anna: good morning from bloomberg's new european headquarters. manus: this is "bloomberg daybreak: europe." these are today's top stories. republicans scramble to save their bill. manus: extending gains, oil moves after opec and its allies maintain production cuts until the end of the year. most, andaccepted by a time to adopt this was fairly short. anna: brexit breakthrough at risk.

keeptened to derail a you -- i u.k. deal with the eu. ♪ anna: good morning. this is "bloomberg daybreak: europe." we have been tracking the tax story. manus had a bear in what we saw in u.s. equity markets. what we are seeing an asian session is where we are headed in the trading day. heain and the key role plays. the dow over 24,000. you -- the equity story from yesterday. we are expected to go a little lower. keep an eye on what is happening in asia. thetax story also affecting

dollar. the broader story for the week is different. keep an eye on treasuries. we saw treasuries holding their side. we have the oil price up around a third of 1%. expected, -- i suppose you touched on those equity markets. how broad is your rally? futures are at the bottom of your screen. how broad is the stock market rally? he've put together the breadt

indicator. this is where we are on the s&p 500. h ismeasure of breadt expanding and a is usually a sign of good health. the realized correlation, that is an indication of breadth. saysof america's survey that their respondents say equities are overvalued. anna: coming up on the program, we will be joined by the lloyd's ceo. joins us at 7:00 a.m. u.k. time. >> the white house is weighing a

plan to replace wrecks tillerson with mike pompeo. frustration with the top diplomats slow pace. a spokeswoman declined to say if trump had confidence in tillerson. the extension was beefed up with the inclusion of nigeria and libya. by keeping the 1.8 million and returnay stockpiles to their five-year average. although this is a scheduled event, we agreed to hold another meeting which will give us another chance to get together

in a large group of countries and assess the market situation, and also give us an opportunity to assess what else needs to be done based on market conditions. the u.k., the breakthrough in brexit talks that negotiators have been working to clinch next week is at risk. is eight, question quote, big stumbling block. northern ireland's democratic allow primey minister theresa may to govern, and threatened to withdraw their support for her government if she fails to back their position. lloyd blankfein's comments come after a roller coaster week for

the cryptocurrency. moves up andthat not feel safe. if it gets worked out and more established and trades at a store of value, and does not move up and down 20%, and it is liquidity in it, we will get to it. >> global news powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on bloomberg at top . up here in thegs asia-pacific, let's get a sense of how we are doing in the equity markets. it is a fairly forgetful week. it is the first week where we have seen declines on the benchmark. if things stay the way they are into friday, the magnitude of the drop is not so much. that being said, we are coming off what was another monthly gain, i'll 11 straight for the

asian pacific. china pmi is steady as she goes. growth, have a look at south korea also came out today, it did justify the be ok's rate hike. s rate hike. of forces at work. it was up 23% until a week and a half ago. komatsu getting an upgrade. closing higher in sydney. that is the state of markets in asia pacific this friday. manus: thank you.

the u.s. senate has suspended votes on its tax bill after the collapse on a key compromise to win a majority. republicans are scrambling to salvage the legislation. mcconnell said voting would resume at 11:00 a.m. in washington. schneider has been tracking this bill and all of its nuances. what needs to happen to get republican leaders to get the bill over the finishing line in the senate? five people seem to be holding back. that's right. they need 50 votes. they need them all to come from republicans because note democrats will vote for this bill. they got senator john mccain on board. they lost some ground when a deal that they hope would bring

on people concerned about the deficit fell apart when a senate rulemaking body decided they could not go that route. they could not do the trigger, which would allow tax cuts to be rescinded. they could not go that way. now, a trio of senators including senator jeff flake who is retiring who are concerned about the deficit say they are not sure they are going to vote for this. a have to bring them on board. hasn collins of maine problems with the repeal of the individual mandate in obamacare. they have to figure out how to windows votes to get it over the finish line. a few votesy lose because there are only 52 republicans. there are different views

as you highlight. future for the secretary of state rex tillerson? is president trump likely to replace him? many people are talking about the pellet -- about the possibility of a shakeup. jodi: several officials that bloomberg spoke to say the cia director mike pompeo is being considered for mr. tillerson's seat. been cleared tension between president trump and the secretary of state tillerson, a lot of it around north korea. thepresident undercut secretary of state's remarks on several occasions. in recent weeks that tension has grown even more. the white house is not saying they will replace him.

