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tv   Bloomberg Daybreak Europe  Bloomberg  November 19, 2018 1:00am-2:30am EST

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anna: good morning from bloomberg's european headquarters in the city of london. hese are today's top stories. -- jointstatement statement between mike pence and president xi at apec. theresa may makes her brexit appeal at the confederation of industry. and comments from the fed vice chair move treasuries and the dollar. ♪
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deeper into our stop stories. we are in sydney with today's top stories. annemarie? theresa may makes her case to business today. annemarie: she's hoping to gain support, especially as criticism is mounting against her and this agreement regarding the brexit deal. her own party says it is less than ideal. reasons why they fear the other side of this deal is chaotic. they've fought for the two year transition they think is vital to give them time to adjust
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before the actual exit from the e.u. secondly, the business community closer deal focused on future, ases in the well as something similar to the customs union. theresa may is really going to make her case to the business community. she's urging lawmakers that they should talk to constituencies and ask them what they think. cbi director says, isn't it time to move on? >> where do we stand on the leadership challenge to may? annemarie: she lives another day. committee,runs the
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did not seem like he was about to unleash political chaos. tories that sent leaders need 48 in order to trigger this no confidence vote. they only have 23. the sunday paper has done an extensive investigation. lawmakers.2 48 is where they need to be. this is still something she has to worry about. >> thank you. let's turn to dan in sydney. no joint statement for the first time in many years. why is it so sour at the summit? depends who you talk to.
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the chinese will say it's because they could not agree to language on wti reforms. the chinese never wanted to make a deal and tehhey were surprised when americans wanted to compromise, americans say. americans say the chinese did not like a line that was condemning all unfair trade practices. they say the chinese never intended to strike a deal at this meeting. >> strong words exchanged between mike pence and president xi during speeches. what might that tell us about g20? dan: it does not bode very well. they cannot get statements after the speeches. that's indicative of the challenges they will face at the
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g20 summit. tongue, he -- the tone is not looking good. came out swining, saying the u.s. will not change course until china changes its ways. xi did not say anything that would indicate china would budge. corbyn,eak with jeremy after 5:30 p.m., london time. if you are just waking up, here is some of the action. a little bit of a mixed picture in asia. manage to make out small gains, but u.s.
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futures pointing lower, perhaps around concerns on trade. we saw a drop of more than percent on friday. growths over global perhaps impacting the fed. the ten-year yields dropping for the low-end. end.ward the low we saw some moves. we'll discuss. wti jumping one percent. trade is perhaps focusing more on the output curves over rising production. let's get a look on the markets in asia.
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rishaad: we are seeing a move to the upside. on himly have one market s howing a bit of weakness. the nikkei power ahead by 2/3rds of one percent. the apec summit is being shrugged off, posturing perhaps into next week. the most inis down two months, looking for a savior. balance sheet looks like a bit of cheese. maybe there will be a cash infusion.
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there is speculation this next company can do very well cutting costs with u.s. drugmakers. this company provides meical supplies and services to the military. lost out on a bid. falling 20%. what is the fed pricing for assets across the spectrum? of week pricing in treasuries as well. on yourjoin the team bloomberg. for now, let's get the first word news. : the apec summit ended by
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failing to issue a joint communique for the first time since 1993, when the event began. china objected to the wording of a statement on trade. vice president mike pence sharpened u.s. attacks on the world's second-largest economy, calling on nations to avoid loans that would leave them indebted to beijing. uphill struggle continues as she tries to salvage her brexit deal. prime minister is going to meet with the confederation of british industry in london to gain business support. members of her cabinet are opened the discussing rewriting the deal. rewritingdiscussing the deal. i am not going to stand in a
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tory leadership contest. i support the prime minister. anyonenot be supporting sending in letters. debra: the trump administration will issue its report into the murder of journalist jamal amidstgi on tuesday pronouncements that the killing was orchestrated at the highest levels. president trump says the real details of the killing may never be confirmed. he did have people that were reaonsably close to him that were probably involved.
