Skip to main content

tv   Bloomberg Daybreak Europe  Bloomberg  April 3, 2019 1:00am-2:30am EDT

1:00 am
♪ >> good morning. from bloomberg's european headquarters in london, i am nejra cehic with manus cranny live from dubai. this is daybreak: europe. theresa may turns to her rivals for support. her move opens the door to a brexit. stocks in asia bounds, and u.s. futures climbed after a report says the u.s. and china have ironed out their trade differences. the wto slashes 2019 to global expectations in a warning that the economy has lost momentum. ♪
1:01 am
manus: a warm welcome to a daybreak: europe. there is a rally in the emp. i have three cards in the back of a car going, are we there yet , and the ones in the front are saying, almost. the yuan and the dollar with momentum this morning. volatility at a two-week low for the yuan. the dollar also getting stronger. take you back 24 hours, we saw a push and pull between the possibility of lower rates in australia and hf or economy versus this morning, which is all about the potential for trade deal. the aussie dollar is up, the yuan is stronger, and the dollar is down. i want to show you the oil market, quite literally on a tear. year.ghest this
1:02 am
donald trump said to be doing for the oil market what they can only dream of themselves in opec and non-opec. the most effective driver is the venezuelan sanctions along with additional extension of iranian waivers. russia is not doing what they said they would do in terms of hitting the mark in terms of their cuts, and i know you love a technical thomas nejra, we haven't blown through the 200 day moving average on wti. good morning. nejra: i do love a technical, manus, you are right. equities, global equities look to be building on the best start of the year since 2010. asian equities looking towards a fresh six-month high. s&p futures up a half percent, and we are back at 2.50 on the three-month 10 year. cable slightly on the front foot, up 1/10 of a percent, 1
1:03 am
31.43 as theresa may reaches out to jeremy corbyn for cross party talks. does it open the door to a softer brexit? that is the question. in terms of 10-year yields and equities, the picture is risk-on. but analysts say that positioning is still bearish, and the paying trade is to move higher cause people aren't position for good . and doesn't look like that in today's market, anyway let us check on markets in asia with juliette saly in singapore. good to see you, juliette. juliette: we are seeing stocks at fresh six-month highs, the msci asia-pacific with a strong handle, the sensex continuing on a record run. new zealand stocks have come off their record run, there was a big drop in milk prices and their home price inflation is
1:04 am
up. but where you are seeing momentum is hong kong and china on these frustrated hopes, particularly in chinese shipping companies, in hopes that this potential deal could open up more ports and allow more shipping routes to come through. japan in late trade up about 1%. looking at the asian session, you see a big jump in the number of casinos. the macau casino revenue very much in focus in hong kong, goldman upgrading this stock to a buy from neutral. also in focus after some strong sales numbers coming through is this company, there is a report saying that they will increase in their staff pay for the spring. we did have reach sales in , andalia for february down one retailer having a downgrade from morningstar. that is look like investors are selling that stock.
1:05 am
nejra: juliette saly in singapore, thank you so much. theresa may is turning to the labor opposition party in a last-ditch attempt to find a deal. >> i am taking action to break logjam. i am offering to sit down with the leader of opposition to try to agree on a plan that would -- that we would both stick to two and sure we leave the european union and do so with a deal. nejra: corbyn welcome to the move, saying he would be happy to meet the prime minister. >> we hold and reserve our ride to bring a motion of no-confidence to the government if the government froze it is incapable of commanding a majority in the house of commons. our response to the opposition is to make sure we don't crash out. and also to make sure that we have a government that commands a majority in the house and in deed commands support, majority .upport across the country nejra: this opens the way for a much softer brexit, potentially
1:06 am
keeping the country inside the union. joining us to discuss is the chief investment officer at saint james management services, from ralph, and anna "bloomberg markets". anna, what can we expect this time? anna: what we can expect depends to what extent theresa may is prepared to really compromise and to really change those red lines. is she going to go back to the customs union, even though we know the support for the customs union in her party is low. so it also depends on how close it takes jeremy corbyn to a general election, that has always been the holy grail for him, and they have a lot to do in the next two days.
1:07 am
manus: anna, hold those thoughts, the brexit process will keep going. we have a little breaking news from our own point of the world, on amyris ndb. the is -- emirates ndb, second major piece of news on theemirates nbd story over past 24-48 hours, rallying in the past session, the highest since may last year. the revise of the deal to 16.48se this bank for billion lira, another piece in the jigsaw puzzle for the ceo. network international of course ipohe other piece of the has demand for all shares on its first day. so the pieces in the deal for nbd coming together.