the secretary of not saying anything. ise and more, there discussion that he will be replaced, and perhaps by mr. pompeo. anna: thank you, jodi schneider. along, anticipate there will be some bill that got past. again, it wasn't the driver of my argument for why it makes sense for interest rates to move up gradually. it was based on where the economy is. we will wait and see what gets past. we will evaluate that package as it gets past. now, kitining us

juckes, chief fx strategist, societe generale. the sticking point seems to be deficits. these are the deficits going back under obama, bush, clinton, and h w bush. numbers do not equate to the deficit size. what does that mean for markets? have we absorbed that risk yet? markets are more worried that you are not going to get significant fiscal easing through the u.s. administration to get it passed. deficit, and so it is going to get watered down. and we are left in this slow growth world.

anna: this is what the market is watching, whether we get the fiscal boost or not. they're talking about the strength of the u.s. economy. how strong is the market? how strong could it be if we get this tax rate? you said this will move the dial on the u.s. economy. kit: i just listen to the people who say this might boost the deficit. if you are not quite to boost the deficit with your tax plan, you are not going to add that much in terms of demand in the economy. it will tragic along a little bit. that is what we are used to. up.fed is moving rates we will see what happens when they get the 2%. keeps on goinget

on its weight. -- on its way. not a lot is changing from the tax discussion. agobond deals were a year when we were super excited about what trumps fiscal plans were. i am very pessimistic about europe. not a lot has changed. changed,t a lot has but you talk about bonds. the bond market did move aggressively yesterday. --iette: up anna: up to 2.4%. kit: i'm excited about that. should we be? there is a line coming through that the u.s. needs to have a tax code where the wealthy lift others up.

that is from the former president, mr. obama. moving to the upper .nd of a range the upper end of that range has come down quite a lot. said i am struggling, it correlates with that yields so closely. the idea that we can get to three deals like a pipe dream. i do not think we will get a tax plan that does that. where do we had on the dollar? it has not joined in with the euphoria around what president trump might deliver in the u.s. tax lan. -- tax plan.

moree seeing outperformance by tips. do we think inflation is coming back and the united states? we've taken tips yield above 50 basis points. six times maybe now in the last year. day, even at the the real yield week we will be under one. that is very low. you're not going to get a super strong dollar out of a sub 1% yield peak. that underlines it. ifthe moment, we are seeing this tax bill gets through.

the fed is going to hike. but seek how far we go -- let's see how far we go. anna: thank you very much. kit juckes. woody johnson, the u.s. ambassador to u.k. joins us for at 10:30ive interview a.m. u.k. time. manus: can we move, can we drain the global glut? brexit breakthrough at risk with the irish borders, still a main sticking point. we discuss the impact this is having on the divorce deal. this is bloomberg. ♪

manus: it is 2:20 in the

afternoon in singapore. stocks are ashamed lower. we are waiting for the compromise on the tax deal in the u.s. asia has its biggest decline in almost a year. anna: let's go to vienna. opec and its partners have agreed to extend oil cuts to the end of 2018. a day of talks show the strength of the unprecedented alliance between saudi arabia and russia. analysts said moscow was reluctant to keep going. 2018 will matter what we have

done. we have seen an increase of global compliance from opec and opec countries. october are very encouraging, and we expect november to reflect this as well. ours: for more let's get to bloomberg markets middle east anchor. good to see you this morning. did we get a little bit of a surprise? you've got libya joining in. i thought that was a surprise. you have libya and nigeria. give us the lowdown. yousef: what is fascinating to see, these two heavyweights, russia and saudi arabia side-by-side sharing what they

thought is a competent outlook for energy in 2018. some have described it as a bromance. at the end of a very long day here in the ni, a little surprise. got in terms of inclusion of libya and nigeria, what happens now is not a formal cut or cap. it is locking in a pledge to not use beyond 2017 levels, which shows you how opec non-opec is willing to refine this deal a little bit and push these expectations to the side. the russian minister talks to me earlier. pledginguntries are for full conformity. it is very important to us. andives us an opportunity

assess the progress toward rebalancing and take actions which are needed to achieve this. nigerialibya and combined at 2.8 million barrels per day. there was concern that could strengthened 2018 and try to revive their respective industries. as with many things in the oil industry, this may depend in what happens in the united states. this could be an easy win for opec. yousef: absolutely. there was an expectation that we could get communication on what unwinding would look like as a strategy. they did not feel this is the right time to do it. let's see how the broader strategy works in 2018, and we can talk about unwinding the agreement. clearer timeline

