>> good morning from london, on anna edwards. manus: and i'm manus cranny, live from dubai. this is bloomberg "daybreak: europe." today's top stories. following a asia largely telegraphed result in the midterm. do investors like the divided washington? sessions out. after -- chinese growth accelerates as countries rush to beat u.s. tariffs.

manus: a warm welcome to "daybreak: europe." of these different breaking news for you this thursday. let's get into it. lehman delivering their numbers to us. a buyback for you if you are a shareholder, it's coming. up to 3 billion euros worth of 2021.by november rewarding the shareholder, a headlines, your read business profit, 2.15 billion, beating what the market expected of 1.59. and the industrial profit margin will be 11%-12%, that is the guidance for them. the power and gas, you are seeing fourth-quarter power and gas slumps but the fourth quarter be, just digging a

little more into it you can see the profit and most of the byiness is largely offset but it's aas, buyback and upbeat will we -- we will be focused on. what's going on in saudi arabia and iraq? at 6:30speak to the ceo a.m.. what a monster delivery from this man himself. good morning, let's get into the banking sector. numbers from commerzbank over in germany. trying to gut -- growth through client acquisitions. what wasve anticipated. the outlook remains unchanged and that's the bottom line picture.

income isquarter net a shade above the estimate of 211 million. when you look at the nine-month picture, the operating profit is in at one -- has come billion euros. 2018. share for the outlook remains unchanged, watching the rate at which they are able to acquire you customers and to what extent the new customers will be able to conduct meaningful business. will speak to the ceo of commerzbank live following -- acting: 30 u.k. time. numbers coming through from deutsche telekom and the outlook is interesting, raising their and cashdjusted ebitda

flow. it's well ahead of the 6 billion that had been anticipated. raising their forecast after earnings topped estimates. they are waiting to get approval for the $26.5 billion acquisition of sprint. that's what they're hoping the t-mobile u.s. unit can achieve in the united states. european business is looking more sluggish. turkey and iran have cost miss ise third-quarter in turkey, taking a provision in iran. the is what is knocking unicredit numbers. those are the factors of the report revenue and they're saying they are cutting their revenue guidance for 2018, 2019,

buffers equity tier one of carbon. punch.triple we will get a breakdown everything. this year revenue will fall to 19.7. it had originally projected 20.1. when it comes to write down on turkey and its 850 million euros in the third order for the turkish business. net income 29 million, they have been wiped out by that write-down in turkey in this quarter. those are the breaking news on. how are the markets performing this morning? the word we use was a palpable sense of relief. there is the dollar over the past two days. there's a number of houses out

there that you will see eight demise in the daughter -- in the dollar. what is opec doing? exert new cutsto on production? is that really a possibility? nasdaq down and the s&p futures on ratcheting higher, by 2%. in's get the asian markets context. david has the latest in hong kong. good day. with yourt we start point on oil. when you look within the asia-pacific, oil is one of the groups leading gains. a good example is the hang seng, .8%.

oil prices on the way up as well. the nikkei is having a stellar session, up 1%. samsung electronics is up over 10%, tencent up over 1%. volumes are still like which has been a feature so far this week. chinese trade numbers helping them and it looks like frontloading ahead of the tariffs kicking in january seeming to help the numbers so far, up until this point. that thick of earnings season over in japan. repeating ongoing concerns, cutting the sales forecast. the company still makes those laser disk players. toshiba was out with earnings and announced a buyback, shares of the most in over a year.

gambling has not really taken over from the holidays back in the start of october. that's a wrap up of markets here in the asia-pacific. you for the markets in hong kong. were asking questions, when will funding squeeze impact the fed? usn the debate, reach out to and the team at the function on your bloomberg. we are seeing market rates on the rise in some places. have your say. here is debra mao in hong kong. attorney general jeff sessions has resigned at the request of president trump after becoming a target of the president open contempt for ceding control of the rush investigation.

