>> crude oil surges to its arabia level after saudi agreed to cut output more than previously agreed. hear on the back of a pivotal nonopec agreement. > the difference as we go country by country, but i was very plastic antily surprised to see so many countries respond by opec and russia to help save the markets. forwardng ahead, moving with plans to raise 5 billion in capitol after extra

time won't be granted to raise cash. minister is tasked with forming a new government. >> u.s. president-elect donald is sticking by the one china policy should come with the united ts for states. he points the finger at beijing's currency and taxation policy. in n trial, i.m.s. head is court on charges of negligence rom when she was france's finance minister. we're outside the court ahead of the event. > welcome to bloomberg day break europe our flagship morning show. i'm anna edwards. netflix ng bad, the

series, this is what happens with oil. the question for the market is is the oil price, the yield as well and the u.s. is this whatever it takes moment. line in this story this morning. to cut below the big of 10 ogical level million barrels of oil per day. since the opec meeting back in the middle of november. here in the tracking and the effects that these big is having l prices along with the fed conversation u.s. nald trump on the 10-year yield heading for its biggest quarterly increase since 1994. so the market45%, is already now discounting this rally, this momentum will at $55.

60 could be on the card. and it's from frakkers. is up by 4.95% compared first previous close, the company in 15 years, an agreement includes around 60% of world output. e're watching it carefully, tantalizing close to the 2.5% mark. manus: the dollar-yen is moving bit, all of these trades just beginning to run out little bit of steam. barrier as logical well. prime minister has

been holding talks as he draws ministers.of proposed the outgoing minister was given a new date to form government after another quit last ing the defeat in year's constitutional referendum. >> i am aware of the urgency of giving to italy a government to full powers in order reassure our citizens that to ace what the maks dedication and the maks determination, the nternational, economical and social priorities starting with he rebuilding of the areas hit by the quake. > bill english has been formally named as the 39th prime zealand.of new he will have bennett as his deputy. down last tepped week. e inherits a party riding high

n the polls and an he can normalic platform. steve jones has resigned. signals that he'll run o become the city's chief executive in the first protest.p hong kong's current chief last week announced that he wouldn't serve a second his because of pressure on family. powered by more than 2,600 in morests and analysts than 120 counsel. bloomberg, anna, manus. for : thank you very much that update. one redheadline coming across bloomberg terminal. of its o buy 1.62% shares. going to spend 150 million.

how are you? of the markets across the asia pacific. had a good start to today's opec and nonopec members over the weekend. you'll seeing in the emerging vietnam and singapore coming under pressure today. 2.3%, this is the had st drop that we have june 13. investment is fairly steady, a coming through today. down over 1%. the energy players, on the hang

are stronger and similarly as you would expect in australia, a good rally. rest of the market dragged banking icularly with and tech stops under pressure. 1% on the close. topics remain on highs. anna: thank you very much, with to know g you need asian level. onopec companies including russia agree to pump less. how putin feltng about the deal.

>> i think that the key ought to given to our leaderships and role here who s understanding the role and having this political support just spoke about, this as significantly helped us to deal with the very trustful from opec and countries. > are these nonopec cuts genuine, though, or natural declined? different uation is country. by country by i was surprised to see so many stabilize the markets. most of the companies which

and they join voluntarily. most of the companies will be active measures. help us make g to the farther? not the only possible result for us, there will be countries which they would join the arrangements. bases and what i can 560 ve, higher than the which we spoke about today. another -- for thegreement is open first christmas joy. is the it's important

doors are open and it has been made. framework. a >> the saudi oil master said he more, ling to cut even maybe below 10 million barrel a day. russia cut more than $300. at this point we have signed the six months, the first at the end of the first half. the effect of this agreement on he market, compliance of countries and make a decision as to whether an extension of this necessary upon completion of this term. > when does russia begin their curving? >> i think that's the first cut, n the first stage of the cut, .e would be able to see > companies are aware of what

they have to do and considering this is a voluntary step that is taking because they understand the benefits of this deal and they understand deal is there in place and they have agreed to it. considering this, they are the cuts eparing for which will take place starting in january. o as we speak now, they are aking measures and all right clear. on the to have you program. looking at the reaction in arkets, markets really quite convinced by what they've heard weekend? first we have seen in 15 years. met him and alexander novak this meeting, they did a victory