to make the necessary decisions. they are shrugging off the shale threat for 2018. he says it will be the same as 2017. manus: thank you very much. yousef gamal el-din. it is almost as if the russians and opec members got what they wanted. deal hands the shale producers on a plate the opportunity to lock in at 60, 62. was it really that good of a deal? dealit might be the best you could do. the reality is, the global economy is doing as well as it can. it is improving on a global basis. the reality of it technological improvement of shale means that

you do not squeeze them out of this price or a price below this. everybody has got to make do. there is plenty of supply of available if prices fall even marginally. rangeg prices in our might be all the big producers can aspire to do at this time. and make such hey as there is while the global economy is this strong. does this throw up opportunities in your fx universe? kit: not many because most people perceive this as temporary. there is not massive upside or downside. i think the canadian dollar is a bit cheap. anna: thank you very much. kit juckes, chief fx strategist, societe generale. he is staying with us. i deadline is looming. can the u.k. in the eu reach a

deal on ireland. that is next. this is bloomberg. ♪

anna: this is "bloomberg daybreak: europe." the asia equity session is in limbo. the conversation on the senate floor is being pushed into friday. that is causing many markets to pause. we are flat on the fx story in tokyo. let's get an update on what is happening in the markets. markets are equity pretty much trading sideways.

it is a mixed picture if you look across the region. here is the picture on the world map. closing.i australia rebounding after the losses yesterday. a mixed picture overall. 24,000.hit the s&p 500 on track for its longest run of monthly gains since 2007. at the dollar, a bit of weakness coming through. we had afford a winning streak. weeklyn track for its gain. if we look at the next chart, we are looking at the 10 year treasury yield. of 2.43% in high yesterday's session. we are at 2.4% right now.

at a key level for the 10 year yield. the curve flattening in today's session. sterling, has been gaining this week on optimism we will see progress in the brexit talks. white, to week is in yellow. you can see where the zero line is. it has been getting less bearish. manus: thank you. that potential breakthrough on brexit is at risk. the issue, the irish border. it is still a major sticking point. the u.k. has been given to monday to present a solution which avoids a hard border. u.k. wants an agreement before talks move on to trade.

is kit juckes, chief fx strategist, societe generale. just when we thought we were going to make a breakthrough, there seems a tractable issue which is the irish border. you think they will get a deal done by next week? is this the horse trading of politics? kit: i would be surprised if you got an all-encompassing solution for a tractable problem by this time next week. if ever i can needed kicking down the road, we will sort out an agreement. we cannot reach a final agreement if we do not know what the arrangements are between the u.k. and the eu after brexit, but we will agree to find a solution. it will be a better way of moving forward. we won't get it. they are trying to kraft

wording that is acceptable for both sides, some wording that makes enough progress for the irish but does not destabilize the u.k. government. is crunch time for u.k. assets? i'm seeing conflicting reports on how much the deadline on monday matters. mondaye is no solution for the irish border, do we see a lot of canceling? kit: our starting position is to be gloomy, and pessimistic about what happens. the thought we might get a deal and move on to trade talks was positive. we are back to where we were, which is despondent. we will see sterling fall back. reacting more to

good than bad news, just because the plan is very low and cheap. the consensus is very pessimistic. stanley put out a note about a potential labor administration. the risks of the labor government rises. sayingstanley was dispute which you have had that favors capital and not labor, and jeremy corbyn says, you need to think about tax rates going up, nationalization which favors capital over labor the past 20 years. jeremy corbyn says you should be worried if we are potentially coming to power. how much discussion is there in the trading rooms? kit: the discussion about the

election risk, i would have to circles foround in a number of reasons. the first is, were we to have another election, that is almost , it throws all the balls in the air. basiss are priced on the that the u.k. will leave the eu, and it will do it in a messy -- and without a good plan for the future. a lot of has some is him around. an election can change that. that would be good for sterling even if it was not good for other assets. the dup could throw the government into turmoil, but with the dup do something that might bring jeremy corbyn power deliberately?

big is a stamp on your own toe. ,ost people end up thinking this is going to be messy and difficult. as soon as we talk about the irish border, we realize that , theg to please the dup irish, and the british government is hard enough to get in the way of what needs to be done, which is to not go back and opened a can of worms that was closed with the good friday accord. toa: there is a lot of work be done to sort this out. chart, it emphasizes how the markets are expecting volatility around the middle of december with the eu summit, the bank of england meeting. see a labor government looking more likely, what volatility that beat creating?

