080 Speaker 1: And then there's so I'm gonna say that there's sort 26 00:01:32,120 --> 00:01:37,240 Speaker 1: of a tone uh fragility in Europe and I will 27 00:01:37,280 --> 00:01:40,000 Speaker 1: put it over even to non full faith and credit 28 00:01:40,520 --> 00:01:45,720 Speaker 1: UH debt, peripheral spreads, wider, lots of talk about European banking, 29 00:01:45,760 --> 00:01:49,640 Speaker 1: and there's just sort of a soup this morning as 30 00:01:49,640 --> 00:01:52,440 Speaker 1: we look at the challenges uh maybe led by Europe. 31 00:01:52,440 --> 00:01:55,120 Speaker 1: We'll see how that migrates in the next one hour 32 00:01:55,640 --> 00:01:59,840 Speaker 1: as well. Bloomberg surveillas this morning broch By Invesco. In 33 00:02:00,000 --> 00:02:04,440 Speaker 1: investing isn't about meeting benchmarks, It's about achieving goals. Find 34 00:02:04,440 --> 00:02:09,160 Speaker 1: out how invest goes high conviction approach can help visit 35 00:02:09,280 --> 00:02:15,400 Speaker 1: investco dot com slash high conviction yields in two basis points. 36 00:02:15,400 --> 00:02:19,720 Speaker 1: In the tenure on West Texas making a dash for 37 00:02:19,840 --> 00:02:23,960 Speaker 1: twenty nine handle. That's important. Oil is migrating three days, 38 00:02:24,000 --> 00:02:27,480 Speaker 1: four days in a row. Lower, We're right at inter day. 39 00:02:27,520 --> 00:02:31,080 Speaker 1: Lowe's thirty point zero four was the inter day that 40 00:02:31,200 --> 00:02:34,400 Speaker 1: was twelve minutes ago. Uh, and we'll see from there. 41 00:02:34,480 --> 00:02:37,640 Speaker 1: Yet as another piece of UH, the global litmus paper 42 00:02:37,680 --> 00:02:40,760 Speaker 1: one sixteen sixty one stronger yet a lower number is 43 00:02:40,760 --> 00:02:44,520 Speaker 1: a stronger yet versus the dollar, and oh maybe we 44 00:02:44,960 --> 00:02:48,360 Speaker 1: grind lower. We're not seeing that right now. It is 45 00:02:48,400 --> 00:02:53,200 Speaker 1: wonderful to have in New York Luigi's and Gallis. He 46 00:02:53,280 --> 00:02:56,600 Speaker 1: has been an expert for US on Italian football. I 47 00:02:56,600 --> 00:02:58,960 Speaker 1: don't know if he's an expert on American football. Maybe 48 00:02:59,000 --> 00:03:02,640 Speaker 1: we'll find that out in half hour. But he is 49 00:03:02,680 --> 00:03:07,359 Speaker 1: an expert on the culture in fabric of American. What's 50 00:03:07,360 --> 00:03:10,640 Speaker 1: so wonderful about this is he's beyond Italian holding court 51 00:03:10,680 --> 00:03:14,280 Speaker 1: in Chicago at the Booth School. And I would suggest 52 00:03:14,360 --> 00:03:16,280 Speaker 1: or it gives you a different prison. What is this 53 00:03:16,360 --> 00:03:18,320 Speaker 1: your first time on radio? Get the mic next to you. 54 00:03:18,680 --> 00:03:21,480 Speaker 1: There you go, But but what is it like being 55 00:03:22,360 --> 00:03:26,160 Speaker 1: so Italian as you are? Seriously in Chicago? It gives 56 00:03:26,160 --> 00:03:29,400 Speaker 1: you a different view, doesn't it? It does I think 57 00:03:29,480 --> 00:03:32,119 Speaker 1: is that one of the few advantages of moving back 58 00:03:32,160 --> 00:03:34,920 Speaker 1: and forth between the Rope and the United States, And 59 00:03:34,960 --> 00:03:37,320 Speaker 1: when now in you up you feel like an American 60 00:03:37,400 --> 00:03:40,000 Speaker 1: and when you're in in the United States you feel 61 00:03:40,040 --> 00:03:43,560 Speaker 1: like in European? What what? How do you filter going 62 00:03:43,600 --> 00:03:46,120 Speaker 1: into New Hampshire or Morow Mr Sanders and Mr Trump? 63 00:03:46,720 --> 00:03:48,800 Speaker 1: I mean you had who was the candidate in Italy? 64 00:03:48,880 --> 00:03:52,240 Speaker 1: That there's an uproar? Is it not Fabio? Who was it? 65 00:03:52,680 --> 00:03:59,440 Speaker 1: Who was the candidate bellas Conio? Is there an equivalence 66 00:03:59,520 --> 00:04:04,880 Speaker 1: there of big reel or too Bubby Trump or Bubby said? Um? Actually, 67 00:04:04,960 --> 00:04:08,880 Speaker 1: there is an equivalence in the sense that both Trump 68 00:04:08,920 --> 00:04:15,120 Speaker 1: and Sanders appealed to rage in the American people, rage 69 00:04:15,240 --> 00:04:19,440 Speaker 1: particularly directly to the fact that the large candidate, the 70 00:04:19,480 --> 00:04:25,440 Speaker 1: important candidates are all financed by big corporation of big 71 00:04:25,520 --> 00:04:29,400 Speaker 1: vested interests, and they're not really freeing their sort of 72 00:04:29,839 --> 00:04:34,320 Speaker 1: political decisions. So I think that I was listening to 73 00:04:34,360 --> 00:04:38,480 Speaker 1: a program and one young voter of Bernie Sanders said, 74 00:04:38,520 --> 00:04:43,120 Speaker 1: every time you hear Ellerie Clinton, you won't wonder who 75 00:04:43,160 --> 00:04:45,520 Speaker 1: has paid for it. I think that this is not 76 00:04:45,680 --> 00:04:49,320 Speaker 1: just Elleri Clinton. This is the view that most Americans 77 00:04:49,360 --> 00:04:53,120 Speaker 1: have have of the political system, which is not too 78 00:04:53,120 --> 00:04:55,800 Speaker 1: far off. And I think that the big innovation of 79 00:04:55,880 --> 00:04:58,760 Speaker 1: this electoral cycle is that now you have two candidates 80 00:04:58,839 --> 00:05:02,080 Speaker 1: very different, but they seem to break the circle. Bernie 81 00:05:02,120 --> 00:05:05,960 Speaker 1: Sanders able to raise all his money from small donations 82 00:05:06,000 --> 00:05:08,800 Speaker 1: and raise a lot of it and may be competitive 83 00:05:08,839 --> 00:05:12,760 Speaker 1: on this front. And Trump, of course that is not 84 00:05:12,880 --> 00:05:16,159 Speaker 1: really raising any money, but certainly not raising from big interests. 85 00:05:16,200 --> 00:05:17,720 Speaker 1: Hard and soul. Here, if we go back to the 86 00:05:17,800 --> 00:05:21,039 Speaker 1: various shades of Chicago economics, Frank Night, no one's going 87 00:05:21,080 --> 00:05:26,680 Speaker 1: to call an optimus classic book. He was an ordinary professor, 88 00:05:26,920 --> 00:05:29,479 Speaker 1: and then you had George Stiegler, and then on the 89 00:05:29,520 --> 00:05:32,520 Speaker 1: Milton Friedman and Gary Becker, who we missed so much, 90 00:05:32,920 --> 00:05:36,440 Speaker 1: and and the rest. There's an optimistic assessment of the 91 00:05:36,560 --> 00:05:41,720 Speaker 1: Chicago view of markets and American exceptionalism. Is it still there? 92 00:05:42,839 --> 00:05:46,080 Speaker 1: I think that is that there is still a very 93 00:05:46,120 --> 00:05:50,200 Speaker 1: strong and optimistic view of markets. And the concern is 94 00:05:50,279 --> 00:05:53,839 Speaker 1: that America is not as exceptional anymore. And this is 95 00:05:53,960 --> 00:05:57,920 Speaker 1: that traditionally where America was exceptional is that markets were 96 00:05:57,960 --> 00:06:02,640 Speaker 1: walking exceptionally well and totally uh, they're walking less and 97 00:06:02,640 --> 00:06:05,080 Speaker 1: went well and that they're more and more in the 98 00:06:05,200 --> 00:06:13,240 Speaker 1: sense of manipulated by political powers that are responsible or 99 00:06:13,600 --> 00:06:17,120 Speaker 1: or respond to vested interests that financed the Latoral campaign. 100 00:06:17,160 --> 00:06:21,359 Speaker 1: So the idea that the political system is reading the 101 00:06:21,360 --> 00:06:24,680 Speaker 1: economic system, I think he is an idea that is 102 00:06:24,839 --> 00:06:29,000 Speaker 1: becoming prevailing us Chicago, Luigis and Galus with his folks 103 00:06:29,000 --> 00:06:31,920 Speaker 1: from bus School, Chicago. I want to resell the book, 104 00:06:32,000 --> 00:06:35,880 Speaker 1: folks the Washington Posts as an accessible and powerfully argued book. 105 00:06:36,000 --> 00:06:37,719 Speaker 1: Here's what you need to know. It was my beach 106 00:06:37,800 --> 00:06:41,599 Speaker 1: read of a couple of summers ago. A Capitalism for 107 00:06:42,320 --> 00:06:48,720 Speaker 1: the People, recap recapturing the lost genius of American proper prosperity, 108 00:06:49,000 --> 00:06:52,440 Speaker 1: A capitalism for the people, Luigians and Gals. I can't 109 00:06:52,440 --> 00:06:57,360 Speaker 1: convey enough how twisted the book is through professors in 110 00:06:57,480 --> 00:07:01,000 Speaker 1: Galis is uh prison with in that is. We talked 111 00:07:01,000 --> 00:07:04,920 Speaker 1: about this earlier, Robert Gordon saying technological progress that happened, 112 00:07:04,960 --> 00:07:07,800 Speaker 1: it was lovely. It's over and we know we have 113 00:07:07,880 --> 00:07:11,960 Speaker 1: technological progress right now, but it's a technological progress of 114 00:07:12,040 --> 00:07:14,760 Speaker 1: the few. How do we diffuse it to the rest 115 00:07:14,800 --> 00:07:18,480 Speaker 1: of America. I disagree with the promise that the technological 116 00:07:18,560 --> 00:07:21,680 Speaker 1: progresses of the few. I think that that what we 117 00:07:21,800 --> 00:07:25,320 Speaker 1: observe is that the benefit of this technological progress are 118 00:07:25,400 --> 00:07:29,200 Speaker 1: not reflected enough to the many. And part of it 119 00:07:29,280 --> 00:07:33,960 Speaker 1: is that markets are increasingly concentrated. I think that the 120 00:07:34,000 --> 00:07:39,120 Speaker 1: real genius of capitalists is competition, and we are forgetting this. 121 00:07:39,280 --> 00:07:41,320 Speaker 1: And I think that even in the United States that 122 00:07:41,440 --> 00:07:44,760 Speaker 1: used to be a very competitive market, concentration is up 123 00:07:44,880 --> 00:07:51,400 Speaker 1: and the benefits of innovation are not diffusing enough to everybody. 