♪ anna: good morning. is "bloomberg daybreak: europe." these are today's top stories. anna: bitcoin's debut. futures and the cryptocurrency begin trading with a bank, climbing 25%. prime minister may faces scrutiny in brussels today after david davis is debit -- david davis calls for a trade agreement. anna: central-bank bonanza. markets in europe for rate decisions. ♪

for rates gear up decisions. ♪ 2 very --anna: very good morning, everybody. dubai.s in we need to talk about what is going on in the markets, about bit going, and let's talk about the asian session. we had the msci asia-pacific session up. volumes on the nikkei and kospi, 20% lower than you might have expected on a regular day of trading. 20% lower than the 30 day average. the fed meets this week and a hike is expected. we have central-bank meetings. we have a better than estimated jobs number out on monday with the unemployment rate holding at a 17 year low any tax conversation as well. the dollar down by .1%.

a spot price.is the futures started trading in chicago last night. futures began trading and at one point they were up by 20%. we have a number triggered by the volatility we have seen in this cryptocurrency. than 1500% this year. substantial volatility. we will talk about whether this is an asset people should be getting involved with. up .8%.zealand dollar they have named a new governor, and that seems to be going down well with the markets. we get data out this wealth this week -- out this week as well. emmanuel macron says donald trump's decision to recognize jerusalem as israel's

capital is dangerous. his comments came as he hosted benjamin netanyahu in paris. protests against the decision interview across the region. the u.s. ambassador to the u.n. says it is up to israel and the palestinians to decide the status of jerusalem. president trump is said to be planning the closing argument for the republicans tax in a speech on wednesday. he will speak in washington as house and senate teams try to iron out differences in the plans. tweeted, getting closer and closer on the tax cut bill, shipping a better than projected. house and senate working hard and smart. and results will not only be important, but special. brexit secretary once a trade deal with the european union that includes the best parts of the block agreement with japan, canada, and south korea, along with financial services. david davis's comments came as prime minister may will hold a

cabinet meeting before addressing the house of commons. -- what we want is an outcome. we will start with the best of canada, japan, and south korea, and add services. juliette: the uk's labour party is debating moving some of the bank of england operations to birmingham if it wins the next general election. the plan is based on an analysis. britain's financial system is feeling to deliver the investment needed in its technology sector. to deliver the investment needed in its technology sector. australia has named a new governor, replacing the acting governor.

kuwait's oil minister says opec and its allies, including russia, may add production curbs by 2019 if the market balances by june. russia is keen to and the output capping deal as soon as possible. they will discuss an exit strategy at a meeting. . global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . the regional index in asia up half of 1%. let's talk about some of the stock first. high-end a motor falling the most in two years. there has been weak growth in china and across the globe, and the yen is going to impact its sales. we start to see it compete with japanese motor companies. hai coming through with its -- with its highest november

sales. up two .6%. we saw the taipei kayaks rally strong today. this is a drugmaker in hong kong , up almost 16%. this is a stock that is up 227% year to date, but generally it has been a positive session across the asian region, led by a rebound in tech players and the energy stocks. manus: thank you very much. trading keeps going higher. bitcoin has landed on wall street with a bang. it surges as much as 25% during the daily session on the cboe. that triggered temporary trading halts. the launch of trading on a regulated exchange is meant to

be a watershed moment for bitcoin. investors are reportedly still standing on the sidelines. nakamura joins us now. the volatility is pretty incredible. give me the other side of the trade, which is volume. reporter: volume has been stronger than people expected. we have seen $40 million worth of futures trade in the first eight to 10 hours so far. it is higher in people expected. a lot of it is being driven by retail traders. we are seeing consistently three or four traits a minute coming in. this isn't about foreign opening day. dish -- this isn't bad for an opening day.

it has been pretty encouraging and not a bad start. anna: tell me what we have seen coming out of the gate at the start of trade. a couple of trading holds. reporter: that is right. i don't think it is a futures market pushing the price higher, is $40 the volume million. during the same poco -- during the same time, -- it is not much, but people so the future trading began and things are stable. that boosted the market sentiment. it pushed the price up, and triggered the trading halt on the futures market. for now, the futures market is following the spot price, but a strong start. the features of his -- the futures has given confidence to the market as a whole. manus: the retail investors story, everybody is excited

about it. it is fresh, new. the breath of ownership of bitcoin is not that expensive. that is one of the things which is causing the institutional side of the money be more reticent. if you talk about breadth, you don't have the fundamental liquidity that allows you to act --a more volatile reporter: one of the biggest concerns from investors is that only half bitcoin, are in an account that can be touched in the last year, which means liquidity on exchanges is small. you have futures, and the potential for liquidity is higher. day, i think a lot of them are waiting to see how the final formal process works next month.

