Transcripts For BLOOMBERG Bloomberg Surveillance 20240713 :

Lebanon had sought his release a week before he fled tokyo. Welcome to surveillance, i matt miller in berlin for francine lacqua. Lets check in with what is going on in the markets for the first trading day of the year. The stoxx 600, the broader european stocks index, is gaining 0. 8 . Futures that are rising as well. We could see a positive start in the u. S. We have a ton of pmis out this morning. I just had germany at the end of the hour. 46. 7. 46. 3. E looking pmi is still weak wherever you look. I thing we had italy or france and they were also pretty disappointing numbers. Coming up, a couple big interviews on the docket for friday. Chicago fed president charles fed president the chicago fed president joins our colleagues at 4 00 p. M. London time tomorrow. Set your dvr, because at 6 00 p. M. , we have the cleveland fed president joining Bloomberg Television. Another interview you dont want to miss. Lets get the bloomberg first word news in new york. Happy new year. Iranaqi militia backed by has broken up its encampment outside the u. S. Embassy in baghdad after fighters attacked earlier this week. The move could ease tensions between tehran and washington. Israels Prime Minister Benjamin Netanyahu said he will see community on corruption charges. There is no functioning government to consider his request. He is gambling that once the coalition is formed, he will be the one leading it. North koreas leader has called for shocking action against the u. S. He declared he was no longer bound by his pledge to halt major missile tests and would soon debut a new strategic weapon. That adds to president Donald Trumps Foreign Policy concerns in a politically charged Election Year. Theralia has drafted in navy to rescue tourists from wildfires. Many struggled to escape rural towns. 8 people have been killed in the blazes this week. Hundreds of properties have been destroyed. Global news 24 hours per day, on air and on quick take. This is bloomberg. Matt . Matt thanks very much for that. The pboc has slashed the retired required tax reserve ratio, eashing about 115 billion 115 billion of liquidity into the financial system. It aims to help it make help make it cheaper for companies to borrow. The manufacturing pmi stayed in expansionary territory for the fifth straight month, inline with recent pickup and economic data. And over in the u. S. , President Donald Trump says he will sign the first phase of a trade deal with china on january 15. He said he would even go there himself to help negotiate phase 2. Joining us now is simon french. This good news out of china and the chinau. S. Stocks, does that make you bullish for 2020 . Nearterm, certainly. I think there is enough signs of use in those pmis to get through the first half of the year aligned to the stimulus the Central Banks put into the Global Economy during 2019. My concern is that we talked about phase one, we are already talking about phase 2, but this is going to remain a conflict between the economic superpowers that will run for many years and it will lack send wayne and the concern will be and it will wax and wane. The concern will be that there could be violent reversals. Are your expectations in terms of rates . Earlier whost on said he actually expects a resurgence of inflation in the u. S. And he expects the ecb to ratesm negative interest to zero Interest Rates. That is an outlier point of view. What do you think. Simon it is not a view i share. You mentioned in your intro that president sr from fed this week. The fomc have guided markets to expect to be on hold. They really will tell the market to look closely at core inflationary pressures in the u. S. Economy, i would think, and see whether an increasingly tight labor market with uncertainty over how much Spare Capacity is left, whether it will start to show the kind of inflationary picture that would justify a pick back up in u. S. Interest rates. I think that is unlikely. I think it is even more unlikely that we would see inflationary dynamics in the euro zone that would permit the euro zone to move off negative Interest Rates. Yes, that is an outlier view. I dont see the core inflationary pressures in europe or the u. S. To justify the change. 2019 is thet get in level of stimulus we saw in 2019, which was its most conservative for a decade. Matt right. You dont expect that to continue. Is that a problem for supportive markets . That kind of stimulus, that kind of expansionary policy has been viewed as addictive in the past. Simon it has been very addictive and certainly if you trace the significant gains we saw in risk assets in 2019, it was all to do from the initial plateau in rate expectations. Then the subsequent cuts in Interest Rates. Are we addicted to it . We have to go back to core Earnings Growth when trying to assess appetite for equities. I think that is correct. A slight caution. Monetary policy and fiscal policy comes with a lag. We saw the action in 2019, the impact into the real economy in terms of earnings behavior, greater appetite for investment wont start to sort of pick up towards its peak during the middle of 2020. For me, the concern is what comes next because Central Banks time tocymakers deliver what is relevant in the euro zone. They by time and the clock is ticking. My concerns are the back end of 2021, you cant play the getting stimulus gain from Central Banks again because we fired those shots already. Matt we will talk a little bit more about that through the program. Simon french. Panmure gordhan. Coming, tales to tell and scores to settle as theories about carlos ghosn escaped from japan run rampant. Tokyo seeks talks with lebanon about the scandal. We will