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tv   Bloomberg Markets European Open  Bloomberg  December 23, 2020 2:00am-4:00am EST

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♪ anna: good morning. welcome to bloomberg markets. i'm anna edwards live in london. the open of european trading is under one hour away. video, president signals he may not sign the covid-19 relief bill. u.s. futures slipped on the news. open for business. france resumes critical trade
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links with the united kingdom but travel will depend on negative covet test results. i brexit deal hangs in the balance as officials talk on. michel barnier says both sides are ready to make a final push. welcome to the program. under one hour to go until the start of the european equity trading session for this wednesday. let's look where we are on the futures. this is the picture for european futures right now. yesterday, and mixed session in the u.s., more positive in europe. much more positive in the european session. the u.s. going in a slightly different direction. in terms of u.s. futures, quite a deal in terms of catch up. the comments we had from president trump talking about not wanting to sign the pandemic relief bill, wanting to make changes to the pandemic relief bill. that seemed to take it edge off futures in the united states and europe.
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0.7%utures down as much as overnight but it is flat. it seems like we may be working our way through that story i looking through it. it leads to questions about delay in implementing the stimulus package or relief package. the dollar is down a little this morning which makes a difference may be more risk on coming through in fx markets. the pound making some modest moves. three opening trade with france past the conversation. the u.k. cut off in terms of global travel. not many people traveling this time of year. also uncertainty and we will talk more about that through the program. the u.s. and european stock futures are pointing in the red after president donald trump said he's asking congress to amend the pandemic aid legislation that was passed earlier this week. let's get to our conversation with simon flynn in singapore.
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good morning. interesting to see how this played out in the markets because it was seen as risk off, wouldn't lead to a delay in president trump signing this into law? on the other hand, president trump wants to see more pandemic relief and the democrats instantly -- nancy pelosi saying, sure, we can do more. where do you think this leaves us? simon: hi. you are right. it is a real back-and-forth. at the moment, the markets are reflecting exactly what you said. first of all, this could mean more money. secondly, the democrats are clearly ok with substantially increasing the cash behind personal checks. thirdly and finally, some people are reasoning the biggest problem here will be conservative republicans. the argument is even mitch mcconnell will be forced to give some ground because after all, the republican party needs trump's support for the georgia
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senate runoff. they shouldn't be in overwhelmingly important block for the stimulus bill. anna: something else we are astching attentively i this year draws to a close, ever closer to the 31st of december, is the brexit negotiations. the more pressing matter has been reopening the border with france for freight traffic. that has happened. brexit negotiations -- i was reading reporting talking about deals possible as soon as wednesday, but i guess we have all been here before. we have seen plenty of deadlines and aspirations come and go. simon: yeah, and a lot of these deadlines are fake deadlines. our working assumption has always been things lasted until at least new year's eve and even talk of -- beyond that, that would mean no deal period. i think the important point is
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most of this is tempted issues seem to be solved. we now seem to be down to arguments about fish stocks and fishing. are demandingsh and with the eu are demanding in 5%ms of catch size is only of each other. the transition that the u.k. is demanding, five years and seven. it does look like compromise is possible. people remain optimistic that ultimately something will be done. one week volatility on the pound certainly elevated as a result of this uncertainty. the deadline looming. less than 10 days away. let me go to the question of the day. you have been discussing and throwing around. how will virus resurgence hit the 2021 outlook? when i speak to investors, depends on the vaccine remains
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in place and biontech has no reason to believe it wouldn't. if the vaccine remains in place, many investors did not see much reason to be bearish even if you don't have to adjust short-term expectations of what economies can deliver in the lockdown. simon: you are absolutely right. the astrazeneca, biontech announcement, it is highly likely it will work is very important. i number of articles showing a number of independent scientists agree with that assessment. reminder that it is a we should try to get as many people vaccinated as soon as possible because we want to reduce the virus population. we want to reduce replication. in doing so, we will eliminate the possibility of further potential mutations or limit those mutations. that is still very important. anna: thank you very much.
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thank you for bringing us your thoughts this morning. simon flynt. we touched on volatility on the pound. some of that is elevated levels. let's tell you we will be talking further about brexit. we see the brexit deal hang in the balance. boris johnson and ursula von der leyen have been reaching an agreement for the u.k. leaves the market next week. this is bloomberg. ♪
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anna: welcome back to the european market open. still 50 minutes ago until the start of equity trades. fairly mixed. u.s. futures are fairly mixed. we are close to the end of the
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year. let's get a bloomberg business flash, the top corporate stories we are covering. it's a move that could change the way u.s. initial public offerings have been operated for decades. approved the new york stock exchange with primary listings which would allow startups to raise money on the exchange without thinking big underwriting fees to wall street banks. critics say the change erodes critical investment protections. elon musk want to try to sell tesla to apple. musk says tim cook refused to take the meeting. it came during the darkest days of the model 3 program where tesla was burning through cash. apple declined to comment. the u.k. and canada has reached a temporary agreement to prevent tariffs from january 3 whether u.k. will no longer be covered for canada's trade deal with the european union.
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the measure remain in place until the two sides can ratify a longer-term plan put forward in november. that is your bloomberg business flash. nine months of talks between the u.k. and european union over post-brexit trade accord hang in the balance. still, boris johnson and european commission president ursula von der leyen intervene personally in a last-ditch effort to reach an agreement before the u.k. leaves the market at the end of the month. officials try to bring forth the inclusion as soon as today. the managing by partner to discuss all the changes around brexit will mean for service industries, in particular, consultants and professional services. thank you for joining us. let me ask you about how your business is preparing. i know you set up a brussels-based business to handle some of your european operations but after the end of the transition.
