Transcripts For BLOOMBERG Countdown 20240622

Welcome to countdown. Im anna edwards. Ryan and i am ryan chilcote. Anna we have numbers on the swiss wealth manager. The distant profit before tax is 128 million swiss francs. Here is the key number. 1. 4 million. Ryan 284 billion swiss franc second of april. Anna the big story around this business is around m a in both senses of the word really of whether anyone would be arrested in buying this business wednesday settled there outstanding issues and indeed what they might be interested by. Ryan indeed. They are about when billion dollars worth of cash they could deploy. We are seeing holds on acquisitions. Definitely something we will be speaking with the ceo. Anna lets talk but u. S. Equity markets. Fascinating moves. The great takes opening up in a limited fashion this morning. Seems the equity markets are trying to move on from that story. Anna ryan a remarkable story. Looks like investors have moved on. Anna 100 of the s p 500 reported this weeks earnings very much a focus. Lets talk about the greek story. Angela merkel held up the prospects of limited debt relief for greece. She ruled out any haircuts on great greek debt. Greece has been granted relief. Private creditors were allowed debt cuts. Because consider such measures again as their part of the mandate. Once a hypothetical program has been discussed, we will discuss that question then. As we said, classic haircut and death forgiveness cannot happen in a Currency Union Debt Forgiveness cannot happen in a Currency Union. Imagine if every country came about this way . We would enter a hopeless situation which would network. It is reflected in our wish that greece remains part of the euro. Such a haircut is not possible. Ryan greek thanks reopened for the first time in three weeks. Lets head to our correspondent who is on the ground outside a ranch of the National Bank. Controls are still in place right . Thats right. If you look over here, people are going inside this branch of National Bank of greece. They were giving out numbers to people to go in through the side doors over here. Others are queuing up. As you say, capital controls remain in life. In place. You cannot take 420 euros out her week paris per week. You could also access other bank services. One thing we were not expecting to happen looks at the reopening of the greek is a real thing of the greeks. Further regulations need to be in place an order for that to happen. Anna how does this tie in with other news around greece . What is the news there . Elliott this whole bailout deal with agreedupon last week. There was an allnight negotiation. The point of that was to enable some kind of finance that would permit greece to make it repayment to the ecb today. 4. 2 billion in theres no question it will make that payment. If it had not come that is against the rules. Banks would not have been reopening today. The winner probably propelled greece to the exit doors. Scott would probably have propelled greece to the exit that would have probably upheld greece to the exit doors. The support would have been withheld. They would have been pushed out of the euro. That was a key reason they made that deal. Ryan talk to us about sales tax going to 20 . I guess people will need access to the money to pay higher taxes now. Elliott this is something they were agreeing to under duress. Taking trust greece to make good on its promises. Raising it is on restaurants and also public transport. It would also happen on the islands. Not wont happen for a couple of months. Perhaps economist will be left wondering that the economy is being tebow by these cash withdrawals. You got toursists on holiday. At the same time, sales tax will go up. Some a think it will not do much for a week economy. It will make good on promises. Ryan thank you very much. Anna theres a lot to watch in greece today. Thanks reopening. The Stock Exchange remains closed. Ryan chancellor Angela Merkel has been weighing in on the greek crisis. Her french counterpart says there frightened by not to it europe, but a lack of it. Is he right . That is the twitter question. Anna is calling for that. We will see where that takes us. Get involved. It you will find me on twitter. Ryan my guess is that hollande will not see that in the teacher. Lets talk asia and shanghai stocks swung again. We would tell you more on that. David good morning. The shanghai composite just reopened. We are back here again. We still try to find our footing. A lets look at the context. It is a fairly volatile session. To put 5 move up. There we go. At one point we were above. Look at the options traders. We are basically paying 1. 8 times more to get those options in place than they would have if they have with their money on other options. That means lets take a look at the fundamentals of the economy. The short of it is that you have price game spreading to more cities. It is also worth noting that a lot of these easing measures property restrictions have so far only fill in two things we havent actually seen that. Obviously a lot of these developers are still try to get access inventory. The other story gets to have the equity markets overall are doing. Gold prices. Im sure youll be talking about this later on. It was at a fiveyear low. It went off a cliff. The strap right here is about 45 u. S. Dollars. Having said that, we are seeing the effect of this, especially in the australian market. It looks good in australia. Were looking at a 40 drop. We will continue to follow this. Theyre still recovering from these. A quiet start to the week. That is effect in volume to a large extent. A very quiet start to the week. Where mostly back to levels of last tuesday. You look at the benchmarks. Back to you. Ryan next up, the ceo of switzerlands largest right that bank. Just under 300 billion in assets under management. Today he will join us at the top of the 7 00 hour which will be right here on countdown. Anna eu Foreign Ministers gather in brussels. Were back in love minute. Ina a couple of minutes. Anna here are the stories that you need to know this morning. Agree reopened today after closing their doors three weeks ago greek banks reopened today after closing their doors three weeks ago. Transfers abroad from greek accounts remained banned in most a closed. Ryan Angela Merkel has held out the prospect of limited debt relief, but ruled out a haircut for creditors. She says shes appeared to discuss the matter whats greece successfully completes the first round of the new bailout. Remarks dont be on the pledges made. The signal the topic could be considered before the end of this year. Anna barclays is ramping up its costcutting measures. That is according to a person with the knowledge of the projection. They will also shrink their workforce. The chairman has pledged to tackle what he has described as a