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tv   Bloomberg Markets European Open  Bloomberg  December 4, 2017 2:30am-4:00am EST

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>> good morning. this is european open. than 30ity trade less minutes away. so, we have some senate access the dollar yield rallying on the tax reform story. brexit's day in brussels after a weekend of intense negotiations.
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steel stocks could have a volatile ride. the press conference to announce that is at 415. less than half an hour from equity trading this morning, what are we looking at? this morning we are very strongly did. really latching on to what happened with the tax story. take a look at europe this morning. 1.23% to the upside. we were talking about this on daybreak a little bit earlier. it looks like it could underperform today.
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pointing to amany 1.6% rally. that is what we are seeing there. friday, when europe closed, down by 1.25%. the reason for that is that europe closed with out pricing in the tax story, but pricing in the flynn story. as we have already indicated, that is going to turn around quite quickly. look at the swiss franc trading, down really strong this morning.
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the bloomberg dollar index trading up by 0.5%. there are some interesting anomalies taking place out in asia. down, kind of a bit like the swiss franc story. copper is stronger. you may see a difference in performance of the base metal stocks with what is happening with the oil stocks today. plus, also, a little bit of the dollar story thrown in for good measure. issue of theo the pound, it will be interesting to see how the pound trades throughout the day given what is happening in brussels. marketsing on in these this morning. >> in the u.s., the senate
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suggests aon potential case of obstruction of justice. to the topording democrat on the jude issue area committee, dianne feinstein. michael flynn pleaded guilty to lying to the fbi. >> i think what we are beginning to see is the putting together of a case of obstruction of justice. i think we see this and the four indictments that have just taken place. it in the hyper frenetic attitude of the white house, the continual tweets. >> u.s. republicans are drafting a contempt of congress resolution against the deputy attorney general and fbi
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director. republicans, including the president, have reported to reports of a removal of an fbi evidence that the entire investigation is politically motivated. directors at the fed have chosen a new senior executive at global consulting firm as its next president.
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he also has the support of the board of governors in washington. it was unclear whether the board of governors had warmly voted to approve him, which is required for him to take office. crackdown is being launched against bitcoin against crawling -- growing concerns. until now, anybody buying or and othertcoins digital currencies have been able to do so anonymously. day andews 24 hours a more than 120 countries, this is bloomberg. >> thank you very much. it is a big day for brexit.
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after a weekend of intense , the role of the european court of justice and the future of the irish border remain uncertain. are we going to get a breakthrough today? were -- will we hear from officials? >> we are. it is going to be a really big day because, on the eu side they set a deadline. however, in the past week or so we have seen a number of issues come up.
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yes, the irish border still remains an issue, although there has been some progress on that. justice isn court of meeting at 1230 russell's time. 12:30 brussels time. it seems, in some ways, we have gone through every issue here. i'm not sure that anyone it.cted they have said today is a staging post in a run-up to the leaders summit.
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theresa may is coming under increasing fire in the u.k.. >> so that is where we are. the u.k., in some ways, downplaying expectations. what does the timeline look like? ideally for the eu, it would have been we get a good offer from theresa may, discuss it on wednesday, than on december 14 say we can move the talks on to trade. december 14 being the last chance this year to move those talks from the divorce issue to the issue of trade. but, if we get a breakdown today which is looking increasingly it will be unlikely will
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move on to trade this year. u.k. is concern that they might crash out of the eu in march. >> great stuff. looking forward to the coverage throughout the rest of the day. 19 minutes to go until the start of trading here in europe. trop.t, good news for -- good news for trop. could the fall out the flynn investigation d real that --
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derail that. ♪
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>> 16 minutes till the start of european trading. let's get a bloomberg business flash. buying at no for about for aboutn -- aetna
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$60 million. a 29% premium in the share price. general cable is being purchased and a $3 billion deal. rio has named simon thompson the chairman.
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the chairman who held the post since 2000 and nine is stepping down. disney is set to renew fox talks. that is your bloomberg business flash. the u.s. senate approved its long-awaited tax bill earlier on saturday morning. roseollar treasury yields with investors focus shifting away from the ongoing investigation. aane feinstein says there is growing case for obstruction of justice against the president. with us now in hong kong is bloomberg's jodi schneider.
