francine: the u.k. and eu make a major breakthrough. the tax plan gain. the overall pushes ahead as president trump approaches senators. and taking care of north korea. pyongyang fires what it says is a new type of missile and the whole of the u.s. could now be in range. good morning. welcome to "bloomberg surveillance" and i'm francine lacqua in london.

markets overall seem to be brushing off a little bit of concern with what we are seeing in north korea. actually, european stocks are following the asian markets higher. i am also looking at the pound-dollar higher. we had pretty significant news about the hurdle of the brexit bill coming through. down and we have a great line up for you today. bitcoin, investing in emerging markets with bob diamond. a little bit later today, we have alexander friedman. and then still to come, we talk with joseph stiglitz. he has a look at the euro. that is a great line up for today. but first, let's get to the bloomberg first word news. exchangee london stock says this ceo will step down immediately and be replaced in the interim by david warren.

the chairman will not be running for reelection in 2019. to draw theked representation for a general meeting. kim jong un says his regime has completed the nuclear program after firing a missile that put the entire u.s. in range. kim watched the test of the new missile, which is improved technology. donald trump has held discussions over how to deal with the issue without offering for the details. launched ae was little while ago from north korea. we will take care of it we have general mattis in a room. we had a long discussion on it. it is a situation that we will handle. francine: bitcoin has passed $10,000 for the first time. that's even as warnings multiplied that the largest

digital currency is an asset bubble. yesterday.id >> this is a bubble and there is a lot of fraud misxed in. there is a lot of fraud in anything as exciting as this. i think this will be the biggest double in our lifetime by a longshot. >> i want the record to show, i did not say that. mostly because it is so global. francine: the outlook for republicans to deliver a tax overall has brightened as the president trump dushed the gop holdouts in a closed session. trump said that this was somewhat of a lovefest, adding that they wanted to see this happen. in saudi arabia, one of the highest profile suspects in the corruption ca crackdown has been released. the presidentys

was freed yesterday and at least three other suspects have made deals. it was not immediately possible to reach the prince for comment. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. i'm nejra cehic. this is bloomberg. and eue: the u.k. averaged an agreement. climbed higher on the news that a major hurdle had been clear. however, questions over the irish border remain. first of all, good morning. what exactly has been agreed? >> well, the big thing here, and it is a big breakthrough, the agreement on the methodology about how the divorce bill will be cut -- this is something eu, and they have been calling for it. finally, we have an agreement that will be presented on monday

by theresa may, when they meet in brussels. it is important that it is not a figure they have agreed on. on $40ve not agreed billion or $20 billion or $60 billion. they have agreed on the calculus, the way they will come to a number eventually. francine: will she be able to sell this back home? jones: i think so. i think the eu is sensitive to the domestic political situation for theresa may. they are kind of exhibiting the imagination and flexibility that the u.k. side has been calling for four months now. so, we are not going to be talking about a figure. we will just be talking about a deal to get to a figure and this, i think, will be enough to have the talks move on to trade in december. that decision ultimately is up to the eu leaders, but it looks like we are taking a big step forward here.

francine: thank you so much, jones hayden from brussels. that means good news for the markets. mark gilbert joins us from bloomberg gadfly. thank you for joining us today. mark, you are good at looking at complicated matters and translating them into plain english. is this good or bad news? there are so many hurdle still. this should have been one of the easy ones. mark: it is actually the hardest want to sell at home domestically for theresa may. that will be the issue. it is good they have agreed on the framework for this decision. yes, it is good that they are moving on to the future relationship. but my word, she is going to have a hard time selling this to the public. they were promised all this money for the nhs. last was a cabinet meeting week. this allegedly has been agreed by the whole cabinet. that is what allowed her to move

forward. johnson willris not come out and trash this now. francine: i wanted to call for sterling, but issue facing a rebellion? mark: there could be a rebellion. they could easily be a rebellion. the smart move is the eu will not make them give a final number. this will be stretched out over several years. we will probably never know what the final total is. that makes it a little bit easier to sell. boris johnson said, you can go and whistle for the money. the idea that the brexit hardliners will simply allow her to sign tawaway this money, i fd that very hard in this domestic local situation happening.

>> we have seen a good reaction overnight. clearly, the news was unexpected yesterday by the u.s. so, we have seen steady rallies. beyond that though, we are not sure if this fundamentally changes the picture. we still have the issue of the irish border to resolve and once we get this resolved, this just opens the way for trade negotiations. francine: this is my chart, probably of the day. -pound.oking at the euro is that the one you target because of the strength in euro, or are you looking at cable? elsa: i think you are better off looking at euro-sterling. we have got the 200 day moving average just below us here and that the lows from november and september. through them, we might see some further positions getting stuck down. k. investors have

turned a bit more neutral, but i just got back from a few weeks in america. francine: do we have any sterling votes here? elsa: i don't -- mark: i don't think this changes the outlook. the bank of england will not raise rates by more than it has said because the brexit bill has been agreed. so, this reaction by sterling -- yes, it reduces the chances slightly of us falling up the brexit prefect, but it does not change the economic facts, which are a weakening economy and really no emphasis on the bank of england raising rates in the coming years. francine: but how do we deal with the irish border? we are not seeing snap elections in ireland. mark: i don't know. elsa: idol think anybody has a good solution yet. anybody has ank good solution yet. francine: this is one of my favorite charts. this is the ftse in pound terms

versus dollar terms. the blue is actually dollar terms. do people understand the new wants? thi-- to people understand the nuance? mark: if you look at the pound's performance against the dollar this year, it has risen. so, the alleged boost to exports that a weaker pound was going to give, we see that anyway. francine: we continue with elsa lignos and mark gilbert. we will be talking about the fed, and much more. we will speak with bob diamond. andet his bit on brexit africa. this is bloomberg. ♪

francine: this is "bloomberg surveillance." we are talking about economics, finance and politics. let's get straight to the bloomberg business flash. nejra: the london stock exchange says the ceo rolet will step down immediately, and be replaced in the interim by cfo david warren. the active shareholder was asked to withdraw the requisition for a general meeting. regal is in talks for a $3.6 million sale. the movie theater chain control by a billionaire says the company's are negotiating a price for regal of $23 a share. if created, the deal would create a bigger international rival for amc entertainment. santander will take a charge

amid a review of investment. spain's biggest bank says the fourth-quarter charge included 500 million euros related to a reduction in earnings relative to prior years. the impairment will not affect the calculation of the capital ratio. widened in the third quarter as the ride hailing leader struggled to fend off competition, regulatory scrutiny and legal challenges. the san francisco-based company reported financials to shareholders as part of a formal bid last night. that's the bloomberg business flash. francine: the north korean hiser, kim jong un, says regime completed the nuclear program after successfully firing a new intercontinental ballistic missile.

the latest missile landed in the sea of japan and put the united states in range of the nuclear warhead. donald trump was quoted as saying, we will take care of that situation. seoul.orter is in what has the reaction on the ground been? i am trying to get a comparable sense of what the people are feeling. and you know what, it's business as usual. i am on this shopping street in just a couple of hours ago, i noticed a couple people standing around the tv sets, replaying the kcna broadcaster from north korea with the announcement that they have now reached nuclear force. they reached this historical milestone. herebeen a bit of a shrug because they have been under this threat for quite some time. not a nuclear threat, of

course, but a threat for six d ecades. shrug on thet of a back of this news that they have an icbm that could reach the united states. francine: what is china saying? saying: well, china is they still prefer dialogue. they will have to be a team player in that and get all the parties around the table, but so far, there has not been any progress on that front. they said they will swiftly uphold the u.n. sanctions against north korea. no new sanctions or actions against this. are worldstephen, leaders and markets underestimating the threat of north korea?

goes back to the .entiment in south korea the japanese stock market was up today. the korean yuan was up again to a 30 month high. this is the best performing currency so far this year against the dollar in this region, up 11%. so, theyare shrugging it off. analysts say, what is more important than a nuclear missile test is the answer from the bank of korea. they have not raised rates and 14 out of 19 economists expect them to do so. they are looking at the economics of this moreso than the missile test. francine: that was stephen engle

in seoul. i don't know if this is the market taking a bet that nothing ugly will happen in geopolitics in the short-term. gop: you hear more and more analysts saying we will have to accept north korea as a nuclear state. general mattis said, that is impossible. we will not accept it. it will be difficult to have north korea hand over its nuclear program. francine: if the rhetoric were to heat up -- first of all, i don't know what that looks like -- do you look at twitter, market sentiment? what does that mean, mark, for exactly how we view events going forward? what's the haven right now?

mark: bitcoin. i'm joking. francine: bitcoin is going up. mark: you are seeing a benign inflation environment. 4% could easily see growth. we are moving into the end of this year stronger than expected. francine: what does that mean for actually how traders -- the fact that algorithms are more and more playing into the market, is that bad or good for geopolitics? humans don't think like robots do when it comes to trading. is that a positive when it comes to north korea? mark: i don't think algorithms are a massive indicator of geopolitics. i think the economic backdrop has been strong enough and central banks are still supporting the markets, floating the markets with liquidity.

