ecb on deck and the bank of england is holding pattern as mark carney tackles inflation. mario draghi is set to unveil the ecb's 2020 outlook. investors, hungry for clues on how the central bank mobilizes policy. to announce at buying a $60 billion -- the $60 million -- is bob geiger clever like a fox? they will buy 21st century fox. .he whole deal fox will spin off some of its asset but disney will buy a good chunk of that. iger will -- bob remain ceo until 2021. he will -- we want to see that transition and that merger through. lisa: we will get more details coming up. we will look at who potentially from the fox organization might move over to disney to help

control these assets. we will dig into the implications for netflix because they potentially stand to lose possibly the most if fox and disney pull together and emphasize hulu, their direct competitor to netflix. alix: lisa abramowicz is joining me, by the way. fox.y will be buying the deal looks to be about $52.4 billion. disney will assume 13.7 a fox's debt. this also means that disney will by fox's 39% ownership of sky and bob iger will remain ceo through 2021. a look at what's happening to the stoxx premarket. disney up 4/10 of 1%. the news was widely expected. take a look at fox to see what shares are doing. by about a few

percentage points. fromt to get more reaction gita. what is your initial reaction to the deal? >> this has been in the works for about a month or so. all of these rumors and news reports. disney instrumental for for its streaming strategy. gives them a lot of heft in the marketplace. a lot of ammunition in terms of a deep library of content. increases negotiating leverage with tv operators. makes them a formidable force in a traditional media marketplace. alix: we are giving more details. $52.4 billion for this acquisition. can you give us a sense of what your take is on the valuation that we have? >> the numbers seem to suggest it would be about a 28% -- a $28

$12 fore to disney and the assets that stay at fox. it is a substantial premium to what fox has been trading at. the majority of the valuation is for the regional sports networks . about 22 of them. this enables disney to become a dominant force in the sports programming field. alix: disney acquiring assets from fox for $52.4 billion. deal closing at the end of june 2018. fox will seek to complete the plant purchase for the rest of sky. $13.7 will assume about million -- billion dollars of debt. lisa: let's get more details on from thebeen disclosed

deal. as go to bloomberg's media reporter in london has been following the announcement. joe, what are the details we know so far? u.k.,nterest in the disney will acquire fox's 39% stake in sky. the detail that fox will continue with that transaction in the u.k. and disney would buy sky. iger staying on until 2021. questions about the future of james murdoch, current ceo of fox, whether he will have a senior position at disney. more details expected soon. alix: before we move on to the succession plan, lisa: what a culture clash. -- what we know disney will have and what we know fox will have at the end of this.

joe: we know disney will acquire the movie and tv studios fox has. assets like star. news, fox keep fox sports, and from the fox broadcast network. disney would acquire fox's stake in hulu. alix: the question being that we wind up having james murdoch moving over to the disney management and will he be a de facto successor to bob eiger? blockbuster the potential for that. >> that is conceivable. disney has a fantastic session plan this succession plan all along until internal candidates left. now, with this transaction, it is conceivable that james murdoch moves over to disney.

tremendous expertise in the international areas in the digital space where it disney wants to beef up its presence. it's possible that after 2021, james murdoch might emerge as the eventual successor. alix: what kind of culture clash does that bring? particularly in the u.k. when it comes to roger ailes in the u.s. and also spying on some etc. ers, hacking, is my daughter looking at daisy duck and saying i want to watch that movie. what do you do with the optics of that? always hadey has this clean image and i think that is what is going to carry through. one of the reasons why fox preferred to go with disney, rather than comcast or some of the other companies interested in acquiring it. apart from the regulatory angle.

i think disney will prevail. lisa: let's get a sense of what we're waiting for today. from bobe hearing eiger in the 9:00 a.m. hour on bloomberg television. what are the questions we need addressed today? joe: we've also got a conference call coming. much more comes out of that. i think investors would like to -- what kind of faces at thesney moment. how fox will help with streaming services looking to roll out more and more. the questions to be asked about company strategy. where does james murdoch fit in all of this? alix: checking in with you throughout the next couple of hours as we get more details. headlines.terate

disney will be buying assets from fox for $52.4 billion. if you take a look at some of the interesting parts around it, 21st century fox will spin off fox broadcasting. disney expects fox to seek complete purchase of sky and the sky deal will close in the end of june 2018. rob iger staying on until 2021. lisa: we should also note we are getting breaking news on teva. the fed going to cut about 14,000 jobs. 25% of their workforce. we will bring news on that as well. alix: in the next few hours we ,ill be talking with bob iger do not want to miss that. disney stock up 3/10 of 1%. the other breaking news at the top of the hour came from the boe, nothing really happened. sterling, pretty much flat on the day. they wound up keeping asset purchase program at 435 billion pounds. their corporate bond target at

10 billion pounds. not a lot of information. so everyone zeros is on board withholding rate steady. fromohnson joining us london. help me understand what was the key in this meeting. die: the headlines probably don't tell you a lot about what is happening but i suspect behind the scenes there is a more serious debate happening about what direction policies going to go in. the bank pointing to a gradual appreciation in rates over the next three years. the market price in two hikes during that period and the bank to dissuade that idea. i talk a lot the debate behind the scenes. inflation and the u.k. running at 3.1%. hawks on the committee that argue as a result the policy should be tightened. there are dubs arguing -- there are doves arguing the opposite. in the brexit story the bank has

highlighted the fact that the deal done, moving on to phase two, does provide an opportunity to push the crashing out scenario to the left-hand side of the distribution of outcomes. that probably is a factor that the bank is relieved about. i'm not sure what we had from the bank of england really tells the full story about the debate that's happening behind the scenes. dated pushinglong the curve flatter than recently. something that the market is latching onto at this point. the inflation story and how quickly or slowly inflation rolls over at this point, probably the best clue as to which way the bank will ultimately go. a gradual story or more fierce story coming from hawks. alix: walk us through what happened with brexit conversations. parliament tying theresa may's hands as she goes to brussels.

