Transcripts For BLOOMBERG Bloomberg Markets European Open 20240714

The former fed official draws criticism after suggesting the central bank hold back on stimulus that would help Donald Trumps trade policy and reelection. The president s deadline. Italys political leaders meet today seeking agreements on new government. Failure could mean a new elections as soon as november. Bp exits alaska. They sell their business in the state for 5. 6 billion saying it is no longer a competitive investment. Good morning. Matt good morning. We are looking at bund yields down to 70 basis points right now. Take a look at the threeday trade. Yields continue to follow how lower fall lower and lower. For the most part, futures are pointing to a negative open right now. We have futures down just marginally on dax futures and ftse futures. Futuresowing cac falling more significantly. Anna we look at europe versus the u. S. We will see how that levels itself out. I have a mixed picture coming through in the asian session. A bit weaker over in the chinese markets. The Investment Community really struggling for direction around the trade story, trying to guess what happens next on trade, where the white house and beijing take us next on this one. We see the dollar of a bit stronger. Some movement to the downside in other currencies. The New Zealander dollar, citing in that region the dovishness of the central bank has one of the reasons for the fall in the new zealand dollar. Lets move onto the other side of gmm. A mixed picture coming through in the equity markets. The big talk was all about the italian bond market yesterday. We will see whether we get any type of movement in the politics, what that does to the narrowing of spreads we saw in the italian market yesterday on btps. Lets look at commodities. This has been a story of the last 24 hours, crude prices on the rise as a result of expectations we are going to get sinking u. S. Inventories. How good are oil prices . An interesting chart i have got for you later on that particular subject. We will talk more about commodities and where we go next. The big story overnight, really in the latter part of yesterday and playing a reaction coming through overnight, bill dudley has suggested the fed should reject interestrate cuts that would help Donald Trumps trade policy and would help his 2020 reelection. In an oped for bloomberg opinion, the former new york fed president states policymakers should not bailout an administration that keeps making bad choices on trade policy. In response to the column, effect Spokesman Says Political Considerations a fed Spokesman Says Political Considerations play absolutely no role in fed policy. Lets bring in a markets perspective. Mark cudmore in singapore is with us. Really interesting comments coming through from bill dudley. I know you have been talking about this. Your initial thoughts when you saw this oped . Did you think this was some sort of big expose about the way the fed functions behind the scenes or would it have been naive to think they have no Political Considerations . What are your takeaways . He is the former new york fed president. He does not have a role in the fed right now. We have to bear in mind that his incentives are slightly different, his incentives for writing this piece. He would not have written this piece before. I dont think this reflects how the fed operates. I dont think the fed will operate like that. I think the statement from the fed was important to clarify the political that Political Considerations do not weigh into their decisions. It is furthering his agenda for perhaps his own political ambitions farther down the line. I dont think we should read too much into it. Unfortunately, they are going to see those headlights. Matt im shocked. Mark im afraid its true. We cannot dismiss it because of all the headlines. Matt i am absolutely shocked. I cannot believe you are saying this. I mean, he was the president of the new york fed for nine years. It was the vice chairman of the Federal Reserve until last year. Hero a piece suggesting the fed get involved in the 2020 election he wrote a piece suggesting the fed get involved in the 2020 election to defeat donald trump. He spent a weekend in deep discussions with leaders from Central Banks around the world. This has to show that central bankers are political animals. That, what issay his role now . He has no role at the fed now. His role now is at princeton. His role is to have an interesting opinion, a controversial, exciting opinion. His role now is more similar to my role than anything to do with the fed. He is there to say an interesting view. There would be no point in saying something that would not get readership. His incentive is to attract attention. Perhaps his ambitions are if trump loses the election next year, that he gets into the next administration as the next treasury secretary. Perhaps this is furthering his own gains. He has no role within the fed now. I think it should be dismissed but it will not. We see those headlines. Dudley is a big name in Monetary Policy. We forget that he has no role on the fed. I think it undermines fed policy a little bit. If they do not cut in september, people will go, there following dudleys advice. If they do cut, are they caving to trump . Fed policy has been undermined all year by the tweets coming out of the white house. Now, it is even further undermined. Something that it provides more volatility, and undermines the dollar live as well. Will billmuch dudleys oped for bloomberg impact on u. S. Rates . There is another way to look at this and the impact it will have on rate setting, i suppose. Does it act as some sort of trial balloon for the relationship between the Central Banks and government