anna: theresa may meets eu leaders for the first time since her disastrous election. diplomats fear britain's plan for ex-pats could trigger a row with brussels. trumping obama. top u.s. banking officials are set to tell lawmakers they support rolling back regulations on the senate braces for revamped health care bill. foxconning away, pursuing thep semiconductor business. ♪ anna: a warm welcome to

"bloomberg daybreak: europe." from hearing the city of london. i'm anna edwards. let's start by talking about oil. it's been very topical in the last 24 hours. brent dropping below $45 of arrow, now in bear market territory. what does it do to all the central banks? oilstocks are reliant on revenue. let's talk about where we been on the inventory story. too much oil seems to be the basic headline. we are stuck in his air market. crude inventories slid last week , and that's what you see in the blue at the far side of this chart. but inventories remain above their five-year average. 100 million barrels above the five-year average and u.s. production is at its highest level since 2015. opec is aware of this, according to our grant. consensus is difficult. radar and at the risk

you will see that it looks a little strange if you're expecting the oil story to be rid large across markets right now. we're expecting u.s. markets to open pretty flat. if you look at the s&p 500 energy index, the top performers , only two of them aren't positive territory so it certainly taken its toll on some of the oil companies. increasing. still also gold increasing. you can see what this is doing to asian equities, we are seeing strengthen asian equities today. partly because were quite stable on oil right now. were actually quite stable. here's where the msci asia-pacific is, up by .5%.

a continuation of gains in china as well. this is the pound, it is that right now but with a lower handle them we have enough late. this is according to the chief economist at the bank of england , giving a boost to sterling yesterday in the session. let's get the first word news with juliette saly. in the u.s., donald trump has said he will propose legislation that would ban immigrants from receiving any welfare benefits for five years. ae president was addressing rally in cedar rapids, iowa. he campaigned on promises the crackdown and documented immigrants and shortly after taking office, signed an executive order that led to increases in deportations across the country. regulatorsnking discussing constraints on wall street. plan tong comptroller

tell lawmakers today they support revamping key structures. the trump issued a long list of proposals last week for rolling back post crisis financial rules. leaders today will release a discussion draft of health care legislation meant to repeal and replace obamacare. republican tom tillis of north carolina said the drop will would effectively delay the repeal of obamacare until 2020, allowing more generous tax credit for people buying individual insurance policies. the white house has created a website urging repeal and replace of obamacare ahead of a possible senate vote next week. the mexican finance minister says the central bank is probably near the end of its tightening cycle and may be able to cut rates before next year. inflation isberg likely to fall below 4% by then. however, he sees more rate hikes before borrowing costs start to come down.

seeing the markets are is potentially another couple of increases this year but is starting to predict that interest will go down. >> global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . much more of a relief session coming through across asian equity markets today. australia had its biggest plunge since november yesterday but is up by almost 1% in late trading. up, rallying on the back of the msci inclusion. qatar coming back online for the first time amid reports it could

file for bankruptcy protection as early as this week. heard it's expected toshiba still in the race for the chip business. and bonds falling by a record but we've heard from the group in the last hour saying its operations are sound. let's look at this chart, we route hasthe tech been playing into u.s. equities although there has been a significant rebound. this chart shows you the nasdaq index in light and it have the msci information-technology index overseeing giants like samsung rallying more than their u.s. counterparts this year, very solid move coming back through in 10 sent shares. shares.nt anna: juliette saly in hong

kong. theresa may will meet with eu leaders in brussels for her first summit since the disastrous general election. she is expected to outline how britain proposes to treat the black citizens after leaves, while diplomats worry her strategy could lay bare divisions over brexit. joining us is matt miller. what does theresa may have to sell to the other 27 leaders at this summit? they will have dinner tonight. 4.5 million people from the countriesnion, the 27 -- these people's rights, it's important to theresa may as well as eu officials including germany's angela merkel. it's important that these

people's rights be extended past the march 2019. theresa may has to come up with a plan to maintain the free movement of those people at the very least without impinging on the rights of her own citizens post-brexit, and the eu leaders that are coming to brussels are skeptical that she can do that. anna: the obstacles that are faced here and getting to the same page on this, there seems to be plenty of opportunity to follow about who is included -- fall out about whose rights are included. there are many differences of opinion here. matt: eu leaders want people who don't have the documented paperwork to prove that they lived in britain before the are before last year in unit to the other to stay. the cutoff date officials want to be march 2019. they may want to european court

