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tv   Bloomberg Markets European Open  Bloomberg  May 25, 2021 2:00am-4:00am EDT

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>> good morning, welcome to bloomberg markets. i'm anna edwards live in london. the cascade has just left -- less than an hour away. e.u. leaders have sanctions on belarus for the diversion of a jet. they label it and attack on democracy. global stocks push higher as fed
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officials stick to the script on inflation. price pressures will be transitory. elon musk push to boost bitcoins green credential has another rally in the cryptocurrency but has those gains this morning. welcome to the program, welcome to the european market open. just past 7:00 in london. mark, what have the markets been saying to you? mark: a relatively positive day in asia led by chinese stocks. it seems like risk appetite is coming back. this comes after the recent focus from the chinese government on dampening down commodity prices. there is a perception in the market of that's where the new focuses. we will cut down the commodities market and speculation will shift away from the commodities market back into the equities market. anna: let me get to some of the breaking news. that comes in the shape of the
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german gdp as u.k. budget data. the german gdp number dropping 1.8% quarter on quarter. the estimate was on 1.7%. this is the final reading. not much range around that estimate. most people had had it somewhere around 1.7. 1.8, not a million miles away from it, a little disappointing, but not too far. this number for the first quarter, the pace of recovery from recent lockdown measures. clearly the focus goes into the second quarter as we are firmly in the second quarter of 2021. this is the impact. there isn't much at this point. let me get into u.k. data. the u.k. budget deficit figures are coming through. the u.k. budget deficit inc. -- excludes the banking groups. 31 point seven billion pounds -- 31.7 billion pounds in the month of april. the estimate was for 31 billion.
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that looks to be in line with what was anticipated. let's get back to what mark was talking about for global equities. just under away from the cash equities session in europe. it does look as though we will see a continuation of gains from yesterday. european markets were higher. u.s. markets went a little more strongly to the upside. nasdaq up by more than 1.4%. a tech rally. futures in europe and in the u.s. are there. we will see a continuation of that. what do you see on the gmm? the positivity we see in this session rolled on. mark: that is the key theme take away is the positive session for equities, particularly china. the reason i highlight china is not just because of the equities column, but because they have broken out of the range. csi 300 has been in a range for 10 or 11 weeks.
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i thought the breakout would come to the downside. it looks like, from today's price action, i'm wrong. we break into the top side and that improve sentiment across the region. there are a ton of things to draw attention to, the fact that commodities are having an ok day and that's in context with the tough week since china has put more pressure on the complex. that's consolidating the longer-term trends. the extra theme is that in the effects column, you can see the chinese remember he is a second box with a gain of 1.6%. it is reasonable for the yuan to make. that is dollar you on testing that 640 level. that seems to coincide with the idea that the bloomberg dollar index is testing the six year lows. neither are breaking below yet. you have to assume that the pboc leads the drop that will be the green light for the next stage of dollar weakness. if pboc holds the line at 640, maybe the dollar will bottom out
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for a short while. anna: this is a manic currency and it has moved substantially since 2020. we have seen it strengthen from 716. it has gone to 641 or so. you are saying this is linked to the dollar weakness. dollar weakness has been the story of late, the other side is what the chinese are allowing in terms of their currency to strengthen. you see the dollar breaking through the six-year low and whether the chinese currency goes through is linked. mark: the yuan has a 3% rating but that's effective. there are so many currencies in the region that take their lead from it. even though it is at 3%, there are other asian currencies that won't depreciate unless the u.n. -- yuan does. there are many other ways to come through. dollar cny is the key driver of
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what has been the broader trend. of curse there is a currency, but many currencies are managed in different ways. we see those free traders in the world, the arrow sees frequent verbal reference. of course we see things like the swiss franc be managed. see people intervene in things like the rupee. it is not unique as a managed currency, but it has done a good job. anna: let me ask you about what's going on in the u.s. and the fed's narrative. they stuck to the script as we said in the headlines, continuing to emphasize they see any inflation threat as transitory, maybe not lasting. do you think the market is coming around to the fed's way of thinking? is that why we see 1.6, but i think it dropped to 1.59? mark: we are seeing subsiding of the inflation threat the media term in terms of market pricing and how concerned people are in
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the short term. i would not say people are changing their minds. this is an issue people are entrenched. because we will have a conclusive answer for months, people will see what they want to see. it will ebb and flow. those who see the transitory and an upper hand it will go back and forth. the upper hand will appear about inflation without having a conclusive answer. but for now we are going, you know what, inflation is not a threat right now, let's put it on the back burner, maybe it will come up as a main topic in the weeks preceding the june fed meeting, whether there is a chance that might be a discussion tapering, not actual tapering. anna: talking about tapering. let me ask you about cryptocurrencies. the ongoing ride continues on the front. bitcoin has gained on a tweet from elon musk talking about the efforts that have been made to make bitcoin greener with renewable energies in mind. some of those gains are being
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pared back. we talked about this yesterday and i know you have thrown this around in the markets live blog. how will it peek other assets? do we have any more of a sense as to whether crypto really moves on its own, and is it isolated or does it take others with it? mark: there is in increasing consensus for where we were in there is more evidence to back this up that it is more isolated than many of us thought. i thought at one point it was far enough that the losses would spread into other assets. we saw a little bit at the extreme last week, but not any major contagion. the general theme is, if we survive that big of a move, what's the drama? these are losses in the big largest cryptocurrencies in terms of market cap. they have really suffered tremendously, markets haven't panicked. i think this is proven largely quite isolated. anna: thank you for the thought
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so far. mark for this hour on the program. you can get up-to-date analysis and insight from his team. coming up on this program, eu leaders about broad sanctions against belarus after calling the plane landing in attack on democracy. we will speak to france's minister in latvia has minister. one of the most prominent investment banks in the world to investment of european finance. we will talk about the impressive turnaround. we bring you that story later in the program. this is bloomberg. ♪
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>> what has happened here is this is unseen. >> it is behaving like that in
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the hijacking a plane. >> the european council decided there will be additional sanctions on individuals that are involved in the hijacking, but this time also on businesses and economic entities that are financing this regime. >> particularly also against companies and the economic sanctions and sanctity supporting this. >> we need clear actions in order to change the pattern of behavior of this very dangerous regime. anna: eu leaders reacting to the false -- forced landing of an airplane in belarus. it starts with the talks that began yesterday and continue today. you leaders have kicked off the process with setting further economic sanctions against belarus. that's after it forced the plane to land in minsk and arrested a dissident journalist and his partner on board. for more on this maria joins us. you have been following the summit and that concluded day
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one. they did come up with a package of measures against belarus, what did they include? >> the idea was to go beyond individuals and come up with measures that would be much more comprehensive. essentially what you have is a clear mandate from european leaders to go after this day owned companies, to go after the finer things that goes behind the regime and is a full band on the belarusian airbase. we will see a lot of the european companies in european countries come up with a directive to shut their airspace. they will be speaking to him in a few minutes and he said he has instructed carriers and controllers in france to shut that airspace. overall, when you look at the full measures and those this morning, they actually argue that this is on the top end of
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what the european council could have gone for. a lot of the behind-the-scenes on this also points to a agreement. that was part of the object that european leaders wanted to go forward. when it comes to an external threat, there was nothing going on and there quite united on that front. mark: good morning. your opinion is to discuss russia. what is your situation on that front? anna: we seem to have a problem. we have a problem with your line, apologies, but thank you for joining us. and she said she will be back with the really interesting interview with the fed transport minister later. we will get some further insight in the way in the speed with which european airlines can and ask some of the policies announced yesterday by european leaders.