policy . This is not just a fed question. We perhaps see central banking officials at odds with political decisionmakers. Mark i really dont think it does. Dudley had nine years working at the fed where he did not express anything along these views. That might have been a trial balloon. He has waited until now when he is working as an opinionhe has other incentives, when he has moved beyond his career at the fed. He has had a great career at the fed. Matt but mark, he should have been were this kind of thinking truly offlimits in a completely independent and apoli tical Federal Reserve, he would have been so indoctrinated to that thinking that he would not be able to express this kind of view, certainly not after meeting with Jerome Powell and spending the weekend with all of the voting members of the Federal Reserve. I mean, it is just, i think, truly on believable unbelievable not that the fed is political, but that one of their former leaders out some self himself. Lf outs that the fed should use Monetary Policy to influence political elections is unbelievable. Is ani think dudley exceptionally capable person. In his time at the fed, he never went beyond outline. I think is possible it is possible that he has the ability to transition to a new role. He is in a new role with new ambitions. If you want to be treasury secretary under a dramatic democratic president , what better way to show where his loyalties lie . He is a very smart and capable guy. This piece is gathering attention. I think he has the capability of transitioning from been the fed governor to transitioning to a new career beyond a fed governor. It does have an impact on the markets. I say it should not, but it does. People dont see him as just an opinion writer. They see him as, what does he know thats going on in the fed . It does undermined Monetary Policy. It undermines the dollar. Its another negative for the markets but it does should not be given the week it has it hasven weight been given. Get a bloomberg first word news anna lets get a bloomberg first word news update. The u. K. Sees an opportunity to restart brexit talks with the eu after Prime Minister Boris Johnsons meetings last week with his german and french counterparts. A u. K. Official told us they appeared to relax their language on the need for the irish backstop. Dropping the provision is one of johnsons red lines for radio. Deutsche bank has confirmed it has tax returns sought by house democrats. They had a request for Financial Information on President Trump and his family. Exactly whose returns are they . That is still a mystery. The disclosure was made to unappeals court on the panel is considering trumps request to block access to the financial records. Results bolsonaro says president macron must apologize for socalled Brazils Bolsonaro says president Emmanuel Macron must apologize for socalled insults before accepting funds to fight the fires in the amazon. A Spokesman Says any funds will be welcomed as long as they dont interfere with brazils sovereignty. Former malaysia Prime Minister in court on charges related to an investment fund. He is standing trial on 25 Money Laundering and corruption counts. The trial reached the end of the prosecution phase yesterday and may conclude by november. Najib has pleaded not guilty to all charges. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is blumberg. Anna, matt . Matt thanks very much. Annabelle droulers with your first word news out of hong kong. It is crunch time in italy. A Coalition Deal is nearing, with Giuseppe Conte seen staying on as Prime Minister but key Sticking Points remain. We will talk about what they are and what can be done about the next. Them next. Emic remember, Bloomberg Radio is live on your device. This is bloomberg. Back to bloomberg daybreak europe. We are 16 minutes away from the start of the european cash equity trading date. Now to italy, where the fivestar movement and democrats are meeting today to decide on a new coalition. The sides have agreed on Giuseppe Conte returning as Prime Minister but the key Sticking Point is fivestar inder luigi dimaios role the new government. Maria tadeo, good to have you on this story. How close are we to a deal . This seems to be a crucial date. It really is crunch time today for italian politics. It has been almost three weeks since the crisis started. The negotiations between the five star and p. D. Are still ongoing. In principle, there is still a deal which is not final yet. It would see a new majority led by Giuseppe Conte and would avoid an early election. The market likes this. They like the fact that you can have a government not go to a new election and perhaps be inclined not to be on a confrontational road with brussels. Perhaps we will see tensions deescalate with a new majority. The one Sticking Point and this has become a big issue over the past 24 hours, is luigi dimaio, who is currently the deputy Prime Minister in this country. The p. D. Says he really needs to go, otherwise there is no deal. He cannot stay in that job. Ni . T what about salvi a couple of weeks ago, he seemed like a huge winner after the elections. His party had garnered so many boats. It looks votes. It looks like he was going to topple the government to become the new leader. Whats his deal now . The question now is when did this whole thing go wrong for him . He was polling 40 . He was assured there would be a quick election. That may not be the case. He could see himself going home emptyhanded. That tweet from President Trump yesterday where he said he likes Giuseppe Conte and he hopes he can stay in office, so everything that could have gone has gone salvini wrong, especially if this deal is confirmed today and we see a government that could stay all