>> good morning from bloomberg's european headquarters in the city of london. i am nejra cehic. manus: i am manus cranny. these are today's top stories. point tos. futures gains. economists are calling a rate hike a done deal. trump against the world. the president draws laughter at the u.n. general assembly. what do markets make of his global grievances? nejra: surprise shakeup, banco santander -- they watched both banks at the open today.

manus: let's get straight to our top political story. president trump's address to the u.n. we are joined by jodi schneider in hong kong. responses, and laughter was one of them in the auditorium. why? startedesident trump his speech in a very america first kind of way, almost like he was speaking to a campaign rally, and the laughter came after he said that he had accomplished more than perhaps any other president ever, so the were amused by that. they did not think that was the right tone to address them. he went on with his list of grievances, basically starting with iran and being very tough on iran, and then moving on to china on trade. some tough talk there. tough talk on venezuela. , youally said that opec

know, had harsh words for opec members. indicated that allies around the world were freeloaders that were living off of the u.s.'s aid and that he aims to change that. there was very little in the speech that was in critical except for, interestingly, so different from a year ago, the leader of north korea. he praised what he calls chairman kim, and said he looks forward to continuing to work with him. a year ago, he was much harsher on kim. he basically took him on in terms of all kinds of language including rocket man. he barely mentioned russia in the speech. russia did not come up. most everyone was criticized. nejra: thank you so much from jodi schneider for us in hong kong. let's get to the market. it is 6:02 in london. we are seeing a mixed picture. japanese stocks pulling back

high.n eight month chinese stocks gaining, outperforming on the upside. said itafter the msci is considering increasing the weight of the shares. meanwhile, all eyes trained on the 10 year yield ahead of the fed. the rate hike, highly anticipated. a little shy of the 3.13 handle, may, was 2018 high hit in and brent crude study after three days of gains. 81.81. we have been talking about $100 oil, but goldman sachs pours cold water on that, saying another supply catalyst is needed to push prices higher. we are hearing more analysts coming out and talking about the potential relief from the strategic petroleum reserve, talking about that. it could come before the midterms. thes: if trump can't tweet price of oil down, he can have a pretty good go at the strategic

petroleum reserve. 30 million barrels could knock a couple of dollars off the price. let's pull them together. this is the chart in the library. these are oil prices and the 10 year yield. the bloomberg survey suggests that you are pretty much near the top end of the yield rush at the moment, but as far as crude is concerned, it results in inflation. the rising crude in syncopation with inflation. invoking a faster more aggressive federal reserve, inflation is the mandate. oil is something they are pouring cold water on, but we will hear more from him shortly. really stressing the tightness of the market. the single biggest option trades are in the market. they are rolling off the shelves, $100 call options. that is where the volumes are.

record volumes on option trade in the oil market at the moment. nejra: if we are still talking about crude, u.s. stocks were mixed yesterday, but we did see basically oil drillers rallying while industrial shares were underperforming. the closed a little lower on the s&p 500 yesterday, but futures higher across the board. manus: it is a busy day in new york. this is what we have got. it really is quite hard-hitting. you have the u.k. prime minister going to the telegraph, talking about tax rates. ramaphosa, the south african president, and the exclusive with mr. macron. his poll ratings might come up. what do you reckon? nejra: what an amazing lineup. that is not even all. credit suisse ceo, blackrock ceo barry think, and goldman sachs ceo david solomon, or rather the

co-ceo discussed with francine lacqua. let's talk to juliette saly in singapore. u.k.'s prime minister will pledge to use low tax to make pre-brexit brick and -- jim and economic powerhouse. anher -- pre-brexit britain economic powerhouse. she said it will have the lowest rate of corporation tax in the g20, making it one of the most business friendly economies in the world. also be aimed at eurosceptics in her own party. theresa may gives that speech at 1:30 p.m. london time. spain's banker santander has as its ceo.new head switzerland's largest bank in

filling the vacuum by promoting -- to replace the cohead's of the investment bank. chairman ofay on as santander spain and becomes vice bancoman of santander. the head of norway's wealth fund sites he is concerned about the deepening trade were between the u.s. and china. he made the comments in an exclusive interview with bloomberg's editor in chief. >> our investment is based on globalization and of course, there are some disturbing signs about the development of that big trend, which has been happening for 30 years now. the interesting thing is to see whether there is a rupture in that trend. juliette: in the u.s., bill cosby has been sentenced to at least three years in state prison after the judge declared

the 81-year-old a "sexually violent predator." he was found guilty in april of drugging and sexually assaulting a woman at his gated estates in 2004, after being bearish by multiple allegations. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg top . are seeing very good gains coming through from chinese markets, this on this news that the msci is considering lifting the index, potentially allowing a lot of the smaller cap companies -- the hong kong index rebounding after that big selloff on monday. it was closed yesterday due to a public holiday, but we have seen the hong kong dollar actually have its biggest slide this year after that surprising rise on friday. the nikkei is higher but the topix is lower.

