>> good morning from bloomberg's european headquarters. this is bloomberg daybreak europe. continues. asian stocks build on dow and s&p record. salzburg breaks up with no progress. theresa may promises a new solution. deal, deal, deal. the largest acquisition ever. uber is in talks. the future of sky will be in the hands of the highest bidder.

good morning, everyone, and welcome to "daybreak europe." let's get you caught up. markets,day in equity building on two strong weeks for a asian equities. 0.8%, extending gains from the u.s. session. dollar-yen on the front foot up 0.2%. the yen hitting a two week low. 112.74 is where that is. we are keeping and i on the. -- on the japanese markets. that 40 day yield hitting its highest since november. that 30 year yield up three basis points. you saw the s&p hit a fresh record yesterday and the dow finally hitting a record. better late than never. all the u.s. benchmarks have erased losses since february. it also begs the question whether concerns around brent

actually are not subject concern anymore. the last of the four u.s. equity benchmarks to hit record highs is the dow. this chart shows the sequential nature of how this happened. we saw the nasdaq first back in march, followed by the russell 2000, then the s&p 500, finally the dow. let's get the bloomberg first word news with juliette saly. the u.k. is promising fresh plans to break the brexit stalemate after eu leaders bluntly rejected theresa may's blueprint and warned that time is running out. two days of talks broke up without progress as leaders piled more pressure on the british prime minister to shift her stance. they say a special november summit to sign a deal will only go ahead if the u.k. makes more concessions next month. may reiterated she is ready to crash out of the bloc.

have always said, we are preparing for no deal. if we get to the position where it is not possible to reach a deal, the british people can be confident we will have done what is necessary to ensure we make a success of leaving the european union. juliette: u.s. president donald trump has continued to hit out at china after announcing another round of tariffs, signaling the trade war will not end anytime soon. he made the comments to fox news in las vegas. >> the youngstown framework, context of administrative law, questioning unilateral executive rewriting of the law, in the criminal law where i have reversed convictions, i am not afraid at all. washington, wein have been hearing lawyers for a woman accusing brett kavanaugh

of sexual assault asked the senate judiciary committee to push back a hearing on her claims until thursday and take testimony from additional witnesses. bloomberg has learned the attorneys have said she could not appear monday as the committee's chairman, chuck grassley, plant -- planned. formernt trump's personal attorney has had lengthy interviews with investigators working for robert mueller. sources say he was asked about trump's business and any business dealings with russia. he has been one of trump's closest associates over the past decade and admitted he made illegal campaign contributions in the 2016 presidential election at the behest of trump. as.-canadian trumps over post-nafta deal have missed the deadline. an american trade representative and canadian foreign minister met again yesterday in washington. no agreement was reached.

the two countries remain in a phase of continuous negotiations. the bank of japan has unexpectedly cut purchases of superlong bonds by ¥10 billion in today's regular operation. it is buying only ¥50 billion of notes longer than 25 years, the first reduction since july. jgb's ats accumulating the slowest annual pace in more than seven years under what many economists describe as stealth tapering. women's soccer has scored a victory for equality with fee for agreeing to fund business-class flights for teams heading to france for next year's world cup. prize money will also significantly increase at the 2015 tournament -- over the 15 tournament. states took $2 million for winning the women's trophy three years ago.

global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . we are going to see that next round of tariffs come into effect, you are seeing another day of good gains in asia. we have the regional benchmark ,ndex for the fourth session asian stocks on track for their best back-to-back weekly gains in sometime. we have seen the hong kong dollar jump the most in a year. the overall topics index on japan on track for its best week in two years. let's have a look at stock movers in the region. you have seen this week is coming through in a lot of the chipmakers after we saw macron come through overnight in the u.s. largest chipmaker forecasting first-quarter sales below estimates, playing into the korean chipmakers as well.

a very good rally in consumer stocks in china. daneswall leading those after the state council unveiled measures to boost consumption. to the downside you're seeing yes bank the worst performer after the company's ceo said no to a further three years in that job. that spurred multiple downgrades for that indian bank. nejra: thank you so much. u.s. equities climbed higher yesterday. the s&p 500 and dow rose to new records as investors shrugged off the latest salvo in betrayed scuffle. the boj trimmed its purchases of notes dated longer than 25 years. the japanese 20 year yield reached its highs level in nearly 18 months. we are joined by bloomberg's asset managing editor. we saw the dow finally catch up to where the u.s. benchmark and that record high yesterday. u.s. futures pointing higher

today as well. we are seeing optimism in asia. what is behind this optimism? >> it is interesting. we have had pronounced gains across equities around the world in recent days. that tells you, despite the fact that the u.s.-china trade war continues to escalate. what we are seeing is a couple of things being pointed to by investors. , whichone hand, china after all is the second-biggest economy in the world, has made clear it is going to support growth as it pursues its trade battle with the u.s.. we heard that from the premier just earlier this week. they are cutting taxes. but they are taking other steps to strengthen infrastructure spending. you have the number two economy basically saying, we are going to make sure growth does not

roll over as the trade battle continues. the other thing is, for all the rhetoric we have heard about the trade war, and the actual imposition of tariff hikes, if you look at the trade numbers around the world, they continue to be good for now, it does not look like the trade wars having a significant impact on a global expansion, which, while it might have peaked earlier this year, remains intact. if you look at earlier this week we had japanese export figures, for example, actually accelerate in august from july. just this morning we had from south korea, which is a big trading nation. their exports exhilarated. no real -- their experts accelerate. we are seeing longer dated yields rise on jgb's.

