Transcripts For BLOOMBERG Countdown 20160412

Countdown. On the bottom of your screen, 1000 jobs are under threat. That is a story that nejra cehic will bring you in a little bit more detail. Story. Come on that backstopping the banks. Italian banks will be in focus once again, more details on the function. It is not a backstop bank, it is a backstop front. 3827 backan real, impeachment. The real is making its way up higher. 2. 8 yesterday. What you have here is politics, the new alpha in this market. Economists lowering the view in terms of what we look at for rates. Potential for recep leavy rousseffving leaving has emboldened oil is down 0. 3 . Goldmans doha will do little to boost prices. Kuwait having production at a 40year high. At the bottom of your screen, you have a break off trend. The relative strength indicator says that yen was overbought, dollar was oversold. You have this reversal of fortune. Temporary or longterm . We will discuss that. Sean solomon is here, good morning. Soloman is here, good morning. Assuageis is to investor jitters in the crisis. One banker said that the new atlante may create 5 billion euros. British Prime Minister David Cameron has diverted his tax affairs to parliament, saying he delayed the response to questions about the Panama Papers due to his anger seeing his late fathers name attached to stories since tax evasion. Since 2010, i have not owned any shares or investments. The publication of a Prime Ministers Tax Information in this way is unprecedented, but i think it is the right thing to do. Im not suggesting that should apply to all mps. Rish the conservative partys candidate for london mayor says it is a greater threat to the capital than whether the u. K. Votes to leave the European Union in june. It certainly comes as part of a package. He has nominated Jeremy Corbyn and said he would nominate him again. Bour party represents eventually frightening for the u. K. Business community. Goldsmith just one of those to behold to be held in the Mayoral Election in may. A judge has ruled that a jury must decide whether led zeppelin ripped off another band with the opening guitar part on stairway to heaven. It is claimed they copied it from a band called tourist. Jimmy page and robert plant are expected to recount the origins of the song more than 40 years ago in a trial set to start in los angeles next month. You can find more stories on the bloomberg on top go. Manus lets get into these markets now. Juliet is standing by. The shift in the dollaryen is what is giving a little bit of reprieve to the equity market story for you. Opposite ofs the what we saw yesterday when a Chinese Markets were being boosted and japan is lower. Today we are seeing it start to wink and we can for the first weaken for the first time. The nikkei 225 is up 1 . We are also seeing some good gains come through with the won higher against the dollar. That rally that we saw in Commodity Prices yesterday is 200ly helping out the asx in late trade as well. Elsewhere, there has been a switch out of the shanghai market. It is down 0. 3 0. 75 . We heard that there is pressure on the chinese economy and it is relatively large. We have seen a bit of a switch up on that hm market which outperformed the others yesterday. Looking at the individual players, we have been talking about nomura in tokyo all morning under reports that it could shut down its European Equity operation. Australia,lumina in that number is better than estimates even though we saw other showers dropping and. Afterhours trade in afterhours trade. Htc is dropping ahead of the yuan. We also had some at Economic Data out of australia. Conditions rising in march to an eightyear high. The highest level since the start of the financial crisis business confidence. That is supporting the aussie dollar. Also mentioning that the korean won is higher today as well. Up 0. 25 there against the dollar. Manus great rundown on the latest on the markets. Lets talk about brazil. I mentioned it at the start of the show. Lawmakers have pushed Dilma Rousseff a step closer to impeachment. She was voted to go in the first formal test from congress. The brazilian real hit a seven month high on speculation that rousseff may be ousted. This government has run out of atmosphere, has the political base, no credibility, and nobody believes this government anymore. Thiseir own leaders said, government does not know how to have a dialogue. It is arrogant, authoritarian, and does not accept divergent opinion. Manus strong words there. Justin kerrigan is standing by. This vote, 3827. Run me to the probability that we moved to impeachment with rousseff. Thee are looking at probability of 60 70 . It is probably about momentum at the moment. We are seeing a growing trend toward the impeachment camp. The vote in the committee yesterday was slightly greater thisvor of putting impeachment process through to the lower house than was expected. Now we go to the lower house itself and that will probably take plac eon s place on sunday. Still not a foregone conclusion that the two thirds majority needed to keep this alive will be reached. It is about momentum and there are a lot of different numbers flying about. You have to think that miss rousseff is not going to be happy at this latest of element. Latest development. Manus politics is a statistical game, isnt it . I mentioned to the real, but there is a genetic shift dramatic shift. If she were to go, what happens to the currency . Is not just the real. We have seen it perform very well. It is among the best emergingmarket currencies of the year. We are also seeing that reflected in the stock market as you might expect. Sharplyee it rising about 2. 