124 00:07:51,640 --> 00:07:54,880 Speaker 1: Where give us an update investment. I remember Boweing of 125 00:07:54,920 --> 00:07:57,440 Speaker 1: Seattle moving to Chicago, and it was a big deal. 126 00:07:57,480 --> 00:08:00,160 Speaker 1: And there's just a different view. I mean, in a 127 00:08:00,200 --> 00:08:03,600 Speaker 1: manufacturing recession, according to many, or at least the growth 128 00:08:03,640 --> 00:08:07,720 Speaker 1: recession in manufacturing, what's the state of investment? Or as 129 00:08:07,920 --> 00:08:10,720 Speaker 1: vice chairman Fisher says, there's just a lot of uncertainty 130 00:08:10,760 --> 00:08:15,480 Speaker 1: out there. I think that the weason indeed a lot 131 00:08:15,520 --> 00:08:20,480 Speaker 1: of uncertainty. But I think that my my hope are 132 00:08:20,680 --> 00:08:24,080 Speaker 1: that with the increasing wage that we're observing, I think 133 00:08:24,120 --> 00:08:27,400 Speaker 1: that in ton of demand will go up and investment 134 00:08:27,440 --> 00:08:29,600 Speaker 1: will go up as well. How can internal demand go 135 00:08:29,720 --> 00:08:32,240 Speaker 1: up if we have oversupplied and I mean, you know, 136 00:08:32,440 --> 00:08:36,920 Speaker 1: between demand dynamics which is where everybody focuses, including too 137 00:08:36,960 --> 00:08:40,839 Speaker 1: many quote unquote Keynesians versus supply dynamics. Isn't there a 138 00:08:40,880 --> 00:08:44,360 Speaker 1: lot of supply out there? There needs a lot of supply, 139 00:08:44,520 --> 00:08:48,040 Speaker 1: but if wages grow, there will be also a lot 140 00:08:48,080 --> 00:08:50,680 Speaker 1: of demand. I think that there are a lot of 141 00:08:50,720 --> 00:08:54,240 Speaker 1: poor people who don't have access to a sources and 142 00:08:54,280 --> 00:08:56,679 Speaker 1: will demand much more if they just had the money. 143 00:08:56,920 --> 00:09:00,520 Speaker 1: And I think that wage growth is the first stepping 144 00:09:00,559 --> 00:09:04,080 Speaker 1: that actually, do you see wage growth? Yes, you see it. 145 00:09:04,400 --> 00:09:08,800 Speaker 1: I don't. We were so in generate a little better 146 00:09:08,840 --> 00:09:11,520 Speaker 1: on the John Supports fair. Yeah, and uh, I don't 147 00:09:11,520 --> 00:09:14,560 Speaker 1: think we're gonna see it continuing at the path of 148 00:09:14,840 --> 00:09:18,320 Speaker 1: uh pace of generally because it was very strong. But 149 00:09:18,360 --> 00:09:20,280 Speaker 1: I think yes, I will. I would see it continue. 150 00:09:20,520 --> 00:09:22,760 Speaker 1: Luises in gallis with us and star. Let me do 151 00:09:22,800 --> 00:09:25,760 Speaker 1: an extended data check to get your Monday I'm started. 152 00:09:25,800 --> 00:09:27,640 Speaker 1: What you need to know on oil is thirty point 153 00:09:27,760 --> 00:09:31,520 Speaker 1: zero zero. That was two minutes ago, thirty dollars exactly. 154 00:09:31,520 --> 00:09:34,360 Speaker 1: We don't have a twenty nine handle, but looking at 155 00:09:34,360 --> 00:09:38,120 Speaker 1: the drift function of West Texas Intermediate, we're going to 156 00:09:38,200 --> 00:09:42,320 Speaker 1: drift down to twenty nine handle here in any second 157 00:09:42,600 --> 00:09:45,240 Speaker 1: to review for those of you stayed up to watch 158 00:09:45,280 --> 00:09:50,360 Speaker 1: the paintent ball um and we don't wanna, John Tucker, 159 00:09:50,400 --> 00:09:54,320 Speaker 1: I can't mention cold Play during the entire three hours. No, okay, 160 00:09:54,440 --> 00:09:57,600 Speaker 1: we're cold Play free. But within that future is negative 161 00:09:57,600 --> 00:09:59,680 Speaker 1: twenty four. They were negative five when I walked in 162 00:10:00,200 --> 00:10:03,600 Speaker 1: the door. Real deterioration. Dal future is well under sixteen 163 00:10:03,640 --> 00:10:06,760 Speaker 1: thousand to two hundred one. The yields come in by 164 00:10:06,760 --> 00:10:09,080 Speaker 1: two basis points. I don't want to overplay that, but 165 00:10:09,160 --> 00:10:11,600 Speaker 1: there it is, and it's Francy Laqua mentioned earlier, some 166 00:10:11,640 --> 00:10:15,280 Speaker 1: real damage across all of eurok West Texas in immedia 167 00:10:15,360 --> 00:10:17,559 Speaker 1: trying to get to a twenty nine handle Brent Crew 168 00:10:17,640 --> 00:10:21,280 Speaker 1: down seventy eight cents thirty with Gold up a snappy 169 00:10:21,400 --> 00:10:27,280 Speaker 1: nineteen dollars eleven seventy six uh parouns. That's something that's really, 170 00:10:27,280 --> 00:10:30,680 Speaker 1: you know, getting out there to watch on Gold. James 171 00:10:30,679 --> 00:10:35,040 Speaker 1: Steele at HSBC really calling for Gold to finally find 172 00:10:35,040 --> 00:10:38,760 Speaker 1: a bid off demand dynamics in Asia. James Steele is 173 00:10:38,760 --> 00:10:42,000 Speaker 1: with hs BC euro dollar one eleven twenty three, the 174 00:10:42,080 --> 00:10:46,800 Speaker 1: yen one sixteen uh fifty five. The yen is stronger, 175 00:10:46,840 --> 00:10:51,520 Speaker 1: but I wouldn't call it breakout strength this morning. And 176 00:10:51,559 --> 00:10:53,679 Speaker 1: now to our news here in New York City, here's 177 00:10:53,720 --> 00:10:56,079 Speaker 1: Michael Barr. Tom, thank you very much. The front runner 178 00:10:56,120 --> 00:10:59,520 Speaker 1: in the New Hampshire Republican primary is hoping that translates 179 00:10:59,640 --> 00:11:02,720 Speaker 1: to a winning number of votes. Donald Trump says he 180 00:11:02,720 --> 00:11:05,880 Speaker 1: doesn't need to win New Hampshire tomorrow, but would like to. 181 00:11:06,280 --> 00:11:10,280 Speaker 1: Some rival Republican candidates, including Jeff Bush, say their campaigns 182 00:11:10,280 --> 00:11:13,400 Speaker 1: will go on no matter what. On the Democratic side, 183 00:11:13,440 --> 00:11:16,520 Speaker 1: Bernie Sanders leads in the polls against Hillary Clinton. Clinton 184 00:11:16,559 --> 00:11:20,720 Speaker 1: and Sanders are avoiding any predictions. Some Broncos fans party 185 00:11:20,720 --> 00:11:23,960 Speaker 1: too hard after Denver's Super Bowl victory over the Carolina 186 00:11:24,000 --> 00:11:28,000 Speaker 1: Panthers in downtown streets and central Denver police reported some arrests. 187 00:11:28,320 --> 00:11:30,880 Speaker 1: At least twenty two migrants have drowned after a boat 188 00:11:31,000 --> 00:11:34,320 Speaker 1: sank off the Turkish coast. Earlier, the bodies of eleven 189 00:11:34,320 --> 00:11:37,080 Speaker 1: migrants are found near the a g And resort, bringing 190 00:11:37,120 --> 00:11:40,640 Speaker 1: the death toll today to thirty three. Global News twenty 191 00:11:40,640 --> 00:11:44,160 Speaker 1: four hours a day, powered by our journalists and more 192 00:11:44,160 --> 00:11:46,800 Speaker 1: than a hundred fifty news bureaus from around the world. 193 00:11:46,960 --> 00:11:49,800 Speaker 1: I'm Michael Bartop. Michael, thanks so much. I haven't said 194 00:11:49,840 --> 00:11:52,920 Speaker 1: this in ages. I'm gonna say it right now. Peripherals 195 00:11:53,160 --> 00:11:57,240 Speaker 1: in Europe are wider. There's no other way to put it. Delicately, 196 00:11:57,679 --> 00:12:01,000 Speaker 1: grease off by forty seven basis points. What a throwback 197 00:12:01,040 --> 00:12:06,719 Speaker 1: to two years ago? Bloomberg Surveillance. What you need to 198 00:12:06,800 --> 00:12:10,040 Speaker 1: know about Italy. No, it's not Emirates to Milan or 199 00:12:10,080 --> 00:12:14,040 Speaker 1: the cars hell known as Italian Airlines to Rome, Luigi's 200 00:12:14,080 --> 00:12:17,760 Speaker 1: and Galis on his Italy. It's a fragile Italy. Stay 201 00:12:17,800 --> 00:12:24,280 Speaker 1: with us Bloomberg Surveillance, Global Business News twenty four hours 202 00:12:24,280 --> 00:12:27,400 Speaker 1: a day at Bloomberg dot Com, the Radio plus Mobile 203 00:12:27,440 --> 00:12:30,760 Speaker 1: Act and on your radio. This is a Bloomberg Business 204 00:12:30,800 --> 00:12:34,079 Speaker 1: Flash and I'm Cara in Moscow. This updates Rozzi U 205 00:12:34,120 --> 00:12:37,680 Speaker 1: Bay National Realty Returns on cash and rented real estate. 