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tv   Bloomberg Daybreak Europe  Bloomberg  July 1, 2021 1:00am-2:00am EDT

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>> good morning from bloomberg's european headquarters. i'm dani burger alongside yousef gamal el-din. this is "daybreak: europe." the s&p 500 finishes one of its best first tabs in over two decades. asian stocks flipped with concerns capping sentiment. tapering should start sooner
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rather than later. opec-plus heads into a crucial meeting with russia and saudi arabia split on supply hikes. markets expecting an extra half million barrels a day in august. president xi stands defiant. he uses the 100th anniversary of chinese communist party to warn the world not to stand in the way of beijing's historic mission, gaining control of taiwan. good morning. i can't believe it is already july. i have no idea how this happened. we are heading into this july with the stock market extremely resilient. s&p 500, to be specific. what caught my eye was howard silver at s&p global noting the global superlatives of the benchmark index. eight all-time highs last month, five happening consecutively. one of them ending yesterday. so far this year, about one in every four trading days has seen
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a new high for the s&p 500. yousef: in the meantime, the vix is down to a 16 month low. it is making bulls nervous. the worst month for value plays in 20 years. jp morgan sticking with their trade. they say the current market positioning is not justified, adding that what you will see with the vaccinations is a move higher in bond yield value and cyclical stocks. eight percentage points was the lag of some of the counterparts over the course of the last month. the most since 2000. let's check in on the market action in more detail. the s&p 500 mini future stories called higher. u.s. 10, 147. the hawkish shift in monetary
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policy. of course, it is helping the trade in the last couple of months. then you have the euro-dollar, 118:40 -- 118.47. kind of define the strategists, those who were calling for its demise and further deceleration of momentum. that has not come through. brent crude at $74 a barrel. citi saying we might get a surprise from opec-plus, that could lead up to the actual meeting in the coming hours. a big point in this program. now to our top story. robert kaplan says scaling back the central banks asset purchases should be done gradually. speaking to bloomberg, he also repeated his argument it would be prudent to begin the process sooner rather than later. >> to start sooner rather than later. excess risk taking, excesses in
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the housing market, and imbalances in the overall economy. and i do believe if we take our foot off of the accelerator gently now, we will have more flexibility down the road to avoid more abrupt action or severe actions. dani: fed president who also spoke. he said while the u.s. has actually fully recovered from the pandemic on a gdp basis, it will take time to get back on employment. with the economy being 10 million jobs below pre-covid levels. let's get more with alexandra dimitrijevic. first off, thank you so much for joining us. we heard from bob kaplan saying they want to put the communication out there, help avoid a 2013 style taper tantrum. does it look like they will be
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able to do that? has the fed been effective enough in their communication? >> good morning. thank you for having me. interesting, he's noting to have -- the communication from robert kaplan here. inflation has been one of the hot topics that is looked at over the past few months. as you said previously, a lot of news coming out of the economy. that is also reflecting on credit. and that raises the question with the rebound in the economy, the pressure we see, the supply and demand imbalances taking place, the bottlenecks pushing prices up. how long is that going to last?
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and the conditions in the market -- with the low rate, this is obviously something that we need to unwind as we move to post-pandemic situation. but we are expecting gradually for rates to increase. our forecast for the u.s. is more in q1. yousef: you talk about credit. one of the most read stories on the terminal this moment is around wall street beginning to get nervous around some of the big credit plays. you have seen the risk premium of high-grade and high-yield bonds basically get pushed to the lowest level in well over a decade. now the prospect of a gradual increase in treasury yields,
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many warning it could be time for investors to get defensive. so high-yield and high-grade remain very tight. where does it go from here? >> they are very tight. i think the whole story here is how things are going to normalize. if we are going through a gradual reflation, gradual normally inflation in the gradual increase, it is positive, because it reflects the trends of the economic recovery. the risks here would be if we have some shock repricing, shock volatility. this is where it can hit credit. remember, we had over 40% of the corporate credit in the u.s. --
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so it is really the pace we get on that transition. dani: where are the vulnerable pockets? what are the sectors you would be most worried about? >> the sector that we see suffering a lot from the situation of the pandemic, those with the restrictions like transportation, on airports, leisure, which have taken a lot of leverage during the peak of the pandemic. and where we expect the activity to normalize until 2022, or even 2023. these are the sectors. the highest share of credit on a negative outlook, where we could have more of the defaults coming in.
