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Speaker 1: Broadcasting live to New York, Bloomberg to Washington, d C,

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Speaker 1: Bloomber to Boston, Bloomberg twelve hundreds, to San Francisco, Bloomberg

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Speaker 1: to the Country Channel one ninety and around the globe

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Speaker 1: the Bloomberg Radio plus Bloomberg dot Com. This is Bloomberg Surveillance.

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Speaker 1: Good morning, seven thirty on Wall Street Time. Michael McKee

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Speaker 1: along with Tom Keane. We had some mergers, or at

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Speaker 1: least merger news. We don't have any actual mergers to

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Speaker 1: report this morning, but the attempt by Gannette to purchase

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Speaker 1: Tribune Publishing runs into a snag. Tribune says no, just

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Speaker 1: a short time ago rejected the Gannette bid, but they

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Speaker 1: are offering a the opportunity for to sign a nondisclosure

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Speaker 1: agreement and then look at the books and talk some more.

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Speaker 1: We'll see what happens with that. Investors not impressed at

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Speaker 1: the moment. Tribute Publishing shares off seventent in pre market trading.

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Speaker 1: Monsanto shares are up eight percent. They haven't said anything

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Speaker 1: but bear out with details of the offer they made

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Speaker 1: last week for the company sixty two billion dollars. Now

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Speaker 1: that's a hundred two dollars a share. For Moncetta, but

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Speaker 1: Moncetto shares are only up to a hundred and nine

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Speaker 1: sixty four at the moment, so investors not convinced. Accent

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Speaker 1: that's France's largest insurer says it's gonna stop investing in

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Speaker 1: tobacco and invest all of its two billion dollars of

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Speaker 1: assets in that industry. Didn't say which tobacco company stocks

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Speaker 1: it holds, but that's something to keep an eye on. Now,

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Speaker 1: on's check in with Michael Barr and get the latest

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Speaker 1: world and national headlines. Michael, Mike, thank you very much.

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Speaker 1: The US and Vietnam are celebrating the next stage of

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Speaker 1: an improving relationship at the state luncheon and on here

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Speaker 1: with visiting President Obama. Vietnam's president spoke of the long

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Speaker 1: effort to overcome profound grievances from the war years. President

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Speaker 1: Obama has lifted a half century old ban on selling

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Speaker 1: arms to Vietnam. The US also welcome the Vietnamese government's

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Speaker 1: approval of the Peace Corps to teach English in Vietnam.

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Speaker 1: Twin suicide bombings and Yemen have left at least forty

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Speaker 1: five people dead. The attacks in the southern city of

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Speaker 1: eight and targeted young men who were planning to join

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Speaker 1: the army. Normally quiet, pro government coaster areas of Syria

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Speaker 1: came under attack today by rockets and suicide bombers, killing

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Speaker 1: at least sixty five people. A new NBC Wall Street

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Speaker 1: Journal poll shows Democrat Hillary Clinton I had but Republican

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Speaker 1: Donald Trump gaining ground. Clinton is that and Trump is.

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Speaker 1: At Global News twenty four hours a day, powered by

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Speaker 1: our twenty four hundred journalists more than a hundred fifty

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Speaker 1: news bureaus around the world. I'm Michael bar Mike. Thank you, Michael.

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Speaker 1: It's time now for the Landroverer Percipani Bloomberg NBC Sports Update.

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Speaker 1: Here's John Stash Thanks my stunning game last night in

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Speaker 1: the NBA. Not just at Oklahoma City beat Golden States

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Speaker 1: or regained the leading their playoffs seris, but the ease

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Speaker 1: with which the Thunder did it against the team that

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Speaker 1: won more regular season games than any team in NBA history.

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Speaker 1: And Thunder doubled up the Warriors in the second quarter

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Speaker 1: thirty eight to nineteen. They led by twenty five and

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Speaker 1: a half, and then they scored forty five more points

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Speaker 1: to the third quarter build their lead up to forty one.

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Speaker 1: The final was one thirty three to one oh five,

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Speaker 1: and the series is to one okay see setting up

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Speaker 1: a big game for tomorrow. Stanley kept playoffs overtime in Pittsburgh.

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Speaker 1: Tampa Bay's Tyler Johnson deflected one in off his back

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Speaker 1: the lightning one four three for a three to lead

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Speaker 1: there one win from a trip back to the finals.

