Skip to main content

tv   Bloomberg Surveillance  Bloomberg  December 13, 2016 4:00am-7:01am EST

4:00 am
francine: unicredit's capital plan. a billion dollar right out. the president-elect hands that the succession plan for his businesses and his plan to nominate exxon mobil's rex tillerson for secretary of state. continued momentum, but is growth solid enough to withdraw payments? this is "bloomberg surveillance." i am francine lacqua. counting down to the fed meeting. that starts today. we get the announcement
4:01 am
tomorrow. we have great interviews. will president-elect trump-ish -- escher in protectionism, and what will it mean for global trade? we speak to the owner of the world's largest container shipping line. plus, is the banking industry headed for an uber loan? we talk about bitcoin, cyber security, and disrupting the banks with the former barclays ceo and the block chain cofounder, later in the show. gett things first -- let's to the data check. we have a special guest from asia. this is the picture of these markets. breaking news out of the iea, saying the opec deal will create on oil supply deficit in the first half of the year. we will monitor that. i wish i had the picture for oil, but overall stocks unchanged. unicredit gaining 4.2%. there you go. this is the picture for oil, gaining 3.2%.
4:02 am
55 point $67. first, let's get to the news with nejra cehic. plans to raiset $13 billion in an offer to sell off bad loans and slash costs. italy's biggest bank is targeting 4.7 billion euros net profit in 2019. as part of the strategy, it plans to shed 6500 jobs, bringing the total to 14,000. president-elect donald trump will announce today that he plans to nominate exxon mobil ceo rex tillerson as secretary of state, according to a person familiar with the decision. if confirmed by the senate, it would hand the job of top diplomat to a man whose ties to vladimir putin go back almost two decades at a time when possible russian interference in the u.s. election is under scrutiny. at the same time, gary cohen of goldman sachs was the air blank fine andyd has been named top economic policy adviser. he will have the economic
4:03 am
council, one of the most influential panels in the white house, hoping coordinate the president's economic program. google news 24 hours a day, powered by journalists and analysts in more than 120 countries. i am nejra cehic. this is bloomberg. francine: as the fed prepares to tighten monetary policies, home prices hitting a 2009 hi, taking it more expensive to borrow to buy stocks. when -- let me introduce my guest, the managing director and vice chair of asia-pacific for j.p. morgan chase. always great to see you. coming on.or when you look at the world, when you look at china -- we do not worry about china like we used to. are we lulled into full security? there is still outflows and get to deal with. a stabilizing chinese economy, which is good for world growth. right now, the single biggest concern is what is going to
4:04 am
happen about u.s.-china trade when trump takes office in january. also, what has happened in u.s.-china relations. in the recent several weeks, we have seen more money coming out of china. we have seen chinese currency reserves bundling. they were around 3 trillion u.s. dollars, but that is down from 4 trillion u.s. dollars about a year and a half ago. the single biggest concern among investors is, what is going to happen to the chinese currency? also, if there were a trade war between the u.s. and china, what would that do to china's growth rate? francine: we talk about the falling renminbi, the outflows, and what we are seeing in the reserves. the three are not really compatible. how do you fix that? tog: i think china has generate more growth from the domestic economy, rather than relying on exporting, even though, in recent months, chinese exports recovered. it is still very much down from
4:05 am
the highs achieved some time ago . the chinese leadership is looking at trying to stimulate domestic consumption. so for this year, they have been quite successful, because the housing market has been on a rebound. consumer sentiment is high. e-commerce is bullish. service industries are beating growth. owing forward to 2017, there are uncertainties. trade is still very important to china. with trump threatening to name china a currency manipulator on things he saidhe on the campaign trail -- he would put a 35% tariff on chinese exports -- at the endrancine: of the day, he is a businessman, and the most important relationship for the u.s. is china. jing: but i think we're in a new era. trade has been rolling over the last many years. ince the economic downturn
4:06 am
2009, trade between the u.s. and china is critical for china's economic health, but also very important for u.s. companies that produce hundreds of billions of dollars of goods in china. also important for u.s. consumers, who have been enjoying low-cost, high-quality products from china. francine: let's say that donald trump, when he gets elected, either on the day or a couple of weeks afterward, he insults china in some form, either by not adhering to the one china policy, or by calling them some kind of manipulator of some sort. will china retaliate? jing: china absolutely will. francine: by closing of borders? say how is hard to china will react in situations like that. so far, china has been very common reaction to the rhetoric. what china might do is, thinking about the terms -- china is the single largest holder of u.s. treasuries. china still holds 1.1 trillion u.s. dollars of reserves.
4:07 am
right?nk about it, china is the single largest banker to america. china is the single largest holder of u.s. treasuries. if china were to sell down u.s. treasuries, what would happen to u.s. treasuries, which are already on the rise? francine: if the u.s. is retrenching foreign policy, this gives a great opportunity for china to step in and be the big guy in the region. enormousna has an economic pull in the asia-pacific region. if you look around china's neighboring countries, from japan to korea to the 10 island countries in australia, china is the largest trading partner for all these countries. all thesentime, countries have to balance their relationships with the u.s. and china. strategically, a lot of the countries in asia are under u.s. protection, from the philippines to south korea, etc. but economically, china has an enormous influence on these countries.
4:08 am
how do these countries balance relationships between the u.s. and china? it is critical in 2017. francine: thank you. ulrich stays with us. 20 coming up including, how is the owner of the largest container shipping line dealing with overcapacity and sluggish growth in trade? the as president-elect gives clues how he will step away from his businesses. we bring you that story and the latest on his pick for secretary of state. and could the banking industry beheading for an uber moment? we talk cyber security, bitcoin, and disrupting the banks. ♪
4:09 am
4:10 am
4:11 am
francine: this is "bloomberg surveillance." the fomc meets for the first time since the election of donald trump. long-term bond yields in equity markets have soared while expectations of a hike are priced at 100%. for more on the rotation from debt to stocks and what it means for the global economy, we are back with j.p. morgan chase's jing ulrich. when you look at our wirp function on the bloomberg terminal, 100% of a hack tomorrow. what happens next year? jing: we forecast another two hikes. all central banks or data dependent. they will look at what happened to inflation next year, what happens to unemployment. two hikes for now. it could be three. interestingly, emerging markets are looking at the u.s. rate hike with some level of capitation. in the u.s. of course, it is
4:12 am
baked in. we are seeing bond yields rise in recent months. we are seeing people wanting the fed to hike. otherwise, they will be well behind the curve. for emerging markets, what it means is basically capital outflows. we had the taper can from a couple years ago. now, we may have a different tantrum, because we have had a selloff in emerging market currencies. francine: i thought everything was priced in. you look at the dollar move. is that it? i do not know if that is it. i think we will see continued pressure as the u.s. dollar grows stronger. as u.s. rates go stronger. that would pressure emerging markets, especially with current account deficits. ar china, the situation is little different, because the currency is not free-floating, although in recent weeks the currency has been very weak, right? we have seen basically since august of last year, the chinese yuan depreciating about 13%
4:13 am
against the u.s. dollar. that sounds like a dramatic movement. but the currencies are relatively stable. for the chinese leadership, they need to focus on, number one, stimulating the domestic economy, as next year, remember, we not only have the european elections, which are very anticipated, but also chinese leadership transition in november of 2017. we will have the 90th party congress. there could be a second term. francine: the outflows are something we follow very closely . i have always been told because they are held by local authorities, they can roll over. but the outflows must be a huge concern in the government in power. jing: yes. capitals a close account, but the capital account is quite leaky. corporations and individuals have been trying to diversify out of r&b assets into hard currency. it has been an ongoing trend. when the currency weakens, we
4:14 am
see those outflows accelerate. what will happen in the next several months is i think the chinese leadership will aim to stabilize the mystic sentiment. so -- domestic sentiment. they will introduce measures to stem the outflow from china. for instance, individuals cannot use their pay card overseas to get as much foreign currency as they wanted in the past. even corporate investments, if they are investing in "speculative assets" -- real estate, capital receipts -- he will be subject to more scrutiny. the outflow in the coming months, after the introduction of these measures, may slow a little bit. francine: if it does not slow, are you going two-seamer volatility? we have nothing volatility in the chinese market since january of last year. or this year. his 2017 going to be a different story? the chinese20 16, leadership has engineered a soft landing in the stock market. they stabilize the economy. but in 2017, i think the biggest
4:15 am
risk is u.s. for relations, and what that might mean for chinese exports to america and the asia-pacific region as a whole. both economically and strategically. francine: what is one thing you worry about the most, away from china, away from the donald trump presidency? what is something this priced in the markets now? elections arepean a wild card. we have three major elections coming up in 2017. onple have digested the news brexit, because it is a long process at least running into 2019. but somehow, in the first half of 2017, we could have election surprises out of european countries. then, we could have another question mark about holding the e.u. together. if the e.u. work to deteriorate, all bets would be off. francine: thank you for all of your insight. rich of j.p. morgan
4:16 am
chase, vice chair of asia-pacific. how is the owner of the world's largest container shipping line doing with overcapacity and sluggish growth? speak to the ceo. ♪
4:17 am
4:18 am
4:19 am
francine: this is "bloomberg surveillance." here's nejra cehic. donaldpresident-elect trump has given his first clue as to how he will step away from his businesses. in a series of tweets overnight, he said he would put his sons in
4:20 am
charge by inauguration day on january 20. he also said he would make no new business deals during his time in the white house, but offer no information about his own role. the largest provider of digital wallets for bitcoin has included a former barclays ceo to its board as the company attempts to persuade the wider financial industry to adopt open-source ledger technology to settle transactions. we have an exclusive interview with the former barclays ceo, antony jenkins, and black chain ceo peter smith, at 9:40 u.k. time. in a credit plans to raise $13 billion, selloff bad loans, and slash costs. italy's biggest bank is targeting 4.7 billion euros of in 2019.t it plans to shed another 6500 jobs, bringing the total to 14,000. that is the bloomberg business flash. francine: thank you. for more on the unicredit story, let's bring in the managing
4:21 am
editor for european finance here at bloomberg. thank you for coming on again. yesterday, we talked about monte dei paschi. today, unicredit saying it wants 13 billion from investors. will they succeed? >> the market at the moment is telling us it will. shares are up, notwithstanding the 13 billion at the high-end of what the market was expecting. there had been rumors about a figure in that order. but it has been doing a couple of -- people were saying it would be less. essentially, it is turning a corner, cleaning out its balance sheet, cutting costs, doing whatever it can to make that palatable in an environment which is not conducive to much revenue. francine: yesterday, we were talking about monte dei paschi wanting 4 billion from investors. there is a question mark whether monte dei paschi can raise that money. if you are an investor, do you say i want to give it to unicredit?
