the currency market, the dollar is higher. the dollar/yen at 118. we broke the 120 level and we have not gotten there yet. a one point rally. the pivotal one to watch for currency. the u.k. 10 year yield up by 10 basis points. gold getting hammered. to know.at you needed central-bank divergence. the bank of england leaving key rate unchanged while rising inflation with the fed raising benchmark 25 basis points for the first time in a year. forecastst yellen three hikes fear. the dollar at its highest since 2003 westphal said decision -- with the fed decision. hacked. of yahoo! lower after a set of the compromised more than one billion accounts back in 2013. that's what you need to know. turning back to the fed's decision. janet yellen tied it to a rising economy. she was upbeat about how far we have come. new jobsn yellen: net have been created, unemployment have fallen further and inflation has moved closer to our goal of 2%. we expect the economy will continue to perform well, with the job market strengthening further and inflation rising to 2% ov

outlier is the bloomberg dollar index. so the dollar the big beneficiary of this. what we've seen in emerging market currencies is despite the fact that the fed is talking about a strong economy, the rest of the world is not picked up on thepositives and saying u.s. economy is strong, that is good. they focus on the negatives of this really strong dollar. >> the reaction on the market was a result of the two rate rises, to the december estimate that has three rate hikes. started the year talking about the divergence between the fed and the rest of the central banks. we are back in the same place at the end of 2016, still talking about that. it's quite notable that the medium estimate was for three rate hikes. the balance of participants you 5-4 in either side was favor of those expecting a lower policy path. it will act as a softening impact on the u.s. economy. anna: so you're quite dovish compared to the median of the fed and market expectations. >> a lot of the broader market expectations, believing we will get 3.5%-4% growth. i spoke about those three baskets.

manus: the of their chart we the trajectory of the dollar. our last guess was talking about extreme positioning. long as long could be in the oil market, long and bond markets. these are quite extreme positions. do you see the market remotely taking a breather in bonds, in oil, in the dollar? >> i think there is time for a pause for breath. play you have seen is almost a turbocharge, people really focused on the inflationary aspects, and that he saw a real step up and yields. movement in the dollar, and bond markets, and equity markets. that was almost like a microcosm of what could certainly play out over the next few quarters. for me, you'll probably get a bit of a pause, but i think this reflation trade certainly has plenty of room to run. from that perspective, we think yields can potentially move higher. you can see a steepening of the yield curve continuing and inflation coming back. manus: do you think we will have 3%? >> potentially. everyone is focused on that as a line in the sand. that i think if you look at the underlying trend --

dollars or the eu. seeing herewe are is that investment should be turned inwards. longer profitable to be sending investments overseas. so we turn investment in words. we start funding ourselves. that is entirely what should happen in a situation like this and i see this as healthy. anna: do we see further evidence of that? of reduced a lot -- reliance? still very soon after the vote and nothing has changed with respect to our relationship with any of our eu partners. early to bevery claiming success or to be too fearful of what may happen post-brexit. anna: i was amused by the release of some previously secret papers that sheds light, on the transatlantic lowtionship regarding productivity under thatcher. seems like we are still talking about the same dory. james: the comparison is appropriate because the comparison between donald trump and ronald reagan is hugely appropriate. inboth sides can engage supply-side policy using government coffers when necessary, i would say that is hugely productive going

the last two big dollar values -- the reagan dollar value, the clinton dollar value -- the clinton dollar value and should with the g-20 intervention in support of the euro, which was a fallen card at the time. i think this time the weakness of the euro is a good thing for europe and the general strength of the dollar helps rekindle the average demand in the world. the key will be the place. the federal reserve slowed its rate hike it anticipated last year partly because of the strength of the dollar. that will be the story of the first quarter of next year with the fed out of the picture. francine: what is priced in? it feels that 2017 feels different. we go into it for the first time and what the fed expects the market to do are aligned. there is an expectation about monetary policy. are we mispricing things? marc: there are two parts of it. maybe we are getting ahead of the story in the u.s. part of it is may be an exaggeration about how much fiscal stimulus can be delivered by the new administration. at the same time, there are problems in europe. the german two-year yield is at recor

as the dollar climbs, the ruble falls, down almost 2% against the dollar, had been rallying late. russia inflation hitting the government target, down but at the pivotal target for the government. i love interesting movements with the geopolitical tension. david: thank you. coming up, we could not close out the euro with some news on monte dei paschi, what the italian government says what it needs to do to bailout their third largest and whether it is doing enough to satisfy the european central bank. this is bloomberg. ♪ stand,ere is where we 2.5 until the open in the u.s. on the last trading day in 2016, s&p futures up 1/10 of 1% and the dax and ftse softer. that index closes in 15 minutes. in the fx market, i love this story, euro-dollar up seven cents of 1% and overnight asian trading up 1.6% along with the swissie versus the dollar, the flash rally as we are calling it. ten-year yields go nowhere despite a strong seven year note auction yesterday and crude softer, down 2/10 of 1% but brent headed for its best year in four years. the showdown between italy and the ecb, the i

