tv Bloomberg Daybreak Europe Bloomberg December 13, 2018 1:00am-2:30am EST
>> good morning from westminster in london, i'm nejra cehic. i'm manus cranny, live in dubai. these are today's top stories. >> pressing on, theresa may survives the tory coup attempt but is further weaken. does she have the clout to see of brexit deal through as she heads to brussels? asian stocks firmly in the green. plus plenty of central-bank decisions on investors minds today, the most important being the ecb when mario draghi detection in to the era of bond buying.
>> is 106 days to brexit and theresa may has survived an attempt to oust her. last night she won the no-confidence vote but more than a third of her party voted to ditch her. does prime minister may have the authority she needs to get any concessions from the e.u. and to get the plan through parliament >> great job over the past couple of days. she is, some would say of vassal state now, much reduced in power . what do you make of it? dead woman walking as well is what somebody called her. she survived the confidence vote , 200 tory in these voted for her, 117 against, so she does
had to brussels to try to get these concessions around the backstop which is the biggest sticking point with lawmakers back home. there are still some he challenges ahead for her. the expectation was that she would win it, but does that change the parliamentary math at all? there is still a lot of opposition to her withdrawal deal at home and also what kind of concessions will she get from the e.u. to satisfy lawmakers back home? there's a prospect of jeremy corbyn from the labour party calling a no-confidence vote in the government. that could lead to fresh elections. also you still have some members of her party trying to work through a plan to get an even softer brexit through. to me, this is not changed a huge amount since the beginning of the week in terms of how much clearer we are on brexit. what is fascinating for me as i walked into the office this morning, brexit is not really made it on the front page
of anything. this is the collegiate times. may stay safe. this is where we are likely in the middle east. don't forget, this is a destination for many of the ex patriots at this time of the year. i stand ready to finish the job. i found it fascinating that our front pages here in dubai have led with exit. , can the market reposition itself? we had for a softer brexit, a second referendum, or do we had four perhaps another referendum, another general election and is the carbon risk priced into these markets? nejra: i been asking this question all week whether they are being too complacent about the downside risk. meanwhile we have brexit covered from all angles this morning.
bloomberg's london bureau treat is here at westminster with me and maria is in brussels. good morning and thank you so much for braving the cold with us here this morning. first question, does the vote we had and the result actually strengthened or weakened the may has beenheresa severely weakened overnight by the results of this vote. dicey aroundbit six gawker or 7:00 p.m. last night and she had to go in front of the 1922 commission and say marketld make a concession and still one third of her party failed to support her. today she will go to brussels and tried to change it to think line of northern ireland. that is unlikely to be change. then you have the prospect of labor with a no-confidence vote. two --wo today, round round three maybe tomorrow or
next week. maria is on the move in brussels. theresa may is back in brussels today pleading for a lifeline from the e.u.. she is arriving, is she really arriving stronger? she has a significant number of votes against her. she didn't see the irish tee shot yesterday. the message from brussels was very clear, you will find it hard to get anything definite from us. maria, good morning. maria: good morning, manus. yesterday there was really a big it wasn as to whether still being offered european leaders, and let's not forget about this, they want a deal. nobody here once the u.k. to crash out of the u.k.. the out as we know that in order
to do this the deal has to go through parliament. for the time being, they don't want to open renegotiations. they've made it very clear. --opean union has allowed maybe this is what we're hoping to see tonight. is whethereresting we get new member states coming out and saying we need to soften the stance on the u.k.. that really will be the key whether we will get will get member states to say at this point we need to take a step back and give her some concessions. perhaps not legally binding, but soften the language. what i'm hearing on the ground however is that were not going to get anything done, this will go all the way until january. manus: that is the time ticking down and that will force the house of our limits hand. from brussels,us braving the cold outside parliament. narrow will suffer in silence. breaking news coming through from one of the biggest asset managers in italy.
this is the company that suspended jim hayward. they've had revisions of what is deliverable in terms of profit. full-year net loss of 925 million swiss francs. they are scrapping the dividend. , theis about rallying board decided to cut the size of the management or from nine to seven. they will be a full-year loss. whohas lost both their ceo will step down, being replaced by the interim ceo. this all goes back to one lines manager, tim hayward. looking at performance of the stock, down over 60% in terms of foul you. 32%rought it back down to over the month. that you're breaking news. juliette saly is in singapore. the second session of gains here in asia.