you have enough good reasons to ignore. francine: what is the haven right now? would you trade yen? they are so close to north korea, that this is probably not a haven. elsa: it still is. given the tendency of investors to repatriate funds, the yen will still trade as a haven. francine: what is the dollar right now? not a haven? elsa: no, because given the fed's reaction function and expectations for them to keep ishtening, the dollar-yten very closely correlated to equities right now. francine: the u.s. have been trying to get russia and china on board in dealing with north korea. do currencies actually trade on this kind of diplomacy, or have they moved beyond that? elsa: not at all. i have heard several investors

demand that political events have very limited market impact will step at the end of the day, it is down to rate rises, global growth. the politics don't seem to matter much. francine: what about growth, in general? mark: i don't think growth has been fantastic and it has taken a long time to recover from the global financial crisis. but the economy seems to be firing on three and a half cylinders right now, if not four. they have generally taken their foot off the accelerator, but are not tapping the brakes just yet. francine: are central banks starting to price in this gradual organization? elsa: if you look at this vol right now, is hard to say we are pricing in this. francine: what is the biggest

risk to the global economy? you have argued the fact that we need a real person, an entrepreneur, running the fed, right? mark: we do. the risks are central banks could tighten too much. the high risk in yield credit markets that they are underestimating the default risks possible. generally, the scenario is quite benign. your friends been is here and it is hard to see anything that will dissuade investors from following that, at least into next year. francine: is there a currency that is more distorted than others? federations are not particularly stretched at the moment. it is look across g10, difficult to find any particular currency that is very undervalued and overvalued. francine: what do you make of the flattening yield curve?

powell and then testimony he gave yesterday, but how flat can it get? elsa: people are asking the question. is this signaling something bad around the corner for the u.s. economy? is the yield curve going to mechanically lead to a recession because banks are less willing to extend credit, or is this time different because the bank of japan is buying assets. generally, i don't think that is the consensus out there at the moment. one of the highest profile suspects in saudi arabia's corruption crackdown has been released after reaching a settlement at the top of $1 billion. the head of the national guard until earlier this month was read yesterday. at least three other suspects have agreed to a deal. great to have you on the program. what is the latest on the probe

and the status of the other prisoners? reporter: that is the latest, and the news that five people will be submitted to the public. still, we know that around 200 people are held up in the ritz-carlton. the government expects to retrieve around $100 billion in illgotten gains, allegedly. so far, the government has not provided any charges against any of those accused. we were not able to reach the prince or any of those held inside, or their lawyers, but they basically say, government says those accused have had access to their lawyers. so far, we expect that more of this will come in the next few days, as the others are being released. francine: $1 billion is a pretty punchy number. how is this being viewed back

home? some might see this as a way -- or the man leading a change in saudi arabia, he might be looking now to wind down this corruption probe that basically roused up the entire market. crackdown was perceived with a lot of fear by investors that started to move their money. investors, who in the past, would have been looking to invest in saudi arabia, now might be wary of what is happening there and might have questions about the rule of law and their ability to be on the case side of the law, in anything like this happens in the future. francine: very quickly. do you think the detailed charges will ever be released? >> we don't really know that,

but some analysts are saying, we don't expect any charges to be released and the process so far has not been transparent. none of those accused have not been released and we are not able to confirm any of the allegations against them. most of this is really shrouded in mystery, so far. francine: thank you so much. still to come on surveillance, and jay powell says the case for a december rate rise is coming together. we are back and we talk currency, as well as the yield curve. this is bloomberg. ♪

francine: this is "bloomberg surveillance." i'm francine lacqua in london. let's get to the bloomberg first word news. nejra: the london stock exchange ceo will step down immediately.

he will be replaced in the interim by cfo david warren. asked an activist shareholder to withdraw its requisition for a general meeting. north korean leader kim jong-un has had his regime has completed its nuclear program after firing a missile that puts the entire u.s. in range. state-run news says kim watched the test of the missile. in response to the test, u.s. president donald trump said he has held discussions on how to deal with the issue without offering further details. >> a missile was launched a little while ago from north korea. i will only let you know that we will take care of it. we've had a long discussion on it. it is a situation that we will handle. nejra: the u.k. and european union have reached an outlying deal on the divorce bill.

according to a person familiar with the situation, while european governments haven't signed off on it, negotiators have reached a preliminary agreement. e.u. leaders will have the final say. the pound strengthened after the report. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm nejra cehic. this is bloomberg. u.s., thein the outlook for republicans to deliver a tax overhaul has brightened after president trump addressed the gop senate holdouts. trump said the meeting was somewhat of a lovefest, adding that they want to see it happen. the senate budget committee has voted to send the bill to the floor for a vote as early as tomorrow. how does this affect the dollar? elisa lignos is still with us, as well as mark gilbert. do all of your forecasts assume there is a tax plan, or do you leave it out and change your

models if we get something? 3 at the moment, we have some trades which are geared towards the tax plan. our favorite trade is long dollar-swiss. whatever kind of tax plan we get, we are likely to get a tax break on overseas earnings. francine: anything else out we could do a good trade on? elsa: long dollar trades in general. it depends how much we get actual fiscal stimulus. the original plan was $1.4 trillion. there are going to be a lot of changes between now and legislation getting past. francine: mark, what does it help with? we had a great story on the bloomberg terminal suggesting that a lot of ceo's will focus on share buybacks, that they will give back to shareholders through dividends. how much does it help the economy? mark: it gives another boost to

the global equity outlook. u.s. stocks closing at records across all the indexes yesterday. there's nothing to stop stocks from going higher at this point. the fed rate rise is factored in for december. next year is a little cloudy on that. the u.s. economy is doing well. trump is delivering on something he's promised. it is good to see the tax , andes being agreed investors are just going to keep buying stocks at this point. francine: does it help with inflation? mark: the inflation remains something for central banks. you could see money being repatriated from overseas. that is not going to change the wage structure and the labor market structure very much. talked about the fact

that inflation can fall below 4%. the inflation outlook remains very benign even as growth is increasing. we've had a bit of a goldilocks scenario. francine: you wrote a piece on that, a must-read. this is my spread. goesan kind of -- this all back to what fed policy does and inflation. will inflation, as janet yellen believes it will? elsa: there are a number of central bankers wondering why we haven't seen it so far. a number of theories, digital technologies, structure of economies, demographics, high debt, but the reality is that the phillips curve is not dead. it may well have a kink. bank of canada was looking at the idea that as we get closer, we could see a sharp turn in the phillips curve.

i think it would be wrong to assume there will be no relationship. it just may take longer. mark: the yield curve has predicted 17 of the last six recessions, as the saying goes. you've got a flattening yield curve, but that doesn't signal the economy is going to move into recession. there's too much momentum at this stage. the wage puzzle, you may get inflation, but from this low level, you are probably not going to see inflation accelerate to the kind of levels where the central banks need to the raising rates. francine: if you are the fed, you don't want to take a chance. what do you do? you raise quicker than the markets expect you to? elsa: i'm not sure about that. we've seen central banks across the world ignore signals when it doesn't suit their narrative.

the bank of england ignored high inflation for many years. i'm not sure that the central bank is going to respond that aggressively and impulsively to the yield curve signal. francine: what does mario draghi do from here? mark: mario draghi has to keep his hawks in line. all the signs are that qe will come to an end next year and that will give them scope to raise interest rates. rate is where the interest is. there's a lot of room to raise rates. you've still got your foot coming gently off the accelerator. no one is hitting the brakes yet. that is a distinctive point. they want to slow growth, but they are not having to do anything in terms of trying to arrest inflation. it time to have a german as head of the european central bank? mark: probably is.

ll is saying all the right things about how he will run the fed. you've got jens weidmann as head of the ecb, i think you would see a similar shift in attitude from him. at the moment, he's the hawk on the committee. he will be much more interested in not frightening the hawks if he gets the job. it probably is time for a german at the head of the ecb. francine: you agree? elsa: i agree that it is not their role to be an outlier. at the moment, the euro area doesn't have inflation. as long as that is the case, very difficult to be a lot more hawkish. francine: thank you for joining us. our gilbert and elsa lignos. up next, we speak exclusively to bob diamond, the former boss of barclays. we talk bitcoin, emerging markets, and brexit.

this is bloomberg. ♪

francine: this is "bloomberg surveillance," where we focus on economic finance and politics. let's get straight to the bloomberg business flash. nejra: the london stock exchange had said the ceo will step down following a request from the board. he will be replaced in the interim by cfo david warren, while the chairman won't be standing for reelection. the lse also asked a shareholder to withdraw its recommendation for a general meeting.

regal entertainment has said it is in talks for a sale. the movie theater chain controlled by philip and chuck said the companies are negotiating a price of $23 a share. the deal would create a bigger international rival to amc entertainment. banko santander will take a goodwill impairment charge amid a review of investment in its u.s. auto lender. spain's biggest bank said the charge includes 500 million euros related to a reduction in earnings relative to prior years. the vendor said the impairment won't affect the calculation of its capital ratio and reiterated its goal to increase dividends in 2017 and 2018. loss widened in the third quarter as the ride hailing leader struggled to fend off competition, legal challenges, and regulatory scrutiny. the company reported financials to shareholders as part of a formal bid last night from a

softbank led consortium. that is the bloomberg business flash. passede: bitcoin has $10,000 for the first time. the cryptocurrency has risen more than 50% since october alone. the euphoria continues to drive it to new highs. warnings multiply that bitcoin is in bubble territory. take a listen. >> this is a bubble. there's a lot of fraud in anything that is as exciting as this. i think this is going to be the biggest bubble of our lifetimes by a longshot. >> let the record show i didn't say that. francine: is bitcoin in bubble territory or is it an opportunity? i'm pleased to welcome -- i'm joined by a man of deep knowledge of financial changes. he is bob diamond, co and

founding partner of at this merchant capital. great to have you on the program. bob: nice to be here in these beautiful new headquarters. francine: we get you on to talk about bitcoin, but we put the glitz. what is it? bob: i'm not going to top what mike and glenn had to say. course, butthy, of i think the real issue isn't bitcoin. the issue is the disruptive nature of technology. the things we are doing in greece, hopefully in italy over time, the banks we're operating across africa, all of them recognize the disruptive nature of technology, whether the application of block chain, processing, or delivery to customers and clients, financial services today is being disrupted by technology.

