Is long europe and along french financials still. To buy Christian Dior. Is this another bet on global reflation . Just a halfhour away from this tuesday open of the european session. I just want to point out we are looking at gains in futures once again today. If you expected another pullback after the big games that we saw in european, Global Markets yesterday. You might be slightly disappointed this morning, ishough the ftse move mispriced down, so maybe we will see a drop there. Also, look at the bonds right here. Not a lot of change from yesterday. This is a threeday chart, so you can see on the second day of this chart, the big game that we had in bund yields, the big drop , but not a lot of movement. Although 08 t yields continue to fall a little bit. It will be interesting to see how things shake out in other asset classes. Guy plenty to talk about this tuesday morning. Lets talk about what happened yesterday and rolled into today. Massive monday. A fair way to describe it. You stocks up by 4 . Cash outperforming, germany doing well. The point i would make on this is we have been decent volume. There have been a few lowvolume rallies of late which arent a ringing endorsement. But yesterday was a decent volume and that tells you a lot. The other thing i need to tell you is, the dollar is back on the front foot this morning and definitely worth paying attention to. Lets get a bloomberg first word news update with juliette saly. Juliette in france, Marine Le Pen is stepping down as head of the National Front party in order to be the candidate for all the french people. She is set to face Emmanuel Macron in an election that is seen as a battle between nationalism and globalism. While macrons critics say he has no clear policy, supporters argue he would be good for europe. More europe is needed, not just for monetary union, which is a pillar of european integration but to ensure citizens that europe is about growth and jobs, something europe has not been doing very well recently on. Juliette in south korea, a u. S. Nuclear powered submarine has arrived as part of its schedule to conduct briefing patrols in the pacific. The arrival of uss michigan comes and mid amid heightened tensions with the north. Rex tillerson is to discuss the and denuclearization of north korea during his meeting with the Un Security Council on friday. Chinas nonperforming loans have stabilized in the pressure from capital outflows has eased. The economic recovery takes hold , according to the countrys deputy central bank. He was speaking at the forum in new york. Economic to maintain growth and also work on the leveraging process and making sure that our lending and broad money supply has been growing consistently with the leverage aspect. Juliette global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Matt . Matt donald trump is to call for tax cuts for individuals and 15 accordingrate to white house officials. Trump plans to make the public his broad outlines of what he wants for the change in tax code. The details are likely to be left for later negotiations among congressional leaders and officials from treasury. Lets bring in mliv macro inategist mark cudmore singapore. Lets talk about first what trump has to do tomorrow to pacify markets, to move markets. What are we looking for . Have been trying to debate that on the desk and after the failure of the healthcare bill, it will be hard to provide a big impetus for markets. Markets want to see a deal that is signed, sealed and delivered before they react after promises were failed to be delivered earlier. If he announces something particularly special an interesting. Just and the sizing he is still following his campaign to miss a 15 Corporate Tax. I think shortterm, we can get a little support, but it is a hard stretch to sustain. The bar is very high for him to surprise markets in a massive and sustainable way. Guy that is the baseline. Probabilitybout the of him delivering something significant here. How ready is the Administration Im not talking the white ready is the administration to deliver on tax mark mark i dont want to speculate too much, but you have to think they are focused on this and certainly the reports coming from both sides of the house wants tax reform. I think after the health care failure, trump needs to deliver something on tax as soon as he can. To mean in they summer. It may be difficult by the end of this year, but he needs to get on it and he knows that. I think he will be trying to deliver something that markets will get their teeth into. Aboutou have been talking the e. M. On your blog this morning. This chart stood out to me. The emerging market currency index, which is the white line and the bloomberg Commodity Index and the spread has widened. Each way will this one break . Which way does it move . Mark hard to know. In emerging markets are trading well. Global growth is picking up and it is a good story. Valuations were low after a multiyear negative market for emerging