francine: brussels lockdown. the belgium capital remains assed for the third day authorities warn of an imminent attack. manus: commodities washout. the dollar pushed higher. shares and minors are sinking toward 2008 lows. francine: argentina. the country lx -- the -- the country lx -- set to make a record-breaking wanted to $50 billion deal. the announcement affected as early as today. bit --rd-breaking $150

$150 billion deal. the announcement affected as early as today. pulsene: welcome to the live from europeans headquarters. i am francine lacqua it manus: i am a manus cranny. we have breaking data. manufacturing comes in at 52.8. that needs on the headline estimates -- all the headline estimates. just off its highs of the day. let's get across to break these numbers down, the pmi came out of germany. that was better, francine. france under pressure from the data being taken off. hans, take us behind these numbers. germany did a little bit better. france under pressure. the manufacturing and services beats and comes ahead of the estimates.

hans: the fact that we are getting too strong beats for the entire euro zone gives you the sense that the german economy may be pulling through and getting momentum. you may see strengthening a little bit when we get fourth-quarter numbers in a few months. what we saw out of france, disappointing on the services side. is the effect of terrorism on tourism. in germany, you have a manufacturing beat and a services be. you might have a slightly stronger number, especially on the manufacturing side. the survey was 51.6. almost a full percentage point better. when wedering tomorrow get those gdp breakdowns for germany, we get the final 0.3, but is, we had want to see how much of that what that's how much of that was consumer spending.

how much were exports. .e saw soft data earlier the navy exports worth slowing down. the pmi numbers were dragging in the other not -- the other direction. the german economy wasn't not -- was not exactly robust but healthy. francine: it look these figures. i know you were talking about some of the caveats. what does it mean for mario draghi's policy? hans: if that economic activity leads to upward pressure on inflation, then yes. i don't know how quickly that will filter through. what has been clear, the latest data is inflation expectations were lower. they had to revise them down. they had to revise growth downward. until they see upward pressure from wages or inflation, mario draghi has his excuse. massivelyif not

increase quantitative easing, just tweak it. you get empowered transmission. you get more bang for your buck of the asset purchases side. we are waiting to see how much asset purchase they are going to whether ither -- or is going to be indefinite. hans nicholsmanus: on the data in berlin. francine: their company is the european head of global market research. he joins us now, derek. give us a sense of what the pmi figures tell you. do -- does it need to rise? is executed in december a done deal at? >> i think it is a done deal. the data was good but the projections from the ecb are

pretty much on the growth side, not too bad. the data that has come in since the last projections, the gdp estimates, looks like it could be surpassed. the concern is not necessarily that the growth picture has changed. the global picture has changed. the downside of risk going forward have raised the concerns. in circumstances where there has not been any uplift on the inflation side, i think the risks have deteriorated. that is why we have the key medication which is signaling -- the communication which is signaling. they are not happy and they want to do more to reach their inflation gold. manus: what would that be? you say divergence trade is not fully priced in.

derek: there is a long dollar position. what might happen in the short-term yield market, it is very difficult to know your me putting in some very conservative estimates in terms of what happens to the short end of the yield curve, i think we 1.01 to 1.02. francine: that is quite a figure. here we this is over one third of europe's bond market going negative. derek: sure. in terms of what the ecb does, i think the message from the last meeting is extending the timeframe does not do it. is goingways says he to do that. what they have to do is increase the size. why did you bother?

i think you have to go from 60% to 80%. then you get 10 basis points. most crucially is this thing about communication. differentis no according to chief economists. the next part is committee case. 10 basis points but we will do more. that to me is going to be a big difference. everyone is talking about we are going to get this dovish rate hike. i am sorry but i think draghi has a better chance of sending a dovish medication, given what he is doing. the feds are going to be raising rates. -- much more difficult job yellen has a much more difficult job. she may get through it initially. francine: what i don't understand is we have been told it is coming for 18 months. for the last two weeks, this is

starting to be priced in. why such a big shop -- big shot? derek: not that there's going to be a big shock. the ultimate message has to be more data dependent. then you get inflation starting to pick up. in the data we have at the moment is a good risk. you get more lego market data which shows strength. the market is going to go hang on. isn't that enough? manus: we put that thought .ecause the feds spoke up he is stuck in the 2000. , he is going to stay with us. david cameron says he six support to carry out the strike -- the airstrikes in syria. he spoke at a press conference. >> it is right to take decisive