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we put on massive sanctions on a large group of people. -- i want to stick with a good ally. major spending issues with must remain in place. is ready tont eradicate wasteful programs. a review of eurozone's plans will be issued on wednesday. global news on air, 24 hours a day and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. >> debra, thanks. let's turn to talking about global risk. global head of
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flow strategy and solutions. let's talk about global risk. we updated our viewers on where we stand with brexit and theresa may. has anything shifted in the past week? >> the month of october has been quite violet tile. there was a correction similar to what happened in february, with those equities and on swelling. investors are out looking for more facts going forward. we have seen a lot of these italy, that led to a market correction. it's unlikely investors will pull the trigger or with -- trigger with too many uncertainties. wouldt decisive movements you advise investors take at this point? >> we have seen bonds that have lost their ability to be shock
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absorbers. this has created a headache for investors. one of the best ways to protect portfolios against complex scenarios is options on sterling, to hedge a soft brexit scenario where the sterling could rally significantly. we have also seen investors looking at dispersion trades. one of the things this conversation is leading to is massive sector rotation. >> what about the equity market? how are you playing this? is that through options? are you still invested in equities? k >> the business cycle is ending
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late 2019, early 2020. you typically have a real leveraging phase. there will be -- releveraging phase. there will be a boost in equity. you want to be invested in balance sheets. you want to have an interesting value alternative to protect yourself with the end of the business cycle while being exposed to the strong balance sheet in the next few months or years. companies have real leverage -- selves quite massively releveraged themselves quite
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massively. there is also a tightening cycle when it comes to interest rate policy. withming up, we speak jeremy corbyn from london. that conversation is at 5:30 p.m. london time. in to bloomberg radio live on your mobile device or on dab digital in london. this is bloomberg. ♪ >> 6:18 in london.
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perhaps a mixed session in msci --shruggin off the mixed reviewsg of the mixed apec summit over the weekend. crude at 1.2 percent. at weeks of losses we saw the end of last week. ftse futures pointing lower. could see some thinner trading in a holiday week. but at the bloomberg business flash. -- let's get the bloomberg business flash.
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debra: the elliott management board chose a new bank to succeed as ceo. topdecision undermines telecom italia shareholder vivendi. the danske bank money laundering whistleblower is fully committed to working with danish parliament. he led the banks trading operation from 2007 until 2014. he later spoke out against the amount of money flowing through the estonian unit to the media. there's ald bloomberg move by a zurich based asset manager to contain a crisis.
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payments would be ordered -- over a 2-3 year period. this bank has dropped off the list of global banks deemed too big to fail. the bank stability board removed this bank from its list on friday. finland's financial watch dog nordeantinue to treat as a bank that is too big to fail. clardida said raiseolicymakers need to interest dates while keeping an eye on slower growth abroad -- rates while keeping an eye on slower growth abroad. he does not favor aggressive rate hikes. let's bring back kokou.
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i have this chart appear -- up here. the market is not even pricing in two rate hikes next year. has the market gotten a bit ahead of itself in terms of repricing? kokou: i don't think so. the u.s. is still going above pace in terms of gdp growth. this is the concept of trumpenomics. some are aruging the next two years of the trump presidency is unlikely to be as aggressive comes to fiscal easing
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and tax reform. we could see the second derivative of economy growth slowing down. he fiscale t stimulus that the trump administration has started could be waning. will: does that mean we see yields move lower and that supports your case maybe the bonds aren't the best diversifier? owners of biggest treasuries today is the fed. things we are expecting in q$ is more -- q4 is more treasury issurance, and the and demand could be
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tilted toward high bond yields. the market will track the economy, but you have to bear in mind the technicalities of the fed unwinding its bounds -- balance sheet. short term, higher. medium to long term, lower. nejra: that is the way the fed will unwind its balance she eet. what is the impact of fed repricing across assets? kokou: one of the biggest buyers of u.s. equities have been companies themselves. we call that equity easing. haveimpact it could could make share buyback less.