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laura: bitcoin rallied overnight after elon musk's latest tweets. he sought to bolster the green kurd angels, saying north american minors were committed to being more transparent on their energy use. the billionaire has set off last month criticizing how carbon coin is. the u.s. has issued a new travel warning saying american should avoid going to japan. it's about tokyo's plans to host the olympics in less than two months. the action comes despite a far lower rate in japan than in the u.s. much of japan is still under a state of emergency. if the u.k. finance sector were a country, it would have a bigger carbon footprint than canada. that's according to reports from greenpeace and the world wildlife fund. the impact mostly because from the investment portfolio. according to nonprofit gdp, it is 700 times higher on average than direct impact.
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greenpeace says finance is the u.k.'s little secret. global news, 24 hours a day on air and out bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. anna: laura wright here in london. coming up in the program, fed officials are downplaying inflation fears. we will discuss the market reaction to that next. u.s. treasury yields at 1.6% this morning. we will get into that conversation next, this is bloomberg. ♪
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>> if we saw some development pushing inflation up, i wouldn't expect that to get embedded in
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the ongoing inflation rate. of course if we did see inflation that moved persistently and maturely above our goals in a manner that also threatens to have some impact on this long-term inflation expectation, we have the tools and the experience to gently guide inflation back down to target, and i think no one should doubt our commitment to do so. anna: the governor there as fed officials are downplaying inflation -- inflation fears. price pressures should be temporary while the fed president signaled the conversation around tapering are still laws away. mark: we have what we expected to hear from fed officials. as we expected last week, it's more likely to make news in one year. fed officials are saying something different, but inflation is not transitory in the time to taper is soon, but we are just not there yet. mark: that's right. you could argue there is a clear
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and consensus message. the fact that they are being so consistent as having an impact. market-rate inflation is breaking even and coming off the highs, that there were only at the start of last week and we were not off the highs. the longer-term perspective is that we are at levels that seemed unimaginable only a few months ago. even though we are 5, 10 basis points off the highway whether you look at two-year, 10 year measures. this is a picture that will ebb and flow. the thing we are watching from the speaker is any hint of hawkish and is and when we will think about talking about tapering. anna: if we can identify hawks, or any more hawks, that would be more newsworthy. let's get to the chief global economist who joins us now. your thoughts on the transitory nature or not of u.s. inflation right now. you see something a little more fundamental at work, does that mean all of these inflation pressures will not subside?
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>> good morning, yes. imminently i very shocked. so the supply disruption is already there. i think the key stepped -- key stepped will start affecting expectations. in the best step that i see is temporary and will become more enduring. we think that they will go. the key aspect is that the fed and the central bank are treating the shops as temporary until they see the fed money. and it will show how high it will be to force them to react. she's talking about material, and the increase in inflation. it is going to be much later in time. mark: good morning. so you think at some point we will probably see the transitory side pitch when inflation starts moving enough.
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when exactly do you expect that to happen? what's the timeline for us seeing a large enough move in inflation expectation that people start acknowledging that maybe it's not transitory? >> when it comes to central banks, for example, the fed will start to taper next year. i think over the next few months it will seek the message. the new strategy implies the data. it's not about the outlook, it's the outcome. and that's historical for the kind of preventive fashion. central banks used to tackle inflation. and in a way of promises to remain behind it. but because you expect inflation to come in. which i think increases the chance of it coming in with respect. but with these materializing in the way the fed is working, --
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anna: so they need to see the data. it's no longer going to act in the preemptive way they would in the past. let me ask about wage dynamics in the united states. will it be possible to see pressures even when there is pair capacity in the labor market? what have we learned about that? >> one point is that we have already seen some forms of that. the latest, whether it's hi, was in the stability market. this was due to frictions in the deliverable market. because supply may be injured from the benefits. but it can create a perception that is not possible. and i think over the beginning term it will mark and observe --
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absorb this much quicker than a few months ago. so i think it will close sooner than anticipated, creating the state of florida, which is pressure. -- pressure is building up over time in the region for these temporary shops. mark: how much do you feel that this spreads across the atlantic? you made a good case for the inflation being more sustained in the u.s., do you think this is a global problem? do you think europe will have a global inflation threat, and how much will it be domestic driven if there is an inflation threat, or will it be about contagion? >> not necessarily a problem at the moment, but it is a global phenomenon and it does affect them. the europe is where markets are at the chance of having a more sustainable firm.