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if you take a look at the actual , with of paper handwritten notes and all kinds of things on it, really hard to see if there were will be a successful outcome with the republicans. but it is really being treated as such, isn't it? >> it was a victory. they did get this over the finish line. there was some thought that they were not going to get the votes. if they are able to reconcile this bill with the house bill it will be a big victory indeed. something that investors and wall street badly wanted. if they get it done, it will be a victory. somewhat eclipsed by the president's tweets and mr. flynn's guilty plea. >> when you take a look at
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futures and the united states and here in europe, both are trading strongly. we going to reconcile the house and senate and their versions of this bill. how easy is that to get done? >> it is complicated. they have to have the same exact language. the two bills are somewhat different. contains abill repeal of the individual mandate of obamacare. that is a key part of obamacare. of course, the house has already repealed obamacare entirely cannot rely a any democratic votes in any chamber. they need as many republican votes as they can get. in the senate, they basically get rid of that deduction entirely. the house built limits that.
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i can be a tough situation for some house republicans to be in. there are a number of these differences they will have to work out. also, this legislation is so , that to get it under budget they had to do a lot of maneuvering at the very last minute. they will not be able to undo a lot of those things to get it back through the senate. they have to be very careful how they tweak this bill. to see be interesting how many tax triggers would drop out in the last minute. let's look at the issue of flynn. it is been put aside right now, but you have to wonder for how long. what are we expecting after this weekend?
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where are trying to understand the trop tweets for him and some of his staff. we are tried to get little understanding of just how big some of these issues can be relating to the streets. >> i think we are to see some of that over the weekend with senator feinstein coming out and saying that she thinks there could be a case made for obstruction of justice. tot is a pretty serious term use for someone in her position. senator blumenthal came out and said that the president, in his mr.tweet, said he fired flynn because he lied to the vice president and the fbi. blumenthal says that that shows the president knew there was falsehood and that it had gotten uncovered. i think these kinds of things
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bring it closer to the president, and that is the real issue. get closer in, what are we going to find? i think that is something to start looking for. again, with these key senators coming out this weekend and using the terms obstruction of justice, one has to think they are going to start looking at things like hearings. we have an understanding of the timing around all of that? this morning we are focusing on tax, and not focusing on the flynn story. when are we going to start getting an understanding of those hearings you are talking about? before christmas, after christmas, a short-term issue, a long-term issue?
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>> a lot of this is going to be determined by molars investigation. every time there has been an indictment, a new revelation, congress tends to be reactive. i don't know that we are going to see anything right of way on this. obviously, they had a year and deadline to get this tax bill done. next year is an election year, and it is very hard to focus on anything beyond that. it will color what happens in the 2018 campaign. >> great stuff. thank you very much indeed. let's talk about the market reaction to all of this. >> great stuff. thank you very much indeed. a strategist joining us out of singapore. why is the market focusing on the tax story rather than the trump story? >> there are two things.
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the tax story has a little more certainty than it had last week. that was not necessarily expected. the tax bill might be watered down a bit, and the reconciliation process might be hard. but, suddenly, it is much closer. the target is before the end of the year. it is both immediate and concrete, with a bit more certainty. not only is it much less notain, the trop story is likely to be an issue by the end of this year. about what is
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happening with the pound. i'm beginning to wonder whether there is any upside with the pound on what can happen today in brussels. if we do not get a deal, the pound goes down. it does seem more of a bigger reaction to the downside. but there is a chance that the if the eu saysy they feel like they're close enough for guidelines and can proceed to trade talks. both sides want to proceed to trade talks. i do not think anyone is rushing to leave the eu. not want the u.k. economy to completely suffer, because that is not great for the eu. they might say, you know what we
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have not got as far as we wanted but progress has been made, so we will move on to trade talks. most likely they will give them to the end of this week. it is unlikely to be a real shocker. have the chance that they say the u.k. is not making any real effort at all and trade talks look unlikely. the pound would really get hit by that. >> the valuations haven't been the stretch since the 1900s or something like that. people out there voicing their concerns that we haven't overinflated stock market. any changes in terms of where we are with the stock market story? >> i do not think we are
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overvalued. we are definitely not cheap. repeat, growth is still there and expected to go higher and secure. earnings are still good. we are not seeing as much gain as before, but earnings are still increasing slightly. mass amounts of liquidity are still being pumped in. stocks remain positive. you have to remember there are many different ways to value stock markets. the curve is much flatter than it was in history. the discount rate is lower for stocks. i think that stocks are expensive, but they are not crazily expensive, and the environment still remains structurally good. >> thank you very much. four minutes away from
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the start of european trading this morning. european equities are strongly bit this morning. this is bloomberg. ♪
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♪ guy: one minute to go into the start of trading. let's talk about what we are seeing this morning. euro-dollar is bid this morning. we have seen this drop at the start of european trade. oil is back a little bit. the commodities could be a mixed picture this morning. gold is trading softer. you have base metals trading center. the most interesting chart is the spx from friday. you saw this sharp down move. the theke a look at beauty i am look at what is happening.