5 . I was in sao paulo last week and the fund manager was saying, should this keep going, you will see the stocks continue to react. Particularly as we get closer, if we do, to that impeachment itself. Manus lets bring in my guest host. European head of this is the very personification of politics. The real has been getting traction throughout the year. She you look at the story, is a resilient woman to stand there. Real is one of the bestperforming em currencies this year, and it was the worst last year. The big story is politics and how that plays out. I would say that perhaps a lot of good news is priced at this level. Dilmagh the removal of from office could improve the political outlook, there is still an awful lot of question marks in terms of how the Corruption Scandal plays out. Could cameron get drawn into that Going Forward . A threat ofll constitutional challenge in regard to the committee vote. Manus there is a lot that could go wrong in the trade, but when you look at south africa, when you look at brazil, when you look at the political machinations, do you take some small risk in em . Batteredder loved and as you said. If we look at the real, the dole, and the ringit, you play for economics or politics . In terms of the real, you have to play the politics. When i say perhaps a lot of the good news is priced, perhaps at some point we get a correction higher. If we did see the real quebec up to 370, 380 if we did see the or 380 ck up to 370 it is an improving story. Manus they are talking about a better confliction in terms of inflation. It is not all politics. Absolutely not. Downsides is we have had a dramatic improvement in brazils external balance. The requirement of an external is diminishing as the deficit shrinks. On top of that, incredibly, despite what we have seen in brazil, the flow of Foreign Direct Investment has been pretty sustained. That tells you that investors are looking longerterm and that there are potential positives in the longer term. Manus this is wcrs. The function that we have here. There are a couple things at play. But january 20 do you like the big mac index . Index,ng to the big mac developing nation currencies, which bottomed out january 20, are still undervalued on the purchasing power parity of the big mac index. We talked a little bit about the real. Is there anywhere else in terms rupee had four straight months of a rally. Will they tolerate that kind of a rally . Is it all down to the fed later . The backdrop is two dominant factors. The pullback from the fed and china. The fact that we are in a situation where some of the flow of data from china looks to be stabilizing, but more importantly, the fx story is conducive to improved risk white thethat is dollar is playing a big role as well. Manus stay with me. We have a lot more to get through. Lets set you up for the day ahead. In less than an hour, well get the final reading of german inflation. Inflation figures for the u. K. , as well as ppi data. The imf issues its World Economic outlook ahead of the Spring Meeting with the world bank. We also have three fed reserve president s speaking at various events. Patrick harker, john williams, and richmonds jeffrey lack a jeffrey lacheker. Very it is 1 18 in a foggy hong kong. The hang seng is a quarter higher. It is 6 18 in london. We have rishaad salamat, good morning. Lvmhs sales trailing estimates following a decline in tourism after the terror attacks in europe. The 4. 1 median from 20 analysts recall thatnning a is being made to repair the cars third row seats, which failed some strength tests. Japans largest brokerages number a and it is getting is nomura. And it is getting smaller. The job reductions could come as soon as today. As many as 1000 employees could be affected. That is your Bloomberg Business flash. Manus lets get a little bit more on that story with nara che pitch. Ehic. Th nejra ch ra we are talking about and this is according to a person familiar, about 1000 jobless is in europe and the americas. Nomura has about 3000 employees in europe and about 2. 5 thousand. In the americas that is about 6000 employees in those regions. So we are talking about 1 6 of the workforce. We could get an official announcement as early as today, but what we have been hearing from a person with knowledge is that nomura will be shutting equity research, sales, trading, and underwriting for european stocks. This is coming because of cost cuts because nomura hasnt seen an annual profit outside of japan since the year ending in march 2010. This is about costcutting. It is about what we are seeing across the industry, including credit suisse, cutting jobs as market volatility and low Interest Rates are curbing trading. With nomura, the firm has gone through a series of expansions and contractions. 2010, they but Lehman Brothers european and asian operations, only to have to cut back operations later after we saw costs and losses swell. Investors responding well to the news today, because what we have seen is the shares rise as much as 8. 