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tv   Bloomberg Markets European Open  Bloomberg  July 12, 2019 2:30am-4:00am EDT

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anna: good morning, welcome to "bloomberg markets: european open." live from therds european headquarters here in london. .tocks in asia, trade mixed european equity futures point to a positive open. cash trade is less than 30 minutes away. sticking to the script, fed chairman jerome powell builds the case for a rate cut despite strong inflation reading. about barkin is worried
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business confidence. >> the first quarter was fine, but indicators for the second quarter are less strong. i do not see people cutting back existing plans, but they are not leaning forward in the way you might. anna: along for the ride, vw is nvest in ford, valuing it at $7 billion. tropical storm barry heads for the louisiana, curbing oil out ports. markets, welcome to the european market open. 29 minutes into the start of it trading day. this is what the futures story looks like. ftse futures, cap teachers pointing high cac futures looki. the session in asia is more
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mixed. the trade story and the impact on asian economies already. president trump tweeting about being disappointed in china and the lack of imports by the chinese. the dyer numbers out of singapore in terms of gdp. town more than 3%. much in focus, and the market focused on the inflation story and what the fed will do about interest rate. yesterday the inflation number was higher than expected. a couple fed officials appeared to be pushing against the line. they are convinced about the easing line coming through. australian dollar on the move, up by 0.4%. in fixeda sister move income markets. the south korean won down.
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zealandralian and new , a lackyield in focus of demand is pushing those yields up on those bond markets. tracking movements we have seen in treasury markets. keep an eye on these commodities, brent crude up by 0.75%. what that does to the demand story. let's get to the markets. mark cudmore joins us from singapore. give us your thoughts this friday morning. we have the market convinced about a supportive backdrop from the fed but trade tensions and number in singapore, how gloomy do you feel? mark: i think it is about time
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span. i think the goodwill coming from the fed will support the market. it is hard for traders and the goodwill we are seeing on a friday when people who have been shorting the market are the most squeezed. we will keep that goodwill going into the europe and the u.s. overall, the singapore gdp and generally the data we are getting from everywhere is making the picture clear. .e are beyond late cycle we are going off the cliff. we have not looked down or seen at the ground has moved beneath us. it will happen and a couple weeks but maybe not for another month. the data is consistent, it is not confusing. there is only so much that the fed can relieve the pain from the data. in the short term, goodwill will optimistic,ort-term
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but i do not expect it to last long. stateside weres joking that oprah winfrey should be in charge of the market because of the game show elements that these sugar rushes bring excitement by equity investors. the earnings story, the mliv question, daimler second quarter significantly below, the premium second quarter loss have 1.6 billion euros. it is expected to be below the prior year. essentially they are guiding downwards, giving adjusted earnings, and it is not looking better. they say it is getting worse. also specifics around autos, but probably speaking this reminds us we are going into earnings season. will an expected decline in earnings outlook outweigh the equities of a fed rate cap?
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-- fed rate cut? again, i think the answer is in the time span. in the short term, though sugar rush from the fed does give a burst, but the daimler items stereotypell be the of the earnings season, that is what we can expect. we will get disappointing earnings and guidance lower. the second quarter earnings season, but more important it will be more drastic in a few months only get the third-quarter earnings. the decline in earnings we will see over the next six months will massively overwhelm anything central banks can do. the fed does not have a lot it can do. it has been impaired for a number of years. they only have 250 basis points if they go to zero. earnings will be more important, but earnings may not dominate the sugar rush on a short-term
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basis. anna: interesting the way they's rub against each other. if this is making those investing in western markets gloomy, let's talk about something else which you do not think is as gloomy, was ill. -- brazil, what excites you? mark: the passing of the pension reform is a game changing moment. story in the em mid to thousands, high-yield and the currency kept rallying. it boomed on the super cycle, and the emerging markets super cycle. since the crisis it seems like the growth will never bounce up. administrations have been mired in scandal. now they are talking about $260 billion of savings of in the next decade for the government, that will open the floodgates of investor sentiment.