markets. Back into emerging markets. Shortterm, i am worried. Emergingmarket currencies are trying to break into a higher range than they have in two years. I worry that with commodities trading so poorly, can this virgins sustain . Divergence sustain . Also, china is talking about import tariffs, might bring a nafta deal back into focus to threaten the mexico deal. Turkey has rallied after its own story. But those idiosyncratic stories are still there in the longterm and ken retain market narrative again. Matt quick question on france because i noticed one of the polls has macron up only 20 points. Basically 10 points if you give them up to Marine Le Pen, could change the picture a lot. He is being grilled for the hubris he showed in his acceptance speech after only winning the first round and Marine Le Pen is looking to broaden her base by stepping down as leader of the National Front. Is there a chance that things get shakier than markets are expecting . Mark i think we probably will narrow a little bit. This is often a theme in the second round. It is different in france for the expectation is that the supporters of candidates will move behind macron in an anti Marine Le Pen vote. There will be narrowing, some attacks on macron and a market commentary. Analysts point out the risks. The more people repeat the risks , it gets in the narrative that there are risks here of Marine Le Pen winning. I dont think people people going to the second round complacent. There is an expectation macron will win, but not complacence. Going into the next round, i think we will put a little of those hedges again, some risk rhenium into the second round. Matt mark cudmore, bloomberg and live macro strategist. You can follow insights on the bloomberg at mliv. Coming up, we will be speaking to s. A. T. s ceo in his first interview of the day after the companys sales topped estimates at 7 40 5, 5 minutes from now u. K. Time plus 45 minutes later wrong, we speak to the covestro in an interview we dont want to miss. An exciting day as more earnings continue to roll out. This is bloomberg. Sap has topped sales analyst estimations. The new version of its flagship suite of rogers. Were joined from the Companies Headquarters in germany for the first interview of the day. Take you so much for your time this morning. You beat the estimates with sales. You guys have talked about the license sales in canada and mexico. I want to ask specifically about the u. S. Always interesting to what is going on in my home country. How are u. S. License sales going . Absolutely. First of all, let me say i am pleased to report an outstanding start to the year. We really enjoyed outstanding growth across all the pillars of our business. Software licenses were up 13 . Cloud new bookings close to 50 and you cannot have these numbers without a Strong Performance in our main markets. The u. S. In particular, did remarkably well with double growth in Software Licenses as well as the cloud. We are off to a strong march. Both across mature and emerging markets which is good for sap. Matt that is your established market and your established products doing quite well. What about the new s4 suite . How many people are running it testing andn versus what is your goal for getting customers up on the s4 suite . A remarkable First Quarter as well, we were up in significant double digits. We now have more than 5800 customers and we are seeing more go live. This has a sales fortifying effect as live customers come back as references, spreading the news to other prospect. We see our growth accelerating. It is one of the key reasons our Software License business is growing so much as our analytics portfolio. More importantly, it integrates growth across our entire portfolio, including our cloud solutions. You can also see this from the fact that our order entry from deals above the five euro mark from 17 of total 27 ins in q1 2016 to 2017. That is what i call a cross fortifying effect across our entire portfolio. Guy it is guy in london. What will a 15 u. S. Corporation tax rate mean for s p . It wouldl, of course mean a lower effective tax rate as our business is growing in the u. S. Any lowering of the Corporate Tax rate would be beneficial to sap. We had a good performance in q1. We have remained lower than in q1 of 2016. Lets see what the future brings. There is still a lot of time that needs to pass until we see entirely clear on the u. S. Tax reforms, but any reduction to the Corporate Tax rate would benefit sap. Guy would it change the way you invest geographically . Luka guy lets shift to paris. Offered to buyas. 