of justice to have a say in the rights of those people post march 2019. theresa may is made the european court of justice impinging on her rights or britain's rights is kind of a redline in her brexit negotiations, so that will be difficult to agree. anna: thank you very much, matt miller joining us there from brussels. with us to discuss exit and much monson.guy give us your thoughts on the latest twists and turns in the u.k. political story and how this impacts on the u.k. economy and brexit. we will start with where the economy is at the moment. i had this chart, this is the of theent intentions manufacturing and services sector. showing as if they're

resilience in the face of all the uncertainty around brexit and the most recent election results. it does is at the bottom of g7. i've seen quite a few industrial companies and the message coming back flex your chart. in many cases they are saying the impact of the week pound still effectively swaps the uncertainty of brexit. anna: while they are entitled to export to the eu. guy: we're hearing restoring, quite a lot of activity being brought back to the u.k., partly because that's the general trend but also because the prospect of the u.k. is cheap. and there seems to be a relatively resilient capital expenditure picture which is surprising. interesting on the services sector. i was looking at comments coming through on the advertising side.

often we look to advertising to give us clues about confidence. the adam smith group said we previously discounted brexit as a drag on the economy but the recent u.k. general election has magnified rather than reduced uncertainty. it's amazing that that could of been significantly enhanced the uncertainties around the election. guy: i think that comment is wrong. i don't think actually we will madeout the election has things more uncertain. almost sort of drifting toward a government of international unity in terms of how we face brexit. anna: we did talk about working with all the parties yesterday. so the tone has changed, but ,hat -- will that be reflected will it feature in britain's

approach? could allow them to breathe him with all the confidential negotiations. that is a huge step forward from where we were the day before. i think were seen a slightly more stable backdrop after the election which is ironic and is probably too early to see it in the data, but i wouldn't be surprised if it's not stronger than expected. and it's given to look hammond more space. that would potentially allow him to negotiate and interim transition where for at least that time britain remains in the union. he wanted the transition floating on the cliff, we talked about that a number of times, and maybe over a substantial timeframe. are we not talking about a difference in the end

destination, were just talking about the time it takes to get there? that's probably right, although you do here in brussels that some of these interims, semipermanent situations sometimes can become permanent. open not be at all surprised if the length of that interim is longer than everybody's expecting. and if you're brexit watcher, that would be one of the indicators for how the deal is going, do you see a longer or shorter interim. anna: do you expect something off the shelf? theresa may saying we're going for something bespoke. now her hand has been slightly reduced. does that increase the likelihood that we go for something in the short term that is off-the-shelf? guy: i think what you're seeing is a coalescing around a norway model both in the commons and in

europe. at the moment, my thoughts would be on a long period that broadly resembles norway with perhaps special deals and services. fascinating decision. mark carney says we have to support the economy and others say there are risks to letting things key policy lose for too long. where do you see that going? guy: it has rather surprised me. every other inflation indicator in any other global economy showing an extraordinary effect where the phillips curve is broken down. something we haven't the bank of england where a few could describe a temporary factor, this is one, trying to hard code comeinto a rate increase

at the moment i think it is just noise. i think carney does still rule the roost and i don't see any interest rate risk within the next 12 months. anna: saying the weakness in the pound can have a longer lasting of that. she will be at the bank of england much longer. -- thank youch very much. time, we getu.k. of monetary policy decision from norway. after the close of u.s. markets, there are regular -- results of the dodd-frank bank stress test. how will those change over time? and how do you solve a problem like korea? donald trump's top cabinet secretary's call for china's help, despite the president suggesting those efforts have failed. this is bloomberg. ♪

anna: welcome back to "bloomberg daybreak: europe." the hang seng is up by .5 percent this afternoon. 1:18 over in hong kong. 6:19 here in london. the equity markets over in asia are little bit risk on even if that's not what were seeing in the currency markets with the yen and with gold. let's get bloomberg business flash with juliette saly. juliette: the foxconn chairman has bow to press on with the semiconductor business. it could cost $27 billion and usher them into the image of business. he will decide by next month which your estate will be the location for the display making plant. kata has plummeted this week. amid a glut of sale orders,