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-- look at the wti and look at what is happening. up 1.5%.s s&p futures called up .7%. that is what fair value look. look look at actual market numbers. we are expecting a strong start. here is the breakdown of the market in terms of i met. you have financials. let's see how they rally. industrials may be as well. keep an eye on the china dumping story. strength coming through into the financials and industrials trading strongly. you in terms of the move screen what is going on. here we go. here are the movers. chrysler strongly bid this morning.
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akzonobel is down. we are watching carefully what is going on. the levels are important. we are seeing a market trading strongly off the back of this idea that we are getting some positive momentum coming into the u.s. tech story. -- u.s. tax story. there is this issue of the investigation into russian meddling into the 2016 election. that suggests a potential case of obstruction of justice against the president. that is according to top democrats. one of those suits on the senate judiciary committee, diane feinstein. her comments came after michael flynn pleaded guilty to lying to the fbi. >> i think what we are beginning to see is the putting together of the case of obstruction of justice. we see this in the indictments
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that have taken place and the comments being made. attitude at the white house, the comments, the continual tweets. investors see more concerned about the progress of the republican tax reform bill. s&p futures pointing upwards. europe opened in the green this morning after the senate voted 51-49 in favor of the plan early saturday morning. joins us now. has this got legs? what we are seeing in the moment and the dollar stocks. on the dollar leg of things, we have priced in a situation where we saw -- what we thought that tax rate was going to rumble, and it is quite likely now we will get the tax reform passed in mid-december and signed into law. that is an upside risk for the
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dollar. it can go on from the dollar leg for sure. guy: how long will it take us? peter: it depends. there is the scope to get sub .18 in your dollar, i would think. we will have to see how the tax reforms develop. whatlet's take a look at exactly this will mean for the fed. powell coming in to replace yellen, but if this gets done, does the fed have to lean into it and does it likely the dots start to get hit? peter: i think the dots will list on two factors. if the tax reform lifts u.s. gdp, and we will get that final number next year. fed will broadly price that
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in. i don't see huge upside risk from that perspective. if we start to see more aggressive wage growth, then i think we have upside risk. guy: a couple interesting things, does this feel regressive to you? that is the criticism leveled against it. that it isn't going to average -- going to benefit the average u.s. consumer, and as a result, the trickle-down story isn't going to be there in the way you would expect. looking at the numbers, you would expect more than .2 on gdp. peter: i agree. i think it is regressive and some of the assumptions made in are ambitious. they think this is going to spur investment by u.s. corporate, but don't forget u.s. corporate's are already massively cash-rich and haven't been investing already with easy financing conditions, so why should they now?