you talking about the party that is talking about re-nationalizing utilities. that would be looked at with new eyes by the investment immunity if we did see it looking more likely that we end up with the jeremy corbyn government. kit: if someone mentioned the words, another referendum, or a brexit deal that tried to stay in the single market as much as possible, you trade sterling 10% higher. if someone said jeremy corbyn -- a hard brexit, policy -- economic kit: if we go into an election i think all we get is volatility.

what has happened over the past it is very weak and does not get up very much, and we get excited about moves. it does not take much to knock it back. step forward to steps back. if we talk about europe in a broader context, we know what is going on here. if we look at the data from you've got this as it which is thatnce nice growth rates, nice unemployment, we are still not getting inflation on the upside. iceland has had wage growth that 8.5%. it takes a lot of wage inflation .

the european story is, there is no reason not to let the economy run when inflation is this low. there is a debate in the european central bank, do we have to get rid of negative rates. you have a similar debate in japan. why would we normalize when inflation is way below target. anna: doesn't politically get difficult to justify extending into the future. we saw at the last ecb meeting, extending into the future. now we have rhetoric from the usual corners, germany being one of them, about whether that qe program should continue. is herdingdraghi

everyone of his cats here. they extended because they were taken aback by how much the they're trying not to let the currency run ahead of itself as they talk about normalizing. a few months of currency going sideways. now,are in a better place but equally the commitment to ,eep on going at this pace until september of next year, seems a solid commitment. we're debating, do you have a hard stop, when you see the first rate rising in the spring of 19. good: if the data gets as as it has been recently, if it picks up momentum in 2018, you could see a change in language come through.

the risk in euro may be topped out at the moment. the dollar rises, the euro but if you turn the data more aggressively, you could get a spike. is that a fair assessment? , i don't think you have the euro dollar back above 21. we might not be able to hold it. there is an elastic trying to pull the euro towards a fair value level between 125 and 130. manus: what is it that weddings that band -- what is it that twangs that band? don't have itthey short very policies in place, it

wants to go back. the japanese are in the same position. as much as the ecb white -- might not want people asking questions about the future, every time we see a populist threat and europe rise, -- thank you very much for joining us. kit juckes, chief fx strategist, societe generale. manus: a reminder, if you are a bloomberg customer you can watch this show on tv . conversation.he blankfein's views on bitcoin. everybody has of you. -- everybody has a view.

he talks about his banks strategy. anna: america's costly hurricane season, we will look at the financial impact on united broadernd on the insurance business. this is bloomberg. ♪

manus: welcome back. this is "bloomberg daybreak: europe." the s&p is on track for its longest winning streak since 2007. the question is, have the technology stocks really recovered? that's get your bloomberg business flash. withs get started

nippon. they have failed to reach an agreement. they expand -- they plan to expand sales. anna: thank you. it has been a wild week for bitcoin, with the cryptocurrency jumping 50% -- 15% before plunging 20%. goldman sachs ceo lloyd blankfein says it is too early for his bank to have a bitcoin strategy. speaking alongside michael bloomberg, he said he does not consider the digital currency to be of value. >> it is not for me. there are a lot of things that were not for me in the past that

worked out well. it was 20 years forward and it worked out, i could tell you why. based on everything i know, i am not guessing that it will work out. i cannot say. i cannot say it is a fraud, because it might. confuse bitcoin with block chain. there is a technology where you can have different accesses the data. people can control it. you can see who is doing what. there are places where that is useful. the bloomberg system is a block chain. usersd of having the control it, we control it. it has all the attributes of that. bitcoin is something very different. bitcoin and other currencies, every day you have a new one, is something very different. whether or not the governments of the world will lose control of monetary policy, i am

skeptical. they are not going to let that happen, and they should not. >> something that moves up and down every day does not feel like a currency. lloyd you grew up in a commodity business. trading the unregulated world of bitcoin? where is the fraud going to come? all --first of >> is a buyer? is it seller? prepared -- you can perpetrate trial. it is hard to accumulate cash. the world is going in a different direction. of cash,getting rid everybody is paying with their smartphones. people who are begging industries have a sign next to where they are sitting, people

who really need help from society, they are begging for money. have a sign with the code. if you want to give them money, point your cell phone at the code, hit a button, and they account.nk account that is how they are getting their money. china is heading in that direction and they have gone out long way. they are getting rid of cash. you can stop the black market and drug dealers, and you can track where the currencies are going. we are not going to go in a different direction. america may not be ready to go there, but we may be left behind. much more efficient way of paying for goods and services. whate already knows everybody is doing with their money. nobody complains about that. thinking aboutbe banking investment strategies with bitcoin. lloyd: no, i don't.