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hardest part of reform to get through, if they can get it, they can get other easier things through. there is a chance brazil can be a good news story. the dollar might continue to weaken, and brazil is one of the few countries in benefiting from this trade war. china is getting more of its agricultural food imports from brazil. in terms of trade, brazil is at the highest level in two years. very short-term, the pension reform is expected to pass. over the next year, this could be the opening of the floodgates for investors to pour money into brazil. it is one of the few good stories. anna: a lot about the timescales, whether brazil, the fed market, or earnings. thank you, mark cudmore. you can join the debate and get involved in today's question.
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the decline in the earnings outlook outweigh equities and a fed rate cut? let's get the bloomberg first word news from debra mao in hong kong. : goldman sachs is joining the chorus warning of u.s. intervention in the fx market. it's as president trump's repeated complaints about other currencies has brought u.s. policy back into the spotlight. analysts are entertaining that the u.s. could weaken the dollar. it has not taken that step since 2000. it is 50-50 if the eu will strike a deal with the u.s. on trade goods, it could come this year according to the german economy minister. after meeting robert lighthizer, he told reporters there is a mutual interest to avoid escalation. a powerful weather system in the
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gulf of mexico may put 70% of u.s. lng exports at risk. tropical storm barry is turning toward louisiana. american lng exports have surged. sinceplants coming online december. the u.s. is reportedly holding off on imposing sanctions against iran's foreign minister. it is part of the u.s. crackdown tehran's top officials. the latest incident is a standoff between the u.k. and iran over the passage of a bp tanker. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. bloomberg. anna: thank you very debra mao in hong kong. up next, we focus on the corporate story. a delay to what could be the , it will not ipo
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price its listing today. we talked about this brewing growth story yesterday. we will get the latest, next. this is bloomberg. ♪
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anna: welcome back to the european open. we are 17 minutes until the start of the trading day in europe.
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this is what the futures look like. we are expected to be stronger on the cac. the auto sector will be in focus today. we saw i a profit warning from daimler. below theheir ebit prior year, guiding lower. we might see european markets try to catch up with a late rally in the day with the u.s. the german market will be weighed down by the auto story. that could affect suppliers in france as well. let's get a bloomberg business flash, here is debra mao in hong kong. boeing 737chief of program is retiring after a year at the post. he headed boeing, that program will be run by mark janks. more than 500 planes are stored
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around the world. 150 have yet to be delivered. airbus delivery delay has pushed iag to buy from boeing. it was a factor in the decision to place a $24 billion order for the 737 max 8. he does not want to be solely dependent on one company for his entire fleet. president trump has warned facebook over its plans to create a digital currency. he tweeted that it would have little credibility. and if facebook wants to be a bank, it must be subject to normal banking regulations. facebook has faced -- that is your bloomberg business flash. anna: thank you, debra mao. fed chairman jerome powell during a two-day testimony to congress repeatedly cited slower
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global economic expansion as a reason to ease policy. barkin says the message has not changed. >> i think he said the same thing yesterday that he has been saying the last month. we do not have forward guidance anymore. we are watching carefully what is happening in the data, and looking very much on upside and downside risk. at this point, they are tilted to the downside. >> the market has priced in a 100% chance of a rate cut. can you go against the markets? >> we will see what happens. we will have a lot of data that comes in. cpi came in this morning. it will get retail sales and consumer spending. if the data ends up with a different outcome, the markets will adjust >>. >>what is your view of the
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economy? i feel pretty good about the economy. on the consumer side spending is great. labor markets are tight and those are healthy signs. what the chairman mentioned yesterday, and what is a concern on my mind is business confidence and investment. the first quarter was fine, but the indica orders for the second -- the indicators for the second quarter are less. feele been asking how you about the climate for business investment, and folks have not pulled back yet. i do not see them cutting back existing plans, but they are not leaning forward. >> let's talk about that, you have a different background. you were a business consultant at mckinsey. you talk to the ceos, what is there a feeling about the
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economy and where it is going? do they think we are going down? >> confidence is fragile, and most everyone i talk to says this is the longest upturn in my memory, and has been in recorded u.s. economic history. it has to change at some point. there is concern that things are close to changing. when you talk about their businesses, with few exceptions, they are doing well. today is good, but they are nervous about tomorrow. >> what are they saying about demand going forward? have they seen any falloff? cfos andwith consumer they could not be clearer that demand is not falling. i have taken that as recently as this week, i was in south carolina talking to business people, and they tell me demand is strong. i do not see any issues on the consumer side.