yesterday we had that buoyancy coming through after the huawei ceo was granted bail. in canada it's about soy gain -- soybeans. up to 2mmitting to buy million tons of soybeans. hoping there can be a reprieve in the traits that. the nikkei higher by 1%, yen weakness pushing that index higher. the hang seng and csi 300 leading gains in the region. the csi 300 and china jumping the most in about a month. we've seen pretty good positivity coming through on number of emerging-market currencies today. and the nifty up by .4%, rising for a third session in india. the rupee breaking its losing streak as well after we heard from the new central bank governor overnight. let's look at some of the stock movers we are seeing in the region because apple is very much in focus, saying sources telling bloomberg that if we do see those steps increased to
25%, at the apple will look at starting to do some of its manufacturing countries other than china. contrary --decision company up by 2% today. decatur pharmaceuticals jumping the most in almost three years, some short seller interest there and cbd telecom in sydney the worst performer. the regulator in australia has put question marks over its merger with vodafone in australia. andfalling by got 17% dragging telstra down with it. juliette saly in singapore, thank you so much. i am here at westminster talking about brexit but it's not the only story in global markets today. we are asking the question, how much if at all with the nikkei advance in 2019? the world's second-biggest equity market has had a good run recently. there's still time to head over to add your forecast to our 2019
market survey before polling closes on friday. now let's get the bloomberg first word news from debra mao in hong kong. >> theresa may is heading back to brussels today after winning a confidence vote among fellow conservative members of the u.k. house of commons. more than one third of lawmakers voted to ditch may, but an emotional concession before the ballot when she said she would not leave the party into the next general election. she is now safe from an internal challenge for your and returns to the task of getting her brexit deal approved by parliament. she will head to brussels for summit with other e.u. leaders. >> i'm grateful for that support. a significant number colleagues did cast a vote against me and i've listen to what they said. following the ballot, we now need to get on with the job of delivering brexit to the british people and building a better future for this country.
>> china is said to be considering plans to delay its strategy to dominate high-end technologies. my the main targets in president trump trade war. sources say beijing may postpone some of the made in china 2025 program by a decade, although a final decision has not been made. we not china has resumed buying u.s. soybeans, bringing some relief to farmers in donald trump's heartland. the soybean 84 council says up to 2 billion ettrick tons of soybeans have been purchased by china over the past 24 hours. todays. senate is to vote on a measure that seeks to withdraw u.s. support for saudi arabia's military campaign in yemen. the resolution proposed as a punishment for the killing of jamal khashoggi would aim to end u.s. assistance for the gulf states war against the rebels. the white house has threatened to veto the move. historic repute of
what saudi arabia is doing in yemen. it's a historic reviewed in what they getting killing a dissident jamal khashoggi and they are on notice. if they keep behaving the way they are, in january this comes back up and i think we will actually get to a vetoproof majority on this saying no more arms to saudi arabia. >> 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. nejra: debra mao in hong kong, thank you so much. theresa may has survived a no-confidence vote, the u.k. prime minister won a towns to her leadership, despite more than a third of her own lawmakers voting to ditch her. this leaves her authority damage as she heads to the summit in brussels in another attempt to win concessions. eoin murray.n
other risks skewed to the downside from here for sterling? eoin: we know we are guaranteed more risk, which simply reflects uncertainty. whatever the latest development as theresa may goes to brussels and is given the cold shoulder, expect more risk on the downside. successful with concessions, think can see risk to the upside. maybe there is a deal that will be pushed through the optimist might suggest there will be no brexit at all. good morning to you from dubai. i'm looking at volatility. you have to build this chart for five years to understand how volatile sterling is. if there is a labor motion of
no-confidence in this government, do you think we go into a much more chaotic tailspin on the pound? eoin: i think that is almost guaranteed, manus. we look at starting, it significantly above most developed currency and even above most emerging currencies at this point. i'm not sure that today's rate accurately reflects the level of uncertainty that exist in the sterling market right now. nejra: so much uncertainty, but what would be your best bet of where we go from here? clear inke we are no terms of where brexit goes from here. do you think she will be able to get the withdrawal agreement through parliament if it is put to another meaningful vote? eoin: i don't fear massive change the great deal at all. if you just take 10% to 15% of those that voted against her leadership last night crossing
the house to the opposition in the event of a vote of no-confidence in the government, that's the end of the story. the story has not changed at all with this leadership vote last night and effect, and summits she is weakened by having to make concessions about her future leadership. saying she's not likely to come back with anything substantial from brussels in terms of the backstop. she's not going to get anything radical in 24 hours that she did not get over two years. in your opinion, are we closer to a general election, and or another referendum? eoin: yes, i think we are. i think those two are now more likely than they were before the start of this week and perhaps that is simply a reflection that as we get closer, as we have we get closeras to the 29th of march, the extremes now come more into focus and perhaps look more
likely. nejra: is an extension more likely now or not? sure our current partners in your are willing to go there at the moment. i think they put their best deal on the table and they would like to see the u.k. deal with that. thank you very much. we have a lot more to get through this frosty morning outside westminster. a guest host for the next 45 minutes. coming up, germany wants to help deutsche bank by making it easier to merge with commerzbank. more on the details, it's a bloomberg scoop. and clashes between italy and the e.u.. how will the commission react? and if you're traveling to work, you know what to do, up on to the radio, were live on digital radio in the london area.