cumbersome and bureaucratic company. Ryan the price of gold has sent to its lowest level in more than five years. Investors with the prospect of higher Interest Rates. China said it is holding less metal in reserve been some analysts expected. Gold is something were looking at very closely. Gold was down by more than 4 . It is just above that. There it is. Anna there we go. Fiveyear on the gold price. Fascinating. It is about the strong dollar. If you think Interest Rates will go up in the u. S. , dollar goes a little bit further. They dont report very often, china. Ryan nonetheless, it was a they increase in terms of how much gold they were buying big increase in terms of how much gold they were buying. Less than analysts estimated. Anna they see it as a diversification, dont they . They are talking about how they expect china to keep on writing gold buying gold. There the second is gold buyer after russia. Ryan look at the ratio. The are still pretty small. Theyre playing catchup with the likes the u. S. Germany. Still on a knowing anna anna yeah. Lets stick with the story. It minutes past 6 00 in london. Meanwhile come speculators cut their bullish bets to the lowest levels since march. Why is there customer where where do they go from here . Welcome to the program. Thank you for sitting patiently. Lets talk about where the oil price is going. You see a number of reasons. [laughter] i think greece hasnt help the eurozone turmoil. As a huge impact on the dollar. Gold is coming off as well. The china stock market has had a huge impact as well. China is such an important part of any commodities really. There are concerns about hard landing there. It hasnt happened. The concerns are there. Perhaps one of the most important actors has been the expectations. With all of these lots of question should be emphasized in terms of what could the the impact of nearterm versus the longerterm. Ryan give us your best guess. Do expect this to stay there given what you were saying about demand and maybe some of the concerns about demand being overblown . Amrita the band has been crazy. Demand has been crazy. The problem is what lies beneath. Ryan everyone is piling in. Amrita oilpec continues to pump at levels. There pumping as much as possible. I dont think isis will go up. That will take time. Yes, we are going to see you wont happen until next year. Ryan national and anna do you worry about the chinese growth story . Why should it be on the way down . Amrita i think the bearing is much more concerned about is there more to come . Is there a hard landing coming . There should be a very limited impact. And youve seen that in the gasoline numbers. I dont think it will change the dynamic very much. It will have a very limited impact on the overall economy. Ryan something they have been reluctant to do. Do you agree with that . Amrita sharp you many to stand balance to balance the market. The whole policy is why should we cut question like it will take time why should we cut . It will take time. Anna what about the effects of the Iranian Oil Coming back on string . Number have suggested this isnt going to happen immediately. Oil prices typically look ahead, dont they . What we are seeing now, does that reflect all of this Iranian Oil Coming back . Or does this mean we are going to see for the downside of the result of the oil entering back into the system . Amrita i think we have seen the substantial downtrend. There has been downward rusher pressure. Fair to say that people are expecting quite a bit of iranian to come back next year. We expect that as well. Hopefully everything does go to plan. The u. S. Congress not happy about the. Companies will be cautious. Anna you got a five year chart here. Amrita no longer the case. [laughter] anna we even talk about the rebound. We havent made much of an impression. Amrita we get prices to go into the 80s and 90s, but not. 2017. Until 2017. We are at a huge negative impact from the Dollar Strength pretty much through the course of this year. A lot of it has in price been priced. It has downward pressure. Anna thank you very much. Lets take a quick look at what to watch this week. Earnings season is in full swing in the u. S. We saw the S P Companies reporting and leaving clues for good names. Apple, boeing mcdonalds. In europe, we get numbers from Credit Suisse and air france among many others. The minutes will be out on wednesday. The pmi figures will be out on friday. Qe will continue until they sustain inflation. Ryan greece miami front and center of the agenda speaking to National Broadcast print Angela Merkel hinted at limited debt relief for the country as she weighed in the option being rolled out. At on how imagine a socalled gre it depends on how you imagine a socalled grexit which does not exist. Greece exiting the eurozone was on the table, but what counts is that theres a mandate for negotiations regarding a third rescue package. This is what all 19 members and greece agreed upon. Anna not a haircut just get. Ryan coming up, greece has reached that deadline they couldnt afford to miss for a bill they could finally afford to pay. 4. 2 billion for euro i should say repayment. We will have more on that with our next guest. Stay tuned on countdown. Get excited for the 1989 world tour with exclusive behind the scenes footage all of taylor swifts music videos interviews, and more. Xfinity is the destination for all things taylor swift. Anna welcome back to countdown. Are the stories that you need to know. Greece banks have reopened after closing the doors tree weeks ago. Transfers abroad from greek accounts remained and banned and will remain closed. Ryan Angela Merkel rolled out a haircut for creditors. She says she is prepared to discuss the matter once greece completes the first round of a new bailout. The signal the topic could be considered before the end of this year. Anna gold has some to its lowest level. Investors with the prospect of higher Interest Rates. Chinas holding less metal and some analysts expected. Serve and palladium also lost more than 2 of their value. Ryan you think you before police restart the u. S. And cuba restart relations today. They will improve ties between the nation. Lets get more on the stories we are watching today with our guests. Welcome. Thank you. Were sort of moving away from the debt with greece, what kobe expect this week . What could we expect this week . We have got another vote on wednesday . Me know greece will make the ecb payment. We know greece will make the ecb payment. The could have her pedal the entire greek banking sector. The grace to put the money back into the banks. I do think that the changes are pretty cosmetic. A some of the capital controls have been made easier because the banks have been reopened. It is not really a game changer for greece. Until they are recapitalized and stuffed full