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yousef: what do you think has been the trends that dominated, in terms of rating actions? the reality is over the last year, ever since covid began, it has been a story of downgrades across sectors and geographies. when could that bottom out? you talk about normalization, does it mean a return to pre-covid ratings, or is the lower ratings than covid going to be the new normal? >> i think we have always seen a shock -- stronger than expected in the rating trends. you look at since the beginning of 2021, we have had a few times more upgrades than downgrades globally. that really remained a fraction
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of the downgrade that took place last year in the wake of the pandemic when we had the first big lockdown of the economies. what is really important to look at is a lot of these downgrades in the b or to the c, those that are more vulnerable to this shift in cycles. if we look ahead, we look at the negative that comes to the future downgrade risk, it is already down at 300 level at 40%. so that points to significant -- and i mentioned the lax transportation and leisure, 30%. dani: alexandra, thank you. that is alexandra dimitrijevic. she will stick with us. let's get to the first word news with annabelle droulers.
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>> china's president struck a defiant tone in his speech marking the communist party's 100 year anniversary. xi told thousands of officials gathered in tiananmen square that china's adversaries should avoid standing in the way of his government, and calling the quest to gain control of taiwan an historic mission. >> we have never bullied the people of any other countries, and we never will. we won't allow any foreign power to bully us. >> the u.k.'s chancellor is to outline what is described as an ambitious vision for the country's financial services. in his annual speech, he will set out plans to sharpen the uk's competitive advantage in the sector, with a focus on technology and grade finance. bloomberg will be speaking to the chancellor at 10:30 a.m.
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london time. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. yousef: thank you very much for that. we have some breaking lines hitting the bloomberg. dp world buying -- for an enterprise value of $1.2 billion. one of the biggest port operators in the world. it is expected to close in the second half of the year. it will be funded from existing available resources. dp world also saying it continues to make progress on capital recycling programs. they are fully committed to the leverage target of below four times net that evens out by the end of 2022. the eu's covid-19 vaccine -- today. they are seen as key to saving summer. we hear from the spanish foreign minister.
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that is next.
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yousef: welcome back to "bloomberg daybreak: europe." i'm yousef gamal el-din in dubai with dani burger. the eu covid-19 certificates go live today. they are seen as the key to saving the summer. spain is hopeful tourists will return. more on this with -- she is in madrid. in terms of numbers, how significant is it going to be for the summer season in spain? >> this is seen as the key to
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reopen safely. we know 2020 was a horrible year for the tourism industry. looking at this country, tourism spending fell 86% in 2020. looking at the numbers, it hit a 51 year low. the spanish government believes the vaccination received in the country, but also the digital passport coming into effect will save the summer season. some expect 17 million people to come into the country. on a normal year, spain can get to 70 million people. they are still taking a hit, but three times the amount we saw last year. the key will be vaccination, but also tracking the variants. i asked the spanish foreign minister how worried the spanish government is about this. this is what she had to say. >> in order to understand the prevalence. for now, extremely low of the
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delta variant. we will continue to sequence and pay a lot of attention to ensure we know and can respond. but the best qe have at the moment is essentially to keep vaccinating. >> that was the spanish foreign minister, arancha gonzalez laya. another thing to keep in mind is the delta variant is the number one variant, the predominant one in the u.k. it is a key market for spain. restrictions went up this week for tourists coming into spain. they have to take a test into the country. the spanish foreign minister told me it could change in the future if the number of cases for population goes down in the u.k. they are not ruling that out. >> i guess the approach to the u.k. has not been even. do we have sense as we have covid certificates going into
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effect about how united europe is in their approach? >> yes. if you look at net -- at that certificate, i hope we can show it on screen, it allows you to say you have been vaccinated, tested negative, or gone through covid. in terms of the eu 27, they managed to get this done on time. a few weeks ago, there were questions as to whether this could go into effect by july. they managed to do that. that is on the certificate side. on the politics, we see differences of opinion. germany is incredibly cautious on this. some countries, being too cautious can be economically detrimental. it is a tricky balance. but they have agreed on the certificate. we see political tensions over what restrictions could come into effect if the delta variant picks up in europe. dani: thanks for staying on top of this story. that is maria tadeo.