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some of the assumptions in the plan are ambitious. that, why is the fact would u.s. corporate's invest when the u.s. consumer is not on the front foot? this is the bit i don't understand. they are anticipating global demand will be good or that demand will pick up in the united states. that is the missing piece to me. i don't understand how you get from we are going to give you a tax break to spending that on fixed equipment if there is no and demand. -- no end demand. peter: we do see better global demand than we have. but as regards to the use -- to the u.s. corporate's and investing, they are investing, just not in america. will some of that investment,? -- will some of that investment
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come home? i'm not sure. guy: the net puts of this is what? peter: good question. this reform is taking place at precisely the wrong time in the economic cycle. this should have been done seven or eight years ago, not now. guy: financial conditions in the states. the bis brought this up over the weekend. i have the chart. financial conditions and the u.s. remain incredibly easy, and this is the anomaly people are trying to understand. we have these easy financial conditions, the fed is tightening them up and not having much of an effect, so how do i value the u.s. bond market? mac -- how tot step back and make a rational bag valuation about where i should be putting my dots? peter: it reminds me of the
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expression there is no point being clever in a full's market. , you look at u.s. yields think, it is higher than everywhere else, but as long as japan, eurozone, and elsewhere will putyouth, that downward pressure. we have negative real interest rates in america, so we have easy financial conditions, but it can continue for a while. guy: how long? 2018 into 2019? 7 easily. --peter: easily. the dot plan gives us a real interest rate of zero. still very easy financial conditions for a long time. the data being kicked out of europe at that -- out of europe at the moment, the assumption, and it relates back
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to the question of how you value treasury market. expect, going into 2018 -- which bit changes? the data has been kicked out of europe, strong at the moment, is that the bit that changes the way the ecb starts the guidance going forward? peter: i don't think so. the inflation profile next year in the eurozone should be 1.2%, maybe 1.3% next year. the following year, 1.5%. that is as good as it will get. i don't think change in the tapering program. guy: the data is so strong. hereurvey data, soft data -- soft data. peter: it has been great, but the inflation hasn't. u.s.ould argue that the
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--, which has been flattening aggressively, it could steepen if we see inflation surprises in the u.s. apart from that risk, i don't see a lot for the outlook for treasuries. stays withkinsella us. up next, they meets juncker in brussels. that is next. this is bloomberg. ♪ ♪
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welcome back. you are watching the european open. we are 12 minutes into the trading day. let's look at a few numbers. you can see some really bright spots this morning, if you can describe green as heat. germany trading up by over 1% this morning. london actually is more in keeping with the rest of the market. the rest of the european space, up. a anticipate we will see strong session stateside on the back of the tax story.
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definitely focusing on tax rather than flynn and mueller. is still with us. pound,alk about the about what is going on in terms of the story. as we go into this meeting that theresa may will have with jean-claude juncker, i wonder how the us imagery looks around this. -- how the asymmetry looks around this. if they say we are done, what does the pound do? peter: i think it rallies. in.t has been priced investor pointan of view is sentiment has been so negative sterling for so long, it is hard to change that mindset overnight. progresset sufficient -- we get onto a trade deal
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sterling is so cheap. slipping. in cable is there is a lot of upside. i can bring up a metric here. plenty of options on the screen here. next twotrade over the weeks? let's say today we don't get everything. we are going to delay it, move it on. do i sell the pound today on the back of that or anticipate we get a deal done and stick where i am? let's deal with the options today. one is we get a big deal, done, move on. the other is we have a few issues to deal with, wait until
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the summit, and then decide. peter: if we are 90% of the way , it tells us we are going to get a deal, not this week, probably next week or we can after. i think investors can handle that. todayget a disappointment , and this is what we haven't priced, we can reverse two or three figures enough. guy: that would happen instantly. peter: within a day or two. guy: how fast is that tale? i am trying to figure out the risks. peter: i don't think it is a huge factor, because the optics and data we have been given by the u.k. and european and irish side has been pretty constructive. is more likely -- it is more likely we will get a deal done. guy: as i drove around this
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massive billboard with jeremy corbyn talking about a hostile takeover. appliedcount is being to sterling for jeremy corbyn at this point, if any? peter: it is not. it is a significant risk. mainly of the fiscal plans he is talking about. this is already a heavily indebted country. what will that do to yields? good question. and the antibusiness rhetoric, which a lot of people don't like. that is a big tail risk for sterling. it is not priced at all. guy: in that scenario, would there be an expectation the bank can raise rates aggressively to deal with sterling depreciation? peter: i doubt it. guy: there would be nothing to stand in its way on the downside. peter: the only thing the boe could do, you are talking
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emergency rate hike territory. i don't see them doing that. guy: would they be allowed to? peter: the radically, yes. in practice, -- theoretically come in yes. in practice, i don't see them doing it. guy: as i extrapolate at if today, let's say we get a deal done and move on, does the jeremy corbyn story change in terms of how you would price it? progress,is a showing therefore i don't need to do anything. it is not in the market, but you are saying it should be. how do i join the dots? peter: if we get positive conclusion to today's meeting, the immediate likelihood of a jeremy corbyn government reduces.