it is a big part of what we are doing. francine: are you telling me that bitcoin is symptomatic of the fact that people don't know what comes next? they are kind of investing in the dark? bob: i just think i'm the wrong one to comment on bitcoin and valuation. in terms of the technology, i think a lot of it is known. the efficiency of financial services. i think we know where we are going in a lot of areas. you have more experts on where bitcoin is going than me. francine: how will i bank in 5, 6 years? how long is the transformation? ib: one of the places that think represents a great opportunity is africa. banking is kind of a simple model.

technology can help leapfrog. in many developed economies, there's a legacy technology that takes a long time to replace. areass a tendency in many to say this is all going to be technology and the days of branch banking are gone. we're seeing in africa that the demographics are driving urbanization and increase in discretionary income. technology is driving a more efficient branch system and technology is straight to the customer. i think it is going to be a blend and a combination evolving. francine: do you think there will be a new way of consolidation in europe, and what are you looking to buy, if anything? bob: in the u.k. and in europe, we see phenomenal opportunities. we acquired a bank in greece.

we acquired a terrific management team. we are developing online deposit taking. given the consolidation, if you think about greece, prior to the crisis there were 25 banks. today we are the fifth. the nonperforming loans of all 25 banks are now on those four. the opportunity to be a challenger where we can get lending to small and medium enterprise businesses is critical. francine: is their appetite for lending? $16 trillionbeen in qe since the crisis. that has had a positive impact on large companies, a pretty good impact on big banks, but it hasn't gotten through to small and medium enterprise companies. focused 100% on small and medium mid-cap companies, the opportunity for

us to be lending for those small businesses, they've still been starved of financing opportunities. francine: if brexit turns into something ugly, you may be taking on risky loans. is it not too risky a business in the middle of negotiations with the e.u.? bob: we've talked about this a bit before. not just as a result of brexit, years ofrend over 30 increasingly global and increasingly universal is really broken apart through regulation. business models and financial services that are focused on countries and regions, that are selective in terms of their products, the new ceo has that business 100% focused on small

and medium mid-cap companies, and if that is your business, and you have a brokerage relationship, and you are doing research, you know them so well. the other thing we are doing is, rather than just provide new issue equity, but provide capital. we've introduced debt advisory. we've introduced private capital solutions. getting financing to these companies -- this is another number that is stunning. , 74% of theplc's private sector employment, is employed by small and medium mid-cap companies. francine: but if inflation is out of control, how do you model brexit? inflation is up, tariffs go up, interest rates go up, so a lot

of these businesses will need debt restructuring. is that the business you are going for? bob: they need access to financing and it needs to be prudent lending. relationship with that surrounds thelly ability to provide financing. francine: are there opportunities in africa? is there a space that looks very attractive given all the changes we're seeing in 2018? bob: we are doing a number of things in what i think of as the broker-dealer environment. for years, the big securities businesses had a benefit of capital by being in a bank holding company. we seeing a lot of those businesses come out of the banks. one of our most important investments is in south street

securities in the u.s., a standalone repo business. we wouldn't have thought prior to the crisis that that business would operate better than a bank holding company. because of supplemental leverage rules, a number of other things, it is far more effective. francine: are you looking at anything in italy? bob: we are looking at italy. one of the things i also find has changed significantly in the , postive or six years is financial crisis, we thought about core europe, we thought about germany, we thought about france. where worried about greece, portugal, italy, breakup. one of the unintended consequences is the pulling together of europe. probablyece and italy had to deal with the issues earliest, we are starting to see the recovery. quarters where

every country has had positive growth. francine: politics in italy, what happens if the five-star movement comes into power? bob: there's uncertainty. something we are recognizing is some political uncertainty. the question is, is it appropriately priced within those businesses, and are you investing in models where you are not dealing with the legacy nonperforming loans, but if you can get a good banking franchise in greece or italy, and you are not dealing with the legacy nonperforming loans, and what we like to think of ourselves is that we are good at operating, and we can get the right talent in the right technology, we can really be helpful to driving lending and growth. francine: what kind of business in italy? bob: banking. francine: is it to lend to small and medium enterprises? a very retail kind of -- bob: we think the single biggest

opportunity in many of these countries, the single best banking opportunity, is lending to small and mid-cap companies. francine: nothing in germany? they look healthy. bob: we don't see that as a great opportunity to be investing in banking right now. one of the things we find interesting is that the opportunities are stronger in the periphery than the core. that is different than it was post crisis. francine: what about africa? are there countries you see opportunities? positive on the medium to long-term opportunities in sub-saharan africa. we've doubled our investment in nigeria. we think it is a fantastic bank. it has managed the very challenging two to three years in nigeria with a weaker

currency, weaker oil prices. we've doubled our investment there. nigeriapportunities in and a number of other countries. you have to have a medium-term view. the volatility is higher. but the demographics are clear. growth,tion, population but most importantly the increase in the amount of discretionary income. francine: the way that the continent uses the mobile phone in banking, is there a single piece of advice that european banks should take on how mobile payments go through in africa that we should look at here? bob: absolutely. it is the ability to leapfrog because of the lack of legacy. people -- 70% of the people you would like to do

banking with have probably never been in a branch, and don't live close to a branch. if you don't have technology to reach the potential customers and clients, you're not going to have much of a bank enterprise. francine: is it just that they are big? bob: certainly block chain technology is something that is getting a lot more attention. but i think one of the big issues for the traditional banks is there's a legacy of decades and decades of mergers and acquisitions where the core platform is not something that can be turned around quickly. i think it is going to be a long process. in places like greece and italy, if we can get on the ground with a challenger kind of focus and operation, not a lot of legacy technology, certainly trying to

be away from the legacy nonperforming loans, it is a tremendous opportunity to do lending. francine: do you worry about the new kids on the block? bob: there's competition in everything. francine: how do you reach millennials? is that the golden grail? bob: i think it is a very important part of the demographic, but technology is the big disruptor. we are investing in banks. we are investing heavily in technology. francine: bob, thank you so much. bob diamond, ceo and founding partner at atlas. "bloomberg surveillance" continues in the next hour. tom keene joins me. we will be talking to alexander friedman. we also have mike amy of pimco. there's a thing or two going on with the yield curve. stocks in europe are gaining.

u.s. equities yesterday rising. asian benchmarks also higher on optimism that we will get u.s. tax reform. that overshadows concerns about north korea's missile test. we also try to find out where there's a haven. yen still a haven despite the close proximity to korea. british pound strengthening after the u.k. cleared a major brexit hurdle. this is bloomberg. ♪

francine: divorce settlement. the u.k. and the e.u. make a breakthrough as they agree the

brexit bill, but the irish question looms large. gains steam. president trump addresses senators in what he calls a lovefest. will he be able to win over holdouts? and, pyongyang fires what it says is a new type of missile. analysts say the whole u.s. could be in range. this is "bloomberg surveillance ." i'm francine lacqua in london, tom keene in new york. we are seeing quite a lot of news. i'm looking at brexit and geopolitics. tom: geopolitics as well. what is interesting is how high up it went. the trajectory was absolutely unique. much different than the images you see. straight up and straight down, lending so close to japan. francine: we have to look at the implications for that. let's get to the bloomberg first word news. taylor: we are starting with that story.

north korea warns that its atest missile can deliver nuclear warhead anywhere on the u.s. mainland. kim jong-un's regime conducted its first missile test in two months. president trump responded, saying, we will take care of the situation. on capitol hill, republican plans to attack the tax bill have picked up steam. president trump spoke to senate holdouts in a closed door session and called it somewhat of a lovefest. the senate budget committee voted to send the bill to the entire senate for a vote. a breakthrough on brexit. the u.k. and european union have agreed to an outlying deal. that leaves the issue of the irish border as the last major obstacle. the "financial times" says the u.k. accepted liabilities up to billion, but aims to pay half of that and spread it out over years.

bitcoin keeps defying the skeptics. the currency has gone over $10,000. the price has risen more than tenfold this year and is up more than 10% since october alone. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. tom: thanks so much. right to the data. let's get to it. the idea of green on the screen, good equity markets, curves not doing much. oil status as well. next screen please. i put in bitcoin in four decimal points. is that true? orncine, we have had three four bitcoin, right?

francine: no, i don't. true?t look, stocks are gaining. i think there's a lot out there. that seemed to be overshad owing in the concern over north korea's missile launch. stability reports, tom do you have them? the risk of the global asset remains. political risks loom. tom: i think this is a lot more

responsible. let's look at bitcoin. let's bring it up here. this is a log chart. not yet onfrancine, the hyperflation chart. so, we're not in a german bubble kind of chart, but we're getting there rapidly. complex chart. francine: a deal seems to be in place for hte u.k. and

amount britain will play whay when the deal is reached. with one hurdle seemingly clear, the irish border remains one of the last major obstacles for the u.k. and eu leaders to resolve. joining us now is our london bureau chief. david, does this work for theresa may to sell at home? can she say, we have agreed on how much we're paying the eu, and not be booted out? david: yes, the negotiators have negotiated on some agreement. that's a big hurdle to be achieved. it is a very politically sensitive number.