action to stop terrorists when they are threatening the lives of citizens. the united kingdom will do all in our power to support our ally --nce to defeat this evil excitement manus: -- francine: the city of brussels is on high alert. tola adil salaam continues -- joe's hayden is in there with his. what is the mood like? jones: not a lot of people around as you can imagine. most of the businesses have told people to work from home today. with the metro not running, that seems to be the best option. has peopleg bank working from home. other companies as well. haseuropean commission nonessential people working from

home as it does nato whose headquarters is very nearby. a big cloud hanging over brussels because of this terror threat. people are trying to get on and have as normal a life as the week get started as they can. medical brussels hosts a special meeting -- manus: brussels hosts a special meeting today. what can we expect from that? the lock downe of here in brussels, they are going ahead with this meeting. it is to talk specifically about the cost of fighting terror and it is very relevant to be doing this in brussels. it is about the budget for the euro area states for next year. how they are going to be able to accommodate the increased spending that we are seeing, especially in france and belgium because of the increased terror alert that we have.

because of the increased border protection. another think they are putting into place. the european union has strict rules on budgets, but they have already made clear they are standing by france, and the terror attack is the main priority. fighting terror is the first thing to do. they're going to use the flex ability and the rules and order to make sure that the money is there to make that happen. manus: jones hayden, thank you very much. our bureau chief in brussels. francine: french president francois hollande will be meeting with world leaders. he met with david cameron today. he will meet with barack obama tomorrow. on wednesday, he will meet angela merkel. manus: on thursday, he will meet with putin. on friday, he will be a part of a national tribute. let's could you up to speed with what else we are looking at this monday morning on the pulse.

david cameron will announce plans to boost britain's military equipment budget. in response to the terror threats. this as cameron met with hollande to discuss security today. francine: the merger of pfizer and allergan could be announced as early as today. the so-called inversion that would allow the company to cut taxes by moving the address outside of the u.s. manus: could he be the next president of argentina after winning the general election? he takes office on the cymer tent here it 12 years of the leftist in argentina. it also heralds the end of punitive export action.

francine: up next, commodity washout. the slump deepens. oil leads losses. shares slide. ♪

francine: welcome back. a little bit of breaking news. we understand that alibaba's

jock mom is in discussion to buy a stake of s c&p this is hong kong's morning post. this is a newspaper. it has come under pressure because people now read online. interesting to see what jack ma wants to do with it. whether he thinks of putting it online and changing the business model. he acquired recently a video company, like the youtube of china. manus: he is moving in a myriad of different directions. a real innovator. as a get a little bit -- as we get more details, we will give it to you. it was our headline. the slump is deepening with oil and metals retreating. copper hitting the lowest level since 2000. venezuela predicting prices may drop as low as $20 a barrel and less opec takes -- take action

to stabilize the market. francine: derek halpenny is the head of mobile market research. he is our guest host for this hour. stewart, thank you for coming in. what this means. i know it is a dollar story here -- dollar story. how low can these commodities go? >> i mean looking back 10 years ago, we were way under where we are now. $40 to $50 a barrel for oil. theoretically, it is about cost of production. that is going to very. the more you get, the more you knock out the cost. this -- an element of two cents to three cents a day cannot be justified.

manus: we look at the demolition . brazilian riel dying. the ring it, the rant. commodity currencies have been battered. derek: the story has changed a thele bit in terms september ofc. the best-performing currency since that fm osc, the lear the best performing currency. manus: england the past month, the overall sketch is these commodities are under pressure. derek lowe we need to look at the bigger picture in terms of how much depreciation has been put in and whether some of these currencies have adjusted to the terms of trade, negative shock.

there is more to come. there are certain currencies holding up on the divergence trade like the australian dollar which is done quite well. the idea that the rba is going to be happy with that and stand on the sidelines if that continues, the likelihood that we are can see further depreciation of the australian dollar. it is not sustainable for some of the comes -- for some it currencies. francine: i guess when there are some of these shakeups, there are some winners. there are companies which have been restructuring or more healthy. uart: glencore is bringing down its debts. it's selling some assets. are an importer of commodities, i am thinking about japan, this is very good news for them. i would argue that i love the

time we think about trading in commodities being a straight bet on the long side but of course many of our customers also have gone on the short side. short, just one good trade in volatility. these are ideal markets for them. you're getting 4% to 5% moves in commodities every day. medical if we look at some of the spikes that we have had in volatility, it has been quite phenomenal. is that something that the market needs to get more used to as we ease toward the end of the year. derek: if the curb was to move over a short. of time more aggressively than the markets are currently assuming, then i think that has reverberations for global financial markets. commodity prices would be in that as well. over the next couple of months