26 stake in Christian Dior the family will offer a mix of cash and Hermes International stock. We have our guest joining us from paris. Why now . That is a very good question. Is, no an easy answer family has currency in their pocket that has gone up greatly in value over the past few years. A shake hermes. A stake in hermes. They can swap that. The backdrop has been pretty good in the luxury industry. Been difficult in early 2016. Things seem to be doing well. Im not quite sure, but those are pretty good reasons. This is a company that makes dresses, shoes, sunglasses, and perfumes. By this transition transaction as a measuring stick, what is the outlook for a Company Valued so richly . These are iconic brands. I dont think they sell cheaply. One analyst was commenting the price is very high. Lvmh is going to pay for the Christian Dior couture business. They never sell at a huge discount. The backdrop has been pretty good. It has been optimistic in the recent Conference Calls we have heard. The outlook looks pretty good. Where does that take us . I think the expectation among investors is bernard is also always looking for investments by. There is speculation that comes up regularly about a lot of closely held assets that might come on the market. That has been his mo for decades. Think, lvmh, can that get much bigger . You can add collections. He is not done making deals. Matt thank you very much for your time. Fill in paris covering this. It is an iconic name. It is a massive amount of money, more than 13 billion for a 26 stake. We are getting french headlines crossing right now. Manufacturing and Business Confidence here. Business confidence in line with estimates at 104, but Manufacturing Companies beating versus 105. 108 we see french confidence rising a little bit higher than had been anticipated. A couple other numbers coming out. Three versus a one. The french numbers coming in higher than the estimate after yesterday. We saw the massive rally in the as Emmanuel Macron cannot came out victorious with Marine Le Pen after the first round. Things seem to be firing on all cylinders for now on the french market. Guy lets talk about stocks we need to watch. It was a massive day yesterday. , recentlyories abundant around europe. Ppg, the u. S. Company, looking to consolidate within the sector , raising over 29 billion now is the offer. The possibility of going hostile is something we need to be there in mind. Be interesting to management int will they admit we have got to talk to this company as well. Fresenius is buying akorn as well. I was getting excited with akzonobel. Classics were the future, and now we are here. Investors making a specialized classics. It had an excellent First Quarter. Werests say estimates beaten and guidance was raised. We are going to speak to our guest soon about this. Profit beat and you should see some move on the open. Guy i want to talk about one of the charts on the day. That is the outperformance we are seeing from airbus. Look at what has been happening. The me show you this chart. This is the attack in the blue. You can see the expansion we have seen over the last few days. Look at the outperformance you have seen from airbus. Defense spending coming from government. It is an amazing outperformance. This is in advance of the paris air show. It is the open. This is bloomberg. Guy we have a minute to go threadhe european open looks like we are going to see some continuation. Looks like we will not open up as strongly. Not a bad performance 5 . Idering we are up nearly im looking up because currencies have been so important to watch. Here if you want to access it yourself. Nd little bit higher today the euro may gain a little bit. A lot andout cable the dollaryen. It is interesting to watch some of these other pairs. European go. We are trending around the variety points to a fairly more positive story. Opening a little bit more , but i guess after a day after incredible performances, probably a fairly exceptional performance along these markets. Have come off a threemonth low in shanghai. Market have a look at this relationship. Etween the s p 500 this is the inverse correlation between the s p 500 and the shanghai composite. What happens in china does not transfer itself to the rally. Another 25 higher in Global Equity markets in two years. Be the lastt to guy. Politics is no longer an excuse to be outside of the market. Afterrkets are much more seeing their way through. Is the election losing 5 and before that the french exit. The 10 day200 of gilt markets these are the june futures market. Unchanged attely 1. 6 . Guy lets talk about where we are with these markets. Point of the setup. The markets seems to like what it is doing. Well. Ending higher as on the downside, lets talk about what is going on there. Erickson you can never tell. Sap is also softer as well. Political story. It was a rally driven by the french election. The european earnings kickoff this week. Some really big names and we will be talking some of the senior leaders. I guess more upside in french financials. Now out of the way. What is it . It is discrepancy in america right now. Trading at 11, 12 times. I think you had clear reasons why there was a gap. With bad debt, but i think that is fully reflected in starting tol risk diminish. I think all those things together you should see a reconvergence not getting to the u. S. By any means. Are getting some interesting earnings as guide pointed out. Erickson is down because sales failed. On the other hand, you have for volvo with a gain in sales because of infrastructure spending. Europeansee the economy supporting the gains that we have seen . I think the european economy. S moving along consensus is probably 1. 