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Speaker 1: Great weekends for the Mets and Yankees. Michael Conford, O

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Speaker 1: Homard as Druble Cabrera to run single and plenty enough

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Speaker 1: for Noah Syndergard, who has become the Mets A seven

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Speaker 1: innings allowed justin earner and run struck out eleven. Mets

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Speaker 1: finished to sweep of Milwaukee three to one. Big series

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Speaker 1: starts tonight in Washington, and the Yankees a four game

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Speaker 1: sweep in Oakland, winning five to four. So after a

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Speaker 1: seven and three homestand a five and two road trip,

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Speaker 1: they'll host Toronto tomorrow. Yanks have gone from last place

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Speaker 1: to a tie for third with the Bloomer. NBC Sports Update,

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Speaker 1: I'm John Stamp, John Tucker. Can I get away with

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Speaker 1: saying thunder and lightning prevail? Is the sports headline? Is

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Speaker 1: that just too? Next? This is Bluberg sur Helence sign

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Speaker 1: Michael McKee along with Tom Keane. We're watching futures. H

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Speaker 1: they're down. I was gonna say deteriorate, but it's only

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Speaker 1: like a quarter of a point, so we really can't

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Speaker 1: say that. SMP features off three points right now about

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Speaker 1: two tenths. Same for down futures. They're down twenty four

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Speaker 1: stocks in Europe trading more by two points in the

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Speaker 1: stock six hundred index. That's half a percent. Let's check

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Speaker 1: in with about moon. It's time for the n j

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Speaker 1: I T STAM Report, brought to you by a New

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Speaker 1: Jersey Institute of Technology investing more than a hundred and

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Speaker 1: problems and improve life. Learn more at Stories of Innovation

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Speaker 1: dot m j I T dot E du B. Michael,

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Speaker 1: Good morning. Here's what's making news in science, technology, engineering

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Speaker 1: and math. Toyota plans to work with the inventor of

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Speaker 1: the Segue human transporter, Dean Cayman, to develop advanced wheelchairs

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Speaker 1: for disabled people and aging populations worldwide. Toyota and Cayman's Manchester,

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Speaker 1: New Hampshire based Decca Research and Development unvailed the Alliance

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Speaker 1: at a Paralyzed Veterans of America convention in Jacksonville, Florida.

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Speaker 1: The agreement gives the world's largest automaker a license to

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Speaker 1: use balancing technology that Cayman has installed in prior generations

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Speaker 1: of wheelchairs for medical, rehabilitative therapy and other purposes. In November,

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Speaker 1: Toyota said it would spend a billion dollars on initial

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Speaker 1: five year investment for research focused on artificial intelligence and

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Speaker 1: robotics scientists at the new Toyota Research Institute promoting traffic

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Speaker 1: safety and non automotive goals like elderly mobility and A

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Speaker 1: twelve year old student in Sacramento, California, who already has

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Speaker 1: three community college degrees and has been accepted by two

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Speaker 1: University of California campuses, says he plans on a biomedical

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Speaker 1: engineering though he has yet to decide on which university

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Speaker 1: he'll attend. He ultimately plans on becoming a doctor and

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Speaker 1: medical researcher by the time he turns eighteen. You know

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Speaker 1: his name is not Doogie Howser. It's Tannish Abraham. He

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Speaker 1: started community college at age seven, where professors didn't initially

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Speaker 1: want him in their classes because of his age. And

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Speaker 1: that's this morning's Bloomberg and j I. T. Stem report. Michael,

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Speaker 1: we can't feel that way about Tom. You know, when

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Speaker 1: he grows up, he can come back. He can conquer

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Speaker 1: the world. He can conquer the world. All right, thank

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Speaker 1: you very much for joining. So let's talk currencies. Now.

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Speaker 1: If you're going to if you're going to have basically

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Speaker 1: any kind of rate move in any kind of central bank,

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Speaker 1: you're going to have a move in the currency market.

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Speaker 1: But what we're not really seeing is the big increase

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Speaker 1: in the dollar that everybody forecast once the FED started

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Speaker 1: talking about higher rates. Let's talk to Jeremy Stretch. He's

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Speaker 1: the Canadian Imperial Bank of Commerce CIBC for ex strategies. Um, Jeremy, Uh,

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Speaker 1: we were just talking with commascree commerces. You know, the FED,

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Speaker 1: if they raise rates, they're going to have this tremendous

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Speaker 1: reaction in the markets. But we're not having a pre reaction,

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Speaker 1: a preaction in the markets. The markets aren't seeing to

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Speaker 1: the Fed at the moment, don't do this. No, that's true.