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as the u.k. and europe deal with the delta variant, the u.k. has laid out its rules for green bonds ahead of a planned sale of at least 15 billion pounds this fiscal year. we seem to have a delusion of bonds from the european union, as well. alexandra dimitrijevic is still with us. the last figure i saw for eu bond generation was a demand of $200 billion, more than 10 times the sale amount. is it possible demand for these euro area bonds could sack demand from other bonds, or replace treasuries at some point? >> it is good news that we have the first bond issued under the eu continuation plan. it can play a role to have some
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eurobonds at that level, and over time, continue to strengthen the positioning of the euro in the market. what is really interesting is, as you were saying earlier, the increase in -- bonds in europe, the u.k., are generally -- or generally in the market. we really expect these bonds to continue to develop and show the importance as the economy recovers in europe and the rest of the world to be a greener and more digital economy. that is a role the market can play in that. and i think this is also a first mark of the sector recovery and
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resilience europe can have in the region. yousef: i look at the ecb and begin to wonder with the strategy review whether some of what we just talked about needs to get factored in more aggressively. >> we will have to wait for september to hear hear about the strategy review. i think we started the discussion with the fed, the pickup in inflation. it is not like in the u.s., but i think all eyes will be on the ecb in september to see if we won't start to leave the fruit off of the table and start gradually reducing the amount under the gdp.
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and we still see the ecb later into 2024. but i think they will be focused into the second half of the year on the transition of covid, and how we manage the big unwinding. trillions of support, which have been very important to damage control during covid, but now how we do it without creating too much volatility in the market. yousef: that is the multitrillion dollar question. fantastic getting through all of this with you. alexandra dimitrijevic, thank you for being with us. we will talk about banks. they are doing more to reclaim talent as the industry competes to keep staff during the pandemic. few people are getting a bit more, in terms of pay. we will let you know who it is. this is bloomberg. ♪
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>> we are taking inflation from -- to bring in a market where people immediately will connect. i think the soul of manufacturers is in their roots. if you connect to the routes, you lose a little bit of soul. dani: that was luca de meo speaking with bloomberg's caroline tuning. yousef: let's step back into some of these metrics on asset classes. we had the commentary from mr. kaplan. it did cause some repricing. it was necessarily significant. we are looking to extend the record level. a stellar run year to date the
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first half of the year. jp morgan holding onto the value trade. but the superlatives have been nothing short of inspiring. dani: speaking of maybe a value trade that has not done well, bitcoin with one of its worst quarters in quite some time. it is interesting that despite that, we see some more institutional interest, as well. yousef: .72. they basically are seeking a crypto ahead to manage the cryptocurrency space. also the family office of george soros started trading bitcoin. that is based on people familiar with the matter. it shows the story -- it is way too early to write off crypto, even bitcoin. dani: one thing i also think
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about with bitcoin, when you have the likes of point72, george soros' family office. millennium has been involved. a lot of these are stat driven firms. things like the equity market, it is difficult to find an edge, because it is so crowded. we often talk about volatility in bitcoin. maybe it scares away institutional traders. maybe it is actually the volatility that allowed these types of people to find the edge and make good money. maybe they want that good volatility. yousef: but vix has been back at the lowest levels in about 16 months as we look at the remainder of the trading day. let's get the data board back on. the u.s. 10 arranged down. -- ranging down. let's get straight to brent crude and natural gas. it has been in focus. let's give you of a snapshot of what else is going on. we will get into the depths of
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the oil market. we are awaiting the opec-plus meeting later on. production levels getting focus. talk about fattening supply. this is bloomberg. ♪ (announcer) back pain hurts, and it's frustrating. you can spend thousands on drugs, doctors, devices, and mattresses, and still not get relief. now there's aerotrainer by golo, the ergonomically correct exercise breakthrough that cradles your body so you can stretch and strengthen your core, relieve back pain, and tone your entire body. since i've been using the aerotrainer, my back pain is gone. when you're stretching your lower back on there, there is no better feeling. (announcer) do pelvic tilts for perfect abs and to strengthen your back. do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me, it works 100%. (announcer) think it'll break on you? think again! even a jeep can't burst it.