for the dollar, the u.s. currency rallies to a 10 month high against the and and treasury yields soar. mark carney walks the line between growth and inflation, how does the boe make policy in the dark? i am francine lacqua with tom keene in new york. i was watching your coverage yesterday. trying to pick up from the morning after the day before and look at what the fed move and hot dish tone means for 2017 -- hawkish tone means for 2017. tom: great to have steven saywell with us. francine: important first work news. a deal thatbels say will allow fighters and civilians to be evacuated is back in place. it was originally set for yesterday about a cease-fire fell apart in fighting with russian backed syrian troops resumed with rebel saying the first group to leave a level to areas held by the syrian opposition. china appears to be deploying weapons on all seven -- according to photographs released by a washington think tank. group says anti-aircraft guns are among the weapons that have been installed and china'

rateare raising the base to 1% to represent the dollar peg the hong kong dollar has. elsewhere, we are seeing weakness from southeast asia. the all oil and commodity heavy markets seeing a selloff, given the lapse in the oil price and commodities continuing to get back. a selloff extended. australia is underperforming. the nikkei 225 up 0.25%. we are seeing gains from exporter currency sensitive stock. insurance is one of the top decliners we see over there. in terms of what we are seeing with movers, another picture of a somatic trade we are seeing in today's session. mitsubishi motors, gaining on the topics. -- topix. that is something. a lot of automakers doing well on the back of the weekend yuan -- weakened yen.. we are seeing declines for sunday. rishaad: let's go to first word news. tom mackenzie is there. singapore exports surged in november after elon it shipments to climbs the most in a year -- electronics declined in the more of the year. the estimates of 12 economists we surveyed had been for 8.7% contraction. electronics exports rose 3.5% in the same time

the bloomberg dollar index is up but earlier, the dollar index have been up. the yen is trading higher. a bit of a reversal from earlier. 10 year yield about five basis points, and it tells us investors are buying stocks or bonds as they are selling stocks. indexs hurting the dollar . we see reversals as the dollar is of of its highs. .e have in the bloomberg 2256.s in blue, we have the 10 year yield and and white, the five-year inflation swap. at inflationk expectations. typically, the 10 year yield goes up and then sits back down. we see several instances, right now, suggesting the 10 year yield the fall -- go lower. perhaps taking the bloomberg dollar index off of record highs as well, we could see a reversal in the new year. >> thank you, abigail. joe: u.s. stocks surging in celebration of the president-elect agenda. let's get insight into the year strategist.arket thank you for joining us. a huge split in the way people think about the trump administration since the election and since the night he was elected, futures and people are coming up with all kin

dollar -- or the stronger dollar? >> the stronger dollar is a significant headwind for s&p 500errings 500 earnings. the potential holiday tax is a big impact for firms going into next year. that's a more powerful tailwind than the headwinds we're looking at. >> one factor is valuations. a lot of positivity towards u.s. equities. are there better valuations available elsewhere? europe has had a decent bounce over the last week or two. the valuations remain way more attractive than they are in the u.s. >> sure. u.s. equities from a valuation standpoint, the s&p 500 is trading around 17 times forward earnings. it's not the most attractive valuation in the world. nor is it really expensive either. over in europe, you can find cheaper valuations over here. however that comes with the political risk. we're entering into a busy political calendar. countries representing 42% of eu gdp are holding elections within the next 12 months that doesn't include the activation of article 50 in the uk triggering the brexit negotiations

the positioning and the dollar, the positioning in the bond market. the dollar moving in a slightly opposite direction, crossing to the very last corridor on the far left of your screen under commodities. we have brent crude up 0.3%. the short positions have dropped by nigh on 30%. the stocks to watch, nejra cehic is with us. nejra: talking about that positioning, we have seen those that loans increasing in wti as well and oil extending its gains today. i want to draw your attention to bp because it cemented its 77 year relationship with abu dhabi by swapping $2.2 billion of its one ofres for a stake in the emirates largest onshore oil concessions. the ceo being positive as well of growth going forward. start going up 0.5% at the moment here at the open -- stocks going up 0.5% at the moment here on the open. beitalian -- actelion will acquired by sanofi, talks suggest. a little bit every positioning after the huge gains on friday. danone saying sales growth lower. it shrinks for a third year. hurt by weak demand in spain and a revamp of the activita y

and look at the u.s. dollar. the currency of the u.s. dollar has strengthened to the strongest point. and the stronger u.s. dollar is going to wage on growth in the u.s. i would expect the fed would stay with a gradual and prudent approach in normalizing monetary policy. >> and that seems to be, you know, the desire by the markets, the bond markets in particular. but do you believe that these yields which have really spiked up here in the u.s., do you think you'll gradually come down as we get into next year? we expect u.s. yields would inch down again after the first quarter especially after the honeymoon period for the trump administration is past. i think the market would start to digest the policy implications, the effect of the fiscal stimulus proposed by the strum please administration -- by the trump administration is likely to impact economic growth only in the second half of 2017. so this actually constrains the federal reserve from shifting a more aggressive, monetary policy. given the uld cap it negative impact of higher yield