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has that been the extent of the changes you have to make? of the majorone changes we've had to make from a structure perspective. we've had to really do a comprehensive overview as to what the impacts will be for our clients, our people, our suppliers, and how we deal with cross-border data flows. from an operational perspective, we feel like you're in a good place and probably as prepared as we can be and this really means we have undertaken some rigorous assessments and contingency planning for a no deal brexit across the board. that work has been underway for several years. yes. right, a number of people studying what could happen and yet we have not seen details of a deal and what it does then does not include. are you looking at this deal that could or might not come by the end of this year as having
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relevance for financial services businesses were not? it seems to be mostly about goods, but perhaps there is some impact. perhaps it has an impact on future negotiations. why does this deal matter for financial services? julie: it matters from a number of perspectives. you are correct the deal largely to date has been focused on physical goods where there will be the largest impact but let's be honest, with or without the u.k.-eu trade deal, the end of the brexit transition period will see the largest simultaneous change to the u.k.'s trading, regulatory immigration and judicial system in decades. this has a huge impact for how businesses actually will deal with each other and how they will deal with talent across the board. from a professional services perspective, the tele-impact really relates to how they can employ and exchange diverse
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peoples across their borders. for us, that has been a major impact to ensure that we can maintain that level of diversity of our workforce, including nationalities both within and outside the eu. ey know, we track from an perspective, the brexit tracker, for my financial services perspective, we have left over 7500 since the 2016 referendum. we have seen major financial service organizations, 24 of them to be told, that have transferred assets to the eu. those transfer of assets, while some of the numbers are not value.1.2 trillion of while we still believe the u.k. emerging market remain attractive for financial services post january 1, we know this brexit deal will have a major impact as to how that is
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seen and the mobility of talent across the board. anna: you mentioned how your business is managing this and the way you are going to try to still recruit diverse workforces in various parts of europe. do you still anticipate bringing the same number of eu nationals into london as you would during previous decades or do you think we will see a marked change? julie: i think you are going to see a slow change in that. i think the additional costs required, if a deal is not reached for additional immigration permits, it will definitely increase the cost of mobility and cost of having that diverse workforce. we still believe that those costs will outweigh the benefits -- the benefits will outweigh the costs but it is something businesses will have to include in financial planning and understanding the planning impacts to make sure they are adhering to those regulations in
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terms of complying for work permits and the like. anna: we have talked about some of the movement of people around brexit. what about recognition of each other's qualifications? has that been finally settled? euther u.k. nice some qualifications. what is the latest? julie: there are still concerns around mobility whether people recognition of professional qualifications across the board. given the huge destruction we have seen to the workforce, a lot of the firms, their employees, graduates, interns, they will be anxious on this. today, i can say there is no absolute rarity. while there is the broader talent concern across the board, we have to make sure it is recognized we need a mutual recognition of the
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qualifications. they are waiting for a suitable deal on this perspective so it is impacting all businesses. julie, thank you for joining us. julie teigland, thank you very much for joining us. coming up on the program, president trump demand changes to the rescue plan passed by congress. the details on why he may not sign off on the package is next. this is bloomberg. ♪
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anna: welcome back to the european market open. the start of cash equities trading. futures looking fairly mixed in europe and the u.s. sticking stateside, president trump is demanding congress amend the covid-19 relief package he has been expected to
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sign. i am asking congress to amend this bill and increase the $2000,ously low $600 to or $4000 for a couple. i'm also asking congress to immediately get rid of the wasteful and unnecessary items. now to provides some clarity is bruce einhorn. good to have you with us. what did trump say was wrong? he said the money was not enough. bruce: we heard him say they are wasteful and unnecessary items. in his speech, he listed a bunch countries,o foreign aid to the arts, he talked about money to the smithsonian, and other things. to be clear, those things are not part of the covid relief bill. there are two different things going on. the covid really fill that congress has passed, the $900
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billion, it is attached to an omnibus spending bill which is filled with all sorts of other things that are rather routine. the items that president trump decried are part of that omnibus spending bill. they are apples and oranges. that said, he also did complain about the $600 which he said is ridiculously low. so he wants that to be much higher. that is something democrats are fine with. nancy pelosi has already said yeah, we are game for that, we are on board. anna: yeah, absolutely, democrats reacting with enthusiasm. wasn't the white house involved in the negotiations and on board with the bill? this was reviewed by congressional leaders and passed by congress, and expected president trump would just sign this. bruce: yes. treasury secretary mnuchin was involved in the negotiations of
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sensibly. earlier in the day, two hours before president trump released this speech, steve mnuchin praised the bipartisan bill. and talked about how this is helpful forvery americans in need of relief. mnuchin is hanging out there now, because the president has gone against him. republicans other saying in might not be perfect but it needs to be signed. what happens from here? bruce: that is a good question what happens from here. the president did not explicitly say he would veto the bille. it is possible this is posturing and after we have all paid attention, that the president will go ahead and sign it.