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Speaker 1: Although I think there's still a general degree of uncertaintiest

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Speaker 1: or whether the whether the feder will actually follow through

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Speaker 1: with some of the retoric that we've seen over the

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Speaker 1: course of the last week or two, and obviously with

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Speaker 1: the backwash from the April minutes as well. So I

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Speaker 1: think there's still we've seen markets repricing expectations over the

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Speaker 1: course of the last couple of weeks, but I think

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Speaker 1: we're still some way to go before markets are really

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Speaker 1: pricing in a high degree of a certainty that the

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Speaker 1: Federal Reserve are going to be prepared to the tighten

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Speaker 1: policy in the course of the next three months or so.

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Speaker 1: So in a sense, that still leaves the dollar well

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Speaker 1: below the levels that we were seeing at us of

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Speaker 1: the d X y um just prior to the first

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Speaker 1: of the Fed moves in in December. And I think

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Speaker 1: we've still got some way to go in terms of

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Speaker 1: Marcus just recalibrating positioning ahead of that said move as well.

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Speaker 1: So I think that's still a scenario which will point

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Speaker 1: towards a moderately stronger dollar as we go towards that

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Speaker 1: said move. But I don't think we're going to see

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Speaker 1: an explosion and the d X y empowering north of

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Speaker 1: the hundred again. I mean Jim Bullard speaking in Beijing

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Speaker 1: this morning, St. Louis FED president pointed out that most

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Speaker 1: almost all of the move in the d x Y

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Speaker 1: representing the dollar in x took place in two thousand fourteen,

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Speaker 1: and it basically traded sideways through two thousand fifteen, went

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Speaker 1: up a little bit as we approached the rate increase,

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Speaker 1: and his view is the big move in the dollar

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Speaker 1: is kind of over now and it's not something the

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Speaker 1: FED has to be particularly concerned about. I would certainly

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Speaker 1: have some sympathy with that view, and he's absolutely correct. Obviously,

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Speaker 1: the did have that very big move in the last

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Speaker 1: stage of the fourteen and the first quarter of twenty fifteen.

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Speaker 1: In a sense, I think that is commensurate with the

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Speaker 1: broader dollar ball trend. I think we're probably going to

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Speaker 1: see a moderate appreciation in the dollar back towards um,

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Speaker 1: the sort of perhaps in the d x Y, but

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Speaker 1: not north of a hundred again. So I think it's

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Speaker 1: a case of a modest appreciation in the dollar. Is

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Speaker 1: so we come back to the recognition of monetary policy

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Speaker 1: differential favor in US over most other jurisdictions as we

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Speaker 1: go through the summer and into the into the autumn.

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Speaker 1: But I don't think we're going to see the dollar

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Speaker 1: powering ahead to such a degree that that would cause

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Speaker 1: commensurate problems for the FED in terms of their their

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Speaker 1: their policy prescription. So I think it's a case that, yes,

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Speaker 1: the dollar is going to be raining relatively firm, but

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Speaker 1: we're not going to be powering to fresh extremes which

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Speaker 1: would compromise either the inflation target or the the underlaying

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Speaker 1: exompic environment by the currency being far too strong and

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Speaker 1: impacting exports. We're gonna take a breaking amin. But just

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Speaker 1: let me ask you, if the FED doesn't act, doesn't

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Speaker 1: go the other way, or are we kind of in

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Speaker 1: the range. I think there is a risk that if

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Speaker 1: the if the FED assists from actions, certainly prior to

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Speaker 1: the end of the year, then I think there is

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Speaker 1: a scope for an unwind in the in the dollar.

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Speaker 1: So I think, you know, we we we don't have

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Speaker 1: to go too far back to you know, to witness

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Speaker 1: you know, the fallback in the in the dex wice

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Speaker 1: to DANTA around the ninety two threshold. So I think

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Speaker 1: there's you know, there's certainly a risk that if the

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Speaker 1: FED is taken off the table, most notably, that would

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Speaker 1: probably imply that the data is not supportive either. Then

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Speaker 1: I think that would you know, that would suggest that,

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Speaker 1: you know, the dollar would be edging back towards the

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Speaker 1: sort of areas. So clearly, um, you know the data

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Speaker 1: is going to be important and all market interpretations of

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Speaker 1: the FED will be integral to the dollar's performance. Let's

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Speaker 1: come back Jeremy stretch ce ABC for a strategist here

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Speaker 1: on Bloomberg Servants, we're kind of down to the opening bell.