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the consequences would be lower u.s. equities as a result. ejra: what about theas well -- the credit space as well? you'd benother area concerned with at this point? kokou: the damage is happening already in the u.s. matures, rates have gone up. the problem is earnings momentum. as the economy slows, companies will have a tough time servicing their dat. and there is a refinancing wall coming. next one happen in the
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or two years. companies will have a tough time trying to find the same attractive terms. nejra: do we need to see more repricing in the bond market? make mattersill worse. the cycle has already started. other companies have abused cheap that -- debt. that's why we like the strong balance sheet versus short. long volatility with a positive carry. next, theresa may wants british business to back her brexit plan. into bloomberg radio when
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you are traveling to work, live on your mobile or on the radio. this is bloomberg. ♪ ♪
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nejra: gains in japan, hong kong, and south korea meaning we are seeing gains in the cpi pacific asia index. good start of the week. let's get the first word news . >> the apec summit ended a failing to issue a joint communique for the first time since the events began in 1993 china balked at a statement on trade, objecting to the use of language. at a summit, vice president mike pence sharpened u.s. attacks on
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the economy, calling on nations to avoid loans that would leave them indebted to beijing. >> know that the united states offers a better option. we don't drown our partners in a sea of debt. united states steel's openly, fairly. we do not open it contracting belt or one-way road. we partner with you and we all prosper. desley: the trump administration will issue its report on two murder reporter jamal khashoggi under increasing indications it was ordered at the highest level. the cia concluded the crown prince approved the murder, but president trump says the real details of the killing may never be confirmed. u.k.'s high-end properties are seeing weakness. november prices were 1.7% lower compared with october, the biggest drop since 2012. the property market in britain is weakening after three decades
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of boom. it's making buyers more cautious and prompting sellers to be less ambitious with asking prices. president trump said he won't stop acting attorney general matthew whitaker if he will curtail robert mueller's investigation into interference in the 2016 investigation. whitaker has been a critic of the probe. trump, who has blasted the investigation as a witchhunt, fired jeff sessions and named whitaker to take his place. global news, 24 hours a day on air and at tic-toc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. nejra: thank you. let's check in markets around the world. here in london, dani burger. you, happy to see monday. em equities generally are
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gaining for a third day, so how much of a gain in india are specific to india or because of a broader em rally. niroj: good morning and good day to you, as well. last two weeks were a good gain for indian markets. i was looking at what india has done in one week and a lot of the u.s. market and nikkei and corrected to 2.5-3 percent. i would recommend in part this could be because of what is happening in the em pack. index, it hasm. done much better than the world index has done and insurers emerging markets are turning out to be motivated sellers. good moves in india. they are up on benchmark indices. the going is good for now. let's hope it last.
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it might well turn out to be a watershed event for the bank of india, as well as for markets. nejra: on that point, what our markets bracing for? niroj: well, we're approaching this event fairly well in a calm fashion. it's a gain and the first asset impacted, but if the points are result of amicably, iresolved think the currency chart has showed negative generations. fingers crossed nothing happens between the bank and the government. nejra: dani, let's get to you in london. we're talking about u.s. bonds after the comments from richard clarida on friday. what are you seeing in the chinese bond markets? dani: after that meeting in a
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packed, we had tensions -- aipac, we had tensions cropping up. the tenure tumbled 19 basis points in two weeks. it's falling around 335. we've also seen weaker economic data that has fed into this. when we look at hours, it gets below 30 -- ours, it dips below 30. last time it has this much of a tumble was in april. after that, traders get a 15 point races rally. while the long-term trend might be down for 10 year yields, we might see a breather. the other market taking a breather from a selloff was oil, gaining today. just a point out how much bearish bets have cropped up , the blue line shows hedge funds.
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they rise for a seventh consecutive week, the longest streak on record that we've seen short positions rise. if opec needs to step in here, we need a big catalyst for any sort of move to the positive in oil. nejra: dani burger in london, thank you so much. and niroj for us, as well. let's turn back to brexit. we've got prime minister theresa may planning to face business leaders in the u.k. her uphill struggle continues. she will address the confederate administration trying to win the support of business leaders. eu officials have said they want to limit any extension of the transition period through the end of 2022. maria tadeo joins us from brussels. good to see you. so brexiteers: for a return to the negotiating table. is there any chance of that from brussels?
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maria: good morning. for all the huffing and puffing , theresa may still has time to get a new deal. the brexit summit will take place in just seven days. the europeans believe this has been a great already. took a year to get to this point. the exit will not change. the focus and brussels will be on the future relationship. that's what eu 27 ministers will be focusing on today. this is a key document because it will give us insight into what the future relationship between the u.k. post-brexit is going to look like. it's also going to give us details on the transition period. the european union wants to limit 2022. it's unclear what the u.k. once. we don't know what the deal will look like. a lot of us, the focus on the
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european union is on what has been a great already. very little chance it gets to be redone and renegotiated, if you will. nejra: and after the resignation of dominic rob last week, theresa may will head to brussels to do the negotiating herself. do we have details about a proposed meeting between may and juncker? maria: so that's something we heard from the prime minister herself. nothing will be agreed until everything is agreed. we're hearing in the u.k., there is too much focus on the exit. you should focus on the future. the problem is the withdrawal agreement is legally binding. we don't know when it's going to happen. it should be anytime this week. the summit will take place on sunday. the european union made it clear the summit will go on a matter
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what. if she's in power, good. if not, they will use it for a no brexit deal. it shows prime minister theresa may, the we haven't seen in brussels for a while, has taken charge. she will deal with this. nejra: thank you for joining us, maria tadeo for us in brussels. kokou.ring in a lot to keep up with when you are looking at markets. how are you playing this or are you sitting on the sidelines? kokou: for a lot of investors, it will depend on the intricacies of their portfolio. what we're seeing is volatility. irritation is a big thing. it's something investors have been looking to monetize on
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names that are both sort of domestically exposed and exporters. as the sterling appreciates or depreciates, it creates rotation from one sector to another. you're able to monetize by buying options on the components of the ftse index and sitting on the for the index itself. one thing you might have noticed, the ftse has been dollarbecause of earnings that is stabilizing the drop in the index it self. the currency is stabilizing the index as of now. if we were to go into a no deal brings it, the market -- no deal brexit, the market could be brutal in a repricing of its assets. nejra: that's interesting. what you say about the ftse is true. it was flat. then you saw the commodities futures gain. then it was homebuilders and banks that have the biggest losses.
