Transcripts For BLOOMBERG Bloomberg Surveillance 20170606 :

Transcripts For BLOOMBERG Bloomberg Surveillance 20170606

Into the terrorist attacks. This is bloomberg surveillance. I am Francine Lacqua in london. It seems pretty clear that there seems to be a risk off mood. The haven assets are getting quite a big bid. I want to start with the pound, but it is more of a dollar story with equities retreating in general and investors turning cautious following the sevenweek search, with oil fluctuating. On the oil story, we will talk about the saudi story. 2. 16. 0 year yields, lets get straight to the bloomberg first word news. Reporter we start in australia, where Islamic State has claimed responsibility for a hostagetaking in melbourne that left a gunman and one other dead and three Police Officers injured. 29yearoldt the after he fired a police with a shotgun. He had taken a woman hostage that he had arranged to meet from an Escort Agency and is believed to have killed the building receptionist. The white house has insisted that President Trump is not picking a fight with the london mayor. He criticized the highprofile british muslim on twitter. The mayor last night lit a vigilant solidarity with the victims of saturday nights atrocity. Thousands gathered near the London Bridge to honor the thousands. Tim cook says the company has helped british officials to investigate terrorist attacks. Pressure is mounting on Technology Firms to protect their products and services from being used by violent extremists. Tim cook we have been cooperating with the u. K. Government, not onlyi in Law Enforcement kind of matters, but on some of the attacks. I cannot speak in detail about that. But in cases where we have information and they have gone weough the lawful process, not just give it, but we do it very promptly. The white house says President Trump will not use executive privilege to prevent james comey from testifying to congress this week. Comey is likely to face questions about conversations they had on investigations into alleged russian meddling into the election. Boris johnson is claiming that only theresa may can get brexit right. This comes two days before the general election. Its campaignusing on the welfare support for retirees. Global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. This is bloomberg. I am nejra cehic. Francine the ruler of kuwait will travel to saudi arabia to mediate an end to the diplomatic crisis in qatar. Qatar airways has suspended all flights to the uae. The white house says President Trump wants talks with all parties to resolve the dispute. The president is committed to having conversations with all the people involved in that process. We want to continue to de escalate that. At this point, we are continuing to work with each of those partners. Francine plummeting the most since 2009. For the latest on the diplomatic span, bloombergs middle east anchor joins us from dubai. What is the latest on the political front . There seems to be a lot of will to resolve the situation, but what is the likelihood of that happening . A lot of commentary,what is e political francine. The United States has answered through Central Command in qatar. You saw some of those developments firsthand. Ultimately, if you look at the u. S. Track record of patching up relationships in the middle east, it has not been very strong. This will come down to the gulf counsel figuring this out themselves. This is going to be very difficult. , thereme around in 2014 were ambassadors during the last crisis discussing, and it took seven weeks to resolve. Kettner commented this could drag from six months to all the way up to one year. What is at stake in these conversations, the folks at Eurasia Group made clear it will come down to radical changes in qatari policy, or absolute capitulation. Francine give me a sense, the u. S. President says he wants this peacefully resolved. We see kuwait wanting to get involved. It will have the most impact in terms of mediation . Yousef ultimately, it will come back down to the gulf leaders to figure out themselves, as much as the u. S. Is going to try to get involved, it would be tricky for them to pick one side over the other. They have a voice, they have relationships with qatar. It isnt everybodys interest it is in everybodys interest to bring this to a wholesome conclusion. Ahmad have not taken a position to isolate on qatar. There could be another split between the gulf council. You have this alliance that is trying to isolate qatar, and then you have ahmad and kuwait, backing out of this, and then you have qatar on the opposite side. Francine what is the Market Reaction today . Yousef it has been remarkable. We are seeing a bit of opportunity come back into this market. Keygold is one of the functions people like to pull up. A lot of strength is coming through with telcos and utilities. A lot of Downside Pressure remains on energy and materials. Those companies, crumbling. Also watching out for credit, insuring sovereign debt for qatar, which remain relatively high compared to the usual average that they trade on. That is what we are watching and we will keep you uptodate on the story. Francine yousef, thank you. Now joining us is jane foley, head of fx strategy at rabobank and max kettner from commerzbank. Jane, lets start with the middle east. What is the read across into your currency world . Jane we have seen the yen a little bit firmer. That is not just because of the gulf news. Here are other pieces of news in japan last night, there was the news of the siege australia. They did not have a huge Market Impact in terms of risk appetite. Ahead to, if we look the rest of the week in the u. S. We have the former fbi director questioning as well, the ecb meeting. Right now, the market is waiting and looking forward to the events we have got coming. Francine