1:08 am
let's bring it back to europe. the indicativeth votes? you say the corbyn wanted a general election, but where are we with indicative votes? how does that work out? is, ift seems as if that theresa may and corbyn cannot reach an agreement, there is still a plan for the indicative votes to continue to take place, the process by which they have been trying to establish what mps can vote for them get behind. it is sort of like a fallback option in which the government would take over the process. what is crucial to what theresa may had to say yesterday, she has promised to be bound by what parliament would get behind, that also a crucial question to ask is whether the conservative party stays together. given the display yesterday, seven hours of talks, whether the government can stay together behind a plan that doesn't reflect the for red lines they
1:09 am
went into the last election talking about. manus: that is a key point, if the government can stay together. nejra: chris, does it seem like we are moving into a soft brexit? chris: we have always said, we need to be looking at the longer-term implications of a brexit deal. if it is as s says, if it moves us toward a softer brexit deal, i think that would be positive for the sterling, for the markets, and for u.k. assets generally, and they have been looking very attractively valued. it could allow a further move forward in terms of the u.k. market. manus: chris, good morning. the question is whether we move toward something called a customs union, which, as nss, could split the tory party -- as anna says, could split the tory party. do you think it is priced in, or what would it take to make a big finish, what breaks us above this level? chris: i think what is exactly
1:10 am
priced in at the moment, my sense is that a very hard brexit, a no-deal brexit is just not being priced in by markets. the probability of that has been declining. we are in a position where markets are looking for good news whether it is on the customs union or similar. my personal view is i am not sure where the markets would react incredibly positively quickly if a deal were to be agreed, because presumably, as ana was saying, if it were agreement with the labour party, to whom many conservative mps would think to be complete anathema, it could create a fracture in the conservative party and lead to a general election, and what people might see as a potential new government. nejra: global averages have been adding more to u.k. equities,
1:11 am
why? chris: it is a risk-reward trade. your u.k. companies trading on attractive valuations. the u.k. market is trading it in your 20 year low -- at a near 20 year low, and if you are a global equity markets manager, you could be saying, this is an attractive time to buy those. manus: anna, you have been on brexit since the morning it was actually called. by oneas a freudian slip of my guests for you, he used g party.e -- the e or he has spoken to lots of benches, back-and-forth. do you think we are closer to more divisions politically in height? anna: the divisions have been so out in the open. to onend spoke backbencher in the conservative
1:12 am
party outside parliament before theresa may had said she would go. and he said they are very openly saying, she needs to leave, she needs to name the date, she needs to not be there in easter, christmas. i had to remind the international obvious that this was someone from her own party speaking. the divisions are so clearly on display. with boris johnson and a lengthy comment on twitter about how disappointed he was about all of this. so far, brexiteers, even if they avoid a great it is satisfaction with this plan, behind closed doors, in many cases they probably did, at least in public, some of them are sticking by heart and suggesting they are in favor of what is going on. the telegraph reported that a majority of tory mps actually want to go for a no-deal brexit. some of our reporting suggesting that there might not be any vote on that. so this is the question, whether the conservative party stays
1:13 am
together. if she loses part of that party and jeremy corbyn called a no-confidence vote, then everything changes. rates i think that is an important point, we haven't seen iat happened with -- chris: think that is an important point. we haven't seen what happened yesterday, if there were real fractions created from the covenant meeting -- from the cabinet meeting yesterday. anna: we don't know much about what the brexiteers want, but if sevenmy marches on, -- varieties of damage, manus. [laughter] not french wine, that is key. manus: i have a new one. you will not -- she will not be upset, she is very forgiving of me. it is anna edwards, the duchess of brexit. good morning. our guest -- do you like it?
1:14 am
anna: idea. by the way, i was cracking my head asking, why are they having chilean wine and not french, but chile was on of those countries that signed a trade deal with brain along with the fair islands and some others. manus: more press echo, i say. ok, enough of brexit at the moment. prosecco. pe we will look over brexit i get it later on. we have more of you first word is >> trade negotiations into the u.s. and china resumed today. the vice premier is in washington for the latest round of talks. both governments are looking for an agreement to end the ongoing dispute. the financial times reports that the u.s. and china have not agreed on a mechanism for the trade deal. the global economy is in a precarious position. the imf manager christine lagarde says there is
1:15 am
deceleration around the world, though in recession is not in the near term. trade growthlobal forecast, echoing the sentiment. >> those uncertainties are holding back investments and investments of course, dampen the numbers for trade. to a large extent, i think the u.s.-china tensions are the main source of it. a line air sensor on 737 max has been linked to the october.ash last bloomberg learned that it was repaired in a florida aircraft maintenance facility after the tragedy -- before the tragedy. a gauge of mexican avocado prices is surging in almost a decade, as buyers weigh the latest rhetoric from president trump, furniture close the border with mexico, the fruits biggest supplier. avocado is now seen as a superfood.