halting its recent run. let's look at stocks we will be watching in the region. arise coming through from the oil majors in hong kong. petrochina jumping the most since may. more than triple the benchmark index. company saying oil producers are rising as the climate is improving. you are seeing nissan under pressure. it will update the media at 3:00 p.m. tokyo time on this emission test scandal. this is amid increased competition. credit suisse cutting its price on theand its rating stock, sending it down by 10%. manus. inus: juliette saly singapore. let's turn our attention to the fed policy meeting and the central bank is expected to raise rates. the third hike this year according to economists surveyed

by bloomberg. the fed will continue its quarterly rate hikes through june 2019. it is a more aggressive pace than the fed anticipated back in june. welcome to the show. a very good morning to you. wakey-wakey. our survey says take a look at the board. we will hit it by next year. i would ask the, are we on a predetermined path to 3%? or are we still data dependent? of thisthe tone comments, this gradual hike, it does seem as though they are looking at it in that fashion, and the economic arguments are clearly there. we have got inflation that pretty much all measures are at or above target. the risk-taking from monetary policy. they want to keep this process moving. a are looking for certainly

hike today, another hike in the first quarter. i think there is the potential for a pause. the fadingr dollar, effects of fiscal stimulus plus the emerging-market -- worries that are starting to build an trade war issues could lead to a bit of a positive some point next year. nejra: the pause in the second that would basically engineer a soft landing for the u.s. economy? jodi: the fed will be somewhat nervous -- >> the fed is somewhat nervous. we have seen leverage both up in the system so i do not think they will want to continue. there will be a pause for evaluation at some point. i think we could see a little bit of a soft patch in the first quarter as we have done through pretty much every year for the last five years or six years and that could give the excuse to pause and wait. manus: you talk about the potential for bubbles. where aren to you is

their bubbles? where do you see the risk of bubble is the market? -- in markets? james: that's right. if you're building up potential for the future, the fed will be alive for those risks. if they do start to worry about asset prices, that could be the reason for this sort of situation and why they are focusing in on that. nejra: in this survey, economists basically said the next recession in terms of the respondents would be triggered by the fed raising rates to quickly. the financial bubble was third. second in line was an external nontrade short. if the fed does not do what you say, which is caused in the thend quarter, -- pause in

second quarter, does that put us at risk of recession? james: it's incredibly difficult. if you look at the shape of the yield curve, it is incredibly flat. historically, you have typically seen recession within two years of that. clearly, there is anticipation that these risks are growing. i think, you know, the fed is alive to that threat. they have been vocal. they don't want to see the curve inverted. others have said we must avoid that at all costs. they perhaps want to go slower. because we on that had a guest met talked about partial invert. or is already an inversion. it said day. -- it is fed day. is it different this time? thesurvey says we are at top end of the run. if you go by our survey, we are pretty much there. which would perhaps suggest that

we do invert. james: i think there is the risk that we do see it, but i am still a little bit concerned about the long end of the curve. real fiscal sustainability issues in the u.s.. we have an economy growing at 4% annualized rates the growing at 4% gdp to fund that. unemployment is continuing to come down, borrowing continuing to go up. that break happened in 1968 when america was spending 10% of gdp on the vietnam war. we are not in that situation right now, so there are concerns that could drive the retire. manus: james knightley -- nejra: james knightley stays with us. from 7:00 p.m. u.k. time, we will bring you special coverage of the fed rate decision with market reaction and analysis. manus: coming up on this show, switching it up. santander surprises with the appointment of its new ceo. what does it mean for the banks future? the french president,

macron, joins us from the bloomberg business form in new york for an exclusive interview at 9:00 u.k. time.

nejra: today was bloomberg for the rest of the day, up unmissable interviews and events -- some unmissable interviews and events. remarks from theresa may. later on, we will be joined by south african president cyril ramaphosa. from the one planet summit from emmanuel macron. manus: heavyweights from the world of finance include credit suisse's representative, larry davidand the new ceo, solomon. they discussed the state of global finance with bloomberg's francine lacqua at 4:30 u.k. time. juliette saly is standing by in

our singapore studio. good day. juliette: manus, shares fell in late trading after the growth margin nearly missed estimates. numbers, including overall revenue and north american sales, outpaced expectations. the quarter closed just before the headline-grabbing ad featuring colin kaepernick. he says he's proud of the work company is doing with the nfl star and says it's having a positive impact on the business. >> is driving a real uptake i think in traffic and engagement, both socially as well as commercially. we have seen record engagement with the brand as part of the campaign. juliette: blackstone, the soon-to-be owner of thomson reuters, is said to be weighing a sale of a currency trading platform. bloomberg understands the business could fetch more than $3 billion. a representative declined to

comment while thomson reuters says it does not comment on market rumors. bloomberg lp competes with thomson reuters in providing financial news, data, and analytics. he also holdings has drawn interest from suitors including blackstone and carlisle. bloomberg has learned that that the private equity firms are considering submitting bids for the giant. a deal for nielsen, which has the market value of $9.6 billion, would rank as one of the year's biggest payouts. representatives declined to comment. ceo says he does not see an impact on oil sales from the u.s.-china trade war, but bob dudley says -- the price it pays for steel. speaking exclusively to bloomberg, he said he sees further upward pressure on crude prices. >> what is going to happen with