as markets we adjust to this idea of the fed moving off zero. there is room for increased volatility across asset classes. francine: guys, think you so much. derek halpenny stay with us. medical up next, a new era for argentina. the country gets its first center-right leader after 12 years of leftist populism. we will have the latest. stay with us. ♪

francine: argentina voted for change and last night's election. the center-right observation -- the center-right opposition leader one the election. he is willing to work with argentina's neighbors in a new era of cooperation for the country. the quality that we have, we have to put it at work for our future. that weo say to you want to have a good relationship with all of the countries. i want to work with all of you. manus: let's bring in derek halpenny. the peso gets priced up as new york comes in to do business later today.

give us your thoughts because the market has so much expectation on this new administration, in terms of changing the rules in terms of looking at the currency, on holds from a default. the worst one we have ever had. derrico -- derek: he is pro-markets. he wants to move away from this study, gradual depreciation of the peso. if he is true to his word and he does allow the markets to trade more freely, you would expect another substantial devaluation of the peso. trading in the region of 13 to 14. manus: wow. is a bigr forecast figure through most of the forecast points. under these option that there would've been an adjustment.

atyou look at just you today the argentinian peso, it is outperforming rest of -- it is outperforming the rest of latin america. in order to recapture some that lost competitiveness, on the real effect of the basis, we don't know. 20% to 30%. there has been a big loss of competitiveness. francine: how do you take advantage of the situation if you believe that the center-right will it mean business. is it through currencies? or stocks? select theaps currencies, it is difficult to trade. it is not open to everyone to trade. be aquity markets would positive period. francine: derek, thank you for having -- derek, great to have

you on the program. manus: brussels on lockdown. we are live at the belgian capital as authorities keep the city on maximum alert. stay with us with the latest on brussels. ♪

i just had a horrible nightmare. my company's entire network went down, and i was home in bed, unaware. but that would never happen. comcast business monitors my company's network 24 hours a day and calls and e-mails me if something, like this scary storm, takes it offline. so i can rest easy.

what. you don't have a desk bed? don't be left in the dark. get proactive alerts 24/7. comcast business. built for business. francine: welcome back to "the pulse." i am a francine lacqua. manus: i am manus cranny. here are our top headlines. the semper cisco fed president has reinforced there will be a great hike next month. case." thattrong depends on the data continuing to be encouraging. francine: the commodities slump is deepening. copper tests the lowest level since 2009.

crude has extended its decline with venezuela protecting prices may drop to mid $20 per barrel. glencore shares retreating this morning. manus: brussels remains on lockdown today as authorities keep the city on maximum terror alert. socks and underground networks are closed -- shops and underground networks are closed. they gather in the capital this afternoon to discuss the 2016 national budgets. metcine: francois hollande david cameron in paris. it is the first in a week of meetings. they discussed security in the aftermath of the paris attacks. hans nichols is standby in berlin. talk us through a loans week. he is trying to muster support for some kind of alliance.

hans: he is getting on a plane. his a busy week. he is not translating for others. davidl be arriving at cameron spirit he heads to the white house tomorrow. on wednesday, he is back here in berlin before heading off on thursday for an audience with vladimir putin. with mr. cameron and that press conference, we heard one offer and that is using the base in cyprus to conduct over syria on isis. their positions there. what he is good to ask for in , steppedis an increase up more action, more air. that is an easy get because president obama has signaled a are going to do more. it is hard to go back and say you did not win into thing -- when anything.

with merkel, they are going to be calibrating the response. the most crucial, vladimir putin on thursday. that is going to be a chance for to set what mr. putin is targeting. since shifting it more toward isis, the terrorist group, the russians are blaming for bringing down the jetliner, leaving cyanide -- leaving sia nai. clear obama making it that putin is going to have to make his mind up about where he stands on the whole aside question. question.le assad angela merkel is under increasing pressure and division within own party in regards to the refugee crisis. is that rising now as an issue