walk us through how that plays in. four guy: hours the parliament has exerted its sovereignty effectively forcing theresa may to ensure that the parliamentarians in the u.k. have a vote on the final deal. that is a proper vote. that kind of means there is a checks and balances factor that comes in on the ultimate deal. inre's another big boat which theresa may hope to codify the data -- codify the date. backsa may, having a push from within her own party. this is something coming from the tory party. the rebels coming through and voting with the labour party to make sure parliament has its say at the end of this process. that probably makes a harder brexit less likely. alix: definitely no one wants that job. appreciate you breaking down the headlines, guy johnson.

interest rate decision at 5/10 of 1%. modest tightening over the next three years. ofthat buildup -- a buildup pressures and they know the progress and breads talks. a conversation around the scene is much more to -- more dramatic as they factor in what's happening with brexit. sterling, flat on the news. lisa: i'm looking at teva. breaking news that recently crossed. tebow to cut about 14,000 jobs as well as suspend its dividend, about 25% of its workforce. to put into perspective what this company is, the largest pharmaceutical company that supplies generics in the world. more than $30 billion of debt. very closely watched company from the debt perspective. it has been trying to shore up its balance sheet after making a number of acquisitions it has

failed to grow into. it has seen its leadership change. taylor -- teva with job cuts planned, 25% of its workforce. alix: the other story with disney, drink by fox, assets for $52.4 billion. fox will keep its broadcasting as well as some of the real estate and you wind up having disney take on its stake in sky as well as hulu. marvel, avengers, the movie studio and all the content as well. both stocks higher in premarket. to closingl adding at the end of june of 2018. bob eiger says he will stay on with disney until 2021 present ugly to smooth the transition of the acquisition. where does james murdoch know and where does fox go after this? asking these questions to bob geiger, joining us in the 9:00 a.m. hour. this is bloomberg.

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emma: this is bloomberg daybreak. resident trump is promising the average american a giant tax cut and says it could be ready in time for christmas. the president made closing arguments for tax deal republican leader signed off on yesterday. he's had a family of four earning $75,000 a year would see a tax cut of more than $2000. theresa may has suffered a serious brexit defeat at the hands of her own party. lawmakers voted to change brexit legislation to guarantee parliament votes on the final deal to leave the european union

. that raises questions on whether making get enough support for her vision of brexit. may is headed to brussels for european summit. , the government has unveiled a $19 billion stimulus program to private sector groups. the money will be used to support housing construction and fee waivers for small businesses. the government hopes it will create jobs. that is your bloomberg first word news. alix: the first central bank or one of the bent -- one of the central bank news comes from the boe. holding pattern is the theme for the bank of england and you can see that reflected in what happened with sterling. flat on the day. the ftse down by 1/10 of 1%. the boe meeting rates of 5/10 of 1%. modest tightening over the next two years. buildup of domestic inflation pressures at how much can they say with the brexit question over their heads? joining us for moore is the

silly cerami -- the sea lisa rir vassili: for investors you cannot separate the boe from brexit. i think there was hope that because of the progress they made, the doe might be more hawkish. they did mention in the statement but it really was not very strong. -- hikes remain in place. we don't expect the next hike until 2018. not much to get excited if you are here. lisa: let's talk about things that are pretty exciting in the central bank world. we talk about the bank of england, the ecb, we talk a lot about the fed yesterday but we got a lot of decisions from the switch national bank -- the swiss national bank. surprising markets and saying they were going to possibly hiked rates sooner than expected before the end of next year.

what is your take on this? a global synchronized tightening the people worried about. vassili: there's a huge difference from 2017. we came into this year thinking the fed is going to hike, everything else is a snoozer. 2018 will be the year when different central banks move at their own pace. i think you have to pick your winners and losers here. , centralperspective banks in scandinavia are underpriced in terms of how hawkish they can get. lisa: do you think that the chrome is going to gain more? vassili: we are bullish on the region and swedish currencies as well going into 2018 because an overlookeds part of european growth story. the currencies that have their own central banks so they are not tied to the dovish ecb outlook. lisa: there was somewhat of a different take with the rate

hike not doing enough and going far enough to stave off the inflation they have seen. the lira fell against the dollar. do you think the pain that has been ongoing is going to continue? vassili: sometimes you hiked rates to keep the currency stable. i think turkey is not the currency we particularly favor into 2018. we got to see more hikes. mexican central bank is probably going to hike rates. is it just responding to the fed ? what is the motivation? think thereeral, i is safety. that year will be a whole new game with central banks having more reason to tighten policy. who are you watching most closely at this point? we're getting a lot of decisions, a lot of noise. who's going to be the bellwether for this?

vassili: that is a great question. the ecb is one central bank that i think matters a lot. obviously if we start getting any inflation surprises, you look at the way european rates , -70 basis points, you got to start thinking if there's any inflation surprises in europe european rates can move even until might not be hiking 2019. i think it's not just about where you start, it's about how far and how quickly you can go. the dollar is not benefiting it isrom the fed because largely priced in. the cycle is mature. focusing on cycles that are still kind of nascent. alix: we wind up getting the ecb decision today. a survey of bloomberg survey of economists and says the ecb is

going to taper bond buying to zero in the fourth quarter but they won't make that decision until midyear. vassili: we agreed there is no point pre-committing now. alix: going to have to answer questions about tapering. he's avoided it at every conference and mario draghi cannot a they have not talked about it again. -- vassili: hee has become pretty good at describing things differently. is no point for -- no point in pre-committing right now. growth is good. 2020 inflation forecast will be 1.8% which is somewhat optimistic. quite positive for the euro. it is about growth for the moment.