when futures expire they go off a certain price. there is controversy with these cboe futures and how these will settle come january. process works well and liquidity is strong, if it stays strong, that is going to give confidence to investors that we don't have to rely on the underlying bitcoin network, which liquidity is strange there. we can rely on derivatives. liquidity inmited derivatives. if you have enough buyers, you can create futures out of thin air. you can discontinue making it. -- you can just continue making it. day, it hase first been encouraging. volumes are strong. price is staying in line with the spot. things are off to a decent start. anna: thank you so much. the underlying itself is almost made out of thin air. riley joins us for the

hour. very good morning to you. are you ready to embrace bitcoin coin in its spot for more on the futures market? david: i wish i had embraced the coin at the start of this year. that it has gone up 600%, i --old-fashioned enough it makes you wonder a little bit. we are very keen to look at alternative assets and tools that could be used to help the portfolio. the level of volatility that we have in this asset, what is the fair value? the lack of liquidity something which means we are away from

embracing it. anna: manus. manus: a good morning to you, david. like the italian bonds, greyhounds jumping up and down. by of this bitcoin is held 1000 users. is that more risk in what other people are calling protective of a bubble? david: it is a concern. breadthe such a narrow in terms of holders. as the market moves higher and becomes more liquid, you are waiting for a number of people to monetize the gains from the investments, which they can't do at the moment. how theiraspect is

framework needs to develop to provide a broader range of institutional investors to come in. that is the next step for the maturity of this, if it is to mature as an asset class. anna: how much concerned you have about the fact that we have got reputable exchange is now offering futures in bitcoin? we had the chairman of interactive brokers writing to the ftc suggesting that because of the wild swings and volatility in bitcoin that trading on platforms shouldn't be allowed. there seems to be some contagion fear from what could happen in bitcoin futures. do you think that is well-founded? david: i think it is unproven and untested. if you look at the initial margin being required, it is high. there are going to be restrictions if you go through brokers.

the other thing that is an interesting point is we have seen a big surge. part of that has been operating out of china. we have seen china's authorities try to clamp down, but it has been a capital foyer. it is another indication of the level of uncertainty and volatility. about the be careful potential spillover that could have. manus: interesting. we caught up with gilbert last week. he said he doesn't understand how or why he would want to trade it. jamie dimon seems scriptable. -- seems skeptical. what is it take for an institution like you as we head of your institution to release a this is a product which has come

of age, this is a product we should embrace, even if it is only with half a percent of portfolio? inthere an asset allocation your house toward bitcoin, or are you discussing it? david: there isn't an allocation towards bitcoin and cryptocurrencies generally across the strategies that we run. before we move down that route where we are investing on behalf of investors, we have a fiduciary duty to have a situation where we would be comfortable with the liquidity, the ability to transact. transaction costs are very wide within cryptocurrencies. testedd want to see you during a down phase as well and a less favorable stressed environment. we areer say never, but

quite some way from making cryptocurrencies even relatively small fund. anna: thank you very much. david riley stays with us. marketsof cboe global will join us for his first interview of the day. fascinating to get further information on how the bitcoin futures market is shaping up. manus: i can't wait to hear when the first margin requirements coming. coming up, u.s. investors are told to brace for the biggest tightening of monetary policy in more than a decade. it is fed week ended week to go before congress adjourns for the holidays. can republicans make a legislative victory on tax? this is bloomberg. ♪ ♪

you were looking at a live shot in singapore. rising at ats are good strong jobs number, rising on friday. that is adding to the momentum. the msci asia index has declined .6% this month on geopolitics concern and some profit taking. let's get to juliette saly with your business flash. the government has -- the government of carter has entered into a contract for the supply of 24 -- supply of aircraft to the air force. the deal is subject to financing conditions and receipt of first payment, which is expected no later than the middle of next year. a company is replacing its ceo following forecasts of a loss. shares plunged last week after the ship third -- the shipbuilder announced it reduction of that plan.

it may not be enough to support the company in the long run with the struggle of overcapacity and filling orders. of --off has ordered ordered a pair of advisors for a meeting with banks. they will advise on the liquidity management and operational measures. shares crashed more than 80% last week after the company said it was unable to publish its result with the departure of the ceo. u.s. and european banks have billions of dollars at stake. that is your bloomberg business flash. thank you very much. president trump is said to be planning the closing argument to the republican tax cut in a speech on wednesday. aswill speak in washington house and senate teams try to iron out differences in their plans. the fed is expected to raise interest rates this week as the jobs market remains a bulwark for the u.s. economy.

