♪ anna: good morning. i am anna edwards. manus: this is "bloomberg daybreak: europe" and these are today's top stories. anna: asian equity markets rise, as trump agrees to talk with kim jong-un. manus: u.s. president slaps tariffs on steel and aluminum, but excludes canada. the sony energy minister cells bloomberg be giant oil minister -- -- says the ipo could be pushed back. >> there is no value lost for the kingdom.

deadline a the sufficient deadline you are for two. deadline you to refer to as being significant in the decision-making progress -- decision-making process. ♪ good morning, everybody. this is "bloomberg daybreak: europe." quick look at the asian equities session told us we are .25% withsitive, up this geopolitical bouncing markets. the bounce coming looking -- coming through in equities. selling coming through in safe haven tried -- trades like the yen. president trump has agreed to a meeting with kim jong-un. what can be achieved by such a meeting in terms of denuclearization? we will see. the timeframe has been set, set to take place by may.

a positive vibe from the terror of conversation, relative to the initial shock of the conversation. mexico and canada getting exemptions. that has boosted their currencies. are not expecting to see a great deal of the upside for equities from here as a result of those two positives. s&p futures pretty flat right now. jobs report due out later. vibe, if weolitical want to look at what has been happening from -- happening with the yen. what will corona say about trade tension and the yen? --manus: mario draghi opened the door to do something in terms of the yen. not everybody can seek exemption in the united states of america.

there is nothing stopping the foreign central banks buying bronze from the united states of america. bonds from the united states of america. this is critically important, because of all of the arguments about trade wars. could you see a buyer strike? could it come from china? the irony is china owns the most bonds in seven years. that is what you saw on the back end of last year. would you do with the proceeds, you put it into treasuries. they are the holders of these bonds. that is where the risk lies. j.p.estingly, you have morgan going 5% underweight bonds versus 0% on the prior month. j.p. morgan asset a location is shifting. the foreign central banks love them. geopolitics and play.

treasury demand something we are watching. we will bring you some interesting voices on a range of topics today. conversation with john mcdonnell. we talked about brexit. bring you our interview with the saudi oil minister. you heard him talking about the timing of the aramco ipo. let's get a bloomberg first word news update. juliette: the bank of japan has its monetary stimulus with corona's final policy meeting before his new term begins. , the central bank kept its yield curve control setting and asset purchases unchanged with a stronger yen threatening progress on inflation. economists have pushed back there forecasted date for changes to the boj stimulus program. trump has set off a race among nations and companies to

win relief from his steel and aluminum tariff. he slept a 25% tariff on steel imports and 10% on the aluminum. mexico and canada have been excluded, as nafta talks included. -- talks continue. >> we have to protect and build our steel and aluminum industries. at the same time, showing great flexibility and cooperation toward those that are really friends of ours, both on a trade basis and admit -- and a military bases. juliette: the 11 members of the transpacific trade pact who officially signed the agreement in chilly. some say the accord kobe lamented by year-end. donald trump called -- pulled the u.s. out of the deal last year. the governor of the people's bank of china has said markets

assets reform should be accelerated. he said policymakers are now focused on achieving quality growth rather than the pace of expansion. china'sents came as broader gauge of new credits slowed. u.k. officials join -- officials don't expect to reach a brexit deal by the end of the year and expect january is the real deadline. european union chief negotiator michel barnier has long said he wants the withdrawal agreement done by october this year so there is time for it to go to the european and u.k. a parliaments -- and u.k. parliaments for approval. the timetable could foot. 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 . asian markets very much focused on the prospect of talks between the sitting u.s. president and north korea's leader. we had the yen fall. we saw investors move out of state havens. the nikkei closed higher. a lot of focus on south korea. the kospi is up by .8%. we had the data out of china. keeping its stimulus unchanged. when we look at stocks, it was about the impact of what we are seeing. if kospi could search 30% tim gives up nuclear weapons. there is a big surge in south korean stocks -- south korean tourism stocks. bluescope steel one of the companies that could be impacted by the tariffs, but the ceo has said the company is a unique

case for tariff exemptions. a lot of focus on chinese steel players. a lot for asian investors to digest, but overall, it looks like we will finish the week with a gain of .6% on the msci asia-pacific index. anna: thank you very much. back to geopolitics. president donald trump says he has made progress after agreeing to meet kim jong-un in the first-ever meeting between a north korean leader and sitting u.s. president. here is what some contributors had to say. >> along with president trump, we are optimistic about continuing a diplomatic process to a test for the possibility >> of a peaceful resolution. stick more of the success or failure of his presidency on this. >> he has offered to meet them. >> it would be great if they

meet in mar-a-lago. himould be important to get john kuhn north korea so he can't present this as another homage to north korea. some of the reactions there to the news flow. what could come out of the spring summit with kim jong-un and trump? it is a high risk, high reward. some people say whatever it is, it delivers legitimacy to an administration. ian bremmer just said that to us. this could be the defining issue for this administration. reporter: you are right. the symbolism of this meeting between two of the world's most

eccentric leaders in the world is actually quite something. if we look at what is happening here, it is important that we remind ourselves of the fact that the u.s. and north korea are still technically at war. the korean war that started at the start of 1950 still continues, theoretically, because it did not end with a peace treaty. it ended with a cease-fire. what trump might try to do is offer a peace treaty deal that would formally conclude the war, which would help remove the fear among north koreans that the u.s. might try to provoke another war. in return, trump might be able to get a promise from kim jong-un that, yes, we will try to denuclearize. morning,ead a lot this limiting my expectations as to what can be achieved in negotiations. indeed, what we can predict will happen from here.