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and you factoring has challenges, and in the equipment hearts business, you may have seen a slowdown. that is what happens on the investment side. >> in terms of uncertainty, jay powell kept coming back to the idea of trade. is that what the ceos are telling you? >> i think the ceos would like to have the rules of the game made clear. they understand what we are doing and why, but they are business people and they want the rules clear. regime,include a tariff that is fine, but when they are clear, they will adjust their supply chains accordingly. they are challenged by the uncertainty. it is just knowing what is going to happen. anna: that was thomas barkin speaking exclusively to bloomberg. we are minutes away from the open. funny of stocks to watch.
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we will -- plenty of stocks to watch. china is considering a 750 million pound rescue of the travel agency. this is bloomberg. ♪
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anna: 7:52 in london, minutes
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away from the start of equity trading. you about what is , selling 60% wpp .f their business to spain this has been suggested for a long time. proceeds around $3.1 billion. the plan is to return some of that money to shareholders and pay down debt. also the auto sector could be weighed down by a profit warning from daimler. it does not cite the trade tensions. they talk about the airbags and specific issues in the van business and management decisions there. we will look at the fallout in other sectors. let's look at the other stories. we are looking at numbers out of seb. and daniies team
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burger have a new story. let's go first to the banking business. >> good morning. today was one of the bigger banks to have the second-quarter earnings, looking at a solid miss. despite the q1 they managed to steer clear around the money laundering scandal in the region. helpedems to have attract customers. it is doing well on the corporate and retail side. anna: numbers coming in better than estimated. yesterday after markets closed, shareholders accepted a buyout from private equity firm kkr.
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this ensures growth for the future. the shares jumped back in may when news broke, now they are trading at 62 euros. anna: on the thomas cook's story, there is chinese interest. dani: a little bit of help for , china isas cook considering a 700 million pound rescue of the firm to get control of their travel and tour operations. this willk says provide liquidity for trading to the end of the winter. shares higher by 10%. anna: thank you for joining us. you can get the latest stock stories from our equity team from your mobile app. coming up, futures are suggesting we will be stronger on some markets.
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a couple news items in the last half hour, look for the auto sector to be week after the profit warning from daimler. this is bloomberg. ♪
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anna: a minute to go until the start of cash equities >> this is the asia-pacific region. flat. trade tensions back to the floor. -- back to the fore. not impressedp
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with what china is doing. market is buying into the weaker fed policy and the cpi number did seem to change that. yields. bit firmer. little down on thering coast of louisiana. slightly positive but not in germany where we are very focused on the profit warning from daimler. corporate news. the big picture around the fed and the inflation story and the trade narrative. the specifics around the auto sector in focus in the german market. dac to to the underperform. euro stocks underperforming
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right now. up by 0.2%. we had a profit warning out from daimler. they cite dieselgate. and issues having to do with the airbags.ess and provisions being taken. interesting to see to what extent that is all translatable and can be right across other stocks. we do expect it to have some read across effect. euro and thet the pound grows stronger as a result of the dollar weakness. let us talk about the markets from a sector perspective. pretty evenly split. red coming through including discretionary and staples. health care is firmly in the red. financials firmly in the green. this morning.xed
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let us see if we get anymore clues as to what is happening when we go to the individual movers. 600 -- showstoxx us where we are on the individual movers. for thepside, sab start. hannah was talking about how it had stayed away from the nordic the scandals and numbers were better than expected. by 2%. up deutsche bank catching a bit this morning. that stock is up by one .8%. the upside. on the stoxx 600. to the downside, a profit warning out of an insurance business out of the u.k. and that stock is down by 3 -- 3.5%. this adjustment is that we will not get a pricing on the ipo
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business there. ashmore group trades weaker. anheuser-busch. downgrade to that particular business from one of the brokers. eo, bmw to the weaker and daimler jumps on the losers' board around 4.5% this morning. us leave a stock specifics there. fascinating stories in the auto sector. to the chinese markets. waiting for a host of data -- chinese first half imports up. exports rise by 6.1%. the total trade value with the year on year. the overall size of the trading
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relationship would seem to be in retreat from those numbers. a first chance to look at those numbers. bether the pboc will revamping its monetary policy to try to work more effectively. recapping some of the numbers -- and the imports story -- exports rising 6.1% in q1 terms and the imports rising 1.4%. let us leave their -- that therefore the moment. derek, good to have you with us. china datahese settle down a little bit. let us talk about trade tensions.
