where is -- they thought that would of come to the forefront but maybe be cap is too expensive. let's put up the risk radar and show you where we are. we are seeing a little bit of support for the japanese equity markets, the weaker yen, that is helping. china is selling. that has fizzled. we are near december near record levels. manus: keep an eye on oil. we are waiting to see what

happens at opec/non-opec. you've got disruption at the keystone pipeline, transcanada is said to reduce shipment by 85%. this week, oil is up .7%. let's get to edward ludlow. he's got your first word news. edward: germany's biggest opposition party is debating whether to begin talks with angela merkel on a minority government or coalition. it is the first sign that the socialist -- social democratic party is willing to help the chancellor stay in power. as they met last night, martin schultz faced calls to drop his refusal to join the merkel coalition. u.k. officials have tried to accelerate brexit negotiations , ireland could

hold fire and block a final call if it wished. avoiding a hard border in ireland is one of the key issues requiring sufficient progress for the eu will allow the future relationship with the block -- with the bloc cured in the u.s., the legal team for former national security adviser, michael flynn, has stopped sharing information with donald trump's lawyers. that is according to two people familiar with the probe. the move signals that flynn who was fired in february may be in discussions with robert mueller. the u.s. navy has abandoned the search for sailors missing after -- the plane came down southeast of okinawa but a search involving uss ronald reagan, three helicopter

squadrons and other aircraft failed to find them. eight of the colleagues were found soon after the crash. president is due to be sworn in later. the ceremony takes place after a dramatic 10 days before the military seizing harare. mcgarvey's resignation sparked -- yet to be seen how much change he will bring to the crisis hit nation. u.k. consumer confidence tumbled in november reaching the lowest level since the onset of the brexit vote. optimism suffered its biggest decline since the month after the referendum with all eight measures. the score for the financial situations in the past 30 days dropped to its lowest level since january 2014.

global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . let's check the markets in asia. the day has turned less perilous with chinese stocks with one hour left to go in trading. shares in hong kong resumed their climb but volumes are light. investors were reminded you cannot be complacent about china's resonators i rising margins and the ongoing monde rep. -- ongoing bond wrap. chinese stocks fell as tariffs on imported goods are to be cut. over in tokyo, mitsubishi materials is losing the most ground since june 2016 after it said two units -- we do have a touchy cuckoo acai climbing -- i do have hitachi cuckoo's

--kokusai. anna: interesting lines coming through from clarion, in relation to the investor, white tail. the carrier met with white tail. they have been putting pressure on the management. white tail do not present their own strategies. major investors are backing the plan to buy strategy. this was the company to abandon its merger because of activist shareholder pressure. current says the board has approved desk clarion says the board has approved the merger. manus: that was unanimously rejected. let's talk what china and the chinese stocks. the energy consumer discretionary shares leading the lot.

the drop comes amid concern about the bond market selloff. some of the highflying stocks. anna: china says it will make further cuts on a wide range of consumer goods. let's get to beijing with m o'brien. is this a temporary blitz in the chinese stock market or does the selloff we saw more yesterday, does it still have legs? >> are signs -- there are signs that beijing may have expired. ever since then, markets have been a lot more volatile. this not the first big dip that we have seen in the afternoon and the hours of trading in china since that congress and there are a few people saying that this is the beginning, credit suisse saying the correction is only getting started and sean darby, he is

the global equities strategist to jeffries and says that china may be seeing the correction that is about to spread so we could be seeing the angst and decline in china spread on the correction, i guess, in china that is due for the global equities market. manus: the other major story that was just beginning to get into, i do and i do not know if where more excited about the cheese -- about blue cheese. we are talking about important tariffs. what does this mean? biggest one -- moot.ggest cut was there biggest one, the

that we are looking at, that we think will have the most impact is this reduction on tariffs, some to zero for baby formula. this could have a really big impact for producers like nestle, and that were really big and into this market here. china, the world's biggest very market and also the world's biggest market for baby formula. you have the one child policy scrapped, boosted to two here so it is a growing market. i'm sure that there will be peering over in the headquarters of those companies. there was a wide range as you set of products. this is all about easing consumer access to some of the products that you are just unable to find a local productions of here. some are saying it is also a bit of an olive branch to donald trump. he was here in beijing a week or so. maybe a hat tipped to this