dartmouth college professor of economics said the fed misled the labor markets. >> the market doesn't really believe this story, which is inflation is coming, all is going to be great. the government is going to do a big fiscal stimulus, which one might -- which might give the fed some leeway, but if i was the fed, i would be sitting on my hands and taking it seriously about how strongly i miss read the labor market and i would think about all of these people who have week wage growth. riley is still with us. we will talk about the jobs market in a moment, but in terms next, thehe fomc goes indication is the fed will hike this week. you are not so much interested in the move itself, as it has been talked about the but you are interested in the changes in economic and interest rates.

you the -- david: we know we are going to get a hike. the issue is the extent to which they upgrade the economic projections and therefore start shifting these dots. prospect of tax cuts, the u.s. economy clearly has some momentum and accelerating into the latter part of the year. it is growing three plus percent -- 3% plus on an annualized basis. as part of that, i do think there is a non-negligible chance the fed or the fomc meeting --

fomc members will raise their dots. for us to go from three rate hikes for 2018 to four rate hikes, but right now the fed is only projecting to rate hikes for 2019. that could be pushed up to three easily. manus: pushed up to three. they get a little bit more aggressive, do you want to join be shorter end of the yield curve? you were looking at two-year yield just under 1.8%. blackrock is buying bonds most at risk of added fed hike. is that the strategy that goes with that thinking if you get that shift in the dots? that we haverategy adopted in terms of our view around the fed is that the market is still underpricing the path of short-term rates. that is if there is a skewed to

higher rather than disappointed relative to the expectations. we have a short position across a number of our strategies expressed in terms of the short end of this u.s. curve. enhance andng to benefit our portfolios if the docs move higher -- if the dots move higher. the significantly if interest rates move hilar. we have had a flattening of the curve. assets have aedit duration around four to six years. the planning of the curve has been perfectly fine for them. they have not least a duration headwind. we have had a short position of the short end. this chart.ed up this is what j.p. morgan is looking at.

they say the inflection is actually around real fed funds, fed rates, they say when it gets to1% that is when they start see weight cycle. do you share that view? are we at late cycle already? david: i don't think we are. it is just a very long cycle. it is an unexciting suckle from a macroeconomic point of view. -- unexciting cycle from a macroeconomic point of view. it is still actually very accommodative, still loose. growing abovey 3%, unemployment dropping the 4%, notdropping below much in the way of inflation pressure, but it is starting to pick up. we are headed to positive real rates. manus: thank you very much, david riley there. he stays with us.

coming up, we will bring you an exclusive interview with mark carney. that is tomorrow at 10:30 u.k. time. the british chambers of commerce at a marshall joins us.

♪ anna: this is "bloomberg daybreak: europe." is 3:30tokyo, the time in the afternoon. you can see the dollar against the yen. we are seeing generally a little bit of dollar weakness this morning. little in asia are a lighter than he normally might the. -- might be. lots going on in markets this week to muscle we need to focus on that. it's give you a rundown. , we will get news from the u.s. federal reserve.

later, the rupee meters gather in brussels -- the european leaders gather in brussels. will they say enough progress has been made on brexit and we can move on to trade negotiations? manus: how committed are we to that progress? that is a question for markets. speaking of brexit, the secretary there once the trade deal with the e.u. that includes the best parts of the blocks agreement with japan, canada, south korea. along with financial services. that is good news to the city. thed davis told the bbc chances of leaving the block without a deal has dropped dramatically. his comments come after the prime minister prepares to hold a cabinet moving -- the cabinet meeting before addressing the house of commons later today to spell out her brexit deal. outcome.e want is an we will probably start with the best of canada, japan, and south korea, and then add to that the

bits missing, which is services. alignment and the best. that goes with the swedish trade ministers words. let's get to a reporter in sweden. david davis sounds optimistic about the second phase of these brexit discussions. the question is, is it too early to benchmark one of -- to benchmark the chances of a trade agreement? we are not starting on the backstop. we have very strong alignment. reporter: right. there is a good place to start, but as you know, the whole brexit thing is to pull out of that alignment, so there is a lot of people in the u.k. and theresa may's cabinet who want to make sure that that alignment isn't there, that the u.k. is on its own at the end of this process. what she will be doing is trying