we will see. if it works out and gets more established, and trades to store value, and does not move up and down 20%, and there is liquidity in it, we will get to it. the original question was, when he small business have to think about their bitcoin strategy. i would worry about opening the doors and producing things you want to buy. there great conversation with goldman sachs ceo lloyd blankfein, and our own bloomberg owner, michael bloomberg. the hardest part of china's stock market, maybe not as much largecoin, switching from cap to smaller cap stocks. this gives you perspective on china's biggest companies that have fallen by more than 2.5 percent this week. it is the biggest loss of 2017. it had been the best place for

chinese investors to put their money until the government signaled it has concerns about the pace of its gains. money has flowed into beaten-down small-cap stocks. joining us from beijing. drop inbiggest weekly 2017, why would you not take money off the table anyway? you have a risk of deleverage. you have a cracking year. take some money and go. bithat might be a little about what is at play. there are deeper issues, some of which you touched on. deleveraging has emerged as a specter cents the party congress ended last month. we have seen that affect the stock market as well. this rotation triggered quite significantly by a stock.

this is china's biggest liquor maker. it is the most valuable alcohol company in the world thanks to a .ig run-up it don't its value this year. beijing has not seem happy with those gains. a couple of weeks ago the state media hit out at the rally, saying it was too fast. investors took a signal from that to get out of these big gaining big caps that have been the engine for the chinese equity rally this year, and put their money elsewhere. that is why we are seeing a flow into the small caps now. the states in china not shy, trying to ring in speculation. in speculation. >> the stock market is something

they pay attention to because it is dominated by retail and business, almost 80% on the mainland stock market, which is the world's second biggest equity market after the u.s. retail. it is a political issue for them as well. that is why they are more paternalistic toward the equity market than they might be toward the bond market. it is much more led by institutions. currency close ball into the stocks basket, and they pay attention to that one as well. it attracts attention. in 2015 we saw that big boom, which was driven by a good from retail investors. it is on their radar. manus: thank you. we are getting set up with the last trading day of the week. 2.4%.t in asia is down by

that is a big smack. is that catching up with the shakedown we had in the technology session earlier in the week? anna: some of that was unwound yesterday. some of the moves we saw and the united states, the s&p 500 up by 0.8%. it was broad-based, what we saw. the senate is suspending its tax bill debate. that sent republicans scrambling. keep an eye on the banks. .anks index rose by 1.3% that is the highest since 2007. that is predicated on deregulation and rates. punchy movetty yesterday. anna: a record-breaking u.s. hurricane season comes to a

close. how the business is dealing with the hurricane season. how the brexit preparations are going. this is bloomberg. ♪ is this a phone?

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manus: good morning from bloomberg in the city of london. this is daybreak europe and these are today's top stories. manus: senate republicans scramble to salvage their bill -- bill. the vote is suspended until later today. maintaining production cuts till the end of next year. >> the project presented by a group of miniatures -- ministers was accepted by most. manus: brexit breakthrough.

at risk. opposing viewpoints on both sides of the irish border threatening to derail a deal with the eu. it is 7:00 a.m. in the city of london, 8:00 a.m. in europe. it is daybreak europe and a lot to chew over. much theas not so trump dump but then this kit -- mccain boost that flowed into the european complex. ftse futureser, down by eight books. sterling still strong. steady.s the debate is, the risk for markets 2018. do you deleverage more? under a little pressure and opec and non-opec come together with a meeting of the minds.

nigeria,k in libya and but it is the pound strength that knocks u.k. futures a little. that is the state of play. we should have a little bit of a stronger opening in the european equity market. politics in germany will come comesend center but it down to if theresa may can save the republic of ireland and unions. both making comments in the last 24 hours. what has been happening in the last 24 hours, some of the strengths we have saw in the u.s. session and what are the futures telling us? what we will see at friday's opening, it looks to be weaker. .2%.es down we are still looking for a negative start to the trading day. that stalling in the tax process the dollar.dge of

their slideolding after we saw yields going higher than 2.4%. isn't that telling you something? we all got so excited about the 2.4% level, isn data later from the u.s. and in the headlines come in the move in the oil price this morning. the ongoing production cuts story from opec and friends. it seems they have a few more friends on board. up .2% in the oil markets. they managed to surprise again by including nigeria and libya in the cuts. manus: goldman sachs said they didn't expect libya or nigeria to produce more than their current limits in 2018. will review-opec the situation in june, giving themselves the caveat to move. you mentioned the u.s. treasury market breaking above 2.4%. u.s. treasury bonds, these are the futures, up by under an