4:22 am
or does unicredit get affected if monte dei paschi cannot raise capital? elisa: there are things to consider. there is a limited pool of funds that can go into italian banks and let's face it. investors will the sting was between the banks. the banks are at very different junctures. monte dei paschi is also doing a clean, but is also retooling considerably. remain -- it is a bank that has had legacy issues, where lending has not been top class. they are really presenting a monumental change quite rapidly. having said that, if monte dei paschi does not proceed, one does need to look at the effect on the broader confidence particularly in italy of households, banking stock, banking debt. that of course could potentially impact unicredit. francine: the timing is unfortunate, i guess. the deadline is the end of the year or 20 december? elisa: monte dei paschi is looking to wrap up by the end of
4:23 am
the year. they have been told by the ecb they cannot have more time. in a credit have said they will do their capital rates in january. very close timing. francine: thank you so much. always great to have you. part of our finance team in europe. the owner of the world's largest container shipping line is going boards in copenhagen today. matt miller is there. skou,i am here with soren the ceo of moller maersk. right now in the middle of maybe period of breaking up or splitting up the business, is probably a better way to put it. the shipping side, transport side, logistics on one, oil on the other. does the rising oil price make you want to keep some of these businesses? the oil price going up is clearly a huge help for oil. also of all, oil companies
4:24 am
by oil service businesses. over the past couple of years, we have worked hard to build an oil business that is profitable and growing. $50 oil or $45 oil, we eventually achieve that, the breakeven oil business is less than $40 a barrel now. when the oil price goes up to $55, $57, that is a good day for us. but it does not change the strategic direction of the group. we believe that the future of on globalgoing to be container shipping, container logistics, and that we will separate out our oil and interrelated businesses, so they can continue on their own. matt: so this will maybe help you get a better price when you sell or depressed these assets. let's focus in on shipping. there is about a 30% estimated overcapacity in the world for these vessels.
4:25 am
and you want to also be very conservative on your, so you are to buy more you are going to hold ships. you are going to hold your capex down. how do you have older ships last longer with lower capex? soren: in shipping, there is a clear consolidation wave ongoing right now. in the 12 months, a total of seven out of 20 carriers, what used to be the top 20 carriers, either merged or announced being gone out ofave business entirely. so we are seeing the industry consolidating. the old model of growth through acquiring new capacity, building new ships, is not working any longer. there is too much capacity, and the industry needs to consolidate. so if you want to invest in shipping today, you are going to have to buy ships that are already on the water. matt: you recently purchased or are in the process of purchasing
4:26 am
hamburg sued. -- there were 20 large shipping companies two years ago. as you said, seven have been taken out. how many do you see room for in the future? soren: first of all, i believe we will continue to consolidate in the industry, continue to become more efficient, take cost out. there are players in our industry that have not been profitable for a long stretch. so i see consolidation continuing. the-term, i would expect whole industry would end up looking very much like the packaging industry, where you have dhl, fedex, ups. those are businesses where you operate capital-intensive global networks, distribution centers. shipment. it is a similar type of business. and i would expect that long-term, our industry would converge toward that model as well. matt: you have about 19% of the
4:27 am
global market with the merger. let me ask -- who is next for moller maersk to pick up? soren: i do not know that we have plans. matt: nobody in your sites right now? soren: first, we have to clear this transaction through regulatory approvals. it is going to take 6, 9 months. and then we need to integrate it. i think that is going to be the transaction we want to do in the short to medium term. the future, we will see, once we have consumed that transaction, what happens next. matt: what about pricing power right now? obviously, prices have fallen. they have been in the doldrums. it has been a problem for your share price and every other player as well. do you see more pricing power coming back? do you see, in 2017, stronger pricing? soren: the global container
4:28 am
shipping industry went into what i think we can call a global price war. basically, in the second quarter -- and it was driven by a lot of capacity being added into a market that was not growing. we are very much the victims of supply and demand. growth has come down a lot. and actually, last quarter, we have seen demand growing faster than capacity. we have also seen, for that reason, prices starting to come up again. matt: are you concerned about donald trump's stated policy aims? he wants to put a 45% tariff on chinese exports. goldman sachs has said he could bring down, with his terrorists, -- with his terrorist -- tariff, shipping by 50%. you think he is going to do that? khan. is.
4:29 am
president-elect. he has not published any specific legislation to that effect. there are a number of things to consider. some of the policies in terms of moreaxes would imply consumption in the u.s. that could be good for trade. clearly, we also, as a company, believe in increased trade and global trade. free trade has, you know, it generated hundreds of millions of people that have been able to come out of poverty in asia. and for those who live in the west, we are able to enjoy products that we in all likelihood would not be able to afford if we had to make them ourselves. i think there are strong benefits. clearly, for those of us that are in global trade, you have to recognize that global inflation has hurt them. urtglobalization has h some. we need to get everybody on the right path. that is presumably what president trump will do. we will see what happens. in the short term, there are positives and negatives in the
4:30 am
matt: do you think investors are overreacting to a fear of these kinds of protectionist policies from donald trump? do not have much of a view on that to be honest. matt: so many analysts have come thing thatgreat shares are undervalued and they should be trading for 12,000, 13,000 krone. what you think about this wave of upgrade? soren: i read those as recognition that the spread of the strategic path we are selling the group on in terms of separating out the energy spending for the diversified models and moving much more towards transportation, global container transportation logistics.
4:31 am
is aindustry, that space global when trillion dollar industry and it is growing with global gdp at least. it is an interesting space to be in. player and have something to build on, and i think that is what the investors are aware of. matt: goldman sachs has you on their convictions by list. list. you are working with alliances, mediterranean and you are working with shunned i -- hyundai as well. soren: when he do sharing agreements or alliances you build a bigger, better product, network that costs you less per container so to speak. that is the advantage. hmm merchant
4:32 am
marine to our network in the east-west trades. we do that principally in order to get savings and in order to get a better product than what we have today in particular on the pacific. .att: fascinating stuff thank you so much for your time. the ceo of a.p. moeller-maersk. matt, thank you so much. a great interview there. miller in copenhagen. we just had some u.k. inflation figures. inflation accelerated more than econ of us had forecast in the month of november, given a boost by the process -- price of clothing and gasoline. .t came in at 1.2% we are seeing more and more
4:33 am
evidence of the buildup in inflation pressures because of the pound's decline and rising oil. surged almost 15% in the november, the biggest annual increase in five years years we will have a boe decision on thursday so we will see whether they have to raise their inflation expectations in the coming months. let's get straight to the bloomberg first word news. president-elect donald trump will announce today he plans to nominate exxon mobil ceo rex callison as secretary of state. if he is confirmed it would hand the job of the nation's top diplomat whose ties to vladimir putin go back almost two decades to the time were possible russian interference in the u.s. election is under scrutiny. goldman sachs once the heir apparent to lloyd blankfein has been named donald trump's chief tall dutch policy advisor.
4:34 am
-- policy advisor. news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, i am nejra cehic. francine: stocks higher this morning. let's head to mark barton at the terminal for your asset check. are rising led by media and bank stocks, the highs since january. the best-performing, unicredit, the italian lender, shares up 9%. they are planning to sell off bad loans and slash costs. a return on tangible equity above 9% as part of the street year -- three-year strategy to shed another six and a half thousand jobs as they aim for
4:35 am
1.7 billion euros of annual cost savings. shares this year, 53% lower. economic stabilization holding in china in november, offering more room to switch focus away from stimulus toward curbing natural risks. industrial production, the blue line, climbing 6.2% versus the earlier in november. the estimate was for 6.1%. 10.8% lasts up month, that is the white line. fixed investment assets increasing. bloomberg's china monthly growth 7.4%,r picking up too, proving its resilience in the final quarter of the year. next quarter -- exporters cushioned by the weaker currency and factory prices snapping out of their deflation refund.
4:36 am
today, event kicks off two day deliberations at the fomc, the federal open market committee. a very simple chart. the probability of a fed rate hike has consistently held at 100%, as you can see from this chart, since november 21. it is not about will they hike, it is about what are they going to do in 2017 and 2018 that matters. francine: thank you so much. hasident-elect donald trump given first clues as to how he will step away from his businesses, saying he will put his sons in charge by inauguration day but offering no information about his own role. he is expected to announce the exxon mobil ceo is going to be his secretary of state. stephanie baker, thank you for joining us. he tweeted saying no business
4:37 am
deals while he is in the white house. his son will take care of the business. we do not know what role he will have and his daughter will have. stephanie: i thought it was significant that he did not name ivanka trump as having any role, which indicates to me that she and her husband jared kushner will have some role to play in his administration, and that he wants to create distance. i think the other significant thing in this is that he has said nothing about ownership, that he would hand over ownership to his children. it is all about management. i think the whole issue of him not doing business deals while in office is going to still be a problem for him, because he has signed agreements all over the world, and some of those projects are in different stages . even if he will not sign any new agreements, some of those agreements will definitely benefit from him being in office.