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we can see inflation could be a target. so there is more to price and when it comes to europe. in the underlying reasons are very much the same. the demand is likely to recover very quickly, and it's quicker than an -- then people anticipate. it is very likely to accommodate the temporary shop. anna: let me ask you about the ecb specifically. you say that they are going to announce the slowdown in the pace of the pandemic program, the pet program. you think that's coming in june, what message will that give the market? what message do you think it should give the market? >> it is very much a communication challenge. we expected to be at the base of activities. what's the story? the story is that it suggests to
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control. you have to allow the outlook, and they could think -- and they think they can do so very moderately with the asset budget. at the same time there would be an objective with the intermediate target with the accommodation for a longer and keeping the conditions. and i think this is a more medium-term set which would be a strategy that i think the ecb will move decisively in a dovish direction. so it's time to catch up with the fed. anna: so it's a communications challenge they face in june. luigi, thank you. chief global economist, thank you for joining us this morning. coming up, we will be back to the belarus story as the eu sanctions belarus over its force landing of a flight and arrest of a dissident journalist. what belarus says. we speak to the french transport minister over measures being
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taken. we will discuss the forced landing, the briefs of aviation rules and the airspace. this is bloomberg. ♪
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anna: welcome back to the european market open. 7:30 in london. 30 minutes until the start of the european equity session. european futures point modestly to the upside. u.s. futures gaining momentum in the last half-hour. nasdaq futures up by six cents of a percent. 30 minutes to go until a looks to be a positive session. commodities once again, something to focus on. we see that the bloomberg commodity indexes up the most in around a week. things are looking a little
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different this morning. mark: it is a positive session. part of the reason is positives of the inflation threat we have been talking about has perceived to have subsided slightly in the short term as we discussed. the extra advantages and china, which is driving optimism out of asia, is perceive that policymakers are more focused on damping down speculation in the commodity market rather than the equity market. the equity market is free to rise again. that's the kind of narrative that is out there today. one of the things i want to draw attention to in the commodity space is while we see china ramp up their verbal record against this space and kind of really make clear they want to control commodity prices, we had several more comments today saying how they want to stabilize them. the fact is, we have not come off very much given where we have come. this chart on your screen at the moment is showing the last year. it's a very clear trend channel. we have not yet broken that. you have got to assume that it's
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only when we break to that line at the bottom that speculators will capitulate. until then it seen as a healthy consolidation in the backdrop is here. not only the longer-term demand picture is good, but in a world were dollar is not yet bouncing off that six-year low, and the next move might be to break through, people aren't inclined to bear out of the middle space. despite the chinese rhetoric, this is more about a consolidation of the longer-term trend, not about a capitulation yet. anna: we heard from the premiere today at repeating that china wants to fight against hoarding and stabilize commodity prices. we will leave the commodity story and get back to the effects story and china. because as you are flagging to us earlier, it was crucial and i see it here on the bloomberg, the offer you on his past 6.4, that is the highest since 2018. watching the dollar, the dollar is weak. how much is this is that dollar weakness story? we talked about the importance
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of the 640 level earlier. mark: i think this will be signaling. i think if we get dollar yuan closing down below 640 today, and if we get a fix in the pboc that is not to aggressively fighting us, than that level of the bloomberg dollar index will go. this is a lead indicator for the six-year lows in the bloomberg dollar index probably about to break. we probably need validation for how we finish the end of the day and tomorrow. but i think this is a very negative sign to the dollar. anna: bloomberg dollar index down by an eighth of a percent right now. we will watch it, it is weakening. let's go to bloomberg business flash. here is laura wright. laura: amazon to announce its acquisition with the movie studio as soon today. bloomberg understands the e-commerce giant is in talks to pay $9 billion for the business currently owned by hedge fund capital group.
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it would bring a library of movies and shows to amazon, including james bond, robocop and iraqi franchises. is the biggest ever takeover in european real estate. german property firm has agreed to acquire the rival for 19 billion euros. the price represents a premium of 18% over the closing price on friday when shares were last traded. the deal brings together the two largest residential landlords to control more than 500,000 apartments. morgan stanley has reached a deal to end a lawsuit which ends discrimination against black female staff. the longtime employee, who became the staff global head of diversity said management refused to adopt her plans to address racial bias. she said they failed to address problems with hiring and retaining black employees. morgan stanley rejected it and
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vows to defend the lawsuit. >> laura wright here in london. eu leaders have kicked off the process of further economic sanctions against belarus after force the plane to land in minsk and arrested a journalist. belarusian officials are said to be added to an existing blacklist in the u.s. imposing a flight daca on the country which would prevent the airlines from flying over eu airspace or having access to airports. leaders are urging carriers to avoid flying over the country. i asked the director general condemned the flight diversion in an interview with bloomberg tv. >> we do have to strongly condemn the actions of the government of belarus. what they did, intercepting a commercial civil aircraft clearly put the passengers and crew and forcing them to avert is unacceptable behavior by any government. anna: i asked the director
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general concerning the actions about the flight. bloomberg joins us to take over this conversation with regards to the transport industry. maria: we are now joined by the france transport minister who is in paris with us. i know you are announcing a number of measures in terms of the air restrictions coming in and out of belarus. i want to ask you, you are a professional pilot by training, you know what the safety of the flight entails. how dangerous was that move of diverting that plane? >> it is a full diversion. and basically you want to have it at all time. if you have information, you must comply to what has been told by the authorities.
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so the utmost professional i praise them for handling it very well, but in that case, the issue is the unacceptable behavior of the authorities and we will get to that in a minute. >> and i know that today you are put in for a number of restrictions, especially when it comes to the airspace from belarus, what it does look like? >> as you know, the eu council was there last night. we have requested all airlines operating in finance to avert the airspace and i have suspended the belarusian operator, i have suspended the operating permit. >> and that suspension, is out already in effect? is that coming into effect today? >> absolutely, it's coming into
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effect this morning. we have two flights, one expected from belarus to france, and one is supposed to depart from paris to minsk. both flights are canceled for today. >> and those flights are canceled and no longer operating. your conversations with air france, what type of discussions are you having now? >> as i was saying initially, we want to ensure safety at all times. the fact that we do not overfly belarusian airspace, we will have a longer flight times. so we made sure last night that everything was ok from safety point of view, and that is under control. of course focus one is safety and security. and as you know, on thursday morning we will have a meeting
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to see the international level with the organization of aviation. if further investigations need to be conducted. >> in terms of that investigation, the belarusian authorities said this was about hamas that it had done this. based on what you heard, how credible are these explanations? >> i can't go into further details here, but what i can say is according to what we know, it was a full -- a folstein version of the flight. hence the sanctions that were announced last night. >> for european cynics -- citizens watching this, some are probably shocked to see this happened in the european airspace, how safe is the european airspace after the measures that you have taken last night? >> the european airspace is very safe.