the way up to 2023. Anna maria, thank you. Maria tadeo live in rome. Lets take a look at the futures. ,. S. Futures pointing higher but the european picture looks more mixed. In fact. , fairly flat on ftse futures. We have a little bit of movement on the other markets but essentially pretty flat. U. S. Futures suggests some of said some upside. Lets get the Bloomberg Business flash. Heres Annabelle Droulers in hong kong. Thanks. A former uber engineer is being charged with stealing driverless vehicle technology. Counts andcted on 33 faces a maximum of 10 years in prison if convicted. s lawyers say he did not steal anything. The indictment adds a new waymosin the saga of case against uber. Oflip morris on the back their biggest deal. Close morris and altria to a merger. They hope to complete the deal in less than six months. Phillip morris owns about 50 of the combined company. Home exercise start up peloton is going to go public. It will likely be the years biggest ipo. The Company Seeking a valuation of at least 8 billion. It is likely to help make 2019 a bumper year for public offerings. It is already set to be the best since 2014. That is your Bloomberg Business flash. Matt Annabelle Droulers bringing you your business flash. I want to quickly bring you break some news on toyota. Toyota and suzuki going to enter into a capital alliance, enter into a Capital Partnership according to nhk. Not as big a deal for toyota, which is the second biggest carmaker in the world, as it is for suzuki, which probably makes so few cars in your market that i am guaranteeing you can only name two models maximum. Toyota and suzuki together will enter into a capital alliance, according to nhk. Anna dont test me on those models. Lets talk about whats coming up. We have earnings from the biggest banks in china this week. They control more than 14 billion in assets. We get a slew of Economic Data out of europe, including secondquarter gdp for france and august inflation for germany on thursday. Matt . Today, the u. S. Releases ecodata. The second reading of secondquarter gdp estimated to be revised down slightly to 2 . On friday, the south Korean Central Bank sets rates. On sunday, the next round of billioniffs on 300 dollars of chinese goods will kick off sunday, september 1. We are minutes away from the open. We will take a look at your stocks to watch, including bp. The oil major is getting out of deala and a 5. 6 billion in a 5. 6 billion deal. This is bloomberg. Anna seven minutes to go until the start of the equity trading day this wednesday morning in europe. Lets get our stocks to watch from around the newsroom. We gathered dani burger, paul jarvis covering thomas cook, and Annmarie Hordern focused on bp. Lets go first to bp. A very sizable asset sale for bp. Icallyy are bas exiting alaska completely and selling their assets for 5. 6 billion. That means alaska and the u. S. s most liquid oilfield there, as well as all of the pipelines. Bp has been there six decades so its quite a big move. Shares are looking to be higher at the open. Matt paul, lets come to you on travel and Airline Operator thomas cook. Fores, the rescue deal thomas cook has finally come to pass this morning. It is a 900 Million Pound deal involving both chinas fosun and the companys lenders. This will help secure thomas cooks longerterm future and get it through the low season over the winter. What does it mean for existing shareholders . It will be massive dilution of their equity position. They will be left with very little. Two participants will end up owning almost all of the business. It will be a rough time for thomas cook shares this morning. They have already fallen more than 90 in the last year. Anna lets talk about the Engineering Software business. This is a case of transatlantic influence, i suppose. Exactly. There u. S. Cut therefore you u. S. Peer cut their fullyear forecast. Autodesk and market trading tumbled 12 in postmarket trading tumbled 12 . Matt thanks very much. Appreciate your time. You can get your latest stock news from our Equities Team by typing first go on the bloomberg and via the mobile app. Toyota and suzuki entering into a capital alliance. Toyota will inquire about a 5 stake in suzuki for ¥120 billion, a little over 1 billion. The market on the others of this break. Other side of this break. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Anna a minute to go until the top of cash equities trading. Lets have a look at the markets. The asia Pacific Story is fairly flat. Up. 10 . Investors trying to establish and make their best bet where they think the trade story is going to go next. This is the s p 500. Showing a more positive story than european features. Oil prices. A hike on the expectation well get inventory information that will support higher prices from the u. S. This is what european features look like now. Tse and futures look to be lower at the start of trading day. Well keep an eye on b. P. Stoxx pacific. Remember the trouble they had in 2006 in this alaska. Oil companies in general could be on the move because of the resurging oil price we have seen ver the last 24 hours or so. Futures down. 3 . Underperforming. The german dax, all of these markets down more than the futures suggested. In rallies yesterday, the british pound on the back of what we were hearing from opposition parties is slipping away. The dollar index is fairly flat. Interesting to think about the euro there. Great chart early on. This is a very split picture were seeing for European Equity markets from a sector perspective. We have some bright areas in green. Perhaps the oil price helping to lift things there. Healthcare an area of red. Staples another area of red. What do you see on the individual movers . Matt about twice as many losers as gainers. Not quite that much to the downside but we have 192 stocks up. 340 are down now. B. P. Is one of the biggest gainers. Not just because it is a huge company, a huge stock. It is actually up now as is rio tinto. B. H. P. Group gaining. Total and the miners are up. It has to do with the continued rally in crude oil. H everyone gaining 4. 