of money theres a third Bailout Program that has been agreed, i dont think it will come back to greece. In terms of the vote, think the government will probably push it to parliament, but only with the help of the opposition. The majority need a vote of confidence. I think they will manage to eke it out. If he loses as many as four more seats it could be an election. It is a disastrous time. Thats right. They want to legislate specific measures. They say no haircut. There there has been some talk from other quarters about whether the they could change the Interest Rates. They dont want to haircut by the back door. And how much of a game changer that is for greece. Megan i think germany will have a reduction. There will be no a haircut. They could reduce the value. There leaking the secret reports. They dont want to be a part of any bailouts. Germany needs the imf to be part of the bailout for the cover. I dont think germany has changed on this. Theyre willing to take out the maturities if anna if they are on board with the third bailout and Angela Merkel talking about not discussing it until progress is shown on delivering on the bailout megan that this right. They need some debt relief. As a carrot to sell any of this home. They voted against the measure so he missed the carrot. Ryan you have got to wonder a week ago today there were all those bilateral discussions. There is nothing to show really other than were going to get that relief. Now we have the german chancellor clarifying do you reckon they will say, ok . Fine . Megan unfortunately, i dont think that is the case. I think greece will have to show it could implement reforms youd think greece will fall behind on its target pretty quickly with this third bailout. Old wine in the same bottle. I think it will go off track for the quickly. Debt relief once again will be off the table. Anna you are in a fan of the bailout. Recycling of gold. Where do you see the endgame here . Were not going to move away from the greek story for very long . Megan no. I think they will be back in brussels. Theyre going to have to go through and implement more austerity measures. Then they will be considering an exit. It will be even more painful than. Then. Ryan the mende, so to speak. Megan he has mandate so to speak. He has no mandate. Ryan has a level the public has approved of him. This will basically will up in flames . What is that point in the next month or two when you say the greeks could we measure the progress . Megan i think it will take a couple of months it greece will probably managed to get through the august 20 ecb repayment. Well be in the same position in a months time within a couple of months, we should be able to see what is happening to tax revenues. Unfortunately, by raising taxes, it would be completely counterproductive. Greece is so far out it is no longer a question of not being willing to pay their taxes. It is a question of them not being able to. Ryan Corporate Tax going up even higher than it was. Anna thank you for taking us back to economics class. [laughter] lets talk about football. Ryan the final of the barclays played in singapore on saturday ahead of the match. We will bring that to you later when it is ready. Were having some technical problems head we will bring that to after the break. Anna we will take a break. Coming up, greek banks reopen. We will speak to one fund manager in greece about the challenges of investing in greece right now. Stay with us. Anna welcome back. Youre watching countdown on bloomberg. Here are the stories that you need to know. Greece banks have been after closing their doors three weeks ago. Capital controls will stay in place. Transfers abroad from greek accounts remain banned. Ryan the german chancellor has held out the prospect of limited debt relief, but ruled out a haircut. She was speaking to the german broadcaster did she is prepared to discuss the matter once greece has considered the first round of the new bailout. Remarks dont go beyond the pledges she has made. They signaled the topic could be considered by the end of this year. Anna a company could see a cut in its workforce. The bank will have efforts that could leave it with fewer than 100,000 workers. Ryan the price of gold has some to its lowest levels in more than five years as invest measure metal prices. Chinas holding less metal in its reserves thence analysts. So ran played them lots more than 2 of their values. Anna banks heavy opened in greece. Other restrictions are still in place angst have reopen banks have reopened in greece it. Other restrictions are still in place. Elliott not much going on behind me. The bank is open. The one thing that we are expecting to happen is that the stock market hadnt opened. Here is the managing director there here in athens. Thank you for joining us this morning. Lets talk about the controls does this make any difference that people can now go into the banks . From a psychological point of view, im sure it does. Im sure they are to stay for a while. Elliott the Stock Exchange was closed at the same time of capital control bit when banks are open, we expect the stock market to reopen, but it hasnt. What is the hold up . Were expecting some controls. We dont know yet what is going to happen with private investors and whether they would be able to invest a certain amount of money in the Stock Exchange. What happens with the cash bounces already deposited . It is quite important. It has to do with the demand side. Elliott many will be looking to sell . It depends. They had to take into consideration the situation. The other hand this control issue will have a severe impact as far as the economy is concerned. The Greek Economy except a recession. Of course we dont know the situation of the greek banking system. Greek banks would have to raise capital. All these things. We need to assess the situation. Elliott when do expect the greeks of the Stock Exchange to reopen . I think it will take two or three days. Expect the market to open this week. Elliott when it does, do expect people who have been unable to sell to try to sell as quickly as possible . It demands depends on the demand aspect. It is 12 lower. Cheers are lower. This is in invitation expectation of what one would expect. Elliott as a broker, what have you been doing the last three weeks question are banging your head against the wall . Evangelos we were doing various stress tests. Then there wasnt much to do. Most of the people took their summer holidays. The rest of us were going parttime into the office and then to the beach. [laughter] elliott longerterm, what could be the impact . Could those Companies Think it is best if we list our shares it betrayed exclusively somewhere else so we dont have to worry about this kind of problem . Evangelos if the situation gets you look good gets liquid i hope this is not