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where do you see this heading? >> i think this is consistent with a lot of the data we have been getting more broadly. it was notable in terms of the singapore gdp, a contraction of 3.4%. the annual rate down to just below zero. 2009 and aince deceleration of 5% from a year ago. it is evident that the point from when things escalated, in the globalt year, trade story has deteriorated and singapore with such huge exports in terms of gdp come the best proxy for what is going on particularly in asia and it is bad news. >> and i have a chart that shows the bad news. singapore's economy contracting 20 12.t since raising an interesting question about what central banks can do
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here. too late forlittle insurance for some of these economies and asia where we have already seen trade tensions having an impact. and tariffs are not being lifted. >> in terms of china, the biggest economy there, there is scope for further easing. the other big economy is japan and that is more of a worry when you consider the government is sticking with its plan to raise the consumption tax from 8% up to 10% in october and on top of that, you have a central bank that -- if we can talk about any central bank that might be out of bullets when it comes to using, it is japan. many banks are shifting and bojing rates but the indicated nothing.
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it highlights the limited scope in which the boj can take part. very creativeeen and ahead of the other central banks in terms of levels of creativity. we are at the stage where they are half of the market and it is not a functioning market anymore curtailing their ability to escalate on that front. that is why we think the japanese yen is one of the best currencies in terms of potential performers going forward from here. >> excellent. we welcome the up that discussion shortly. let us get a little more on the china data. i am joined by bloomberg's chief asia correspondent. we have these yuan numbers on imports and exports but bring us up to speed on your first thoughts at seeing these numbers. >> we are getting some of the data coming as you mentioned. the first halfn
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of the year in yuan terms. indicating it is somewhat positive but we do have to wait for a monthly reading and for the dollar figures. there is a delay on the beijing side in getting the numbers out. sometimes, the government trickles out these numbers and other times a release them all at once. manufacturing is under pressure. ppi is sliding back close to inflationary territory. story ishe extern a weak as well. a singapore's gdp numbers and korean export data which has been the bellwether for global trade is quite weak. while we wait for a complete set of numbers out of beijing, the take away is that the backdrop remains somewhat negative given the broad pressure on the global trade story because of the trade tensions with the u.s. and other issues related to a slowing
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cyclical factors. >> thank you for the update. the instant reaction to the data we have had so far and the data still to come. stocks, we bring you the on the move including thomas cook, share price falling. rescue of the oldest traveling agency in the world. this is bloomberg. ♪
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nejra: --anna: welcome back. the net -- minutes into the
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european session. ftse is up. we see weakness in the auto sector, down there down 2.8% on the back of the profit warning. fallout not quite so extreme. top stock stories, dani burger joins us. dani: some positivity. big movers to the downside. a lot of drama. this is a company struggling to pay off debts. rescue.ion pound thomas cook says the talks are in advance stages and will keep them liquid through the winter to allow them to trade. earnings, out with missing estimates from 5%. they say they will have massive restructuring. investors don't like those numbers, shares down more than 5%. we learn more about this story.
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we're looking for pricing on their asian ipo. we first got the reuters report considering they were reporting, bloomberg reporting they were reporting ipo. they were reporting without cornerstone investors. another hurdle there. anna: they pay trigger, tech about -- big picture, the fed talking about the cuts. here's what he and his colleagues had to say about easing. >> central banks around the world are seeing weakness everywhere and they are providing more accommodation. we signaled we are open to doing that. you're seeing that in the curve. >> we are watching very carefully what is happening in the data and we are looking at upside risk. and , observers.
