.anus: good morning this is "bloomberg daybreak: europe." and these are your top stories. anna: china set a bloomberg report may have cited a wrong source. cutting trade ties, canadian officials say there's an increasing chance that trump will leave nafta. that set the loonie and the peso lower. play, after brexit. ♪

anna: welcome to the program, everybody. this is "bloomberg daybreak: europe." it's 6:00 here in london, 7:00 in switzerland. forgetting numbers for the third quarter, sell a constant currencies looks to be ahead of the estimates coming from this luxury player of watches and jewelry and other things. how are sales able to shake off the negative fx effects? some analysts asking whether we will see around of buybacks of inventory from this particular business. talking about whether there will be a further inventory by back around retailers, notably cartier. the export data looking a little bit letter of late.

so breaking news coming through their. manus: fast retailing depends a great till on the weather. if you here in the u k or in uniclo.you know it as it comes in at 100 ¥13.9 billion. -- ¥113.9 billion. in terms of guidance, it's critical important for them. this is in line with what they guided back in october. the bloomberg estimate comes in it 208.7 billion. eriod, and theld p internationalization of the company is critically important to its success for the chairman. there expected to add 160 outlets abroad. so comfortable beat on the operating profit, pretty much in line with the guidance.

global brands operating profit has risen by 2.4% year on year. anna: so a good way to start the morning. let's talk about what's going on in markets more broadly. the bond market battering that lasted a couple of days until we got the seeming denial from china or at least a bit of -- a little bit of pushback from china. much to that rate questions about how much stocks are overvalued? that's what were dealing with over in the asia-pacific region right now. very muchan currency unchanged. it was down by .7% in yesterday's session in the peso in mexico also weaker and all of that because the canadians are raising questions about the u.s. and whether the trump administration will walk away from the nafta talks. the seems to be a clampdown in the offing, the government drawn

up a bill to outlaw cryptocurrencies. revivalalk about this or this wording of a rebuttal coming from the chinese. we riled the bond market with his story. 2009,ve to go back to talk about the veracity of the bond market. be careful with every story that comes out in terms of the denial. the bond traders are questioning this run-up because if you make it rich enough, they will come. the bond auction that we had yesterday evening, we saw a slight flirtation with the highest level since 2014. this is what we've got, demand for the option came through quite strong. it was $20 billion of notes, it through the strongest ratio since 2016. that is the red line. funds who run mutual

bought 17.4% of this auction, the most since august 2016. the yield goes up and delivers for pension fronts who are morally and legally obliged to take the stock on to their books. they took the lead since march of last year and even bill gross is saying that the bear market he is talking about is a mild one. what is it with these guys? and thent up on fire say don't worry, it's going to be a mild one. doa: and then you have to with it at 6:00 in the morning. go to talk about commodities later on and how you want to play that. we will get thoughts on commodities on oil, gold, and stocks associated with the best way to play this market. that's get the first word news update with juliette saly. juliette: this president donald

trump has predicted that clashes korea and the u.s. -- he was speaking during white house news conference with the norwegian prime minister. were building up our military to a point that we've never been before. weakened overuch riod of time, pe but not with me. i don't expect that were going to have -- because of strength, these through strength. germany is maintaining its hard-line stance on brexit, demanding that the u.k. pay for its privilege after it leads the block. britain cannot hope for a trade agreement that includes financial services unless it agrees to make substantial andributions to the budget adhere to european law. in the k, job vacancies in

london science industry suffered what is being described as a seismic drop in december. a new survey found a number of positions fell 52%. recruitment firm morgan mckinley says his findings underscore the brexit is from the city after a decline in job openings year on year. canadian officials said there's an increasing likelihood that president trump will give six-month notice to withdraw from nafta. a white house official insisted there has been no change in the president's position on the tray packed. a wtoate this week filed complaint over american duties, move described by u.s. trade representative robert white house or as an ill-advised attack. lower afterrading south korea's justice ministry said it is preparing a bill that which i down digital currency exchanges. an earlier report cited the ministry expressing concern

about serious risks associated with exchanges. concerns a been raised by the asntry's officials demand -- demand for cryptocurrencies has driven up demand. armed these have stolen jewels and other goods from a boutique in a paris hotel with media reports valuing the hall at almost $5.5 million. police arrested three suspects but at least to others got away with the loop. several high-end paris jewelry stores have been targets of dramatic robberies in recent years, including cartier, and harry winston. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the .loomberg at top the equity momentum has come to a bit of a stall here in asia. in holding at its best we can about six week, the nikkei down for a second session. look at hong kong, trying to rally for 13th straight session again today. it has been a fluctuating trade. the way down by those cryptocurrency reports and