alix: what does that wind up doing to spreads? if you take a look at the two-year spread, how much wider could something like that get? vassili: if you try to trade the facts on the basis of two-year spread you would've lost or should probably. i think the fed is reaching a stage where unless the long-term set point starts going up there is a cap on how much u.s. rates can move. a lot more potential for european rates. it is not just the short term rates it's about the longer-term rates as well. the 10 year bond yield at 35 basis points, that has quite a bit of potential. deep in moreurves than the u.s. curves it will be positive for the euro. lisa: i have to bring up some euro area data we got overnight. manufacturing prices increase at .he fastest pace on record

the price that consumers pay, you're not seeing the actual consumer prices and the manufacturing. at some point, don't you have to -- the ecbcp is good is going to have to respond to this? vassili: it's a global phenomenon. the response of inflation to growth has not been the same as it's been in the past. central banks are trying to figure out why. the flatter phillips curve, competition, technology, those questions have not been answered yet. lisa: we were speaking with one jpmorgan strategist who says he could foresee a scenario in which the ecb would lift deposit rates before the end of next year. that seems highly unlikely based on where markets are pricing things but do you think that is a possibility here? vassili: what the ecb has signaled so far is no rate hikes

until the end of qe. we know that is not going to happen before the end qe. i would have to be some kind of large surprise in the first half of the year that would accelerate the qe tapering and that would enable them to hike. we have a hard time seeing that. if they are hiking in 2019, when you look at the two-year rates or longer rates, they should start reflecting that this year because they're capturing this period when the ecb will be hiking. alix: it we see them buying less sovereigns and more corporate debt? vassili: we think most of the cuts will be in the sovereigns. i think the parameters were largely outlined in october. i don't think there will be any surprises on that front. alix: great to have you to break it down. serebriakov. the news of the morning. his knee buying assets from fox

for $52.4 billion. some of the details we continue fox looking ate annual revenue of about $10 billion despite the fact that they are spinning off assets. keeping some of the tv business. bob iger staying on until 2020 the acquisition close. we will see about sky, how sky gets approval. lisa: also in the cards, james murdoch, what is his role going to be? alix: we will ask. bob iger will be joining us at 9:00 a.m. eastern.

alix: this is bloombergs a break. two hours before the cash open in the u.s.. european stocks flat.

awaiting the ecb decision just about 15 minutes time on the heels of the fed hike yesterday where you mount up seeing short covering in the treasury market. if you change up the board and take a look at the tenure market, yields moving higher about two basis points. the theme of selling continues in the bond market. also taking a look at sterling after the boe did nothing. currency does nothing. yields moving lower by three basis points. busy central-bank day. it lets get an update on what's making headlines outside in the business world. flash,n the business about te --liminate willva eliminate about 14,000 jobs. suspending its dividends. the company is struggling with $35 billion in debt. a change at the top of ubs costs wealth management group.

unit cost chief is stepping down. martin blessing is the former ceo of commerce bank. the move makes blessing of potential successor to ubs s -- steve: can start managing other people's money. his new hedge fund plans are making some investors wary. according to people familiar with the matter, the new fund with lockup capital for 1.3 years best for one to three years. clients would be able to withdraw their money by paying an extra fee. alix: here is your news of the morning. buying assets from fox for $52.4 billion. there will be an asset spun off from fox like real estate as well as their news section. a huge downside for rupert murdoch in his business. he spent his whole life amassing assets and now he is selling a bunch of them to disney for

$52.4 billion. disney beating out comcast. bob iger staying on 32021. , whatestion now being happens with regulation. joining us for more, dan ives, chief strategy officer and head of technology research for gbh insights. know at this point? geetha: i think the biggest problem for this deal right now is what the regulatory environment is going to be. we have seen an unsettled environment with the doj blocking the at&t/time warner merger. that is a merger that was supposed to be a slamdunk and it has not sailed through. that poses interesting questions for this deal, given that it's a combination of two powerhouses

and is a horizontal merger. we don't know the succession issue. we know that bob iger is going to stay on until 2021 but the real question from investors whether james murdoch could be a likely successor. lisa: i'm just wondering about the point that alex made a little bit ago, the culture clash between 21st century fox, the producer of things like logan,nd deadpool and avatar, some of the big movies, how this merges with snow white and the seven dwarves. is there an issue with this? are we getting more color around how this will go down? geetha: if you see disney's track record of mergers, they've had an extremely stellar track record. all of the acquisitions bob iger has done he has managed to integrate them beautifully. the x-men properties with deadpool that you just mentioned , actually a great fit because that's the only marvel property

disney does not have. now they have a complete set. a great thing for disney. they will be able to mine all these franchises in many different ways possible and they just know how to integrate and mine properties read nobody does it better than disney. alix: that's the interesting point, properties. the big acquisitions bob iger has made, looking at abc, marvel, pixar. this is really a distribution deal. if you take a look at sky, they get inroads into india. what do you make of that shift for disney? dan: this is all about going after netflix and the streaming market. there's been a massive shift. this was disney realizing this is the opportunity that i think we will look back on years from now, this is where they pivoted into the streaming content world. they are launching their own service in 2019, now from a

content perspective, they become king and they come in a position of strength to go after that streaming market with the likes of netflix at the top, amazon, apple, hbo, that is what this is about. 35% to 40% at the box office, but this is about streaming and pivoting from traditional media to a direct to consumer play. they realized this was the window. now was the right time and with ger staying on a 2021, now to strategically navigate this. your other guest talked about potential regulatory issues. lisa: you bring up an excellent point. what does this mean for netflix? we know amazon prime has other streams of revenue but is this combination of disney with fox's assets, is this hugely problematic for netflix and huge

headwind? dan: netflix right now, it is their world and everyone else is paying rent. so far ahead u.s. from a consumer standpoint as well as the international buildout. i believe this becomes a competitive issue if disney executes successfully, how they navigate hulu, and ultimately how to build out the content. this is something where is a competitive risk to netflix, to amazon, but those companies are also significantly ahead of where disney was with doping out content, building out -- with building out content and building out to distribution. have player spending six to 7 billion -- 6 billion to 7 billion. disney is in a position of strength. they become the legitimate content competitor on the streaming side to netflix. you

could not have said that yesterday. alix: maybe we will actually get a good fantastic four movie. wouldn't that be insane? -- ones and geetha bloomberg intelligence. we will be speaking with bob iger. lots of questions for him, especially on succession. one of our other top stories comes from the fed. the fed raising rates upping its growth forecast projecting three rate hikes in 2018. inflation uncertainty percolates in the fed. >> i consider it an important priority to make sure that inflation does not chronically undershoot our 2% objective. and i want to see it move up to 2%. most of my colleagues and i believe it is being held down by transitory factors. there is work undone there in

