Transcripts For BLOOMBERG The Pulse 20240622

Pulse. I am manus cranny. A deal on Irans Nuclear program is done. I wrote middle east editor Elliott Gotkine is standing by. 18 days, 100 pages. What is your feeling . Elliott lets not forget as they have been negotiating in other places as well such as switzerland for almost two years and a standoff on Nuclear Programs for a dozen years. A major breakthrough. A deal has been done. We are expecting an announcement in to ours two hours time and we will get more details about what is in it. It will have wide ranging ramifications diplomatically economically especially for iran. And also regionally here in the middle east where there will be unhappy faces to say the least at the prospect of an agreement with iran over its Nuclear Program. Manus a myriad of Global Voices coming through in terms of reaction when we get the details. Our viewers can see elliott while pictures are coming through. We are seeing vienna where the talks have been discussed where negotiations have been taking place. The diplomat saying a landmark deal. We are expecting a news conference. I am not sure what time. What do we know so far . Elliott some details have been dribbling out. The aim is to curtail Irans Nuclear program for the lifting of sanctions and a bit and wraps dribbling out. The arms embargo on iran over what be lifted until five years a missile sales in place for eight years according to reports. We know the International Atomic Energy Agency it has signed december deal with iran to complete an investigation of the military dimension of Irans Nuclear program. Iranians were adamant there would be no access to military sites, for example, as part. That does not seem to be completely the case and the iaei a hopes to have the final report by the end of this year. That is a deal that has been signed. Manus elliott this story will unfold as the morning goes on. Elliott gotkine or of the Market Reaction lets turn our attention to the iran deal. Mark you have the deals for a variety of notes and people are talking about 40 bucks. Mark the news came out at 7 27 a. M. And i ran and world powers said to have reach an agreement. What i have done is circled the price of brent added that time 7 27 a. M. When the news came out. Went down and recovered a little bit and still down. Phyllis much as 2. 1 , the most since july. It would allow iran to increase crude exports. And oversupplied market, Goldman Sachs, bank of america say irans plan to sell more oil in recapture share is a long way off. The goal of boosting 50 would require an extra 500,000 barrels of day of production which the bank for did it would take six to met 12 months. The price of brent crude. It is important to see todays news in a context of the price of oil since we saw the highs last year. Last july was the height of brent as you can see around 110. We plunged 57 through january. And to the rebound through april of 45 . Since april brent has come down to 56 and declined 60 and the thought of more crude coming to the market via iran because of the deal would certainly put further pressure some say on the price of crude from here. We are awaiting further details. Manus all about the details. Thank you. Some Market Analytics on this. Equities analyst standing by. Jason, thank you for joining me this morning. It is an early day. The reaction as we discuss over 10 days ago when you were here we are seeing this move to the downside. Still a period of detail to be had here, isnt it . Janice jason the first up is verification by iaei before i ran it boost exports and that is likely that will probably take until the end of the year. And then the issue of the iranian with fields shot in production and that takes months. Nevertheless it looks like theres oversupply in the market. Manus one of the things discussed so far this morning is the amount of oil offshore assets and literally alshabaab iran 2025 ships even the iranians were not be that naive to crash the market, would it say . Jason gamel no, i do not think they would but incremental revenue. The day would have to likely discount prices relative to benchmarks in order to our new customers taken them. Logistical issues that will come into play forcing them to be more price sticklers and thats why have negative effects on the overall market area manus the political dimension, the run and saudi arabia he run us out of iran and saudi arabia not best friend. Competing for those asian customers. Isnt that a fair assumption . Jason gamel that is fair. The saudis have anticipated that. We saw a record supply in june. Saudis are looking to lock up their coasters customers and i expect they intend to hang onto them. Manus just when we were beginning to see the impact on the oil side, the big question is at the likes of some of the Oil Producers ready salivating at the prospect of return to some kind of normalcy in iran. What are the prospects and disco discussions star in art and did those discussions start in earnest . Dollars on the grind . Jason gamel i do think the european ioc has shown interest as iranians have put terms together much more attractive than a day were 10 years ago. I do think it is significant potential to help shell and having preliminary discussions. A period of probably years before that investment will start to effect the companies and the production. Manus jason, thank you for joining us with your immediate reaction. Jason gamel, oil and equities. Alexis tsipras is facing mutiny within this coalition after surrendering to creditor demand for further austerity. To begin the process of unlocking funds, tsipras must push the reforms through parliament tomorrow. Does is also result lawmakers and independent greeks it doesnt also result lawmakers and end up dozens of cy reza syriza lawmakers and independent greeks said they would rebel. A challenge isnt it to say the least for tsipras in terms of the political maneuvering humor have to do and work again with has Opposition Party to try and get the support for this bill tomorrow . Olivia and dean. Alexis tsipras has 48 hours to get lawmakers to agree. Indeed. The government has failed to en act over three years. He asked to raise deregulate industry as certain professions. The new piece is the 50 billion euro fund for privatization and thats controversial. Everybody thinks he will bill to find another support and get that he will be able to find enough support and get that through. There is but one person from syriza as there has been one person from syriza data resigned. People are wondering if he will have to call snap elections area i asked the mayor if he will be willing to form a National Unity government was Alexis Tsipras. Here is what he had to say. [no audio] Olivia Sterns we might be having trouble finding the sound. The mayor said he is not ready to do that. What is focusing on is a spirit of unity. Alexis tsipras likely to find a support a but from the opposition and you may lose has majority in parliament in order to get it through. Manus . Manus trying to get the banks open is critical. We have them close and capital controls in place. Unlikely they will open any time released soon in terms of lifting the capital controls. Any progress apart from mr. Schaeuble issuing ious . Olivia sterns they key is mario draghi. He needs extend the life line of the ela. What he said is he will keep the cap on liquidity until the end of wednesday. Mario draghi was the scene lawmakers passed the federal forms before is willing to set say he will keep the banks afloat. The banks are still closed for there is limit on how much people can take out or how much pensioners could take out. The economy is grinding to a halt. The spirit is not chaos and stores are closing. I have not seen any empty shells for it is bad for importers. They cannot take money out of the country and particularly that for tourism in places that i know you like to go. Ferries going half as full. Taxi drivers are waiting twice as long to pick people up. Manus i will support to the Greek Economy and a whole host of ways are you you name it. Lets turn our attention to hans nichols. Before we go into the details of the politics, George Osborne here making comments very, very strong comments where he say the eurozone means the foot of the bill for greek aid. And a nonstarter for the u. K. To help with greek aid. The voice from the u. K. And a down to where will the aid come from and the financer need to be politics first . Hans the question to mr. Osborne was not specific on the bridge or the overall 86 billion euros. Is there way, fly in the ointment. We heard finance minister after finance minister saying certain how that they will solve the bridge financing riddle. You may have actual ious and some sort of credit offering. Very unclear how they will solve this. Do not expect a deal before tuesday. The challenges wednesday, 3. 