Transcripts For BLOOMBERG On The Move 20160401

Is kicking in. The sentiment among the countrys largest manufacturers drops to the lowest level since 2013. And tesla introduces its more affordable model making for the mass market. A beautiful piece of engineering. What is driving and what is engineering this market open this friday morning on jobs day in the United States. There is a hangover. There is a lot of data. It is the yang and the yang. The chinas data and japan as well. Surveyhe japan consumer is disappointing and that is driving the story right now. That the chinese data came in much better than expected but it is the japanese data that is at question. Do you feel rich enough to drop down 35,000 and put down a down payment on the new tesla. It depends on how ecoefficient you want to be. It looks very efficient. We have 30 minutes to go before the start of the trading day. We are going to cover all of the stories for you. Let us check the futures. It is down. 9 . The paris market is down by 1. 16 . You have these various facets at play. You have a Rating Outlook for china. How much of that was already in the market. Usa, and oil is lowered this morning. To that end, you are some reprieve in the markets. Let us get across now tohans. Take a quick look at brent. It started the morning with a big bump up, north of 40. Taking a quick look, now it is Still Holding above 40. The asiapacific index is down. Eurodollar, we are seeing the strength of the euro. That means i will feel a little richer on my vacation. The u. S. 10 year is still creeping up. Let us get to the bloomberg flash. Chinas official factory gauge has unexpectedly jump showing improved conditions for the first time in eight months. The manufacturing purchasers index rose in march i had a 49. 2n estimate of suggesting the economic and fiscal stimulus is kicking in. Sentiment among japans large manufacturers has dropped to the lowest levels since 2013. The strongest yen risks eroding Company Profits undermining efforts to spur a recovery. Declining from 12 three months ago. Economists had forecast eight in a bloomberg survey. The u. K. Economy will shed workers and gain proficiency with todays arrival of a higher minimum wage. That is the forecast of most economists surveyed by bloomberg news. The base level of pay is being bumped up from six pounds 70 27 pounds 20 per hour. The biggest increase in eight years. Hiphop mogul jayz is unhappy with his recent music purchase streaming business. Subscribery inflated numbers. He has touted the service as artists response to spotify apple. Company hasdia denied jayzs claim sing has Company Conducted Due Diligence before agreeing to the acquisition. Day,l news, 24 hours a powered by our 2400 journalists in more than 150 news bureaus around the world. It is the first friday of the month. You know what that normally means. It is u. S. Jobs day today. Expected to climb by about 200,000 workers in march according to bloomberg forecast. Meanwhile, chicago fed president Charles Evans says while the u. S. Employment situation is healthy, there should be continued caution. We are looking at an economy that is close to fulfilling its maximum employment mandate. Unemployment is below 5 . Though that is a good outcome compared to when we were at 10 for the basic measure of unemployment. Payroll employment growth has been quite strong for the last two years. That is good. Inflation though has been low and that is the reason why continued caution is called for. We need to have confidence that we can get inflation up to 2 . Let us bring in our guest. The chief investment officer. Thank you for coming in. , conservativels estimates is 2005000. Sustaining this level of job growth is going to be a challenge for the United States. Guest it is not impossible. It is interesting to hear the comments from the chicago fed saying it is a good employment picture. It is an excellent picture. Say thehave to inflation challenges that were cited in his comments are not necessarily as bad as he puts them. Pce inflation which is the feds measure of inflation is 1. 7 . Not bad. The fed is concerned about market factors much more than economic factors. Hans i went to follow up on that. What is the one dataset that janet yellen abroad is looking at. Is it the price of oil . The price of copper and other commodities . Mohammed she is looking at a number of things. Earlier this week him as she cited a number of factors and global actors. She is looking at ability in the markets. Oil has bounced back and that was give her some comfort. At growth in some of the larger asian economies including china and japan. , theu mentioned earlier picture in china is improving. All of these are reassuring but she is looking for much more comfort from international factors much more so than domestic which is new for a fed chair. Manus those will come down to wages. Hotspots in certain areas. Havehe overall china wages not found any animal spirit so to speak. There is a lovely tagline. Bloomberg