4:38 am
he might have an easier time getting planning approval, raising financing, and the like, so the issue of conflict of interest will continue to dog him. francine: we are expecting a news conference on the 15th. thisanie: he had announced with great fanfare next week that he would hold his press conference, his first and month to announce plans. last night he said he will hold a press conference sometime in january. francine: tweeting. stephanie: and he is tweeting very late at night so this has led everybody to scramble as to why he has delayed it. does he not want to give a press conference or have the details not been ironed out, and why didn't he realize that when he announced a specific date last week? , whyine: rex tillerson still no appointment? how controversial is he? stephanie: i think you will have quite a fight in the senate to get confirmed.
4:39 am
there are prominent republicans like john mccain and marco rubio who have expressed concern about his appointment, saying he is too was to russian president vladimir putin, and that it does not take a lot in the senate to block his confirmation. you are going to see i think quite a fight. francine: we understand donald trump is happy to take it on. stephanie: it appears so, but as always you never know if he has a last-minute change of heart. it appears that he is set on tillerson. some other prominent republicans have urged him to take that step , including condoleezza rice and others. i think it shows his approach to foreign policy which is very much business led, and we are going to see a reset and russian relations. francine: if he does not get that confirmed does it weaken the president-elect? stephanie: it could be a huge setback as then he will have to
4:40 am
go back to the drawing board and figure out who else to appoint. i think regardless it shows where he wants to take foreign policy, particularly as regards to russia. francine: stephanie baker, bloomberg's global correspondent. banking's uber moment. cuts to traditional finance are predicted. we speak to the ceo and new board member antony jenkins. the clock is ticking on monte paschi's capital increase. we talk with rbf chair sir howard davies. no deals while in office. trump tweets his sons will run his company once he is in office . the expectation rex tillerson will lead the state department. tune into radio daybreak on london's digital. this is bloomberg. ♪
4:41 am
4:42 am
4:43 am
francine: this is bloomberg "surveillance." i am francine lacqua in london. the largest provider of digital wallets for bitcoins has just hired antony jenkins to its board. he is predicting an uber moment for the industry as technology eliminates back-office jobs. what does it mean for banks? i am pleased to welcome the block chain cofounder peter ceoh and former barclays antony jenkins. first of all, why block change? ceo, you say,lays then tech.
4:44 am
how does that happen? have spent 30 all years in the industry and i am convinced technology will transform the way the industry operates. many people are working on that but i wanted to work with people who have a lot of confidence and i believed in, but who were working on technology that could create that transformation. i think block chain is one of those technologies. year period, 15 think we are going to see some big moves. francine: you basically have the technology and now you just need the front man to come to the banks. to buildthink you need a platform that is independent so one of the things we are focused on is building an important as independent independent- standalone platform. hiring antennae was less about
4:45 am
antony was about somebody who knows how to run a global business. of our viewers know what block chain is, but for those who do not explain it to me. technology that allows you to move value very securely at a very low cost. technology.iciency technology. what that allows you to do is rebuild the financial services industry. i think there is multiple ways to approach that you're it you ck. do that by buildingblo we are focused on building an independent platform. francine: you have to trace where the money is coming from because you have to prove the transaction. hype a few lot of years ago and it peter deboer off. how do you explain that -- it peter off? .
4:46 am
peter: what banks -- antony: what banks do is create a point of intermediation. you take out risk any take-out cost. on the question of how the technology is seasoning and developing, it is still a very nascent technology. for those of us who are old enough to remember the 1990's when we first started to access the internet on a 56 k dial-up modem we thought it was pretty cool to be able to get emails and a bit of content, and look what we can get now. in 20 years time we will do things we cannot even imagine in a more low cost, risk-free way. francine: i read a lot of papers , including by the federal reserve talking about blockchain . they say the problem is one of burden sharing, there is a problem of regulation, a problem of trust.
4:47 am
what is the one thing you think would propel this technology to more mainstream? is a trust? antony: i think trust is always going to be important but i think it is a lot to do with the technical issues and the technology itself. you do need a lot of computing power to run the cryptology for this, but it is still not scalable across the entire global economy. i think those technical challenges will be solved, but when you look at what happens within blockchain, the ability to track completely and transparently each activity, that is incredibly powerful and does not exist in any other activity that we have today. the trust will come to the for e as the technical challenges are solved. francine: companies are using this technology to track their supply chain. are you disappointed it is not adopted as fast as people
4:48 am
thought? peter: i usually tell people they are signing on for a 15 to 20 year project. i think it will take a long time. we have seen a lot of financial non-services uses that have not gone to production yet. our business has grown a lot faster than i thought it would. this quarter alone, the business has nearly doubled which makes for a strange first board meeting for antony. is reallyof uptick fascinating. there are millions of people actively using our platform. if you compare that to any digital number for a bank, it is enormous. francine: what kind of people? peter: people all over the world who want to store value -- francine: retailers? peter: it is mostly a consumer application, consumers who want to transact internationally in a safe way, consumers who want to save money.
4:49 am
that is where we are seeing a lot of growth, but i think this is going to take a long time. francine: how many job losses will incur? who exactly are you disrupting? antony: frankly it disrupts the entire financial ecosystem. jobs will goof the out of the industry over the next decade. that is not just because this type of technologies but also others, just the power of mobile platforms in 4g. finances are a semi automated industry. you will seenk people working at computer terminals and all of that could be the automated way and there will be a lot of job losses in other industries. peter: a great example that is definitive, we now do about the transaction volume that paypal did when they went public. they had several thousand employees when they went public.
4:50 am
we have 54. that is the scale you are looking at over the next 10 to 15 years in the financial industry. francine: thank you so much. antony jenkins and peter smith. coming up, we have plenty more on blockchain. a month until the dust of month since the u.s. election. we talk cyber security as well. this is bloomberg. ♪
4:51 am
4:52 am
4:53 am
francine: this is bloomberg "surveillance." i am francine aquatic in london. let's -- francine lacqua in london. we are talking to antony jenkins and peter smith. i do not understand, and we were talking a little bit during the bank -- break. if you are a big bank you can avoid -- afford getting into technology like this, that you would resist it. antony: it is the problem of the incumbent. if you look at other industries,
4:54 am
digital photography, content streaming, smartphones, the big companies that on those spaces, they could not make the leap. the fundamental reason is not lack of resources but it is the problem that all human beings have, we cannot see discontinuous change. we tend to think of everything as being incremental and it is difficult in a big company to say we are going to stop everything we have been doing and do something completely different. francine: it would mean that actually you are going to see, if a big bank is disrupted you are also going to see banks consolidate or basically die in 15 to 20 years. is quite think it likely in the first phase we will see a separation between the management and customer relationship, which will be handled in a very technology driven way. the core balance sheet function at the bank provides.
4:55 am
i think in subsequent phases you might see that balance sheet function go away as technologies like blockchain allow people with capital to connect seamlessly. there will be a series of ways -- some banks will make the transition but as we have seen in other industries, many will not. francine: you never thought of working for a big bank, you wanted to disrupt them? .eter: it started as a project the ad of technical interest. -- it started as a project purely because of technical interest. francine: how long ago? peter: about four years. it has been an amazing four years. i never worked for a big bank. i think it is a cultural thing. to workike me, you want in an organization that values technology people come of that puts it at the front of the
4:56 am
business. we do not want to go to the back of the bank and work on our core banking platform and that is ultimately what is going to capture these incumbents, to compete in the next 20 years unique is talented developers that are sort of at the center of your business. i think because of 100 years of culture it is going to be really hard for the big banks. francine: i feel like i'm so much smarter about crypto technology. you have to come back and talk about this underlying technology. peter smith and antony jenkins. bloomberg "surveillance ago --tinues -- close surveillance" -- ♪
4:57 am
4:58 am
4:59 am
planine: unicredit capital --hares rise as it offers
5:00 am
drop hints at this succession plan from his businesses as see attempts to nominate rex tillerson for secretary of state. china stabilizes the november enough tos the growth withdraw stimulus? i am francine lacqua in london, tom keene joins me from new york . i am very excited to be speaking to sir howard davies of rbs about some of the business models that may be troubled in europe. eichengreen will join us from berlin. i saw the 10 for one reverse sprit of unicredit and it is on the edge of citigroup. it reminds me what citigroup did a million years ago in the united states. francine: if you think about unicredit, the share price is about six and a half percent higher so it seems investors are
5:01 am
happy with what they have announced. which isdei paschi trying to raise 40 billion does not get through, as it put our credit on -- more pressure on unicredit? it is a difficult and interesting relationship that they have. let's get straight to the bloomberg first word news. here is taylor riggs. taylor: as you were mentioning, president-elect donald trump lands to name the exxon ceo as secretary of state today. -- accordingted to to a person familiar with the transition, he has accepted the offer. there's a new prime minister in italy. to replace myn tail renzi a constitutional referendum he backed was defeated. one of the first moves is to
5:02 am
retain the finance minister and tell him to fix the company -- the country possibly banks. outeuropean union will lay how it will conduct its brexit negotiations. the e.u. governments will move quickly once the u.k. triggers the withdrawal. the u.k. will be excluded from all meetings where the other 27 nations debate a strategy. people in venezuela are rushing to deposit bank notes or dumping their cash savings altogether. the president is invalidating the largest bills because of what he calls an attack on the country plus the quiddity. -- country's liquidity. his political foes are smuggling currency out of the country. global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. i am taylor riggs. this is bloomberg. tom: thank you so much. let's get right to this.