sessions will be temporarily succeeded by justice department chief of staff matt whitaker, a critic of the motor inquiry and now has the power to terminate .t or curve its scope chinese growth estimates has topped estimates in october. exports were up 15.6% from a year earlier, well ahead of economists forecast of growth of 11.7%. imports rose by 21% over the year. shipments from the u.s. inclined for the second month. to operatorsing around the world is provided the first clues about how bad data from an -- from a sensor might've contributed to the deadly crash of an indonesian airliner last week. statements by investigators suggest the pilots on the debt were battling the plane as the commuter when into a steep dive

during its final moments of light. 189 people were killed during a crash as month. brexit is being blamed for a dust for the housing market falling to the lowest level in six years. saying the index was being weighed down by uncertainty about the impending split and a lack of new buyers. the report echoes similar warnings from others. 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. this is bloomberg. thank you, debra mao in hong kong. president trump is calling for a new spirit of bipartisan politics after democrats won control of the house. he also warned of a warlike posture if his opponent use their position to launch new investigations into his administration. endorsed nancy

pelosi, saying she should be speaker again. >> hopefully we can all work together next year to continue delivering for the american people, including on economic growth, infrastructure on a trade, lowering the cost of prescription drugs. these are some of the things the democrats do want to work on. oustedmeanwhile, trump jeff sessions as attorney general, introducing new uncertainty into the robert mueller russia probe. you are our bloomberg asia government editor. they've had two years of republican control in the senate. how will this impact trump's presidency? can we trust this munificence of almost going dancing with nancy pelosi? certainly changes things

from the first two years of his presidency when the republicans were controlling everything. he certainly will face some investigations. we saw yesterday some carrots and sticks reaching out to nancy pelosi, warning i will not work you at all on public policy if you go after me and investigate too hard, mentioning a warlike posture. he is saying work with me, we can get done maybe a tax cut, infrastructure, something on prescription drugs. if you don't, it's going to be one big fight, and trump loves fights. anna: yes indeed, calling for cooperation. we will see where that takes us. the other big story, the aftermath of the terms. attorney general jeff sessions has resigned. what does this mean for the russia investigation, while trump calls for cooperation, he will be mindful of intentions for the motor probe.

>> that is right. attorneypointed acting general whitaker to oversee the probe. this is someone is used the phrase which i to describe it in the past. he has suggested that mueller would need to be fired, but essentially bringing the .nvestigation to a halt obviously there is a lot of this,n about congressional democrats saying they have to protect the probe and even some moderate republicans, susan collins and that theey saying probe must continue. that will be the big fight going forward. i'm sure there will be a lot of intrigue into how it happens. mother will be under more pressure than when rod rosenstein was in charge of the investigation.

we will see in the coming weeks if indeed he is getting ready to announce more developments in the case. manus: thank you very much for the latest on asian government. of global macro strategy. michael, good to see you this morning. there is almost a palpable, audible sense of relief in the equity markets. for you bull or bear, or is it too early to call for you in terms of the markets post-midterm? michael: i'm very well, and optimistic. put me in the bull camp. i think what we saw last month something of an investor panic, for want of a better word, where we didn't really see a significant change in fundamentals. the market was spewing the glass as half empty. now that we have at least one political uncertainty out of the

us athat potentially gives green light to get this melt up we have been waiting for since the beginning of the order. anna: i'm fascinated by the market reaction we have seen. over the many of american presidencies, it seems the market quite likes tax cuts. it's interesting to see the market can like both. cutsviously we got the tax and that has come through. the economy is running so well already, more tax cuts probably would not have been a good thing. the bond markets might be a little scared by that. anna: for now the chances are they will not be repealed if we've got gridlock. manus: we've got a question of you havend a chart,

libor on the move, and it would probably disagree with that, but that is a whole other conversation. it takes us to the question of the day. squeeze, whichng is what the chart really is, and that impact the fed? should we be bothered by that kind of move on the libor? it's a really good question. the short answer is, yes, it does matter, but not yet. i think that throughout next year if we get this upward drift in dollar funding pressures, if it looks like the fed is struggling to keep the effective funds rate within its target band, then we will start to have a discussion about quantitative tightening and it what point does it in?

the fed has been great on forward guidance. know iswe still don't where it hits the balance sheet. when they start the discussion, it's potentially likely to take the country in reverse. are -- we are distorted by urine funding and things like that. it is a really big question. anna: thank you very much, michael metcalf. he stays with us here on "daybreak: europe." ceoill speak to the seaman after the company's third-quarter results, as q4 profit beat estimates. plus, manus, what lies ahead?

manus: it's all about the fed. this is the man everyone will focus on, tom keene and scarlet fu and expert analysis from a former fed economist and robert schapiro. equityieve u.s. strategist, all joining the fed fray. if a traveling to work, you know what to do. join the bloomberg radio team. this is bloomberg. ♪

anna: good morning, everybody. this is bloomberg "daybreak: europe."