the sense that we need to see it move up in line with our objective. alix: our next guest critics a 75% chance the federal raise height -- raise rates in march. always a pleasure. jan: it has been a while. alix: why four rate hikes next year? jan: we are saying they will keep doing what they have been doing. they have been hiking or starting the balance -- the balance sheet runoff since the fourth quarter of two vessels 16. with the economy growing more quickly than it has for most of the past year i think you are going to see further downward pressure on the unemployment rate area they lowered unemployment numbers to 3.9% for the end of next year. still more downside. we think it will fall more sharply. while chair yellen says bringing inflation up to 2% is an important priority, and we don't think it's going to quite get it's also an,

important priority to stabilize the labor market. they think the labor market has just about improved as much as it can on the sustainable basis. lisa: does that mean an inverted u.s. yield curve? jan: i don't think so. they do more than what markets are pricing at the moment. markets believe the data justifies what they are doing, then the expected level of short-term rates over the next 10 years is going to drift higher. that has an impact on the long end of the yield curve. in addition to that, the term premium, which chair yellin referenced in the press conference, probably also has room to normalize. i think you will see somewhat higher yields across the yield curve. lisa: do you think there is going to be any problem with short-term rates rising with consumer debt? apart from mortgages has reached all-time highs and is more pegged to the short and rates.

jan: of course there will be some impact. the point of raising rates is to have an impact on financial conditions and slow growth if you look at the labor market from the near 200 -- the near 2000 two 100,000. some thing has to happen to bring that about. i think there will be pressure on the consumer. i don't think the consumer is overleveraged overall. in particular, mortgagors tended to be more important from a macroeconomic perspective than other consumer debt. alix: they wound up a lower short to medium-term unemployment rate but inflation projection stay the same. do you think that implies the don't see the phillips curve working and they need a different model? jan: the phillips curve is one thing but there are other things that affect inflation. these numbers are always marking to the latest data.

the latest data says the labor market has made further progress. you got to recognize that. at the same time, inflation .umbers have been pretty mixed they have not been as strikingly weak as they were over the summer. yesterday's cpi was on the soft side. whether that found its way into the projections, hard to know. i think a lot of this is marking through the data as any forecaster has to. alix: yesterday when we had that dovish height feel in the market -- you're smiling. you did not buy that. jan: i'm smiling because when they hike there is almost always the sense we got this out of the way. in the end it was not so bad so many fixed income can rally a bit. it's a bit of a deja vu kind of feel. lisa: four rate hikeslisa:, every year wall street analysts have been two optimistic with

how high yields are going to rise. actually they did two or three hikes. they started the balance sheet runoff which nobody was expecting at the start of the year. more than expected. for sure. 2017 has been a different story. alix: what is your terminal rate forecast? jan: alix: 3.5. how much do you think the fed in theershoot that? short-term to they wind up getting over that at all? jan: in our forecast, no. that is what they get. lisa: which asset class gets hammered most with four rate hikes? jan: the most direct impact is on shorter and intermediate-term bonds. a very loaded term. there will be some pressure in that area.

lisa: what is your returns target for intermediate-term bonds? what do you think is going to be the return? jan: i think they will be low. there will be periods of negative returns when you have sharper increases. gradually inappens our forecast because we don't know which month is going to be a really bad one in which is the recovery. there will be periods where you do see negative returns. alix: you are one of the polish forecasters for global growth this year. we are seeming to be on a global tightening cycle in some respects. what do you think about that going forward for 2018? there will be places where you do get tightening overall i would say the u.s. in the dm world is the major economy that is tightening. i don't think the ecb will be tightening anytime soon. i don't think the doj -- the boj

will be tightening soon. places where you probably will see tightening and we mentioned some of them. the more strategic view is that this fills quite a bit of slack in the emerging world. emerging markets did quite poorly 2015 2016. they've done better recently growing at a quicker pace. ofll a decent amount capacity. i don't think there's any need to slam on the brakes in those places. overall, i'm constructive that central banks can rise in a good amount of growth. alix: we will get the latest central-bank decision from the ecb. here is where markets stand. a few seconds away. s&p futures pretty much flat. euro-dollar, pretty much flat. ? not a lot of movement -- are you getting the theme?

not a lot of movement. one of the bigger movements comes from the bond market in the u.s., 10 year yields moving up to basis points. the selling of the treasury market continues after yesterday's short covering rally . sterling also going nowhere after the boe not decision. you wind up having u.k. 10 year not doing much. a decision is out. the ecb main financing rate comes in the same, 0% marginal same.g facility, the the deposit rate facility down for basis points. no change in any of the main rates from the ecb. they seek you even running until the end of september or beyond if needed. they see rates at present level past the end of net purchases and starting from january they will buy 30 billion euro a month of bonds. they will reinvest for an extended period after the net buying and's. that will be a key question. what do they wind up buying and

paring back? my guess is we are not seeing much of anything. the euro versus the dollar, pretty much flat coming into the news and pretty much flat on the news as well. maybe a modest leg lower but we are flat on the day and 118 is how we print. if you take a look at b unds, up by one basis point fairly. i want to get more details from richard jones, joining us. take us through some of the details of the decision. richard: i think this will be an interesting meeting because we will be getting an update to the stock forecasts for growth and inflation and i think once we get that to coincide with mr. 's press conference we will get a better idea of what the ecb is thinking. given the strong soft and hard

data we been seeing out of the euro area, we can fully expect them to increase growth forecasts. the key will be what they do with the inflation forecast. .hether they lift those higher that has been the elusive thing. growth has picked up in the area but inflation is too low for the ecb. alix: what is your take? jan: inflation numbers? in the euro area it is easier to .xplain the weaknes unemployment rate is 8.8%. spain close to 17%. it looks to me like there is quite a lot of slack. in that environment you expect low-inflation. that i think means we are seeing wantsrowth, but the ecb that growth to continue and they want to make up more ground relative to unemployment. lisa: how much are we expecting to learn today about the composition of the ecb's bond purchases and re-investments?

we know they have been buying corporate bonds as well as government. we going to find anything out today about that? richard: i think we might get a little more. i'm not expecting that to be the key take away from today's announcement and press conference. the forecasts will be the key take away. we've got a good scare on what the ecb is thinking. the forecast is a keeping to focus on. i think the inflation bit is the most interesting. lisa: i want to stick with the composition of the ecb's balance sheet because that has a big effect on investors portfolios. steinhoff, we know the company that includes sleep these in the u.s. to the mattress maker. they have had a dramatic fall and the ecb is thinking of selling their holdings because they have been downgraded to junk and no longer fit into their characterizations. this is important for the market.