eighth of -- .8%. -- 18 of 1%. the 10 year breakeven rate, which is the measure of inflation expectations, is on pace. the biggest one-day move since september. you have the french o.a.t.'s yield rising. this is a conversation we are going to have with the lloyd's ceo? . we will talk about the implications of the hurricane season. every other ceo seems to have an opinion, does she? let's get your first word news with david inglis. stephen: mitch mcconnell has suspended votes on the tax bill until later today after the collapse of a key compromise to a senate taxy for

overhaul. republicans scrambling to salvage the legislation. the gop has a slim majority in the senate and can only afford to lose two members if they want to pass the tax bill without democratic support. in the u.s., the white house is weighing a plan to replace rex ,illerson with mike pompeo according to three administration officials. it comes amid frustration with the diplomat's low pace of hiring and clashes with donald trump. declined toration fullout and said they had confidence. usa -- diplomats have -- the u.s. president had been penciled in for a working visit at the start of the year to formally open up the new u.s. embassy in london. however, according to the daily telegraph, citing a senior u.s.

diplomat, the trip will no longer take place and the new date has been identified amid a public spat with theresa may over trump retreating videos posted by the u.k. far right group. extending gains after opec and allies agree to prolong production cuts through the end of 2018 in an effort to drain a global glut. the extension was beefed up through the inclusion of two members, nigeria and libya, formally exempted. the group aims to return stockpiles to their five-year average without overfeeding the market. this is a also agreed scheduled event to hold another ministerial meeting in june of this year, which will give us another chance to get together in a large group of countries, ss the market situation and give us an opportunity to assess what

else needs to be done, if anything, based on the market conditions and the progress. breakthrough., the in brexit negotiations have been working through is at risk. the irish minister is saying the border question is a big stumbling block that needs negotiations are not where they need to be to make progress. meanwhile, northern ireland democratic unionists, who have more clout than ever before theresa may allowed to govern in london, threatened to withdraw their support for her government if she failed to back their position. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more top stories on your bloomberg at top . -- asia is trading week, let's give you a sense of the region. weei on your bloomberg.

down about 1/5 percent. fairly subdued in a forgetful week across equity markets in the region carried down for a fifth straight session. monday through friday, first time this week. should tell you how good things have been in the asia-pacific. out, steadyers were as she goes. inflation out of japan and south korea, as well. same narrative. it is not where it should be, but growth is. south korea gdp justifying their rate hike we got out of the bank of korea on thursday. to give you a sense of what is happening across these markets, japan is -- as well as sydney. down 6.8%. accounts for about two thirds

of the points declined on the regional benchmark. there down about 2% in close of hong kong. 5% in komatsu. banking group getting a little relief. that is your markets this friday as we head into the weekend. in hong kongnglis for us. a record-breaking hurricane season finished in the united states yesterday. for the first time, three category 4 storms hit u.s. shores including hurricane .arvey it was the costliest season yet with about $203 billion of damage. joining us now to talk about her business's part in that story inga beale.ings, inga inga:

out $1.7et paid billion for harvey, irma, maria. seasons this current ranked against previous ones and what do you learn from it? inga: this could be one of the costliest years on record. we are still having to count the cost and when you see some of scenes, youtain -- can find it difficult to make a final assessment of the damage. it is going to be one of the costliest years on record and what it does for us is focused never mind on climate change and the impact that is happening, particularly on rising sea levels and the impact that has when there are these disasters. manus: the human side of this story is something we focus on, as well. the market side and trying to get the balance right sometimes. you talk about the new concentration, climate change and other dynamics -- what does that do for new product development?

i know there is catastrophe insurance and a whole variety of product, but what about looking at the future and what it is you deliver? inga: one of our major competitors seems to be government. quite interesting when we look at this because if you look at the history of some of the major losses in the u.s. over many decades, 50 years ago, insurers are paying more of each catastrophe loss than they are now and each decade, the government has been taking on more of the risk. that is a challenge for us. of course, governments don't want to see any of their voters left stranded so they will be forking into taxpayer money and footing bills to get people's lives back together, but 50 years ago, insurers were paying 80% of the bill, now 20%. it is completely reversed. one of our challenges in the insurance sector and it is a very important part of