7 in tokyo. Rising the most in two months. Manus thank you very much, nejra cehic on the latest with the nomura story. The fed president Robert Kaplan said that he does not back an Interest Rate hike this month. Speaking in louisiana, kaplan said that he remains openminded about a june hike. It is worth, in this environment, being patient. And basically being willing to cautiousts to be and let events unfold. We will know soon enough. We will not know by april, but there is time to make these assessments over the next few months. Manus the voices from the fed. How do you interpret them . One man who has been doing this for many years is derek, who is here with me. Its not easy. Manus people with a lot more money than us will pick over the bones. This is the atlanta fed gdp. I have a chart. We will pull that up. He is puzzled by this weakening economic story. It is something that we are getting used to, this q1 puzzle. In the last few years it has been weatherrelated. You have these huge nubbers of job creation, but no growth. It does not tally at all. We are to get some thing similar again in q1. The consensus is something around 0. 5 zero. 7 for the 0. 5 0. 7 for the quarter. Will wishnse, the fed to look beyond that as we go to a q2. We have retail sales this week, which is big in terms of consumption. It has been one of the weaker elements in this quarter. If we can get a stronger end to q1, it sets up consumption nicely for q2. Manus what i have for you here is the hedge fund production. When we take away my messages why dont we take a weight my messages why dont we take away my messages . We get nice solid retail sales. This market could whip higher . It could do. What i am saying is, if the fed are ignoring domestic data, you should too. If you look at the fomc and the comedic asians, in the indications, the new if you look at the fomc and the com munications, the new york speech from yellen i think it is more about time. If we get the kind of conditions that we have had over the last month continuing, as we go to this quarter, then there is a ch ance that they will definitely go in june. Everything has to fall into pla ce. Manus everything has to fall exactly in line to get a june hike . It does. To me, that opens up the potential that once again, there could be a reason for delay. Obviously brexit is the week before. If that reverberates, even across europe, that in itself could be manus i had some interesting conversations with people while i was away. Theyre watching. They dont seem overly interested. They might get a shock. Talk to me about jack lew, the treasury secretary, he called on the imf to play more of an aggressive role in policing Exchange Rate fluctuations. Does any of this story play toward yen reversal . It is certainly an interesting story. I was reading it coming in and said, he has upped the ante here. Certainly, it does not tally with the comments from yesterday in tokyo suggesting that intervention would not be inconsistent with the agreement set by g20. In other words, what prime said, thats not something they would consider he is trying to backtrack from that saying, intervention is on the table and we could do it. From the comments ive read from the eft manus there is no appetite for that. We have to get to the yen. Up next, tax avoidance. The European Commissions new proposals as the Panama Papers cause shockwaves and reverberations around the world. Very good morning. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Manus it is 6 30 in london, 2 30 in brazil. Lets get you up to speed with rishaad salamat. Sh japans biggest broker nomura planning to shut operations. They say the move, along with the reductions, could come as soon as today. We are told about 1000 people could be affected. Forilian lawmakers pushing Dilma Rousseff a step closer to impeachment after the first formal test of sentiment in congress. Higher amid speculation that rousseff will be ousted. She has said that impeachment would amount to a coup. Japanese italian banks agreeing to a multibillion euro fund to help the banks raise capital. Oneef executive said chief executive said the new front may be worth about 5 billion euros. Ruled that a jury must decide whether led zeppelin ripped off another band with the opening guitar part of stairway to heaven. It is claimed that they copied it from a track called tourist, recorded by a band that played with them in 1969. Recall the will origins of the song in court next month. If you are a bloomberg terminal user, you can get all of our top stories on top. Manus im in love to hear where jimmy fate jimmy page recounts where that song was trumped up. Lets see how the markets was dreamt up. Lets see how the markets are doing. Asia is doing a little bit better. Do you have a touch of luxury . Nejra i do. I will start with the yen halting sevengame seven days of gains against the dollar as we see japanese stocks rising on the back of that. The yen is also weakening against all 16 major peers today after it hit its strongest level against the dollar and broker 108 again. Again. E through 108 we could hit 100 by year end. What would that do to stocks . If you look at the nikkei 225 stock average, this chart is normalized. This equity benchmark is the second worst performing developed market this year. The only one that has performed worse is italys. Global stocks have rallied more than 11 from this low in february. The bloomberg dollar index is pretty much unchanged today. The outlook is not looking great, because this chart is showing the bloomberg dollar spot index in yellow, in white, hedge funds cut their net bullish positions to the lowest in almost two years. If they keep trimming at the current pace, those bets will be wiped out entirely. We have lvmh First Quarter sales getting 3 , but that did trail analyst estimates and was on a decline in tourism following the terror attacks in europe. We will see how that stock opens. 