going to happen. Hope the capital control will be a temporary situation greece. It has to do with confidence. Get out of this issue as soon as possible. Elliott you expect sometime this week for it to reopen for the necessary amendments to take place . Evangelos yes, exactly. Our the markets to open wednesday or thursday. Elliott thanks very much for joining me. The banks have reopened. People are coming out of the banks after having been and greece is making the repayment to the European Central bank. For now, back to you. Anna thank you. Ryan i like that forecast. The forecast was that it should be open according to the head of the start stock market. Will know about the banking crisis that is happening in greece. What about the Real Estate Market . We spent a day with a realtor and got a sense of what that world looks like. Unfortunately the market has been really dead. Because of the continuing recession of the Greek Economy and the crisis in the real estate or, at least 50 Real Estate Agents have closed down. The market has only been those who could afford cash in recent years. At least 95 of the market. Very nice property here. This house has been six years on the market. In this upmarket neighborhood, 1012 markets a year. This year, we have sold fewer than two. I have been working in this region as a broker for the last 25 years. We are here in a beautiful suburb of northern athens pedal lester was the best since the start of the crisis last year was the best since the start of the crisis. This year, things have been difficult. We dont know where it will go next. Anna lets bring in our next discussion from our business site to run as through big stories under this morning. Good morning. You bring us three gifts this morning. We talked to an oil analyst this morning. They been suggesting it will take a long time. Get to overexcited. Maybe that is all there is. We could see quite a big ramp up. It is. It is an interesting reality check. What it does is it looks at the history of past major outages. One of them was venezuela. Massive strike. Reduction plunged. It took a long time to come back. That turned much more quickly than people expected. It is reality check for an exit the things it will take a long time to come back. Ryan i think a lot of that will depend on how easily and quickly they you ryan is able to negotiate. Many of indicate it will have to be a good deal. Tim big oil has limited opportunities around the world. Iran is unique in that way. Megan i think it will stabilize. You go further down though. I think shale oil will technology the belts over the next several years. It will be lower than the current barrel right now. I think theyll help flood the market. Ryan tim, you have another tech story out of silicon valley. Tim it is. A reality check. It looks at how investors in the tech sector there are starting to feel that if i missions have stretched and are trying to find ways to protect against that and are telling companies that they invest in they need to have some rainy day fund. Billion dollars started valuations. Many just in the last eight weeks or so. Anna dust on friday. Nice work just on friday. Nice work. [laughter] thats amazing, isnt it . We in the middle of one of the most prosperous periods since the creation of the pc. Tim absolutely. Certainly well worth looking at. Anyway, anna sticking with technology. Tim yes. They have created a device that monitors heart rate for rhinos and tigers. The idea is that they could be fitted with a heart rate monitor. The services could respond. The animal freaks out. You will know the animal has been killed. Once the signal is lost you know poaching took place. You could respond quickly. Get there before the have time to ryan one has to wonder what a false alarm looks like if you see a spike in the heart rate. Could it not be poaching incident or when they see something tasty . [laughter] anna i dont know. Ryan what would cause a rhinos heartbeat to spike . [laughter] anna thank you. Coming up ryan an inclusive interview. He is 41 years old. Just under 300 billion of assets under management. He will join us in a few minutes exclusively right here on bloomberg. They with us. Stay with us. Debt forgiveness cannot happen in a Currency Union. Anna Angela Merkel stands firm but signal she is prepared to discuss other debt relief if the first round is successful. Greek pranks reopen after closing their doors to collapse. Capital controls are still there. Anna gold sinks to its lowest in five years. A warm welcome. It has just gone 7 00 here in london. At the numbers out this morning and we will be talking a lot about the banking business. The first numbers look pretty good compared to the estimates. One of the key factors will beat when they will settle with united states. The u. S. Is trying to take some money off of them for their involvement of helping u. S. Customers avoid taxes. These are the comments we have from the boss over at julius fair and they are saying they will bes beating to the u. S. Tax issues they will be closing those u. S. Tax issues in the next few months. Lets recap where work friday. The some extent the markets are focusing back on the earnings story. Not quite as obsessed with the greek drama as we have been. They have a bit of a boost from earnings. Ryan best week for markets since march. Jon anna keep an eye on that. We will see what that strengthen the dollar story will take the edge off. Ryan we had earnings from switzerlands Largest Private Bank earlier. An exclusive chat with the company ceo. Im sure you are there, we all want to know when youll settle with u. S. Regulators. Do you anticipate that you can pull that off this year or do you need to hedge your bets . As we said we are very pleased with the results and we are in advanced state of operation with the department of justice and we are confident that we should be able to reach a final settlement by the end of the year. Anna where does that leave you in terms of m a . A number of analysts and you have talked about your strengthen m a and your ability to bring together businesses and integrate them. What have you got your eye on . I guess we have it on the most important activity which is our own company. We are refocusing for organic growth. We are coming out of 2. 