australia's market eased from that decade high down by another .5% today. looking at stocks in detail, we've been talking about the point and what south korea has said. we seen qatar, one stock that was falling by 7%. morgan stanley analyst have been very busy, they've upgraded air overweighthares to and jb hi-fi industry, saying christmas sales were strong on the back of iphone x sales and flat-panel tv's. saying they can compete with amazon down under, so couple of bright spots, but overall it has been a week session here in asia. probably just taking the foot off the gas a little bit. let's talk about china. saying a bloomberg report may have quoted a wrong source. senior beijing officials

recommend is slowing or halting all purchases of u.s. debt, they got a little jittery yesterday. bill gross is among those who have called for an into the three decade bull market. that i'mar market talking about is a mild one, but it includes negative crisis for high-yield bonds. manus: that's get to our strategists, mark joins us this morning. gross wasesting, bill one of the two big names i used at 6:00 a.m., and here we go. drop.l be a mild mark, good morning. what do you make of it? had this movie playing before and will probably have it played in again here it several times when still spiked toward highs, they will these

regular names and quite often it's these two names. i think there's a misconception that just because of a 30 year bull market, we suddenly need to go into proper bear market. bill gross did clarify his comments and say he's talking about 15 or 20 basis points in that is pretty irrelevant. overall this year we could see yield stick slightly higher but they're unlikely to run away. the structural inflationary play should be a globally are still there. this is why the transitory inflation we've had for many years in the u.s. is not going anywhere and we are unlikely to see 10 year yields run away. i don't think it will be in a proper bear market and i think that it would cut the , irification out of china think we'll see lower yields the rest of this month. price yesterday even before the chinese clarification was very positive for treasury and negative for yield. now that we've had this clarification come he can assume the market will start chasing treasuries higher and bring those yields lower for the rest

of this month. rest of the year it will probably be a volatile range but it will not be a fair market. anna: it's been three decades in the making, hasn't in it, the bull market. so you will be right at some point, i'm sure. it's all a question of timing. what about the china clarification, as you call it? china pushing back a little bit this morning. what do you make of that? are two things to take into account. china has not been the marginal driver of ponder treasury prices in the last year anyway. they have been allocating their resources based on how their managing domestic policy. we were seeing last year that as dollar see and why was rising, they were reducing their holdings. since then we've seen dollar cny come lower. it's been fluctuating back-and-forth. as a clarify today, is just

normal operations. even if they do throw up a trial doloon suggesting that might a strategic reduction of the treasury holdings, i cannot over the ideas that many people have suggested this is a negotiating ploy with trade negotiations coming up this year. they are not going to be vastly reducing their treasury holdings. that would be a terrible thing for china and restart a and reduce their own reserve holdings as not a policy they are likely to follow openly. essentially what the daily profits are saying. saying were fundamentally estimating what is going on here, if anything at all. this is a broadside perhaps to the chinese. this is what they said in terms of if they really were going to reduce the treasury holdings. it would be deeply threatening to the goldilocks scenario we are currently enjoying. would be like three bears

threatening markets like leonardo dicaprio in the revenant. he gives you some sense of the unease that is out there. that's where our guests have said so far this year, it is global trade. the market should be more focused on perhaps then the withdrawal of stimulus. nafta risk is very valid and very real. the repercussions will be massive if that does break down. if the u.s. does pull out and it's the end of talks. it's true there are genuine risks out there. if thethem is obviously stimulus is removed to quickly. it's important to note that were still in the goldilocks scenario at the moment. we have relatively low inflation and yields. good global growth and a new tax plan passed in the u.s. itmay not boost growth but will certainly boost earnings.

the earnings-per-share growth will be higher again in the price-to-earnings ratios will look more attractive. and no longer looking at stretched as they were. overall environment is positive for equities globally. there are risks but it does not mean you should start trading those risks before they transpire. deal and the art of the know larger, it's hard to what to take at face value and what to dig underneath. mark cudmore joining us therefrom singapore. don't forget if you have to turn of bloomberg tv, bloomberg radio is right there in your car or on your device however your traveling to work. pick it up on digital radio in the london area as well. crude holds onto its gains, near a three-year high. we will pick up on that on bloomberg television later. surge,japanese stocks

that story in technicolor, next. anna: and earnings from some britain's biggest names today. this is bloomberg. ♪

manus: a live shot of sydney harbour there. what kind of day is it? a little bit overcast. the aussie dollar is pumping it out. november retail sales beating the analyst estimates, up .4%. that certainly beat the estimate, given it it of a kicker to the aussie dollar. here's what you should be watching for the day. anna: the german economy minister's estimate at 9:00 a.m. u.k. time. 3.5 hours later, an account of the december policy meeting. president dudley