3 over theare down year, but it has still been outperforming its peers, but it is not immune. Manus some great Bloomberg Intelligence research. The other stores moved their stock postparis terror attacks. Lets return to the brazilian story. And how the hedge funds are faring. Guy johnson joints me now. Joins me now. The hedges are long and they are right. Guy it has been interesting to see how National Money has played to the story. It has largely been interNational Money that has driven is ill. Driven brazil. Turn. Is the hedge funds re on brazils focused returned 16 . The biggest gain since 1999 on a monthly basis. A huge out performance relative to other assets. My question is, can this be sustained . You look at this tape that has come out. You look at how impeachments generally work around the world, they are not smooth processes. He still have the issue of what is happening in the commodity space, and the brazilian economy, more widely. Is this a classic case where it is better to travel than arrive . If we do get the impeachment, will that be the high watermark . Will it be make returns beyond that . Manus guy, thank you very much. All to play for. Dilma rousseff hanging onto power at the moment. The plans are underway they were underway before the Panama Papers leaked. We focused on getting Large Companies to make public what the pay in tax in each of 28 eu countries. Joining me now is jones hayden. What exactly will the European Commission be proposing . Like you said, this was in the works well before the panama leaks, but in the wake of that, have tried to expand the proposal and will be focusing more on tax havens. In addition to requiring disclosure, they will also be requiring disclosure in countries with tax paid and revenue acknowledged in countries or territories that are considered tax havens. They are also coming up with a new list of tax havens around the world. This is something they are trying to get through to have more transparency in the wake of the leaks. Manus does the eu have legal basis to require disclosure involving other jurisdictions . They areer to do this, not relying on the tax code in the eu. They are relying on Single Market legislation. This allows them to impose rules on companies that want to operate within europe. They have done a sing similar thing with antitrust and are able to levy fines of up to 10 on companies deemed to have gone against the antitrust rules here in europe. They are using the same basis here to reach beyond the eu borders and to get to tax havens, to try to have more transparency, and a little more reassurance for the people in europe about what companies are doing. Manus what companies will be affected . What countries outside the eu will be affected . At this point, they are saying that companies with annual mobile revenue of more than 750 Million Euros will be the ones who have to disclose within the eu and within these countries and territories outside the eu. There is already criticism of that bit and they want to have that lower so that more companie s are involved so you have a bigger swath of the revenue and tax base been disclosed. In terms of countries and territories, they will come up with a new blacklist of tax havens. They tried to do this last year, but there was a lot of blowback against the countries on the list. Not all of them, but some of them. Countries saying, we do not deserve to be on the list. Some come back and say, luxembourg, and ireland, and others could be determined tax havens as well. There is already criticism about what countries will be on the list. Manus it is certainly an entirely new perspective in terms of how we look at tax and how society will tolerate evasion and avoidance, if at all. The british Prime Minister david hen has defended his said that he delayed his comments due to the Panama Papers due to his anger to seeing his fathers name attached to stories about tax evasion. Ownedce 2010, have not any shares or had any investments. In publication of tax papers this way is unprecedented, but i think it is the right thing to do. I am not suggesting that this should apply to all mps. Manus the former foreign secretary David Miliband compared leaving the European Union to unilateral disarmament saying britain would lose influence if it votes to quit the 28th nation bloc. Miliband set to say, no nation in human peacetime history, never mind britain, has voluntarily given up as much political power as we are being invited to throw away on june 23. Interesting lines coming from the former foreign secretary. Thes bring in derek, european head of Global Markets research at mitsubishi. They have been blindsided. The whole Brexit Debate has been lampooned by tax. When you look at the u. K. , this is a powder cake of risks that is popping. The danger for the remain campaign is, anything politically that comes along that can damage the Prime Minister, or have a bad week, as he put it, could have reverberations in terms of how it plays out on brexit. He has had a bad week and the polls are pretty tight. Votep of that, the dutch last week did not help. That could play negatively as well, Going Forward. Manus trying to ask a brexit question about sterling is the challenge of the day. I will have ago. Options to sell sterling. This is 25 delta. It is at a record it will cost you a record. The most since 2003. That is basically what this chart is telling you. The cost is popping. If i want brexit risk exposure, i will have to pay a fortune to do it via stirling. Theyweek, citigroup said would do it via the swiss, the swiss franc is rallying. Would you be prepared to pay for that volatility in sterling, the highest since 2003 . There is every chance that it is such a major event that if the markets really take on the belief that there is going to be a vote to leave, then i would imagine the price of protecting against it will become even more expensive. It is about managing your risk and ultimately, the scale of moves that you could have post we couldleave easily see the pound falling over a sustained period of the dollar being very weak. That would be my answer manus we have to that would be my answer. We have to squeeze in some dollar yen. Seven day trade has halted. Rsi, the relative strength index, there is dollaryen, 1. 