206 00:12:37,720 --> 00:12:40,559 Speaker 1: Find them at n r I a dot net. A 207 00:12:40,640 --> 00:12:43,880 Speaker 1: group of investors agreeing to buy Apollo Education Group for 208 00:12:43,960 --> 00:12:46,160 Speaker 1: one point one billion dollars in cash and to take 209 00:12:46,160 --> 00:12:49,959 Speaker 1: the company private. U Stock index futures, meanwhile, are falling, 210 00:12:50,040 --> 00:12:52,800 Speaker 1: indicating the route that sent the NASDAC imposit to its 211 00:12:52,800 --> 00:12:56,320 Speaker 1: lowest level since October will deepen. And we checked the 212 00:12:56,320 --> 00:12:59,280 Speaker 1: markets every fifteen minutes throughout the trading day on bloomberg 213 00:12:59,600 --> 00:13:01,520 Speaker 1: S and p even the future is down twenty five 214 00:13:01,520 --> 00:13:03,720 Speaker 1: points and now even the futures down two hundred four 215 00:13:04,000 --> 00:13:06,960 Speaker 1: nasadac eveny futures down eighty four. The dacks in Germany's 216 00:13:07,000 --> 00:13:09,880 Speaker 1: down two point seven percent. Ten your treasury of five 217 00:13:09,920 --> 00:13:13,160 Speaker 1: thirty seconds, the yield one point one percent. Nimex screwn 218 00:13:13,200 --> 00:13:15,640 Speaker 1: oil down two point three percent, or seventy two cents 219 00:13:15,640 --> 00:13:18,679 Speaker 1: at thirty dollars, seventeen cents of arrow comes gold up 220 00:13:18,720 --> 00:13:21,040 Speaker 1: one point seven percent or not ten dollars not ey 221 00:13:21,040 --> 00:13:24,400 Speaker 1: cents to eleven seventy seven fifty ounce the euro at 222 00:13:24,400 --> 00:13:28,120 Speaker 1: dollar eleven seventeen then one sixteen point four one, And 223 00:13:28,200 --> 00:13:31,640 Speaker 1: that's a Blueberg business flash. Tom Karen, thanks so much. 224 00:13:31,720 --> 00:13:34,280 Speaker 1: Louise's in gallis with us making a visit to New York, 225 00:13:34,320 --> 00:13:38,120 Speaker 1: and we are always advantage when he does that. His book, 226 00:13:38,160 --> 00:13:40,520 Speaker 1: A Capitalism for the People is one of my favorites. 227 00:13:40,520 --> 00:13:42,959 Speaker 1: He has many books out look at that at Amazon, 228 00:13:43,000 --> 00:13:46,360 Speaker 1: but A Capitalism for the People um is an important book. 229 00:13:46,400 --> 00:13:48,800 Speaker 1: Are we getting that in the campaign. Are we getting 230 00:13:48,800 --> 00:13:53,280 Speaker 1: a discussion of how business dovetails in for the people 231 00:13:53,600 --> 00:13:56,680 Speaker 1: or is it all hot air. No, I think that 232 00:13:56,920 --> 00:13:59,520 Speaker 1: we have a serious debate. In fact, I think I 233 00:13:59,720 --> 00:14:02,360 Speaker 1: will the book four years too early, because I think 234 00:14:02,400 --> 00:14:06,360 Speaker 1: that I woted just before the previous presidential cycles, and 235 00:14:06,440 --> 00:14:10,079 Speaker 1: nobody was discussing these issues. And and now everybody is 236 00:14:10,120 --> 00:14:14,600 Speaker 1: discussing these issues, both both the right and the left. Okay, 237 00:14:14,640 --> 00:14:17,960 Speaker 1: so the issues there's going to stay, whether a feature 238 00:14:17,960 --> 00:14:21,640 Speaker 1: of the primaries along, I think it's gonna stay there. 239 00:14:21,880 --> 00:14:28,360 Speaker 1: I think that we see how much demand that is 240 00:14:28,840 --> 00:14:32,760 Speaker 1: for an independent candidate on both sides of the political spectrum. 241 00:14:32,840 --> 00:14:35,840 Speaker 1: I think that if we look, basically, fifty of the 242 00:14:36,000 --> 00:14:41,600 Speaker 1: publicans and of the Democrats are unhappy with establishment candidates. 243 00:14:41,960 --> 00:14:46,680 Speaker 1: So I think that this is a sense of revolt 244 00:14:46,920 --> 00:14:50,080 Speaker 1: that is much broader than we've seen the past, and 245 00:14:50,160 --> 00:14:54,120 Speaker 1: I think we will manifest itself also in the presidential 246 00:14:54,160 --> 00:14:56,480 Speaker 1: election and after that, and the time we've got left, 247 00:14:56,520 --> 00:14:58,360 Speaker 1: I've got to go over to your Italy. I was 248 00:14:58,480 --> 00:15:02,240 Speaker 1: shocked this morning. You're called means on Italian banks. We 249 00:15:02,760 --> 00:15:08,000 Speaker 1: have done terrific reporting at Bloomberg News. Um um the 250 00:15:08,160 --> 00:15:12,800 Speaker 1: smaller Italian banks. Tell me the state of Italian brand 251 00:15:12,920 --> 00:15:15,040 Speaker 1: banks and what that means for the rest of Europe. 252 00:15:16,440 --> 00:15:19,920 Speaker 1: So I will distinguish between the largest two banks in 253 00:15:20,080 --> 00:15:24,080 Speaker 1: taste unique credit that are European in every sense of 254 00:15:24,120 --> 00:15:28,040 Speaker 1: the world, especially unique credit. Um with the rest of 255 00:15:28,120 --> 00:15:32,080 Speaker 1: the Italian banks. Many of them are small, the governors 256 00:15:32,120 --> 00:15:37,280 Speaker 1: of them is terrible, and they specialize in lending to 257 00:15:38,400 --> 00:15:43,920 Speaker 1: the local economy. They often friends and family, and they 258 00:15:43,960 --> 00:15:48,600 Speaker 1: have been They are basically brought down by the perfect 259 00:15:48,640 --> 00:15:52,040 Speaker 1: store because Italy has been in more or less and 260 00:15:52,040 --> 00:15:54,560 Speaker 1: the especially for the last seven years. So every bank 261 00:15:54,640 --> 00:15:56,680 Speaker 1: will find a banking system will find it difficult to 262 00:15:56,720 --> 00:15:59,120 Speaker 1: survive to that. How do they clear? That's what I 263 00:15:59,160 --> 00:16:01,080 Speaker 1: don't get. I mean, if we look at hiak or 264 00:16:01,200 --> 00:16:05,160 Speaker 1: frank now you know the Chicago view markets clear, how 265 00:16:05,240 --> 00:16:10,880 Speaker 1: does European banking and particularly non headline European banking clear. 266 00:16:12,480 --> 00:16:15,920 Speaker 1: I think that they need to raise more capital. I 267 00:16:16,000 --> 00:16:20,680 Speaker 1: think that the Wenzier form of the popular banks helps 268 00:16:20,760 --> 00:16:24,520 Speaker 1: in that direction. I'm not so sure that they will 269 00:16:24,520 --> 00:16:27,760 Speaker 1: be able to raise enough capital to to proceed. Um. 270 00:16:28,160 --> 00:16:32,880 Speaker 1: I think that there might be some need for an 271 00:16:32,960 --> 00:16:38,520 Speaker 1: Italian version of top an Italian version of European version. 272 00:16:38,960 --> 00:16:42,520 Speaker 1: I mean, we'll always see this morning futures negative yields 273 00:16:42,600 --> 00:16:46,960 Speaker 1: in the German two year negative point five, and you 274 00:16:47,040 --> 00:16:49,560 Speaker 1: know the negative rates get more negative. We've heard from 275 00:16:49,600 --> 00:16:53,240 Speaker 1: each gas that has profound influence. I think that the 276 00:16:53,320 --> 00:16:55,840 Speaker 1: banking situation is different from county to country. I think 277 00:16:55,880 --> 00:16:59,120 Speaker 1: Portugal is the most similar to Italy because they did 278 00:16:59,160 --> 00:17:01,840 Speaker 1: not went to a with capitalization, and we have seen 279 00:17:01,880 --> 00:17:05,040 Speaker 1: in December when they had some form of bail in 280 00:17:05,200 --> 00:17:09,000 Speaker 1: selected bailing of bonds. That was a disaster from a 281 00:17:09,440 --> 00:17:13,520 Speaker 1: sort of public relation point of view and from spreading 282 00:17:13,560 --> 00:17:16,200 Speaker 1: the fear in the entire European system. It's just you 283 00:17:16,280 --> 00:17:18,600 Speaker 1: don't know who is brought in, who has brought out, 284 00:17:19,280 --> 00:17:21,360 Speaker 1: or bailin and bail out. I think that that's that's 285 00:17:21,400 --> 00:17:25,040 Speaker 1: a very high level of uncertainty. Um. I think that 286 00:17:25,560 --> 00:17:31,600 Speaker 1: in France banks are too lightly capitalized. You need more capitalization. 