economic surprises in the United States are beginning to build momentum. Will theyn is this let the economy run hot before they do anything . There is a sense that todays numbers will not from the rhetoric from the fed. Mohammed it would rather be too late than two early on this. The evidence is that the Economic Data has come in stronger than expected but strong. There is decent data out of the u. S. A global challenge. We see in the u. K. With the introduction of the new minimum wage which is another way to push up wage inflation. I wouldnt be so prized if we saw that in other countries. That is a way to improve the wages outlook. The data is reasonable and quite robust. We have had this underperformance of europe relative to the u. S. We were banging that news drum yesterday. Mohammed overweight, underweight. That comes to under valuations. Valuations in the u. S. Are not as compelling as they are in the europe. As they are in europe. Chinasp next, is fiscal and monetary stimulus finally kicking and . We will take a closer look at the pmi numbers from march and see if they really deliver a surprise. Hans welcome back. I am hans nichols in berlin. Home Retail Group Says it will unanimously represent sainsburys takeover plans to shareholders. Home retail is valued at approximately 1. 4 billion pounds representing a premium of about 74 to the companys Closing Price on january the fourth, the day before its approach became public. The path to the deal was cleared when the South African retailer abandoned its pursuit of home retail last month. The route clears the way for a purchase by marriott which has been in the works since november. It cited various market considerations before pulling its 14 billion bid. Starwood shareholders are scheduled to vote on marriotts offered next friday. Tesla ceo elon has unveiled the new model three. He says there have already been 150,000 orders for the car in the last 24 hours. It is a more Affordable Electric sedan which will cost 35,000 and deliveries are set to roll out next year. Of theel three is part companys master plan. It is the need to move into esther production. Manus improving conditions in china for the first time in eight months with the pmi rising to 50. 2. More. Get a little bit bureau chief there. Should i be smiling regarding this pmi . It is definitely a positive sign. We are now in expansion territory for the First Time Since july of last year. There are some cautions about seasonal factors that may have influenced this number. Or of the endless said pointed to the Property Market as being one of the main drivers for the improvements. The Property Market is quite uneven. It has been surging in tier one cities but in the tier two and tier three cities, it is still performing rather poorly. It is hard to see a sustained recovery without an overall improvement in the Property Market. Hans that is interesting regarding the Property Market and that will drive a lot of the confidence Going Forward. Tierere a sense for those two and tier three cities that the Central Government can do anything . Gregory they seem to be in a quandary. They have been trying to remove curbs and ease regulations to boost those markets but everything they do just seems to turn around and help the markets in shanghai, and beijing, and the major cities. Lesshave been more or ineffective at improving the overall Property Market. Shanghai bureau chief gregory, thank you so much. Let us return to our guest. When you see the snapshot of chinese data, look, three months they have one of the biggest fiscal stimulus is on record. There is no way you would see that all translated immediately. A we have a nice demonstration. Do you believe the rebalancing story . How does it play into your thinking of a global perspective . Recent efforts need time to play out but this is a good shot in the arm to spark a trend of recovery into positive growth again. It is too early to tell but this is a step in the right direction. Concernedot only about its economy, it is also a global player, and it sport or and exporter. This will be a slightly odd question because we do spend a lot of time talking about china especially here in germany. Are we in danger of focusing too much on china . We have a massive political story in brazil. No one white knows what is going to happen there. There is instability elsewhere. Are we to china centric . Is one of thea largest economies in the world and it is going through a big shift from manufacturing to services. It is unprecedented. An impact on global economies around the world. It is reasonable to look at it in close teacher. Close detail. N manus that is where the real discussion is, in japan. Money is leaving japan. We looked at this yesterday. Money is flooding out of japan for the last 12 weeks. Were seeing a demonstrable change. The index in confidence is dropping. Are you part of the exodus from japan or are you still in a Holding Pattern there . Mohammed we have some concerns over the japanese