08 27. It is oversold on the dollar for five days, have we broken the trend or am i just trying to make a story . Be generous. The rsi, perhaps we are in for a period of stability, but are we going to see a reversal back higher . I think there are good grounds to suggest we could see further downside. Even despite this big drop in dollar yen, the yen is still undervalued. Because of Inflation Expectations falling, and actual inflation, you have real yields rising. You have the most rapid expansion of japans currentaccount surplus and record. Manus intent seconds, where in 10 seconds, where can it get to . I think we can go into the 100 to 105 range. Ok, that is a pretty aggressive call. A great roundup of all the big stories here on countdown with Derek Halpenny from the bank of tokyo mitsubishi. R8 supercar. Ew matt miller has taken it for a spin at the Daytona International speedway in florida. Matt audi is reaching for a bigger slice of the luxury high with its of the luxury pie with its brandnew supercar. This is the fastest, most powerful, and most expensive car that audi has ever built. To follow the evolution of a successful design and i think our designers did a great job. Version that we tested puts at 610 horsepower with a naturally aspirated 5. 2 liter lung. The carpets power to all four wheels with a seven speed, dual clutch transmission and it does 060 in about three seconds. Familiar,pecs sound its because the hurucan, built by lamborghini, uses the same powertrain. Part of the Biggest Challenges to keep those two brands separate. Audi wins races. 50 of thecontains same parts used on the lms racecar that won the 24 hours of daytona earlier this year. Theresa carr exactly like this is really special. The 24 out to race a car exactly like this is really special. The 24 hour race at daytona speaks tremendously to what this car can do. Driving at the Daytona International speedway, the lighter weight and rear wing are welcome changes. I have it in performance mode, with manual shifting, of course. You can feel the car slipping already. [laughter] driven this fast in my life. I am actually just flying. We were maxing out the gmeter, doing 180 miles an hour around the corners here at daytona. It is a feeling unlike anything else i have experienced, except for being on a roller coaster. Standing in line for a roller coaster isnt nearly as luxurious as the cockpit of an r8 v10 plus. Atfeels like a bargain 190,000. Manus i feel the need, the need for speed. I am channeling top gun. I will not make the noise at the end of that particular one line. Banking on a buffer. Multibillion euro deal, next on countdown. Manus welcome back to countdown. You are looking at the skyline of new york city where it is 1 50 a. M. Despite alcoves profit dropping is 6 51 here in london. Lets get you up to speed with the bloomberg first word news. Rishaad, good morning . Rish according to persons with the knowledge of all of this, these job reductions would happen in the americas and could come as soon as today. According to another source, about 1000 employees could be affected. Lvmhs sales trailed analyst estimates. This is on the decline of tourism following the terror attacks in paris. The 4. 1 estimate from analysts. Blaming its supplier for a recall that will affect 2700 model x suvs. The recall is being made to repair the third row seats which failed strength tests. All the affected cars are currently in the united states. Global news, 24 hours a day. Youou are a bloomberg user, can find our top stories on top. Manus thank you very much. Italian officials and Financial Firms have finally agreed to create a multibillion euro fund to allow other banks to weaken capital to help investors unload bad loans. Ceo says it banks may be worth as much as 5 billion euros. Yesterdays performance and some of the biggest names on the italian exchange. Joining me now is philippe great to have you with me. To try and do just where we are that is the image of the marble man that holds the world on his shoulders. 