nejra: i'm nejra cehic at westminster covering the day after theresa may's no-confidence vote. i'm manus cranny into by. changed,music has dancing closer to the chinese. day on crudeured yesterday, down by 1%. opec suggesting there could be deeper cuts to come. the narrowest trading range since february 27. how's it looking for you this morning? nejra: we are seeing futures pointing higher on the s&p, largely on trade hopes.
cable had its biggest run-up yesterday in more than a month. theresaet was expecting may two when that boat and she did, but the question becomes whether her hand is weakened both in brussels and also back home. futures a little soft in today's session. , isl shares in the u.k. there value if you believe theresa may can get hurt deal through. manus: let's give it to germany because the government is intensifying their efforts to help fix deutsche bank. no mean task, officials are nailing down how to get a merger with deutsche bank. it follows years of turbulence. the deutsche bank share price has been bouncing from record low to record low as solutions to the lenders problem have evaded management. matt miller is on the story. good to see you this morning.
why would the government be supporting such a merger in the first place? probably hitting the panic button here? to make surent they don't have to hit the panic button in the next financial crisis. germany needs a national champion to support its export led economy. sudden for lenders are feeling that role. they will have to watch as the foreign lenders flood out of the country where as if they have a national champion doing it, they can count on continued financing. just see youthey this morning. how quickly could talks become a reality? matt: we know the ceo deutsche bank has said he wants at least 18 months to let his plan play out, which doesn't include a merger. trying to turn the bank around, making things profitable, cutting cost and possibly is needed bringing in new financing
from existing shareholders and new sources. we've heard that he has told people familiar if his plans don't seem to be working out, if is not able to hit his targets, then he will consider a merger sooner. manus: investor group there are really concerned because this could mean years of no dividends. thisis the best case for -- for deutsche bank at this point? matt: obviously shareholders will want to see the shares pickup. deutsche bank as low as it stands. it's only $.11 a year. they want to see more payouts as they see competitors starting to pay out more. on the other hand, they do want to see some kind of solid base at the bank. if they continue to be stuck in this vicious cycle of falling cost, they sticky
need to do something drastic at some point, possibly a merger is something they have been considering for a long time. we heard back to the previous ceo that this was a possibility thomas something deutsche bank is open to and the government is the biggest shareholder in commerzbank so they could potentially make that a lot easier. manus: let's see what support builds for that to happen. matt miller, thank you very much. italian primee minister promoting to cut the deficit to 2.04% in 2019. this is a significant concession. the european commission within initial target of 2.4% was rejected. it would be a breach of e.u. rules. bring back our guest. if you are skeptic or betting this would be say
a climb down by the italians, or he would say it is a sensible approach by the italian. what do you make of it this morning? quite a significant move. can i tend to be both skeptical and realistic? i think this is reality facing the italian government. they have had some weaker economic numbers. tos is in a sense a reaction that. i feel that without those numbers, they might resist very much on the point that they could get through until the summer without having to formally respond to the e.u. and cut the deficit back to a sensible point. i'm surprised that given in, but when i look at the numbers, it looks like they are dealing with reality here. nejra: perhaps not surprising given some say the situation in france might give italy a little more leeway.