in the meantime, the yen reaching a two month low against the dollar. that seems to be the risk on sentiment. with what the boj has done today in terms of trimming its longer purchases,d bond would you say it has been successful given that those longer yields have risen but the yen has not strengthened? question, the governor kuroda would be very happy. you could argue it is just tapering. the bank of japan has made clear it is not focused on quantitative easing anymore then it is not focused on asset purchases. when the market conditions are appropriate, when the yen is not surging or appreciating, the bank of japan takes these opportunities to trim back its purchases. we are seeing reaction in the bond yields at the superlong and

as a result today. you can also put this in the broader context of central banks around the world continuing to focus on pulling back their extraordinary stimulus that was in place for a decade. this move by the bank of japan today is probably in keeping with norway raising interest rates for the first time in seven years just yesterday. it is another reminder that the era of easy money is sending. -- is ending. nejra: thank you so much to our asset managing editor. joining us now, the chief economist at wells fargo u.k.. let's look at what has happened with the u.s. benchmarks. i showed the chart at the top of the show. the dow catching up with other benchmarks. suggesting there is more threat to the market than some people might have thought. or are we getting ahead of

ourselves? >> there is a little bit more breath. point about not being allowed to roll over in major markets despite the imposition fearriffs, the generalized we may be coming to the end of the cycle in growth has been potholed at the moment -- put on hold at the moment. tradeimposition of the tariffs, it seems there is good news coming out of his markets. investors will bid up on that basis. >> the growth we have seen in the first half is going to start to moderate and we are not going to see that pace looking at the second half going into next year. is this really the opportunity where you want to be buying, because this bull market might come to an end. >> the growth in the first half we may not see in certain places. certainly maybe not in europe. i would pick out emerging

markets. i still think china will have a good beginning of next year's bite what is going on with the trade ties as a result of the stimulus and the loosening of other tariffs against other partners. story not be the global we are so happily talking about at the moment. ,he pressures within the u.s. but emerging markets continue to rally on words >> china is said to plan this broad import tax cut. just another measure where it is perhaps trying to upset the impact of this escalating trade war. do you expect more easing from china that will be affected before the end of the year? >> more easing, they will be keeping an eye on the yuan. of theally got hold currency after the big move in

2015. more stimulus coming into local markets, local governments, to continue the infrastructure spending and drive gdp. other possible hits to consumption later on into q1. i think it is a really interesting move by china. they're going out there as a stalwart of free trade against a stalwart of disruption from the united states. it is a good pr move in the short-term. they also cut tariffs on u.s. goods previously when they did this before. it will be interesting to see if they do this before the u.s. again, whether they leave the market and say, ok, given how badly you are treating us -- nejra: equity markets largely shrugging off escalation in the trade war. what is the fed going to have to say about it? >> it is quite a dovish hike next week. it is priced in that we see interest rates rise. just at to see maybe

tacit acknowledgment things are starting to change and things are starting to look a little picturehe inflation might not be as ideally predicted at the moment. i think the most important thing we have seen in the u.s. data is the inventory bills we saw -- sorry, the manufacturing isn. businesses are starting to hold onto supply because they're worried about supplies later down the line. that will delay inflation. borrowing currency, the costs are implicit in the business now. what happens in the future? >> it is too early to say. it is looking likely become and 2020.rd 2019 nejra: coming up, the u.k. pledges fresh plans to break the

brexit deadlock. theresa may says the country will be prepared for no deal. italy says tax cuts will be depend on the latest economic data. figures drop today. ♪

nejra: this is "bloomberg daybreak: europe. it is 6:19 a.m. in london. retail sales data yesterday. let's turn to brexit and take a look at the newspaper front page this morning. brexit dominating. the government and crisis. may is shattered as the eu rejects her plan. may humiliated as leaders tell her her plan will not work. 80 -- easypredicted

solutions was a liar. strong words from the french leader. the embattled british prime minister faces a tory revolt. the salzburg disaster. the daily express said, she will not roll over on a deal. we will discuss that in a moment. let's get the bloomberg business flash first. royal dutch shell is in talks to sell its interest in a gulf of mexico oil field. bloomberg has learned the deal could value shall's stake at billions of dollars. the houston-based focus oil did not immediately respond to a request for comments. buy a foodtalks to delivery company for several billion dollars according to bloomberg sources.

the company was last valued at $2 billion. it would spark a major attempt by uber to dominate the food deliveries business in europe. acquire aagreed to software maker for $4.75 billion , bolstering its marketing tools in a bid to compete against oracle. the deal, which would be adobe's largest ever is expected to close during the fourth quarter. commercechased a business in june to enter the market for e-commerce. nejra: thank you so much. the u.k. is promising fresh plans. they warn time is running out. two days of talks broke up without progress. leaders piled more pressure on the p.m. to shifter sants.

