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Speaker 1: This is Bloomberg Surveillance. I would expect the interest rate

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Speaker 1: in the Eurozone and it's peripheral will be zero or

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Speaker 1: lower for the rest of this decade. The sector selection

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Speaker 1: does matter. A whole lot of you avoided energy last year,

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Speaker 1: you probably did relatively well. It's half the global economy

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Speaker 1: and it's all slowing. My sense is that this ship

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Speaker 1: things will start to turnarine, and I think that turnarine

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Speaker 1: will be left by China. Bloomberg Surveillance your link to

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Speaker 1: the world of economics, finance, and investment on Bloomberg Radio.

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Speaker 1: Good morning everyone, Michael McCain, tom Kin, Bloomberg Surveillance Worldwide.

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Speaker 1: Thrilled to have you with us. End of the quarter.

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Speaker 1: I am in April Fool's Day training. Every year I

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Speaker 1: get killed by my team. They just crush me. They

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Speaker 1: get me so angry with such stupidity. John. One year

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Speaker 1: you brought in my one oh one k, you know,

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Speaker 1: retirement wrap up, and I went April. You went April Fools.

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Speaker 1: It's worse, actually, but then Aways, we're getting ready for that.

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Speaker 1: Our April Fools is to bring you Barry Dholes four

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Speaker 1: days in a row, five gonna make a full week

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Speaker 1: of of you having to endure my snowfulist meloflist Nasal Twine.

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Speaker 1: I'm glad you can pronounce it. I can't job to

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Speaker 1: day Tomorrow Berry Ridholds and I will have Jim Glass

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Speaker 1: who Bill Gross with us as well. Bloomert Surveillance this

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Speaker 1: morning brought you by Investco. Don't settle for average in

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Speaker 1: your portfolio. To Investco, the right approach means investing with

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Speaker 1: high conviction. Find out more investco dot com slash high Conviction.

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Speaker 1: One of my great high points this week, among many,

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Speaker 1: was meeting with Megan Walsh of Investco. They've been great supporters.

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Speaker 1: Her performance in dividend long only by side investing is

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Speaker 1: lights out phenomenal. It was jaw dropping to look at

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Speaker 1: her upper death style consistency against her peer group individends.

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Speaker 1: So it's great to speak with Investco and thank you

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Speaker 1: to them for their support. Barry, we need somebody to

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Speaker 1: synthesize where we are in the reset from his blinding

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Speaker 1: certitude of twelve three one fifteen. Robert since joins us

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Speaker 1: from Ammer's pierpond. What'd you get most wrong this quarter? Um?

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Speaker 1: You know we expected a little bit of a setback

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Speaker 1: for the dollar. I don't think we expected it to

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Speaker 1: settle back quite this much UM. And also we uh,

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Speaker 1: we didn't think yelling would be quite as dubblish as

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Speaker 1: she really is. We probably should learn that lesson. But uh,

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Speaker 1: as opposed to thinking whether the glass was half full

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Speaker 1: or half empty, she took the glass and emptied all

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Speaker 1: the water out of it. John Norman a few days

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Speaker 1: ago JPM were and recalibrates. He takes dollar optimism down

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Speaker 1: to stability, maybe not dollar weakness. Others actually talk about

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Speaker 1: dollar weakness. Where where does the dollar go in the

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Speaker 1: next three months? You know, we think it's it's headed

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Speaker 1: a little bit higher. We look at some of our

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Speaker 1: short term valuation work, and it would suggest your dollar

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Speaker 1: belongs more in a one oh seven one o nine

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Speaker 1: range rather than the one range we're at now. But

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Speaker 1: nothing dramatic, you know. But I think the dollar creeps

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Speaker 1: gradually higher UM as as we go through the quarter

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Speaker 1: UM because we do think the U S date is

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Speaker 1: gonna look okay. And and and frankly, I think there

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Speaker 1: may be a bit of a attention developing on the

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Speaker 1: f O m C. I mean, I think that people

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Speaker 1: like UH, like Stan Fisher and a number of the

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Speaker 1: folks want to get on with it in terms of

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Speaker 1: normalizing interest rates. And I think they may have been

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Speaker 1: surprised as the rest of us about this yellow and

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Speaker 1: testimony this week. You say, nothing dramatic. You're talking one

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Speaker 1: oh seven, one or nine. We're spitting distance from parity

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Speaker 1: between the dollar and the euro. If I would have

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Speaker 1: mentioned that three or four years ago, people would have

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Speaker 1: thought I was out of my mind. Well, I think

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Speaker 1: there's there. There are a couple of things that have

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Speaker 1: gone on. One. Um, you know, we have seen the

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Speaker 1: continued sluggish sluggishness in Europe and a much more aggressive ECB.

