here at the bank of canada is playing defense after being criticized for staying silent leading up to last week's interest rate hike and some economists say the banks needed approach created an atmosphere of uncertainty in the country while the bank maintains it was business as usual artie's alex mileage joining us from toronto to cover this fund for us alex what are critics saying about bank of canada's zipped up attitude when it comes to raising rates well guess who those critics are and those are bankers economists the analysts because some of them didn't get it right so who know that all of us feel very sorry for bankers and indeed the economists that are dealing with those numbers but let's listen to this one guys the chief economist his name is doug porter he's from the from the molds or the bank of montreal here in canada one of the biggest banks so joe porter basically say they were quiet they were quiet for like two months leading up to the interest rate hike and only six out of thirty three analysts in one scene one poll and one study got it right well you know when you talk

of us banks than of canadian banks. and one of the things i found in my research was the canadian banks especially royal bank of canada and bank of nova scotia to some degree the bank of montrÉal where the biggest competitors to us institutions in the early 20th century. cuba, i mean, throughout the region the royal bank of canada had more branches than citibank and always competed with them for deposits in cuba. you know, when as an example when the cuban revolution occurred in 1959, there was more of a negotiated settlements with the castro government's on behalf of the canadian banks and with the us banks. us banks had to get out. us banks could work something out. we see now in the caribbean that the canadian banks are prevailing especially in the form of british colonies of jamaica etc. the us banks to some degree a retreat from the caribbean, though, you see citibank has recently returned to haiti after many years. i think the larger legacy was less aboutac the actual presence of wall street of the us bankers in the caribbean then it was of their understanding of what this history meant to them for the present and i

of life. chinese ppi beats estimates, u.s. price pressures grind higher. central banks react. the bank of canada delivers a surprise hike. bank of england gives off its first in a decade. the reach for yields shows no sign of ending. austria issues its first century -- europe's first benchmark sized century bond with a yield of just 2.1%. we begin with a big issue. global reflation showing signs of a comeback. >> inflation remains well below 2%. core cpi is 1.7 or 1.6. it allows the fed to go slow and not disrupt market conditions. >> gradual push-up in inflation back to normal, but we don't see anything that will push inflation to levels where it becomes a market issue or forces central banks to accelerate any rate hike plans they may have. >> larry summers is right. you should probably start to tighten when you see the whites of the eyes of inflation. 1.4 core pce ain't anywhere near the whites of anybody's eyes. >> the biggest risk is clients getting in and buying duration right now. we want some duration on portfolio, but too much duration is risk. we do not believe this inflationary strand -- trend is going to be str

the bank of canada has started to make a move, and the bank of england is talking about making a movecalibrated orlly addressed what they think is going to happen with the fed. what you think that is? matt: we think the fed is going to hike in december. that met we got cpi expectations. we expect the fed to come around by the end of the year. jonathan: in terms of communication, the fed spent so much time trying to talk to the market, the boe spends years talking, the bank of canada just doesn't. why doesn't anyone else just do it? kathy: this is part of their strategy to not shake things up. the problem now is we have them and somethingng else. it is hard to interpret when they are all saying different things. jonathan: we will get the summer of economic projections in the federal reserve, what is it worth for next year and the year after one hardly any of us have a clue who is going to be at the fed? george: there are some changes coming on board with chair yellen. expectations have not been as good of a predictor of what is going to happen. they have been coming down dramatically.

date but at one point i chicago business interest in capital purchased a huge chunk of the royal bank of canadao use them. it was a mutual use but use them for the own capital expansion. this is why even now you'll seeh the presence of these banks, this long historical legacy of canadian banks in the region. >> host: peter hudson is a professor at ucla and is the author of this book "bankers and empire: how wall street colonized the caribbean." this is booktv on c-span2. >> booktv visited capitol hill to ask members of congress what they are reading this summer. >> i just finished the nix. excellent novel especially for a first novel. really talented writer and it takes place in many different worlds. i thoroughly enjoyed it. i really like reading novels on my list now is some that are not novels. i have somebody with a little hammer which is a compilation of essays. i enjoyed the mayor that she will. i read that last year so the completion of essays i'm looking forward to my beloved world, sonya sotomayor book that are ready to read that because i care a lot about the supreme court. and also i