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one of the safety us -- safest in the world. it was an eu flight between two eu countries. in their freedom is at the foundation of international air traffic management. so it was very important that the eu member states reacted very quickly and these sanctions are essential to keep confidence for the passengers in the european airspace is safe. >> justice which gears, because summer is around the corner, there is digital paps coming in for tourists. france's reopening for taurus as the coronavirus situation is under control, how ready are the airports to take in this airflow and deal with the digital path? >> the airports are ready. what we are going to do is resume international air travel by mid june for some flights
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about possible situations. we are running some tests on the path in france and all the overseas territories. we will be ready. and as you know, at the european level the digital green pass must be approved by the end of june. we are trying to resume international air travel as soon as possible. >> and i know it's still early days, do you have any numbers that you are targeting in terms of passenger flow? >> it's difficult, but what we are trying to achieve is resume international air travel between europe and america, canada and the u.s.. we hope to reopen also with africa and with some eastern countries. we think it would be difficult to reopen with china as they have a very strict covid policy. but it's difficult to get the
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figures today, but this is what we are trying to reopen. >> just a final question, when you look at air france, you pumped more money into the company. the fact that the borders are reopening in the economy picks up, does this mean this was the last eight we will see from the french government into the company? >> we hope. as you know, the vaccination is progressing rapidly in france, europe, the u.s. and in other countries. so we hope that there won't be a false wave, but we have to be ready anyway, so we have to keep vaccinating our population and have to be really careful with that health of everyone. in we are in france, as anywhere in europe supporting all the economic operators and transport
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with the utmost attention. >> thank you so much, minister. he was joining us from paris on those restrictions coming into play as you heard, today from french authorities into the belarusian airspace. anna: thank you very much for that. maria joining us with the latest on the actions being taken by europe against belarus. we will be speaking to the foreign minister later on in the program. we will get the perspective from a little bit further north. coming up here on the european market open. blackrock has set much of its tech exposure. we will bring you the details, but why now. what the background contact for other companies. this is bloomberg. ♪
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>> welcome back to the european market open. 15 minutes until the start of cash equity trading. future points are up. dax futures are up. perhaps setting its own path. nasdaq futures up by 7/10 of 1%. speaking stateside, the stockmarket rotation is having a big impact on one of wall street's quantitative strategies. that is momentum. the ishares momentum etf has long been tied to highflying tech shares. the $16 billion fund is do to rebalance this weekend will be injected with the large amounts of value shares. joining us to discuss his dani burger. i guess this is because there is a new set of players that now have the momentum. 68% of the portfolio set to change, give us the size and scope and a sense of just how
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consequential that could be? >> it is consequential on face value. regardless of if you think it's transitory or not or if value will do well, it already has. this really just emphasizes and puts a big! on the stock market rotation we have seen. so this fund itself, as you said, has been synonymous with tech, but tech is no longer going to be the biggest holding. now the biggest holding is going to be financials. so financials growing to be about a third of the portfolio from less than 2%. tech was at 40% and will be 17%. if you look at the extra additions, you get that reflationary, maybe even an early cycle type stocks that are getting put in here. in momentum, by its very nature is going to continue to chase those past winners. so this is a big vote in favor of value and a lot of cash will be voting this way because it is
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$16 billion that are in this fund. and of course you would have to assume that when this is set to rebound on thursday, there will be people who will attempt to front run this and buy up those financials, those materials, and those types of energy stocks that will be put in the fund. mark: that's what i was going to ask you, how much do we expect this to prompt some extra portfolio adjustments, and how much do you think we have seen of it already? >> i think most of it is probably done. if you look, it's in the quantitative sector. most will be more nimble than an etf, which rebalances somewhere around quarterly. it can change sooner and it can do more sophisticated strategies. so though momentum will have already been making this change. but now what we are seeing more of is the fundamental crowd that pays attention to these kind of a mentor him signals as an input among other things that will likely follow along. and deutsche bank, for example, analysts put out their flows report showing that you do see a
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lot of these value sectors picking up steam. one of the interesting ones to watch will be commodities. they point out that among all of the value type sectors, commodity stocks, that allocation has not been as high and that's due to the volatility within the sector. of course the recent actions by china only feeding into that, but i think this lean towards value has already taken place. here is sort of the last big push towards the factor. >> the momentum etf is catching up with what others have been talking about and doing for a little while. dani burger with the latest on that etf rebalancing. an important story to keep an eye on. coming up on the program, we will get your stocks to watch. danny will be back. the german company agreeing to be acquired by arrival in the biggest ever takeover in european real estate. the german market was closed yesterday and the news broke yesterday, but today will be the first time for stocks to react.
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let's get the expectations next. this is bloomberg. ♪
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anna: welcome back to the european market open, eight minutes until the start of cash equity trades and futures are up. the dax will play catch up a little bit. i know things that might move will be a focus for dani burger this morning. and stocks to watch, what have you got? dani: playing catch-up when it comes to the german market. just kicking off with a big real estate deal, a monster deal, 19 billion euros to be exact. they are up from 16% on trade gay. they are down 2%. you see that was acquired because a cost money to acquire a company and streamline it. so they are going to be buying it for what equates to 53 euros a share.
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that's an 18% premium to friday's close. nor region -- norwegian, a company struggling a lot, and new rights issue will be a private placement, but i had to leave this a couple of times because i was shocked by the private placement. it will be 6.26 per share. and that's about a 70% discount to what they were trading at yesterday. so we could see some big declares. sticking with the germany scene, the exciting world of cement maker, a u.s. materials company is buying a lot of its north american activities, specifically on the west coast. if anything, this is a reminder to look out for deals that happened yesterday because the german market wasn't open. companies likely to be on the move. anna: the exciting world of cement. dani burger, thank you very much. bringing us the stocks they need to keep an ion. just a few minutes to go until
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the start of the equity trading session. we are focused on dollar weakness and it has continued to weaken. but you are focused on chinese currency strength and a few things. officer u.n.'s past 6.4 versus the dollar, the highest since 2018, what is the onshore yuan you are looking at. mark: you did not confuse things at all, there are two lawyers on a subtlety. the officer yuan is very important. it will lead the mood, but it is the dollar cny, the onshore rate that is probably more important for the signaling that the pboc will let this go. we can see the officer yuan trade below that level in u.s. time. there could be a lot down there. and now will put pressure on the pboc to allow us to go below 640. but ultimately the more important signal is what happened to the onshore yuan, the dollar cny. there are three levels to watch. offshore is the first leader,
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that will set the direction for dollar cny. if it validates with the offshore is doing, that provides permission for the bloomberg dollar index to break down. that's where we are watching this. we had the first signals go, we have not had the other validation, but the dollar can break down. anna: down .1 .6 percent on treasury yield. mark: it's definitely helping, at the moment we are seeing a little bit of inflation and threats come out of it. we have seen the pressure come off the rates move. a little bit of that from the u.s. has not come off much recently. the subsiding rates move is supporting a little bit of dollar weakness in the margin, but it's not breaking just yet. anna: something to watch. we will keep an eye on what's going on with the currency market. there weakness in the dollar. thank you for spending the past hour with us. i will be back with the european
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equity open. futures are pointing to the upside as the german market will play catch up. u.s. futures point higher. nasdaq features up by 7% after strong gains yesterday. this is bloomberg. ♪
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anna: welcome back to the european market open. a minutes ago until the start of cash equity trading. they are labeling it an attack on democracy. global stocks push higher. fed officials stick to the script on inflation. they say price pressures will be transitory, not lasting. elon musk pushed to boost bitcoins green credentials and his spurs another rally in the cryptocurrency. let's take a look at these features then.