constant criticism about the trade surplus that china has the u.s.. as a product, the coffee machines, you may not have seen that, cosmetics was could be key to some of the japanese and korean makers per manufacturers, even ski equipment was on the list. anna: it is a big list. we'll see if it has an impact on any of the share prices that could benefit when they open up. joining us here in the studio, alan higgins. great to have you with us. alan: last day in the studio. anna: it is. our shiny new studio for monday. we need to talk about china. we started talking about market calls. what worries you about china? is it the fact we have seen a selloff in stocks? maybe the chinese actors are not

acting in the same way? what do you interpret from the selloff? alan: yesterday was a big one. stabilized today. that is the good news. that is really good news on the tariffs. we step back in terms of went trump first came in. one of the big risks to markets, trade war, china-u.s. china cutting tariffs, great news. turn to the market, they know the debt buildup in china is the number one concern. it has started to stabilize. i am not worried. if you pulled up chinese biggest banks, icbc, pua shows 6.5. the market knows. the market knows there is bad debts in the system and not all is rosy. it is not one of those situations where completely by surprise. manus: the debate is what is the

chinese preparing this for? one of the guests said that is because inflation is coming. i question that. the trillion dollars worth of debt maturing next year and the spread is blowing out. are the chinese capable of tolerating a trillion dollars worth of maturing debt? alan: not the defaults that may come. they need to -- the maturing debt needs to be reissued. and manus: it is -- manus: it is going to be expensive. alan: part of the debt we leveraging, spreads have widened a bit in the u.s.. we have had a bit of a high-yield selloff. this is part of the adjustment process. they are very aware. we have seen debt to gdp come

down for the first time in this quarter. that is what they want to do because they are aware of the big risks. of -- you ask for the ep the pe of ipo. that is your pe. it,: the point is look at 6.5. it is very low. it is yielding about 5%. it tells you the market knows. when i started my career in contrast,e 1980's, in i can remember i b.j. -- ibj, a japanese bank was on a pua of 100. the market had no clue. anna: when people talk about the extensive large-cap, what do we take away from the fact that we saw a little bit of the selling spread into hong kong. not into europe.

was that because with thanksgiving, people took their eye off the ball? we don't worry about the china story the way we did a couple of years ago? alan: if we have more days like yesterday, we start to worry about the china story more. you remember the consent of the currency? there were concerns we could go much further. one of the amazing country and traits of the year. they stabilized that. hope there is a bit of built in that they can do the same thing on the debt situation. we had amazing strong data out of europe yesterday led by france, really strong manufacturing data. not just manufacturing but the whole economy. that. we will debate alan higgins stays with us. if you're on your way to work, you know what to do, you can leave us or you can go to

bloomberg radio. chauffeurou have a then you can watch bloomberg television. coming up, breaking the brexit impasse. the case suggestion to deal with the irish border issue. manus: will go to germany as the stb showsust as the signs they could join a coalition with merkel. this is bloomberg. ♪

anna: this is "bloomberg daybreak: europe." prettyi asia pacific high today which is no small achievement. shanghai composite is flat. let's get to bloomberg business flash with ed ludlow. toard: unilever has reported have started the foundation of the ceo. according to sky news, thought saying where he got information, -- to help it identify its successor. the report says no date has been set. offer. raised its that is after a rally in the shares of the chip systems maker says many invested including elliott management to seek a higher price from the buyout firm.