5 billion euros do. If you do not pay a with the bridge financing, the range of 6 billion euros you could have problems. Yesterday mr. Dusselbloem was talk about the challenges of the package and what we will need to do. It looks like it could take a month according to mr. Dusselbloem. Mr. Dusselbloem more in terms of substance and commitments and financing needs and negotiate that area with asked the institutions to do it as quickly as possible but it is probably closer to four weeks is an weeks is my understanding. And then 2 weeks and that is my understanding. Hans we are basically talking about technical problems and not political to untie or cut. Technical changes not insignificant as as why expect it to be done according to mr. Dusselbloem on tuesday. Manus thank you very much. Olivia sterns in athens and hans nichols in brussels. Our twitter question of the day. 50 billion euros of greek assets, would you buy any . Tweet me. Here is a look of what else is on our radar this tuesday. Hillary clinton have outlined a plan for Economic Growth will on on americas middle class. She said the United States has two build a fair economy. Hillary clinton i have had the opportunity to listen to americans concerned about an economy that still is not a delivering for them. It is not delivering the way it should. It still seems to most americans that i have spoken with it is stacked for those at the top. Manus facebook has topped 50 billion. The social Networking Company climbed yesterday hitting a record close, three years after facebook ipo making it the Fastest Company on the s p 500 to achieve twitter 50 billion mark. The previous record holder was google. Achieve 250 million billion mark. An aircraft will fly past pluto. The probe is the fastest space probe ever built traveling at 34,000 Miles Per Hour. It will close within a 2000 miles of the dwarf planet. Lets take a look of what else is coming up on the pulse. The latest from the u. K. In terms of inflation. What might that reveal . One week on a from the summer budget we bring you the numbers as soon as they drop. We will talk greece with the Institute President and mark carney and his colleagues will be questioned by mps about stability and we will dip into that through the morning. Lets change and get to live our top stories. The iran nuclear deal. The situation in greece. Joining me is the director. Great have you with us area with us. The iranian deal looks as though it is taking shape. Perhaps not everything. All of the arms may not be lifted it immediately. Very significant step. Guest absolutely. Given the changes within the middle east over the past few years, the splintering of alternative basis and the crisis going on at really important covering iran as a constructive partner in the region because to such an important player. And for the iranian people themselves so many have been wanting, 2 3 born after the revolution. It would be a great historic step. They are looking forward to getting integrated was the global economy. Manus that integration, the grand agreement or agreement and the reality of 80 Million People participating more in the west takes time. Sony kapoor absolutely. It has been a very painful labor of love for the past 12 years or you the amount of time spent on this perhaps is only rivaled by the amount of time spent on greek negotiations. The iran deal is probably shaved more than the greece still. Manus president obama has to reach out to congress and one of the people, one the closest allies is nancy pelosi in terms of getting this through congress. It comes down to that and a little life the Greek Parliament. Congress has got to ratify this for run despite ratify this. Sony kapoor the good thing is nasa pelosi has a track record of keeping her sheep in the flock. A very tough woman. And very few as this is where she is not gotten her weight eventually. Reasonably confident it will happen. Obama has so much riding on this. Unfortunately the timing and terms of being right in the middle of the president ial primary particularly with republican candidates outdoing each other and competing with Benjamin Netanyahu on disrespecting the deal makes serious perception problems. And seem to be supporting the deal will have to think twice if not the returns before doing that. Manus europe seems quicker to embrace it is dell perhaps a than other global this deal perhaps quicker than other global economies. Sony kapoor the signs are there. As we discovered with the case is going on against the oil majors, industries never left iran iran and anyway. Where there is a profit to be made. Manus lets switch attention to greece. What is your reading . We have had lots of Alexis Tsipras who saying he looked like a battered event that capitulated at every turn and thats to get agreement to begin negotiations. This is a tawdry deal, isnt it . Sony kapoor it is, by most measures, it is humiliating. Basically telling the truth about how bad this really is in terms of greek capitulation. For context, not directly comparable to the deal on offer before tsipras called the referendum. That was an agreement for what was set to unlock the rest of the previous of bail out. This is a new bail out big negotiated. A much longer time horizon and Debt Reduction is on the table. It is after the first ok. Manus you have to deliver first. Sony kapoor i agree. Is it a financially viable . Politically viable . No. All of these parameters, it will fail. The hope and my hope is that as an element of trust is restored as economic common sense and the imf hopefully ways in, one will see a gradual easing of the choking stranglehold applied. A reduction on the micromanagement and gradual breathing space on the fiscal side. Manus i was under the impression the creditors had a substantial amount to say also way of war cap is on daytoday basis. Sony kapoor it is difference of what is on the paper and informally talked about. It cannot be captured on paper for political reasons as greece restores trust, there will be a gradual easing on debt relief, fiscal space and micromanagement. Hopefully, that combined with what will hopefully be bounceback effect if a deal is set in stone. It will mean growth will back and the political system holds and there may be ground for cautious optimism over the medium term. Manus lets hope the world shares of that. China and the shanghai composite has fallen for the first time in four days. Extended losses ahead of the data due to be released tomorrow. Head of emerging markets at Morgan Stanley said if the slowdown continues in the coming years, it may drag Global Growth below 2 . That is the threshold he believes is close to world recession. Guest it has different meanings in Different Countries but in chinas case, only growing at 5 whether than 7 . The other indicators and the chinese economy could slow down a by