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you're saying investors are interested in getting access through volatility. are they waiting to take any opportunity in the stocks themselves or is that something people want to stay away from? kokou: investors have been staying away from the companies that suffer dramatic loss, where we took a no deal brexit. nejra: the value proposition isn't there yet. kokou: absolutely. is not a question of whether it's 10-15% cheaper. you will still be in business or not. the decision or distribution of outcome is quite huge. as a result, people are staying on the sidelines. it's more about buying insurance policies. a lot of investors are having gains on their dollar or foreign assets. were we to go into a soft brexit, cable could rally significantly and they would have rallies on their dollar.
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and buying call option on sterling has been interest positive worth having. nejra: briefly on sterling, one-month risk reversal, the market is most bearish since the brexit referendum. how would you take advantage of something like that? kokou: this is something you look for, the upside as opposed to the downside. the fear is sterling could fall further. then on the downside is more expensive. it's probably too expensive to buy that scenario, hence looking for the positive outcome of a soft brexit is better. kokou stays with us. coming up, we speak with labour party jeremy corbyn from the conference in london. that conversation is after 5:30 p.m. london time. xiaomi is expected to report a slowdown in sales in the third
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quarter. we look at where it goes from here. plus, india's central bank versus the government. which side will come out on top? if you have to step away from the tv, to into bloomberg radio live on your mobile device or on dab digital radio in the london area. i'll be following you there from 8:00 a.m. there, as well. this is bloomberg. ♪
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1:46 in:46 in london, new york. we could see a lower open for the u.s. equity market after modest gains in the s&p 500. we could see thin trading this week in the holiday shortened week. advanced happy thanksgiving to you all. let's turn to accompany we are watching, xiaomi is fighting a
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stock slump, shares down over 20% since its july listing, parley over concerns of internet services business. xiaomi has the opportunity to relay those fears with third-quarter results. joining us is china correspondent tom mackenzie. great to see you. looking at xiaomi, what is going to be the focus of the earnings later today? tom: whether or not the company can improve it can move on from just being a hardware company to being a hardware company plus internet services, are they managing to monetize their operating system? are they managing to monetize their gaming, music services, and additional services? time is of the essence. when you look at smartphone sales, the expectation is, counterpoint research, you could see a 1% drop in smartphone sales globally and xiaomi is
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facing the pressure in terms of competition and margins. they want more revenue coming. quarters, you saw 70% of revenues coming from smartphone sales versus less than 10% for internet services. can they move those metrics? that's what investors will be looking at what results come in for the third quarter. nejra: and depending on those results, there could be more about valuation multiples, similar to tencent and alibaba. tom: absolutely. and many have questioned why that is given they are primarily a hardware company at the moment. they're saying that transition is underway. there is a potential buying opportunity, citigroup upgraded their rating for the stocks, saying xiaomi will benefit from overseas expansion and the company says it's seeing strong growth sales in countries like
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spain, far beyond india, its major overseas market. others are more skeptical. bank of america and merrill lynch downgraded the stock, pointing to concerns around emerging-market currencies and impact on xiaomi. they sell 95% of their products into emerging markets. you look at the indian rupee and chinese u.n., that could be an impact given they book many of their cost in u.s. dollars. that's something bank of america and merrill lynch has flagged as a concern. over 24 hours, they do have a vibrating on xiaomi and they have an average upside, 50% in the next 12 months. we get those results and of the day hong kong time. nejra: thank you for joining us. you have made this transition easy for us because now we turn to india. investors are watching a power struggle.
