♪ francine: the fed unmoved. unchanged but staying on course for december hike despite a critical president. oil enters a bear market. wti crude in its longest losing streak on record. and relationship building. goldman's lloyd blankfein is said to have personally forged ties with malaysia's sovereign wealth fund. ♪ francine: good morning, if you are in europe and good afternoon if you're in asia. welcome to "bloomberg surveillance," i am francine

lacqua here in london. a concern of what has happen in china, some slowdowns and a disappointing day we had from china. the question is what policymakers can do to counter the slowdown and whether there will be any unintended consequences from some of the parties in place yet u.s. 10 year yields, because of what we heard from the fed yesterday, 3.2%. crude oil starting in a bear market, karen at $60.25 a barrel -- crude oil starting in a bear market, currently at the dollars -- $60.24 a barrel coming.h up on "bloomberg surveillance. , we hear from the chief executive of days about the company's streaming services. he also talks to us about the theme parks and the content for

their channels. we get first to the first word news in new york city with taylor riggs. >> goldman sachs averaged a bond deal of no at the heart of the global corruption scandal. forged, lloyd blankfein ties with malaysia and its new seven will find the . this is all according to people with knowledge of the matter. both solomon and his presidents just predecessor have said the scandal was the work of a few rogue employees. --dman says it's believes goldman says it believes the -- eeds from that sale oil is set for its longest stretch of decline in record after entering a bear market, with investors awaiting weekend meeting of opec and its allies prices have dropped 20% in just five weeks t.

producer nations will weigh possible out what cuts when they meet in al abu dhabi next week. according to briefings given to industries, ireland currently relies on a u.k.-based firm crest to settle trade. but the company that owns crest, says it probably will not be able to continue providing service. meanwhile, the ceo of bank of america's is brexit is not good for europe. heaking on bloomberg, estimated how much i have spent change.g for the >> 300 or $400 million to this thing and we don't know exactly what the rules of the. so. moving all the people around, disrupting real people's lives, it is not good for europe in the

near-term. >> the u.s. is proposing barring immigrants who illegally cross the border from mexico from being granted asylum. . in a statement, the acting attorney general and him and security secretary's day the current system is overwhelmed to blamedthe president has the u.s.'s asylum rules from a barring migrants -- fark drawing best for drawing migrants from latin american countries. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm taylor riggs. this is bloomberg. francine: think so much, taylor. the fed has left rates unchanged, despite recent movement in financial markets .nd a critical president the fomc stated that it's

outlook remains one of gradual rate hikes. but there was a sort of -- a whole host of issues not discussed by the central bank. the strengthening dollar and the crisis.emerging market so what is next for the central bank and for u.s. assets? guest,joined by my next chief economist at ubs .nvestment bank let me start off with you. when you look at the fed, where do you start? >> i think the statement was nuanced. they changed a little bit in terms of u.s. investment in terms of seeing inflation at a reasonable clip, it is a green light for december and we also think it is a green light for three rate hikes in 2019. >> what about you, aaron? >> pretty much the same. it tells you that they will go in december. had they had any kind of doubt, they would have referenced the market and what is happening in emerging markets. francine: how much do you worry

about overheating of the u.s. economy. we spoke to our guest was said that that is probably their biggest concern. >> it is their concern, that unemployment levels, and tariff impact. he will get some natural slowing as the tariff ampex take hold. our inflation forecast is still very benign. we are a bit above target on core pce but we will settle target next year. as long as inflation is not taking off, i am ok with overheating. francine: the worry about a overheating? mike: some of the numbers are good in terms of growth, inflation is also good to riyadh i think in the financial sector there are areas overheating, leveraged loans, for example. we think the u.s. equity market valuation still remains stretched. sadly financial -- the financial cycle is still secure.

francine: why does that mean for values, do ratings look cheap at the moment or undervalued? >> looking at a globally, i think the issue is that the u.s. is still the cleanest shirt in the drawer. technically right now, the market obviously does not feel very good. yesterday for instance come think it was another day when all 15 asset classes went down to riyadh does not happen very often. the market feels a bit a broken. 2% we are still looking at to 4% growth next year. there is nothing overly wrong with the global economy right now. i think we're just having a technical shakeout and we will bounce back. francine: do you agree? george: i think the u.s. equity market has got to factor in 3.6 510 year yields, by the end of

2019. we are not going to get the repeat of the bonanza in earnings that we saw this year. earnings will be 10% best, prob. in that kind of environment, equities will be heavy. onare looking for 2650 the s&p 500 by year end. francine: thank you both. coming up on "surveillance," no hardmay repeats border periodically break down the facts behind the brexit deal. plus, disney's new kingdom is all about streaming. can they justify their purchase price for fox? this is bloomberg. ♪

♪ francine: economics, finance, politics, this is "bloomberg surveillance." i had of the global corruption scandal, then chief executive of goldman sachs, lloyd blankfein helped personally forge ties with 1mdb. that is according to people familiar. ,e spoke to the chief executive who addressed of the scandal in day to be with us on wednesday. >> it is obviously very distressing to see 2 former wentan sachs employees who blatantly around our policies and blatantly broke the law. the matter extremely seriously and we continue to work with authorities as they investigate ir.

the people involved, because there are 3, 2 of those come other one who pleaded guilty, and the other who is said to have known about the scheme, were partners in the investment bank that you run for 12 years. these were your guys. how does that make you feel? ongoing.vestigation is i feel horrible about the fact that people who worked at doesn'tsachs, and it matter whether he was a partner or an entry-level employee, would go around our policies and break the law. i feel horrible about that. unacceptable. there is not a lot more can say -- other than we continue to cooperate with authorities. >> there are a couple other things you can say. i will try. there is an investigation

underway. your clients, your shareholders and your employees want to be certain that neither you, lloyd blankfein, or any other members of your senior management team had any reason to suspect any unique gallery or any breaches of goldman's -- suspect any easy illegality. that?u answer >> we take compliance and control very seriously. we have been around for 150 years and how we control the firm, the velocity and volume of transactions that move through the firm, it is of huge importance to us. francine: that was of goldman chief executive, david solomon, speaking to our bloomberg's erik schatzker. due to a the work was few rogue employees. a spokesman for goldman sachs declined to comment on blankfein's behalf. we are joined by bloomberg's

malaysia bureau chief. what does this mean for goldman sachs? >> for one, it shows how high up issues go up to into goldman. we know that people present at the meeting with people already linked to 1mdb. we know that the prime minister was there, and we also know that someone who is seen as the mastermind behind the scandal was there. we also know that tim eisner was there, he has pleaded guilty to conspiring to launder money from 1mdb. so these are the names, but in addition to blankfein, i think it really shows how high up the behind the and also scenes, goldman has really shown that a lot of these deals were eisner,,to just

but his presence at the meeting, blankfein's, shows that it went further into the company. next in theat is 1mdb investigation? are there other investigations around the world? i know the justice department is looking into it. what are we expecting to hear? guilty pleaink the and the subsequent charges revealed in the doj really show that it opened a can of warms. we are closely -- opened a can of worms. so far, there is still no sign of them reaching one of the people charged with money laundering. malaysia has also been seeking interpol to find him but so far, sign. later this month we are also going to have the auction for the super yacht that malaysia

got as part of the long list of assets the u.s. seized as part of the 1mdb investigation. the deputy minister is also fighting extradition to the u.s.. he has agreed to surrender some singapore.y to the progress of that and whether he will be extradited will be interesting to watch. going into next year, we will also have the former prime minister's trial. maybe we will hear more about what did happen in 1mdb doing the hearings. francine: thank you so much could for the app eight, we will best for the update. -- thank you so much for the update. italy's prime minister, luigi demaio is .peaking let me remind you about the standoff between milan --

actually, between iran and brussels. italy pushed back against the eu saying that its budget plans are not going to change. the finance chief accused brussels of faulty deficit forecast. we'll have plenty more on that and look at yields, and also look at what happened to those bund spreads. details next. this is bloomberg. ♪