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it's possible that they will have to make changes. the problem is congress is not actually in session now and not scheduled to return until after the christmas holiday. the other complication is that, as much as the democrats say they are on board for increasing the payouts to $2000, it is the republicans who have been opposed to this until now. the question now is what are they going to do because they are the ones that have kept the dollar figure low and now the president has said that is a ridiculously low number. it puts them in a difficult position. anna: yes, yes. strange story. bruce einhorn in hong kong, thank you for bringing us the important details. we are joined by the investment manager in gans european equity team. from the european investment and
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equities perspective, this put some edge off some risk appetite when we saw these lines that president trump might delay the signing and getting more for the american citizens. what relevance for the risk appetite towards the end of the year? >> i think it has already been a fairly choppy week. we start the week with the transport restrictions in and out of the u.k. which weight on the markets and the new mutant strain of the virus. in all of the new news that president trump is not prepared to sign on the bill as it stands which will be a negative as the hope was the stimulus checks would get into the hands of americans, if not before christmas work medially after and perhaps that looks a little delayed now. i think a surprise element, this would be a relatively quiet week. it has not been like any other year and so the new news that keeps emerging whether it be on brexit is enough to keep the
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markets on their toes. anna: absolutely, plenty to trade around. it has not felt that way for the last few years. what about the underlying need for this money? we see high savings which is an average and does not represent everyone's experience and that is why this pandemic relief is needed. in terms of consumer confidence, what are you seeing ? swetha: i think the stimulus check is needed because the jobs that have been lost has been mainly they retail and hospitality services has not come back as these restrictions around the u.s. have only increased in recent months. although there was a growing optimism about the pace of the recovery, that has been tempered by the increase of infections over the season. you are right that aggregate savings remain very high and the level of savings now which is
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about 17%, the last time we saw levels this high was in the 1980's when interest rates were in the low teens versus 0% today. that is not everyone's experience and there is big income bifurcation in terms of the saving ratio which the stimulus checks coming through. in terms what that means for consumer confidence, we thought mixed picture. the consumer sentiment picture painted a rosier picture than the conference board data yesterday. there is no doubt december, there has been a lull following the lead up into the holiday season when people pulled forward there spending for the holiday. and that consumers are awaiting the next round to feel more confidence in aggregate. thank you very much for joining us. us from coming up, we will discuss in the reopening of the french-u.k. border, an enclosure that
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crippled the busiest port over concerns of the new virus variant. this has been resolved it would seem. we have live pictures from this morning as we see vehicles moving more. this is bloomberg. ♪
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anna: welcome back to the european market open. futures a little mixed this morning. more buoyant than they were half an hour ago in europe and the united states. critical trade and transportation links between the u.k. and continental europe have resumed after france agreed to end a suspension that crippled written's busiest port at a time of high political drama over brexit. france cut off shipments from dover after concerns of a faster
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spreading variant of covid-19. travel will now depend on negative covid test. let's get into a conversation about what this means to investors. as if the political drama around brexit was not enough, we had to overlay this additional standoff between france and the u.k., and to some extent, the global response to the new virus variance in the u.k.. all of this resulted in a bounce in the pound. that takes us up to 1.34. the past few days we have been 131 to 1.36. we see elevated expectations for volatility over the next week. what is your expectation for how this plays out in the pound? we have an ever evolving situation with the deadline for brexit negotiations. by tonight, we expect to reach some type of agreement. we have been here before so i would not set too much store by. the freight link is one step in
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the right direction even though there is a backlog to clear. at least we are not adding to it. this was clearly something that was going to stress supply chains for the u.k. particularly in terms of food supply had it not been restored. i think the pound will continue to be buffeted by noise around the brexit negotiation. it did seem after the initial u.k. concessions on fishing rights that the pound did have a move. that was rebuffed by the eu and now we are waiting for the next move back. until we see a firm and to these negotiations, i expect the pound to remain choppy. anna: what does this mean with your european equity focus? what does this mean for u.k. stocks? we have talked with investors about what has been a negative relationship between the pound and the ftse 100. it would be interesting to see on news in either direction,
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what kind of relationship there is between the currency and the large-cap market. and indeed, for how long that lasts, how durable the response is. absolutely. now there is much more of a focus on small and mid-cap in the ftse 250 rather than the ftse 100. those are the companies that will directly bear the brunt of the outcome of brexit negotiations, seeing as they are more domestically focused than international x odors that are present, that dominate the ftse 100. see ah, we should correlation between the ftse 100 and the ftse 250. but the ftse has been the most unloved market index since the referendum. i would expect a revolution in either direction would provide clarity for investors and perhaps with a valuation gap relative to historical averages as a result in both indices.
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anna: we have heard interesting comments from the bank of england saying the central bank needs to maintain a laser focus on keeping inflation expectations in check after the the suggestion that if we did see no deal, that might lead to it nation. what is your expectation for inflation, and what drives that? is absolutely right for him to say the focus needs to be continuing -- to continue to be on maintaining inflation, but we are far below the level at the moment. gap has been raised as a result of the pandemic and the dampening of the u.k. economy. while this is something we should focus on, i see near term inflation risk other than on the food supply is fairly limited considering if we do enter a no deal scenario, consumer
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sentiment and confidence will be much more deflationary, at least in the short term. we talked about the uncertainty over u.k. assets. we talked about where we are on the u.s. right now with president trump suggesting he is not going to sign the pandemic relief package in its current form. where does that leave you in terms of appetite for global stocks were european equities and the balance between the two? is it cyclical in europe you go? -- in europe? where do you go? remains attractive in the short and medium-term if you consider that in the u.s. two thirds of the market gain has been driven really by the tech stocks. that has been a very narrow concentration in terms of market leadership. in europe going forward we have
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emerging market recovery, much more exposure to the global , andmy from european names i think with of the vaccine rollout, even though it is currently staggered and there are issues to work around timing as well as this new strain and proving it is just as effective against the inoculation, there is more i think hope and cheer around european equities going into 2021 then there has been for some time primarily because the exposure of the underlying stocks listed here to the global chinay and particularly which has staged an impressive rebound from the crisis. anna: you mentioned tech. that is going to be an area where europe has not performed as well as the u.s. in many periods. when you look at the tech ipo's that could come -- we spoke to one vc investor who is very excited about his own portfolio.