planning to file for bankruptcy protection as soon as this week. it would take the way for the sale of the airbag maker. takata said no decision has been made on the bankruptcy filing. boeing has secured twice as much in order value at -- as rival airbus. following expression of interest for about 420 planes. 229us posted tally of airliners valued at about $25 billion. it marks the first victory in at the aviation industry's annual showcase. nomura has picked frankfurt is the headquarters for its operation after the u.k. leaves the block. japan's biggest brokerage will start preparations this month to form a base in the german financial center. they will seek regulatory approval and find office space

before transferring fewer than 100 employees from london. $1.9 billion raised in this second biggest u.s. public offering of the year. shares for $30d each, near the top edge of the market price range. he comes one year after it was formed when its parent company closed the acquisition of cablevision systems. that's your bloomberg business flash. trump's -- todent a president trump's top cabinet secretaries said china still has in north role to play korea. secretary of state rex tillerson appears to have disregarded and earlier tweet from president trump saying that chinese efforts have a. failed. >> we reiterated to china that they have a diplomatic responsibility to exert much

greater economic and diplomatic pressure on the regime if they want to prevent further escalation in the region. guy monson is still here with us. it seems the americans are trying to pressure china in various ways. president trump taking to twitter, as he does. geopolitics in this region, is this something that worries you in itself for stability in the region or is it simply a distraction from what you would rather washington were getting on with? guy: i think it's the secondary effects that worry us. was a possible buildup is what stands behind the trump tweet is a possible move toward sector -- secondary sanctions that hit chinese financial services firms and companies that trade directly with the north korean

regime. that will be messy but it's clearly one of the few available screws the americans have to tighten pressure on north korea. so were not building in north korea event risk yet but possible damage to some u.s. relations. anna: those have already been damaged by all the conversations during the election campaign around trade but that hasn't yet manifested itself on a large-scale cents president trump has been elected. the chemistry seems rather good between the two leaders. i think there is an element of mutually assured destruction as .hey embark on trade debate relativelye been successful. i don't think either side would want to escalate but the problem hisore president kim jabs

thing are at the united states was greater pressure. interesting,art is is is the easy financial conditions we see in the united states. the easiest financial conditions in three years over here, despite the fact that were seeing a tightening cycle. so tightening is not really tightening. guy: that's exactly the sort of chart that gives janet yellen nightmares. , we're not seeing the core inflation rate go up, in fact it's going down. it's ending up in conventional moves by the federal reserve being interpreted as further easing. what we saw the wobble and low grade bond spreads, i would entirely echo that chart.

that's why despite the inflation mrs. yellen was so keen to say that she was on the same track and one more rate increase for this year and three for next. this is absolute issue of the day. are we miss measuring, it's beginning to sound like greenspan when he set of not moving rates because of technology or something and the measurement of the statistics is wrong. i think the yellen agenda will stick for some time. will she stick, given that the position is up for reelection in 2018. looking back at what other presidents did with the incumbent when they arrive. guy: there is a lot of president for a president of one party accepting the previous nominee from another party. reagan appointed volcker who was originally appointed by jimmy carter. greenspan was originally appointed by reagan. there's a lot of ping-pong

before the election. now the white house seems to be quite close to yellen. donald trump need two things. he will need a federal reserve chairman who keeps interest want tow and he will keep pumping out these 50 year so the scene is ultimately a friend of the bond market. do you like u.s. banks on less regulation for the banking sector? guy: i love them. they are an amazing parting investment toolkit. are a wonderful interest rate hedge. if we are wrong, higher interest rates being higher -- mean higher bank rates. anna: x: 26 here in london. green light to

chinese stocks but will in spurts investments country is hoping for? how will it turn that into the stock market? this is bloomberg. ♪

i've spent my life planting a size-six, non-slip shoe into that door. on this side, i want my customers to relax and enjoy themselves. but these days it's phones before forks. they want wifi out here. but behind that door, i need a private connection for my business. wifi pro from comcast business. public wifi for your customers. private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. so we need tablets installed... with the menu app ready to roll. in 12 weeks. yeah. ♪ ♪ the world of fast food is being changed by faster networks. ♪ ♪ data, applications, customer experience. ♪ ♪

which is why comcast business delivers consistent network performance and speed across all your locations. fast connections everywhere. that's how you outmaneuver. , this iscome back tokyo at 2:30 in the afternoon over in tokyo. 6:30 here in london. the marketscheck on with guy johnson. fair value, take a look at the gmm. saudi arabia yesterday, very strong performance coming through as result of what we saw with msci. what was interesting, and we'll talk about this enough yesterday , we mentioned it but didn't talk about it enough. the argentinian market getting