tesla, namingrom its new chair. this is after elon musk stepped away from the business. the appointment is effective immediately. robin dead ball will become chairman of the board -- robin denholm. director at tesla since 2014. she has already been part of the business but her main job is currently in australia. she will serve as the tesla chair on a full-time basis. let's get an update on the other bloomberg business news you need to be where up with debra mao. itsocgen has added -- in

consecutive quarters of contraction, joining a small number of european firms that are beginning to close the gap with their wall street peers. revenue jumped last quarter, beating estimates and outperforming all but one of the top global investment banks that have reported so far. >> what we have seen this robust activity including in the u.s.. we managed to capture the market. support forgrew its the airbus and is looking to increase orders for one model.

the two sides are talking, but did not permitted details. the largest budget carrier has strategy,ing and utilizing more efficient planes. >> we are now in discussions with airbus in terms of maybe changing over our 320 23 21. that gives us more bang for our buck. >> that is your bloomberg business flash. anna: thanks, debra mao in hong kong. shipmentsrush to make before the higher tariffs kick in. will increase duties next year, further adding to incentives to get trade done as soon as possible. e is still with us. i have a chart here that shows

china's trade partners, pmi gains of china's major trade partners. it is trending down but is still in growth territory. , as is the broader picture look at who they are going to export to. generally speaking it is a global growth story. michael: i think we are expecting to get softer data and we are not really getting softer data yet. we think it might be frontloading ahead of the tariffs but the shipments in the u.s. are actually down. the report is quite strong. think there will be another important part of the bullish case the market makes. manus: that was something one of my earlier guest suggested, that

perhaps we are underpricing the bang for your easing but that you are seeing in china. look at goldman's call on commodities. is it equity, short , maybe some bonds or vicariously by commodity? how do you want to play the china exposure? do it throughould all of the above. of the ones you talked about, i would not necessarily expect the chinese to its us to stimulate their economy through the -- through a weaker . toward fair is back value after significant weakness this year. the best valuation play is through the equity market. chance that the stimulus actually works. anna: thank you, michael

metcalfe. we will talk european banking next. interview from her with the socgen deputy ceo. this is bloomberg. ♪ [ phone rings ] what?!

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manus: it's a little bit of a relief, global equities, australia in the green, up .5%. is that your alpha trade investment? will trump do a deal with china? how do you want to play the periphery to china? stocks are rising. there's a palpable sense of really. do a deal with china because he lost control of congress? day two of the drop in dollar-yen. what should be

setting your agenda for the day. at 10:00 a.m. london time, the european commission publishes its quarterly economic forecast. keep an eye out for any divergence with the italian government. will focus onwe that story with regard to italy. then will get an update on the world's largest economy with it u.s. jobless claims numbers and the consumer comfort index. policymakers at the federal reserve are expected to leave the u.s. interest rate unchanged. see penultimate leading for 2018. there is only one destination and we will break it all down for you. anna: let's get an update on the markets on this research is asian session. next the resurgence we are

and one of the best things has been the strength in the aussie. you have the msci asia-pacific index on the board and the aussie dollar. a big rally in both. they have been tightly correlated, a big boost to both of these assets. we're less likely to get the fiscal boost that will boost the dollar as well. this is something traders will have their eye on. for now it seems they are both rallying after the midterms. another currency that has some bullish sentiment is the chinese yuan as well. you're a have the three-month risk reversal. it reached a peak around the had ahat trump and xi call. by all accounts, optimism is rallying around the current. we also had the trade data from

china today, no big negative surprises from the first round of tariffs. it looks like it had that's my have more room to run. word let's get the first news update from dubai. >> president trump is calling for a new spirit of bipartisan politics after the democrats won control of the house. he also warned of a warlike posture it his opponents use their position to launch investigations into his administration. he i expectedly reverses antagonism toward nancy pelosi, saying she should be speaker again. >> it's about what you have done, it's what you can do. what you have done in the past speaks to your credentials. i think a am the best person to go forward to unify, to negotiate.