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what are you seeing? agree.uld 2020 has been relatively disappointing for europe in terms of ipo's considering the momentum we have seen from the u.s. most recently, but also china. i think this year, european investors have typically been more skeptical of our homegrown tech names. this year has really provided a proof point in terms of an inflection point in profitability for many of the names here. i am thinking of companies such as deliveroo which came into their own during the lockdown as well as the payment company. these are companies that could ipo into 2021 along with other tech names in europe and be moved by the nyse just yesterday to allow more direct listings on their market. this could suggest to these companies might look to list in the u.s. as many european tech companies have, which is another long-term question mark for the
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homegrown tech companies. anna: i do wonder how that changes. thank you very much. 20 or so minutes to go until the start of the equity trading day. let's get a first word news update. england sees a laser focus on keeping inflation expectations in check after the pandemic, according to the chief pushmist warning they will up bond yields adding to the debt load. >> very near term, the next quarter or two, as the vaccine rolls out, it's going to remain a bumpy ride. not as bumpy as earlier this year, but bumpy nonetheless. we see virus cases on the rise. we see prescriptions on the
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rise. some of that stop go cycling will persist. is looking at looking down more areas of england to counter a faster spreading variant of coronavirus. other regions could face restrictions meeting non-essential shops have to close. the cdc is warning the new variant could already be in the united states. israel is heading for its fourth election in two years. its governing coalition collapsed after failing to pass a budget. the new ballot is set to take place in march. a new challenger may be able to win enough support to dethrone benjamin netanyahu, prime minister for over a decade global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. the united states commerce
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secretary wilbur ross says there is more to see one trade with china. he spoke to bloomberg about how the trump administration has handled negotiations. >> the chinese commitment for example to purchase agriculture is huge. i believe it will turn out that this past year that is just ending will be the largest agricultural purchase year that china has ever had. things a very good because our farmers have been hurting. remember, though. we have remained with tariffs on quite a lot of goods coming from china. is wer reason for that still have some trading room so that if we do get the kinds of concessions that are needed for the bigger issues that we have something to give them potentially in exchange.
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i think it was a very well-balanced use of tariffs, pulling off tariffs on some in a reciprocal way as they lowered their tariffs and non-tariff trade barriers to us, leaving some in reserve so that we can get the rest of the way. we must solve the technology problem. we must solve the industrial espionage. we must solve the stealing and secrets in various ways. we must solve their efforts to become the dominant military power at our expense. you haveent trump and made that a priority dealing with the industrial espionage, the theft of intellectual property. can you measure that in terms of where we have made a difference, or has it not kicked in yet? legislation passed
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that moves a little bit in the right direction. big issues like market access still remain. there is work to be done, and we knew that. this was not announced as a complete trade deal. this was announced as a phase one. and the chinese both are well aware there is more to do, and hopefully that will happen in the coming period. >> i don't want to let you go without asking, you are a senior official. cyber attack from russia. can you give us a sense from inside the government of the priority being given to this? what is being done? >> there is a lot being done. ince it is a work in progress am not at liberty to discuss it.
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i can assure you it is a very top priority of the intelligence community, of homeland security, of the effective departments, and of the president and the vice president themselves. this is a very serious situation. hackingvery widespread and very sophisticated one. >> one last short question. is there any the question the president will sign it? -- the defense authorization act. is there any question the president will sign it? >> it would pass both houses with bipartisan support, so i would hope that he would consider looking at it favorably, but he is the president. there is only one president at a time and it is his decision.
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that was the u.s. commerce secretary wilbur ross speaking to bloomberg. just want to give you an update on what is happening in hong kong. this media business. we understand from reports in a company owned by next digital is reporting their -- has been freed on bail. hong kong is going to appeal lai,st jim -- jimmy pro-democracy campaigner. he has been charged with endangering national security. he is now free on bail. good asristmas is as canceled for london's traders as brexit negotiations go down to the wire. we look at what this means if you are trading these markets next. ♪
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>> we are in a crucial moment. we are giving at the final push. work with thee to member states. >> the final push. that was the eu's chief brexit negotiator speaking to reporters this week. london in the city of may have been hoping to unwind over the christmas break. they have been bitterly disappointed with last-ditch brexit negotiations down to the wire. many firms are warning staff the usually quiet period could turn
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frantic. here with us now is keith campbell. i had to take slight issue with this idea the holiday is quiet. it does not feel that. particular, what is the worst case? what are you fearful of? >> the worst case scenario is onll deal or no deal december 25 or on december 31. the worst of the worst scenario that theno deal, given some kind ofing -- deal will be coupled together. i looked at what is up on the , with the headline,
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brexit deal hangs in the balance. it is the same story we have been seeing for how many days, how many weeks over the last three years? anna: what scenarios are being priced in by markets? >> with the pound between 1.32 and 1.36, we are in the range we have seen, what has been considered emerging-market style volatility. people on the various desks are stepping more than they usually there will be more people on-call than there ever would. more desks on-call in key asset classes.
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the banks and brokers will be on call. from ournteresting first story on this is tier four has kicked in. you have more potential scenarios. anna: this adds another dimension, doesn't it? i was thinking, surely a deal could not come christmas day. that is not a day many in london will be working. i realized it could happen before christmas day and it might already be christmas day somewhere. that adds an extra dimension, doesn't it? you talked about finding holiday cover. is it going to be easier to find this year, given all that has traders, given the way have been working from home so
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much already? does that make it easier to be flexible in a situation? right. is absolutely for most people, the tech troubleshooting, march, april, may, after the you got your computers running, your home office is set up, the back office trades are flowing, everyone is set up to just open their laptops and be on-call if needed without problems. one more thing to make an easier scenario is indeed this travel ban. i suspect a lot of people in the do not have ad vacation to go to. it might be just very easy to fire up the laptop and log in if
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we get some kind of shocker results. >> i do hope you get to reschedule the skiing holiday. keith campbell, thank you very much.