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the central bank is holding a board meeting that promises to be anything but dull. rupee and bond may come under pressure as they restrict central-bank freedom. government nominees appointed to the board, the question is if compromise can be found or if the public spat turned uglier. we have been tracking the developments. great to have you with us. what's gone wrong between india's central bank and the government? >> it's classic power play. the government believes we have gone rogue and independence and autonomy has been attacked upon. now,has been many months when the deputy governor of the bank of india in a speech attacked the government and said the government that does not accept tank independence will incur the wrath of the financial markets. a word between
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the government responded with a snarky tweet and detentions reached a peak when the government exercised special powers that directs to do their bidding. the actions shifted to the board meeting today, which is underway right now. the government has two nominees on that board. one of them has been critical and from all indications, it's an extremely somber affair. nejra: so the board meeting underway right now, as you say. what outcome could there be and what could the broader impact be? harsha: there are a couple of issues that has created this problem. one, if the reserve bank of india restricted lending of a few weak banks as part of its bad lend program, the government
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believes this is hurting economic activity and could hurt small to medium-sized businesses. the second and more contentious is that it's sitting on excess capital. more central banks have 20-40% has 200%l, while india as capital reserve. they are asking for compensation, what is the right framework and how much is necessity? the third is liquidity. particularly india's shot of bank. -- shadow bank. not much has been done to support liquidity for these banks. there are two outcomes. if they agree to most of these issues, then it's business as usual. if they do not agree, voting is likely. markets are nervous because any outcome is seen as impinging on the economy will not go down
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kindly with international investors. prime minister modi is aware of the situation. he will not support any outcome that destabilizes markets or reduces credibility of his government. nejra: thank you so much for joining us. let's bring back our guest, kokou. link betweenmake a em and tech week is there's a great story on the bloomberg talking about the flip between 2018 winners and losers. gm is starting to pick up and i have a chart that shows this. emerging markets have stopped underperforming the u.s. if you look at the index versus the s&p 500, the downtrend has sort of bottom doubt a little bit there. whereas tech, performing well at the start of the year, although u.s. tech has come under question towards the end of this year. you mentioned interesting things about tech. is there a proposition to be
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made for emerging-market tech, particularly in china? kokou: absolutely. weakness in em has been dollar driven. it's a biological organism going through the darwinian process of evolution. you can think of these companies as it evolved species. that has become less s intensive and labor intensive and managed to have profit margins bigger than what they were in companies 50 years ago. as a result, when it comes to em tech, the challenge is to make sure they can convert topline growth, clearly higher in em than dm in higher earnings road. and this is done through operating leverage and obviously more efficiency when it comes to governance, labor costs, etc. our view is tech carries the business in this area in terms of generating profit. e.m. tech needs to evolve
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similar to the u.s. in being able to convert higher topline growth into more sustainable earnings growth. this is the challenge when it comes to these companies. nejra: are investors you talked to buying into that? kokou: absolutely because a lot of investors are interested longer-term to the growth process of china, the domestic story. but the problem is, how do you convert that gdp growth in two companies that are efficiency managed and able to convert revenue growth into earnings growth? for that, you need a process of evolution whereby you're a lot more labor efficient and a lot less capital intensive. nejra: we were talking earlier about the fed, the impact that could have across as its. you made a point about u.s. equities and we could see less debt field by back. how does the tech sector fit into the outlook? oneu: tech has clearly been
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of the bigger systems of excess capital and cash, and they've been buying their own stock. that's the performance going forward. the difference between tech and u.s. equity market, they are not using as much debt as small caps. therefore, the buyback has a lot more ways to go when it comes to u.s. tech and its supporting. forward,g said, going it's given the valuation a question about growth rate and regulation, we talked about social media, is a concern. in the meantime, the buyback will be supported for the sector. nejra: thank you so much for joining us, kokou. kokou will be continuing the conversation with us on bloomberg radio at 7:30 a.m. u.k. time. you can catch them there, as well. president trump says you may never know whether the saudi crown prince was involved in the jamal khashoggi killing.
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it weighs on investor sentiment. we'll discuss that and when you're traveling to work, to into bloomberg radio on dab digital radio. this is bloomberg. ♪
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nejra: good morning from bloomberg's european headquarters. these are today's top stories. trade tensions. apec ends with no joint statement. only a war of words between mike pence and xi jinping. appeal toy makes her the confederation of british industry before heading to lead negotiations with europe. pricing out the fed. comments from the fed vice chairman of treasuries and the dollar, reading too much into a change of town.