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-- upside risk. and they are looking more upside to downside. >> we need more of a stronger punch. >> if we had lower interest rates, we're forced to pay more than other countries because we have a rate that -- that's high. anna: the european head of global markets research is still with us. in amongst that, we heard from jerome powell and president trump, we heard justifications for why we need interest weight -- interest rate cuts. i've got the jobs report data, the cpi data, may be making an impact. it doesn't seem the market reads too much into the data. they go with the federative. guest: i think that's right. a lot of the indicators adjust
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we're decelerating. i think that's reasonable. there is broader evidence of slowdown. the fiscal support that's been there that brought gdp growth is going to end by the end of this year and then you go to a more fragile situation. but it's the government policy issues, trade, brexit, that's been mentioned many times. but the debt ceiling was explicit. anna: is that unusual? decisive, buten not written in communication. it's been escalated up the ladder of concerns for the fed, perhaps correctly. we're in such a mess. it's tied in with the budget plans for the next fiscal year, starting in october, and the new
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nafta trade deal. we have these three together and no signs of progress. we're about to go into summer progress. we don't come back until september. riskse reports suggested because tax revenues are less than expected. we could hit the moment where the debt ceiling needs to be raised in september. anna: something to keep in the radar. president trump talked about foreign-exchange markets and now he thinks the dollar is to highly valued. -- too highly valued. wass reading that it likening the effects to quantitative easing. we could get fx intervention. andight cut against norms, it's kind of akin to nonconventional policy. adjusting way to look at what many in the markets would seem to be out of balance for the
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u.s. administration. guest: i've read the story. i was thinking it's bizarre. it seems crazy. but any policy idea is up for consideration when it comes to the trump administration. you can't rule it out. the metrics in terms of fx valuation don't stack up to the dollar extremely overvalued. valuation across the g10, there are extremes, the swedish krona the most extreme. that's dentist answers from the past. past.ish answers from the that's not at a level i think would force the u.s. into extreme action like that. the other complication is that even though they have power, you do need the fed to implement that.
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would you have a unified approach? the markets would question that. that would reduce potential. strong dollarh policy and say you've moved to a prorate policy. people would read between the lines you want a weaker currency as a result. slightly unconventional idea. as you suggest, unconventional ideas are fronting airtime. derek: they are. the dollar is the reserve currency. there solid reason that won't change. you shouldn't play with that. to have an explicit dollar weakness policy through actual intervention, when you look at the flows, the reason why capital has been net positive for the u.s. is repatriation back to the u.s. by u.s. investors. foreign investment has been fragile.
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the auctionse of in recent days haven't gone well, certainly longer duration. derek: absolutely. strong, adollar is lot of it is short-term. anna: stay with us. derek sticks with us on the program. could we see cuts from the fed and the ecb this month? we'll look at draghi's last hurrah. this is bloomberg. ♪
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anna: welcome back to the open. got a mixed picture. down there down 2% as a result of the profit warning. not setting global trade. let's talk about european policy. ecb policymakers were reunited in june on a planned for more stimulus. a dovish turn with a broad consensus the governing council needs to be ready and prepared to ease policy. a recent toughening language from mario draghi, saying if it doesn't approve, that would be enough to warrant action.