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the assumption is her government can hobble along. it is not priced, but the assumption would be we can get on with the rest of the program for government. the immediate risk of general election in q1 or q2 2018, that declines. -- we havecherished a tear risk for sterling. guy: in terms of the gilt story, this intooy price short rates, five-year, 10-year? we are on the curve do i price this story -- where on the curve do i price this story? peter: probably be long end of the curve. if you look at the spread tens,n u.s. tens and u.k.
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that can reverse for the u.s. if we see a jeremy corbyn government. guy: peter kinsella joining us. he is going to stay with us. up next, we bring you the stocks on the move this morning. the turkish lira is also a story we should talk about. this is bloomberg. ♪ ♪
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guy: 22 minutes into the equity market session in europe. it's talk about the movers. aviation, some industrial cabling, and insurance this morning. let's talk about aviation sector. a percent this morning. the ceo saying they expect 30 million passengers. that is an uplift of 25% compared to the previous year. rysmian willn -- p buy general cable court.
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this will add north american and south american exposure to the business. they are paying for this with an 81% premium with a $30 per share they are offering for general cable core your -- general cable core. we also have insurance for you. tryg is up by 3.6%. this is denmark's biggest insurer. they have a great to buy alka forsikring. -- they have agreed to buy alka forsikring. they say this will give them an increased presence in denmark's nonlife market. going is proving -- bitcoin has been on a spread. they are at twice the figure for
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gold for the same period. still with us. volatility is the story here. peter: it is. this isn't a currency or cryptocurrency for the fainthearted. bitcoin is trading around 77%. put that into context. at the height of financial crisis, my manager at the time told me you will never see numbers like this again in your entire career. so far, it has been correct. we are getting there on bitcoin. guy: what would the market like on the way down? peter: painful. it is highly volatile. from a flow perspective, there is a lot of people that use bitcoin for different things.
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you have the so-called investor trying to get into cryptocurrency, and there is the black market. it has its own reasons for transacting in bitcoin. a person transacting in bitcoin from an investment perspective, pain for losses is relatively low. market guys, different story. guy: would you expect your manager to be wrong at that point? we will have to see how the next couple weeks ago. it's normally indicative of a bubble forming. tryingue on bitcoin is to evaluate is difficult. there frameworks we use for currency don't use -- don't apply for that going.
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it doesn't have an interest rate differential. getting about your nation is difficult. -- getting a valuation is difficult. guy: in terms of the direction of travel, as a foreign exchange guy, what can i learn from this? what is it telling me about the way monetary policy is going to be run, the way governments are going to have to look at how much information they have or don't have about what is happening? can i take any long-term trends out of this? peter: there are two risks surrounding it. the first would be, or people investing in bitcoin because of block chain or because of the going? -- or because of the going -- or because of bitcoin. ? the government is not going to give up because somebody has
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decided that that going algorithm is worth a certain amount. the market is 53 minutes old.
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♪ >> we are 30 minutes into the trading day. let's talk about the headlines. european stocks open strongly as american tax reform clears a clear hurdle. brussels exit a weekend of intense discussions. stocks could have unintended today. it could make it harder to fend off chinese dumping. we will learn the details at 4:15. talk about this market.
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let's talk about what's going on. you're watching the market open. i'm joined you from bloomberg's new european headquarters in london. this is the breakdown of the stoxx 600. let's show you what is going on. you can see that parts are performing. the market is outperforming an area. banks are trading very slowly -- strongly. retail,rformers, personal households and goods and utilities. . the more cyclical in that the market is trading more strongly. that's what we're seeing here in europe. let's get a first news word update. the investigation between doldrums campaign a russian meddling suggest that a federal case of obstruction of justice is developing against the president.