u.s. waste permit equity company increased its october bid by 18%. that is your bloomberg business flash. manus: edward, thank you very much. the has try to accelerate brexit negotiations by suggesting that rather than willing its veto, ireland could hold fire and block the final court if it wished. anna: that comes as theresa may is due to meet with donald tufts in brussels today. it is tumbled flows level since the brexit. alan higgins is still with us. quarter, business investment and trade were not supposed to be a driver but the consumer story was still a driver. what is your assessment of u.k. economy after the budget will

result productivity estimates slashed? alan: those numbers were long-term. we will address those. u.k. economy is underperforming and there is no doubt that because of brexit, at least short-term, u.k. corporate sector is somewhat cautious and now with all this gloomy news around no big surprise, the consumer confidence in the doghouse. we are underperforming. lucky thing is is the global innomy is either in a boom europe so that is getting us through. we are underperforming. something on productivity. if you think about it -- manus: this is the chart. alan: activity means we have slow growth but very strong employment. our unemployment ratio is close to 4% in contrast in europe, several countries are 10%.

employee a lot of people and productivity looks low, or have a high unemployment rate. " it is just a political choice. -- anna: it is just a political choice. alan: u.k. has great incentives on lope come to work. -- government says the first very low rates of tax at the front end so incentive to work. he compares incentive to work to low played employees, it is very -- low-paid employment, it is very good. it is not all bad news. there's a big debate on productivity. is gdp understated? it is hard to measure it are we really picking it up? , just like the united states, the u.k. has vast

numbers of people employed, very low on implement rate. manus: -- very low unemployment rate. manus: one-man shows up with a lot of jokes. how bad lee off -- how badly off are we? resolution sunday's but it is a fast track. let's have a look at it in terms of what they believe we are going to do. 42 billion pounds smaller and the economy by 2022. we are going to have the biggest fall in living standards and our average pay is going to drop by 1000 on disposable incomes are going to fall for 19 quarters. if i was an investor, i would worry if i saw those facts. alan: if that is true, that is the forecast. say that is unlikely to work based on that scenario.

we would be skeptical because it is about the court sector. one of the -- corporate sector. when i'm in speeches to the press people in the u.k., one of the things i point at is a very good survey. the world bank ease of doing business. in ranks countries from one to 190. how quickly can you get electricity? instruction permits -- construction permits, really practical. .umber 190 is libya the u.k. is at number seven. u.k. is a very good place to do business. manus: we are very open economy. alan: it is the corporate sector the creates the world. anna: you think there will be a transition deal? alan: we think there will be a u.k. tradition deal? why? europe needs the money.

all it needs is extending it. most people would agree that u.k. just doesn't have enough time to get a brexit deal and therefore we need the time. game theory would suggest in the history of european negotiation is dirt tends to be a deal and it just be really difficult. we think there will be a tradition deal of this is more short-term. deal, we'll see higher sterling. probably not that great for ftse 100. probably ok for the ftse 250. i don't know if you saw last week one of the big enough banks that is survey and they shorted markets up there, one of the most unloved markets is the u.k. short-term you got a lot of opposition to the k. -- to the k. manus: up next --

usa: ian duncan smith joins at 9:30 people will talk german politics when we come back. -- 9:30. we will talk german politics when we come back. ♪ is this a phone?

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manus: it is friday afternoon. dollar yen is on the move. the dollar suffered three days of losses. we are seeing a little bit of a turnaround. the yen is weaker. the question is, where do we go to? is dollar yen really cap out. anna: we got a little bit of yen weakness. we got equity indices to the left of the screen. china csi 300 which seems pretty flat. weakness in the big cap stocks that we saw. we did see it spread to hong kong a little bit but not the

european session yesterday. we talked with the currency markets and the move we have seen in the yen to the bloomberg dollar index is pretty flat. manus: you see copper and iron ore rallying as investors look beyond what their calling the winter steel curves. we have these curves in terms of production. iron ore is having a renaissance . shaping up to be a strong week. china -- investors are looking to china. you've got wti. you've got disruptions at the keystone pipeline. the trend canadian pipeline down by 85%. you've got, you know what? we are down 7% in november so there is belief that opec/number of pick -- opec/non-opec will do something.

anna: flat of the euro. they got strong data coming out from europe, particularly from france. let's begin alan higgins was about the european growth story. in particularly the french data. i was taken by some of the french data. i am taking it out now looking at some of the numbers. hiring at the fastest pace in almost 17 years in the french economy. is that a boom? alan:in recovery mode? boom or boom let. as manus like to calls it. -- manus likes to call it. also thee impact but fact that we've got global signal nice growth. all he could -- global synchronized growth. all economies are doing well. the employment story, france really needs that.