♪

francine: we have live pictures coming out of room, italy's finance minister speaking to lawmakers of the lower house on the current state of the 2019 budget. also the deputy premier speaking at the foreign press club. the finance minister saying that italian economic growth is slowing in aligned with the rest of the eu. we will bring you any updates as they speak. of course, the premier says changes to the budget will take effect in 2019. . the deputy premier is ahead of the five-star movement. lu have the coalition between ig anda the five-star movement, which is why you have the budget issues. a funny trio that we need to look at.

alibaba's annual shopping event takes place this sunday. the single day extravaganza is twice the value of black friday and cyber monday combined. this year marks the 10th anniversary. here are is a look at the big numbers? >> 2 billion. that is how many transactions alibaba could process the single day. the company strategy for reaching the milestone, expanding further are broad and deeper into it -- further are broad and deeper into china, promoting the event in six southeastern asian countries. services in focus as market tries to wrestle shares from other companies. 150,000 merchants from the platform will get discounts on services. at its peak last year, alibaba processed an incredible 225,000 second.ays orders per

they see the event growing as much as 30% this year. however, there is one big unknown. to what extent will the trade war putter dampener on demand? francine: to keep the conversation on china, are my next guests. rend,, we start off with you. ,ou worry about china unintended consequences of the tariffs or not having enough tools to deal with a slowdown? mike: i think the slowdown is real? arend: the impact of all the tariffs that have been imposed 80 basis points. i think you are left with an impact of about 50 basis points in a slowdown in china, about half a million to a 1.2 million jobs translated. what is coming is real. you have a lot of offsetting forces so far, we are still

looking at 6.5% growth in china so far. consumption has been a little weak. i think there are some headwinds coming here2? mike: i think we will see slowing next year as well, to about six point 3%. consumption is significantly more important than 10 years ago in china. also, we will see policy responses, and as a backstop, the chinese authorities will be willing to retake some of the theyn back in 2005 when build out the financial system. we think that is coming in the years.uple of francine: when you talk about headwinds, how bad are they? could they actually bring a financial meltdown to china? >> we have already seen them increase dramatically. the funding available to local governments for public infrastructure, that has slowed down. -- thes been the big week part of investment in china.

this is also a story of the trade war. how do you measure the escalation of a trade war, through the renminbi or through swiss? >> probably more the dollar, actually. the problem with the renminbi is that they don't want it to go crashing. not just because it would irritate trump, but also because it could cause some epic outflows from china. i think the better indication is the aussie dollar. letting athey are not crash, but they are not doing much to stop the slowdown. >> to have some things that they are doing to stop the flow -- stop the crashes. but they are not fully in control. the size of the moves we saw the moves we saw this year was much bigger than many expected. is if there is escalation, where does it go? next year,t is

tariffs across the board, we're .ooking at .75 renminbi we will see where that market takes it and then we'll find out what the capital controls, whether they are as effective as people believe. francine: ok, both of you will stay with us. be the next will attorney general in the u.s. now that jeff sessions is out? sources say former new jersey governor chris christie is on the short list. bloomberg sources say former new jersey governor chris christie is on the short list. we discuss what the impact could be on the dollar. this is bloomberg. ♪ . . . [ phone rings ] what?!

ready for christmas? no, it's way too early to be annoyed by christmas. you just need some holiday spirit! that's it! this feud just went mobile. with xfinity xfi you get the best wifi experience at home. and with xfinity mobile, you get the best wireless coverage for your phone. ...you're about to find out! you don't even know where i live... hello! see the grinch in theaters by saying "get grinch tickets" into your xfinity x1 voice remote. a guy just dropped this off. he-he-he-he. francine: economics, finance, and politics, this is "bloomberg surveillance." i have francine lacqua here in london. world leaders are coming together to celebrate, 100 years

since the cease-fire of world war i. today, the prime minister, theresa may, and president emmanuel macron meet to discuss as a cabinet meeting. this will president trump is en route to europe. he is going to meet with macron. will alsordogan attend the parade. breaking news u.k. corner, september, the investment was 0.1% from philadelphia losing 0.6% in the now boasting .6% in the third quarter for the u.k. economy. it is something we will have to

keep an eye on. thet of the pound movement economic forecast and also indication on whether there is a revolution with, of course, what is going on with the irish at the irish border or not. new jersey governor chris christie among those being considered to replace jeff sessions as attorney general. bloomberg has learned christie is on the shortlist that includes units jones among others. considered a divisive figure who can have problems when a confirmation. , let'se on all of this go to our senior writer, stephanie. what is the timeframe of this? yesterday, you were saying the current acting attorney general current state for 10 days. could the president policy choice the confirmed before the? -- could the president's choice

the confirmed before that? stephanie: i think you demonstrated for one, his role in a florida company that a federal trade commission accused ofst year, scamming investors and consumers, that is one problem he is facing. another is legal experts have pointed out because he only ofved as sessions' chief staff, which is not a rule that requires senate confirmation, he has never been confirmed by the senate. it is actually illegal for them to even serve as acting attorney general. but for by the local people, the husband of kellyanne conway, trump's advisor, his name is george and i think that has given field to fire for people how longss to question and whether or not he can serve as acting attorney general. i think he wants to push a

replacement through, but i think most of those candidates would face an uphill battle, labor secretary alex acosta i think is favored by senate republicans, because he has already been confirmed. as you pointed out, chris contender, another but again, he would face an uphill battle, and there whetherstion mark over he could oversee the mueller investigation because of his role in the truck campaign. it really depends -- trump campaign. it really depends on how long is in place. i saw a report that alex acosta, labor secretary, did not want the job until mueller had issued his final report, and i think facess the problem trump trying to fill the role is no attorney to take over

general and have a poisoned chalice of overseeing the mueller investigation. i think it will be a sort of protective battle in the senate befigure out who might able, and who might not have a conflict of interest. francine: stephanie baker from our senior writer who has been following the trump administration very closely. let's get straight to first word news with taylor riggs. taylor: years before goldman deal atranged a bought the heart of a corruption scandal, lloyd blankfein with thea 2009 meeting former malaysian prime minister, according to people with knowledge of the metal, both solomon -- matter. both solomon and others say it was on the shoulders of a few rogue employees.

longest setor its of declines on record. futures in new york are bracing for a intense day, declines over 20% in just five weeks. exacerbatedhas been by the decision to allow eight countries to continue importing from iraq. ony meet in abu dhabi sunday. transcanada's decade-long close to conduct more than 1100 transport conduit to oil sands across the u.s. against were prepared the u.s. in march of 2017,

shortly after president trump gave his approval for the project. u.s. is proposing boring immigrants illegally cross the border from mexico from being granted asylum. president has blamed u.s. asylum workers for luring thousands a year from south american countries. the president plans to issue a proclamation later today. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am taylor riggs. francine? francine: taylor, thank you so much. now we focus on brexit. the u.k. minister is on standby or a special cabinet meeting. to meet with his eu counterpart to publish the full withdrawal agreement on tuesday. but the irish border remains a

point of contention with the eu pushing for the border in the case of a no deal. expectations of a no deal are ramping up, with bank of america spending $400 million preparing for a hard brexit. how likely is a no deal scenario, and what would it mean for the markets? mike gallagher is continuing economics and arend kapteyn -- mike gallagher of continue on continuum economics and arend kapteyn of ubs investment bank are with us. what is your pound coal based on, arend? arend: it is entirely based on brexit. we are counting on one deal, which will give you some relief. areink the gdp numbers interesting, because what we have been seeing from the investigation, which is now

lasted about two years are running at 1% of gdp per year, so they are big. there was the year, not much uncertainty, we saw gdp bounce back a little bit. see a heating up, we see some slowdown in growth. i think that is interesting. to be honest, we do not know what is going to happen. it does not like the votes are there. we will see. the way we deal with it on the baseline is we shoo-in away. we assume things by march will resolve themselves. mike, there is a constitutional process, right? pound?es through the mike: we attest to the u.k. leaving on march 29, 2019 with no deal. it is actually more likely that the alternative scenario is the brexit is delayed three or six months on an agreement with the eu under article 50. the main scenario is that we

actually sort of get a deal, and that deal does lead to a temporary balance in the pound. the problem for the uk's economy as we are so dependent on the consumer, yo the u.k. consumer is fatigued, pretty much a late cycle economy at this point in time. you will not get the trade deal done until the end of 2020, maybe even 2021, so the uncertainty will lift, but it will not completely clear, so you will not see a bounce back on you caps on on a withdrawal deal. deal,do see a not that is really bad for the pound and u.k., and it would really provide a dampener to investor'' appetite. francine: thank you both, mike gallagher from continuum economics and arend kapteyn of ubs investment stay with us. coming up, opec discussing outlet strategy.