much of the new impetus for the dollar comes from the election. and the potential for fiscal thecy changes coming from new administration. what could be very conducive to dollar strength is a combination of fiscal expansion with monetary tightening in the u.s. we have seen the latest reaction from the fed, where they definitely stepped up their hawkishness. the exactncerned with opposite policies being run in the other major countries around the world. the u.k., the eurozone, japan, all running additional measures or strategies, together with relatively muted fiscal, negligible fiscal stimulus, or, to be honest, fiscal austerity is the problem. this type of recipe tends to lead to very large currency movement. to the second part of your question, how much can we expect? if we look at history, the main that isthat we had similar to what we may be going through was the early 1980's under the reagan stimulus. there, the dollar rallied 30%-40%. julie: from a lower base, right? base,o: much lower cheaper valuations. the dollar is already overvalued. ov

even surprise the dollar. you're in for a surprise when you thought the dollar value was anywhere near an end, is that something you can subscribe to? i probably do not subscribe to that necessarily. a continuation of the dollar strength and the continuation of the oil price rally in perpetuity is unlikely. primarily because volatility will not allow it to happen. there are too many hurdles in the way. global political risk. you look at europe and the amount of events you have in 2017. the ability for the fed to raise than three times or more the market is suggesting is a bit of a stretch considering the amount of political hurdles we have to get over between now and then. i would be looking at any major further rally in dollar strength and subsequent pain for emerging markets as an opportunity to add further to the emerging markets. anna: back to the u.s. story. i have a stock chart and i wanted to translate that into your world. this is a bullish signal on the economy. smaller stocks are outperforming the ru

i look at the dollar and anticipate the dollar weaker. when we think about tax cuts, when the impact of tax cuts happened. when spending happens, those will happen quickly versus the growth those can potentially engender, generating higher taxes. that comes in the longer term. in that regard i think that prospect for higher deficits should actually be putting a bit of dampener on the dollar. we'll have to watch the fed. will they become more hawkish or say we've been asking for fiscal stimulus for so long, why will we work to counter act it by raising rates too quickly? >> as we look at potential things that could derail this rally, and take ourselves back to this time last year where things were looking rosy towards the end of the year, suddenly january and february, big selloffs based around the rest of the world, china. what do you think about the situation in europe, in china? is that something that could derail this domestic-based rally? >> the s&p is effectively an increasingly global index, tied to the world so we have to be mindfu

the dollar is overbought. we would expect the dollar at some point in 2017 to correct. >> folks would tend to agree with you. the dollarying against the yen before the election and now selling the greenback. hold that thought. staying with us. globalcoming up, fragile demand and a transitioning economy. we will take a look at china's prospects in 2017. this is i've spent my life planting a size-six, non-slip shoe into that door. on this side, i want my customers to relax and enjoy themselves. but these days it's phones before forks. they want wifi out here. but behind that door, i need a private connection for my business. wifi pro from comcast business. public wifi for your customers. private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. hey, drop a beat.flix? ♪ show me orange is the new black ♪ ♪ wait, no, bloodline ♪ how about bojack, luke cage ♪ oh, dj tanner maybe show me lilyhammer ♪ ♪ stranger things, ma

the dollar rose to its highest level of the week. we are seeing a little bit of consolidation in the dollar. 116.87. the euro a little bit of upside. and qe, rebounding from seven-month lows. kiwi, rebounding from seven-month lows. let's talk more about this. joining us from singapore is our guest, live from singapore. good to have you. king dollar.ut we have seen it reached a new high. let's show the were is how much we are seeing in terms of the upside. 23 of the 36 trading days, it has arisen cents trump won the election. does -- is it time to sound some caution now? >> there is no doubt there is a consensus the dollar is heading higher. certainly in these illiquid markets at the end of the year, there is a potential for volatility. there are very good reasons many investors are bullish on the u.s. d at this point. is likely to extend into 2017. the risk is we might see more rapid dollar appreciation. then many the market anticipate. the reason the risks are weighted on this side is we are going to see a shift in terms of market f

dollar index. the u.s. dollar is of critical importance to the rest of the world, particularly emerging markets and some countries close to home here in dubai. how much pressure does this put? >> it puts some pressure. em varies. it differs from country to country. the bottom line is tighter financial conditions. it is not exhaustive because they can offset that through other means. but it is something to pay attention to. >> a lot of analysts have been commentsing yellen's as a more hawkish fed. her comments on the idea she does not want to run a hawk economy as an experiment quite interesting, what is your take? >> if i was to summarize it in one phrase, it would be beyond the data. the fed took a strong step toward being data dependent. markets moved to during a press conference. part of that is exactly what she said. she walked back this notion of high pressure. are we not just seeing a higher expectation for rate hike? but in addition, a could be tighter than we saw otherwise. it was not so much a stat

the dollar has been the center of the action post-fed. dollar/yen, strong dollar, weak yen. th almost at $1.18 on dollar/yen. back down to 1.0495 on the euro. even the pound is weaker against the u.s. dollar, 1.2516. if you add it up, the dollar index the highest several since 2003. this is always the risk when you have the biggest central bank out there raising rates and forecasting it might raise rates more aggressively. that makes the dollar assets more attractive. money pours in. >> quite the opposite from the ecb last week. will it be the opposite from the bank of england at 7:00 a.m.? that will be important for the pound brpairing. >> gold selling off a bit. down again this morning, 2.2%. finally yesterday's move, what was expected, investors were focused on what janet yellen had to say about the future, her t outlook somewhat cautious. >> all the fomc participants recognize that there is considerable uncertainty about how economic policies may change and what affect they will have on the economy. and insofar as that will affect monetary policy, of course we will have