why is kim jong-un reaching out at this point? sam: that is a good question. point to theto yuan security council and the u.s. with the sanctions that have been biting in terms of money that has been going into north korea. north korean officials has been feeling the pinch. they feel it is time to extend an olive branch, because especially after kim jong-un said last year we are complete with our nuclear arms program, we have to sell to be will to hit the u.s. mainland with a setear armed, so now they up the stage for this type of all of branch. with the winter olympics, there could not have been a better occasion for north korea to send people to south korea to start a dialogue. anna: thank you very much for

the contribution. sam kim joining us there. here in london, jeremy is with us. good morning. there were talking about the developments we have seen. i have a chart that shows the korean won not getting as much of a boost as you might have expected him a given what we heard. maybe we temper our expectations a little bit, but we have a little money coming out of the yen. there is a little of that predictable move in a risk on market. jeremy: the news has to be welcome. if we are going to reduce the topolitical risk, that has be welcomed. we are seeing some of those traditional risk orientation trades looking to start gaining a bit of traction, but if we look at south korea in terms of the news flow, clearly the currency should get a benefit,

but we are still talking about the tariffs, which are slightly more detrimental or problematic for korea until we get into the debate about exemptions. we have the master headline, which is about something historic that could happen, but the reality of what did happen factually is that he did sign tariffs on steel and aluminum. line we have used, he started a race for everybody. he has lit the torch. the most trump on a potential trade war. -- donald trump on a potential trade war. jeremy: the devil is in the details. we started off with the headline news, and we are now in a scenario where we know where the current parameters are. to the individual nations to go to the u.s. and say, actually, we are very important, we are strategic partners.

ofase give us some degree exemption. what we are dealing with is the political versus market imperatives. the political imperative is he is able to tell his base i have protected our industries, as i said i would. or vote for republicans. now we are in a scenario where the markets are saying let's look at the practical interpretations of this and seeing which economies, which countries will be impacted and see how that is going to be formulated. anna: do you think markets care aboutr willow bay care the reasons behind --or will they care about the reasons behind the tariffs? unpredictability about trade policy, will it matter why these things are important? this came out of national security concerns. that seemed to annoy the canadians a great deal. there are other tariffs that could be applied around

intellectual property infringement. will the market start to distillers between what seems to be a pretty double and what seems to be less so? jeremy: in the context, as you say, this was under the office of national security. i don't think anybody really believe national security is at the heart of it. there is this unpredictability. we have been understanding that few the course of the last months. that unpredictability is governed by twitter. we have become accustomed to that. the reasoning behind the trade policy i think is going to call some degree of consternation. it will facilitate markets to of theskeptical in terms policy agreement, because as we know, things can do a 180 degrees been under this administration. we have left one of the

biggest data points behind in our conversation. it is about wages, the jobs report. the chart. we have the whisper function on the bloomberg. this is what moved the bond market down -- on market and dollar dial down. has it got lost in the weeds? jeremy: it is surprising. here we are on payrolls friday where we are discussing in the first instance, many other things. as we go through later in the day, if we see average earnings higher, we will see the market pivoting back to thinking about fundamentals and the inflammation -- and the invocations after the fed. the data starting with a slightly different perspective.

we will be dragged to the usual phenomenon on payrolls friday. anna: a lot has happened since january. jeremy: it has if you think about equity market volatility and the bond markets. we have a very short time horizon these days. jeremy, stay with us. we have a lot more to get to. fxemy stretch is the head of strategy and he stays with us. coming up, brexit delay. u.k. officials are said to seek no deal until 2019. we look at what that would mean for britain and wrestles. this is bloomberg. ♪ ♪

this is "bloomberg daybreak: europe."