economy. It is safe to say that the japanese authorities are throwing everything at it and badly for them they have nothing to show for it. We are not seeing the recovery in the data and money is flowing out. For us in terms of whether there is an opportunity in japan comes back to valuations. There are some compelling valuations of some of the japanese stocks but some are overvalued and the sectors are not as compelling as it used to be. Manus hold that thought. We have to compare and contrast between china and japan. Mohammed will stay with us. Minutes away, 11 minutes to go until the start of the trading day. Next up, we know that this is what you tune in for. What a beautiful morning across the city of london. Who will get to the other side of the bridge first . Downn futures indicated. 6 . Manus it is 7 53 a. M. In london. I will go first. What i cap here is the rising relationship between the price of oil in the relief rally we have seen in emerging markets. The 60 day correlation hit 66, the highest since 2012. During the First Quarter of this year. The momentum. With emerging markets. It is called the trade of the decade. We rose from 22 . Local currency has risen by 8. 3 . Case hold . Ll normally, it is 44 billion shares. In the past seven major advances. Hans that chart reminds me of your short tie combination ie combination. It is much too busy. We have jobs numbers coming out. This gives you a sense of how much data there is on bloomberg. Is it shows you the average number of days that they had to use heating. It shows you how much activity takes place inside versus outside. When it hits down, you have worm weather. I want to look at the end. Trough, giveshat you a sense that the week at the survey was taken, there was historically warm weather in the states. I am a secret weatherman. Let us ask the guest. Mohammed you are putting me in a tricky position. They are both interesting analysis. The correlation chart is interesting. The rise in emerging market currencies. You can extend it further. There has been a general risk on rally and you can correlate crude oil to equities or crude oil to some of the other risk assets. There is the other relationship with risk back on. Hold that thought. Manus hold that thought. We will take you through a choppy morning at the start of this friday trade. Manus ever a very good morning. You are welcome. This is on the move. Colleague,ide my hans nichols. We are moments away from the start of the europe trading day. Jobs day. Eally is how will wage growth figure into the feds hike thinking. Chinas factory gauge unexpectedly jumps suggesting the governments economic stimulus is kicking in. Asanese equities we can sentiment among the countrys large manufacturers drops the lowest since mid2013. And Tesla Unveils its new, more affordable model. It is launching a drive for the mass market. We dont have much time to talk about futures. What do you have for us. Outlined the data we got out of the asia. Positive for china and not so much for japan. Stocksled a lot of asian both in japan and china. Looking at europe, futures are pointing lower. Let us see what happened at the opening. If that translated into losses. Ftse opened lower. Still waiting for the dax to open. Remember, that was the First Quarter. European stocks underperformed u. S. Stocks since the most since 2003. Could this Second Quarter be better . 2011,y shows that since the stoxx 600 has rebounded in the three months after every quarterly decline but one. Perhaps, we will see a better quarter Second Quarter for european stocks. Right now, it is pretty much read across the board. Looking at some of the individual stocks we are watching. We move into the market open starting with sainsbury and home retail. Both of these trade lowered. Board wills unanimously recommended sainsburys takeover. There was a bidding war between steinhoff as well. Steinhoff withdrew from the battle to actually acquire home retail and now we are seeing home retails board will recommend sainsburys takeover. , that ist drax gaining. It has agreed to terms with the National Grid for a 12 month contract. The contract is supposed to start in april of this year. It is currently at the top end of the range of the current forecast. Looking ahead to u. S. Jobs data, giving you a quick check on the date on the dollar. Unchanged but it is coming off its worst quarter since 2010. And myself are getting involved in this conversation. We are also with mohammed. As you can see, we have a slightly lower opening. It makes sense. Europe had a tough quarter. The u. S. , what a magnificent whipsaw. Dying 10 to eke out a tiny game. We have not seen that kind of with sauces 1933. Since 1933. Why not pare back a little bit . January and february were challenging months for Financial Markets where there were a lot of the questions being asked whether it was recovery, Central Banks and whether they could take the necessary actions. What we have been telling our clients is to be cautiously optimistic. There