-- shift her stance. in any doubt.be we are. for no deal so if we get to the position where it is not possible to reach a deal, the british people can be confident we have done what is necessary to ensure we make a success of leaving the european union. >> that was theresa may speaking at a news conference yesterday. let's get to our guests, chief economist at world first u.k.. issue? an intractable it is seeming more and more there is no resolution to this irish border. >> i do not see one at the moment. the u.k. government has agreed to the imposition of a backstop in december, but did not plan on what that would look like. byhave to have something march 29, 2019, but what we agreed to is not what we are likely to get. the customs union, the cutting

off of northern ireland, and vice versa, is not going to play politically in the u.k.. january,e get maybe february, still no deal, markets are main very volatile on the basis and we see an extension. that is the end game. trying to get some kind of agreement. nejra: we have seen sterling rally not just on hope a week or so ago that we could get some kind of deal, but also on the data. sterling traders getting a little bit ahead of themselves? >> if there is one bet you would have to say, regardless of what happens with brexit, sterling would not be where it is now in six months time. it will either be materially higher on the basis we have a deal or there is a second referendum to remain, or there is a no deal and we are close to the end of article 50 and something is going to come lower.

the data surrounding the u.k. economy, bank of england expectations have been quite interesting. next also will not be 5% may. they will either be higher or lower. i do not think the bank of england will hike on the basis of a no deal brexit. for now, the data is ok. it is better than it has been. talking about the fact there is an intractable debate between the u.k. and the eu. if we look at italy and other political risk, yesterday some reports coming through there is real tension in the coalition. do you see the breakdown of the coalition as any risk? >> it is a risk obviously if it were to happen. i do not see it happening to

quickly or happening at all. italy is one of those risks everyone says is a risk for the euro at the moment, but nobody is trading in like a risk. it is the kind of risk everyone has to keep half and i on. on.n eye the movements we have seen in italian debt, in the euro, belie that fact. >> i have a chart showing the two and 10 year yield spreads. that spread has been coming down. we saw it in the past couple of days widen out a little bit. where should this be trading? >> if we are looking at a coalition breakdown, if we are looking at the kind of factors breaking eu budget rules, if we are talking about that kind of youlist injury -- intrigue would expect to see people worried about the italian banking sector referenda for example on the future of the --

of italy within the european , you would have to say that is below the point it is now. i do not think it will do that, to be honest. nejra: we get data from the statistics agency today, output data, ahead of the budget number we're going to get. we understand the eu needed below 3%. is it that much of a concern if it exceeds 2% reflate? >> i do not think it is. the line in the sand will be 3%. we are seeing is a win in the short-term. reactionary elements have been kept at bay. btp's will rally, so will the euro. nejra: chief economist at world first stays with us. if you are a bloomberg customer

you can watch the show using tv . you can follow all of our charts and functions using the iv function. coming up, we talk opec and oil. . ♪

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nejra: let's take a look at sterling. 132.67. it jumped 0.9% following retail sales data despite the lack of progress in brexit talks. let's get the bloomberg first word news in singapore. promisingthe u.k. is fresh plans to break the brexit stalemate after eu leaders bluntly rejected theresa may's blueprint and warned that time is running out. two days of talks in austria broke up without progress. leaders piled more pressure on the british prime minister to shifter stance. -- to shift her stance.

they say a deal will only go ahead if the u.k. makes more concessions. may reiterated she is ready to crash out of the bloc. said, we arealways preparing for no deal. if we get to the position where it is not possible to reach a deal, the british people can be confident we will have done what is necessary to ensure we make a success it -- a success of leaving the european union. juliette: donald trump has continued to hit out at china after announcing another round of tariffs, signaling the trade war will not end anytime soon. he made comments to fox news at a rally in las vegas. over anadian talks post-nafta deal have missed another deadline. robert lighthizer in the canadian foreign minister made -- met again yesterday in washington. ,o agreement was reached

although the countries remain in negotiation. the bank of japan has unexpectedly cut purchases of superlong bonds by ¥10 billion in today's regular operation. it is buying billion yen of notes with maturation longer than 25 years. jgb's ats accumulating the slowest annual pace in more than seven years under what many economists describe as stealth tapering. ferryzania, a passenger has capsized on lake victoria. officials say the death toll is expected to rise when rescue efforts resume. 37 people were rescued yesterday. authorities were unable to put a finger on how may people were on board the vessel. such ferries often carry hundreds of people. women's soccer has scored a victory for quality with fisa

agreed to fund business-class flights for teams. total prize money will significantly increase from the $15 million shared among the 24 teams at the 2015 tournament. world cup champion france earned $38 million for winning in russia while the united states took $2 million for winning the women's trophy three years ago. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . you can see how much green there is across asian markets, on track for back-to-back weekly gains the spite the fact we are likely to see tariffs come into effect monday. you can see good buying coming through in aluminum and copper. have a look at the hong kong dollar. it has jumped the most in a year.