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anna: six minutes to go until the start of cash equity trading. futures looking more positive than they have been. we have gone mixed to more positive. u.s. futures to the upside. let's get the stocks we are watching this morning. dani burger joins us.
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's last stand,p maybe. you found interesting individual names. >> very macro heavy. we could see moves from a few companies. lufthansa is one of them. lufthansa says it is going to start today airlifting food from frankfurt to the u.k.. it is going to come into a northern england airport. this they are saying is to help cope with the fears of food shortages, even though france is reopening its border with the u.k.. more specifically, it is going to fly 80 metric tons of what it says is perishable food to that airport in northern england. santander as well. there u.s. consumer unit paying $4.75 million to settle u.s. claims. they gave erroneous data that impacted passports. finally, a software company selling its asia and australia business.
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it's going to get 95 million pounds for that. >> dani burger with some individual stocks we will keep an eye on. it seems as if we have recovered from the risk of knowledge that president -- the risk of a nudge. ♪
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anna: we are one minute from the open of cash equity trading in your. here are your headlines. signals he may not sign the covid-19 relief bill, u.s. futures splitting on the news. open for business, france reviews critical trade links with united kingdom, but travel would depend on negative covid test results. a brexit deal hangs in the balance as officials work on. michel barnier says both sides
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are ready for the final push. welcome back to the program, open.s the european futures are looking more positive over the last hour. overnight, president trump with an impromptu statement around the pandemic relief bill, not happy with things attached to other legislation, but unhappy with the amount of aid going to americans. he found support from democrats. in u.s.o a wobble futures and european futures, but we have recouped those losses. we are opening on european equity markets, and we can see moves to the upside coming through or anticipated. that is what we have for the stoxx 600, with the ibex up 0.1%. 0.3% over00 is down brexit uncertainty and the fx
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markets. the dax is up 0.3%. 0.3%.c quarante up let's talk about where we are on these markets. the u.k. and eu negotiators are trying to push a post-brexit trade deal over the line before christmas. joining us now is jane foley, exec. director / head of fx strategy, rabobank. were thinkingople of winding down as a result of getting into the holiday season, close to christmas and the new year, we have so many news items on the agenda. brexit and the unresolved nature of the trade talks are front and center. are you gearing up for a deal between now and the new year? is it getting too late with the european parliament saying it has no time to ratify it? jane: good morning.
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i think for many people in the market, there is the belief there is a skinny deal for the taking, and that is probably the central view. knockedfidence has been a week or two ago, but there is a prospect we could get a deal. we have news stations suggesting we could get it as soon as today, and people are hoping it comes to today and not over the christmas break. if we look at the price of sterling, it reflects a little hope. the expectation is that if we get it, parliament could meet next week to push it through. and there is speculation the european parliament would not be able to vote on it before the end of the year, and now they could intentionally to enable
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the deal to be put in place before they have time to ratify it. anna: there is a risk we could get a deal over thin market trade. today and tomorrow you get into reduced opening hours of various markets. volumes on christmas day in the asian markets might be open. that would make for an interesting move in markets. we know unexpected large moves do not happen in volume. jane: i think you are totally right, and we have seen a lot of trade in many asset classes in the last week. buts likely to be choppy, many people involved in the sterling trade have had time to prepare about the trade they would do or would not do if a deal is or is not reached.
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that might give some control. i imagine there are orders placed, so that could give a little control. but there is likely to be choppy activity. we can say with certainty, if there is a deal, sterling will go up. if there is not, sterling will go down. and ifs a binary here, and buts, but the door is left open for talks here. that clearly will be more assuring than no deal at all and a bitter divorce. anna: do you think the tier-4 lockdowns in southeast england, the restrictions in wales and scotland, the housing secretary said government is meeting today to discuss more areas moving into tier-4, will that limit the
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upside we see to the pound on any deal being reached? jane: yes, i think you are absolutely right. i have thought for a while any relief rally we see could be short-lived. it could be a skinny deal and many sectors will be left in the cold. when you put the political backdrop on that, sterling is a vulnerable currency. there was optimism the u.k. had the first rollout of the coronavirus vaccine, that could help the economic rebound. fast forward to now and what we are expecting, further tier-4 restrictions that could place more weight on the economy. people are adjusting to the realization that q1 could be poor in the u.k. if we have tier-4 restrictions for a few more weeks. that will weigh --and if we look
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over the last month or two, we have various revolts from the tories against the prime minister. this could be a difficult year for the prime minister as well, and that is political uncertainty that could create volatility and downside pressure for the pound as well. anna: i'm thinking about growth expectations. looking, but accor underlying what we have been through over the last nine months. spanish gdp numbers coming ,hrough this morning, down 9% it makes -- a look similar to the number from the u.k. which shrank. 8.6% in the third quarter. this is the extent of the catch up economies have to play going into 2021. will we start picking winners based on how quickly and which
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countries will close that cap the quickest? jane: people have started to do that. we saw the vaccine rollout in the u.k. and that spark optimism . andu.k. we know was hit bad had a lot of coronavirus cases, and a service taste economy is one of the reasons why the u.k. economy was hit so badly. that intot perspective with the lockdowns now and the disruption potentially because of brexit, and the disruption before brexit, i think the market has to remain on its toes and reevaluate. when we look at what is happening in the last few months, we see several countries tighten up restrictions, and that does mean what we are
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seeing in many countries is fairly meaningless. we know q4 will be bad, and q1 could be bad with this new strain and additional concerns about the coronavirus spread in europe. anna: thank you very much with us, jane foley, exec. director / head of fx strategy, rabobank. up, president trump demands changes to the rescue plan passed by congress. details on what he may not sign off on the package, next. this is bloomberg. ♪ every year, we set out to do one thing: help the world believe in holiday magic. and this year was harder than ever. and yet, somehow, you all found a way to pull it off.