the you think the composition is going to change? what does that do to the positioning of investors? alix: lisa is a bond nerd by the way. lisa: bond interested human being. be: that will probably mostly in governments. what happens beyond september 2018 i think is still unclear. environment is not going to be quite as favorable from the perspective of central-bank demand for assets. i think it's a gradual process in the euro area and i don't have an investment view on sleep ies. ,isa: the reason why i ask this when i talked to bond fund managers, they scrutinize the ecb balance sheet. you talk about it on the desk? jan: not at that level of

granularity. i do think it has been very important what they have been and onn forward guidance qe. mario draghi has been successful in getting the euro area economy going. we focus more on the macro. alix: if you take a look at pm eyes, killer in europe. does that gel with 33 basis points on the 10 year bond yield? jan: 33 basis points is more about the level of utilization in your area as a whole. 8.8% unemployment and 1% core inflation rate. maybe it is a little lower. over time it's going to go up. if you focus on the level. gross -- the growth rate is a different story. making up ground.

a lot of ground to still make up. important to keep those concepts six thanked -- important to keep those concepts so synced. we talk about rates of change because it's fast-paced. that is normal. from a policy perspective you have to focus on the levels. alix: in about 40 minutes time, mario draghi will be in the hot seat. richard jones, the number one question you are going to ask if you're in the room? richard: i would like to see when they sink the buoyant growth we are seeing is going to start feeding into inflation numbers. that is the conundrum. there is probably more slack than a lot of people think there is. it would be nice to get a bit of a time frame on when the ecb expects growth numbers to feed into inflation. alix: great stuff area very

special thanks to richard jones .f bloomberg and jan hatzius and a little over 40 minutes we were here from mario draghi. newslive coverage of his conference. this is bloomberg.

alix: and chair janet yellen weighs in on the potential for growth. >> most of my colleagues factored in the prospect of fiscal stimulus along the lines of what is being contemplated by congress into their projections. some havemphasize been -- into their projections throughout the year. alix: we are back with jan hatzius. jan: about a quarter point in

2018 and a quarter point in 2019. that is meaningful. it is not enormous. i don't think it's too far away from what i am gleaning from the feds forecast. they raised numbers for next year by 4/10 of a percentage point. also probably pent up demand for increases because the numbers have been better. it looks in the same kind of ballpark. alix: what does that mean for the fed? jan: at the margin if you get an extra .5% of gdp relative to potential, it's probably worth an additional hike or so. maybe a little above that depending on how you think it feeds into unemployment and inflation. it supports the idea that the fed is going to keep going. introduceakers to some infrastructure bill early next year. is there any room left to do that given the battle here and

the changed composition of the senate? jan: you mean from a political spectrum -- a political perspective, could they do it? we don't put in a lot of probability. it's relatively low. basically because there is not that much demand for infrastructure. the trump administration is in favor. a lot of democrats who are in favor. a lot would still have to happen for that to be passed through congress. on the republican side there's not much demand. we are getting more spending for disaster rebuilding. that is also a factor. alix: jan hatzius of goldman sachs. disney on deck. this is bloomberg. ♪ retail.

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>> $52 billion worth of 21st century fox assets, and epic downsizing for rupert murdoch. central bank whiplash. the ecb and the bank of england keep rates unchanged. is set to unveil the 20 outlook and investors very hungry for clues for normalized policy. thursday.come on this i am alix steel. david westin is off today. he definitely gave me notes and these are the kinds of things. an hour and a half before the cash open here in the u.s. .quity futures flat s&p is flat, euro-dollar, ecb does nothing.

the selling resumes a little lighter. fascinating.ind of you see the dollar gaining and following as it failed to increase rates, enough to give confidence that it is staving off inflation. that theygaining could raise rates sooner than possible. fascinating story, and a company with more than $30 billion of debt, the biggest generic drug maker in the world. they are cutting 14,000 jobs, 25 percent of their work staff. their stock is surging. up 16.7%.

is moves, are whether it paring down. >> we see in the media world, even telecom, it has to be about building up strength. >> the other interesting thing is the tax plan. companies will see a negative impact for the plants. >> let's get an update on the business world.

trump is promising the average american a giant tax cuts in time for christmas just as he was saying. family of four earning 75,000 dollars a year would see a tax cut of more than $2000. president, vladimir putin, says accusations that president trump colluded with russia has hurt the u.s. political system. he says the claims against trump have been spread by political opponents to undermine its legitimacy. an agency says it will not be a happy new year for opec and its allies. new supplies from u.s. shale and other competitors may grow faster than demand next year. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries.

i'm emma chandra. this is bloomberg. news of the morning, disney buying certain assets, $62.4 billion that includes film and television studios along with cable and international tv businesses. you wind up having stocks moving higher and now they are lower. intent onas been making content acquisitions and you could make an argument this is a distribution acquisition. , what do you make .f the distinction >> arguably some of the best properties in the world but they have publicly acknowledged over the past few years that they a gooddid not have

distribution strategy. when they announced they were going to pull content off of netflix, it was a little bit of a defensive move. you see them going in on the , getting the very dis--- disproportionate distribution channel in europe, which gives them a whole platform in an emerging market weather is a lot of growth. and international is what the deal is all about. collects can use when the market move, the initial response for companies as people dig through details, shares have gone down why? dealbig concern for the will be the whole regulatory issues surrounding it. we saw a earlier the department of justice blocking time warner and at&t mergers, which is a

vertical transaction. there is a lot of uncertainty on how it will play out. investors were possibly expecting a higher valuation may be for fox. what trumps everything is the regulatory environment. >> joining us is a reporter. >> necklace and amazon spending the kind of money on content and , he cannotke that really get that, so he decided it would be better to get rid of the businesses and start talking to comcast as well and verizon is also in the picture.

