Global business news twenty four hours a day. If Bloomberg dot com the radio plus mobile lap and on your radio. This is a Bloomberg business flag from Bloomberg World Headquarters. I'm Charlie Public forty three minutes to go. Ahead of the clothes here mixed picture for US equities. Let us head right over to the first word breaking news desk for today's afternoon call. Here he is Bill Maloney. Good afternoons, Charlie. That's right. In the US, averages are trading mix today.
That Dow currently down forty five point says it Bees dropped two and Azack is trading higher by eight. The small cap six under games three points, and the US ten yield at one point five six percent. Half of the S and P sectors are lower, led by lasses in telecom, utilities and consumer staples. Materials, industrials and technology lead down. Transports outperformed gains seventy one as a biotech fall twenty, utilities drop seven, and the VIX is higher
by one point three percent. Down leaders to the downside, including McDonald's, Verizon and free M, while Caterpillar, ut X and Boeing led to the upside and dealing new shares of analog devices and linear technology are currently halted, and alot of devices is said in advanced talks to buy linear technology. Following some of your names or the bigger names set report after the Belts and I include ACAM, I, Panera, Bread, Twitter, June, Ber Networks, US Steel and Apple. Live from the first
Breaking news desk on Bill Maloney. Charlie, all right, hey, thank you very much. We'll be all over Apple and Twitter as those numbers break and to hear live breaking news over your Bloomberg tipe squawk s q U a K s q u a w K on your terminal. I'm Charlie Pelton. Dat's some Bloomberg business flash. This is taking stock with Kathleen Hayes and Pim Fox on Bloomberg Radio. Central Banks and focuses data that the Reserve started it's
two day policy meeting. No rate hike expected at the end of that meeting, however, maybe some signals that they could be in the future. Meanwhile, the Bank of Japan starts it's to day policy meeting on Thursday. By right, it is expected to announce some more stimulus. The question now is how much. Meanwhile, the yen surging the most is Britain voted to leave the European Unions as traders scaled back expectations for further aggressive monetary and physical stimulus
before UH. They meet later this week at the Bank of Japan. Joining US now to put it all together for US is Doug worth Quick. He's managing director, head of f X Foreign Exchange at Chapter Lane and Co. Doug, welcome back, Thank you very much. So first of all, you know what's interesting? Um? In an interview, UH did Dan?
I believe it was Bloomberview contributing Muhammaduarrian was talking about how the maybe the markets too complacent about the FED raising rates once maybe even twice this year, and he also mentioned how he thought that right now that you're not going to see the volatility around central banks so much in stocks and bonds. The currency market is where we're going to be seeing all the big movers. I
think it's correct there. I think that you're you're seeing central banks involved pretty much across the board, and that's really pushing down in volatility right now. But the currency markets still have a little bit of freedom, is still not as much as we'd expect. Doli En certainly is trading up and down based upon the expectations for guidance, and the Japanese press has certainly been fueling this fire, with the NICK saying that fiscal spending would double to
six trillion yen at the same time overnight. Yet Taro Aso, the Finance Minister, coming out and saying regarding fiscal stimulus, we've yet to decide on the size of the economic stimulus. So the market here's one thing, gets excited, buys doll an here's something else, and then sells off again. At the same time, as you said, we've bet a b o J two day metings starting on Thursday ending on Friday, there's a question of whether to expand montrely stimulus. Further,
I think that that actually maybe unlikely. I think what maybe more likely is on Friday we'll find out they start talking about forward guidance for the first time, and that means maybe talking about maintaining the size of their balance sheet going forward, which would give people some comfort, and staying long dollar yen at that time being. But then again, I think that any sort of position right now long dollar yen is sort of like pushing on
a string. Given I believe there are other actors right now that are selling dollars buying end that would include central banks like like China, Dog Borthwick. What's long term in the mind of a currency trader, but that the bands long term normally is you get in the one spot and you get a long term once you once it goes your way. So if I'm right with Dolly, and like the last time I think we had a discussion, I said, we go through a hundred. Obviously we dipped
down past that hundred level after the Brexit. Certainly that long term and I've been taking profits around that time. I think nowadays, if I have to think long term here, and I'm thinking maybe we could go up to one ten on some sort of surprise, and at the same time, I think it much more likely to go down to I'd say that's within the next month or so. Okay.
The reason I asked that is because I'm wondering whether moves in currency markets are leading or lagging indicators for investors that may not be in currency markets but are
in bonds and stocks. Well, I think you can think of currency markets as being sort of the tip of the spear, and the currency markets when a piece of news comes out or we see something hitting the tapes, people would trade the currency first because it could be that the equity market is closed or the bond market is closed, but the currency markets are always open, as you know, and so I think that certainly there is a little a bit of a leap there in that respect.
But also people when they buy the currencyre they sell the currency. You find that macro investors get on board on that before they start thinking about what to do with the currency once they bought it or so that's a very important question then for the Bank of England and uh, you know, to get into the weeds here
a bit, but it's it's big news today. Bank of England policymaker Martin wheel who had been somewhat you know, dragging his feet on immediate and big interest rate cuts in in the UK, now say he favors immediate stimulus for the UK economy. Recent indicators on manufacturing looking much worse than he was looking. So you've got the pound hit by that, and then weak economic data in the US kind of moving the pound in the other direction.
If it's the pounds a tip of the spear for people looking at those UK markets, what's what's the takeaway now. I think that the Sterling as soon as that happened. I think the most market participants believe that there would be a rate cut coming forward. I think there's a little bit of a surprise that they didn't cut last month, but certainly August fourth that looks like they'll cut from zero point five percent to around I think that's certainly
an expectation. I think that's already priced into Sterling. I think if anything, what Sterling has done over the past week is or the past couple of weeks since Brexit is it's it's it's managed to find a foundation or a floor, and people have realized that this isn't going to be a full blown Brexit, but it's looking more like Brexit light. And I think that with with materials Amain there, I think that what you're gonna find out is you're gonna find out that she actually starts pushing
things down in the line. They won't trigger Article fifty until the end of the year at least. I think before that you're going to find some sort of stabilization in Sterling. And maybe I pushed back up to that one for two level because people understand that it's not going to be quite as catastrophic as everyone was expecting. Dog Bothwick, just quickly, dollar Euro currently one oh nine, give you about twenty seconds. Well, I think the year at all with this one or nine level is still
very much below it's fair value. I believe that there are buyers of the year dollars that are moving their reserves into the euro and out of the dollar. I think that we're have an expectation to see run one fifteen certainly by the end of the year. And even though you see the basis moving out in the euro. The last time we were at these levels in the three year basis wall the euros at one twenty. Thanks very much, Douglas Borthwick, Managing director ahead of FX at Chaplin,
Dame and Company. Right now Euro at one oh nine versus the dollar, pounds, sterling one one and the Japanese gen trades at one oh four sixty two. This is taking Stock. I'm pim Fox my co host Kathleen Hayes. This is Bloomberg. Bloomberg Taking Stock is brought to you by with and Smith and Brown c P, a s Audit tax advisory services to help your business be in a position of strength. Experience the withm Way by visiting with them dot com