51. 7. The numbers have been very strong this quarter. There is some Capital Investment for some companies. What is the political discount . I think a lot was removed yesterday. Biggest. Siemens is our rallied. Why the banks i dont know how much macron makes a difference. I think the political discount maybe a little bit, but most of the cap wiped out yesterday. Mostly like . Mostly wiped out . Does it matter who wednesday german election to the markets . If you get someone from the far right or far left, that really worries the markets. Netherlandsce and you dont have that risk as much. Food and beverage is a safety sector. I think youre looking at four times book value. It is not a cheap sector like you get with the rest. Great companies and wellmanaged companies, but very rich. If you start to see higher they arerates, i think Bond Investors forced into equities. Still plenty more to come. Market braced for chumps spending reforms. What will that mean for the Investor Base a rally. Rkets enjoy we will break that down. On the show his views european politics and brexit. That is more to come. This is the open. This is bloomberg. Guy the europeanck to market open. Lets check in with how the index equities are doing. After thee changed big gains weve had yesterday. He ftse up interesting point to make about the dax. Yesterday, it reached an alltime high. The ftse for the close to its record high. The cac is still welloff from the alltime highs it hit back in 2000 and still off the it hit in 2007. We are talking about 6600 or around the 6100 level for those years respectively. The cac had a bank update, it is still pretty far off from the highs its all a decade or two ago. Or two ago. Decade guy petting a little bit of weight to the market. Lets talk about the upside. We will see much of Christian Dior folderstian then. He is still with us. Some seamen positions siemens position. A cleans up a longstanding problem, but i think in terms of management, it brings together dior could tour your could tour i think that has to be a good thing. Where is this business im looking at headlines overnight out of china saying they are. Ulling back where is this business getting the most of its sales growth. Is it the asian area . Yes. I think the recent results did comment particularly on chinese whethers driving demand it is in paris, sydney, or tokyo, they are spending. Great company, great return on equity, salt consolidator of brands. We wanted it was half price. The company very well run. They allssues have potential risks. What is that safe for the future . For the share price Growth Potential of these chairs . The multiple is a full multiple. I think we need to see earnings growth, but i think the track good and oneremely of the things we still like is ,he emerging market consumer whether there is a lot of growth still to come in countries like india, indonesia, brazil. There are wealthy consumers in those countries. Does the luxury sector work differently . You understand how the different sectors are working. When ita different comes to pulling businesses into one Umbrella Organization . Luxury is different. I think it is good at focusing on true luxury. The things that are quite scarce and have a premium via. I think you can distinguish that true luxury which i think Brand Management is first class. Chart here. Euro this tracks back about 12 years. You see a relative weakness in the euro including emergingmarket currencies. It is kind of thing and benefit to a country or anyone selling goods out of europe . Basically. You that eight tailwind for a number of years. Over the longterm, youve had a benefit from that. Think ecb is going to continue in effect will be reducing its balance sheets. Italy think it will be a stronger dollar. 20 think about the rest of the sector, is lvh the only one you can own . The luxury sector fashion changes. Fallee brands rise and relatively quickly depending on who happens to be the crazy director or who doesnt. It is one of those things fundamentals dont apply. Lvh ingreat thing about there are other ones that have a great portfolio. Lvmh very good at managing that. Not over investing when the brand is hot, but also buying new brands in investing in building them. That is the trick. Guy we will carry on the conversation with patrick in just a moment. Torick armstrong is going stick around. Taxp next, u. S. Corporate could be cut to 15 . What is expected from Donald Trumps tax and spending reforms. Suffice to say, a lot. This is bloomberg. Minutes past the hour. Germany has agreed to buy a u. S. Drugmaker for 4. 