the unemployment rate is circa 10% and in contrast with the u.k. down to 4%. plenty of capacity in france. manus: anna, just as you were creationbout the job which is the highest in 17 years . the whole of europe is eating up the capacity. i want to test you on this. bloomberg intelligence would say going into 2018, this is irony. and despair and commodities is going to be enough. soften.are going to i think this is bringing in negative drum. banging a negative drum. anna: how long can the last? alan: we have had a little bit of tightening from the strength

in the euro. over the course of the year, it looks a little bit pessimistic. clear despite this very strong data, he is not tightening. we had a little bit of tapering clearly. ecb.: to the key, to the anna and i -- anna and i had a long discussion about this. anna: no, no. as our story says, they're committed to's keep -- to keeping their portfolio in line. this is basically very contentious in germany. we have statements from the bundesbank saying they need to stick to the p. p.t to the -- to the key. the capital

idea of the ecb buying more periphery. it is hardly periphery these days. the bundesbank just doesn't like that because it sees credit risk and the like of portugal, spain. manus: this is the debate when you get to the end of bond buying which is in theory will and at least -- theory will end next september. they stipulated money maturing from debt to be reinvested in the country until that point in time. they have this wiggle room. are we underestimating the momentum from reinvestment? alan: reinvestment alone is worth $12 billion a month. the idea of big bond bear market in europe is probably remote. it is good value. if you buy -- even if you go as far as portugal that is struggling at the 2% level on tenure bonds -- on 10 year

bonds. it is not a great investment in terms of long-term income. this buying that we've got until september so i agree with you. i do wonder whether draghi could change. we keep getting economic want to know i could in q1, i said we can keep it until september. given trust like this, the economy is so strong, he could take away a little bit more. central bankers do change. anna: one thing i saw, we are going to get an update on german politics. the ecb minute is whether we're talking about buying corporate bonds and saying they will not decrease in proportion to the scaling bank. where they are going to scale back on be on more on the government side. corporate'sily on

-- on corporates. does that represent any opportunity? alan: we have lightened up on the high-yield area. cooper bonds a very tight. not much of an opportunity -- corporate bonds are very tight. not much of an opportunity. saye saw graphic this, you european rates are 2% or 3%. they are negative and they are doing qe. manus: allen, hold those thoughts. germany's biggest opposition party is debating whether or not to begin talks with angela merkel. the first time that the social democrats may be ready to help merkel stay in power. callsmartin schultz faces to drop his refusal to renew the grand coalition. joining us now, matt miller. the stp the outcome of

leadership meeting? matt: the leader of the party has renewed his refusal to join a grand coalition according to rbb, a new source here. another new source says the party chairman has said he is want to wait with the country's president to advise them on what to do and if the spd is willing to go into talks. this party is one that is not unanimously agreed on any task. the party leadership did vote unanimously on monday not going to coalition and to push for new elections. looks like the new elections option is one that most people are now seeing as less preferred to moving ahead. manus: to a certain extent, that is political expediency.

a rerun of the grand coalition, this could be seen as to really extract some kind of real policy terms for merkel. is that what is his tensing schulz? -- is that what is tensing schulz? matt: nothing is tempting schulz because he is refusing to go into a grand coalition. that could be key to what the looks like in the future. my german is not good enough to give you that nuance but a lot of people are talking about olaf schulz is a possible new leader of this party. , if he continues to refuse a grand coalition, but the rest of the party sees no other decent way forward for the country, he could find himself without a job. anna: matt miller, thank you very much.

the future of the spd. quick word on the german politics and fascinating german politics story. a bit unpredictable until now. maybe people thought it would end in some sort of coalition discussion. jamaica was something new to talk about but it didn't have -- does the growth carry on you go alan: in contrast -- carry on? alan: in contrast, it is a very stable situation. rather it is merkel on its own, it is very stable. the spd, they're much more pro-europe -- the sdp, they are very much pro-europe. could be very bullish for greece . they're much more favorable in terms of writing off debt. anna: place your peripheral

call, maybe? alan: we haven't bought any greek debt. we're not that brave. we have portugal. it is been a real winner and it has upgraded. manus: i know you are long sterling. euro, areook at the you still long? how do you play the currency traded? what about the currency? alan: we had a short dollar view. also at the margins, where we can play delly-euro, we are overweight the euro because interest rate differentials is not the only game in town.