delivers his keynote speech on the outlook for the rest of the year. let's get the bloomberg business flash with juliette saly. juliette: ferrero nearing a deal to acquire nestlé's confectionery business for 2.8 billion dollars, according to a person familiar with the matter. the business inclusive butterfinger and baby ruth rants and is suffering a decline in revenue. selling 1.5 billion euros more of its remaining stake as part of its ongoing plan to focus on drugs and life sciences. the german company has been steadily paring its stake in the former division as it shifts away from industrial chemicals to focus on pharmaceuticals and cross chemicals. it's agreed to buy monsanto, a deal that will test buyers financial firepower. rio tinto has dropped out of the

bidding for a stake in one of the world's top lithium producers as it pursues other ways to capitalize on the electric car boom. according to people familiar with the matter, rio decided not afterceed with an offer information in a data room. ats worth about $5 billion current market prices. representatives for rio tinto and the others declined to comment. the biggest ever makeover of the diet coke brand for coca-cola. new versions include ginger lime and blood orange. diet coke was launched in 1982 and while it remains the third biggest selling carbonated soft drink in the united states, sales volume fell more than 4% last year. the original diet coke not be changed. that's your bloomberg business flash. anna: ending on the biggest

story there. it wasn't the first time the central bank has done this, the announcement a guided speculation that officials are looking to relax the tenure bond till target this year. the back of this news we have seen the japanese yen strengthen and the topix klein almost 4% this month. rick, good to see you this morning. thanks for joining us. would turn to the boj move, is this still tightening from the boj? is this just a small technical tweak? rick: i think most people think it is probably the latter. the market reaction to it i think is interesting. presage what is likely before us over the next couple of years. as the big central banks wind

back there stimulus and start tapering. i think we can have a lot of comfort that central banks are going to be if it all possible, very moderate, gentle, and certainly careful, presuming they can precipitate a really big drop in bonds or big rally in the u.s. dollar, that's the thing, from whatever they do. manus: good morning to you. if i look at the markets i'm going to show the veer what i got here, which is again rising and the yield rising -- the yen rising and the yield rising. rising bond yields are not at catastrophe. rising bond yields drives the banks. it may be just a precursor to a little bit of a fade in the qe move that might not necessarily equal disaster. ric: that's true.

this is one of possibly the core questions that investors will have to answer in the next year or two. as you rightly say, usually the early stages of monetary tightening, which are associated with a bond yields inching up often, or great news for equities because essentially, , not are still very low really pulling back the economy at all and economy is rising. the traditional goldilocks scenario. is it different this time? that's a question. the reason it maybe different is pushed policies have bond yields down to such low valuations mayty be to some extent the payment almost very low yields. that may be the case, although i don't see that as being a catastrophe.

be 10% worth of bay andon -- a relation, profits continue to grow at a good pace in the overall result for stock markets could be a bit of a pullback rather than a real catastrophe, as you say. anna: that's the global picture, nicely laid out. terms of the japanese story, it's fascinating, talking about whether there's still tightening going on from the boj. that pushed up the yen. it has not really hurt japanese exporters and the stock market in the way you would expect it to. measures orader broader look at japanese stocks has not done all that badly despite all the move higher in the currency. overall,'s right, and japanese valuations are probably

not too high, in my estimation. i think the market reaction we are seeing at the moment probably reflects that. although even when we do get some official move to tighten policy, there may be a bit of an impact. manus: always good to get your input here on the market moves this morning. cheap market strategist at cmc markets asia-pacific stays with us -- chief market strategist. you can get all of our charts and functions at tv . it can even ask ask a question, nothing too hard this morning. it has been dubbed china's -- despite the best efforts to curb the crypto market. 's founderiew with neo coming up next. we'll talk about china oh and

whether the bitcoin miners are moving locations to take advantage of cheaper energy prices. and what is south korea up to in terms of regulation? this is bloomberg. ♪

anna: this is "bloomberg daybreak: europe." it's 6:30 here in london. 7:30 in many other parts of continental europe. london asive shot of it's about to wake up this morning. marketsheck in on the .ent nedra change we are seeing weakness across a lot of the indices. australia is down, some weakness in china and japan as well and in south korea. -- msci cassation

asia-pacific down as well. one bear market not quite, morgan stanley setting itself up against bill gross. 2.53% after the tenure auction went well yesterday, but also we had news from china saying the report that it could be halting or pulling back on this treasury purchases. the upper line is showing the 2014 highs in the tenure treasury yield. we are still a little bit of away from that at the moment. a bit of recovery in the dollar against the yen today. it's still near a six weeks low. this chart is shown some technicals where the dollar-yen andw -- broke below the 100 200 day moving averages among some other technicals as well. a little bit of recovery in the

