>> good morning from the city of london. this is "bloomberg daybreak: europe." are your top stories. one final flattening. spreads near their tightest levels in a decade but with the fed forecasting three height, is a central bank underpricing risk? new year, new fear. italian politics will be front and center in 2018 as opinion polls put the prime minister expecting to end his administration later today. bitcoin resumes its tumble

after south korea said it would shut down at least some stopocurrency exchanges to -- to stamp out speculation. ♪ risk and regulation, cryptocurrencies had better watch out if the south koreans or any benchmark to take guidance from markets, one last hurrah for the bond market a flat. asian equities are steaming toward record highs. is bloomberg commodity index at a six-week high. sincequities the best 2013. the momentum is there but could central banks unseat the momentum in equity markets? that is the mood for the next hour.

could the tax change -- don't forget the rebalancing in china. the consumer is king and queen in china. hurrah, or is it? 50 basis in terms of the spread. yesterday.2.41% about the 2% level. what does it mean for the bond market? the bid toou saw cover ratio at the lowest since june. the bloomberg dollar index, the dollar has not had it easy this year. we are hitting a three-week low on the bloomberg dollar index. the biggest slide since we started collating data in 2004.

the flows should be the driver according to some of the analysts. south koreans are worried, they want to get regulation. couple of things that will get you in the end, death, taxation, and regulation. it's at a four-year high. you have not seen a run like this since 2004-2005. sideriction on the supply tenets under the copper trade as well as synchronize global demand. saying $7,400. this metal has outperformed all of the others is your and the inflows of money into raw materials, you're looking at the longest love money since 2010.

yesterday i told you goldman sachs, they all talk their book anywhere but they are saying copper is red-hot. pushond market, one last from the bond traders. let's get to the first word news , taking us over the line for 2017. >> strong growth in exports, factory output expanded in november from october and 3.7% on a yearly basis. just ahead of expectations. in the u.s., the irs has said you can do duct property taxes if you pay the bill before the end of the year. it comes as homeowners and sates

for the highest property taxes have been peppering local officials with questions on how to prepay the levy to take advantage of a tax break that will be limited next year. held.u. negotiator has face-to-face talks in a breach of protocol is regarded as evidence of the u.k. brexit secretary being sidelined. according to the times, oliver running then effect negotiations. the paper says robinson stealing directly with michelle as well as his opposite number in the european commission. german chancellor angela merkel's public support for another full term has split. showed 47% of voters want her to step down before the end of the four-year mandate. sign that a political statement since election maybe working

against the acting chancellor before preliminary talks with the social democrats begin in the new year. in new york, a former lawyer for martin shkreli and company might be heading for prison. includingcompanies retrofit and was found guilty of helping him still is $11 million from the company to pay back investors after the hedge fund manager lost his money in risky trait. they will ask the judge to throw up the verdict. barack obama has beat known company gallup poll to be named the person most americans admire. the first time since 2008 that the sitting president has not won the accolades. hillary clinton was a most admired woman for his 16th straight year, although support fell to its lowest since 2002.

global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. find more stories on the .loomberg at top investors may be ready to bid goodbye to 2017 on a high note. asian stocks edging closer to a new closing record. asan backing the trend exports fell on a stronger yen. shares in mumbai are little changed after the government raised its borrowing target. the hang seng trading at its strongest level in a month and chinese stocks joined the party after it closed start. it might be time to pop the let's check in on the stock so far today. juan, up 7% in0 a chinese sharemarket. shares reinforcing

one of the year's best things. 97% in that time as the company an equitypects reverse on the radar. manus: thank you very much. forecast,d's latest basically the u.s. economy is running hot next year, they predicted back in september. we ask, what is in store for the fed in 2018? it an important priority to make sure that inflation doesn't quite late undershoot our 2% objective, and . want to see it move up to 2% >> the trajectory of interest rates next year is of real

importance. there is some uncertainty about that. >> i think time will tell. i do think we should be removing accommodation in a gradual and patient way. >> you're saying it's not priced in the market just yet. it could trigger a lot of inflows into the u.s.. >> we also expect three further hikes next your. if the tax bill leads to more capital spending, with regard to corporate, we just need that incentive. if we do get more growth in the u.s., then the fed can be more fast with regard to their rate hikes. >> changes in tax policy will likely provide some live to economic activity in coming years. the magnitude and timing of the macroeconomic effects of any tax

package remain uncertain. hashe u.s. economy clearly go.ng limits, a long way to at some point, certainly not next year or the are after, at some point the fed needs ammunition for a slow down when it comes. threatensshort rate the economy going forward. elseed should stop soon or the economy will slow down. >> i'm not going to change it now. the view from some rather distinct people around the world . is with us. guest welcome, good morning. you have heard them all, to hikes, three hikes. pimco last week was talking about for hikes.