to sell this deal on the to herm, the way forward cabinet and the house of commons later. it looks like she will be successful in that, and then we will get to the second phase of talks. that is going to be even more complicated than the first phase. anna: good morning. from thelso the view officials in the e.u. 27? is that what the europeans are saying? davis, he seems to want everything. he wants the best bits of all the trade deals. view is if you are leaving the e.u., you can't have as good a deal. if you are not in the customs market, not in the single market, then you can't have all of those benefits. at the same time, if you do want some of them, you have to follow some of the rules, including freedom of movement. this is something, once we get

to the trade talks, for sure there is going to be more back and forth. i don't think it's clear that we are going to have something on paper by march of 2019 when the u.k. is supposed to leave the e.u. lives thees, their voice of reason. there is a long road to go. to gettaken eight months this far, and it fell over on the irish border. what kind of agreement do you think they are going to be will to get? this plus, plus, plus version, is that blue sky thinking and too optimistic? reporter: it is not bad to be optimistic, but in terms of how long it is going to take, the agreement he is talking about, taking the best bits of japan and canada, these trade agreements to years and years to negotiate. it is not going to happen by march 2019. that is why the transition is

going to be important, so you set in extra time to make the deal work, get to the trade deal. if you want to throw in financial services, that makes it that much more complicated. much. thank you very jones running us through. anna and thes with london studio. when you saw the headlines break, i know you have some very aggressive calls. seen, thereu have was a palpable relief when anna and i broke this news on friday. do you share the moderate level of optimism, or do you say this just want run according to plan? where do you stand? david: the fx market i think reacted bang on, which was there was a bit of a pop in sterling.

it is a net positive to move on to phase two. brexit has a hard somewhat diminished, but there is still a lack of realism in , as wef the u.k. side with cherryid davis picking across different types of deals. or is it going to be a comprehensive trade deal by the end of this process. going to be a comprehensive trade deal by the end of this process. what we are going to get is a transition, and there are two things that need to be resolved. one, still the resolution on the isservative side as to what going to be the business economic model. side -- we need to

look at what the leaders are willing to provide in terms of a , what they are willing to negotiate. there is an excessive level of optimism. is sterlingskew weakness going forward. anna: let's follow this chart. it illustrates the moves we saw in the pound during last week when we thought optimism building in the deal and we saw a selloff as the deal was announced. we didn't move all that far given the announce -- the amount of news flow. -- you david: our short position across sterling assets, and sterling is a liquid wake where we can

express that review, we have some concerns around the credit market and in terms of where gilts are. essentially, there is still not enough premium. there is too much optimism across a number of investors and across the market in terms of how this process will evolve and what the end state will be. there is still a lack of agreement within the u.k., let alone across the e.u. 27. we think sterling can be looking to fall below. we would target 125. u.k.ther aspect is fundamentals are deteriorating, not improving. rbc talking about 119 by march. you are not that bearish? david: in terms of the targets

we have set from an investment portfolio -- investment point of view, we move towards those targets. in the medium term, we could see sterling getting to parity in terms of the euro in a bad case scenario, which we think is still -- which we think still have a chance. i was reading and the line caught my eye. it is talking about the u.k. is economy -- the u.k. economy is so weak. this is a warning. are we that week? has it got worse? when you talk to business people , they are saying the are

keeping their head down, getting on with the business of the day. are we still going to look at a bailout style like 1976? we have been -- what is being referenced there is a if you think about what happened in 1976 and the imf becoming involved in the u.k. policy management, fun a mentally, -- fundamentally, it was about a lack of condiments -- fundamentally, it was a lack of confidence. what is the outlook for the u.k.? we discount a complete lack of confidence going into the u.k. policy framework? whereby you have a situation where we are not making progress post-ms of the transition eu economy.

instabilityu have within the u.k. and the possibility of a general election and a change of government. could you have a situation where that level of uncertainty whereby itonfidence is not do to what happened in 9076? -- in 1976? it is a different issue. of english isk hawkish at times, even though it is deteriorating. anna: there is no election scheduled in the near-term, but there could be. how would you react if we did see a labor government? they have been reaching out to business on many fronts.

