"all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. >> measurements on terrorism may be a the british prime minister best pressure mounts on theresa may. the pound falls. on word of opec cuts in 2019. and a single days extravaganza. the world's biggest shopping event sets a alibaba. can the chinese consumer help markets? and a weak yuan? ♪ francine: hello, everyone, this is "bloomberg surveillance." an francine lacqua in london.

these are your markets. we saw some zigzagging in the equity markets, the stock x300 down, and i am looking at the pond because there is a lot of may.ure on terroris theresa we are going to the implications, whether there is more of a chance of a constitutional crisis or not we had found-dollar is currently 128.59 -- sterling pound-dollar is now at 128.59. the vat shares also falling over the news of a possible ban on mental cigarettes in the u.s.. share price down 8%. one of our biggest movers of the day. coming up, we speak to the chief and his of bp thoughts on demand, especially from emerging markets.

first let's get to the bloomberg first word news. >> sebastian: leaders from across the world gathered in paris to commemorate the centenary of the end of the first world war. but the weekend exposed tensions between the u.s. and europe as growing concerns of u.s.-security guarantees under president trump. oil has climbed amid speculations that opec will cut output next year along with its allies. making them also announced fewer shipments for next month as the cartel and its allies again laying the groundwork to reduce oil supplies in 2019. prepared to step down as , as alibabajack ma set another record, $30 billion in online sales yesterday. that extravaganza featured xiaomi and others brands attracting customers. offering a gauge of customers sentiments amid a slow economy

and the escalating trade war. the most instructive series of wildfires in california history hit the state. insurers say that at least $19 billion in damage have occurred. the cartilage could be on par with the destruction triggered by hurricane michael. governor jerry brown called on president trump to release a new federal aid. this comes a day after the president threatened to -- withhold funds; at least 25 people are known to have died, and a quarter million have been forced to leave their homes and seek safety. 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. this is bloomberg. ♪ francine: thank you so much, sebastian. theresa is mounting on may to abandon have brexit proposal. pre-brexit conservative lawmakers have joined forces with the northern irish party that pops up our government.

the sterling has taken another leg lower on all of the uncertainty. earlier, and edwards spoke to a guest about the situation. >> if prime minister may manages to get a deal and persuade her cabinet to accept the deal, manages than to persuade her party to accept it and it goes to parliament, the message to labour mps, isst to ask yourself, what is good for our country? what will make life is your for yourself, your children and grandchildren of your constituents, and also to realize, if you think that deal should be rejected? have it election and have the public have a say, with the option of staying in the eu. anna: but the upshot of voting against the deal might be a no deal brexit. is that something that labour mps should be prepared to vote for? >> it is a really important point. you viewers may not realize, but

any motion the government puts down, it has to be able to be amended by parliament. the idea of us taking back control in the house of commons does not mean in the executive has all the cards and parliament has no cards. the discussion taking place in parliament now is whether it is possible to amend the motion. i cannot be taken or leave it. it has to be negotiated or the public has to have a say in whether they want to stay in the eu. the worst of all worlds would be it no deal. i don't think prime minister may would be that reckless in the interests of her party. that the speaker allows mps the opportunity to amend the motion. isa: so even if the motion amendable, basically, will there be time to send theresa may back to brussels to do a different deal? >> i met with michelle barnier, 10 or 12 days ago, who is the negotiator on behalf of the

european union. to prepare now for the possibility of an extended article 50. he is aware that prime minister might view negligently the theyle 50, which means would need another two years to secure the deal to riyadh what i said is that i think the eu should be working now on the extension of article 50. all the experts we talked with, including the drafter of article 50 say that it is possible to extend it in the case the eu does not want a hard brexit. bad for london, but for the u.k., but for the eu. i am hoping the eu accepts the extension of article 50. francine: that was the mayor of london. now let's get straight to tim ross, our u.k. politics team leader. he joins us also with the founder and chief investment officer of bamberg. thank you so much for coming

out. i am confused. this does not look good, is it for real? is it really crunch time for theresa may? tough? ever had it so >> it is a tough week for her, really. they were hoping to get a cabinet meeting today, so they top team of ministers could sign off on her plan for a brexit deal, but that will not be happening. if she does not get them to iree by the end of this week, think she is looking at there being no chance, really, of a november european summit to sign off on the deal that pushes it. active end. the u.k. will need. to start implementing plans for a no deal brexit after that. francine: let's take it back, can theresa may survive this? if they don't like her deal, does she go back to square one in the cabinet, or does she get

replaced? >> it is certainly possible, there are some brexit-backing ministers who are happy with how things are going, because they don't think her plan was a clean eu.gh break from the but there are also pro-remain ministers who are also happy, some who have actually resigned over that. is it enough to derail her plans? well, she resigned the resignation of boris johnson in july, a big one, and also david davis. so i think she will try to battle through. francine: what kind of deal could she get through parliament? really put your finger on it even if she gets a deal in back cells. -- in brussels, she still has to find a way to navigate the house of commons. she has no majority in the house of commons and it is not clear what majority exists for any kind of brexit deal. francine: what does that mean for best what is priced in the market right now? >> the market is looking at is a hard brexit risk when it is

priced for the pound. the pound has largely moved sideways. , if youoise increases get a deal, i would accept a relief rally. thereer the basics, aren't enough brexiteers to take over the conservative party. deal.ant a the problem is there is no majority for the deal on the table. so it is like you they will have to go through a noisy. prevails. argument francine: what does that mean for what the market does? does it sack from now on or zigzag until something happens? >> the moment you get a deal within the u.k. and the eu, nobody should conclude that it is done, you have to wait till parliament signs the deal. the fear of a hard brexit may focus on majority of mps to pass the deal, whatever it is. then you expect a relief rally for about two days.

then, next year, i think the economy is set to do better than the market anticipates. if you get a deal with 2% growth, you get a second phase where the u.k. assets start to navigate upwards in a line with fundamentals. francine: i actually have a really good chart i would love to show right now, looking at what traders are pricing in in terms of u.k. stocks compared to the counterparts. what do you see being priced in? >> i think the price of sterling today is not only impacted my brexit, but also by the strength in the dollar. my concern is also around the euro. in 2019, i think that will be critical in terms of the departure of angela merkel and changes their. but in terms of the u.k., i think that whatever deal is the , and is or discussed agreed on, will most likely be signed through by parliament, knowing very well that if they don't, we will have a corbyn government i am sure they are aware of that.

francine: when you look at the different factions, is it more likely that we get a constitutional crisis, less likely or more likely that we get a second reprisal? if you are an investor, what should you be looking at? >> you should be looking at what is known as a meaningful vote, the point where the house of commons will give interview on whatever deal theresa may has is there the danger for her that it is not just a brexiteers in her government that have rebelled, is also that her deal me know please -- her deal may not please people in her party, as well as the labour party. francine: it sounds like hell for the prime minister. oshie trader get the best deal possible and hope to get it passed? >> they have to take it one step at a time. they will always have an eye on the mass in parliament. it is an extremely difficult? elation and it is not looking backstrom good for her at the moment. francine: thank you very much, tim ross of the rest of our

guests. both of you staying with us. the bigger shopping spree in the world gets even bigger. singles' day cashed in over $30 billion for alibaba. we are live in shanghai next. this is bloomberg. ♪

♪ francine: economics, finance, politics, this is "bloomberg surveillance." i am francine lacqua in london. alibaba rigs in $30 billion in its annual singles' day extravaganza, this as jack ma prepares to step down as chairman. this could indicate that sentiment continues to be robust.

toming us for more is mackenzie in shanghai, our china correspondent. what does this tell us about the health of the chinese consumers? francine, yes, it is of interest to us, because it is a litmus test for chinese consumers, and something to gauge the direction of alibaba there we had in terms of the top line numbers, they seem to suggest about remains in health. you point out, $31 billion sales transaction number, compared to $24.2 billion for 2017, which record.tself a in the first two minutes alone, they racked up more than $4 billion worth of sales, one hundred 80,000 different brands involved in this singles' day event, including companies like apple, dyson and even xiaomi, the chinese smartphone maker aroundays it racked up

$740 million worth of sales in period.hour if you are looking for flies in the ointment, you might zero in on comments from the cofounder, who talked about the lower sales of big-ticket items are weird you may also zero in on the pace of growth, 27% versus almost 40% in 2017. but i think you would be a brave man or woman to bet against china's consumer crumbling, at least at this point, even if the headwinds and the pressures on the mastiff consumers heighten. is alibabaverall, also facing a lot of challenges? we have the founder wanting to step down. what should the priority of the new chairman be? that's right, jack ma told us in that exclusive interview that he would be stepping down, handing the powers to daniel a.ng, the current ceo,