when you look at the risk to the united states of america, the fed may not get the growth numbers that they think. we've got to shut down and inflation spike. what is my biggest work at risk ?oing into 2018 for the fed >> right now it's about 60 basis points of hike priced in between now and the end of 2018. the risk is probably that they could do more. pickup ind be a pickup inflation in the second half of the year. there is still a lot of uncertainty regarding what the impact will be on the tax reforms that have just been passed in the u.s.. there's a lot of elements that could be pushing for more aggressive fed.

manus: have a look at this, the 10's.ndetween a more aggressive fed, this that invert the curve? it could. the question is, should be as should we be worried about an inverted curve? typical --we in the it's nothing new, just reinvention. we have had a new buyer and a lot of the u.s. treasuries are now owned by the federal reserve. so if a big buyer were to interstate let's let reinvest

and know they are going to riskest, is that still a to the bond curve? >> they shone they can modify their investment, modify their purchases to massage the curves. they can decide, the curve is to inverted. so i start to roll into a shorter curve. was interested in what bill gross had to say there, which was stopped worrying, stopped getting so perplexed and the long end of the curve. it's the short end of the curve that you want to be focused on. we are going to pull up a chart and have a look at that. this is what jeffrey is actually talking about. he's talking about a three-year paper hitting the level of 2%,

breaking that level. is that where i should worry more? is a firm relation of what they are saying? brexit show should there has been a tightening in rates. the question is, will it lead to much weaker economic rose? we already have a lot of -- weaker economic growth? we already have a lot of momentum. it is a sign of deeper troubles underneath the surface. manus: what is the big struggle? unfunded, bad for the bond market, it's going to be anemic in terms of its growth momentum. would you agree with that? is it is negative? , the wholeargin

sustainability of the fiscal situation will come to congress in five years time when they it will be very hard to reduce the deficit now. have a positive impulse coming from the tax cuts. how big will it be? it is hard to anticipate. there are a lot of moving parts. income tax cuts, this is what to expect. now we have a mixture of different types at the same time. it's not clear how strong when blended together it will be. you have a view in terms of how to actually play this market going through into 2018. you say we have a goldilocks scenario. charles: obviously on one side

we have the fed hiking rates that will continue to be negative for rates in the u.s., are positive for rates in the u.s.. at the same time you have a change in terms of imbalance of supply and demand for longer-term bonds. >> you have a big fire wit -- big buyer which was the fed that's turning into a net seller. it's not guaranteed that you have more demand for papers if ,ou have a good growth scenario which would normally be more beneficial for equities. manus: so where along the curve do you want to be positioned? if you are in the longer term, you will have to make a hit on your market to market. .anus: stay with us

coming up, this is what we've got. retail sales numbers beat expectations as consumers began to open their wallets. , they willt time have to deal with what is facing them in 2018. this is bloomberg.

london.:20 a.m. here in sophie is standing by. >> bitcoin has resumed its humble after options including a potential shutdown of some cryptocurrency exchanges. there's no immediate indication ages fourth-largest economy will move to it changes that have a

counter for more than the state of global trading. regulators the world over expressed concerns about private currencies. a 74pple ceo has received percent increase in's bonus for 2017 as the iphone maker posted our revenue and net income after a rare decline a gear earlier. combining salary and an equity was $102 million. others got bonuses of about $3 million, bringing their total compensation more than $24 million each. u.k. jobseekers saw their first increase in more than two years in november. according to an employment search company, while the average advertised salary still way2%, it is below the pace of inflation which exceeded 3% last month. there are completed --

continuing issues that will extend through next years. that is your bloomberg class. manus: japan showed signs of , beatingin september expectation. overseas demand continues to support actress and the broader growth story. .etail sales also saw a boost rising 1.9% from a month earlier. our tokyo bureau chief joins us now. good to see you. strong retail sales number, they really knocked it out of the park. what happened next? andertainly they did so obviously this comes after a drop in retail sales in the third order. obviously this number will help , the finaluarter quarter of 2017. private consumption in japan has