1:16 am
global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. nara, manus. nejra: olivia, thank you so much. today, we're asking the question on mliv , which asset would hurt the most if the imf cuts its outlook? you can get into the debate and reach out to us. risk-on are having a day across markets on the progress in trade talks. coming up, is in the trade war insight? reportssumed today amid that the u.s. and china could be nearing a deal. we discussed next. this is bloomberg. ♪
1:17 am
1:18 am
1:19 am
♪ ♪ nejra finish this is bloomberg daybreak, i am nejra cehic in london. manus: and i am manus cranny in
1:20 am
dubai. the markets, risk-off from currencies along with commodities. msci up at a six-month high based on fresh hopes that the u.s. and china will resolve most of their trade issues. but there are still issues to be touched on. you on stronger this morning. bitcoin seeing a momentous rally yesterday. -- can an ashcan it it endure? we have a lovely bloomberg opinion piece, aquinas surging again, just ignore it. [laughter] that with oil as well, brent moving toward $70 a since for the first time september, news we have heard of opec cuts countering what we
1:21 am
have heard from the u.s.. cable struggling for direction, theresa may reaching out to the labour party for cross party talks. that could mean that we are moving toward a softer brexit, but cable seems a bit unsure this morning. with a bloomberg business flash, here is olivia how. olivia: allegations that this bank provided dollar cleaning services to this client, would in relation of sanctions against that country by the u.s.. blackrock's chief executive is charging a path for growth we on the u.s.. larry fink has announced a massive overhaul of leadership, shifting my responsibility to region-specific leaders in a desire to cement clients ties beyond the americas. blackrock oversees about $6 trillion in assets. into has named george davis as chief financial officer. he has held the same position at
1:22 am
qualcomm, its rival, for up to six years. intel faces increased competition after introducing new prices into technology. that is your bloomberg business flash. manus: olivia, thank you very much. another breaking news line, this time on carlos ghosn. we told you earlier that he would have a nice conference on april 11, we now have a new -- tokyo prosecutors plan to rearrest carlos ghosn on a new charge. that is according to a report. a prospect of a new arrest for carlos ghosn. we have the stories overnight, additional stories that there are further allegations, must emphasize the word allegations about yachts, planes, and investments into startups.
1:23 am
those are additional allegations reported overnight. tokyo prosecutors planning to arrest carlos ghosn on new charges. details.ait for more talks are set to resume in washington between the u.s. and china, reportedly moving closer to a deal. the financial times reports that most of the issues have been resolved apart from two points, mainly the fate of existing u.s. tariffs, and the terms of enforcement mechanism. betweencited tensions the roles to dub largest economies, cutting trade growth projection to the lowest in almost three years. arehose uncertainties holding back investments and so on and so forth, and investments dampen the numbers for trade. the large extent, i think u.s.-china tensions are the main source of it. manus: meanwhile, the imf is increasingly pessimistic about global growth as well.
1:24 am
christine lagarde saying it has lost momentum, leaving the world economy in as she calls it, a precarious position. chris ralph is still here, chief investment officer at st. james place management services. i looked at economic uncertainty. this is china policy uncertainty, this is a u.s. economic concerns you, and global economic uncertainty. they are all beginning to roll over. with reports yesterday, hindsight or prescient -- were they? chris: to me, probably hindsight. we have beeng -- seeing stronger economic data come through from china, the stimulus from last year starting to come through. the data from the united states is not too bad. it is clear that global trade is weaker than it has been, but that is counterbalanced by
1:25 am
strong domestic economies than i think most of expected in the two biggest economies, the u.s. and china. nejra: there is an analyst report out this morning, saying that even though we saw the best quarter since 2010 for global equities, the paying trade is actually higher. . when i look at this chart, though, look how much stocks have rebounded despite the negative prices. the 70 the forecasters are getting it wrong, or the forecasters were wrong? chris: you are two things happening. the falling markets in q4 of probably more than people were expecting, i think everyone was surprised by the weakness as we went into the christmas period on reasonably low volumes. markets for the way quickly and we had a substantial bounceback. we have seen a stronger economies than most people expected.
1:26 am
so there is a potential pain trade of markets moving further ahead from here, but i do wonder how much petrol there is left in the tank for the rest of 2019 considering how quickly have gotten ahead in q1. manus: there is still quite a lot of cash in the sidelines. goldman sachs this morning saying, there is a 25% outside in terms of the chinese market. they say they are supporting the msci expansion and capital markets, and the pe is running pretty. much at average line that is a we are --giving given that we are up 30% for the year. do you agree with that call for that momentum? chris: yes. worth they are not market expectations, then that will consolidate the markets from here. nejra: chris ralph, chief investment officer at st. james
1:27 am
's place management will stay with us. wound, butarket's how is a relationship now between trump and powell? we look ahead before friday's report. this is bloomberg. ♪ want more from your entertainment experience?
1:28 am
1:29 am
just say teach me more. into your xfinity voice remote to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. [ ding ] show me my wifi password. hey now! [ ding ] you can even troubleshoot, learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome.