disney won out. it also means they get to have a stake in it. james murdoch, his birthday was yesterday. >> what were the main sticking points in the negotiations? what is a part of that? that out.ed to sort he is 86 years old and wanted to make sure his kids are in the , will probably run the rest and there is talk they .ight want to merge that >> walk us through the transaction of stock and debt or how much debt will he take on and who will get what in the deal? >> it is an old stock offer. that is being funded through .hat

. i have to double check on that. >> story for century fox in negative territory. headlinesow, bringing , disney ceo joining us at 9:00 in london. do not miss that. turning to our other big story of the day, keeping rates unchanged as expected. it will be about an economic update and what we see for 2020. joining now is the mortgage -- morgan stanley chief strategist. do you see a tightening bias next year? risks, the single biggest

for next year. we are reaching a point of peak liquidity. a risk that does present to the global economy. the size of financial markets today, if you look at financial we're 3.5 times larger than the economy. any movement in financial assets has a big effect now on the real , particularly when household savings rates have dropped. hass rare in history of 3% changed. how much of the household is ,elying on the effect to fund --you end up getting possibly declined -- rather than the other way around is a condition to thinking. expect froman we

the ecb and a few minutes? is there a hawkish surprise we're looking for? cutael: they said they will in half starting in january. do that?hey do they cut in half, do they go more to the corporate bond space, and now it looks like they are going bankrupt and will lose money on that. and have a lot of problems plus they will loose some ground in terms of what they are doing .n the corporate space . we may see some news out of that that may influence some bond market. buying in half.

that has forced them to go elsewhere, including in the united states, and they can buy more sovereign in europe half. that has and we see an effect on the u.s. as well. was saying last year, that this year would be a real rate -- year of change. we saw negative yielding debt has increased to $9.7 trillion from $9.3 trillion a year ago. why would next year be different? collects we are doing this exercise and this year at the we got it really wrong. they expected growth to remain sluggish and inflation to rise and the opposite happened. the optimism has slung -- swung the other way. it sounds contrary to what is happening in the markets, but i next year we have

peaks likely to hit. peak growth in the cycle. we look at institutional regional investors today, it is close to an all-time low. on.t of risk has been taken liquidity in the mix of peak youth and peak is issuing, could have a fair amount of trouble for financial markets in the second half as liquidity begins to wane. alix: great to have you here. coming up, a tax debate continues on capitol hill. the clock is ticking, like five or six days. we will be joined next. this is bloomberg. ♪

emma: disney has agreed to a $52 billion deal which breaks up much of the fox empire run by rupert murdoch. u.k. pay-tvhe provider. murdoch will keep running the fox news channel. shares of pharmaceuticals eliminated about 14,000 jobs, more than 25 -- delta airlines to update its fleet. the airline agreed to buy jet

liners. delta has an option for 100 more. the company has also considered buying the boeing 737. that is your bloomberg business flash. trump delivered a speech rallying his support for the tax bill yesterday. want to givemp: we the american people a giant tax cut for christmas. giant, i mean giant. as we speak, congress has reached an agreement on tax legislation that will deliver more jobs, higher wages, and max relief forve tax american families and companies. alix: janet yellen did not seem as optimistic on the growth yesterday. janet yellen: along the lines of

what is being contemplated by congress into their projections. i should emphasize some have incorporated those expectations into projections throughout the year. us is one of the handful of republican lawmakers on the committee working to finalize the tax bill. diane black who once upon a time had a balanced budget amendment. thank you for joining us. we have two republican senators criticizing the bill because it does not do enough for the middle-class. it helps the high-end earner spirit what is your response? >> i want to make sure they are looking at the bill we are looking up -- looking at. take care of the people right there and as we work through the process, i felt there were times where we were not doing what our main goal was. earners got the greatest relief

but i'm feeling very comfortable in that space and looking forward. american people can see a reduction in their tax burden by february. the irs has begun to initiate theprocess so we can see first checks make a difference. >> republicans are known for being fiscal hawks but this tax plan will likely increase the deficit by more than one trillion dollars. how are you planning to offset that? slung thing for me as a legislator is our congressional budget office and jet -- tax committee cannot use economic iswth and show there macroeconomics. -- >> excuse me, they do use it and even with that, the deficit would be is over one join dollars. >> if you are to have outside macro economic

growth, that is a different thing than what we have in the house and the joint tax committee. back in history, it is not just what we know from outside sources, but look back in history at what happened in jfk's time. look what happened during reagan and clinton's time. we know that occurs. but i fiscal hawk, realize it is not just what we do to simulate the economy, we have to be careful we do not continue to spend that money. that is one of the greatest problems, when we see the revenue grows up, the spending goes up on the other side. i am proud to say our budget committee put at the budget that was the most conservative budget in 20 years. conversation.

we have got to talk about this year after year. we can never balance the budget. up, want to put this chart and it shows what happened after the reagan tax cuts and after george w. bush's tax cuts, revenue fell. there is no study out there that suggests you will have anything less than one trillion dollar budget deficit. people are wondering what -- our tax cuts more important. budget?ancing the you wanted to do that when you came kook -- to congress. >> i was a sponsor of the balanced budget amendment.

it is a two-way street. two thirds of the budget, we can do an annual budget every year. we are only dealing with one third of the spending. we have got to adjust it. until we are willing to, we will never balance the budget no matter how much more money you bring in a few continue to spend more and you do not look at that side of the equation. will seehat mean we legislation from house republicans that will cut social security and medicare? >> there is a will here to congress. how we can go to welfare reform and make sure, it is not just the saving of money, it is actual work for people here in

make sure our policies give them the ability to succeed without the government. in january where that talk will be taking place. it is not about the dollars. i know what it is like to work my way out of eating in poverty. that work is what really makes a difference. many people talk about the saving of the dollars. but you really save a life. what is your trade-off between the deficit versus the tax reform? >> in the economic expansion at this stage, whatever happens,

and the ninth year of economic expansion, i am a bit disappointed with that. we would like to see a race to the bottom. a corporate tax rate and we need to compete. loopholesointed more will close. i think this is for both parties. same people who are now raising this talk about emphasis with couple ofeople a years ago, saying no interest rate forever, more interest-rate

expending, let's raise the debt and deficits. i feel the victim here is the surpluses, germany likes to have a balanced budget. we really appreciate it, ruchir sharma. assets from fox. here is what we know from the call. expect the deal to close in 12 to 18 months. to offset any dilution from the deal, it will help them accelerate. much more of that for the next two hours. this is bloomberg. ♪

alix: we are just moments away from mario draghi's news conference. we want to hear an economic forecast it what will it be for inflation in 2020?