been recovering, so this obviously plays into that picture. five years and suddenly we have these kind of numbers up. how do you think this will impact boj and their thinking? a country well away from the inflation target, aren't we? >> absolutely. keep in mind this is just one month of data. a much longer at trend. even a private consumption has been recovering, consumer inflation has remained pretty weak. nowhere near the inflation target of 2% which the bank has said it would be targeting. at this point, whether the recovery will lead to actually inflation is yet to be seen. that will probably be the story

going into 2018. manus: thank you very much for that latest update on the data. let's bring in our guest who is still with us. out, it'sheir wallets a good set of data and a vindication of the imf paschi you and broader chatter about synchronized global growth. >> you can clearly see there is strong external demand for japanese goods, and that is a push in the right direction for the japanese economy. then it translates into stronger domestic demand that will be welcomed by the japanese authorities. manus: the one thing the caught my eye, we have our team on the go this morning.

profitability, japanese year, up, 10.3% this from 8.5% last year. we're on track for the best year since 2004. does that momentum continue into 2018? do you want to participate in that kind of return? >> i think japanese stock is a good place to be invested in terms of general equity global view of equity. momentum inowth and global growth, they are linked to what is happening in asia. there is a lot of positive momentum going there. manus: the other point this morning is that a couple of things could unseat this trajectory. andis the market can move, begin could move. we just heard our colleague in asia. for the bank of japan, you have

a view that they are going to have to move from this 0% target . when, and why, and where do we go to? >> in the second half of the -- of the year, the boj will be under more sure to that -- longer end of the curve they will be under more pressure to let the end of the curve. you also have a global rising interest rates that will put some pressure on the jgb curve. it will be getting harder and harder for the bank of japan to control that segment of the curve. it's all about the communication. we'll talk more about that's shortly. charles stays with 13. coming up, medved to and more

there will be a hotbed of regulatory activity in 2018. that could revolutionize financial services. this is bloomberg. ♪

manus: a live shot of the emperor's palace in tokyo. it's 3:30 in the afternoon. falling by .5%. it has had a tortured old gear. a little bit a move, treasury yields moving lower yesterday. it is right and sunny across the if for hours palace. this is what is making the top stories on today's edition. no relief for britain, the top line from brexit this morning as jobseekers saw the first

increase in advertised salary's in more than two years. bitcoin up, down, roundabout. regulation,ion, and they will all get you in the end. options include a potential shutdown of some of the cryptocurrencies changes. and finally, daybreak focuses on an explosion in the supermarket in russia where these 10 people have been injured. never far from our minds, the tragedies around the world. guy johnson is standing by. record highs were asia. what stands out to you, 30 minutes into the show? next that is exactly what will not happen in europe looking at the likes of things.

looks like we will be opening around .6 percent. it looks like london will get back a little bit of ground. of by .2%. let's talk about what's going to be happening here, it looks like the technology is not going to be working. manus has already been addressing what is happening with the yen. the markets reassesses what the rba is going to be doing at the yen is having a positive session today. that means the tokyo market is not having such a positive session. manus: european banks and the moreance industry face regulation going into 2018. they will control payment of

services, money markets, dated, privacy, cybersecurity, to name a few. they all come into force. meanwhile the future of financial services you post-brexit era hangs in the balance. us, she's aoins senior analyst and covers european financial policy. method to inith terms of the impact it's going to have for the research industry. we've covered various lines drawn, a myriad of issues to be dealt with. from your view on, how did it impact the research industry the most? >> it is bigger than dodd-frank in the u.s.. one of the most impactful

research. separating the impact is likely to be felt across the globe. other results with managers being forced to pay for research and banks have to put a price on the research they are providing, it's likely to trigger further traction in cell phone coverage and more consolidated wi-fi. you talk about perhaps it will show obvious movements. is it going to be a little bit more -- give us a little bit more clarity? that's the ultimate goal, to give investors a clearer idea of where their money is going. it's likely to go global. manages aing research contentious point in the u.s.

