♪ it is 8:00 a.m. across the emirates. our top stories. opec and its allies are meeting. what options are on the table? the heads of u.s., france, russia, and turkey in paris. president trump and in manual macron work through tensions. president erdogan says turkey has handed over the voice recordings. smash theerdoganalibaba on paco single day sales record in just the opening minutes.

♪ >> 4:00 a.m. in london. i am yousef gamal el-din. what a week for global markets. we are stacked up for a busy few days. this is friday. down for a second day. the move the biggest since falling on october 26, apple the biggest contributor to that decline. 3.18%. yields at both speculators and asset managers are bearish across 10 years and u.s. bonds. cable 1.29. allianz weighed in.

these are guys consistently short the pound since 2016. they have switched to multiple long positions. we could get news flow in the coming days. copper futures down, an important metric and gauge for global economic momentum. in biggest weekly loss almost two months. industrial metals tumbling with the dollar over concerns where we are headed in terms of tensions between u.s. and china on trade. some headlines from around the world. >> thanks. alibaba log 1.44 billion dollars in sales in the opening minutes. the company aims to surpass its 2017 sales record. this year's edition offers assumer sentiment in china there are trade tensions and the economy slows. emmanuel macron move to defuse

tensions with donald trump, saying he agrees europe needs to do more to defend itself. the u.s. president took offense at the proposal for europe to create its own military force. emmanuel macron says he shares trumps of you and his proposal on defense was consistent with it. stop revealing saudi coalitions -- refueling saudi coalition planes in yemen. saudi arabian official news agency attributed the ability of the coalition to continue refueling in yemen. turkey gave voice recordings related to the murder of jamal khashoggi to the u.s. and other nations. president erdogan set the recordings were handed over to saudi arabia, u.k., germany, and france.

he is expected to meet donald trump and during his trip. a pro-european minister quits theresa may's government over her brexit deal. joe johnson resigned, saying he could not vote for the accord. post asher left his foreign secretary in july. it deals a fresh blow to any hope of getting a brexit agreement through parliament, even as negotiations with brussels have made progress. wildfires in california have killed 11 and forced into hundred 50,000 residents to evacuate. the fires have grown to more and could00 acres destroy tens of thousands of structures. president trump blamed force men management and threatened to withhold federal payments, but later moderated his tone.

global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. thanks. oreo has continued its downward .piral wti sliding into bear territory last week. opec and out lies consider cutting production next year. >> anything about cuts or scenarios for cuts? >> it is premature. premature. yousef: we are following opec's progress. manus, how bad historically is this latest row? >> this year's gain is

completely gone and volatility is back. the headwinds are pushing against the technical committee and opec. that is thean shale risk factor into 2019 in terms of delivery oversupply. you have a rare market. stockpiles are rising in the u.s. so multiple headwinds attacking that beautiful equilibrium that opec and non-opec have struggled so hard to keep in check. yousef: how is compliance developing? in the past, some countries not towing the line. manus: i like that delicate phrase. compliance has been getting better. they wanted to reduce that over compliance.

in october, compliance was 104%, down from this over compliance, inucing production, 111% september. 104% in october. the goal is 1%. you just heard that it is too premature to talk about cuts, but the stage is getting set. it is saudi arabia that turned on the taps with political push from the u.s. there was concern about the iran waivers. the question is, is this a demand and oversupply equation? yousef: we have had mixed signals from opec will on whether they will take action in the coming weeks. i personally think the art of the deal, and i use that

tongue-in-cheek, literally the svengali of corralling opec and non-opec. what roadmap the kingdom sets as the swing producer within opec will be the key. you saw that piece last night. well done for picking up those words. there are a number of issues. one of the political sensitivities of introducing a cut when the jamal khashoggi affair is still going on. could it be opec will coalesce around saudi arabia, or will they want saudi arabia to consider stepping forward and taking most of the burden themselves, as opposed to spreading it equally around the opec members? getting the russians on board is critical. don't forget this deal, opec and non-opec, it is an open ended deal and you must future neighbors with you if you want the caravan to travel safely.