5:03 am
bonds,eck, equities, currencies, commodities. a lift in futures after another day of equity gains. oil elevated. on to the next screen. we will be doing our fed coverage tomorrow. there is the dow, 19,800, on the way to 20,000. euro-swissie is important. dollar index at 101. francine: there is a little bit of movement on what we saw with oil after the iea report. i wanted to show you the european stocks, gaining a touch. look at the pound. u.k. inflation accelerated more than forecast. if you think of the pound , that is building inflationary pressure plus rising oil costs, you could look
5:04 am
at a different picture for inflation going forward. it is a good story. tom: it is a great story. rescue.t to the here we go. the bloomberg chart. we will be showing this a million times. i did this force or howard. here we are a year and a half howardi did this for sir . here was a year and a half ago, and here is the huge disappointment down, and the grudging move up. the junk condition of trump reflation, way out over 1%. it is a breakout above 1%. good news. we will migrate the circle up here off the fed meeting tomorrow. francine: on the back of that i want to show you the most simple chart. tom: it is a zen chart. not really. the probability of a hike, 100%,
5:05 am
and you look to next year, this at.hat we are looking it seems that most of it is priced in. let's ask our experts. sir howard davies, chairman of rbs, thank you for giving us your time. get fed expectations, what the banks are going through, what is the biggest risk and 22017, that monetary policy does not deliver or the crunch in the banking sector? howard: i think the way monetary policy is evolving is on the whole quite beneficial. i think we are in a gentle tightening phase. even the ecb reducing the amount of qe somewhat. i think on the whole that is quite good from a banking perspective because the yield curve is rising, and unless you have a positive sloping yield curve ranking is a difficult business. i think the worries are
5:06 am
elsewhere, still in chinese credit growth. i was in beijing last week and things are still moving forward. there is growth in the economy that coming at the expense of an expansion of credit and that is something we have got to keep an eye on. of course we have to keep an i on italy although the news is slightly better. francine: on china, what is your biggest concern? you have the renminbi going down outflows accelerating, and reserves also going down you'd how do you fix this? howard: i think the chinese at the moment are sticking plaster to it in taking various measures to reduce the outflows, whether it is preventing people from using their credit cards in hong kong or whatever. there's a lot of micro measures going on. i think in due course they are going to have to acknowledge that credit is too high and they probably are going to have to raise rates. tom: the great call in the bond arket now, not that you are
5:07 am
fixed income strategist, but it holistic goes into your work in economics. with a trump reflation, do we have a sustained move to higher rates or are we going to dampen back to what we were all talking 7,ut on dissent -- november 24 hours before the election? bring up this chart. the basic idea is the idea of do we go up here and stay here, and you learned this, the dampening function. with come back like this some path to a lower terminal rate? which is it? chartist or aot a bond trader. i think it all depends on what happens on the fiscal front in the united states. tom: agreed. my view is some of what the president elect to do is
5:08 am
relatively easy. you can cut taxes quickly. some other things are much more difficult. increasing infrastructure spending is a terrific idea, but the number of shovel ready -- projects is relatively low so i do not think we will get the scale of fiscal boost that some are forecasting. i am not one of those that thanks interest rates will carry on rising. tom: we are honored to have you we speak delicately about bank affairs, but how do corporate leaders strategically plan for the trump reflation? in whether you are rbs are caterpillar, can you plug in the trump reflation or do you have to wait to see the outcome before you make a strategic plan? howard: i think what most corporate's do what they follow some kind of consensus forecast. .hat is what we do
5:09 am
we are not trying to bet the .ank on the economic view the forecast would tell you the central expectation for inflation has gone up somewhat. the expectation for the yield curve is it will be upwardly sloping, whereas until the election we were looking at a more or less flat curve. i think people will be planning against that background. i doubt if people will be placing huge bets on the probability of a massive boost in infrastructure spending. i think they will want to see how realistic that is before they do anything. on: we will continue european banking and the update on brexit as well. tomorrow across all of bloomberg radio and television, our fed coverage will begin early in the morning. 1:00 p.m. tomorrow afternoon the fed decides, scarlet fu leading our coverage. this is bloomberg. ♪
5:10 am
5:11 am
5:12 am
francine: this is bloomberg "surveillance." francine and tom in london and new york. here is taylor riggs. buyor: japan has agreed to sab miller beers for $7.8 billion. that brings maybe and inbev a step closer. it strengthens a soft he's hold in europe. hold in europe. merck -- maersk maersk's energy business generates about $10 billion a year in revenue.
5:13 am
italy's largest bank is planning its biggest overhaul ever to boost capital levels and profits . unicredit will sell $13.8 billion in stock and will sell off that loans to cut another 5500 jobs. in the latest european stress test unicredit has the slimmest capital buffer among banks considered important to the financial system. that is your bloomberg business flash. francine: for more on italian banks and the banking industry at large we are back with howard davies, chairman at rbs. breaking news from the unicredit ceo saying to keep liquidity buffers it needs to be in excess of 150 billion euros, there needs to be decisive action by 2019. what is your take on italian banks? there are healthy banks and not so healthy banks but sometimes the market confuses them. howard: overall in italy there
5:14 am
is a major problem of nonperforming loans, and that is dramatically higher than in france, italy, or the -- france, germany, or the u.k. different banks have different business models in different incidences of nonperforming loans, and different quality of management. , i presume presume he would not give that size a party unless you got some guests were going to show up so he has some reason to believe he is going to get that money. whatis good news because has been happening in italy is the banks have been trying to improve their capital position but having to do it by reducing the scale of their balance sheet . the morning rain in lending, -- reign in lending, the more growth in nonperforming loans there are. you cannot increase the health
5:15 am
by reducing the balance sheet. ultimately you have to have a stronger capital base so the fact that they are going for a big injection of capital is good news and i think that is why share prices responded positively. francine: i do not know if it is anchor investors, but is there an anchor link -- inter-linkage between many credit and monte paschi? -- unicredit and monte paschi? if monte paschi cannot raise the capital does that mean that unicredit is a risk? i suppose it is a fair point to say the market has a degree of appetite for italian bank risk, and probably that is limited. it'll will be looking at their overall portfolios and saying, how much do we want? there is some sense in which there is a zero sum game but i think monte paschi will depend heavily on what price they want to put.
5:16 am
put up the royal bank of scotland on this chart, that here we have for banks. paribas,diamond, bnp deutsche bank, and unicredit down here with 93% of their loss in equities since the beginning of the financial crisis. everybody wants to be like jpmorgan, i get that. when you are in a meeting, what is your number one message to bank operators to right size the behavior of european banking? what is the davies marching order to get tactical results? howard: there is an overall structural problem, which is that europe is too heavily depended on bank finance. therefore, what you really need is the development of capital markets. you need a project that seems to
5:17 am
be somewhat stalled since jonathan hill left. because banksthat in europe are taking too much of the strain. if you look at unicredit, it is in an economy that has not grown for 20 years. gdp per had in italy is the same as 20 years ago. if jamie dimon had faced that situation he would not be looking as healthy as he it is today. there is an element to which the banks are mirrors to their own economy. there's not a great deal you can do if you are unicredit, about the fundamental situation of the economy. tom: you know that in the 1930's, given terrible growth we saw combinations. is that what is missing in europe? i do not want to get you in trouble with general counsel or the prime minister, but is the m&a in of unicredit more bank europe? howard: i think that europe is
5:18 am
not really one place from this perspective. i do not think you are going to see m&a in the u.k. on any massive scale. we have a pretty concentrated banking system. that is probably true in france and italy is a different question. germany, different again. a distributed bank system but a lot of it is mutually owned and state owned. , i believethe ecb they would say in some countries there is a need for further consolidation and other countries not. francine: i want to ask about rbs and at the same time we are following this news conference of unicredit. we understand they decided to 40% to 1.2s pay by million euros. that is usually done as a sign of solidarity from the ceo. if you move it to rbs, how do you describe the turnaround?
5:19 am
it seems painfully slow and is there any way rbs should be taken because the turnaround has been so slow, it should be taken over completely or broken apart or turned into a customer owned lender? howard: have to take apart your initial premise. the corporate business of rbs is doing well. we are growing share in mortgages and business lending. the core business is throwing off roughly a billion dollars a quarter in profits. the problem at rbs remains the legacy. glenn, it is the consequence of the state aid in 2008, and the subprime mortgage problem does the same as deutsche, credit suisse, barclays. .e are in that queu these are things that date way back. it dates back to 2007, has nothing to do with the current management or previous
5:20 am
management. there is a core business you have got to look at. it is doing ok and it is not clear to me he would do anything to improve that by restructuring the bank. are you disappointed the government still own 73%? if you look at the timeline, we would have thought they would have sold shares. true, at theis obstacle has been this low resolution of legacy issues chime afraid are not completely, -- issues which i am afraid are not completely out of our control. which i think is the principal obstacle to a government sell back so it is important to distinguish between the continuing bank -- come backe going to with sir howard and speak of the distinctions of the various places on the balance sheet and how it affects the income. coming up in our next hour, barry eichengreen, one of their
5:21 am
great international economists. from our berlin studios on europe.