iran sanctions? is that oil going to come off the market or go back on the market? you could see volatility up, you can see it going down. oil prices seem high to me. overall, the stock levels are low, so there is upward pressure, but volatility is the word from now to the end of the year. juliette: and that is your bloomberg business flash. nejra: juliette saly in singapore, thank you so much. let's bring you a bloomberg scoop. santander appointed a new head of investment banking -- the head of investment banking as the new ceo. he helped management build empires in the precrash era. the appointment fueled speculation that santander could be about to embark on some deals. this to our senior credit analyst at hermes investment management. thanks so much for joining us. there is speculation about more than just deals. it's also about general strategy

and succession. will we see more deals from santander? >> yes, it's a question everyone will be asking because as we know, andrea is one of the most well-known on this planet, but the question is, it does not , so that heavy baggage is the question. santander does not really have capital market activity. it is not really the avenue you would expect for a man like orcel. nejra: he -- manus: he is a dealmaker. are we going to see santander come much more aggressively into the investment banking arena? filippo: no. i do not expect it to become big.

they may have a go at investment banking. it's a long story of european banks trying to -- investment bank. we have seen a lot of write-downs. i think santander is safe enough not to go down the investment bank road. nejra: if santander was to focus more on acquisitions, would we see the focus more in the u.s., since it came away with a clean bill of health from the last stress test? filippo: we have to remember they have at least 10% in the principal market, which is of course the u.k. and spain, and well above that, the u.s., brazil. a re-staffmaybe thing of the portfolio. i would be more excited in europe. -- may been talking

santander could participate in the consolidation. it is still a long way for that. the focus is to integrate banco popular. staying ono see him as the executive chairman for spain. manus: let's get to strategy at ubs for sergio ermotti. in my mind,o back and i do not think he has worked at investment banks. i look at deutsche bank. i just wonder, at an investment bank, does it really work -- dual head really work? filippo: no, you're correct. it does not work for the investment bank. focused.re the other one runs the trading book. if you look at the footprint of ubs, we know the strategy was to

-- increase more the corporate side. think they have been very successful the last four years in increasing the equity capital market, so i do not know. i think they are both out ending individuals, but in terms of will it work -- nejra: what do you think the boardwalk to achieve with this, having the cohead's for now at the investment bank? filippo: it tells you that maybe is irrepressible so you need to have two components. manus: one thing i have learned in life is nobody is irreplaceable, nobody is irreplaceable in this business. i wonder if they have cohead's at the wealth management side, blasting of course, along with that. it suits the ubs style to have

this cohead-ology. filippo: it is an easy internal solution. they could have borrowed someone, but it may be able to disrupt as well. maybe in the short to medium term, yes. manus: let's see what comes out of the strategy update. of course, we will be covering that in full. that is the senior credit analyst at hermes investment management. for youwhat we have got up little bit later on. we are going to talk to the ubs chairman. he is joining us for an exclusive interview at 10:00 a.m. this mine. this: remember, -- morning. nejra: remember, you can follow all of our charts and functions. there we are next to each other. is it just directly as well function.ib president trump says opec is ripping off the world.

oil isley thinks $100 still possible. we hear from him, next. this is bloomberg. ♪

manus: live shot of london. it's beautiful, gorgeous. you're looking at the time this morning. brunoa may, of course, -- le maire saying it would be terrible for europe if there was a good brexit deal. u.k. households are more pessimistic about the outlook for inflation data anytime in the past five years according to a citigroup yougov poll. will it over. let's have a look at the ftse futures because oil and commodities will be the key focus for our markets. 74.74. nejra: it's interesting on theresa may, manus, because

she's been pushing back at the brexiteers in her cabinet, but the same time, very wedded to this idea of the you cannot being broken up, i.e. not having the border between northern ireland and the rest of the u.k.. business leaders gather today for the bloomberg business form in new york. theresa may gives a keynote speech at 1:30 p.m., london time. let's check in on the market. annmarie hordern. >> it seems like asia has turned a bit more positive. japan is up .3%, but that is the nikkei. tenths of a 1.8 percent. china nearly up 2%. the msci index saying it's considering increasing the weight of the shares from next year. the themes driving these markets this morning is of course the fed. that decision later today.

deepening trade tensions as donald trump told the u.s. that the trade deficit with china is not acceptable. futures in london and new york are pointing to a higher start. dollar really is hanging on the fed's policy. the fed expected to deliver its third rate rise. the currency up on the strong economy and really being backed by the fed, but over the last month, it's been under some pressure due to the trade tensions, so this technical chart is showing the 94 market as a line in the sand. anything above that, we could see some fresh eyes year-to-date on the dollar. we can talk about the market without talking about oil. crude oil pushing up rates. this is wti. higher crude prices result in higher inflation as well as an increase in treasury yields. uranian into the --

sanctions hit in november. this is likely to be a key question for the fed today. manus: thank you very much, annmarie hordern, with the latest on chartology. juliette saly. yes president donald trump used his address to the united nations general assembly yesterday to reassert his america first worldview. he chastised the regime's of iran and venezuela and offered a rejection of the u.n.'s multilateral approach and prompted laughter as he lauded the success of his administration. pres. trump: in less than two years, my administration has accomplished more than almost any administration in the history of our country. so true. -- [laughter] did not expect that reaction, but that's ok.