you have been on a caravan as well around abu dhabi . that is manus cranny. joining us now is the head of investment strategy at abu dhabi commercial bank. we put together a chart to give some additional context with iranian crude supplies. fallen, buton has not as much as exports have. what do you make of this particular gathering in abu dhabi? are we going to see some cuts? >> i think the oil markets will remain shrouded in uncertainty because of the iran factor. we don't know when the waivers will be taken away. we know the presidency, the volatile nature of the decision-making by president trump, this is a factor that

will remain there, so if i look at the oil price, it does come down a lot. it is now basically lost all of its gains of 2018, but still well above where it was on average in 2017, so i would not overdo it. i would also suspect that immediate measures are unlikely. it is true that the kingdom of saudi arabia could be taking a lead in this, being the swing producer, but i doubt they will. i think the russians will be reluctant to take immediate action, because the russians hate oil prices that are too high. uncertaintyot of and we will not get any news over the next days from opec in any direction. yousef: so where does that leave price? the oil

we have had some of the big names come out and revise their forecasts lower. have you done the same? are you telling clients to go defensive on oil? >> no. it is more likely the oil price at some point will stabilize. it is important to take into consideration that global growth is less, but we have seen a ramp-up of supply, so the phenomenon of the price coming down is more related to supply then demand. this adjustment we have seen has taken that into account. given the uncertainty, we would be more likely to see oil now trading in a range rather than continuing to come down. yousef: yes. says opecintelligence and russia may have to trim to

support prices. we still have a lot to get through. let's get you a snapshot of what is up next. we discussed whether rising inflation could derail the rally in egyptian stocks. best performer in the regions in the last five trading sessions. the seven weeks left in year, it's their time to salvage global markets? how does that fit get factored into this equation? more on that next. this is bloomberg. ♪

yousef: let's get you a check of the business flash headlines. >> thanks. nearing anand ford agreement to join forces on electric and the self driving vehicles. ford's selft in driving partner.

the german carmaker is also going to share vehicle technology, allowing the carmaker to piggyback off the investment of battery-powered automobiles. major u.s. investment banks are planning to shift assets to frankfurt because of brexit. j.p. morgan, morgan stanley, goldman sachs, and citigroup have submitted plans to increase assets held through their frankfurt subsidiaries after the u.k. leaves the eu. it would see their balance sheets in germany grow to $283 billion. says theexpress people's bank of china has approved its license to become the first foreign payments company allowed to build a network in the nation. it will let charges be cleared and settled in china. it is a sign of progress in the access to mainland china. that is bloomberg business flash. yousef: thank you.

dipping foreign reserves in china, iranian sanctions, midterm volatility, some of the key themes last week. we take a look at the top charts. >> let's look at the charts this week. china, foreign reserves for october decreased for a third month. you can see that on the blue bar. this amid the rising dollar. people finding ways to get money out of the country. banks in september selling more foreign-exchange to the clients. this was the week when we got u.s. sanctions kicking in against iran. what i have here are iranian production. in the white, exports, both decreasing. the exports decreasing more. more of the oil is staying in the country. finally, look at this. we had the midterms this week. the blue line is the measure of spikingty, the vix

heading up to the vote, then coming off afterwards. this fits into a trend. the yellow and white are the vix over the lead up to the 2016 election and the 2014 midterms. they suggest we could see the vix below 14, as happened after this last two elections. let's widen out the conversation and focus on what fund managers have been doing. they pick stocks for a living, but just watched a good year turned sour. things could change to the upside with seven weeks to go. historically, the s&p 500 rallies in the fourth quarter, 25 times in 30 years. to index has a propensity rise after a midterm election. 18 instances since 1946, it has gone up.