a point or two more so my big take is historically for the world, the u. S. Economy has mattered the most sprint even a major has mattered the most. Every major recession globally has been caused by the u. S. The nass global recession will be made in china like many other things in the world today. Manus the views with sony kapoor. That is one of those discussions we have taken a little piece out, typically other countries. Morgan stanley, very worried about china. The stocks to prevent this. Do you think rate cuts, are we at the base level . Sony kapoor encouraging and discouraging trends. Encouraging is the rebalance going on. Very clear to all that it was going to slow down. Things are going on that front as expected and nearterm data driven by the government. The real economy has not done that badly. The complete disconnect between the stock market which is primarily confidence field bubble may be triggered or deliberately triggered by support for people speculating and stock markets. The disconnect is huge area the question is what does the spillover potential for what is going on in the stock market and the real economy . At the margins, relatively significant because a lot of this new money from the middle class could have and should have gone to boost consumption which is by the rebalancing. In terms of the bigger danger is what it means for potential loss of confidence. The governments ability to keep the economy on the track and that Political Risk to growth and confidence and investment and consumption is a stronger one. It is too early to say. Manus one of the largest challenges. Always great to have you with us. Make sure you, back. Well talk about syriza and if they meet the levels free thank you very much. Sony kapoor. Up next a day to. U. K. Inflation data and waiting for Consumer Price index. What will it say about the british economy . A quick line from israel on this story mistake as they see it in iran. Manus welcome back to the pulse. I am manus cranny. Time for breaking data in the united kingdom. Consumer prices year on year at flat 0 area that matches the estimate. The june inflation rate falls to 0 matching the median estimate of the previous month and that was up of 0. 1 . Joining me to discuss the state of play in the u. K. Is Bloomberg Intelligence chief economist jamie. I mean as expected flat lining a delicate balance for the monetary policy. Jamie what they will be looking at as the services that number closely related to domestic pricing. We do not know the degree to which oil will play in the number and the numbers they will look at. Manus when we look at this sort of negative numbers in the three months for the first time in half a century. The drivers here if we have Energy Prices and iran coming at the play in oil falling further sterling store and plays into the story as well. We have decline in oil prices and strong sterling and where is the debate in terms of some of the impacts . Jamie murray sterling will have a substantial effect. When you have 10 , start to pass it on. And on the Service Inflation the flip side 2. 2 no sign wages are pushing up. Manus a critical part, wages have been rising but in a relative sense. Those wages have been rising above 2 level. Relative to precrisis level perhaps the debate is how much pressure from wages. Jamie murray the thing that matters for inflation is if wages arise faster than productivity light output. If that happens, maintaining their profit with upping prices for you will not seen so much evidence of that. We will get more data tomorrow when it comes out. Manus in terms of the breakdown and the contribution to the annual inflation rate from clothing due to unusual pick up in prices in june 2014 a balance and effect against the last year relative to this year. The largest impact from the european roots a main driver of the drop in the core measures. A wide variety of elements in play. Carney nobody can say what that man ever says, what do think it will be . Jamie murray as you say, hard to judge carney. You do not know if he will pop up with something surprising. I think it will be waiting for the latest data. A bit more concrete. Manus thank you for reacting on those numbers. Jamie murray at Bloomberg Intelligence. The other top headlines. Iran and world powers have rich and storied dell for the Nuclear Program in return of lifting sanctions have reached a Historic Deal for the Nuclear Program in return of lifting sanctions. Threats of military action from the u. S. As well as from israel. Facebooks market value has topped 250 billion. Its climbed yesterday and hit a record close. Just three years after facebooks ipo, making it the Fastest Company in the s p 500 to achieve the 250 billion mark. The previous holder was global who took a twoyear is free on Alexis Tsipras is facing mutiny and its coalition after capitulating. Tsipras must pass of the four through parliament tomorrow. Dozens of syriza lawmakers and the Junior Coalition and independent greeks saturday will rebel against the cuts. For more on greece a view from germany. Our next guest is critical of the agreement reached by the eu summit as said greece is too expensive. Hanswerner joins us from munich. Very well, back. Daschle welcome back. We spoke barely 10 days ago and did not go your way. The greeks seem to have laid the road work and so did Angela Merkel. Pleased or displeased . Mr. Hanswerner it is a deal and has some advantages. More control of the greek budget. On the other hand another 86 billion euros out of gdp which will be flowing to greece without a helping the country sufficiently. That money will not be enough to please the people and more than the taxpayers of the other European Countries are willing to give area the true problem is the country is not competitive and can not to be may competitive through money. Manus one of the strongest elements of this is the Greek Parliament having to enact reform do you doubt the reforms, Structural Reforms will be effective or implemented . What is the biggest risk here . Hanswerner sinn that they will not be implemented and there will be some legislation will increase of the taxes for example. People will not pay the taxes. The fundamental problem in greece. A twostep procedure, the parliament have to implement and then the legislation the tax officers have to implement the tax increases but they do not know how to collect taxes in greece. That is the fundamental problem. Mens been i thought that was the manus i thought that was the eo oecd to join in. Is that worth anything . Hanswerner sinn well, greece is a sovereign state a you cannot easily boring task collectors from outside into the country. I do not not the solve the problem. It is not only making is all rules. It does not organize like other European Countries. The government sector is utterly inefficient for. In efficient. Manus a damning view you have on the greeks. It is like, show no mercy. You respectfully show no hope. Why has europe bothered to keep greece in . Surely Angela Merkel has allowed this deal to go through . Hanswerner sinn well i think the agreement was ultimately made because france wanted and they wanted to keep every body in. Will europe be just the Currency Union where everybody is liable for its own debt . Thats the fundamental question which has been answered to some extent. Europe is moving toward a transfer unit with this decision of yesterday. Manus and the 50 billion euros of assets which are to be transferred into a Privatization Fund or escrow fund what do you make of that . My reading is greece has secure the privatization of billions of euro and smp saying there is a recession, is a fanciful that 50 billion euros is achievable . Hanswerner sinn it is just an imaginary number. I cannot think of a possibility to generate 50 billion euros. Only 2 billion euros or 3 billion euros has been