Skip to main content

tv   Bloomberg Daybreak Europe  Bloomberg  October 6, 2021 1:00am-2:00am EDT

1:00 am
>> good morning from bloomberg's european headquarters pit 6:00 a.m. in the city of london. i am dani burger. this is "bloomberg daybreak: europe." and here is what you need to know. inflation years gripped markets. stocks sank as blackstone and brookfield say it is time to sell. the energy crisis continues. france and spain call for new action on surging gas prices. we are at the summit in slovenia.
1:01 am
boris johnson will use his speech to shift the blame for the supply chain crisis, presenting it as an opportunity for the u.k. if yesterday was all about yolo and bargain buying, today is all about yields and the warning shot they are sending across the globe when it comes to the inflationary picture. this is yesterday's close, shooting up more than seven basis. the energy crisis running amok it's not just that. in the u.s., surveys showing that manufacturers and purchasers are worried about this inflation and supply chain issue. it means right now, we are getting this pretty significant spike in 10 year and 30 year yields. it is being led on the long and, pointing to inflation staying power at this very moment in this environment. this not only puts us in a difficult position in assessing these markets and how you invest but it puts central banks in a difficult position as well.
1:02 am
let's flip up the boards. mohammed saying how difficult an environment it is, saying other than the emergencies of the 28 and 2020 crises, it is the most uncomfortable operating environment for the federal reserve in some 50 years. it's transitory inflation call, it's not playing out. stagflation area wins complicate -- stagflationary wins complicate it. it is this transitory inflation not playing out that has markets worried. here is your view of markets today. it is impacting stocks today. euro stoxx 50 down one person in the premarket futures trading session. s&p futures down .5%. we are finally getting that concern about yields. dollar stronger today against the euro. brent crude back up above $82. in terms of the central bank story, one central bank has gone
1:03 am
ahead and went to raise rates to control inflation. they also signaled further increases may be needed. let's get to juliette saly in singapore. how is that impacting the markets today and generally, how are asian markets faring? juliette: we are seeing a bit of a deputy nation markets but this lift off from the rbnz, when some were suggesting perhaps they would hold given the delta variant upending the overall economy. really pointing to not only inflation but the unsustainable price rises. you can see inflation rising to its highest on record in 2020 one, signaling we are likely to see for the rate hikes ahead. let's take a look at how it has affected the kiwi. you saw the kiwi move higher against the dollar and it is now lower against not only the dollar but also the aussie as a focus -- as the focus moves to what they rba will do next.
1:04 am
in terms of these markets, continuing to see growth stocks hit the nikkei, down by 1.8%, on its longest losing streak since 2009. we were talking about this index being the world's worst performing in october so far. we are already six days in. seeing weakness in the hong kong property sector as we see the fallout of evergrande. we have been hearing from carrie lam about boosting land supply and this pickup in energy players, the only bright spot for investors. testing year-to-date lows. dani: thank you so much paid a lot of market moves. juliette was mentioning hong kong and carrie lam. speaking in the last hour, the chief executive announced plans to ease the housing prices including a massive boost in supply. let's bring in stephen engle. what have we heard so far from
1:05 am
carrie lam? stephen: i am still monitoring it. it has been two hours and it's full of details and lots of vision about the integration. her ideas for integration further with mainland china and the cornerstone of that is more housing, low income housing, which has been's housing crisis. if you want to call it that, it has been a source of friction we saw bubble up on the street. trying to solve that by creating a new metropolis on the border with mainland china. creating some 926,000 homes in total to house a population of about 2.5 million people, i should say. we don't have a timeline but it will take at least a decade, maybe more, to create this new urban metropolis in the north which is really farmland that is often times controlled by the
1:06 am
property developers here. that is part of the whole plan, to get this land back from the property developers here in hong kong, which helped controlled land prices and get some low income housing built and also build an international i.t. hub. in addition to housing, we saw news about the national security law. she praised it for bringing stability back to hong kong as well as the need to basically pass article 23 which is hong kong zone security law as she continued to think beijing for its leadership over hong kong, a troubled couple of years. finally, she said they need to expand trading and stocks denominated in the yuan, a further step to help beijing's goal for the renminbi. dani: so many important topics. thanks for monitoring them. this global housing issue. that is our stephen engle and
1:07 am
hong kong. let's go ahead and pivot to the u.s., specifically the debt drama that has been unfolding. some of democrats third bid appears to be set to fail today. due to that uniform republican opposition. that spring in bloomberg's enda curran in hong kong. one of the ideas that has been floating around to solve this issue is a loophole where the treasury could mint a coin. picking up a lot of steam but yellen does not seem so into the idea. enda: there seems to be a disconnect between social media and the treasury on this one. the treasury secretary said on cnbc that the idea is a gimmick and the point that she made was that what you are asking for the fed to do is print money, which would erode the fed's
1:08 am
independence from the executive and it could lead to a broad base of inflationary pressures rather than congress borrowing money itself, so she came out against this. the white house themselves, a spokesperson said it's not just the fed side. at all points back towards this october 18 deadline. we heard president biden warning of a meteor heading towards the u.s. economy and blaming the republicans for blocking the debt ceiling. this will become a pressing issue for investors as we get closer to this deadline. >> there is a disconnect between social media and the real world? i am shocked. we also had biotin voicing support for powell after elizabeth warren questioned leadership. how important were those remarks that came from president biden? enda: pretty important.