1:30 am
♪ asian equities are heading for a fresh six-month high, at 10 year yield is on a 2.50 high and all. so we are back to risk-on this session. this seems to be the headlines around trade driving that. i am asking myself whether these markets a jump on any excuse to move higher. the flip side would say that actually, the market is not position for good news. i don't know the answer. debate.t is a very hard if you look at the yuan, bouncing for the first time in nearly two weeks. it is surprising. the question is, how much higher is that rally.
1:31 am
if there is a deal, where does that manifest the most? is it to equities, or is it the yuan? those other two questions this morning. and inabsolutely, commodities, we are seeing oil higher, brent at nearly $70 a barrel for the first time since november, we are dimension of the u.s. 10 year treasury yields. we are also talking about what is coming up later today on trade. manus: we are indeed. you will have an exclusive conversation with ana botin. that is where francine has spent her time. we will bring that to you a little later on in the day. as european ambassadors gathered in brussels, the uae -- i.e. you is hoping to start conversations with the u.s. on keeping auto tariffs at bay. but france is resisting unless the u.s. backs the climate
1:32 am
accords. what could field talks mean for the european auto industry? dani berger is here to explain. dani: germany is the obvious victim of auto tariffs, but the industry does have a very complex your murphy. in relative terms -- complex your murphy. geography.complex volkswagen and daimler have slovakia and hungary, and each year, each of these countries sells more than $1 billion of cars to the u.s.. that translates to as much as 1.7% of their gdp. this would come at a bad time for germany and the wider economy. so, europe is already slumping amid a global growth slowdown. in this week's reading, we saw the germany fell to its lowest in terms of manufacturing pmi in seven years. in the euro area, measures of
1:33 am
factory demand and confidence are at multi-year lows. in a few hours, we will also get the final composite pmi, likely to reinforce the weaker outlook just as the e.u. struggles to reach consensus on u.s. trade. dani, you use a very dangerous word there, consensus. great charts, dani berger in london. let us get to the first word news with olivia howe. olivia? olivia: thanks, manus. theresa may has reached out with an olive branch to the opposition leader to work on a plan fo her brexit and prevent the u.k. from crushing out of the e.u. without a deal. this opens a door for a much softer brexit that could potentially see the u.k. staying within the customs union. element has been arrested for unauthorized entry at mar-a-lago.
1:34 am
according to court documents, she led to secret service agents she subsequently. told officials that she was told to talk to a member of the trump family about u.s.-china relations. she remains in custody. all jerry as president has resigned. his departure threats -- algeria 's president has resigned. celebrations erected in the capital of algiers following the news. clouds were heard chanting, this is a start, there is more to come. the long-awaited trial of malaysia's prime former today.inister begins there are 42 counts of corruption and money laundering and the case could shine a light on the actions that led to the disappearance of billions of dollars. he has denied any wrongdoing. there is a surge in avocado prices in the u.s.
1:35 am
president trump has threatened to close the border with mexico, the biggest supplier of the fruit. mexican avocados make up 75% to 80% of u.s. productions. avocado is now seen as a superfood. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. nejra: thank you, olivia. joining us from our bloomberg quint partner in mumbai is niraj london, we arein joined by our guest, annmarie hordern. areear treasury yields moving higher, but the indian stock market hit a record high. what has driven the rally given the oil is higher as well? niraj: you summed up everything i wanted to say, hearing you at the start of the segment, talk about how the risk-on seems to be out there and markets are looking for an excuse to move up. excuse witheed an
1:36 am
the way the money is coming in from across the region. benchmark the third index to hit a fresh high today some of the main one, arguably. now the nifty 52 also hitting record highs. it shows that way that the macros are working as well. the currency is threatening, bond yields have dropped ahead of the meeting yesterday as well, and frankly, was of the cross-border skirmishes, indian markets have not looked down. i just leave you with one thought, i wrote a column yesterday about how the market are, they seem to be high, and morgan stanley mentioned that because -- you look look at the ee, you at valuation. and on those funds, there is more headroom and indian markets are not look overpriced. so people are willing to stay extended over india or by more into india.