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it's not about the toys or the ornaments but about coming together. santa, santa, you're on mute! just wanted to say thanks. thanks for believing. anna: welcome back to "bloomberg
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markets: european open." 11 minutes into a trading session that shows european markets up by 0.4%. the ftse 100 is a bit of a laggard. we see gains on the ftse, and the pound is the distinguishing factor, making gains. perhaps that is weighing on the ftse large-cap. some of the top corporate stories we are covering -- digital is soaring in hong kong
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as the founder has been granted bail. he will be confined to his home and have to report to police three times a week. he was charged under the controversial new security law. the paper reports hong kong plans to appeal the decision. fixed income traders are likely to see a 10% bump in their bonuses at citi,m as they posted their best performance in more than a decade with revenue up over a third this year. citi has to balance that performance with $17 billion for loans. elon musk once tried to sell tesla to apple at a 10th of its market value. tim cook refused to take the meeting according to musk. it came in the days when tesla was burning through cash. apple declined to comment on the remarks. that is your bloomberg business flash. president trump is demanding
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congress amend the bipartisan covid relief package he had been expected to sign. >> i'm asking congress to amend this bill and increase of the ridiculously low $600 to $2000, or $4000 per couple. i'm asking congress to get rid of the wasteful and unnecessary items. anna: jane foley, exec. director / head of fx strategy, rabobank is still with us. president trump wanted more money for americans, and objected to other spending he deemed wasteful in a bill attached to the pandemic relief bill. democrats said they can do more money, republicans just want something signed. where does this leave us? a little risk off during the asian session, but markets are back to a risk on vibe. how do you interpret his
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comments? markets,does seem the the fact futures are pushing hires, discounted him. several people are saying they expect trump will sign at the 11th hour before christmas. the democrats point of view, these comments will be welcome. trump sounds like the democrat he used to be in terms of aid he wants to give to help americans. fore look at negotiations this fiscal build, the democrats onto something bigger. they have had to compromise because they thought they would not get control of the senate after the january 5 runoff. it could be trump wants to leave a legacy and remain a peoples man. some aspects that he wants to take out of the bill are aid to african countries, and that is
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true with his nationalistic point of view. anna: where do you stand on the dollar, and how badly it does in 2021? there are many guests who tell us we will see a weaker dollar. we are already seeing a weaker dollar, although with the news of the veria of the virus in the u.k. -- variant of the virus in the u.k., that changed. now we are back dollar weakness, how long does that last? jane: this is an overcrowded trade, and it is a relief to see the pullbacks that we have this week. when we get an overcrowded trade , pullbacks are inevitable. trend is not over, and if we look at one of the main drivers in the euro-dollar, the real change in real interest rates. if we look at what the ecb's
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warning about in terms of inflation in the euro zone, deflation could stay here for a while. cpi inflation at the last meeting was revised down. factarket does not by the that the ecb will be successful in creating inflation. real interest rates favor the euro. perhaps we need an adjustment for things to turn around for the euro-dollar. that could be when we get inflation in the euro zone, which will be a long time yet, or when we get higher interest rates in the u.s. perhaps we have to wait until there are signs of growth in the u.s., when we see market speculators wonder if the fed will back out of its accommodative policies. that will be quite a while. maybe 2022 we will see a change.
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i was hearing from dani burger about the fact the death of carry trades have been called many times, and seems to come back to life. how much do you see that in 2021? jane: the dollar weakness is forcing people to look for greater yield. we see a big flow back into emerging markets, the same way we kiev low into high -- the way we see a low, and when we see interest rates low, conservative investors are pushed into taking more risk. this will be a trend. how much will central banks push back against the weaker dollar? no one wants to see their currency appreciate, and we see some any central banks adopt
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policies of quantitative easing. australia was an interesting example of this when they extended the quantitative easing program in early november and said candidly the reason they are pushing that is to keep bond rates low, to stop the australian dollar, to stop the and investors piling into australian bonds for the yield. there will be a pushback. how far dollar weakness six extends is related to how much pressure the u.s. has on the dollar, but other central banks will be fighting back. anna: thank you very much, jane foley, exec. director / head of fx strategy, rabobank. 18 minutes into the european session that looks risk on. jane will continue her conversation with us on bloomberg radio after this program. --the up, germany
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government wants to do something. this is bloomberg. ♪
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anna: welcome back to "bloomberg markets: european open."
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21 minutes into a session that shows equity markets bouncing from earlier weakness. woman at theve a helm for 15 years, but it is seriously lagging behind other nations when it comes to the representation of women in the boardroom. let's get further into this conversation. why is the government pushing for a quota on the number of women on boards? germany isaid, lacking compared to its peers when it comes to how many women are at the helm of businesses. in the u.s. in u.k. it is around a quarter in the top 30 companies taken by women, but when this was last looked at in september of this year, the ofen only occupied 12.8% executive roles in germany.