with some of the pension funds in the southern states saying they wanted extended to the u.s. to increase transparency. who would have thought the americans wanted a little bit of european regulations from into the mix. we talk about brexit in a variety of ways. passporting.t be is the u.k. likely to get a bit of a stoke deal with her? polls talking a little more favorably toward the u.k.. potentially more stove financial services. next nine months will be critical in negotiating a new relationship with the e.u., but it must be remembered that the chief brexit negotiator did say there would be no bespoke deal

for the city of london. not probablyould be able to gain access to the single market on the same terms it does now without accepting the other freedoms, like the free movement of workers. charles, financials move on a holder right of reasons. side of thery argument, for you, we've had an interesting run. we are getting ready to reap price it. >> it's a different environment. they have to change the whole way they have been working, the whole functioning of the south side is moving and changing. they might be understood

challenge. that will come at a cost. as the experts explain, it opens up a bit more access on the other sources and of research which increase competition and may actually be hitting that side of the business. charles. stay with us, italy, we areut on the cusp. the prime minister sat down at a news conference today. likely to sign a decree to dissolve parliament either today or tomorrow. that takes us to general elections. they get hit on march 4 or march 11. , ahead of thement

ruling democratic party, but none of the three would get the necessary majority to govern. so much foryou joining us. what are we expecting to happen today? >> will speak about his achievements and go up to meet the president. that will be the start of the election campaign that will go until march 4. manus: i was saying you have the five-star movement showing ahead of the polls. is there anyone else in your family that has an outright ?eordie

what do we expect the outcome to look like, if we are to trust the polls? still two months to go, but it has been consistent for the past couple of months. the only certainty is that it will be a hung parliament. italian politics, the day after the election, people can form alliances and meet and become their allies. but it is very fiscal. ourselves with backroom in the negotiated to try to set up a coalition. that will besly

front and center in the middle of this. that herehave thought we are, knocking on the door of 2018, there is no government in germany. macron was the only one really to defeat the secession of the right. looks politically difficult place, from where i sit. >> perhaps, or perhaps it is bre use to others, and plan would be if the talks are tracked on and there is no chance coalition to put them through the backtrack. he has demonstrated that he can hold together and provide stable government. this would be a short-term government with a limited

mandate, and then we have a whole can of worms, do we even intellection,w order would go through the nightmare scenarios of debating it new, which would take ages. manus: thank you very much. when you hear that, maybe more elections, etc. no government in germany. is europe really that strong >>? >> at this point we can see the economy coming back, they are striking out. germany, no government yet.

you wouldn election pass some laws. been you have spain we also have -- the population catch-up. a good present team from 2018 and 2019. we have really had strong lot. once of ant for irish were in politics, the ecb could be forced to expand qe or will the economic street -- treat the policies? you expect another three-month extension. just put it together for me there.

views.e are two have core inflation at .9%, too low for the ecb to continue or hydrate. with all the politics going on, d.c. could be tempted to say that is bit more gradual, not too much of a shock on the system. if the economy is running slight to side -- site too high. -- slightly too high. it could help, and if we remove some of the supports. >> so an extension on the time frame. thes us more time to get magical and mythical to present. take a look at this.

we are probably rolling office in terms of the front market. the market is pushing the expectations quite aggressively. it is a market being overly aggressive in its pricing of the propensity for rate hikes. >> looking carefully at the inflation number. unless you get it closer to 1.8%, it will be hard for them to feel the confidence. >> it will be a big job in eight or nine months. i am not a qualified economists,

maybe i'm wrong. the gentleman who was with me said i have never seen anything like this, calling for a near tripling of bond yields. >> we need to think in terms of what is germinating that increase. the only kind of push would be inflationary expert patients. or global rates going higher. goingsee the global rates at much higher to make it go up that much. the other dynamic talked about a lower dollar. let me see how long if you are. it has been cap out.

no spike, there is an extension of the time frame of qe. i wonder if there is some huge upside left. , thereeuro first of all pakistan --lready packed-in. on the negative sign let's see what you have to say. anna: it might not create that much inflow is your. but still look for corrosive please -- let's have a look at this chart. it's about the value.

together, doose you think the market is under owned in europe? this is a valuation relative to the s&p 500. >> we believe there is still a lot of founded in european stock, compared to u.s. stocks. >> if you are in the u.s., you are in the later cycle. a little harder for equities to go higher. at the same time, we think the ecb will continue to provide close to liquidity. long live the central bank. stay with us.