1:37 am
manus: we are certainly seeing the highest inflows since 2013 in the first three months. london, fresh trade hopes breathing life into the market. it is a juxtaposition between a trade hopes and these dying growth outlooks. which camp are you in this morning, amory? ? a marie: there are certainly trade optimism hopes and we have a risk on rally this morning. the kospi, the hang seng, the japan nikkei up 1%. this is a double win, they also had retail sales beat. also bullish today, up more than three percentage points. i want to show you what is going on in the oil markets, there has been quite a tear on both wti $52 aent prices, wti at
1:38 am
barrel and more today, and these are future prices, higher than the spot prices. it is catching up to brent, which shows that supply levels are tightening, as opec tighten. to we have voluntary cuts, venezuela dropping, and dwindling inventories in the epicenter. why do we care about this girl? if you are an american driver, pump prices in the u.s. have been up over 20% in the last five months. anyone with an automobile cares about this, and certainly the president of the united states. nejra: great to have you both, thank you so much. president donald trump says investors should prepare for highs.ock market speaking at a republican party event in washington, trump says, we have 22 records where the stock market hit new highs. it was looking bleak a few months ago, but that was
1:39 am
artificial. chairman jay powell received a call from the president on march 8, regarding his concern about the u.s. job market. the chief investment officer at st. james's place wealth management, chris ralph is still here. we are building on gains that we saw last quarter, the best quarter in a decade for u.s. stocks. how much further do we need to see the s&p 500 rally for it to potentially reprice the bond market? because the bond market might start to see a fed concerned about fueling bubbles? chris: having seen the fed do a u-turn at the back end of last year, are we going to get a position? it will be interesting to see what comes out of their meeting the where the fed is looking exposed is that it changed its policy on further interest rate rises, the continent policy of quantitative easing at exactly the wrong time , when we are just seeing a blip
1:40 am
in the data. markets are actually moving ahead very quickly. i think it is tricky for jay powell at the moment, particularly with the pressure coming from the white house on a very regular basis. manus: the debate is whether we are seeing the bond market reprice. i mentioned the jp morgan survey, it is in the gtv library. this is a drop of 11% in terms g in theositionin survey. investors have cut their long positions to 11%. but are we beginning to see the rebirth of some kind of normalization in pricing? do we trade a little higher in yields, or is it more than just profit-taking? chris: it would not surprise me if we traded higher
1:41 am
in terms of yields. i think when yields on the 10 year got to below 2.40, it felt like too far in the short-term. but it was not that long ago that we were at the 3.25 and saying that yields are going much higher from here. so we have had a pretty big shift over a relatively short period. if we see the yields trade between 2.50-2.70, it would not surprise me at all. nejra: would that be fair value for you? chris: it points to where the value is in terms of u.s. significant it is a choice between the u.s. treasuries and equities, they both look really fairly valued compared to one another. manus: we are all building up towards friday. narrow will be both driving the car and changing the gears, i will not be here. if there is a shock in terms of those headline numbers, what will that do to your assessment
1:42 am
of u.s. policy? donald trump just said that we will get another record, because there was a bit of a policy missteps just before christmas. how important is friday? chris: obviously, friday can go both ways. we could have very strong data or not so strong data. i think it is a negative shock -- if it is a negative shock, then it reinforces what we have just been talking about, that there is not going to be such pressure on the fed to rethink its policy. but if we are seeing jobs data really very positive, i think it adds the pressure. so i think jay powell is in a very tricky position, and it seems that whenever president trump is concerned about what is happening in the stock market, he likes to point the finger and blame someone. and jerome powell has been his target for pretty much every disappointment.
1:43 am
nejra: i want to ask you about blackrock, i know that you are well-positioned to talk about this. we heard about the massive overhaul in the firm's leadership yesterday, shifting to regional-specific readers. what does the ships tell you about what is happening in the moment?ndustry at the chris: that tells me two things. first about blackrock is a really truly global organization that has strengths not only in the united states but here in , and i thinkia they are trained to get some better balance and make sure that they have key people in those regions. it also reflects the changing nature of revenues in an asset management business. we have this continued shift from active management over the past two years to a balance passive.ctive and the etf business from blackrock has been a key driver of where they have been going. so i think it reflects the evolution in business and the
1:44 am
way it is likely to continue in the next few years. briefly,ris, very given what larry fink will try to change, we have seen some consolidation in this industry. do you think there is going to be more? chris: i do think there will be more consolidation. it is hard for those companies that are not as well positioned as lack rock and the other really colossal -- blackrock and the other colossal companies. for the middle companies, it is there.bly difficult out what we saw through 2017, 2018, with ever do standard, yanis henderson, i think we'll see more consolidation. manus: we will certainly pick up those conversations. we will have the aberdeen standard ceo, talking about what the merger and acquisitions really mean in that space. chris, stay with us. we have more to do. ralph, chief investment
1:45 am
officer at st. james's place management. lull in the fed economic activity is nothing more than a blip. yes, according to the bloomberg economics team. , whatme of our top guests do they think? the ubs chief economist paul donovan says in some sectors, the problem is there are not enough workers. that will limit the nonfarm payroll growth. nejra: the view from vanguard's chief economist is expected to growth to rebound from last month week numbers yet reaffirm trend in job chief economist for grant thornton, she says employment is bouncing back to 65,000 jobs, gains driven primarily by health care and professional services.