bring you the latest annex. This is bloomberg. Matt hong kong kicked off 2020 with renewed protests, vandalism , and tear gas in the streets. Riot police and demonstrations, fighting running battles on new years day. After tens of thousands of mostly Peaceful Protesters flooded the streets. What was the turnout and mood like last night . We saw hundreds of thousands of people come out on the streets. They marched through downtown from Victoria Park straight through to the central financial and shopping district. For most of them, it was peaceful. There were a lot of young families out. People handing out flyers. A bit of the Block Party Vibe we saw when the protests were largely still peaceful. At night, it turned a bit more tense. We saw police bring out a water cannon. Protesters let a couple of fires. Compared to a lot of violence we have seen in recent months, especially through parts of the fall, this did not escalate as badly as that. It still managed to maintain an air of peace. This signaled regarding the turnout that this is going to sustain well into 2020. Protesters saying they will continue to fight into the new year. They still want their demands met. This showed that that does not show any sign of slowing down for the next little while at least. Matt clearly, the protests are going to continue. The question is how does the momentum feel . Does it seem to be ramping up or does it seem to be slowing down . It definitely feels like it is sustaining momentum. A lot of it depends on the week, a lot of it depends on what the government has done. Have more people been arrested and that is going to bring more people out . At the same time, we saw this real peak of the violence in the fall and in recent weeks, things have calmed down a bit. We did see some flares over Christmas Eve and christmas and on new years eve and new years day, but it is not quite as violent as it had been. The peoples worst fears have not been realized and a lot of people looking to rebuild in the coming year, looking for things to be stable. At the same time, protesters saying they will continue the fight. How this all shakes out and whether either side makes concessions will be seen, especially in the coming few weeks. Matt all right, thanks very much. Lets get the Bloomberg Business flash with Karina Mitchell in new york. Karina china is cutting reserve requirements for banks. The ratio will be lowered by 50 basis points for commercial lenders. Releasing about 800 billion you want of liquidity into the financial system. The aim is to make it cheaper companies to endeavor is looking to expand, looking to acquire on location experiences. The deal is valued at about 660 million. India is shooting for the moon once again. They will probably attempt a landing this year as it seeks to restore credentials as an ambitious space power. That comes after a previous try last september failed minutes before a scheduled touch down. David stern, the man who transformed the nba into a global multibilliondollar powerhouse, has died at 77. He boosted revenue from 118 million to 5. 5 billion. His 30 years of service make him the longest tenured commissioner of any professional sport. That is the Bloomberg Business flash. Matt . Matt thanks very much for that. Lets get back to our top story, which is Carlos Ghosns dramatic escape from japan. It continues to pose more questions than answers. We may get some answers soon. In fact, we expect i believe a press conference from carlos ghosn. He previously had sought to give a press conference, but then was quickly rearrested. He did release a video, but the names in that video were censored. It will be interesting to see what we finally get. Lets bring in our asia transport editor. Talk first about the escape. I have heard a denial that he escaped in a cello case. Beenw that there had reports that lebanon was pushing for his release and maybe even talk that japan might have kind of look to the other way. What are you hearing . Will happy new year. There are many colorful and interesting theories as to how he did escape to lebanon. What we dont really know is the exact mechanisms of how he did it from start to finish. , there had been developments just recently. Turkish investigators are launching a probe into how he got to lebanon, because reports suggest he went by private jet through turkey. Also, prosecutors had gone into his home in tokyo to look around. We dont quite know what has come from that. Is that heelopment reportedly entered lebanon in a second french passport. He was allowed to hold two. What do we expect to hear from him . You were telling us earlier reminding us about the video that he released in which the names that he used were censored. People in companies or named ands set to be shamed here . I think that seems very likely. In his statement he issued when he arrived in lebanon, he said he could now finally speak freely. Expect much more forthright comments from him when he has his press conference next week. N that, january 8 perhaps he will release more names. He said he feels more free to speak from lebanon. Right, will. Thank you for covering the story for us. Coming up, we are going to talk about the year ahead for europe and the challenges facing the European Central bank. More with simon french. This is bloomberg. Mberg. Economics, finance, politics, this is bloomberg surveillance. Im matt miller in for francine lacqua. One of the two new executive Board Members for the ecb joining the central bank this week signaled she wants a more precise inflation goal. She warned her native germany against unjustified criticism. Makes as ecb policy issued a strongly worded letter to leaders to prevent the region from preventing low Economic Growth. Simon is still with us. Let me ask you about what you think of the ecb inflation target right now. It is close to, but below 2 . You could take a broad definition of that. They dont seem to have taken a very broad definition of that. 1. 