for merkel? hans: it is been at a boiling point for a good month. we have seen this back and forth between her and her main coalition partners, really the sister party in the south, the csu. on friday, he seemed to both warmly embrace her and distance himself a little bit. .his dance that is taking place it has been fascinating to watch. we don't know if there's going to be in and. merkel celebrated 10 years in power. i don't mean she actually celebrated. it was quietly marked. one of them said voters thought that only someone else other than merkel could handle the refugee crisis better. much slower percentage. of that, only 6% picked the csu leader in the south. in some ways merkel is strengthened by the fact there

isn't a real challenger to her. in a lot of ways, it is hard to see how the coalition stays together with any other policies. francine: hosni goes, thank you so much. let's get more on the situation in brussels. margaret gilmore is the security analyst at the royal united services and joins us now. margaret, great to have you. brussels under lockdown. this has been three days as this paris terrorist suspect seems to be alluding police. is this a new normal? are we going to be in a heightened security alert? or is this very specific until this suspect gets caught? margaret: there is the latter. cane is no way brussels carry on not operating those schools, major meetings and what have you. this is not the new normal. the terrorist threat level is very clear that if you are on

the top level, that means they have intelligence indicating that an attack could be imminent . somebody out there probably has the capability to carry it out. that is what this is all about. manus: margaret, good morning. give me some sense of what kind of intelligence. we use the word. we hear it reported globally. what level of intelligence? what kind of intelligence does it take to close down an entire city? a european capital for three days and no sign of it abating? margaret: it is likely to be linked to two things. --, it could be the thing someone linked to the paris bombings. have theeve may well ambition of carrying out bombings. in that flat, they find weapons it they don't know if they got

all the weapons or if the person disappeared with more weapons with the intention of continuing this series of attacks. the fact that there are people still leading on their radar. opt islamone is this slam who they want to catch. they believe he is still holed up somewhere in belgium. they believe that he will be getting weaker and weaker, more vulnerable. because he wasr the only one after the ones involved in that attack who did not carry out his suicide attack. for that reason, he will worry that isis is on his case as well. be looking forre an opportunity to carry out an attack. it is assumed he will be well armed.

he may have a suicide vest still. he could be waiting to be found and at that point that nate something. he is -- at that point that to nate something. he is very volatile. attacks andopycat the four perpetrators and the detonators the network. and they escaped. there were caught within a week. i remember it was incredible fear. nobody knew what kind of conditions the minds of those people who were running away were in. francine: we heard from the federal prosecutor that counterterrorism officers carried out 22 simultaneous raids in brussels. can you expect to us why belgium and brussels same to be the jihadi center in europe?

margaret: they found it easy to operate there. they find it easy to hide in a community where there is a lot of mainstream muslims. they can hide within that community. i remember two or three years ago hearing counterterrorist officers from various organizations telling me they worried about what was going on in brussels. people have been going from brussels to syria than any other european country. they have a strong jihadi community. there was a feeling that a couple of years ago not enough was being done in belgium. at a time when in the u k, a lot of the radicalization lands -- plans and counterintelligence was being racked up to deal with digital plots. make sure they were listening and watching more.

manus: margaret gilmore, thank you very much for the latest there. security analyst at the royal united services institute. coming up, it is all about the currency now. 18% against the dollar this year. what is the currency we are talking about? it is the malaysian ringgit. francine: we're talking about the economic challenges facing the country. that is coming up. ♪

manus: welcome back to "the pulse." live from bloomberg's london headquarters. here are some of our top headlines. mochrie is to be the next resident of argentina. he will take office on the simmer 10. the center-right victory ends 12 years of left optimism, setting the stage of economic liberalization. it heralds the ends of the next four taxes. it may unleash $8 billion of shipments of stored profits. of pfizerthe merger and allergan is expected to be announced today. may add aon that combined company to cut taxes by moving the official address to outside of the u.s. says --.k. sunday times

by bank lands its workforce 9000 over the next three years. regulators have given the green light on 10 -- get your bids in on new share sales. we are joined by nick wadhams. it is the last glimmer of hope. others are saying it is a --tatement of confident confidence in markets. where do you stand? nick: what we are seeing is the government wants things to get back to normal with the chinese market. there is the stock market plunge in june, then there has been a bit of a rally in the last couple of weeks. the government took so many measures to arrest that stock slide in the summer. it caused a lot of questions about the government's

credibility. were they willing to allow the market to take a greater hand as they had promised in recent years? when they maintain the control of the state? would like to get back to the impression that this is a free-flowing market. a safe place for people to put their money. allowing those ipo's was a key priority for the government. we are seeing them finally take that step. francine: nick, thanks for all of that. that was nick wadhams. asia, staying with president obama was in malaysia over the weekend. countries leaders vowed to strengthen the ties with india to combat terrorism. speak with dato sri abdul wahid. he is a part of malicious economic planning unit. thank you for being here on the