back to reality. u.k. officials don't expect to reach a brexit deal by the end of the year. october target slipping. i spoke with the shadow chancellor and asked him if he could see that the labour party could back conservatives about a customs union. the amendments have come from others conservatives but parties as well. they seem to be almost exactly the same as ours. however we get there, we hope we can convince the majority of parliament for a customs union. the government will accept the amendment cannot push it to a vote. anna: can you see that being

what happens from here, that we end up staying in a customs union? >> i think it is almost inevitable. aboutt see any other way securing the tariff free access we want and also securing the position with regards to northern ireland border. it is extremely complex, but this could help. there was talk about the --trade deal. customs union would have a say about future trade deals. we think there is a deal to be had. in moving in this direction as well as moving in terms of ,aintaining the customs union

we think we can change negotiations. anna: would britain still be able to do trade deals with china, australia, other countries? john: being able to negotiate through a customs union, we would have an influence. we would be rule makers rather than roll takers. the opportunities for us is working with european partners to ensure we have trade deals, which reflect our own development of our own economy. i'm doing that on scale as well. has the perception been in your party to your new policy around trade? years, jeremy corbyn and others may be thought about brussels as capitalist. john: as a party, we took the view we should campaign. clear.and i made it we didn't think we would be evil

to convince people unless we had a reform agenda. able to convince people unless we had a reform agenda. we are we are now is exactly there. we are into a reform agenda that we think can convince people that having a new relationship with europe will be constructive, collaborative, and in the interest not just a britain but of europe. we are moving there. was john mcdonnell speaking to me. jeremy, interesting to hear his views there on the customs union and brexit. it reminds us there are so many things that could change. there is what the government the, what the e.u. says u.k. could have, and there is what parliament will agree to. all of those parts are moving. jeremy: that last element is one of the most interesting things, what will parliament agreed to?

they are talking about suggesting the deal may not be agreed until after this year, that takes us close to the absolute article 50 deadline, and the debate about whether parliament will have a substantive vote becomes a more interesting one. there are many moving parts. that continues to be one of the issues for sterling and terms of its trading performance. there is a lot of political noise. if you are sitting outside of the u.k. looking at those headlines, they are more likely to be negative, at least the initial phases, rather than the big positive and pragmatic in terms of solutions being found. manus: fx traders are always a benchmark. have a look at this. this is implied volatility trading relative to -- get these bigo

nasa nations. thinkt point, or do you we trade their rage is in sterling -- we trade the ranges in sterling? jeremy: i think you have to focus on the policy on the u.k. side and from europe in relation to the ecb. there is a monetary policy dynamic in the u.k., so we shouldn't ignore that. that is one of the interesting dynamics is markets have been contemplating whether the bank of england can raise rates. that is another variable we need to keep in mind. manus: can the bank of england put the floor on the sterling versus politics? jeremy: they would like to, suadee that would help some of the inflation fears. anna: well done, jeremy.

he stays with us. up next, top saudi ministers visiting the u.k. aramco remains in the spotlight. we will bring you our interview. this is bloomberg. ♪ mom you called?

oh hi sweetie, i just want to show you something. xfinity mobile: find my phone. [ phone rings ] look at you. this tech stuff is easy. [ whirring sound ] you want a cookie? it's a drone! i know. find your phone easily with the xfinity voice remote. one more way comcast is working to fit into your life, not the other way around. ♪

manus: nice shot of tokyo there. kuroda toting for begin talking. towards 100?ctory north korea and the united states of america could define this presidency. what phil kuroda say -- what will kuroda say? let's get your market check. nejra: we are seeing risk on in asian equities. largely based on the fact we are

going to see this unprecedented summit between president trump and the north korean leader. if we take a look regionally, gains of .6% in china. gains in japan on the kospi, pretty broad-based gains across the region. the hang seng up more than 1%. let's take a look at the kospi. there are interesting things happening in the south korean assets in particular. cds drop to the lowest since january. it has already gone above the 200 and moving average. -- 200 day moving average. we have seen a bit of a pulling back in the yen, as the safe haven becomes less appealing. at thiss is showing talk of the yen moving possibly to 100 if trade tensions rise,

the implementation of the tariffs softer than what some people were initially anticipating. donald trump opening the door for some wiggle room force or countries. dollar-yen has been falling, even as thep -- yield gap has been widening. question whether yen goes toward 100 or 95. a quick check on oil, holding near a three-week low, heading for a second weekly decline. part of this is on the fundamentals. we have seen production hit a record. orders --mments that broader trade tensions could hit commodities. manus: little bit of news coming from ubs in terms of renumeration. 6% -- up by up i 6%.

it is the lines on brexit and where they may move some of their functions that is probably going to catch the markets attention. lines around those compensation breaking in the last hour. ubs looking at a more decentralized model for their brexit plan. their portion of london staff will be affected. all of this coming through from orcel writing a memo to staff. banks will make their preparedness for moving ahead. let's talk about the ecb in europe. mario draghi, this was a pretty cool move. pledge to ramp up bond buying if the economy deteriorates. the central bank is expected to continue its asset purchase program into the fourth quarter of 2018. anna: a sign it is looking to

end qe in the not so distant future. asset purchases will total 30 billion euros for the last three months. mario draghi wade in on the trade tariffs conversation. >> disputes should be discussed and resolved in a multilateral framework. the unilateral decisions are dangerous. is a certain were you are concern about the state of international relations, because if you put tariffs to against your allies, one wonders who the enemies are. is stillremy stretch with us. we are getting lines coming through from kuroda. we will bring those the next half hour.