5 . On the downside s. A. Spmbings one of the big losers. It is a big, heavy company on the stoxx 600 as well. It is taking the most points. Anheuserbusch is falling crels crew and lvmh. Anna rejecting that the fed should reject Interest Rate cuts that would help donald trump in the election. They said dudley should not bail out the administration that keeps making bad decisions on trade policy. Joining us now, a coc. E. O. Very good to have you with us here. Well start with this issue and the fed and the role of the fed. How political do you think the fed should get . I think his piece is great. I think he should bet back against the white house. The white house shouldnt be interfering with an independent fed. If anything, what the Trump Administration should be doing is criticizing the inversion of the in curve. Anna the oped said that the fed should set policy that influences politics. Realistically, the point im trying to make is that the white house is criticizing the fed. They shouldnt do that. It doesnt make a lot of sense. They should use their influence in a way they can have a more impactful way opposed to trying to interveer with the independence of the Federal Reserve. Matt it is supposed to be a politically independent body that only focuses on the two mandates of employment and prices. In his piece, bill dudley said there is an argument that the election itself falls within the feds purview. This means he is encouraging his former colleagues, his peers to use Monetary Policy to effect a political outcome. I wonder, do you think they have done it in the past and what will they do, if they dont like this president who is relatively pro wall street, what would they think of a Bernie Sanders presidency . Im not a political strategist. Were portfolio managers. We have a positive view on the way the fed is managing the the extent of this recovery. And i think that is reflected in some of the main indicators we looked at like for example credit spreads. Like for example, delinquencies. Like for example employment data. Those are the types of things that were focusing on that are going to turn back our investment decisions. And so far we believe that there is too much commentary focusing on the negative when in reality there is quite a lot that is positive to support portfolios in the shortterm. Matt it is a good point, greg. I get carried away. I get excited about the political and the kind deep state Conspiracy Theory aspect of this. Your focus on trying to figure out what the fed is going to do with rates and how that affects your portfolio. Previously you would have only had to focus on employment and prices to figure out what the fed was going to do with rates. Do you now have to consider whether or not they like this president . Whether or not they like this congress . What they think about global warming, etc. , and so on . We have no choice but to take into consideration what the Trump Administration is doing d it is true he has plitized what we would politicized a lot of what we would normally look at. Of course we have turned our attention over the past 12 months to the trade wars. What trump is doing. How president xi is reacting. Majority of these Big Decisions are hanging on what is going to happen with these trade wars. Our opinion is if the trade wars start to die down somewhat, all of a sudden, a lot of these bottlenecks holding back manufacturing will abate to a certain degree and this will be old news. Anna are we looking at any kind extent will the u. S. Economy slow down . Looking at the yield curve, that is a typical signal there. What do you look at to tell you what is coming . This is sthoge way that oil prices have typically proceeded or come at the very start of recessionary periods. We dont see a spike at the moment leading colleagues to conclude we are not heading to recession. I think there is a big debate about the yield curve. 152148. I think so what a lot people are forgetting to take into consideration, even the fed admits that the 10year yield is lower than what it would be had they taken out, removed the extra 2. 5 trillion worth of fixed income. I dont understand why the market doesnt focus more on that. If you would normalize the curve, wled not be in inverted territory. We should also buttress that argument. We havent seen any spike. Anna because of the way the fed has played in the bond market, you cant get your clues from the bond market . Matt ill call your attention to this chart that i have up here which shows real yields. Of course were now slipping into negative territory with the 10year yield below the c. P. I. Rate. So what does this change in your medicine opinion, when youre looking at your own portfolio and now all of a sudden yields are negative for real, what do you do differently . Like i was mentioning earlier, a lot of this has to do with the xitrump relationship. We see a deterioration in that relationship of late. We saw a significant rally in the fixed income market and the gold price and an uptick in japanese yen. This is just the typical riskoff play playbook. The reality is that donald trump doesnt want a recession to take place on his watch. If that does take place during his reelection campaign, he is going to be having to fend off criticisms that he wasnt able to properly manage the economy and one of the ways he could quickly fend off the prospect for this type of potential