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yousef: good morning from bloomberg's middle east headquarters in dubai. i'm yousef gamal el-din with dani burger in london. this is bloomberg daybreak: europe, and here are today's top stories. s&p 500 finishes and one of its best halves in over 20 years. virus concerns sap sentiments just a little bit. the fed reiterates tapering should start sooner rather than later. opec-plus heads into a crucial
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meeting with russia and saudi arabia. they are split on supply hikes. the market is expecting an extra half a million barrels a day from august. and president xi jinping thinks that he uses the 100 anniversary of china's commonest party to warn the world to not stand in the way of beijing's historic mission, gaining control of taiwan. for me, this is the last working day of the week. in terms of the market, there is still a lot of room left until late friday and a lot of data to get through. but we are looking to build out some of the record runs we have had in stocks in the first six months. even though volatility has bond to the lowest levels in about 16 months. dani: i do think one of the things that's striving the lower volatility is the lower levels of economic policy uncertain we've seen -- uncertainty that we've seen. you can look at the index and
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it's built looking at different newspaper clippings that different people are saying and that has been falling. the one strange thing is that the skew index, the index of hill ridges has been near record high. there are still -- still parts of the record that are hedging things. yousef: you have parts of the market sticking with the trade. jp morgan after the worst month for value stocks, they are saying, markets have to wait it out a little bit, they will come back. dani: let's go to the data, we are seeing some of that value trade that jp morgan is talking about, that you are talking about this morning starting to shine through. i think that is the crux of why the european futures are outperforming up for 10th of a percent versus the s&p 500's 2/10 of a percent. really driven in the s&p 500 futures by industrials. i say that because the dow is outperforming.
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meanwhile with -- meanwhile we have oil below 75,000 -- $75 a barrel. being delayed by one day. and i had to bring it up again, i had to put natural gas on their at its highest since 2018. it's so hot in the u.s., that's why we had that really, really high price when it comes to natural gas. oil and focus, as i was saying today, opec and its allies are holding critical talks on hiking output in global demand bounces back from the coronavirus pandemic. there has been a division between saudi arabia and russia on the pace of production increases. joining is now to discuss this is the energy aspects head of research. first off, thank you so much for joining us. what a perfect day to have you on. what are you expecting out of opec-plus today? >> thanks for having me. opec-plus is expecting a small
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increase today for august. i think anything up to $500,000 -- 500 barrels a day not to saudi arabia, gcc as a whole are very cautious of increasing production about the delta variant. iran coming back. they really want to add nothing. russia wants to add potentially, we've heard, a million barrels per day. so let's have the difference of meeting in the middle. our view is that it won't be more than 500, but it could be less than that. yousef: i look at a know it and they are arguing that you are going to see the markets still playing catch-up here. in fact, what you might see is oil prices go even higher, and that opec-plus is going to be behind the curve. they are making the case for mid 80's for brent crude. i wonder if you have any projections at all? >> we absolutely think prices
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are going to continue to rally, especially if opec adds anything up to 500 barrels a day. it's a drop in the ocean. we are expecting over 3 million barrels a bay in q3. the market will take that as a no. they are doing something, but very much behind the curve of when it comes to adding barrels required for the summer. so we are expecting prices to trade above $80 as well, despite opec increasing production. if opec were to increase one million barrels per day, we might get a few dollars of correction, maybe 2-3 dollars. but i don't necessarily think that will be long-lasting, as long as demand picks up. that is the key variable over here in the delta variant has caused a lot of concern. that if demand is rising, we see prices back in the 80's. dani: opec is likely to be behind the curb. even if they did want to catch up or put enough supply out into the market to match the demands for the summer, do they have the capacity to do that. the spare capacity -- is spare