[laughter] [applause] the u.k.'s prime minister will today pledged to britain an to make economic powerhouse and the envy of europe. in hurt keynote address in new york, theresa may will say that britain will have "the lowest rate of corporation tax in the g20, making it one of the most business friendly economies in the world." as well as being a sales pitch to foreign investors, the comments will be aimed at eurosceptics in her own party. theresa may gives that speech at 1:30 p.m. london time. , comedian bill. cosby has been sentenced to at least three years in state prison. the sentencing came after the judge declared the 81-year-old a "sexually violent predator." he was found guilty in april of drugging and sexually assaulting a woman at his gated estate in thousand four after being there is -- in 2004 after being

arraged by accusations. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. nejra: juliette saly in singapore, thank you so much. dudley thinks iran's oil customers might find it more difficult to purchase crude under the new sanctions. he spoke exclusively to bloomberg to discuss where oil prices are heading. >> there is a lot of uncertainty in volatility in the next month. what is going to happen with iran sanctions? wilmette oil, the marketer will market ore market? -- go back up on the market? there is upward pressure here. volatility is the word from now to the end of the year. >> what happened the last time with iran sanctions? did the oil come off of the market or not? will that instruct what happens

this time? bob: i think there's more pressure this time. now thations are such they are going to have a hard time leasing the ships and the insurance to actually move the oil. even if people said they would buy it, so everyone is being cautious. >> which is different than last time, the crude product. what are the longer-term implications of this for you and for the market? bob: we are going to continue to plan our company within that disciplined framework. the oil prices have come back up. i think the industry is not off to the races. stock levels are now down below the last five years of average, so the industry must invest enough to provide the energy, but cannot get out of the frameworks and then lose the credibility. it's quite a delicate move forward with the companies. >> as the ultimate control over has it shifted from

saudi arabia over to the united states? bob: i think you have three countries out there. you have the united states, russia, and saudi arabia. saudi can probably flex more than the other countries. the u.s. is market-led, bottlenecked right now. it is truly the market working right now. >> talking about america and the opportunities for you, you are putting a lot of effort into not only projects, but also having an annual meeting in d.c., pivoting and shifting to north america. what is the opportunity? bob: for bp, it's the u.s. it was built out of the mergers with u.s. companies. ,e just made another one finally having the confidence to make a significant investment. we produce 700,000 barrels per day in the u.s. it's a really importantly trust. >> can you rank it? you have u.s. shale it also

deepwater, and there is more availability of supplies, for example. how do you rank it? now, existing production in the gulf of mexico with all the infrastructure, those are the highest margin of barrels in the world trust and other companies as well. shale, we are just getting started. you can optimize that. we can take the talents of a good team and put it on the quiz the u.s., and i think that will be more and more important. manus: bob dudley on the oil market. thanks in focus, ubs, santander, unicredit. banks in focus, ubs, santander, unicredit. ceo may turn his attention here. unicredit will review the bank's strategic options. lots of reports of socgen, etc.

uses knightley is still with . i want to reflect back to bob dudley and his call on the oil market. , one hundredrts dollar oil. goldman sachs saying that is not really going to be obtainable. how big an issue for you is oil right now? ames: it's moved up quite long way after the last few weeks and months, and i think the risk is in the near, it does go higher. to trump'st react relative aggressiveness in trying to increase supply, so there is the potential for that to happen. we don't really know the impact from the iran sanctions. it?hina going to ignore there is a lot of uncertainty about strong growth in the u.s. which could contribute to that demand pushing oil prices higher in the near term.

nejra: rebalance risks more to the upside to you. could we get $100 oil by next year though? james: i think it unlikely. reserves.elease nejra: before the midterms? james: possibly so. it was ahead of the midterm elections at this stage. his current popularity rating is 25 to 40t with losing seats in the house, leaving the democrats running the house of representatives, making things difficult. this is one option where he could get traction with the voters. what concerns me for next year is we are starting to see obviously the bad news and emerging markets coming through. is that going to translate into weaker demand for oil as well? that could lead to a call back next year. manus: you mentioned the strategic petroleum reserves. i have created a chart.

look at this. this is the relationship between strategic petroleum reserves. the city is debating if there was 30 million barrels released, how big a message would it be if he did release from spr? james: it does not happen very often, so it's a clear signal. it's tied for the midterm election story. if he does do it, he has to do with early to get traction with the voters to get benefit from it. in terms of the growth story, another $10 on oil will not derail the u.s. economy as such. it's very much physically driven. nejra: james knightley, thank you so much, chief international economist at ing. let's take a look at what you should be watching today. thanks for joining us. looking ahead, u.k. opposition labor leader jeremy corbyn speak said his party's conference in the report. manus: the government envoys

meet in brussels to discuss brexit. bruno le maire warning about the perils of giving the u.k. a good brexit. it would be disastrous for europe. nejra: if you have been asleep all morning, we have the u.s. federal reserve policy decision at 7:00 p.m. u.k. time. manus: the man running the world's biggest sovereign wealth fund is trying to figure out how much damage geopolitical risk might do to his portfolio, but the risk that has not faced him is brexit. the ceo spoke exclusively with bloomberg and chief john micklethwait. is affecting global logistics and these are the major parts of the world. young people want to live and work there hopefully in the future. these are cities with a strong growth prospects, but we found pricing these days attractive,