5 years of international integration. But we will continue to pursue m a and we just completed the integration in switzerland. We Just Announced this morning that we are entering mexico with an acquisition of 40 and i think we will be on the lookout for anything transformational over the next few months and years. Ryan i know that you have said that you dont anticipate larger banks taking huge interest in julius baer before you have a settlement with the nuggets states, with the united states, the before you get that do you expect to come and play once you get this deal . Guest i think we are looking at the future on a standalone basis. We would like to continue our Growth Strategy without interferences of anyone looking at us in a distinctive way. We will continue our strategy. Anna more predator then praey . Guest that is correct. Anna you mentioned your ventures into mexico, any other clue as to where you see them expanding . Is this about shoring up the swiss part of the business or private inking and london or tapping into emerging markets and a greater way . Where is the focus . Guest i think the focus is two fold. On the one hand, to increase our exposure to markets and contrast with what we may have around us here. To move away from swiss ranks with making investments into a better balance of business for us and increasing our investment into nonswiss franc denominated countries. Ryan you mentioned the frank it has hit costcutting issues, how is costcutting going and will this be a recurring theme for years to come . Guest i think normally we wouldve planned to do this on a gradual basis over years. But obviously as when we will have the shocks like we had in january this year than we may need to take more imminent cost measures. Anna speaking of the currency markets you referred to the headaches what about the eurozone crisis . Has that meant that you have been more keen to take on new clients with other assets rather than euro assets . Guest i think that we stand to benefit situations of uncertainty. Swiss banks continue to remain good protocol in this kind of market environment. So we are seeing some inflows of new assets from existing clients. Ryan we will have to leave it there. Thank you very much to julius fairs ceo. We will switch gears and stay in the eurozone. On the sand in the country faces a 4. 2 billion dollar Debt Repayment to the ecb. Paul gordon is with us from frankfurt to give it that ecb angle. The banks are open but many restrictions are still in place. What difference does this monday morning bring . In tactical terms the differences that instead of just taking out 60 euros per day they can take out 420 per week. You dont need to be a mathematician to workout that is still 60 euros per day but i can take it out all in one go. One other thing that we were kind of expecting to happen and tandem with the reopening was the athens Stock Exchange we expected to reopen today. That hasnt happened. We were just speaking with the managing director and his best guess was wednesday or thursday we should see the stock market reopening. Capital controls remain in place but are not quite as stringent as they were before. There are not even any cues here or journalists filming them. Everyone thinks ins are moving in an efficient matter this morning. This is another thing that the Prime Minister did not want to do. He has agreed in order to get this third bailout to increase sales tax on certain items. Broadly it is processed food restaurants and public transport. The joke going around is you will only pay 13 vat but if you have peppers you will play 823 . But fish, milk am a dairy, vegetables and fruit will remain at 13 and those that have got up to 23 will include coffee tea and oil including all of oil. And funerals will also apparently go up to 23 so as Benjamin Franklin said the only thing certain in life is death and taxes. Now dying will cost you more in sales tax. Lets get to paul gordon who is in frankfurt. Presumably there is no doubt greece will make this payment to you heard mario draghi saying that he anticipates no issues. You have to assume because the money is there. It is 3. 5 billion euros of coupon payments that have to be made today. This was the critical one. If this one isnt made in the ecb is in a situation where it is effectively monetary finance the governments illegal in that thats the deal that got Alexis Tsipras the site finally sign up to the austerity deal. Key thing here is that what happened next is very important. The ecb has upset exactly when this money has to be paid back. What is the ecbs reaction likely to be to Angela Merkels suggestion that she is likely to consider debt relief. Probably delighted for the most part. If mario draghi loses to this in his restaurant is less week is that it isnt in controversial that greece needs debt relief. No formal haircut on the face value of the debt and merkel reiterated that in her chat. The key will be to look at lengthening insurance payments and they the ecb believes that is necessary. Thank you joining us there in god can. Ryan lets bring in the chief economist at asset light. Last week was the best week since march. I think the markets have been pretty boy at that economist at the least are fixated on when this will finally lift off and we heard janet yellen speaking giving some hint that she thinks it will be this year though we are guessing when. I think the fed should wait until next year she hasnt asked me yet. The fed is nowhere near its inflation targets in their are a lot of indications of slack left in the labor markets. The sign has been posted so clearly that they will have to start posting rates this year. Anna you mentioned the inflation numbers. If it really doesnt show any signs is that something that will make some delay . Many economists are saying that they just want the hike. They are waiting with the data to catch up with that fundamental desire they have to lift off. I think they are looking much more closely at the labor market so if you dont have any upper pressure on wages and you will not have a lot of upward pressure on inflation. Dont forget that she is a labor market economist by trade. Last jobs we had in the trade show that there is a lot of slack. It didnt take up the force Participation Rate was pretty lackluster so this all indicates that were adding a lot of jobs in the u. S. Were adding them in lowwage sectors. The Oil Price Fall has actually been a bit more negative than some would expected it today. We havent seen consumers go out and send us a bag of Lower Oil Prices and that is because households still have quite a bit of leveraging to do in the u. S. Were actually still way above where we were in the 1980s and 1990s. Households are trying to save on loans. Gas was about three dollars a gallon. No one seemed to agree with me. And when looked at me like the oil price is pretty low. You should enjoy these rices. It does seem to be lost on americans. Americans dont know what to think about Oil Prices Going forth. If they could assume were going lower minutes and more but it is all pretty unclear. Megan stays with us a little bit longer. The shanghai stocks have swung once again will bring you the latest in asia and anna welcome back. It are other stories that you need to know this morning. The greek banks every opened after closing their doors three weeks ago. Capital controls will stay in place a 60 euro per day with