is a sense of optimism that you have to put into play. Valuations in equity markets are not that bad. You can harvest some good returns. But there are some shortterm headwinds and we will all we see those. Across theyou look street this morning, it does it give you a sense that the japanese data is overshadowing the chinese pmi data . Mohammed there is some reflection in terms of what is happening in japan given what they have done with monetary policy. Everyone is looking at japan as a monetary experiment to see if what they are doing works and to see if other Central Banks need to conduct similar efforts. There is some concern there. The big news will be the jobs data to see if it is actually as robust as the market thinks it is. Caught ourthing that eye sometimes we get overly focused on china pmi. Are set to double the 2016 budget. Hans, thank you you sent this across to me. This is worth talking about in the context. This refers back to the refugee crisis which is ongoing. This would be a sin a significant stimulus. China Going Forward with an economic fiscal stimulus. There is a move towards the end of monetary policy, towards this goal policy. What is the scale of fiscal policy that yuan to dissipate globally this year . There is a big shift. Let us the of all. Doubt, youithout a are seeing that shift. If you go back to the Global Financial crisis in 2008, we have seen more than 650 cuts by Central Banks. They have made increasing noise in recent weeks to say it is time for the fiscal authorities to pick up some of the burden. That is what youre starting to see from some of the treasuries are around the world. Manus who is the most important player on the fiscal stage . Mohammed they will all be relevant but the u. S. Is a major player in the monetary stimulus we have seen there has been huge. Before we get back to hans, this is the dax. You are saying a significant aift you are seeing significant shift. It has had a good run. It has outperformed its peers in europe over the quarter. Does this tie back to what we believe is going on in china . The stably stabilization . Are seeing a prevailing mood of bearishness. The data from china today although it is an uptick and it is positive, one data point is not make a trend. Everyone will be observing to see if it is sustainable. If it is not, we may see a drop in the equity markets. Hans looking at my terminal. Especially what the dax is doing, it is negative across the board. Is there a sense that april can be a difficult month . In terms of how difficult april will be, it will, down to firstly, how the also,ic data pans out but it is the end of quarter one. It will be a key quarter for companies to report and the earnings season. It picks up in europe and across the world. That would be the first sign on how the recent drop in Economic Activity is affecting companies. We appreciate you sticking with us. Up next, japan suffers a poor start to the new fiscal year. Stocks are down and so are corporate confidence. We are live in tokyo to find out why Business Sentiment is so low. Hans welcome back to on the move. Let us get the Bloomberg Business flash. Chinas official factory gauge has unexpectedly jump showing improving conditions for the first time in eight months. Ahead ofories the median estimate of 49. 4. It suggested government fiscal and economics amulets is kicking in. Nonfarm payrolls at of the u. S. Later. Employers probably added around 2005000 jobs in march with a jobless rate holding at an eight year low of 4. 9 . Chicago fed president Charles Evans says the Employment Situation is helping, low inflation means that should be continued caution. We are looking at an economy that is close to fulfilling its maximum employment and eight. Andployment is below 5 that is a good outcome compared to when we were at 10 for the basic measure of unemployment. Payment employment growth has been quite strong for the last two years. Inflation has been low and that is the reason why i think continued caution is called for and we need to have confidence that we can get inflation up to 2 . The willha the u. K. Economy gain efficiency with todays arrival of a higher than among wage. David camerons government is pushing up the base level of pay pounds ounds 70 27 to seven pounds 20. Stories on there bloomberg go. Manus let us give you a quick snapshot. You have a cool new page. Lobo market monitor. This is how it looks. You can begin to see the percentage moves. What is the most Dynamic Movement on the market. Equity markets are lower. Ratings outd its there. Emerging markets are off a four month high. The u. S. Eke out a close. Hipsaw movement. Switzerland is down 1. 7 . Finland is down 1. 