-- output strategy. we will be sticking with the uae minister. do not miss those interviews coming up. this is bloomberg. ♪ coming up. this is bloomberg. ♪

francine: this is "bloomberg surveillance." i am francine lacqua here in london. oil after wti entered the bear market. talksion will be part of in abu dhabi on sunday. joining us from martha stewart -- joining us for

, alonge stuart welch with mike gallagher and aaron kapitan, who are still with us. st: maybe another one is coming very soon i was? soon.y who knows? needed a u-turn on the trump administration on iran. they had a very hard line. how do you manage a market where you have got plus or minus one million barrels announced given what they are asking? the trump are spots with waivers, that of course will unbalance the market. how is demand holding up? you can see it is very clearly in the equity market in e.m. of thinking about

if you are in a bear market for oil, you have come down very fast. mitigating in emerging markets, so maybe that will help out. going into monday issue is -- out of a manage the market over the next six months, contending only with the u.s. administration on the stuff going on in india, nigeria, and so on -- liberia, nigeria, and so on? francine: basically wti kind of .trading at a range what are futures telling us about what it could be? has been and a change in the market. a couple of months ago, it was not uncommon to talk about $100 or barrel. bet. not a firm over the last couple of ways, that has really dissipated, and you do not hear that.

people are bearish, but on the other hand, we're not talking about hundred dollars a barrel. francine: mike, everyone has a bloomberg terminal, trying to figure whether this is bearish or bullish on some of the equities. what is the ideal oil price? mike: somewhere around $70. it has to be said that the opec meeting is sort of important, whether we get an official cut or maybe the alternative option or compliance of production cuts, which they have used in the past to stabilize the market. they will probably be some soothing words. it has to be said, though, there has been a big washout of the in the oil position market, and perhaps a scale of the move is over exaggerated. look at the, if you global growth picture, it is slowing next year. e.m. growth will remain still reasonably robust, and that is

going to be important for both transport and petrochemical demand in e.m. francine: we do the prices start hurting equity markets? is there a higher price for equity markets and bonds? mike it is: not that obvious to me. i think it is oil prices are perceived as a single about global growth, and that is sending is a signal about something else is going on, that is when it starts to eat away at confidence and equity markets. i agree with mike. at these levels, it is still relatively neutral. it is probably slight net positive. one of the big changes over the last two years since distribution, obviously lower oil prices is that for whichers, but the u.s., has become a major producer and really suffered in 2014, 2015, 26 and from lower oil prices has suffering, so at these oil

prices that you are doing much less damage than you were doing two or three years ago. francine: thank you so much, mike gallagher from continuum economics and aaron kapitan of ubs investment bank. we need a five-our show -- eric kapteyn from arend ubs investment bank. i am telling you, we need a five-hour show. up next, we discussed disney. is it a challenge? this is bloomberg. ♪ this is bloomberg. ♪

francine: economics, finance, and politics, this is "bloomberg surveillance." i am francine lacqua here in london. the steelmaker down 11%. pressure withttle a civil complaint filed by the department of justice. we will keep an eye on the progress throughout the show. fourth quarter profits beating highest estimates.

igery chief executive bob outlined his vision in an interview with bloomberg's david westin. bob: the studio and the theme hit record year's end record quarters, so clearly they were a part of the success they had an quarter. that is strictly year as well, but we also have good results at our media, particularly in broadcasting, so it ended up being a great quarter of the company, pretty much across the board. david: where are you on 21st century fox? give us a timeline, when you are expected to close. still going through the regulatory process third way announced a couple days ago that we gained approval in the eu. that is a big deal for us. markets, some countries, that we are waiting for approval on. we are in the middle of that process. back in june, we said it could and nowmonths to close,

we are increasingly more optimistic it will occur before that. we're not saying specifically when. as we wait for regulatory approval, we have started to really focus on immigration -- integration. we have made some announcements in that report, particularly the television group have the studio. when we talk about integration, we're talking about the plan, not implementation. even though we have made announcements about people and structure, obviously nothing to do to -- nothing can be put into place. until the deal is closed. we have gotten a lot done. go ahead. sorry. david: you are a planter. i know -- i worked for you. how do you justify the price? how much of that is cost-saving? well, these are great assets that we are buying. they are assets that are doing not only will today but easily

into incredibly well in the combined entities, particularly as we move more and more and direct-to-consumer businesses, where intellectual property will become critical and brand will become critical, as well as the talents that will be required to make the kind of product that we will need, all very important. so is substantial justification for the price when it comes to strategy, revenue growth, and when it comes to bottom-line growth. and there are opportunities for cost savings. as you said, when we made the deal, because of the overlap in our businesses, this will largely be german by the combined entity having the --lity to operate even more largely been driven by the combined entity having the ability to operate even more. having the scale of these brands in the people is vital to the success of this company and its ability to grow long-term. francine: that was disney chief executive bob iger speaking with

bloomberg's david westin. matt joins me here in london. littlee has given us a bit about where he sees the strategy going. the main focus is on the new contacts. matt: that is direct-to-consumer, that is the new buzzword you will hear a lot. those light sky will have to remain focused on content 33-pronged approach -- those lik e sky will have to remain focused on content, the three-pronged approach. and the new platform, disney plus, which they have been flagging for quite some time but lost untilget the tail end of 2019, in the u.s. quite a different approach to netflix, where you see a single

randall a single platform trying to appeal to multiple audiences. a singlele brand, platform trying to appeal to multiple audiences. francine: what about fox? matt:matt: it is going well. there are still a few more hurdles to jump. it will take well within the 12 months of the original timeframe, so that is going well. particularly for the hulu platforms. matthew, you were saying a lot of the european providers were also going to do the same. is the market big enough? now, clearly the big losers are the traditional broadcasters, putting pressure on ad revenues and also general viewership. that is when they get customers to pay for content as well. if you like the

international players, the local players, it will not become clear until about 2020 if the local broadcasters will be successful with the ad revenue pressure. francine: matthew, thank you, ham fromblox bloomberg intelligence. a little movement on oil. this is what we are looking at on oil, you can see down a touch. wti, $60.19. to the formerking energy secretary under president obama. this is bloomberg. ♪ obama. this is bloomberg. ♪

policymakers leave

rates unchanged but stay on course despite recent fissures in the markets. enters the bear market here wti crude has its longest decline on record after two weeks of decline. is said tolankfein have personally forged ties with the malaysian sovereign wealth fund. a little bit of news with the standoff between brussels. i am looking at cbp figures in the u.k., as we put into the brexit context. tom: i know taylor will touch on that with the news, but it is amazing, election to election. say at least 10 elections are under three days on and under review right now. more on: yes, let's get that with bloomberg first word news. here is taylor riggs. hi, taylor. taylor: it started with the federal reserve.

they are staying on track for another interest rate hike next month. gradual rate increases after wrapping up a two-day meeting. the job gains have been stronger and president trump has been openly critical of the fed for raising rates. is trump administration discussing restricting migrant claims for latin america. the new rule is almost certain to be challenged in court. over in the u.k., a lawmaker from a northern irish party says the party cannot support the current brexit deal. the reason according to a democratic unionist party is treat northerns ireland differently from the rest of the country. and in thousand, california last night, hundreds gathered to

honor those killed in the shooting. a former marine veteran, who may have had tedious the -- may have had ptsd, is the shooter. he then reportedly killed himself. authorities say they do not think he targeted anyone. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. i am taylor riggs. francine, tom? tom: taylor, thank you so much. equities, bonds, currencies, commodities. all at the fed into meeting but a very light market response. futures come in a little bit, dow futures down -80. strong dollar.g i will show that chart in a momentary crude oil front and center. francine, we do not have a 59 handle yet on west texas, certainly the weaker dollar off of the said meeting, francine. francine: definitely on oil.