buyer given the skepticism you just outlined? eoin: i think you could be a buyer at this point. reality has set in so they look a little bit stronger. i think you are right to highlight that will now take all of the attention and there deficit numbers will be substantial. they may well get the focus of the e.u. themselves now. manus: thank you very much,'s you will stay with us this morning. up next, stocks rally this morning with renewed trade optimism buoying the markets. light heiser and mnuchin are withng poser to talks china. china seems to be making more moves to ease tensions with washington. will this be the weaker we see a pivot in the sino u.s.
grateful for that support, the significant number of colleagues did cast votes against me, and i've listen to what they said. following the ballots, we now need to get on with the job of delivering brexit to the british people and building a better future for this country. nejra: theresa may declared is time to get on with the job of delivering brexit. i'm covering the story outside of parliament. she did when that boat 200-117. the question is whether iran has been weakened. she has to try to get more concessions to placate lawmakers that home. still be questions over what this means to brexit, whether we
could see a sort of brexit, a softer brexit, a second referendum or whether the deal will eventually pass. appetite in is no that house of parliament the heinz you for the form of this. can she really that's what can , peoplem brussels with saying what is she going to come back with apart from rhetoric. from the market perspective, that's what we're interested in. the pound slightly retrace your. the question is, do you just add new short positions of potential volatility between now and the middle of january? that's a question from the market perspective. nejra: any bounce we get could be even stronger. our guest is sitting with me on
westminster and he said there is more upside to the pound yesterday. it rally the most in a month on expectation the boat would be won. we are still waiting to see what jeremy corbyn might do in perhaps of calling a no-confidence in government. never far,ow you are so i want you to go and look at research. will talk more with our guest a little later on. we have 15 set up for you to do that. our partner in mumbai is standing by. dani burger is on the big screen. we have lots of news on india, it's been also tough as brexit. how are the markets settling toward the end of the week? >> surprisingly very well.
i used the term very carefully --ause i don't think anybody the market will go out and everybody would laugh, but that's what happened the last three days. we are trading well and truly in the green. the banking space is up almost a percent yet again, so very strong show by all the market indices and the money markets are doing well also. well also. the bigger story is what is happening in bond yields. maybe the inflation in india was at an 11 month low. the bond yields have come up quite meaningfully. it has inched up and come up rapidly as well. for now, the going is really good.
nejra: going good for now. you are taking a look at the yuan, risk on in asian equity markets on the prospects for some optimism around trade. what are you looking at for the yuan? chinese importers stepping in to buy u.s. soybeans. we might be looking at a more optimistic picture. we are also seeing do a little bit better today and now it looks like the momentum might be in favor of the chinese currency. here i have charted the u.s. dollar cost versus the yuan. the one-month moving average has just crossed over the 55 day moving average. this shows you the momentum picture. .omentum is pointing downward what china does and 2019 with the monetary policy will mean a lot to this picture here but it used to be, would we get to the level here. now the next thing to look out for is will it get to its 200
day moving average. trading atllar cost 687. since you are out there in the freezing cold outside of parliament, to bring up the pound volatility. pound is little changed today holding on big gains from yesterday, options still pricing in some concern here. so i have the pound one week risk reversal versus the euro. they tend to trade together. we have this big dislocation initially in early november but it is still happening again. the pound is more volatile than the euro, even know we have that ecb meeting today. a lot of concern, not much movement. traders on the sideline are pricing in more volatility. manus: thank you very much. let's see where it goes from here.
breaking news, this time an upgrade to earnings. saying earnings will rise by at least 20% higher than one year ago. they are seeing improved performance. full-year earnings per share 20% higher than last year. platinum reporting an increase in their first cap profits of the year. upside, up 53% over the past year. let's get your first word news from densely humphrey in dubai. >> theresa may is heading back to brussels today after winning a confidence vote among fellow
conservative members of the u.k. house of commons. quite an emotional concession before the ballot when she said she would not leave the party until the next general election. she returns to the task of getting her brexit deal agreed by parliament. she will head to brussels today for a summit with other e.u. leaders. the italian prime minister has proposed to cut the country's deficit target to 2.04% for 2019. it's a significant concession to the european commission after the initial target of 2.4% was rejected for preaching e.u. rules. deputy premiers have insisted the landmark election pledges should not be deluded or delayed. cohen said he is repaired to reveal publicly what he knows about his former client
once robert mueller's investigation is completed. -- the largest said his client expects to testify that what he knows in front of congress at some point. that comes after he was sentenced to three years in federal prison. ties x k motors has started delivery of its first commercial model for years after the country's founding. the sport utility vehicle gives the company instant credibility and revenues while hundreds of other startups are still working on their prototypes. >> we have always told the chinese government would lift restrictions around licenses, subsidies, and tariffs. rejections that benefit us in the short-term, but in the long-term, it would damage us. >> 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. this is bloomberg.