how do you balance those things? david: in practice, i think it is a difficult thing to do with a great deal of confidence ahead of where you have this intensity of a general election and actually see what policy priorities an incoming government actually will have. apparentecoming more is the labor opposition is turning -- is starting to put together a softer brexit coherent becoming more and credible in that regard. that would be positive for sterling assets. on the other side, still some skepticism across a lot of

businesses and within finance as to whether, under current leadership, this is a acio-democratic party or like 1980's hard left labour party. in thef we start to see polls running up to an election that this party might be in the -- party might win, would we see a start in u.k. assets? too early to say? david: there are a lot of hypotheticals. the likelihood of a u.k. election in the near-term has gone down. you could have easily seen a challenge to may, but that has pushed back. it is not at the top of mind of investors. from a medium-term perspective, sterling and sterling assets

don't have enough risk premium, and is that is why we have short buyers. anna: thank you very much, david riley. he stays with us. we will bring you an exclusive interview with mark carney tomorrow at 10:30 a.m. u.k. time. manus: let's check in on the markets. equity markets rising. the nice relief rally coming through from late friday evening . the chinese csi up. singapore is up. in the currency space, you have the new zealand dollar trading higher. there is a little bit of optimism about the new zealand dollar. it could be because you have a new governor there. we are looking at a changing of the guard there. allies,p, opec and its

, could the enda production cuts before 2019? this is bloomberg. ♪ ♪

anna: of them back. this is "bloomberg daybreak: europe." -- welcome back. this is "bloomberg daybreak: europe." let's get over to asia where we find juliette saly but the business flash. bae systems and the governorate of tar have entered deal for a supply of aircraft. the deal is subject to financing conditions and a receipt a first payment, which is expected no later than the middle of next year.

replacing itst is ceo following forecasts of a loss. .hares plunged last week analysts say it is a short-term fix that may not be enough to support the company in a long run with the global shipping industry struggling with overcapacity and falling orders. a pair ofhas ordered advisers to help prepare for a crucial meeting with banks. the company has appointed those two handle discussions on the credit he management and operational measures. 80%es crashed more than last week after the company said it was unable to publish its results and announced a departure of the ceo. u.s. and european banks have billions of dollars at stake. that is your bloomberg business flash. manus: i will pick it up from here. kuwait's oil minister says opec and its allies, including

russia, might end up reduction -- mike and reduction curbs before 2019 if the market rebalances by june. russia is keen to end the output capping deal. he said opec will study an exit strategy at the midyear meeting. el-din has made room for me on his set. let's talk about oil. yousef: good to see you. manus: let's talk about the oil market. we are little bit better off. now they are going to talk about an exit strategy. is incredible, the shift in terms of the narrative. just a couple weeks ago in vienna, an exit strategy was not part of the conversation. that theye hearing

are considering an exit strategy possibly if the data holds up by the summer. they have always said the data is going to lead the decision-making, so what -- so the option is on the table. the russians feel strongly about this. united arab emirates have also weighed in. they think, come summer, they might be in a good place. did tell you in opec last week that we will find out in the middle of the year if we will do a review. is that really a new piece of it puts usyou think on cautionary notice that if things continue at the pace they are, don't depend on this deal lasting until the end of next year? yousef: a standard question i had was whether an exit strategy was on the table. the reactions i got there was a list of an eyebrow and it is too early to talk about this. there is definitely a shift in terms of what they are talking

about, and we are seeing interesting views in oil price. jp morgan, pricing upwards to $60 a barrel for 2018. clearly, momentum behind the trade. manus: there is the fracking story as well. the fractures have promised value of return. putin goes to the polls. is russia really going to need everybody in this region after he wins another term? let's deal with the fractures. every time $60 a barrel, the common. -- they come in. yousef: that makes it interesting for opec. expanded rig count to a three-month high, potentially

countering efforts that opec and not opec are trying to do, and possibly delaying plans to wind down this broader agreement. we get more data later this week. both of these have different views on what is the into happen with shale in 2018. yousef, we will spend the rest of the week together and have fun. anna, back to you. anna: david riley keeping me company here in london. they were talking about the oil market, opec, the russians, what they decided, when they might plan the exit strategy. up in the united states when we see prices are higher. to fields adding rigs

for a third week. this is something opec and friends can't control, but matters for when they can exit their strategy. david: it means there is going to be a cap on where oil prices could go. becomeale producers have between producers in terms of -- the twin producers in terms of the oil market and price. has been helped by the recovery in global demand and global growth. that has been coming from emerging markets, not just china, that more broad-based. that has stronger demand. andas had some constraint moved the oil price into a more comfortable place. sort of setting the path for an eventual exit. they have a little room to do

it. manus: i would like to expand beyond the oil story. you mentioned china. you say we have become too complacent on china. everybody that has sat down with us has said don't worry about being about 4%, that is a sign of inflation coming. it is all about a squeeze and lending paper at the end of the year. is it really? david: it is more than that. it is signaling the tightening of monetary policy and financial policy within china. acrossaving an impact the economy and financial markets. what is potentially interesting about what is happening in the chinese local bond market is flat from thet 10-year point. even at these elevated levels, the pboc is actually intervening