3 billion. Europes biggest publicly traded Health Care Provider also made a. Maller purchase says it mayes allow a takeover of exons dax akzonobel. Hareholders meet tomorrow Sales Top Estimates again. That is your bloomberg . Thanks. For at trump calling Corporate Tax cut to 15 . Trump plans to make these plans public tomorrow. Whatd outline of one he wants to change in the tax code. The details are not to be released until later to figure how it gets paid for. Patrick, can you be optimistic about this yet or do you have to take it with a grain of salt since none of it seems to have been worked out yet . Definitely take it with a grain of salt. It is not going to be easy to get through. A one foot in dollar if you can lower the headline to 15 then as long as the effective rate doesnt change much and get rid of loopholes. Nothing is going nothing is going to come easy. It is not easy math. Guy if there is a change in the way that debt is treated, will that change your thinking on the u. S. . Theres so many sides to things you do. If you have great tax reform, cut taxes, you probably have the fed coming in to tighten rates quickly as well. Everything has repercussions and who trump said twice is knew it would be so constituted on issues . How you think the markets are going to respond because everybody has been geared up for this. We saw initially a huge rally. Do you think the market is going to appreciate this tomorrow . I dont think we will get much of a market move on any tax changes. We think there is a lot of difficulty there. 25 timesding at earnings. I think that is largely based on tax reform. People are still hoping he will get through, but hes got a lot of work to do. Guy where did he put money . If you look at the market at 19g, google is trading times right now. That is all based on earnings and revenues from advertising coming on youtube and search. Apple trading at a discount to the market. You l going bio techs another market. At marketrading multiples. Give me the dollar overlay on london. I think the dollar will strengthen, not sharply, but it is just a characteristic. Youve got negative Interest Rates so even if youre getting nothing, you are making money on carrier. Guy we are going to talk more after this break. Silicom, covestro in the First Quarter. Mark President Trump to slash tax by 50 . How much detail tomorrow. Markets shift gear after the micron equity rally stalls. The attention to earning seasons, is results next. Lvmh is to buy Christian Dior for 12 billion euros. Bloomberg markeys onside gus guy johnson. Guy lets talk about how equities are performing. Nevertheless holding on to some of those gains. We are up by. 2 in europe. Attention to which individual stocks are moving the markets. Also in the mix as well. Up by 2 . Lvmh is up by 3 . Christian dior is up by 12 . Although picking up pickingucture volvo up infrastructure. Seven stocks in the stoxx 600 this morning. Farsi and swiss re and vinci. Matt that wasnt set the 2017 outlook, the plastic manufacturer soul volume rises 9 thanks to sustained demand for polymers. The companys ceo Patrick Thomas for his first interview of the day. Take you for your time this morning. Boom time and should we be wary of what next year will bring . The way you have to look at it is this is the ninth consecutive quarter. I would characterize it not as a boom but as positive momentum continuing. While i think it is happening in the market, we are seeing the Global Growth accelerating and that is why we have raised our forecast. As you said earlier 9 Global Growth. It is interesting to look at the geography of that. China with a growth rate of 13 in asia. In europe and north america we saw 7 growth. How is it that we grow above gdp . The main reason is because we are substituting materials with High Performance plastics and which replaces things like steel and glass to make cars lighter, to make better windmill blades. It is a great name of the lots of these processes. We see that particularly strong in china. There is a theme developing about the chinese economy where the nature of the growth in china has become more quantitative in terms of quality qualitative. Really strong growth in medical, electric vehicles particularly the automotive sector. Strong growth in insulation for industrial buildings. Have competitors like basf who are boosting their capacity to produce polymers. Is that going to provide more competition Going Forward . If i look at the growth rate over the next five years, what you are talking about. One of the main polyurethane materials for insulation. The growth rate is around 5 . Actually last year it grew 6 . The Capacity Addition rate is growing at an average of 2. 