1:09 am
it is one of the few times we have seen that recently. given that there is so much pressure on him, we have the issues with the fed president having to resign over the stock trading issue. naturally, a president will issue confidence in his own central bank governors. the opposite would be quite newsworthy in itself. there is a critical juncture. his term is up for renewal in february. we know there has been some opposition towards him getting renewed, most especially led by the left side of the democratic party but interestingly, on the banking committee, chair powell has a majority of the sport at the senate level so that is an important vote of confidence for him, coupled with what our own colleagues have been reporting, that president biden tends to support him for another term.
1:10 am
global markets would want direction and signal from the white house in terms of who will be steering the fed and what it means for policy heading into the post-pandemic economy. dani: fair enough. if there is anything markets hate, it is uncertainty. that is enda curran. first word news with juliette saly. juliette: hello again. major policy differences with the cdu led conservative block after they formed a three-way coalition with the free democrats. merkel's conservatives are still hoping to lead a government candidate despite their merit defeat. the u.k.'s brexit minister, david frost, says france is unreasonable to suggest he is not respecting the post-brexit deal. in an escalation of tensions, after france highlighted britain's reliance on imports for its electricity supply, france says it is not getting
1:11 am
enough fishing permits. mark zuckerberg says accusations that facebook puts profit over user safety are "just not true." the ceo addressed concerns in a note to staff after a whistleblower told a u.s. senate committee the company is well aware of societal and mental health risks of its platform. >> i would not be at this company as long as i had been if this company did not prioritize safety. we do. we have accepted billions of dollars. we have more than 40,000 people who are working in safety and security across the company. juliette: global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. dani: thank you so much. juliette saly in singapore. coming up, the energy crisis fueled concerns about inflation and slower growth. investors look ahead to u.s. jobs data later this week and we will discuss the latest in global markets, next. later on, i will be speaking to
1:12 am
the ceo of schroders at 2:00 p.m. london time as part of bloomberg's global invest conversation. we will be talking about the private assets and where investors are demanding products now that we might be heading towards a regime shift of higher inflation and moving central banks. more of that, coming up later today. this is bloomberg. ♪
1:13 am
1:14 am
>> there's not a lot of places to go in a regime like we are in now. >> it is a very good time to be liquefying assets. >> markets are liquid. exiting makes sense. >> i am saying that there is sensitivity. >> you still want to own equities. >> reasonable growth equities, that they are in the end the only alternative for most
1:15 am
people. >> what you don't want to own is long-duration fixed income. >> long bonds seems like the wrong answer. >> you are more vulnerable. no place to hide. >> many institutions seeing a home. >> the mainstream. corrects the risk/reward potential far outweighs any of the other things that they may be able to look at. corrects some of our top experts speaking at the bloomberg global news conference. let's get the view of one more expert. the head of investment strategy and research at state global. thank you so much for joining this morning, getting up early for us. it does feel like these because of concerns are stacking up. is now a time for you where you want to be taking profit in some areas and stepping away from a more volatile and concerning market? >> yes, we still do think that equities are the place to be.