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Speaker 1: Brought to you by the Jew Grand Cherokee, the most

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Speaker 1: the Radio plus Mobile Act and on your radio. This

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Speaker 1: is a Bloomberg Business Flash and I'm Ker in Moscow.

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Speaker 1: headline here. Crossing the Bloomberg Area's Capital to buy American

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Speaker 1: Capital and a deal valued at three point four billion dollars.

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Speaker 1: Tribune Publishing's board rejecting Gannet's latest fifteen dollar a share takeover,

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Speaker 1: saying the bid is clearly inadequate for the owner of

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Speaker 1: the Los Angeles Times in the Chicago Tribune, but said

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Speaker 1: talk will continue and earlier today, Tribune announced a seventy

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Speaker 1: point five million dollar capital investment from Nant Capital. They

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Speaker 1: are offering sixty two billion dollars to buy mn Santo,

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Speaker 1: deepening investor concerned that is stretching its finances to become

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Speaker 1: the world's biggest seller of seeds and farm chemicals. Monsanto

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Speaker 1: shares are higher in early trading, their up seven per

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Speaker 1: set futures have now well they're little change to hire now.

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Speaker 1: Smp E many futures up at point, DOWIE Mini futures

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Speaker 1: up eight and nasdag E many futures up seven. The

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Speaker 1: decks in Germany's down four tenths per set tenure treasury

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Speaker 1: of three thirty seconds, the yield one point eight two

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Speaker 1: percent yield in the two year point eight seven percent.

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Speaker 1: NIMEX screwed oil down one point one percent or fifty

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Speaker 1: three cents to forty eight a barrel call my school

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Speaker 1: down three tenths per cent or three dollars eighty cents

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Speaker 1: to twelve forty nine. Ten announced the euro a dollar

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Speaker 1: twelve oh eight the n one oh nine point four nine,

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Speaker 1: and that's a Bloomberg business flash. Tom and Mike Casa,

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Speaker 1: thank you very much. We're talking about where did the

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Speaker 1: markets go if the FED acts or doesn't act, and

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Speaker 1: we talked a lot about the dollar, but I want

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Speaker 1: to now continue with jeremy stretch from CIBC in terms

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Speaker 1: of where the rest of the world goes. Um. Obviously

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Speaker 1: the FED meeting in June is important, but you've also

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Speaker 1: got Brexit a week after the FED. So at this

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Speaker 1: point the pound and I would presume the euro are

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Speaker 1: at risk of volatility. Where do you see happening with them? Well,

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Speaker 1: it's absolutely true that I think whilst Brexit is often

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Speaker 1: perceived as the UK only event, it's far wider than that, because,

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Speaker 1: of course it's there were to be a vote for

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Speaker 1: the UK to leave the European Union, and I think

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Speaker 1: we would see the Eurozone and or the euro under

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Speaker 1: pressure and probably would see global risk appetite compromised as well,

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Speaker 1: so that isn't the base case scenario, though I think

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Speaker 1: they will most likely vote to remain within the European

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Speaker 1: Union parts. And it is an important part that whilst

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Speaker 1: the opinion polls in general, and certainly all the more

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Speaker 1: important or more reles opinion polls in the UK, those

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Speaker 1: that are based on the tell Us and rather than

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Speaker 1: the Internet, have been suggesting there is a relatively large

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Speaker 1: eight twelve lead in terms of the Remain campaign. But

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Speaker 1: if there is a degree of narrowing in those opinion polls,

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Speaker 1: and I think the voter turnout will also be hugely important,

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Speaker 1: then if there isn't narrowing in those opinion polls or

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Speaker 1: question marks about the likely victory for the Remain campaign,

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Speaker 1: that I think volatility in Sterling and or euro will

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Speaker 1: accentuate and impact the performance of both currencies. Jeremy, how

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Speaker 1: range are we If we're in a range, there can

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Speaker 1: always be debate about the the viscous quality of that range.