, we a press conference stalk these ministers for months level negotiations from the highest level of these overnment to get the deals done, they are saying they are ready and willing to cut below a day.ion it's a sign to the market they business. maria. done to you, anna >> let's talk about some of the ig players, we're hearing that we got a c.e.o. of one of the world's largest companies. afraid to say. >> his relationship with putin 1999.back to is, of course, rex, tapped donald etary of state,

trump, elects his cabinet. spoke to the next oil industry. exxon was one of the recent investors. listen. >> widely respected figure in the industry. to develop the hepany he has worked for and is a true professional. regarded, also a friend from michigan. you're very welcome. >> widely respected within the oil industry. choice be an interesting for secretary of state, though. and only oil executive the second from texas. >> thank you very much.

us from live from vienna. to be joined by the jarron patrol. bring our guest hose. welcome to the show. $55, societies are ready to o below the big psychological level of 10 million levels a day. point for urning for owe pec. when you think about the so the amount of -- what you have on market, is 1.5 million a day. get ink things will

interesting over the next few months. of many ht on the cusp becoming profitable. we have already seen if you look at the future's market. you have a lot of u.s. producers starting to edge out contracts. comingu.s. job producers back into the market, this is in we see that picking up just in the most recent days of course. says.at is certainly the if you look at the amount of versus its peak in 2016. it's equivalent to a million a day. anna marie that lap around, glad fly which is our columnist that wrote the piece.

they have tried everything, 1970's.ontrols in the price control in the 1970, 1980 and where you stability. ceases to peak. do you want more producers to as a good corridor? >> this will be seen as somewhat success. you think of the total amount of 'll production has been decreased by 20%. revenues you're must increase. to see more demands for oil rise. longer term of a

story. five-year a two to view. >> it's interesting, the saudis ust in the most recent months were casting doubts on whether this kind of deal would be perhaps a t was negotiating tactic. it was donald trump's victim, would that end your oil conversation. >> that's one thing. gross, so far the ast two months, we have seen them pick up. tell me about the didn't as we close 2016. a year of great politics, markets and record after record. are responding to normalics after the

50. stock is the relationship is still very strong. started in september with some inflation rates stopping, pusho charges by trump. the ek at all more about over the 10 javier. from highlights, a week ahead. hammond was quizzed by m.p.s. the production, fixes after investment. event we have seen the ather, the final possess division forever the year. withat gets us into friday

a rate decision from russia. deal, u.s. a president-elect donald trump, his support hinges on a better on trade. we get the latest from our next commander in chief. >> pressing ahead with a $5 capitol racing. this court from when she was finance minister of france. this is bloomberg ♪

it's monday morning and a bright and beautiful hong kong, quite different than london. 8 of 1%, 564 as we start the trading day.

>> it's morning here, of course, 6:22, afternoon in hong kong. reportald trump says his for the decades old china one deal on trade.er speaking to fox news, he taiwan's is call with president. >> i don't want china dictating me. this was a call put into me, i didn't make the call. saying very short call congratulations, sir, on the victory. t was a very nice call, short and why should some other nation be able to say i can't take the call. would have been very disrespectful to be honest with taking it. >> meanwhile, emerging as the secretary of state. he is a supporter of closer russia, on with speculation that a long awaited of relations with russia is

near. > markets remain optimistic about overnight interest rate waps with a 100% chance of a rate hike on wednesday. michael is still with us. it's 100% in market expectations, michael, it doesn't seem to be much that can throw that off track, never say ever, the expectations from 2014 from the federal. >> there is probable going to be a little in terms it will be -- they don't keep saying, they're not going to ant to speculate about what policy might mean. > they're going to give us a little indication, it's going to be in the dots. expectation,median

the green line and the purple line which is the market. closer and s coming closer to the fed. it's ironic, the feds have been market.the the market is just catching up, gap between the two since 2014. how many rate hikes potentially year and ds for next does this fed become more aggressive in terms of their market. to the two think there will be rate hikes next year. still some room for c.e.o. to rise pureth next year. potential surprises, it's going to be around the amount of fiscal stimulus. our expectations are that trump 30% in terms of what he promised in additional spending adding 1% to s gdp. and leads to inflation u.s. treasuries.