otherwise the swiss franc would be developing. something like the french sentiment that we saw, the strength of the economy is very important. we deemphasized difference rates -- deemphasized interest rates and emphasized the strength of the european economy and we stayed long and it seems to be, the ecb just seems to not want to tighten. alan higgins stays with us. manus: you can also follow bloomberg daybreak on your bloomberg function. it is about black friday. early indications are today's retail bonanza will be a monster . anna: the national retail federation projects many consumers, 69% of americans will go shop at stores online over the weekend. anybody with any now account has

noted it is black friday. manus: one lady that knows about shopping, emma chandra will take a close look at how stories to open. amoco there's a fair amount of optimizing heading into black friday. analysts are pointing to strong economic growth and low unemployment and skyrocketing consumer confidence. offered 3% tons 4% sales growth over the holiday season. that could be about $680 billion in sales. analysts wanting to a string of positive earnings results over the past few weeks and saying that a number of retailers are in better positions this year for what the consumers will want in terms of integrating both online and in-store retail. they have often said they have been promoting early to make sure that customers know exactly what they are offering but there is a double-edged sword when you look at it promotional

environment. what we see here is a number of retailers are chasing sales to cutting prices and that could impact margins. -- both in-store and online in order to compete with the big online or e-commerce retailers like amazon and online shopping continues to grow here in the u.s. it is expected to go up 20% this holiday season accounting for $100 billion in sales, that is just from e-commerce. amazon is expected to be the big winner. last year they took 30% of all e-commerce sales during the holiday season -- took 38% of all e-commerce sales during the holiday season and that is expected to grow. anna: the macy's ceo is going to be a part of the program later on. stay tuned for that. 20 to talk about on the retail front. macy's ceo, 2:30 p.m. mountain

time. this is bloomberg. ♪

manus: it is 1:48 a.m. in new york. futures indicate a little higher. it is a short trading day and the united states but everyone

is going to be online clicking, in terms of where they want to get there black friday deals from. hass into edward lolo who your business flash. toard: unilever has reported lay the foundation for the departure of ceo paul clement -- paul taubman. the company is hired a guns and are to help it identify its successor. the report says no firm date has been set. unilever spokeswoman declined to comment. -- that is after a rally in the shares since the maker -- many investors to seek a higher price. the new york-based private equity company increased its bid by 8% bellowing the target at $3 billion. -- valuing the target at $3 billion. that is your bloomberg business flash.

anna: let's talk about emerging markets. zimbabwe, they're going to have the swearing in of a new president today. manus: the former vice president who returned on wednesday he will be inaugurated in harare stadium. yousef gamal el-din joins us. oft is the latest in terms -- is the country still be boolean and joyful that this demand? >> at present it seems it is called but it is the calm before the storm. moment mnangagwa is sworn in as president or interim leader of zimbabwe, it is about to spur up all over again. you saw earlier this week when robert mcculloch they officially resigned -- robert mugabe officially resigned.

call --w it is a bit of calmb but a calm before the storm of jewish and. anna: people asking questions about those who were close to the magali administration will make a big difference for some way -- for zimbabwe. focus in south africa because what we expect later. take us through that story. reporter: that is quite true. the agency came a yesterday saying south africa would rather maintain its current rating and that keeps us with regards to our foreign investment grade. today, two big ones, moody's and s&p will release their ratings of south africa. quite important that the local currency debt remains one level

just above noninvestment grade. ift is quite key because both decrease, south africa could lose at least 100 billion rand or 700 billion u.s. dollars. that is according to 50 banks. of course, a key focus heading into later this evening. much. thank you very alan higgins has been listening to the conversation. this is south african five-year -- anna: in conjunction with the queen of france. manus: we're waiting for moody's and s&p to come out. that is the focus. how important is this rating they suggestm back

be lowering the local debt. calls.rs desperately bearish calls. -- pretty bearish calls. approaching got it 50. in bit of it is in the price. emerging-market bond investors are not usually that trouble about a junk rating so s&p so we take the morse -- the key one is moody's. that soof sawtek and that would be a specific so the issue is, it was a member of the fragile five. there is no growth.