5 billion euros, is it big enough . It comes down to the details. How much leverage will this fund take on in equity, and this split this is a fund, the m ain fountain is to be a backstop. The ancillary task would be to we talked about in january. This fund can add some spend power. Manus so the banquet take the nonperforming loans. They have to offload as much of that as they can, and they have got to mix it up. They have to have the worst pieces of that, as well as part of this, and then the fund to steps in. In terms of equity, it will be the debt that they are focused on . Capital raisings we understand will come quite soon. Probably this fund is there they do not go through as expected. Having to even consolidate those weaker banks. The fund is there to take an equity stake on those banks. Manus this will help the pop olare, yeah . It was not there before, so now we know, in case the equity does not go as planned, this fund can step up. Manus many people will refer their benchmark to spain and ireland, but it caused the government to go for bailout. This is not a bad bank that italy is setting up, the nuance is very clear. It is not a bad bank because, probably the time to set up a bad bank is long gone. They should have done it in 2012 like spain. It would have come with a conditionality. I think the spaniards agreed to 23 different conditions. Italy probably lost the chance back then. It was a political decision. Nonperforming asset has come to the fore, and it makes sense to finally tackle the problem. Manus one thing that caught my eye was, there was a huge relief rally in ireland and spain, mainly built on the property. Bad assets were put into the vehicles. It is not the case in italy. These are mature, industrial loans. But the relief rally, it will be tough to get . Spain was very, much driven on commercial real estate. In italy, there is a part of commercial real estate which overlaps with the corporate lending, but it is much less pronounced. Manus great to have you with me this morning, putting some context around that backstop for the italian banks. Up next, rough times ahead for rousseff as the brazilian president is pushed one step closer to impeachment by lawmakers. The italian banks are in focus. Manus nomura job cuts hit japans largest brokerage says jobs. L slash around lawmakers push the brazilian president is the closer to impeachment. Italian officials and Financial Firms agree on a multibillion euro plan to help we can banks reap capital and unload bad loans. Manus welcome to countdown. Welcome to a 1 billion deal. Alibaba is on the acquisition trail buying an ecommerce business in southeast asia. 1 billion. Alibaba buys a controlling tank in the lozada group. This is breaking news coming in. Keep an i on that story as the business day progresses. That is your breaking news. A billiondollar deal by alibaba in terms of acquisition to kick off this trading day. We are focused very much on the breaking news coming from the mara. Coming from nomura. 9 stock rallied up almost at one juncture. We will put context around the story later. Bad stock in italy. It is a buffer to help the banks offload their bad loans. Lets get into these equity markets. Impeachment. Er to how was that playing out . This year european futures board. Yet futures indicated lower you have futures indicated lower. Oil is dropping slowly. London, paris and frankfurt all indicated ever so slightly lower. Three very clear themes are in the market. In terms of the riau, this is where the real focus will come in. We have this potential impeachment. The real iraq did 3 yesterday. The real iraq did 3 yesterday. Lets get you into your risk radar. A lot of this is around the ce of oil and you have Oil Goldman Sachs say the much the april 17 meeting. Opec could be a negative for the market, because it essentially, it is tough to get a deal. The markets expectations are so very high. Oil coming lower. Dollar yen has stopped in its tracks. Saying dollar yen according to rsa, it was yen overbought. It dollar oversold. You can see a trade down toward 100 level. In the meantime, lets get to your Bloomberg Business word news with a shot salamat. Financial firms agreed to trade a multibillion dollar euro deal multibillion euro to unload bad debt. One bank speaking on the sidelines of the meeting. A 5 billion euro created with taking place [indiscernible] british Prime Minister David Cameron to parliament telling to Panama Papers due attached to stories about tax evasion. Thee 2010, i have not publication of a Prime Ministers Tax Information in this way is unprecedented. I think it is the right thing to do. Let me be clear, i am not suggesting that this should apply to all mps. Mayor Zac Goldsmith says the arrival is a threat to the capital and whether the u. K. Will leave the eu in june. It comes as part of a package which represents the business. Anything in my lifetime nominate Jeremy Corbyn. He said he would nominate Jeremy Corbyn again. Truly frightening for london. Mayoral election being held on the 10th of may. You can see all of the candidates there. A judges role but a jury must a guitar part on stairway to heaven. A band name spirit. Jimmy page are expected to recount the origins of the song more than 40 years ago. The trial is scheduled to begin in los angeles next month. Global news, 24 hours a day,. Owered by 2400 journalists for all of our top stories go to bloomberg top. Manus. Manus well done. Thank you. Lets get the other side of the coin. Juliette saly is standing by in asia. Everything comes down to dollar yen, doesnt it . In terms of risk sentiment and what we believe can happen in the japanese stock story. Could i be mistaken a little bit inkong in china calm china . Juliette a little bit of calm. Down. 75 . Yen has weakened for the first time in eight sessions. That is given strong support to Japanese Equities which trade inversely to the yen. A lot of money going back into the japanese banks today and also export stocks on the weaker yen. A good pick up their here it in terms of china, a good pick up there. Some fairlychina, negative comments about the role of the chinese economy saying there is large pressures on the economy and that it is going to face difficulties or did money coming out of the asian markets and also in taiwan. Elsewhere it has been a pretty solid sage and pretty solid session across the asian region. At theirconditions highest level since march 2008 in australia helping the aussie dollar and aussie stocks. Korea, we have seen the cost be close higher. This is what the regional index looks like we have a few markets trading including china and here in hong kong. The basic materials sector played the game today. There was a switch out of the telecoms. A pretty interesting story on the bloomberg, there has been this 11. 