2.5%. are close to >> the oil prices come through, not because of the strong rises weeks, butt couple of the base effects from the low last year. e're going to seeing inflation in the 21/2-type range this is to ing more on the feds deliver. reflection, but we steepness. is the dollar still bid? 3% on the 10-year, the long dollar consequence and the are going to feel the -- eze

very much, michael. facing accusations of negligence, we're live to paris. this is bloomberg ♪ seeing is believing, and that's why

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private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. we were just talking michael,hone call with the dollar against the yen. let's leave the markets there for the moment. available on bloomberg and mobile, some of the top stories into today's edition. alix: ill to oil. the saudi's. the russians. , saudi arabia is

ready to cut production by more than expected. do whatever it takes moment for opec. also non-opec members agreed to cut it back by 558,000 barrels a day. the door is open for more non-opec to come on board. anchor: what happened over the weekend in turkey. the terror attacks, coordinated bombings in his sandal killed 38 and wounded 160. to suicide bombers carried out the attacks. 25 people died in a bombing in a egypt. alix: finally, the banking story. the bank is doubling its efforts to execute a debt for equity swap.

thesing an extension for year-end deadlines, getting bondholders to agree to a swap would allow a commitment for one billion euros. people familiar with the matter have been telling bloomberg. go to your mobile. standing by with us now. what are you drilling into? reporter: nice pond. .how oilprices -- pun prices . are affected. brent above $56 a barrel. non-opec countries agreed to cut. saudi saying it is ready to cut out more than previously agreed. doing whatever it takes is how people are interpreting that. oil prices there, how that is feeding into the asian trade

while energy stocks are some of the best performances. be asian index touching its since augusts 2015. we are done 1/10 of a percent on the asia index. chinese stocks dropping the most in six months on concerns of the property market and real estate. of the space, no surprise we are seeing the biggest gains in the commodity season. mexican peso, canadian dollar up. rising against the greenback. choppy dollar trading. overall pretty unchanged. what is happening in treasury markets. we have the fed it meeting this week, expecting to see the right rise as a certainty. prices, the highest in 17 months, seemed concerns

about higher inflation. 10-year gilts to a two-year high -- yield. 2.94% on the treasury yields. , raising that on treasury to the highest in almost two years last week. that,see a correction in it doesn't make the dollar vulnerable. anchor: new from phillips this morning. an enterprise value of $2 billion. some thing that has been delayed previously. to acanceled the plan group that by a chinese business because of opposition of u.s. relations. he said we needed patience, patience in terms of understanding. this is a company going through transportation -- transformation.

it is going to be a 2 billion euro enterprise value in terms of the deal. it has finally crossed the line and that will be a relief to them. lumiledrity of limu -- is to be sold to appollo. anchor: is it going to be private equity? area of the answers. -- now we have the answers. alix: the prime minister of italy is on the list of proposed ministers after a mandate to form a new government. anchor: he will refer back to him as soon as possible. of the urgency of getting to italy a government with full powers. in order to reassure our citizens and to face the maximum

dedication and maximum determination, the international, economical, and social priorities, starting with the building of the areas hit by the quick -- quake. anchor: michael is still with us, our guest this morning. i was making notes, a little google -- political continuity is usurped by the banking crisis. gentiloni.d power -- it seems the reaction to european banks from the italian referendum is there being a solution. the delay in the referendum, the time it has taken to get the voters former has delayed the resolution being presented.