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Speaker 1: Early on, the e c B was not very aggressive,

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Speaker 1: the FED was aggressive, and so the global divergence was

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Speaker 1: actually in favor of the euro as opposed to the dollar,

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Speaker 1: and it was horribly overvalued. Um and now we've seen

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Speaker 1: that adjustment process UH taking place. I think people still

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Speaker 1: think fair valuation is somewhere around one fifteen on euro dollar.

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Speaker 1: But I think we're gonna undershoot that because the e

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Speaker 1: c B, um, you know, will be easy for an

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Speaker 1: extended period of time. And and and we think and

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Speaker 1: hope the FED does begin to or move further along

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Speaker 1: the policy of normalization of interest rates here in the US.

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Speaker 1: So we look around the world and we see the

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Speaker 1: US dollar versus the Canadian loon versus the Mexican pay

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Speaker 1: So we go to Asia, Uh, we're back to an

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Speaker 1: era of king dollar, or at least that Howard, That's

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Speaker 1: how it feels. Are there any other currencies out there

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Speaker 1: that can go head to head with the dollar and

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Speaker 1: actually um allow our exporters to to sell into their

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Speaker 1: markets at a competitive rate. You know, I think we've

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Speaker 1: we've we've had the bulk of the adjustment of the dollar. Uh.

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Speaker 1: You know, we're now talking about fine tuning. If we've

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Speaker 1: gone from one forty down to roughly one ten on

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Speaker 1: euro dollar, enormous, enormous move, big move if we if

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Speaker 1: we're one oh five or if one fifteen, that might

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Speaker 1: make a big difference from a short term trading perspective,

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Speaker 1: But in terms of the big picture, you know, I

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Speaker 1: think we've had a big, big part of the dollar

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Speaker 1: adjustment already. We've seen US companies have to adjust that,

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Speaker 1: We've seen the U S economy have to adjust to that.

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Speaker 1: Bob since Jonah switch gears here in Berries are really

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Speaker 1: attuned to this as well. You've seen. I mean we're

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Speaker 1: talking earlier about bear Stearns A. S. Greenberg with you know,

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Speaker 1: his vest On and his paper tickets and Alan Schwartz

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Speaker 1: in those days and Bank of America. Has the industry

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Speaker 1: been taken over by the whole E T F hedge

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Speaker 1: fun very smart guys, not evil people, but people just

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Speaker 1: making huge swing trades, if you will, in and out

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Speaker 1: of see whatever the theme is of the moment. Yeah,

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Speaker 1: I mean, I think that we have built up such

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Speaker 1: huge pools of capital that have great demands for short

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Speaker 1: term performance that we do tend to see markets that

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Speaker 1: are more volatile, particularly commodity markets. You know, commodity markets

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Speaker 1: used to be things that that that companies dabbled in,

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Speaker 1: you know, that people actually bought and sold this stuff

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Speaker 1: to produce something. It's become much more financial. We saw

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Speaker 1: this with foreign exchange fifteen or twenty years ago. It

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Speaker 1: used to be something that companies used to dabble into

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Speaker 1: to satisfy their trade needs. Now it's become much more financial,

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Speaker 1: become much more volatile um and I don't think that's

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Speaker 1: particularly helpful, helpful and healthy for for the economy in general.

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Speaker 1: Per pot we get started on three hours of Bloomberg Radio,

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Speaker 1: Charles Evans of Chicago and Kithley News, really a high

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Speaker 1: point in the nine o'clock hour as well. Barry So,

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Speaker 1: I keep coming back to the strength of the dollar

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Speaker 1: and what it means for our overall economy. I was

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Speaker 1: in London about a decade ago when I was astonished

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Speaker 1: at a forty dollar hamburger at a local pub once

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Speaker 1: you figured out the exchange rate. Now it seems the

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Speaker 1: US tourists can travel abroad and things are are really

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Speaker 1: reasonably priced. What does this mean for global capital flows?

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Speaker 1: What does this mean for uh, the overall state of

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Speaker 1: the economy with with the US seemingly the only strength

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Speaker 1: that's out there. Yeah, you know, I think we're we're

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Speaker 1: seeing a shift in in global patterns, some some big

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Speaker 1: shifts in global patterns. I think one thing we're seeing

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Speaker 1: is that services are becoming a much bigger share of

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Speaker 1: the economy globally, which is something you'd expect with an

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Speaker 1: aging population, both here in Europe, even in China and

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Speaker 1: and and parts of Asia. Um. And that just means

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Speaker 1: that we're going to see areas of demand in different

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Speaker 1: in different markets. We're seeing the labor markets actually perform

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Speaker 1: reasonably well. Um service consumption is very labor oriented. What

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Speaker 1: we're not seeing uh doing very well or commodities and

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Speaker 1: demand for commodities and and that's because global trade and

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Speaker 1: and and frankly, global industrial production growth has slowed down

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Speaker 1: very dramatically. So we're consuming fewer things, we're consuming more services.