you're seeing more broad-based buying an equity markets. the nikkei up by 1.2% with a half hour of trade left to go. the topics is on course for its best we can two years. i want to show you what it means in terms of the bond market. we had the story about the bank of japan cutting superlong purchases. you have seen yields rise. no escaping this selloff. climbing from their extremely low levels to multi-month highs. if we have a look at what that means for the overall rate environment, you have seen catch up coming through in libor, coinciding with the flood of bets for two more hikes by year-end from the fed. you have seen quite a bit of a jump coming through in that libor market, suggesting we will continue to see that rate move fourr as we see possibly fed hikes over the course of 2018. nejra: thank you so much.

oil is headed for its second week of gains as investors seek clues on whether opec will replace the iranian output well the u.s. has pressure the group to lower prices. donald trump tweeted opec must get prices down as the group heads to algeria for a meeting this weekend. jeremy thompson cook at world first u.k. is still with us. nick onsetjoined by right now. great to have you with us. let me start with jeremy. we got that tweet and it did move brent. does the president have appointed? >> the president has a point he wants to see lower oil prices. he does not really want to see lower oil prices. asyou are looking at tariffs a consumer tax moving forward. the impact is starting to lessen.

this is not the first time he has tried to target movements in oil prices. but he has a point. nejra: great to have you with us as well. ?ould you like to weigh in >> is going to be hard for him to talk the price of oil down. he got concessions out of saudi arabia earlier in the year. it is getting harder for opec to react because the capacity they have is less. the market is tighter. oil, the sources of rig counts have not been picking up. the market is tight at the moment. whatever trump says, the price is going to be hard to keep down. nejra: that is the question, how they're going to make up for that supply. really, iran can say they will veto opec decisions, but the power rests with saudi arabia. >> they are the only marginal

supplier apart from russia. every other opec producer is more or less running at full capacity. there is little space there. the only chance you might have is if you see global demand's tail off. we do not see that at the moment. or perhaps chinese investment in russia and venezuela. the market remains pretty tight. -- ishink this obviously obvious for emerging markets moving forward. , -- dollar the ruby rupee, one of the worst performers of this year. the oil sector continues to run on the back -- in the background. i expect markets continue to target those markets and those economies as well. nejra: how are you adjusting your portfolio in terms of where oil prices have been if you are

making changes? >> we have become more bullish on emerging-market currencies recently with the recent price action. given where oil is, we looked at fx currencies which have -- which are oil producers, and see what we think. we have started to scale this and currencies like the russian ruble. general weakness, but also the sanctions. we have also added inflation breakevens as well. nejra: interesting you mentioned inflation. we look at where the oil price is now. is this going to have an impact on inflation expectations globally yet? >> not yet. we are still below levels we have seen earlier in the year. it is not so much the level we are seeing at the moment.

it might be the rate of change that has a slight inflection point within expectations in the short-term. but how sustainable that is is obviously a factor. movements in oil prices, we can talk about them a lot. the impacts very low in the short-term. if they are sustained, we start to see them on higher. now, consumers, businesses, i am not too worried. nejra: looking at the commodities spectrum, having goldman coming out saying they are bullish on commodities, they have had that call for a while. we have seen metals rally this week despite the output we have seen in trade tensions. does that tell us investors in metals are confident global growth is going to sustain? generally, risk assets have taken a big hit on trade concerns. once the news was out there in

the actual -- was lower than , they put that certainty into their price forecast, giving people more interest. i think china reacted and they are going to boost infrastructure. it typically has been fairly commodity having. -- heavy. nejra: you have talked about allocation around oil. what about metals and miners yet the -- miners? really -- in fx. commodity producers we quite nigeria, in like the hard currency space, a lot of oil, the yields sold off a lot. nejra: a great note to end on.