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capacity a concern? >> a great question. the simple answer is they don't have enough capacity. saudi arabia, uae, kuwait have invested. at throughout the pandemic but generally they have the capacity. for example, the last two months they have been struggling to raise production, even with higher opec-plus. a lot of countries, and you are seeing this in nigeria and angola, so much decline rates accelerating, and so much last year when oil prices crashed. it has been very difficult for a lot of countries to maintain production let alone grow it. so the headline number of the 5.8 million barrels of the capacity that opec-plus has, we think it's less than half of that. yousef: who's going to be the wild here in the opec-plus group. every time around there is somebody doing something they are not supposed to be doing.
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and i wonder who that is going to be this time around. >> the good thing, in a way, is everybody is enjoying higher prices. it does seem like our sources tell us it's a cross of opec-plus. everybody wants to maintain the status quote. the prices at a very comfortable level, especially after the hardship last year. so though to it -- they don't necessarily want to rock the boat that has been used in communicating to us. i think that is why there is more confusion. russia is more worried about inflation this time around ahead of the september election. that's why they are pushing for the increase, not necessarily about market shares. yes, there are differences between russia and the rest, but it's not insurmountable. >> of the wildcard be the return of iranian oil, how does that impact the action of opec less today? >> annmarie: this has been -- >>
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this has been a big debate with opec-plus, and saudi arabia's right to be cautious about this, and anyway the fact that opec will be behind the curve is dictated that they need more clarity around iran, when are they coming back? if iran is coming back it does make sense to run down inventories because they will have it back. but talks have not been progressing very well as of late in vienna, as you have seen from the headlines. the last round of talks was they don't even have dates right now. there are a few sticking points that are becoming quite difficult to overcome. the ball is in iran court, whether the supreme leader wants a deal or not, but there are definitely signs that it is proving harder, that even we would expect the end of may. so you could see rates of oil delayed to q4. yousef: u.s. natural gas futures
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are extending gains for what has been the best first half since 2008, the heatwave that's rocking new york city. but heat waves that have affected various parts of the world. how much of an inflection point have we seen for the energy sector broadly? are we going to see an increase in capex, a return to some of the dirtier fuels to try to meet demands? run me through what your initial interpretation is on. >> it's the times we live. remember the winter we just had in asia and the u.s. as well. the texas freeze, record low temperatures, it was very similar. we have to use fossil fuels. like you said, record heatwave in canada and u.s., even parts of the middle east. in the middle east they are back to burning liquids with crude oil and fuel. the world announces the use of fossil fuel. i think the biggest issue right
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now is that consumers are not moving away from fossil fuels as much as the narrative is, and therefore supplies are moving away from fossil fuels a lot quicker. this is one of the big reasons you see white oil prices are where they are today. there is no investment in oil, and gas is very similar. some companies are investing in gas because they still think it's a fuel, at least for transition, if not for the future. but generally oil and gas continue to be vilified in the industry. and when it comes to demand, we are so reliant on both. yousef: it has been immensely valuable, thank you for reflecting on some of those insights. the energy aspects head of research. from propelling vehicles and heating buildings and introducing electricity in industrial materials, we are all more or less familiar with the uses of oil. but how much of a barrel is used
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towards each of these is a different matter. >> crude oil, black gold. almost 100 million barrels will be punched -- pumped each and every day this year, and shipped to refineries for processing. but then what? what comes from a barrel of crude? exact amounts vary, but more than 40% of a typical u.s. barrel is refined to gasoline, the largest product. next, think diesel, that's fuel for trucks and trains and heating oil for our homes. 10% is turned into kerosene and jet fuel. of course jets, but also portable heaters and cooking stoves. then there is residual fuel, the heavy stuff for ocean liners, power plants and industrial boilers. but that's 2% of a barrel. that still leads about it -- leaves about a fifth. crude makes everything from propane to asphalt two ingredients for plastic and chemicals. so as the world contemplates a greener future, the challenge with doing it is the fuel that
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is so much of our life today. dani: let's hear from annmarie hordern about what comes out of a barrel of crude. you can catch her on the washington beat out of d.c. the chinese communist party turns 100. in his address, xi xiping said his people would not allow foreign forces to bully them. up next we will be live from beijing. this is bloomberg. ♪