the bond market and the dollar .ould be critical stronger dollar. we are ignoring both of those things, it seems. >> there was a really good piece from threadneedle investments published this morning trying to reconcile some of these questions. part of the answer may be that there are these headwinds coming from higher rates. there is always the tax cut effect, they believe earnings are going to go up because there is going to be some estimate. but it is an interesting question because a lot of things that we have been told for so long that are headwinds to the market are not apparently of concern to people. david: there you have it. that is joe weisenthal and vince. we have another chapter in the saga of chipotle. they have come to terms with pershing square and have appointed for new directors as part of that. there was the shakeup in the sea suite is little bit earlier. this story keeps on going. jonathan: matt miller is a big fan. i wonder whether business has dropped in new york city. who knows? david: for an update on news outside of the busin

in the fx market, the dollar index getting back to a 14 year high, the dollar-yen claimed the and and market treasuries are off, yields high by about two basis points. david: here's what you need to know at this hour. a truck plows into a christmas market in the heart of berlin, killing at least 12 people. chancellor angela merkel says it must be assumed to be terrorism. we are live in berlin with the latest, on what it means for germany and chancellor. the bank of england -- make japan capping a momentous year with an outlet -- an updated outlook on the economy. keeps it sealed purchase an asset programs unchanged. -- what will it mean to have one of their own running the treasury department. we have the scorecard, and that's what you need to know. jonathan: as we begin our coverage with the fx market and the bank of japan, the dollar index reclaiming a 14 year high. , dollar-yeneak justices 118, we trade of about .7%. bit of a venture as the negative interest rates yield curve control. at one point, again was strongest since 2013. strongest since 2013. joining us is kazuo momma. the

the movement of the yield curve dictated the dollar. whether the dollar was going up or down had a dominant effect. the yield curve is important. we've seen that. we've got this enormous divergence in market views about how much it is likely to move in terms of fed policy during 2017. as a consequence of this divergence, we have this divergence in market opinion about asset prices. there's a lot to play for out there. there's likely to be quite a lot of volatility. i think right now that is perhaps the only thing that most market commentators agree upon. tom: what does yen say? i'm interested in yen breaking out. now 115. we are getting towards 120. what does a ¥120 single? yen signal? a 120 jane: expecting the bank of japan to carry on. whether or not yellen signals a hawkish stance or a dovish stance this week really could make or break that trend. if she does signal they are going to carry on hiking and are concerned about reflation in the u.s., the dollar goes up and the yen goes down. if she does say, look at in the year on in wag

in the dollar. as is bloomberg. ♪ i've spent my life planting a size-six, non-slip shoe into that door. on this side, i want my customers to relax and enjoy themselves. but these days it's phones before forks. they want wifi out here. but behind that door, i need a private connection for my business. wifi pro from comcast business. public wifi for your customers. private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. ways wins. especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. nejra: live from london and new york this is the european close. i'm here with vonnie quinn. stocks fi

the euro-dollar reaching 1.04 off the lows of the session. the dollar-yen up, in addition. dollar strength reigns true. can equities hold on to their gains? david: we turn back to europe any year with pop -- when populist voters changed policy across europe and the united states, the world ticky wealthiest people got richer. for more on this story is jacob kirkegaard. you are an expert on europe. here is more because of security ending -- immigration concerns than economic issues. how is it motivated in europe? -- theit is a mixture of general type of alienation from economic insecurity, the sort of fear of the loss of middle -- of the middle class and unemployment. the big driver in europe of populism is immigration. there is no doubt that this was probably the defining issue for the brexit referendum. it is also what is putting america under pressure in germany. rise to theg the national front in france and other populist parties. immigration is the big one. ,avid: if you are angela merkel running for france or theresa may, how do you position yourself with your constitue

the hong kong dollar is pegged to the u.s. dollar. bank of korea holding rates steady for the sixty month in a row. the bank wants to take that wait and see approach to see how the fed rate hike impacts the economy. back to you. >> the government should fight for the city of london in brexit negotiations and should not be ashamed to stand up for britain's banks expertise. that's according to the house of lords eu financial affairs subcommittee. the committee is believed to have been warned that big banks will start making decisions next year as to their long-term future in the uk. the report went on to say the danger is that in the absence of clarity firm also restructure or relocate on the basis of a worst case scenario. >>> elsewhere, eurozone lenders put a short term debt relief deal for greece on hold. greek prime minister alexis s cyprus announced the program. the esm already criticized the speech on monday, but a parliamentary vote will be held today in an effort to rally domestic support. >>> and let's bring you the latest in i