9 increase in china for people buying foreign groups online. These are milk producers. A lot of Chinese People by their infant formula from these companies. Significant downward pressure on this stocks. Talking about the nomura moving out of europe. Tokyo, up 7. 4 of the close. Illumina has alumina has a joint with alan a. Manus a great roundup from Juliette Saly in hong kong. Lawmakers have pushed the president a step closer to impeachment. Go. Mmittee voted for her to rea, arazilian sevenmonth high on circulation that she reacted. This government has run out of atmosphere, has no clinical base, has no credibility. As their own leaders said during a debate, this government does not know to have the dialogue. It is arrogant, authoritarian. In and get aring little bit more perspective. Justin, every time we talk about this, we seem one step closer. The momentum is building. What is the likelihood that she will be ousted . Justin the likelihood is 70 probability. That probability appears to be growing. This committee of the lower house yesterday went slightly more in favor of the impeachment continuing the process than we expected. You talked about momentum. That is very much the crucial factor in this whole game. Now we have seen the process going to a vote in the lower house it self. The two thirds majority it will need to keep it alive is a foregone kaluz foregone conclusion. That difference between the pros and cons narrows, it is further bad news. It applies more pressure on the president and we are seeing the reaction which is a positive one in markets. Rockets wanting to see the president at least pushed out or at least some kind of resolution to this whole impasse come through. Manus justin, thank you very much. Now, lets welcome our next yes. He is theu agbobloua global head of engineering. You listen to these politics stories. My favorite story over the past couple of weeks has been politics in terms of markets. With that in mind, this is the. Ea on the machination the potential demise. A Political Risk increases. The rea, they love the story that she might be on the way out here it had the look at local news . The bestperforming emerging market currency this year . Havinghere when youre is a situation of pretty high uncertainty in terms of the maturation of outcome. Justin mentioned 70 probability , but what is also interesting is to look at the applied volatility of the real which is also pretty high. It suggests that the market is not clear as to the direction of the real. It is also pricing a oneday move should the event actually occur. Manus what i have done is taken us back weve got one week here could lets take us back just one week here. The sick is back one week here. Lets take us back. The brazilian rea has applied 18 . The market should move by . 1. 3 average move per day today you have the real jumping up to 35 which suggests close to 2. 1 average daily move. If you think about it, it is just as high a volatility as an equity investment. Currencies are presumably less volatile than equities. In this case, the brazilian real is expected to move as much as equities. Leavingencies brazil aside, you have written a paper recently. What is it that . Why should i be focused on it . Kokou this is our q2 outlook looking at a whole host of trade ideas. The title we have used is serendipitous of uncertainty to simply highlight the fact that given our stress environment, you have unexpected opportunities that could occur. We have focused on relative value ideas around brexit, negative rates and its impact on equities here it equities. Manus talk to me about the thematic basket. Kokou the thematic best etc. Things, noble themes that investors the thematic basket are things that investors are looking at. Capturing a specific theme. What we design our emetic baskets that are accurately typically theme, champion which highlights Global Companies which have pricing power. Marginal capacity to sustain margins longerterm. Yen themes around manus pricing powers in an uncertain world. Kokou part of the new. Com or Telecom Industry in the u. S. That have Huge Technology technological advances. The car industry or iphone. These are the ones that are leaders are are expected to be leaders over the longterm. Yet teams that are on the buyback. Highyield complex where we suggest shorting a basket of Companies Whose credit is in the highyield index. Manus on the u. S. Side. We will pick this up when we come back. Hold that thought. How do you traded that domestic move in an uncertain world . Agbobloua. Quite nomura is said to be equity. Stay with countdown here on countdown stay with countdown. Manus a very good morning to you. 7 18 in london. Markets are unsure as to paris is indicated down 1. 8 . Giving away minutes going back in time. Lets talk about the breaking news from the city and Financial Firms. Were talking about nomura. They plan to shut operations. Shares in the stoxx surged on the news. Is said to include around 1000 jobs that could be lost at the continent. Caroline hyde has the latest. It is one of those ironic moments in terms of financial markets. The stock rallied 4. 