6 . Capacity are totally normal and are needed to supply this very fastgrowing market. If you take a regression on growth over the last 20 years it is above 7 . This continuously has been a highgrowth sector. Can you give me a sense of what restocking looks like and ere we are in that cycle and some of our growth came from restocking particularly as we signal price increases from the first of april. To be honest the market is very well balanced at the moment and there is a limit to how much material can be stocked physically and eight regulatory point of view. China, a lot of materials we sell it you need a special license to social best to store them. Many customers use our storage rather than their own. There is a limit to the type of Specialty Products we make in terms of how much stock building can be done as raw material. I dont see much evidence of that yet. Guy your cash flow positive. Give me a sense of what you think the priorities for that money is. Our. Very simple. Firstly we have a dividend policy which we have established last year. Ideal of just about 2 . Attractive anddy that will be the baseline level Going Forward. We intended to maintain or increase that as we go forward yearbyyear. Were coming up to our annual Shareholders Meeting where the dividend is expected to be approved. Good dividend policy, stable and increasing over time. To continue capital to expand assets. We are in a phase where we can to bottleneck in much better costs. All the Greenfield Assets are on the ground. Now in a really good place to actually do the bottleneck it. Necking. We are number one and polyurethane globally. Number one in poly carbonate. Competition law does not let us buy into those sectors. Outside of those sectors there is nothing that is really attractive to Building Quality of the business. Let me ask one final questions for you patrick, try and get clearance for the big purchase of monsanto. Mistaken, they recently sold 1. 5 billion worth. Should we be worried they should sell more at a discount this year . I would not see it as a worry or concern because it is up to them when they sell. I see no reason why not. The share price if you look at that placement recovered very quickly. I dont think there is a concern there. We see it as a positive for investors to increase fully free flows. From the point of view of any entry into the dax, one thing we need is greater free flow. Guy think you are a must your time with us. Congratulations on the numbers. He is the ceo of covestro, joining us in germany. A bit of news coming through on japan. Sold mostly to retail investors, more details to bring him. We will bring that in just a moment. We will come back and we will deal with this. Down, youf the rights can see it appear. On the righthand side you have breaking news. Jobs, more than 1700 japan looking at charge. You have this great function down here. You can get involved as well. Up next we will be talking to a few finance ministers. I am not, like bosses. My boss is. Could pave the way for a stronger euro. This is bloomberg. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries matt this is the European Market open. Markets sure the outcome of the first round of french president ial elections. Sitting down with italys finance minister to discuss the result of the vote and how it could impact brexit negotiations. This is the first round, of course it is good news. Lets wait for the second round. This is good news for france, europe, and the global economy. Do you think this could reform the European Union . Could this mean a more integrated eurozone that we have seen before . More europe is needed not just for the pillar of european integration. Those who are sure just about growth and jobs. Some the giro has not been delivering very well. Do think the problems to do with pushing that integration together will be easier with that it would have been with hollande . Exploit much more than a single markets. Im convinced that macron will uses leadership to deliver on those areas. The british negotiated with macron, have you noticed he is different . The negotiation will be on very clear terms. A commonly reach negotiation with brexit. That will be a hard brexit . Maybe a clear brexit. Carlo pattern one, Marine Le Pen is stepping down as head of the National Front ready to campaign for the french presidency is a free candidate who can represent all the french people. Now is the moment to move from words to action and is the reason why it seemed essential for me to take leave from the presidency of the National Front. I am no longer the president of the National Front. Im the president ial candidates. Candidate that which to unite all fronts people behind the product of hope and security. Emmanuel macron should win by 20 percentage points. Complacently that complacency that some say was laced with hubris and a dinner he wants to immediately with all of his staff. Are we making too much of this . Does mccrone have this in the bag . Bag . Cron have this in the ive learned not to say he is the winner. With the trump election nothing is impossible. Theres probably going to be a couple of twists and turns. You cannot say he has it in the bag. Solution . Is the solution to what . Does it get rid of civil unrest . Appease the people . Economically and europe. It is not answering the