as well. is not a china hard landing or a china crash, but we have's -- but we have two scareslobal china growth , which had big spillover effects. in 2017.iet i do that investors need to focus back on china, because there are risks building. anna: even if you see four hikes in the fed next year, that hike cycle is not too much of a threat to the em world? david: ultimately, growth will triumph rates when it comes to what is happening in emerging markets. our forecast suggests emerging markets, that growth gap with developed markets will widen in 2018. when that happens, em tends to outperform. anna: thank you very much. david riley joining us. big day.bitcoin's

could the bubble burst? this is bloomberg. ♪ manus: good morning, this is

"bloomberg daybreak: europe." >> these are today's top stories wils. manus: futures are climbing with a bang. asa: may's fragile truce, her deal faces scrutiny in brussels as david davis calls for a candidate plus plus plus trade agreement. manus: central-bank bonanza. there are no fewer than four federal bank decisions this

week, including the fed and the ecb. manus: welcome to "daybreak: europe." london, paris, and frankfurt, up and running. global equity markets take heart from the jobs data on friday, the unemployment rate falling. we are waiting for the tax deal to potentially come through in the u.s. a little bit of breaking news from london -- londonup by .3%. really holding the negative askew on these u.k. assets. the dax, up by .2%. you have this global synchronized growth story. there are a couple of breaking headlines in terms of the

economy. the turkish economy, respondent by 11.1% in the third quarter. the number of deals have officially by announced. anna, you have the risk radar, in terms of the appetite. we've got the post brexit rush we broke up friday. everybody is chewing over the facts. anna: yes, indeed. also looking ahead to the host of central-bank meetings. there are plenty of reasons to perhaps sit on the sidelines -- and perhaps that is what we are seeing in asia. we are getting confirmation of qatar, agreeing to the contract. the deal is valued at 5 billion pounds. we are getting regularity confirmation this morning. the msci asia-pacific is up by .

6%. xbt, bitcoin, up by 7.5% this morning. the big news story is about futures trading. we have seen a couple of trading holds overnight as the market tries to get used to the volatility of this new asset in the futures. the stock price is up by more than 1500% year to date. plenty more to debate on that subject. i put the new zealand dollar in there as well. we got confirmation from the central bank over there, or from the government, that they have named the governor of the central bank and the market seemed to like that. we have many things to talk about this week. umpteen rateve decisions, not least the fed. what will the new dot plot --

those are the u.s. treasury's, picking up ever so slightly. the dot plot will change, a more aggressive fed possibly will be delivered. that's a conversation we just had with david riley. how do you prepare for the bond market? saying he wanted short data paper, whereas blackrock said, rick rider at blackrock said the selloff in treasuries makes the yield attractive. and you are seeing the oat's off by 0.14. what happens with u.s. and european bond markets? that's where the real attention will be. what happensbutton next there is incredibly important. let's get over to juliette

saly. juliette: macron says donald trump's decision to recognize jerusalem as israel's capital is dangerous. he hosted benjamin netanyahu in paris. againste, has protests the decision continue across the region, the u.s. ambassador to the u.n. said it was up to israel and the palestinians to decide the status of jerusalem. president trump is planning the closing argument for the republican tax cut for his speech on wednesday. he will speak in washington as house and senate teams try to iron out differences in the two plans. the house and senate are working very hard. results will not only be important, he says, but special. the u.k.'s brexit secretary wants a trade deal with the includesanunions, which agreements with japan, canada

and south korea. david davis' comments came as theresa may will today hold a cabinet meeting before addressing the house of commons to spell out the details of the brexit deal. >> what we want is a bespoke outcome. we will start with the best of canada and the best of japan and the best of south korea and then add to that the bits that are missing, which is the services. juliette: the labour party is considering moving the operations to birmingham. the plants are aimed at spreading across the country. we will be speaking to john mcdonald later today. orrzealand has named adrian as a new central bank governor. he will begin a five-year term on march 27. orr is currently chief executive

of the continuation fund and was previously a deputy governor. kuwait's oil minister says opec and its allies, including russia, could and the production terms before 2019 if the market rebalances by june. endaid russia is keen to the output cut as soon as possible. the cartel and his partners agreed last month to curb production until the end of next year. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. you can find more stories on the bloomberg at top . anna: pretty solid session in assia, but as anna mentioned, volumes are lower than normal with the nikkei closing higher by 0.6%. we has solid moves on the hang seng, led by the casino plans, and a rebound in the tech stocks. you saw that reflected in taipei as well, surging very strongly