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22nd until the start of the european equity cash session with futures pointing to the upside. bear in mind that germany was close. they had some catch up to play. europe made gains yesterday. so interesting to see that germany is expected to umber -- underperform. and we have m&a to talk about. germany perhaps we'll underperform. we see expectations with gains and futures up by a quarter of 1%. u.s. futures also pointing higher as we get the european equity market session underway. the u.k. at 5100 by a 10th of a percent. we had a strong session on wall street up by 1.4%. tech stocks rallied in the monday session. we could have further to run on that, despite the rotation that we had talked about with technology and more value plays. we see the nasdaq coming back with another herat up by 7/10 of
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1% on u.s. futures in the nasdaq. futures up by fortunes of 1%. the u.s. equity market futures back to european stocks. up by 1/10 of a percent. the imax up by 2/10 of a percent waiting for the german market to open after it was placed yesterday. all in all, making some modest gains across the european equity market, focusing on a growth story and on expectations that inflation may be won't derail things, that has been the fed mantra and maybe that line of argument is persuading people that interest rates won't be rising in a hurry. european equity markets are opening positive up by a quarter of 1%. meanwhile, the dollar fell against its peers on the treasury yield. in weak u.s. data supports the common as bond feds have a spike in inflation that will be short-lived. joining us to think about ethics moves, the head of strategy.
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jeremy, really good to speak to you, thanks for joining us. we are seeing appetite for risk asset and appetite for equity and going along with that and we will expect to see dollar weakness. we see that this morning. what is in the driver's seat when it comes to dollar weakness today? >> we are seeing the dollar under some degree of pressure. i think he has identified key themes. one is the declining u.s. yields in terms of nominal. so we are back trading through 160 in the u.s. tends. that could easily extend towards another beat or two lower. back towards 158 and tens. but at the same time we are seeing u.s. breakevens push higher. that's impacting u.s. real yields. that is causing some concerns in terms of the u.s. dollars valuation. and then you overlay that with some of that recovery play of the recovery narrative that we are seeing in that plays into the euro, which is likely to
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benefit from the uptick this morning. and it's also playing into sterling that goes into positive territory. also in terms of the consumer sector. it seems to be the case that u.s. real yields declining are weighing on the dollar and there are good reasons to look at those european currencies, which are gaining as the macro backdrop improves. anna: and this is coming from the u.s. real yields signal that you talked about. what do we expect to see him breakevens? inflation expectations outside 10 years? we continue to hear this dovish messaging coming through from the fed. >> that's right, if you look at those u.s. breakevens, obviously inevitably he would look at the fives or tends. but if you look at the twos, they are higher than the longer-term inflation expectations. that validates the inflation prudence are transitory.
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as we continue to see data suggesting that they are remaining robust. pretty much all of the survey data, looking at the prices paid components are moving higher. when we start to look at those question marks about wage growth or the difficulty we are seeing in terms of filling vacancies in the u.s., which could cause wage pressures, for now it feels as though the path of least resistance is continuing to screech higher. and that will just amplify the pressure on real yields if we are going to see those nominal's remaining pinned against 150 to the mid one 60's threshold. anna: we spoke to the chief global economist and he said we could see wages growing in the u.s., despite the fact that we do have that capacity in an output gap in terms of the labor market in the united states. what is happening in the labor
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market and the link in with inflation expectations? jeremy: the difficulty is to whether there is this ongoing reluctance to return to the labor force and whether that is going to necessitate significant uptick in wages or support mechanisms eradicate and the employment -- the education sector comes back on stream allowing more normal childcare patterns. that will allow workers to come back into the labor force without the necessity of a significant uptick in wages. there's some real challenges to understand the employment wage dynamic as we move forward. i think that is going to be an important issue for the fed to consider. but for now at least, it feels as though wage pressures are going to be pursuing. the question is if that will deanchor inflation expectations over time. the fed is assuming that won't be the case. as the evidence point to the
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opposite direction, that narrative will continue to be challenged as we move through the summer. anna: jeremy, thank you so much. jeremy stretch. we have talked a lot about the dollar. we will get into some of his other thoughts. also worth mentioning on the german wheeler state actor -- sector. a $23 billion deal. we heard about that yesterday. today, the first time for these stocks to react. quite substantially up by 15.8%. moving in the opposite direction as the acquirer. eu leaders vow broad sanctions against belarus after a forced point landing and calling it a force. we are back with all the developments. this is bloomberg. ♪
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anna: welcome back to the european market open. 10 minutes into the european trading session. european equity markets moving to the upside. the dax was closed yesterday and we see a little bit of catch-up, up by .75%. i should have mentioned the swiss market was closed yesterday. the smi index rising to a record high, up by 0.4% or so.
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the dax not that far from record highs as well. bloomberg's dani burger joins us. dani: start with an earnings one -- an engineering company. one of the biggest gainers. they were able to beat on their earnings, also raising its final dividend as well. we are seeing those shares up more than 4%. that is nothing compared to the move we are seeing in deutsche bonin. it is one of the biggest deals in european real estate. those shares moving higher. it is being bought by vinod via. acquirer down by 4% or so. finally, i brought up argo blockchain. it is a pretty small company listed in london. about $25 million market cap or so. however, it is joining this bitcoin mining counsel. the council talked about by elon musk to promote energy transparency.