what opec has had to do from no real fault of their own, just playing with one million in terms of taking off or not being taken off. stocks are down following a retreat in asia. there are concerns about the slowdown in china and how close they can get, though. the dollar is up, staying on track for the september rate hike. this is, without a doubt, my terminal of the day. look at wti falling from 21% from october. that means in the air market, tom, this will also have an indication of how much emerging markets will be on oil, tom. tom: francine, it is remarkable to remind ourselves of all of the $100 per barrel talking seemed only days ago. francine: yes, you are right. december, the

central bank says economic activity has been rising its own rates, and job data has been strong. gradual rate hikes. there was a whole host of issues that the central bank is not discussed, including the market makers the dollar, and the asian crisis. joining us now is george globalos, deutsche bank cohead of fx research. george, do you worry about this? it is an interesting question, because you look at the data, you see some modest growth. you see, which the fed mentioned as well. starting to slow down, starting to see some headwinds in the dollar from the lower external headwinds as well. there is an issue around inflation, how quickly will accelerate, but the baseline is we do have a smooth landing

rather than an overheating scenario. francine: george, brent crude falling to $70 a barrel for the april.ime since if you look at the price of oil, it had implications for demand for emerging markets and slope ofrm for the inflation, and that can be headed for central banks, tom. tom: absolutely. george, what is the dollar dynamics with oil? george: these correlations have been very unstable over the last couple of years. the dominant factor this year, perfects in a sense the storm for emerging-market weakness, is you have this mix of rising u.s. yields and rising oil prices, and particularly for the oil importing countries, such as turkey, that was a big problem. as oil is coming off, yields, if you look at the correlation

between breakeven and oil is fairly high, it is a fairly positive thing, but some of the stress stories we have seen over the course of the year, indonesia, turkey, it should be quite positive. fromthis is the logarithm bloomberg technology some a really cool chart with a huge up, strong dollar, and george, essentially trading range with the moving average essentially flat. what are the ramifications, george the the financial system is the dollar breaks up over the ?6th dean and 2017 peak george: this chart that you are showing is where my favorite charts, because you have so many things going on in the financial markets over the last couple of years. huge rise in yields over the rest of the world, core performance -- growth performance.

the dollar has underperformed versus where it should be given what the fed is doing. that speaks to the underlying weakness in the dollar. our view is we are not going to exceed these peaks, but if you do, and that you is wrong, the fed will have to react as a quite sharply in it is becoming a much bigger headwind for the u.s. economy inflation. francine: george, we look at the trade war and the escalation of the trade were between the u.s. and china, did you look at the u.s. dollar as the barometer, or do you look at the renminbi? george: at the moment, it is all about the renminbi. at the start of the year, it had a broad strategy in terms of trade for the u.s., no question of nafta, also in europe, but now the strategy has shifted to be very china-centric. so now it is all about the renminbi and specifically the trade-weighted renminbi.

the trade weighted renminbi has been still there a weak. francine: george, thank you so much. george saravelos of deutsche bank stays with us. coming up, we will talk about the midterms in the u.s. but also politics in the u.s. this is bloomberg. ♪ e u.s. this is bloomberg. ♪

taylor: this is "bloomberg surveillance." i am taylor riggs. the company lowered its profit guidance for legal provision for an investigation into still price fixing. it is the latest blow for the new ceo. they are trying to move forward with a restructuring plan. of u.s. it has accused ubs

defrauding investors. the lawsuit include accuses thes bank of fueling the 2008 financial crisis. two years ago, credit suisse and deutsche bank settled similar claims. disney ceo bob iger has laid out his vision for the company's big bet on streaming. on several,ing including a sports process. meanwhile, the company reported quarterly sales and profits that were better than expected. that is your bloomberg business flash. francine, tom? tom: taylor, thank you. joining us now are stephanie right now,-

stephanie baker with us of bloomberg. election,s the wednesday, thursday, very close races, and friday brings us to the chit, maybe the speculation that mr. mueller, postelection, will get back to it. if mr. mueller gets back to it today or any other given friday, who do you presume is the next area within his investigations? stephanie: yes, will, we are bracing for something. moeller does have a tendency to drop things, and documents come on fridays. mueller does have a tendency to drop things, indictments, on fridays. much of the speculation has been over roger stone, whether or not he has got more on roger stone and his communications with wikileaks.

there has been an intense scrutiny with the grand jury with roger stone and people connected to roger stone. most people are expecting something on that. of course now with the change in the justice department with matthew whitaker being put in as acting attorney general, it is unclear whether or not that would move forward, whitaker has the ability to stop mueller from issuing indictments, whether or not there is something already in place remains unclear. tom: the point of discussion must like the global audiences "he "new york times essay, which really question the constitutionality of all of the actions.'s stephanie, what i want you to address for our audience is the culture gap and almost the geographic gap between mr. whitaker in iowa and basically the stereotype, everybody else on the east coast. there is more going on here than just the news flow.

withinf this is cultural the legal business, isn't it? stephanie: yes, i mean, there is a real divide between the likes of matthew whitaker and the people that are apparently on the short list, trump's shortlist to permanently replace sessions as attorney general. they are all from the right, judges, who have been backed by the federalist society and take views on many issues, such as abortion, same-sex marriage, that are to the right of what is probably the right u.s. on thosens' views issues, and it is part of trump's culture war, that he is pushing these people need to take far right views to the right of the vast majority of u.s. citizens. francine: stephanie, in terms of the timeline, does the president

want to move quick and get the attorney general confirmed within the next couple of months? do we have any idea what he is thinking on that? stephanie: he will probably want to wait until january, until the new senate comes in to session. given who is on his short list, i think they all have their own issues. it could create problems for their confirmation, whoever he ends up picking. however, has many people have said, the current senate that was just recently elected is up.y trumpian in its make yes, he has picked up a couple of seats that makes it easier, a few moderate republicans might switch sides, but he has a bit of a in upper hand with certain senators who gets a oh, with anir elections, trump -- of

upper hand with certain senators who can say oh, with their elections, trump was campaigning on their behalf. tom: stephanie, thank you very much to talk about, particularly dolla market moves, dollar strength. george saravelos of deutsche and wolfango piccoli, looking for to getting an italian update and a brexit update from mr. piccoli as well. be extraordinary the sunday in paris, 100 anniversary of world war i. we speak with someone who has really, really thought about stewart patrick of the council on foreign relations. stay with us. this is bloomberg. ♪ us. this is bloomberg. ♪

francine: this is "bloomberg surveillance." tom and francine from london and new york. cities are celebrating armistice day. this marks the 100-year cease-fire of world war i. celebrations are said to be held. today, prime minister theresa may and resident emmanuel ron meet and discuss race ahead of the cabinet meeting. on sunday, -- president emmanuel macron meet to discuss brexit ahead of the cabinet meeting. saravelos,rge

deutsche bank cohead of fx piccoli, and wolfango are both with us. who is the leader of the free world, who is not, who is in trenching? where does trump stand after the midterms? does he feel emboldened? i don't think he will feel emboldened. thea little perspective, concern is after the midterms, whether the a unilateral approach will become a even more pronounced in the future because of the european point of view. iran inalready seen one, so europe, in many different ways, from the european perspective, from and all they others, with a look at risk, if putin were the number one risk

until recently, trump is very soon becoming the number one for the european point of view. similarly, from a european perspective, we have already seen this. two years since president trump got elected, what do we know about the foreign policy? he talks tough, but that he did not quite go to sanctions, because he had waivers for the countries. when it comes to nafta, they renegotiated a deal. wolfgango: it is a foreign policy that is not about allies, it is about deals. what matters is the military and economic mind of the united states. it is a very transactional kind of foreign policy. no nafto, then we go to nafta 2.0. wolfgango, it will be a lot of emotions, particularly for the french that we see on

sunday. john micklethwait talked to dr. kissinger in singapore. how nationstate is europe right now? we have a new populism and that old nostalgia for what occurred. which one is going to win out? wolfgango: um, i don't think one or the other are going to win. also the nextng -- will happen, at least at the even though they knew election, no commission, and everything that goes with that. there is a recognition that europe has to be able to stand alone more formally, -- more firmly, not only around the political commitment of various leaders, it is simply not there. continues through here, and that very much will depend on what happens in the key capital, germany, given merkel's