dollar. finally, i want to take a look at bitcoin because we've been seeing some moves here, a bit of a pull pick -- a bit of a pullback. it's dropped as much as 11% in the session on news that south korea might be considering outlawing bitcoin on exchanges. we've seen some declines in other cryptocurrencies also. if you were worried you'd never see volatility again, all have to do is to curtail into that water. china has cracked down on cryptocurrency more than any other major economy. the founder of the world's 12th largest digital currency says that beijing is unlikely to take the rules of another -- up another notch. >> i think the regulation is already very strict. i don't see any more strict regulations coming. the miners are leaving because

they are subsidized by some local governments for mining by claiming they are doing cloud computing or similar things. now the local governments or patching in those subsidies. i don't expect more strict regulations coming. beatty: how do you feel about the speculation going on in cryptocurrency? >> it's a very speculative market. some claim it's the biggest bubble in human history. i think we need to separate asset bubble from technology. it's possible there are bubbles with those tokens, those cryptocurrencies, but i do think there's a huge potential for technology in china and i think the technology will change human being very fundamentally. : i hear that a lot that

the technology is solid but some of the cryptocurrency technology is not. do you think you're on cryptocurrencies being powered by speculative money, and if so, are you concerned there will be inrash in the aucoin's -- neocoins? >> i have been in this industry for more than six years, so we have seen a lot of crash. it's normal, and every time assets crash, for a project, team is focused on technology, they will recover. i would also like to add to that con is not controlling everything. it's like the parent to look after the project for the next few years, but eventually it will be fully decentralized.

we mentioned volatility, have a look at this. we've touched on this a couple of times. bitcoin prices move by 17% between the top and the bottom last week. it keeps getting punched from a lot of different directions. anna: one ceo said he doesn't see regulation increasing. it started between christmas and new year, the south koreans were considered outlawing cryptocurrencies, going that far. it does seem to have captured the market's imagination now rather than back then, which i find interesting. on the other side of things, jamie dimon, who with cover about, was very scathing

victor currencies. now saying he regrets his bitcoin comments. but that is a distinction, it's a serious business. manus: the repercussions of bitcoin are manyfold. some saying it's a blockchain technology make it more efficient. how do you drive bitcoin? cracking story this morning, basically saying bitcoin will upstage electric cars to drive the global power. this goes back to what the nobel laureate said to me before christmas. this is something were not tosidering, you can get infinity in terms of production, but of course it's the power is being used that adds to the overall constraint. a little aboutk what's going on here in the u k in terms of the reporting season. are getting some ports from the highest street -- highest names in the -- biggest names in the

high street. is andrea,ing us great to see you this morning. proper warning, so it's a very disjointed picture we are getting. try and make sense of that between food, nonfood, and luxury. retail we have a real division emerging between food retailers and nonfood retailers. the nonfood retailers have been helped by inflation. the matter what they say, inflation is very good for their sales. if they can get a few price increases through, it increases the value of their sales. that's very useful compared with the year ago when you didn't have as much inflation. growth foodll the sales look good.

pay morel having to for central such as food, we have less to spend on things that we simply want, like a next her gift at christmas. that is why the nonfood retailers -- anna: we held back on the sparkling christmas stuff. that was to everyone's advantage. it's interesting because you mention this makes between food and nonfood. ceo sayingth one that even within food, consumers traded up to the more expensive brands. even when there was a little extra money to spend, it was spent on food. >> that is right, although there is trading up and there is trading up. we've seen that the discounts have also done very well. anyone who thought they were slowing down has another think coming. art of the reason is they have

increased their top in product. manus: were all talking about the risk to the market, but natural fact, the best week for the year ever in the u.k. was the christmas sales. that is there risk, that we are at the high end of the calendar. easter, christmas, thanksgiving, and in essence that has its own risk, as has been proven. how much market share to the have, and word is -- greg said got the same market share as morrison's combined. that could easily increase. today we will hear from

tesco. food will be the driver once again. the thing about tesco is it has to have a good christmas because it has the vote coming up. last year we had some investors who said the deal is a big distraction. if they don't have a good christmas, they are left open to those accusations of having taken their eye off the ball and that could cause problems when shareholders come to vote probably in february. cfos: they brought in a new . humphrey singer brings great experience with cost-cutting i understand from his former role. is that what we can expect? it just got bigger and bigger under its former chief executive. the new ceo had a go at cutting

it. so expect cost-cutting at marks & spencer. manus: let's see what the numbers deliver at 7:00 a.m. get digital radio on the go. we're talking about bonds. anna: coming up on bloomberg television, will opec and allies start cheating on the output production curve agreement? that is next. this is bloomberg. ♪

manus: a live shot of new york, the empire state holding their lighting up in green. futures another higher if at all. those are your yields at the