max . Max absolutely. If we had cross asset perspective, there is not much of an effect on world prices. The reaction is relatively muted. Yields are on the year to date lows. That is something that is fired up by the risk off move, but it is relatively contained so far. Francine i am surprised on oil because yesterday it spiked up quite a lot. I am not sure what calmed nerves in the market. Max that is tough to tell. It comes down to the point that we are in Uncertain Times and a very uncertain week. Markets generally have a very tough time pricing uncertainty. We used to price risk, but we are not used to pricing uncertainty. Francine what happens next . If this escalates, jane, can this have more of a bid for safe havens . Jane it could. A number of commentators said this morning, if this gulf situation escalates, there could be less reason for the various opec nations to comply with their cuts. There might be more supply coming on board. It is very difficult to know which way to take it at the moment. It is early days. It takes a fair amount of political will. This crisis, it is interesting, the timing. It is literally days after Donald Trumps visit to saudi. Maybe they are sending a strong message. They need to look at the u. K. Government. They have ties to qatar, significant investment links. I think for now, the take is that this will not go too much further. They are in a very difficult position. It is also in their interest to calm this down. For oil, it is very difficult to tell right now. Francine jane and max both stay with us. Lets get straight to the Bloomberg Business flash with nejra cehic. Reporter banco popolars chairman will not go ahead with meetings today, citing identified people as Investment Banking sources. The spanish newspaper says they do not plan to request emergency liquidity assistance from the ecb. Early merger talks between tmobile and sprint indicate an all stock deal might be the preferred option, avoiding the need for refinancing. Parent Companies Deutsche Telekom and softbank still not know if they want a deal and a sprint and tmobile are talking to other potential partners. Any potential merger would become located by the need for regulatory approval. Airbus is planning a further cut in bills rates in the superjumbo amid the new orders. The company is assessing how best to drop output between the 12 planes a year, known as rate one. The company said in july, they should be sustainable for next year. A decision will be made before the end of this year in the absence of further sales. That is a Bloomberg Business flash. Francine the u. K. Foreign secretary, Boris Johnson, claims only theresa may can get the brexit right. This comes just two days before the general election. Labours switching the focus to welfare support for retirees, saying tory plans are the biggest attack on pensioners in generations. Anna has been braving westminster for us. Theresa may is putting boris into action today and he is focusing on brexit. Anna absolutely. Good morning to you. Boris johnson has moved back to the northeast of england. Anybody watching as the brexit results rolled in one year ago will remember the role played by the northeast of england, and the Early Warning signals it gave to investors as to just how strong that vote for brexit was going to be. He went to the brexit heartland, to the labour heartland traditionally, to campaign for the ruling conservative party. He says this is a moment to believe in the huge potential for Brexit Britain and the only theresa may can get it right. In the meantime, the labour party will talk about retirees and pensioners. The focus is still on the aftermath of the terrorist attacks, broadly. How much do the police now about the attackers as various reports surface about how much was known by the police . Police suggest there was no evidence of any immediate attack being planned. Nevertheless, these are the conversations going on. That rhetoric could still stick to theresa may, who was home secretary for six years. Francine what is the latest in the polls, anna . Anna the latest is, they have been narrowing. We had another poll overnight. This showed one percentage point lead for the tory party. That was narrowing from the previous time we heard from survation. The polls range between a 1 percentage point and 12 percentage point lead. We have heard from axa overnight. They talked about how guilt yields could double if we saw a labour victory. I got a message from a gilt trader, saying how we have not reached peak risk, in his words, as the news about the terror suspects starts to percolate and stick to the conservative party. Deutsche bank say they see a tories. Jority for the that could mean the hard brexiteers get a hand. But having said all of that, my colleagues of Bloomberg News suggest that theresa may and Boris Johnson, as they campaign in the traditional heartland, that could suggest the believes theparty polls are not as tight as we have been led to believe. Francine anna edwards in westminster through the morning for us. Still with us, jane foley and max kettner. Jane, we also had great pieces of analysis saying, if labor yields couldgilt reach 10. 