current predicament. in: ok, but if we want europe to provide stability, what does the united states need to project? i do not know if we are getting that with the present president, but what is the best practice of the united states if we want to push against fascism and populism of this flavor in europe? ah, i think the issue here is that if you look at some of the populist forces --europe, so any in italy, mikael savini in italy and others, what they are doing, especially in social media and doing exactlye what trump is doing, so maybe a bit left of the u.s., trump's u.s. could be the trick here is

if i want to be a bit provocative. francine: what does this all mean for currency? does currency move on the back of foreign policy, george? george: i think we see it certainly does. the difficulty the market has this year is to understand the interplay between the politics and the abenomics, because if you look at the economics, the theis giving -- and economics, because if you look at the economic some of the fed is giving a very certain expectation. the policy narrative is getting interrupted with politics that are difficult to understand and predict. italy be in one, trade wars being another. from a currency stays, the biggest implication is a greater uncertainty. it is not clear to me that leads to greater volatility, because when you have greater uncertainty, sometimes markets will step back, because they have lesser degree to what inpens, and currencies stuck

relatively light wages. it has an impact on the market. francine: thank you very george saravelos of deutsche bank and wolfango piccoli of teneo intelligence stay with us. coming up, we will ask about their markets, back to geopolitics and the iran sanctions. what we really want to find out is -- what is the transfer oil prices from here? what does it mean for demand from oi emerging markets, and what does that mean globally? this is bloomberg. ♪ y? this is bloomberg. ♪

tom: good morning, everyone. francine lacqua in london. tom keene in new york. thank you for being with us. here is taylor riggs. taylor: the trump administration

is coming up with new roles into choking up migration from latin america. people who illegally cross the border will be restricted from claiming asylum. president trump has blamed a silo rulers from -- for luring thousands of central american migrants every year. thousands of people have fled a wildfire that has destroyed structures. 27,000 people living in paradise had to evacuate. firefighter said the town has been wiped out. u.k. third-quarter economic expansion was the fastest in two years. gdp rose .6%. the economy flatlined in september and duck tober. october. that points to slower growth. china is a step closer to posting its first annual dropping car sales in two decades. auto sales fell in october for the fifth month in a row.

china'sncides with the new emission rules that forces carmakers to increase spending on electric vehicles. global news 24 hours a day and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm taylor riggs. this is "bloomberg." francine: thank you so much. clean energy and what the opportunities are. our next guest is a former u.s. secretary of energy under barack obama. he advanced strategic stability, working with the scientific community. kerry, he played a role in negotiating of the historic iran nuclear agreement. sanctions were reimposed under president trump this monday. welcome to surveillance, mr.

moniz. you can make us a little bit smarter. opec has done about three you turns of this year. have they been dealt a rough hand? certainly, the sanctions issues are important, especially in a time of tight reserve capacity to produce. i do not know the specifics of the waivers. in thee temporary and longer term, the oil markets will want to know whether sanctions will continue. exporting 1.5 million barrels a day and if that were would expect stability in the markets and barring another big geopolitical upset. tom: where do you see -- francine: where do you see the price going?

is it more difficult to predict now than it was? ernest: what you said is correct. it is always hard to know how the price moves. sanctions waivers are continued, there is no structural reason to expect major shifts. there are always surprises in this business, including if there is a significant additional reduction in exports, or if the issues between kuwait and saudi arabia are resolved, that could provide supply. with oil prices, we have to see. i do not see any major structural issue if the iran exports are sustained. sayght add, because you did it was a reimposition of sanctions, that i will note a

major difference here and that is that prior to the iran agreement, the world cooperated on enforcing those sanctions and as we have seen with the united states unilateral action on the deal, there is no support internationally for helping out with the sanctions. not that they will not be effective. they will be partially effective because of the united states strength in the global financial system. it is hard to see sustained maximum effectiveness. what is your sense about where energy policy is headed in the u.s. after elections? ernest: one thing i think is underpinsis that energy policy and our move towards low carbon future is what emerged as a consensus on clean energy tech knowledge he

-- technology innovation. i see no reason why that would not continue. in terms of a energy policy that addresshing global warming, i think it is unlikely to see that. tom: i know you took theoretical and is at stamford believe your thesis was on gridlock. let us go to wit. can we have -- go to it. can we have an energy policy with congressional gridlock? say, i do not expect a policy. there will be other political issues to sort out. i am optimistic that somewhere down the road, we will see a national policy emerge to address global warming. we should not lose sight of the fact that the states have been and ifce of progress

anything, the elections on tuesday expanded the footprint of the effective state action. i was thinking about you in the oval office with president trump explaining thermodynamics. we are not going to go there. anti-science view among many in america. when i look at democratic victories, some republican victories, when i look at that democratic party tendency, does that get us closer to some form of new debate on climate change? ernest: i hope so. translatehink it will into action but it will set the stage going forward. by the way, there have been additional, with the democratic congressman, additional technically trained people going

to congress which will help. it is unfortunate that the scientific aspects behind global warming and climate change have become political footballs for no good reason, frankly. science of global incontrovertible in terms of human activity. we need to be prudent. are going to spend money adapting to the changes we are seeing. tom: i want to explain technically trained. trained means they barely got through trigonometry jr. year in high school. francine: thank you, tom. i think we get it. ernest: some of us have advanced degrees. francine: what are you doing in europe?

are you advising the parliament and are you concerned that the political uncertainty, what is happening in italy and germany, and that climate change will take a back step? ernest: i am in dublin now. this trip will be dublin and london. in dublin, i am focusing on clean energy and climate change. the irish government has made strong commitment. they will acknowledge they are lagging behind. i have come here to offer suggestions in terms of how i think the clean energy agenda has to evil. .t does include -- evolve it does include a focus on innovation, technology and policy innovation. if i flip back to the united states, when president trump made the announcement one year thein june to start

withdrawal process from the ,aris agreement, within days governors and mayors, and business leaders said that is fine but we are going to continue on the course of low carbon. the business community recognizes we are not going back. they would like to see more can doty so they long-term planning, long-term capital allocation. businesses going to be important going forward. francine: thank you so much. the former u.s. secretary of energy and the current nuclear threat initiative cheap. we will get back to george saravelos and wolfgang piccolo. coming up, mike evans, the president of alibaba at 10:30 a.m. in new york. it is always great to talk to alibaba. this is "bloomberg."

francine: bloomberg surveillance. tom and francine from london and new york. the u.k. ministers are in stand for a special meeting. the secretary is expected to meet with his counterpart to publish the full agreement on tuesday. the irish border remains a point of contention, with the e.u. pushing for a border in the sea in the case of a no deal. america spending $400 billion preparing for no deal. george saravelos of deutsche bank. first, what are the chances of a hard brexit? 30% based not on the

fact they are not going to reach a deal. the vote in is westminster once the deal is reached. brussels and london will reach a deal, it is unclear at this point whether theresa may can get the majority to approve it. that is the risk. francine: what does that mean for the pound? we think the pound is already pricing the agreement. is what is then path towards that happening? the key thing we are watching is the dup vote because it is the dup that has the power to pull the plug on the election. if it is still maintaining support for the government, i think it is likely the market

continues to rally. even if: with the dup, they do not like the agreement, what would they do? if they force and election, -- force and election, they have no power. george: that is why the market is looking through the volatility. even if the vote fails, they will get through. we have to see how that process pays out. the issue for the pound is not how the market will perceive the deal but how it will perceive the government changing. the markets are thinking about the risks. they have to think about the policy implications. it is what is going on here rather than the agreement itself. tom: three days after brexit, everybody was hysterical overflows. current account deficit, current account dynamics.