pulse. we have a lot to talk about. the fallout from emerging markets if the fed rises. economic growth. just a quick comment on your concern on the rising level of terror threats across the world. -- dato: we had the presence of 10 liters. president obama, among others. session, our prime minister made it clear that the terrorism threat is a global phenomenon. it must not be taken lightly. malaysia stands along with other countries committed to fighting terrorism. manus: let's talk about malaysia. there is 10 countries in the asian pact. the revenue comes from

oil. the currency has been under pressure. as a destination for capital, those are lofty challenges. dato: [indiscernible] you spenda time when on commodities. downthe years, you break to 18% of gdp. in terms of the constitution of oil and gas to the revenue. for example, to 30% last year. issue, we come down to 19%. we broadened our revenue base and that meant introducing gf fc. -- gf

2016, oure into revenue from falling glass is down to 14%. economy hasy in our managed to grow consistently. francine: there must be challenges. where looking at stock movements. we are looking at stock movements. what are your three main concerns? dato: the global economy has been down. on our part because of our diversification, we believe we are able to focus in. they talk about the commodity prices. advocating lower oil prices. brent is now it $23.4 per barrel.

$43.4 per barrel. i think over time, things will get better. that remains a risk to many countries. because of our reduced dependency on oil, it should be manageable. but we need to do is follow through on the fundamentals. that is something that we will continue to do here it manus: one of the issues that obama raise with your prime minister is transparency and press freedom. are those biggest challenges in terms of investments? dato: i had the benefit of running three large government companies. my last posting was as the president and ceo of the largest bank in malaysia. toust say that when it comes

-- the governmental companies have been at the forefront in transparency. andthey performed well become champions. it is embraced across the board. forward, the government has been committed to greater transparency. francine: thank you so much for your time. , thesri abdul wahid minister in the malaysian prime ministers office. .anus: coming up, a $150 deal pfizer and allergan i expect to announce the merger today. lubricant down. ♪

francine: welcome back to "the pulse." phoneing on your tablet, and bloomberg.com. manus: now let's get to china's markets with mark barton. mark: the rate hike in december is 36%. today they are at 70%. that is boosting the dollar. that is heading commodities heart. come in close, this is the bloomberg commodity index. i have gone back that far for a reason because commodities have sunk to their 1999 low.

copper dropping below 4500 for the first time since 2009. nickel sinking to a new 2003 low. the london metals exchange index has fallen for six weeks. the longest stretch in three months. gold dropping for five straight weeks. crude oil on a three-week losing run. by the way guys, it is set for the first desk for the worst -- investors looking at mariota draghi, his comments on friday, saying the ecb will do what it must to raise inflation it -- raise inflation. analysts see the euro at 108 by the end of the year. quickly, with commodities go basic resource stocks. industry group on the stoxx 600, there you have a good charge. all 19 are declining today.

to industry groups on the stoxx 600 have followed this year. this and industrial metals. glencore down to 67 percent. commodities.ar for francine: mark, thank you so much. mark barton with the charts. allergan could announce record merger agreement today it that is according to a person familiar with the matter. manus: nejra cehic is here with the details. this could be a beast in the pharmaceutical world. nejra: it is an interesting turn of events. we were talking about the classic merger, pfizer wanting to buy allergan. what we are seeing now is a reverse merger. pfizer is exchanging 11.3 shares for each allergan share it it is structured so that technically allergan is buying pfizer which

is the bigger company. this is going to break a lot of records if it happens. the biggest acquisition this year. the biggest acquisition ever and -- ever ineutical the pharmaceutical sector. companiesike these are still fighting to go ahead with the deal. where there is a will, there is a way. francine: it will be a monster deal. thank you very much. it could come now. we are ready for. manus: what is big in the global surveillance? , --cine: for those listing for those listening -- we will be talking about brussels, it is still under lockdown. we'll have a look at the pmi numbers. we will talk about monetary policy.

in the meantime, you can follow us on twitter. we have plenty more coming your way. ♪

capital the belgian remains locked down. pfizer and allergan are said to be close to a deal. it would be the biggest pharmaceutical company in the world. argentina elects a pro-business president. investors hope for opportunity. good morning. this is bloomberg "surveillance." i know the big focus