287 00:17:31,680 --> 00:17:34,040 Speaker 1: I think Spain is doing better. Where's the cash call 288 00:17:34,119 --> 00:17:36,840 Speaker 1: in Europe? I mean we just assume in America, if 289 00:17:36,920 --> 00:17:41,000 Speaker 1: any bank of any ability once cash, they literally do 290 00:17:41,119 --> 00:17:43,840 Speaker 1: a syndicate, just to use a broad phrase, they make 291 00:17:43,920 --> 00:17:46,639 Speaker 1: six or seven phone calls to major institutions and the 292 00:17:46,720 --> 00:17:50,080 Speaker 1: deal gets done. Do you have that same belief in 293 00:17:50,240 --> 00:17:54,040 Speaker 1: European banking I don't. I think that part of it 294 00:17:54,280 --> 00:17:57,720 Speaker 1: is the lack of well in in the United States. 295 00:17:58,160 --> 00:18:00,320 Speaker 1: Banks raise a lot of money when they know there 296 00:18:00,520 --> 00:18:03,640 Speaker 1: was either I put you so of some top honey, 297 00:18:03,760 --> 00:18:06,879 Speaker 1: or you keep the top honey with very strong conditions, 298 00:18:07,240 --> 00:18:09,560 Speaker 1: or you raise money on your own. And surprise, surprise, 299 00:18:09,640 --> 00:18:13,120 Speaker 1: the banks did raise money. And in you, they've never 300 00:18:13,200 --> 00:18:16,600 Speaker 1: been put in front of this tough choice. And if 301 00:18:16,640 --> 00:18:18,960 Speaker 1: they were to be put I think the vast majority 302 00:18:19,000 --> 00:18:22,080 Speaker 1: will find the money, and there a small minority will 303 00:18:22,119 --> 00:18:26,680 Speaker 1: be sort of help by by a flux of government money. 304 00:18:28,040 --> 00:18:30,280 Speaker 1: One final question, let's go back to you know what 305 00:18:30,400 --> 00:18:34,640 Speaker 1: you're famous for, which is rekindling American spirit and government 306 00:18:35,080 --> 00:18:39,840 Speaker 1: help us find a new American spirit. I think that 307 00:18:40,560 --> 00:18:45,320 Speaker 1: there should be number one, a campaign finance reform. Without that, 308 00:18:45,480 --> 00:18:48,240 Speaker 1: I think that it would be very difficult to for 309 00:18:48,400 --> 00:18:52,960 Speaker 1: any government to find a new spirit. And and after 310 00:18:53,080 --> 00:18:56,159 Speaker 1: that we can start discussing about what the role of 311 00:18:56,240 --> 00:18:58,680 Speaker 1: the government and where the government should get out. But 312 00:18:58,720 --> 00:19:01,080 Speaker 1: there was the if you the philological in the New 313 00:19:01,200 --> 00:19:03,560 Speaker 1: York Times a couple of days ago about thecau Cilative 314 00:19:03,640 --> 00:19:07,480 Speaker 1: case for campaign finance with Holme, and he was saying 315 00:19:07,720 --> 00:19:11,600 Speaker 1: that if you have a big campaign donors, you're gonna 316 00:19:11,640 --> 00:19:14,960 Speaker 1: have big government, and you're gonna have a corrupt government 317 00:19:15,160 --> 00:19:17,960 Speaker 1: that that favors wound investors. Yet, so I don't think 318 00:19:18,000 --> 00:19:20,440 Speaker 1: you can change the system if you don't change the 319 00:19:20,480 --> 00:19:24,280 Speaker 1: campaign financing. Luisi, you gotta leave. Futures are deteriorating because 320 00:19:24,280 --> 00:19:26,800 Speaker 1: you're you're talking to markets down. So you gotta, you gotta, 321 00:19:27,040 --> 00:19:29,640 Speaker 1: you gotta leave Luisions and galls with his folks from Chicago, 322 00:19:30,080 --> 00:19:32,600 Speaker 1: his book of Capitalism for the people. I can't can 323 00:19:32,680 --> 00:19:37,959 Speaker 1: they how illuminating it is, particularly for the younger acrew 324 00:19:38,040 --> 00:19:42,080 Speaker 1: futures negative twenty eight now negative twenty seven. Dow futures 325 00:19:42,160 --> 00:19:45,560 Speaker 1: at negative to twelve tenure yield the four digits. I 326 00:19:45,680 --> 00:19:50,159 Speaker 1: just had a one eighty handle one one sixteen West Texas. 327 00:19:50,240 --> 00:19:51,920 Speaker 1: We don't get to a twenty nine handle. Let me 328 00:19:52,000 --> 00:19:57,119 Speaker 1: double check that here right now, um, West Texas in 329 00:19:57,160 --> 00:20:00,560 Speaker 1: remediate the loaf for the day thirty point zero zero. 330 00:20:00,680 --> 00:20:07,439 Speaker 1: Stay with us. Bloomberg Surveillance Bloomberg Surveillance s wanted by 331 00:20:07,480 --> 00:20:10,119 Speaker 1: sector Spider e T S. Why by a single stick 332 00:20:10,359 --> 00:20:12,880 Speaker 1: when you can invest in the entire sector? Visit center 333 00:20:13,080 --> 00:20:15,800 Speaker 1: s P d RS dot com or Callum one six 334 00:20:16,160 --> 00:20:25,879 Speaker 1: sector e t M broadcasting live to New York, Bloomberg 335 00:20:25,960 --> 00:20:31,240 Speaker 1: eleventh to Washington, d C, Bloomberg to Boston, Bloomberg twelve 336 00:20:31,359 --> 00:20:35,800 Speaker 1: hundreds to San Francisco, Bloomberg to the country, Series X 337 00:20:36,119 --> 00:20:39,520 Speaker 1: Channel one ninety and around the globe. The Bloomberg Radio 338 00:20:39,680 --> 00:20:44,760 Speaker 1: must happened Bloomberg dot Com. This is Bloomberg Surveillance. Good morning, 339 00:20:44,840 --> 00:20:48,440 Speaker 1: seven Wall Street on John Tucker where two hours away 340 00:20:48,440 --> 00:20:50,600 Speaker 1: from the opening deal. Let's catch you updated on the 341 00:20:50,640 --> 00:20:53,480 Speaker 1: news you need to know. Another down day for the 342 00:20:53,520 --> 00:20:57,120 Speaker 1: market's US futures lower following last week's three percent declined 343 00:20:57,160 --> 00:20:59,720 Speaker 1: for the S and P five hundred. European stocks are 344 00:20:59,760 --> 00:21:02,760 Speaker 1: down for a sixth day. The cost of protecting European 345 00:21:02,880 --> 00:21:05,960 Speaker 1: banks and insures senior debt is on the worst run 346 00:21:06,040 --> 00:21:10,439 Speaker 1: since March of and yields on Germany's tenure buns are 347 00:21:10,520 --> 00:21:14,399 Speaker 1: the lowest since April. And oil is lower for a 348 00:21:14,560 --> 00:21:18,040 Speaker 1: third day. We have Brent crude right now down fifty 349 00:21:18,119 --> 00:21:21,920 Speaker 1: seven cents a barrel at thirty and nimex crew down 350 00:21:22,000 --> 00:21:25,040 Speaker 1: eighty cents a barrel at thirty dollars eight cents of 351 00:21:25,160 --> 00:21:28,800 Speaker 1: barrel one on Wall Streets and let's get an update 352 00:21:28,840 --> 00:21:31,280 Speaker 1: on it was from around the world. We say good 353 00:21:31,320 --> 00:21:35,000 Speaker 1: morning to Michael Barre, Good morning John. Presidential caninettes are 354 00:21:35,040 --> 00:21:38,680 Speaker 1: making their final push before tomorrow's New Hampshire primary. Democrat 355 00:21:38,800 --> 00:21:41,960 Speaker 1: Bernie Sanders leads rival Hillary Clinton in polls in the state. 356 00:21:42,480 --> 00:21:46,200 Speaker 1: For the Republicans, Donald Trump continues to lead in polls. Meanwhile, 357 00:21:46,240 --> 00:21:49,560 Speaker 1: New Jersey Governor Chris Christie was asked about the qualities 358 00:21:49,680 --> 00:21:52,840 Speaker 1: he would look for in the Supreme Court justice during 359 00:21:52,880 --> 00:21:55,960 Speaker 1: a town hall in Hampton, New Hampshire last night. Vin 360 00:21:56,040 --> 00:21:59,439 Speaker 1: to Christie said Justice Samuel Alito is a good example 361 00:21:59,520 --> 00:22:01,239 Speaker 1: of the type. Eat a point to the court. If 362 00:22:01,280 --> 00:22:03,280 Speaker 1: you want to know what kind of justices I would appoint, 363 00:22:03,800 --> 00:22:06,440 Speaker 1: read family of this opinions, look at his history. That's 364 00:22:06,480 --> 00:22:09,440 Speaker 1: the kind of guy I would appoint. A quiet, consistent conservative. 365 00:22:09,960 --> 00:22:13,080 Speaker 1: President Obama says he's not surprised that North Korea launched 366 00:22:13,119 --> 00:22:15,919 Speaker 1: a long range rocket over the weekend. It comes as 367 00:22:15,960 --> 00:22:20,440 Speaker 1: the UN Security Council condemned the rocket test. German Chancellor 368 00:22:20,520 --> 00:22:23,960 Speaker 1: Angela Merkel and Turkeys Preme Minister have held more talks 369 00:22:24,000 --> 00:22:27,320 Speaker 1: on reducing the influx of migrants to Europe. Turkey faces 370 00:22:27,359 --> 00:22:30,000 Speaker 1: pressure from the EU to open its border to up 371 00:22:30,040 --> 00:22:34,320 Speaker 1: to thirty five thousand Syrians fleeing an onslaught buying government forces. 