5:22 am
5:23 am
5:24 am
tom: bloomberg "surveillance." francine lacqua in london, tom keene in new york. sir howard davies with us, chairman of rbs. the elephant in the room of all the bloomberg helical dutch headlines on unicredit -- headlines on unicredit as they
5:25 am
are going to take the npl's and sell them for next to nothing to entrepreneurial american upstarts like pimco and fortress. if you take accounting you and or $.21 on the dollar. will that markdown change unicredit? howard: i suppose it will as part of a package to encourage people to put in new capital. investors of new capital do not want to think they are pouring capital into a hole of uncertain size. therefore, crystallizing the size of that loss is often a way of building confidence for people to put in new capital because they do not want to feel that this is going to go down, $.21 will become $.10 in six months and it is their capital that will go down. italianthe responsibility of banking
5:26 am
setting up massive gains for pimco, fortress, and the others taking advantage of their npl's? howard: we will see. i would need to look very hard at the packages of npl's. i do not think that is necessarily the case. resume a bully they believe they can work those out and have the capital to work them out. whether that produces great gains for them, in some cases some of the people who bought packages of mortgages have done well and some have done less well. it is a gamble that you have to attract new capital into that kind of situation. tom: we will continue with sir howard, foreign affairs, gideon rose in our next hour. ♪
5:27 am
5:28 am
5:29 am
of thee: breaking news new italian prime minister, sworn in as italian premier. he is at the presidential palace
5:30 am
and is now addressing the senators -- i think both houses. news talking about the government and says it is urgent to give italy new government. he said he will stay within the outgoing majority, and is making remarks on the italian banks solid.they are of course we will get more from him throughout the day. paduan is staying as the minister of finance. syria, rebels have suffered a terrifying collapse in the face of an assault by syrian troops and have retreated from their former stronghold. they have regained control of 99% of the rebel enclave. british lawmakers warn that theresa may must strike a temporary transition deal with the european union to protect trade.
5:31 am
the house of lords raised fears that i post brexit agreement will be impossible of -- a post-brexit agreement will be threeible in the next years. president elect donald trump is about to set the stage for a confirmation battle in the senate. today he is expected to nominate the exxon ceo for secretary of state. several are concerned about his close ties to russia's president vladimir putin. meanwhile, trump says he will make no new business deals while in office. he also said he would put his sons in charge of his business by inauguration day. he postponed his december 15 news conference to announce his business plan. global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. riggs.ylor this is bloomberg. francine: thank you so much.
5:32 am
let's get more on the president-elect is stephanie baker. still with us sir howard davies. what have we learned from the president-elect? it is his sons that will run his we understand if he nominates rex tillerson it will be messy. stephanie: on the business front , he has given not very many details and said he will hand management to his sons. he has not said anything about ownership which a lot of white house ethics lawyers have urged him to do, divest his holdings as the only way he can settle the whole issue of conflict of interest. notably his daughter is longer trump has been left out of the management -- is longer trump -- ivanka trump has been left out of the management which is an indication she could be in some kind of advisory role.
5:33 am
there were reports they were looking for a house in washington, d.c. and they were going to move with them. the conflicts of interest will continue to dog him if he refuses to die fast his holdings -- divest his holdings. if his sons continue to run the company there will be issues as they go around the world, that people will think whatever deals they might do with the trump organization might help them create favor with the u.s. president. new deals, existing deals, these are ongoing relationships that it is hard to make a clean break if you continue to own those businesses. francine: if rex tillerson gets appointed secretary of state, what are the chances of him getting approval? he faces huge opposition among certain republicans in the senate. for one, john mccain is another who have voiced concern about his close links to
5:34 am
russian president vladimir putin. his business dealings as head of exxon in russia. he could face quite a fight alone in the senate foreign relations committee where there are republicans, including marco rubio, who said they question the wisdom of that appointment. tom: sir howard, with great respect for your eclectic education and history in modern languages, here work at stanford and of course with mackenzie, you are an eclectic guy. ceo and civil engineer from the university of texas. should he be penalized because he does not have a fancy set of degrees like howard davies? the secretaryect of state, it is going to be personality, backbone,
5:35 am
determination that will be the top criteria you are looking for . his background suggests he probably has all of those things, and an oil company does give you a lot of geopolitical understanding. that is what oil companies need. i do not think that you could year at he is prima face --prima facie unqualified. scenehere is a lovely where john adams goes to see the king of england and goes in and cannot figure how to back out of the room in deference to the king as he makes his exit as the ambassador to the court st. james. how is rex tillerson going to back out of the various rooms? this is original stuff. ors he back out with grace will this be a graceless administration? howard: i have no idea about that.
5:36 am
we are all waiting for who we will get as ambassador in london. i am more interested in trump's business plans. maybe i will hand over rbs to my two sums. francine: from tom's grateful -- graceful or ungraceful question dograce to regulation, how we know what donald trump wants for regulation of wall street and what impact it would have on european banks? howard: we do not know directly but the ideas that seem to be of interest are the ones put financialom the house services committee. the idea is that if a bank meets a 10% leverage ratio than a lot of the other requirements, the volcker rule, the stress test requirements that they need to put in a huge capital plan each year will fall away.
5:37 am
if you are that safe with that little leverage come you are fine. many u.s. banks do not meet that yet but they have on average 8% or 8.2% leverage so they are within striking distance. that would be an interesting challenge because it would make regulation a lot simpler, touches an attractive idea. it would of course -- which is an attractive idea. it would of course make the american banks fairly safe. then of course we would be faced with a situation, in the u.k. what do you do? you decide you should move in that direction because u.k. banks in the u.s. would be facing a different competitive environment? i think if they do move in that direction it is going to be quite some interesting policy choices in the u.k. tom: you are briefing the new secretary of state on brexit. what have you learned in the last number of weeks and what we look for in january?
5:38 am
howard: specifically in relation to financial services, i think what we are seeing, and you will hear that from the chancellor of the exchequer today, the government is appreciation and market needs some degree of reassurance on the transition, and that the notion of a cliff edge where one day you are in and one day you are out, is one that is very alarming for financial markets. the optimist in me says that is starting to be understood. that is not an is to of questioning whether we leave or not, that is about how you do it. if you do not have some assurance in the market on a transitional arrangement, next year you will see a lot of firms preparing for the worst in starting to move people to other centers in europe, which would be unfortunate from the u.k. government point of view. i am slightly more optimistic in
5:39 am
the last week or two then i have been, the realities of the brexit market are starting to be understood. francine: are you surprised it has taken this long? some people in the city would like a transitional arrangement and some politicians do not want to leave. i think there has been a lack of trust to in people in financial markets and politicians, and that is starting to be rebuilt. howard, thank you very much. stephanie baker, thank you. i love the trump updates from across the pond. there is a fed day tomorrow. we will have our fed coverage, to give you perspective. charles plosser coming up on television and radio, for that this morning, the former president of the philadelphia fed. worldwide, this is bloomberg. ♪
5:40 am
5:41 am
5:42 am
francine: these are live pictures of angela merkel talking in berlin with the french president francois hollande. he said he will not try and become president next year, so he is out of the race. have the presidential elections in france, i believe in march or april of next year. angela merkel saying e.u. leaders all by the e.u. turkey accord. i am francine lacqua -- e.u. leaders will stand by the e.u. turkey accord. expectations of a hike are at 100%. , we aremeans for europe
5:43 am
with the chief economist from bank of america merrill lynch. a hike on wednesday is fully priced in. what happens after that? >> after that our guess is that the fed would like to look at what we get from the new u.s. administration. point.s probably no we know what the administration wants, kind of know what the new administration wants. now we want to get the magnitude of the fiscal push. what kind of impact the protectionist indices may have on the world economy. from their point of view, this hike is a hike that would have happened anyway specters of who won the election. afterward you will not really -- regardless ofy who won the election.
5:44 am
really reflatewe the economy? gilles: the figures we have in mind are half a point to gdp or maybe a whole point if you are generous. the question is what kind of dollars can be found between the white house and congress so the easiest to get will probably be tax cuts. on the infrastructure spending, it will take more time if anything gets sorted out. so we focus on this, the tax cuts, but you need to know exactly how things will shape up because you want to know whether some of it will immediately go through corporate investment, if some of it will go to consumption. it is really early days and for the fomc it is hard to make a strong call on the shape of domestic demand in the u.k. next year -- tom: i understand there is a lot
5:45 am
of dynamics in here, not just your european focus. here is really good math on dollar dynamics, and up we go to new dollar strength. what is the merrill lynch call, are you assuming a brutal move, are you gradual lists, or does it can't found the doctor -- dollar optimist? gilles: -- dollar optimist? gilles: what was really interesting is the move we had earlier in the year. this is what really shaped the feds reaction function more than what we got over the past few weeks. at this stage we are waiting in because focusing on the euro, what we got from the ecb last year was wishy-washy. we found a sort of new range wereen 105 and 110, and we
5:46 am
a bit surprised by the market reaction just after the fact. we are in wait and see mode. tom: here is the beginning of the year as i try to draw a vertical line. there is the beginning of the year, and there is the dollar pullback. am i right that that gave the fed room to wait? drag from had a big the strong dollar on inflation which certainly had an impact on the fomc approach. you really have to make sure they could get some respite on being faster on normalization. by and large, even if the fed cannot completely disregard, i think what is going to shape their views for 2017 is going to be domestic demand. we know to some extent the strength in the dollar is going
5:47 am
to dampen. francine: and funding. gilles: what is going on now is that even if you forget about four minute, if it is possible, the change brought about by the u.s. election, the fact we will get a fiscal stimulus, in any case we were having a normalization in inflation in the u.s. four inflation is getting close to target because the labor market is tighter, wages accelerating. if you are the fed you want to know what impact this fiscal stimulus will have on a story which in any case was conducive to a normalization of monetary policy. francine: does fed policy make it easier for the ecb? i am not sure you read what they did last week, was it tapering, was it not tapering? whatever the fed does, if they start tightening, and if donald
5:48 am
trump means the dollar goes higher it must make mario draghi's life easier. gilles: not in my view is what is going on from the ecb point of view, it is not so much the euro that is weaker but the dollar that is stronger. in trade weighted terms the euro is not depreciating that much. my reading of the ecb last week is actually that we have gone on we know there is going to be less from the ecb is rather than more. i am not convinced that this was the right decision. i think it is premature. there is something odd in reducing the pace at a time where is section that effective inflation remains weak. it is even stranger to do this when you argue that you are not sure by 2019 inflation will be back to target, so my guess is
5:49 am
that the ecb is losing heart on qb in general. six to 12 months, intellectual support for qb started to fade, and we have less interest from the ecb. rate matchesk that in their calculation, it is more the reverse effect of qe. francine: thank you so much. up next we will be talking a little bit about the rest of the world and the boe and the inflation figure we had today. later today, erik schatzker will sit down with morgan stanley colinational president kelleher ♪.