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do not have a single woman on the management board, including brands like membersas well as newer like delivery hero. that covers a number of sectors. will companies be impacted enough to make any difference on the ground? agatha: that is the question behind it. this proposal is supposed to is ament -- there significant loophole, which means it will only be a requirement on boards where they have more than three members. in real terms this would only make changes in about 30 of germany's top hundred companies. the green party members in the bundy stag have been questioning
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if this proposal goes far enough. and have indicated they would rather a percentage of about 30% so this would avoid a token woman on the board. when we spoke to social democrat politicians, pushing for this for years, they see what they have done as in a story achievement. -- as a historic achievement. >> we have been fighting for many decades so women are not a foreign concept. we have secured an historic achievement and a binding legal requirement for these executive wards. agatha: the decision needs to be germanat by the government and voted on in the bundestag, but is hailed by media as a necessary step forward. much.thank you very
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of the moversome this morning. the broad feeling around the market is a slight risk on feel, but heading toward quieter days over the holidays. some individual movers, cv project is now down in trading 4%. it is whipsawed quite a lot from the numbers. then we have negative numbers from brokers, we saw it jump 2.8%, then fall 4%, and it remains in that territory. a $1.2 billion tax with india is lucrative for that business. dimer, that stock is up -- dainlemler is up.
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keep an eye on the auto space. in terms of the overall markets, modestly risk on, monday we saw heavy selling. the closure of the truck routes between the u.k. in france weighs heavily on sentiment, not just in europe but locally. yesterday we started to claw back some of that in terms of the risk on trade. today we are continuing with that move, move to the upside of 0.5%. the ftse 100 briefly in positive territory, but flat now. health care is one of two sectors in negative territory, the biggest falling sector, food and beverage. all sectors elsewhere moving to the upside. daimler getting the best numbers today.
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a last-ditch effort to reach an agreement before the u.k. leaves next week. we will discuss that next. this is bloomberg. ♪
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anna: welcome back to "bloomberg markets: european open." 30 minutes into the trading session, positive for european stocks, up 0.4%. the ftse 100 is a bit of a laggard. the spanish ibex up 0.9%. get to a news update. bloomberg first word news, top stories we are covering. a disgrace is how president trump describes the rescue package passed by both houses of
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congress, he is demanding changes for he signs it, including stingless checks of $2000, three times what is agreed. he wants to remove what he calls wasteful parts of the bill. the bank of england has a laser focus on inflation spec tayson's in check after the pandemic, according to the chief economist, warning if the central bank lets them spite, it will add to the massive debt burden. near-term, next quarter or two, as the vaccine rolls out, it will remain a bumpy ride. not as bumpy as earlier this year, but bumpy nonetheless because we see virus cases on the rise and restrictions on the and that will persist near-term. anna: israel is heading for its fourth election in two years.
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they failed to pass a new budget. polls indicate the new challenger may be able to win enough support to dethrone benjamin netanyahu, who has been prime minister for over a decade. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. nine months of talks between the u.k. and european union over a post frexit trade accord or hanging -- post-brexit trade accord are hanging in the balance. officials are trying to bring talks to a conclusion as soon as today. joining us now is georgina wright, senior researcher, institute for government. i do not know if we are supposed to have inklings or hunches
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about this stuff. tell me what you think based on a hunch or what you have heard. do you expect we will be in a position to see a post-brexit deal today or next week? georgina: that is the million-dollar question. businesses would take a deal today because we are running out of time and need to know what will happen on january 1 to prepare. time is the enemy. of 2000 pages, but there are significant differences, and it is not clear they will be resolved today. some are looking to a more realistic deadline. anna: what do you make on the latest standoff on fish. it seems we are looking at fishingthe eu view on
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-- the french have said no. where do you see room for compromise? is it around those numbers, or the implementation? georgina: that is an excellent question. i think it will have to be both. we know if there will be a final deal, it will be the result of compromise. the eu, it is about access, and the british have accepted that. now the question is how much they can catch, or will it have to depend on the type of fish. it seems to be a disagreement on how much they can catch, and terms of tuna and mackerel. long doesmise, how the implementation phase look?
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is it five or six years, then what happens after? do you have negotiations? both sides [indiscernible] want to retaliate quickly. what happens in the final text is what the compromise will be. anna: in terms of cross retaliation, this week has been an interesting illustration, as if we needed it. the vulnerability of u.k. supply chains, and the way the u.k. supplies parts of europe. what do you think that lends to that conversation about cross retaliation? do you think they have become connected? francea: i do not think
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closing its borders has anything to do with brexit, this is a health and safety concern for the french government and neighboring countries. the key concern about the virus mutating and being easily transmitted across borders. there has been a decision to reverse that, and they will test and trace at borders for lorry drivers. it is important to remember it has to do with brexit, this is the first sign of what disruption could look like. cross retaliation is not about stopping -- both sides recognize they want to ensure goods can continue to cross borders seamlessly as possible. about if the changes fishing quotas, can the eu limit access to its energy grid? that would be cross sector rather than specifically cutting coming in and out of the u.k.
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anna: we will see what the deal, if we get one says about cross retaliation. we heard on monday from a member of the european parliament who said it is too late to assess this now, they do not have time to read it and will not ratify it by the end of the year. will the council come up with an alternative process if there is a deal to approve? georgina: the eu treaty allows for that. reaches a trade agreement or international agreement, it can provisionally apply that agreement pending ratification. that means that you government can say the u.k. parliament does not have enough time, but we will provision the supply. it is not a yes or no decision. the negotiators have to decide what provision do they apply,
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the whole dealer bits of it, then what happens after that. consistently, they -- they say this consistently. reached, there is a way for the eu to provision it and for ratification would be expected. a lot of your research focuses on the engagement and influence of the u.k. in brussels, and will have after this transition. a lot of people tell us financial services are interested in the deal not because of what it contains, but what it will mean for the tone of negotiations ahead. for the rest of the u.k. economy, the services side, is that why this trade deal matters, the tone it sets for future talks? georgina: yes, absolutely.