>> chinese export growth has topped estimates in october as companies rush to make shipments before higher tariffs kick in. exports rose in dollar terms from a year earlier, well ahead of economists forecast growth of 11.7%. imports surged more than expected. shipments from the u.s. decline for a second month. for a keybeing blamed gauge of the u.k. housing market, falling to its lowest level in years. survey say the index of prices were being weighed down by uncertainty about the impending split and lack of new buyers. the report echoes similar warnings. 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. anna: thank you for that update

on the top headlines. unicredit of italy has ported -- reported third-quarter profits that ms. -- results that missed estimates. socgen has ended five consecutive quarters of contraction is its key equity trading business with a 19% jump. small number of firms are beginning to close the gap with their wall street peers. paris, let's start with the unicredit story. what do we focus on when it comes to the conference call because there are headlines around the turkish exposure and alone historic story surrounding iran. ring is up today. numbers weook at the just got from unicredit, overall -- it's the detail in the report

, saying they will have to take a right down. we talked about this on the show many times. currency,on on the clearly it was a hit for the quarter. obviously analysts will want to see a little bit more clarity on where the situation stands but they will have to provision 740 on allegations they violated sanctions against iran. now that has translated into a number of -- cutting down the revenue target or 2018 and 2019 and the forecast for both years. and a concern going forward, analysts will want to see the exposure to the btp market. behind the uptick in the

business, if you look at the , where is the real growth coming? there are a couple of parts of socgen we have to focus on. say, asnk it is fair to you pointed out, the deep in expectations. i think the highlight is the equity trading unit. this is up 19%, ending five quarters of contraction. the deputy ceo i spoke to yesterday told me about the benefit of having a global platform. let's take a quick look. what we have seen in this quarter is very robust activity

within the u.s. speaking, the activity was subdued in europe. that's why we have seen this bounce. about -- this has been an ongoing story for socgen. they tell me 2018, that one specific case in the u.s. they think they will be a settled within weeks, if not days. manus: thank you very much, maria. michael matt kempe -- michael

matt kemp is still with us. on unicredit first. and surpassed socgen santander. there's a little bit of irony there. test, thef a stress italians are doing better than the french and the spanish. which portion of european banks do you want? thing, ihere is the think what you are going to see today is a bit of a stress test of market sentiment toward the banks. we've had mixed results but what will the market reaction be? the thing i am curious about is how much of the bad news is already discounted in current valuations? today,ng on the reaction

quite a lot of the bad news is already discounted. it was only exposed to the italian debt risk but also turkey when that was under a lot of pressure. it's interesting to see what kind of reaction we get from the results today. anna: in terms of the bread and butter of the banking sector, and slightly higher interest rates from the ecb might help some of them. to that end, what is your expectation for the ecb and how quickly given the headwinds from the italian story and the change in politics in germany, how quickly can they ecb exit from this extraordinarily loose policy? michael: inflation is back at target so i think we will see an ecb that is intent on

normalizing. growth, tordless of a point. they will keep normalizing, but it will be slow. is, thise argument came through yesterday in singapore, they could go for one hike and then they are done because the global economy could run out of steam. when it comes to the italian story and that explosion in the i caught up with the global head of finch and he said you will have the bond traders exert much more influence over the italian spread and the italian market than the commission ever could. where do we go next on the italian spread?

do you think the spread over germany could go to 400? always, you are speaking to exactly the right people. the near-term risks are past. italy is not going to be junk anytime soon. it really is all about market sentiment. the italian growth forecast, you do look a little optimistic, i'm sure the commission forecast we will get today, we know what the projections are. it is hard to say now that even if you get steps toward an deficit procedure, italy has been there before. quite a lot of the bad news is already priced in until we start -- unless we start to see major

italian growth. anna: thanks so much for joining us, michael. we need to talk about what's going on with big german corporate's. manus: siemens beat on the fourth quarter in the industrial profit business. it put a positive spin on its full-year outlook despite its struggling power and gas operations. great to have you with me this morning. buyback. on the share that is a joy to any shareholder right there. you talk about profit margins. that's start their. you're putting a positive spin on 2019. we have spoken to ceos who are cautious and pessimistic. you are optimistic. why is your class half-full?