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interesting elon musk not only moving bitcoin, but companies related. for the macro, we do have the offshore you want breaking below the 6.4 level. as markets point out earlier, we want to see if that onshore yuan can do the same thing. you have the weaker dollar, the messaging from china -- perhaps mixed messaging on would they support the yuan in capital inflows. and the u.s. 10 year yield, that is that transitory. anna: dani burger, with us on a buoyant equity market picture globally. following the summit that was taking place just yesterday in brussels, eu leaders kicked off the process of further sanctions, economic sanctions against belarus after it forced a plane to land in minsk and arrested is journalist and partner on board.
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maria tadeo joins us now. european leaders met and quite quickly came to this conclusion about the measures they wanted to introduce to talk us through what has been decided. maria: yes. in fact, that is a very good point because this package has measures against belarus and the belarusian government agreed and very quick manner. if something european officials behind the scenes told us there was no disagreement or bickering among the eu 27 on this point. that there was a real united front. when you look at the details, two ways. one is airspace that would lock flights in and out of belarus. we are seeing european measures and governments taking that action, restricting flights into the country. they are also going after people, individuals and companies, especially state-owned companies and belarus. the european claims they are financing the regime. they the airspace and the
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money. the analysts i have been speaking to this morning say it is tough and on the upper range of what european leaders do and have tried to do in a quick manner yesterday in the european council. anna: it is interesting. ukraine has halted air traffic with belarus from may 26. this is according to a couple of agencies in russia reporting this, not just eu countries. european leaders also discussed russia, i understand. how are relations there? maria: yes. it's interesting that during that meeting, european leaders were not able to use their phone. they were not able to take any electronic devices into the room. confidentially was the request made. it shows you to some extent there were concerns about some information, discussions leaking or potentially being hacked.
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on russia, we heard from the head of the european commission with some very tough language. she talked about a country that is escalating its behavior. that is now actively trying to destabilize countries in eastern europe. she said clearly it is meddling in elections, carrying out cyberattacks and assassinations. she did say, however, that russia is too big to ignore. it is geographically very close to europe, and therefore, european leaders need to find a way to engage but also be ready to take more actions in june if there isn't a change in behavior from russia. anna: thank you very much. maria tadeo joining us for the latest on the eu leaders summit. the may the quick decisions around belarus, but they will be back with more. let's back to the market action. jeremy stretch is still with us. thinking of g10, i want to ask
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you about the euro. you referenced this in the weak dollar. how important do you think the june meeting will be for the ecb? dani told us about the communication challenge that lies ahead. they want to reduce the amount of what they are doing in the pet program, but they don't want to make a look like they are tightening policy. that could be a tricky tight rope to walk. what would you be watching for? jeremy: yes. i think it is going to be a difficult balancing act. i think it will be interesting to see how the doves and hawks play this going into the meeting. i think the subtext is a meeting which comes with the forecast, seemingly going to rise up that essentially, it makes it a difficult challenge for the ecb. i think i want to make sure and flag they are prepared to maintain the buy towards preserving financial conditions.
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i think the balancing act is going to result in continued grinding higher in terms of those german bund yields. it has an impact in terms of nominal spread. i think that is going to be the narrative that will keep the euro relatively well supported, but the ecb will have that ensuing balance and they have to preclude an overt degree of strengthening the euro which could compromise the recovery through the second half of the year. anna: when i looked, moving on to another european territory thinking about the pound, when i look at what the conversation revolves around, back to inflation, i wonder is how is different is the inflation conversation in the u.k. versus the u.s.? the bank of england plays down the runaway. the same dovish message we are hearing from the fed. compare and contrast the two.
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jeremy: there are some similarities. in the context of the wages debate we were having earlier about the u.s., that could be relevant to the u.k. because we are seeing a significant uptick in vacancies. the we can press reports underlying the difficulties employers were having in recruiting staff because of various structural factors. i think there are some similarities in terms of those inflation dynamics. of course, it is very much the case of the bank of england and governor daily and including those that appeared other than how the treasury select committee yesterday are playing into that central bank orthodoxy of mainly suggesting it will be transitory. that will probably play out in the context of the u.k., but inflation is on a much higher plane in the u.k. relative to other developed markets. the bank has to be mindful of that, but nevertheless, the bank of englund have shown a tendency historically to be able to look
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through a spike in inflation i suspect that is what they will do this time around. but the narrative in terms of the consumer rebound, we will see that in the distributed trade survey later today. validate that sterling has a potential upside irrespective of the inflationary concerns. anna: another thing the bank of england was asked about yesterday, thinking of governor bailey, cryptocurrencies. governor bailey describing crypto as dangerous. saying he is skeptical about it. it has currency in the name. your thoughts on where we got sue in the crypto narrative, because there has been lots of volatility. a lot of attention on it, a lot of retail exposure which means regulators will be watching it perhaps a little more closely. jeremy: you are right. in the context of governor bailey, you took the words out of my mouth because the word skeptic very much describes his presumption of that particular market. i think the obvious dynamic in
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the market space is the degree of leverage and the degree tale -- of retail involvement. that does underline there is it inevitable uncertainties with big price movements. we saw that when we saw that significant price drop and we saw discussion about margin calls. i think there's going to be this increasing focus from the regulators in terms of the dynamics, not least of which because there are concerns about the rather less pleasant dynamics in the cryptocurrency in terms of perceptions of money laundering, etc. i think it is the degree of leverage in the retail sector involvement which could create instability when we see significant price moves that will continue to keep a close eye from the regulatory environment in terms of the broader perspective. anna: jeremy, thank you so much. jeremy stretch will be continuing a conversation with us on bloomberg at 9 a.m. u.k. time.
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i look forward to catching up with him again. coming up, from one of the most prominent investment banks in the world to a decade spent as the fixed man of european finance, we chart which a ban -- deutsche bank. this is bloomberg. ♪
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anna: welcome back to the european market open. 8:22 in london, 9:22 in paris or berlin, and in frankfurt is where we will head to next. the european equity markets making decent gains, certainly the case in the german market. deutsche bank is this survey where the ceos expected to highlight it turnaround at germany's largest lender. it's a far cry from the shareholder angst two years ago as the bank remains shackled with the sick man of europe finance tag. we have taken a deep dive in today's big take story on the bloomberg terminal and bloomberg website. let's talk to steven arons who joins us now. the big picture for us. steven: hi, thanks.