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-- tone., we are just under an hour away from the european equity market open. we are seeing u.s. futures point lower. a mixed session in asia. it has turned positive in the last couple hours. look at how europe might open. we have seen three days of declines for european equities. we did see the stoxx 600 close down on friday. dax and cac 40 futures flat. we are seeing the ftse 100 point a little bit to the downside. a stronger cable on friday in terms of sterling. that is a steady in today's session. the spreadsee where for negotiations go and what happens with a political crisis for theresa may. also keep an eye on the leadership challenge. overall, struggling for direction. do bear in mind we could see
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thinner trading because it is a holiday shortened week in the u.s.. let's look at what is happening in the bond market. what caught traders attention on friday were comments from the fed vice chair talking about reaching neutral, but also concerns about the global economy. we saw treasury yields drop both two-year and 10 year yields. the 10 year yield dropping to the lower end of its recent raise. also dollar weakness. that is the context we are thinking of in the global bond market. not a lot of movement in the 10 year yield. we are steady on a 307 handle. we could see italian bonds a little bit in today's session. a little bit of tightening in that btp-bund spread. the conversation is after 5:30 p.m. london time. let's turn to saudi arabia.
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slightly higher this morning after saudi stocks declined the most in a month yesterday as the u.s. sanctions 17 officials over the death of journalist jamal khashoggi. the announcement came after the kingdom charged 11 people for the murder saying it will seek the death penalty for five who confessed. theing us from dubai is leader of our emerging markets team in india. we are seeing a little bit of reaction. how could we see saudi stocks react for the rest of today? >> you would expect some positivity today. especially after trump basically through into doubt whether anyone could ever prove a connection between mbs and the actual murder. that is actually throwing into doubt the findings the cia is going to present on tuesday.
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bear in mind, saudi stocks fell a lot yesterday. some investors are finding this selloff is a bit too much. we are also seeing the same reaction across bonds. there are some people saying this is really the time for a bargain. nejra: in terms of foreign investors buying more meaningfully, we are a bump higher today but nothing too , what do foreign investors need to see before they start buying saudi equities and reacting positively to other assets in meaningful way? >> they really want to see this story go away. they want the u.s. to stop talking about it. they want the international community to move on. they also want to see this drop in oil stock. when we saw oil fall into a bear market, there was a lot of
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concern saudi arabia might not be acting fast enough in order to stop this. this was compounded by the fact that a lot of investors were worried about the fallout, the merger of the journalist. what investors want to see is this to end and to move on and to start to talk business. we have seen investors fell for six straight weeks and this is a bit of a worry. positivity.e saudi stocks will be joining the msci index next year. a lot of investors are excited by this. thank you so much. now let's check on the markets in asia. .ishaad has more earlier in the session we were seeing the msci asia-pacific index a flat line. we are firmly in positive territory now. >> as you mentioned, we have seen this turnaround over the
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last couple of hours. roughly positive. a whole swath of asia to the upside. tokyo up two thirds of a percent at the moment. trade tensions never really bothered investors in this part of the world. they shrug them off despite the fact it does look like the meeting between donald trump and xi jinping may well result in nothing more than a few words. let's have a look at movers. currently, this is what we have. airways waiting on investment. not getting one of the moment. a troubled airline. the biggest fall in two months there about for jet airways. also we have 10 aircraft which were rounded and delayed. making several passengers stranded in india for operational reasons. place,ck program taking
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450,000 shares being brought back. this is going to be dropping out of the msci asia index. many bank losing a government contract in australia as a result. they have a flavor of that turnaround taking place in this part of the world. thank you so much. today we are asking the question on mliv. repricingthe fed signal for assets across the spectrum? we have seen a significant repricing in the eurodollar futures market. it looks like markets are not even pricing in to rate hikes next year. you can join the debate, reach out to us in the mliv team on your bloomberg. we will be discussing this with our guest later. for now, let's get the bloomberg first word news. summit ended by
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failing to issue a joint communique for the first time since the event began. officials meeting and papua new guinea said china balked at the wording of a statement on trade -- mikeg to the use pence sharpened europe's tax on the world's second-largest economy. he called on nations to avoid loans that would lead them in debt to beijing. >> the united states offers a better option. we do not drown our partners in a sea of debt. we do not covers or compromise your independence. the united states deals fairly. we do not offer a one-way road. when you partner with us, we a partner with you and we all prosper. strugglea may's uphill continues as she tries to sell her brexit deal. addresse minister will british industry in london today trying to win the support of business leaders. members of her cabinet are