the focus is getting a solution. ecb is puttinghe more pressure on the government to do something and that something is going to look like ail-in wit a compensation scheme. anchor: what does that have to look like from the government perspective? awaresly there are very of this type of story. they need the polls, giving five and a half percent against the government's 29%. michael: the next governor -- general election wasn't until 2018. anchor: unless we get to an earlier one. markets ands gets

to give italy a freezing space. capital thatt have the bank has is 11 and a half percent. is not a bank on its knees in terms of capital. on the perspective of markets, is it contains with one name? is it something that raises risks for the rest of europe or that a vanguard? arupy bank, we have resolution mechanism, make it work. show the world the resolution works. get on with it. michael: one is the morneau issue that we have. the other is the grotto -- broader issue of the nonperforming loans being too high. of banks have that. the equivalent in the u.s. is 1%. with banks still having this unaddressed mpl, is preventing them from being able to lend

more money and is preventing the economy from being able to get growth. anchor: is -- are they trying to force the issue into a solution of some kind? they are putting the deal into the government's hands to come up with a solution. anchor: we have bigger issues to think about, not confusing the notet about tapering and tapering. what did you make of last week, where we stands out on the ecb story? michael: a very good job of communicating to the markets that production is not tapering. that is something we were worried about. there was a good chance it would reduce the pace but we were worried about how that would be connected to the markets. now that the dollar has moved lower, the market is a

comfortable that it is delivering at the pace of 60 billion a month. alix: i am determined to take you back to foreign exchange. here is the euro in the market today. second-worst performing of the 10 before the yen. a clear call on the euro, what are the ramifications for spreads, yields in europe? michael: we are looking for parity next year. when a team of policy diversion and it is something we are talking about here. raising rates, ecb has given us a clear mind that week they will be keeping it and loving and of leaving it until the end of next year. ecb is going to be buying more

first -- short-term bonds. they are buying less long-term bonds. expects of spread, we fiscal risk any europe to remain contained. you're seeing double yields higher, given the european governments have extended the situation on their bonds, higher interest rates are not going to me you have fiscal instability in europe. anchor: think you very much for your time. joining us this morning. steps back into the spotlight in france facing a special tribunal over her role in the so-called affair. anchor: failing to prevent a big government payout back when she was france's finance minister. she dies the charges. the charges.

what is she facing in this trial? to 2007: it dates back when she was finance minister under sarkozy. she had to sign up an arbitration case involving the u.s.. . accusing the states of defrauding him when he sold his stakes in 1993. she is accused of alleged negligence. she failed to prevent this arbitration and failed to overturn it a year later. if she is found guilty of negligence, she could face up to one year in jail and 13,000 euro fine. lawyers haveed --

told bloomberg it is a very unlikely she will face jail time. they are expected to ask for postponement of the trial until another wider investigation related to the misuse of public forms has been settled. they ended up paying more than 400 million euros with interest. she will face court of the republic. a special court. composed of three judges and 12 lawmakers. from the lower house and upper house of parliament. she is excited to arrive here at this court around 2:00 p.m. french time. alix: let's talk about the risks. have a and heads of imf history of bad press. what is the risk, the jeopardy of the imf? reporter: all along, christine lagarde has denied any

wrongdoing. she has denied the charges. law she is presumed innocent until the verdicts. peaking onshe was national television and said she was confident and determined heading into court. the negligence charge was not all doneal and we have it negligence at some point in our life. the imf board is supporting her. in february she was named for a second term as the head of the i'm a -- i -- imf. even when she was named as the head of the imf in june 2011, the initial investigation in the affair had already begun. anchor: thank you very much. joining us from paris.