collected. The last time, greece promised to privatize 50 billion euros of stay access and it has not happened. All of these promises but not actually carried out and thats the fundamental problem. The same with the pension refund. It was already enacted but the court said you cannot do it. It was not really done. Grease makes promises and does not keep them. Manus before i let you go will greece still be with us in three years . Is it a matter of time, grexit . Hanswerner sinn well, i do not know. I think at would be better for the country if they exited. It could revitalize of the economy. Neighboring countries have whatever the politicians do they will not solve the problem. Manus you put that crisis instantly. Hanswerner sinn. Guess you put that you put that succintly. Facebook is the Fastest Company to reach a quarter of a billion dollars and we will take a closer look after the break. Manus welcome back. It seems like yesterday that facebook went public. Now a market value of 250 billion. More on this recordbreaking achievement. Caroline hyde breaks it down. Caroline take your mind it back three years ago area when they first sold shares and now christians a crescendoing to 250 billion. This a record. That three years is the fastest with ever seen on s p 500 company get to that level making gets a nice Biggest Company. 9th Biggest Company print it is bigger than walmart and proctor and gamble. The only company that came close was google and that took eight years area a stellar plays. It has a managed to achieve it despite the roller coaster at the beginning. We saw a lose half of its value in the first four months and now escalated that up and looking pretty toppy. 87 times. Came into the markets at 37. Now we have arisen to 90 per share record high achieved yesterday. Back to what their earnings looked alike. Lets look at the valuation. 87 times earnings and where they each trade. That is quite have the compare to the as the t 500. Five times what the s p 500 trades at. Could we be seeing too much exuberance in the Technology Sector . Lets look at the drivers. Appetite of sells. We estimate that scale to keep on a up 37 . This next set of numbers and is all about mobile. They have reoriented themselves. We were worried about the reselling up them scaling up. They have managed to make the change. Mark zuckerberg clung on to mobile first. And more to monetize. 87 times earnings is where they trade. Instagram monetized. And whatsapp and messenger and oculus. When will we see that monetize . A lot still to gain from facebook. A long way to go. Nowhere near where apple is. The number one on the stop on the s p 500. Manus a long long way to go. Caroline hyde, thank you. Some of the top headlines. [indiscernible] it makes britain the first country outside the United States to get what apple said will be accepted and more than 250000 locations. Rapper 50 cent filed bankruptcy after a court said he must pay 5 million to a woman over a sex tape. She accused him of posting sexually explicit video of her online. And wes and within the next few hours, nasas new horizons will fly past pluto. It took nine years and it will be the fastest spacecraft ever built. Currently traveling at 34,000 Miles Per Hour and will come with an 8000 miles of the planets. Time for a little bit more analysis on the pulse. Mark barton. Mark bart chart what is next for oil . Limitation on the agreement implementation of the deal will take months. The lifting of sanctions will enable the oilrich nation to ramp up energy asked orders. The intraday movement as down as much as 2. 5 . This deal will allow iran to supply. Goldman sachs and bank of america say irans plan to sell more oil and recapture share is a long way off. Boosting would require 100,000 Barrels Per Day which is the banks predict will take six to 12 months. Oil has rebounded from the sixyear low in march but it is faltering with uncertainty in china and greece and speculation of a global glut will persist. Prices could fall further as the world remains massively oversupplied according to the ia e. What has been happening crude oil bottoming at 43 on march 17. That is the red circle. Slumping 58 . March 17, it rose 46 . Since event it just slid by 17 . Goldman sachs say surging opec outputs and resilience drilling activity any u. S. Will push crude to 45 a barrel by october. Commerzbank said we manus seen the bottom. Said we may not have seen the bottom. The median forecast of strategists is for an oil price of 62 in the fourth quarter. 51. 09 is where we are now. Manus when it comes to the iranian deal, thank you mark barton. The u. S. Saying they will cease to apply sanctions to iran if it up if it complies with the accord. Sanctions release on centralbank transactions u. S. These are the u. S. Forces on oil and banking across the spectrum. The sanctions are raised and these are important announcements from the eu and europe. The iranian breaking. Shine bright like a diamond. From rihanna to royalty. She has designed jewelry for years and among her fans as top princes rihanna and real princes tape kate middleton. Crooks they are her favorite earrings. Crooks they are her favorite air. I designed cufflink. They are her favorite ea rrings. As we opened more stores, designed what i like to du jour return of the. Reporting she sold the business she started reporter she sold the business she started with her husband. I think i could look after my children and be the perfect mother. But after a while, a year, ive not worked since i was 19 and lucky enough to be passionate about what i do and i miss it area reporter she is starting again a building another jewelry brand. Wishing her husband sold links of london they had 48 stores and a wholesale business. Turnover was 42 Million Pounds a year, a real success story. Why sell . A hard decision. And just like selling a child. [laughter] but it got everything the creativity had gone a little bit. And i really preferred much a smaller where i could have something. Reporter she and her husband bought at the pascal jory this is a rebranded it bringing bigname celebrities. Gwenyth, jennifer lopez, kate hudson rihanna. We are very lucky to have tremendous following. And hopefully it will continue. It helped. That is the influence. Reporter she now has 2 stores in london and new york and los angeles. She said she has no desire to two rolled the scale but to kick to grow the scale but keep things intimate. I am lucky enough to meet fascinating people and to trauma and discover new things and fascinating people and travel and discover new things. Other colleagues for the leadership in making this process include what to fruition. Thank you. We proceed to the adoption of the agreement and then we will move. Thank you very much. Some other organizations, please this will end the public session. Thank you. [indiscernible] manus formal thank yous out of vienna after 18 talks of lastminute negotiations carried through. Iranians and europeans thanking everybody for ratifying. Joining us is elliott dokken. We had in the eu and u. S. Both referring to the u. S. Talking about the actual relief for them in terms of applying sanctions. They will ease the sanctions. Europeans saying they will lift sanctions on banking and insurance. It is a moment of really of reality, isnt it . Elliott historical. This what iran wanted and why entities talked and it was not doing that to be nice or for pleasantries. They wanted so crippling sanctions to be lifted. As we heard from the u. S. Delegation and you delegation, sanctions on everything from the oil industry and exports against the central bank and iran and money transfers within europe and globally and all of these things are sanctions will be lifted. And as iran complies with the points in this agreement. None of the sanctions will be lifted on tilde the report from the national Atomic Energy repeport and is the possible military dimension of irans previous Nuclear Program. Do not expect anything to really happen until then. At talking about the lifting of the arms embargo and that will stay in place for five years. And the missile embargo for five years. They will reduce their uranium stockpile by 98 or cartel and cut centrifuges by 2 3. Something for iran, that is what it wanted and four world powers who wanted to make sure iran is unable to get its hands on a nuclear bomb. They have been talking on and off for almost two years. The marathon stretch of 18 days. Finally, we have a deal and we will get more from the key players. They will hold a press conference in vienna. Manus thank you. Elliott to dock in, our Elliott Gotkine our middle east editor. Mark, you are on the markets. Oil has moved. What is the update . Mark we have been as low as 2. 