12 months transition the company is facing a number of challenges, in increasingly a competitive market from the another jd.com and upstart which is carving out market share in the second and third tier cities. the stock is down about 16% year to date. the cofounder telling us last night that in some respects, investors will miss reading the china.ment here in and also alibaba's ability to utilize leverage in technology such as big data ai to incorporate both online and off-line. he also pointed to their expansion in southeast asia which has proven a success, even for their expansion plans in the faltering. francine: thank you so much, tom mackenzie, bloomberg's china correspondent in shanghai. let is also give the conversation and china with our guests. china, when you look at and singles' day, i was always told by the former pboc governor , the trade war would play on

sentiments, but it would actually not heard economic growth right away, it would hurt sentiment. so do these single date numbers mean that we should not worry too much about the trade war? >> i am an economist, i don't say anything about single companies, but x work oriented companies -- export oriented companies note it in the global climate when something changes. it shows up in export-oriented confidence numbers, then it affects economic activity. the key thing about china is that its underlying growth rate is slowing. forever. cannot grow when you get these periodic slowdowns, the market struggles to decide whether it is cyclical or a secular issue if it. is secular, you. can put it to one side, this is normal. to riyadh what do we know, we know that china can control capital, it does not have an inflation problem. which means, when things get a little weak and of the market

panic's, trust the government to slowly but surely introduce more and more stimulus until it works. so my bet is that next year, china.look better for francine: let me bring you to a chart we have done looking at some of the china activities, retail sales in white, fixed asset investment in yellow to react you can see that they kind of converge, where before there was a gap. how much do you worry about the strength of the economy, and the practices a have to be put in place to stabilize it? >> i think there is too much doom and gloom. any impact from the trade wars is going to be minimal. china would win a trade war the u.s. on the back of the number of factors, including the fact that there is no term limits for the president of china, they control the message and they can contain social unrest potentially. they also have the nuclear option of looking to sail

treasuries, which they would not, but it could lead to the ..s. into a recession , but also the region's our view is that the economy will continue to grow, although at a slightly lower pace. francine: how psychological is the sentiment for the renminbi, and what does that tell us? >> the problem we have from afar is knowing just how strong the underlying economy is in china. if you were to have a free flow of the currency, it would attract the underlying growth rate. if you have a weak yuan, markets the underlyingat economy is weaker than the numbers suggest there we had so it is significant from a psychological point of view. from an economic point of view, it might be better to weaken -- to let things we can. francine: thank you both, you will both be staying with us. up next, president trump leaves feeling isolated amongst

allies after emmanuel macron flags the rise of nationalism. this is bloomberg. ♪

♪ francine: this is "bloomberg surveillance." i am francine lacqua in london. macronnt emmanuel flagged the rise of nationalism as leaders met in paris for the

centenary of the end of world war i. he used the occasion to scrutinize nationalism, saying that it is a betrayal of patriotism. joining us live from paris is bloomberg's annmarie hordern who was there for the festivities. the weekend started with a public spat between president trump and president macron. do the best did they make any progress on their disagreement? anne-marie: good morning, francine. spat was really correlating on twitter, when president trump touchdown in paris, saying president macron's idea of a true european army was insulting, as well as alluding to the fact that countries need to paint more for nato must pay nato.or they seems to come out of their meeting jointly on the same page, in regards to the

issue. but as the weekend progressed, we saw an isolated tone taking on. president macron a speaking behind me, attacking nationalism. of course, president trump has called himself a nationalist. angela merkel also at the peace , talkingere she spoke about the threat of isolationism and nationalism. . president putin and president gan werenterd at the audience as well. thank you very much, unmarried. when we come back, we continue to talk about oil. this is bloomberg. ♪

is "bloomberg surveillance." let's check in on what is trending.

companies are uniting in hong kong to put an end to the shark fin trade. the launch of small rockets and new zealand promises a new era for quick and cheap access to space. california faces the most destructive series of wildfires in history. pressure is building on theresa may on a brexit plan. president trump appeared isolated after the world war i commemoration. let's get straight to the bloomberg first world ne -- first word news. sebastian: world leaders gathered for the world war i commemoration. over theoncerns reliability of u.s. security guarantees under president trump. pressure is building on theresa may to ditch her brexit plan or face of the feet and parliament.

and the eu have been into toward a plan, but she faces potential rebellion with the london mayor urging london mps to vote down the deal. >> the deal she is currently negotiating is at the very best a bad brexit deal and the worst, we could be in a situation where there is no deal whatsoever. i say that she should give the public a vote for the first time on whether they accept the outcome negotiations with of the eu. n to stay in the alibaba launched up another record. bellwether offering a gauge of consumer sentiment amid the

escalating trade war. the most destructive series of wildfires in california history could cost $19 billion in damages. the carnage could be on par with the type of destruction triggered by hurricane michael. governor jerry brown called on president trump to release new federal aid after he threatened funds under what he called gross mismanagement. a court of a million people have had to leave their homes and seek safety. global news, 24 hours a day, on air and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. salek and this is bloomberg. is higher this morning as saudi arabia said it will reduce crude sales in september. is rising that opec and its allies will cut production next year.

dudley was asked if you got a cut of one million barrels a day would stop a drop in the oil price. >> from saudi aramco's customers areheir looking for a reduction in september. they inventories building. i don't think any decision has been made. opec will meet december 6. shocked by the speed at which the market is going? >> opec has reduced production in june. we probably would be over $100 a barrel right now. the big uncertainty was iran's exemptions.

i think we would have seen a higher oil price today. since that has happened, it is uncertain to drop back down. in a way, opec is responding like markets. prices come down and now they are adjusting. he said we might be underpricing the impact of iran. the look at it that way? >> it is quite possible. the markets drop so fast. it was overshot and now it has shot back down. i think with this announcement with at least saudi arabia reducing, it will confirm the price. manus: do you think we get it below $70? -- even theket projections of global growth in

demand are 1.3 billion barrels a day, which is below what people were thinking, i think global economic growth will accelerate a little bit. 2019.rket is firm in you have big uncertainties. venezuelan production, libyan production. production be faster out of the permian basin in the u.s. francine: joining us now is manus. seems that the saudi's are more than just setting the table for cuts. what is the latest? manus: i get the sense that they are consensusbuilding. they want those people who had exemptions back in the original nigeria to consider joining the pack. maybe even creating a central bank for oil. that is a fascinating concept. set.tate is getting

-- stage is getting set. they need to take action. he said if i had 2020 vision backwards, we might not have put the pedal to the metal as aggressively in the middle of the year. the reality is, those waivers on iran were not expected. that has caused the market to go into a slight tailspin. he is the magician of hurting the capital of opec. leadership from saudi arabia. saudi arabia shows leadership, 500,000 barrels in terms of the drop of demand for them. where does the other 500,000 come from? around december 6, in the cold, in the snow, looking for the price of oil. francine: thank you so much. great work on the ground there. let's keep the conversation on oil.

when you look at the price of opec has done about three u-turns in the last month because they are trying to figure out demand and waivers. what is the ideal price? the key driver on the price of oil is president trump. i think he started meddling in the oil market back in april of this year. became negative on the price of oil because of political involvements, specifically with saudi and russia. are going back to neutral here a price between 55 and 60 is fair value. we don't expect a global slowdown in any way so any signs of weakness below that would be a buying opportunity. we do expect a trade range between $50 and $60 to stabilize maybe around $55 around crude. >> it will probably trend down a

little from year. the market is very different than it was five or six years ago. broken.ook of sales has when the price rises, you see more production. when it falls, you see a cut in production. expect these political interventions to some a price on other way. eventually, things will stabilize. francine: is there enough demand? we are focused so much on supply that we forget emerging markets may be tailing off a little bit. kallum: there is plenty of demand. the global economy is not doing quite as well as it did, but it is still above trend.the u.s. is going to get year.to 3% growth this it is interesting to see the way oil impacts consumers on either side of the atlantic. the higher inflation from the recent tick up in oil and europe

will weigh on consumption growth. in the u.s., you get a transfer of an term -- income from consumers. if oil into next year, comes down, it could be a plus for consumers. i don't see an issue with demand. hanos: i don't think central banks will be impacted. i think the fed will continue to raise rates and continue into 2019. the ecb is totally off the accelerator. i think with more volatility, geopolitically, anything will be looking to tighten next year. francine: when you look at the emerging markets and the impact the oil has on imports and exports, is a game changer for a lot of these were emerging markets -- these emerging markets? thanos: i think what they will

be looking for is the china economy. within the em space, there will be those oil exporters. there will be a little bit of a benefit their, but not associate -- there, but not necessarily an oil prices. francine: plenty coming up,. italy has until tomorrow to submit a revised spending plan. softbank unveils plans are a $21 billion ipo. we will discuss that a little bit later. this is bloomberg. ♪

francine: this is "bloomberg

surveillance." tomorrow is the deadline for italy to submit a revised version of it spending plan. the government has signaled it will bow to pressure from brussels. the prime minister is meeting with deputies ahead of that deadline. the euro slumped to its weakest level in more than 16 months as investors took a dingy of political risk gathering over europe. how much is italian political risk weighing over europe? overall, you are you are about italy than germany? thanos: i worry about italy as well. francine: which one do you worry about more? thanos: italy. i think we will see the yield go back to a 4%-6% level. merkel has the one who has kept

all of the eurozone together during a difficult time. with her out of the picture over the next 6-18 months, there is not going to be a clear leadership on the eurozone. people do not agree with macron taking over. i'm very much worried about the eurozone and italy, in particular. there a danger that the country turns euro skeptic? populace do if the lists do a -- popu good job explaining what italy has done such a bad job since the early 2000's. francine: their main messaging is that it is brussels fault. kallum: weaponize in the euro is their most effective policy for building euro skepticism in italy. first, italy has a low, underlying central growth rate.