thank you so much. let's turn to trade and china's plan to dominate high in tech may be a victim of the trade for. -- trade war. they may postpone some of the eight in china 22 program. it has been one of president trump's main targets. meanwhile china reviews -- resumes buying u.s. soybeans in the first significant purchase since the two countries began imposing tit-for-tat tariffs. we get headlines on this every day, but do you see a significant softening trade tensions that could give a meaningful lift to equities from here? eoin: i'm not sure i do. we are seeing a temporary softening in trade tensions but you are right to highlight the fact that the trade war masks something much deeper and it is the tech war.
there may be some concessions in terms of china dropping some of the major issues in their 12 point plan for made in china 2025. i'm not so sure, it strikes me that xi is a lot invested and it is part of a 2025, not just a short-term thing. the chinese a very good at dealing with long-term issues. with the movesion to -- to move some of their targets to 2035. what about the consequences if , the get a decent deal nikkei 225 is up this morning. how much will it advance in 2019? is 13.8, and that is
quite a bit below the s&p 500. trade deal done, advancing in global trade, is this where you would put a bit more exposure in the nikkei? it's interesting, in many ways emerging markets as a whole look attractive at this stage just in valuation measures alone. i don't think we should lose sight of the backdrop. it tells me we still have economic growth and a strong chance that the s&p will slow the backend of next year and into 2020. nejra: you see the end of the bull market in equities coming. is that before the end of 2019? eoin: it is at some point in the next 12-18 months. apologies for sitting on the fence. manus: some days it is actually good to sit on the fence. some days it is good to sit out of the market. i'm looking at haven assets.
let me see if i can pop up. there has been a run into haven assets. shows you would have been better this year if you had gone to haven. do you fancy a little bit of swiss, little bit of yen and a little more bonds in terms of haven asset allocation? i do, i think there are some interesting plays there and some of the other safe havens in terms of gold, the dollar itself of course is a safe haven and we should not forget that as we see these moves in monetary policy from the central banks around the world. and a continuing tightening in liquidity positions globally. nejra: thank you for joining us
this morning and braving the cold with me here at westminster. will continue the conversation with us on the radio, so you will be heading back to the warmth of the studio. it is decision day for many of europe's central banks. five decisions, including the final ecb announcement of the year. as always, remember to head to bloomberg radio if you have to step away from the tv. this is bloomberg. ♪
>> the pound doesn't look strong and maybe what we should be thinking is we should shortened, and that's worry that investors will think it's on a downward track with certainty, and that's the problem for the u.k. government. it doesn't look like the markets are putting a staff of approval on may's negotiations. that's the former bank of
england policymakers speaking to bloomberg little bit earlier. sterling is slightly lower this morning. your a reality check for the u.k.. by paper is dominated theresa may and her victory, if you want to call it that, in a no-confidence vote that took place late last night. theresa may survives the says she won't lead her army into the guardiantion, the 117 people voted against her. she heads back to brussels for the e.u. summit as prime minister, but is she weakened? the daily mail, this is the blood that runs blue in britain. tory grabbed for the middle class, letter get on with the job.
saw the rebellion of her lawmakers with nearly two thirds of her parliamentary backing her. that is the other way to look at it, two thirds voted for her. nejra: and we are no clearer on the direction of brexit from here. with brexit hanging in the balance, is the future of london as a financial center also in jeopardy? we asked barclays chairman john mcfarland what comes next. that if thereng is a deal somewhere around june in 2020 that some things can continue on the basis of equivalents. but of course a lot will not be able to. the city can move when it needs to move, because we have the contingency plans. they are not really contingency plans because with the uncertainty of whether or not
there will be a transition, everyone is planning for march. hoping the fund management delegation can continue to keep this in line. >> we have seen the british pound weakened considerably partly on uncertainty for what happens. do you expect it to weaken much further? is there a floor insight? generallynd has been a weakening currency for a very long time. and itas a devaluation is 126 today. so you have basically seen quite a decline against the u.s. dollar over eight long time, but enormous volatility.