the japan economy proof -- improved. draghi, i to mario listened to it and i wonder, it was almost like a double punch, wasn't it? intook away on one hand regards to the bias, but then he gave the forecast on inflation. take a look at the projections. they drop .1%. that is not a huge move, but it does move the conversation about when they will move rates. change if you took the in the pledge we had in the rate decision initially in the market , and i think that was a way to -- you would assume that when we got to the publication of the forecast, the probability would have been the gdp forecast would have been north of 2%. when you look at the composition goesose numbers, it

towards the ecb adding more time or more room in terms of maintaining the easing policy stance. prescribedcurrent underlines the fact that we are likely to be discussing the removal at the year end. we have seen the euro give back those initial gains. this chart was showing the move upwards we saw in the euro and the selling we saw subsequent to that. i read some commentary talking about 2011 and the ecb moving too quickly. comparison -- is that a legitimate person? jeremy: i would say not. anticipating the risk

of growth coming in as slightly above the numbers the ecb are currently discounting. i was surprised they didn't upgrade their growth forecast for the next year. i think that provides room in my attitude for the ecb to pull away from the bond buying. latitude for the ecb to pull away from bond buying. progressiveis a one. the ecb needs to make sure that as they withdraw but stimulus, they don't want to encounter a taper tantrum. variable thather the ecb is keen to avoid. i was trying to take some of the data, this is what we have done. we have put together the unemployment rate and the output gap. it defines it over the past four years. is totalhave got

employment has risen by 8 million. the total number of 8 million has fallen by five. the annual gain is 1.2%. from your world, you see more flow in terms of preparedness the dailyhen perhaps and one month fx moves per se? jeremy: we are seeing some of that. one of the things relevant for some of the clients we speak to in terms of the sovereign's base is the debate about positive rates. that has been a key variable in terms of perception of holding euros in your reserve portfolio. we move conceptually towards that unwinding, that will be hugely significant in terms of the structure and dynamics of flow data. the fundamental story remains

compelling. that suggests the euro, which is still below what i would consider to be equilibrium, so there is significant scope for the euro to appreciate and it is to be on the cheap side of fair value before it starts to compromise the growth trajectory. fundamentals and are still relatively compelling. the ecb wants to make sure that process of appreciation is slow and progressive. in terms of the politics story, he showed yesterday he wasn't going to let uncertainty around italy stop him from moving guidance. you, given these uncertainties around that particular geography, that we still got this change, the hawks were victorious, i suppose in achieving that? jeremy: the hawks were victorious in terms of removing

the bias. that was encouraging. we have been arguing that we thought they would become more ascendant in the ecb. that has been indicated. in the political dimon it's him a -- in the political dynamics, mario draghi would never want to be seen dragged into the short-term. in the italian political spectrum, he wouldn't want to be seen to be creating special circumstances. even more likely that he would repeat he eight the issue of political dynamics impacting monetary policy. i said before we started the show, i wonder to what extent did mario draghi open pandora's box in terms of allowing kuroda the latitude to get a bit frisky with fx intervention.

kuroda has his problems. he has a strong yen. anna: we will talk more about the japanese central bank shortly. let's go a few of these. about the ongoing deputy governors contributed a lot to policy, effects of global market instability limited on the economy so far, which is interesting. japan corporate profits have been strong, despite that strengthened the currency. policy has remained a bit higher after subsiding. a host of comments, nothing that has grabbed the attention too much so far. manus: let's draw a line on that conversation. as we get more from kuroda, we will bring that to you. jeremy stretch is our guest host this morning. saudi arabia on the agenda. anna: the energy minister has saudi aramcoo of

could be delayed to 2019. he said he doesn't see this year as a significant deadline. he was speaking to bloomberg. listing, as the aramco london continues to be in contention. the only certain thing about saudi aramco ipo is it will and theit will happen anchor market will be the exchange of saudi arabia, which is being prepared to not only take the aramco shares but bring intore foreign investment saudi capital markets. given the importance of london plays and will continue to play, we believe brexit, the relationship between these two centers of capital is important. as far as the second venue of

realistic for saudi aramco, if any, it would be announced in due course. the decision has not been made. the international listing 100% confirmed for this year? >> the international listing will be ready to be made this year. we have said that repeatedly. the company has prepared, and the government has prepared. ,e have created the framework fiscal and otherwise for it to be listed this year. the actual timing will be announced when we feel be conditions for the success of are in place, and some of those conditions are not in our control. we have make sure the global capital markets are ready. is there a chance we could see a delay into 2019? >> i cannot comment on that, but

i would just say that the objective of the ipo has always been to optimize value for aramco and its investors, and that is the guiding principle we will use. bankers say we only have a short amount of time left for the ipo train. when is the last possible moment you can decide to hit 2018? believe we are hitting any deadlines, and as far as i'm concerned, between december 31 in january one, there is no value lost for the kingdom. a sufficient deadline you refer to as being significant in our decision-making. good to see you this morning.