for an emerging market economy, very low growth indeed. may the currency needs to the weaker to compensate. anna: the debt investors -- what do you mean? they sort of already prepared themselves to take the risk to the brush it off. alan: the tim: emerging-market, stressing bond investor, they buy everything they can disinvesting from venezuela come all the way to test the. south korea which is amazingly some people consider an emerging market. there's a wide range. the rating itself is less important and it is much more important for investment grade and corporate's. less important but there will be the crossover investor their lives on that moody's rating in

south africa. i would be alone the cautious. manus: can i ask you about russia. we are fleeing russia. investors richer $70 million -- investors withdrew $70 million. a weekly decline. there's a bit of a change, do you share that bear versus zero. >> we are long russian equities. our stance is willing to go against the train in geopolitical events. we invested in 2015, initially had someout we spectacular returns and this year, they have liked. i'm not surprised that money has come out. if you look at the fundamentals, we all know it is achieved market but it is cheap by

russian standards. oil should be very positive story. the big banks continue to perform which is a big component to the index. it is a bit like when we went in. we did make any money and then we had a big surge. with these value opportunities, yet the patient and wait for other investors to come in. etf flows, you have seen it in emerging markets. to make a cell, we would have to change our view on oil. anna: allen, thank you. thank you for spending the last hour with us. we'll see you next time in the new studio. manus: it will be like to new pens. as today was china who dropped the markets. pull up the asian session. you can see the hang seng is up by .5%. the csi is back to green and in essence, the contagion didn't

flow through in the european session. anna: we are working that chinese stock story. we will get which goods could be getting cheaper for chinese consumers and was companies supply them. this is bloomberg. ♪

♪ slashing tariffs. china cuts import charges on a range of goods in a move that should help consumers and the country's trade balance. a selloff in chinese equity fizzles. anna: brexit blues. confidence tumbles in november. prime minister may meets donald cook today. manus: sdp to the rescue. willarty debates whether -- whether to begin talks with angela merkel on a minority government or a coalition. will bemerson mnangagwa for name. -- will be sworn in. ♪

manus: welcome to "bloomberg daybreak: europe." welcome to the program. a quick look at the futures and where we expect to go. thanksgiving yesterday and today it is all about the shopping. yesterday, we saw a fascinating picture from china where we saw a selloff. provide at seem to great deal of contagion into europe yesterday, and today in asia a little bit more stable. manus: it will be interesting to see how quickly -- we were chatting about the possibility of tariffs, donald

trump came to twitter and said, well done, me. nestle, we are debating about it. they have many products, so there will be wide-ranging implications. we put up the risk radar. we have a bit of weakness in the yen. hoping some of the japanese -- japanese stocks making a comeback. manus: there is a breaking news headline, red and hot. it has to do with libor, the benchmarking. the u.k. sta is confirming he will have 20 bakes supporting the libor benchmark until 2021. this goes back to the financial in terms of how these

benchmarks were used and priced. there was a lack of regulation open to the possibility of manipulation. 20 banks will support the libor benchmark until 2021. anna: a ceo said earlier this year that while significant improvements have been made since april 20 13th when the scandal blew up, the underlying market access means the future cannot begin indeed. the support is needed until the end of 2021 by when a transition can be made. this is about shoring up that transition. manus: interesting. by 2021, some of those intuitions -- some of those detentions might be -- let's get to your first word news. edward: germany's biggest opposition party is debating

whether to begin talks with angela merkel on a minority government or a coalition. it is the first time the social democratic party may be ready to help the chancellor stan powder after her talks on forming a coalition with other parties field. martin schulz faced calls by social democratic lawmakers and state leaders to drop his refusal to join in merkel coalition. u.k. officials have try to accelerate brexit negotiations by suggesting that rather than wielding its veto next month, ireland could block of final call if it wished. avoiding a hard border in ireland is one of three key issues requiring progress before the eu will allow efforts to move on with the block. confidence tumbled in november, we just -- reaching the lowest level since the aftermath of the brexit about.