so we have not left that much for the last couple of years. john: are the prices getting too high and you are reacting to that rather than a shift to big cities? yngve: it is. our long-term strategy is to build up a real estate portfolio, focusing on these cities. there is a human capital element where we think real estate will do good. people aren, most going to take a rough average and are looking at the road about brexit and think there will be a hard brexit. what difference would that make to your view of london? yngve: i think our confidence is strong. as a financial center but the world capital. there is a lot of activity that goes on there that is key and crucial for the economy so we

will be long-term investors in london and the u.k. in general. john: over the past couple of hilst brexit has been an issue, have you pulled back at all? yngve: no, we have not really changed our view on investing in london. john: do you see london as a rival to new york being one of the great cosmopolitan cities? do you think it may have peaked? they need to have a strong financial center. the u.s., new york, and london will be the one for europe. asia do you put most of your efforts? we have a shanghai office, looking at bad as long-term positioning. as theou see shanghai natural commercial capital of asia? yngve: it could be if you look at its positioning. it is the hub if they wanted to go that way. there is strong competition

within china between hong kong and beijing. growth not seen a strong as we would have expected 10 years ago. manus: that was the investment management ceo yngve slyngstad speaking exclusively with john micklethwait. show, u.s.n the consumer confidence at an 18 year high. we speak to the ubs wealth management global cio on wh ere risks and opportunity lie for markets. this is bloomberg. ♪

manus: stay with bloomberg for the rest of the day. the bloombergm business forum at the plaza hotel in new york. .his is the rollcall the u.k. permits are, theresa may. what has she got to say about tax?

we will be joined by the south african president, cyril ramaphosa and from the one planet summit by the french president emmanuel macron. nejra: heavyweights from the world of finance including the credit suisse ceo, blackrock ceo, and goldman sachs ceo david solomon. they discussed the state of global finance with francine lacqua. confidence consumer jumped to its highest level in 18 years this month. that's according to the conference report yesterday. in the late 1960's came just before the recession and the selloff in the equity markets. one man was a very global perspective. he joins us from the ubs wealth management. great to see you this morning. i'm waiting for someone to say you have never had it so good in the united states of america. that's right.

i think we have added slightly to our risk assets including global equities but also in the emerging markets, we are putting our toes in with some of the dollar denominated sovereign bonds. the confidence is strong in the united states, but one of the things we are here to talk about with our client is a bifurcated view in the world where some of our clients are very cautious on asia at this point and maybe a little too optimistic on the united states. nejra: with the u.s. equities, i understand you are adding to risk, but how do you protect those equity profits? how would you advise the clients do that? mark: i think the first thing that is necessary and something we talk a lot about up a family office summit is the global

diversification because you do see the decoupling of -- that's one of the key traits we saw this summer. the decoupling and the different markets. investors who were globally diversified are up on the year, whereas some markets are actually a bear market. diversity is the key. you are at the global family office event. it's a range of people. what is the view on emerging markets? we have got the bond market for our viewers to have a look at. it's dropped by -- is there an appetite in that bonds? participate in em mark: i think people here are very much aware that there's only so much decoupling that can

go on between the united states and emerging markets. had quite a selloff in emerging markets and despite the fact that global growth remains strong, and i think that's one of the reasons that, selectively, we are looking at yen assets, particularly on the bond side. nejra: looking at global bonds, i am interested that you are overweight treasuries. tell us about that as we head towards the fed meeting. the 10 year yield touching 3.1% this week. look.yes, this has been a very big call for us. at the beginning of the year, some people were saying that treasuries were headed towards 6% or something like that and what we found in our research is that when the fed starts to mike, the 10-year tends to react quickly to that and so much of the move in the 10-year happens early in the rate hike cycle, so with inflation relatively in

check, we simply do not think that the 10-year is going to run away. in a diversified portfolio, it provides that ballast when things get a little volatile. i'm trying to get to grips with duration. a lot of people come on the studio saying you want to reduce duration, you want to buy one year paper, you are getting rid of yields. you make it very clear that you think there is an improvement in credit quality and we should expand duration. could you qualify that for me and help me understand what that means. mark: sure. inre's a lot of moving parts the credit space and the bond space, but i think what one of the things we have seen, as you hunt is this tremendous for yield that has gone on globally for many years now, and

i think that we have tried to andalready in the spring have reiterated now is that this is a time, as we get later in the cycle to really think about what you hold and have you been reaching down towards much lower credit quality in search of yield? we wanted to remind our investors and suggest to them that going out and duration now and things like the 10 year might be a better way to get hold of that yield that they are looking for rather than keep ier credit.junk that's how i would explain that to you. nejra: some of the risks that you point to even as you are moving towards risky assets are escalating trade tensions and an oil supply shop. how would you allocate? well, first i think, the

oil supply shock issue is probably one that is not our biggest risk case. we see oil going to $85 per barrel over the six-month period, but the u.s. economy, the world economy, should be able to absorb this as oil is not quite the driver of economic growth that it won't months -- it once was. is the first thing. the second thing i would say is that a good way for investors to look at that if they are worried about oil prices spiking is still to look at energy company equities where we still see some value. front, irger trade think this is a very interesting we have thesenow, terrorists. the bulk of the tariffs on the u.s. side and china are in place, and this will act as a tax potentially on your

consumers, so one of the things to be watching now that these tariffs on place is are we starting to see them show up in u.s. data? for that to impact the federal by december, we are going to have to see that in the data relatively soon. at the global family office. how do they look at the u.k.? we will talk to theresa may. are the families risk on for the u.k.? mark: well, i think that families are not risk on, say, in most of the capital markets. we know that u.k. property something that people are interested in all around the world given how beautiful u.k. is. we have seen a little bit of a risk in the bubble. nejra: they do so much, mark haefele, from the ubs global

family office summit in zurich. manus: we have more ubs. enough of this. this man joins us for conversation at 10:00 a.m. u.k. time. this is bloomberg. ♪ ♪ this isn't just any moving day.