the bottom line is, where is this ipo going? when is it going to happen? >> this is what every investor wants to know. it seems like they are>> pushing back expectations. now, the ceo of aramco is saying we will have more questions for sure answered in mid--- in mid-2018. manus: the language is slipping. reporter: it keeps flipping and being pushed back. was of the original plan supposed to be 100% dual listing, and now they are pushing riyadh, the core listing. two years, 4% of people invest in that exchange, foreigners. they want that to between 5%. they haven't answered the

question yet about london or new york and the timing. anna: opec, what did he have to say about how they will work to keep prices where they are? they will liftid the production cuts possibly in the first quarter of 2019, but he had a very mario draghi moment. they will do whatever it takes to keep oil markets stable. we do see oil slightly up this morning. a very strong stance they will work together to keep the markets stable. day, so i feel like you can't ask what is going on with women there. he was like, we need to move beyond that. said, could you see women being the ceo of aramco? he said i have three daughters and i hope one of them to run institutions bigger than aramco. manus: thank you very much.

let's get a business flash. juliette saly standing by. hna group is poised to dispose of a plot of land in hong kong to a local property developer. embattled chinese conglomerate accelerates its selling spree to repay debts. the site is likely to be completed by may. the bid is higher than what -- than what hna paid for the site. is making way for liquidations force u.s. operations. although the situation is still fluid, a shutdown of the u.s. division has become likely.

so far, failing to find a buyer or reach a restructuring deal. martin tricky faces sentencing today on a securities fraud conviction. prosecutors say he deserves at least 15 years behind bars for performing funds. made ayer has last-minute pitch for leniency, saying his client didn't try to create a circus like atmosphere at his trial, which he blamed on a rapid media presence that did its best to users -- to disrupt the case. that is your bloomberg business flash. the governor of the people's bank of china says market access performs a should be accelerated and the country can be more bold with opening the economy. there is also a signal that china may reduce its reliance on credit. focuses is on achieving quality and growth rather than the pace

of expansion. for more, let's get to our china correspondent. good to see this morning. rate -- the races governor races red flags. that is the question about chinese debt. tom: there were no repeats of that were made in october. he was more moderate in the way he addressed the debt question, saying that growth was relatively stable. he says the priority for chinese policymakers is on quality growth and there would be less -- once on the m@money the m2 money supply. he addressed the question of reforms. as relatively liberal. he used the platform as the governor of the pboc to say china needs to be bolder in

opening in reforming its economy. we have been preparing after joining the wcto for several years to further open the market, but unfortunately met with a global financial crisis. now that we are in a new stage, we can be bolder and make the degree of opening larger. sayinge governor regulators are going to be working more closely to tackle the financial risks and oversee the financial system. the pboc would play a more important role to close the loopholes that have led to so much of the financial risk in the system. 320% debt to gdp by play 22. a big task for whoever takes over. good to see you. did we get any sense that officials in china are ready to restart efforts to liberalize the currency? with that part of the conversation?

-- was it that part of the conversation? tom: it has been on the list of many investors looking at china. the currency is relatively strong, but he poured cold water on the idea that they would take any major steps. he said the big steps had already been taken. priority with the controlling risks. after they have done that, then they would take more steps to liberalize the currency. people hoping that widening the band the currency traded would be widened or you get steps for capital controls. it doesn't seem like that would be a minute. this is probably the last time he will meet with the press, the public. he is expected to step down. his successor is expected to be named on march 19 and may have

challenges going forward, including the liberalization of the yuan while maintaining adequate growth. manus: thank you very much. tom mackenzie there in tiananmen square. more headlines coming through from bank of japan. we are not at a point to discuss exit details now. this is perhaps a little bit of a pause for thought from where .e were at of the bank of japan uncertainties are high for its cpi forecast. forecastferring to a to hit cpi goals around 2019. he mentioned perhaps the exit any fiscal year of 2019. anna: he says a high chance of reaching the 2% around 2019, but meeting that forecast does not mean immediate exit. .till with us, jeremy stretch

your thoughts this morning, as we watch but the boj is trying to communicate. the 2%ance of reaching target, but that doesn't mean immediate exit. jeremy: he is trying to separate those issues. to join thewill try two together. bethe cpi target is going to attained, what does that imply for the boj? is there going to be a policy reversal or gradually tapering back? he is attempting to limit the rate of appreciation in the yen. he doesn't want to see that 100 threshold hit in the near-term, because that will have consequences. he is trying to walk a tightrope to say we are getting closer, but don't automatically imply that will see us moving. the market will try and move in

that direction. we have been arguing we thought they yen would continue to strengthen. we have seen reversal now, but ultimately, we are still headed towards the low 100s in the course of the next few months. add to the might scenario, and you can follow all of the editors on the bloomberg. the question is, what defines an exit? what would cibc say? jeremy: it goes back to the ecb and trying to push back the idea of tapering. there is a comedic nation's issue. in a sense we are talking about -- there is a communications issue. in a sense we are talking about fine-tuning.