5 down. The intraday chart and that is when the announcement came out. Roughly 7 27 a. M. London time when the news crossed the bloomberg terminal. Reached a nuclear agreement. The price came down and has rebounded a little. A decline. The big question, the full implementation will take months and contingent on the pace of which iran meets is obligations but over time the lifting of sanctions will enable iran to ramp up Energy Exports. Ramping up Energy Exports and a time where many think the market is oversupplied, Goldman Sachs egg of america say iran bank of america say irans plan is a far way off and would require extra half a Million Barrels a day of production. The banks predict will take six to 12 months to replace aging wells. Goldman sachs says surging opec resilient to drilling activity in the United States will push dublin crude by october. An interesting time for the oil markets and will single slide in crude oil and the rebound and a little more all a slide. What happens to oil if this comes on to the market . Manus the 40 oil and where it sticks. Mark barton on oil and Market Reaction. Back to greece. The Prime Minister is facing mutiny within his coalition after surrendering to creditors demand for further austerity. Tsipras must pass of the reforms through parliament in a vote tomorrow. Dozens of syriza lawmakers and independent greeks said they will rebel against of the measures. We are joined by Olivia Sterns and hans nichols. Olivia, our attention to you. We need to understand what tsipras will fire some of those politicians and what happens next in terms of getting the agreement that he has done in a brussels through the parliament to behind him. Sony kappoor earlier said it is not economically great but it is about the will that greeks will meet targets. Olivia sterns all true. Alexis tsipras has less than 48 hours to get his parliament to approve the toughest package of austerity measures ever been put before them. I have not spoken to anybody oil does not think he will overall find it of support to get approval. It is going to cost him political allies. We have seen what resignation from his own party, syriza and we expect more. Likely that many people say, it is possible he could lose the majority in parliament because he will lose his Coalition Partners. Earlier, we spoke with the head of independent greek syrizas coalition party, Coalition Partner in the defense minister and he said he is not buying it. We will remain together to fight but will not accept a unity government with partners a gimmick away everything while the Prime Minister was negotiating hard for greece. Olivia sterns it seems probable he will lose his majority in parliament but nobody thinks he will not have enough support to pass of the measures. What seems inevitable there will be a cabinet reshuffle. Manus he has made overtures he will not send in a grand coalition. What about the banks . Again, we need to see the bridging finance, the ela. They ecb is the linchpin in this , isnt it . Olivia sterns exactly. The banks are bleeding and running out of cash. If you look at the posit numbers, they are frightening says at the beginning of the year. 37 billion euros were pulled out of the countrys Banking System 18 of total deposits. Extraordinary amount of flight. The banks desperately need the lifeline from mario draghi with the liquidity assistance and the word for mario draghi if he wants to see lawmakers in athens agree to the reforms before he makes any more promises. As badly need recapitalization. It is a part of the broader package that has been talked about. For now, as they are on their last legs and the government said they will take those through the end of wednesday. Caution optimism that the banks will open thursday or friday. As for the bigger issue, cabbage rolls and nobody rings they are going away anytime soon. Capital controls and nobody rings they are going away anytime soon. Manus hans nichols, it could be a while before greece gets of the aid it needs. It has missed an imf payment. It has paid a technical creditor and avoided a technical default and paying the japanese bond. The imf does not constitute a technical bond, does it . Hans nichols they say it is a missed payment a you can only going to the our rears and cannot technically default arrears they cannot technically default to the imf them a solution to the solvency problem. We still of the liquidity problem and no path forward. Finance ministers are trying to hammer out a deal and trying to do something on the bridge deal. Remember, said the report 5 billion euros due to the ecb july 20. We heard a couple finance ministers saying they are technically optimistic and they will find a creative solution and lawyers will find some kind a loophole. George osborne coming into the meeting and made it clear that would be no money from the u. K. Treasury, her majestys government will not. They are playing around with it are you they are looking to bridge the gap and get to greece through the esm money. The lawyers are working harder than negotiators because it seems to be a technical problem not a political one of. Manus thank you. Hans nichols. All of the bases covered on greece. What else is on our radar for this tuesday. Hillary clinton as outlined a plan for Economic Growth focus on americas middle class. She said the United States has to build a fair economy. Hillary clinton i have had the opportunity to listen to what americans concerns about an economy that still is not delivering for them. It is not delivering the way it should. It still seems to most americans i have spoken with, it is stacked for those at the top. Manus facebooks market value have cap desktop twitter topped 250 billion. Yesterday, they hit a record close. It is three years after their ipo. The Fastest Company on the s p 500 to achieve 250 billion hundred 50 billion. The previous record holder was google which took eight years. The next few hours, nasas spacecraft will fly past pluto. The trip has taken it 9. 