with global central banks staying relatively dovish, and the liquidity environment still pretty supportive for asian credit. of canadars might raise rates next month. you see that resulting in outflows out of asia? bank we continue to see diverging global monetary balicy, and the boe and the r are expected to raise their interest rates later, and in the region, the asian central banks are still facing pretty limited invasion threats, and the growth agenda, will continue to dominate monetary policy positions. with favorable policy. this is going to support asian credit. david: on that note, will leave it there. behind head of asian investment strategies at hsbc. thank you. the markets are opening soon. ♪ ♪ are just under a minute away from the open of market here in hong kong. china has been a window washer, i see. it is probably a good idea to be out there, it is a bit humid. said, markets are hyping hot here in hong kong. have a look at my chart, 28,200 is now your level on the hang seng index. we're looking at this, there we go. we talked about how some of these markets like taiwan for example, a 27 year high for t

we have overnight breaking news of the bank of canada raising and we see a drop in u.s. llar versus the canadian dollar. the bank of canada saying it is raising rates to remove "some of the considerable monetary policy stimulus in place." at the same time, it is flagging risks to the economy and has a cautious tone. interesting they are raising but having a cautious tone but the dramatic market reaction, mark. mark: we are looking ahead to the ecb decision tomorrow. expected.h drama a little change, down earlier, about .4. the upon list to the lowest level since february. for the industry, the insurance industry, it is 33, close to being oversold. we rebounded from a decline of 1%, holding that first day decline with the first gain in three days. this is the european gauge, a fourth day.for the market is rising, the fix indexis the -- the vix is climbing earlier. even despite those gains, and any other games pre-french election, the u.s. november election and the brexit vote in june last year, that puts the moves in perspective. in june, the correlation between the stoxx

of canada, as compared to the focus on the fed, boe, and the ecb? what is the key distinction of the bankhis is a good starting point. thiere is a unique story in canada. we have a tendency to extrapolate to all central banks, to quarter night, -- to coordinate, but there is something specific going on. canada has been facing a massive shock.ce shice they have been responding to this with two rate cuts, and they have categorized this as insurance policy against major headwinds. since april of last year, they have made clear that they don't think this is required anymore and we see now two hikes that have been implemented most recently last week. tom: let's go back to the chart here, folks. i've shown this many times. i call this the trudeau chart. this is 1.40 on the dollar canada. here's the massive oil boom. strong canada, lehman low. when mr. trudeau came in, she dollar-canada wa weaker than it was during the lehman low. the question is, can canada breakout to new looney strength given the new leadership? >> i think they will be important drivers of the outlook and an important observa

of life. chinese ppi beats estimates, u.s. price pressures grind higher. central banks react. the bank of canada gives a surprised hike. s no sign of ending. austria with a yield of just 2.1%. we begin with a big issue. global reflation showing signs of a comeback. >> inflation remains well below

of life. chinese ppi beats estimates, u.s. price pressures grind higher. central banks react. the bank of canadan a decade. the reach for yields shows no sign of ending. austria issues its first century bond with a yield of

bank of canada leaving the door hike but doingr so would boost the loonie further and hurt exporters.'s jobs report is due out tomorrow. joe: and finally, let's take a at commodities. not much going on in oil. ald getting a little bit of bid which fits with doing the same thing treasuries are doing. up 1%. gasoline futures falling, of course. gasolineeen talk about shortages which we saw in places in texas post-harvey, now in florida as many drive north. nonetheless, not a lot of action in prices. orange juice futures back up, lots of whipsaw action there the possible florida strike from hurricane irma. concentrated orange juice prices up nearly 4%. scarlet: sounds like the duke brothers. what did you miss? president trump coming to a short-term fix for the u.s. debt ceiling and european central bank soft currency remarks leaving investors with a little about.s to worry is based in london but joins us in new york. larry, let's talk about the bank.an central how hard did mario draghi really the euro?k down he know he can be more forceful in rhetoric. signaled serious concern about the