given the volatility, it could join the euro easily. , it came up to the low one 20's and bounced back and has come up again. inhink the market has priced a number of things. it has priced in the probability of a deal, it has priced in the probability of no deal and the probability of a different government, and it is quite a heavy price because it has come up quite a bit. my sense is it has come up so much that i don't think you are going to see this radical downward move in the event of a negative announcement. but when you information comes into the market, it tends to get a response and it will,.
some banks will have a longer p eriod than that. we looked at domestic banks and this price they are trading at is discounting the 30%-40% decline in 2020, so there is a lot priced in here, and the fact that people have speculated about tarp. you remember when tarp was announced, the try to get it to the house and it didn't go, and then markets reacted very violently, and it went through. i don't think we are in that circumstance because things have come up. if that was the strategy, it's not a good one. softening.et a
i don't think it is likely. nejra: the barclays chairman at the toronto global forum. it's a big day for central banks today. first up, the swiss national stick withely to this rate announcement. norway central bank is expected to stick at 0.75%. economists forecast turkey will also keep rates on hold at 24% come and finally, last but not least, european central bank looks set to cap asset purchases after spending 2.6 trillion euros over the last three years in its fight against inflation. that's at 12:45 p.m. u.k. time. ecbs: that stick with the and turn to our guest for his thoughts on the end of bond buying, that era. eichmann ats oliver
dws investment. great to have you with us this morning. meeting for mr. driving, and this is the data he , pmi, flagging momentum rolling over, germany under pressure, italy stagnating and , is it a quarterly backdrop to end qe? oliver: good morning. first of all, there's almost no alternative than to end asset purchases. it has been clearly flagged already and i guess they will do so. the question you're asking on economic growth, our expectation is that while we have seen a material drop in pmi, for example, or forecast is still that we see potential growth next year and that inflation
should be somewhere in the area where the ecb would like to see it. i'm that point of view, the ecb can stop it that asset purchase program but it has to reflect mario draghi in the press conference, and expansionary monetary policy for the next years to come. we investments for some years to come and low interest rate, we don't see any rate hike anytime soon. i think the ecb's monetary policy will remain accommodating, even if they stop asset purchase by the end of the year. hikes,on the rate goldman sachs basically put out while the loss of momentum in the 19 nation economy had the outlook for italy skewed risk toward a later
first hike in borrowing costs. the key question is how fast the ecb moves after that. is the euro area going to go into the next downturn with the ecb still having rates in negative territory? i guess you really cannot exclude that. it is not our pace case. we stick to what the ecb said and we expect the first rate hike not before september next year. it's not even september but october. the more difficult question is when will we see the first hike in the main refinancing rate, and will we have the deposit rate at zero anytime soon thereafter? there, our level of conviction is less high. we don't think we will get the hike in the main refinancing rate in 2019.
for now we expect there will be some hike in 2020, but that is based on the assumption that the economy will grow around potential, but there is a lot of political risk. brexit is still a looming issue, so therefore i think the risks surrounding the base case are quite high and our expectation is that the ecb will acknowledge this and in any case, will be very cautious in raising rates. in referring to the bond market outlook that means we don't expect it to rise significantly anytime soon. to speak tor, great you this morning. thank you so much for joining us. coming up, we will speak to the chairman of the swiss national bank. it's a big day for central-bank.
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leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. manus: good morning. this is "bloomberg daybreak: europe." nejra: these are today's top stories. theresa may survives the coup attempt, but is weekend. will she -- weakened. u.s. stocks, and european futures all in the green amid signs trade tensions continue to ease. plus, plenty of decisions. investors have a heavy day. the ecb when draghi declares an end to the era of on buying.
-- bond buying. anda: 106 days to brexit, theresa may survived an attempt to oust her. she survived a no-confidence vote but more than a third of the party voted to oust her. i am out here in the cold. the trends facing theresa may are the same. she still has to get the concessions to placate her lawmakers back home. of the question, whether we will hear from jeremy corbyn. also, what this means for the prospect of exit. will the deal get voted through in parliament? could we see a softer brexit for the second referendum? two of thehed on
most important things. our guest thinks we are closer to a general election and another referendum. myriad of streets and corridors behind you, the question for markets, the barclays chairman, , nohinks sterling pricing deal, hard deal, this is the term i have used all week. the bandwidth is limited. to that and, you need to ask yourself, is this a prime minister with a dead woman walking? nejra: we do have exit covered from all angles this morning. maria in brussels.