7 . Jane the market is very concerned about public spending. This cu couple of overrunning points. The markets are very much focused right now on this point, the gilts. They are very much looking at this. Some of the media have not shown this in a good light with respect to their calculations. Public finances, how the labor government would afford to have free education, free tuition fees for universities, higher spending on pensions, etc. Francine what does that mean, max . Lets say there is a Hung Parliament first of all, if we assume there is a Hung Parliament, the tories cannot pull a coalition together . And what does that mean for the markets the next day . Max the markets would have a tough time initially. It is a different situation than with brexit, when you said sterling is down in a couple of you. K. Equities. You will see the proposed labour policies. That will probably not prop up u. K. Equities. Equities will have a tough time win, as willlabour sterling, probably. Francine jane, these are my positions on pound. Do you expect this to accelerate . We are two days away from the vote now. Jane we had one sterling value in january, when tresa may outlined she had her plan sterling rallied as a result. The next was when she announced the election on april 18. The polls at the time showed she would win in a landslide. Sterling rallied again. But it did suggest that yes, the markets generally speaking, prefer that government because of the publicsector financing applications. But opinion polls now are much closer. We have seen these short positions change a bit, the market no longer wanting to take that bet that theresa may will get a strong government. The market is also concerned that if she does not get a strong majority, the brexit negotiations could be a lot more messy, more difficult for her to sell her plant a at home. Francine if she gets the huge majority, she can almost ignore the ventures. Jane sterling would go up with that. Francine jane and max stay with us. We will be building up to the u. K. Election all week. Tuene in for our onehour special thursday, when we get instant analysis as exit polls a re published. Up next, an exclusive interview with apple ceo tim cook. This is bloomberg. Francine you are watching bloomberg surveillance. Im Francine Lacqua in london. Apples chief executive says the company has helped u. K. Officials investigate terrorist attacks. Tim cooks exclusive interview with bloomberg comes as Technology Companies face mounting pressures. Emily chang started by asking him if apples new operating system helps strengthen user security. Tim these terrorist attacks first of all, our heart goes out to everyone affected by them. They are horrendous and the u. K. , for us, we have been in the u. K. Pretty much the whole length of time for our company. And it feels like they are our neighbor. We have thousands of employees there. Our heart goes out. What do we do, helping with this . We have done, one thing since the beginning of the app stores, app store. The we dont want hate speech out there. We dont want these recruiting things on there. We have tried to be very careful since the beginning, not having that stuff on there. I am not saying we will never make a mistake, but actually, i dont know of a case where something has gotten through in that perspective. We are really vigilant on what happens from that point of view. We also, we have been cooperating with the u. K. Government in not only in Law Enforcement kind of matters, but on some of the attacks, and i cannot speak in detail about that. But in cases where we have information and theyve gone through the lawful process, we not just give it, but we you know, do it very promptly. And so, i think, i would hope, that they would say that we have been cooperating well. That. Think, you know, there was valuable information. There is a misunderstanding, i think encryption does not mean there is no information, right . Because likely metadata exists. Youre area, if putting together a profile, is very important. Emily can we assume apple is always working to make encryption Even Stronger . Tim the reality is that the cyberattacks on people and governments and i mean, it is happening left and right everywhere. These upset your safety, your security. It is not just privacy. It is not privacy versus security. It is privacy and security versus security. And so, we are always working to try to stay one step ahead of these hackers that frankly speaking, had gone from the guy in the basement that is a kind of hobbyist to a sophisticated enterprise. It takes all we can do to do it. Userst think our should have to think through all of this. It is not practical for people. We try to stand up for users and stay one step ahead of these guys. Francine tim cook there. Up next, will critical questions about the jobs report influence next weeks fed Rate Decision. We look at that and the movements on the markets. We look ahead to the fed, but also the ecb, next. This is bloomberg. You are watching bloomberg surveillance. I am Francine Lacqua in london. Islamic state has claimed responsibility for a hostagetaking in australian that left a gun man and another dead and a policeman injured. Him after he fired at least with the shotgun. He had taken a woman hostage and was believed to have killed a building receptionist. The white house has insisted President Trump is not sitting 8 starting a fight with the london mayor. Vigil led a vigil and thousands of people gathered near London Bridge to honor the seven killed and dozens others injured. Airlines has canceled flights. Plummeted the most since 2009 as a result of a dispute. President trump wants to talk with all parties to resolve the situation. Committed toent is continuing to have conversations with all of the people involved in that process, and those countries commented deescalate that. In the u. K. , the foreign secretary Boris Johnson is claiming that only theresa may labor isbrexit right. Switching the focus of its campaign to welfare support for retirees, saving the conservative plans could lead to almost 4000 more deaths this winter. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Cehic. Jra this is bloomberg. We get the u. S. Federal reserves latest Rate Decision this week after last fridays jobs report. Critical questions about economic vitality. The market still sees a 90 chance of a rate hike according to the world Interest Rate probability. If you have a bloomberg terminal , ju

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