4 on fairly tough news. Give us the contacts. Caroline it is all about costcutting. We are looking at the numbers. About 1000 equates to 17 of those based in the europe and indeed the americas. These are the two regions that are being scaled back from in terms of International Presence of japans biggest brokerage. It is europe that is going to feel the brunt of it. Sales,trading, underwriting of european stocks. All of these areas are going to be scaled back from. We could see units completely closed by numero. By nomura. Theres going to be some scaling back in the americas. Perhaps that is less of a surprise because we did get a warning in february actually in march that we will be that they would be cutting 20 of their jobs in the americas. 17 . s about maybe no surprise. We were expecting in the First Quarter equity trading to fall. We had barclays close their cash equity business and asia. Equity business in asia. Manus listed about what prompted this. Lets talk about what prompted this. Youve got credit suisse, deutsche bank. Now nomura making fundamental decisions. Caroline i was just speaking to Chris Wheeler and he was saying it is interesting that equities is being stepped away from. It is relatively capital light compared to fixed income areas in the Trading Volume being on the downside is pulling people out of the equities business. Competition is just too hot. It is an interesting take because nomura has been looking to scale internationally. They bought Lehman Brothers in europe back in 2008. Now to have to scale that back as it led to losses. A. B. Comes as no surprise. Maybe it comes as no surprise. March 2010 was the last time we saw a fulltime profit in the business of nomura. They have seen competition hit them in the chief executive did say i am abandoning my goals outside of japan. This is scaling back internationally. Manus caroline, thank you very much. Agbobloua from socgen is still with me. Brexit, i finally found a guest who wants to talk to me about sterling volatility. In toe going to be locked this program for long time. What does it mean . How do i traded . I traded by the euro stoxx 50. Kokou when you look at brexit, u. K. Assets are reflecting a lot of risk premium. Our argument is that if you have brexit, you are going to have everyone therefore, you should look at the second order impact. Eurocks or the dax. Stocks or the dax. The euro stocks is activated if the euro dollar goes lower. A brexit will put into question whether the euro construct is still a valid. Remember the grexit we had . Weare essentially assuming would have european equities under pressure as well as the eurodollar. Manus i am going to put my euro is 29. 24. Which talk me through it. What is the trigger on the euro trade . Kokou the pricing were looking at is three to six months, 95 . 5 on the money. The contingency on the eurodollar which is forward makes the price between 50 to 70 cheaper. This is very interesting because it means we dont need if the euro is not under pressure and a brexit does not occur. You save 60 to 70 off your premium. Manus this is the conundrum. Production is the most expensive. To me that says sterling is so heavily priced. Why . Why are gilts not under more pressure . Kokou this is a big debate. Our argument is that when you have a risk up environment, the acid allocation the Asset Allocation tends to go into bonds. In the case of brexit, our assumption is the longerterm ailt could start to price credit risk component, because a recession in the u. K. Or a jar up in the gdp would increase or a drop in the gdp would increase nominal you could see yields under pressure. Our argument is to think about production. You can also add the contingency on sterling being lower. Buying putlike options. Ive got a trigger that helps me find it. Kokou this is exactly one of the Asset Classes which is alternately correlated between equity and fx or equity and credit. It can deepen the structure of your implementation of the trade in a more effective way. Manus help me here. This must be one of the cheaper des because the guilt gilts have returned over 5 . Dish if i was the city which is the that which is the best value trade . Which would you prefer . Contingent. Is manus youve got to get the report which means you have to sign up. Kokou absolutely. A trade that put brexit in context if you really want to move markets. Kokou agbobloua from socgen. That is it from countdown. On the move is next. The real is set to move higher. The bestperforming emerging market currency of 2015. Futures, 51. 47. Youve got the brexit trade. They it back on bloomberg. Play it back on bloomberg. You shouldnt have to go far to get the help youre looking for. Thats why at xfinity were opening up more stores closer to you. Where you can use all of our latest products and technology. And find out how to get the most out of your service. So when you get home, all you have to do is enjoy it. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Shoshow me more like this. E. Show me previously watched. Whats recommended for me. X1 makes it easy to find what you love. Call or go online and switch to x1. Only with xfinity. Guy welcome to on the move. Were counting you down to the european open. Im guy johnson alongside hans nichols. Italy strikes a deal to clean up its banks. Maybe atlas is an even big enough to shoulder the nations debt. Nomura is expected to cast desk to cut around 1000 jobs. Cut around 1000 jobs. Who will fill the void