the withdrawal of reforms will lower that potential growth rate. second, you have the widening of the fiscal deficit. that has the effect of widening spreads, leading to higher bond yields. in essence, any public sector activity will crowd out private sector activity. the market will penalize. in the short run, expect lots of many crises, become next recession, when the underlying weaknesses are exposed, italy is a candidate for a debt crisis. at that point, markets could be very worried indeed about the prospect of italy. francine: or you could argue that salvini is beating up on brussels to try to get votes. biggest those and get into bed and goes on a smoother path for investors. thanos: the concern is that italy cannot really blame the eurozone. go backs had a history,

before the eurozone where the only way the economy grew was by devaluing the currency. so they can blame the euro for it? thanos: they are. in my view, is not dealing with the situation. even outside of the euro, they would not be able to provide competitiveness. reforms.es structural blaming the eurozone is not going to deal with the situation. francine: the concern is, doesn't make a difference if you have fresh elections are do you look at the kind of european parliament elections as an understanding point on where europe goes next? lum: the populists in italy have tried to change europe, and fail it gives the argument that you cannot change with more merit. by thehollowed out advent of emerging markets like

china in the early 2000's, but didn't address those issues at the time. now, italy is in a very tough situation where it needs a big internal devaluation, was can only come through aggressive regulatory reform or a sudden rise in unemployment. both of those are particul -- politically difficult to swallow. they favor the populists. deutsche bank saying they have had a surplus for such a long time, brussels needs to give them a break. is there a chance they will? : any help and a crisis in europe is conditioned on you sticking to the rules. the rules are the most serious criteria which keep all of the eurozone countries working together as a unit. how would it look if, from a

moral point of view, italy renovated deficit which exceeded ? the criteria and then got help in a crisis it would undermine the bedrock of the eurozone project. francine: thank you both for joining us. announcedoftbank has a 20 billion ipo of its telecom operation. what does this mean for the tech giant? we will discuss that next. this is bloomberg. ♪

francine: economics, finance and politics. this is "bloomberg surveillance." ma continues jack to step down as chairman, alibaba notched up another record. the ominous of against the featured apple and dyson among the most popular brands attracting customers. single shares a bellwether offering a gauge of consumer

sentiment amid the escalating trade war. sources tell bloomberg the all caps transaction could be announced as soon as today. i think the health shares a closed just above $120 a share on friday, valuing the technology company at about $4.9 billion. the italian maker of $2000 ski slowingseems to have a in chinese retail. the company expects to post strong performance in the key market for luxury brands. 2018, the first quarter,. was huge in the first six months, nine months, was very good. , i cannot say

anything. which i always to make our view long-term. to findn: denmark hopes out whether the estonian unit at the center of a massive money laundering scandal was used for illicit trade before takingen over by danske bank. british american tobacco has plunged on his of a possible ban on menthol cigarettes in the u.s. food and drug administration --.ssioner scott that is the bloomberg business flash. francine: softbank is seeking to raise over $21 billion in the ipo of its domestic telecoms operation. the company's founder is

spinning off the company's cash cow to raise capital to fund tech fields. tim joins us now from taipei. $100 billion has already been raised toward vision funds, why does he need more? tim: you can never do with too much money.another $21 billion will go very handy for him because he has got $100 billion after his first vision fund. he has even talked about a second which would rely on saudi arabia and money. he has backed off a little bit of that recently after all the scandals going on in saudi arabia and the fact that getting any of that money might be poison. he wants to cash and what he has got, any some images to hold onto 63% of it through softbank. he gets both sides of the coin. francine: talk to me a little bit about the timing. is a difficult to be at in

publi -- to be in public business right now? given the turmoil in the markets over the last 6-8 weeks, definitely, it is reasonable to question the timing of going for an ipo right now. if things got worse, it would be even a worse time to go ipo. having said that softbank corp.'s numbers are pretty good. they compare very favorably to the other telcos in japan and around the region. the various symmetrix are pretty solid. they do look pretty good and that they price it right, i think there will be a lot of interest in this telco, despite the timing and turmoil. day, investorshe still want to invest in something and this might be a new option for them to look at. francine: thank you as always. we will have plenty more from tim throughout the day and the week.

surveillance" continues in the next hour. tom keene joins me out of new york. is at 1:30 p.m. london time. in the meantime, we will go through what is happening with oil and brexit. a little bit of movement on pound. treasuries actually close for veterans day. this is bloomberg. ♪

francine: pressure mounts on theresa may.

she is facing increased calls to deter brexit plan or face catastrophic defeat. cutting crude oil gains on the prospect of opec curves in 2019. trump isolated. nationalism as leaders commemorate world war i. this is "bloomberg surveillance." tom, i'm looking at the markets. with of the dollar strength really front and center and really against developed nations, less an em story with strong dollar versus euro. francine: we will look at your full currency roundup. a reminder, it is veterans day in the u.s., treasuries aren't trading. another six that have been found in the northern part of california. that raises the death told to

29, matching california's record for a single fire. more than 6500 homes and other buildings have been destroyed. almost 150,000 people remain evacuated. high winds are again forecasted. president trump appearing isolated. it also underlie great concerns about the guarantees of security guarantees under president trump. opec and its allies are laying groundwork to cut oil price next year. they are reversing an almost year-long expansion. saudi arabia is leading the way saying it will export half a million barrels a day. is putting pressure on the so-called opec plus group to act before december's policy meeting.

pressure is mounting on theresa may to abandon her brexit proposal. if not, she could face a catastrophic defeat in parliament. pre-brexit conservative lawmakers have joined forces with the northern irish. they are going to reject a deal that could treat northern ireland differently. global news, 24 hours a day, on air and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. on sebastian salek, this is bloomberg. tom: data check. equities, bonds, currencies, commodities. a point to spread going everywhere. -- .2 spread going everywhere. oil with a little bit of a live today. showing us where equity markets closed. blended old-school

trading nation that doesn't include china. that really begins to like out toward 98. francine: this is what i'm looking at. european stocks turned lower. we also sell -- saw u.s. futures lower. i think investors are trying to figure out what it means for equities after the roller coaster of the past few days. i'm looking at dollar up.oil snapping attend a selloff because of comments from the saudi arabian oil minister. the pound is sliding as the u.k. prime minister's fought to keep up her brexit before -- divorce plan. pressure is mounting on theresa may to abandon her brexit proposal. if not, she could face a catastrophic defeat in parliament. conservative lawmakers have joined forces with the northern irish party.

they are going to reject a deal that could treat northern ireland differently. early on, manus spoke exclusively to london on the deal. bob: it is at the very best a bad brexit deal. the worst, we can be in a situation where there is no deal whatsoever. when i say to the prime minister is that she should give the public a vote for the first time on whether they accept those outcome negotiations with the option to stay in the eu. francine: that was the london khan speaking to us earlier. let me start off with you. when you look at brexit, is a turning point, if theresa may doesn't have that november

summit, if she can't even put anything to parliament, what does it mean for u.k. assets? it is kind of the lack of clarity here. investors want certainty. unfortunately, there is very little certainty. the risk is we thought that perhaps december might be the last, but there's a chance it might go the on the. it is hard to know. march 29 is a key deadline. they could extend through year-end into early next year. francine: what is priced into the markets right now? patrick: no one knows. the difficulty is there are so many hurdles to get a brexit deal. you have to get a deal with her cabinet, get her party on side, so many potential stumbling blocks even if we see something that looks like good news. that doesn't mean we are anywhere close to getting a good

deal. i think we are hearing more and more on article 50 getting extended past march 29, and living in this gray zone for the indefinite future. francine: is this like looking at arithmetic? does theresa may do a deal that gets passed parliament? chris: i think the next step is this is tricky as the next one. i don't know if that is a given getting it through parliament. both labor and conservatives said they want to respect the will of the people, which is brexit, but it is very difficult. labor has their six steps that a brexit deal has to include. so many potential stumbling blocks, i don't see hey geither all of them even if we did a deal with the eu. tom: chris turner, you were invited over to 10 downing street today. i'm looking at the chart, there has got to be a point where it

tips to a resounding weakness. what is it? a think the lower end of the trading range we have seen is about 126-127. i think you are right. sterling cells breaking below saleskind of levels -- breaking below those kind of levels. , fornk the issue would be theresa may, that she basically say that it is a bit too early for her to be presenting a deal right now. does she really need to leave it as late as possible and say either this deal or no deal? tom: i am the ugly american here. it seems like every day there is a brexit day. what is different right now from three months ago, six months ago, besides the timelines moving on?