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manus: good morning from bloomberg's european headquarters in the city of london. nejra: this is "bloomberg daybreak: europe." manus: asian stocks are mixed and u.s. futures point to gains. -- economists are calling a rate hike a done deal. nejra: the u.s. president draws laughter at the un's general assembly. manus: a surprise shakeup. dealmaker. watch both banks of the european open today.

nejra: let's get straight to president trump's address to the u.n.. we speak to our senior international editor, jodi schneider, a mccaw hong kong. kong.ent trump -- in hong president trump had a long list of grievances. >> he started off with a campaign rally america first start to his speech. tickinged taking off -- off domestic accomplishments. he turned to a sober tone, tough on a number of international targets. one was international bodies like the u.n. he also talked about allies saying they were not paying enough, that the u.s. paid too much in foreign aid and did not get enough act. he was very tough on iran and major the u.s. stands by leaving the nuclear pact, and he then

called out opec saying there was a lot of freeloading there. then he also turned to other international targets. one target that was a very big target last year was north korea. , as year he had praise for he called him, chairman cam -- chairman kim. in whichrgely a speech he struck out at most of the world in a sober tone. is clear he wants to pay much less in foreign assistance around the world. i think we will start seeing from somee u.s. examination of foreign aid policy. manus: it was a laundry list of complaints. thank you very much. let's get straight to the markets. it is fed day. you will find out the tone of

jay powell later run. equity markets this morning, keep an eye on oil. oil is a bit lower. trump could go after the strategic petroleum reserve. the dax is up 36.5%. ubs.ust heard from we will talk about that in a moment. paris is up. unicredit, basically saying unicredit could be looking at abm or lloyd's. interesting take on that. santander gets the dealmaker in play. he moves houses. all the deck chairs are changing in the banks. 2019 is going to be the deal year for banks. nejra: something we are focusing on this our in the europe session. looking back at asia we see a mixed session, a pullback in japanese equities.

of shanghai composite, one the biggest gainers, up 1.3% after the msci is increasing the weight of shares in a global index from next year. a mixed picture in asia. we are focusing on the 10 year yield. some interesting thoughts from ubs. overweight treasuries. the 10 year yield on a 309 handle. we did touch 3.1%. that is quite close to that 2018 high we hit. , near aioned oil, brent four-year high, pushing back. goldman pouring water on calls for $100 oil, saying that has got to be more to that supply story than just iran. that is something where focusing on today as well. the bond futures, i thought it was really interesting. everybody has come in here and said you want a shortened duration. mark kimberly's point on the u.s. treasury market would be you want more. star going deeper into junk,

stop going deeper into bond assets. go longer in duration. keep an eye as well on the italian government bond market. are getting here from the five-star movement with regard to the budget. let me give you this. italy's five-star movement says it may block the 2019 budget. ministers of his passing the so-called citizens income must be included in the budget or the group's members will not vote for it. this is the latest from luigi demaio of a credit cards to the budget. there is a great deal -- luigi demaio in regards to the budget. talking bruno le maire about any possibility of giving a brexit deal to the u.k. citizens what indeed cause more headaches. the phraseology eludes me.

it certainly would not set the example the french wanted. the rollcall of attendees today is going to be quite splendid. miss: you do not want to bloomberg's business floor at the plaza hotel. remarks from theresa may, later on, we will be joined by cyril ramaphosa and the french president emmanuel macron. manus: this is the list. fink on allarry things finance, the blackrock ceo. and the new man coming in at goldman sachs. he joins francine lacqua. from get your first word juliette saly. juliette: u.s. president donald thep used his address to

united nations general assembly to reassert his america first worldview. he chastised iran and venezuela and offered a blunt rejection of the u.n.'s multilateral approach. he prompted open laughter as he lauded the success of his administration. than twomp: in less years my administration has accomplished more than almost any administration in the history of our country. -- so true. [laughter] i did not expect that reaction, but that is ok. [applause] the uk's prime minister will today pledged to post-brexit u.k. the envy of europe. in her keynote address in new york, theresa may will say britain will have the lowest rate of corporation tax in the mostmaking it's one of the

business friendly economies in the world. the comments will be aimed at eurosceptics in her own party. theresa may gives that speech at 1:30 p.m. london time. the head of norway's trillion dollar southern wealth fund says he is concerned about the deepening trade war between the u.s. and china. he made the comments in an exclusive interview with bloomberg's executive editor. globalization, and of course there are signs about the development. the interesting thing is to see whether there is a rupture in the trend. juliette: 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 .