crushed, down by 4.82%. this heaven at the front end of the u.k. curve, having quite effect in terms of positioning there. still not a big enough move to justify a change in the narrative. back to argentina, the msci story yesterday, the argentinian peso falling to its weakest level ever. you can see the move that we saw. what were not getting his confirmation that this is an economic slowdown from the oil price. take a look at what is happening with the metal's index. it's not rolling over in anything like the same way oil is. it looks like it's just an oil related story. anna: a new edition of daybreak is available on your bloomberg and your mobile. let's look at some of the stories that have made it into today's edition.

the cover story is the eu test. the prime minister attends her first european summit since the election. this week's opening round of talks was considered to be generally constructive but diplomats said theresa may's plan for ex-pats may lay bare the decision between a big difference in opinion as to who gets rights in which rights they get and who else they will have to bring along for the ride. next story is on the fed. the u.s. central bank is running a substantial risk in its tightening campaign. saying that core inflation is 1.5% in an almost fully employed economy, where only one major adverse shock away. daybreak focuses on george clooney, the actor and his partner for cashing in on their tequila brand.

the company was founded four years ago by george clooney and some celebrity friends. already owns one tequila brand and is looking to expand in the fast-growing category. into msci'sptance benchmark index has put the world's second-biggest stock market on a new global footing but the challenge now it's translating that into what really matters, significant investments. y, the chinese story gripped us over the last 24 hours. there was quite a substantial buildup to it. includedent they were but it didn't send chinese stocks skyhigh, are you excited chinese mainland shares and what they could do as an investment opportunity?

for years in shanghai ago for the first application, and the excitement of pressure to the -- to succeed was extraordinary. it was a new phenomenon in. it's great to see they have got to the end of the road. the inclusion factor, how much will be implied to the index is very low. ,or that number to increase talking about potentially over liquidity,eform, access, all key issues. it's quite interesting, etc. quite a bar at the hands of the reformers. all those reasons why china was not admitted the first three times around, had those improved or changed?

guy: i think it's an extraordinary toolkit. they reenergized it about nine months ago, increasing volumes and increasing simplicity. it does work exceptionally well. i think it is a genuinely fair step forward. it goes some way to beginning to build an index that is representative of china income. the csi is up 1.8%. we got to get a benchmark index that's more realistic in terms of the chinese economy, otherwise it will be a tech bubble. anna: are you concerned about risk of contagion more than previously? when we saw the big boom and in the crash and chinese equities, many talked about how well it is insulated, the contagion doesn't

spread around the world in the same way as if were talking about the nasdaq for the s&p. more integrated china becomes, the greater investment opportunities, but that any kind of crash to be contagious. the deeper they get, the more difficult it will be. i think the crucial test will be if the regulators can keep up with the global chance -- trend toward market liberalization. overall it's great news, in my view. it's a big step forward to china being the stock market they should be. is there exposure to chinese cannot get by just going into hong kong or other global players? you need to be in those mainland

shares to take advantage of it? guy: domestic consumer spending can be accessed better through mainland shares. you get a more genuine feel for what the chinese investor is doing, each part of the future of the chinese market. forcednot so obviously into three or four gigantic -- gigantic technical moves. anna: this is total nonperforming loans at chinese banks hitting a 12 year high, returning to the fundamentals in china. are you concerned about what we are seeing in the shadow banking sector and in the banking sector? as the chinese authorities try to take action on this and many applaud them for trying to take action, but there are risks. people are surprised how robust the economy has been with the goosing the administration

gave it. that's drawing to a close and i think there really is an agenda now for beginning to get quite hard the shadow economy. we've seen tweaks on overnight rates which seems to have the same drift toward dealing with this bubble. i think growth will disappoint and the administration wanted it to disappoint. those nonperforming loans will be hard to be dealt with. there is high profitability in the banking sector but we will have a tough 18 months and that may rebound into global growth as well. guy: thank you very much, monson. let's cross the atlantic to mexico. with mattrview

weaker, he discussed u.s. mexican relations and nafta. donald trump said he would rip up the free trade agreement, so five months into his presidency, is the worst over? >> were in the process of modernizing it. you can put some other adjectives to it. the airports,t the railroads, highways, electricity, oil and gas pipelines, if you only look at the infrastructure, it's difficult to identify the borders. one could argue whether that came about because of nafta or whether nafta came about because there were dynamics that may the north and made -- north american region -- mexico has a lot of naftarade agreements but

brought it to life and brought it along. there's probably some core that makes it reasonable for us to trade, to integrate, and to participate as a block. the largest lock in the margaret will continue to be the north american economic lock. scope, many things are happening today that would in theral to include immigration problem. either they don't exist or would not have the economic possibilities putting them on the table, and now we do.