5 years and 3 billion miles. The probe is the fastest spacecraft traveling at 34,000 Miles Per Hour and will come within a to thousand miles of the dwarf planet a 2000 miles on the dwarf planet. It is bastille day. You are looking at a parade. A military parade in paris. This zone the avenue and this is on of the avenue. The french with their military power. Manus and little bit more on the iran nuclear deal. Joining us is a middle east and north african ceo and emerging markets frontier investment bank. Great to have you with us. Thank you for joining us. The europeans are getting ready to raise some of their embargoes and the americans are getting ready to consider the view in terms of oil and sanctions relief including central bank transactions. What is your take . Guest all parts from what everybody is talking about lifting sanctions and more investments into iran, the way we look at a as well is what will be the impact on our region and middle east and north african Financial Markets . The obvious to look at first is dubai which will be a gateway and trade hub with iran. Dubai will be one of the primary beneficiaries. If you look at stock markets, pricing it in. Talk about capital, it will be capital going out of iran and dubai is the first place investment. Real estate and banks. I think we will see a lot of capital inflows, that the places like dubai as much as capital inflows. Manus the capital flow side and dubai is wellpositioned, but the coastal for market share in oil is probably the very near term market implication, oil prices dropping. Walk us through the view of the shortterm and we are seeing calls for 40 bucks, will that stick . What to do you think . And longerterm implication up by the First Quarter of next year, iran coming back in Oil Production. Ahmed badr as you said, web seen oil prices pricing in potentially iran deal for the past few days. That has been happening. Oil is down 2 this morning. Shortterm, oil will be under pressure. Everybody knows that theres oversupply in the market. It will add more to the oversupply. Looking at short, medium term, the oil price under pressure. When we look at it in a house, anywhere between 50 bucks, 60 bucks. Manus also depends on how quick iran can ramp up Oil Production in gain shares. Manus where looking at 80 Million People will are hungry and desperate for participation and western product and attracting foreign capital. From your perspective, is it going to be industry that benefit, the oil makers, who are the immediate beneficiaries of this . You talk about the Capital Position of dubai but from a global perspective, oil and the likes of consumer goods . Ahmed badr consumer goods are definitely going to benefit. Oil, we discussed. If for talking about low royal low price of oil, a beneficiary. Across the sector and we mentioned dubai. Iran if you look at the population and highly educated population, a lot of good can come out of it. You will see across sectors and not just specific sectors. They will benefit from lower oil prices. Manus ahmed badr thank you for joining us. The other major issue, greece. Joined by citigroup. Everybody at citigroup calling it here we are, the roadmap. Talk me through the upside. Start me off with something optimistic. Guest we have [laughter] the positive aspect. It was not necessarily a surprise, politicians on both sides having to justify and posturing and we are not there yet and im sorry to put something on that. You have some of the parliament to go through. It is important in greece and arrests other European Parliament and the biggest risk on the greece side. If germany vote, the rest of europe will most likely follow. We need to grasp. The coming week, the banks are still closed and the real attention will come later q3, q4. When you get sustainability debts and from all proper third bail out agreement as some of the conditions on greece will go back up. Some pressure put on the greeks and local reaction more evident. And a real chance of of third bail out and push the can three or six months. Manus by no means done and past. Still a possibility of this whole thing falling apart. Antonin jullier that is a fair assessment. What has changed is the timing of it. Our chief macroeconomists, were still going for grexit the most likely outcome on a 13year outcome. We just pushed it down. Manus markets did react and they did. 17 or 18 equity markets were in correction mode. Italy and spain and portugal rallying. Is it that over enthusiastic over the past 4 days or qe will return to the forefront of our minds . Antonin jullier probably a bit of both. We of learned a lot from the news last week. 11 right now. It is a fair balance and the space of a week for something that is not a full deal. We are coming out of three months where the market is going nowhere. Therefore, we do not feel like investors entered the last few weeks with a risk. A lot of the price over the past few days was futures driven. Not the case of changing allocations within portfolios. Covering hedges and to try and get a bit more exposure to the market. Manus the features or derivatives or options ring executed and complemented perhaps in the cash market. Antonin jullier cash values yesterday was 11 billion euros which is not a bad but not a huge and day given the news we had a. By the end of the day, futures trading five times more than cash. It is a high number. The tail wagging the dog. Manus the irish interpretation. The bigger picture, your job is the global head of equity trading at citigroup. What you have got to do is say china is a bigger power. Would you agree with a gas on the other day china with a guest the other day will say china will grow 4 and we had Morgan Stanley saying china will drag us into the next global depression. Where does china fit into your perspective . When you talk to the team, how do talk about china . Antonin jullier for a few weeks, greece grabbed so many other headlines, china was under. And i would argue probably the last week or two, a lot more questions about china. Where i do struggle is the macro picture which is rather bearish on growth and negative. To all of the bears, i would point out with the market heading 25 percent nobody called gdp higher. Now everybody is calling gdp lower. We should already price it the way down. China, a bubble being created and the authorities are engineering a new class which is equities. One chance to do it now or they will lose another five years. We have sin a little of what they have been doing. Coming down with reaction. Part of the plan of what they are trying to do. If you think all why greece was a problem, losses in the system and understand the global basis. Chinese is retold driven. No big losses. China is retail driven. It should be controlled. Authorities are taking the right steps but not big enough to jeopardize or retail derail the rest of the world. Manus fantastic to have you with us. Antonin jullier equity trading. I remember the opening of this stock. Facebook. My gosh, they have made up for lost times. They topped 250 dollars. Caroline hyde breaks it down. Caroline it was three years ago. A cool three years they have a whopping market violation of 250 billion. Will never seen and s p 500 company get to that level so quickly. 9th Biggest Company on that index. It is bigger than walmart and procter and gamble. Google it took eight years to get to this valuation. What is so notable is a managed to fight so much turbulence. Remember may 17, initially listed at 38. It dipped by half, lost half of market violation within or months. Look at the trajectory. 90 per share, record high. The fight was against competitors. Looking quite expensive. 87 times earnings. Five times the average of the s p 500. More than the internet index on the nasdaq. Far more expensive than its own internet competitors. Are we getting worried about potentially the size and scale of facebook . They did in of where the growth will come from. Advertising sells is 90 . It keeps getting stronger. We are expecting that level of growth and continue 37 higher in the next quarter. All about mobile. Cleverly reoriented themselves and realize they were a bit behind mobile and now mobile front and center. 2 3 of advertising sells. Millions of videos consumed on facebook via mobile smartphone, tablet. Monetizing. Instagram and whatsapp and oculus, they have yet to eke out value. Manus thank you. Much more on the pulse. Global freight and back to greece and another conversation with one individual. Stay with us for that. Manus welcome back to the pulse. I am manus cranny. Iran and the world powers have reached a Historic Deal to curved the Nuclear Program in terms for the lifting of sanctions. It caps two years of diplomacy and will and a 12 year standoff over the Nuclear Activities and iran, which have drawn threats of military action in the u. S. And israel. The market of facebook has topped 250 billion. They climbed 2. 