supporting human progress and the way the world has to move on is more and more governments seem to want to step in to look after their own citizens and that is one of our challenges. it is happening in mature markets and is predominant in emerging markets where an sure to his well-known and they don't buy much insurance. abouti want to ask you other types of insurance, innovation in the insurance sector. a lot to talk about and you have been talking about if -- artificial intelligence, driverless car's and the frontier of technology and the insurance industries role in all of that. what headwinds do you see for driverless cars? the dangers if your car was hacked, breaks remotely applied and all the new challenges thrown up for your industry. been atoyd's has always the forefront of new risks and cyber attacks are one of the big risks we face in the world,

really, when we think about technology and digitalization going on around us. lloyd's writes about a third of the cybersecurity market globally. all of these provide new threats and risks and it will change the face of some insurance. we go to driverless cars and dynamic key proponent of it, if we look at the accidents on the road mainly caused by human machinesif we can use to eliminate human errors, we will all live in a much safer world, but then you run the risk of things being attacked by malicious hackers and things like that. our challenge is then to work with the car manufacturers to think well, how can we redefine the insurance product? people won't need to buy motor insurance like they have for decades. manus: we reported on the number thealware attacks around world. did you see a significant uplift

and consequently, pricing in terms of cybersecurity products for yourself? year as the this malware attacks went mainstream? asa: we can see opportunity soon as there is another big attack because it raises awareness. particularly, in the boardroom room, the directors are saying what about us? a couple of years ago, it was only businesses in the u.s. who .ought the insurance everyone else seemed to think they were in the end. these attacks are showing no one is immune from a fire attack -- cyber attack and we are seeing increased demand across europe, parts of asia, the rest of the world is waking up to this threat. for us as an insurance sector, we don't have years and years of data to even understand if we are getting the pricing right but from a lloyd's perspective, underwriters, brokers were together to think about all

types of scenarios -- how much they would cost and they do their best at guessing what we should charge. anna: what is the scale? how big is it versus natural disasters and give us an idea of the potential -- still focused in the u.s., even if it is growing elsewhere. inga: primitives for cyber insurance only are estimated to be $3.5 billion, which is nothing compared to other perils, but it is just starting on the journey and is going to have dramatic increases, particularly in europe because we will be having the new data regulation coming in. that will focus every mind on data and how they need to protect it. the fines put on companies if there are breaches and they don't behave responsibly. we are talking about it as if it is one product, but i am guessing as this becomes more developed, it is

fragmenting. you mentioned how people might not need insurance driving their cars in the same way if they are driving their cars, but then they need cyber protection. it breaks down into subcategories. inga: it does, and you can buy individual protection. identity theft, if someone has attacked you as an individual. there are many types of product. let's talk about that in terms of development. you have mentioned the u.s. a number of occasions. we have a tax deal set to go assumes everybody america is roaring, 3% growth and growing. ofth korea is more than 50% business. joyous form.n good growth, corporate's are up. how much are you yielding from the united states of america? inga: we have seen growth in the

last few years in the u.s. for lloyd's. very specialty area, so not the mainstream insurance risk, we take out all the catastrophe exposures and anything specialty. we have seen 8% growth in the last couple of years year on year. we anticipate that coming through in the future. it is going to be a focus for all of our underwriters and brokers looking for growth. it will continue to be one of the countries that come with new risks, they are investing in the future. we want to be alongside of them. manus: no better woman to make sure that lloyd's is a part of that story. and beale stays with anna myself, the ceo of lloyd's. let's get a business flash. 17 minutes past seven in london. hong kong has gone after 3:00. david? broadcom, the company is planning to increase its $105

billion offer ahead of a proposal next week to replace directors on the company board. according to people familiar, broadcom doesn't plan on increasing its offer until closer to the san diego-based company board making. they declined to comment. -- shaking up his hedge fund, which had been battered by investor withdrawal according to an investor c by bloomberg. -- seen by bloomberg. letting investors shift assets to the main fund as of january 1. the letter said he will principally manage the flagship fund, which will be the firm's only multi-trader fund next year. the firm declined to comment. -- failing to reach an agreement to buy a

japanese paint maker plant to expand sales to automobile manufacturers and bolster its footprint in the united states. shares have jumped the most in a year in tokyo trade while it slumped in the u.s.. biggest investor is warren buffett. that is your bloomberg business flash. setting youinglis up with your business flash. it has been a big week for bitcoin, breaking the $10,000 barrier. it has been a big week for bloomberg with our big launch. if ife been asking guests we are looking at a bubble that is about to burst. >> there is no currency in the -- is involved with dollar the volatility we are seeing in bitcoin. it is undoubtedly a bubble but

whether it is the south sea bubble or the dutch bubble, you have no idea before it will -- if it will double before it halves, but it will go a long way down. but who knows, it could hit $20,000 quickly. , theythe global level have not focused on the dangers of the development of the scam and when they will, i think some people will get hurt. bitcoin has a lot of potential and implications. it may one day lead to a digital currency, but we are cautious with bitcoin because we think it has a number of unattractive characteristics. thinkfeels frothy, but i the real issue isn't bitcoin. i think the issue is the disruptive nature of technology. in a way, it is fascinating, but it will make central banks lose control and they are not going to let that happen. time, maybe ain