bottom of the screen. this all goes back to treasury bonds gaining across the curve is china more or less rebuffs, pushing back on report that we broke yesterday that officials are recommending are slowing purchases of u.s. debt. a little bit of pullback in the bond market. that's get your business flash with juliette saly, standing by. ferrero is nearing a deal to acquire nestlé's u.s. confectionery business for 2.8 nine dollars according to a person familiar with the matter says an agreement could be signed as early as sunday. the business which includes the butterfinger and baby ruth brands is suffering a decline in revenue. nestlé and ferrero declined to comment. bayer has said it will sell more of its remaining stake in part of its plan to focus on drugs

and life sciences. to german company has been steadily carried it's taken a former division as it shifts away from industrial chemicals to focus on pharmaceuticals and crop chemicals. it's agreed to buy monsanto, a deal that will test bayer's financial firepower and leave it less able to pursue targets for drug unit.ble rio tinto has dropped out of the bidding for a stake in one the world's top lithium producers as it pursues other ways to capitalize on the electric car boom. rio decided not to proceed with sqmffer for a 32% stake in after studying information in a data room. it's worth about $5 billion at current market prices. coca-cola is launching its biggest ever makeover of the diet coke brand, adding four new flavors and taller, thinner cans.

new versions include ginger lime and blood orange. it remains the third biggest selling soft drink in the united states. sales buying fell more than 4% last year. the original diet coke formula will not be changed. anna: thank you, juliette saly in singapore. oil is trading above $63 a barrel as u.s. crude stocks whilst decline. production trump the most since october. near demise close in more than three years. levels we have not seen for three years, just under 38% in the last three years. yousef gamal el-din joins us from to buy. what stood out in terms of the report we got from the united states? yousef: a couple of things that struck a chord with the analysts we been speaking to, a temporary

response to some of the severe weather conditions. the polar vortex as it were in the united states is reflected in the latest crude inventory data. looking at a drop of 4.9 million barrels last week. the api had suggested we get somewhere around 11.2 billion -- 11.2 million barrels. so a beat on that front. gasoline stockpiles were up for the night straight time. u.s. crude production was crude production decline 290,000 barrels last week, to the lowest since october 13. quite a lot of color in this report, whether to draw dan will continue once the weather conditions improve a little bit is a big question. anna: looking at the price of a , it started it

made about whether the price rises are in the interest of producers. what is the deeper story there? it's nothing short of shocking when the oil price rises and you have producers complain about rising energy prices. the iranian energy minister is one of them. he said anything beyond here, the levels are not conducive to maintaining the kind of interest they are defending. ultimately it could bite back. the uae energy minister has been speaking. he made it clear that oil inventories still need to drop 100 million barrels and the fundamentals are likely to take over from geopolitics in 2018. he said there is still room for improvement. julian lee points out that higher oil prices mean there's cheat.centive to

they need to hold steadfast with her plans to rebalance the market in 2018. goldman sachs makes clear that anything above $70 a barrel could bring opec into trying to talk down the market a little bit because of the kind of risk it brings about. manus: i will pick it up from here, yousef gamal el-din. great roundup of the oil market there. our guest joins us for the next 20 minutes or so. , happy newne story year. the bond market lit up like a torch yesterday. we have the scoop. the chinese were thinking about perhaps cutting back in terms of the amount of ions. they come out with a rebuttal on that and maybe this is not what they are about. ,hatever way you look at this

this is the chart am talking about, 10 year government yields the highest since 2014. where do you stand? bondmag definitely not eddon. broken the levels where it's been capping yields for the last nine months or so. ,he bigger issue to my mind it's been strange to see bond markets not fully pricing what the fed has committed itself to do, pretty much, in its statements over the last year or so. the bond markets were not and it was like they're starting to do that. anna: so you see what is going on in the bond market as the

market waking up to what the fed in tens to do, rather than a reflection of chinese buying are the boj and tapering going on there. thumb, i think flowmore dangerous to view is the main determinant of prices and is always right to view fundamentals as the main determinant of prices. as yields tendat higher, there are plenty of constituents within the market who will be -- the flow element element, it's more recognition of what's going to happen as a result of tax cuts and because inflation is trending up. manus: and we did have a bond auction last night and they came . it's interesting that you talk about the backdrop. we caught up with the golden

sachs chief economist and he talked about the tax adding about .3% to the u.s. growth. , as you see the growth story in the u.s., does it add to the equity story? this is financial conditions in the united states, very accommodative, and this is one of the drivers that will drive the market up. toy reckon its move from -1% plus 1% in terms of financial conditions. you can also see it if you look at the credit condition index. if anything in the last three or four months, there has been a slight loosening. seen an enormous credit search within the united

states, despite the fact that the recovery there is been what, nine years? ,lso looking at house prices the house price index is one of tose key charts looking back 2008-2009. house prices have recovered all the ground they lost in the financial crisis. you expect that because house prices are a nominal measure that gdp is expanding. it still expanding in a constructive way. with the likelihood that there will be a further extension as we go through this year. anna: how much of that is priced into equity markets? as you say, it will be nine years in march since the bottom of the equity market, the middle of the financial crisis.