in that market. we are hearing about adrian orr becoming the new central bank governors.w we saw a pickup in the kiwi. switching and looking at stocks -- i mentioned that movement in all.mc goldman sachs says they expect stronger than expected growth into the new year. 5.4% fromrop of hyundai motor. the carmaker competes with the likes of japanese carmakers. and this is the owner of the donut king franchises. there have been immediate reports saying there has been a bit of an investigation into the way it runs its franchises and the stock has fallen the most on record. the companies are rejecting the report, saying it is committed to the business of the franchise

owners. anna: a bit early for donuts. bitcoin has landed on wall street with a bang. futures on the world's most popular crib nypotech currency are surging. that created two temporary trading holds, which were meant to create volatility. it was meant to be a watershed moment for bitcoin. but investors still seem to be on the sidelines. we are joined with the latest. it seems volume has been pretty decent so far, exceeding expectations. >> yeah, that's right. in the first eight hours, we have seen $40 million of these features being traded, compared with $2 billion traded globally with all the bitcoin exchanges. this is not a bad start for any futures contract for the opening day, but there is much

uncertainty around it. 40 millionn, dollars, and a lot of that came through during the first couple hours, but we see consistent activity throughout the day. we are seeking one or two trades happening every minute. that is sending the signal that there is actual demand for these contacts. what i am hearing from people that i am talking to is that a lot of this is driven by retail trading. guess what? retail already had access to bitcoin through bitcoin exchanges. and instead, we cds and demand coming into the future. even though they have the option, we are losing sentiment that these products will be useful and popular in the market. ji, obviously we have had this rush. this is the retail rush, as i like to look at it. one of the things we picked up on one hour ago when we spoke was the lack of breadth of

ownership in this market. to what extent does that put the institutions off, or create an opportunity for them to broaden the market and fill that back in? know, there is just not that much liquidity underlying the actual bitcoin. as we said, there is $60 million of bitcoin in existence. there is a pretty small supply of money that can be traded. we i think the hope is that will look at these derivative contacts and embrace them. you can create supply from these futures. if there is a buyer and a seller, you create a contract out of thin air, basically. the supply could be there to meet the demand. that is the hope. we will see how that plays out, though. anna: yuji, thank you very much.

yuji nakamura joining us with the latest on the bitcoin phenomenon. let's get institutional perspective on what is happening with bitcoin. tell us then, what would it take for schroders to get involved in this company, bitcoin? now, theright biggest issue for institutional investors is what this bitcoin stands for, in particular what is in the client's portfolio, its role in the portfolio, and how do you value bitcoin? how do you value what the price will be in five years time? investors are trying to understand the role and how you value it. manus: a very good morning to you. we just had david riley on with us. there is a thumbnail off of toet allocation going

cryptocurrencies. thehat extent are conversations inside schroders in that bubble? or, is it, we have to be robust in our knowledge, do more investigation, and embrace something that has given pretty much, 95% of every member of the s&p 500. those are the facts. that is not the debate. at the moment, it has that kind of value in size and swagger. reporter: no, you're absolutely right. right now our view is that this thisregime shift, that stands for something, that the demand for bitcoin stands for a change in financial markets, a change in the way in which people are looking at asset classes. this is the type of debate we are having. we are very dynamic at schroders . we are really forward-looking and we are digging deeper to understand the essence of

bitcoin is and what it means for the future. right now we are focusing on what this technology means. so, it is not necessarily bitcoin as an asset class, but what does it mean for asset prices going forward. anna: in terms of the portfolio and where you choose to put money then, a lot of people have moaned about a lack of volatility in many asset classes -- we certainly have volatility in bitcoin, if that is what you are looking for. we see lower than expected returns for many asset classes. invest a fine for schroders does not mean going down the bitcoin route. what other alternative assets are you looking at? remi: right now someone has to be fairly open-minded when it comes to asset classes. area isties, the the attractive. we are looking at the credit market, looking under the surface. alternative assets, in

particular infrastructure. that is an area we believe is quite attractive. there are a number of things right now and the key thing for investors is to be very open-minded. manus: open-minded. we are always that on "daybreak." coming up, what have we got for you? well, it is a little bit more of brexit and the brexit negotiator himself outlines the trade agreement terms. the bank of england, the european central bank and the fed, all have their moments. this is bloomberg. ♪

anna: this is "bloomberg daybreak: europe." this view is from berlin. we are up 0.1% on the euro

against the dollar. in the terms of the futures, we are expected to go a little higher. u.s. futures also pointing a little bit higher. let's get the blumberg business flash the juliette saly. systems in the government of qatar have entered a contract worth 5 billion pounds to the qatar air force. the deal is subject to financing conditions and receive a first payment no later than the middle of next year. ceoung is replacing the after shares plunged last week. the shipbuilder announced a $1.4 billion shift in sales. analysts say it is a short-term fix that might not be enough to support the company in the long run with the global shipping industry struggling with over capacity and falling orders.