reversal, fine tuning, and i think the markets will be looking for those signals. we are the runway to policy change. how long will that runway be? kuroda is trying to extend that runway at the moment. manus: can a pick up one other line. is hosing down the talks. you are worried about him getting frisky, but there is talk that he is a hosing down. what about appointments at the bank of japan? how much differences that make for you? what about the other appointments around kuroda? jeremy: that is interesting, because we assume he would get a second term. we felt that was appropriate in terms of policy.

looking at the deputies, the balancee keeps unchanged, but the other candidate is very interesting. in the context of his policy background in the grooming of a successor perhaps, so he will be one to watch in terms of the policy backdrop and interpretation of assessing both sides of the financial sector, political dynamics, and the monetary policy environment. in terms oftructive his apartment. manus: jeremy, thank you so much for being with us. heels greatt, trump progress after agreeing to the first-ever meeting between a north korean leader and a

sitting u.s. president. we will have the latest. we will get analysis. this is bloomberg. ♪

manus: good morning from the city of london, i am manus cranny. anna: i am an edwards. this is daybreak europe. ands: asian equities rise begin falls after donald trump agrees to talks with kim jong-un. anna: trump's protectionist play, slapping tariffs on steel and aluminum but excludes mexico and canada. we await today's payroll report. delay, saudi minister tells bloomberg the giant oil company's ipo could be pushed back to 2019. between december 3 -- 31st

and january 1, there is no value loss for the kingdom. deadline youhis refer to as being significant in our decision-making. anna: good morning, this is daybreak: europe. 7:00 in london, 8:00 in germany. let's get a sense of where we pick up our news. we have january industrial wasut, -0.1%, the estimate for an increase of 0.6%. this is below estimates, the second time this week we have had data below estimates. let's keep an eye on euro-dollar, see if we get any impact. one's worth, but coming off

of other disappointing data sets. the bigger picture story is risk on. we have carried it into our european trade. you have london up, dealing with trade tariffs being an acted, but starting a race, launching a global race for exclusion from those steel tariffs. a little breaking news coming through from five star, they are prepared to talk to anybody. european stocks are just a little bit unsure of how meaningful it is that trump a of -- having progress on north korea. there is a long way to go before you deliver the denuclearization of north korea. the draghi to step his back. it is back, dropping the forward guidance, but lowering the inflation expectations and projections for next year.

average hourly earnings. anna: i like the draghi to step, good lifeline. there is a bit of a two-step going on in asian equities. we have pushed up by two factors. one is the alleviation of tensions around the tariff story with talk of exemptions for mexico and canada, pushing up those currencies, it also the geopolitical story is something markets are trying to embrace, even if that only means a move msci5 percent on the asia-pacific. the korean stock up 1% in the last hour. with julia -- geopolitical bounces, we have a summit the u.s. president and kim jong-un. that doesn't mean futures are getting too carried away in what is achievable from those talks. we see s&p down .10%.

we put in the dollar-yen, a move of around point 4%, dollar goes higher and the yen is falling as a result of the geopolitical story. we have the jobs data due later. it was a month ago we got the january number that led to the wobble. about the vix once again, wages in the united states and where that will push bond yields. on the bloomberg, you will get the current whisper from the bond market that earnings could rise by .3%, above the consensus estimate at bloomberg. as far as treasuries are concerned, we are lower. the german data you just broke is not going to help the situation. jpmorgan asset allocation goes underweight bonds and are cruising -- boosting credit, 5% underweight on bonds virtually -- versus a mutual setting of 0%. short duration position is still

extreme, in their opinion. the lines from japan, remaining fully engaged with the bond market. the adjustment rate can happen in theory before we hit the 2% target, but he is not considering adjusting the yield curve. there is a team live there -- tliv there. yield.t rise in there is a lot to deal with. there is trade, there is politics and tariffs, all on the platter for friday. don't forget the wages. juliette saly has your first word news. u.s. president donald trump has set up a race among nations and companies to win relief from his tariffs. as expected, he slapped a 25% tariff on steel imports and 10% on aluminum. mexico and canada have been excluded as nafta talks continue while trump through the door

opened to further exclusions for countries and niche products. to protect our steel and aluminum industries, while showing great flexibility and cooperation toward those that botheally friends of ours, on a trade basis and a military basis. manus: the 11 members of the transportation -- transpacific trade pact have signed the pact in chile. the accord could be implemented by year end. donald trump called the u.s. out year and theast tpp signing came the same day he slapped those fresh tariffs on steel and aluminum. the bank of japan has stayed the course with its monetary stimulus. governor kuroda's final policy meeting before his new term next month. as forecast by economists, the asset purchases were kept