the f.t. were talking $120 billion. it depends on how you calculate in a comforted over many, many years. they could be spread out for decades they've come to some sort of agreement around the process, or the methodology to get there, but we are already starting to see some blowback at home. we've got polls that show the u.k. are only willing to accept a far lower fi gure it's not going to be easy for theresa may to sell this to the public. francine: does this mean more rebellion? david: it is possible, but she has also got the northern irish question to go. that's harder because our government only exists with the agreement of the northern irish thep. party and that is

question that is still unresolved. that's a bigger threat to mrs. may and her party at the moment. tom: i guess you're calling it a divorce. if that's the case, what is the united kingdom getting? europe is getting a lot of money. what does the u.k. get? david: we don't have those details at the moment. we know the u.k. is committing to the money it isigned up for. the u.k. does get a rebate for the budget contributions. we're not getting those specific details yet. it's all behind closed doors. the negotiators agreed on the principles. the $120 billion figure in the ainancial times," that was gross figure.

the net figure will be about half that. whatever the financial settlement is, it's going to bet better for the eu than the british side. the british government acknowledged here that the eu holds all the cards. francine: thank you, david merritt. we're also joined by our guest amey.or the hour, michael this is quite an eventful day. when you look at brexit, how do you view it? is it, steady as they go? are the negotiations as you expected? or is it slower than expected? >> it is slower than expected. i'm not sure today matters. it's more clear

on the currency and keeping yields lower, then perhaps today we will see a bounce in sterling. francine: mike? mike: i think it is quite a significant moment, actually. i think the reason is, the most politically charged aspect has been the bill. what we've seen is theresa may aly increasing the number over the last couple months. if she can get over that number, the scope to get goodwill on both sides is important. francine: what does that mean? is there a buying opportunity on bids? >> i think u.k. rates still

look expensive on brexit. so, you'd see the market rally. if we start to see some clarity on the brexit negotiations, i think we should see some rates,t in uk.k. certainly to other markets, but a good brexit is probably bad for the bond market. tom: walk us through this process. , rather thanay move to other countries? all, we arest of moving from mayfair, i guess that area to the city. we think the city is more attractive. in terms of why we are investing opposed to, as leaving for another country, our view is first of all, we are in

14 countries. we have a pretty robust group of folks that don't want to leave. this is an attractive way to do business. i don't see that changing, tom. tom: this goes to the heart of the matter. we're going to continue this discussion, huge newsflow this morning. in our next hour, really looking forward to this. we will speak to joseph stiglitz. we will speak to him. this is bloomberg. ♪

taylor: this is "bloomberg surveillance" and i'm taylor raikes.

they could be a huge takeover in the movie business. talksentertainment is in for more than $3 billion and that would create an international rival to amc entertainment. the ceo of the london stock exchange group is stepping down immediately. javier rolet announced next month he would be leaving next year. since that, there has been battle between the board and the tsi fund management. directors have asked that rolet leave the company for now. santander will take a charge in the fourth quarter. most of that has to do with a reduction in earnings at the u.s. auto lender. santander says it plans to boost its dividends next year and this year. that's your bloomberg business flash. francine: jay powell has told lawmakers that the plan for

raising interest rates next month is coming together. the labor market can get even stronger. >> we don't see wages signaling any tightness in the economy. there is no sense in the labor market. francine: for more, let's get back to alexander friedman. thank you both for sticking around. what does the flattening yield curve tell you today? i ask you every time. david: classically, a flight yield curve is a good indicator of a recession. so, everybody is focused on that. i think at the moment, we think a flattening yield curve is in part a recognition of the fed raising rates, when none of the

other central banks have gone on the rate rising kind of elevator . the problem with that, you anchor long-term interest rates. ist we think will happen central banks, as you go through next year, and central-bank start to become less an and dizzy a printing, that could cause long-term rates to back up as well. we don't think the flattening of the yield curve is particularly a sign of a recession. francine: how much do you worry about that? mike: i think there has been a strong messaging about who has been picked as the chair? the chair has been picked for his continuity. wage growth basically means a slow rise in interest rates.

theink what we'll see is competition on the board. we will see more of the same, a major shift in policymaking. at: looi look here, mike, qualitative tightening. and i guess that is what we will see next year. are we going to see it with stability? the italian two year zero is down at a negative interest rate, at least it was a couple days ago. are we going to unravel this with stability? mike: i think that study is one of the great questions for the next couple years. central banks in aggregate have been printing money for many years. what we don't know is whether there is a stop effect or flow effect if you stop buying, will that affect interest rates, or do you have to shrink the balance sheet?

it is probably more of the latter, but we are clearly going to go into uncharted territory. areral banks themselves approaching that as well. tom: do you just assume yields up, price down? mike: for a bond. tom: that would be a bond. mike: yup. if you argue that most asset prices in some way, shape, or form affect interest rates, there is a question whether broader asset markets come under pressure, if you do start to get a backup in long-term rates. they are clearly worried about the speed with which they withdraw from monetary stimulus. tom: let's jump in on this. you are living in the real world as well. you have to manage money about this reality of yield up, price down. what do you do?

david: a couple, comments before. the scope for mistake is quite possible. you also have to factor in that you have a new fed. the scope for communication uncertainty is also heightened. in relation to your prior question about the flattening of the yield curve, two comments first, although it has usually been a good predictor of recession, the timing on the tradition part is very uncertain. six months could be two or three years. interest rates are going to go up, and long-term growth does not look that great. that does not tell us anything too new. i don't know if mike feels differently. tom: let's come back. we will continue this discussion. this is an important conversation. it carries a surgeon and interesting weight. -- it carries a certain and

interesting weight. this is bloomberg. ♪

tom: this is "bloomberg surveillance" and we are fired up about washington and president trump. right now, francine lacqua in london and i'm tom keene in new york.

councel here on the state of the industry. opene give you an question to start. what is your biggest headache? >> well, we are an active manager, tom. we face a big industry disruption, passive investing. it's likely to continue and it is forcing active managers to reevaluate their business model. tom: ui kenw the answer -- i knew the answer, folks, but i had to set it up with alex. the answer is consolidation. i don't buy it that we will end up with three or four money managers and one will be pimco. will consolidation lead to better return? >> maybe i could start with that one. i don't think bigger is necessarily better.

one of the ideas with consolidation is, if you are in a target zone and your business is disrupted by a passive product, if you merge with another firm in the same dynamic, you have a bigger iceberg, but it does not solve the core challenge. e specialist at a g. and i -- there are specialized of strategies. tom: within this is the revolution of the interest of people and investment. this is an american question as well. losing thestry retail investor? >> that is a really interesting question, tom. certainly sense qe it has been very hard for active managers to perform. years, sentiment

has shifted for the typical retail investor undoubtedly towards passive investing. it's going to take it while, many years, for that to shift back. you have to remember one in important point. -- one important point. there are more pricing inefficiencies, so there is a natural equilibrium, not necessarily in terms of flows, but in terms of the performance. tom: i love your honest answer. today, anlater exceptionally important conversation with jeffrey currie from goldman sachs in the 8:00 hour. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store

near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. francine: good morning, everyone, this is bloomberg surveillance. tom kean in new york. we just get to the first reviews. taylor?

taylor: senate republicans have taken a big step to getting the tax reform passed by the end of the year. the senate budget commit voted to send to the entire senate. the lawmakers could vote as early as tomorrow. president trump spoke to republican holdouts in a closed door session and described the eeting as a love fest. president trump won the first round in who will be the head of the bureau. the judge ruled mick mulvaney can remain acting head of the agency and rejected a bid by leandra english who said by law she was entitled to the post because she was the bureau's deputy director. english is likely to appeal. opec meets tomorrow in vienna to discuss extending the oil production cutbacks. iraq's oil minister said the big question now is how long the extension will be. >> there are three options, hopefully the extension is agreed. we'll discuss them on thursday. either until the end of 2018 or

six months or nine months in 018 or one whole year. taylor: the current curb lasts to march. the housing shortage is in sight. the shortage of listings that has defined the housing market in recent years will begin to ease in the second half of next year. that's expected to slow price increases. global news 24 hours a day powered by more than 2,700 journalists and analysts in more than 120 countries. i'm taylor rigs. this is bloomberg. francine and tom? tom: wonderful perspective from stephanie baker in london on washington and the tax cut uproar. she joins us now with bloomberg business week. thrilled to have you with us, stephanie. everything reported last night from 5:00 p.m.-ish into the late evening was this was a great day for the senate. it was a great day for republicans. i don't buy it for a minute. where is your radar up on this

wednesday as we get to thursday? stephanie: yeah, sure, it was a victory to get it out of committee despite some of the opposition. but we still have nine senators o are wavering for competing reasons and can only lose two votes in the senate if they want to get this passed. some of those nine have said their concerns are being addressed but still remains to be seen. there are going to have to be changes to the existing proposals to satisfy them. you know, you've got deficit hawks who are worried about this adding to the national debt, and they've been making noise about how they are getting an agreement to add an automatic trigger to increase taxes. and now that could cause other senators to balk and oppose the deal. we don't have details on that right now. terri: i looked at the math in tom: i looked at the math and

my eyes glazed. brief us in london what is the revenue trigger mr. corker twants and no other conservative does, right? stephanie: the concern with the trigger is a, it doesn't allow companies to make long-term plans and b, it could be triggered in the middle of a recession which would be counterproductive and i think that's where the concern lies. you know, i think the details need to still be hammered out and debated in the senate. and then you've got the other side, the competing concerns from those two senators who think that the current proposals don't do enough to help small businesses and what they want is in turn going to add potentially hundreds of billions of dollars to the cost of this program. francine: i love somewhat of a love fest is what we have in surveillance when we're not hitting each other with tom. how much do you take at face value that he will get support in this?