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openly discussing rewriting the deal. some of her own lawmakers are campaigning to get rid of her. speaking to the bbc, the former brexit secretary dominic rob and said he still supports the prime minister. stand inot going to the tory leadership contest. i'm supporting the prime minister. i will not be supporting anyone who is sending letters. in a vote of no contest i would support her. administration -- on tuesday. this amid indications the killing was ordered at the highest level. there are reports the cia has concluded the crown prince approved the murder but president says the real details of the killing may never be confirmed. know?l anybody really will anybody really know? he did
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have certainly people that were reasonably close to him that were probably involved. you saw we put massive sanctions on a large group of people from saudi arabia. at the same time, we do have an ally and i want to stick with an ally that in many ways has been very good. >> global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. thank you so much. now let's turn to brexit. theresa may speaking to the business community today. for the latest, maria is in brussels and annmarie hordern is in westminster. we are still getting questions over any challenges to theresa may's leadership. today she addresses business leaders. what is she likely to say? >> good morning. she is hoping for their support. what she's going to say and what the daily telegraph is reading, may warns cabinet rebels deal is
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final. this is what she has been talking about all weekend. this is what she's going to say to the business community. this is a minor deal. it is this or fear of leaving the european union. the something the business community is in favor for. they do not want a chaotic exit. they definitely do not want to be deprived of two years they fought for. a transition period to get their ducks in a row and things in order before they officially leave. the others in the business community does like is closer economic ties and the future between the u.s. -- the u.k. and the eu similar to a customs union. this is not it for theresa may. she could face more resignations like we saw last week and a leadership challenge. the times is talking about this morning, rivals preparing for leadership challenge. the threshold needs to be 48 letters to the committee. 23 tories on record have sent letters with some of the sunday
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newspapers saying that number is closer to 42. still not the 48 needed for the vote, but there is mounting challenge within her own party. nejra: all the bickering and the political fights in the u.k. is over the withdrawal agreement whereas of course therefore -- focus is turning toward the trading terms. for that, let's turn to brussels. what are we hearing on that? >> good morning. for all the chitchat we are hearing in the u.k. about their still being time to get a new exit deal, a new and improved withdrawal agreement, the music sounds differently in brussels. they think what has been agreed has already been agreed and that's not going to change. the focus is on the future relationship. the document that is still being worked on, there are a number of sticking points. one has to do with trade. that trade deal is key for theresa may to sell this back home.
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there are other sticking points which come with the political declaration which we think now is going to be a document of 20 pages. we still have time to get something new done before sunday. the answer from brussels is no. when it comes to that summit that is due to take place on november 25, the point is it will go on whether theresa may is in office or not. the european leaders will use it to either seal the deal or prepped for a no deal brexit instead. nejra: thank you so much to our bloomberg reporters for joining us. another tense political situation. there are rising fears of economic cold war dividing asia after the apec summit in papua new guinea ended in disarray. joining us now is the portfolio manager at hermes investment management. we come to this monday morning with a lot of risks on the table. has anything shifted in your view in terms of global risk?
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given brexit, given italy to a certain extent, and increasing trade tensions. we have heard over the weekend from apec, no joint statement doesn't bode well. >> the apec news was interesting, but expected. we were not expecting anybody headlines to come out of that, looking for the next step for one trump gets together and actually makes some big statements there. looking at brexit, actually, you know, we have had the pound that new lows. there will be investors were positioned for that, who have taken money out. at the same time, we are still seeing a little bit of complacency. expectations that a deal will we need -- will be made. today certainly with the statement that will be a positive step for business supporting theresa may statement. nejra: have we gotten to a point where u.k. business were any deal will do? >> to a certain extent, there is a next occasion it is better to have a deal and to have a little
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bit of certainty. a lot of businesses are already positioned with their eu offices being located. communications to staff, that has already happened. therefore this planning has already been put in place. where waiting to see what that outcome might be. nejra: i had an interesting conversation in the last hour. the way investors are looking to play this is through volatility in you can equities. we see the sector rotation with sterling volatility rather than exposure to equities or any sort of direct exposure to sterling. as a longer-term investor, is there anything you're doing right now where you are just waiting it out? >> we do look very much at volatility, those short term signals. at the same time, there are more opportunities in which to rebalance rather than taking on new positions. a lot of the time, when these kind of short-term signals can often be overdone, therefore we