unchanged with a stronger yen threatening progress on inflation, economists have pushed back their forecast date for changes to the boj stimulus program. the governor of the people's bank of china has set market assets reforms should be accelerated and the country can be more bold with opening up the economy. chan said policymakers are more focused on maintaining quality expansion. the comments as china's credit slowed and factory -- eased amid the lunar holiday and signed a campaign to diffuse financial risk may be gaining traction. u.k. officials don't expect to clinch a brexit deal by the end of the year and privately think

january is the real deadline to get an accord in time for exiting. that is according to people familiar. european union chief negotiator michel barnier once the agreement done by october so if there is time for it to go through both parliaments for approval. david davis has indicated in public that the timetable could slip. 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 . trump meeting with kim jong-un came through as asian markets opened up. you saw safe haven assets dumped, the nikkei closing .1%.r by a lot of focus on the south korean market, closing higher by 1%. a slight gain for the regional index, but despite volatility for asian investors this week, it looks like we will round out the week with a gain of about .6% on the regional index. looking at the stocks we have been focusing on, it has been the south korean players. the tourism stocks have had the least exposure to the missile system. we heard security saying foreign

institutional investments have targeted these stocks. up by almost 23% on the close in seoul and we had -- heard that if kim dumps his nuclear weapons, you could see the cost be rise by 30%. steel in sydney off by 2.7%, although the ceo has said his company could be exempt from the tariffs. anna: thank you, juliette saly in singapore. has madeump says he great progress after agreeing to meet with kim jong-un in the first-ever meeting between a north korean leader and a sitting u.s. president. here is what some contributors had to say about the potentially historic talks. >> along with president trump, we are optimistic about continuing a diplomatic process for the possibility of a peaceful resolution. >> trump is going to stake more of the success or failure on his presidency on this deal. >> a sitting president has

offered for the first time to meet them and they have had to give nothing. >> it would be great if they meet at mar-a-lago. it would be very important to get kim jong-un out of north korea so he can't resent this as -- present this as another homage to north korea. >> nobody wants to be shot at and north korea is not the exception. more -- governmentsenior reporter joins us. david, great to see you on the show. who is winning here? you listen to that stream of voices and i said what this reminds me of his ronald reagan and gorbachev way back in the early 88 -- 1980's. this is a seminal moment if it happens. who wins? think it will happen and if you look at it, trump is winning at the moment because as one commentator pointed out, the united states hasn't had to give anything to get kim jong-un to

the table. what we have had the last year or so is a series of bellicose tweets from donald trump that a lot of people have said is harder sanctions each time north korea has done anything provocative and what we have now is a situation where north korea has agreed to everything donald trump has asked for. he has backed down from his refusal to tie talks to denuclearization, he has agreed to trump's condition that he puts a freeze on missile and nuclear testing while agreeing the united states can go ahead with military exercises which is something he said had to stop before. it does look as if trump is in the driving seat here. anna: is trump the man for this job? how do we expect them to handle us? -- this? david: i've been speaking to people who say the fact that may be trump doesn't have any of the

baggage over two decades of failed talks with north korea and he has this unconventional approach, maybe trump will come and do something unconventional and make some progress like have talks, for example. it is unprecedented. certainly to have the talks before you have a deal rather than a grand photo op afterwards. the other issue is trump doesn't read, he doesn't have a south korean ambassador, doesn't have an envoy to north korea, a team in place. how is he going to bring this off? it is going to be a huge logistical exercise to actually come up with a solution to the seemingly intractable problems about how do you offer north korea security guarantees without leaving yourself completely exposed, as well? manus: david this will be a fascinating year to cover this

meeting if and when it happens. david tweed, always great. joining us on the phone from pyongyang is the professor of the united nations studies at the university in seoul. right have you with us. he is also the former korean ambassador to the u.n. talking about the religious ticks and the challenges. no ambassador on the ground, little real presence on the ground. set up the logistic challenges for us as you see it in your former ambassadorial role. think the bottom line seems to be that this is a because ifvelopment north korea is genuine in this willingness to meet the united state president, and talk of

denuclearization, but i think they have a good chance to do it at the highest level. if they are trying to play a game and are not genuine, we have an advantage in the way that we will know soon. we don't have to waste time or a month or even years to see if north korea is really trying to do this or are playing a game. anna: where do you look, in terms of the history of the talks -- or relationship rather of the united states and north korea, where do you look to see if this will come to anything? read commentary this morning that talks about other locations where talks have taken place and little has been achieved. joon: in the past, we have seen to persuadeempts north korea to give up their nuclear weapons and failures and frustrations, but we can still

look forward to success this the, not least because international sanctions imposed on north korea are greater than ever. so we will have to see. manus: i should correct myself, you are in pyeongchang -- my apologies for that. is this proof, professor, that sanctions work? genuine north korea is in its willingness to turn around and change policy and are ready to talk about need -- denuclearization, we should have internationalo pressure and sanctions, which opinion is the

toughest in the history of the united nations. anna: interesting line. where should this meeting take place? the optics of this will be important. we heard one voice speculating as to whether this could happen at mar-a-lago. where would you see this best taking place? joon: hard to tell, hard to guess. trumpt think president would pay a visit to north korea. i'm not sure if mr. kim jong-un is willing to come to the united states, either. i don't know. that is very difficult to guess. ask what thei benchmark for success is when these talks actually happen? benchmark,est have a which is denuclearization. but here we are with the president of the united states essentially legitimizing the north korean regime.