michael is still with us, we want to talk about stocks right now. i'm looking at the u.s. features, many of these indices are moving in the same direction, some are not. the oil lanes doing a little bit better. overnight moving 4.9%. is this something you start moving trade round? michael: something we look at for trading. the sector that gets the most influence, u.s. high-yield credit. the best place to play it's because of the amount of energy producers in that index. from a valuation perspective we are worried about the u.s. credit high-yields have been performing. are all there, a

triptych, what caught my eye is the movement. 1.1 -- 1.5% over the next couple days. it is actually beginning to rise. we have not seen them like this since 2002. are we being beguiled by the stock rally? delete we should be paying more attention to the press? michael: if you look at the vix overtime, very low levels historically. your chance at the next move being an apartment is greater than the lower move index. that's essentially what we are starting to see play out. particularly wary of is the s&p price performance versus people's expectations of

arnings. , expecting earnings to be the s&p has been doing very well, expecting earnings to be higher. dividend swaps are the first market indication of how earnings are improving. or how people expect them to improve. these have risen 4% since trump. the s&p has risen 6-7%. your evaluation of stocks has increased even further. higher yields in bond markets usually means evaluations should be lower. we think it is causing a dislocation, something to keep in mind next year. anchor: great to get your thoughts on stock markets and beyond. alix: coming up on daybreak,

moving to consolidate a media empire. whether the proposed buyout will get a nod from regulators. does the deal with 20th century fox raise public concern? anchor: reporter -- reached tol has been cut oil production. stay with daybreak for an exclusive interview with the russian minister.

anchor: welcome back, 6:51 in london. breaking news on the banking sector. europe's largest public money trading manager of great to buy asset management from unicredit.

that is the previous story. we are getting confirmation. alix: all part of the italian banking story. unicredit and monte dei paschi trying to raise capital. selling parts of the business that they no longer want. is 226s of assets, this billion that they are going to get their hands on. juliette: it has agreed to sell majority interest in lead -- lumiled. an enterprise value of around $2 billion. a transaction is expected to be completed in the first half of next year. 21st century fox and sky executives worked through the weekend to file down terms of a takeover deal.

murdoch hasr rupert been intimately involved in the discussion. the pulmonary and burnett on sriday is backed by sky' independent directors, it is under discussion. they declined to comment. bill gates and more than one dozen of the world's most wealthy individuals have revealed a $1 billion investment fund. .nergy benches intooal is to pump money risky long-term energy technology that could dramatically reduce greenhouse gas emissions. president-elect donald trump has been warned by one of the richest this has been that u.s. jobs are at risk if he tries to curb chinese investment. over $10 billion in the u.s., employing 20,000 people. if something goes wrong these

people might be out of a job. the largest north american theater owner. that is your bloomberg business flash. they're are back, bidding for sky. what does it mean? will the deal go through this time? thank you for joining us. what has changed? fox is back. politicians lost their jobs, it was a huge spectacle. what has changed materially that's what allow this deal to go through now? guest: politics have changed. five years ago, you had the whole phone hacking scandal. a coalition of government. business secretary that was hostile. that dramatically has changed. if you look at what happened this week at the by election,

the for performance since 1982. the conservatives will feel quite confident in terms of their opinion. the second thing that has changed is that news corp. has the fox side of things from the newspaper. of the same concern as five years ago that he would have a page of the assets and newspaper put together. anchor: two bc the u.k. government keen to accept money abroad? do you see the u.k. government keen to accept money abroad? michael: -- ian: you have heard the calls to call the competition, very few competitions here. the politics of the situation, people not wanting rupert murdoch to have full control of sky.

there are a few grounds to block this deal. very unlikely that they will. alix: 36% premium is what the market have. stock finished at 10 pounds. telegraph ripping into it saying the stock price was here in february, sterling is down. this is not the premium et al.. shareholders several over. over. -- have rolled have they? , it is juste are back to where we were in february. dollar terms, it is much cheaper. you have to look at the dynamic of things. the bottled market, triple plate market clear from the past couple of months with sky that things could be difficult. anchor: thank you so much.

-- up next. alix: a failed coup and the louvre hits a low -- lyra hits a low. this is bloomberg.