how much further do they have to run? mind the american market has been discounting the tax cuts. they did get the congress, and since then there has been a net revision upwards to estimates of american profitability in 2018 and we are seeing that from analysts. that's like sort of a one-off, the tax cuts. onlong as the recovery stays the road, it's possible for equity markets to continue to power ahead. i was having a -- the conversation with tom keene a week or two ago. the dow is a nominal measure. if you look at u.s. nominal gdp, that makes a new all-time high every quarter he prices will tend to follow that. data.eally interesting qe has compressed

volatility in most financial markets. it seems to have compressed volatility in equity markets more than bond markets. it's not extraordinarily low, whereas for equities, it looks .lmost phenomenally low with qe being dow back in the fed looking to shrink its -- wee sheet, it would be could see volatility higher. i think you have to hold your nerve. anna: thanks very much for your time this morning, giving us his thoughts for the big moves in the bond market and what it means for the world of equity. we will turn our attention to the u.k. retailers. we just got a preview of what to expect. they will be reporting some of

their numbers. a mixed picture so for -- so far for britain's high street heavyweights. this is bloomberg. ♪

manus: good morning from bloomberg's new european headquarters in the city of london. i m&s cranny. -- i am manus cranny. said a bloomberg report may have cited a wrong source. anna: canadian officials said there is an increasing chance that trump will leave nafta. money and the peso higher.

anna: this is bloomberg daybreak: europe. we have breaking news coming from you kate retailers. let's go to tesco. an estimate of growth of 2.4% on this u.k. percent -- specific number. we will dive into the christmas excluding vat of i 1.9%. interesting to see how the market takes this. it is going to be crucial for them to have a good christmas to 1.9 percent number go down in the market. they have taken these strategic decisions that have been questioned by some investors. to takeing the deal over book or the wholesaler. the third quarter number coming through in the christmas u.k. comparable sales number

excluding fuel and vat. the food side of things has been pretty strong. to the detriment of other things such as electricals. waited to go to spend your pounds in terms of getting ready for christmas? did you go to ali? marks & spencer's, let's give y ou the flow. clothing comparable sales fell by two point 8%. a drop of 3% on that. they stick with the full-year guidance remaining unchanged. they had a mixed quarter with they say a better christmas. marks & spencer's third-quarter revenue 3.17 -- 3.1 7 billion pounds and they brought in humphrey singer, a man who knows how to sway through that costs from his former employer. fasteror a harder and cost-cutting.

it bloated on the previous leadership, they said. slightly better than the analysts estimate including in-home. food is worst than expected. those are the retailers. this is how we look in terms of the stocks performance of the year, down 4.8%. they are cutting costs. we will get futures. we have equity markets coming off those orders. you have more breaking news. anna: we have a comparison for the christmas number. the third quarter number was light in order with estimates. mother u.k.mas comparable sales excluding fuel at one point and percent and at 2.8%.the estimate that might not be the strong performance they said the business would be looking for to silence the naysayers in terms of strategy. tesco on track to deliver. medium ambitions outlined, that

is the comet coming through. we have comments from booker. that is the top line and tesco. missing estimates when it comes to christmas sales. manus: it was a hair's breadth before the -- below the estimates. one thing in europe we have not picked up, the negative's one that came in and asia. this is the state of play in london, paris, and frankford. aching out small gains. we dropped on the bond story that we broke, the chinese are rebutting the source perhaps that we used, yet has rallied this week. on course for the best week since november by bank of america said it is a taper tantrum in the bond markets. rising another asus -- 50 basis points would represent the biggest it to the bond rally. goldman sachs has been warning that we want to shift expectations about the fed in china's economy, the premier talks about the chinese economy ining it expanded at 6.9% 2017.

china is the driver of the world economy in terms of those exports. the premier saying 6.9% for the world, the growth pace exceeded most estimates on the bloomberg survey. you have the risk radar. anna: a quick line on bayer. estoril -- nds give [indiscernible] the placement volume amounted to 1.8 billion euros. they agreed to a 90 day lockout. keep an eye on that. listedve been, they kavestro. questions ofng

equity markets and that is what asian markets are dealing with. the canadian dollars unchanged. that and the peso were weaker in yesterday's session because of concerns about the nafta talks. will the u.s. or want the u.s. walk away from those conversations? we have bitcoin. down by 8%. this is as the south koreans said they are looking to increase the amount of regulation and perhaps stop any trading in cryptocurrencies. can you imagine what that will do to margin calls and they cryptocurrencies? the bond markets are the focus. bonds have gained across the curve late into yesterday evening. all of this on the rebuttal from the china state administration of foreign exchange, pushing back on our report saying beijing officials are recommending a slowdown, a holding of u.s. purchases. they are rebutting the sources. you see a rise in the bond markets this morning. there is this release coming