4 with a record closing. It terms three years after facebooks ipo made it the Fastest Company to achieve the 250 billion dollar mark. The previous record holder was google. Alexis tsipras is making news with his coalition. After surrendering to the demands of creditors for further austerity. To begin the process of unlocking funds were third bailout, Alexis Tsipras must pass the reforms through parliament tomorrow. Dozens of lawmakers and the independent greeks say that they will rebel against the cuts. We are global today. From periscope, john ferris with the markets. John Investor Confidence falls back for the fourth straight month. Equities are a little lower after adding 7 to the german benchmark. We cut back by 4 10 of 1 . Right here on the front seat 100 in the city of london is unchanged. The price action is subdued, likewise in the bond market. Bond yields are lower by 0. 84 . Likewise in italy and france. Yields are down not even by a basis point. The big move is in the commodity market. A deal in vienna for iran. It will bring iran back to the Global Markets and give everyone else a promise that they will not develop nuclear weapons. This is when the story started to leak through in the press. Down crude goes to 52. 51 a barrel. The story is interesting. A heavily oversupplied market. Crude ready to go in tankers off shore. Opec is exceeding their own target. He will make space for a iranian oil, if at all . Manus they are fighting over the space. I cannot imagine the saudis giving up much space. And now surveillance from new york. We are doing periscope, but it is all about greece . Tom jpmorgan will be out earlier. Bernstein, adam parker will join us for Morgan Stanley. I have to be honest, im still focused on greece and the historic challenges that Alexis Tsipras has as he goes back to athens. Olivia sterns will come to us from athens. We are looking at hans nichols from brussels. This story will not go away. So the last 18 hours are widening, and greece will not go away. Manus i just had the head of equity trading at citigroup. The best Case Scenario is still that greece has a grexit in the next couple of years, because is about delivery and setting these benchmarks for greece to hit in terms of structural reform. With the people accepted . Well Alexis Tsipras be around to implement it . Tom there are tensions across the different parties in athens, but i would go back to the reporting of hans nichols, that there is substantial disagreement among the smaller nations on what occurred a few days ago. It is just a much a european story as a greek story. Manus lets not forget what a historic day with the iran agreement coming through. This is something monumental. At least in my memory and my lifetime. Tom a goes tax 35 years. Whenever anyone thinks of a historic moment for the west they speak to tehran. Manus thank you. Have a good show on surveillance with tom keene at the hour. Olivia is standing by in athens. Olivia what a phenomenal 24 hours. The challenges of Alexis Tsipras almost begin again. If you thought he was battered by the creditors, he could be in for another political battery in the parliament behind him. Olivia many people are thinking it will be difficult for him to keep the coalition together. They think a cabinet shuffle is inevitable. Im joined by a Harvard Business school professor. He has a case study out next week. We are getting a spoiler on greek debt sustainability. Who better to speak to, with less than 48 hours to go for Alexis Tsipras. Professor, the first question is it a good deal . Does it get the economy going . Does it get the greek debt to a sustainable place . Guest i think the answer is probably no. It has measures that will be extremely difficult to implement. More tax increases some fundamental reforms that the greeks will resist. Some of those reforms are actually recessionary measures. I think it will be extremely difficult to implement. The question is, what will happen at the first evaluation at the troika. When the European Commission and the imf will evaluate this deal . Olivia what you think will happen . George serafeim it will be very tough for the greek government to implement. Some of those reforms will be slowly implemented, and as a result there will be a fail on some of those reforms. Olivia increasingly there is a realization that there will need to be out right that relief. Our right debt relief. George serafeim i think different people talk about Different Things in terms of debt relief. Angela merkel talked about no relief we will see some extension of maturities from lowering Interest Rates. Lowering Interest Rate is not an option. The Interest Rates are very low to begin with. They are paying these are important things. They are paying a percentage of the revenue. Olivia how big does the haircut need to be . George serafeim they want higher nominal value. Lets say to 60 years. To me, that is not the issue. As i said before, greece is saying they have a percentage of the revenue that is very low. What is really the issue . It is a fresh start. We need to accurately measure the debt and use that as a guide for policymaking. Right now we are measuring the debt in nominal values, leading us to make wrong decisions. In the bailout fund, for example, part of the 50 billion euros in proceeds will be used to repay the debt. Why would you use that money that you would use for growth to repay debt with a maturity of 30 to 40 years . Olivia that is why some are talking about freezing the servicing of the debt. This 50 billion euro fund that will facilitate privatization, is that realistic . George serafeim i have a hard time imagining, in the current economic conditions, where you will find 50 billion euros in government action. The bailout fund is wrong to begin with. When you set the target from the getgo, with the 50 billion euros in assets which you are incentivizing is to sell as many assets as quickly as possible without thinking if it is a good deal for the greek people or not. I wrote a couple of years ago about a Large Company that had the target to sell 350 hotels every year. They sold a bunch of hotels without considering the price. I do not want greece to have a fire so. Olivia are we wasting our breath . George serafeim i think the greek government will struggle to implement the deal. Trust needs to rebuild. We need a fresh start. We need to start from accountability, and reforming the government. Within the euro. Drachma means a loss of value, not competitiveness. I just gave a talk about talk german economies to accountants and i said they have a misperception that greece cannot be competitive in the euro because they look at the manufacturing sector. Greece can be competitive in other sectors. Olivia how did that go down with the germans . George serafeim many are considering that they are using the wrong analysis. Olivia a professor of the Harvard Business school. His case study on greek sustainability is out next week. Ask to you. Manus thank you very much. He said the germans have it wrong. Lets bring in breaking headlines. Mark carney is the head of the Treasury Select Committee in the United States. Inflation has flatlined in the united kingdom. We just talked about greece being one of the members of parliament. He says on the greek privatization plan is needed for the economy. The debt profile is not sustainable. In that regard, he says that a greek deal is still executing. That goes back to the guests point. The deal execution will be difficult. There are risks from the breaking headlines. About the debt profile and privatization is not so much about what assets go into the 50 billion Privatization Fund, you have an economy that will reenter recession. That makes it harder to make those assets more attractive to