patrick: nothing. there is really nothing concrete that will be voted on because i think they can just get kicked down and i think the article 50 being kicked down, extended past march 29 is probably our best case to get there has been no progress of any substance over the last six months. fromine: we are also urine the commission president giving hearing in berlin -- from the commission president giving a speech in berlin. where is europe headed and what does it mean for investment? italy is a big concern. the eurozoneether is safe together because angela merkel is weekend and italy is fighting the rules. patrick: there are lots of things always happening in europe. angela merkel leaving might be good news if there is someone less of a budget hot coming in.

even a small pivot allowing some fiscal flex when an the economy is underperforming. that thewho can see eurozone was better off, it might be good news. meanine: what does that for euro and is a play on euro or equities? chris: is certainly plays on the euro. the links we have seen most recently is italian political noise over the last six months, since elections. eurozone growth has been so weak in the third-quarter. it is going to be another breakout year for eurozone growth. . and we had the disappointment of q1 and q2 german third-quarter growth may contract later this week. i think that link between politics and the macro and ecb is all combining to keep the euro quite weak. tom: we will continue this

discussion. uniteds day in the states with bond markets closed. much more coming up. a conversation later today on technology. please stay with us. this is bloomberg. ♪

sebastian: this is "bloomberg surveillance." conquest -- there are

concerns about trade wars and other political issues. >> business leaders generally one stability uncertainty on policy. we have always said that. i think it is the uncertainty that creates lack of confidence. the price of oil rose after opec and its allies raised -- saudi arabia came out and said it would reduce oil sales. >> we have to wait and see how the market is unfolding because our ultimate goal is market stability. as i is stated on numerous there is a toolbox which allows us to increase or decrease production. we have shown that we can go either way depending on what the goal is. the goal is market stability. shares of british

american tobacco are plunging today. u.s. regulators reportedly may ban menthol cigarettes. that would hit a business that generates about a fourth of the -- profits.ogress tom: thank you so much. it is a dollar stronger recently. the president of united states has left any and all know that. patrick and chris are with us as we consider foreign-exchange. story, it isem more developed nations story. i want to get mathy on you. this is a long-term chart back to the 1970's, the plaza accord. another dollar about in 2002. what is so important is the this.ng this or nature of

we are really talking here, elevated dollar strength.what are the consequences if the dollar breaks out to new dollar strength? i think it is going to be very painful if you look at 22019 at some of those emerging 2019 at some of those emerging markets. think we have gotten tied to u.s. policy at a time we driving the strong dollar as well. it is going to be a very difficult time for emerging markets in 2019. q1, iro and yen into think dollar strength can potentially extent. tom: within not is the euro this morning. what is the key level for euro-dollar? right now, 116, the initiation

of the euro way over decade ago, 112. what is the level below that which has chris turner's attention? chris: i think we are talking big figures now. probably a 110 figure. a small technical level just below 112 or so. certainly, that is the direction of travel for the time being. that is the thing. may be brexit news. we have seen occasionally brexit and sterling drug the euro with it. brexit is a problem, not just for the u.k., but europe as a whole. patrick: we are long dollars still, but we have been reducing it month on month. the dollar has interest-rate differentials and much stronger economic growth. with democrats taking the house, you might have political issues

in the u.s. if the mueller investigation or of democrats want to investigate the white dollarwe are still long because the economy is still not accelerating. i think political risk may start to balance out in the coming year. francine: if you had to get one call right, i guess it is or dollar call because it means you get your emerging markets right as well? patrick: it is the biggest driver for emerging markets. we don't see an end to the dollar strength in the near-term. ask, with of to the attention of the continent at this early hour in the united states, on eurosterling, what is the dynamic you see versus sterling dollar? chris: i think of last week or the last couple of weeks,

definite sterling outperformance of the euro. we are slightly closer to a brexit deal. those sterling gains have been handed back. bias.k we would have a ing thinks there is a possibility for a deal before march 29. sterling fundamental is very weak . of virtual price for sterling would see a repricing for the bank of england cycle in two 2019. we think --into 2019. greater confidence that if there is a chance for a deal, eurosterling can break into the 85 area. tom: important for global wall street. patrick and chris will continue with us. much more to talk about today. nice ideas for the 6:00 hour. kevin cirilli will join us.

technology ceo tonight in the 5:00 hour. this is bloomberg. ♪

francine: "bloomberg surveillance." tom and francine from london and new york. the french president has a slammed the rise of nationalism as world leaders met in paris to

mark 100 years since the end of world war i. policiesized the embraced by president trump. annmarie spoke with the nato secretary-general about the french president's comments. about ahe speaks stronger european effort on the fence, this is within the frame. --, asme a more european long as it takes place within alternative not an or something that duplicates. annmarie is joining us from paris. was foreign policy really discussed? was president trump really isolated or just optics? morning. good

if you look at the front newspapers, you can see that idea thatthis bit of president trump was shunning the rest of the world leaders. part of this is saying he shunned the peace corps and the president macron organized, washington calling it an apparent victory for macron. nationalism. president trump has called himself a nationalist and is the architect of the american first. angela merkel as well struck a similar tone, rejecting nationalism and isolationism. and really a sign of symbolism and the audience, attending with president putin and erdogan, but missing was president trump who is headed back to the states. francine: thank you so much. will get back to patrick and chris. we will talk a little bit more about the markets and a little bit more about what it means for

geopolitics. geopolitics is weighing on the markets. patrick: very difficult to price it in. you get more volatility in the news and geopolitics than an underlying fundamentals or interest rates. that is a thing that gets the headlines and moves markets, and then it comes back. it is very difficult to price. you can't ignore it. markets typically overreact to any geopolitical news. you can't ignore it. tom: a lot of talk about the president of the united states this weekend. what did you observe and what do you observe forward in the dynamic between germany and france? france, andmany and is very difficult to say because who is quite a be the leaders of those two countries over the next four years? we don't know that. i still think the eurozone is viable. small compromises right

now and elections heavily provoked parties that don't want to make compromise and are moving against building a closer europe. it will be interesting to see the political backdrop. . that is the geopolitical event that is probably most important in europe much more going on here. we will discuss this in our next hour of "surveillance." patrick and chris with us today. coming up, much to talk about. ♪

tom: good morning from london and new york. let's get right to it. fires inst instructive california's history could cost the state ensures come and

homeowners at least $19 billion. the fires in northern and southern california have killed at least 30 one people. more than 67 hundred houses and other buildings have been destroyed. the winds are making atop her firefighters to contain the blazes. in florida, the senate and governors election is going to recount. tweeted that democrats are trying to steal both elections, but he offers no evidence. acting as attorney general matthew whitaker is signaling some critics worst fears about him won't come true. he has told the justice department will not cut the budget for special counsel robert mueller's russia investigation. whitaker had said the probe could be halted by withholding funds. posted $3.7ibaba billion in merchandise sales.

that is up 27% from last year. champion of online sales event. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more 120 countries. this is bloomberg. francine: thank you. oil is higher this morning as saudi arabia said it will reduce crude sales in december and speculation has risen that opec and its allies will cut output next year. manus cranny spoke to the bp chief executive. he started by asking if it would stop a drop in the oil price. >> from their perspective, their customers asked for half a million barrel reduction in december. they will do that anyway.

i think that is a perception of one million down now. i don't think any decision has been made. >> are you shocked? we could see the volatility. production ined over $100 afrankly, barrel right now. the uncertainty -- there are several, but the big one is exemptions. had there been no exemptions given. i think we would've seen a higher oil price today, much higher. it was uncertain and drop down. in a way, opec was responding like the market. they had been over supplying oil to get ready for that. it did not happen. the prices come down. now they are adjusting. as simple as that. underpricing the

impact ofiran. do you look at it that way? -- it isquite markable quite possible. the market overshot i think in both directions. it overshot up and now back down. and the announcement of at least saudi arabia reducing probably will firm the price. >> do think we get -- planning 50 to 60 long-term. the market does look firm. if in the projections of global growth and demand of 1.3 billion barrels a day, which is below what people are thinking, i think global economic growth is starting to accelerate a little bit. in 2019.t looks firm you have big uncertainty. libyaelan production, production.

you have what could be production out of permian basin in the u.s. francine: manus cranny now joins us. what is your take on what exactly saudi arabia wants to do? you were in the thick of it. are they going to take barrels off the market? they are setting the stage. the president of opec was isculating that opec watching the buildup of inventory that will not oversupply the market. it is the rhetoric. rhetoric is the road to intention. in that is the sentiment. a svengali of opec, and non-opec. nominations,ed dropping for december. they will probably cut that export by 500,000. we're talking about a million barrels. the king of saudi arabia is back in swing factor.

they are ready to reduce. probably by 500,000. that potentially lives 500,000 to be distributed among the rest. restraint isis -- is the name of the game. francine: what is the mood like? i know geopolitics has a big thing. is are going to be more investment, longer-term in some of the infrastructure that big oil company need? you hit the nail on the head. if you think geographically where i'm sitting, i'm sitting in the middle of the uae. to my right hand side is asia and china where the trade wars. to my left hand side, the united states. this is where the conflict is happening. there are other deals i know in the pipeline.