1:16 am
they have the highest forecast return for us and if earnings keep delivering like they did last quarter, we think the equity markets will keep justifying their current high valuations but we have been taking a little bit of money out of equities recently. putting into long bonds as a bit more of a hedge and moving some of our standard equities into low volatility equities as well so we are paring back but we certainly don't think it is time to get equities altogether. dani: how interesting. when you're taking the money out of equities and putting into long bonds, low volatility, is there any specific area within the equity market that you have been drawing back from? altaf: i mean, we have been paring back on emerging markets for a couple of months now. that is related to the china slowdown. just to be clear, we don't think that evergrande is china's lehman moment but we think that
1:17 am
this broader kind of program of common prosperity will have wider ramifications for the market so we have been taking a bit out of emerging markets. we are getting more positive on europe as well. we think the u.s. will be passing the baton to europe in terms of earnings growth and market leadership so it's not like we have got an overall negative view on equities but we do think it is worth taking a bit of risk off the table and repositioning as well. dani: we will talk about china in just a bit but one thing that you wrote about in your thoughts to us before the show, this interesting dichotomy in markets. you talk about the possibility of a complacent market so where are we now at least in the short term if longer-term we are constructive? complacent or optimistic market? altaf: this is a market that was getting overly optimistic and definitely teetering on the edge of complacency and that did worry us and lead us to start
1:18 am
taking a bit of money off the table. the thing about complacency is that it is not a risk by itself but it can leave the market a lot more fragile. when worries do come along like china, like the debt ceiling, the market is more liable to be pushed around and that is what we have seen in the last two weeks, moves up and down on an alternating basis. the market is more volatile and it will remain more volatile going into the end of the year but once again, we don't think we do a major collection. dani: fair enough. we have seen four straight sessions of s&p alternating between 1% gains and losses, the longest streak since june of last year. that is a very solid point. i have a question on your long bond position. we are seeing yields spike up at the moment today. we saw that yesterday as well. so is your assumption that this move higher in yields uses somewhat as we head into the end of the year and next? altaf: we do think, as central
1:19 am
banks have been saying, that inflation is transitory but for different people, transitory means different things. 3% to 5% for more like six months to a year so not as much of a blip as central banks would have us believe so we think the rise in rates will moderate. we also think that there is always support for the long end from pension funds, institutional investors. it is a good place to hold a hedge but it is not our core view. it is definitely more of a hedge and we would rather be invested in growth aspects. dani: altaf kassam will stick around. coming up, recent regulatory actions in china prompt concerns that the country is seeking a sudden anti-investor shift. top investors give us their thoughts, next. this is bloomberg. ♪
1:20 am
1:21 am
1:22 am
>> i think if you are investing in markets, it's impossible to have no view about china. it's too big a portion of the markets out there, too big a portion of the global economy to it more. >> chinese tech companies having western capital and a vested interest in their success very much suited china's goals. they don't need that anymore so they can take their $700 billion and take it back on shore into hong kong. >> they don't have all the answers yet because that story is still developing. we are trying to figure out where it is going to land. we are still investing and deploying capital in china and we think that in many sectors, the fundamentals are still pretty strong. >> like other investors, they need to reposition and i would say perhaps with this move to
1:23 am
hardtack, our expectation of returns need to be adjusted. >> if you think about education, you think about health care, housing, things that impact lower and middle income chinese people, you have to be more selective. the same thing around some of the businesses with a lot of consumer data. broadly speaking, as china has traded off, it could create interesting opportunities. >> differing opinions on whether or not to invest in china. the discussion has been facilitated as part of the global conference which runs until tomorrow. let's stick on this topic with china and dig into it with our guest host of state street global. some opinions on china. you yourself said evergrande -- you are taking some of the risk off the table when it comes to em so if it is not a lehman moment, what is behind that negative view on china and em generally?