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that's according to the top democrat on the finance -- senate judiciary committee. i think what we are beginning to see is the thing together of a case of obstruction of justice. i think we see this in the aldstments and please -- -- pleas. i see it in the hyper frenetic attitude of the white house. the comments and continual tweets. u.s. senators are congress a contempt of action. pro andrt of the miller
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is trying to prove that the investigation is likely motivated. tax may put the profits in some industries and squeeze others. the reduction of the corporate income tax to 20% in the provision to allow some companies to bring back profits at low rates. chosen askin has been the new president. this is for barkin. the board of what governors has formally decided to vote. the treasury has disclosed plans and forcee bitcoin
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traders to disclose their duties. as of now, anyone buying and selling bitcoin is able to do so anonymous way -- anonymously. this is bloomberg. >> accuray much. i want to turn to turkey and talk about what is happening in terms of the inflation outlook. we had data that showed interesting numbers. we were expected to be strong but not as strong. this is the data you can pull up on your side. it came up at 12.98%. that's picked up from 11.9 the prior. . these numbers are starting to get quite punchy. you wonder where the story is
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going to end of the central bank. what kind of reaction should expected to this kind of data? the reaction you would from a normal central bank as an aggressive rate hike. however, as we know, things in turkey are not normal. they have a politically controlled central bank. and -- become a bit -- doing those rate hikes become a bit more difficult. you see lira selling off as a result. is there a point were the central bank has to act the disappointed? if the central bank doesn't go far enough to we take that as a positive because they have taken a step or do i say is nowhere
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storm good to bailout even faster? >> if you look at the history of currency crises, the central will do a little bit and tend to experience even more aggressive selloffs. in the past, they made it difficult or people to short the currency. that's what you have to do in this situation. it does call for drastic interest-rate hikes. we've been here in turkey a couple of signs. they raise rates just enough to fend off the crisis but as soon as come down they cut rates again. we've been here before and i think will be here again. look at the chart.
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skyrocketing. the political optics are hardly helping. overall it's a tricky seen for lira. -- isa secure hearing's this a turkey idiosyncratic story or is this able to be read about what is happening to the and southth turkey africa have in common political but it seems eerily familiar. wonder if you treat them the same way. do i to them in the same way on your treatment differently? >> personally, i treat them differently. it seems that turkey is taking tens of this that's.
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institutions are very different. >> the governor has come out saying that they are an independent bank and will do what they have to do. i was impressed with south africa the last two or three years with a raise interest rates by a team is it 100 basis. they are prepared to get out of the curve. in that regard, i think there are differences. if you look at the wider emerging markets tory, you take a look at indonesia, there are plenty of areas were demand remains strong. local government bonds are just edible. continue? n >> i would say can't.
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you seen central banks reducing their interest rate. but inflation in emerging markets pretty mistrusted. emerging market peavy isa going to the roof of the moment. we could get cost versus nation in the end. if we get any sort of inflation surprised the states, we're looking at a slightly stronger dollar and the wrongs part of the cycle. peters join us and he will continue on with the conversation and joined the radio team. 9:00 a.m.. he will bring you the stocks of including chrysler that
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is in the talks with hyundai. this is an interesting development. we'll talk about that next. as is bloomberg. ♪
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♪ >> let's talk about with stocks are on the move. >> the brought pictures it
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really positive story. let's focus in on a few stocks that are on the move. first i picked out sky. this is a broadcasting sector in the u.k., up 2.5%. thattelling bloomberg disney could have discussions about1st century fox purchasing parts of the business. what with the doj has to say about this? they raise their eyebrows over at&t's attempts to acquire time warner. skies up by two and a half percent. ryanair in the aviation sector is up .7%. november traffic up by 6%.