will it rise any closer than 2%? equity futures flat. a little negativity for european stocks, down .4%. the euro-dollar is how we print up 1/10 of 1%. right around the highs of the session and the bond market, we are seeing a bit of selling up one basis point. substantialseeing buying here, yields down by about four basis points. same with spanish yields as well. sterling up by 1/10 of 1%. sterling a nonstarter. up by three basis points after that rally yesterday, 237 on the 10 year. eyes will be on what is happening with mario draghi. ratesb left interest unchanged, keeping options open beyond the schedule and the qe markets little changed before any kind of re-think.

michael mckee bloomberg international economic correspondent. what is the first question in the press conference. >> the key thing is whether the inflation forecasts are higher. rates higherowth in the forecast, why is inflation not rising as much as it should. not only mario draghi, i think it is the key thing i want today. mike: we have eco-data out for the u.s. strong sales for the month of november up from 2/10. so americans are spending, which

is good news. republic.ana we seeing data from the storms? >> it does not look like it. saying, we are not getting inflation in the if the ecbes, but sees more inflation and janet yellen does, better that -- better than expected but no inflation. >> you are seeing mario draghi himself take his seat in his chair. the question will be what about projections from growth and inflation. 1.5% and inflation at 1.7%. will it get closer as it goes on to 2020. will they extend their bond buying program and wind it down in september?

we have 625 council members to the end of september question market will be hard for him to ignore that going forward. mario draghi taking the center stage read about -- right around the highs of the session. mario draghi: ladies and gentlemen, the vice president and i are pleased to welcome you to the press conference who now report on the outcome of today's meeting of the council, also attended by the president of the euro group and by the commission vice president. based on the regular economic and monetary analysis, we decided to keep the key ecb interest rates unchanged. them tonue to expect remain at present levels for an , well past the

horizon of our purchases. monetary no standard policy measures, we confirmed from january of 2018, we tend to continue to make asset purchases under the purchase program at a monthly pace of 30 billion euros. until the end of september of 2018 or beyond if necessary. in any case, until the governing council sees a sustained adjustment and inflation consistent with its inflation aim. becomes lesse favorable or the conditions become early progress, we stand -- and the duration. him --

mature securities purchased under the asset purchase program for an extended time after the end. in any case for as long as necessary. this will contribute to favorability conditions and appropriate monetary policy stance. our monetary policy decisions financialrved conditions needed for flight -- toward levels close to 2%. it indicates a strong piece of economic expansion and improvement in the growth

outlook. the strongest cyclical momentum give grounds for greater confidence that inflation will converge. domestic price pressures remain muted overall and have yet to show convincing signs of a sustained upward trend. it remained necessary for underlying pressures to continue to move up and support headline inflation developments over the medium term. supporttinued monetary is provided by the additional purchases for october monetary policy meeting by the sizable stock of acquired assets and

forthcoming for investments and forward guidance on interest rates. let me explain the assessment in detail. starting with it economic analysis. of 2017, realter gdp increased by 0.6% quarter and quarter after 7% in the second quarter. data and surveyed results have broad-based momentum. it has facilitated the leveraging process and continued to support domestic demand. isvate consumption underpinned by employment gains, also benefiting from past labor market reforms and by rising

household wealth. investment strengthens under very favorable financial conditions. and strengthening demand. housing investment is also further over recent quarters. supported byeing the broad-based global expansion. this assessment is broadly reflected in december 2017 euro staff microeconomic projections for the euro area. projections foresee annual rate 2017,ncreasing by 2.4 in 2000 18, 1, 1.9% in

.7% into the 20. -- in 2020. the outlook for real gdp growth has been revised up substantially. surrounding remain broadly balanced. strong cyclical momentum underpinned by continue positive developments and sentiment indicators could lead to further positive growth surprises in the near term. relayde risk continue to primarily to global factors and developers -- developments in exchange markets. according to an estimate, euro area annual inflation was 1.5%

in november, up from 1.4% in october. measures of underlying inflation have moderated somewhat recently a part owing to special factors. looking ahead on current futures prices for oil and annual rates of headline inflation are likely to moderate in the coming months , mainly reflecting these effects in energy prices before an increase in the game. underlying inflation is expected to rise gradually over the supported by monetary policy measures and the continued economic expansion, corresponding absorption of economics and rising wage growth. this assessment is broadly reflected in the microeconomic

projections in the euro area which foresee inflation at 1.5 1.4 in 2018, 1.9 in 2019, and one point seven in 2020. compared with december of 2000 17, macroeconomic projections, the outlook for headline hi cp ,nflation has been revised up mainly reflecting higher oil prices and higher food prices. journey to monetary analysis, we continue to expand at a robust base with an annual rate of 2017, in 5% of october from 5.2%, reflecting the impact of the ecb's monitor policy of

-- policy measures, and the cost of deposits. aggregate monetary continue to be the main contributor to broad money growth, expanded at an annual rate of nine point are percent in october after 9.8% in september. the recovery in the growth of lows in the private sector since the beginning of 2014 is proceeding. the annual growth rate of lows to multinational corporations andeased 2.9 in october september with an annual growth rate to households, it remains stable at two point 7%. monterey measures put in

place, june, a continues to significantly support borrowing conditions for households, access to financing, notably for small and medium's center rises, and credit flows across the area. a cross check of the outcome of economic analysis where the signal is coming from the monitor and else is can earned the need for an ample degree of monetary accommodation to secure a sustained inflation rate to levels that are below -- but close to 2%. in order to reap the full benefits for monetary policy measures, other policy areas must contribute to strengthening longer-term growth potential in review -- reducing vulnerabilities.