1:24 am
>> let me say that evergrande is not a lehman moment. we don't think it is a systemic issue that will cause wider contagion either through china, emerging markets, or even into developed markets. it will remain contained. it will be ring fenced. it will have wider ramifications for the property sector in china, already seeing that, but beyond that, the effect will be limited. this goal of common prosperity, the regulatory crackdown in china, will have much wider ramifications for the chinese market as a whole. china is following a different path for the rest of the world. with those opportunities, there are higher risks. they need to be able to navigate that regulatory environment as it unfolds so we would be advocating an active approach for china. not investing just through the benchmark, going for a more
1:25 am
active, hands-on boots on the ground kind of approach. dani: does that mean when we see things like asia, high-yield bonds, really see some price destruction made them, it if that is the index level, then where are those opportunities? where can you go bargain hunting , again, if you are being active and not just buying the benchmark? altaf: the opportunities are coming in sector by sector so we heard a lot about education technologies. there is a huge amount of investment going on in china into artificial intelligence. china is facing the same kind of demographic challenges that we are seeing in the developed world so there is a lot more interest in robotics and automation. those are some of the kind of areas where you can see a lot of innovation from chinese companies and those could be areas to be investing in, for example. dani: what does the rising price of oil and commodities generally
1:26 am
do to your emerging-market outlook? altaf: it can be a bit more selective within emerging markets. there are some emerging markets that have energy exporting capabilities. we focused a lot recently on natural gas. russia to be a beneficiary of higher natural gas prices as the nord stream 2 pipeline comes on and the traditional oil exports as well, clearly the middle east and the gcc, so there are pockets of emerging markets which could be beneficiaries of higher oil prices. we think it is a supply shock. energy prices will revert to a normal level. in the meantime, there will be temporary beneficiaries. dani: while we are talking about risk, i want to pivot before i let you go to the u.s., and the u.s. debt ceiling debate,
1:27 am
whether or not we will get a breach there. we have wells fargo saying markets are being too sanguine about the breach of the debt ceiling. what is your assessment? altaf: we have been a bit blase about the debt ceiling. it is a dance that happens every year. we tiptoe through it. he'd is unlikely to be tackled on a bipartisan basis, which it has been every time in the past. republicans are looking to democrats. democrats are saying, well, hang on. everyone is using it. there is a bit more of a bargaining chip to get what they want passed through congress so most likely option is that democrats raise the debt limit in reconciliation but even though they said that they will not do this, clearly, the more that this process is delayed, the closer we get to the fiscal cliff and the more market
1:28 am
volatility that we are going to see. dani: really great to catch up with you this morning, altaf kassam of state street global. coming up, we talk about the e.u. leaders summit in slovenia on rising tensions with china and the energy crisis. it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one. move your xfinity services without breaking a sweat. xfinity makes moving easy. go online to transfer your services in about a minute. get started today.
1:29 am
1:30 am
dani: good morning from bloomberg's european headquarters. it is 6:30 a.m. in the city of london. i am dani burger and this is "bloomberg daybreak: europe." here's what you need to know. inflation fears grip markets. 10-year and 30 year yields hit the highest since june. brookfield says it is time to sell. the energy crisis continues. france and spain call for e.u. action on surging gas prices. we are at the summit in slovenia. remaking britain.
1:31 am
boris johnson will use his speech to shift the blame for supply chain crisis, presenting it as an opportunity for the u.k. good morning, everyone. happy wednesday. while yesterday's -- well, yesterday's -- the 10 year yield leading the way, seeing this big spike up yesterday. this is yesterday's closing price, a rise of more than seven basis points. for your 10 and 30 year yields. in the u.k., it is much to do with the energy crisis but the prices hitting the highest on record. in the u.s., we are seeing a spike yielded this morning. these are prices at the bottom being led by the long end of the curve, indicating that inflation does not seem to be going away. this is not transitory. this is sticky inflation, considering the pace of these moves. that stagflationary is wrong.
1:32 am
here is your break even when it comes to the u.s. it perked up by one basis point but you can see this big move yesterday coming after the ism survey. you have a lot of concern about supply chain and inflation as well. charting higher today. breakeven rates in germany at the highest in quite a few years. this is a global problem as well. for today's market, we are looking at red for u.s. futures and european futures. european futures down .7%. your s&p down 14 points. finally, a stronger dollar at 115.89 and brent up .4%, above $82 a barrel. european leaders are gathering in slovenia for a special summit against the backdrop of rising geopolitical tensions with china. we have been talking about threatening the european economic recovery.