1:46 am
baron berg chief economist says, expect a more normal number, probably just below 200 k for march. chief city private bank investment strategist pointing out -- we expect the much employment data to rebound towards the average, near 160-170,000. if you want to have your go, go on the terminal. we always want your input. you can also have a go at nejra and i. some of you aren't very nice on it, i can confirm that. be to the we must santander executive chairman and about teen. ana botin.t teen -- nejra? ♪
1:47 am
1:48 am
1:49 am
1:50 am
manus: this is bloomberg daybreak: europe, i am manus cranny a dubai. nejra: and i am nejra cehic in london. the from a prime minister of in asia is facing trials global scandal that has also sachs.d goldman nudges raza is to face seven of 42 charges of corruption and embezzlement. sophie kamaruddin is in kuala lumpur for us. sophie, what is expected of today's trial? sophie: today's trial takes place 10 years to the day najiv razak was sworn in as prime minister and amendments since he was served charges in the 1mdb investigation. depending on today's proceedings, he might be order to take the stand should the trial judge see that he has a
1:51 am
case to answer for. so there will be a lot of attention on opening statements on the malaysian attorney what tack the presentation will take. will focus oning allegations linked to his oversight over funds held by src international, a former unit of 1mdb. let us clear the board to see those kinds of again. isafnajiv razak charged with 10 counts of money laundering. that is just a fraction of the allegedlyf dollars embezzled from 1mdb. if he is convicted of just one of these seven charges, he could face potential jello time of up to 20 years. he has pleaded not guilty to all the charges. bear in mind, this is the start of a long few months. we have a second trial already
1:52 am
slated for april related to 1mdb funds. and another trial slated for july with two more cases to be heard thereafter. manus: selfie, we will track every twist and turn of this. sophie kamaruddin in kuala lumpur. crude bounced to its highest level of 2019, as saudi-led production cuts and receding fears over global growth appeared to be easing investor concerns. wti rallied for the fourth consecutive day as there are reports of the u.s. and china are getting close to a trade deal. chris ralph, chief investment officer from st. james place wealth management is with us. wti breaking the 200 day average. there is a debate on the mliv team that we have it wrong. that the rally is because of supply cuts, not because of real global demand. what is the song sheet of oil singing to you? it has beennk
1:53 am
delayed impact of those supply cuts you have been describing. global growth is not so strong that it is going to substantially lead demand. , the supply cuts from saudi arabia, we have seen reduce production from venezuela, so i think that has been the reason we have seen a bounce in oil. but of course, we have seen president trump treating in recent times that he is beginning to get concerned about the impact of a high oil price -- president trump tweeting, and the impact of the high oil price , so thats. consumer will be a tax on the u.s. consumer which he will not want. nejra: it has been it not only a strong start to the year for oil but also other commodities. if you look at em equities, emerging market indexes have been trading sideways, lagging china and the u.s..
1:54 am
it is the emerging markets underperformance in equities going to continue? chris: you could look at it case-by-case. asia,ve to think about you have to think about latin america, look at those individual circumstances. i think if you look at asia, it will be closely linked to what is going on with china. there is a saying that if china sneezes, the rest of asia will all catch a cold. but latin america will be much more driven by what is happening in the commodities cycle and more domestic factors, particularly with elections and political considerations. manus: when it comes to deciding where to allocate assets, whether it is to equity, maybe a pimco are overlay, an really bullish on the equities side. you are looking at a nearly 8% return, the most since 2008.
1:55 am
do you think that kind of momentum can continue in the bond space? would you take em bond risk relative to equities, or would you tilt's to equity? chris: for me, what this has been all about is a sort of turbocharge recovery from the markets we saw in the fourth happening slightly earlier in emerging markets, because we were more concerned about cheney's weakness. so from here, we were just talking about the indian market being at an all-time high. emerging markets going to move ahead whether it is an a bond land or in equities in the short-term very quickly? i doubt that. but over the longer-term, is emerging markets going to be a sensible toit seems be allocating more money, absolutely. nejra: how much does the dollars outlook, how bullish does your
1:56 am
view hinge on the dollar outlook? the dollarley sees sliding 6% in 2019. chris: i think a number of us have been surprised by dollar withgth in 2019 because jay powell saying that he will not put rates up, that could have created dollar weakness rather than dollar strength. dollar strength, if there will be further dollar strength, that will not be good for emerging markets. nejra: chris ralph, chief investment officer at st. james's place was management good to have you with us. chris will be continuing the conversation with us on bloomberg radio at 7:30 a.m. time. coming up, we speak to the santander executive chairman ana boting. do not miss the interview later th afternoon at 3:00 p.m. london time. manus and i have shown a lot of bloombergs hour,
1:57 am
users can interact with all those charts and the show on gtv . coming up, we talk more on the risk-on we are seeing today. june into bloomberg radio as always on your way to work. this is bloomberg. ♪ this is bloomberg. ♪
1:58 am
1:59 am
2:00 am
>> good morning from dubai. i am manus cranny. are the top stories. crossing the aisle. theresa may turns to her labor rivals for support. the move opens the door for a softer brexit. andks in asia bounce midwest futures climb after reports that china and the u.s. have ironed out most of their trade differences. slashes trade growth productions -- projections.