we will be talking about nigeria shortly. thank you, jeremy from world first u.k. will be continuing the conversation on bloomberg radio. nick stays with us. bloomberg users can interact with the charts using gtv . browse recent charts to catch up on analysis and save charts for future reference. coming up, a series of guests from cyprus as business leaders gather for the cyprus invested event. us bank of cyprus ceo joins forex goes of interview at 7:00 a.m. u.k. time. later, an schools of interview a.m. 30 -- at 8:30 ♪

nejra: it is a 6:44 in london. for kong dollars heading

its biggest gain since september 2003. we have seen gains in asia carrying through from the u.s. session where we saw the s&p 500 hit a fresh record. the dow hits a record as well. more about the markets in a second. the msci asia-pacific indexes higher. dollar-yen interesting because the yen is hitting a two month low against the dollar with the risk on sentiment and u.s. futures pointing higher. we could see another session of gains in the u.s. what is interesting is now we have seen all the u.s. benchmarks erase their february losses. the dow, better late than never. the last of the four to hit that measure yesterday. wells fargo plans to trim its workforce by 5% to 10% within three years. ceo tim sloan works to pull the

bank clear of customer abuse scandals and lagging stack price. reduced headcount as he cleans up the bank and streamlines operations. growender is struggling to under a federal reserve asset cap. royal touch shell is in talks to sell interest in an oilfield to focus oil. the deal could value shall's stake at $1.3 billion. focus oil did not respond to a request for comment. adobe has agreed to acquire a software maker for $4.75 billion, bolstering its marketing tools in a bid to compete against salesforce and oracle. the deal, which would be adobe's largest ever, is expected to close during the fourth quarter. adobe purchased a commerce company to enter e-commerce in

june. bloomberg is in talks to buy a food delivery company according to bloomberg sources. a bid for the london-based company would mark a major attempt by uber to dominate the food delivery business in europe. spokesman declined to comment. micron technology shares have asbled in extended trading first-quarter sales forecast fell short of analyst estimates. willhipmaker says revenue range from $7.9 billion to $8.3 billion. analysts had predicted a $.45 8.4 $5 billion -- $8.45 billion dollars. medtronic has embarked on a plan

improve its operating budget. it expects a deal to weaken its earnings per share. that is your bloomberg business flash. nejra: thank you so much. the continent of africa has felt of this year's young currency and stock rout as keenly as the continent of asia. johannesburg's all africa index is down more than 5% with nigeria's embattled mpn epitomizing the volatility of market. the country's central bank has been forced to keep its rate at 14% for more than two years to combat high inflation levels. joining us now is the former deputy governor at nigeria's central bank and a presidential candidate in nigeria's next general election. and a portfolio manager at all mutual global investors is still with us. welcome to daybreak europe. great to have you with us on set.

as we said, you are a former central banker. you are also part of the political establishment. you have not run profit for. do you think you -- run for office before. do you think you stand a chance of winning? >> we are at a historic moment where citizens have come to realize the cycles of politicians have done them no favors. we have been a democracy since 1999. the country has just gotten poorer. population is rising. the trajectory needs to be broken not by the usual politicians, but by technocratic politicians, which is what i think i am. someone with technocratic knowledge about how to manage the economy and wage war against poverty. that is the theme of my presidency. nejra: the economy is growing very slowly.

as you suggested, it not recovered from the oil price crash. it improve in the current president gets another term? >> i think it will get worse. for the very reason that there is a fundamental level of incompetence in the presidential administration. politics trumps everything for them. rational economic thinking is a bit -- when you process everything from the perspective of populist economics, hopes for the nigerian economy are not very high. does that mean if you do not when you would prefer the main opposition's democratic party? >> i plan to win, that is the point. the message i am putting out to the people of nigeria is increasingly being accepted.

i'm still at it. people tell me they want something different. something bold. they think i represent that. nejra: you have been putting your message to the people. have you been hearing from investors? >> that is part of why i am in london. to meet with investors and tell them there is hope on the horizon. i will be meeting with investors today. i have been a member of the board since i left the central bank. we will be talking about investment prospects. nigeria is a huge market. kindt needs is the right of political leadership for huge potential to be realized. speaking of investors, we have one on set and i know he has a question for you. >> we have seen some pressure on the local currency. we have seen some devaluations the last few years.

i am wondering what you think of the current fx regime and whether it would be more beneficial for nigeria to move towards a floating fx rate. >> i believe it will. for that happen -- for that to happen, have to put fundamentals -- we have multiple exchange rates. there is no transparency in the fx regime, which is one of my concerns and the concerns of many investors. we will have to move to a floating regime. i suspect the central bank will not do that at this time for political reasons. nejra: to be clear, because you mentioned the multiple rates, would it be better to have a single rate? >> i think so. i think it would be better to have a single rate in the marketplace. that is what i have always advocated. the problem is the central bank at this point has not been acting completely independently. tore is a political concern

keep the prize of the dollar fixed so that the company can continue to import at a very subsidized rate. have subsidized be foreign-exchange market because the central bank keeps popping dollars and the market. i think it should find his true , and thenvalue nigeria can develop an export economy that helps its transformation more realistically. nejra: it is interesting you brought up central bank independence. it has come up when we talk about emerging markets. the reason why investors are concerned about countries like turkey. look at nigeria and you think about how investors look at it, is it a risk of falling under the umbrella of concern around emerging markets? >> i think it is. it is a transitional phase. nigeria has much more rational political leaders such as