not a great deal of movement in the dollar and the dollar-yen being fairly typical. a new edition of daybreak is andlable on your mobile bloomberg. the cover story is about russia. that's where money managers are areing and develop markets focused in 2017, apparently. centered on the markets and where the political climate is improving. from higher u.s. borrowing costs says stoll policy announcements, but some are less enamored by russia, of course. yusuf: absolutely. the nest or -- next-door he is the white house plans to announce punitive measures against countries for interference in the election. the response is expected to include economic sanctions, diplomatic steps and covert action. anna: interesting to see how things shifted -- under president trump. 1.29 u.s. it will pay dollars to buy more than 500 gas stations across australia from will work. that can make the u.k. oil company one of the nation's biggest will providers. the deal includes a long-term strategic partnership between the two countries to preserve incentives for customers. we heard recently abo

we have reached a low point of 84 to the dollar and are now stabilizing at 64, 65 to the dollar. the oil-producing currencies are going to be much less under stress. the pegs of the middle eastern currencies, which did look stressed, i think those pegs now are going to have much -- be much less under pressure. very much. you bob parker stays with us on bloomberg. the closely watched election takes place at some :00 a.m. london time. london time. italy takes off a slew of pmi data from across europe. yousef: vladimir putin start his annual address to the russian federal assemblage. feds facebook the tells us a positive -- beige book tells us a positive story about the u.s. economy. anna: strength in the chinese economy. we will go live to beijing. yousef: the cash clampdown looks to be crimping growth. stay tuned. this is bloomberg. ♪ anna: welcome back, everybody. you are looking at a live shot of hong kong harbor. the hang seng is up. stocks are related to that oil price, which keeps going higher, they are doing pretty well. up 0.2 percent. here is juliette saly. manus: citigr

the white line is the dollar under reagan. the blue line is the dollar under bush. the purple line right over here is the dollar so far under trump. do you think that a trump dollar echoing a reagan dollar is just that? and i knowre spot on you have been discussing this, that's a great chart. , ifcommon thread with them trump does what he seems to be saying he's going to do, is you have a very large fiscal stimulus when the economy doesn't really needed and that the stimulus is heavy on tax cuts so that the growth multiplier as well is low. put those two together and, going back to your previous question, david, that usually results in a lag in federal reserve types. that is a pattern that leads to an unsustainable boom bust. you get a sort of short-term recovery, you get employment rising beyond what sustainable, you start getting inflation pressures, the dollar goes up, the fed goes up, and then the economy starts to turn around in the wrong direction. david: as you say, you call it a mug to game for central banks to try to anticipate what's going on. we looked ba

have a look at the dollar-yen. the yen is now weaker against the u.s. dollar. one thing that i want to watch is, when you look at the euro-pound. when you look at the 12 month chart here, you look at the 200 day moving average which is roughly at about 81.21. the last time it was trading ago, that was 12 months before we came to the new year. that is coming to watch. at how we are doing across the bond market. these yields are coming down. when you look at the u.s. 10 year, we are done for the second straight day. australia is down eight basis points below 2.8%. equity markets are doing this. volumes are picking up. in about an hour's time we will be watching in other news the shenzhen hong kong stock takes off but it is not exactly the best time to get underway. as i mentioned, things have stabilized somewhat over the last 15 minutes. not quite sure when europe opens up and when italian banks are trading on monday. in europe i will close my eyes because that will not be in favor. betty: thank you, david. president obama has blocked the sale of german semicondu

there is the dollar against the peso. dollar strengthening and the peso weakening and you today, the mexican peso is one of the worst performing emerging-market currencies against the dollar, down 17%. extending its decline on that news that the central bank governor is resigning. also breaking news on brent crude, rising to its highest, this year. we saw a post opec rally, 9.5%, yesterday. we are up 3%, today. coming up, we will have more on that, and other markets. i will also have our interview with the deputy central bank governor of the central bank of mexico. this is bloomberg. ♪ vonnie: you are watching bloomberg. nejra: this is your global business report. oil rising on opec steel to cut production. we spoke to venezuela's oil minister after the agreement was reached. vonnie: apple is taking aim at google, a look at how the text -- the tech giant is trying to rise above the search engine's map services. nejra: a look at the evolution of 3-d printing and how it is predicted to up -- disrupt everything from medici

that reflects the dollar side, the stronger -- struggle for the dollar to continue its run. a lot of risks are political. once you get to the first half of next year, if we don't see a further rise in populism, marine le pen come to power in france. maybe it isn't bad and we can end the year without political risk. ultimately, a pretty flat forecast. not looking for a massive move here. tom: what will you listen for from chairman yellen? the trump address reflation? that has to be front and center, right? comeic: i think it will into the equation, but there is so much uncertainty. how can anyone -- the fed or in be market -- how can you certain about what president-elect trump is going to do and how successful it will be. it will be hard for them to change their forecast based on a few tweets here and there. that's the tricky thing. they'll pay lip service to it, but it won't come towards their future forecasts. still looking for a pretty flat projection from our side and that also means it is hard for the dollar to keep drawing forward in the long-term. guy: interesting to

and also the dollar. and it also creates quite a lot of significant amount of diversion between small cats and large caps. if you're there backing up, a mayfurther, then large-cap struggle more than all caps. that, there has been a huge amount of globalization. they are really big companies. if there is anything trump has said is that he really does not like multinational companies arbitrizing. downsizehe risks -- the upside is limited because of some of the other policies in place. that is less of the case for small caps, which are much more specifically exposed to the positive policies and outcomes that could come through in the u.s. and was exposed to the international d globalization efforts. globalization efforts. matt: you are not getting tattoos, is what you're saying? >> i do think u.s. equities continue to do very well, it is just that there will be quite a lot of dispersion. just because there will be headwinds to that equity advance from relatively lost evaluations already, but those get furthe