drawl them it ring replaced by a weekly when it. The athens Stock Exchange will remain closed. Angle merkel has ruled out a haircut for creditors. She was talking to a rd last night and said she is only prepared to discuss it after greeks successfully complete the first round of a new ll. Barclays is ramping up its costcutting measures and could see its workforce shrank by a quarter in the coming years. The bank will also shrink its workforce by operations in those benchmarks could leave it with fewer than 100,000 workers. Thats after the chairman has promised to tackle what he described as a cumbersome and bureaucratic company. Investors weigh up the rates of higher Interest Rates and Precious Metals were hit hard after china said it is holding less in metal reserves than some expected. Silver and palladium lost more than 2 of their value. Lets get more on what is happening in asia. Another roller coaster session in china. Where do we stand on the other stories youre covering . We had just got 20 minutes past 2 00 p. M. Just to mention i will get to the broader markets in just a moment but only give you the chart for the day. At these levels we are basically about a week and a half back. You mentioned we were briefly above or thousand but briefly came back down. The story popped up and then we came back down. At this level i guess you could argue it is obviously a sign that these measurements the government has taken could stabilize the market. We are no longer seeing the kind of chaos he saw the two weeks back. Although i do have to mention that about a fifth of the market is still frozen. Will obviously see more and more of these Companies Get underway as the week progresses. At which. 39 82 lets see if we recovered at which point 3182, lets see if we recover. Home prices were also out over the weekend so that is something that these markets reacted to as well. Further stabilization across the housing market. They really were no more than half of the cities. Thats what happens with the other big market story and investors touched on this. We already have recovered from the low point of the day but very early here in asia. Just after nine in the morning. You have this massive plunge in gold prices. At this low point we were 10. 84 per ounce. So the on that level there were no key support levels here. There was a sense of hannah if you considered some of these mining spots and in australia to a lesser extent you had a couple in china. While the market was not exactly a risk, there was a rush to the exits. We were panicked. You take a look at these losses there. This was an industry to keep in mind. It is still recovering because of the plunge we saw in 2011 all the way to 2013. It depends how long we stay at these levels and that is one market story. The rest of the region looks ok. It is not a rush to the exits. Japan is closed today. Back to you guys. Anna david angle joining us from hong kong. Lets get more on what has been happening. Give us your thoughts on the roller coaster ride you saw on chinese equities and how that has been. I think they really won the battle that they have lost the war. Six months ago it seemed inevitable that chinese equities would be included another at his completely inconceivable. The lesson for Foreign Investors is he to figure out what is politically expedient for the central bank and invest accordingly. In terms of the impact on the real economy where you are boosting the equities market to manage the debt, particularly for corporate in china but given that property prices have been falling. For investors but not that many Retail Investors have been involved. I think that the collapse of chinese equities have not had a huge wealth effect. And get what you mean about what we have seen from the regulators and the central bank. There are many voices that stood to the weston said what are they doing . There has to be a downside. Were Central Banks in the west to try to drive wealth effect so where is the line . Central banks are the only actors out there and they are propping up and distorting economies and markets globally. I think the intervention here has been much more heavyhanded. They are afraid of upsetting authorities and you do not have that anywhere else. Foreign investors are really paying attention to this and wondering if they ever really want to get involved even if the equities are boy didnt. Like i said the real risk to the chinese economy is ready minimal. I dont think china will face a hard landing even if it is stabilized now. They just posted their first client in sales in a decade. What is that tell us about the overall. Some of that is customer preferences but part of it is presumably about the economic background. It is an interesting commentary on the Economic Growth model. The whole plan is to rebalance away from investment and consumption or it that is happened only because investment has fallen off a cliff. There is some kind of safety net for chinese and that is what is inc. Played out in the registration figures. Anna thank you very much for joining us this morning. Lets tell everybody about our twitter question for today. French president lond says that europe needs the eurozone government for the 19th amendment. Ryan you can check that out following us on twitter. Anna be a way that your ex is saying eurex says there will be a delayed opening do to a technical. Technical issue. Anna welcome back to countdown. Here are the stories you need to know. The greek banks have opened after closing their doors three weeks ago. Capital controls will stay in place with a 60 euro per day withdrawal limit. Transfers abroad from greek accounts will stay close. The german chancellor has held out the process of limited release but held out a haircut for creditors. Speaking to arg she said she is prepared to discuss the matter. They say the signal but the topic could be considered before the end of this year. A breakthrough has been made on a World Trade Organization agreement. Valued at 1 trillion. The proposal will be considered will be considered by the governments of 80 patients. If approved it could contribute as much as 119 billion to go toward gdp. Ryan the price of gold has sunk to its lowest level in more than five years as investors waive the prospect of lower Interest Rates. Prices were hit hard after china says it is holding less metal in reserve and some analysts expected. Palladium and silver lost more than 2 of their value. Anna whenever chart here that shows five years of the gold price. Assuming that Interest Rates will go up in the dollar might go up and the dollar has gone up. That is part of the story but there is the china angle. Ryan this doesnt happen very often but we have from china how much gold there holding in their reserves. It is less than many analysts were expecting and one of the reasons why we saw the big