myself, who, as we struggle to come to office, that risk will receive. nejra: the last couple weeks we have seen a rebound and more inflows going into em. acm assets come under pressure again, are you worried about -- ets comeets -- em ass under pressure again, are you worried? are largely politically induced. that is the real problem nigeria has had. it is not a lack of sound economic thinking. when you operate under the authority of politicians who have different agendas, then you have a problem. that is why i've chosen to go into the political arena instead of serving as a technocrat. nick, are there countries

on the african continent you would go towards in terms of investment or stay away from? >> it depends on our view on oil. we have been long on the oil producers like nigeria. with nigeria, they have been conscious of outflows. they have kept local rates very high to keep portfolio outflows there. nejra: i also want to ask you, kingsley, what you think of the central banks handling of allegations that the mtnl legally transferred $8 billion out of the country. >> it is difficult to comment on regulatory issues. i am not in the central bank anymore and i do not have the facts. but if they sanctioned ntn, there must be a region -- a reason. is that a lot of

companies are not able to manage their regulatory risk. this is something multinationals should pay attention to. it is no good when you do not manage your regulatory risks and when the central bank hits you, you begin to complain about the larger economic consequences of your possible collapse. it becomes a problem because the central bank does not want companies like that to fall down. at the same time you do not want them to have a free hand and do what they like. companies must manage their regulatory risks. i hope that is the lesson that comes out of this experience. lota: we have learned a from you today, the former deputy governor at nigeria's central bank, also a presidential candidate. a portfolio manager at old mutual global investors stays with us. the reserve bank

of zimbabwe joins us. if you fancy friday fun, check our weekly quiz on your bloomberg. ♪

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nejra: good morning from bloomberg's european headquarters. this is "bloomberg daybreak: europe." asian stocks build on dow and s&p records. it is a bull market back in sync. the eu summit breaks up with no progress. theresa may promises a new solution. adobe announces its largest acquisition ever. uber is said to be in talks to buy deliveroo. the future of sky will be in the hands of the highest bidder. good morning, everyone.

it is just on 7:00 a.m., we are just over an hour away from the equity market open. the s&p hit a fresh record in yesterday's session. the four u.s. benchmarks hit a record high. all the u.s. benchmarks have erased their february losses. it also begs questions asked whether the worries about markets threat, perhaps overdone. looking ahead, six days of gains for european equities now. this could be a seventh judging by futures. ftse 100, dax, and cac 40 pointing higher. we have seen the rally continue in asia. a good couple of weeks for em. is generally risk on. let's take a look at what is happening in the bond markets. if we look at the 10 year treasury yield, that is up 1.5 basis points. we are staying well above that 3% level.

we have seen long and jgb yields rising. yield has been rising in japan after the bank of japan basically tweaked, reduce the buying of its longer dated purchases. if we like -- take a look at futures, we could see yields edged higher. we could see widening out of spread. bund let's get the bloomberg first word news. promisingthe uk's fresh plans to break the brexit stalemate after eu leaders rejected theresa may's blueprint and warned time is running out. two days of talks in salzburg broke up without projects -- without progress as leaders put pressure on the prime minister to shift her stance. a november summit will only go

ahead if the u.k. makes more concessions month. theresa may reiterated she is ready to crash out of the bloc. said, we arealways preparing for no deal so that if we get to the position where it is not possible to reach a deal, the british people can be confident we will have done what is necessary to ensure we make a success of leaving the european union. juliette: donald trump has continued to hit at china days after announcing another round of tariffs, signaling the trade war will not end anytime soon. he made the comments at a rally in las vegas. pres. trump: is time to take a stand on china. have no choice. they have been hurting us. our farmers are starting to do very well again. we are putting very heavy sanctions and other things on various countries and we are getting along with some countries. but we have been ripped off by the world.

juliette: in washington, lawyers for a woman accusing brett kavanaugh of sexual assault asked the senate judiciary committee to push back a hearing on her claims until thursday and take testimony from additional witnesses. bloomberg has learned ford's attorneys have said she could not appear monday as chuck grassley plant -- planned. juliette: president trump's former attorney has had lengthy interviews with investigators working for robert mueller. sources say he was asked about trumps business and any business dealings with russia. cohen has been one of trump's closest associates and admitted he made illegal campaign contributions in the 2016 presidential election. vietnamese state media has reported the president has died

in a military hospital at the age of 61. he had been suffering a serious illness and received medical treatment abroad and in vietnam. he was sworn in as the ceremonial head of the communist country in 2016 following his stint as head of the ministry of public security. in tanzania, a passenger ferry has capsized on lake victoria. the death toll of 44 is expected to rise today. 37 people were rescued yesterday afternoon. authorities were unable to put a figure on how may people were on board. often carry hundreds of people. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . a risk on day across asia. we are on track for a second weekly gain. back to that gains in asia. have a look at china.