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Speaker 1: That adds the g d P, but it's a different

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Speaker 1: kind of g d P. But but within that, and

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Speaker 1: I know you come into some a Ford exchange perspective,

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Speaker 1: what is your calling commodities? Are they hit bottom? Are

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Speaker 1: they in a range? Do we need to further clear markets,

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Speaker 1: particularly within you know, obviously oil, but within industrial medals

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Speaker 1: as well, like conquer. You know, we've gotten a bit

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Speaker 1: of a boost here in in commodities across the boards

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Speaker 1: with a week or dollar. I don't think it's real. Um,

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Speaker 1: you know, I think if you look at industrial production data,

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Speaker 1: I think I looked at twenty five or so major countries.

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Speaker 1: I think there were five that had increases on a

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Speaker 1: year of a year basis and twenty that had decreases

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Speaker 1: on a year of a year basis. That's pretty unprecedented.

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Speaker 1: You know, we're not in a recession, but the industrial

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Speaker 1: sector probably feels like we are in every sssion. I

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Speaker 1: think there's probably some further clearing to take place in

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Speaker 1: commodity markets. And what I particularly note is that with

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Speaker 1: this weakness in the dollar in the last week or so,

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Speaker 1: oil prices haven't gone up. They've actually started to trickle

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Speaker 1: back down again. So lower oil prices at a time

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Speaker 1: when the dollar is weaker tells me that there's some

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Speaker 1: fundamental weakness starting to show up again in UM in

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Speaker 1: in the In the one of the last ten days,

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Speaker 1: we've moved from a blah range found at oil to

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Speaker 1: all of a sudden right up on support. Yeah. I

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Speaker 1: mean we've go from low forties were now into the

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Speaker 1: mid thirties at a time when the dollar is weakened

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Speaker 1: up UM and that that tells me that it's an

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Speaker 1: oil move, it's not a dollar general pricing. For the

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Speaker 1: update here on three sixteen, very where the quarter go

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Speaker 1: uh with the week ago, with the quarter goo, things

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Speaker 1: continue to move along. When the news flow is as

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Speaker 1: active as it's been this quarter, time just flies by.

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Speaker 1: You see that with the South African news and some

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Speaker 1: real challenges to their political leadership and the SMP negative outlook,

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Speaker 1: the outlook rather turned negative on China in Hong Kong,

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Speaker 1: and they're they're like news, their headline news. But it's

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Speaker 1: still just part of the swirl. Plus the reality show

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Speaker 1: that is US politics. It has been a news cycle

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Speaker 1: every hour. It's been NonStop, utter fascination. It's a carrect

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Speaker 1: you can't avert your gates. Well, we're gonna continue with

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Speaker 1: that again. Charles Evans with Catherine and Angel here that

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Speaker 1: on Bloomberg Radio. Uh in about two hours, I'll say

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Speaker 1: two and a half hours. Uh. Maybe that's an important interview.

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Speaker 1: Is Evans has really been out front on caution on

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Speaker 1: a lifting GDP. It hasn't happened, and he looks prescient

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Speaker 1: to say the least futures uh flat negative one down,

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Speaker 1: futures negative two, yields are in. Yields are lower points

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Speaker 1: seven five Bloomberg Samynan's This Morning rutch of by Volvo Cars,

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Speaker 1: White Planes. Visit Volvo Cars, White Planes dot Com from

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Speaker 1: New York with our news Michael Barr, Tom Berry, thank

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Speaker 1: you very much. A two day nuclear security summit kicks

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Speaker 1: off today in Washington. The US and leaders from key

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Speaker 1: Asian countries will meet to discuss North Korea's nuclear weapons program.

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Speaker 1: President Obama will also meet with China's president Ji Jing

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Speaker 1: Ping on the sideline to talk about cybersecurity. Republican presidential

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Speaker 1: candidate Donald Trump walked back on the comments there would

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Speaker 1: have to be some form of punishment for women who

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Speaker 1: have abortions if the procedure became illegal in the US.

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Speaker 1: Trump later issued a statement saying that abortion providers, not women,

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Speaker 1: should be the ones punished. We're learning more about the

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Speaker 1: Egyptian man who authorities say hijacked and egypt airplane and

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Speaker 1: forced it to land in Cyprus. The man Cypriot ex

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Speaker 1: wife says her former act husband is an extremely dangerous

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Speaker 1: man who used drugs. Global News twenty four hours a day,

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Speaker 1: powered by our journalists. I'm Michael Barr, Tom Berry. Michael,

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Speaker 1: thanks so much again. I get a lot of shirting

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