-- since the aftermath of the brexit vote. all measures that make up the index falling. to its global level -- lowest level since january 2014. in the u.s., the legal team for stoppedflynn has sharing information with donald trump's lawyers about special counsel the investigation into russian interference in the 2016 election. that michaelals flynn, who was fired, may be in discussions with robert mueller, who is investigating possible collusion between trump associates and russia. the u.s. navy has abandoned the search for three missing sailors after a crash off southern japan. a plane came down on wednesday, failed to find

them. colleagues were rescued soon after the crash under said to be in good condition in the hospital. emmerson mnangagwa is due to be sworn in later this morning. the ceremony takes place after a dramatic 10 days with the military robert mugabe seizing control and relinquishing -- with the military season control and robert mugabe relinquishing power. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . let's check in on the markets in asia. here is sophie kamaruddin in hong kong. >> a drop in chinese stocks towards the close. they are down for the week after thursday's tumble.

the regional benchmark is set for a seventh weekly rise. the head of the chinese -- lator gary stocks, not much for them, falling. in tokyo, mitsubishi materials slipped the most since june 2016 after two units faulted by data. anna: thank you, sophie. let's talk about the chinese stories. china says it will make further cuts to import taxes on a wide range of consumer goods in a bid to boost consumption. the average tariffs for 187 products ranging from diapers to

cheese will drop from 17.3%. manus: let's get to beijing. behind this cut in the import tariffs, we are splitting hairs between products, but what products face a lower tax? how wide is this from beijing? reporter: as you said, over 180 products, everything from coffee machines to equipment. you highlighted vermouth. that has the biggest cut, the martini and gradient, 214 percent. -- the martini ingredients, to 14%. , some products will that is highariff to 0%.

worlds biggesthe markets and baby formula have to fastest growing very important to china over the past couple years. nestle, a big player, and there are a couple american players. even fonterra, the world's biggest dairy exporter. the aunt abie formula -- beyond baby formula, vermouth and whiskey saw a tariff cut. manus: thank you very much. we have several european countries that could benefit from these tariffs. , spirits companies,

drug makers, novartis. these are just the european companies. to lucy macdonald. good morning. waking up to this news about a cut in tariffs from china, this is the way of things, because the chinese will do more and more, we think? to help balance out their import -- export story. -- import-export story. it is very encouraging. multinationals operating in china, they have been suffering recently because of competition from local

companies. we will see if that balances up. -- balances out. let's talk about what happened yesterday. i want to understand, when you saw the csi drop as it did , some reprieve today, what did you think? how concerned should we be? has the shanghai put this appeared? --put disappeared? lucy: for the moment. increasecause for the of more regulations and a focus on leverage and products. that has been in the eye of the regulators for some time. while the plan was carried out,

there was no restriction. post that, it is now the focus on reducing leverage and increasing stability. we see yields go up over 4%, do you think maybe that is not a cause for concern because if it is all because of the more medium-term objective to improve? the system, then it is worth it? lucy: maybe. manus: we have this other comparative. the csi and amount of leverage in the system. you are talking about one trillion you want -- one trillion you want. filling -- you're talking about one trillion yuan. how big a risk is one trillion

in financing? lucy: corporate debt has been rising, in the u.s. as well leverage has been rifling consistently. -- leverage has been rising consistently. i think when we are looking to seewhere you might begin to a crash after the great run, that would be one to watch. anna: did you get excited or did you think this is an economy that is already highly indebted? what was the story there? lucy: it is a long-term growth market, competitive, and you need local partnership. story,taking the chinese

160 products, taking global equity markets, is this another piece in the synchronized growth strategy? it adds to earnings. is it another piece of the synchronized growth story for achilles -- for equities? have seen through the corporate earnings season that is still there. earnings recovery in energy is there. financials as a whole have done well. that is across the board. decent -- froma earnings. anna: which is stocks are you buying? lucy: we are interesting in

companies that benefit from technology. seeing across the board to who is actually going to be the real beneficiaries, and that can be financial, health care, industrials. manus: lucy, you stay with us. up -- anna: we discussed germany. -- we discussed germany. -- we discussed germany. this is bloomberg.