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some say rate cuts as soon as this month. dark is with us. -- derek is with us. you would go along with that. cutthink we will see an act -- you will see -- we will see cap. derek: why wait? if you consider the speech, which was basically if things don't approve dish improve, we need -- improve, we need to ease policy. there's been little evidence of improvement. things have remained the same. things have come right back down again. we have the minutes yesterday, essentially laid out a plan, in my mind, to prepare the markets. they've now done that. and really, if the ecb wants to show the markets, but they have
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ample bullets left in the locker for further monetary easing, the best way to show markets that is to go big and to go sooner than markets expected. anna: you don't think the markets say you've done everything you can and now you have less left? they'll keep convincing the market they can do more? derek: there will be some sort of tearing to diminish the immediate impact on the -60 basis points. once you tear and the forward guidance would be strengthened, it opens the prospects of prospects going forward. anna: i've got a volatility chart, falling to the lowest level since 2007. lagarde going to the ecb behind that. sparks aif any of this respond to volatility. at the moment, markets are
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convinced about the fed. are they convinced about cb easing? euro goes higher, dollar goes higher? derek: if they go on the 25th of july, like we expect, that's not priced, clearly. last time i checked, three or four basis points. so,. so,-term, we get look -- very near-term, we get lower. the fed is coming in six days later and going forward over the next year, we think the fed will be doing more, certainly on rate cuts. we do think we're close to a low, even with the ecb on the 25th of july. anna: what are your thoughts on the falling dollar? derek: we think washington is going to become a mess.
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we've got the mueller investigation hearings next week, debt ceiling coming, presidential election caps off. economy -- kicks off. economy slowing. can you imagine what he will be saying next year? with think the mix of the u.s. is going to get worse. we have euro trending up, 1.20 1.20 on euro. derek will be continuing the conversation with us on bloomberg, bloomberg radio 9:00 a.m., yucatan. find that on -- u.k. time. find that on dab or other resources. we'll be speaking to german lights aberdeen. stick with us for that interview. we'll talk to him shortly, that interview on the markets open program. european markets wait down by
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that warning -- weighed down by drama. now pretty flat. ftse 100 and the cac doing better, up one quarter of a percent. this is bloomberg. ♪
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anna: 30 minutes into the trading day. jerome powell builds the case for a rate cut, despite strong readingment inflation -- inflation reading. >> first quarter was fine, but indications were second-quarter of strong -- are less strong. there are not leading -- leaning forward. anna: they go flat/ the asia unit struggles price ipo, puts a lid on what could be the biggest listing. betting down the hatches, hurtles toward louisiana,
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cribbing oil output, 70% of lng capacity at risk. welcome to bloomberg markets, the european open. i'm anna edwards in london, 30 minutes into the trading day. we've got a norwegian start to the upside, help 5.7%. -- up 5.7%. up 3% on the back of the numbers. easyjet got an upgrade. we've got a whole -- host of reasons why was he stocks on the up move -- upgrade. they put out a profit warning earlier today. anheuser, we've been to the news the asia ipo looks as if it's delayed, certainly not able to
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price at this time. european equity markets rage band, negative on the auto sector. let's get to the aib annual meeting in luxembourg. uber markets anchor haslinda amin joins us for an exclusive interview. haslinda? haslinda: of course, this meeting is on the back of uncertainties in the market. let's get the views of sir douglas flynn. good to have you with us. the biggest risk to the economy right now? douglas: the biggest risk is something uncertain happening right now. ande could be fiscal policy and a salad outcome from some of
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the uncertainties around trade talks and brexit. there's an expectation things will work out. haslinda: there's such a great reliance to drive growth. annetary policy can't be engine of growth. douglas: it continues to be a thing. inflation doesn't seem to be a threat at the moment. thisnk markets anticipate comes at extensible continue. you can look around the world and see unemployment is good. growth is good. trade is unsettled because of geopolitical things, but the amounts investment required -- overinvestment required should create an economic backdrop. powella: fed chairman