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dani: welcome back to bloomberg daybreak: europe. i'm dani burger in london. yousef gamal el-din is beside me in dubai. china is celebrating the 100 anniversary of its ruling communist party. addressing a crowd of about 70,000 in beijing, xi xiping
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highlighted the nation's progress towards "a moderately processed society." the chinese president used his speech to warn foreign powers do not get in the way of the country's historic mission. >> we have never bullied the people of any other countries, and we never will. we won't allow any foreign powers to bully us. dani: joining us now from beijing is bloomberg acre -- anchor tom mackenzie and from hong kong we have our north asian correspondent stephen engle. what did we learn exactly from his speech? tom: he had a number of different audiences in this speech that he laid out for those 70,000 members as he stood at the gate of heavenly peace in their forbidden city. he was talking to the domestic audience at the party is self in the international audience. with the domestic audience he was underscoring the successes
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that he sees of the communist party over the last 100 years, particularly on the economic front. he mentioned the moderately process society. this is been a long term goal for the party in china has met that. it essentially leaves china closer to developed nation status. you are looking at an economy that has grown 50 times since the 1970's. you are looking at individual incomes, capital, wealth of about 10,000 u.s. dollars, it's well below the u.s., but far higher than it was years ago. you are looking at a stronger, in terms of military, country here that as he would say, is rejuvenated. that it's back towards its rightful place on the world stage. you also have some pretty strong comments for foreign countries. anyone, as you say, who tries to bully china will meet a great wall of steel, he said. and he also reiterated they key theme for the communist party would be re-unifying china and
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taiwan. yousef: just in terms of the optics, interesting to see in this nationwide address, basically above the portrait of the tiananmen square, it has been quite a few days. what else briefly would you say we have learned? tom: also pointing out that the economic challenges for xi jinping are up and the men. this is economy that has not rebalanced in terms of the economy. there is a massive wealth divide after it continues to be a major problem amongst the corporate. there is the question of the demographic challenge. and then international saying china is looking more isolated. xi jinping said, we are a nation that wants to see global peace, we are ready for cooperation, but again, the international perspective of china according to the latest pew data is
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suggesting there is a lot of concern. it's in developed countries about the policies that china has enacted along the belt and road as well. dani: let's talk about policies and hong kong. stephen, from where you are sitting, what does the current outlook for hong kong seemed to be? stephen: it's a poorly rising question and issue and hong kong. and i have lived in and out of hong kong for the last 31 years. i have been here pre-handover, post-handover and into this current situation. we have seen beijing's influence in the city as strong as it has ever been. the national security law and subsequently the complete overhaul of the electoral process of where many pro-democracy candidates and former lawmakers are serving jail sentences or standing, waiting for trials, perhaps under the national security law. we've had a number of different
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changes here. but then again, the government says this is necessary. and again in commemorations today, here at the hong kong waterfront saying a broad stability, and the national security law will be continued to be implemented in various forms going forward. but it was a much more muted ceremony here today to mark the anniversary 24 years ago of that handover. also the hundredth anniversary of the founding of the communist party of china. and also, yesterday was the one year anniversary of the national security law. there was 10,000 police out on the streets in hong kong today. they often times, the protesters gather. there were no protests to be had. the main area where they had the commemorations today was sealed off from the general public. so much more muted than the big party up in beijing today. yousef: thank you very much for that, that is our chief north asia correspondent, stephen engle from hong kong and tom
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mackenzie there as well, getting some particular insights. here's what's coming up. dallas fed president robert kaplan says scaling back the central bank should be gradual. he thinks -- he speaks to bloomberg next. this is blue. . ♪ -- this is bloomberg. ♪
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>> there are parts of this price surge that will moderate used car prices, lumber prices. also, what we are seeing in our work, we are seeing a broadening of price pressures that are ripping into a broader range of items.