after the dialogue happens, we're going to have a consensus that it makes sense for us to find agreement on the basis of what has already happened that is important and if we want to continue to see in terms of continued competitiveness. >> when you expect agreement? >> with the perspective of uncertainty, which many of the indicator show the austerity and anxiety of the mexican conti -- mexican economy, it has already happened. the scope of possible outcomes has been bounded by the economy, reality behind the process.

remember if you are a bloomberg customer, you can watch the show watching tv and you also get to follow all the charts and functions we have been using and you get to influence the conversation by clicking the button that says ask the guest question. that's on the right-hand side of the screen. coming up, the head of one of the uae's biggest conglomerates gives his views on the saudi reshuffle. we will talk about oil, the boj making some interesting comments this hour. we will get to that shortly. this is bloomberg. ♪

anna: welcome back. we had some downward numbers.

were getting comments from the deputy governor of the boj saying oil prices are on a rising trend. you see the drop in oil prices, it won't affect cpi in the longer term, saying there's no need to change the price outlook doesn't oil. we will talk about oil very shortly. let's get the bloomberg business flash with juliette saly. juliette: the foxconn chairman has vowed to press on with the bid for toshiba's semiconductor business. the deal could cost $27 billion and ushered them into the memory trip business. he will decide by next month on which u.s. state will be the location for a $7 billion this lay making plant. tokyo ins plummeted in the first trading on the stock this week.

there were reports it was planning to file for bankruptcy protection as soon as this week. it would pave the way for its takata,the airbag maker who said no decision had been made on the bankruptcy filing. wants ordersing and expressed some interest for 420 planes were as much as billions of dollars. playmakerse u.s. first entry in five years in the aviation industry's annual showcase. frankfurt ascked the headquarters for it european union operations after the u.k. -- they will start preparations this month to form a base in the german financial center. they also said it will seek regulatory approval and find office space before transferring

fewer than 100 employees from london. and $1.9 billion raised in the of thebiggest u.s. ipo year. the company and some existing shareholders so it to 3.9 million shares for $30 each, near the top end of the market price range. he comes one year after it was closing the acquisition of cablevision systems. that's the bloomberg business flash. anna: energy markets need to brace for an even more certain saudi arabia that could threaten regional stability in the heart of the global oil industry after the appointment of the crown prince. by the man who runs one of the uae's biggest conglomerates. they began by asking him about the potentially destabilizing force coming from saudi arabia.

>> i'm so happy of the changes an came since king salm into the position, there's a lot of positive changes. the most important economy and stability for the saudi people and for the neighboring countries. and fighting terrorism all of the world. the changes for young men and futurethat will be the of our area. and this is happening now. as a something really positive and i'm really happy about it. can see there will be a major improvement. saudi arabia is not an isolated, small country. it needs a lot of work and a lot of time. we have to give them the time and i'm sure with the leadership prince,salman and the

they will deal with it and there will be improvement. >> there are concerns about the dynamics between the new crown prince and president trump. you have been an outspoken critic of the u.s. president. how do you assess washington's stance toward the gulf, including saudi arabia? >> i cannot continue being negative against president trump, but basically he has change positively, but as i say, i don'tto be patient, trust promises.