adnoc is in dealmaking mode, bringing and partners. bob dudley of bp ready to get andhands on u.s. shale saying to me a little bit earlier, these are good assets, i'm comfortable with my balance sheet. the risk for the market is simple. we went into light constraint and we could have a little tightness in the near term. but it looks like we have a healthy oil industry with good cash flow. yes, $70 is hard to live with. nobody wants to see $60. a right now opec are stepping up thank plate francine:. you so much, manus cranny. we will have plenty more interviews and conversations on the ground. patrick armstrong and chris turner are both still with us. patrick, i don't know how you view oil. is it a dollar story or demand from emerging markets story? just three months ago, we

were asking for more oil because it wasn't going to meet demand. i don't think you really want to chase oil prices if you're relying on opec and opec cuts to basically balance supply and demand. you want to be buying oil when you have to get more production out of people to keep up with demand. there is always going to be cheating if people have to curtail supply, it is not something you can count on. we like the european integrated oil companies because we think they're very profitable. at current prices, even $10 lower they are profitable. -- o not like we're not really negative on oil. tom: chris turner, what does ing see in the correlation of dollar to oil, oil to dollar? >> this year we have seen higher a firmers lead to

dollar. i think particularly in september when we pushed a lot higher in crude prices. then it spilled over to emerging-market countries, large imports in places like india and some others out there. we could be at a time of a strong dollar and high rates, the fact oil is going higher just sort of reasserts that trade we saw in september, which under pressure again. you could also say, what is linked between crude and high dollar rates? core inflation we're seeing this week from the states, probably headline inflation were oil prices to go higher with the headline inflation any higher. perhaps most likely responding to those higher oil prices you would say the fed would support the story of higher fed rate into 2019. francine: thank you, both. patrick armstrong and chris turner both stay with us. coming up next, tyler brule.

the soft power offensive. we will type of france and soft power and the publishing business. this is "bloomberg." ♪

tom: "bloomberg surveillance." lacqua in london, i am tom keene in new york. economics, finance, investment. forget about it. london is going to die. everyone is going to leave london. maybe they're going to go to zurich like tyler brule. look at that. that is a successful magazine. it is almost sick. it looks like the october issue of harper's bazaar.

joining us from paris, tyler brule on a soft analysis of where we are now in were the dynamic is. tyler, is paris winning? is paris doing better as a destination city? for sure. if you look at the tourism numbers after such a long run of terrorism incidents, it bounced back. it is not the most beautiful day today, i have to admit. macron is not winning on that front. once you get into the city, so many weekend papers across europe are talking about the move to paris. financial from institutions, whether it is hedge funds and many others -- everyone is sort of pointing, this is probably going to be the one city that is going to really singularly when after brexit. ties of newts and york and london are wound up about the future of london.

i would say your staff is more wired up on what people actually want to do. do they actually want to leave the city of london? no, i don't think they do want to leave. i think people want to stick around. they want to be part of a winning team. i think that is the big component. when you see a lot of businesses, when you see your colleagues heading for the door -- or when there is an evaporation of people applying to come into advertising agencies -- britain likes to talk about its creative economy. suddenly when you don't have graduates coming in, that is a problem. people look elsewhere. francine: we need to make a musical education for tom keene, tyler. in this fantastic addition, you also talked to christine who is french. two people actually bring the soft power to the country? >> for sure. that is a big component of what

we look at. a couple of the reasons why france did so well this year -- and we had to take the measure ,f christine and the queens and tom, it is a long week ahead of you better for the weekend, i would suggest to probably download a couple of videos and see what she is up to. but it is a real sensation in terms of what she is been able to deliver globally. this is not just isolated to the story, but truly international. the other component -- only look at soft power -- go ahead. thecine: i was going to say youth is not doing great. you have been losing soft power. you say they are squandering soft power wins. was certainly broke up. i did not get that question. francine: number nine, the u.s. squandering its soft power monocle says. >> well, for sure.

this is across a variety of things. tom was rubbers -- referencing harper's bazaar, a great u.s. magazine and is certainly respected fashion outlet. but if you look at international brands, international fashion which, this is a story has dominated by the french and also the french openings was brands and italian brands. if you think of your day-to-day experience, think back to a couple of years ago. the power that the gap had. then you had the power of abercrombie & fitch. we see probably victoria's secret take a stumble as well. the u.s. is not playing in the same style arena it used to terms of touching people's lives day in and day out. yes, there are delivery brands like amazon doing it, but you don't have the power you have in other cities. tom: from your point, synthesis maybe of what the elite are doing, what they are thinking, what they are actually doing with their money.

fit in the americans right now. a one-off wrapped around a president of the united states, or do you sense a real seismic change of where the united states fits in to the aesthetic of the world? -- it is a one thing great question because i think there is still a drive. there is still agenda set probably on both coasts, whether we look at film -- i think certainly the role that pop culture, whether it is on the small screen by netflix or amazon, that certainly has an influence. wase i thought you're going the bigger issue. i have noticed in the last certainly 18 months for the first time when i really have been speaking to american friends who have been living in japan or america for the first time, if you would have spoken to them five years ago, they were never going to give up their past work. i probably have met three people in the span of the last six or seven weeks is said, i'm just

going to go with my dutch passport or have us woods passport, i don't -- or a swiss passport, i don't want u.s. passport. i never thought i would experience that in my lifetime. tom: tell us at the margin what you see out of china. we speak to economists and retail and the important of china at the margin. is china as the margin now? are they going to pull back with the trade war? think china will power ahead. it is interesting when you look at the importance of china, tom, when it comes to luxury, whether it is a third of some companies businesses, is approaching 20% for others? that it is absolutely crucial. the bigger point also is the chinese out in the world. the story is not just about china purchase in country, but two streets away or one street away from your bureau in pairs of that gallery lafayette. the global spinning power, the

chinese being out in the world is a something you cannot ignore. the big question, when are we going to see a global chinese brand in the retail space? when are we going to see a proper chinese luxury brand? is going to really go up against a bmw or audi we would want to drive. love the factso you spend a little time looking at the other half, the spouses. to we underestimate? trump numbernia one and fill it may number two. the power of the spouse. to underestimate their influence? >> i think we do. it is always a sideshow. it is that soft third story, the

page seven or eight story when there is a major event. we certainly -- when we've had coveracron gracing the magazines, even outside of this market, you see a bit of a hit. it is essential. it becomes part of everyone wants a total package these days. , froma shame sometimes the news desk one of you, it is a bit down page. good, tyler brule. thank you so much, editor-in-chief of monocle. incredible magazine out of zurich, out of london as well. we're going to come back with hat trick armstrong and chris turner -- with patrick armstrong and chris turner. forward to the stronger dollar day we see. maybe something to try this week. you have a bloomberg. you can see all of our charts. you can steal them from us, .ncluding dxy

brexit jitters as well. they with us. this is "bloomberg." ♪

francine: tom: "bloomberg surveillance." interesting and busy week. right now with patrick armstrong and chris turner, we have some really important ideas. what was so interesting to me, patrick, was over the weekend, with the remembrances of world war i, to see macron and merkel and may and to think of europe, yes, a europe of 100 years ago or maybe 100 years forward, and it really comes up to the tensions that are there around economic growth. 3,ope has rolled over 1, 2, four quarters in a row the well under 2%. is that a trend, patrick? >> yes, definitely, because the capacity for economic growth in europe probably doesn't get to 2%. 1.6%, 1.7%, that

is the potential growth of europe. we have like economies were we can compare to the u.s., which probably has a capacity of 2.2% or 2.3%. we cannot compare apples to apples versus other countries, nothing like china has 6% growth. 2%.5% to the economy is not robust, but it is not falling off a cliff, either. euro sclerosis, chris turner? >> probably not quite as bad as 1999, 2000.in the issue could be on the agenda for 2019, perhaps. wem a euro perspective, if look at what happened last year, with such a huge rally in the electionr the macron where we had a brief window were european politics was off the agenda and we could focus on growth and there was a lot of

optimism in the second half of 2017 or so. butto see where we are now, as patrick was saying, the fact we're going to see growth maybe 1.4%, one .6% is not the end of the world but is a reminder european growth is potential growth is far lower than we are seeing in the u.s. francine: if you look at italian debt, are you buying it? >> you don't want to buy it this week, it is in the headlines. when everyone is panicking about italian debt, it does make sense to do tactical trade. it is in the headlines, tomorrow especially, but it doesn't take much to get a compromise. both sites may be other one to talk very tough, so they can know they've done all they can. want thehe italians easy to come and tough and hard so they have to cover my selecting to their constituents to say, they fought the battle and god is more than the 2% deficit, come in at 2.2%, two