add that the bank of england is not in isolation. the bank of canadagnaling it will do that as well. this is just part of the overall narrative. jonathan: the bank of canada doesn't talk about it, they just do it. >> but still, it is part of a larger narrative. they are basically going with the flow. offsets the currency each other in theory. it is when the policy diverges like in 2015 with the fed it trying to tighten that you get these real dislocations in the currency front. i think everyone is trying to go with the same flow. alix: i can't get a grip on it, are central banks convergent or divergent? i think it's a question of which central bank is converging faster. last year we talked about how they were hot to trot and they can't say the currency effects anything. , once the north korean , marcus beganside focusing on the cpi and they are saying may be there is a root by which the fed could hike in december and they could get annualized numbers that look closer to 2%. maybe the u.s. will bound ahead of the ecb. canada is different which is a vict

of life. chinese ppi beats estimates, u.s. price pressures grind higher. central banks react. the bank of canada gives a surprised hike. ves off its first in a decade. the reach for yields shows no sign of ending. austria with a yield of just 2.1%. we begin with a big issue. global reflation showing signs of a comeback.

bank of england came out with interesting statements on inflation. so it represents a leveling off of the dollar weakness we are seeing this global monetary policy tightening sense. the bank of canadased rates, bank of england suggested a rate rise could be coming do you think the fed is feeling the pressure to join the party >> join the party in the sense that trying to keep global interest rates in a path or at least at a level that everyone is consistent. it's difficult for some of these central banks now to get out of line with partners across the globe. you're right it will put pressure on them, more likely to raise rates than leave rates alone. >> to your point, inflation, breaking a streak of five consecutive monthly declines but at the same time the jobs data was disappointing >> we know the august employment numbers are very tricky because of the seasonal adjustment factors. that may have played a role there. my sense is that the job numbers do recover in the next month or two. they will probably revise august up a bit it will reinforce a december move. >> we had a big move in yields, 2.05 we touched ten days ago back above 2.2% on the ten-year. what is your expectation fo

we did have a surprise rate hike from the bank of canada. mes in the wake of that decision, but it is still trading near a two-year high. a last look at the cost be -- kospi. .ot getting much of a dent financials leading gains after falling on wednesday. i.t. stocks also pairing ahead. energy east shares -- energy shares tracking. we do have oil prices now under pressure, but today so far, we are seeing korean assets ng their head despite concerns about a missile launch potentially this weekend. betty: sophie, thank you so much . as you mentioned, south korea thee minister's is telling defense conference that there are expectations that north korea may launch a missile on september 9. that may increase pressure on japan, and shinzo abe says the nation to discuss whether to allow the u.s. to place nuclear weapons on its territory. those conversations follow north korea's latest nuclear test over the past weekend. for more, here is isabel reynolds in tokyo. isabel, the fact that north korea has launched this test, does that fundamentally change

currency markets aflutter from andents from mark carney bank of canada timothy lee.and the canadian loonie are reversing losses we saw overnight. , thees due out later today aussie gaining ground, up .2%. it has cap steady over the past -- kept steady over the past two months. this perhaps could prompt fresh moves higher after the recent consolidation. for aussie bears, they are watching iron ore markets. see has fed into what are has been doing over the past year. we have the yen on the front foot, gaining .1%, but still holding near a two month high. this strength could be coming through on expectations of shinzo abe dissolving parliament to pave the way for snap elections, but it is not just politics that could be driving the yen move. the dollar again tracking treasury yields and to your rates, the line in blue, back at levels seen in early july, that was when the dollar was closer to 1.14. this could mean another leg higher for the pair. the dollar yen could lose line, a above 61.8% retracement of the slide from the july high to the september low, but the pair c

concerned, quite a bit of other things going on at the moment and what surprise increase from the bank of canada the big ecb day tomorrow. almost existential questioning edarting to seep into f discussion with what is going on with inflation at how come the phillips curve is not acting as it should with unemployment. a lot going on with the dollar and the institutional changes presided over by bernanke and yellen which makes the fed kind of a different place than it was. mark: do we bother looking at withots beyond of the year the upcoming change in personnel? part b, to what extent does theher's departure change timing of the balance sheet and normalization or the amount of hikes we might expect and the next six to 12 months? balance: let us take sheet normalization, i do not think it will change at all. they have signaled the december vote will be the question of balance sheets reduction and it is hard to see stan fischer's departure altering that trajectory. as far as the dots beyond next year, who knows. if you look at this year and with the previous 2 years, the markets was actually a bette