things looking more positive in late asian trade. the nikkei closing higher by 0.4%. lower, aboutghtly 1000 stocks in that index trading. you are seeing very good gains from china's market, also hong kong as it resumed trade after that public holiday yesterday, reversing a lot of monday's losses. australia's market closing flat. a bit of a selloff on india today. we are on fed watch and hong kong very much moved in step with the fed. we are watching the one-month hibor rate, which jumped by four basis points. a 2.21 percent rate, its highest level since 2008. analysts saying it could have room to move further from there. the u.s. dollar slightly higher against the hong kong dollar.

earlier the hong kong dollar had its biggest slide this year, falling as much as .01%. that after that big jump on friday, its biggest in 15 years. we are watching a selloff coming through in indian assets. we have seen the rupee and bonds under pressure. authorities mulling steps to curb the dollar. you're seeing the dollar slightly higher against the rupee. still holding toward record lows. now let's turn to the fed's policy meeting. the central bank is expected to raise rates by 25 basis points, the third hike this year. according to economists, the fed will continue its quarterly rate hikes straight through to june 2019. it is a more aggressive pace than fed watchers anticipated in june 2018. joining us now is the global equity fund manager at aviva investors. great to have you with us. what has changed in the u.s. economy to make economists

forecast a faster pace of hikes? >> it is inflation. the inflation backdrop has been strengthening. wage growth is one of the conundrums people are waiting to see. we have seen the impact of heil -- higher oil are prices. now you're seeing ways growth as well. that has moved the dow now. >> should they be more cognizant of emerging market risk? hardr the fed it is quite to price that in. certainly people have been looking at emerging markets more. there is risk. from the fed's perspective, all you can do is look at the u.s. economy, which is going very robustly. i think that is all you can do right now. emerging markets, trade wars, very hard to factor that in. the pace you predict, a

hike a quarter next year as well , does that pose any risk to u.s. equities? >> at the margin, in terms of a strengthening economy, i do not think it does. you start to see that if you look at 10 year yields pushing north of 3% now. that has implications for allocation respect. where we are now in terms of a we expect that, to continue for some time. manus: we have this line from one of our columnists, markets worry? what, me, why should i worry? >> i still think you need to be invested in equities right now. everyone is looking at the trade tensions right now saying, the recent $200 billion step up is

quite a big change. it is a broader range of products. i think you are going to see some second-order of impacts. the market so far has been quite sanguine. manus: we did a bloomberg fed survey and a tiny proportion of that survey believes trade wars would cause the next recession, it would be a fed policy misstep that -- >> and external shocks. >> the keys are those second-order impacts. what you will eventually see our companies passing through to the u.s. consumer. that has consequences for inflation and the fed as well. second-order effects are going to be critical. nejra: what about financial conditions? >> there's $200 billion, we are past the market here, talking about a broad set of tariffs. what is going to be interesting is how u.s. companies deal with this.

do they passed this through to the consumers? impact, going to be an there is no question about that. nejra: global equity fund manager at aviva investors, stays with us. we will bring you special coverage of the fed rate decision with market reaction and analysis. manus: let's focus on the european banking sector. satan there has appointed the head of investment banking at ubs. he made his reputation as a dealmaker who helped managers told empires precrash. at senior banks analyst bloomberg intelligence, good to see you. sos was a bloomberg scoop, huge shout out to the team. he helped them build their footprints.

a good marriage? >> if you look at investment banking, it is in capital return mode. he has refocused ubs. santander will be a much bigger challenge. you have revenues flatlining. the of that income is from brazil and mexico. santander needs to do something. if you look at their capital position, they are not -- they are week y's. -wise.ital certainly the focus on asset management, he should drive that, focus on digital cost-cutting. he has proved his mettle at ubs. nejra: is that going to be enough to list the share price? santander has been underperforming. >> there is no quick fix. you can grow, but we know the credit risk.

funding, they are fine. at some point you will see benefits come through from the deal. you look at the top line, you struggle, you end up thinking, this can clearly go one way from here. it is all about costs. he needs to deliver a costs. >> that battle at ubs, and sergio ermotti, quite a big bow. -- listened that conversation. i will keep an eye on unicredit as well. they may be looking at lloyds or abm. when you look at european banks, how much european banks do you want relative to american banks? >> i think consolidation is very hard to see that happening. cross-border, everyone is looking at that. you are seeing management shuffling as a scheduled

precursor to that. at this stage, very hard to pin your european banks story on cross-border. it is more about, can we get through the italian budget? you have european banks trading upwards. u.s. banks absolutely are in a strong position, but that is always reflected in the values you are seeing in these companies. you have european banks trading for low book value. i think it is a valuation argument. discounts -- which is where we are going to be in a couple of years. itook at the p&l, i think, has to be about costs. theyroblem with costs is have multibillion-dollar investment plans. they are switching the way they deal with a consumer and is costly. you have a cost drag as well.