5:50 am
5:51 am
5:52 am
tom: bloomberg "surveillance." francine lacqua in london, i am tom keene in new york. ,here is a little bit going on a new secretary of a small battery -- matter of a bank in italy. prominent short seller carson block has targeted a
5:53 am
japanese company for the first time. shares could drop as much as 52% from yesterday's close. muddy waters accuses them of the global oil surplus will change to a deficit in the first half of 2017 according to the international energy agency. will fall bykpiles about 500,000 barrels a day as opec and its partners cut oil production. they are at their highest level in almost a year and a half. that is your bloomberg business flash. francine: thank you so much. we are back with gilles moec. the forecast for inflation has changed, having to do with the oil price, and in the u.k. it has to do with the pound, pound
5:54 am
slighting, and the brexit but in the u.k. inflation came in stronger than the economist expected. how fast can it rise? gilles: it can go quite fast and we think we will bridge 2% quickly and 3% is within range. in the u.k., even if corp. was higher than expected, it reflects the depreciation of the currency so it could be because --have trouble getting currently clothing prices were very high and there are many reasons around this. my biggest concern here is that in the u.s., what we have is proper, i would say good inflation. it is a reflection of better macro economic conditions, growth. what we get in the u.k. is a reflection of the lower pound and in the eurozone will be an increasing and -- reflection of
5:55 am
higher oil. it is not proper inflation. it means that mark carney, who said he would look through this, his right to do so. gilles: we have always been big fans of this approach. if you are in the midst of a major depreciation of the currency and have major uncertainty as to where the economy will land after the brexit negotiations, your monetary policy should be on the dovish side. it has been a little bit more open and that it is more symmetric and could move anyway -- either way, but maintaining this dovish tone makes sense. tom: what do you presume for the productivity of europe? it is a great mystery in the united states, and i understand it is a mystery to capital dynamics, labor dynamics, total factor productivity. in europe get its act together?
5:56 am
out the i.t.u take producing sector, which is a big chunk of manufacturing in the u.s., there is not a major difference in productivity growth in germany and the u.s. it is down to one big sector. obviously the u.s. was right to invest that much. jump inxpect quite a 2017? reforms have stalled. tom: we are out of time, thank you so much. when we continue in our next hour, on the new international order, gideon rose. ♪
5:57 am
5:58 am
5:59 am
tom: the president-elect selects his secretary of state. he chooses the engineer from austin, texas.
6:00 am
in this hour, gideon rose of foreign affairs on the out order international order. plus, britain, then italy. the continued populism of europe. eichengreen, barry from berlin. and is it for real? chair yellen in the spotlight tomorrow. this is "bloomberg surveillance ," live from our world headquarters in new york. . am tom keene in london, francine lacqua. acts.y, unicredit francine: definitely at the high end of expectations. we have to figure out if there is a linkage with monte dei paschi for investors. the share prices gaining 8%, 7% at the moment. if they aree saying going at 13.8%, they want a part of it. the americans will make the
6:01 am
capital gain. with that, let's get to "first word news." taylor: in italy, the new prime minister is in his first full day on the job, and already he faces the confidence own in parliament. he is outlining his agenda to lawmakers in rome today. he is hoping to have the government in place before the european council summit on thursday. he wants to boost economic growth and he also says italy is ready to collaborate with the new u.s. administration. on thursday the european union will lay out for the first time how it will conduct its brexit negotiation. e.u. governments will be asked to use -- to move quickly once the case formerly triggers a withdrawal. the u.k. will be excluded from meetings in which other nations debate the strategy. to bellerson is expected
6:02 am
announced as donald has picked for secretary of state today. those family or with the transition -- tillerson has accepted trump's offer. there is the rp the president-elect donald trump has decided on former texas governor rick perry as secretary of energy, according to fox news, which cited an informed source close to the transition team. perry ran for the 2012 republican presidential nomination. global news 24 hours a day, powered by more than 2600 journalists and analysts in more i am taylorntries, riggs. this is bloomberg. francine? tom? tom: further breaking news -- widely anticipated, he will be the secretary of state. there will be a senate debate on that, to say the least. mr. tillerson of exxon mobil is selected by the president elect to be his secretary of state.
6:03 am
he is a civil engineer out of the university of texas, austin, and has led exxon for any number of years. 3m is out with their view forward for the year. what interests me is they set the revenue growth 1% to 3%, which i thought was low. i want to get to our esteemed guests this hour. we have a terrific, interesting hour for you. 1.0615. next screen, please. gains, showing equity 12.39. the dollar index elevated fractionally. francine: this is my data board. we have inflation data in the u.k., much stronger than expected -- well, maybe not much stronger, but stronger because of the pound decline. be on unicredit watch because they want 13.8 alien
6:04 am
dollars. and then crude oil. tom: with us today, ira jersey of oppenheimer funds. lots to talk about, particularly about the reflation reset. our team is so damn good, they knew ahead of schedule that mr. tillerson would be nominated. gideon rose of foreign affairs magazine celebrates a spectacular year. when francine and i have a martini at the dorchester hotel, one martini for francine costs more than a year subscription to "foreign affairs." this is the stocking stuffer for every bratty college kid out there. it is absolutely fabulous. francine: we obviously have drinks whilst reading the magazine. it is not standalone. tom: this one is on rex
6:05 am
order,on, out of question mark. rex tillerson with the very count nations of the -- he is an incredibly impressive guy, but when we watched michael jordan go from basketball to baseball -- tom: i saw that. what does it say about president-elect trump and his supporters pushing aside decades of american diplomacy? gideon: we are not entirely sure that he understands that is what he is doing. there are a lot of generals and businessmen there it there are very few people in the cabinet who actually have experience in governing or with foreign policy. but we just do not know how much they are attending -- how much they are intending to change
6:06 am
things, or if they just think they can run it better. francine: tillerson is controversial. we do not know if he will get the senate approval. is this a bold move from donald trump because he wants a businessman and will accept the consequences if he does not get approval from the senate, or would it weaken donald trump's position it the first nomination for secretary of state does not get approval? gideon: i think it is too early to say what will and will not get approval, especially with the republican congress. it will be interesting because it intersects with the russian the new which administration's surprisingly friendly relationship with russia and the causes are still a puzzle for the vast majority of people watching this. it will be fun to watch this play out. tom: what does it tell us about donald trump's thinking for his cabin and or his administration. he wants a businessman or
6:07 am
somebody who is close to vladimir putin? gideon: we will see. i think both of those are true. this is a situation in which the president-elect ran the strangest primary campaign ever. he ran the strangest general election campaign ever, managed to get through despite being told he would not be successful. he will now run the strangest transition ever and is on track to run a presidency like we have never seen. yourone of your themes in magazine of populism is the idea of a fall back to a zero-sum psychology. if i know one thing about the chairman and chief executive officer of hotel, exxon mobil, ge, none of these guys are neil mercantilist -- none of these guys are neomercantilist. gideon: we do not know how much administration appreciates
6:08 am
the international order. during of what happened 1930's, when it was each country for them selves, we just do not know what will happen next. the otherieve you and market vigilantes will tell gideon rose's world what to do. is the reflation permanent, and does that fold into apron and, stronger dollar which upsets foreign affairs magazine's applecart. ira: we are not convinced that the trend in inflation will go on indefinitely. until we actually see some of the policies that come out, what is the new international order? will the trump administration ond up raising tariffs chinese goods, which could have an impact on inflation? will that affect the global economy and the global economic outlook? these are all things that the market will vote with its seat,
6:09 am
where investors will take their money out or put it in based on these policies. i think our relations, u.s. relations with europe will also be important. i have a question for you, gideon. the populisme of that has happened in the u.k. and the u.s. -- will that feed into europe, with votes in italy and places like the polling -- and places like the netherlands and th poland? gideon: it seems like there are a lot of correlated events in the world these days when it comes to domestic populace -- to domestic populism and politics. when you look at the trump election and the u.s., with the italian referendum, it is hard not to see some trend building across different countries. if i were angela merkel, if i were a non-marine le pen voter, i would be scared. -- a non-marine le pen
6:10 am
candidate, i would be scared. forcine: is a too late politicians to come in and find a solution? i agree with you, without giving an analysis, that the italy referendum could be seen as populous. but a lot of people are refuting that. how, if you are a moderate politician, do you address it? gideon: this is a great question. looked like a neoliberal thai politician and was not able to make it ultimately work. there are not that many successful politicians in the center these days anywhere around the atlantic tom:. -- superb,s is absolutely an essay by robin niblett. bring up the quote, if you would. robin niblett, talking about the new liberal order.