possibly some more speculation. the csi 300 up by 2.3%. japan closing higher by 0.8%. you have seen the topics have its best weekly gain in two years. broad-based buying across the region, a fourth session of gains for the msci asia-pacific index. let's look at the market teams that have been focusing investors attention today. kongave seen the hong dollars bike to its highest level since september 2003. this is on speculation we could see rates rise along with the fed. there is a public holiday coming up. potentially stop losses there. you see the hong kong dollar up 0.5% against the u.s. dollar. nejra was mentioning that yield. we saw that so-called stealth tapering from the boj.

has not been a great week for the greenback amid this improving risk on sentiment. the aussie dollar having some of the best gains over the course of the week in response to that rally in commodity currencies. set for the best weekly gains since 2017. nejra: thank you so much. u.s. equities climbed higher yesterday. the s&p 500 and dow rising to record levels. the last of the four u.s. benchmarks to hit that record high, the dow. all benchmarks have erased their losses from february. investors shrug off the latest salvo in the traits couple. the boj -- the trade scuffle. the japanese 20 year yields reaching its highest in 18 months. we have to look at the even longer dated bonds as well. oldrtfolio manager at mutual global investments still

with us. i have a chart showing the 30 year yield climbing it nine basis points. -- 89 basis points. the boj cuts superlong purchases. are these yields going to sustain these highs? >> they can. they are much more concerned about controlling the front end of the curve at the moment. they are prepared to let the backend steepen. it provides more stability for the insurance sector, the banking sector, and also gives liquidity to the market. i think they will see this is a healthy sign. jgb'sl as volatility in remains under control. nejra: probably reasonably happy with the yen, at a two-year low against the dollar. that is potentially more about risk on. >> i would agree. you also saw overnight japan

could see investment in foreign bond as well. you could see outflows. the biggest risk to the global has been because the u.s. market has moved in isolation. you have not had this did been growth because you had this stimulus in the background. the money was flooding into u.s. assets, whether that was the s&p like you saw, or whether it was treasuries. the treasury yields have been held down by inflows from the rest of the world. in recent data, you have big risk events, certainly to moderate currency. tariffs,he trump trade turkey has stabilized, argentina has stabilized. you have imf money being frontloaded and btp spreads. realkind of -- these terror risks are out there for

the global economy. nejra: you mentioned the u.s. equity markets. i want to show the chart again. it shows the sequence of the u.s. benchmarks hitting their record highs. we started with the nasdaq, followed by the russell 2000, then the s&p, and the dow, raising questions over whether there might be more breath in the u.s. equity market. i want to bring it to your world, which is fx and rates rather than equities. the 10 year treasury yields on a 308 handle. is this tipping point where we are going to see money coming back to the u.s.? that 10 year yield continues to rise higher. >> that has been interesting the last week or so. you're seeing treasury yields go higher, but seeing dollar weakness at the same time. people were seeing higher dollar yields and the move in sync. that is a positive sign.

one of the arguments before the em selloff was the u.s. needs higher yields. that should be supportive for the global funding cycle and it should see money flow back into some of these countries have been starved of dollar liquidity. i think that is why broad risk assets are -- this dollars going is that has been underway has fallen into the background. nejra: thank you so much, portfolio manager at old mutual global are investors -- global investors. nikkei is staying here right on is staying-- nick right here on tv with me. we will be speaking to the bank of cyprus ceo. he joins us for exclusive interview next. ♪

nejra: this is "bloomberg daybreak: europe." a beautiful sky across westminster. cable holding onto its gains, jumped 0.9% after retail sales data. analysts predicted $8.45

billion. that is your bloomberg business flash. nejra: let's take a look at what you should be watching. canada's foreign minister and the eu host a meeting of women foreign ministers. it is a quadruple witching as four u.s. markets -- and at 5:00 p.m. london time the auction for european broadcaster sky gets underway between fox and comcast. a drawnout battle for control of sky reaches the climax this saturday. an auction will be held to

settle who is willing to pay the most. , joe joins us now. tell us how the auction is going to work. >> is a maximum three rounds of bidding. comcast has the opportunity to respond, and if the auction is still going, there is a final round where each makes their best and final offers. that will be it. nejra: do we have any sense he might win at? of m&amberg did a survey across the world. comcast, fourng saying disney, and two on deciding. the market currently is that comcast will win. it is a hard one to call. there is no clear consensus. it will come down to who has the biggest appetite.