>> crude oil surges to the highest level in 17 months after saudi arabia says it will cut output higher than previously agreed. we hear from russia's oil minister the back of a pivotal on opec agreement. -- on the back of a pivotal non opec agreement. >> i was pleasantly surprised to see some many countries respond to the invitation by russia and opec. anna: monte paschi is moving forward with plans to raise capital. this, as italy's foreign

minister is tasked with forming a new government. manus: donald trump says sticking by their one china policy should come at trade benefits for the united states. he also points the finger at beijing's currency and taxation policies. francine: christine lagarde is in court on charges of negligence when she was france's finance minister. we are outside of the court ahead of the event. manus: welcome to "daybreak: europe," our flagship morning show. i'm manus cranny. francine: and i'm anna edwards. gdp numbers are out from turkey. this is gdp year on year, 1.8%.

the estimate was for an increase of 0.3%. so, substantially weaker than was expected. the prior reading was 1.3% growth. we see further weakness in the turkish lira as a result. we had earlier weakness because of the violence over the weekend, two bombs going off in istanbul, killing more than three people and wounding over 150. before we get to the details on the u.s. bonds story, let's get a quick word on this. weak datark on this from turkey. >> the outcome from the turkish economy is likely to remain challenging from here. we have seen the turkish central bank trying to hike rates to defend the currency, which

represents heightening of the financial conditions. that is the last thing that the economy needs at the moment. it needs further support. the outlook is likely to remain challenging. what is an interesting side story to that, we have been highlighting that in view of the political risk in the eurozone, the turkish lira is becoming an attractive hedge. you could sell the turkish lira, which is a currency that has economic ties to the eurozone and euro. fif things do go wrong, it is likely to sell off in excess. anna: we will return to this topic no doubt, as we track what is going on in this economy. let's have a look at the futures. manus: we had records in the united states on friday night. you had more momentum coming through within the u.s. equity

story, the global inflation story driving higher. at the bottom of your screen now is the bond news we have, 10 year government bond yields, 2.504%. the big focus will be on the dot from the fed on friday. treasury short positions are the largest since 2014. anna: about one hour ago i said we were up 90 basis points since september 30 for the u.s. 10 year. let's have a look at the risk radar. oil, very much in the driving seat, up by 4.8%, the first global petroleum cut in 50 years. this encompasses 60% of the world's output coming through vienna. manus: we were just talking

about the lira, the single worst performing emerging-market currency on the wcos board. that is the third day in a row the lira has dropped on the back rific political side of things and the emerging-market story. let's figure bloomberg first word news now. president-elect donald trump says he is close to naming his secretary of state, dropping heavy hints. tillerson hasthat not been formally offered the job yet, but is likely to be picked. anna: trump said his support policy will hinge on cutting a better deal on trade. this comes one week after he spoke with taiwan's president in a move that prompted protests from beijing. donald trump: i don't want china dictating to me. i did not make the call.

it was a very short call, saying congratulations on your victory. it was a very nice call, short. why should some other nation be able to say i cannot take a call? i think it would have been very disrespectful, to be honest, not to take that. manus: the prime minister has been holding talks as he of possibleist ministers. this as matteo renzi quit following his defeat at the constitutional vote. >> i am aware of the urgency of giving to italy a government with full powers in order to reassure our citizens. faced with the maximum dedication and dedication, international, social, and economic priorities, starting with the rebuilding of the areas hit by the quake. anna: bill english has been

formally named his england's next prime minister. he was elected unopposed after two rivals withdrew from the race. english succeeds john key, who unexpectedly stepped down last week. he inherits a party rising high in the polls and had a solid campaign platform. the financial ceo has resigned. currentg's chief executive unexpectedly announced last week that he would not seek a second return because of pressure on his family. anna: global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. you can find more stories on the bloomberg at top . anna: juliette saly is standing by. stocks in europe have set a bet

ter bid tone. i was monday looking? -- how was monday looking? reporter: monday was looking good, but we have seen weakness come through in the afternoon session and we are looking at the shanghai markets with these concerns about the property market and more curves in china sending the shanghai composite down today, down more than 2.5%. that is the biggest drop we have seen on the shanghai composite since you and 13. hong kong's market, also under pressure. you were just talking about the unexpected resignation last week. that has caused a little bit of weakness coming through in terms of volatility in hong kong, though we have seen many of the energy players do well on the back of the rally in crude. oil pricesn was not enough to lift the asx 200. the nikkei, still holding up by