6 . Sovereign bonds, you are seeing swiss bonds and swedish fonts rise. This was a barnstorming performer of quarter one in 2016. A little bit of a rally. Frozen orange juice, there is money there. Let us talk about japan. Stocks started the fiscal year with one of the biggest losses in seven weeks as Business Sentiment deteriorated, hitting a three year low. Let us get to the bureau chief. The tank can index. On . Is going this was a pretty bad reading. Expected. I was shocked watching the numbers roll in. We all knew that the japanese economy was not doing great in the first order but todays reading does confirm that we are in a bad place right now. It all has to do with the strong yen. Japanese companies are fighting to maintain the profit margin. Profit margins are challenged, strong yen is a challenge to the corporate. What does that mean for the boj . That is a question we are all asking right now. The consensus a couple of weeks ago was that the boj needs more time to assess the impact from this unprecedented policy which is negative Interest Rates. Given todays reading and the bad data from the last week, there is more of a sense of urgency for the boj to do something right now instead of waiting for the summer. Much werenk you so taking us through the data. Mohammed is still with us here in london. The report is at a three low. There seems to be a dissipation abenomics and a mutual distrust that governor kuroda can pummel the yen. Mohammed there was much excitement when a abenomics came along. The hugehat led to surge in the japanese equity market a couple of years ago. Now, we are a few years on and we are looking at the basic economic situation. It is still basically uncompetitive. In anrld around japan is easing phase. It is difficult for japan to act in isolation when other players are also easing and putting in stimulus in place. Hans when you look at where the dollaryen is, is there a target where it makes sense to get into Japanese Equities or do you look at other factors . Mohammed we look at valuations overall within the equity market. There is a relationship between the japanese yen and some of the but some of japan the drivers of the japanese equity markets are going to be the earnings potential for some of those companies outside of the yen. For some of the domestic players. The other noticeable factor is that although japan may be to weaken its currency, you have other economies come in notably the daughter the dollar who is also trying to be dovish. Scripthen you flip the to the states, do you not look at the overall strength of the dollar compared to the Market Basket of currencies . There is an argument that the strong dollar is really hurting and causing a mini recession within the Manufacturing Sector in the states. Noteded janet yellen that in her comments earlier this week. She says the strong dollar is one of her concerns and one of the reasons she is delaying the Interest Rate hikes in the u. S. That is clearly an issue. That has been pulled back in recent weeks and months. There is some reassurance for her to wait and see. This is a challenge in the currency market for some of the global players. It is it will available and there is a lot of volatility. Manus i want to bring your attention to this. The breakeven. This is what a lot of on to market activists look at. At the top, you have u. S. Break give you break evens. Followed by the german break evens. And the japanese. Caught their inflation linked to issues. Inflationion, the linked bonds delivered a negative return of 1. 5 . The u. S. Delivered a return of 4. 4 . No sign of inflation in japan. What is that telling you . Taking this wide. This was over one year. If i take this over five years, you can begin to see how tortured a soul inflation really is. Mohammed there has been a reversal in terms of Inflation Expectations reflected in the prices. The longterm trend is deflationary focus. There are structures in all of creatingies Deflationary Forces and that is why the trend has been downwards. If you roll the clock back aches weeks, there was a prevailing mood of negativity and that is why a temporary bounce back. Do you need oil to stay above 40 a barrel . Commodities need to stay at high levels. Or 70ds to go to 60 for it to have an inflationary impact. Manus what are the chances of that . Mohammed quite high. It is a volatile asset class. Movehance of another 50 could easily happen in a very volatile and risky asset class. Manus mohammed, many thanks for joining us. Up next, we will take a look at the rand. This is a currency cranking on gas. It is it about to run out of steam . We have political turmoil. That is coming up. Hans welcome back to on the move. Chart of the hour and the focus is on south africa. Nejra guess what, i have a Double Golden cross for you. Take a look at this church. Were looking at the South African rand and the johannesburg oil share index. This is a technical signal we are looking at. The blue line is a 50 Day Moving Average for the rant and the johannesburg oil share index. It is poised to climb above the yellow line. Average of moving library known as a golden cross. Shorter term moving average poised to go above the longerterm moving average and that is a bullish signal. We couldhat that means see more gains for the grant and the South