through in the bond market. we are not in a bear market yet according to the treasury. bill gross is saying it is a mild drawdown. get ready for some flow to come to the market. you had the u.s. treasury auction and the auctions in italy, the u.k., and 30 year bonds. this is the man we will have a conversation with. commodity mining and metals industry in context. hambro -- evy hambro is our guest. beauty in an apparent reference to a bloomberg news story published yesterday, the state administration of foreign exchange said we think the report may have cited wrong sources or may be fake news. not cleard it was

whether the recommendations had been adopted. u.s. president donald trump has predicted a crisis between america and north korea will be resolved without war. he promised the south korean president that he wanted -- [indiscernible] he spoke during a white house news conference with the norwegian prime minister. president trump: we are building up our military to point we have not been before. but notbeen weakened with me. we are going to have peace through strength. germany is maintaining its hard-line stance on brexit, demanding the u.k. a for the privilege of its financial firms having access to eu markets after it leaves the block. according to german officials, britain cannot hope for our trade agreement that includes financial services unless it agrees to make substantial contributions to the eu budget

and adheres to european law. in the u.k., job vacancies in london's finance industry suffered what is being described as a seismic drop in december. a new survey found the number of positions fell 52%. recruitment firm morgan mckinley said the findings underscore the brexit exodus from the city. the canadian dollar and mexican peso fell after canadian officials said there is an increasing likelihood that president trump will give six months notice to withdraw from nafta. a white house official insisted there has been no change in the president's position on the trade pact. canada filed a of you teal complain over american duties, a an ill-advisedas attack. bitcoin is trading lower after south korea's justice ministry said it is preparing a bill that would shut down digital currency exchanges.

report cited the ministry expressing concern about serious risks associated with exchanges. concerns are raised by the country's officials as fever demand for crypto currencies have driven up demand. stolen jewels and goods from the paris ritz hotel. valued at $5.5 million. police arrested three suspects but to others got away with the loot. several high-end paris jewelry stores have been targets for dramatic robberies in recent years including harry winston, and cartier. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . watching hong kong this hour because it has one hour more to trade. it is in positive territory. if it sustained it will be an impressive 13 sessions of gains, the lowest on record. it has a stall in the equity rally.

the nikkei impacted by the higher he and closing out the session down by point three of 1%. -- .3 of 1%. stocks the south korean crackdown on cryptocurrencies impacting a lot of those players in seoul. we will have a look at the stocks. down by 6% there. opit.com. stake in and closing higher. this is a milk company dragging on the overall index. a downturn in the dairy milk providers. finishing out the session at a four-week low. manus: thank you. juliette saly in singapore. the bloomberg mining indexes of almost 4%. proof thesm is

[indiscernible] hambro from blackrock. thanks to -- welcome to the show. happy new year. , ids are going to outperform in the lift cycle. they will outperform and 2018 and i said you are smarter than gundlock.- bull or bear for the year? evy: we are bullish. as we said last year we have the synchronous global growth going on. it is training ahead of expectations. under five, six years investment. you have the convergence for the sources. and when those two things

converge to get an explosive price was sought -- response and that is what we have seen. it will take time for this things to settle down. 2018 is the year where margins and cash flows for the sector will be robust and we're looking forward to getting rewarded for patients. patience. sure there are a few mining executives listening. i want to bring you this. you talk about why we might see comedy prices performing robustly. the bloombergt on and this shows the pe discount that the mining stocks have against the broader sector. this is another reason why you are bullish on these stocks. the commodities have gone up but all the -- not all the miners are banking on high prices yet. evy: not just yet -- that, it is the investors. terrible track

record. many investors were badly burned, ourselves included. it takes time to trust the management team. they will not repeat the same mistakes of the past. people are nervous around china. is china's growth going to be sustained, they had a great year last year, will it continue into the future so there are always skeptics. that -- the third one that we companiespe is the are different in the way they allocate capital. they do not go on a big spending splurge. the closing of that gap, not just the underperformance but the discount that the sector is trading at relative to the historic multiples is a reflection of the underweight that most investors have for this space. exactly the same in energy today. manus: we do risk radars every day. we have done copper, aluminum,

the drought -- drawdown in alameda stocks. various things drive markets. do what extent do i bank upon the continued construction by the chinese. act as a floor to my base metals this year, to copper, aluminum. is that going to continue, and over tightening by china in terms of driving these markets? evy: i am not the expert here but my guess would be that china is at a rate crisis too high for their economy. actions result in that taking place and there is commentary out of china in relation to coal. i want to see a price above 100. then they would start to think about that. you might see that commentary. margins for the companies remain above what most people are expecting them to be. we will have cost inflation but it will not be dramatic. the margins are normal -- enormous and they are not