stephanie: apparently he has described and completely hit it out of the park. but the other thing that sticks in my mind is how mitch mcconnell compared it to a rubics -- rubix cube and seems more like an apt analogy. francine: let's say it goes through, what do the c.e.o.'s do with the money they have left over, do they give it back to shareholders, is it only good for equity markets or does it help with the economy at the margin? stephanie: we had a good story overnight about that showing how many companies are planning to use the money for share buybacks and higher dividends with the economy at almost full employment, it's hard to see how this could add to additional jobs. some people think it will result in greater economic growth but not as much as they're projecting? francine: what about inflation,

alex? alex: i totally agree with that point. i don't see it translating to more productivity, but see it translating to support for the stock market which basically is good for the wealthy because they're the only ones that hold stock in the u.s. which further the income divide which is a real negative. in terms of wage inflation, that's the missing ingredient. we're at full employment or past full employment and we don't have it yet and there's lots of potential reasons for it, none of which seem to be accepted as the explanation, certainly not by the central bank in the u.s. tom: what did pimco say about the tripping point for deficit to g.d.p.. it can be america or any other country as well. have you modeled what the tax cut bill will do and where that critical point is of fiscal angst? >> the way we start is by asking how much will add to g.d.p. because there's two components to debt ratio, one is the level of debt and the

other is the level of g.d.p. nd i think the conresolution -- conclusion we come to to is because of the long time and the other will to be roll over some expiring packages anyway. the g.d.p. impulse even if the package gets passed will be of the order of a few tents of g.d.p. rather than anything more meaningful. so in terms of transforming either the growth dynamics or indeed getting you on to a fundamentally better path we would be skeptical. we would look at this as being something which would be a modest increase in the growth profile but really not more than that. tom: what do we need from the president, whether republican or democrat, i love what mike allen said on axios about monday, a total waste of a day to paraphrase what mike said. what does the president need to do today to zip his lip and

assist mcconnell and ryan towards victory? stephanie: he's already made overtures to meet the concerns of some key senators, susanne collins, for instance, who wants separate legislation passed to help prop up the insurance markets to counter the repeal of obamacare that's part of this tax cut package. likewise, he seems like he's willing to do almost anything to get this through. and i think what is heart to -- hard to game here is how much they want a deal, they want to be able to say they've got a tax cut deal passed and that's a hard thing to predict what they're willing to do to get it done. alex: he said no legislative accomplishles, this is make or break. tom: mccain and flake of arizona, are they the two most powerful people in washington

right now? stephanie: absolutely. and i think mccain is key because we don't know what he thinks. he said he has a lot of concerns about this bill and he was the one that torpedoed the repeal of obamacare. he and flake, they're not facing re-election. they're not beholden to him or the republican party, you know. they are the ones i think that are hard to predict what they're going to do. francine: thank you so much. bloomberg stephanie baker and mike amy of pimco and alexander friedman. we're getting breaking news out of germany where the commissioner for brexit of the european commission is talking. he says negotiations about finances aren't finished yet. we did find out overnight that negotiators between the u.k. and e.u. have said to agree on an outline deal on the divorce bill. i don't know we'll get a number, it seems unlikely but we'll get the calculations of how they'll settle this and the

thorny border still remains to be resolved and talking about a german business conferencing. island remains a big problem in the negotiations. we'll have plenty more on brexit next. this is bloomberg.

francine: this is bloomberg surveillance. we must go to seoul in korea and after two months of relative calm, kim jong-un said his regime completed his nuclear program after testing a new type of intercontinental ballistic missile which puts the bowl u.s. in range.

president trump told reporters yesterday we'll take care of the situation. joining us from seoul, bloomberg's chief correspondent steven angle. great to have you on the program. first of all, do we believe north korea? >> well, i mean, that's a question everybody is asking, of course. the main goal that north korea is trying to achieve will be to have this nuclear weapon, the sword as they call it, so they can go to the eventual pargening table and have dialogue from a stronger position. again, this is not something shinzo abe is something they are willing to allow them to be a nuclear power and that's what kim jong-un wants and tested today with what is another suspected to be long range i.c.b.m. missile that flew some 53 minutes to the east landing

just off the coast of japan. yet another sign that kim jong-un is not backing down in the face of these u.n. sanctions. on the streets of seoul at least, it's a festive christmas atmosphere. it doesn't seem like it's rattled the nerves too much here in the south korean capital. francine: where is china in all this? have they spoken? stephen: they have spoken and condemned this latest test that happened earlier this morning. but at the same time, they're also calling on dialogue and also have again reiterated their support for the russian plan, for the u.s. to stop its large-scale military exercises with south korea in exchange for north korea abandoning its missile and nuclear programs. again, that's not something that necessarily is feasible according to the united states but it is something russia and china have been pushing quite strongly.

tom: i want to go to your wonderful work in engineering and through toneian trajectory, you're so good at it. there's a massive thing wrong in the media, we show the missile cruising over, like some tourist missile landing in japan. the reality is this dog went straight up in the air and came straight down and that has the attention -- that map is gorgeous. i love this map, folks, but it doesn't capture the height of the trajectory. that has the attention, steve engle, of general mattis, oesn't it? stephen: he said this particular test was the highest of all tests of north korea. it went as high as estimated 4,000 kilometers so 2,500 miles up into the sky. and you're right, it was on kind of a bit of a trajectory but did go straight up and down

to the sea and not other alkido like the previous test did and wanted to see how high they could go. but again, the questions are again raised about when their kind of missiles, are they able to go out of the atmosphere and re-enter with precision? nobody knows. tom: what is the response of the chinese? to francine's question earlier, i get the idea mr. trump will respond. does mr. xi actually come out with a specific statement on this? stephen: xi does not necessarily make specific statements from the press and we often get it from the foreign ministry press spokesman from beijing and he made those same reiterations about their past positions. we are not privy of what he told donald trump in their meetings in beijing a couple weeks ago but doesn't seem like donald trump got many

concessions from mr. xi, at least publicly. francine: still with us mike and amy and alex. the market is sanguine about this, is it because they don't know how to price it or because they don't feel this is a threat? mike: i think that the issues, we've seen so many of these saber rattling events and the markets have now got to the point of which they acknowledge the risk but don't really know how to price it and move on. and what we saw yesterday. whether you look at the stocks the korean yuan and korean shoppers, it doesn't look as if people -- it doesn't look like people have regarded this as net new information on the aggression of north korea. francine: is this the wrong way to look at it? alex: you can argue both sides of it. first the markets are also discounting trump's comments,

the boy who cried wolf dynamic who said millions of times we'll take care of it. if you took it face value it would mean the u.s. would take military action. it does not seem to be the military case certainly in the market's view. he counterstatement is let's go to dinner but there's a 20% chance we'll crash the car. you obviously wouldn't go to dinner. there's not a 20% chance we'll end up in the military conflict, or the market doesn't think so. the question is what is the right percentage? francine: what is it? alex: richard haass thought it was almost 50% and thought it was by accident, meaning there is something the u.s. did perhaps to take out a missile while it was being fueled which led to a provocation. i don't think the market view is 50% and would have to say a minority case, 25% less than that. francine: interesting. i like to talk percentage. thanks so much, alex and mike, both back with us shortly. and in the meantime if you have

questions for either mike or alex or both, what you do is log on to tv go and underneath the tv screen you can steal a lot of tom keene's chart and we will ask questions on your behalf and it will be tom's pleasure. this is bloomberg.

♪ taylor: this is "bloomberg surveillance." let's get to the bloomberg business flash. profits grew bigger according to people familiar with the matter. the service lost $1.5 billion. uber is trying to fend off competition. plus is facing more legal challenges and regulatory scrutiny. the latest software for apple mac computers has a significant security flaw and the glitch allows anybody to log in without a passport and access private documents. the security bug involves the high sierra. apple is coming up with a fix. wells fargo is facing new problems with the regulator. according to the "wall street journal," the office of the comptroller of the currency sent a letter and the letter says it is weighing formal

enforcement actions because of inappropriates in the auto insurance and mortgage operations. that's your bloomberg business flash. tom and francine? francine: thank so you much, taylor. we've been talking quite a lot about the b.o.e. and stress tests and british banks passing the bank of england stress test and the clean bill of health coming with concern about a messy brexit according to mark carney. we also need to see the impact the budget unveiling had on the markets. back with alexander friedman of gam holdings and mike amy of pimco. mike, we touched a bit on guild at the start of the show but how difficult is for governor carney to look at interest rates? he raised interest rates not just because of the reversal of the emergency cut or can he be on a hiking path? mike: i think they certainly regard it as the start of the path. the question is how quickly they go on that path. and i think, you know, it was

relatively surprising the timing of the first one so they clearly want to make a statement i think with the first one. but i think the thing, if i were governor carney, what i'd want to see is some stability on the inflation rate to come down next year which i think is what we all expect and then we think about the growth profile and where the brexit negotiations are very important. if you get a smooth brexit, i suspect there is scope for growth to accelerate as we move through the second half of next year which makes the job easier. at the moment he's caught between these multiple challenges of weak growth and high inflation. and the fact that he wants to t off a zero at some point and want to get away from the emergency rate settings. francine: what is a smooth grexity and -- brexit and when do we find out, next week or a clue about the transition or another few months? mike: we're getting it now,