African stocks. Not say to you what the volume is on the rand. Cranking pastnd, five days. The new output in emerging that isis politics and what is driving this story to a certain extent. Nejra you cannot help but see certain parallels with brazil. Strengthening almost 5 this week. The best performer against the dollar. It has also had its best month in seven years, in march. If you look at bonds, benchmark South African bonds, they completed their strongest quarters since 2010 and stocks, their best in a year. This is across assets. Even credit worthiness is climbing for south africa. Despite the South African president stumbling from one crisis to the next. Has this been driven by the fact that the rand had a 25 slump last year . We cannot forget yellen and the dovish signals. The question is, is this south africa cost specific cusp specific . Manus we saw yellen, a more benevolent fed. This gives a helping hand to emerging markets stories around the world. The question is, can we see a head on emerging markets. Regardingbig deal momentum in emerging markets tied to oil. Brazilhen we get to the story which is also commodity tied. You see the strength in the brazilian reality gives you a strong sense of how much traders are looking at the politics of that and look at what is happening there. It is a remarkable story. We thank you for your time and your chart even though i probably understood 20 of that. I will use the Double Golden cross at my next cocktail party. That is coming up next, stay with us. Hans welcome back. This is on the move. What will the wages big . It is the beginning of the Second Quarter and with that in mind, traders want to take a little bit of risk off the table, adding to a touch quarter, relative to a tough quarter. The Third Quarterly decline in four yesterday, yesterday we dropped 1. 4 . Eyes will be on that jobs report and the wages component in there with the china data. There is a warning of a dying grade coming in. He dax i can tell you, 9788 the traders are building up their negative positions. Lets take you inside bloomberg and show you what is going on in the rest of europe. Stocksld stocks euro are at 50. In terms of the actual foreignexchange movement, it is down by. 1 . See paris is down by 1. 6 . Natural gas has gone up by 1. 6 . That is the complexion. What happens next with the italian banks . That is the question. Lets get you to nejra cehic. She has your stocks to watch. Nejra i am starting with one of the biggest gainers on the stock sincxx600. The contract is due to actually start in april of this year. Seizedof that, draxx 2016 in the top and range of its current forecast. Now, moving on to osram. Osram fromwapped out a list of its biggest suppliers and instead, added royal. That is part of a supply chain reshuffled by apple, ahead of the release of the iphone 7. Osram, really a blow to which has invested one billion euros in a plant that builds some a contactors used to make led. It is the worst performer on the stocxx 600. M a. Ly, this is about stansberry is down 1. 3 . The takeover has been tonimously welcome recommended shareholders. Sansbury values home retail at about 1. 4 billion pounds. It represents a premium of 74 of the companys Closing Price on january 4. We are saying sansburys down here. Draghi isio towards a record. Many companies are inching closer to borrowing for free. Yes, you heard it right. Darling for free as the ecb expands its stimulus package. We are joined with our Corporate Finance reporter. It is great to have you with us. The does this tell us about european credit market . When i look at this story, i see one big bubble. It may well be a bubble. What it does tell us is that Investment Companies are listening to Mario Draghis message. They heard loud and clear. We have seen a near record amount of issuance in march. That across the board, investors are reaching down to try and get yields. Deposit rates have been cut to. 4 . Investors are looking for places to put their cash that are not negative yielding. They have looked to Corporate Bonds. Across the board, there is a lot of advertising for credit at the moment. Hans hans here in berlin. You cover Corporate Bonds so well. Do you see the National Breakdown . Are german corporate borrowing less . Why do we have this French Company that was the first to issue such a low yield . Katie we could make a connection to that fact. It is a very highly related company. It is of course, investment grade. Expect it to can fall into the category. When ecb corporate buying starts any Second Quarter that is. This means that for investors, there is a vast amount of appetite to hold these bonds. These bonds will rally further when the ecb comes in. Forms in the many past. It did a threepart deal last year. That made investors willing to allow companies to issue bonds for three years with a yield north of 5 . Lets pick up on a couple of these things. I get the math and negative deposit rates. We have negative yields across the yield curve in italy and spain. 