the ox -- rocky road in 2017. the u.k. brexit secretary is theresaly sidelined as may's government comes under pressure to reveal what it knows . this is bloomberg. ♪

manus: it's going: 50 1 a.m. in the city of new york, looking at the skyline, beautiful christmas in the capital city -- not the capital city, it is the capital city in my heart. what talk about 2017, and

a rocky right it has been. joined by ahas been fresh team as a try to move the company into the right lane. eric newcomer looks at the companies past, present, and potential future problems. that uberhe year probably wants to forget. the embattled ceo resigns. dozens of executives left. allegations of sexual harassment by employees brought its company culture to light. that was not all. t continuedival lyf to eat away at market share. alleged tradeover secrets pre-to round out the your, uber lost its london license, was ruled a

transportation service rather than a digital one, and continue to face mounting legal battles from all over the globe, but uber is trying to turn the corner with the new ceo and coo ship.y try to right the meeting with angry regulators worldwide is bringing the uber skeleton out of the closet, such as the massive hack up over 57 million attacks that have been covered up for more than the year. business grew in 2017. million in 2016. still, the company lost a massive amount of money. the years losses could reach over $4 billion. so what is on his list -- to do list in 2018? a new ceo, new board chair, and

new directors. and don't forget, cutting losses -- facing off over her self driving technology. the u.s. justice department waits its turn, looking into five different cases of overpricing, bribery, and trade secrets. but thing is for sure, 2018 will not be the year uber goes public. instead, it will be the year it has to rebuild its reputation in the court of public opinion. manus: reputation is everything. there.wcomer and other rocky year here in the u.k.. all about brexit. 25 lawmakers urging philip stand firm. set part of it

was to hold the government to account. as it stands, there are too few of them to force the prime minister's theresa may's conservative partner to act. with fits like brexit and starts. here we are with parliament trying to get more information on the impact of grexit on various industry parts. this is what david davis year, some saying it's more like a wikipedia page or even less information. are we getting enough information from the government on brexit? >> we would like to have more, of course. we would like to make sure, we have analysis of the impact and various situations where could happen.

we have to rely on what private sector economists have been saying since the referendum. is winery,said it but you are skewed. i prefer that to a hard brexit. >> did we agree that it seems to be suggesting were going toward exit, while the discussion around the irish order makes it a -- it seemsave to be pointing toward a sumter of the still part customs union, but we will see. it still needs to be approved, and we don't know, 18 months down the road. manus: nothing is agreed until

it is all a great. thank you very much for your conversation this morning. we will talk a lot more about the fed and its 2018 outlook. this is daybreak. ♪

mass: good morning. this is the city of london. i am manus cranny. this is "bloomberg daybreak: europe." yield spreads near the tightest levels in a decade. with the fed for kite -- forecasting four hikes in 2018 is the central bank underpricing risk? five starlls for the are out in front. is expected to end his administration today. bitcoin resumed the tumble after south korea said it would shut down some currencies.

a warm welcome to "daybreak." drifted confidence that a little bit lower in the u.s. yesterday but abenomics delivers. they are spending, retail sales comes in, that has set the tenor of the town for some of our markets. london is up and you have the commodity trade. london is being driven by the commodity alpha trail. copper, thein alameda, all of those elements that go up to make the real, the bp's, the shell. slightly higher

open. the dax is down, one thing that beige my eye, the chinese book signals there may be a warning coming from china. to slower shift growth. recent data offering a warning after the party congress. how is this transferring into the dollar? the dollar is down. this is your risk radar. the dollar has had a battered old run. it is down 8% for the year. on another one third of 1%. you have month-end liquidity flows. treasury yields got smacked. 1.1%.ped before -- below

is the fed underpricing what needs to be done next year? will inflation be one of the biggest risks for the bond market going into 2018. we drop below 2.41%. hurrah of the bond flat nurse. flatteners. thes important to look at three-year note. the five-year option where the it to cover ratio was the lowest since june. record highs in asia. 10-year note's recovering some of their poison. the dollar is lower. this is what we have on france and the long bond futures down by a couple of tips, buttons are off by a couple of pips. long you want to be

european bond markets going into 2018 given the political risk? you're looking down the barrel of an election in italy and maybe a hung parliament. and the ecb, my last guest said you will get a [indiscernible] from the central bank. you first word news. sophie kamaruddin has the latest. sophie: japan's industrial production rose last month is fueled by strong growth in exports. expanding by .6% in november from october. ahead of expectations. november retail sales rose topping forecasts. taxpayers can deduct next year's state and local property taxes on their 2017 returns if they pay the bills before the end of the year.