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that is one of the key consensus of a no deal outcome. we know there will be disruption if there is a dealer not, at the borders. it is really about that trust element. a no deal outcome, that would be a tremendous fallout. [indiscernible] they will be hosting the climate change conference and the g7, and these are areas that the u.k. government has an interest to work closely with eu partners. businesses are used to the brussels scene, they know how it works.
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the u.k. government will have to stateafter being a member for such a long time, and then going to a third country where you are no longer part of the single market. knowing what is going on in the eu will matter, and it will be interesting to see how british businesses operate. thank you very much, georgina wright, senior researcher, institute for government. 40 minutes into the european trading session, we have success in reopening the border between france and the u.k., but what does that mean for supply chains? we will have that conversation, next. this is bloomberg. ♪
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anna: welcome back to "bloomberg markets: european open." 43 minutes into a trading session, u.s. futures point moderately to the upside. we are recovering a little bit from the earlier phase where we were concerned around the new virus in the u.k. france has reopened its border with u.k., the move ends the 48 hour closure that crippled
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britain's busiest port. freight transport should resume this morning. over 3000 trucks have been stuck in south east england since sunday. joining us now is philippe binard, europe general delegate, freshfel. good to speak to you. what can you report from the frontline? do you hear reports of fresh food going to waste, rotting as a result of being held up for 48 hours? philippe: when you look at the , in case of the trucks of fresh produce, they are waiting for direction. market0% of the u.k. which is supplied by european fresh food from france and spain , this is drawn by
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trucks which go to the u.k. supermarket and come back. aretrucks which are blocked mostly empty. anna: let me ask you how difficult it is to persuade drivers to go to the u.k. now, is that something your members tell you about? the trucks have to driversk home, then the will accept to go to the u.k. ,here are a lot of questions
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this is coming at a critical moment. the situation related to the new strain of the virus. went to the u.k. because of the christmas period. i think it is a combination of factors that will make the situation difficult, and there will be a need for companies to use their trucks to go there, expecting they will not be blocked. [indiscernible] this situation will take a few days before being settled, and on top of the uncertainty of january 1. anna: you have been calling for
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a green lane to allow freer movement for fruit and vegetables across the border. have you any interest from u.k. politicians in that suggestion? philippe: the concept of the green lane started with the .irst blockade with covid [indiscernible] not only fruit and vegetables, but you mentioned meet and fish products. there is a certain interest in the context of the brexit discussion. for the moment i do not think there is a concrete plan. in any case, the congestion we see at the port will continue for a while. it is important we find a solution to fast-track a
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solution for moving fresh produce into the operation. anna: how prepared are your members for the changes that will come january 1 or january dealardless if a trade is reached? there will be paperwork and customs, how prepared are your members? look at theen we situation today, most suppliers to the u.k. are fresh produce that work within the program of the single market. when the u.k. will be out of the single market, it means different custom rules. we have talked about that for several months, and the preparedness of the member
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states and the operators -- we know most of the rules now. .here is still uncertainty competitiveness regarding the final price of the product. [indiscernible] everything over the next month, fresh produce, 3.5 million pounds that go every day into the market. day.00 trucks per will try tothe eu continue the supply and keep business as much as usual.
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anna: thank you for joining us, philippe binard, europe general delegate, freshfel. let's get a bloomberg business flash, today's top corporate stories. projekt is down even though it is has sold -- it factors in the number of refunds it has to issue of the games. sony has pulled it from the playstation store. microsoft is offering full refunds. digital is trading higher in hong kong as the founder has been granted bail and will be confined to his home and have to report to police three times a week. he was charged under the city's controversial law. they plan to appeal the decision. citi's fixed income traders are
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likely to see a bump in their bonuses as they are set to post their best performance and more than a decade with revenue up over a third. citi has to balance that performance with $17 billion it is setting aside. that is your bloomberg business flash. coming up, president trump demands changes to the rescue plan passed by congress, what this could mean for markets, or are we done with that already? this is bloomberg. ♪
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anna: welcome back to "bloomberg markets: european open." 53 minutes into the trading session, european equities up 0.4%. a risk on field, not much though. the dollar is down. let's get into the market conversation. richard jones strategist joins us. president trump objecting to parts of the pandemic relief bill and parts of the legislation attached to it. how significant is this? wobbled initially but got back into its stride.
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could this proved to be significant? inhard: i think markets are wait and see mode. a lot depends on what direction the president takes from here. he used strong language to criticize the legislation. if he follows through on not signing the bill, we could possibly see some material downside in u.s. stocks and treasury yields. the market, once the bill was passed, it was a foregone conclusion the president would sign the bill. if he does not, it gets interesting. the way markets are reacting is with the view the president will sign the bill, and this might be saber rattling. if he does not, things will get interesting. than 30 daysss until the end of his presidency. we watch this story with
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interest. the other move we are watching, the pound a little stronger, 1.34. we have been down and up since friday. quite a range of movement based on the latest brexit headlines. what is your best hunch, will we get a brexit deal? richard: i think the way the market is trading with the pound higher versus the euro one dollar, traders are edging toward the view that we will get a brexit deal in the coming days, if not today. having said that, we have been here so many times before, and the negotiations could drag into next week. a french minister says they must not go beyond the end of the year. d-day is almost here, and the market is cautiously optimistic a deal will be found. until it is signed, we do not
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have any plays, and we are in limbo as we wait a result. anna: thank you very much, market live fx strategist joining us. we were in limbo at the u.k.-french border, no longer. live pictures of dover this morning, things moving slowly. ♪
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yousef: president trump signals he may not sign the covid-19 relief bill passed by congress. he calls it "a disgrace." its borders,s allowing arrivals from u.k.'s busiest ports. they are required to show a negative test result. and a brexit deal han


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