0. 28 for theis, royal dutch share. 0. 3 from rush paper. These are really below zero. We are not allied to have opinions, but what are people saying to you regarding the ability to take these bonds lower . Is a major question. A lot of this depends on what happens with oil and commodities. For some of these, the people who are investing in these are not your traditional credit buyers. Therefore, we could still see these yields go much lower. When speaking to underwriters, we could see Companies Issue bonds any primary market at a yield of zero or maybe even with a negative yield. Never say never. Nowre entering a new era and we will have to see where the ecb takes us. Manus can you imagine being in a world where you are an asset advisor or a pension advisor and you actually have payouts to make . Know, you pick up a wee bit of yield. Manus, i dont know if that was directed toward me or katie. If i was an asset manager, i would want to hijack katies notebook and then i which are that information with people on my m a team. When you look at all of this money sloshing around and katie, this question is for you. Do you expect m a to pick up in the Second Quarter on the back of all this cheap Debt Companies can raise . Tie that is not something i would want to say, yes, to. It depends on who you are speaking to. Some say, just because mario draghi is comingn to buy bonds, that does not mean the european economy is going gangbusters. This is the time to invest your money and expand her business. Be moreuld maybe cautionary. Hans thank you for your article and your insight. Hopefully, we will see a lot more of you. Up next, driving in the fast lane. We know manus is a fast driver. Tesla make the play for the fast market with a new model costing 35,000. We take a look at that, next. Manus this is on the move. It is time for a market check in. Lets take a look at some of these markets. The stoxx 600 is down 1. 4 . Third quarter in declines. This is the Third Quarter of declines out of ourfour. This is part of the reason. This new paradigm shift we have two negative rates in the Corporate Bonds. If you are an insurance company, you have problems. For the ftse 100. Lets talk cars. The electric carmaker is counting on this new car to expand the Customer Base and reach expandable profitability. Outlines motivation for the business. Why are we making electric cars . Why does it matter . Because it is very important to accelerate the transition to sustainable transport. It really, really [applause and cheers] it is really important for the future of the world. Manus the future of the world. Lets talk about it with ryan ch icolte. It looks beautiful. The device thousand dollars, that makes it very real. Ryan that does make it very real. Onprobably has a few options that. Is going to be a less expensive car. It is still 35,000 in the u. S. And therefore, is still classified as a luxury car. Then, you get the extra battery. The price can easily be doubled. But there is quite a buzz over this car already. Manus who is the competition against . They are all grazing to create efficient, affordable, and durable battery solutions. Ford, bmw, i mean, where are we in terms of the competition . Ryan five years ago, there were just four electric cars in the United States. I the end of next year, there will be 60. There are a lot of competitors. The first one is the chevy. That will come out next year and it is roughly the same price. It is actually a bit cheaper. They say it is a mark practical car, they say it is a more practical car, gm does. Gm is focused on getting this car out early in the year, ahead of the model 3. We dont know when it will come out, elon musk says they are decently certain, but they have had delays before. Maus hold that thought. Hans we have breaking italian pmi. Point five. Was 52 based on italian pmi, we are coming in a full point ahead. And came in ated 53. 4. We have different stories in italy and spain. That is the story on the pmi front. We have a little bit more coming in 10 minutes. Ryan, if i could drive this conversation steer the conversation veer this conversation back towards tesla, what other challenges do they have . Ryan they have other big competitors, like gm. Afford tolike gm can take a hit on Something Like the chevy bold. They are doing this because they dont want to lose california, where they have to have a zero emission car. They can subsidize their chevy with all of their sales and other cars. As some of the challenges, to be frank, are internal. This has been a niche luxury carmaker that makes a cool car for wealthy people so they can make a statement. When they go for the mass market obviously, it will have to be a good functioning car. Not everybody thinks that tesla has been that solid of a car. Itsas a safety record, but performance record has had mixed reviews. It will be a little bit different. And for investors because there is the retailer and buyer, but then there is the investor. Elon musk has to show that people are ready to buy this car and that b, he can deliver profitability in the process. All of these cars he has been selling so far, he has taken a loss on them. Investors expect profits coming soon. investors are expecting continued losses. Thanks for breaking that done for us. Lets get to the Bloomberg Business flash. Kumutha thank you. Anbang has locked away from its proposed takeover of star hotels. Marriott has been in the works since november. Cited various market considerations for pulling a 14 billion bid. Bid ontels are going to Marriott Hotels next friday. Sansburys takeover plan will be recommended to shareholders. Home retail is a valued at approximately 1. 