what is success for the west? denuclearization full stop? joon: i don't think it will have the effect of legitimizing the north korean regime. it has the advantage of finding out whether or not north korea is sincere or not. we don't have to waste time. if north korea is really trying to turn around, i think it is going to give them a good opportunity to sell their weapons at the right price. they are meeting the highest person in advance, in the beginning, so that will give them opportunity to save face, to achieve what they want by giving up their weapons. anna: professor, thank you very much. kyung hee joining us

from south korea. china foreign ministry spokesman saying they welcome the positive signals from the united states and north korea on dialogue. the markets have given caution welcome. manus: there was this roaring to life in the asian equity session. we pored over into the european session and it was the s&p that was the prison, because the s&p never flew on the back of this. futures were indicated a little lower. up, boj on hold. governor kuroda is sticking to his guns as he pairs for a new term. he is still speaking in tokyo. more on the boj and what policy lies ahead. this is bloomberg. ♪

♪ manus: 7:21 in london. a softeraring up for open across european equity

markets. juliette saly standing by with the business flash. juliette: ubs has boosted sergio ermotti's pay and increased the bonus pool by 6% after profit before a charge related u.s. tax changes increase. the bank boosted the bonus pool for 2017 to 3.1 billion swiss francs. it are monte demeans the highest-paid the highest -- highest-paid executive. that contains 11.4 million francs in variable compensation. saudi arabia's energy minister has hinted that the initial public offering of the state oil company aramco could be delayed until 2019. the move would push back the central bankers plans. the comments were made in an exclusive interview with bloomberg. >> i don't believe we are and as far deadlines as i am concerned, between

december 31 and january 1, there is no value lost for the kingdom. i don't see this deadline -- artificial deadline you refer to as being significant in our decision-making process. that is your bloomberg business flash. anna: thank you, juliette. saidoj governor kuroda hitting the 2% inflation target exit trigger an immediate from policy stimulus. he saw u.s. trade policy as a risk, but reiterated economic fundamentals are good. manus: we are joined by growling -- brian fowler in japan. good to see you this morning. what extent could i interpret the lines that have dropped that this is kuroda stepping back from the language used 10 days ago by exit fiscal 2019? well, it has been a very

interesting press conference. this is his last one in his current term and he was asked initially why he would ever agree to take a second term. he laughed out loud and said very seriously that he is only halfway through with his job and aims to finish the job in his second term, if appointed. he was careful about talking about exit. the remark you made recently about saying it could happen in fiscal 2019, he said the only reason he said that was he thinks there was a high probability that inflation will hit the 2% level at that point and that is why they might do the exit at that point. it is not that we would automatically start talking about an exit when we hit fiscal 2019. it is incumbent on price moves and this is based on his expectations of meeting his goals. anna: trying to separate the two reduce the conductivity between them.

interesting to see him talk about protectionism in trade policy. he doesn't think protectionism will spread globally, an issue many central bankers and governing councils will have to be dealing with in the current political environment. brian: that is right. it was quite interesting. he started out cautiously saying he would be watching developments in trade negotiations carefully and went in little further and said protectionist acts are clearly self-destructive to economies and the international society agrees on the importance of free trade. he came out very strongly on that. the other interesting thing was he asked if he had any regrets from his first term. he gave a very long answer about communication by central banks. he said fiscal policy is very straightforward. you tend to have fairly concrete words about tax breaks or tax hikes. is a lot morey

subtle and tends to filter through the markets into the economy and there is a more vague use of forward guidance and expectations. he stopped short of saying he felt he got it wrong during the last term, but the fact he spent so much time on that may be related to what he said recently about the exit in 2019. i think we are going to see him in the second term being very careful about trying to prepare the markets for what is coming next and letting us know well in advance when things might start to happen. manus: they are going to give us the signpost. , our you, brian fowler managing editor in japan. dollar-yen 106 .68. yen is weaker, having to do with the backdrop of what trump and kim jong-un are doing. anna: the geopolitical markets moving fx markets.

boost to korean equities and there has been something of a boost in the asian session, but it doesn't look to spill into europe. europe called lower this morning, as our u.s. futures. ♪

guy: good morning, welcome to "bloomberg markets: the european open." at our londonn headquarters, alongside matt miller in berlin. cash trade less than 30 minutes away. ♪ guy: president trump hails great progress after agreeing to an unprecedented meeting with north korea's kim jong-un. asian equities have risen, the yen is slumping. european equities a