2:01 am
>> good morning and welcome to daybreak europe. we are a day away from the start of cash equities trading. higher, zero .8%. ftse 100 futures struggling for direction, inching into positive territory. u.s. futures set up to the upside. the question is whether equity markets are seizing on these headlines and touring some of the signals at least for today about dark clouds. a great story talking about all the reasons to fret about the global economy. china services pmi better than
2:02 am
expected. data out of europe. that might give us more direction. the bond markets. >> the bond markets are incredibly important. the price is rising. they have confirmed they are doing the deals to buy the turkish asset. you get a discount, 14% less. we will have a look at those. it is rising. trading at 11:20. slump, recently, they money to buy the assets. bank eatingiggest into turkey. into the first
2:03 am
recession and almost a decade. the numbers. you are seeing it bond markets move quite aggressively. , u.s. treasury prices are dropping. above the 2.5% level. booms are down. and the u.s.ese got together and done a deal? versus the downgrades to global growth? how is it playing out? juliette saly has the latest from singapore. it is playing out well, particularly in china. up on the csi 300. expected to continue those talks
2:04 am
in washington. you have seen the asia-pacific index rise again. .ix-month highs japan having a good session. a bit of a voter friendly budget. rising 0.7%. pricesland stocks, milk a little lower. let's look at some of the other assets. thetrade hope playing into currency market. a bit of a proxy, rising 0.6% offshore yuan up 0.2%. some of the gains have been muted. there are concerns about overall existingn terms of levies on terms. we are seeing the philippine peso, the best performing currency, up against the dollar.
2:05 am
money flowing through into that market from foreign funds so far in the last couple of weeks. veriest -- very latest on the overflow. is turning to the opposition in a last ditch attempt to find a brexit deal acceptable to parliament. the move has angered conservative brexiteers. accused them has of ensuring the final stages to labor. >> the result will almost intainly be that we remain the customs union. so we cannot control our policy. huge areas of lawmaking we cannot control. brexit is becoming soft to
2:06 am
the point of disintegration. >> that is one view. us is the chief investment officer. also, our colleague, anna edwards. what exactly can we expect between these talks? >> they will have to get on with it pretty quickly. until wednesday of next week when theresa may wants -- a lot will depend on how far they are prepared to move away from the red line. corbyn will be pushing for something, how corbyn once to have his fingerprints all over this brexit.
2:07 am
something could have taken months and years to put together. it will depend on whether corbyn can see this as a way to getting him closer to power. deal theresa may tries to put through is going to include the withdrawal agreement as it stands. what have we heard from the eu so far? more details get on their response. we heard about the criteria for delay. she has blown through the conditions for the extension. the most contemporary piece. he did call on people to be patient. was clear toe eu point out their criteria.
2:08 am
because therebe is a political process taking place. an election or some kind of new referendum. there has to be involvement in the elections. there will be preparations. we have to wait to see with the french and the austrians have to say. they have been outspoken critics. >> there has to be significant rallying. let's bring in our guest host. you are listening from those lines coming from anna. boris johnson, this is his of fixation moment -- is moment. towards customs union, softer brexit? that a correct assessment at the moment? or is there a risk in terms of hard brexit?
2:09 am
there is no way we are going to end up -- there are a number of outcomes that could come through in time. all of the options are on the table. i would not want to predict which one we think is going to come through. standpoint,stment it is somewhat difficult to put too much risk on the table. spoke yesterday, he made the point even though high-yield credit has cheapened relative to eu high-yield brexit, it has so much's uncertainty it is making them cautious. they think certain industries will be hit. positioning? >> we are somewhat cautious.
2:10 am
without the determination as to what is going to happen, we don't know. we are suffering a little bit from an economic perspective. business investment has fallen. someis leading to challenging economic conditions. well growth will be ok, it is not going to be at some of the higher levels. when you look at what spreads is somee, there complacency. that is potentially an option. it is something that gives us cause for concern. companiesa lot of that would be less impacted.
2:11 am
that is what we are taking for this exposure. anna, i want to bring it back to you on the brexit discussion and the nuances. it was a long cap netmeeting. -- cabinet meeting. >> they got through with a lot of sandwiches. from my colleagues with people who were there. hours, sandwiches and seven different varieties. no mobile phones were allowed. this was to stop anyone from hacking in outside. that is how they got through. and then it was topped with chilean wine. thank you very much.
2:12 am
>> not recommended. >> thank you for joining us. staying with us. let's get the first word news. carlos ghosn is to be --ested on a new charge of he is currently free on bail. arrested ond allegations of improper payment. trade negotiations between the u.s. and china will resume. both governments are pushing for an agreement to end the ongoing dispute. the financial this -- financial times reports -- the global economy is in a precarious position. director saysng there has been synchronized to deceleration, but a recession is not likely in the near term. echoes that sentiment.