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suggested a rate cut is coming. what would make sense? what is realistic? douglas: i don't think the market would be surprised with 25 basis points. i think 15 would surprise people. signals heccount the comes from monetary conditions, market conditions, and economic forecasts. this is a due to driven world, and the most shortage of data -- no shortage of data. haslinda: what did it is important for the fed right now? growth, unemployment, the job numbers are the most important number. as the economist -- economy generating activity. were talking about how a no deal brexit is unlikely, at least in expectations. here we are talking about the
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bus 30's of a real no deal brexit. douglas: i hope it doesn't happen. i think it would be in adverse outcome. both of the candidates would become the prime minister and would have to leave the final elements of the process. is the outcome they do not want to happen but both are saying it's possible. aere's going to have to be huge amount of effort with our friends in europe to see what can be done to avoid a new deal brexit. i think it would be a better outcome. richard: if there is, branson said the struggling with slot. he says parity versus the ust is a possibility. your take? douglas: i don't think anybody knows. haslinda: would you be surprised? douglas: i don't think anybody knows what will happen. so many productions of doom -- projections of doom anglin. --
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doom and gloom. i think people are reacting to the events and mitigating what would happen. let's make the best of not a comfortable place to be. i'm sure if we end up with a no deal brexit, on both sides of the channel, there will be actions taken to make sure it's not as bad as could be. what that leads to, i don't know. the responsibility should be to avoid it. haslinda: here seem more optimistic than most. what is driving the optimism that it's a possibility? douglas: i'm not. haslinda: your hoping? douglas: i'm hoping it's not going to happen. i'm hoping we reach an agreement with your that enables the u.k. a government to agree terms of withdrawal and enter into
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discussion in a positive frame with the europeans. that's what both sides want to achieve. the challenge is how to achieve that in a short timeframe. i want toaslinda: touch on the asset management business. forefront stay at the wins much changes happening? douglas: i think that's a fast any question.. there are three trends. the increasing importance of private markets, the acquisition of public markets. but the biggest change is the number quotation -- democratization of saving changes. they are required to take more responsibility for long-term savings to find and if it mention schemes test benefit pension schemes -- benefit
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pension schemes. theink the savings culture, needs we have over the next generation to enter people retire with stability in a way that's physically affordable is hugely significant. we have a responsibility in making people concerned they have to manage their futures on their own behalf. provide products that will help them in the future. is giving people an opportunity to aggregate assets. part of the role of capital markets is to create capital citizens. that requires people making choices, particularly this , changece, to do with
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and sustainable investment. that requires engagement with the corporate sector. that's what expectations have to deliver on. haslinda: given the circumstances, is scale important? the pressure on fees, looking for cheaper alternatives. douglas: very important. if you're providing enter value products, because they are adding value, less importance. i do you get sufficient scale to afford services if you're doing it in a low cost, passive way? revenues you can generate is much lower. if you're doing it in an active and how you return are a to, you can have less
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involvement. haslinda: we have seen a consolidation friend as a way to trend is away observe -- as a way of survival. do you see that continuing? douglas: yes. you need scale. one way of getting that is to combine. you may want to add elements of solution you don't have portfolio. yes, there will be continuing consolidation as it reshapes the way society is expecting it to interact. haslinda: mark and gilbert made a doesn't acquisitions to get that scale -- a dozen acquisitions to get that scale. are you looking to make acquisitions on that scale? we're very conscious of
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making sure we build from a sustainable base. the moment we are completing the combination of the two businesses that came together, if there are bite-size morsels that would set the shrug sport of capabilities we've got -- the smorgasbord of capabilities we've got. haslinda: thank you so much for your insights. douglas flint there. -- sir douglas flint there. there you have it. that.thanks very much for converts -- conference taking place in luxembourg. enable meeting, including -- the meeting, including philip hammond.