is money coming into the united kingdom? george: the short answer is no. if you look at current account dynamics, you have not seen any adjustment. you have had this swing in the pound. the trade balance has not adjusted because consumers are price insensitive. they want to buy european goods. if you look at medium-term flows for the pound, they remain weak. foreign direct investment is weak. the bank of england is raising rates but until the market gets a clear picture of the end, it is going to be difficult for flow dynamics to look positive. tom: the other is the ballet of international relations for prime minister may. you think about, what will you study this weekend about the future for the prime minister? future isi think the

more about what happens in the u k rather than their interaction with the leaders. referring to what george was talking about, the way out for theresa may to get the dup on board is by saying she protected the integrity of the u.k. but that would mean affecting a customs union deal which precludes the ability of the u.k. to try to strike trade deals. the integrityen of the u k and abandoning the streams of trade deals, that is the card may can try to use and the comments over the last few days about the borders are setting the stage for that kind of deal. francine: the biggest concern i guess, when it comes to europe, is it brexit? are we spending too much time on

brexit and not enough on italy? wolfgang: on brexit, we have a deadline. we can look at it and try to figure out what is next. italy is a longer-term story. terms of italy, the markets seem to be willing to withhold judgment despite this fight which is a sideshow with the european commission. italy is something that remains to monitor. that would be driven by the markets. brexit, we have a deadline and we need to get ready. francine: how much pressure will italy put on euro? the market is fully pricing this tension between italy and the european commission. it is pricing the deficit. key question is does it start to price capital flight. for now, the market is giving

the benefit of the doubt. the politicalat calendar, thinking there is an early election in italy. maybe that makes fiscal deficit numbers come down. italy is preventing the euro from repricing higher. the threshold for the euro to take a leg down is quite high. is there a secret plan to get out of the euro? no matter what happens, can the italians return to the euro? wolfgang: the numbers are decreasingthat it is towards europe. populist force push through some sort of referendum on europe? i do not think so. there seems to be an assumption

in the market that the early election in italy would be more fiscally responsible. i would agree. i think that will not make a .u.ference and the anti-e stance will become more pronounced. tom: good cumbersome asian friday to frame your reading -- good conversation on a friday to frame your reading. gtv , your knees are shaking. deutsche bank, london, you have got a 2:00 p.m. meeting and you are scared. what do you do? you download a chart from gtv . you dazzle. you go over to westech center media. a shot on oil. gtv . this is bloomberg. ♪

francine: this is bloomberg surveillance. tom and francine from london and new york.

goldman sachs arranged bond deals. heart of a scandal. lloyd blankfein may have personally forged ties with malaysia and it sovereign wealth fund. people withrding to knowledge of the matter. we spoke to the new goldman chief executive, david solomon. erik schatzker asked him directly about the scandal. >> your client, your shareholders and your employees want to be certain that neither you nor any members of your team had any reason to suspect illegality or any breaches of compliance practices in connection with the account. can you offer assurances? david: we take him compliance and control at our firm seriously. we always have. we have been around and how we control the firm, the velocity and volume of transactions is of

huge importance to us. francine: that was david solomon speaking to erik schatzker early this week. both solomon and his praetor sizer have said the scandal was the work of a few employees. -- his predecessor have said the scandal was the work of a few employees. us go live to kuala lumpur, where we are joined by our malaysia bureau chief. where are we on the investigation? is malaysia pushing to find out what happened? about more than 10 countries investigating right now. singapore, malaysia. is the change of government in malaysia, we have seen more cooperation with international investigators. we have seen them and date attorney general's and to work

together. charges, keyseen is the one for former goldman bankers, who are fighting extradition to the u.s. now. malaysia, we have had the former prime minister facing more than 40 charges related to 1mdb. how far down into malaysian society does the scandal reach? is it of the elites or are the people in gauged? before the election, there is a saying that malaysians on the street do not know what it is. it was a part of a conversation leading up to the election and that led to malaysia having its

first change in the government since independence. i think the new government will prove that it is key and a subject that comes up during parliament meetings. they will know what it is. tom: thank you so much. we think wolfgang piccolo for a wonderful perspective on europe. coming up, it was armistice day for the fed yesterday. chris rupkey joins us. this is "bloomberg." ♪

morning, it was a meeting, a live response. oil continues weakening.

the dollar surges. will a strong dollar b president trump's next big headache? a democratic congress. they are counting chads in the florida senate race. it is friday. it must be mueller time. i am tom keene in london. francine lacqua, brexit, get me into the weekend. brexit, front and center. brexit, left, right, and center. we are expecting the cabinet to be on standby for a meeting. gate some kind of deal or idea of how they -- we may not get some kind of deal or idea of how they want to treat the border. china, there is concerned there is a slowdown. with the remnimbi backing up after a number of good days of strength.

your first word news, here is taylor. taylor: the federal reserve is staying on track for another interest rate hike next month. policymakers repeated their outlook for gradual rate increases after wrapping up the increases after wrapping up the meeting. the fed said economic activity and job gains have been strong. president trump has been critical of the fed for raising rates. the trump administration is moving to restrict asylum claims by migrants from latin america. new rules would block people who illegally cross the border with mexico from claiming asylum. the rule is going to be challenged in court. in the u.k., a lawmaker for the northern irish party that props up theresa may says the party cannot support the current brexit deal. the reason is that mays plans to treat northern ireland differently than the rest of the country. wilson will not say if the party would try to bring down mays' government. in thousand oaks, california,

hundreds gathered for a vigil to the latest killed in mass shooting. a former marine veteran who may have had ptsd killed 12 people. the shooter apparently killed himself. no word on what the motive may have been. authorities say they do not think the shooter targeted anyone. global news 24 hours a day and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm taylor riggs. this is "bloomberg." tom: thanks. check, equities, bonds, currencies, commodities. brent under $70. the dollar stronger. one of the great outcomes of the fed meeting. the vix coming in 17.17. $60.nder francine: what i am looking at

is stocks in europe sliding following the retreat in asia. it has to do with china and the slow down. dollar is advancing. i am looking at oil. oil with disappointing figures, the talk of the town. we did have disappointing weighingrom richemont, on what we are seeing in europe. the crude is $59 for wti. you can see wti following through 21% from the october peak and this has to do with that oil coming on the markets because of the waiver. there were sanctions but it means oil has been taken off the market. talking withbe frederick lane about that. we need a summary of where we are after the tuesday election.

i went to the cook political report and five ideas. here they are. this was a suburban revolt. this was the year of the fired up female college graduate. it is next to impossible for democrats to ditch nansen a -- nancy pelosi. the republicans who survived did so by establishing their own moderate reputations. the onma is set to last this week buried in charge of drummer for bloomberg surveillance, kevin cirilli. -- last beyond this week. for bloombergrama surveillance, kevin cirilli. the democrats are winning most of these close elections. kevin: they are. you look at what is happening implored a, arizona -- happening

in florida, arizona. is ank the suburban vote crucial point. as you saw in swing districts, and the issueote of temperament over trade and policy is what was weighing there. some goodught fox did pieces on what kind of democrat won. were loud andes visible but am i right that the progressive did not do that well at the margin? kevin: yeah. is progressive another word for liberal? kevin: call it what you want. , theor john sense or democrat from montana, won by reelection in a state president trump carried. senator john mansion, another centrist democrat.

manchin, another centrist democrat. they are going to be looking to see how they can take off pennsylvania. that is a state the president carried. the turnout in the suburbs of pennsylvania were 22% higher. there is a lot to work with for democrats as they head into this cycle. francine: talk to me about the attorney general. who will it be? got chris have christie's spotted at the white house yesterday. you have got john cornyn. outgoing,ot an retiring public congressman. the president is looking for someone who is not going to recuse himself from the investigation.