only if the taxes were assessed between -- before 2018. homeowners in states with taxes have been asking questions about how to take advantage of the tax break that will be levered this next year. .ea the brexitarded as secretary being sidelined. his former permanent secretary is running the negotiations. the paper says robbins is dealing with michelle bernier. and his opposite number. angela merkel's public support for another full-term has slipped. 47% want herowed to step down before the mandate and it is a sign of a political

stalemate. talks become -- begin in the new year. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more on the bloomberg on top . korean markets are done for the year. and in with the best annual gain since 2012. we are seeing banks dragged into tokyo. and him someating bonds are sinking. we have seen the hang seng trading at the highest level and chinese stocks join the party after a slow start. it might be time to pop the champagne. and is we is soaring

have a gain of a percent soaring toward a new fresh record after boosting profit. that is rebounding with asian tech shares reinforcing one of haveears test themes, we extending games for a third day. manus: the latest on markets and your first word news. the powers of the global central bank story, the federal reserve. their forecast says the u.s. economy is running hotter next year than was predicted in september. investors pondered the potential ripple effect of the trump tax plan, the path to inflation. what is in store for the fed 2018? consider it an important priority to make sure that inflation does not chronically 2% objective and

i want to see it move up to 2%. >> the trajectory of interest rates next year is of importance uncertainty some about that. >> will it turn out to be three? time will tell. i do think we should be removing accommodation in a gradual, patient way. >> we are looking for a three rate hike. that is not priced in the market. >> we will maintain our cautious outlook for the year. >> it could trigger inflows into the u.s. >> we expect three further hikes next year. if the tax bill leads to more capital spending, with regards to corporate's, we need incentive. if we get more growth the fed and faster. >> changes in tax policy will

likely provide some lift to economic activity in coming years. the magnitude in timing of the macroeconomic effects of any tax package remain uncertain. >> even before any prospect of tax, the economy has strong lament jim and accelerating into the latter part of the year. a long way to go. needse point, the fed ammunition for slowdown. that is the rationale to move on this quarterly timing cycle. >> the 2% short rate, not the 10 year at 235 that threatens the economy going forward. elseed should stop sooner -- soon rlc economies -- soon or the economy will slow down. manus: it is all about the short end of the curve. paul dobson joins me this morning. we have a headline, one last

push to get this curve flatter. the flattest of the market has -- that it has been in a decade. some say it does not matter i have flat the curve is. what do you make of the debate? paul: one of the big traits has -- been getting behind this flattening yield curve. there has been constant [indiscernible] the last move was partly due to the fact that we had a new [indiscernible] rolling in with a higher yield. is is this a sign of the economy slowing down and about to roll over? comes up,yield curve not really a danger signal yet. like --effrey gunn

away said thats more important aspect. that terms with what bill gross was saying. nevermind the long end of the curve, it is about the short end. this is where the risk is of knocking the economy of her. if you take consumer confidence, index, ifan consumer the soft data is supporting the the short end,t it would not risk taking the short end of the curve, we are penciled in for three hikes next year but the risk of taking the short and up above the new terminal rate is perhaps where the market is debating. .all: the market is worried the outlook for the economy is incredibly strong so it is looking good.

there's more stimulus coming. the fed has to be mindful of that as well. well, itfed did communicated for the year we just had and delivered as well. as long as the fed content -- can continue to if the market warning about where it's passes, it does not seem to me like that for ating investors up panic and a meltdown. manus: this is what they want to avoid. there is a cracking story. want to be positioned? they have everyone and their .rom blackrock everyone wants to take him a trophy. i love that kind of line. he likesing through --

the front end of the treasury curve. this is where two-year paper, two-year yields, bring it on. i want to buy short paper because i have not been effort thingered that kind of before. this is going to be the debate for 2018. whether we see real gusto in inflation. as that is the bogeyman for that market. if it looks like it is getting out of hand, there is no sign of that at the moment. manus: it is not cracking like it is up. paul: that is the thing. people want to make sure it does not get too excited. that could eat into the yields theare getting from three-year.