and the bloomberg london bureau chief. i want to start with you. get you as a political expert, the question of what the various options for brexit are and if any are more likely? crunchre still in the phase where nothing has a majority. reporting ministers have been pushing the idea she put a series of proposals to parliament. clear no proposal has a majority. her deal would presumably get itcessions from brussels, will look more presentable. it looks like a long slog and a difficult process at a difficult time for theresa may. manus: maybe those ministers were not actually listening to juncker. very clear.
maria is in brussels. the prime minister arrives still but muchminister, depleted in terms of her power. what do you think she can walk back to london with that could help her cause? >> good morning. for all the political drama we see day in and day out, the european union still once a deal. -- wants a deal. willte the drama, the u.k. leave in march and leave with a deal. the? leaders, european saying we want to help you get to the finish line but we can give major legally binding concessions. she wants some sort of legal document. if it is used, it is a temporary
decision. that is going to be difficult to stomach for european leaders. there is no appetite to open up the negotiation. another theory i am hearing, december, nothing will happen. we will have to wait until january. it looks like it will be a question of a deal with tweaks but no brexit. manus: they don't want a hard brexit, what will the strength be in regards to northern ireland. thank you, braving the cold. the bravest editor of them all. i want to show you the bond market typically have seen a bit of a pop. the italian government bonds, up by 38 basis points. you may say, really? the original deficit was 2.4%.
is this the italian beginning to compromise with the eu? in terms of yield, the cash markets, dropping below 3%. there could be a little bit more of a bid. more value, down to 2.75%. the bond market, u.s. treasury market, flat you might say. the view is from a number of different houses, the seymour the marketing than is pricing and. treasuries at 3.4% by the middle of next year. the market could be underpricing the fed. those are your bond markets. looks like your futures are a little stronger this morning. nejra: i will also be focusing in an hour on the market open. we saw gilt yields rise ahead of the new confidence vote.
of course, she has won now. what it means for the gilt curve. we could see the gilt curve invert in the next six weeks. equity markets, a strong close for european equities, the ftse 100. the backdrop of a stronger pound. sterling rallying the most in a month. ftse futures dead now. dax futures going nowhere. futures struggling for direction, edging up a little bit read after some gains in asia. pointing higher. optimism around trade. that is already reflected in the european futures right now. let's check in on the markets in asia. juliette saly has more from singapore. >> it is interesting you say it is not just the trade sentiment
boosting asian markets. up by 1.5% on the close. you can't put this out down -- all down to the fact china has agreed to buy some soybeans. we are expecting some strong policies to come from chinese government officials which could boost the overall chinese economy. elsewhere, you have seen a second session of gains. a weaker yen lifting the nikkei. slightly higher, still recovering from the 23 month low. rupee the front runner. we have heard indonesia is considering lowering its taxes on sovereign bonds.
stressing on the need for a console to approach. as i mentioned, a weaker yen, the dollar higher zero 11%. -- 0.1%. there is a powerful sense of relief in these trade relations. this is for you. the nikkei, how much will it advance in 2019? tech has been a big proponent. the pe is expected to drop to sub 14. nikkei if youre believe in trade wars? you are seeing the dollar down against the indonesia rupee, against the indian rupee. dollar-yen on the move.
i want to refresh some of the headlines. the cfo says they need to accelerate their capital buffers. bey said the net loss will theyd by alex friedman, had to dismiss one of their fund managers. the stock down 70% on the year. indicated on the call this morning to see the stock 5% lower, premarket, 5% lower. the cfo saying further expanding and restructuring their process. this is an asset manager in reorganization mode. those are the moving pieces. desi humphrey moves quicker than your average person in dubai. heading back to
brussels after winning a confidence vote among hello conservative members among the house of commons. for than a third of lawmakers voted to ditch may. when she told him she would not lead the party into the next general election. safe, she moves to her deal agreed to buy parliament. >> a significant number of colleagues did cast a vote against me. and i have listened to what they said. we needg this ballot, to get on with the job of delivering brexit to the british people and building a better future for the country. >> china considering delaying its strategy to dominate high-end technologies. some of thepostpone
made in china 2025 programs by a decade. meanwhile, china has resumed buying u.s. soybeans, bringing some relief for farmers in the donald trump heartland. the soybean council says 1.5-2.2 metric tons have been purchased by china over the past 24 hours per the u.s. senate is to vote on a measure that seeks to withdraw support from saudi arabia's military campaign in yemen. proposed as a punishment for the khashoggi.jamal white house has threatened to be told the move. we are told high-level discussions have included the finance minister and deutsche ceo over how to combine the two largest lenders. the talks include tweaking rules to make a merger less costly.