372 00:22:34,720 --> 00:22:37,640 Speaker 1: Global News twenty four hours a day, powered by our 373 00:22:38,080 --> 00:22:40,480 Speaker 1: four hundred journalists and more than a hundred fifty news 374 00:22:40,560 --> 00:22:45,600 Speaker 1: bureaus from around the world. On Michaelabar, John thanks who 375 00:22:45,640 --> 00:22:47,680 Speaker 1: hold Ball Street now with the Bloomberg in vy see 376 00:22:47,680 --> 00:22:52,280 Speaker 1: sports up date John Stasure. There was a game yesterday, Yeah, yeah, 377 00:22:52,440 --> 00:22:56,120 Speaker 1: Super Bowl fifty stream Super Bowl because the Denver Broncos 378 00:22:56,119 --> 00:22:58,400 Speaker 1: and we had eleven first downs, only a hundred ninety 379 00:22:58,440 --> 00:23:01,359 Speaker 1: four yards of offense, one for fourteen on third down, 380 00:23:01,800 --> 00:23:05,840 Speaker 1: but their defense sensational, forcing fourth Carolina turnovers. Broncos had 381 00:23:05,920 --> 00:23:09,479 Speaker 1: seven sacks held down the high scoring Panthers, who were 382 00:23:09,480 --> 00:23:13,360 Speaker 1: the number one NFL's offensive team. Broncos win Super Bowl 383 00:23:13,440 --> 00:23:16,879 Speaker 1: fifty twenty four to ten. Von Miller named m v 384 00:23:17,000 --> 00:23:20,040 Speaker 1: P all over the field. He forced the two key 385 00:23:20,119 --> 00:23:22,159 Speaker 1: fumbles of the game, the one that resulted in the 386 00:23:22,240 --> 00:23:24,399 Speaker 1: Denver touchdown and the one that sealed the win. At 387 00:23:24,440 --> 00:23:27,679 Speaker 1: the end. Peyton Manning modest numbers a couple of turnovers himself, 388 00:23:27,720 --> 00:23:30,000 Speaker 1: but a Super Bowl champion for the second time and 389 00:23:30,040 --> 00:23:33,359 Speaker 1: has expected. Many shied away from questions over whether this 390 00:23:33,480 --> 00:23:35,720 Speaker 1: was his final game, but if it was, he finishes 391 00:23:35,840 --> 00:23:40,000 Speaker 1: with exactly two hundred victories at the Garden Nuggets be 392 00:23:40,040 --> 00:23:42,080 Speaker 1: at the next one oh one to nineties six. That's 393 00:23:42,119 --> 00:23:44,560 Speaker 1: five straight losses for New York nine and the last ten. 394 00:23:44,640 --> 00:23:47,160 Speaker 1: Carmelo Anthony missed the late three that would have tied 395 00:23:47,240 --> 00:23:50,440 Speaker 1: the game at the Barkeley Center, all Islanders eight to 396 00:23:50,560 --> 00:23:53,800 Speaker 1: one over Edmonton at Echi Matziyama won the Phoenix, opening 397 00:23:53,840 --> 00:23:57,240 Speaker 1: the playoff with Ricky Fallothie Bloomberg NBC Sports Update, I'm 398 00:23:57,280 --> 00:24:00,560 Speaker 1: John Stashnower. Alright, thanks John, handed the mark get open 399 00:24:01,160 --> 00:24:03,800 Speaker 1: on Wall Street. We have the futures. They are lower 400 00:24:04,280 --> 00:24:07,119 Speaker 1: across the board, A, S and B futures down twenty 401 00:24:07,160 --> 00:24:09,439 Speaker 1: four points. That's done one point three percent. That as 402 00:24:09,520 --> 00:24:12,320 Speaker 1: deck at futures they're down eighty five right now, that's 403 00:24:12,320 --> 00:24:15,040 Speaker 1: down two point one percent. The down futures done one 404 00:24:15,560 --> 00:24:18,520 Speaker 1: and ninety three, one point two percent lower. This as 405 00:24:18,600 --> 00:24:22,040 Speaker 1: a Europe was also declining. The footsie in London down 406 00:24:22,119 --> 00:24:25,159 Speaker 1: one point nine percent, in Paris, the Kak down two 407 00:24:25,200 --> 00:24:28,040 Speaker 1: point four percent, and the German decks right now two 408 00:24:28,119 --> 00:24:32,359 Speaker 1: point six percent lower. You're listening to Bloomberg surveillance on 409 00:24:32,760 --> 00:24:43,680 Speaker 1: Bloomberg Radio and Bloomberg surveillance continues with Tom Keane Michael 410 00:24:43,720 --> 00:24:46,359 Speaker 1: McKee taking the day off today turned out for the 411 00:24:46,359 --> 00:24:49,560 Speaker 1: Bloomberg n j I T STEM report is being blunted 412 00:24:49,600 --> 00:24:54,159 Speaker 1: by New Jersey Institute of Technology. New Jersey Institute of 413 00:24:54,240 --> 00:24:58,119 Speaker 1: Technology partnering with government in industry to apply the university's 414 00:24:58,160 --> 00:25:02,120 Speaker 1: world class research assets to innovate and spur economic growth. 415 00:25:02,280 --> 00:25:05,159 Speaker 1: Learn more at n j I T dot e d 416 00:25:05,359 --> 00:25:09,399 Speaker 1: U hackers used malware to penetrate the defenses of a 417 00:25:09,480 --> 00:25:13,120 Speaker 1: Russian regional bank and move the ruble dollar rate more 418 00:25:13,280 --> 00:25:17,320 Speaker 1: than fifteen percent in minutes. This according to a Moscow 419 00:25:17,400 --> 00:25:21,359 Speaker 1: based cybersecurity firm hired to investigate the attack. Russian language 420 00:25:21,400 --> 00:25:24,720 Speaker 1: hackers deployed a virus known as core code trojan to 421 00:25:24,880 --> 00:25:27,879 Speaker 1: infect Cousin based Earn Good Bank in place more than 422 00:25:28,000 --> 00:25:31,240 Speaker 1: five hundred million dollars in orders at non market rates 423 00:25:31,359 --> 00:25:35,680 Speaker 1: in February of This is according to group I'd be 424 00:25:35,960 --> 00:25:41,040 Speaker 1: telling Bloomberg without identifying individuals behind that attack. A British 425 00:25:41,200 --> 00:25:44,240 Speaker 1: fuel cell developer that was first to put the technology, 426 00:25:44,320 --> 00:25:48,400 Speaker 1: harnessing the power of hydrogen into London's distinctive black cab 427 00:25:48,840 --> 00:25:50,480 Speaker 1: so that it's working now in a system that would 428 00:25:50,480 --> 00:25:53,640 Speaker 1: allow mobile phone users to charge just once a week. 429 00:25:54,119 --> 00:25:58,560 Speaker 1: Intelligent Energy Holdings as an emerging smartphone maker, will provide 430 00:25:58,600 --> 00:26:01,040 Speaker 1: seven point six million dollars to have helped a fuel 431 00:26:01,119 --> 00:26:05,119 Speaker 1: cell small enough to be embedded in mobile phones. And 432 00:26:05,320 --> 00:26:09,720 Speaker 1: that is this morning's Bloomberg n j I T standardport 433 00:26:10,119 --> 00:26:13,959 Speaker 1: now Black back to Bloomberg Surveillance Tom Keane. Last day 434 00:26:13,960 --> 00:26:21,320 Speaker 1: I saw Michael McKee. His face was orange. Folks, if 435 00:26:21,359 --> 00:26:23,360 Speaker 1: you have a noticed, Mr McKee is out out out. 436 00:26:23,440 --> 00:26:26,200 Speaker 1: This was scheduled months ago when he knew that Brackos 437 00:26:26,240 --> 00:26:29,400 Speaker 1: would go all the way. But Mr we said good 438 00:26:29,440 --> 00:26:32,720 Speaker 1: morning to Michael mckeefe's listening uh in support of his 439 00:26:33,440 --> 00:26:36,440 Speaker 1: Denver Brackos. We did. I want to book Limby Cantrell 440 00:26:36,480 --> 00:26:41,840 Speaker 1: of Pimco, but her people said she was not available either. 441 00:26:43,280 --> 00:26:48,199 Speaker 1: Oil breaking down below thirty. I don't want to make 442 00:26:48,240 --> 00:26:51,080 Speaker 1: too much of it, but nevertheless itself with a vengeance 443 00:26:51,119 --> 00:26:56,960 Speaker 1: of thirty one change down to over the last three 444 00:26:57,000 --> 00:27:01,520 Speaker 1: and a half hours, the US two year yield and 445 00:27:01,680 --> 00:27:05,240 Speaker 1: point uh two in two basis points point six nine 446 00:27:05,960 --> 00:27:09,080 Speaker 1: eight one it is a very good time always from 447 00:27:09,119 --> 00:27:13,800 Speaker 1: Credit Agricole to speak of Valentine Mironov, but particularly important 448 00:27:13,840 --> 00:27:18,080 Speaker 1: this morning with the euro tinge two things, Valentine, good 449 00:27:18,119 --> 00:27:20,760 Speaker 1: to catch up with you. How much of the angst 450 00:27:20,840 --> 00:27:24,800 Speaker 1: this morning is euro angst? Uh? Well, I mean it 451 00:27:25,040 --> 00:27:27,840 Speaker 1: is the case that there is some part of it, 452 00:27:28,000 --> 00:27:30,720 Speaker 1: but overall, uh, it is the case that the euro 453 00:27:31,040 --> 00:27:34,480 Speaker 1: is uh certainly benefiting from the overall risk of movement 454 00:27:34,560 --> 00:27:37,240 Speaker 1: in the market. So so if anything, the euro coming 455 00:27:37,320 --> 00:27:41,240 Speaker 1: off there has to do with the ongoing migrant crisis 456 00:27:41,359 --> 00:27:44,439 Speaker 1: we're having in the EU of the whole, and if 457 00:27:44,440 --> 00:27:46,920 Speaker 1: anything concerns that, So the euro is very much in 458 00:27:46,960 --> 00:27:49,680 Speaker 1: the line of fire for the cb mall may come 459 00:27:49,760 --> 00:27:51,359 Speaker 1: from them before long. I don't want to get you 460 00:27:51,400 --> 00:27:55,399 Speaker 1: in trouble with Credit Agricol legal it's completely inappropriate for 461 00:27:55,480 --> 00:27:58,000 Speaker 1: you to talk about the bank or even French banking. 