like we reported, the attorney general has purview over immigration, over marijuana and the questions we have four the attorney general are going to be aired at the confirmation hearings. i think you are at a time now when this attorney general, will the president want to name someone ahead of mueller finishing his investigation? mr. whitaker, the acting, there is chatter about whether or not that is a position that has to be confirmed. there is chatter about just where all of this is headed. francine: where are we? what does it mean for the probe? kevin: if there is no attorney time muellere

reaches his conclusion of his investigation, one could make the case that mr. whitaker could be more of a thorn in the side of bob mueller. tom: this is important. we talked to stephanie baker about it. sources, i made a joke about it, it is mueller time. it is friday and it is really mueller time. do you have any sense about how he is prepared to shift to the president this week? kevin: i do not think they are going to shift. i think this time, they have been operating on an independent basis. tom: waiting for the election to be done. said, several of my sources surrounding the are staying the

course, as if nothing will happen. tom: we will see. kevin cirilli with us today. listening and watching all of this is frederick lang. we will speak to him about courage to be in the market. tohave seen this before remember mr. cox and the ballet of the 70's. how distracted are you in the investment from this politics? i do not tend to put a lot of emphasis on the current political situation to drive decision-making. when ica see a sector i think is going to be disfavored by appending this -- by pending legislation, that could have impact. a long-term investor should ignore what is going on. talk, of whicht

we are going to hear a lot, strikes me as something which could be distracting and the short term. the democrats run the risk of being blamed for distraction. my guess is, they are going to handle this with temperance. you do in october, with portfolios? did you unplug your phone? frederick: nothing but we nibbled away with -- away at additional stock. i am not sure the wait is over. we have regained more than half of the drops from the top of the market. this is a lesson in why staying the course matters. we can get into that. francine: what does this mean for the markets? is that it for tax cuts? what does it mean for him for structure and fiscal spending? frederick: infrastructure

spending is not seen as a positive. the question is, how do we fund it? we have increases in federal debt. to implement a large infrastructure spending bill seems to me to be a tricky place to navigate. the only way to do it is through progressive taxes. a tax increase right now to fund that would not work. tom: this weekend, you're going to look at your 201 k. with fredericke lane, perfect to speak to on a friday. goes the other side of the aisle. a republican in california mentioned as attorney general. conversation in the noon hour.

taylor: mrs. bloomberg surveillance. let us get your flash -- this is bloomberg surveillance. let us get your business flash. in germany, shares of thyssenkrup profit sharing group fell the most in two years. the company lowered his profit guidance for illegal investigations into price-fixing. it is the basis latest blow for the ceo. he is trying to move forward with restructuring. the u.s. has accused ubs of defrauding investors who brought -- who bought securities of mortgage backed securities. it has accused the bank of fueling the 2008 financial crisis. ubs says the claims are not

supported by facts. suisse andgo, credit deutsche bank settled similar claims by paying a combined $12.5 billion. the former and monopoly of italia has -- will write down its debt assets. pressure from american activist investor elliott management. shares are down 25% this year. that is your business flash. tom: it was interesting, a wonderful fed show yesterday. within a dead fed meeting. maybe they last a meeting with no press conference. is looking at the markets, which are not dead. chris rupkey is here. he survived the dialogue yesterday. we noted a market on the move.

why did the dollar go up yesterday off the fed statement? chris: more rate hikes are coming. i think what happened is the dollar was rallying that they -- that day. it was rallying before the release of the fed press statement. it kept going. there to nothing in suggest how many rate hikes were coming in the future. we assume they are going. the market basis remains unchanged. tom: when we say we are data , his next press conferences going to focus on we have to wait. what data is chris rupkey looking at to frame the beatings? chris: yellen has been talking about this for a while. they do not like the unemployment rate falling.

the unemployment rate falls, it tells them the economy has got a good head of steam on it and that rates need to come back to normal levels which is 75 basis points away. go may be three more times and it is going to be run off unemployment. what if unemployment goes steady for the next several months? maybe they skip a meeting. do you worry about the u.s. overheating? should we worry? chris: it depends on what major we look at. we usually think of inflation and an outbreak in inflation. here we have a situation where unemployment is falling but we do not have inflation yet, at least no wage-based inflation. overheating?

it is going to be difficult given the inflation indicator the fed uses. it is going to be difficult to see that move up materially. it is interesting to me that fed chair powell looks back at the 1990's and says there was not inflation. really? the greenspan fed moved rates up 6.5%. this measure of inflation is going to be difficult to show the economy is overheating. what is the plan not for november, what is the plan for next year, for five years? frederick lane and chris rupkey will weigh in on that idea of single returns. was an important conversation, bob iger of disney

and bob iger of disney plus confronting digital and the profit challenges of streaming. look for that. this is "bloomberg." ♪

tom: francine lacqua and tom keene. singapore at the new economy forum. she will get rested up this weekend. do your children still know who

you are? francine: they do. that is why i'm not going to get much rest. tom: it will be good. important meetings in singapore. and frederick lane with us. with the regroup here hysteria of the quarterly earnings call. if you are a long-term investor and you know if you buy and hold, you do better, how do you do still the quarterly ballet? , therick: recently situation has been that almost no matter what companies announce, even if they beat projections, these stocks get management's are increasingly guiding down going into the rest of the year. they are going down because they

want to be cautious. they have had great growth and they know that the rate of growth is likely to slow down. when that slows down, investors bail out. do you wantbalance to hold the position and how much punishment is the portfolio going to take in that position. you may lose the opportunity to get back in the stock. tom: tell me about the banks. i own a long-term portfolio and i am frustrated with the banks. what do you do? frederick: i have one position of 15 in financials. i do not think the dynamics in the sector are attractive. we see other areas of that we think have better long-term growth. francine: where? can you hear me?

where do you see value? frederick: i do not know what value is. it is interesting hearing people talk about i am a growth buyer, a value buyer. is that shorthand for multiples and valuation metrics or is it more fundamental? i think a lot of cyclical gdp oriented stocks are traps. many cases, they have sensitive metrics about future growth. we focus on companies where we believe the long-term growth rate will be a multiple of gdp growth. we think it should be at least 9% long-term. tom: thank you so much. as we recalibrate for the end of the year. chris rupkey getting ready to write his urine gospel and we endl touch -- his year

gospel and we will touch on that. an important sunday in paris, in remembrance of world war i. we will be joined by the council on foreign relations. what are we watching? oil, front and center, a 59 handle on west texas intermediate. $100,crude on its way to not so much. under $70 a barrel. this is "bloomberg." ♪ show me movies a grinch would love.

[ barking ] nu uh, i'm picking the movie tonight. [ whimpers ] be sad, i enjoy it. show me grinchy movies. oh, goody. [ whimpers ] mmm, fine! show me movies max would like. see the grinch in theaters

by saying... "get grinch tickets" into your xfinity x1 voice remote. [ laughs ] uh oh. [ laughs ] something in my throat. comcast business built the nation'sroat. largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. tom: there is no question, all eyes on a washington. what a week it has been.

washingtonur team in for a terrific effort. bloomberg radio, as well. it has been exhausting. right now, here is taylor riggs. in washington,g the trump administration is coming out with new rules aimed on choking off migration from latin america. people who illegally cross the border will be restricted from claiming asylum. president trump has blamed asylum rules for luring thousands of central american migrants every year. in california, tens of thousands of people have fled a wildfire that has destroyed structures. 27,000 people living in paradise had to evacuate. firefighters said the town has been wiped out. the u.k. third-quarter economic expansion was the fastest in two years. gdp rose .6%. the economy flatlined in september and october. that points to slower growth.

china is a step closer to posting its first annual drop in car sales in two decades. auto sales fell in october for the fifth month in a row. these slow down coincides with china's new emission rules that forces carmakers to increase spending on electric vehicles. global news 24 hours a day and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm taylor riggs. this is "bloomberg." francine: thank you. it is a big weekend in paris. leaders will celebrate armistice day. years since the cease-fire of world war i. bilateral discussions are said to be held today. theresa may and president emmanuel macron meet to discuss

brexit ahead of her cabinet meeting well president trump is en route to europe. on saturday, he will meet with president macron over lunch. a lot to watch out for. the main focus will be on foreign policy. tom: very good. within the emotion of president trump visiting, it is good to speak to someone with experience on the tensions of europe. stewart patrick is with the council of foreign relations. he wrote a book on sovereignty. importantly, as a child, he witnessed the tension ofarmistice day and the idea the emotions of the french. it is wonderful to have you with us. as a kid, you witnessed the

french, they could not go to the battlefields. stewart: i had many friends who they tried to get to go with them to the battlefields and they would not go because it was too painful in their lives. tom: john keegan has written a wonderful series of books that try to drag us back to 1918. extensivehe horror is and the miscalculation. where is that tension between france, between germany, between france and england? those still resonate, don't they? stewart: it took a second global conflagration, to begin to sort those things out. there is the famous reconciliation that is occurring. president macron has invited angela merkel as part of the comer murray should to be the -- part of the commemoration to

speak at this day. tensions are still strong with to brexit negotiations, where there is an effort to give theresa may and offer them. tom: what is so interesting. childhood, world war i was distant and it was there were. but we doterans day not have the resonance europeans do. how should he approach sunday? ideally, president trump would use this as a moment to not only have a remembrance aat americans did die but moment of reflection about what happened in its aftermath. some of the turbulence unleashed a definingd war is characteristic of our own times,