6:11 am
we are trying to get that up. robin niblett with the whole idea of liberalism. is liberalism gone? has it is operated? it is out of favor right now, but as they said in "casablanca," it could see changes. talkwe have so much to about. ira and gideon rose with us through the hour. we are thrilled to bring you barry eichengreen, later on. this is fun. it is not even like a job. rose, barry gideon eichengreen? yes! -- michael mckee will be in washington. from london, from new york, this is bloomberg. ♪
6:12 am
6:13 am
6:14 am
francine: london and new york. we will get on to the markets and some financial news as we get back to foreign policy after we understand the donald trump has been told that donald trump intends to choose rex tillerson as secretary of state kerry let's get to the "bloomberg business flash." taylor: merck plans to make up the money that it is losing with the separation of its energy business by boosting growth and transportation. carrierest container will increase shipping and logistics activities through organic growth and acquisition. -- energy business italy's largest mankins planning its biggest overhaul ever to boost capital letters and profits. --credit will sell 13 point
6:15 am
13 point $8 billion in stock. in the latest european stress test, unicredit had the slimmest capital buffer among banks considered important to the financial system. that is your latest "bloomberg business flash." tom: there has been so much written over the weekend and into the early week on the uproar over russia and the president-elect. i thought i would run this up the "surveillance" flagpole this morning. michael hayden of the cia and the chertoff group -- tom: boy, are the quotes -- boy,
6:16 am
are those quotes from another time. and the difference between what hayden said they should have said and what they actually said are significant. the professional opinion of the intelligence community is ridiculous -- that suggests a denigration of professional expertise in general, in a way that is kind of scary. people in washington are worrying whether that signals combined with the lack of intelligence briefings and an administration that is not going to listen to professionals throughout the government. matter --eart of the i think you ought to have this in your next edition of foreign affairs -- mark twain. the idea of the certitude of second rate. everybody is walking around like this, the people around mr. trump. whether we support him or not, he is certain of what he is doing. gideon: the other quote i would
6:17 am
use is, the old moynahan quote about you have the right to your own opinions but not euro in fact. does this administration respect facts in general? even if they put in ways that they do not want to see. francine: let's get away from facts and opinions and think about donald trump, the businessman. what kind of business relationship will he have with china? i know he has said antagonizing words and people are worried. but if he is a businessman, this is the only deal he needs to be sure to secure. gideon: you might think so. if that was the case, it would be unlikely to start out but picking a fight with china because of accepting the call of taiwan. we do not know. it is not fair to say that we are -- i think it is fair to s that we are in totally uncharted territory here. , how do you interpret the phone call with taiwan? is this a bargaining chip? it
6:18 am
does not mean that he wants to antagonize china further. trump's firstr. foray into foreign affairs, and we really do not know. he is such a different candidate, different president, we are not sure of the direction. his secretary of state in the t -- his secretary of state up t, we do not know what his -- his -- weary of state up the do not know what his foreign policy will be. the selling of chinese foreign -- because they have a weak currency because of the fundamentals and the relationship with the u.s.? tom: the backdrop for this is growth. we saw how would babies. ira jersery, help me with this -- the 1960's, it was
6:19 am
great. in the 19 knees -- in the 1980's it was less great. but we had real g-7 economic growth. critically, ira jersery, it is over here. funds, withiner your international perspective -- do you see this vector turnaround over the next 12 to 24 months? ira: not significantly. we think there will be steady 2% growth among the g-7. it is kind of unimpressive, but it is relatively stable. the risk winds up being some of the political risks. tom: does that become a zero-sum g-7? there is also the policy stuff and the distributive effect. it is not just that growth is slowing. the shares are going to a smaller segment. when timesis that get bad, everyone turned inward,
6:20 am
looks to themselves, says i do not care about the system at large, i am just going to protect more of mine. then you get to a beggar-thy-neighbor situation. things could get ugly. but there is no reason to believe yet that they are going to. it is just a possibility. tom: gideon rose and i will continue through the hour. forhe has been calling higher interest rates. plosser of philadelphia in the 8:00 hour, on bloomberg television and bloomberg radio. this is bloomberg. ♪
6:21 am
6:22 am
6:23 am
6:24 am
francine: this is "bloomberg surveillance." im francine lacqua in london. tom keene is in new york. we have to go back to the markets and look at the fed. it is probably the biggest news item of the week. wednesday --on let's get back to gideon rose. and ira jersery, oppenheimer photo manager. if you look at the fed -- there was one fact i was trying to figure out -- the federal reserve monetary policy has never been this easy with the jobless rate this low. is it about time? is everything priced in, or if they do hike more than expected next year, will we see a movie market prices? ira: we will if expectations start to build that the fed will go faster than two times a year.
6:25 am
then the market has to reprice dramatically. if you look at u.s. two-year notes, that could mean that two-year notes end up at 2% by year.ddle of next that could be a big selloff in that part of the curve for it one of the things the fed is cognizant of is what have interest rates done with the idea that we are going to have faster inflation, faster growth the cousin of the change in administration? so you have seen a steepening in the curve. 10 year yields have risen compared to two-year yields. the federal reserve is happy with that because they were worried that the rate was too low. it, do not want to overdo overpromise and under deliver like they have done over the last four or five years. they will probably stay the course. the doctrinal change and the market will continue to price in
6:26 am
for about two hikes a year. francine: how much of a concern is dollar strength? kelly goes back to the funding, with the experiment donald trump is doing. ira: that is one of the reasons why the federal reserve will remain cautious. if they hike too fast or expectations increase that the price against the market, there could really be a way to against u.s. economic growth. tom: i would -- francine: ira jersery, thank you. up next, we talk russia. this is bloomberg. ♪
6:27 am
6:28 am
6:29 am
tom: what america needs is infrastructure. to the east of new york city, two major infrastructure
6:30 am
projects known as jfk and laguardia. i can see the flight path coming into jfk moving from the east to the west. that is beautiful. right now, to "first word news peter: syrian troops have retreated from their former stronghold in eastern aleppo. syria pass military says it has gained control of 99% of the rebel enclave. that theawmakers warn prime minister must strike a temporary deal with the european union to protect trade. the trade agreement may be impossible. discussrefused to whether she is seeking a temporary arrangement. president-elect donald trump is ready to set the stage for a confirmation battle in the senate. earlier this morning he nominated rex tillerson for secretary of state. three senate republicans and
6:31 am
several democrats have already expressed their doubts. they are concerned about his close ties to russia's president, vladimir. trump says he will make no new business deals while in office. -- p said he would he has postponed his december 15 news conference to announce his business plan. global news 24 hours a day, powered by more than 2600 journalists and analysts in more i am taylorntries, riggs. this is bloomberg. "out of order," the new "foreign affairs magazine." ira jersery is with us as well, with oppenheimer funds. dots,elp us out with the which i think speaks to sclerosis. i think we can all agree that the 2019 dots are going to
6:32 am
migrate down, right? ira: that is the expectation, that we end up with a dovish hike tomorrow, and lower some of the dots. at the end of the day, 2.5% is probably more realistic long-term than it is for the end of 2019. tom: 2.5% out there. help gideon rose. is this american sclerosis? is what we are seeing with the new terminal rate euro sclerosis? -- euro sclerosis light? potential growth lower globally -- and it seems to be that way if you 's potential growth being essentially 0 -- you would expect interest rates and terminal interest rates to be lower, even in an environment where you have growth maybe that is picking up from uber low
6:33 am
levels. francine:'s growth going to get better next year, or because a lot of the reflationary hope the it in europe or the u.s. or surgeon -- or certain asian economies -- because that is priced in, we make it into a recessionary environment. ira: there is always a risk, but i do not think it is a metric. the risk is not really recession but probably faster growth. next year i think is him was baked in the cards, where we wind up with moderately faster growth than we had this year. what winds up being the 2018-2019 outlook, that will change based on policies in the u.s. there are risks both ways. there are risks that we get into on thears, and then other side it could be that we wind up with some kind of fiscal spending and tax cuts that ends up telling the outlook for
6:34 am
2018-2019 growth. and then you wind up with higher interest rates and may be better growth going forward. francine: yesterday i sat down with the nigerian oil minister, and we had a lengthy conversation. he said that there ideal numbers are at $60 a barrel. if you reflate the global economy to $60 a barrel, is that good for growth or bad? ira: part of it is the pace of how we get there. if we end up getting to $60 in the next week, that can probably hamper near-term growth just because we have to adjust spending habits and the like to a different oil regime. but if you get there over the course of the year, a year and a half, that is sustainable. the economy could absorb that without seeing too much pain. tom: we saw the g7 charter earlier. here is my chart of the year.
6:35 am
gideon rose turned this down for "foreign affairs" magazine. the presidential moving average in the late 1990's, 4% of real gdp. then we migrate down to 3%-plus real gdp. i'm sorry, gideon, that it is not good enough. do? would president romney all of us are trashing in different ways on the unconventional nature of the president-elect. would president romney be that much different in terms of effective policy echo gideon: i do not think president romney would have been different in terms of economic policies. the interesting question would be the trump administration's foreign and domestic policies and the unconventional way he is putting together the cabinet. withve very few people actual experience running government departments, and a white house filled with outsiders. tom: you are an insider.