course of the last couple of weeks, what's been driving the yen has been that we've seen the bank of canadae change of dynamics in the bank of england and the one central bank keeping its foot firmly to the pedal is the bank of japan. we still have that stimulus very much in play. we're talking about the election providing another term to prime minister abe potentially. splendid isolation in terms of monetary policy expansion. it's been the trade of the day in the past couple of weeks in particular. , the: again, the market approval ratings have come back. disagreement,an however you want to phrase it, is monumental according to trump . to a certain extent it lends itself to this bump. absolutely. it seems as though his handling of the crisis domestically come his approval ratings have been going up. it provides them with an opportunity, sometimes you look at these factors. appears to be abe looking at the underlying dynamics and seeing it as an opportunity and utilizing it for another term. anna: thank you very much, jeremy, with thoughts on the yen. merkellor angela suggesting concern abo

of life. chinese ppi beats estimates, u.s. price pressures grind higher. central banks react. the bank of canada delivers a surprise hike. gives off its first in a decade. the reach for yields shows no sign of ending. austria issues its first century -- europe's first benchmark sized century bond with a yield of just 2.1%. we begin with a big issue. global reflation showing signs of a comeback. >> inflation remains well belo

the body language of the ecb, bank of canada, normalization is in the works so over the next 12, 18 months think interest rates will be higher you need to line yourself up with that. yew tutilities are a crowded tr. >> so we speak about planning ahead. tax reform is something we'll talk about a lot today with some possible announceannouncements you don't think it's priced into the markets. if we get it, does that cause us a nice bump up >> especially if we can get something done in the 25% corporate tax rate, which i think we can bargain around and make things retroactive for 2017 none of that is priced in. any success out of washington being able to lenl lagislate ha been priced in repeal and replace is dead, or at least put off until eternity. infrastructure spend is a dream that's way down the road, too far on the horizon so i think tax reform is the one thing that republicans desperately need heading into 2018 they have had very few victories. this is something that they can accomplish through budget reconciliation, we get something out of the house before thanksgiving, on the presiden

of banks and insurers leading the decline. non-manufacturing imf's tomorrow. joe: and i will watch for central-bank decisions after -- out of canadaresident trump with leaders, much on the agenda. scarlet: that is all. joe: have a great alisa: i am alisa parenti in washington. you are watching "bloomberg technology." irma is now a category five hurricane. the monster storm continues to gather strength as it roars toward the caribbean. it is the strongest atlantic hurricane since rita in 2005 and comes less than two weeks after harvey devastated parts of texas. the storm get it florida this weekend. south korea's navy conducted an exercise as seoul continues to put its military might on display. this follows north korea's launch last weekend. thegyang joins the u.s. for long going stand offense is the only way to solve the crisis is for the u.s. and south korea to stop joint military exercises, which it called a rehearsal for war. president trump is losing another white house aide. insiders say it could be the most damaging. keith schiller is lose -- leaving. he was once mr. trump's bodyguard and closest confidant. they welcomed ba

do you think the fed looks at the bank of england and the bank of canada that are talking about raising case of canada? we are not the only one hiking rates at this stage. matt: i think it is the fed looking at other central banks and the fed and other central banks looking at the improving global backdrop so they are all kind of in this same mind where they say we can raise rates because financial conditions are getting easier, not tightening. that kind of give -- kind of gives us free hikes and that is playing across the board. with histt boesler chart as usual. from new york, this is bloomberg. ♪ ♪ >> in each with a u.n. general assembly, president trump didn't mince words when it came to north korea. trump: the united states has great patience, but it did is forced to defend itself are its allies, we will have no choice but to totally destroy north korea. reporter: the president told and his pursuit of nuclear weapons poses a threat to the world. hurricane irma caused up to $65 billion in property damage. damagemated 80% of flood was to homes without flood insurance. meanwhile, offi