drop in the price. When of the biggest gold fires in the world. Anna in 2009, they have been the second biggest gold buyers after russia since 2009. It is all part of this effort to decrease or diversify the effort away from hard currencies but they have a lot of catching up to do despite the fact that they are one of the biggest buyers out there. Much smaller than what they could be if you look at germany and the united states. Anna lets talk about where he went ahead on the equities session. Where 27 minutes away from the start of European Equity training. It looks as if we are set for a slightly positive open. The u. S. Stocks had a good week last week so moving on a little bit from the greek obsession. Last week was the best week since march for u. S. Equities. And this week is a good one for earnings reports on both sides of the atlantic. Ryan lets return to the top story which is still greece. The german chancellor held out prospect for limited debt relief as the country reopens its banks for the worst time today. It is mostly cosmetic but she ruled out any haircut on greek debt. First of all, greece has been granted relief and drive it creditors were allowed a voluntary debt cut. We can considered such measures again as they are part of the mandate once the hypothetical program has been reviewed successfully we will discuss that question. Not now but then. As we said a classic haircut cannot happen in a Currency Union. It may happen outside not within. Imagine if every country came about this way to the Countries Holding the leased debt. We would enter a hopeless situation. Anna her comments come as greek banks reopened today for the First Time Since june 29. Lets speak to elliott goggin. The banks are opening but some restrictions and capital controls remain in place. The scene there has been very calm. Things were a little bit more exciting 90 minutes ago. There is a big q and the bank manager came outside and was giving everyone numbers. People went in that entrance and a few minutes later the main doors opened and people went inside the bank to the first time they did a couple weeks ago hello and sugars in. Some say that the only real differences instead of being limited to 60 euros you can take out for hundred 20 for the week or it i know that 60 euros every day in a week comes up to 420 but this time you can do it all in one go. There wasnt any kind of massive long queue. In addition they can deposit checks or gain access to safety deposit boxes or it the other thing that we expected to happen in tandem simple because they close at the same time was the athens Stock Exchange but hasnt reopened today. Some new regulation needs we put in place before that can happen part of that is the project that wednesday or thursday should be the day we expect markets to reopen as well. Ryan i guess we can call the banks reopening some kind of progress. We also have an increase in sales tax hitting consumers in athens and around the country today. This is really a test for Alexis Tsipras. Whether they can be trusted to make good on its commitments. A third theyll out five years worth some 86 billion euros. Some interesting specifics and the jokes during the round here is that for one of their Greek National issues if you order it on its own that will be 13 tax but if you get it with peppers it will cost 23 tax. No doubt there are some anomalies as a result of these changes but the food on the greek islands which they were resisting that will be going up but not for another couple months. The big moment in this ongoing crisis with sales tax going up and Alexis Tsipras had resisted that but when it came down to it he didnt have any choice. Ryan i guess you have more reasons than one to stay away from the peppers today. Thank you very much. Anna there are 20 minutes or so to go until the start of the european equities session. Lets talk to our next guest harman, good to see you. Where do you stand in terms of your Global Outlook because you are feeling quite defensive at the moment and you are looking to protect your investments rather than take on a great deal of extra risk. Last week was just a giant relief rally as china and greece came good. I dont think that either of those two events is a longterm solution but the what we notice in all of our models from the end of may onward is us that between equities and fixed income has gradually tilted in favor of fixed income. I think we will look back at the end of may and think that was a high water mark. It will go higher because i dont actually see the triggers pushing any further. If you think greece is the solution than that is the trigger. But if you dont then after a couple of weeks listening to Angela Merkel right now there is no debt relief and that means there is a big punch up with the imf before 2016. Ryan european banks we have this curious story on barclays over the weekend about job cuts there perhaps by the end of 2017 leading to a much thinner bank with 100,000 employees. Anna that they have hundred 32,000 employees and you could get down to 109,000 employees taking off the numbers they said already and this is a bank undergoing huge Management Change right now so there is clearly a lot that is uncertain whether or not we have any more job cuts imminently. Speaking generally about the banking sector, what do you see that is driving it. I would regard as a global tank and all global banks have big operations in the u. S. And the fed is basically saying unless you can demonstrate that there is real added value we would prefer that you reduce complexity and the scale of the operation and if you do that we will charge you less on your capital. So theyre leaving it to management to work out how and when they would like to break themselves up. We have the bank levy which is a nasty piece of legislation and that is completely absent in the u. S. Is quite an important difference. Dont ask me the details but i really dont i think it is a bit on the verge of being vindictive and the point about the u. K. Having its own currency and therefore having problems addressing competition within its banking market. Anna will take a short break. The greek banks have reopened for the First Time Since june 29. As the repayments to the ecp ecb fall do we will bring in the latest in frankfurt. Anna welcome back. 7 45 in london and we are getting some breaking news. Ryan four italian workers have been kidnapped in libya that is coming to us from the Italian Foreign ministry. They were kidnapped near compound in libya bad news coming across the terminal. In the last three or four minutes. The danger about doing business in libya as the oil industry comes back online. The greek banks have reopened today after closing their doors three weeks ago. The 60 euro per day withdrawal limit. Check transfers abroad remain banned and the athens Stock Exchange