>> you have to take opportunities. the of course we know about geopolitics and how uncertain that will make the world and of course we know about the economy which is at full speed i now. it might be slowing down a little bit. we also talked to our customers. and makes us feel quite comfortable and we can continue with quite a success story on industrial information. we are goinge seen to a positive turning point as we have been able to compensate for the massive slump and slow down of the business, which is hard to find. let's dig a little deeper into the power and gas business.

have we seen the worst in that business? is this the low point in that business? joe: the restructuring charge of 300 million is a positive because that will show the market and us that we have been able to achieve agreement with representatives in how we do restructuring. if we take away the 300 million service charge in the power generation business, it's about 5%, which is hard to find in the industry like that. obviously it's going to be a sincent struggle in 2019 there is quite a set of capacities. on the other hand, we have a very robust and very established service business which should help us in the new business

environment. fii,: you council going to to saudi arabia just a couple of weeks ago and you delayed a $20 billion parity. or will youlay, sign that deal, it's just a matter of logistics getting you there on the ground? which is it? look, the intent has been said enough, honestly, and has been quite the attention of the whole world. i made myself very clear on what i believe needs to be done and also how i look at the whole situation. there is nothing more to say on that one. we are a reliable partner to the kingdom. we have a lot of friends there.

3 million young people who should have a good future. there has to be justice and clarity and transparency. i've always been a big promoter about the fact that people should talk to each other, and not about each other. manus: we assume that you will sign the deal in due course. signing a deal always means there are two parties. as i said, we need to see how things develop and then we will take it from there. the door is open to look into the future but we need to be clear about the fact that there is a big issue and that clarity is needed. manus: when you get that clarity, of course that will

take your business forward. you have a memorandum of understanding with iraq. we understand that it was pressure from the american side to get america to sign up with ge. is this a clear demonstration of how america first has a big risk for ceos like you? mean, there's nothing worse than getting into subjects which you are not clearly used to, such as politics in that case. we focus on our customers and what we can offer. we have a very comprehensive offering. it's not just about making a sale on very good equipment, at this time.d rebuilding a country means contributing to society, such as education, training people and helping people to receive health care. we have made a very

comprehensive proposal of helping the country and its people. of course we have noticed there have been unusual forces obviously affecting the level playing field. on the other hand, we are an american company, too. there are almost 60,000 people working for us in the united states. we have been creating a lot of jobs. we are part of this country and the economy, so we would also actually think that creating a level playing field is always the best way for making the best team in getting the best service to the customers. manus: joe, thank you very much. your canned are -- your candor is very much appreciated. and iion euros, well done fund advisor has

a little bit in the portfolio. stay tuned, if a traveling to .ork, join the radio team we are on digital radio in the london area. this is bloomberg. ♪

anna: welcome matt, this is bloomberg "daybreak: europe." president trump is calling for a new spirit of bipartisanship in the united's dates. -- a senior member of

angela merkel's party, great to have you with us, peter. morning.od it remains to be seen, the easy answer is, it's a tough question, we will have to see the shift of the balance of power. donald trump seems to have gotten the endorsement of his policies on the senate side. it's more important to us on the airlines for international politics. we will see how this works out between the president and the house. manus: good morning, it is manus in dubai. do you think angela merkel's position makes her less focused for donald trump? positioneakened german

, on the status with america? >> is of all, i don't see angela merkel weekend now. she has announced that she will a again for the top position for her party and she will not run again to be chancellor of germany, but she has more time now to focus on international relations. i think that we will see more of angela merkel. she is needed in germany, but also in europe as a strong political leader. in will be strong international and transatlantic relations. i would not agree that she will be week across the atlantic, on the contrary. anna: what can you do to lessen the impact of iranian sanctions on german business, or does the midterm change that side of things? peter: again, we have seen quite some while that a broad

sanctions regime by the u.s. administration, we are concerned here, especially our businesses here over in germany and other parts of the european union, and we are trying to find a solution , a way to protect the business interests of our economy and companies over here on the european scale. you've heard about the special purpose vehicle that should protect some of the financial transaction. it's a difficult in, but we are in serious talks about these matters. of thein terms relationship for the whole of europe with america, are we in a stronger or weaker position post-midterms? wrigley. peter: is going to be tougher. the broad range of topics on the table needs to be sold, and they

will not go away automatically. we need to address them and is going to be a more intense dialogue and before. anna: peter, thank you very much for your time. this is bloomberg. ♪

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manus: good morning from dubai. i am manus cranny and this is "bloomberg markets: the european open." -- bloomberg daybreak: europe. anna: these are today's top stories. manus: the market rally rolls on. stocks catch a bid from europe to the u.s. and now asia following a largely telegraphed result in the midterms. sessions outcome of the u.s. attorney general resigns, injecting new uncertain to into robert mueller's russia probe. unicredit's third quarter misses on turkey and iran provisions. signals on the call to expect more pain from turkey and

trading. anna: this is bloomberg daybreak: europe carried 7:00 in london and looks -- let's look at the european future. a positive updraft from the united states yesterday and we expect a higher spin on the back of the certainty we have with a divided congress and the united states. we continue to rally in the wake of the midterms. markets liked what they saw in the tax cuts under the trump administration but 18th seems they like a divided congress, as well. perhaps a lack of political meddling. story,porate earnings astrazeneca, third quarter core eps, $.71 against $.65 per share.