bank of england is between a rock and a hard place. it's only an emergency withdrawal, but it would send all the wrong signals to the markets, wouldn't it? michael: the bank of canada to do that yesterday with their statement. it's difficult for them because right now there is so little yield any way that anyone that looks like they are tightening is going to attract investment flows. that's the big challenge, to remove the brexit easing but it might be difficult to get that across. with u.k. do we do stocks in the meantime? be? would your strategy you can hedge the currency risk. manus: we got numbers from berkeley yesterday. it drop the most in three months. guidance,irmed their but they say they are leaving it better than it was last year but it's worse than two or three years ago. this is when it begins to chip away at the data. dissipation ista enough to promote the year of politicians, or and i just having a dream? >> i think it will. the data would have to be far worse than it has currently been. we forecast a recession straight after brexit. look at what happened to growth expectations for 2017. the shock has not happened. lags that i get wrong. ,if you're

we are looking at what the potential rate hike in sterling is similar to the rate hike for the bank of canadas the emergency cut done for brexit, similar to what was said about the emergency cuts taken back with hikes in canada. we may see this one and done a rate hike for the u.k., which would put sterling on a sideways level. scarlet: talk about brexit. negotiations are ongoing. sometimes progress does the back step. to what extent do we see it showing up in jobs, economic growth? >> i have not seen issues with it so far. perhaps jim can speak to that, he lives in the u.k., perhaps he sees it more closely. the new york times reported that france and germany wanted to halt some of the free flow of movement within the european union, which is part of what the negotiations of brexit are about. julia: jim come i want to talk to you about the famous anniversary we were hinting at earlier. a sense of what you feel from the u.k. here about the brexit negotiations. what is the sense, and you feel impact day-to-day? yes, we feel very much lost. i am not sure the consensus is what we want to achieve

the bank of canada unexpectedly raised interest rates and left the door open potentially from our rate. over the longer-term term, the loonie has been on a steady rally. that is a three-year chart -- i am sorry, i meant for a different time period. as of late, the loonie has been on a rally. joe: let's take a look at commodities. lots of interesting moves going on. nymex crude selling off today, down 3%. texas intermediate below $40 a barrel. gold not doing much. orange juice has been all over the map this week, with traders trying to position, figuring out how hurricane irma will or won't affect the florida orange crop, up 5%. all the industrial metals having a bad day today, the third worst day this year. trade data out of china causing people to question underlying sources of demand. nickel got hit. ugly day for industrial metals, including copper. abigail: let's take a deep dive into the bloomberg. you can find the following chart using the function at the bottom of the screen. i would like to look at this chart on the 10 year yield, on pace for its biggest drop since 2016. this is

of canada, and our belief, and we wrote about this in november of last year, heading into our forecast for 2017, that we feared the banknada was too bearish heading into the year, and they, in fact, were, and now they're playing a bit of a game of catchup. we've seen frain structure spending, provinces like ontario and quebec start to see better housing growth. we've seen housing stabilize in both alberta and british columbia. we've seen a bit of the froth kind of come out of ontario and toronto housing market so. things are stabilizing in canada. the difference is that we found through our experience having a property canadian strategy product, since we've been at the b.m.o. is that canadian investors are so negative all the time. they're one of the best sentiment-driven investing bases i've ever seen. so for our part, canadians are underexposed in financials and energy they're. they're bitter that oil is not at $80, right? they don't understand the positive notions of a trading range market, which could be very good. between 1992 and 2002, w.t.i. was in a very tight trading range. in calgary, that area, really great

bit of move in the south korean won as well as to currencies.ar we get a rate decision from the bank of canada. no one assumes anything is going to happen so we keep an eye on those markets. the soft commodities will be very much in focus for us track hurricane irma on to florida. what happens with orange juice, those are main features to trade. let's get to juliette saly standing by in singapore with your first word news. the fed's rate rises may be doing real harm to the u.s. economy according to minneapolis fed president neel kashkari. he said interest rates may explain why inflation is low in job growth is slow. he has been an outspoken critic of the fed's drive to tighten monetary policy. clicks may be our rate hikes are doing real harm to the economy. it is possible that our rate hikes of the past 18 months are leaving the slower -- leading to slower job growth, more people on the sidelines, leading to and leadingrowth, to lower inflation and inflation expectations. these premature hikes we have been embarking on are not free and we need to remind ourselves of that. juliette: the fed wil