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also, -- at the same time getting those indicators on what the oval -- overall risk rhombus is our. are.omises focusing on yield players, looking really at those companies who do have strong balance sheets but are able to withstand volatility. the uncertainty that is there. also invest in their business, where they are going within the next stage within this new agreement that is being played out. nejra: a portfolio manager at hermes stays with us. coming up, we speak to jeremy corbyn from london. that conversation is after 5:30 p.m. london time. coming up, comments from the fed vice chairman of treasuries and the dollar. is the market reading too much? we will talk next. ♪
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nejra: it is 7:20 a.m. in london. where 40 minutes away from the european equity market open. echo recession in asia, taking a positive turn after a mixed session earlier. -- equity session in asia, taking a positive turn after a mixed session earlier. at
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gains on friday, waiting and seeing, the market is. in italy, the 10 year yield moved lower. we did hear from luigi demaio over the weekend saying the italian government is ready for dialogue with the european commission. perhaps why btp's up a little bit today. wednesday is going to be the key day for italy this week. ftse futures pointing lower. the rest of the european market is pointing a little bit in terms of futures. modest gains on friday as well. now let's look at what you should be watching this week. appears tomorrow before parliament's treasury committee to discuss the latest u.k. inflation report. wednesday, the european commission publishes its opinions on the budget plans of euro area countries. watch out for what italy has say -- for what it has to say about italy's debt. the traditional start of the u.s. holiday shopping season, black friday, roundup the week.
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it is thanksgiving this week so we could see trading in general across markets. now let's get the bloomberg business flash. >> telecom italia's decision to name its ceo marks another victory for elliott management. the board chose the former merrill lynch banker to succeed -- ceo who was ousted for the call to expand a landline network. danske bank money laundering whistleblower is fully committed to working with spanish parliament even with the threat of prosecution. that is according to his lawyer. he led the banks trading operation until 2014. he left after alerting management to specifics -- suspicious amounts of money
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flowing through and later spoke out to the media. for retention bonus to keep fund managers. sources told bloomberg the to buy the is zurich-based asset manager to contain a crisis that has seen investors pull money and shares plummet. nordion just dropped off the list of global banks deemed too big to fail. that does not mean it cannot hold less regulatory capital. the financial stability board removed it from a group it defined says globally systemic. finland's financial watchdog indicated it would continue to as tooordion -- nordea big to fail. nejra: thank you so much. today we are asking the question on mliv. what does the fed repricing
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signal for assets across the spectrum? reach out to us and the mliv team. iv plus tv on your bloomberg. let's go back to a portfolio manager at hermes investment management. we did see a move in the market on friday following comments from richard clarida talking about mutual rates, talking about concerns run the global economy. how much does it matter if futures see fewer 2019 fed hikes? >> it is significant. that is one of the key metrics all investors are looking at. that alongside inflation. there can be a tug-of-war between the geometric -- looking to keep that in line. that is why we are looking at posturing which where we might go. >> first of all, yields. his are going to be more of a move to the downside? we are already near the lower
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end of the raise we have seen for the 10 year yields. >> certainly we saw that set change previously. we expect to see more of that. certainly that making the fixed income asset more attractive. particularly as the historically in the last two to five years, we have not seen so much from that area of the market. it's looking to get more parenting from a fixed income -- parity from a fixed income perspective. nejra: what does that mean for other assets? what does it mean if we continue to see u.s. yields move lower for equities and other assets? >> generally it is more attractive for us depending on -- certainly we are able to position all sectors that benefit from the rises. when there is good visibility of those movements, the market tends to move quickly. nejra: is there actually good visibility?
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there are questions whether the market overreacted to clarida's comments. is it getting ahead of itself in pricing out as many fed movements? >> it is in the fed's interest to be as transparent as they can be. avoid someointing to of the headwinds with the positives and negatives moves not market -- moves in that market. nejra: think you for joining us. louise dudley, portfolio manager at hermes. that is it for bloomberg daybreak europe. anna edwards will join us from the cbi conference in europe. we will have a break -- a big brexit focus. if you have to step away from your tv, and you are traveling to work, tune in to bloomberg radio live on your mobile device
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and on dab digital in the london area. this is bloomberg. ♪
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nejra: good morning, welcome to bloomberg markets. we are live from our european headquarters. alongside anna edwards at the cbi conference. anna: good morning. i am here in central london where theresa may will try to sell her brexit deal to business leaders as she finds almost insurmountable opposition in parliament and a possible leadership challenge. the cash open is less than 30 minutes away.


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