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semiconductors shortages first effected and used cars, now they are starting to affect more broadly consumer products. having said that, our pc forecast for this year, for year end is 3.5%, but we think that will moderate to somewhere to 2.4% next year. but, that 2.4% next year won't be impacted by an extreme number of high items, it will be price pressures on a much broader range of items. the only comment i have made is i don't want to label, but i'd like to manage the risk because there is uncertainty in upside risk. >> there is uncertainty, and a lot of the inflation we are seeing was predicted by members of the fed and the committee. so how long is it going to take you to have actual concrete numbers that are based on just reopening to know whether you are right or wrong about inflation? >> i think this is going to be a
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dynamic picture. i don't actually think there is a date at which this is going to become, all of a setting, clear. i am hearing from my contacts, some of these pressures are due to reopening. we will see evidence of that, i would guess, through the fall. but some of them they tell me are more persistent, have to do with other secular trends, long-lasting supply and demand balances and they may take longer. >> we could see excesses in financial markets, if you wait too long. how long is too long? if the market consensus is the end of the year, is that about when you should start tapering or sooner? >> i would prefer sooner. and i have said the words sooner rather than later. and the fomc meeting i very specific, more specific about timing. we still have to continue to make progress, clear that we've weathered the virus, which i think we have.
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i think it will be far healthier to start sooner rather than later. why? excess risk-taking, excess in the housing market and imbalances in the overall economy, and i do believe if you take your foot off the accelerator gently, now, we will have more flexibility down the road to avoid more abrupt action or severe actions in the future. i really believe that >> you have set -- that. >> you said to the markets we will give you a long runway. if you move it up, does that shorten the runway, and is that a prism of a taper tantrum fear? >> i think the aftermath of this downturn is very different than the aftermath of the great recession. 2013 we learned a number of lessons. on the other hand, i think, today, i think our adjustment in purchases is likely to go much better. in one of the reasons why i have
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been out there talking about adjusting purchases is i wanted to get out into the market, and i think this debate we are having at the fomc, some of it publicly is good, that people are on notice that these adjustments are coming. the only question is when? i think it will be far healthier sooner rather than later. yousef: the federal reserve bank of dallas robert kaplan there. even though there were some fresh bits in his comments, the markets did not aggressively reprice. here is how we are looking at the asset metrics where we are higher on the euro stock futures. u.s. 10 year yield, 146, rallying into the month. dani: every day we have done this show together there has been a new high in u.s. stocks. maybe we will see that again today. coincidence? i think not. we are looking at a weaker euro versus the dollar today. brent crude trading around $75 a barrel. telling us today she could see
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it go above 80. that's it for us at bloomberg daybreak: europe. yousef: miss you. dani: miss you too, it's been great. this is bloomberg. ♪
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>> welcome to "the european open." the s&p 500 finishes with one of its best first half's in 20 years. asian stocks slip. kaplan reiterates tapering should start sooner rather than later. opec-plus heads into a crucial meeting with russia

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