1:33 am
those 27 held an informal dinner last night where china featured as a central theme in their discussions fed we go to maria tadeo, who is -- discussions. we go to maria tadeo, who is on the ground. what does europe perceive china to be? maria: yes, and that is still a big question for the european union. that was the central theme in that dinner that took place yesterday. just as an anecdote in the dinner that happened behind closed doors, the 27 leaders of the european union were told to not bring in their phones and not bring in advisors in the room. is to avoid leaks coming out. the idea was to have an open and frank discussion and keep your phones out. this is something the european union tends to do when they talk about very sensitive issues. when it comes to china, european leaders recognize that china can
1:34 am
be a partner in a number of areas, specifically when you look at climate change. it's too big to ignore. china remains and continues to be a strategic rival to the european union. they call for this relationship, particularly on the trade to be recalibrated and to become a two-way street. there is a deal, the e.u. china investment deal that has been on hold for months. many in the european union say that this deal is probably -- we will not see it being ratified anytime soon. you do see that for the european union. china continues to be a thorny issue especially when you factor that germany with a new government in place could take a much tougher stance on china and that could really change the balance of power in the european union. the germans have been on the more lenient side when it comes to china, particularly when it comes to the trade relationship for the country. dani: china is one thorny issue. the other issue that has transfixed europe is energy and we understand a couple of
1:35 am
countries are pushing for a joint type of agreement, a joint venture to control the energy story. what can you tell us about that? maria: yes, and in continental europe, the energy story. this is a top item for many governments year. they worry about the economic repercussions, the inflation picture and they also worry about the social impact that this could have, especially as we enter into winter, whether this has social pushback because of the bills that managed that. the concern is that they will not be able to do this for long. this was another theme that came up. the spanish time ministers talked about it at length. five countries including france and spain called on the european union to take common action. a way to negotiate contracts, in a way that perhaps can reduce
1:36 am
the price but also do procurement together and that could give the european union advantage in terms of how these contracts get negotiated. it's still very much a big topic in the e.u. and energy is top of the agenda for many of these countries that worry about a very cold winter in europe, especially as they moved away from nuclear energy and have seen themselves depending on russia and russian gas. dani: maria, thank you so much. maria tadeo on the ground in slovenia. that's dig deeper into the story -- let's dig deeper into the story. joining us now is jill. thank you so much for joining us. such a perfect time to have you on. in your experience of dealing with policy when it comes to energy, this kind of thing, how would you would pop -- advised policy at the moment? maria talked about negotiating some of the prices. is that the way forward for the
1:37 am
european union? >> the short immediate problem. we have to ensure we are not in this situation again. they would argue that one of the things we need to do is reduce our dependence on fossil fuels. we have been looking at coal for a long time and gas is obviously an issue. one of the things we would expect to see is to maintain that transition away from fossil fuels. let's bring back coal. you have to keep it on the straight and narrow. the discussion about the short-term of how to negotiate gas prices, they will be immediate things like that. they cross their fingers that we don't have a very cold winter.
1:38 am
it has been well rehearsed. the post-pandemic surge happened globally and has been a large part of that. -- as much as it normally did and other factors. a lot is dependent on the weather as we go through this energy transition has we make sure we are no longer contingent on gas in the future. there is a lot that needs to be done right now. one is to be firm on what their ambitions are. dani: i wonder if we could see more of this type of environment as we make this transition. as we become more mine on renewables, we don't have all of the infrastructure in place. could this repeat itself in years to come? jill: as with this crisis, a lot is dependent upon the weather and whether sharks for situations that are not normal.