recession is to come to some sort of draw to conclusion the trade wars and all of a sudden a lot of these problem also start to wash away. Anna it is a good point you make. We have heard it from a number of guests. It is just a question of when that pivot starts to kick in. Did we see that at the g7 . Well see. Up next, well bring you to tock, thomas cook plunging the share price. The stock down. Delusion is the reason for that. Well have more details. This is bloomberg. Anna welcome back to the european open. 13 minutes into the trading day. U. S. Futures look a little less positive. Pointing up right now for the major indexes. Lets get to the indexes in the european markets. We have to start with thomas cook this morning. It is plunging down some 13 . His of course is after a bailout led by more than one million investors. Aveva also on the downside. They cut the fullyear guidance and forecast. We saw those shares slump in afterhours trading. And b. P. Up 1. 2 . All oil and gas stocks. It is the best sector this morning on the stoxx 600. B. P. Inking a deal ealing selling its alaskan assets. Getting out of the state where it was for six decades. Matt thank you very much. Lets get to italy. B. T. P. Yields are are lower on hopes of a Coalition Deal. The two sides have regret on have agreed on the Prime Ministers return. The c. E. O. C. I. O. Is still with us. I wonder what you think of italy is constantly in political turmoil but yields are still almost 200 basis points above bond yields. Do you like them right now . I guess ill start with saying thanks for the promotion. In terms of the italian situation, i think what the bond market has told us specifically, the Italian Government bond market is that actually they are trying to forecast a little bit of calmer waters going forward. It is true, no one can predict the outcome of the political volatility. We also should take into consideration, there has been political volatility in italy for decades. So is this really any different . I was asked just the other day whether this is a good entry point in terms of Italian Government bonds and i think the issue with that is that there is probably there has been a big rally and realistically there is more downside if there is election than there is upside if we see calm. Anna one guest earlier this week said sure the politics matters but the investment story around b. T. P. s, really the e. C. B. Is the only thing that matters. We did see a big move in b. T. P. Yields. I dont disagree with your guest. I would add in one factor which i think is pretty well covered. Will there be a fiscal bit from germany . Will e is, then if they not negotiate, that gets cleared to some degree, that gives latitude for the Italian Government to say look, you think youre the boss. You have implemented some fiscal stimulus. Why cant we . Anna they are looking at different numbers i suppose, in answer to that question. You can see where that comes from. Matt i wonder what happens if get a fiscal boost from germany . They are looking atette behind the scenes in berlin. Automakers are one of the only losers among the Industry Groups on the stoxx 600. Greg, what do you think who is are the beneficiaries of a german fiscal stimulus if we see a package . I think the key thing in terms of the fiscal package situation, a lot of people are coming out saying it is going to happen and it is a nobrainer. Im sympathetic to the argument. I would curtail peoples enthusiasm a little bit. It will take quite a bit to unraffl some of the rules. Having unravel some of the rules. One potential solution would speak to the point you made earlier, would be maybe a cash for clunkers solution. If you look at some of the german auto numbers, auto production has fallen off a cliff over the past few months and cash for clunkers, i think they implemented during the credit crisis. Matt they did. Lets face it. Trade and manufacturing has taken a little bit on the chin. Anna we expect we spoke to someone earlier this week who said sure, infrastructure is important but some of these other ideas are quicker to get into the economy. That needs to be looked at as well. Bernstein makes the case for the equity market to be downgraded to second tier status. Why all the enthusiasm from public to private. This is bloomberg. Well discuss. Matt welcome back to bloomberg markets. This is the european open. 21 minutes into the session. Were looking at red arrows as far as the equity index is concerned. Public markets looking at being downgraded to second tier status. That is the latest from bernstein research. Investors are moving further into private markets. According to that team at bernsteins this matters because public equity markets are the to sh rink. Ized way sticking with the supply side here, businesses are shunning Public Markets to retain autonomy to achieve private debt or go to private Equity Companies flush with cash. When we look at the number of stocks in the u. S. , that share has been shrinking for 14 years. The Global Equity market, the only reason this is declining is because it is declining everywhere else. F you want access to private growth, those who can are investing. The public funds stock allocations dropped 13 Percentage Points and most of that money is in alternatives. Private equity, real estate, they have taken off and things like infrastructure including things like timber, they have seen their allocations rise from essentially nothing and this creates a feedback loop with cash overflowing in the private markets, there is plenty of funding for companies who want to avoid going public. Anna thanks so much. Lets get back to our guest. Our final conversation with you this morning gregory. We wanted to talk about some of the conviction