.3%. i think both can live with it. we will get there but it will be a bumpy ride. tom: patrick armstrong and chris turner, the lead market story today, stronger dollar against developed nations looking at euro it will under 113. francine, we have brexit as well. tangible brexit news after a quiet. much more on that. on the u.s., a few chads, few election issues underway. we will touch on that with kevin cirilli and jim glassman on the american labor economy. stay with us. this is "bloomberg." ♪

tom: this morning, forget emerging-market angst. the dollar strength against

major currencies. what is it mean for europe? what does it mean for president trump? it is a new and improving washington for democrats. they take their fair share of contested elections. beware of the chads and numerous florida recounts. macron-may remember. i am tom keene. in london, francine lacqua. what did you observe in london yesterday as we all remembered world war i? francine: first of all, it was very emotional because it was 100 years. it kind of harks or memory back to some of the challenges facing . i thought it was gripping to hear nationalism is bad because it leads to war, something in economics we don't quite often think about. overall, he goes back to geopolitics and anything that has to do with geopolitics we see 60 world leaders on the

stage in paris, and also goes back to currency dynamic. tom: mr. macron certainly taking headlines this morning. right now with our first world news on the fires in california. the death toll now raised to 29. magic help when his record for a single fire. another two have died from fires in southern california. more than 67 homes and other buildings have been destroyed come on the 150,000 people remain evacuated. are again in the forecast. president trump appeared isolated. allies over u.s. his decision a pullout of an intermediate range missile deal with russia. concernsined growing about the reliability of u.s. security guarantees under trump. france president macron appeared to have the u.s. leader in his sights when he attacked nationalism. opec and its allies are laying the groundwork to cut oil

surprise next year. the reversing almost year-long expansion. saudi arabia is leading the way saying will export a half-million fewer barrels a day. marketlapsed into a bear , putting pressure on the so-called opec cross group to act before december's policy meeting. pressure also mounting number is prime minister theresa may to abandon her brexit proposal. if not, she could face a catastrophic defeat in parliament. pre-brexit lawmakers have joined forces with ireland's democratic unionist party. there are vowing to reject a deal that could treat northern ireland differently. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more 120 countries. this is bloomberg. markets.s look at the the dollar front and center. veterans day, bond markets are closed in america. the equities. no movement in the

u.s.-governments indicated by the two cents spread. bureau, 76 down. next screen, please. the events, 17.7. friday close on the dow. dxy, 97.4. it is the way they got there with developed economy weakness. francine: yeah, tom, that is a good way of looking at things and a very good way of looking at your markets. what i am also looking at is the seven mark for dollar renminbi. dollar strengthening with oil. i'm also looking at brexit. the pound sliding as theresa may was try to fight to keep her brexit divorce plan alive. tom: much to talk about here, particularly on politics and .nternational relations kevin cirilli and in reporter. in marie, what do we learn about

the present dynamic between germany and france? >> good morning. the present dynamic between germany and france was on display in a quite moving ceremony between president macron and chancellor merkel, even at moments macron really embracing merkel, merkel leaning on him and the two held a ceremony quite private and emotional to mark the 100th commemoration of world war i here in paris. also on display was a bit of isolationism between president trump and his peers, really, the main event taking place he was behind me and president macron was taking aim at president trump's america first policy, rejecting nationalism, and snub the piece form. that is really what the french paper seven focusing on here on the ground. francine: did the two leaders get along?

i know if you was isolated, but did they come into any kind of agreement on anything that go i'm talking about macron and trump. they gave a met, thumbs up. they had about an hour or two long discussion. one of the main things was defense. when trump landed in paris on friday, he shot off a twitter -- a tweet saying what president macron had to say about it true european army earlier this week was insulting. macron has said he did not mean europe needs to defend itself against the u.s., and they seemed to get on in terms of talking about nato defense spending. that goes hand in hand, macron is been pushing for more cooperation in europe. when it comes to ideologies, and if you look at president macron's speech, there seems to be a widening gap. as "the washington post" is calling it, the bromance, is fading. quite a weekend.

kevin cirilli with us. we could go on an hour today on the election detailed. i want to go to the emotion of the weekend, which was the president missing the friday trip. i put out an uber map of what it .as is there any permanent damage to the president from not going out in the rain on friday or saturday morning? >> domestically, democrats are criticizing him, recalling what former president obama used his umbrella and spoke in the rain when he was there during his presidency. republicans are saying this was something he was just unable to attend. therems of whether or not is lasting damage, i think the critics of the president will continue to criticize. it is getting some pickup, we should note, on how he is representing the u.s. on the world stage. tom: the lonely photograph of general kelly at that cemetery in a horrific battle of world

war i. writingnew york times," nicely on the change that kevin cirilli brought to us at of schedule. voting remains more difficult here than in almost any other affluent country. i had to wait in line for 45 minutes, most of the ballot initiatives will pass in both blue states and red, our system with workday elections. long voting lines, cumbersome registration rolls is designed to discourage mass participation. kevin, what a show by the democrats in the close elections that we have seen over the last 10 days. how has this changed now versus wednesday last? >> democrats and their his own a 30 point lead in arizona. then you have in florida, where the gubernatorial as well as the senate race is below the .5% threshold, which has triggered a

recap. they will be counting chads. not much has changed since i was a kid in terms of florida elections. the business community understands that. we always hear about there is a regulatory patchwork in terms of how the different regulations across the state make it more difficult for businesses to kind of get a forecast of what is coming down the pipeline. it is the same exact problem in terms of voting. there is a regulatory patchwork of voting rules, laws, regulations in the u.s. it is different for every state. look at what we're seeing in terms of florida and arizona. tom: i know you are the ugly eagles fan that without a shirt can and that goes up in the air and you are leaning over the balcony trying to grab the t-shirt. axioms with a subpoena cannon of the democrats beginning in january. are they going to muck all of

washington with 1, 2, 10, even 15 investigative hearings? >> yes absolutely. last week i interviewed maxine waters and she says she was the president's tax returns. then i interviewed another is said, look out for the trump hotel. look, those are two democrats were saying subpoena power. they say they can walk and chew gum at the same time and they will be able to investigate and legislate. this is a new washington. it was also a tough loss last that. i don't to talk about it. i can't stand the cowboys. nfl football for our global audience, american football getting excited. i do this because i need therapy from jonathan ferro. kevin cirilli, thank you. coming up, our economic question of the day. james glassman is the expert on the dynamics of the labor economy.

jim glassman on the president's worst nightmare, which is the welcome a fully employed america. stay with us. this is "bloomberg." ♪

the business flash. the ceo of qantas continued strong cash flows at the us trillion airline, even though the fuel bill gives rising. he told bloomberg is enough to fund capital expenditure, shareholder returns, and to manage debt. still, concerns about trade wars and other political issues. >> business leaders generally flaunt stability and what certainty on policy. we have always said that. i think it is the uncertainty that creates lack of confidence.

in china, a limo is an all single stepper motion posted a record 3.7% billion -- $3.7 billion, up from last year in the last single day before he steps down as the chairman of alibaba as the ceo. he is been a champion of the online sales event since it began a decade ago. and that is a bloomberg business flash. tom: appreciate it. jim glassman with us on american economics, the trends he sees, his expert ability to focus on a fully employed america. the right now with dollar dynamics today and weaker euro, out of the foreign exchange font of the world, the university of texas at austin, john hardy of saxo bank. wonderful to have you with us on short notice. why is the euro weaker? largelynk the move was -- two things. the move was largely technical.

it was getting close to the 113 area last week but at good triggered a number of stop losses. it was a clear level on the charts. the other thing is since there's no change in the fed's plan and we're seeing this strong dollar issue coming back as a sort of attempt by china to keep or showing an effort to keep the foreign player seems to be fading as rapidly as it came and you're seeing the dollar come back on that front as well. tom: when i look at the dollar, it is the idea of mr. powertel interested, mr. trump interested. is mr. draghi generally interested? >> i think mr. draghi is essentially surrendering because the issue for e.u. has gone political. the ecb did everything it could to keep the eu together with its monte -- money printing machine. the ecb has shot all of its

bullets, you could say, and is out of ammunition. i think they surrender to that fate. francine: john, overall, do you see the standout between brussels and run on the italian budget turning ugly? >> yes, i do. long-term the question is, is it more of an issue this time next year or is it going -- the confrontation going to come this time around? i could see on the one hand, wait tillice to after the parliamentary elections to see if the populist mandate has been enhanced by sense of populist wave across the eu due to minor adjustments this year as long as they still get some of the platform through, then take up the big fight next year. but i don't know. i do see it coming, but isn't this cycle or next? tom: john hardy, thank you. the euro weaker this morning. to jimood always speak glassman of j.p. morgan chase.