.8%. but also a market that closed off of its highs. we have been watching the bond market quite strongly today because bonds have been sold off, yields rising across the region. the australian tenure come up three basis points. -- the australian 10 year, up three basis points. a little more momentum is coming up there. so, a little bit of mixed movement in terms of equities in asia. energy stocks getting a good bid, and bonds are getting sold off today. anna:oi thank you, juliette saly. oil has surged. saudi arabia ihas agreed to cut output. we spoke exclusively with the russian energy minister and asked him about the deal. during the first stage of the cuts, you'd be able to see this

as early as january. we already discussed this with the companies. the companies are well aware of what they have to do and considering that this is a voluntary step these companies are taking, they understand all the benefits of this deal, and they understand the deal is there in place and they have agreed to it. they are already preparing for the costs, which will take place in january. you, great to see interview and conversation with novak. what do you think his sentiment was? did he strieke you has a minister that had the crowd behindwas? him? >> yes, it does sound like that. he and the saudi oil minister did a victory lap after the meeting. these are two two countries that are at odds in the middle east

when it comes to syria and other ventures, but when it comes to the oil market, they really banded together, saying, talks could have stopped, but high diplomatic negotiations took place, secretive meetings, in and out oc f corridors. they were explaining how this deal got done. did say to me that it was a very dogmatic and pragmatic approach. it is not the 6000 barrels a day. it is 558,000, but he says more countries could add to these cuts. russia is leading the charge with that 300,000 barrel today cut. -- 300,000 barrel a day cut. anna: are there a lot of smoke and mirrors going on when it comes to assessing who is going to do what within the oil

market? >> yes, probably creative accounting. so, you do have some countries saying they are going to definitely cut. kazakhstan,s ca taking 20,000 out of the market. when it comes to mexico, this is a natural decline. these countries have been facing and theireclines since output is dropping. i spoke to the deputy mexican oil minister about this. take a listen. we want a transformation of mexico. processalso part of the of the production decline that

we have the experience with over the last 10 years. what we have done is to manage the process of the decline. reporter: i think the market is overlooking these, what i call creative accounting, genuine versus natural declines. the asaudi oil minister said they were willing to cut 10 million barrels a day, and that is where we can see the market rally. manus: it was a great weekend reporting for us come aliv, livn vienna. oilave the on syria algerian 9:00ter today, live at a.m. anna and i were looking at this, valentin.

the momentum in these market is beginning to shift gears. --s is like you living this is quite you leading up -- this is coagulating around the oil story. >> there is a very positive story between the stock market's performance and oil. whole, and seems to be supportive for the output down the road. what will continue to confirm from here is the pickup in inflation expectations. we can see in the eurozone and u.k., for various reasons. inhave seen a pickup treasury yields, but also, given the positive correlation, we could continue to support stocks. the key question is, at what point will we see on the back of stronger oil prices cost pu

shing inflation? we are continuing to support growth. at what point will it joke the recovery in that the pickup in , the nominal wage bewth, will it continue to paced with oil? anna: on the one hand, the oil price is increasing and that could support some emerging markets, those that export oil on the other hand, you have the trump effect. that in the short-term, many people are counting on some growth in the u.s. and getting into the dollar and away from the emerging markets. how do you reposition about these two themes? >> this indicates the growth and resilience, ultimately. yes, excluding the oil exporters, the emerging markets

still have to pay to the process of higher yields in the u.s. and there is potential of withdrawals of the u.s. capitol supporting the currencies. ultimately, i think the biggest winner will be the dollar because the u.s. is the only one who could stand the possible tightening conditions on the back of the oil prices. at the same time, as the u.s. continues to support the tightening of financial conditions around the world, that will hurt the more vulnerable emerging markets. manus: is there anything that causes you to opause there? thedollar-yen is int he white. the value in the dollar, potentially, is hitting an exhaustion point. do we pause at all? >> obviously. we never get to a straight line, but you would think that markets would realize, we might be getting too bullish. if anything, the fed will have a