well ahead of expectations, on track to deliver their full-year 2018 five. story of, this is a moving away from patents and watching developments for new drugs for cancer, drugs, diabetes, how are the new businesses doing? they are maintaining their full-year view, which is a positive. has been paring back their portfolio, selling the rights to aging block esters and focus -- blockbusters and focusing on a new raft of product and focusing on the chinese market. china is the source of about 20% of their overall revenue. we will see what these numbers deliver on china. the ceo of astrazeneca will be speaking to bloomberg following the company's third-quarter results after 8:00 a.m. u.k. time. manus: let's check in on the bonds markets. a lovely headline on the

bloomberg. a sloppy auction last night. they didn't really show up because you saw an interesting flattening of the curve yesterday. u.s. treasuries at the bottom of the screen, down by 12. fives, 30's, below the 200 day moving average. buyers did not show up. dealers were left with the most amount of bonds 38 -- 2015. does that mean there is a slight indigestion in the united states? the democrats get together over infrastructure, what would that really mean for accelerators in terms of the u.s.? do you want to be long bonds in that situation? italy off by 17 pips this morning. pips. bunds, down 24 next year's big dilemma, qe.

the asianes puts equity session in context for us. good morning. david: good afternoon heredavid: . breaking news coming out from malaysia. the central bank left rates unchanged and to that point in new zealand, keeping there's unchanged. those are the two central-bank stories. there is a data story. in october, data trade data was up when you look at import and export growth. this narrative ahead of those tariffs kicking in in january, keeping numbers decent. how long will it last? 31% down on the chinese markets into the close. the rest of asia, looking decent and good. about 60%, 65% of blue chips on the way up. we are on track for a seventh day of gains. we are in the thick of earnings

season in the japanese markets. gaveave pioneer, which fairly disappointing sales guidance. they are also reiterating this ongoing concern. toshiba is up the most in over a year because they are out with earnings. they reinstated their dividend, talked about a buyback. some decent numbers there. the story is about on one hand, everything else, and the casino stocks under pressure. names down 5% for these and the outlook for the industry moving forward. back to you. manus: breaking news coming from afml. you had optimism. have a look at this. asml, expecting that sales to grow to 30 billion euros by 2020. originally, that was around 11 billion euros. that was the previous guidance. quite an uplift for them.

they expect to continue returning significant amounts of cash is the other line coming through. returningntinue significant amounts of cash, providing a financial update. two blockbuster headlines coming out of asml. that is not glass half-empty kind of synopsis of the outlook for one of the big chipmakers in europe. let's get your first word news with desley humphrey in dubai. david: -- desley: president trump is calling for a spirit of bipartisan politics. he also warned of a "warlike " if opponents use their position to launch investigations into his administration. the president reversed his antagonism toward new majority leader nancy pelosi, saying she should be speaker again. can all work we together next year to continue delivering for the american

including on economic growth, infrastructure, trade, lowering the cost of prescription drugs. these are some of the things democrats do want to work on. export growthe has topped estimates in october as companies rush to make shipments before higher tariffs kicking. exports rose 15.6% in dollar terms from a year earlier, well ahead of forecasts for growth of 11.7%. imports also surged more than expected, rising by 21% over the year. shipments from the u.s. declined for a second month. to 737 maxrning operators around the globe has revived the first clues around how bad data from airflow center might have contributed to the deadly crash of an indonesian airliner last week. the bulletin from boiling -- boeing suggested the pilots on the jets were battling the plane

as its computers commanded a steep dive during its final moments of flight. 189 people were killed in the crash last month. promoting fewer employees to partner this year as new ceo david solomon concentrates on the bank -- or moneymakers -- banks core moneymakers. six staff are being elevated. come fromtwo thirds banking with asset management bearing the decline in the new club. 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. anna: thank you, desley humphrey joining us with the latest headline. the u.k. grocery reported first-half numbers, adjusted pretax beat estimates. the market says it is engaging constructively with antitrust regulators on approval for the

asset merger. we are joined for his first interview of the day. thank you for coming to talk to us. i want to talk about your conversations with the cna on the approval. hqt is the thinking at the about the number of stores he will have to unload to get this deal done? that: we are in part of investigation with the cna looking at the details of the proposed transaction. they have issued a timetable, noting additional findings in january. we wouldn't want to second-guess what they will conclude, but we are working constructively with them on a great deal for u.k. consumers. >> kevin, is there a critical juncture at which you would say if the cna forces x percent of these stores to close, is there any guidance you can get in terms of a breaking point for you?