it is the thing that could flip currency markets and cause volatility to come back. it has been such a easier in some ways for markets because volatility has been so low. inflation to be one of the triggers for that. manus: if you want your own volatility index, this is the top story. south korea is talking about regular eating or closing down some of the exchanges. you have to have nerves of steel is to be in this -- to be in this market. what is the latest talk in regards to bitcoin? paul: i was talking to my colleague in sydney and he said as long as the coin stays in the range of 10,000 to $19,000 i am already interested. not exactly a narrow spread but

we have been up and down and all around for the last couple of weeks. korea's del valle meant is interesting. that is where a great amount of the interest has been coming from. -- they aret looking to clamp down and cool things off where they can. is a sign of the concern among policymakers about this instrument, something that you do not understand and something they do not know how to treat or trust so they are worried that a lot of young people are getting into this and it will come down in a nasty way. gallo produced a chart. , we are talking a lot about it. we are trying to work out whether there is a potential global issue.

am not decrying what can happen but relative to the other asset classes around the world, it does not appear to have the same kind of systemic threat. paul: no. it is a small thing. the reason people are interested is volatility and every thing else has been so low. bitcoin, exciting new product. people do not know, it made millionaires and billionaires almost overnight. it is something that people will want to follow and be interested in. the impact on broader financial markets is miniscule at best. manus: we are spending so much time, we are feeding that beast and that is what worries me more. thank you for being with us this morning. great headlines. bitcoin maniac. paul dobson is with our mliv

team. doing a fantastic job in 2017. you can follow the insights of everybody on the team at life go. we speak to the ceo of an app payment company. missing, it isng the profit. bitcoin tumbles once again but can it bounce back on its roller coaster this is bloomberg. ♪ ride? -- on its roller coaster ride? this is bloomberg. ♪

a.m., it has gone 8:20 what a beautiful site as we go towards the end.

hardly call that huge. the debate is where do you want your money in 2018? do want to put it in the u.s. or the stoxx 600? at 119. is trading there is your markets. asia banging away on the door of there is your markets. record highs. pips, nothing to see there. doughts --st said he doubts the ability and does not call that an aggressive move. let's talk about bango.

fastest growing tech companies in the world. than 250y more percent. the massyments for market. i love the name of the company. tell me what you do. guest: we draw payment platform into andomers plug charging purchases to credit cards are bank accounts, the charge it to their phone. -- you can get whites

would -- widespread deployment. manus: where the biggest growth? guest: we see a lot of growth in japan, the u.s., brazil. it is all around the world especially markets. a lot of the bigger markets are embracing it quickly. manus: is there a sociological step change? was taught up and how to use traditional banking, where almost skipping a necessity for banking. push youople used to to get a bank card. you can keep a bank account but in most people most people do not have bank accounts. people will have established a phone bill in many areas but no

bank account. profiting? are you guest: things are going very well at the moment. what did you do for profit in 2018? guest: we have doubled the volume of sales for the past three years. since there was a fixed cost for .unning the platform manus: investment, donald trump once it. -- once it. we you invest in the company, but i see profit be reinvested? guest: we have made sure we are ready for the scale we are expecting from the big guys using up platform. -- amazon launched in

japan so you can buy shoes and perfumes through the mobile phone. we have launched prime fresh which is a service paid for by mobile phone. google has announced they used us to launch in africa and mexico. a lot of the companies want to use us around the world. you should expect big things. manus: i resume, is that one of your biggest costs? in finance or data. make us ae things valuable asset for our customers. we have to be careful with their data. we do a lot of encryption. manus: people that you are based in the u.k.. is brexit having an impact in terms of the talent you are able to tap? have you seen many changing people wanting to work with you,

one he to work in your area? yes: we have dozens of arelopers, the majority from eu countries or outside, nigeria, pakistan, brazil. we have not seen a direct impact on brexit. the recent developments around that have been helpful but we have not seen significant changes as a result. manus: what is the most valuable element in a word? guest: it is the data. the fact that we are seeing information coming from the goliaths of the world helping them use that data to improve their sales and improve their marketing. that is the essence of the platform. manus: thank you for sharing your story with us. 241.ng at

it is a positive as of a couple of months ago and profit is expected in 2018. that is it for "daybreak." the market open is next with guy johnson.

guy: good morning. welcome to bloomberg markets. i am guy johnson at our new london headquarters. cash trade less than 30 minutes away. let's talk about from risk. another italian government comes to an end and with the five start hardy ahead in the polls will next year's general election get in the way of the strengthening euro? blitzer bust. bitcoin resumes its tumble after south korea city could shut down the cryptocurrency