see what theit in u.s. administration is going to see at a later date. changes, whatof happens in the middle east by president donald trump or by the , that's wheren i'm expecting that. but will wait and see what happens. i never had faith in the administration, unfortunately, because of the bad experience i had with them. president obama did great damage to our country and i cannot say anymore, we will wait and see. anna: joining us is tracy

alloway. he is also quite outspoken about qatar. what did he have to say? >> outspoken indeed. he was basically talking about what qatar needs to do in order to end the impasse that has diplomatic relationships over the past couple of weeks. his demand is an interesting one. he says the only solution is emir of qatarer actually leaves the country. he sees power from his father back in 1995 and back then a lot somec nations voiced discomfort with that, as you might expect their it also saying qatar needs to end its support of terrorism. that's a little more nebulous, although all gulf countries have been saying a similar thing. the reactions we are getting to that list of demands is also

interesting. we saw statements from the u.s. state department saying they were mystified that the countries have not laid out the details of the accusations they qatar.bying against rex tillerson saying he hopes any list of demands presented to qatar actually ends up being actionable. anna: thank you very much, tracy alloway joining us from to buy. monson is still with us on the program. we heard yesterday that msci decided to keep an eye on saudi arabia, that they might be included at some point. do you look at the change in the politics in saudi arabia and think about investment opportunities there? do you think about the geopolitics and the changes for oil? guy: in direct flows, not yet.

not a core asset allocation in any way. the politics are critical. a spatver really seen like this. , donald trump pouring fuel on the fire, interesting to see zero reaction in the oil market yet from this. tension have expected at this level to drive prices up. to me, the key issues we are not seeing is, were not seeing the rate plateau in the u.s. and that is an absolute must-have for an oil rally. supposedly below $45 and were not seen that. i fear the new saudi leadership will have to look closely into

another round of cuts. the iranians talking about how opec is discussing that. you might have thought the tensions in the middle east .ight lift the oil price i have this chart that shows the retreating inown, the level of stockpiles we are seeing in the u.s.. it comes down to the level of production in the united states. production is at its highest since 2015 and above its five-year average for inventory. so we are not seeing the market working in a way that allows the price to go any higher. think below $45, the nice consensus that oil works for everybody works for producers and you are's -- and users, starts to break down.

the central banks freighting about the stubbornly low rate of core inflation, it will gradually factor itself into the core. your previous commentator was right, it will drag metal prices down. these comments from the deputy governor of the bank of japan, saying oil prices are an increasing trend and it is transitory. he is not being from of course just yet. guy: they are saying just leave this, it's going to turn. that's my hearts, and i think the two things to watch for if you are a viewer is a plateauing of the recount and preferably action on deeper cuts. anna: thank you very much, great to get your thoughts this morning.

monson joining us. the eu leaders gather for a two-day meeting in brussels. more details to come next. this is bloomberg. ♪

-- diplomats fear the plan could trigger a row with brussels. top u.s. taking officials are set to tell lawmakers they support rolling back regulations. in chipping away. a warm welcome.

europe."daybreak london, 8:00 in paris. let's look at the futures. looks like we could see a slight move to the upside. markets taking time to find any direction this morning. giving not surprising the signals from the asian sessions. equities on the upside. game of the japanese currency. gains for gold. to futures suggesting we could eat up i 0.1%. the ftse may be a lacquered. give that some time to settle down. the u.s. session, pretty flat. a bit, down a bit. they are oscillating. i will mention some of the risk

move this. we did see strength coming through in the japanese currency. tokyo stocks, increasing. money going into gold. a little money going into yen. if we tip it over and have a look, we saw a rebound in australian stocks. we saw china extending its gains. showingthose factors why we are up. put underit of a flaw the oil price at least in the asian session. retreating a little bit. we did see a flaw coming through. now down by 0.2%. perhaps a little bit of stability in the oil price. we got the pound in there as well. well below the handle.

a boost from some of the comments. over at the bank of england, leavingout the risks of policy. a slightly divergent path from the governor. overall, one of the big stories has to be the oil price. we are seeing a flaw. moving into a retreat in these oil prices. 0.2%. let's get the first word news. juliette: donald trump says he will propose legislation that would and immigrants from receiving any welfare benefits for five years. he was addressing a rally in cedar rapids, iowa. shortly after taking office, signed an executive order. to immigrantg advocates has led to increases in deportations. top u.s. banking regulators are sprinting to ease the volcker

rule and other constraints on wall street. they plan to tell lawmakers they keyort revamping structures. the trump administration issued a long list of basel's for proposals for rolling back rules. republican tom gillis of north carolina said the bill would delay the repeal of obamacare, taxwing more generous credits. the white house has created a website urging the repeal and replacement of obamacare, ahead of a possible senate vote next week. the mexican finance minister says the central bank is probably near the end of its tightening cycle and may be able to cut rates for next year. said it exclusively, he