actually, and what we need to see is an agreement on the divorce settlement and obviously we need to see an agreement on ireland and once you have got ton a point of a transition arrangement and if you get there relatively early on next year, i think bitses -- businesses will feel better about penitentiary up resent and you see the bank of england raise rates again. tom: does this ballet increase the polarity and inequalities of income and secondly the inequalities of wealth in the united kingdom? alex: i know you'll talk to professor stieglets later but we're living in a unique period of time. let's take the u.s. first of all, the wealth disparity is back to the 1920's and wages have gone up 10% since 1973. the main culprit of that is central banks and the reason is all this quantitative easing

have made income yields basically nothing and everyone piled into risk assets and stocks keep going up and the only people who hold stocks are the well off and continue to further the wealth divide. the longer we have loose monetary policy and even with the tax bill in the united states it goes through, the more support there is for increasing this wealth divide which creates real social fabric problems. tom: for next year does political europe coalesce or do we have the fractious election sequence we saw this year? mike: it looks for the moment fiscal year will coalesce around better growth numbers. politics becomes a lot easier when the unemployment rate is coming down and growth is above trend and europe is in one of those situations now. obviously you have the italian elections and catalonia and it looks to us as if they will not be significantly destabilizing

events. you know, those are the two ones we all look to but at the moment it looks like the politics of europe sick electrically and sick electrically is important and - cyclically is important. tom: mike amey, thanks so much and alexander friedman as well. in the next hour, joe stiglets and mike lee will join us. this is a great setup. illiam lee of the milken institute and joe stiglets on our discontent. this is bloomberg. ♪ is this a phone?

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choose by the gig or unlimited. and ask how to get a $200 prepaid card when you buy any new samsung device with xfinity mobile. a new kind of network designed to save you money. click, call or visit today. ♪ tom: this morning your new tech word is trigger, not roy

rogers' horse but a revenue word. senator corker likes it. every other conservative on the planet does not. can the g.o.p., can president trump get a tax bill through with a revenue trigger? a breakthrough, a breakthrough i say on brexit. the e.u. wants $60 billion and a beach house and britain wants to pony up $40 billion with full access to the waterford crystal in ireland. and ireland is the key stumbling block. he's the arch liberal, i say arch liberal conservatives must consider on the new plutocracy and the american discontent. litz. ureate, joe stig francine, we say good morning to you. brexit, on the headlines today and am i right, this is the real deal this wednesday morning? francine: i don't know it's a real deal, it's a deal, tom, and i guess a step in the right direction. if you look at the sticky points in the negotiations, there's a lot -- there's e.u.

nationals and the irish boards and we still haven't resolved that but also the divorce bill. this is you and i divorce and i'm going to pay you money. it's amazing, actually, they haven't found a solution for that but it's because it will be difficult for teresa may to come back home and sell it without a trade agreement. but seems they finally agree on how to calculate. while we won't have a final number we know what the equation is. tom: we'll get clarity along the way on surveillance this morning. right now crystal clear with the first word news. here's taylor riggs. taylor: starting with north korea and the warrants this latest missile can deliver a warhead anywhere on the u.s. mainland. kim jong-un's regime conducted the first missile test in more than two months and president trump responded, saying, quote, we will take care of this situation. the united nations security council meets today on the matter. it's a breakthrough on brexit. the u.k. and the european union have agreed on an outlying deal on what britain will pay when

it leaves the block and that leaves the issue of the irish supporter as the last major obstacle. the financial times said the u.k. accepted liability of up to $120 billion but aims to pay half of that and credit out over many years. back in the u.s. on capitol hill, the republicans plan to pass a tax bill by the end of the year has picked up steam. president spoke to holdouts in a closed door session and called it somewhat of a love fest. the budget committee voted to send the tax bill to the entire senate for a vote as early as tomorrow. bit coin keeps defying the skeptics and have gone over $10,000 that it's an asset double. the price of bit coin has risen more than tenfold and up more than 50% since october alone. global news 24 hours a day powered by more than 2,700 journalists and analysts in more than 120 countries. i'm taylor rigs, this is bloomberg. francine and tom? tom: let me get through the

headline quickly, francine has the e.c.b. headlines as well. here's the data check. green on the screen. up, up we go, euro 119, a little weaker today. oil. there we are, jeff curry on bloomberg television and radio. second screen with a fix inside of 10, the great equity markets 9.90 and put gold up there for francine. bit coin is up, up, up. come on. it's ridiculous. francine, you have the e.c.b. weighing in on la coin to bit. francine: i don't know what to make of it, tom. tom: i do. francine: if you look at -- i shall not give you my thoughts on this except if you look at supply and demand, supply can just increase. if you look at just basic math, it should tell you something about what comes next for bit coin. this is what i'm looking at, stocks gaining and u.s. tax in focus, and look, south korea, north korea, it seems markets are just completely, completely

brushing that off. tom, this is what i'm looking at and this is my terminal, definitely my terminal of the day and probably my terminal of the week. what i'm looking at is basically the participation rate of primate males in the u.s. on the back of the jay powell testimony and this if you look at this, it may actually signal more labor market slack. it's a way of looking at the comments made at this confirmation hearing and a good way of looking at it as well. top: i'm going to tom: i'm going to whole foods with a vase with tulips on it and put it here. there's my tulip drawing to sketch it out so i know what i'm getting at whole foods as well. that's tulips. let's look at the chart. are you kidding me? bit coin log. airs matic and high person la -- everybody looks arismatc and this is a

hypebola. and up we go. it's not like this yet on a logged chart which is like you think of hyper inflation, german mark, zimbabwe, there's a log chart showing this amagsing convexity and maybe bit coin will solve our problems. kevin cirili is with us. i find it bizarre. i had to go back yesterday and look at roy rogers' horse trigger. what's a revenue trigger and how alone is senator corker of tennessee? kevin: senator corker is joined by the folks like senator jeff flake. this will come down to the wire. but the vote could come as early as tomorrow. we'll be carefully watching to see whether or not triggers are pulled, procedural triggers are pulled to set up what's known as a debate on the floor and

would essentially start the clock for there to be a vote tomorrow. but there are a handful of folks, not just the deficit hawks but people like senator ron johnson and senator dane and senator lankford and all of them have similar concerns and some about the deficit and the lowering of the passer rate. the bottom line is i think momentum is on republican leadership side to get this done by the end of the week. tom: maybe it's different than health care. here's a summary, from "the new york times," you've seen this, it made the rounds in the early morning. describe the benefits of a different tax plan and make it sound as if you're talking about this one. i love this one, talk about the plan's middle class tax cuts and ignore the middle class tax increases, pretend the future will never arrive and the final one is rush, rush, rush. kevin, describe in the marbla hallways of cirili land what rush, rush, feels like?

kevin: get it done by the end of the week. the bottom line, if this gets done and is voted on and signed into law by the end of the year, the middle class and lower income america will be filling out taxes in the first quarter of next year and look, some folks might not even see a significant tax cut but they're going to have to weigh the gains in their foulkes and -- in their 401-k's and the lowering of pass-through rate and where the balancing act comes into play and that's a political gamble the republicans are making right now. i'm told in the spring of next year when they get to entitlement reform that could be a potential fix-2 measure where they could address some of the issues of an imperfect tax bill. democrats, though, are really going to frame this as only having benefit for, as we all know, the wealthy. francine: we heard from the majors, is there anything they

can do to convince them otherwise? kevin: i think that these corporations are really going to have to suggest that this is going to benefit, also, to the middle class lower income and the republicans will have to try to argue and make that case as well, francine. but look, when you look at the 2018 crystal ball here, it's similar to some extent, some sources i'm talking to suggest that just as democrats of a few years ago said they had to pass health care reform and then they lost to republicans, you know, history repeats itself. francine: something we need to keep an eye on. talk to me about north korea. of course they're saying this nuclear push being complete means the entire u.s. is in range. has the president called the president of china? kevin: what we know is the president and the security and the intelligence community is

saying this is perhaps the most brazen effort yet on behalf of the dictator kim jong-un and the chinese have been working with the united states and those calls have been rather around the clock so to speak. i can tell you that this is really posing a geopolitical risk in the sense that the u.s. has to work with russia and has to work with china in order to address this. but the politics at home, of course, any day can make that even more complicated. dictator kim jong-un has shown no signs of slowing down. tom: thank so you much. greatly appreciated. let's get to joe stiglitz and william lee will join us from the milken institute as we pick up the pieces of the cirili report from washington. big news on brexit as well. in our next half-hour, joe stiglitz will join us from columbia university and want to talk about the new discontent

and globalization and talk to joe to upset every conservative about the new plutocracy. this isberg. ♪

taylor: this is bloomberg surveillance, i'm taylor riggs. there may an huge takeover in the movie theater business. world group is in talks by the second biggest chain in the u.s., regal for more than $3 billion and would create a bigger international rival to the industry leader aamc entertainment. the c.e.o. of the london stock exchange group is stepping down immediately. javier said he'll leave next year and since then has been a battle between the board and

t.c.i. fund management. directors asked rolet leave the company now. spain will take a $711 million goodwill impairment charge in the fourth quarter and most has to do with a reduction in earnings of the u.s. auto lender. meanwhile, they reiterated they planned to boost dividends this ear and next said santander. francine: a deal seems to be in sight, the u.k. and e.u. have set to reach the preliminary agreement on the amount britain will pay when it leaves the block. the outline deal needs approval by national governments and the prime minister teresa may and john claude are due to meet on monday. one hurdle seemingly clear, the thorny issue, the irish border is one of the last major obstacles for the u.k. and e.u. leaders to resolve. joining me from brussels is jones hayden.