what is going on in dollar -- a three-month chart, the bank of canada governor suggesting the bank should cautiously with global factors created uncertainty after rising -- raising rates by 50 basis points in the last 1.5 months and it regained footing on oil jumping to a five-month high. joe: real quickly, on the commodity, not a lot of action. oil falling by 1%, but $51 and west texas intermediate. copper has done pretty nicely and continues to pick up, 1.6%. below $12.90 -- $1290 per ounce. those are the market minutes. scarlet: the moment investors have been waiting, president trump unveiling the framework for tax reform legislation. republican of tennessee senator bob corker told us that this will make health care look like a simple thing to do. what investors perspective, short-seller of pimco associates will be with us. if you look at the tax plan president has proposed, 20 percent corporate tax rate and a writeup of capital spending for five years and three tax brackets for individuals, this is the starting point and things will get water down. do you think that congress will buy

tightening policy a fair bit, the market focusing on second movers central banks, the ecb, the bank of canadaigher real yields and to the extent central banks are pushing itreal yields globally, tends to be a bear factor for gold was so you have two competing forces there. changedoes any of this at all the view on what central banks can do, particularly the fed? , perhaps indirectly, but not significantly by any extent. the fed is looking at the u.s. to globalth an eye conditions and the global economy. dollar is the you week on the back of these developments. equity prices notwithstanding a more cautious reaction over the last few weeks are still very, very high, so financial conditions in the u.s. aside from this geopolitical development are very, very loose. david: how does it filter in here? i'm looking at some of your calls here. you are saying it is time to lighten up on duration. if i listen to all these projections that rates were going to move up, i would have lost a lot of money. why should i heed that advice now? iswell, i don't think it time to go massively underway to bonds. unti

cato institute has done a lot of studies of free banking in scotland and canada and the united states, and actually it worked pretty well. but the fact was that a lot of other things were going on during that time, and the transition from free banking to a central bank, there was a lot of change, and so free banks located in all the different states was not -- were not suitable for a national economy. just as free banks today should be global banks rather than banks -- restrict, confined to pick -- specific states, like medical insurance is confined to specific states. it doesn't work very well when you break up your market into 50 segments. >> host: so back in the free banking days -- that means basically anybody could print their own currency? >> guest: yeah. >> host: competition judged its worth? >> guest: yes. you can good back. we now increase -- >> host: went around with the internet. >> guest: increasingly we now have an internet after knew for new growth globally, and global internet really needs a global money, and that is what the digital age is supplying. various digital fo

bank of america head of canada and mexico economics. anks again.epublican senator richard shelby. this is bloomberg. ♪ vonnie: the president, donald trump, is speaking at a meeting with lawmakers on the house ways and means committee. a couple of headlines, president .rump saying he is going to very comprehensive report on tax reform is coming. he also says tax reform will make taxes more simple. that is one of the goals of the tax reform plan. the plan will increase the child care tax credit. these are some of the headlines emanating from the meeting with lawmakers on the house ways and means committee. also saying that the plan will cut taxes for the middle class "tremendously." joining us, this and more from capitol hill, senator richard shelby. let's get your reaction to the planet seems to be agreed upon. will there be any more luck on this legislation than health care so far? sen. shelby: we have our problems and challenges with health care. we probably have 47, 48, 49 republican senators together, then two or three that don't want to get on

of years and see which policy was off, it would have to be the funds rate. jonathan: what interests me is how central banks are responding to inflation data. the bank of canadas just getting on with it. the bank of england is talking about it. the bank of england has this model that suggests unemployment falls, labor becomes scarce, and market power goes to the employees, moving wages up on the back of that. will that happen in the united states? will wage growth, as unemployment goes lower? >> is hard to say that. the fed leaders believe in the phillips curve. janet yellen believes in the phillips curve. will she have that job in five months? it is hard to say. if you listen to the comments by senior fed officials in the last few months, they have been misses as inflation being transient. i don't think anyone is going to tell you which growth is going to be 4% anytime soon. with a like to see 3%? sure. do they think that is going to happen, i think they do. yields are so much lower compared to where many people thought they would be. the federal reserve seems to have this faith in models that don't seem to be working anymore. >> frankly it is all about the