8 ly, what they mean is or 1. 9 . Should that change . Simon i dont think it should. If you are not hitting your existing target, lets be honest of the ecb has not been hitting its existing target if you choose to lower it, you are effectively capitulating. ,f you choose to increase it then how realistic is that given your inability to hit the previous one . Week orhe backdrop of inflationary pressures. The danger is that the market looks at this and says, the ecb is playing around with technocratic measures, which might make economists such as myself pick up and take interest but actually are losing sight of the bigger picture. How do you return the euro zones growth inflation dynamics to the kind of levels where citizens are comfortable with . I think that is a really important part of the story that gets missed. Christine lagarde has managed through her first couple of months to contain the unrest that was taking place in the Ecb Governing Council following Mario Draghis decision to stimulate policy. Is she going to be able to reconnect with the agenda with politicians in the fiscal and structural reform side . That is where the success of her tenure will ultimately be determined. Growth andkind of inflation do you think they need to achieve here . Well, you cant immediately you certainly cant over any shortterm horizon change the underlying demographics of the euro zone area, which is consistent with growth across the zone of below 2 year on year. It is modest. What you need to assure is that given that it is relatively , yout, the Downside Risks have the policy arsenal and the Structural Reforms that limit the risks that it falls into a negative cycle. 2 growth range is not an unrealistic expectation for immature area, but in order to insulate it from Downside Risks, Mario Draghis failure was to move his statement into action. Christine lagarde has to do that to provide the safety blanket for the euro zone. Matt all right, simon, you are going to stay with us. Our guest cohost for the hour. Is beginning already. The countdown to the 2020 election. If President Trump wins again, he will be the first impeached president to win reelection. We will preview the key dates to andh this Election Year talk about how markets could react. That is next. This is bloomberg. Whether youre out here on lte or here on a wifi hotspot, Xfinity Mobile has more coverage to keep you connected to what matters most. Moooo. Thats because its the only Wireless Network that automatically connects you to millions of secure wifi hotspots and the best lte everywhere else. Save up to 400 a year when you switch. Plus, unwrap 250 off our best phones. Click, call or visit a store today. Matt the pboc plans the rrr as chinese stock falls near two year highs. This comes amid reports beijing has suspended plans for the shanghailondon stock connect. Hong kong starts the new year just as it ended the last one, with protests, vandalism, and teargas in the streets. We are live in the city with the latest. Get away. Os ghosns theories emerge about how the former head of no escaped of. Enault escapes japan you are watching bloomberg millerlance, im matt in berlin for francine lacqua. We are getting pmis throughout the morning and right now getting u. K. Data. December manufacturing pmis in at 47. 5,d kingdom read and the preliminary number was 47. 4. So a little better but silly contraction. That has been the theme of the morning with all but still a contraction. That has been the theme of the morning with all the connections we have seen so far. Lets check in on your european stock movers. For that we go back to Annmarie Hordern in london. On move we have a risk at the start of a new year, the minors more than 1 . Therekinds of financials this comes down to china, china moving to inject more capital into the economy. Theses why we are seeing sectors pushed higher. Airbus up 3. 5 . They delivered a Record Number of aircraft for december and are expected to exceed their 2019 goals. Performer forst the stoxx 600 for 2019, now starting 2020 on the back foot. They discovered oil in guyana, that they not enough anticipated before they started drilling. Matt i believe earlier this morning, it was off almost 20. Annmarie hordern, thanks very much for that. Lets get to first word news with Karina Mitchell. An air recce that comes after the fighters attacked of the compound earlier in the week. The move could ease tensions between tehran and washington. Says he willnyahu seek immunity from prosecution on corruption charges. That essentially blocks the start of his trial for months because there is no functioning government to consider his arrest. He is gambling that once the coalition is formed, he will be the one leading it. North koreas leader has called for shocking action against the u. S. Kim jongun says he is no longer bound by a pledge to halt missile tests and promised a new strategic weapon. That adds to Donald Trumps Foreign Policy concerns in a politically charged Election Year. Struggled toakers escape rural towns in australia as fire danger escalated. Many went to south wales and the neighboring state of victoria. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in this isn 120 countries, bloomberg. Matt . Matt thanks very much. It is officially the year 2020. That means it is a president ial Election Year, in america, and in just over a months time, we will get the first real results in terms of who could face donald trump with the Democratic Caucus in iowa. Here with more