we're certainly going to see a lot of noise about these deals. manus: surely the regulators -- you have commerzbank, deutsche bank, the rumor that the government is happy to stand by. what is going to stop its elevation? >> the balance sheet. italy needs domestic consolidation. caps on is ok, but it is not great. capsule is ok, but it is not great. lloyds makes no sense at all. manus: i do not want to blame for that particularly. it is quite a low bar, it's cost-cutting target. the have a lot of issues to face. a lloyds or abm deal makes no sense. those banks are in capital return mode. santandertalked about , but ubs, we were discussing this, the fact the cohead of the investment bank -- is that going

to work? ego, as weall about know with investment banks. you have one looking at the trading side, one looking at the fixed income, client solutions side. maybe. it comes down to how they are paid in with their reporting line is. deutsche bank, you had co-ceos and cohead of and business banking. analyst, andnks opinion from the bloomberg intelligence team. always entitled to an opinion on anything to do with markets. he stays with us. juliette saly standing by in singapore. fell in: nike shares late trading after first-quarter growth margin narrowly missed estimates. other numbers including overall revenue and north american sales outpaced expectations.

the quarter closed just before the headline grabbing ad featuring colin kaepernick. nike's boss says he is proud of the work the company is doing with the nfl star, and it is having a positive impact on the business. >> it is driving a real uptake in traffic and engagement, both socially as well as commercially . we have seen record engagement as part of the campaign. blackstone's soon-to-be owner of the financial and risk arm of thomson reuters, weighing a sale of ethics all, a currency trading platform. bloomberg understands the business could fetch $3 million. a representative from blackstone declined to comment. bloomberg lp, the parents of bloomberg television, competes with thomson reuters in providing financial use data -- and analytics.

interest from suitors including blackstone and carlisle. the private equity firms are considering submitting bids for a consumer data giant. a deal for nielsen, which has a market value of $9.6 billion, would rank as one of the year's biggest buyouts. ,epresentatives for nielsen blackstone, carlisle and elliott declined to comment. oil sales from the u.s. china trade war. bob dudley says the dispute is being felt by the company in the price it pays for steel. speaking to bloomberg, he also said he sees further upward pressure on crude prices. >> what is going to happen with the iran sanctions? is it going to come off market or go back on the market? prices feel high to me. overall, the stock levels are low. there is upward pressure.

that is your bloomberg business flash. manus: thank you very much. stay with bloomberg for the rest of the day for unmissable interviews and events from bloomberg's global business forum at the plaza hotel in new york. we will be carrying remarks from theresa may, later we will be joined by south african president cyril ramaphosa and french president emmanuel macron. manus: the heavyweights keep coming from the world of finance. we have the blackrock ceo larry think in the incoming goldman sachs ceo. they discussed the state of the global finance world with francine lacqua. thee going to talk to thisl asset manager at -- morning we were talking about oil, talking to bob dudley,

crude is pushing up rates. it is a consideration for the fed. this is in the gtv library. can we make $100 oil? >> i think this talk of $100 is premature. from a supply perspective i expect things to remain relatively tight. i think you're going to have to wait until next year for that to get resolved. you have the iranian supply coming up at the moment. there's a lot of reasons to expect oil prices to remain firm on the supply side. going into next year is going to be worse. things will become more balanced. the demand side will come into question as we see the impact from trade. at this stage, $100 is a little bit premature. i expect oil prices to remain relatively flat. nejra: when you look at opportunities in the commodities space, do you talk about stakes -- stocks such as bp and shell,

is this a commodity play? >> just referencing the oil stocks, the? mark becomeson where you see the oil price. looking at bp you have breakeven at about $50, similar levels for other european majors. there is leeway for the oil price to come down from here materially. it is still generating significant amounts of free cash flow. for me, that is the dynamic. what is going on in terms of cost-cutting, getting the breakeven down. they can't survive it at lower levels from here. that is the key for me. the capex discipline is keen. -- key. last time oil went to $100, they paid the heavy price. that is the forefront for where oil ceos are right now. manus: they paid the price but

also the mining ceos as well. when we look at glencore doing another billion dollars of share buyback yesterday along with the dividend audit trail, is it dividends you are interested in in commodities and miners? you have to tolerate a lot of pain to stick with the miners. is it a dividend cycle? >> i think so. yields the you are seeing right thatand buybacks on top of -- mining companies have undergone a lot of balance sheet repair. which oil companies are also going through. balance sheets are in good shape. commodity prices are in relatively decent shape as well. it is a capital returns flow driving these shares. at europeyou look versus the u.s., we can talk about valuations and say perhaps that is the reason you should be buying. a lot of people, not so positive. what is your take on that? >> it is really interesting.

we have been looking at the valuation discrepancy between europe and the u.s.. going back to the start of this year, people were starting to get more positive on european equities. what really not sentiment was italy. the italian election results, the political instability since then, uncertainty around the budget. for me it is a sentiment argument weighing on european equities. there is a lot of money sitting in u.s. equities looking for a home elsewhere. the italian budget for me is key. if we see something sensible out of italy we will start seeing more positive flows to european equities. global equity fund manager at aviva investment. btp's are little bit lower this morning. nejra: sticking with europe, emmanuel macron joins us from the one planet summit in new york for an exclusive interview at 9:00 p.m. u.k. time. that is it for "daybreak europe.

"the european open" is next. ♪

nejra: good morning, welcome to "bloomberg markets: european open." i'm anna edwards alongside matt miller. matt: i am in zurich. we will be speaking with executives including the former ecb president. right now we are looking at chinese equities rising, oil prices near a four-year high, and yields at 3.1%. cash trade a less than 30 minutes away.