462 00:27:58,520 --> 00:28:01,000 Speaker 1: But but what is it? What we've the female morning 463 00:28:01,119 --> 00:28:05,720 Speaker 1: for us has been the fragility of clearing markets in Europe. 464 00:28:06,200 --> 00:28:08,320 Speaker 1: Is that true that the lack of liquidity is there, 465 00:28:08,680 --> 00:28:11,120 Speaker 1: or the lack of trust or the lack of unable 466 00:28:11,160 --> 00:28:15,880 Speaker 1: to find a bid, uncertain instruments? Is that there this morning. Well, 467 00:28:15,920 --> 00:28:18,040 Speaker 1: there is some part of that and that explains how 468 00:28:18,080 --> 00:28:21,080 Speaker 1: to the under performance of the banking stocks. It is 469 00:28:21,160 --> 00:28:24,880 Speaker 1: the case that was the measures of banking liquidity strains 470 00:28:25,080 --> 00:28:28,520 Speaker 1: like like basis swaps have been correcting higher. That is, 471 00:28:28,680 --> 00:28:32,240 Speaker 1: the spread to the dollar was correcting here later in 472 00:28:32,280 --> 00:28:35,520 Speaker 1: the last year. That renewed wide and increasing at the 473 00:28:35,560 --> 00:28:37,399 Speaker 1: start of the year. Could be an indication that there 474 00:28:37,520 --> 00:28:40,160 Speaker 1: is some demand for for for for cash and indeed 475 00:28:40,240 --> 00:28:43,800 Speaker 1: liquidity concerns are on the rise. I mean the liquidity 476 00:28:43,840 --> 00:28:47,240 Speaker 1: consider a horizon and the euro confounds the parody crew. 477 00:28:47,600 --> 00:28:51,280 Speaker 1: What is your call now on euro and by that 478 00:28:51,600 --> 00:28:54,960 Speaker 1: on dollar strength or weakness. Well, it depends only on 479 00:28:55,000 --> 00:28:57,479 Speaker 1: the horizon. But if anything, we believe that so long 480 00:28:57,560 --> 00:29:01,800 Speaker 1: as the divergence straight remains in place, that is, effectively 481 00:29:02,160 --> 00:29:04,840 Speaker 1: people believe that the fat will hike at some point 482 00:29:05,200 --> 00:29:08,040 Speaker 1: later this year. But at the same time the ECB 483 00:29:08,160 --> 00:29:11,400 Speaker 1: will continue to ease. That will continue to encourage demand 484 00:29:11,760 --> 00:29:15,400 Speaker 1: for euro funding. That is, foreigners coming to the Eurozone 485 00:29:15,400 --> 00:29:18,360 Speaker 1: board in euros and then selling euros and repaying they're 486 00:29:18,560 --> 00:29:23,680 Speaker 1: already quite expensive dollar debt. We saw that happening last year. Actually, 487 00:29:23,760 --> 00:29:26,800 Speaker 1: that total amount of issues grew to ninety billion, up 488 00:29:26,840 --> 00:29:31,120 Speaker 1: from sixty billion in fourteen. We expect that demand to continue. 489 00:29:31,320 --> 00:29:33,920 Speaker 1: So and as the investors continue to come to Europe 490 00:29:33,960 --> 00:29:37,479 Speaker 1: and indeed borrowing euros, sell the euros to and buy dollars, 491 00:29:37,800 --> 00:29:41,680 Speaker 1: the downside pressure on euro dollars should remain in place. 492 00:29:41,920 --> 00:29:46,120 Speaker 1: If anything, the ECB will continue to encourage that inflow 493 00:29:46,400 --> 00:29:49,520 Speaker 1: or demand for euro funding by cutting rates further, potentially 494 00:29:49,560 --> 00:29:52,320 Speaker 1: as soon as March, and potentially even further still later 495 00:29:52,400 --> 00:29:56,640 Speaker 1: in the year, and by adding to its existing quee program. 496 00:29:56,840 --> 00:29:59,720 Speaker 1: At the same time, I think that the FAT is 497 00:29:59,800 --> 00:30:02,720 Speaker 1: on course to high crate further if anything. Going into 498 00:30:02,800 --> 00:30:07,560 Speaker 1: the UH the FAT chairs testimony on Wednesday Thursday, I 499 00:30:07,680 --> 00:30:11,480 Speaker 1: think that UH the chair yelling will highlight the fact that, 500 00:30:11,880 --> 00:30:15,240 Speaker 1: if anything whole, the FET is watching, monitoring closely the 501 00:30:15,360 --> 00:30:17,840 Speaker 1: tightening in the global financial conditions on the back of 502 00:30:17,960 --> 00:30:20,720 Speaker 1: China and other concerns. It is the case that historic 503 00:30:20,800 --> 00:30:23,880 Speaker 1: evidence has been that such parts of uncertainly only temporary 504 00:30:24,000 --> 00:30:26,480 Speaker 1: impact on the recovery. By implication, the FET is in 505 00:30:26,560 --> 00:30:30,680 Speaker 1: a weight and see mode, not necessarily abandoning any hikes completely. 506 00:30:30,760 --> 00:30:33,160 Speaker 1: So against this background, how to expect that the euro 507 00:30:33,280 --> 00:30:36,400 Speaker 1: dolla native to continue. So hence euro dolla negative and 508 00:30:36,480 --> 00:30:39,120 Speaker 1: Valentin Marinov where US credit agricol as we looked at 509 00:30:39,160 --> 00:30:41,920 Speaker 1: Europe particularly this morning. Let me do an extended data check. 510 00:30:41,960 --> 00:30:43,840 Speaker 1: We look at equities, bonds, currencies. Come out of these 511 00:30:43,880 --> 00:30:47,560 Speaker 1: futures negative six down, futures negative two or nine under 512 00:30:48,200 --> 00:30:51,160 Speaker 1: sixteen thousand or four digits to tenure one point eight 513 00:30:51,280 --> 00:30:54,280 Speaker 1: zero six four or two years under a point seven 514 00:30:54,880 --> 00:30:58,480 Speaker 1: to four digits point six nine eight one. All you 515 00:30:58,600 --> 00:31:03,920 Speaker 1: need to know NIMEX thing recent lows, not record lows 516 00:31:05,560 --> 00:31:08,320 Speaker 1: down a dollar four in West Texas, Brent does better 517 00:31:08,440 --> 00:31:12,400 Speaker 1: thirty three twenty three down eighty three. Since Michael McKee 518 00:31:13,680 --> 00:31:17,920 Speaker 1: is off in celebration of Peyton, we're here. It's Bloomberg surveillance. 519 00:31:21,200 --> 00:31:23,480 Speaker 1: Surveillance brought to you by your Mercedes Benz trying to 520 00:31:23,480 --> 00:31:25,320 Speaker 1: state dealer. When it comes to winterry, I want it 521 00:31:25,360 --> 00:31:28,440 Speaker 1: split your best poor wheels forward with Mercedes Spens formatical 522 00:31:28,480 --> 00:31:31,560 Speaker 1: wheel drive. Visit your Mercedes bens trying state dealer for 523 00:31:31,800 --> 00:31:39,520 Speaker 1: a test drive. Today. Global Business News twenty four hours 524 00:31:39,600 --> 00:31:42,720 Speaker 1: a day at Bloomberg dot com, the Radio plus Mobile 525 00:31:42,760 --> 00:31:46,000 Speaker 1: Act and on your radio. This is a Bloomberg Business 526 00:31:46,080 --> 00:31:48,880 Speaker 1: Flash and I'm Karen Moscow. This updates brought to you 527 00:31:49,040 --> 00:31:52,360 Speaker 1: by cbo E VIX Options and Futures. Volatility can be 528 00:31:52,880 --> 00:31:56,360 Speaker 1: Volatility can be harnessed with cbo E VIS Options and Futures. 529 00:31:56,600 --> 00:31:59,240 Speaker 1: See disclosures and learn more at cbo E dot com. 530 00:31:59,360 --> 00:32:03,080 Speaker 1: Slash power or full Outcomes. VIX Vesty A Group and 531 00:32:03,160 --> 00:32:05,960 Speaker 1: other investors are great to buy Apolo Education Group for 532 00:32:06,080 --> 00:32:08,560 Speaker 1: one point one billion dollars in cash and take the 533 00:32:08,720 --> 00:32:12,480 Speaker 1: education company private. Apollo is up almost twenty seven percent 534 00:32:12,560 --> 00:32:15,880 Speaker 1: in early trading. Hasbro posting fourth quarter profit that beat 535 00:32:15,880 --> 00:32:19,280 Speaker 1: analysts estimates after demand for Star Wars and Jamassic Jurassic 536 00:32:19,400 --> 00:32:23,760 Speaker 1: World merchandise boosted sales. Futures this morning are following SNP 537 00:32:23,960 --> 00:32:26,720 Speaker 1: EVENI futures are down about thirty points now E Many 538 00:32:26,800 --> 00:32:30,320 Speaker 1: futures down two hundred thirty seven, NASDAC EUNI futures down 539 00:32:30,440 --> 00:32:33,520 Speaker 1: ninety nine. The decks in Germany's down two point nine percent, 540 00:32:33,960 --> 00:32:35,880 Speaker 1: so is the CACK in Paris, while the FT one 541 00:32:35,960 --> 00:32:38,760 Speaker 1: hundred is falling two point two percent. Ten year Treasury 542 00:32:38,840 --> 00:32:41,480 Speaker 1: up eleven thirty seconds. The yelled one point seven nine 543 00:32:41,560 --> 00:32:44,360 Speaker 1: percent yield on the two year point six eight percent. 