will stay close. The german chancellor has about the prospect of limited debt relief but has pulled out of a haircut for creditors. She said she is prepared to discuss the matter once greece successfully completes the round of a new bailout. She has already made reference it could be signaled before this year. According to a person with knowledge of the projections trade the bank will shrink its workforce by automating operations and those efforts could eventually leave it with fewer than 100,000 workers. The chairman has pledged to tackle what he has described as a cumbersome and bureaucratic company. Ryan it is sunk to its lowest level in five years earlier this morning and investors with the prospect of higher u. S. Interest rates hit hard after china said it is holding less gold in reserves than some analysts were expecting. Anna lets bring back the parting capital ceo. I got a chance to look at the copper price and you were saying if you look at any of these commodities they show a similar picture. They all had a peak in around 2011 and 2012. It has been coming off since the start of the year. What are you learning from the price right now . Is it telling you about a slowdown . I will go with this old story and say here is a widely used industrial commodity which is conflicting with some of the growth forecast we get in both the u. S. And china and i prefer to go with a traded commodity like this than a bunch of forecast. I would also add that it is entirely consistent with iron nor. And of course oil and i think the strength of the dollar. There is a multifaceted story but i think it is possible. Ryan what else does this tell you yet go we were talking earlier about how five or 10 years ago investors were told that they need to diversify our get into commodities and you think that was over stated and bad advice. Most people the way that money came in and 2008 and two dozen nine after the crash it hasnt worked. People have not made money out of this. That is it area did he diversify . No. I see the points of gold if you are an official processor. I see it as 2 to 3 in your portfolio. If you are really scared about a systemic failure of the Monetary System but dont expect a return out of it in normal times. Anna we are surprised that we didnt see more attention expressed you go gold did not go up and that tells me that some of the buyers in india and china may not have as much spare cash as people thought and secondly that people didnt believe it as a useful hedge in that crisis. Unless you think there is something specific about the greek crisis then gold goes down from here. And possibly breaks 1000. When you look at these charts and not just the gold we are seeing here. The trend is similar with all of them. What does it mean for stocks. On the supply side there is oversupply and you talk about the demand story. We have been massively underweight in the materials and Energy Sector for the last three years and i dont see any reason to change that you secondly i find it very hard to square this commodity with 11 Earnings Growth in 2016 and 2017. I think that there is a huge disconnect. Especially if one of the reasons why the commodities are going down is because the dollar is going up. Anna stay with us for just a moment areas greece faces a 4. 2 billion ecb today. Good to see you again. There is no doubt that greeks will make this payment today. The coupons associated with it are 3. 5 billion in debt. So it should be made. The ecb hasnt given us an exact time of when they expect that debt to be repaid. Its reasonable to assume it wont be made until the end of the working day. This really had to be made and it could be a good reason why Alexis Tsipras decided to accept austerity measures. If he didnt placate the ecb they were in line of being accused for financing the government and they wouldnt stand for that. We heard for Angela Merkel basically holding out the prospect for some kind of debt relief later in the year area what is the ecb likely to say about that. As mario draghi said last week it isnt controversial that the ecb needs debt relief. The question is how it should be achieved. He would be an line with Angela Merkel on this. She also ruled out a haircut to the nominal value of the debt and that is something that looks to be ruled out under eu law. But the point is the debt burden is very high in the imf suggests it is headed toward 200 area so mario draghi at least within the council and the ecb is quite happy to see those talks get underway. Anna john farrell has joined us on set to talk about what we can expect from on the move. Good morning. Jon i would love to fill you with the dax futures are doing but they are saying they opening is delayed. Quite a remarkable run. We have had eight Straight Days of gains and nine Straight Days of gains for the spanish bonds. With bonds and equities moving in tandem. Still a reversal in the bond market. We have seen spreads really tighten and that continues. Anna youre going to be talking about oil little bit this morning. Jon gary ross is a fantastic individual and close to saudi arabia. A lot of people go to him find out what is going on in the market to new actually have a seminar where they talked about the change in direction so it will be interesting to get an update from gary on what he sees in the market right now in the real discover instruction on the supply side of things. You wonder what it means for the next 12 to 24 months and that is a question i will be putting to him. Ryan he is definitely moving around at the opec corridors there. Anna its time to say thank you to simon, the you have one great train to leave us with . I would actually still be looking at japan if the Public Sector would buy another 5 of the equity market it would go up. Ryan that is it for us at countdown so stay with bloomberg for the market open. Jon welcome to on the move and welcome back to work. I am Jonathan Ferro right here in the city of london moments away from the european stock market open. Greek banks reopen to prevent a collapse and lenders resume limited business but capital controls remain. Gold sinks to its lowest level in five years. And cost cuts. Barclays macy its workforce shrank by about a quarter but he tackles what he calls a cumbersome and bureaucratic company. Head of the open, futures markets doing this. Dax futures never got an opening. No dax futures and no bund futures either. Ahead of the open, come with me. They are really moving in tandem. Two straight weeks of gains and a solid week of gains on the periphery. We are still around 1. 96 firmly bloat 2 . We are in line with spanish debt at 1. 96 and bund yields will go higher this morning. So the bond market and the equity market are moving in tandem. Theres only been one currency pair that has made a lot of noise and it has been euro sterling trading near a 2007