to do that on jobs they worry is provided wisdom without question, is thinking on youth unemployment and the financial crisis. he joins us now with a fully employed america. jim glassman, i get more mail on -- when suits and ties say it is a fully employed america. i get more mail on that than anything else. ? something to it. if we are fully employed, where we still getting implement growing 2000 and more? it tells you we are pulling people back into the market. a lot of folks who gave up in the recession, dropped out, doing something else, some of them are starting to come back in. i think everybody -- you see "help wanted" signs everywhere. the labor market is pretty good. the question is, where the patrons going to be going? francine: do you worry about the economy overheating? >> i don't. i think that worry is dying down

a bit because we're -- one of the things, to be one of the advantages of getting older as an economist, you have had more time to make mistakes. one mistake we make is we have this idea that are rigid limits to the economy. the truth is, when we get a really hot economy or press the limits, we find businesses have clever ways of getting around it. i think we will see more legal immigration, more productivity. the economy has the capacity to produce more. the inflation trends are not making you think there is an overheat a problem. tom: when you look at your work, all of your travels, he folded into the macro economics of bruce castor men and his team in new york, the linkages of moving from a 4% gdp to a 3% gdp 22 point x percent gdp, does the house of cards stay together as we go forward -- 4, 3, 2 and we hope not one? >> in our community, we get

nervous. we think, we are fading out. the truth is, the economy slows down from 4% to 3% to 2%, we are still rising. the state of business around the country is still strong. everyone is dealing with challenges. tom: come on, jim, raise their wages. >> that is going on. there is this massive demographic shift going on. you have these 60-year-olds going into retirement -- tom: don't look at me like that. >> i was looking at myself. hard to find a 20 year old who knows what a 60-year-old those. frankly, that is a bigger challenge for most businesses than the skills gap. tom: 60 euros in retirement? -- 60-year-old in retirement? this is an important interview. virginia, thee of former virginia governor. he is someone that really understands the democratic party.

westin, 12:00 man today with government caller. this is "bloomberg." ♪

lacqua infrancine london and tom keene in new york. jim glassman with us with jpmorgan chase. in a brief moment to speak about what are they doing -- corporate officers -- what a tax cut?

we all knew it was coming, but there it is. they're not really doing investment, are they? >> no. there was the reason a think they would. businesses do investment when they see a better economic outlook. it takes a while to build confidence. where the money is to finance investment is less relevant than what your market is doing, and what your outlook is doing. i think there is more optimism about the u.s. economy. and leverageld up optimism. they're looking at the different events of the last 24 months as a one-off, aren't they? >> you probably are. i think it takes a while to figure it out. tax cuts are permanent and it does level the playing field. it is making people feel better about the financial backdrop. you know what? bank lending is slow because companies have two minutes amount of cash. honestly, although many of us are optimistic, the outlook has

not changed that much. meanwhile, you have markets in asia growing 6% or 7%. that is the driver that makes people figure out, where should i be investing? francine: gym, where do you see the dollar? and if you get your dollar call right, does it mean you win investments? >> i don't have a big view about the dollar because for the last several -- a few years ago, the dollar was weak because the fed was doing asset purchases, then the fed backed out and the europeans started it. i think around the world we are becoming more synchronized. central banks are sharing the same goals. our cycles are little more in sync. from that point of view, when you think about the big dollar moves in the last 50 years, the reagan era in the 1990's, was all the noise you there some -- it was either forcing the dollar up or this enthusiasm about technology. i don't really see that playing out.

i think we're going to stay here in this range. where d.c. trade tensions playing out? does it hurt pockets of growth in the u.s. are due largely ignore it? >> i don't think we will ever know, frankly. we have a lot of stimulus put in place in the u.s. people may be more cautious, but i think what is driving businesses is the realization that there is a world around us that is waking up and wants to go to work and once what we have. if you believe your asian markets are going to grow 6% to 7%, their living standard well below the u.s. in europe, i think that is going to be the driver. the rest of it is more short-term noise. i think the earlier fears of a global trade war have died down and the focus now is more, can we get through -- are we going to get some kind of deal with china and the u.s. i don't think it changes the

outlook for the global economy because of this. francine: jim glassman, staying with us. coming up in the next hour, kevin book of clearview energy partners, head of research. the focus on a lot of the talk today is on currencies. we will also focus quite a lot when it comes to the markets. i am seeing the pound sliding on concerns over brexit. at, what else i'm looking our futures. they were higher, now a little bit mixed. if you speak a lot of work of participants, they're trying to figure out what stocks are looking for and it is mixed. a lot of it on geopolitics, outlook for equities depending on what happens with currencies. this is "bloomberg." ♪

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my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. tom: "bloomberg surveillance." on veterans day in america, the bond markets are closed. it is one of those holidays in america were some people work, some people don't post of equity

markets are open as well. what i know for certain is everybody that was in paris for these emotional remembrances, they have to go home. francine: that includes prime minister may, doesn't it? francine: she was home a little bit early because they have their own day in london. the pressure is mounting on theresa may to abandon her brexit proposal. if not, she could face a defeat in parliament. pre-brexit conservative lawmakers have joined forces with the northern hours party that props up her government. they are bowing to reject a deal that could treat northern ireland differently and tie the u.k. to european rules indefinitely. joining us to discuss bloombergs brexit editor, thomas. when you look at the concerns out there with the market looking at, what will happen over the next week? if nothing happens, or going to see government resignations? it is interesting. what is going to happen is

almost the easy bit. we've seen from the eu they are mapping out the plan of what getting to a deal looks like, involving negotiator levels there would be some kind of ally and possibly this week. the tricky thing is getting this through parliament. the arithmetic, just the simple math of how theresa may gets this thing through parliament is increasingly tricky. late on friday we had a pro-eu that is due and quite surprising because so far all of the opposition has come from the brexit here can. you mentioned earlier the northern irish party. for a long time we've had opposition from the brexit camp 's said, butp may now we have the pro-eu side. we have essentially the conservative party divided is united in opposing theresa may's plan. last week we had her deputy saying, what's we have got a deal the dynamics would change of parliament would fall in line

behind the deal. but that is looking increasingly difficult for theresa may. when you look at the concerns about what can of deal theresa may would put her parliament, issue going to vote found? is it about the arithmetic of how much support she can get through any jesse puts in front of parliament? >> that is right. actually, she is probably going to find yourself in the position where she is going to sign up to a deal that she doesn't know is going to make it through parliament because such as the division of parliament and her cabinet and the dynamics of the negotiation. i mean, the way -- the position things have got to right now is theresa may, in order to avoid an eu proposal on the irish border, which she said was unacceptable, so she came up with a new proposal and was delighted when the eu accepted it. instead of carving up northern ireland, the whole u.k. would

remain within the eu customs union. the problem is now we are looking at the small print in the eu said all well on your new proposal, but these are the conditions attached. that is what the fight is over now. as joe johnson put it when he resigned last week, he said the conditions, the small print leave the u.k. handing over our sovereignty to the eu than they were handing over as members of the eu. that is a situation where we are now were the small print, the nitty-gritty of the negotiations is, to a lot of people, seems like a worst deal that not only staying in the e.u., but also leaving without a deal at all. francine: thank you so much. somehow i think we're going to have near the same conversation seven days, back and forth and the brexit.th on she and her team have done a fabulous job of looking at this intractable debate in the united kingdom. right now on a monday, your first word news.

the most instructive fires in california history could cost the state, insurers, and homeowners at least $19 billion. fires in northern and southern california have killed at least 31 people. more than 6700 houses and other buildings have been destroyed. are making it tougher firefighters to contain the blazes. in florida come the senate and governors election of gone to a recount. outcry from republicans. the president tweeted democrats are trying to still both elections, but offered no evidence. acting u.s. attorney general matthew whitaker is signaling that some critics worst fears about him won't come true. bloomberg has learned whitaker told associates the justice department will not cut the budget for special counsel robert mueller's pressure investigation. he has said the probe could be hold i withholding funds. the price of oil rose as they

raise the prospect ever production cuts by opec next year. saudi arabia said it would reduce crude sales next month by half million barrels a day. well has slumped into a bear market last week. we spoke to russia's energy minister. >> we have to wait and see how the market is unfolding because our ultimate goal is market stability. as i have stated on numerous , there's a toolbox which allowed increase or decrease production. we have shown you we can do it either way, depending on what the goal is. the goal is market stability. >> global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more 120 countries. this is bloomberg. tom: thank you. print west texas intermediate, on a 60 something handle on brent crude, this after we're all going to $100 a

barrel and we're all sober and kevin book joins us with clearview energy partners. kevin, you have a rate, simple chart -- a great, simple chart that shows linear rise in oil demand. is that just assumed in the future ever up, up, up on hydrocarbon demand? >> i think that is a question of slope and eventually plateau aeration. right now you have a strongly goods between gdp growth and consumption in the emerging world. it is in inverse relation a lot of the time, but for most of the growth parts of the market, as long as gdp grows, so does consumption. test university. on brent crude, what is the geopolitical plug-in you use right now? is it $3 dollars echo $7? is a more than $10? , but it is pretty

clear there were expectations built into brent going into the iran sanctions event. we were more bearish than the consensus, partial because of the geopolitical challenges associated with forcing sovereigns to stop buying oil for their own economic growth. i'm looking at a store that the saudis don't see any major oil supply cuts but there more concerns about a supply glut. who is getting it right? >> there is been a surge in supply. opec producing probably 1.5 maybe 1.6 million barrels a day above what we think that will need for calendar 2019. , that is aa weak 1q time when you would expect them to put on the brakes. the question is whether they will do adjust themselves and just for december as indicated in this comments to media yesterday, or whether they will get cooperation from the broader group. that is something >> tantalizingly thrown out there,

which has its own bullish catalyst in the market. the decision has not yet been taken. francine: if you look at prices, where does the price of oil go? to threehat about two you turns only in the last 18 months. >> the price of oil is going probably down right now based on the oversupply trend we're looking at. maybe you get a bit of a bullish support from the weekend's comments. if we continue on the status quo, particularly if the 500,000 barrels per day we're talking about is a one-off and not a continuing trend, you're still going into oversupply in 1q and that would imply movement to the downside. tom: take the synthesis of clear view energy and advise the president, who is worried about strong dollar, higher interest rates, a fed that wants to derail his economy. view.t from an oil is the president on to something? >> he has an interesting situation on his hands.