544 00:32:44,760 --> 00:32:47,600 Speaker 1: NIMEX screwed oil dropping down three point six percent or 545 00:32:47,640 --> 00:32:50,400 Speaker 1: a dollar ten now at twenty nine dollars seventy nine 546 00:32:50,560 --> 00:32:53,880 Speaker 1: cents of barrel comes. Gold is up two point two percent, 547 00:32:54,000 --> 00:32:56,560 Speaker 1: or twenty five dollars thirty cents to eleven two ninety 548 00:32:56,560 --> 00:32:59,400 Speaker 1: announced the euro and dollar eleven twenty four the end 549 00:32:59,440 --> 00:33:02,920 Speaker 1: one sixty point to one. That's a Bloomberg business flash 550 00:33:03,000 --> 00:33:05,720 Speaker 1: to yeah, Karen, real market. Nice data check their Karen 551 00:33:05,760 --> 00:33:09,080 Speaker 1: Moscow with our data check and real market deterioration. Little 552 00:33:09,120 --> 00:33:11,680 Speaker 1: things you see on the Bloomberg terminal negative twenty nine. 553 00:33:12,200 --> 00:33:16,600 Speaker 1: On the futures, West Texas is in ugly now twenty 554 00:33:16,720 --> 00:33:21,520 Speaker 1: nine seventy one, down a dollar seventeen, even Brents beginning 555 00:33:21,560 --> 00:33:26,520 Speaker 1: to catch up critically. The hydrocarbon currencies have yet to 556 00:33:26,680 --> 00:33:30,200 Speaker 1: go weak. That's a key follow on we haven't seen 557 00:33:30,560 --> 00:33:34,440 Speaker 1: this morning. Looney and Ruble are still relatively strong, but 558 00:33:34,600 --> 00:33:37,720 Speaker 1: ever so slightly. That could change literally in the next 559 00:33:37,800 --> 00:33:42,320 Speaker 1: fifteen Men's James Steele just publishes at HSBC. Mr Steele 560 00:33:42,360 --> 00:33:45,960 Speaker 1: reaffirms is long on gold, is optimism on gold eleven 561 00:33:46,040 --> 00:33:49,360 Speaker 1: eighty two of the ounce. Adam Parker just publishes moments 562 00:33:49,400 --> 00:33:54,080 Speaker 1: ago at Morgan Stanley, he reaffirms um along on financials, 563 00:33:54,160 --> 00:33:57,240 Speaker 1: he has underweight energy UH and says it is most 564 00:33:57,320 --> 00:34:03,400 Speaker 1: difficult out there for long shorts. He would diminish gross exposure. 565 00:34:03,480 --> 00:34:06,040 Speaker 1: That's a little bit of jargon talk there. But we 566 00:34:06,120 --> 00:34:08,200 Speaker 1: say good morning to global Wall Street. We do with 567 00:34:08,360 --> 00:34:13,120 Speaker 1: Valent and Maronov with Credit Agricole is we look at 568 00:34:13,160 --> 00:34:16,040 Speaker 1: what foreign exchange says about the rest of the markets. 569 00:34:16,480 --> 00:34:19,919 Speaker 1: Is foreign exchange valancing now about relative relative real rates 570 00:34:20,320 --> 00:34:23,320 Speaker 1: or is it about flows? Well, at the moment, it 571 00:34:23,400 --> 00:34:26,520 Speaker 1: seems that investors are focusing a bit more on flows 572 00:34:26,600 --> 00:34:29,279 Speaker 1: than the rates story. Is the case that what the 573 00:34:29,360 --> 00:34:32,840 Speaker 1: experience with the last few weeks, what's the unwinding of 574 00:34:32,960 --> 00:34:37,239 Speaker 1: the so called divergence trade, investors punishing the dollar for 575 00:34:37,400 --> 00:34:40,040 Speaker 1: out taking on motavish fed ahead. So guess it will 576 00:34:40,120 --> 00:34:42,880 Speaker 1: take some time until the rates markets start leading the 577 00:34:42,960 --> 00:34:45,960 Speaker 1: FX markets. For now, we in the correction saze we 578 00:34:46,080 --> 00:34:48,480 Speaker 1: which may have still further to go about our think 579 00:34:48,600 --> 00:34:53,279 Speaker 1: that Yellen testimony on Wednesday Thursday could indeed effectually put 580 00:34:53,320 --> 00:34:56,520 Speaker 1: an end to that. Finally, so some more really renewed 581 00:34:56,920 --> 00:34:59,920 Speaker 1: impacts from the rates markets cannot be excluded before long care, 582 00:35:00,280 --> 00:35:03,879 Speaker 1: what not will you listen for? But what does cheer 583 00:35:04,080 --> 00:35:08,160 Speaker 1: Yellen not want to say? Well, obviously she doesn't want 584 00:35:08,160 --> 00:35:10,279 Speaker 1: to scare of the market. She doesn't want to come 585 00:35:10,320 --> 00:35:13,120 Speaker 1: across a way to hawk ish, actually turning a blind 586 00:35:13,200 --> 00:35:15,760 Speaker 1: eye on what's happening, what the markets to the signal 587 00:35:15,840 --> 00:35:17,680 Speaker 1: really or dead here to the signal that the markets 588 00:35:18,000 --> 00:35:20,920 Speaker 1: are so vocally trying to send to her, really, do 589 00:35:21,040 --> 00:35:23,200 Speaker 1: not hike, do not hike. And so I guess that 590 00:35:23,320 --> 00:35:26,520 Speaker 1: what Yellen will also try not to do is at 591 00:35:26,560 --> 00:35:29,960 Speaker 1: the same time to add to that investor pessimism but 592 00:35:30,080 --> 00:35:33,440 Speaker 1: sounding way too cautious on the US economy a mistake 593 00:35:33,640 --> 00:35:35,319 Speaker 1: or indeed, if you want to call it this way, 594 00:35:35,880 --> 00:35:38,520 Speaker 1: really that she she made back in September, where her 595 00:35:38,560 --> 00:35:41,399 Speaker 1: cautiousness actually added to the risk on to the risk 596 00:35:41,440 --> 00:35:44,520 Speaker 1: of so effectively what I would expect the more balanced language, 597 00:35:44,560 --> 00:35:48,120 Speaker 1: whereby Yellen will signal confidence in the recovery, partly because 598 00:35:48,120 --> 00:35:50,880 Speaker 1: of the only temporary impact from global risk calls. And 599 00:35:51,000 --> 00:35:55,760 Speaker 1: at the same time, however, underpinning actually desire that continue 600 00:35:55,800 --> 00:35:59,880 Speaker 1: to normalize don't normalize rates when when that you and 601 00:36:00,160 --> 00:36:02,920 Speaker 1: but that said, obviously the fat clearly in wait and 602 00:36:03,000 --> 00:36:05,480 Speaker 1: see mode and awaiting a better time to really high 603 00:36:05,600 --> 00:36:07,759 Speaker 1: rate from here. One of our great interviews last week 604 00:36:07,840 --> 00:36:11,200 Speaker 1: Valentine was Stephen Short, the oil guy from Philadelphia, was 605 00:36:11,360 --> 00:36:15,960 Speaker 1: remarkably smart on US oil dynamics and then folding it 606 00:36:16,080 --> 00:36:20,920 Speaker 1: in to the international scene. He ascribed oil strength to 607 00:36:21,160 --> 00:36:25,200 Speaker 1: dollar weakness. Is the dollar weakness over and must we 608 00:36:25,400 --> 00:36:30,200 Speaker 1: look for dollar strength and oil relative weakness. Well, you 609 00:36:30,280 --> 00:36:33,399 Speaker 1: could argue that potentially if the belt does really yes, 610 00:36:33,520 --> 00:36:37,360 Speaker 1: oil could weaken somewhat. But I would argue that something 611 00:36:37,400 --> 00:36:40,960 Speaker 1: that argues against that correlation really intensifying is the fact 612 00:36:41,000 --> 00:36:44,200 Speaker 1: that oil has so much more correlated with risk correlated 613 00:36:44,320 --> 00:36:48,279 Speaker 1: upset in particular obviously Canadian dollar, n A Norwegian crown, 614 00:36:48,360 --> 00:36:50,880 Speaker 1: but also S and T and other ris correlated usets. 615 00:36:51,000 --> 00:36:54,000 Speaker 1: And I think that underpinning that correlation is the fact 616 00:36:54,080 --> 00:36:57,440 Speaker 1: that both oil and global risk assets are driven by 617 00:36:57,640 --> 00:37:01,520 Speaker 1: global demands concerns as compared to flight concerns. That's one 618 00:37:01,600 --> 00:37:04,600 Speaker 1: and two when all's selling of investors are hearing that 619 00:37:04,680 --> 00:37:07,880 Speaker 1: sovereign wealth funds or indeed central banks of all producers 620 00:37:07,960 --> 00:37:10,960 Speaker 1: are selling those afts. So by implications is the sorough 621 00:37:11,239 --> 00:37:14,319 Speaker 1: to strengthen from here? But at the same time. That's 622 00:37:14,360 --> 00:37:17,640 Speaker 1: what's happening against the background of potentially brightening up global 623 00:37:17,680 --> 00:37:20,000 Speaker 1: growth outlook, or indeed a bit a bit of a 624 00:37:20,120 --> 00:37:22,279 Speaker 1: risk bite in the risk sell I would argue that 625 00:37:22,320 --> 00:37:26,360 Speaker 1: actually all could stabilize even as the dollar was strengthened. 