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i think one of the most important things is to actually stop the infighting that deutsche bank was notorious for before he became ceo. this rise -- he replaced people he didn't see as loyal to him and put in charge people he knew very well. he recruited strong loyalty and it worked. the implementation of his strategy has been much better. ceos were notorious on the failures to follow up on their word. that has changed. he's been lucky too. the trading boom has helped them a lot. anna: elusive combination of planning and good fortune. how stable is deutsche bank now? steven: it is pretty stable actually. at least not less stable than its competitors. that used to be much different a few years ago when people were
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really concerned about the viability of the bank. the credit spread just blew out of proportion. credit investors, investors generally were concerned about the bank. that has changed. it has strong capital buffers now. i think it has regained the trust of many investors. if you compare credit spreads right now, deutsche bank's credit spread to those of their competitors, there's not a big difference anymore. anna: what does it mean to be a normal bank? will deutsche bank be one? steven: yeah. a normal bank is one that just ticks along. it provide stable returns to investors and stable services to its clients. and deutsche bank is at least on track of doing so. the big question now that the ceo is facing is whether he'd be able to achieve his return on equity targets, profitability
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target. it is still something many analysts doubt he will pull off. i don't think the strategy will actually deliver the returns he has promised. we will see next year if that happens. he has set a deadline to achieve the target. many think he want and we will see -- won't and we will see. anna: steven, thank you very much for joining us. you can read more on this big take story on the terminal or we will revisit the deutsche bank story should anything come through from the shareholder meeting taking place later this week. coming up on the european market open, the u.k. must take bold steps to leave the economy out of the post-covid and brexit slump. that is according to the confederation of british industry. we will speak to the group's director general about the organization's recommendations, areas of improvement, what they'd like the government to
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enact in terms of policy change to enable the u.k. economy to seize the opportunities of the future, and deal with the challenges. this is bloomberg. ♪
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anna: welcome back to "bloomberg markets: european open." european equity markets making gains. some of that is a legacy story from yesterday as the german market and swiss market play catch up. we have some m&a from germany we are factoring in. the ftse 100 a little flatter, struggling a little bit. if we move onto the breakdown, some of the negativity this morning from the insurance sector, the media sector and telecoms. european equity markets are in positive territory, and sectors are positive.
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to the upside we see real estate at the top, up 1.4%. the acquiring company down by 5.5%. that weakness not enough tower way the movement to the upside. -- not enough to outweigh the movement to the upside. a strong session yesterday on wall street. laura: eu leaders are vowing sanctions on belarus and a flight blockade on the country after the forced landing of orion air jet and the arrest of a dissident journalist. they are looking at belarusian officials to be added to a blacklist, and looking at broader measures to target businesses and entire sectors of the belarusian economy. u.s. issues a new travel warning, saying american should avoid going to japan over
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doubts. tokyo will host the olympics in less than two months. much of japan is still under a state of emergency. the u.k. finance sector, a bigger carbon footprint than all of canada, according to greenpeace and the world while i fund. the impact comes from investment portfolios, according to nonprofit. those activities are 700 times higher than average. greenpeace says finance is the uk's dirty little secret. 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. this is bloomberg. anna: thank you. the u.k. must take steps to transform its economy with a series of changes that could be worth 700 billion pounds over the next decade, that is the
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view of the confederation of british industries that says the u.k. can bounce back from brexit and covid by encouraging decarbonization and leveling up its regions. the u.k. economy saw its deepest recession in three centuries. joining us now is tony danker, director general, cbi. i wanted to ask you about this vision of a country that can come together, something to unite the nation to move on from past challenges. how much is this about moving on from the divisions of the brexit era? how much do your members want to move on? tony: good morning. it is great to be here. brexit is behind us, the pandemic still with us, but hopefully the worst is behind us. a huge surge by the world toward
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net zero. the economic agenda is transformed. i think we are only beginning to realize there is a lot of opportunity for british businesses, but we have to be incredibly future focused, and use this moment to sit down together, government, business, finance, and look at what are the bets for britain in the decade ahead, and our report tries to detail those big bets rather than just have them as ambitions. anna: you want all these parties to come together to set this vision and a decarbonize economy is part of that. the finance industry, they talk about being on board. an interesting report from greenpeace says if the u.k. financial services industry was a country, its carbon footprint would be bigger than canada. how much we need more from the financial services industry to get to the place you describe? tony: of course, we do.
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i think they are on the agenda already and that london has the potential to be the leading financial hub in the world for green finance. most of the banks and financial institutions i speak to in the city are desperately keen for projects and businesses to get behind. we need the taxonomy to decarbonize businesses so we know to invest in. i understand the sentiment in the report, and we cannot be complacent. it describes a moment in time but does not look at the lead indicators. i think the city is getting ready to embrace this world. it helps with mark carney, but we should not be complacent. the city can play a huge world in leading the world on green finance, and help us back with big investments in britain. we need to bring together the bank of england, the treasury, ourselves to say what are we
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banking on as a country in terms of driving growth in a next decade, and where will the money come from? what is the role of government, the private sector, the city of london in financing all the green investment we will need in a decade ahead. i am confident the city will rise to that challenge. anna: does money have enough flexibility where it is invested? one of the things you are calling for is unlocking finance for growth and investment. sometimes we speak to investors who expressed frustration that pension funds are restricted in the investment they can make in the real economy around infrastructure. how much of a blockage is that? tony: i think that is fair, there is a lot of concentration on that point. we need to do the basic exercise. bankers call it sources and uses, what are the uses of the money? the government's plans are banking on infrastructure that will crowd finance, or the r&d
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targets at 2.4% depends on private finance. i do not think we together have a granular sense of what it the money is for, what are the biggest investment projects we will get behind, and the sources of funding that can support that. i agree that patient capital can do more of the work. the bank of england is looking at the right mechanisms to make that so. anna: you talk and your report about the need to scale up economic clusters. i talked for years about the way academic and will come together with guests. how is it possible to do something new on that front? tony: you are absolutely right. this is the biggest bet in the report, to do what you described. this time to build these coalitions led by business. in the past when governments tried this, they tried to get a university going or a mayor
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tried to get something going. it is being led by the public sector in the hope that if we build it, they will come. business and finance crowd in on the great plan. what we have never tried is a coalition of businesses together. it might be aerospace in the southwest or renewable energy, and say, are we going to invest in making this a success? if so, what do we need from government to make it so? do we need finance, regulatory freedom, the universities and colleges to get behind certain degree courses. that is what we want to try. can we have business led cluster strategies that say financial services will grow twofold. northern irish fin tech will grow twofold, and we will set the agenda for what you need to invest and get behind this. i think we have never tried that as a country, and i want to put the cbi at the heart of trying