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Speaker 1: Are we stuck in a range? Um? I think we

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Speaker 1: probably are for the moment, and I think in a

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Speaker 1: sense here we are in a little bit of a

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Speaker 1: sort of holding pattern until we get some of these

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Speaker 1: June events out of the ways. Obviously the Brexit vote

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Speaker 1: here in the UK is one of those, the backwash

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Speaker 1: from the Juna Said meeting is is another, and then

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Speaker 1: you've got things like elections in Spain as well. So

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Speaker 1: I think there are there are a number of variables

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Speaker 1: to you know, sort of contemplat as we go into

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Speaker 1: the into the month of June, and of course we're

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Speaker 1: going into the summer and lower levels of liquidity at

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Speaker 1: the same time. But I think once we're clear some

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Speaker 1: of those risk parameters, then I think there is an

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Speaker 1: opportunity for a potential breaking out of the range. And

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Speaker 1: I think if we are going to see the FED

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Speaker 1: maintaining the rhetoric that we've seen from a number of

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Speaker 1: SAID members in the course of that statement in in June,

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Speaker 1: and the data is also complicity within that, then I

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Speaker 1: think we can see the range break. And we will

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Speaker 1: probably see the range break in favor of the dollar,

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Speaker 1: or those I was saying before the break are not

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Speaker 1: necessarily convinced that the dollar is going to be powering

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Speaker 1: higher through those those highs at the back end of

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Speaker 1: last year. But the but the dollar, I think we'll

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Speaker 1: have a modest degree of ascendency as we go into

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Speaker 1: into the long summer. I had wanted to ask about

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Speaker 1: emerging markets, but I wanted to get the Brexit thing

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Speaker 1: in there, because obviously they do with the europe countries

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Speaker 1: as almost as much as the US, if not more. So.

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Speaker 1: What happens to emerging market currencies over the last half

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Speaker 1: of the year, Well, I think it. I think it

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Speaker 1: really depends UM, and I think we have to be

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Speaker 1: mindful of not just putting all emerging markets in one

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Speaker 1: large bucket. I think we need to be a little

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Speaker 1: bit more UM discriminating between those e M currencies. So

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Speaker 1: I think those that have UM structural issues or whether

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Speaker 1: it be current account dests, whether the political uncertainty, I

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Speaker 1: think those currencies will continue to struggle and underperforming on

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Speaker 1: the on the provider that we are seeing a modest

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Speaker 1: degree of said tiening. So you know, currencies like the

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Speaker 1: terki Lear for example, in the South African round, I

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Speaker 1: think will continue to have episodes of extreme volatility and

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Speaker 1: or uncertainty. Well, those e M nations which are generating

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Speaker 1: moderate growth or don't have structural problems and are moving

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Speaker 1: towards a sort of a reform based backtor so someone

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Speaker 1: like India, for example, I think we'll we'll probably perform

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Speaker 1: on on a much better relative basis. So I think

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Speaker 1: it's very much a case of being discriminated, discriminatory in

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Speaker 1: terms of your assumptions for your embarked rather than necessarily

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Speaker 1: having one overall view. One of our assumptions Jeremy Stretch

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Speaker 1: is the newly minted leader of Canada is getting a

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Speaker 1: lot of favorable press. Of course, the backdrop for this

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Speaker 1: is all the usual challenges the commodity economy can face.

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Speaker 1: Is it easy now to gain Canadian dollar or is

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Speaker 1: it a mystery? Um well, I think we're are obviously

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Speaker 1: interesting variables to play as far as Canada is concerned.

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Speaker 1: But of course we have the backwash of the still

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Speaker 1: relatively freshly faced for Prime minister one with one will

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Speaker 1: be interesting to see how he looks over over the

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Speaker 1: course of his tenure, but he's obviously arrived in power,

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Speaker 1: and you can argue that the fiscal uh injection to

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Speaker 1: the economy that was part of the liberal policy backdrop

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Speaker 1: was perhaps a rather benign back influence for the Bank

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Speaker 1: of Canada, which is meant that they've been able to

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Speaker 1: stand aside a little bit from the perception of additional

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Speaker 1: policy stimulus, and I guess that the question for the

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Speaker 1: market is the is how the fiscal injection will work,

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Speaker 1: and how that will move through the economy, and whether

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Speaker 1: it will whether we'll move through quickly enough to allegate

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Speaker 1: some of the headwinds that are clearly still evidence in

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Speaker 1: an economy which is significantly influenced by oil. But I

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Speaker 1: think we have to remember that it is lessons in

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Speaker 1: temper cento GDP, albeit of course it has been the

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Speaker 1: primary influence in terms of longer term business investment. Sir Laddie,