i think just about the last maybe seven years or so from the bank of canada, they focused on competitivenessis, how to boost that competitiveness, productivity, and output. it is a really tough challenge to do. you have to tackle it on the macro prudential side and set the appropriate rates. it is a long-term game, but they are focused on a much more than other economies. tom: ron, it is about the dutch disease. the geography of the moment. canada is so close to the u.s. is that still the relationship that matters or can it be a more independent canada? ron: it is hard to imagine canada being completely independent given the trade relationships you mentioned. to your point, there have been some changes that are positive and i think that is great. tom: this will be very interesting. thank you so much. we will continue. shout out to tim o'neil at bank of montreal the did a lot of the original research 20 years ago on that border between canada and the united states. you get lucky. we have stephen roach on the fed. yes, we will talk to him about asset bubbles, the fears of the equity markets. w

of that on story. surprising second-quarter growth in canada, leading to projections of a rate hike. when will the bankernor make the decision? this is bloomberg. ♪ mark: you are watching "bloomberg surveillance" and i'm mark barton in london. a clash with the eu over chip prices. the case was sent back to a lower tribunal. the antitrust fund was a record back in 2009. the case is being closely watched. facebook is offering major record labels hundreds of millions of dollars so users can legally include songs in videos they upload. under current laws, they can ask to take thers material, frustrating users and risking legal action. concerns about united technologies'$23 billion coalition of rockwell collins. it will take action to protect itself if the merger harms the business. united shares plunged by the most in two years yesterday, while credit ratings companies say the manufacturer risks downgrade. revamped electric car was unveiled, boasting features including autonomous parking, and increased driving range. bloomberg data shows nissan sold 29,000 leafs back in 2016. that is the bloomberg business

we have had to rates -- two rate hikes out of the bank of canada. ion out of major central banks. i think it is important to know we are still at a stage were central banks are not tightening policy. they are removing accommodations. it is very slow and very gradual, but the inflection point i think is clear. tom: richard clarida. i hope folks you have love this discussion on economics. don't forget in 40 minutes, the meet.f england will business week this week is strong. equifax, there is an uproar over equifax. "bloomberg businessweek" goes deep on equifax. that is an important article. and francine troubles on the queen mary next week. visa isan american easier than you think. just ask francine. this is bloomberg. ♪ ♪ for those of you worldwide, it is no surprise. over dinner last, we will touch on is the kevin cirilli, the president tweeting no deal with me last night on daca, the masses immigration issue -- the massive immigration issue. goes on to say in a separate tweet, the wall, which is the under construction in the form of new renovations

bank of england than i was in his role. jonathan: why? john: i think he was a clearer, stronger central banker in canada then he has been at the bank of england know what the governor carney playbook is. now having said that, i think if the bank gets on with the job and begins to re-normalize policy and navigate through these post-brexit waters, he bel be -- maybe he will judged to have had a better performance. we will see. i think november is a really good shot for him to revisit the question. david: in fairness to mark carney, nobody sat down and his job interview and set by the way, we will vote to take the u.k. out of europe. that sort of change the rules a little bit on him. he's had to really call some audibles to use a u.s. football fieldn the playing because it's so unexpected. john: yes, i think that's right. difficult to handle circumstances, but at the same time, we do have an inflation rate that is close to 3%. and central bankers are not supposed to like that. i think governor carney from the bank of canada would have been more resolute in making a move to combat that inflation. that's one of the reasons i suspect we are going t

it's remarkable a year later we have got inflation, bank of canada raising rates. so, suddenly, things have changed. much more focused on synchronized global growth, central banks back in place. quantitative exit. as central banks unwind their q.e. francine: on inflation, do we have inflation or don't we cap inflation? people are saying that it is getting better. the level of employment not only in the u.s. but in europe should be a lot higher if you look at the phillips curve. are we waiting for china to start exporting some of that inflation? andrew: each country is a little different. in the u.k., we have inflation. for different reasons. but we have inflation here. we don't think we have inflation in europe. the appreciation of the euro is fed through inter -- pushing inflation rates down in europe next year. we think inflation is falling next year. the u.s. is the biggest conundrum because as you point out we have a very strong labor market, below the fed's view, yet we have not seen inflation rates pick up. the last couple of numbers we had a little bit of bo