sell, and more difficult to get to a real cash flow and returns. The greek population has been coming to terms with the governments capitulations. One of the oldest barbershops in athens we will find out how that decision has been with the customers. Yes, we fought against austerity. We knew it would be deranged if they said they enjoyed being deprived of material, goods, and services. The fact is, the operative issue will be whether in fact investments can be encouraged and if financial and Economic Development can take place. It is not enough to come out with statements about taxing the rich. These are easy statements to make. The question is will there be a climate of the structure of making it possible for people to want to invest in your country . [speaking greek] manus coming up we will speak to the cl a passport company. That is after a jump in operating profits. Stay with us for that interview. Manus it is the pulse on bloomberg television. It is time for the bank of england with the rate increase moving closer. These are breaking headlines from mark carney. This is setting the stage after inflation flatlined. Mark you will have these currency markets in terms of what they are doing . Mark we will look at the level of the pound. Sterling versus the dollar. I called it the carney rate spike. The time for rate increases moving closer. He has said this before, without following through. Maybe he will follow through this time. Economists are calling for a rate increase in the First Quarter. The markets are not so bullish. They are going for an increase in the Third Quarter. This will change things. I will bring up the entry date chart for the u. K. 10 year. The yields were higher already today. The two new year yield is up by four basis points. It is amazing how you can get the immediate maintenance. I will draw a circle. Mark carney says the time for rate increases moving closer. It was barely moving, but now it is down by 11 points. That has investors thinking. Will the gap between economies and investors close matters . It is the Third Quarter for economists and investors. Is that gap going to close . Sterling is rising. The gill yields are creeping up. That is something special, unexpected. Unexpected. Inflation is flatlining. We will go to the ceo of the bank of england. The tightening will be limited and gradual. I think he has had telephone calls with janet yellen. Lets changed him and talk about the earnings. The Second Quarter operating in profits at a freight company. Their stock rose, and gained the most in three years in terms of trading today. Joining us from switzerland is the ceo. He joins us now. It is fantastic to have you with us on bloomberg this morning. Well done on the numbers. Talked to us about visibility. You say it is tough. You are saying that you are going to stick. Your cfo says your company can maintain momentum in the second half, but you have limited visibility. Good morning. Thank you for inviting me. We cannot protect any volume for the next couple of weeks or months to come. Even the rates are very volatile and sluggish. We concentrate on business for customers, and with a market share of 2 we are able to identify markets where we can do business. Manus where are the most dominant markets for you to do business . Is it through pricing . Trefzger we concentrate on complex businesses for customers who are interested in complex solutions. We are a clearly commoditized business. Our markets import to the u. S. On the transatlantic and transpacific. Our exports are strong at of europe into north america, and also into asia and partly into the middle east and africa. Manus you have a unique insight into how the world is really operating. Give us your insight. You are doing business all over the world. How concerned are you about china . Were just getting over the issue in regards to greece, and we are getting ready for rate hikes. How do you see the World Economy as you transport goods . Trefzger we are still very careful, but optimistic. We do not see negative interruptions besides those that we knew since the beginning of the year. The chinese exports to europe were down since february and march. That has not changed. We see a stable yet positive environment depending on political issues to be solved. One dday for that solution will be at the end of this week. We have seen that iran has signed a deal in regards to its nuclear arms and lifting of sanctions. As a ceo looking to expand business what is your reaction . How do you think that fits in to the global trade picture . Trefzger we monitor all of our markets very carefully. As soon as sanctions are lifted or abandoned, we will investigate business opportunities. At the moment we honor all global sanctions, and do not do business in markets that are on a sanctioned list. Manus thank you for joining us. I do want to bring our viewers attention back to breaking headlines from mark carney, the Treasury Select Committee. He is a member of parliament that is questioning him about economy. Have a flat line in the united kingdom. Mark carney says the time for a bank of england rate increases moving closer. The bank of england is looking closely at our sensitivity to rate hikes. This is mark carney indicating with the marketplace. We are one of the Fastest Growing economies in the g7. Wages are rising slightly relative to where they were before the great recession. They are still under pressure. Theyre looking at the household sensitivity. The time has come for a bank of england rate rise coming closer. Janet yellen last friday night, said the dollar is up 6 10 of 1 . You are at dollars sterling moving higher. Lets keep an eye on those. The governor says that when liftoff comes it will be gradual. What else are we watching, lets check in with hans nichols in brussels. Hans . Hans we are looking to see how all 28 finance ministers from the eu are gathered here, and how they will provide british financing. It has been clear that no money from the 28. Let me be very clear, britain is not in the euro. The idea that british taxpayers will be on the line for the greek deal is a nonstarter. The eurozone needs to foot its own bill. Hans it is up to the 18 countries that share the euro how to have bridge financing. There is talk of bilateral loans. There is an immediate payment due in july. Manus there will be no unhappier in the world than yourself when this bridging financing comes up. It is all done with Alexis Tsipras political jockeying in athens. Can he really last . It is all about implementation risk. Hans that is a question that they are asking in brussels. Who will they be negotiating with when they do the final package . It will take four weeks to do. Will Alexis Tsipras be leaving the government, or will it be someone else . That is a question on the minds in brussels. Manus that is it. We will come back tomorrow morning to do it again. Stay tuned for surveillance. Iran has signed a memorandum of understanding on the nuclear deal and when sanctions will be lifted. Announcer this is bloomberg surveillance. Tom oil declines as iran and the west agree in vienna. The accord will be debated in washington. Amid distrust, there is talk of snap back sanctions. There is no euphoria in athens as the details of new and harsher austerity. Tsipras must face his party and his nation. Jpmorgan reports costcutting to make profits. The morning, everyone. This is bloomberg surveillance , live from our World Headquarters on tuesday, july 14. Im tom keene. Joining me, Brendan Greeley and vonnie quinn. The story will not end. Brendan germany has given up all pretense that it was a political union. It is an economic arrangement run for germanys benefit. That seems to be the secondday story. Tom and some real tension in the market. Olivia sterns will join us later from athens. Here are top headlines vonnie quinn. Vonnie