role to play because ultimately, their job is to make sure the recovery continues in the face of currency appreciation, high u.s. yield, all of the tightening of financial conditions, which is something they would like to see, so long as it is warranted and keeps pace with the actual economy. at some point, they will realize that the tightening is becoming unwarranted and is way too premature. yields will be a little bit high, given the economic fundamentals. will it happen this week? it is unlikely. rates are not at 3% and the dollar has unappreciated as much as we have seen in 2015, but i think early next year the fed my have to sound the alarm and say, it has run too far. let's wait for the fundamentals to catch up and provide further economic support. anna: if we are in this paradigm, and we saw that bis, talking about whether we were

seeing financial conditions tightening in the u.s. and people not caring as much as they previously had, what then triggers the fed to care more? and what would they do? >> there are level like that. appreciation of has an impact, which on the u.s. manus: can you imagine the u.s. market, if you actually spike up to 3% in 10 years. that would demolish -- >> it is all about the balance of risk. inflation hand, prices are picking up and oil prices are picking up. at the same time, the recovery is where they also have to take this into account. it is a balanced decision.

on wednesday presumably, that balance will still favor some of the hawkish assessments, but down the road, if the economy does not pick up steam, they will have to restrain the market. anna: valentin, thank you. 2.5042% if the yield on the 10 year right now. coming up. italy's prime minister designates paolo gentiloni to look for a new prime minister as soon as possible. this is bloomberg. ♪

anna: welcome back. this is "daybreak: europe." the56 is the euro against dollar. we will talk about parity in just a moment.

let's get to the bloomberg business flash. reporter: amundi has agreed to purchase the pioneer global asset management from unicredit, paying 3.5 billion euros in cash. the purchase of pioneer, which oversees 222 billion euros in assets, will make the company the eighth largest asset management. 80% stake inan the operation has enterprise value of $2 billion, including debt. the transaction is expected to be completed in the first half of next year. 21st century fox and sky executive worked over the weekend to nail down the terms deal.2 billound pound rupert murdoch and his son have been intimately

involved in the decision. some issues remain under discussion. that is a bloomberg business flash. manus: thank you. that was the very latest top story. italy's prime minister, paolo gentiloni, is joining a list of proposed ministers after he was given a mandate to form a new government. he told the country's president he will serve it back to him as soon as possible. anna: the immediate political nervousness around the euro is all focused on the telly, it seems. it much i-- focused on italy, seems. how much of this is a dolallar story? >> if anything, developments in italy show that will be a resolution of sorts.

they could still be the case the any new elections will come only in 2018, not necessarily next year. from that point, some euro negatives are still in the price. if you look at the euro dol lar, improves any potential downside could be the back of the dollar depreciating again. so, from that point of view i believe any downside from here in the euro-dollar would be based on the dollar appreciating. manus: we have got a couple headlines coming through across the bloomberg from the weekend. we had donald trump rebutting, he will love he told how to deal with taiwan. he took the telephone call. china is now urging the u.s. to deal with the taiwan issue, and the word they use is prudently."

china says they have noticed trup's remarks and are seriously concerned. this goes back to, what is a new paradigm in the geopolitics in terms of donald trump and how he deals with global relations? >> they also say the one china policy is a political biec drock of the base. how muchnot know political uncertainty there is, but it is safety to assume it will remain elevated. in terms of outlook, we do believe the u.s. protectionism is a risk that clients are very eager to ignore. he will be there very much next year. and we do believe the asian currencies will be the biggest performances in the universe in a big part of the is the potential the terrier nation and the risk associated between the

u.s. anna: thank you very much valentin marinov. valenin is off to "bloomberg radio: the daybreak." ♪ ways wins.

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>> monday morning and welcome to "bloomberg markets: the european open." the first trade of your equity day is coming up shortly. i'm guy johnson, alongside matt miller. arabia saysnd saudi it will deliver even deeper production cuts as the russian oil minister tells bloomberg his country's cuts will take place next month. the question is, how quickly will the u.s. share respond? a new leader,