1:39 am
the wind did not blow as much this year as it has done previously. one of the things that also happened this year is the addition after wind this year, 37% of capacity. 2020. if you look at the plan of what is to come, making sure that we have more renewable capacity, making sure that we have into connectors so that we can move energy around, making sure that we do have the most important thing, which is reducing demand for fossil fuels as much as possible to energy efficiency measures. all of these are going to help us. as we go along to a zero carbon economy, there are going to be shocks where government will have it, it seems. dani: is this lighting a fire, this current crisis, to put into place those actions which you are describing, or are you concerned that you will soon
1:40 am
forget this energy crisis and not fixed some of these underlying issues you alluded to? jill: there's a lot of issues coming into play at the moment. some would argue it's time to turn on the coal and some would argue it's time to be affecting energy efficiency measures. the meeting last night -- there is a consistent pressure to reduce dependency on gas and reduce dependency on price hikes. that claims to be energy transition. it is a question of getting through this winter, bringing forward these plans and recognizing that is the best way out of this. the bit that tends to get overlooked is energy efficiency, the things that can be done, local jobs. it helps their bills go down and
1:41 am
keeps them warmer. dani: thank you so much. really great to have you this morning. that is jill duggan of environmental defense fund europe. coming up, we moved to the u.k., where the prime minister has clashed with business over supply chain issues ahead of his much-anticipated conservative party conference speech. we will have more on that next. this is bloomberg. ♪
1:42 am
1:43 am
dani: welcome back to "bloomberg daybreak: europe." i am dani burger in london. things are definitely changing in china and it is important to understand what exactly is going on but tremendous opportunities are still there to be grassed. that is the view of the deputy ceo. he spoke to manus cranny as part of the bloomberg best global summit. >> absolutely, things are
1:44 am
changing, no doubt about it. we have an office in beijing, folks who are on the ground, trying to understand what is happening. but again, this is the second-largest economy in the world. it is still growing. so far, we have not encountered any resistance from an industrial perspective. i think you need to be careful. i think you need to rethink what risk-reward looks like and because you don't have all the answers, because that story is still tbd, if you well, still developing, we are trying to figure out where it will land. we are still investing, deploying capital in china. we think that in many sectors, the fundamentals are still pretty strong. >> what is the most appealing factor in china given the volatility? >> we are looking at a couple deals. we are now making a little bit of a life pushing to china. it still looks very attractive
1:45 am
to me. >> one of the big topics i want to get an idea on, a pivot to southeast asia at a federal level from the uae. into south korea. from the deployment point of view, will you follow, as it were, the minister in deploying more capital with more of a pivot to southeast asia perhaps to developed markets? is there a shift? >> manus, it is not a pivot. it is integrating into the centers of economic growth. we are investors. we follow growth. obviously, we are heavily invested in the united states but you can't ignore the massive economies in asia. you cannot ignore growth hotspots around the world, whether it is china, india, other places. our portfolio has to reflect that. otherwise, we are literally missing out on opportunities. you would not be correct to
1:46 am
characterize it as a pivot. rather, we are continuing to invest in the united states and deploy capital of the reasons i mentioned earlier. we are also investing in places like china and india. we see tremendous opportunity. dani: the ceo speaking to manus cranny as part of the bloomberg best event. we will have more coverage of that for you as we head through our morning. let's get over to our first word news with juliette saly. hello. juliette: hong kong's chief executive has outlined plans to develop the cities tour in a border into a major metropolitan area with close to one million homes in an effort to ease the housing crisis. in the final speech of her current term, carrie lam made a broad defense of the national security law imposed by beijing last june. elizabeth warren has criticized the federal reserve's leadership, saying chair jay powell showed bad judgment by failing to stop unusual trading
1:47 am
activity by top officials. warren questioned why powell did not prevent officials from making the investment. in a later interview with bloomberg, he repeated the opposition to powell's reappointment. >> i cannot support jay powell for renomination. so my view is he ends his term with somebody else in place and i think the fed will be better off and i think our economy will be safer. dani: chinese president xi jinping is said to be planning to skip the g20 summit in rome this month. sources tell bloomberg that xi will not attend the meeting in person, citing china's covid protocols. xi has not been outside of china since january 2020 but he has attended several meetings virtually. the g20 leaders summit begins on october 30. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. dani. dani: juliette, thanks very
1:48 am
much. juliette saly in singapore. boris johnson is do to address his ruling conservative party conference later today. he is expected to make a number of policy announcements during the speech. he will unveil a rise in the minimum wage. >> there is no alternative. we can do much better by becoming a high wage, high productivity economy. we have fantastic supply chains, fantastically clever people working on our logistics and they will fix all of these problems. dani: let's dig into this. we are joined by lizzie in manchester. hope you are holding up well at the tory party conference. we have johnson potentially picking a fight with business. what are the details? >> businesses say they are being left to deal with this political decision.