$25,000, 30,000, somebody will say stop. anna: a variety of voices on bitcoin. inga beale still with us. to you haveations at lloyd's around the block chain or bitcoin. people draw a distinction between their enthusiasm for one or the other. the business of financial services, which means our product is shipping money around, not physical product. bitcoin anddo with how it will impact business models and how we can trust the source of funds is really what is our conversation around bitcoin. strict know your customer regulations that we adhere to. we won't insure anyone who unless we know who they are and where the money is coming from. just as important, we want to know where that money is going to and who. if bitcoin becomes the currency,

and the ending of the attached to it -- >> you are not accepting it? inga: we don't use it at the moment -- >> what will make you jump that rubicon? others have accepted it. how far? inga: we have to spend some more time on this but fundamentally, we are looking at block chain. chain, amateur of block but i understand it provides the record. there is an absolute digital record in cryptocurrencies. you should have some sort of digital trace. once we can feel comfortable that the distributed ledgers and the tracing of the transactions -- they are traceable and identifiable, then i think we will be in a place where we can accept it. more and more banks are looking to see how they can start using them and that will give us some comfort. manus: let's turn our attention to brexit. we are at the critical crunch

point of trade and transition. annad stephen jones and wrote on the phrase, managed divergence. he talked about this is what the city needs. u.k. and europe need to be a managed divergence. is that what you hope for? for sure, and i think many of the financial institutions in london are thinking the same. manus: are the practice -- politicians? inga: they have a different constituency they have to manage. versus peoplenity in the rest of the country who might have different views and i would not to be a politician negotiating, but we focus on the business side and we need to be eu 27uch connected to the

post-brexit. we have to be. we have mutual business flows across the board and they have been flowing quite seamlessly. we don't want any of that to come under threat. overa lloyd's perspective, 80% of our business comes from countries other than the eu 27 and all that business will flow into london as it always has done. from our perspective, we know the city of london is going to be our core base still, but we have got to take moves to secure the eu 27 business that is under threat. anna: we have had a lot written about impossible contract in banking and the insurance industry that have become impossible to fulfill. impossiblee payment to make because it is made it illegal by brexit and hard cliff edges. guarding that for the insurance industry seems to be something that has a lot of focus. you have a preference as to how that is done?

are you pushing for a certain way forward? inga: we are, and this is pretty serious because liability just doesn't finish at the contract date. we have got potential liabilities sitting down there from years ago. if we can't pay the claims, who suffers? the consumer, the very people we are trying to do this for. it is really important we come to a resolution. we would love it if the regulators -- despite politics -- if the regulators across europe, and when i talk about europe, the u.k. is in europe, across europe to come up with a resolution so we can fulfill our liabilities to our customers. manus: there is another story that was written this morning that brexit risks leaving the the migration of thousands of contracts, many billions worth of pounds and the logistical challenge for the

insurance. is there a risk of a breakdown? i remember your marketplace, i know the world has moved on, but the fragmentation is a risk here -- is the risk your of fragmentation? inga: a lot the global business apart from the eu will still come to london and lloyd's is still part of the insurance hub in london. we don't see other centers building in the eu. they will go to different countries and cities, the banking may be more concentrated but fundamentally, we should be working together. insurance and banking, they are such global businesses, you can't attach them. geographic know any boundaries, so we will have to work together. manus: thank you very much, inga lloyd's.e ceo of

that is it for anna and i. market -- it all went well. anna: european markets futures look set for a slightly negative open. keep it on the tax story. this is bloomberg. ♪

matt: welcome to bloomberg markets: the european open. i am matt miller in our new london headquarters. the cash trade open is just 30 minutes away. 24 carat magic in the air. the dow hits a fresh record, but will senate tax reform concerns threaten the rally? at 11:00 a.m.es in washington. irish border impasse. theresa may's brexit breakthrough could be at risk as the dup threatens to