reflected in today's valuations and that is the arbitrage opportunity in the market. anna: when you talk about the last -- lack of trust, some of aggressive by overly levels of cap it are -- capital expenditure and when you look at the plan, what would you say to describe the right level of capex? are there evy: areas of concern? we are seeing cautiousness and they can see the margins. in most cases they dealt with that debt. there are some obvious companies that are paying down debt aggressively and they are great value opportunities for groups like this. they are starting to think about where we should allocate capital. it is coming back to us in share buybacks and dividends. i want to see that continue. anna: you mentioned that a couple of times. what expectation do you have from the sector of return of cash to shareholders in

dividends, buybacks for this year because you are waiting. understand that companies have to reinvest some money to keep their business is going. you have the maintenance. maintenance. companies need to invest in new capacity. then you have the growth capex. if companies are prepared to go down that path they have to come to us and all of their investors and say this is why we are doing this. not because we think of id prices will go up. there is a return on the investment. the same will be true for m&a. in the absence of that the money should come back. manus: thank you very much. we have a little bit more to get through. coming up. anna: oil is holding near its

highest close as u.s. stockpiles decline. we'll discuss that next. manus: we will bring you our interview with germany's state secretary for economic effort and energy. this is bloomberg. ♪

a.m.: it has gone 7:21 we are 30 minutes away from the start of your trading day. futures are at a higher open. we have marks & spencer's and tesco. let's get the bloomberg business flash. here's juliette saly. has cut itsyer stake to 14.2% from 24.6% as part of its ongoing plan to focus on drugs and life sciences. due to strong interest the placement volume exceeded you

citations amounting to 1.8 billion euros. it has been peering at stake in the formal division as it shifts away from industrial chemicals monsanto.eing to buy rio tinto has dropped out of the bidding for a stake in one of the world's top lithium producers as it pursues other ways to capitalize on the electric car boom. according to people familiar, rio decided not to proceed with stake infor the 32% sql after studying information in a data room. interest in sql is worth $5.5 billion. declined toves comment. that is your bloomberg business flash. much,thank you very juliette saly with the business flash. let's get to our conversation. we want to talk about electric vehicles. i wanted to start with gold. we have seen equity markets rise

and we have seen gold rise. dubbedour colleagues this the just in case trade. what is keeping gold on the rise or not? the last year it was about dollar so we had a much weaker dollar than was expected. gold has always had a negative correlation with the dollar. when the -- gold is weaker the dollar has been stronger. we are seeing what you talked about earlier. you made a lot of money in equity markets as a whole. taking a little off and putting it into domestication is a sensible move. manus: let's talk about the electric cars. spent 44 billion dollars last year on clean energy. that is up by 38%. with this in context. this is the chinese restructuring the way they see the world and it has ramifications for the electrical vehicle as far as your world is concerned. evy: i do not know if we were

early but we started to invest in battery materials. and across other portfolios. the reason we did this and we were early is part of my team, we have a new energy fund so they have been the cutting edge of this and they have been forcing us to look at what is going on. the shortages and supply and demand are a reflection of the mining space. it is exciting what is taking place. we can see structural demand growth for some commodities attached to electric vehicles that does not exist in parts of the commodity universe. you will not have structural demand growth but some commodities lasting for a decade . that is exciting. that is why we have been backing these juniors, they have been like space rockets. something you look at small caps for order you look at the majors?

would not surprise me if the major companies are saying this is part of the commodity universe, we are a mining company. is there an opportunity to get in there and help some of these companies? do they understand the market? it is difficult to get finance if you are a lithium company. they can hedge and preserve their returns. very nascent what we're seeing in the space. manus: what is the most met -- radical thing happening in the auto space? we would end up buying bmws rather than tesla. is that a paraphrase? evy: this is a multi-hour-long session. i am fundamentally bullish on this space. mike -- my next car will be an electric car. it ins -- we're playing

the upstream space. i am not an expert in batteries. when you look at solar panels, the margin has been given away to the customer because costs have been declining. i can see something similar happening in entries. the chemistry will evolve constantly. moref these companies need materials to go into the batteries and if you can be there upstream and see the structural demand for what we will be producing, that will be a safe way to play the trend. time to ask you how leaves aramco. interesting time he -- timing. we need to talk more. manus: leaves aramco. interesting time we will get hin the hot seat shortly. that is it from us. on stock you want to focus bayer.ng to be the retailers in focus.

anna: we will be back tomorrow. we will leave you in the capable hands of the european open market team. ♪

guy: welcome. you are watching bloomberg markets. i am in london. matt miller is in the house at our new london headquarters. excited to bely here. the cash trade 30 minutes away. a lot going on today. ♪ guy: fonts bouncing back yields on 10 year treasuries retreat. china rebuffs a bloomberg report that it plans to slow purchases of u