1:49 am
the chancellor and the prime minister have been pushing the benefit from higher pay, higher investment after leaving the e.u. the labor shortages are just growing pains en route to becoming a more productive economy. it is a very risky strategy. most of the country was on furlough and were paid 80% of their normal salary. when you take inflation into account, average weekly real rages actually -- real wages actually fell. they are urging the prime minister to change the immigration rules to ease the labor shortages. you have business groups saying the 5000 visas they granted for e.u. she drivers is like pouring a symbol of water on fire. the government only has received 127 applications from fuel tanker drivers wanting to come to britain so far. they are trying to work out how
1:50 am
to avoid shortages at christmas. chancellor rishi sunak did not rule out further tax rises so that message of fiscal responsibility has stunk like a lead balloon with the business people. dani: you mentioned wages as well as rising. what do we expect when it comes to the minimum wage and announcement from boris johnson? lizzy: there is speculation that that would be the rabbit out of the hat in his speech he had from the pre-speech may be around, it makes sense. ending the low-wage, low cost economy as you heard before. reliance on cheap labor from the e.u. it would also be a response to the rising inflation and cost-of-living, especially with the end of universal credit. and it would play the leveling up message. the timing would make sense as well. proposals for next year to the
1:51 am
government by the end of this month. coming back to the question of whether johnson is taking a fight with business, a significant increase to the minimum wage could hit small businesses who are just getting back on their feet after the pandemic and bracing for national insurance contributions to rise. it will be interesting to see how much it rises by if it does or whether it's sort -- whether it falls short. dani: thank you very much. that is lizzy burden in manchester at the tory party conference bit i want to quickly bring up some lines coming from bruno le maire. the finance minister speaking in a radio interview in france, saying the government may step in if gas prices soar. one could argue that they are already soaring with you can european prices two records. this as the french government may be stepping in as we see gasoline prices soar according to bruno le maire. we have the leaders summit, the
1:52 am
e.u. leaders summit in slovenia, which maria told us is a very hot topic. we have some markets opening in about an hour. we will continue to see if they have that upward much throughout the rest of the morning. this is bloomberg. ♪
1:53 am
1:54 am
dani: welcome back to "bloomberg daybreak: europe." i am dani burger in london. let's get you a look at things we are watching out for today. 10:00 a.m. u.k. time. 30 minutes later at 10:30 a.m., by the eia, we will get the crude inventory report. prices continue to search. an hour later at 11:30 a.m., boris johnson speaks at the conservative party conference where we are expecting he may talk about the minimum pay as
1:55 am
well. at 12:00 p.m. u.k. time, u.s. data. adp implement change in mortgage applications. esther george gives a talk at the kansas city fed's annual banking and the economy forum for women in banking at 4:00 u.k. time. we have the bloomberg best global conference continues. i will be speaking to schroeder's ceo about their outlook and what kind of products they are investing -- offering to their clients. we have bond yields continuing to push higher. you will notice it is the long end of the curve leading the charge higher for u.s. 10 year yields. this is nearly a five basis point higher. that is about four basis points. this might show the staying power of inflation expectations. it is on the long end that this is occurring.
1:56 am
you had ism data that it was positive and it shows growth in the sector. however, there was a lot of survey that should this concern for a lot of these manufacturers about supply chain issues along with inflation issues and that drove that spike higher. there is you look at market. we are seeing the inflation story, that stocks and bonds story in terms of yields really affecting equity market today. it 1% gain on the s&p 500 yesterday. we keep getting this waffling between 1% rise, 1% fall. this shows the dichotomy between the bullish aspect of this market. growth in this market. versus inflationary fears him a debt ceiling fears. wells fargo warning markets are not pricing this enough. you have a stronger dollar, higher brent crude, nearing $83 a barrel. this inflationary concern story still front and center in the middle of the week. i want to fly later today, as i said, i will speak to the ceo of
1:57 am
schroeder. we will get his view on inflation as well. that is it for us at "bloomberg daybreak: europe." the european open will start on next. mark cudmore will be alongside me. this is bloomberg. ♪
1:58 am
1:59 am
2:00 am
dani: good morning. welcome to "bloomberg markets: european open." i am dani burger alongside mark cudmore in london. to take us through all the market action this hour. the cash trading is less than one hour away. here are your top headlines. inflation fears group markets. 10 year and 30 year yields hit the highest since june. bastogne and brookfield say it's time to sell pay the energy -- blackstone and brookfield say it's time to sell.

24 Views

info Stream Only

Uploaded by TV Archive on