4 billion pounds. That represents a premium of 74 to the companys Closing Price on january 4, the day before it became public. The deal was clear when South African retailers find off last month. Shares are trading both this lower this morning. Apple has reshuffled its supply chain ahead of the release of its new iphone 7. Phillips. Added it is searching for a new buyer. Consortia will be prepared to offer 2 billion for controls of Mining Operations in the country. According to people with knowledge of the matter, the Investor Group plans to bid for 80 of the local operating company over the next week at the earliest. That is your Bloomberg Business flash. Manus . Manus up next, it is jobs day in the usa. We will take a look at what you can expect. In thismbers are due afternoon. That is where we will wrap up, right here on on the move. Hans we have french pmi out right now and it is coming in under 50. It was coming in at 49. 6. That was the preliminary number as well, but compare that with spain, which came in worse than expected. Pointcame in at a whole better than expected. Asset purchases will start today, at least the ramped up ones for the ecb. Theill take a quick look at day ahead. In a few minutes, more eurozone numbers will come out, followed by pmi numbers. It is u. S. Jobs day. We get wages and unemployment data all at 1 30. Lets talk to richard jones. Zurich, us today from where he has been stocking up on his own commodities run. He has been buying a lot of chocolate. D, tell us what you are expecting from that jobs report today. Richard good morning from zurich and happy friday to all, today, ilen spoke dont think the payrolls report will take on the importance we normally attached to it. From here, i think it will be interesting. There will be Trading Opportunities rocfrom it. The fed has come out with a very dovish stance. My favoriteking at bloomberg function and the a looking at a 20 chance of a rate hike in june, which is too small for them to even consider going. About the tatalk nkan. Corporate treasurers there, think the dollar will be at 1. 76. What do you make of the tankan . Richard it has swung the fed around to the way of thinking they have now. These numbers are not very encouraging from japan. The numbers from europe or maybe showing some green shoots, but we are not in the trend where we can say that europe has turned the corner. Those two big economies, in addition to the ongoing concerns with china, has swung the fed. And i think you are right, the tankan shows a really discouraging number for the boj. Richard,at the bottom of your screen, you have the dollaryen at 1. 30. This is the least bearish in three months. It is the onemonth risk reversal on the dollaryen, negative 1. 72. The fx, them has really caused havoc in the First Quarter of this year, hasnt it . Richard it certainly has, hans. And we go back to the fed on this. We look at where the fed was at the end of the 15, versus where they are now. The rhetoric is a lot more dovish than it was. We have had a very dovish market become even more dovish in pricing. Weighted onhat is the dollar, which gives problems to the japanese authorities because the last thing they want is a strengthening on the yen. Hans pmi is coming in. The preliminary was 50. 4. The number is 50. 7. France is coming in right in line with expectations, but still native. But is still negative. Italy is coming in on the upside. We have seen some strength with the German Economy, but not a huge upside. Richard, what do you make of these numbers . Think it is early days, but it points to something we have seen before. The German Economy is doing well as a result of the qe. But there is still quite a bit of work to do and the ecb will be quite vigilant in their program. Hans richard, thanks for that. The eurodollar is down on the move. Staying with bloomberg television, we have the pulse coming up next with francine lacqua. All of us here on bloomberg television, we wish you a good week and good luck with those jobs trading numbers when i come out at 1 30 u. K. Time. Francine how long can the fed state dovish . Hoping a march jobs report to shed light on the shadowy rate path. Kickulus kick sharding starting the old engines of growth. Is the rally doomed to fail . Elon musk unveils the newest tesla as orders surge