strong fed he is to particularly fond of, he is made of a hard for non-dollar purchasers of crude to build a continue with the demand they have had. what that has done is it has put some space in the market that has given him room for iran sanctions. ironically, looks like the fed being strong has made room for his iran policy. somejim glassman, yes great work from your commodities to muff this as well, jim, remember vw rabbits? none of that angst now, is there, with the oil prices? >> no. we have got much more efficient. there are more alternatives. honestly, the levels around this rates are not a problem for the u.s. francine: what about the rest of the world? there is a difference if it is at $60 or $90. jim glassman, were you surprised by the level at which demand was

still strong, even when we were inching toward $80 a barrel? >> no, because in the background, the story is, in places where have the world lives, their economies are growing 6% to 7%. global demand for energy in the background has been rising steadily. periodically we have had supply phenomenon with the shale development, but the truth is, i think the long run story is about the world around us that where living standards are rising of people want more, driving more, buying more cars -- that is where the future is going i think. that is why we are where we are. tom: very good. jim glassman with us, kevin book, thank you, clearview energy partners as well. g tv goes over those of greece, bonds, currencies, commodities. i'm going to draw your attention. you can deal this chart. you can dazzle kevin book over lunch.

smart chart. thank you to kevin book of clearview energy as well. please, stay with us. jim glassman on the american economy. this is "bloomberg." ♪

bloomberg. let's get the bloomberg business flash. in japan, wanting to raise 21 billion dollars in the ipo of its domestic telecom operations next month. the company's founder is listing his cash cow to raise capital to keep making investments in text -- tech. japan's biggest mobile carrier plans to cut rates by 40%.

close to a deal to buy at the in a health. it would tell you the covenant at about $5.5 billion. athena health provides is the services including billing for health care providers. christie's has kicked off a week of auctions. depicts thehat artist young lover could fetch 29.6 my in dollars. bloomberg has learned the was alessio ofr merrill lynch before its merger with bank of america. that is the bloomberg business flash. tom: thank you so much. can you bring up that painting again? fromoks like something sixth grade. $30 million. a shorter. francine: i actually like it. tom: franson, what can i say echo right now, single best

chart. we're going to do this with jim glassman was forced at gunpoint read on rip van winkle. right now it is rip van powell. he is been asleep with all of the other central bankers. as a real fed target rate comes up, it is still free money, jim glassman, when is the when when he wakes up and says, oh, real interest rates? >> that is fascinating because of someone did wait government deep sleep, they would not know what this angst is where having about. it gets to an important point. i personally think this expansion, like the third game of the world series, has a shot at going extra innings. i think one of the things that makes that happen is getting me fed's football for gas pedal. having the real fund rate of zero is probably not getting the foot off the gas pedal. we don't know where the real fed rate is in terms, but the fed things it should be around 1%.

and says,emails in stop courting washington irving and start quoting mark twain. are the innocents abroad going to know what is coming as we finally raise rates? >> i think they're feeling it already. a lot of complaints and the emerging markets. i keep having to tell them, look, the worst thing for you would be for the fed to keep rates artificially low, create a problem in the u.s. that than forces us to get a grip. to me, what the fed is doing, fortunately they were able to do this and a gradual way, is avoiding creating some new financial dislocation that in the last several cycles has been a problem. francine: if you look at some of the possible unintended consequences of this normalization of interest rates, what would be your number one? >> the housing sector is having to adjust because people can't qualify for a bigger loan if rates are going up. but we have to know interest rates are largely artificial.

they are where central blanks -- central banks say they will be. you have to make a judgment of where you think are normal level is. as you move back to normal, some areas that are sensitive like housing, maybe commercial construction, are going to be feeling a little more headwind. the truth is, if this policy gives the u.s. expansion a ofger life span, then a lot these short-term adjustments to higher interest rates are going to be offset by a better long-term outlook. francine: when do you see a downturn? >> i don't. francine: not even in the next two to three years? >> nothing goes on forever, right? last 30ast to the years, when you look at what happens when we get out of a recession, the thing that is very different today, you can't find things that look unprecedented. the thrift all about problems. in 2000, the massive tailwind coming off of a booming stock

market, telecom bust. in the real estate problems. when you look around, i'm sure this won't go forever, but it is hard to find things that look like red flags. i think for now, you know, there's the reason to flag it. we're going to continue to go at least several years. tom: jim glassman, thank you so much. look forward to significant on jobs they've. congress back in session tuesday. very lame-duck. leadership underway. when say, a timely conversation with steve scalise. he is house majority whip. scilly's on mccarthy and polo in. stay with us. this is "bloomberg." ♪

tom: "bloomberg surveillance." lacqua in london and i'm tom keene in new york. there was a moment in all of us as we can, looking at the video of the new north and south california cow -- southern california fires. for me was abc news footage of a fire nato the speed of which was absolutely stunning. reports are great, but it really helps to speak to someone who is living this each and every year.

you may ask why taylor riggs is so good. taylor riggs is so good with the news because of jim morris, legendary in the newswriting business. we are thrilled that he could join us on set this one. you live down the street from kim kardashian. seriously, this is really, really local and immediate. why now and why not 30 years ago? >> a couple of things. the big difference is the drought. we have been in drought situations for six of the last seven years. tom: from 30 inches down to 15 inches. >> in the last few days change. according to the u.s. drought monitor, 85% of the state had abnormally dry conditions about three weeks ago. that is 100% now. more than half the state is in a drop condition -- drought condition. you add the winds. you're talking about the fire

and you see these fireballs. california northern started on thursday. it had quadrupled in size by friday. at one point in the northern california fire, it was spreading at a rate equivalent to more than one football field per second. 18 football field per minute. tom: what do homeowners like you want done? if you say governor this or president that were mayor this, what is the to-do of what is occurring annually? thet is funny you bring up politicians because over the weekend, president trump came out and said it was mismanagement, forest mismanagement and he was not going to send any federal money unless something was done. there is been a lot of clearing that has been done. one of the rings you get there when you -- you get something in the mail and it will say, you have to clear this area if you live on a canyon or a big hill or something or you will face a big fine. most people do that.

however, when you live in florida, when you live in north carolina, when you live on the gulf coast of florida, what he going to do about weather conditions? there is not a whole lot you can do. the winds are big problem. thestate came out with forecast a couple of years ago saying it is going to get worse and they blame it on climate change. francine: how much of it is directly linked to climate change? immediately, california getting help from arizona and washington. but what are the carcass need? >-- but what do the fire crews need? >> there is no rain in the forecast. some are down to 5% of what the rain should've been. slightlyhas died down northern california, which is good news. southern california, the winds

picked up again last night. they need a little bit of luck. they need for those to die down. it does not look like majors going to help. a lot of times by this time of year, you will have timber and buth that have gotten wet, we haven't seen the rain. these things are clocking in at two main dollars minimum. million minimum. how will incentives change for people in california? does the insurance go away? do they just leave? what is the incentive you see out of this horrible event? >> people will rebuild. i don't think you'll see -- and every place with disasters are, when the outer banks gets hit in north carolina, people don't say, we're going to move inland. they are staying. you a to say this, but there's a cost of living in paradise. people have agreed they're going

to do it. malibu, these stars that have lost homes, they will rebuild. you don't see them going away. tom: there is no disincentive to stop rebuilding like you with your 400 feet on the ocean, right? >> the incentive will come. bloomberg said this morning there could be $19 billion in cost associated. if insurers jack up the rates or insurance goes out, that would be the incentive. morris with tangible experience in these terrible southern california fires as well. we will continue with coverage of that with our newsgroup to the day and through the week. winds up in california. please stay with us. this is "bloomberg." ♪

♪ >> the saudi intervention.

saudi arabia says it will export less oil in november. russia is not yet on board. europe's political uncertainty rattles the markets. the prime minister may have to abandon her divorce proposal for brexit or face defeat in parliament. in italy's budget battle escalates. wildfires ravage california. thousands evacuated after fires spread over 195,000 acres. some for the damages at 25 billion, leaving utilities on the hook. >> i'm david westin, alongside alix steel, welcome to "bloomberg daybreak: americas ." revenue.times the david: that is how much they will be paying. alix: have you seen the picture of the two guys in charge of everything? , otherthe best sap