i think the way to look at the dollar now is to decide is the dollar a reflection of the fact that the economy is going to do better or is the dollar a reflection of the fact that the economy will hit us hard. i think it's the former not the latter. so not an overall drag in terms of u.s. performance next year. >> lou breen, thank you. kasman, thank you. for people who don't like 2016, you know it's like a longer year than -- >> why wouldn't they like it? >> some people. i don't know. brexit, trump, all this. you know, it's a second longer. >> physical second longer. >> wow. >> because they're adding a second. the year is a second longer. they're adding a second on to 2016. so we have an extra second. i'm going to -- you know what i'm going to do? i'm going to use it to go long on our show so squawk on the street doesn't -- >> i think we've taken a lot of seconds. >> the one we're getting for 2016, i'm using on this show. >> telling them in advance. >> it's because of ocean waves. you are not hip to this? >> no. >> this never happens. it's like a leap year. >> crazy. >> nuts, enjoy. >>

the dollar is 30% up, the explanation of exports. so an 8% rise in the dollar, completely wipes out the gain that you got in gdp today from exports. we've already rallied 10%. >> isn't that self fulfilling dollar negative? you're saying the dollar will choke off any check strength. last block you were spending much of your time arguing how weak the economy was. why is the dollar positive? >> it's positive because there are a shortage of dollars. emerging markets need dollars to pay off their bills. we've seen this movie before. a shortage of dollars will continue to have the dollar higher. look what happened in 2008. you can give me a funny face like that. >> you were reacting to something. >> i think there are technical reasons why the dollar mi might rally. steve grasso was telling us it was going to be 6% last night. people are looking for central bank divergences. people look at the ecb and the bank of japan and say the fed is so far ahead of them, that's why the dollar is trading. if the economy is going to get choked off by a s

yen troubling the most since the dollar in -- dropping the most against the dollar since 1995. japanese exports, their sentiment has been proved to be 10 of the previous 6 quarters. when it comes to milan manufacturers, -- non manufacturers, there was no improvement. falling from 19 in the june quarter, also missing estimates. the outflow from large manufacturers improved to 8 from the previous quarter's. it justmanufacturers, stayed flat. they missed animist estimates. this is a little bit disappointing. we have seen companies on average plan to boost capx by 5.5%, ending in march. that is much less than economists had expected, expecting a boost of 3.6%. also a slowdown from the previous quarter. >> we still can't quite get that. shinzo abe has been pushing for that. why have we not seen that? >> you can call this the missing link in the monetary transmission process in japan. you are seeing more easing, a weakening yen. this is boosting corporate profits. also profit margins for non-manufacturers at record highs. but why is this not being transmitted when it comes to giving

dollar in the past six months. an official has told bloomberg the central bank had little scope to outer what he called a rough drop, set to worsen if the fed hikes next week. myanmar's economy is set for the world's fastest expansion in 2016. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. haidi: this is "bloomberg is "bloomberg markets: asia". i am haidi lun. rishaad: do we still have gains in place? juliette: we surely do. i want to show you some movers, particularly strong gains in hong kong. this is on its share buyback program, up by another 2%. semiconductor manufacturing up 146% in hong kong. no real news on this move, so perhaps an erroneous trade. we have seen a strong rally in tokyo trade. i look at the overall market picture, most markets tracking higher, particularly australia, up .6% despite the weaker than expected gdp. a weaker yen helping out the nikkei, up .4%. a little currency fluctuation as well,won today south korea t

the dollar a little bit of weakness in the dollar once again as we head towards the end of the year. king dollar certainly a theme post the trump victory. that spike in the euro one of the factors going on here as well. w.t.i. the price for oil per barrel is up. this is after the price decreased yesterday. bear in mind the w.t.i. is up 45% year to date. up for the fifth session. that also has had a decent year. up around 9%. a quick look at the futures. very early in the united states or late. up by .2%. the s&p up by 10% year to date. he dow up by around 14%. we saw fairly flat trade yesterday. we'll talk more about that later in the program. let's get to bloomberg first word news. here is angie lau. >> a cease-fire agreement came into effect in syria overnight after they brokered a deal they hope will pave the way to a peace settlement ending the nation's civil war. the u.s. had led peace efforts without success for years. the european commission has approved a liquidity support program for the world's oldest bank. banks a capital shortfall cannot -- schemes. the euro surged as muc

dollar dominance back on the table. king dollar in a big way. 14 year high on the dollar index. some dollar weakness out there captured by dollar-yen. the euro climbs back to $1.04. there is a contradiction in this market. reflected in an equity market at an all-time high. it is also one of the big concerns. what you see on the big screen is the bank of america, merrill lynch --. populism up from nine in october. david: populism might lead to inflation and stimulus. it is not just donald trump, also brexit. it is not clear how populism plays out in the workplace. some of these risk events, brexit, if you have the brexit vote right, not many came out and said go long u.k. equities. many said go short. david: blackstone closed a hedge fund yesterday. they bet against the equity markets against trump. jon: they should have done what carl icahn did. futures in focus, we are going to turn to crude. .e spoke with michael cohen he gave a bullish outlook for the first half of 2017. --prices will average dollars. on average higher in the first half than the second half. what we are going