a redline for sainbury's? kevin: unfortunately, we can't give guidance on that but in any deal, there will be lines. we spent a lot of times working on this. we wouldn't have proposed the deal if we didn't feel it would be a deal that could be executed. we await the cma's conclusion, and the reason we are positive about the deal is it is good for u.k. consumers because we can reduce price for u.k. consumers. in the economy, you create a strong business that contributes a lot to the tax point of view and good for employees. anna: let's talk about brexit. red lines takes us nicely to a brexit conversation. what are you doing to prepare for a no deal brexit very -- brexit? paint a picture of what it would look 5 -- look like for sainbury 's. kevin: we are watching it closely and have teams working

on various scenarios. many businesses in europe will be doing that right now. it is very important that there is a sensible deal from a food point of view, from the food industry because 30% of products that we sell, that would be different than many retailers. food products come from continental europe so a sensible means of getting product across the border will be very good for our u.k. customers, but also for good european suppliers. watching it closely, and clearly, get a sense that things are moving forward at the moment and we hope that is true. anna: ok, so you hope. how inflationary would it be if we saw no deal? i ask because tim martin, the chairman of weatherspoon yesterday said that the public had been given a dishonest and surreal campaign to persuade them food prices will rise without a deal. he said just the opposite of the truth. from a sainbury's perspective,

would a no deal be inflationary for the u.k.? kevin: it would certainly have an impact, that is true. a differentve tariff arrangement, and that would have an impact. to say it would have no impact would be correct. -- would not be correct. difficult to quantify, and it would depend on the mix of imports, but we think it would have an impact and we feel a deal would be the most -- the best outcome for our customers. manus: let's talk about the business in hand. looking at the data. your grocery sales through october 7, in those 12 weeks, you were perhaps the slowest growth amongst the big four of the brochures. how tough -- brochure -- grocers. give us a complexion of what is going on there. kevin: it is very competitive in

the market at the moment. the discount is adding space to a busy market and we are pleased with the performance of our food business in the first half. we had served more customers than ever before. own brand inr range and value. we inflated the leaf can market. pleased with our food performance, but no doubt it is a competitive market. manus: can you tell me what you make of this? chatting with analysts yesterday, their perception is you are moving some of the brand in store to sainbury's and they see that as a strange step and are surprised you are not going more digital. you are moving physical into physical and perhaps not seeing the sufficient acceleration online. your response to that

supposition? kevin: we are a huge move in online from 20%. 60% of argos sales are from online. , we 40% of argos sales didn't know they were coming. they either ordered it and are picking it up a mobile or are having it delivered. moving the stores inside sainbury's is great for customers because we have 26 million people come to buy the food in sainbury's every week and offering them a broad range of general merchandise product which argos has at the same time is beneficial. we are getting very strong like for like sin the stores. -- like for like in the stores. it is working very well for customers. anna: that is the strategy with regard to those two businesses, but the relationship looking further ahead with the consumer,

you are mindful of what is going on with brexit. if i can return to that for a moment, what would you like to hear from the government? you want a deal. with regard to brexit, do you need to hear more about the no deal preparations the government is making? are all working on no deal preparations and we will work -- clearly the government is working no deal preparations, is the focus and sense focus of government is getting a deal and the amount of food that comes from continental europe into the u.k., it is important for not only consumers but our suppliers, that we have a sensible supply chain, because most of this product is fresh and can sit at the borders for many days. i close offly, can with one last brexit question? by the time we speak you again, we will be in the midst of it. have you materially changed the supply chain two on land in u.k.