question that is leading to the votes on both sides. Clearly a coiled spring. If youre sitting in the United States do you still believe that low point passed its of view in terms of Political Risk . Pick longterm. Five years down the road there is europe . In five years time, you may want to throw stones for five you mayr than get not have a likely chance now but mccrone is not macron is not walking into an easy issue. Job heve an easy does not have a government that is going to support him necessarily. Even if he wants to head for more europe, are we going to get that . Guy has raised the question yesterday of eurobonds. It does not look like there for that. The possibility of european army, almost laughably impossible. Is there going to be more federal version of europe . It can move that way but you can also see it falling apart at the seams as well. If you do have a sustainable europe you probably do need eurobond at the center of that. Support countries that are liking like the periphery. I dont know that is palatable for the guy you look at Angela Merkels party with the fact that he supports europe. A decent constituency in germany says no we are not going down that road. What is the trajectory for europe . If that does not happen i think i do not think the eurozone is sustainable. The debt levels are very different and employment is very different. You need that with some sort of physical must in some physical mechanism. That mechanism is not right there now. That integration is needed or else it will fall apart at the seams. Nonetheless an interesting conversation about something you make Investment Decisions based on. You have optimism for the euro. We have both sides of the coin there. Guy were not done with you yet. Patrick armstrong, he will be joining matt and i on Bloomberg Radio daybreak on london via the digital radio. 10 minutes and we will be back chatting on Bloomberg Radio. Emerging currencies reap the rewards of french elections in the first round extending a rally of unusual resistance. It is starting to look stretch. Stretched. This is bloomberg. The london live shot as you can see, probably worth wearing your coat out there. The london market in the deep freeze a little bit today after a big rally yesterday. Lets take you to the stoxx 600, the movs train screen. Novartis doing well on the numbers. Dior, up by nearly 3 . Is trading higher. 1. 2 . G up by seven us go ex dividend in the stoxx 600. Two biggest names are talk p. M. Em. Turkeys Prime Minister had strong words for the eu. He said his country is tired of the European Union treating it like a student. We see fingerpointing at turkey with instructions to do this and not to that is if they are the teachers and turkey is their students. Thats kind of thing will not be accepted by this nation. The turkish lira and other countries were big beneficiaries of the first round election result in france. Assets have been rallying even before that despite commodities and Political Risk. Tracy alloway has been following the trend for us. She is in abu dhabi. Walk us through the price action we have seen recently. I was focused on the polish zloty, a handful that rally yesterday for fairly obvious reasons in the french election. Took. M. Currency rally place outside the region. The mexican peso climbing 1. 6 . South african rand against the dollar and the turkish lira up 1. 5 . Msci emerging market index is actually up almost 20 year to date which is a funding stunning performance since we have headwinds with polo geoPolitical Risk on the rise. Also the commodities route and traditionally declining prices would be a negative but investors seem to have looks past all of that. Guy how long does that last . You have seen a divergence between currencies and that is the line here. This is the Commodity Index down here. At some points that need to come back together, doesnt it . A lot of people, or currencies come down. That is the very, very big question currently mulling over. Anycan take your pick from number of factors that could sway the rally. There is the commodity about but they are also things like a fundamental being less supportive. Weve seen Chinese Markets declining, economic weakness after this year after we have the 19th communist Party Congress in beijing. Global economic growth, that is the rate risk actor. We have seen some weakness coming through uneconomic data. Thanks very much. Tracy alloway from the cupboard of the Global Market site area of umag,g for the ceo matt and i are going to Bloomberg Radio. Patrick armstrong will continue on digital radio. All of that is coming up. This is bloomberg. European stocks held steady and chinese shares regained ground. Francel ahead in the pen is stepping down to camp is a free candidate. The u. S. President wants to personal and private taxes. Bloomberg surveillance in london. It pretty busy day for you and bring you the swiss earnings later on. Firmly on the littlbiof
comparemela.com © 2020. All Rights Reserved.