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the broader more interesting story, is perhaps the repositioning of aviation players around the devices smaller companies. we saw air berlin disappear and that is leaving open opportunities and ryanair is taking advantage of some of those opportunities. another one is fiat chrysler. up 2.6%. had talks they were having some kind of deal with hyundai. they are playing a hydrogen engine partnership with hyundai. seeill be interesting to how that technology rubs up against electric cars. many consumers are looking for alternative fuels. as we have been discussing, it's a big day for brexit and a big day for theresa may. she is heading to brussels where she will have lunch with the european president. deadline,oday's final
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justice and the future of the irish border stays sticking points. nejra cehic is there for us. what are the chances of a big break? it's hard to answer that question below i can tell you is that even in the last few minutes we have a comment from saysrish or ms. where he the irish want to work with, not against the may. a breakthrough is off the ball today. they are not quite there yet. we are seeing progress inching forward. whether we will get something today is the big question. if we can do tj, this over the came out as the most
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important issue to overcome. theresa may was given a deadline of today by the eu to put her best offer forward on the three issues, the brexit bill, the irish border, and the rights of eu citizens. citizenss of eu perhaps the most difficult to overcome. by the eu today to have this lunch, theresa may would put her best offer or, the eu would discuss that in today's time. scenario, on december 14, the talks could move on to trade. all the stumbling blocks coming up, there's questions of whether you will see a breakdown rather than it rate. how quickly will any sort of agreement come through? if the talks don't move to trade on december 14 in the u.k. risks
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crashing out on march 20 19th. -- march 29 of 2019. morning, carsten nickel. do you expect the deal? carsten: i do expect a deal in the coming hours. to see enough progress in time for the december 14 ounce of. >> we have the issue of the irish border. the european court of justice, that -- how does back itself? the big issue is we are seeing these key points in the referendum.
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sovereignty, borders, the trade-off between integration into the european market, immigration, and so on. on the irish border you need a language that reassures the year the inside that the agreement can continue. on the court of justice you need some sort of deal that makes it possible for the british side to claim that the influence of their court has been renewed. was this the easy bit? carsten: yes. we can already see that whatever language you find on the irish order, the core of the border problem will be carried on to the second page and it will be in the second page of the whole issue of sovereignty and axis to the european market will come forefront. domestichink the debate in the u.k. has made progress to. >> when does that become there?
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carsten: it becomes clear early next year. at the beginning of next year will likely see a conversation about the transition. . conversation about the transition period. there is still a lot of work to be done in the domestic you a debate. >> from the people you have talked to in muscles, what is their opinion of the labour party in the u.k.? what is their opinion of jeremy orbit and how he would treat brexit story? carsten: -- carsten: i think regardless who is in charge in the u.k., the fundamental problem that we're looking at is a depolarization, specifically on the brexit issue. that divide runs through the conservative party, through the
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cabinets, but it also runs through labor. resolving this issue just by means of changing the government i think is extremely limited. >> has there been any acceptance the fact that theresa may needs , can't be treated to harshly? the potential there for things to really fall apart in london could be there. is that part of the narrative? carsten: yes of course. it has been over the last couple of weeks. if you look at the way in which the whole financial settlement has been sold, i think that was clearly a nod to the difficult situation that she is in an ethically. the willingness from the european side to move the irish border issue to the second page
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is also a concession. a result of the eu knowing very well how difficult the situation is lori -- theresa may. >> stick around. a bit more to talk to you about. next, merkel's former allies meet to decide whether to build a grand coalition and germany. thatgot news this morning the bavarian premier is going to step down. interesting developments. we'll talk about this next. ♪
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♪ 9:54 in berlin. the bavarian prime minister is stepping down before regional elections next year though he will remain head of merkel's sister party. to stabilize the party. meanwhile, the spd will meet to discuss whether or not to join a grand coalition. underplaying what is happening within the csu at the moment question -- at the moment? carsten: bearish --
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carsten: it's going to remain a story into awesome of next year because of regional elections in bavaria. i think the question of who is in charge is been a long and storied. with international german politics, this csu will remain a very difficult harder and will remain under pressure over the next 12 months. that's regardless of who is in charge in. -- who is in charge in munich. skied be interesting to see what demands end up in the pot. how would you handicap the std's decision-making broad -- forecast? form a coalition or don't? carsten: there's probably no way
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out for the is the and the already leadership and wider readership has long recognized that. the job is now to sell this reality to be already base. -- to the party base. they need to show to their own party base that they are putting philosophy.g >> thank you very much. joining us out of brussels. on the story that could move a little bit later. the german story of the coalition warming. what could that mean? that wraps it up for us. "bloomberg
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surveillance." joining me on the radio is anna. this is bloomberg. ♪
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♪ the uk's prime minister heads to brussels for what could be a $60 billion meal. -- trump attacks the fbi. the president lashes out against the bureau while top democrats develop a structured justice case. cvs looks to acquire at nine and a $60 billion deal that could reshape the second or. -- the sector. good morning everyone.

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