calls you have. Some of the contrarian calls. On the contrarian side, perhaps, you think the gold rally will come with an en, with the fed cutting Interest Rates. Why are you sure the gold rally will end . Gold has become the flavor du jour. I think it is easily mistaken for gold is a panacea for portfolios. The reality is if we were to ve some calming of the trade waters, and german fiscal mpulse, all of a sudden, the momentum investors will get crushed. We would have a preference for areas that we see less activity cause we would view the gold bid as quite speculative. Matt by the way, do you see any change in beck policy under the incoming policy, lagarde or do you see Christine Lagarde as more able to con merkel and the berlin government to spend money . Im very favorable tonle guard appointment. On the lagarde appointment. Monetary policy cannot work in isolation. In terms of a new leader, i think she is starting on november 1, i cant think of a better person to spend time in berlin trying to make the case that draghi was right and my hope is that she will be successful in that. Anna that he was right in calling for more fiscal loosening . Because that was one of the things draghi were talking about Central Banks and how politically evolved they should be. We want draghis successor to go around europe talking about more fiscal spending. The reality is q. E. , you can make the case, it hasnt really worked. Now is the time to support that and try a different playbook. If that means talking to governments to make the case that we should have a twopronged approach, i think that is a very sensible way forward. Matt all right. Greg, it has really been a pleasure having you with us today. Cocrimbings o. He will be continuing the conversation with us on Bloomberg Radio tune in at 9 00 a. M. U. K. Time. If youre in the london city area, if youre anywhere else in the world, you can do it on the internet. Heck out radio player u. K. Anna b. Spmbings getting out of 60 years in alaska. Well bring you that story and have more on the relationship between the fed and the white house as well. Well take another look at that particular story. European equity markets down by. 3 this morning on the stoxx 600. This is bloomberg. Matt lets get your top headlines for you. The former fed official draws criticism after suggesting the central bank try and work President Trump thwart President Trump. The president s deadline in italy. Political leaders meet today seeking agreement on a new government. Failure could mean new elections as soon as november. And bp exits alaska. The oil giant cells is entire , saying it the state is no longer a quote competitive investment. Welcome to bloomberg markets. I am matt miller in berlin alongside anna edwards in london. Anna . Anna a half hour into the trading day, lets look at how things are shaping up. We saw upgrades being felt on these markets. In general, 444 stocks to the downside. There is a bias to the downside and receipt european markets are under pressure and we lose about. 3 . But to the upside, we have this some upgrades lifting thing. H m got an upgrade and leonardo got a positive note. So these stocks are on the rise. We saw oilrelated businesses up. Bp up by 1. 3 . If we sort of this by points, bp would appear much higher because it is such a Large Business and they are selling assets in alaska. Downside and the have a look at what is bringing up the rear. On the oil story, it is not all oil going higher. John would is two point 9 higher 2. 8 higher. We also see this Swiss Insurance business down, despite the fact the numbers came in better than anticipated. Certainly, the combined ratio was more positive than expected. 1. 8 grand falling i Imperial Brand falling 1. 8 . Lets get bloomberg first word news in hong kong. Thanks, anna. The u. K. s ease an opportunity to restart brexit talks at the eu after Boris Johnsons meetings last week with his german and french counterparts. A u. K. Official told as they are prepared to relax their language on the irish backstop. That is one of johnsons red lines for a deal. The younger brother of saudi arabias crown prince is in washington this week. Days after trump signaled his openness for talks with iran. While the trip may have been planned well in advance, analysts say there is no doubt it will be on the agenda. Mike pompeo is set to meet the princes afternoon this afternoon. Jair bolsonaro says president macron must apologize for he will accept 20 Million Euros of funds to fight amazon fires. A president ial spokesman said any funds from abroad what he welcomed as long as they dont interfere with brazils welcomedty would be as long as they dont interfere with brazils sovereignty. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Att , met m matt . Matt a former top fed official, in fact, the vice chair until last year, suggested the central bank should reject Interest Rate thwart donaldto trumps reelection bid. , he saysed policymakers should not quote bailout and administration the keeps making bad choices on that keeps making bad choices on trade and an argument they should get involved in the election. In response, if that spokeswoman said Political Considerations play absolutely no role in Monetary Policy. Dont look behind the curtain. Joining us is our executive editor for economics, simon kennedy. It seems to me this is kind of on something that even politicians have suspected for decades. When you have got someone who works for nine years in the fed and just spent a weekend in the discussions will central bankers around the world at jackson hole saying it is time to use Monetary Policy for political purposes. What do you think . Simon i would push back slightly. He is independent of the fed now, a point they