-- likely totell fall past 4%. >> what the markets are seeing is potentially another couple of increases. interest could start going down as early as next year. by 2700l news, powered journalists and analysts. you can find more stories on the bloomberg. a very strong rebound. after the worst session since november. a little bit more rebound coming through in some of those energy players hit hard yesterday. at his highest level since 2005,

the nikkei is closing 0.1% as we see a little bit more money going into the yen. jakarta came back online and lost half or more than half of its value. this is a mid concerns it could -- we have heard from the chairman, saying he thinks he the toshiba for semi conductor business. we have heard others are the front runners. significantly in china. the company did tell bloomberg its operations remain sound. we have been watching this story for some time. you can see the index of the nasdaq 100. ,he blue line is the msci

information technology index. a big discrepancy. saying, you should be looking at these emerging-market tech stocks. they are actually 35% cheaper at the moment and the nasdaq index. analysts says if they had to make a choice, they would stocks.m.i.t. -- emit anna: theresa may will meet with leaders. howis expected to outline she will treat block citizens. joining us from brussels is matt miller. good morning. what does theresa may have to sell to the other 27 leaders? she is not allowed to stay a moment longer.

matt: they are going to go through a number of things today including counterterrorism. they are going to talk about sharing security. back the tide of immigration from north africa. andill address the group give them her plan for dealing with he uses. non-british eu citizens living and working in great britain. 4.5 million citizens in one country or another. in the european union. the free movement of people has been one of the red lines for envelope merkel?? -- angela merkel. anna: what are the difficulty she faces in trying to find common ground?

matt: one of the difficulties is is insisting she not be concerned, the u.k. not concern itself with who has papers and to is registered now. for people deadline who say european citizens are allowed to declare themselves and then stay there beyond that. theresa may has to guarantee the rights of europeans living and working beyond brexit. that would give them probably more protections than british citizens will face if they want to come and work in the eu. unless he agrees to a free movement of people, she is going to have trouble with eurosceptics at home. she is going to have to let the

european court involve itself in any concerns citizens have. she is going to have to do all of those things in order to get market.o the single this is why people think the u.k. doesn't really understand the reality of the situation. >> complex stuff. thank you very much. matt miller joining us from brussels. during us in the studio, a chief investment officer. good morning. u.k. talk about where the goes. some say we will see a softer stance on brexit. is that all it takes? reporter: this is a very fine line she has to tread. deliver ae wants to brexit, appeasing the europeans. pragmatic.

now we have that. toasted on the outside and soft inside. whole free this movement of people is going to bothe sticking point on sides of the channel. these discussions are going to go on. she is going to have to select her own party as well. and ocalan there are other things we could get stuck on. like the divorce bill. >> these things go hand in hand. we move on to the rest. each one will be quite a difficult series of negotiations. what about the strength of the u.k. economy at the moment? we have seen it fall down the

rankings. compared to the rest of the g7. this shows investment intentions, manufacturing companies. they have been holding up well. is this a sweet spot because we have a weak pound? or is there more material going on. >> investment has been coming into the u.k.. election will have done no harm to that. what is difficult to predict -- consumer spending is a big part of the overall economy. currently, we are seeing the slightly lessng confident. with inflation continuing to pick up, obviously real wages are not keeping pace. anna: why do you say investment will hold up? i was looking at comments from the advertising agency. they said they had previously

discounted brexit as a drag on the economy. after the election, that has magnified things. becausesonally feel theresa may finds herself in a weaker position, the chance of a soft brexit is higher. moneyas looking to put into the u.k., i would feel more confident. that we would get to a no deal situation, probably the worst outcome if you wish to invest a lot of money. what about the length of the transitional deal? is this going to be something that takes years? we find ourselves in a transition arrangement for years? >> i was talking two months ago to someone experienced in trade negotiations. he suggested this would take five years plus. i am not experienced negotiator, but he is. he felt this was not going to be

arrived at within two years. how long that is, given what we have seen with canada. where do you put your money as a result of all that? looking, as always. something that is going to grow economic growth. you want to continue to put money where you can find it, in technology. companies in the u.k.. thee are opportunities in service area but you have to be quite particular. need to look at some of the capital goods areas because we have good engineering companies which are world class. they have drifted a bit and might be interesting. would you vote for a rate hike? >> no, i would not.