how can we comfortable these are calculations the e.u. will agree to? jones: the negotiations are still going on but going on in a constructive spirit. this is what michelle barn yea, the chief e.u. negotiator said this morning at a speech in berlin. there is a better atmosphere around the talks and having this breakthrough just helps in that. for months it seemed we were in a deadlock and incriminations going back and forth but now seems to be progress ahead of the important meeting on onday. francine: we're listening to chief barnier saying the irish boreder is still unresolved. how difficult will it be to find an agreement? jones: we thought the financial settlement would be an issue but the irish border has come

up and seems to be sub planting the brexit bill, if you will. it's still a very complicated thing and reaches into all the areas of the brexit negotiations so you can see where people are saying you'll have to know more about the potential trade deal before we can actually define what the border will be in ireland. the irish government is adamant there be no hard border on the northern island. the northern island is equally adamant there be no distinction between northern ireland and the rest of the u.k. something will have to give in order to reach an agreement on hat issue. tom: you're a great student of this. frame what happened in the next 24 hours in june of next year or december of next year, is it a big deal or another moment along the way? jones: it's hard to say but looking at it, it does seem like a big deal. we've been waiting for a

breakthrough on the financial settlement for months now and finally we have it. it's only one of the three so-called withdrawal issues that the u.k. needs to deal with. so next up is the irish border. just remember, behind that you also have citizens rights and still have to figure out what the role of the court is going to be. tom: jones hayden, thanks so much in brussels. we're thrilled to have joe stiglitz with us later in the hour from columbia university and continue strong with william lee at the milken institute and their chief economist and he has a prodigious career at the international monetary fund and joins us well. the common theme of everything we're looking at is the lack of economic growth. can you say we've reached escape velocity to a better global economic growth or

european economic growth or for that matter american economic growth? william: we've escaped from prosperity and don't have wage growth because we don't have enough productivity. i'm starting to guess given the mandate to say we need to access capitol hill in order to proceed note job growth and good health, the one thing about accessing capital is we're loading up on a lot of debt. the zero rate environment has helped that but putting in a lot of debt encourages firms to give the money back to individuals or go for safe investments. that's where the missing ingredient is. people are focused on the lack of investment but i think the quality investment, you have a lot of debt, people focus in on tangible assets and focus in on safe investments and those tend to be the less productive ones. a lot of the research agenda we at the milken institute are looking at and in our conferences in london and the one in california, we're going to focus on how the quality of investment is holding back

productivity, in fact holding back multipolicy, which is what is the net interaction of labor, capital and technology that will boost real wages. that's missing and what is holding up my group. tom: a two year in italy with a negative yield and every company not investing. what do you mean by quality investment and where do you observe it? william: what the firms are doing issuing a lot of debt, the text books say there is supposed to be a source of capital to produce the capital stocks. but if you look at the chart of debt and capital stocks there's a great gap emerging and firms issuing debt but using the proceeds to pay back -- to get shareholders and buy back their shares because everyone is looking for the high returns. tom: francine, he's just trying to say financial engineering

except when he was at citigroup he wasn't allowed to say that. francine: bill explain it beautifully. full marks, when will it hange? william: starting with tax reform. people are saying all tax reform is going to do is promote investment. i think they're missing the point. yes, when you give people back a lot of money they tend to spend it and give it to consumers and it will boost inflation rates among what they would have been otherwise. when you give it to firms and incentivize them to go for high-risk investments that could be highly productive, that's where you'll get the growth that people are saying is not out there. of course that requires equity capital or you go the other way, where are most firms getting their capital? private equity. private equity is promising higher rates of return because they're putting in a lot of management hocus-pocus to

increase the productivity of management and where the secret sauce is going to be and one of the things we're going to be looking into in the next year in our research at milken is how do we get these high returns to be more productive and get you real growth and not financial engineering growth. francine: thank you very much. bill lee of the milken institute. we hear from the vice president and look for the interview at 8:00 a.m. new york and 1:00 p.m. in london. this is bloomberg.

tom: bloomberg surveillance from our head wars if london in our ine lacqua headquarters. and i'm in new york by bloomingdale's. william lee of the bill ken institute. mr. powell has to deal with the debate of kevin hassett and lawrence summers over growth. he's got to deal with the idea of tax cuts leading to growth. do they and can you help here? william: mr. powell has to deal with the inflation. where is the inflation? and that's where he has to become his own man and can't say he's doing what janet yellen did because he'll have to tell us what framework he's using to try to decide the course of monetary policy if events change and can't keep saying we're data dependent. when we get a tax bill and it

does end up being more productive than people think we'll get extra growth but his focus on slack which is what francine talked about earlier, how much slack is there in the economy and how inflationary will it be? that's the nut he'll have to convince the markets about. he'll have to tell the markets what framework am i using to calculate how much inflation will be for the extra growth and if there's a lot of enhancement and imprumpletes you might not get what they're saying you'll get. tom: do you gain rate cuts next year, have you given that up at the milken institute? william: there is a lot of interest for what our outlook is. certainly december is baked in but next year i don't think we'll get the full increment of three or four people are talking about given the current set of dots because mr. powell will have to be his own man and might do away with things and use fan charts. because i think that's misleading because it lacks credibility in doing that

stuff. tom: wonderful to see you again. william lee is at the milken institute and chief economist as well. coming up on bloomberg daybreak, an important conversation. he is the senator from wisconsin, the very self-made ron johnson. and boy, let me tell you, he's in the crosshairs of senate leadership and the president of the united states. ron johnson of wisconsin in the 7:00 hour. they are watching this in washington. stay with us. this is bloomberg.

francine: good morning, everyone. this is bloomberg surveillance. i'm francine lacqua. we're getting breaking news in opec and a lot of the reporters on the ground have been

speaking to a lot of the ministers arriving for the opec meeting. we caught up with the iraqi oil minister speaking on day one and he says he believes there's consensus among opec to extend the production cut. what we understand is opec but also russia because we did hear from the saudi yesterday he will extend the production cuts if russia would join them but we understand they may agree and extend oil cuts to next year without actually giving a formal consent and without talking yet about time line. tom: we'll see what they do. there is a new elephant in the room including u.s. oil production as well. to our first word news in new york, here's taylor riggs. taylor: senate republicans have taken a big step towards getting a tax reform bill passed by the end of the year. the senate budget committee vote to send the measure to the entire senate and lawmakers could vote on it as early as tomorrow.

president trump spoke to republican holdouts in a closed door session and described the meetings as a love fest. and president trump has won the latest round in the fight over who will be the temporary head of the consumer financial production bureau. a federal judge ruled the budget chief mick mulvaney can remain acting head of the agency and rejected a bid by leandra english who said by law she was entitled to the post because she was the bureau's deputy director. english is likely to appeal. real estate agency say the end of the housing shortage is in sight. a report by realtor.com has defined the housing market in recent years and will ease in the second half of next year. that's expected to slow price increases. global news 24 hours a day powered by more than 2,700 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. francine and tom? tom: he has not one but two redone books, joe stiglitz of

columbia university, the first ne, the euro, out as well now. we'll dive now into something that's been wildly anticipated by all within the economic community and that is the new lengthy afterward treatment of the classic, truly classic globalization and its discontent. the house you grew up in gary, indiana, right now has a skillo value of -- zillow value of $55,000. you grew up basic in indiana, paul samuelson's town of a long time ago. who you is globalization playing next to the average park in gary, indiana? joe: not very well. i did a film on that because it really illustrated how the confluences of globalization played out in a steel city. gary was founded as the largest integrated steel mill in the world in 1906. when i was growing up, it was the peak.

tom: a nirvana and great. joe: i didn't know it was so great because what i saw was inequality, discrimination, lots of labor strife, periodic unemployment. but since then things have gone down very rapidly. tom: the copyright on this book -- you had this in college and didn't read it but just walked around with it just to be coolbaugh you were reading -- ff read stiglitz. people are still talking, you wrote this in 2002. what's changed since 2002 in our discontent? joe: then i was writing about the discontent in the developing countries and had just left the world bank as chief economist and saw it very, very visibly. now the discontent is in europe and america in the advance countries.

you have president trump saying globalization is unfair to the united states. the developing countries are saying globalization is unfair to them. how can it be that something at was supposed to bring well-being to both developing and developed countries had ecome such an ineth make -- an inethma on the north and the south and motivated me writing this new book. francine: we're just getting breaking news out of barclays according to two people familiar with the situation. we understand that barclays top investment banker has told staff there needs to be more differen cheeation -- differen sheation in pay. and we understand he'll actually try to figure out who the best performers are and give them more money while cutting pay for those in the bottom half.

tom: i'm shocked. francine: this is interesting because we heard yesterday, they're looking at the pay structure and usually bonuses move in tandem for everyone but this makes a point in who should get the bonus. i think this is news, tom. tom: and they'll have to move out of mayfair because they can't make the rent. i get it. but then bring the pay cut to america, whether nominal or real wage adjustment. someone in retail in america, somebody making $22,000 or $28,000, would love to get the $32,000 of income. it's not happening. what's your solution from this great american discontent? joe: the key issue is how do we create shared prosperity. part of it has to do with the tax system and what is so disturbing is this new tax bill on the table is going to increase the inequalities in america. it's a huge tax cut for the

billionaires. actually a tax increase for those under $75,000 by the end of the next decade. it's actually going to exacerbate those problems of inequalities that have been at the center of our political debate in the united states. francine: does it mean professor trump will be more unpopular on the back of it. after all he ran on a campaign promising, i don't know if it's more equality but making america great again, this is all america, not just the top half. joe: that's right. in fact, polls show 2-1, americans think it's a bad bill and what's striking is they think it's a bad bill without seeing the details and when they see the details, i think they'll take a horrific deal. and the economic benefits which trump champions are not going to come out, you know. he's not a great economist, let's face it.