626 00:37:26,560 --> 00:37:29,239 Speaker 1: Net that, however, I would expect, however, that strong dollar 627 00:37:29,320 --> 00:37:32,640 Speaker 1: from here could indeed continue to undermine oil prices. For now, 628 00:37:32,960 --> 00:37:35,759 Speaker 1: what are the sovereign wealth funds doing? This seems to 629 00:37:35,840 --> 00:37:40,200 Speaker 1: be a huge mystery. Middle February. Uh well, my my 630 00:37:40,320 --> 00:37:43,360 Speaker 1: personal view here, and that's on the back of meeting 631 00:37:43,440 --> 00:37:45,879 Speaker 1: a few of them, is the fact that whereas there 632 00:37:45,960 --> 00:37:49,520 Speaker 1: is some direct stock selling their primary really venue of 633 00:37:49,760 --> 00:37:54,000 Speaker 1: really liquidating reserves or indeed reducing reserves by selling fixed income, 634 00:37:54,160 --> 00:37:56,360 Speaker 1: what is happening at the same time, however, it seems 635 00:37:56,440 --> 00:37:59,160 Speaker 1: to be a rotation now on the investor in the 636 00:37:59,200 --> 00:38:03,160 Speaker 1: investor community out away from the stocks or indeed risk 637 00:38:03,160 --> 00:38:07,160 Speaker 1: correlated assets and towards the safe haven six income assets. 638 00:38:07,200 --> 00:38:09,800 Speaker 1: So even if anything, when China or in the Saudi 639 00:38:09,840 --> 00:38:12,799 Speaker 1: Arabia are selling treasuries, there is already demand for those 640 00:38:13,080 --> 00:38:17,080 Speaker 1: securities as investors are indeed reducing the exposure to other 641 00:38:17,160 --> 00:38:20,800 Speaker 1: assets that usually under normal conditions would benefit from growing 642 00:38:20,840 --> 00:38:24,319 Speaker 1: inflation or indeed global recovery. Stocks. Given that at the moment, 643 00:38:24,400 --> 00:38:28,920 Speaker 1: global demand concerns and the inflation are indeed ruling the market, 644 00:38:29,239 --> 00:38:31,680 Speaker 1: I guess the attractiveness of fixed income remains in place, 645 00:38:31,719 --> 00:38:34,960 Speaker 1: whereas stocks remain that pressure valve right, which is kind 646 00:38:34,960 --> 00:38:38,719 Speaker 1: of a shows how the markets feel at the moment, 647 00:38:38,840 --> 00:38:42,440 Speaker 1: or indeed their expectations about the global recovery. Do you 648 00:38:42,600 --> 00:38:44,640 Speaker 1: have a trip point on yen? I mean, we talk 649 00:38:44,719 --> 00:38:47,719 Speaker 1: about negative rates in the certitude. Rather the Bank of 650 00:38:47,840 --> 00:38:51,840 Speaker 1: Japan can apply ever more negative rates. Do you have 651 00:38:51,960 --> 00:38:56,680 Speaker 1: a yen level which signals that outcome? Uh, well, another 652 00:38:56,760 --> 00:39:00,279 Speaker 1: one I guess could Obviously, hundred fifteen is an that's 653 00:39:00,320 --> 00:39:07,000 Speaker 1: far away in terms of well, I imagine that's very close. 654 00:39:07,040 --> 00:39:09,680 Speaker 1: I mean the reason for that is to two folds really, 655 00:39:09,920 --> 00:39:11,840 Speaker 1: so it is really the revealed preference by the b 656 00:39:11,960 --> 00:39:15,120 Speaker 1: o J to keep in the end from running further 657 00:39:15,480 --> 00:39:19,279 Speaker 1: and to our evidence is suggesting that the budget rate 658 00:39:19,360 --> 00:39:23,360 Speaker 1: for Japanese exporters in particular is very close to hundreds fifteen. 659 00:39:23,480 --> 00:39:25,760 Speaker 1: So if indeed we to breach that level, or indeed 660 00:39:25,880 --> 00:39:29,080 Speaker 1: remain under the level, that is risking a sustained downside 661 00:39:29,120 --> 00:39:32,680 Speaker 1: pressure on the back of Japanese exporters buying of the 662 00:39:32,800 --> 00:39:35,640 Speaker 1: Japanese here and importantly, given that the end was trading 663 00:39:35,680 --> 00:39:38,759 Speaker 1: well below their budget rate for so long, they're very underheaged. 664 00:39:38,920 --> 00:39:42,360 Speaker 1: So if anything, the BOJ will not risk this happening. 665 00:39:42,480 --> 00:39:45,240 Speaker 1: So I guess I would expect more vocal intervention, potentially 666 00:39:45,320 --> 00:39:48,320 Speaker 1: the negative rate to come on, more negative rate to 667 00:39:48,440 --> 00:39:51,280 Speaker 1: come before long. All that said, I would also argue 668 00:39:51,320 --> 00:39:53,160 Speaker 1: that if you were to compare the b o J 669 00:39:53,440 --> 00:39:55,640 Speaker 1: with the e c B, I think that the e 670 00:39:55,800 --> 00:39:58,680 Speaker 1: c B has much greater leeway in terms of cutting 671 00:39:58,800 --> 00:40:01,120 Speaker 1: rates further below zero then the b o J. The 672 00:40:01,239 --> 00:40:03,800 Speaker 1: b o J is still facing the prospect of actually 673 00:40:03,880 --> 00:40:06,960 Speaker 1: the banks at some point starting to really pass on 674 00:40:07,120 --> 00:40:10,400 Speaker 1: the costs from the penalty rates onto their depositors. And 675 00:40:10,640 --> 00:40:13,000 Speaker 1: whereas if you look at the say a breakdown of 676 00:40:13,040 --> 00:40:16,640 Speaker 1: the financial assets of the Japanese versus the European households, 677 00:40:16,800 --> 00:40:19,399 Speaker 1: the European households are holding about a third of their 678 00:40:19,560 --> 00:40:22,759 Speaker 1: thorough financial assets as deposits, as cash that's got gets 679 00:40:22,840 --> 00:40:24,960 Speaker 1: penalized if you wish by the banks. In the case 680 00:40:25,000 --> 00:40:28,759 Speaker 1: of Japan, that's still six. So any study you would 681 00:40:28,760 --> 00:40:30,920 Speaker 1: look at about the impact of lower rate, say on 682 00:40:31,080 --> 00:40:33,560 Speaker 1: the euros, on the US or in the Japan, would 683 00:40:33,600 --> 00:40:36,360 Speaker 1: tell that actually negative rates in Japan are negative for 684 00:40:36,440 --> 00:40:40,000 Speaker 1: domestic growth just because of that negative wealth effect that 685 00:40:40,200 --> 00:40:43,919 Speaker 1: is actually undermining the wealth of the all these depositors 686 00:40:44,160 --> 00:40:46,400 Speaker 1: that are still very much uh there. So if anything, 687 00:40:46,520 --> 00:40:49,759 Speaker 1: think Coroda quite cautious, right, so so we havena see 688 00:40:50,360 --> 00:40:54,360 Speaker 1: further reform measures to encourage depositors to spend those deposits 689 00:40:54,440 --> 00:40:58,040 Speaker 1: by stocks, by properties. Before Coroda were really to turn 690 00:40:58,360 --> 00:41:01,200 Speaker 1: to aggressive. So out think if anything, if you ask me, 691 00:41:01,280 --> 00:41:03,440 Speaker 1: I think, next to rates, I think the next time 692 00:41:04,120 --> 00:41:07,279 Speaker 1: could be to expand its office purchases. Great, thank you 693 00:41:07,400 --> 00:41:10,200 Speaker 1: so much Marino. I mean, it's always good to speak 694 00:41:10,239 --> 00:41:13,200 Speaker 1: to him, but particularly with Europe so dynamic today. Let 695 00:41:13,280 --> 00:41:16,080 Speaker 1: me have a frame here, uh the data check for you. 696 00:41:16,280 --> 00:41:18,960 Speaker 1: It's become very interesting. I'll be honest. I expected a 697 00:41:19,000 --> 00:41:21,600 Speaker 1: boring day. I was wrong. I walked in the door. 698 00:41:21,840 --> 00:41:25,279 Speaker 1: It was boring. I got wrong. Fast name X Crew 699 00:41:26,560 --> 00:41:30,520 Speaker 1: four is deteriorated another ten cents. We're really buttressing up 700 00:41:31,040 --> 00:41:35,080 Speaker 1: against new lows off the last two bouts of lows 701 00:41:35,120 --> 00:41:39,360 Speaker 1: not record lows, but nevertheless down a dollar fifteen on 702 00:41:39,440 --> 00:41:44,080 Speaker 1: West Texas intermedia and Brent catching up very quickly thirty 703 00:41:44,160 --> 00:41:48,520 Speaker 1: three oh nine, down seven cents. That will test crucial levels, 704 00:41:49,080 --> 00:41:54,640 Speaker 1: crucial support levels, recent support levels, rather uh shortly Gold 705 00:41:54,719 --> 00:41:58,480 Speaker 1: up twenty five dollars. James Steele at HSBC reaffirms his 706 00:41:59,080 --> 00:42:02,400 Speaker 1: recent success. We'll call on long Goo. Ellen Zentner just 707 00:42:02,480 --> 00:42:06,160 Speaker 1: publishes a detailed note Morgan Stanley on the strength of 708 00:42:06,239 --> 00:42:09,800 Speaker 1: the American consumer, part of the optimism that Adam Posen 709 00:42:10,480 --> 00:42:13,560 Speaker 1: has on the American economy and on our central bank theory. 710 00:42:13,640 --> 00:42:17,400 Speaker 1: What a special treat. Adam Posen was so shocked by 711 00:42:17,440 --> 00:42:20,640 Speaker 1: the halftime show at the Super Bowl yesterday that he 712 00:42:20,719 --> 00:42:23,160 Speaker 1: called me up. He said, Tom, I gotta come in 713 00:42:23,239 --> 00:42:26,080 Speaker 1: and listen carefully, and then I promise you I'll give 714 00:42:26,120 --> 00:42:28,279 Speaker 1: you a block. So Adam posing we'll be with us. 715 00:42:28,640 --> 00:42:41,280 Speaker 1: Let's listen to some super Bowl music we aimed to please. 716 00:42:41,440 --> 00:42:45,120 Speaker 1: Could play throughout all of Bloomberg surveillance this morning. Where 717 00:42:45,160 --> 00:42:48,680 Speaker 1: else can you get? Could play then on Bloomberg's surveillance