currently, with weak sterling,, the fact that consumer is under pressure, i think pushing forward with rate hikes is not the way forward. why: you understand they are looking for it? >> absolutely, their mandate is inflation. if sterling could remain volatile, they are worried inflation will pick up again. mark carney says they need to balance that with the need to support the u.k. economy. i think you do have to put , when you comere to vote, around something like this. we will look back and see it is justified, thank you very

much. coming up, as oil languishes, we asked how investors should position around lower crude.

welcome back. 8:19. a sunny and peaceful looking at berlin. 7:19 in london. the euro against the dollar, right now. let's go to the bloomberg/headlines. the deal could cost $27 billion and usher the largest maker of iphones into the memory chip business. they will also decide which u.s. state will be their location. -- the shares had traded during

ofsion hours amidst a glut sell orders. the move would pave the way for a sale of the airbag maker. said no decision has been made on the bankruptcy filing. boeing has secured twice as much show is rivalir airbus. airbus posted a tally of 229 airliners, valued at $225 million -- billion dollars. nomura has picked frankfurt as the headquarters for the operations.on according to a person with knowledge of the matter, the japanese biggest brokerage will --pare next month to

-- hasaire patrick try raised money in the second-biggest initial public offering. the ipo comes exactly one year after it was formed, when the parent company closed the acquisition of cablevision systems. that is your bloomberg business flash. anna: now oil has held its slide into a bear market. -- the iraniann will minister says opec ministers are in talks about making further curbs to supplies. but reaching a consensus will be difficult. i have this great chart, which

is looking at what is happening to the oil price. this is the recount in the blue. the bears back in town. the conversation i was having an it is thehe says recount that matters. production levels in the united states, just so high. the production levels are pretty high. >> yes and it was interesting work done looking at how sensitive shale producers are to oil price. $40, it begins to kick back in. ofiously, they are into sort making real money. the other thing they have done, y have been actively refinancing their debt. which means they are in a strong position. >> that number goes down.

>> that is a suggestion being put by some experts. the other problem that opec has got, both nigeria and libya, who were given waivers, were upping their production. analysts saying $40 is still key, even if it could go lower. also saying, they could see numbers in the 20's and early parts of next year. those are bearish expectations. where would you see things happening? >> sort of the 40-50 area seems to be an area the market is comfortable with and is it the

in balance area. unless one is going to be very negative, i think the oil price will operate in that area. the talk is doing more. what do you think the saudis want? a stablearly love price. that will be their aim. they have a number of different shall we say parties to try and square. we should ignore the russians who are playing ball. upy have the ability to production. a lot of players in the game. i think the saudis are going to have to work hard to gets consensus. they have managed to do deals with the russians. political tensions seemingly

intense. let alone with other members of the middle eastern community. is that something that limits opec's ability to react? the new crown prince is there to get him more status in these negotiations. is, thisuld also say is very unpredictable. statesn none of the gulf interests to see a lower price. it is how much pain they are prepared to take in the short term. how excited are you about the trump agenda? cuts, 2018,is tax if he can get them through, they

are going to be somewhat more muted. there was a suggestion last night, that the obama health care bill reform will not go through until 2020. isot of this legislation being pushed back. i think the market, having gotten terribly excited, is back looking for growth. that is why we have seen such a good run in tech. anna: we are going to hear more about the health care bill today. thank you for your time. that is it for daybreak europe. the european open is next. stay tuned for an exclusive interview with peter smith. coming up shortly on bloomberg television. a quick look at the futures as we head toward the open.

more than 30 minutes away from the start of the trading day. weaker across the european equity space, but not by an enormous amount. the sun is almost shining in london. this is bloomberg.

so new touch screens... and biometrics. in 574 branches. all done by... yesterday. ♪ ♪ banks aren't just undergoing a face lift. they're undergoing a transformation. a data fueled, security driven shift in applications and customer experience. which is why comcast business delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver. tthat's why at comcast,t to be connected 24/7. we're always working to make our services more reliable. with technology that can update itself. and advanced fiber network infrastructure. new, more reliable equipment for your home. and a new culture built around customer service.

it all adds up to our most reliable network ever. one that keeps you connected to what matters most. >> good morning. you are watching" bloomberg markets." openingng you the trade. i am guy johnson. matt miller. what are we watching? what is on the menu? theresa may meets with eu leaders tonight. it looks like it is ex-pats for starters. the brits be picking up the bill ?