raises thetraint stakes for monetary policy as well. still with us is the head of investment strategy at abu dhabi commercial bank. we have a graphic to showcase u.s. equities and the possibility of a bounce back and how that fits into the historical picture. say the market moves recently seem to have overshot the existing macro data. will we see that bounce back in q4? >> high think there is a good chance. earnings and growth are strong. the adjustment really had to do with the relative i you asian between fixed income and equity, the upward shift of the yield curve. that adjustment is now over. be,ng said so, there will there is still too much complacency as far as the markets are concerned with the potential of further rate

increases by the federal reserve. i don't think that will hurt specifically u.s. equity markets. that will hurt in particular emerging markets. the rebound at this point is quite likely. the critical question becomes whether the fed's moves will rein in the gains in an asset class like u.s. equities. fundilt another chart on rates and how that has been moving up. interesting that the three-month saw during level we the post-lehman collapse, at what point with the funding squeeze affect the fed? >> look, if i look at the three , the dividend yield, then

it is true. from a short-term perspective, that has equalized. keep cash onople the sidelines. i like to focus on the overall credit conditions in the u.s. if you look at all credit indicators that look at overall spreads, these overall surveys, then credit conditions in the u.s. are still quite benign. the coverage ratio is still above where it usually is when the country goes into a recession, so the likelihood of further hikes is there, and more hikes than the market is expecting, but overall credit conditions in the u.s. remaining quite a nine. -- quite benign. this means it will be less of a problem for u.s. equities than

emerging equities. yousef: producer prices rose the most since 2012. we looking ahead to cpi. will that bolster the fed's case? sohigh definitely would say them these are lagging indicators. i look more at wage growth. you know, it is interesting to quintiles of the wage spectrum, those segments are going up right now. this is not surprising, because wages on lower skilled labor only go up when the labor market is particularly tight. i look at those indicators. they tell me that there will still be inflationary pressures and the fed will surprise to the upside come a but this is a could -- upside, but this is a particular concern for emerging markets.

overall credit conditions historically are still good in the u.s. if you look at recessions and the overall levels of interest rates. that is still benign compared to other end-of-cycle periods. yousef: we still have a couple of more themes to get through. up, trump's top trade advisor lashes out at wall street executives for intervening in the trade spat with china. more on that next. this is bloomberg. ♪

yousef: president trump's trade navarro accuse peter global billionaires of trying to sabotage president trump's handling of trade relations with beijing. the statements came ahead of a the two in one

is areas. -- when a series -- full-court putting a press on the white house in argentina. the mission of these unregistered foreign agents -- that is what they are -- unregistered foreign agents is to pressure this president into some kind of deal. yousef: our guest is still with us. thinking that with the midterms out of the way in the u.s., it could open the door to negotiations and consensus with china. suggestst commentary sai otherwise. , you know,am sort of i don't think it is that easy that there is going to be an

agreement between china and the u.s.. i am skeptical about that. i'm not sure this is so important. china has been reducing its leverage significantly. it is giving fiscal stimulus to prop up its lower income families, but these people do not import either commodities or capital. china is basically deleveraging because it is taking away credit from state-owned enterprises. that is what is happening with china. even if we have seen china to stabilize its currency over the last month -- that is what these reserve outflows show us -- china will also open the possibility to let its currency devalue. if the dollar is going to

strengthen again against other emerging-market currencies, as i suspect, then the renminbi will follow the other emerging-market currencies and not the dollar. china will not contribute to growth, and that will be a headwind for emerging markets. the trade war impact is much smaller than we all think. i am skeptical about any deal between the u.s. and china, but i don't think it is that important over the next year. yousef: we have to leave it there. of course we did see china lifting some foreign investment ns in the last few hours am a may be an important signal. now let's get you a preview of what is coming up later on in the show. we talk about the situation in turkey. theturkish president says jamal khashoggi recordings have been handed over to the u.s.

we will get into the story on regional equities. we saw egypt outperform its peers. what are some of the key calls? how do you weigh the geopolitical risks? this is bloomberg. ♪

yousef: 1:30 p.m. in tokyo. 90 minutes away from the market open in the emirates. we had some pmi numbers out. expansion, butl not as strong as september. let's check in on first word headlines from around the world. >> thanks. $1.44 billion in sales in the opening minutes, beating last years start. it aims to pass the sales record of $25 billion. this year's edition offers a glimpse of consumer sentiment as trade tensions