6:36 am
how much is manners a part of your ballet? this is not a manners guy, who walked into a room -- his grace critical to diplomacy, or is it a veneer? gideon: the question is, does it reflect an underlying skepticism of the relationship. in other words, being brusque ok.undiplomatic is if the disrespect for the niceties turns into a disrespect for all conventional wisdom, even that with real substance behind it, then things could get scary pretty quickly. we just do not know whether it is a stylistic difference, or whether it is actually a rejection of existing policies. that, we will just have to wait and see. tom: i see all of this. is there going to be a surprise to the fed meeting today echo
6:37 am
this seems to be the ultimate fed meeting of our careers, where if you do something dramatic, now is the time with all the distractions in gideon rose's world. of it, half a point? ira: if the fed wants to go to 2%, why don't they just do it now and be done with it? but they will not do that. so moving incrementally, they will continue to hike. what will be interesting is what we get out of the statement. we will look at the summary of economic projections and listen to chair yellen at a press conference. she is clearly going to be asked about the president-elect, about how those changes in the white house are going to wind up impacting policy or impacting markets. it will be interesting to see what she says on that front. also beit will interesting to see what the president-elect -- how he reacts
6:38 am
to what chair yellen does. known not to like things that displease him, and to not remain quiet about it. it will be interesting to see how he reacts. ira jersery, thank you so much. with opera heiser -- with oppenheimer funds, senior portfolio manager. barry eichengreen changed the economic world with his classic golden fetters. he did that 20 years ago. coming up, from berlin, barry eichengreen on populism. this is bloomberg. ♪
6:39 am
6:40 am
francine: this is "bloomberg surveillance." we talked about the italian
6:41 am
banks yesterday. the day before we were talking about monte dei paschi again. there is the deadline looming before the end of the year. and today we have unicredit asking the markets for $13.8 billion. the point on that is if they offer so much, which is really at the high-end of what we were , they must be confident they can actually achieve it. whether it is comfortable or not is another question. coming up shortly, "bloomberg daybreak: americas" with jonathan ferro and lisa abramovitz. you have a shareholder, of big european banks. unicredit announced a big overhaul. we will talk about that later. front and center, donald trump picking the exxon ceo for secretary of state. here is a man who has brokered some deals in some of the toughest places him a planet. -- toughest places on the planet. tom: thank you so much.
6:42 am
gideon rose is with us from "foreign affairs" magazine with a terrific new issue out on the international order. arguably no one, with the possible exception of dr. kissinger, has reviewed the international economic order like barry eichengreen of the university of california at berkeley. his seminal work was on gold, golden fetters, and then he went on to redefine the imf history and also the dynamics of europe. he joins us from berlin this morning. barry, congratulations on your continued work. what would be your message to chancellor merkel in germany this morning? well, i think here in europe the political mainstream needs to respond to the same kind of concerns that shaped the outcome of the u.s. election. there are worries in germany about the far right, about alternatives for deutschland,
6:43 am
and i do not think there has been yet a mainstream response articulated of the sort that is required. tom: your required one volume is "the european economy since 1945." adenauersthe conrad of today? where is the leadership moving forward? barry: i do not think there is an appetite for a great political leap forward, but only alternatives to that leap forward in europe. i think it is slow, uneven progress. the road is going to be bumpy for a considerable time going forward. tom: howard davies with those this morning. we had paul de grauwe on from the london school of economics. they speak of a likelihood of europe breaking up. have you changed your probabilities that europe can stay together, or is there a new barry eichengreen calculus?
6:44 am
i havei do not think changed my view on that. history does not run in reverse. is a fact.tegration the euro is a fact. backing out of it would be tremendously difficult and costly. here is the respect in which donald trump might even make a positive difference, that the europeans understand they have to hang together, and that they cannot rely to the same extent as in the past on a u.s. security umbrella. that may be new in tunis -- that may be new impetus for integration. francine: are you saying that the breakup of the euro is improbable, or is it actually impossible? if you look at populism -- i would be fascinated if you think the donald trump presidency, brexit, and the time referendum would feed on that populism. barry: we have had several reminders that the impossible is
6:45 am
indeed possible, so i do not think we can rule anything out at this point. any sound economic calculus would suggest that breaking the euro up would be even more costly than holding it together, but you are quite right. politicians do not always make ofir decisions on the basis calculation, comparison of costs and benefits. there are plenty of worrisome scenarios out there. francine: i imagine you are the possibility of marine le pen becoming the president of france next year, , both five-star movement countries wanting out of the eurozone. themis the probability of coming to power next month? barry: the outcome of the u.s. election is a reminder that even we so-called experts ought to because it's about offering
6:46 am
probabilities. -- even we so-called experts ought to be costs us -- ought to be cautious about offering probabilities. a front-ledof government in france is the higher of the two. once you actually have power in your hands, you realize that there are downsides to using it. government-star led could think twice. tom: i know at gunpoint in berkeley you forced the graduates to read jacob feiner, "the power and the plenty." is that really what is going on here? are we going back after the atlantic chartered and after 40 years of negotiations, are we wondering back to a zero-sum society? barry: in a geopolitical sense,
6:47 am
there is that danger on the economic side. surrounding himself by businessmen, business people, who i think understand the advantages of economic openness and the extent of interdependence. so all those possibilities are on the table. like it or not, we are in an age of high uncertainty, where it is too early to tell how any of this will play out. francine: will we enter trade wars in 2017, professor? yes,: i fear the answer is that our new president is going to want to do something. he is going to want to do something visible, and it will be hard to push a big new infrastructure spending initiative through a skeptical congress, which is something that is likely to be trade policy. is what we wanted. gideon rose with barry eichengreen, howard davies before. with all of this going on,
6:48 am
gideon, what is the thing that you would expect president trump will do in international relations? do you tell russia to get out of ukraine? gideon: he will not tell russia to get out of ukraine. we know that. i hope barry is right that history does not have a ratchet and we cannot go back. bride," theress is this character who says "inconceivable." and finally, the mandy patinkin character says, "you keep using that words, i do not know if you know what it means." we have used that word over the last year. anything now is conceivable. who knows what is going to happen? tom: francine, it is inconceivable that i would use the word "extraordinary" too much. francine: extraordinarily inconceivable.
6:49 am
professor i can green, if you to reset- do we need liberalism and globalization? is there trouble? people feel anxious and vote for populism. what is the reset button? barry: the reset has to come , that thec policy problems that people perceive -- -- theity, insecurity problems that people perceive in inequality and security -- mr. trump will not be able to address this problem, those jobs are simply not going to come back. treat education and innovation more seriously. that was not the basis on which this administration and congress were elected.
6:50 am
tom: have you been contacted by the trump transition team to be an undersecretary to secretary of state rex tillerson? the call has not arrived. tom: ok, thank you. i had to ask. terry i can green, thank you so much. very generous of you, with your time in berlin today. we will continue with gideon rose. on "bloomberg markets" later today, bloomberg is your source for intelligently inch -- with -- is your source for -- fromently gige london and new york, this is bloomberg. ♪
6:51 am
6:52 am
6:53 am
tom: mr. trump has nominated rex tillerson as secretary of state. the markets continue on. i'm going to call it a churn to the markets today. gold is testing new lows. we are not there yet, but i am watching gold tangentially. the euro, 122.37. it is a washington, d.c., that is anything but quiet. every conversation that i have had with experts and lobbyists
6:54 am
-- their phones ringing off the hook. they are all reading gideon rose's "foreign affairs" magazine. we are honored that he is with us for the launch of "out of order," a new edition. this is the single best stocking , for brattykids college kids who need to be told what to do. it is absolutely spectacular, every issue, on the set of articles. one of those articles is the former secretary of the treasury, tim geithner, following on from the financial crisis. what did he say, and why does mr. trump care? gideon: this is a great piece, "the newur version of yorker" piece on wheat. mr. geithner points out that it is not just preventing a crisis or a question of how much spare ammunition is lying around, it is the flexibility policymakers toe in the event to have
6:55 am
deal with things. his worry is that we are setting ourselves up for a situation in which there will eventually be a crisis, and we will not have that much ammunition, but we have restrictive policy makers. the discretionary ability to deal with the event. his worry is if we have a major crisis down the road, we could be in trouble. thisthe set of issues december, moving into january 20 and beyond, are what the council of foreign relations is doing. a 1945 cfr, the 1950 cfr on the walls. what about our institutions in 2017? will they be able to withstand the shocks and tests of this new washington? gideon: this is really the question. we have a series of not only domestic and touche and's -- of domestic institutions, international institutions, but we will be testing the strength
6:56 am
of those institutions, especially if there is conflict between the white house and other institutions. francine: how will they be tested? are you talking about legality, rules being drawn up? the library of congress figuring out exactly what the president-elect can and cannot do? gideon: we have an incredibly powerful presidency, but it is not a monarchy and it does not get total authority to do whatever he wants across the entire government and its policies. so when the trump administration has to up against those real limits, what will happen when folks do not get their way? we do not know. you so much.thank tomorrow on bloomberg, jean-claude trichet. ♪
6:57 am
6:58 am
6:59 am
jonathan: worldwide, a warm good morning on this tuesday,
7:00 am
december 13. david westin and alix steele are on assignment. 24 hours away from a fed decision. futures positive, up 65 points on the dow, and the bond market, treasuries go nowhere ahead of some more supply, this time at the long end. and cable, .2, a stronger pound in today's session. let's get you up to speed on what you need to know. donald trump to nominate rex tillerson as the secretary of state. the fed decides, the probability of a fed rate hike this week is at 100%, but the question remains, what will the fed forecast for next year? and getting back on track, uni credit planning a nearly $14 billion stock sale, hoping to attract investors with cost cuts and a balance sheet clean-up. and that wraps up what you need to know. we begin with our top story. president-elect donald trump nominating exxonmobil chairman and c.e.o. rex tillerson as his


info Stream Only

Uploaded by TV Archive on