the implementation of structural substantiallyo be stepped up to increase resilience and boost euro area productivity and growth regarding fiscal policies, the increasingly solid and broad-based expansion strengthens the case for rebuilding fiscal buffers. it is particularly important work -- and companies were debt remains high. all countries would then if it from intensifying efforts toward achieving a more growth friendly composition of public finances. a full, transparent and consistent limitation of stability and growth of the procedure over time and across countries remains essential to

increasingwork -- and companiest remains the economy. strengthening economic and monetary union remains a priority. the council welcomes ongoing discussions of completing the bank it union and capital markets union and further enhancing the institution of architecture of the economic and monetary union. and now we are at your does azil for bastions. >> in the front row. >> bloomberg news. that you see installation at 1.7% in 2020, do you consider that sufficient progress in the medium-term and does that in any way effect your current plans for the asset program?

and on the corporate sector purchases, you said in october they would remain sizable, and where any further details decided in that regard and could you clarify whether that would mean we could see the same amount of corporate bonds being purchased or will simply the proportion -- overall program be higher? thank you. >> the answer to the second question, i cannot elaborate third it will remain sizable, i have not touched that today. language, it will remain the same as last time. on the first question, by and large, the overall discussion today reflects the increasing have in thee of inflation toward

a self sustained inflation path in the medium-term and toward our objectives. of inflation toward a selfgenerally speaking, the gh news are very positive. i cannot elaborate on that. thenow the vision in projections go in the right directions. thank you. >> from cnbc, a follow-up question on one will you give us more of an idea of how the qe program or the asset program will look like after september? there is speculation it could be of -- july ory june. the second question is whether you, the governing council or

yourself have thoughts about what it means that the monitor policy is most likely still in place when we see the economy again, meaning that you could be left with not a lot of ammunition as a central bank to counter the economic again, meaning inflation,uld be leftdownturn,m what is your idea here? it frankly does not seem likely today. in a sense, it seems to be a more remote possibility that would it be -- that it would be a year ago or six months ago. on the other point, really, if we go through the statement i just made, let me go step-by-step.

we continue to expect interest rates to remain at a present level for a time and go past the arrival for purchases. we confirmed from january of 2018, we continue to make asset purchases under the program until the end of september of 2018 or beyond if necessary. change ins not any the language or intentions. reinvests euro system securitiesr purchased for an extended time after the end of asset purchases and in many -- many is, as long as necessary. securities considerations on inflation or even though growth has improved, and will continue to be proved and has improved

more than expected and will continue to improve, that is what indicators say and also projections, the news on mutedion remains somewhat and was say price pressures are muted and we have not shown convincing step -- science. so on ample degree of conclusion -- it therefore remains necessary for underlying inflation pressures to continue to build up and support headline developments over the medium-term. so no change. >> thank you. for reuters. did you discuss cutting the link and guidance and what is your view on the question?

inflationon the 1.7% do you maintain what you said lester that 1.7% is not in line with the target? >> we first of all did not discuss that link. that was not discussed. it is probably worthwhile spending some time on that. noticed, we have not used the word recovery. we have used expansion. the expansion gains further strength and keep some naturally, the stimulus will come and it will come from all the elements of the package. therefore, as a consequence,

coming from forward guidance, interest rates will gain further and further importance. process led byal the recovery. our process accompanies the recovery, as i had a chance to say some time ago. the other point is 1.7. is -- is that it is close but how close is it? strongue is more of how is the conversion desk anvergence path toward sustained and sustainable inflation rate which is close to below 2% in the medium-term. developments we are witnessing on the real economy increase our

confidence for a gap that will get close in the course of next and improving conditions in due time should increase pressure on nominal wages. that has been one of the weiables -- very -- barriers have been looking at as one of the drivers of the underlying inflation and one of the drivers or sustained progress in headline inflation. >> given the economic outlook and also given revisions for significant ass you mentioned, we permanently review it while it is running or on the volumes and duration of

is a count that until at least september of next ,ear, my second question is again, the discussion about the open off -- open. >> it is one question really. decidedram has been upon a month and a half ago. today, the issue is not discussed at all. place ashat stands in far as the volume and timing and the open ended miss of the problem -- problem. >> mr. president, the federal

reserve yesterday increased interest rates and it looks like , and it ispen again apparently more rapid than we thought. it just rates between europe and america become more more wide. that therencern might be significant or negative effects for the economy? touching again on the inflation outlook given the really robust economy at the moment and having in mind discussions over the last years about inflation, and now looking at projections, is it likely we will see 2% in the future again? thank you. >> thank you. on the first question, the difference in monitor policy decisions and therefore in thatest rates decisions

were taken on the other side of different it reflects positions in economic recovery in the united states, at a present time stronger than europe than in the united states . stage is more advanced. especially so when we look at the wage behavior. the monetary policy reflects differences in the stage to are, butwhere areas the other question you asked is whether this affects negatively the european economy. constellation of rates by and large reflects the differences in the state at which the economies are.

confidenther we are that we will reach our objectives, the answer is today, more than we were two months ago. that is so. it is pretty clear the strengthening of the economy is the basis on which the labor market conditions will improve and we discussed this exactly in other places, how in the end, wages will react to improving conditions in the labor market, despite the many factors i have discussed, and these factors are there, no question. by and large, they tend to be within that disappear the negative effect of these factors will disappear with

continued improvement in the labor market. thank you. >> mr. president, some of your colleagues have expressed that the asset purchases will end in september. do you share that view? ecb hasd question, the bought steinhoff bonds last summer and the company is now in trouble. do you take any consequences because of that or are you investigating to take consequences? thank you. mario draghi: the governing

council, we did not discuss this showedut last discussion the governing council's vast majority wants to keep to retain the ended miss feature of asset purchase program as it has been designed in the last monitors part -- monetary council. that motivated by the fact in spite of significant real economyn the in gdp growth in the labor market, and frankly in all sentiment indicators, and all business confidence and consumer reference indicators, and the pmi indicators, we see a unabated scope.ing

in spite of this, the decisions justified by the fact that on the inflation side even on monday in terms of stability, so ultimately that is our stake. and because of that the governing council wants to maintain a steadfast commitment to price stability in keeping and retaining the open end of the program. your second point about the bonds, first of all let me say this program, this program is one of our policy that we consider important, very important for the obtainment of our mandate. the scope of the program is not to maximize profit or avoid losses. let's keep this in mind. that, running such big corporate programs, it is not