if you look what determines investment, even what the c.e.o.'s are saying, they're saying they won't take this pay with lower corporate tax and give it out in wages and won't spend it on investment but do more share buybacks, more dividends. a little to wages but the rest of it will go to those that have done so well under globalization. which one of my points, the wave of globalization was structured and may have increased g.d.p. for the united tates and europe but more than 100% of the gains went on top, to the corporations, and it was a corporate driven agenda. and it was actually globalization as we structured it, as we managed it is one of

the forces that led to the suppression of wages and the reason was obvious. we put american workers in direct competition with low wage, unskilled workers in china. it was almost inevitable and obvious that that system, if it was not well managed, would lead to lower wages in the united states. francine: which leads to my question, how do we manage globalization better? not talking about it philosophically, just in concrete measures from now, how can we handle it so more people feel included? joe: you have to have in part a tax system. you have to have a tax system. yes, the economics may lead to some people at the top doing better but then you take back some of that gains at the top and you use that for social protection and for education to bring up the skills of those at the bottom. you can do it, it's not that

hard. the scandinavian countries have done it pretty well. tom: we're not sweden. we went west to gary indiana and chicago and we're not sweden. joe: that's not the issue. the question is can we learn something from what sweden did? what you can learn is we can have systems of social protection. you don't need protectionism. this is the big divide. one of the reasons i wrote the book is to say trump's solution of the problem of globalization is actually going to make these workers worse off. tom: we'll come back and talk to professor stiglitz about the and talk nd pluocracy about discontent and that's market power and what it means for the rest of america. joseph stiglitz from columbia.

your briefing from columbia. we'll go coast to coast.

taylor: this is bloomberg surveillance. i'm taylor riggs. let's get to bloomberg business flash. news just breaking the last few minutes. barclays top investment banker told staff he'll sharpen divisions and bonuses, boosting pay for top performers and cutting it for those in the bottom half. that's according to people amiliar with the comments. it is said those ranked in the

lower half should see their compensation shrink. bloomberg's losses grew bigger in the fourth quarter. according to people familiar, they lost $1.5 billion. uber is trying to fend off competition plus is facing more legal challenges and regulatory scrutiny. the latest software for apple mac computers has a significant security flaw and the glitch allows anyone to log in without a passport and access credit documents. the security bug involves the new version of mac high sierra. apple says it's coming up with a fix. wells fargo is winding down the personal insurance unit after a series of scandals. the bank says it may be out of the home and auto insurance business in the first quarter. customers sued wells fargo for forcing them to pay for unnecessary auto policy. and that's your bloomberg business flash. tom and francine? tom: thanks so much. tiffany is the bellwether for luxury and they're out, out, out. the head lineups read pretty

good but in the press release japan ain't happening. same store sales -- ♪ moon river there it is on fifth avenue. walked by it yesterday, gorgeous, with the tourists taking feet as. francine, tiffany's, new management and they'll reinvigorate it, but same store sales are pretty tepid. francine: the japan story, a lot of japanese buyers come to london because of the cheaper pound. don't underestimate the f.x. effect it has when you're ying luxury tom: the press release notices they have lower foreign tourist spending as well. we're with joe stiglitz, laureate from columbia and celebrating an important book as well. when globalization and discontent came out, everybody said yeah, yeah, it's stiglitz, the guy from world bank and all of a sudden the strangest thing happened, people started buying it.

and this thing has sold a million copies as well. do they use it in courses, is it used in schools? >> one of the striking things is i wrote it. i hoped it would be used by economics departments. but by the political departments and sociology departments because it's a story about how our global society works. it's used all over the world. very heartening. tom: have they read it at the white house? joe: that i don't know. tom: let's go to 1,600 pennsylvania avenue. every chart shows the 1%. it's the 1% and 5%. it's that. even your biggest detractors agree with you, we have elements of a guilded age and of a plutocracy. how did we get out of the last one and dare i tragically say it was 1914 in the trenches of northeastern france?

joe: the critical thing we realize is one of the elements watts market power. monopolies. and we passed anti-trust laws. we started saying we need to have a balanced of power and gave workers more power. we created unions or strengthened the union. that's exactly the issue today. we've gotten an imbalance of market power. the new technologies have reated what we call net work extranalities. and they're gathering enormous fraction of the profits in our economy. you see the stock market going up and disproportionately to relative firms and when you have market prices, you raise prices and raising prices has a

deleterious effect on standard of living as lowering wages. it's a story once again of market power. francine: is it unlikely to change? we saw the protest vote if the people in charge, if they were elected on the protest vote haven't changing it, who will? joe: president trump doesn't fully under the complexities of market power. what you need is for the 21st century, much more complex anti-trust laws than you had back at the beginning of the 20th century. we'll have to rewrite our anti-trust laws. but we also need to have tax issues. tom: we talked about bit coin and we'll do it next because it's so much in the news. tell us about this book, the euro. it had an impact in europe -- i'm hiding it behind the mike. does that look good? the euro. tell us about the euro quickly,

what's the update here? joe: the issue of the book is that the signal currency was weakening the functioning of europe as one of the reasons europe was stagnating. since writing that book, of course, we've had the brexit vote, the question is how will brexit feed in to the future of europe? and how did the weaknesses in the euro feed into the brexit vote? tom: we'll do bit coin next. we need you in london on our new set with francine on brexit as well. he's joseph still hits, a liberal conservatives hate and they love to read his books as well. this is bloomberg. stay with us.

francine: good morning, this is bloomberg surveillance. coming up early, it's daybreak with alex steele who joins us now. taylor: who better to hear from

than curry who leads in goldman sachs. there hasn't been this much uncertainty in an opec meeting in a very long time. what's the downside for oil prices if we don't get a extension. and yesterday was the offices brand and he's been doing a lot of soul searching on bit coin and has a lot of interesting things to say. francine: i'm looking forward to that conversation. alex, thank so you much. alex steele coming up shortly. in the meantime we were talking about bit coin. it bounces the crypto currency has surpassed $10,000 for the first time taking this year's price surge to 11 fold. this comes amidst warnings the largest digital currency is nothing more than a bubble. e spoke to michael spencer, of nexgroup c.e.o. earlier. michael: the problem with any bubble, you have no idea if it doubles before it halves. but at some point it will go back a hell of a long way back down. now and then who knows, it will take 20,000 pretty damn

quickly. you can't short it, of course, that's the other thing. francine: back with joseph stiglitz. in january professor stiglitz said this. let's bring back the quote board where countries like the united states could and should move to a digital currency. professor, were you talking about bit coin then? joe: i was not. i was talking about extending the systems we already have mastercard, visa, let's into e whole system where we use digital currency. it's not bit coin but basically u.s. dollar based in the united states, in europe, euro and the und, but using electronics rather than paper. paper is so 19th and 20th century. why are we using paper?

that was the question i had. francine: if bit coin could be regulated, could it be viable? joe: look, one of the main functions of government is to create currency, and bit coin is successful only because of its potential for circumvention, lack of oversite -- oversight so it should be outlawed and doesn't serve any useful social function. we ought to just go back to what we always have had and this is just a bubble as several of your commentators have already pointed out, it's a bubble that's going to give a lot of people a lot of exciting times as it rises up and goes back down. what i was talking about is the medium of exchange that we use for transaction and what i was trying to say is let's move

away from paper into the 21st century of a digital economy. tom: this is away from your nobel prize and claim of economics. charles macca, 1841 talks about the peculiar follies in the behavioral component for these bubbles, whether it's 1637 and tulip bulbs, 1840. bring up the chart. here's a bubble in the making. this is log bit coin, i can't stand those charts. this is all you need to know, massive convexity, i haven't seen that chart since the tulip bulbs when we were doing "surveillance" by semifore. they're relying on a marxist theory of value and going back to middle marks and looking at the value of exchange. it's smoke and mirrors, isn't it? joe: precisely. tom: thank you. why? joe: the value of the bit coin is expectations of what the bit coin is going to be tomorrow. if the government says look,

the reason bit coin is being used is the circumvention, they can calm it down any moment and then it collapses. tom: we've got to get you back here and would love to have you join our london set with francine to talk about brexit and politics and also talk to you about the underlying value of exchange of bit coin. he is a laureate from columbia, two books, two books in one. there they are, the classic globalization is discontent and the euro as well from joe stiglitz as well. we'll continue in a moment with bloomberg radio worldwide as well. there's your foreign exchange report. sterling with brexit strength, 134.03. this is bloomberg. .

♪ the republican tax bill takes another step forward.

invoke could happen tomorrow. 10000 and closes in on 11,000. the bubble warnings multiplied. and in brexit breakthrough, the u.k. and european union entry on an outline, but issues remain. ournew york city, for audience worldwide, good morning. i am jonathan ferro alongside david westin and alix steel. let's get you set up. futures are a little bit from after yesterday's big day. high byher all-time attentive a percent for the s&p 500. 1.18. at dead flat. treasuries high today. just 11 basis points in the trading range on a 10 year yield. the gilt different for market. seven basis