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don't miss that interview. forext, louisiana braces disruption. purpose oil outputs and natural gas production shop prices higher. wel'l bring you the details next. this is bloomberg. ♪
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anna: welcome back to the european open, 44 minutes into
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the trading day. a little more positive, finding our footing, up a 10th of a percent. the cac up a quarter of 1%. part of that is the auto story. still waiting on daimler. the other sector is not the biggest losing sector. it's fairly flat. health care and food and beverage are the weakest sectors. denver done only 1.7%. read across across other maker seems to be limited. let's talk about the gulf of mexico because tropical storm barry is raising to louisiana and go to the coastline by saturday. bracing for further description. barry has curbed have the energy output in the gulf, sending oil prices higher. liquefied natural gas are also set to be evicted, two major
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export terminals are in the path of the storm. reporter, is the oil kelly gilbert. good morning. assets, what is perry affecting the most? a fifth of the refining capacity in the storm. of assets,zens including elevators, sugarcane storm, so this is a heading for america's commodities. what does this --anna: what does this mean for other asset prices? kelly: oil is the highest in two months. lng prices are higher. the other thing is oil products,
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refined products. so many refineries shorted -- shut in. after hurricane harvey, those could take a while to come up. that could lean to longtail curtailment. anna:anna: interesting to see oil prices as strong as they the concern is about global growth. that seems to be outweighed by tensions in the middle east and storm activity. what sort of percussions or companies going -- precautions are companies going to take? kelly: every big company taking staff offshore platforms to keep them safe. your seeing refineries shut in. it's about a million barrels a
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day, over a billion cubic feet a day of natural gas, small in the scheme of things. the risk seems big. mind we'll keep this in over the weekend. kelly joining us on set. coming up, they go flat. the asian unit struggling to price its ipo. all the details next. this is bloomberg. ♪
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anna: welcome back to the european open. slightly positive, up -- in fact, fairly flat. positive in london and flat, but overall fairly flat because of the weakness in the auto sector. data coming through from china. we brought you the data in the yuan. this seems to be this at of figures in dollar terms. the import number down seven point 3% year on year and yellen -- dollar terms. that carries on a run of retreating data, if you like, or reductions in imports from the prior number. this drop from 7.3%.
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that imports number not as much as the market is expecting. the white house pouring over what they are buying in terms of soybean and the likes, but here we are with overall numbers. the trade balance stands at $50.9 billion. slightly more positive from the chinese perspective. two highly anticipated ipo's's other plans derailed. ab inbev struggling to price the unit. pipeline may be growing at the fastest pace in four years, but firms face a pressing we're setnt. dani: for the biggest ipo in terms of dollar value, but there are a lot of hurdles firms face. we're seeing that ripple through the market.
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asia definitely dominates here at $29 billion. that's double the value for new listings in north america, 10 times the size of your. what happens to the huge chunk of ipo's if trade talks south? -- turns out? with stocks at an all-time high, you would think there would be demand for new listings. there's clearly a risk between buyers and sellers. six of the 10 biggest listings right at the lower end -- priced at the lower end. that includes uber an end of. they are struggling to price at all. now that means we have a market frothy. andations are near a peak, that's difficult for investors to buy one of the ipo's when the price is so massive. not to mention, 80% of new
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offerings has zero earnings. this problem is worse in europe when you look at what the ipo market looks like exceeded theo's range of what they have given investors. 31% are priced below. 41% in asia are beating expectations, and a third in the u.s. this might be the first signs of cracks in a frothy market. anna: dani with the cracks that seem to be forming. turkey says the deliveries have started as of today. this is in connection with the russian missile defense system. the first major cargo, is purchase has drawn your sanctions to undermine route nato military capabilities.
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we see the possibility of sanctions worked into the numbers. the turkish lira is weaker by .5% as a result of the news flow in today's session. weakness coming through. let's get back to the ipo story. the ab invev. joining us is from the asia deals team. what do we know about the ipo and the latest news around the delay? say herewe were yesterday, talking about how to deal with prices and it doesn't look like it will price as expected in hong kong. it was supposed to price between 40 hong kong dollars and 47 hong kong dollar range. we're hearing from rangers and people ran the deal that because of demand, they will no longer be sticking to that timetable.
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however, they do have until july 15 to decide whether they want to price within the existing range. the other option is to relaunch the deal and perhaps at a different price range, number of shares, adjust the float. overall, investors not responding well to this, partly because the deal has been extensive compared to regional and global peers. terms. pe they do have until july 15. crystal,nks very much, with the latest on a delay in ipo, wrapping up the negative ipo news flow we've seen. that's it for the market open. up next, surveillance. european equity markets struggling for direction. pretty flat.
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the german market weight. down modest gains being made. health care, food and beverage to the downside. this is bloomberg. ♪
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francine: sticking to the script. jay powell builds the case for cuts. markets saying he is sounding like central banker to the world. again. the outlook the fourth profit warning in just over a year. contenders to become the next prime minister. we get the take of the chancellor of the exchequer. ♪ good morning.


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