having a look at currencies, the againstening further the dollar, pushing past that 114 to the dollar handle. also worth looking at, the offshore and onshore renminbi. , thatfshore down by .1% dollar strength. this is after the pboc weaken sincean fix for the most october. a lot of this on dollar strength . we certainly saw buying coming through in the u.s. dollar on the overnight session. rishaad: thanks. having a look at the markets. harsha: first word news with sophie kamaruddin. let's seems to be more at the ecb, mario draghi cut his bond buying program to $64 billion, denying a taper is in place. he had three more months of buying. mario draghi says cute he is open ended. options presented were the ones studied by the committees in the preceding months, one four saw the option of continuing with 80 billion euros for six month, and the other one received a very broad consensus. sophie: a russian official says there is the risk of opec defaulting on its output cut commitments after pumping a record amount of crude in november. moscow will seek assurances about how the cartel will c

analyst witheap standard chartered, where dollars the dollar go in the next six months or so? be athink it will still story of relative dollar strength once we get back to more liquid markets again. today, i would not read anything meaningful into those moves we had. what we will see next year is the focus on policy divergence yet again. people will still be excited about the fiscal policy stimulus that will eventually be rising -- arriving in the u.s., and the policyy pilots -- reacting to that and inflation expectations, and that will be a divergence between the euro area or japan, while there is no more easing coming, the boj has the 10 yearpegged jgb yield around zero, while u.s. treasury yields continue higher. rishaad: in the, as the spread gets wider, it has implications. at what point does the spread look to wide to you? have had some major moves already. been more violent than we saw in the taper tantrum in 2013. we can see u.s. treasury yields as high as 3%, so while we are heading in that direction, we could get more stretched on the spreads before we eventually see

the dollar stronger against the pound. 122.39. at 13-year highs for the dollar. u.s. markets don't seem to be pha fazed or concerned about that one. the two marching hand in hand. >> not so far. we'll see what happens. making headlines, president obama and japanese prime minister shinzo abe visited pearl harbor yesterday. the trip came seven months after president obama became the first sitting american to visit the japanese memorial dedicated to those killed in hiroshima and nagasaki. the two men delivered remarks and spoke about the strong alliance between these two countries. >> making all the front pages, those pictures of that moving moment this morning. >>> in other political news, president-elect trump continues his meetings today at his florida home in mar-a-lago. edward lawrence joins us with the latest on the transition what are we expecting today? >> it's not been as smooth as it has in the past. what started out as a difference of opinion over israel is now turning into a feud between president-elect trump and president obama. >> reporter: the future presi

the kiwi dollar trading at 70 1/5 the three -- 71-53. the prime minister announced he would step down. euro-dollar is holding. flat at the moment. about 0.25%.g returns out of the bank of australia. we are seeing a little bit of loss in the aussie dollar. 0.7455 for the aussie. rishaad: it amazes me talking about the euro. we have those three-week highs against the dollar before the meeting. let's talk about this italian referendum. it was front and center for the market. it has largely gone away. you say a no vote could possibly be one of the worst outcomes for the market. it is seemingly a very big margin and it is no. we kind of shrugged it off. why? >> it is a good point. taking a broader view of the market, it is not particularly good for a time banks were italian credit -- good for italian banks or italian credit. it is similar to what we have seen in the past with the brexit reaction, the post-trump reaction. advertising risk. i think the euro rally is going to run out of steam. meeting this week which will have influence. it is n

fed, -- thes the dollar against the yen, upward move in the dollar as the end is down 2/10 of a percent here. the dollar rally faltering a little bit. thedollar was down on bloomberg dollar spot, down by 0.6% in yesterday's session. perhaps a notable move. crude, 15.82 is where we trade. moves we saw in the oil price inflation. that is why we have been focusing on what is happening to the 10 year u.s. yield as well. 2.476 eight is where2.476 eight. the yield is below that 2.5% level. touching the highest since september 2014 but retreated low it during the session yesterday. let's get the first word news. china's stabilization held in november with industrial production climbing 6.6% from a year earlier. retail sales advanced 10.8% last month while investment increased 8.3%. it gives policy makers more room to switch from stimulus towards curbing financial threats. president-elect donald trump will announce today that he plans to nominate exxon mobil hisrex tillerson as secretary of state, according to a person familiar with the decision. if he is confirmed by the senate, it would have

the biggest decline against the dollar since october. day,falling for a third and the bank of england said it has been the strength of sterling that means the inflation will not overshoot as dovish november, but statement. sterling down by 1.1%. this is bloomberg. ♪ you are watching bloomberg. i am vonnie quinn. mark: i am mark barton. this is a global business report. rupert murdoch expanding his tv empire. sky century fox will bite and it will create the consumer powerhouse. vonnie: dubai plans to suspend $36 billion to build the world's largest airport. to rely on debt funding to finance the project. mark: in today's bloomberg could tech automakers and companies investing billions of company into developing vehicles . the day of the driverless car is getting much closer. rupert murdoch has expanded his tv empire. 21st century fox will acquire europe's dominant pay-tv company sky. the price -- 14.6 billion u.s. dollars. fox calls a 39% stake in sky. fox ceo james murdoch spoke on a conference call. james: combining our fast-growing c