a pair ofhas hired advisers to prepare for a crucial meeting with banks. to company has hired mueller advise on liquidity management and operational management. shares crashed more than 80% last week after steinhoff was unable to publish its results. u.s. and european banks have billions of dollars at stake. that is your bloomberg business flash. anna: we are getting some breaking lines coming through from the eu foreign-policy chief. speaking alongside the israeli prime ministers benderman netanyahu and giving the european take on what president trump announced last week, saying that jerusalem must be the capital of both israel and palestine. president trump announced the united states would recognize jerusalem as israel's capital. we are bringing you up toda

date on some news flow we are getting. manus: there has been worldwide conversation on that. we will be catching up with robert gates, who of course, was under obama and bush. so, this story will certainly be interesting to play out while i am down here. we have got another huge week on the central bank front. there are no fewer than 14 policy decisions, including the fed, the ecb, and the bank of england, and the focus will be on the expectations from the fomc, in terms of when they hike rates, and what will they do int h the dot. aimhe u.s., the republicans to complete their tax overhaul before congress adjourns. on friday, theresa may's breakthrough brexit deal, while the prime minister plans to sell u.k. lawmakers.n to

if you thought you were in for a quiet run in to christmas, you are quite mistaken. how important is maintaining the momentum? we have got a chart here. in 2017.rn to 40.5% we have not seen returns like this since the 1990's. it was bank in 1991 and 1999. do you expect double-digit momentum in u.s. equities in 2018? the strong expect returns to continue and that is purely based on the environment that exists today without the tax bill. the tax bill would be like an icing on the cake. so, growth is great for equities. we expect that growth momentum to continue. if we do get a tax bill, that will be fantastic for u.s.

earnings. that will increase earnings. i think the biggest debate still remains though, will the tax bill lead to greater capital spending in the u.s.? if we get greater capital spending, that is the cherry on the cake. anna: you sound quite positive about what the tax deal can do. others have suggested that we don't know the details, but you seem to know this will add a boost to the economy. that is something the fed can't ignore. so, wwill we get a forecast from the fed this week? the change in interest rates is very much priced in. yeah, so we do expect the fed to move next week. this week, sorry. anna: yeah, it's early. >> we also expect three further hikes next year.

if the tax bill needs more capital spending, that is still an if, because with regards to corporate, we need that intensive. if we get mark capex growth in the u.s., in that environment the fed can be more unfettered. based on the information we had today -- buybacks,re seeing aren't we? has beenfair to say stronger this year. not fantastic, but it has been stronger. the tax deal adds that charity we have been waiting for. manus: it is the cheery we are waiting for, yeah. i just want to bring our viewers some live pictures. we have got mr. netanyahu, who is arriving in brussels. of course, the reaction, the european reaction, the french reaction has been quite with regards to the

speech by president trump on thursday, recognizing jerusalem. the plan to move the embassy jerusalemviv up to has ended, really, global real politics. even though we tried to give insurances, this is netanyahu arriving to meetings with his foreign ministers in brussels. abouttalk a little bit your book for the european central bank. it is interesting how in opec, they are talking about having to review. europe has absolute momentum in terms of growth this year. it is on a roller coaster. does that continue and does that have any implications for policy makers? they might become a little bit more hawkish, perhaps more than we think.

the ecb is focused on being gradual and that is because they are focused on inflation. been solidgrowth has this year, inflation has not. that gives the ecb all the excuse or rationale to remain very patient. when we look into next year, this is actually quite positive for the euro and european assets. it means liquidity will remain quite abundant in europe. seti thinkt the grounds are for european assets to do quite well. anna: let me just respond to the deal the brexit team put together last friday. are you positive about what we tood, or are theretoo many differences? >> i thought, finally, at least we can move a trade discussion. anna: thank you very much for joining us this morning, remi

olu-pitan. that is it for "daybreak europe> "open" is on next. lumiere joins us later to talk about his past. this is bloomberg. ♪

guy: good morning and welcome. you are watching "bloomberg markets." i'm guy johnson. cash trade for equities, 30 minutes away. so, bitcoin futures, starting with a bang. the currency surges as much is 25% on its c.o.b. debut. where are the shorts? will may's fragile truce hold ashe