2:13 am
>> the uncertainties are holding back investment. the dampen the numbers for trade. think the u.s. china tensions are the main source of that. a faulty sensor on a lion air plane has been linked to the deadly crash. bloomberg news has learned it was repaired in a florida repair facility. global news, 24 hours a day. powered by more than 2700 journalists and analysts. thank you very much. today we have a question. this is what we are going to get on. which asset class could hurt the most if the imf cuts the outlook lagardets -- christine
2:14 am
feeblewe are in a position. feeble position. language he used yesterday. precarious position. do join us with your comments. coming up on the show and bloomberg. speaking to the so tender executive chairman -- set tender chairman.r executive ♪
2:15 am
2:16 am
2:17 am
> david westin sits down with the ceo of starbucks in the latest edition of "big decisions." this is bloomberg daybreak: europe.
2:18 am
in london.cheric >> the dollar is getting back out. morgan stanley, the dollar sliding another 6% in 2019 based on growth concerns. more than market expectations. yuan is volatile. higher on the prospect of a u.s. china trade detail being worked out. crude hitting the highest point. non-opec cuts coming to fruition. trump is really rocking it out for the oil market. cable has been whipsawed but we are slightly higher. theresa may reaching out to
2:19 am
jeremy corbyn for cross party talks. does that mean the softer brexit is in the cards? the market moving up for basis points. these markets seizing on the trade headlines at least for today is ignoring the warnings from the wto. u.s. futures also higher. equities holding on the backcourt of global equities. let's get a business flash. nearing aneportedly agreement with u.s. authorities. ofs is over allegations services to a iranian clients. that would be in violation of u.s. sanctions. it would cost the lender $900 million. global management starting new funds aiming to attract $9
2:20 am
billion. bloomberg has planned -- learn the learn to launch the funds in 2019. raise $240 billion in the first quarter. tele-bike planning to raise funding. by -- they are fighting for customers in a brutal chinese market. it is gauging interest. the company said it was worth $2.3 billion. >> olivia how in london. the u.s. andme, china moving closer to a deal. initial times reports most issues have been resolved apart from two sticking points. etf the tensions between the largest economies in cutting trade growth projections to the lowest in three years. >> those uncertainties are
2:21 am
holding back investment. they dampen the numbers for trade. u.s. china tensions are the main source of that. is also increasingly pessimistic about global growth. christine lagarde says it has lost momentum. is chief investment officer still with us. the markets, it doesn't look like there is a lot growth. does that encourage you to search more for yield? >> to some degree, yes. what is worth talking about is what growth actually is. policy that is dovish, as we have seen. that does give us a bit of confidence. itple talk about when
2:22 am
acceptable level of growth is. 1-2% is fine for us. allied is to generally central banks in a dovish state. giving some of the better valuations we have seen, we think there are pockets of value and areas we should be exploring foreign investment. eu flag u.s. high-yield, having returned 7.5%. you see that outperformance continuing. giving that pivot from the fed. can it continue in the u.s.? high-yieldertain looks relatively attractive.
2:23 am
we are not going to see lots more spread tightening. if you see the u.s. and global growth picture improve, which you may do if we get a positive seeome, you could potentially another boost to that. seeing flows into european high-yield. confident total returns will be positive. >> one of the ideas you like euro high-yield. on u.s.t is closing in treasuries. is interesting about it to you? >> you have to look at it from a perspective of an investor. costs u.s. dollar base, are different.
2:24 am
that chart does not give the true picture. let's look at it from a perspective of a european investor. the ecb looking at downside risks. an economy that is stabilizing. a lot of negative yielding debt. it looks fairly attractive for companies not in a real of a gene state. the valuation stack up. seepotentially could also flows from the u.s. because of the pickup you get. >> the other piece we were aheadng, pimco forging with their bets for emerging markets. they are bullish on that. this is what we talked about with our last guest.
2:25 am
onking at a return of 8% asian bonds. it is sovereigns or corporate you favor for a return? >> we like a bit of both. some of the corporate's look attractive. these names are impacted by growth. u.s.,ial recession in the etc.. they have impacted the return. these are names that fundamentally we are very comfortable with. because of that pickup from growth. we have seen pmi's overnight, reaffirming the stimulus is working. this is positive. as a result, we still think there is far you to go and we like that space.
2:26 am
>> those are the pockets. the carry trade rather than the trading that the highest level since 2008. they have done the deal. buy -- it isned to the demolition derby you had on the lira that has given birth to this replacing. >> -- repricing. >> just to link it, we are looking ahead, turkish inflation coming out. better than expected services pmi out of china.
2:27 am
equities building on that best start to a year. 10 year yield above 250. the santander executive chairman. this is bloomberg. n. this is bloomberg.
2:28 am
2:29 am
2:30 am
>> good morning. welcome to european markets. -- bloomberg. i am alongside matt miller. saying don'ts sweat the small stuff. the shanghai rising to the highest level since may of last year. european futures are higher. the cash trade is 30 minutes away.


info Stream Only

Uploaded by TV Archive on