want to note. But this is a provocative suggestion. Interestingly,e something people on wall street have been pushing back against. For the fed to pick sides is almost to engage donald trump in the independence battle he has been raising. His repeated criticism of jerome and whatd rate hikes he thinks is a slower optimization of rates. Whether it suggest something in the fed, im not sure, but certainly it is bill dudleys rule view. But the pick sides of the fairly controversial to pick sides would be fairly controversial. Anna clearly, the fed has a mandate and that is well understood. But if we are discussing what the fed should look like, is this a buy everything binary thing . Surely, there is reason for such banks to give views on what they think certain political actions will do to the economy. We see the bank of england making forecasts frequently. There is that kind of way Central Banks can be involved and say the limits of Monetary Policy, suggesting they cant do everything. Should it be seen as finery binary or is it more nuanced than that . Simon it is more nuanced. Mervyn king gizmo vice on fiscal policy and was pushed back quite harshly. Advice on fiscal policy and was pushed back quite harshly. Try to set Monetary Policy that is best for their goals in the case of the fed as well as employment and inflation goals. The politics goes in there, the trade war. And Jerome Powell is not in the trade war. He is talked about the uncertainty it is causing, but i think bill dudleys argument is that the fed looks in that box and says the trade war is raging , we dont like trade wars, we must give leverage. If the trade war is having an economic effect and reducing inflation and pushing unemployment, that is what they are reacting to. Was sayingcudmore the same thing, that this was ok because he is a former fed president. He was indoctrinated and fed policy and Federal Reserve independence for nine years. The kind of like saying if president of United States says he does not believe in democracy after office, its ok somehow. It seems he is saying the fed it should be able to choose its own political outcomes and work. Owards those ofon he is vice chairman the open market committees main job was to be president of the new york fed. I think he is trying for a cookiecutter approach. Ultimately, when you look at the , whether to cut by 50 or 25 or leave rates unchanged is a huge matter of surprisednt i be very if he came out when he was at the fed and made this case, but he is independent. You do not lose your ability to argue or to have views when you leave the fed. David launch flower another example of someone who left and yet remains quite interesting. , think everyone has a right when you leave a body, to comment on Monetary Policy. Anna there is a history of leaving central banking and being quite outspoken. Thank you very much for joining us. Executive editor for economics, simon kennedy. Itsas agreed to sell business and alaska to another court. That ends a six decade present where presence were crude output has slumped. Joining us is a Bloomberg Energy reporter. Why is bp pulling out after nearly six decades . Polish take us through the story. They have great assets and have a stake in the biggest crude oil day. It is the biggest owner of the huge Pipeline System which runs across the state. Whose bestre assets days are behind and bp wants to focus on growth. They want to put money into the Gas Production of westech and into shale in the u. S. Dont forget, bp bought for millions last year. It wants to put its capital there with a will see production growing and continue to pay out for shareholders. Is hill courthat and what are its plans . Bp is trying to go to the sports car of shale. Corp once the pickup truck, the old, reliable oil fields. Conventional assets in places like mexico, wyoming, and alaska. Analysts have looked at these deals and say that even though these and these assets dont have a lot of growth potential, they generate revenue and will pay for this purchase within 34 years. For him, that is a low risk, if low reward, purchase. Anna thank you for your time. Bloombergs Energy Reporter joining us with analysis of these asset sales. Coming up, we speak to the ceo of campari. Its iconic brand is top amongst europeans, but how does it do in market n the u. S. How does it do in the u. S. Market . This is bloomberg. Anna welcome back, 44 minutes into the trading day. European stocks under pressure. The cac is down 0. 4 . U. S. Stocks point higher. It is good news for the campari group, this drink has grown to become a favorite in europe, but can the iconic brand make a bigger breakthrough in the United States . I am pleased to say that joining us for the interview is the ceo of campari. Good to have you with us. Let me start by asking about this iconic drink and the surge in popularity we are seeing in europe. What are your expectations for how big of an impact that can have . Robert we have been working on this for 15 years. When we bought it, it was a Regional Brand overturned it Regional Brand. This is clearly a big, iconic brand in europe. Is the, globally, it fastestgrowing premium spirits brand plaster. The u. S. Last year. The u. S. Is a large market and we are growing around 50 and we are only at the beginning. Campari and up with soda, compartment and orange campari to orange juice, people prefer to averell. Campari is a lot more better and stronger. It is in the bidders category. Categpory. Matt i gateway, got it. It. Gateway, got are you concerned a trade war could break out between the u. S. And the eu . Robert obviously, we are concerned. At the end of the day, if it does go through, it will end up hurting the consumer. If the tariffs come, will have no other choice but to pass an. Ncrease to the retail price i should be able to weather any issues. Anna we have this conversation with other drink companies, the heritage and location they produce and is everything. There is nothing else you can do other than past that increase on to the consumer. Robert potentially on brands , but i think that would be a last resort. Made in italy is very important. Matt i look through your brands, youve got so much covered from burden to bourbon to bitters to sammy hagars tequila. Is there a hole you need to fill in your portfolio . Robert with the exception of Irish Whiskey, we premuch cover everything. And our view of Irish Whiskey is that it is premuch a one brand story. Started their own breweries that we believe there will be an Irish Whiskey glut out there. Anna looking at asia, what are the opportunities . 