versus overseas? what can you tell us? kevin: we have always endeavored to buy everything we can from u.k. suppliers. we are already buying whatever we can. clearly because of seasons and temperature and climate, you can't buy in the u.k. whatever we can buy, we have been buying in the u.k. and that gets a lot of focus, but there are some fairly obvious products we can't do that. at the supply chain of those products coming into the country, particularly from continental europe and making contingency plans. the pragmatist in me would say a deal will be done because it is good for our european suppliers and that.k. consumers, is what we are looking for, i guess. anna: kevin, thank you very much. kevin o'byrne there. , the cfo ato'byrne sainbury's joining us on the

subject of results and the brexit story. coming up, interviews with the ceo of astrazeneca, following the company's third-quarter results. that is coming up after 8:00 a.m. u.k. time. later, commerzbank cfo, stefan ingles joins us live from france for at 10:30 a.m. u.k. time. tous: if you are traveling work, you still get more bloomberg on the radio, live on your mobile device or on dab digital radio in the london area. this is bloomberg. ♪

>> not for the future of europe. italy will be part of europe. the future of our economy is the problem because solving he --

salvini is the driver. anna: the thoughts of the former italian prime minister renzi. let's look at what is going on with italy's bonds market and the rest of bond markets. you can see the italian 10 year yield, 3.36 is where we trade. 0.46%-year german bund, and the u.s. 10 year, 3.23. bloomberg business flash with deadly humphrey in dubai. --kevin o'byrne --desley humphrey in dubai. desley: socgen has ended contraction at its trading business. it joined european firms that are closing the gap with wall street peers. jumpedtrading revenue 90% last quarter, beating estimates and outperforming all that one of the top global investment banks that have

reported. socgen had pretty solid results. 9%,easing revenues of better than estimates, supported by activity in france. trends we see in emerging markets, a rebound in market activities. is loweringredit expectations for growth amid a string of additional cost, including an 850 million right down on turkish banks. provisions included charges to eventually settle allegations it violated u.s. economic sanctions against iran. the italian lender lowered its forecast for banking revenue. a newhas appointed chairman of the board of directors after a run-in with securities regulators cost elon

musk the position he had held since leading has let's first funding round 14 years ago. he will preside over the board immediately and will leave the role as cfo and head of strategy at hallstrom -- telstrom. >> thank you very much. desley humphrey with the latest rundown. markets are pointing to a higher open following the rally that rolled around the globe as investors come to grips with a divided washington after the midterms. chinese equities were the sole red patch despite the uptick in exports for october. joining us, the cio for fixed income at russell investments. the equity boys and girls had a roaring rally in the past 24 hours. tawas a bit of a cadre --

dry bond auction. what does the flattening tell you about the midterms? time, we havegest expected the u.s. yield curve will flatten. that is genuinely anticipated there is recessionary risk in 2020. ,he midterms have been positive the uncertainty has gone away. it is relatively progrowth out there, but the key issue is inflation. measures of inflation are rising, wage inflation is going higher than 3% and coming out of the midterms, we think the fed will continue its course in hiking rates and that will lead to a bare flattening, the shorter end of the curve rising and we can see the yield curve will flatten ahead. anna: that is interesting. on the subject of flattening, i have another chart. this is two's, tens. this is the one-month view and

the volatility in the market around that issue yesterday and reactions to the midterms. we are asking to what extent the fed will be kept on or off course by what is happening with funding the markets. we are seeing it in a number of areas with rates on the rise. that combined with a divided congress, do we not see the fed more likely to cause? >> -- pause. ? >> more focus will be on what the fed actually says. we think it will be relatively neutral and will point to rising rates. i do think there is some risk relating to the comments being dovish. you have the impact from president trump making challenges to the fed, challenges on the economy, recent market volatility. more may be some comments dovish, but we expect neutral. that will lead to higher funding

cost. have had unicredit, socgen, some of the big beasts of banking delivering their reports and it didn't look pretty for unicredit. when you look at the ecb 2019, what can be delivered by them in terms of tightening as you go to qt globally? gerard: the banking sector in and inhas done better the context of political risk. how resilient can that be in the context of may be some rising recessionary risk coming from the u.s.? what you said, what the ecb can do to support where interest rates can be and overall growth. it will be relatively pro-positive growth and that would be positive for default risk within the market. anna: gerard fitzpatrick, cio of fixed income at russell

investments. timeus 7:00 p.m. london for scarlet fu with a host of guests. manus: it is all about the fed. ♪

anna: good morning. welcome to bloomberg markets, the european open. i am anna edwards live from london. ♪ anna: the rally rolls on. asian stocks follow a strong u.s. session as investors approve a divided washington. european futures point higher. the u.s. attorney general resigns at the request of president trump. what next for robert mueller's investigation? unicredit cut its