we will have to wait and see. nejra: what do these bidders have to win? >> sky for both of them is a great gateway into the european market. for comcast it would be a significant diversification out of the u.s.. giving millions of customers in european countries. for disney this is about helping them response to the talent -- the challenge of netflix. and disney is trying to build out its own consumer streaming service. sky would give them a great platform in europe. a great way to kickstart that service. it is about diversification, responding to netflix. nejra: do we have any sense from sky investors with the preferential outcome would be? >> sky investors what the biggest bid. the hedge funds have been talking up this price.

saying you should go for 18 pounds a share. they will be talking up the price much as possible. there are very activist investors in the stock. they do not want a big bid. they might hold on and say we are not going to sell unless you give us what sky is worth. nejra: thank you to bloomberg to joe mays, working on a saturday. thank you for joining us. banking, investors and policy makers from cyprus are gathering in london for cyprus invest as the island nation seeks to rebuild investment as well as a holiday destination. joining us now is the ceo of the bank of cyprus holdings. thank you for joining us. we can all see why cyprus is great as a holiday destination. what are you telling investors as to why now is a great time to invest? >> you have an economy that has ine out of cardiac arrest

2013 and has posted four years of growth. theoes not look like -- sovereign is the lead indicator of whether or not the country is doing well. as of friday it received its first posting. we have moved back out of junk status into investment grade. the economy is growing well. it is broad-based and its recovery. unemployment is falling. there are a lot of indicators which suggest this is a good time to invest. we have been saying that for a while. it does feel like the momentum is with the country. nejra: what does the country being investment grade mean for the bank of cyprus? >> it is a confidence issue. the banking system is a warrant on the economy. the best way to play it is in a levered investment. if you look at the track record of the banking system without performing loans, shrieking of

the system from a times gdp to four times now, the reliance on foreign deposits, the attraction of foreign direct capital over the last three years, there are a lot of reasons why cyprus actually is poised to grow across a range of economies. nejra: on the nonperforming loans, after the sale of nonperforming loans to apollo, bank of cyprus able to improve its position, but the exposure remain tied -- remains high. >> we settled $15 billion of nonperforming loans. we have reduced that by $10 billion to $5 billion. it is covered by 50% precisions -- provisions. we are down 3.2% per quarter for 13 quarters. plus the 15% gdp trade with apollo. i think we are on the way to getting it done. we have a third of the position

left. we have plans across each of those buckets. nejra: came we expect any moves before the end of the financial year? >> no. way sold more than $5 billion of contractual balances, three billion dollars balance sheet value, for $1.5 billion. that is 14,000 individual loans. a lot of work involved. you have to reshape your organization to go forward and manage what's left. we are confident we have plans to finish the job. nejra: has there been any changes to your eps targets for 2018? >> when you do a dramatic trade significant year balance sheet, you have to reset your business model. we will re-guide later and later -- later in the year. 10% eps per quarter is where our guidance was. we have given all the information necessary to strip out the bits we removed.

>> 10 years from the crisis, last week we were talking about are we anylehman, closer to resolving the doom loop for european banks? >> europe was not ready to react to a crisis back in 2007. as each sovereign crisis unfolded after each of the banks crisis started to unfold, we had a relatively haphazard response to the crisis. i still think we are finding their feet in terms of crisis management for europe. let's hope we now have the mechanisms in place through supernatural mechanisms to make this work better. we have been slow. the u.s. was a perfect example of, get your act together. the u.s. is no longer talking about the banking crisis. there talking about unemployment at all-time lows. there talking about things we would only dream of talking about.

political risk still rife. this intractable issue of the irish border. will there be any impact on economic growth in cyprus if there is a no deal brexit? >> there is a great history between a former colony, 1960 was one cyprus received independence, there are 1.2 million tourists a year who come from britain. that has been growing during this brexit discussion. there is no suggestion at a data level brexit is causing issues for cyprus u.k. into the future. is all about confidence in the relationship between the european union member cyprus and britain will no doubt be negatively impacted. nejra: another issue i want to discuss is the threat of sanctions on russia. we have not had the worst-case

scenario. has that had any impact on your business? >> for sure. cyprus has a natural affinity to history through the church and through 40,000 people speaking russian. 1.2 million russian tourists come to cyprus every year. there has been an interruption of confidence with europe and russia. we hold ourselves to the u.s. patriot act into all of the compliance standards you would expect. that means we do less business with the former soviet republics. people talk about cyprus being a major place for russian money. this is not true. we have more great deposits then we have russian -- greek deposits then we have russian. nejra: great to have you with us on set. coming up we will have more guests from cyprus invest. the finance minister of cyprus

joins us for exclusive interview at 8:30 a.m. u.k. time. looks like we could see a higher open in europe. we are 30 minutes away from the european equity market open. this is bloomberg. ♪

good morning, welcome to "bloomberg markets the european open." -- the european matt: stocks in asia set to cap the strongest two-week rally since february. the u.s. 10 year yield hedges up to 2.08% after new records in the u.s. and european futures point to a positive open as well. cash trade is less than 30 minutes away. anna: asia's