the italian prime minister has proposed to cut the country's deficit target to 2.04%. it is a concession to the european commission. the deputy premiers have insisted the landmark election pledges should not be deluded or delayed. global news, 24 hours a day. powered by more than 2700 journalists and analysts. this is bloomberg. nejra: thank you so much. theresa may has survived a no-confidence vote. the u.k. prime minister won the challenge to her leadership despite more than a third of lawmakers voting to ditch her. -- joining us now,
the cio at an investment management. thank you for braving the cold. we saw a run-up yesterday. it came off a little bit. asian fund managers were actually staying away from the pound. some of them were targeting 120. to sterling skewed to the upside or downside? >> i am looking for one dollar 23. i expect the dollar to continue to be strong. some reasonable grants. i think the pound does not look that bad. good morning. the pound, my favorite word is prevaricates. the question is, what is the biggest risk, 2019? is it a referendum and a general
election? layout those risks for me in terms of how it plays out. is that a bigger risk than the challenge to her leadership? >> i think the real problem for is a lack of a decisive driver. , -- in certainty uncertainty. voteed either to have a people can get behind, i don't see the eu prepared to give that to mrs. may. we need a general election or another people's vote. i suspect trying to gauge the possibility is almost impossible. sticking to about the great, classic british companies and looking for some of the really cheap companies that i think represent excellent
long-term intrigue points. that point, we have seen mid-caps, domestically focused stocks underperform. some of the big names you mentioned. you would be looking for a portfolio that is balanced. some of the mid-caps, smaller companies. >> 10 times earnings, significant dollar earner. relatively new from what is going on. what is discounted by the market. you are going to take margins back to the levels in the financial crisis. i think the shares are a by. you are the brave one who actually gives us names. unilever.
20 years, we have been talking to one another. wages are at a 10 year high. you can't physically see it. this is an economy turning tighter and tighter. wages are at a 10 year high. unemployment, just shy of the lowest rate since 1975. what does this data, actual data to you about investing in the u.k.? investment data in the u.k. says britain suffers from the deficit at government level, household level. and at the trade level. not an economy that can grow fast. if there is a change of government, mr. corbyn has made clear when it comes to
commerce briefing going on in china. what rhetoric does to markets. global markets on the up. we are binge watching trade tensions. target -- china delaying targets. the mood music is shifting. from the live pictures ministry of finance. you can follow this on your bloomberg. all of the lines coming through. talking about the national security situation they are investigating at the moment. what else will they say with regard to trade? the mood music has changed. the high-end's may be victim of the trade war. may be china 2025
delayed by as much as a decade that the final decision has not been made. it seems as if the mood music is improving on trade discussions. are we like a coil spring for good news? >> i think the markets like good news. would said to me where fair value be, i am talking about 2900 point. a heavy uplift. i look at the valuations. that is a number i think is fair. questionhave a focusing on the nikkei. we are asking the question, how much at all will the nikkei advance in 2019? the middle of the
trading range. >> i am not seeing a huge range. it comes down to individual companies. in the anglo colony, we are used to them having a crack of the wit. wihip. manus: the other big story we are tracking is banking. deutsche bank, authorities saying to push them together. what does it mean for banking in europe? >> i think it is a necessary deal that it is not sufficient to allow me to become bullish about european banks. if you are astem, bankser, the commercial have to support them.
that is that a cocktail in my view encouraging long-term banking profitability. i see the european banks along way behind in terms of profitability, cost control. jpmorgan. what about italian banks? thisve had italy offering budget deficit target. you could call it a piece gesture. would you be a buyer of italian banks? >> i am not. i don't think we are over the worst. problemshat macron's to diffuse problems with the yellow vests is going to give him a budget deficit. if we get rattled about the italians, what is the market going to make of the french
efforts? germany's growth under pressure. you want to reduce european pressure overall? >> i see excellent long-term value. if you wanted to go to a bank, i would go to santander. it would make a lot of money in the years ahead. thank you so much. cio there and has braved the cold with me here at westminster. that is it for "daybreak europe." european markets next. anna edwards with matt miller. traveling to work,