70 of sales come from australia. What are your plans there . Robert on the one hand, we could see it as a huge opportunity. Is noteve that m a necessarily the way forward. What we see in all markets is as markets growth of people get richer, they premiumize what they are drinking and move on. Ist is popular in asia cocktail culture. And if you look at the top 10 cocktails, we are perfectly placed. Negroni, which we own, is number two. Anna why are needed not they are in china already . Robert we are starting. Na is almost a 20 by two baijiu market. 100 , growing close to but it is coming from a slow base. What is encouraging to see all of these Chinese Tourists come to europe and really enjoyed that drink. , as ai got to ask you result of grand marnier, you just sold that families villa, this magnificent french billion that is just out on a peninsula between nice and monaco. 200 Million Euros. Price tag. Who bought this place . Robert i know it and you can also buy a late can guess about it. We signed a nonconfidentiality agreement with buyers, so i will give you satisfaction about. Anna you wont tell us where they got their money. Is this the next brand to get the campari treatment . 1015 years ago, it was flat as a pancake and we are growing consistently now in the high single or low doubledigit numbers. When you buy a brand that has been sort of neglected but you cant turn it around immediately, it takes time. But once you have momentum come it is like a supertanker. We set the pace ourselves from may the acquisition. Very appropriate time color for the conversation. Up next, the u. K. Sees an opportunity to restart brexit talks. We discussed the relationship between london and eu. This is bloomberg. Anna welcome back to the european open. 53 minutes into the negative trading day. The uks sees an opportunity to restart brexit talks following or as johnsons with emmanuel and Angela Merkel who are willing to with draw to relax the agreement. Joining us is a consultant on european integration and the vice chair of u. K. Branch for European Movement which campaigned to remain. Do you still see the possibility of remain here . Definitely. The way things are going, there is a strong chance of general election. If its not left right or leaveremain, i think we will remain. The question is if parliament revokes article 50 or if we have a vote. Anna i was listening to john curtis, recently suggesting there has not been much movement. But maybe we will get to your expertise, which is around Financial Services and what is at stake. Lots of equivalence. If we do see a lot of equivalence, what impact will that have on the city . The trading is not just share trading, but bonds and derivatives. The derivative market is absolutely huge. That is the sort of thing where the eu is insistent on preserving financial stability. Surewant to make quite that anyone who is trading in andr markets favors money is safe and sound, following rules which have the same outcome as the eu rules. Anna what about a no deal brexit . . Ver the impact be on the city graham in the shortterm, there may be some fudges the eu is prepared to do. In the longerterm, firms are going to have to look at the amount of capital theyre going to have if they want to trade in the u. K. And trading in the eu. All of that will be something that will weigh in the balance over the years. What is a profitable business, how much capital does it have . The more it shifts to the eu, the london operation becomes short of revenue. Anna those on the other side of the argument, i can hear them suggesting the vastness and depth of expertise in london cannot be replicated overnight. All the services that go along with Financial Services professionals Financial Services, legal professionals, insurance, it will not move quickly. Graham it will not. But just a cast ones mind to back when the eurobond market began, it was level with trumps. And then the Playing Field tip slightly. Two years later, france disappeared and city took it all. Anna graham bishop, vice chair of the u. K. Branch of eu integration. Around,ick surveillance. Is next. Anna is headed to radio. I will be with you for another hour. From the 5am wakers, to the 6am sleepers. Everyone uses their phone differently and in different places. Thats why Xfinity Mobile created a Wireless Network that auto connects you to millions of secure wifi hot spots. And the best lte everywhere else. Xfinity mobile is a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Click, call or visit a store today. Matt dudley is a bombshell. The former fed official draws criticism after suggesting the central bank hold back on stimulus to thwart Donald Trumps reelection bid. Deadline day in rome, the president gets fivestar and the and givesrty fivestar at the Democratic Party if unchecked a final chance. And bp exits alaska to the tune of 5. 6 billion, saying it is no longer competitive. Welcome