scarlet, you mentioned the dollar. how can we talk about the theme, itthing -- does not resonate with me. joe: very refreshing to hear another view. scarlet: everybody has bought into it. joe: they are clustering around 3%. scarlet: we are talking about donald trump's posturing on china, calling them a currency manipulator, you say that has an impact, because china has been selling treasuries in anticipation of that and it is driving yield higher. >> as you mentioned, rates began to rise long before donald trump coming into office, that was andnd two things, the bund china. they have been selling treasuries for some time and now it has accelerated around the election bid and the way that the two-year -- election. and away the two-year moves, we think that is a factor that is helping to lift the long end of of the curve.-- o f scarlet: wendy you see things falling apart -- when you see things falling apart? >> i wish i had an answer. we have talked about reagan redux and every analogy will fail at some point. it will be

higher the the dollar goes, the more that has a deflationary effect. those that mean you really do think the market is not icy in the higher inflation? click cs. if you look at the price of reflation over the next 10 years, it is hovering around 2%. the target is about two, which creates core cpi above 2%. the market is not really pricing a lot of inflation risk. we get the stimulus, the outlook of the u.s. economy theld be growing, foundations are being built. the worst-case scenario is you are owning an asset with relatively good value. attention lot of good if inflation does accelerate. it is about evaluations. it is difficult to look at the market and say higher in nation and reflation is fully priced at this age. we have not priced in much higher inflation. with the u.s. on market for the moment, we had a major rise in bonds and yields. there was not a whole lot of contagion. could we get that kind of a move again and relax if we do now? market seems to be fine with this. >> the thing we have not discussed is the liquidity market. that is the vola

that the dollar has strengthened versus the euro. there is an inflationary impact for a weaker currency in the eurozone, and of course we have raised the prospect of trade barriers and tariffs in the u.s., which raises inflation questions and concerns. that actually, a steep yield curve is exactly what we need, because low bond yields -- we are imposing a huge burden on private sector, increasing the price of pensions and so on, which is stopping investment. a steep yield curve is exactly what the economy needs, and it seems to be what's being delivered. essen at thee in ruling cdu party's national conference. when we see such bullishness out of the u.s., such optimism that tax cuts, infrastructure spending, regulation reform could boost growth and cause interest rates to rise, the yield curve to steepen, does any of that translate over to european governments? this german government is the definition of austerity, right? historically they are austere. is there any possibility that it changes to fiscal stimulus? >> well, there might

. , the story iset of the stronger dollar. you have dollar-yen basically flat and a weaker yen reverberating through most of you -- asia. crude continue his to grind higher. the regulatorsh, say the bank remains solvent. no holiday for trump. president-elect says the u.n. doesn't really do anything and that he would have beaten president obama if they had gone head-to-head. democrats are planning to challenge him on tax reform. looking back on a year of his storks surprises in what promises to be no less of a challenging 2017. if that's what you need to know. donald trump took to twitter over the holiday weekend, touching on the u.n. and how gloomy the world was before he won. quote joining us now from washington is our political reporter. i'm tempted to say it's a wonderful life. there is a lot of analogies being drawn by some people to ronald reagan. this feels more like fdr. he had to persuade the country that it was going to be ok. this is the ultimate optimist in the last 30 years. >> that's a good point. i would note tha

the doppler block -- dollar bloc. we are seeing good numbers out of the u.s. and indeed, europe. that asia is still struggling. in recent days, we have seen it just from japan. yousef: what is your top pick in the em space? gary: russia, at the moment. india is in the back burner. 10%e could be another 5% to for the start of the year. angie: finally, what do you think is going to happen in the fixed income space? guests have been commenting, we have seen it behave like equity space. what do you think volatility will bring to that area? gary: i think the volatility will still be great. as they go into the new year to things pull on her mind. in,tly, donald trump comes pro, maybe more inflation. the 10 year yield could go to the 3% level. seen in thewe have previous years, the first quarter is biased to lower. it will be the balance between a lot of hope on donald trump's policies versus weaker data. yousef: always great to get your insight. -- the chief investment officer. we will discuss july 2015 and the impact on th

the $53 or 54 dollar level. we saw in crude production just cominglevel. we saw in crude production just coming up to where it is now. if we see the price dry through beyond into this 60's, then we will see the return of u.s. crude, probably 9 million barrels, and that will keep a headwind, and hence we are not seeing oil prices in the 80's or the 90's. yousef: let's widen out the conversation to some other key commodities. gold in focus, dropping for six straight weeks, the worst streak in a year off the back of what we are seeing in terms of interest rate expectations. bottom? reached the is this a buying opportunity? >> in the near term, you would have to expect the gold price to go a little lower, primarily because we are still going through as you said the interest rate expectation. we have had to bank quarter percent rises out of the fed, and were expecting further rises next year on the back of expectations of inflation being higher. we have to see if those inflation numbers are higher, and we have to see