♪ manus: it is berlin. a shot of the gate. let's check in on your markets.

we got that are from china yesterday. we have a little bit of a recovery. everybody is going shopping. i am talking about black friday. will be repercussions be of that with the tariffs unwinding? -- what will be be repressions be of that with the tariffs unwinding? anna: let's get a bloomberg business flash. has reportedlyr started to a be foundations for the eventual departure of the ceo. hired anny has executive search firm to help it identify successor. -- to help identify his successor. a spokesman declined to comment. startup has developed a driverless flying car that it plans to rollout as soon as next year.

and carry one passenger in its small cockpit. the firm says it is working on a model that can carry two. the ceo says there will be in dubai next year as long as they get approval from regulators. the drunken stay in the air for tony five minutes. that is your bloomberg business flash. anna: thank you very much. let's look at the picture in europe now. germany's data on business confidence. business sentiment among french companies at its highest level in almost a decade. manus: will be data show a similar pattern of optimism? lucy macdonald is with allianz global investors. the numbers yesterday were stunning. the biggest employment in 17 years in france. you were looking at a really strong european economy.

have a look at the dax, because it is all about germany. this is it relative to the stoxx 600. are you still bullish into the close on the dax? lucy: yeah. it is certainly. -- there are certainly going to be a number of reasons why it heads done so well this year -- there are certainly going to be a number of reasons why it has done so well this year. germany,ad-based in not just exports. it is also consumption and asset prices. , and itet is strong seems pretty solid. given the businesses that will positively be transformed

by technology, where do you play that in europe? theou're looking other than u.s. industrials iny: europe will be the interesting impact of this. maybe different regions of the world will begin to benefit. this is about reinvention of the manufacturing process using technology. where do you look for that in germany? lucy: industrials. we have seen relatively mature businesses like siemens is doing well, schneider in france. they are able to really benefit from technology, which increases their margin, because they have more data and relationships with their end customer. it increases the value of their

business. i know what came out on thursday in the u.k., a lot of people doubling down on the negativity. i'm going to spend a lot of time being less productive. at bloomberg, i won't. [laughter] ,ith all of it heavy-handedness where are you on the u.k.? do you believe the pessimism? should i be taking money out of the u.k.? lucy: it is difficult to be --imistic, that if you consumer is the largest part of the economy in the u.k. debt levels are relatively high compared to europe. is lessd debt to income than a hundred in europe.

you have interest rates starting to rise here. that will put a hold on things. you have consumer confidence coming down, we saw that yesterday. it is really quite difficult to get optimistic. anna: we got u.k. consumer confidence numbers, new ones overnight, showing they reached their lowest levels since the brexit vote. some of the positive influence came from the consumer, not so business investment. the businessath of investment in how does that influence where you want to spend your money on u.k. investment? lucy: investment is slightly on hold. waiting to see what happens with brexit. on the surface, there is stabletic, reasonably

message going out from business, but underlying they are nervous. see some more understanding of what the next few years will offer before they want to invest. off, we haveund called the american cold, flattening yield curves in the u.s. i wouldn't mind your take on that. saying we are , but what do you make of this global flattening issue? lucy: what you are more concerned about is when it starts to steepen. we have begun to see that slightly in the u.s. now. that generally is one of the things you look for to see the end. the short end rising.

something we have got to watch, because the whole basis for the market has been liquidity. ,f that starts to be removed then the biggest support for the assets is removed with it. anna: lucy, thank you very much. our last "daybreak" in the studio. lucy macdonald continues the conversation with bloomberg radio. manus: the egyptian finance minister, next. ♪ retail.

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>> welcome to bloomberg markets. this is the european open. we are talking about the open. i am in london. he is in berlin. germany inches towards a government as the spd resistance fades. could south africa see if rating downgraded -- see if