the fed continues to tighten if the bank of england raises interest rates, if the bank of canada continueso raise interest rates, if the ecb continues to taper, is it going to be 17 times, or is it going to be all of a sudden 15 times we know the massive multiple expansion helped the markets over the last five years >> but that's assuming that earnings don't continue. the gdp doesn't continue to improve, that economies aren't the globe don't continue to improve. >> we've pulled forward in terms of multiples a lot of that earnings have risen much faster than -- i'm sorry. multiples have risen much faster than earnings. >> the actual earnings we pulled forward a lot of future returns >> the key to this is going to that pace from the federal reserve. if they follow a fairly slow monetary tightening pace, that increase or that decrease in multiple expected by the markets or the market would be valuing things at the expectations of corporate growth and economic growth won't be as dramatically impacted, and then we can carry at higher valuations for more sustained period of time it's actually wh

bank systems. one of the things we did find out is there is evidence some to get into atis least one major bank in canadas of questions about what else the hackers did with their time in a good sex? -- in equifax? they discovered the breach at the end of july, but the hackers had been there at least from may. what were they doing over that for months? their equifax announced retirement of senior executives, but there is still questions around this executive share sale. how is this fitting into the timeline of what we think they knew and when? reporter: the timeline is specific, but it does not have wiggle room. they say they learned about the hack on july 29. one group of share sales happened at the beginning of august, but there were a handful of days between the time they learned and the time of the sale. not say the executives did know about the hack in the span of those three days.even the people who work at equifax say that just seems unlikely. a company has a protocol for what they do when they are entailsand that briefing executives in a short period of time, certainly not three days. it raises a

bhanu: i would not say all central banks because for instance, canada -- guy: and the bank of englandand the bank of england is moving quite quickly. that's right. inre is no sign of inflation europe either. there has been a stellar economic recovery. exactly right. therefore, there is much more to go. i think if you look at the unemployment rate, there has been much greater movement within the ecb -- within the eurozone recently, but the levels are different. that matters in terms of inflation generation. what is completely wrong as the backend of europe. that is where the ecb's actions, including taper, are going to have a substantial impact, because the ecb is a larger part market and the eurozone treasury market. you can have a much larger impact if the ecb begins to taper. guy: do you understand the fed's reaction function now? bhanu: they have been very clear about it. they want to normalize policy. they care about inflation, but they also -- guy: does the market understand? the market is up the thing about no inflation. the fed cannot raise rates. does the market -- has the mar

of the world bank so they. weren't serious let's send us an e-mail. canada donald trump ran a campaign that not only question many foreign policy war to dogs he's but also lashed out against neo conservative views of the world today the president is surrounded by men in uniform some are calling this a soft coup. years ago i traveled across. exploring america's deadly love affair with the. bad guy trying to get to one of my family members he would have better a lot better and i think they are inheriting one of my babies my book was published in the year two thousand. million americans have been killed by the u.s. . team yes we did yes this is a middle school we go through drills and we put ourselves in real scenarios it was interesting to see. the subject to try. to who i'd met in those years. but we were not. the headlines on the international. the importance of the latest sanctions against north korea they were adopted unanimously by the un security council. people throw projectiles on. over a minute. comes into effect you know we. rode. a new documentary t

recreational marijuana in canada and that is set for next year yes and it's been a long time coming and people aren't sure exactly how it's going to all unfold so. there's a question of banks hand out on that topic on that question of banks very briefly do you think we're going to see the same thing that we're seeing here in this hearing going case. went back to canada right and u.s. banks not wanting to do business with banks in canada right well i think i mean there's there's a difference between how urgent i am and i don't. find out are quite it's very my hands on transactions and access in the international i'm not sure i mentioned market through cracks in the united states or the toleration arkwright i don't know that kind of. context and situation but i'm also curious and i don't know this but i'm curious how i counted about it i'm legal medical marijuana for many years i've been operating i'm with regards to the transaction that united states backs because it's also not the goal on the federal level to have medical marijuana that's still a mistake though i think really. speaking to speaking from the united states i think that that really needs to be done on our side