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Speaker 1: reporting Italy un a credit chief executive officers said said

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Speaker 1: set to resign as soon as tomorrow, of course uncredited

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Speaker 1: like others, how do you frame from the CIBC desk

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Speaker 1: in Toronto, how we how the euro moves? When challenged

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Speaker 1: by Italian banks in also challenged by I am of

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Speaker 1: Greece discussions. I mean, I get this feeling, Jeremy stressed,

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Speaker 1: I'm sort of asleep on the Euro and I shouldn't

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Speaker 1: be right now. Help you with that? Well, it's true,

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Speaker 1: I mean, in a sense I was. I was asked

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Speaker 1: by somebody else on Friday about Greece, and you can

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Speaker 1: almost argue that it's coming to the summer, so it

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Speaker 1: must be kind of the latest grounds of Greek crises.

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Speaker 1: And in a sense that's in one of the areas

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Speaker 1: which continues to oscillate under the surface somewhat, because of

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Speaker 1: course we know that to the Greek state has some

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Speaker 1: very large bondary payments stop coming in the next month

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Speaker 1: or so, and it's going to be rather challenging. And

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Speaker 1: at the same time, as you correctly you identify there

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Speaker 1: are particular problems in in the banking sector in Italy

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Speaker 1: in particular, and so you know we're seeing the Italian

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Speaker 1: exoty market down more than two percent today. So in

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Speaker 1: a sense, when we've seen banking problems in some of

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Speaker 1: those peripheral nations over the course of the euro crisis,

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Speaker 1: over of course the last five or six years, they've

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Speaker 1: been in markets which are far small of than somewhere

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Speaker 1: like Italy. So in a sense, I think this is

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Speaker 1: another un issue that's bubbling along under the size and

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Speaker 1: I think that I think that's going to be a

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Speaker 1: scenario which will take the Euro lower. But I wouldn't

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Speaker 1: necessarily dust off those parity forecasts just yet, because whilst

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Speaker 1: I wouldn't be surprised if the euro does head back

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Speaker 1: towards the sort of one is seven one o eight threshold.

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Speaker 1: I think you have to remember and be mindful of

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Speaker 1: the fact that the huge current account surplace of the

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Speaker 1: Eurozone continues to run does provide a natural degree of

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Speaker 1: appetite for for euros or flow flow towards the euro.

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Speaker 1: So I think the euro will head lower. I think

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Speaker 1: the Greek issues, the banking sector concerns, monitor policy divergence

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Speaker 1: between the U S and the Eurozone all favor um

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Speaker 1: a Euro that is cheaper. But I don't think we

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Speaker 1: necessarily see another round of Eurozone capitulation unless the banking

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Speaker 1: sector problem even more pronounced than they are accurrenting, Jeremy,

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Speaker 1: thank you so much. Just something I almost never done

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Speaker 1: with the CIBC World markets. Mike, I'm doing something I

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Speaker 1: never do. I can't remember the last time I did this.

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Speaker 1: There is a technical chart pattern called a pennant, which

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Speaker 1: is lower highs, higher lows. It looks just like a pennant.

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Speaker 1: Deutsche Bank is a textbook textbook pennant right now. The

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Speaker 1: pennant converges in July of this year. So you and

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Speaker 1: I can't take vacation. Wait, I wasn't going to you

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Speaker 1: just did you just came back. I was going for

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Speaker 1: twenty four hours. Come on, but you're still I am well.

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Speaker 1: I think you know I'm doing the giant Bayner thing.

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Speaker 1: But it is true. I'm putting this out on Bluebig Radio,

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Speaker 1: plus that I may actually use this on TV tomorrow.

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Speaker 1: U is well. Deutsche Bank is a gorgeous five point's

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Speaker 1: called a five point pennant, and the point is Mike.

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Speaker 1: It points the pointing part of the and it's like

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Speaker 1: Gain of Thrones, a pointing part of the sword is

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Speaker 1: out in above. July of this year, just as a point,

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Speaker 1: there was that too much charts and patterns on radio. John,

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Speaker 1: thank you. Hey, we did our Squared I figure we

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Speaker 1: gonna do charts on radio. Where else are you going

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Speaker 1: to get this? Folks? Michael mckaham, Tom Keane with John

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Speaker 1: Tucker Charts Economics, Finance, Investment, International Relations, another hour of

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Speaker 1: Our Squared Economics. Good morning,