the return to authoritarianism, protectionism, many of those things are at play today. idea ofdopted the america first which was the mantra of interwar isolationist. ofncine: give me a sense where foreign policy goes from here? what will you as foreign policy be? u.s.ar the -- what will foreign policy be? the new nafta deal is close to the last one. when it comes to opec, the sanctions had waivers. takert: the president will the results of the midterm elections as a validation of the policies he has been pursuing. the nucleard weapons policy, it will be a hard line. there is going to be no let up

in the trade war with china because this is something the president believes he can win because democrats support him as more protectionist. more assertive on the global stage. we have seen it when presidents have a separate globally, they turned to the international system because it provides them more leeway. there are fewer checks and balances. in this case, it is one house of congress. francine: what does that mean for trade concerns? do tensions remain, do they escalate? if this i am not sure will be for 20 years but it is for the remainder of the trump presidency. you are going to be seeing the president attempt to renegotiate trade deals on a bilateral way

and ramp-up assaults on the wto including its dispute resolution mechanism. the president is not a fan of multilateral institutions. regionalization and the united states trying to focus on bilateral trade deals where it can, where it has its own market leverage. you are a pro of international relations. you work at oxford. how do you respond when you see articles that talk about world war iii? today, 100 years on from world war i. finding aii, we are motion and then there is the articles about world war iii. stewart: anybody who tries to

look at global risk realizes a are danger signs out there. -- realizes there are danger signs out there. there are possibilities for miscalculation between china and the united states. my sense is that cooler heads will prevail because we live in a nuclear world. i do not see that occurring. what i see more worrisome is the trend toward authoritarian governance. we have had 12 years of democratic recession. i see greater instability and fragmentation in the economy. worrisomeds that are when you put the man the context of technological advancement. the -- put them in the context of technological advancement. africa's population is going to be doubling.

where are people going to get jobs? jobs are going to be automated. francine: thank you so much, stewart patrick there. president mike evans, of alibaba. chinawhat is happening on , whether the trade war is impacting some of the shopping sentiment. att interview is coming up 10:30 a.m. in new york. this is "bloomberg." ♪

taylor: mrs. bloomberg surveillance. i am taylor riggs.

it is another setback for the keystone xl pipeline project. a federal judge has blocked construction pending environmental review. transcanada has been trying to build a pipeline to deliver oil to nebraska. it would go to refineries in your the gulf of mexico. u.s. regulators will clamp down on e-cigarettes. a senior official tells bloomberg the agency will restrict sales of many popular fruit flavors to adult only establishments. young peoplethe use of e-cigarettes is an epidemic. shares of cartier owner signaled that sales growth in china have slow. warned that trade tensions could hurt demand for expensive watches. tom: single best chart. we do it with christopher r

upkey. let us be advantaged and do it now. it is the real fed funds rate, where the fed works and long ago, there was a positive real rate and down we go. we are here, nudging. why are we having this debate about higher rates? there is no inflation-adjusted rate within society, is there? the interesting thing about shows me is that real rates now, the cost of borrowing is low. in a way, it is almost the opposite. you wonder why art interest rates higher? are notast -- why interest rates higher? tom: this is an important question. what is the why? fed has comek the

to the belief that the level of interest rates that the economy can sustain without slowing has fallen over time. the neutralhought rate would be something like 4.25 percent. it is down at 3%. as we get closer to neutral, 3% on interest rates, you're going to see fed members, including president arguing against rates anymore. francine: that would keep the president happy. do you worry about central bank independence? chris: i do not worry as much about that. if the end dependence -- if the such that theas

administration instructed the federal reserve to buy treasury bonds to finance the federal debt each year, that would be worrisome. far as to print money, some of this back and andh, the politics involved the advice from the president to his fed chair, i do not know if that is hurting independence. we will see how it goes in the coming year. francine: what does this mean for where treasuries are headed? chris: we have found that the 10 year yield does not move much past where the fed funds rate is going to be. the fed is saying they are going to push rates to 3.5%. that means the 10 year might continue to go higher. as three .25% after the midterm elections.

3.5%.it goes to i do know know if they are going to go higher. what is going to happen next year, the big thing that worries me, at least in terms of the , maybe next year is the year where the fed pauses. they get rates up and they stop. it: as the election for into , there is research about inequality and wealth distribution. do you assume if we normalize rates at some point, the inequality lessons? it is difficult to change income inequality. they are trying to say if you put -- if you run the economy and drive down the

unemployment rate, that is going to lead to higher wages. 2.5%stically, if you get wages, are you not working against income inequality? get 3.5 percent wages, you are helping to make the economy have greater income inequality. it makes no sense. wages are not going to make up for basic injustice. tom: people are going to get their investment account statements, not today, maybe next week. are playing for synthesizing the bond dynamics into our economics. yield up, price down. one month, two months, three months. are we in a bond bear market with price down? chris: technically, it is. we bobbled.

how deep can the bear market get? tom: i am asking? chris: i do not think it can go that far. i think 3.5% is it. we go from 3.25% to 3.5%. is that a bear market? when i think of a bear market, i think of inflation outbreaks we had in the 1990's. you arewhere they say behind the curve in rates go up. to 3.5%, ares go people going to panic? it is not the bond market seller. tom: what curve is chairman powell behind? chris: rates should be at neutral. i do not know whose fault it is

they did not go more quickly. they can only go four times a year anyway. 2.5% -- 2.25% interest rates, i do not think that is restricted. rates should be at 3%. they need to go three more times. francine: thank you so much. chris rupkey there. bloomberg users can interact with charts tom was showing. we always have this battle of the chart. i am giving it to tom. i had something on oil. you can browse some of the recent charts and use them and dazzle your boss. this is "bloomberg." ♪

francine: bloomberg surveillance, tom and francine from london and new york and -- new york. strong, the big question is what the media giant plans to do with its 21st century fox asset. bob iger spoke with david

westin. >> we are going through the regulatory process. we announced that we gained approval with the e.u. there are some countries that we are waiting for approval on. in june, we said it could take as long as 12 months to close and we are more optimistic it will occur before that but we are not saying when. that was the chief executive of disney. joining us now is the endless for telecom media and advertising. -- the analyst for telecom media and advertising. they want to go big on streaming. >> the direct consumer is the new buzzword. they have streaming platforms that they already had, espn plus. hulu.wned a 30% stake in

they take control of that. that is going to be general entertainment. the new service is going to be called disney plus which will be family oriented, not do to due tountil the -- not launch until 2020. francine: how is it going with fox? acquisition of all of that content of fox, they said it could take one year. things are going well. they have got e.u. clearance. now just a box ticking exercise and they are confident they can get it done. in america andg the digital media is the idea, will anybody make any money? are profits going to be there?

it is not disney but everybody? matt: i think they are. there are people looking at the direct consumer angle, not just disney, but broadcasters in europe. they are saying we need to supplement this by going straight to the customer and by $2 ang them to pay $1 or month. -- i think right now the best place to make money is being a producer or an actor. the next couple of years is going to be more competition. i'm sure it is going to shake out. tom: thank you so much. more on this in november and december. we will see pageantry in paris on sunday.

i move on forward to what find fascinating, a quiet week in europe but maybe next week will be different, to say the least. francine: two things, first is italy and the budget. we are expecting brussels to respond after they said they are not changing anything. brexit is being talked about. we will see if the cabinet approves anything. tom: election results still coming in. kevin cirilli mentioning arizona and florida as well. all eyes on washington. stay with us. this is "bloomberg." ♪

i am a family man. i am a techie dad. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience.

my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. ♪ >> oil bears unleashed.

prices sank but many say the selloff is not fundamental. where is the bottom? no surprises from the fed. sticking to the gradual rate hike scenario. reigniteddown fears, worries of weakening global growth weighing on the equity markets. welcome to "bloomberg daybreak," on friday, november 9. david westin has the day off, much-deserved. beautiful day in new york city, chill and chill in the markets after a wild week. off 15 points. euro-dollar weaker. the dollar and the yen taking on the safe haven trade as markets roll over. buy bond a story unless you are italy. 3.21 how we print. crude, brent