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it. anna: getting businesses to lead instead of the private sector. thank you for joining us, tony danker, director general, cbi. up next, we will speak to the latvian foreign minister as eu leaders thou sanctions and a flight lock aid on belarus. -- flight blockade on belarus. this is bloomberg. ♪
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anna: welcome back to the european market open. european equity markets making gains to the upside, up 0.4%. markets open yesterday are fairly flat, the ftse and a cac quarante. substantial m&a taking place within the real estate sector. some downward pressure on the acquiring company. let's move to the geopolitics. eu leaders have kicked off the process of further economic sections against belarus after it forced a plane to land in minsk and arrested a journalist. belarus and officials will be
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added to a blacklist. my next guest is calling for belarusian airspace to be closed for all international flights. the eu has been clear on this. joining us now is edgars rinkevics, minister of foreign affairs, republic of latvia. give me your response to the decision reached, that was come to at the meeting of eu leaders in brussels. are you pleased with what you heard? edgars: good morning. i think the decisions made by eu leaders, as you said, the flight blockade is something we are asking. this is basically because we are concerned about security and safety of passengers. after the forceful landing of a flight is not acceptable from a
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security point of view, from an air safety point of view. mr. lukashenko is using everything at his disposal to go after his opponents, even violating international laws. this is only beginning. other measures like sectoral canonic sanctions as well. anna: how much credibility you give to the belarusian explanation as to why it was necessary to ground the plane in minsk? edgars: i do not believe that explanation we have heard so far. that there was a bomb, and they had to direct the plane which was already going to land. surprise, what we are seeing after the landing in minsk, the
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journalist and his friend [indiscernible] it looks like an operation from special services more than the suggestion that would be permissible under international law if there were a real bomb threat. i do not believe them. anna: do you think the eu should actually be doing more? you were calling for specific sanctions on large belarusian businesses. are there areas that you should do more on? edgars: you already mentioned that under current circumstances belarusian businesses, stayed on businesses mostly, doing business with the eu or the rest of the world should be
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sanctioned. otherwise the economic pressure will not be there. so far, all the measures adopted were not effective because we saw on sunday the regime actually used force against the plane, and this action cannot go unanswered. we will discuss this, and it will take time. i think sanctions need to be introduced. anna: we heard yesterday before the eu leaders made this recommendation that air baltic would be avoiding belarusian airspace. are you expecting all other european airlines will avoid this airspace, or will that be a more difficult decision for some? edgars: you are right. that decision was immediate
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after the news broke and effective monday morning. many western countries -- i think british airways flights also. there is an economic cost to that. but passenger safety has always been priority number one. we need to look at the situation for the safety of passengers. [indiscernible] mr. lukashenko wants to interrogate and maybe put people in jail for a couple of years. anna: that is what you are
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arguing for. we saw images of you replacing the belarusian flag with a flag that is important for democracy campaigners in belarus, and it has angered the belarusian government, calling it international vandalism. i see as a result we have seen a deterioration in relations between latvia and belarus. can you confirm we have seen diplomats withdrawn from both places as a result of this? is this an unexpected of element? edgars: not at all. i can confirm latvian diplomats are leaving minsk. let me say that this is such unprecedented action as we saw on sunday. there is a crackdown on people,
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protests, people fighting for their freedom. it was the right approach initiated because they have the ice hockey championship to change with a symbolic gesture this flag. i am not going to take any insults from people accused of acts of piracy, acts of terrorism against their own people. this is a situation -- it is up to minsk how they want to continue. anna: if we do not see the journalist at the heart of the center of this released, do you think europe should take further measures? with her an opportunity for
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europe to apply further sanctions? -- will there be an opportunity for europe to apply further sanctions? edgars: this last episode of the arrest of the journalist and his friend, they have hundreds of people in belarusian jails who were in the wrong place for the wrong reasons. i assume this is a broader issue and we should not forget about that. europe needs to continue to put pressure. also more economic pressure. anna: thank you for joining us, edgars rinkevics, minister of foreign affairs, republic of latvia. coming up, back to the market conversation and the inflation narrative. we will discuss what impact that is having on the markets. the u.s. 10-year yield down
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1.8%. this is bloomberg. ♪
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anna: welcome back to the european market open. 53 minutes into the trading session. the dax outperforms, up 0.7%.
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the ftse 100 and cac quarante a little flatter, perhaps looking for more direction. ora cooper is with us. it seems -- laura cooper is with us. nasdaq futures up 0.6%, i wonder why there is a bit of a stumbling europe. laura: european equities are struggling for direction but they are testing the near record highs. i think this captures that spillover from the dovish fed stance yesterday that does seem to be propelling the risk sentiment this morning. we have the bloomberg dollar spot index falling to its lowest since 2014. that is bolstering cautious moves in europe, but as the u.s. opens, i expect that dovish stance will propel risk further. anna: how are you interpreting the latest inflation
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conversation? the fed is sticking to the script, talking about inflation being transitory. i asked mark earlier today whether because the market is coming around to the fed's way of thinking, or is the market coming around to the view that the fed will not hike in a hurry, therefore u.s. 10-year yield can sit lower. laura: the price action suggests the market is believing the fed narrative that they will see near-term price pressures ultimately stay but breakevens setting. we are seeing real yields slip even further. there are a number of risks ahead in terms of the fed keeping inflation expectations anchored. that is what they are focusing on. we have consumer confidence index where underlying inflation expectations for the next 12 months are at the highest since 2011. we have that core print friday
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which like cpi is expected to post the strongest gains since the early 1980's. it will be hard for markets to believe the fed as long as you get more upside surprises potentially ahead. anna: i have failed to do this, but i will do it later this week , showing expectation set to reach levels not seen since the early 1990's. we will get to that conversation is the week regresses. thank you so much for joining us. that is it for the european market open. "surveillance: early edition" is up next. the ftse 100 a bit of a laggard, the cac quarante also lagging behind. the german market is carrying us through, playing catch up, was closed yesterday. the dax up 0.7%.
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u.s. futures are pointing higher. this is bloomberg. ♪
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>> i think bitcoin's greatest risk is it success. >> there will be additional sanctions on individuals that are involved in the hijacking. >> the time of rhetoric and vocal expression passed. it is over, we need clear action. >> this is "bloomberg surveillance: early edition" with francine lacqua. francine: good morning and welcome to "bloomberg surveillance: early edition." tuesday, the 25th


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