>> 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

companies. i wonder what the culture clash will be like. 4%.k down just about we will be talking to ceos later in the show. remember, the bond market is closed for veterans day here in the u.s.. futures down by about 2%. you did have a firm close on friday, a move higher, but still ending down by about 4%. some strain as we handed into the close on friday. the big story was the fx market, a stronger dollar, but the euro-dollar breaking below the level we saw here come with a solid sub or level, now at the months.evel in 16 in italy, 3.44 is what it is yielding on the tenure, not a lot, but it is a first time it has been over the 3.3 level in a whole month. and took a really long time, about four years to break above that level. so there is uncertainty, there is a medical risk being priced in. david: we are getting there.

is happy. time now for a week ahead. vice president pence is standing in for president trump in asia for summits. tomorrow is a deadline for italy to submit a new to the eu commission. regional earnings week also gets underway with home depot reporting third-quarter results. also on tuesday, we get the opec report.oil market on wednesday, the consumer price index inflation numbers for the u.s., with a retail sales numbers coming in on thursday. alix: time now for the bloomberg first take, we are joined by peggy collins, and romaine bostick. happy monday. the first story is oil. . this is what we contended with on friday. wti falling 21% from the october peak, entering the bear market. completely freaking out that members of the opec lost, the oil minister is saudi arabia

saying that ideally, we don't like to cut, but we will cut if we see a persistent supply glut emerging. quite frankly, we're seeing some sense of this coming out of the globally.not we cannot predict what happens in 2019. but this does not support the oil market, remain -- romaine. >> i think we learn rather breach line is to react we have been averaging about $70 a barrel on rent and got around to that level last week. over the last two years, we have been around $60 last, and this seems to be the sweet spot, were opec decides they don't want to go below. i think the commentary shows they will do whatever they can to support it. david: id, we so this would saudi arabia versus iran. will saudi arabia step in and bail president trump, it turns out the u.s. shale, who would've thought? id: yes, it is a whole new world

in terms of the continued surge in u.s. production. i also think it is interesting to see the difference between the supply and winning demand. we are seeing in this case, an oversupply, as opposed to waning demand, which in some cases is good for investors. also, i think it is supporting the fed and making it easier to fight to these inflations that oilre not being, prices skyrocketing. alix: what i find interesting is that if we have a bear market in oil a year and a half ago, oh my god, we would have seen the markets gone to the woodshed, the high-yield market would have exploded. we did not see that this time around. : let's read, we do have folks making the case of that ,emand is bad around the u.s. others say that if you look around the u.s., there are only a few pockets supporting the mission as a whole, such as texas. so long as that holds up, i

think investors will take it in stride. are still welle above what the show producers need to be, to be profitable. alix: we will have revisions from the eia, like you brought up. david: the second story is summer in europe, not sure if it is in italy or the united kingdom, you can see what is going on with the euro-dollar, taking a hit, as well as the pound. theresa may does not seem to be able to hold a cabinet together, much sense europe. alix: it really does feel like is having the death by a thousand cuts, she cannot hold everyone together. longer,taly also seems they keep saying, we are standing by our budget and we're going to barrel register the eu on this one.

romaine: and the eu is saying no way, no how. there could even be economic sanctions. the interesting thing is that i feel like that you is in position where they could almost start getting hurt or this. when you look at the correlations between what is going on between that euro and the pound, the worse the pound goes, the euro gets worse. italy is clearly trying to see if the eu will call their bluff. maybe they will come a battle know if the eu has as much of an upper hand that they think may have. alix: the euro was doing just fine, and now look what is happened. it is getting taken down as well. the hedge fund interest in the euro has also spikes in the next couple of days. it will be interesting to see if italy can and by its call as it remains said, or whether -- as romaine said. alix: so many short positions on

the euro. david: our second story now, ,2 the wildfires there, over 30 people dead, a hundred or a couple hundred missing. estimates are up of over $20 billion, with no end in sight, it seems like. haidi: the other tragedy is that it feels like it is up and down. i was getting text from people in northern california, san francisco, it feels like the date is getting ravaged from top to bottom. alix: that brings us to the utilities, you have edison, sam farr, they all got racked on friday, pg&e as well. will be i think there even more down today. they are on the hope for what is estimated to be about $17 billion from last year's wildfires, and this year they are estimated about nine to 11

billion dollars so far of damage. and that will probably go up. keep in mind, they don't have the cap. state legislators had passed a de facto cap last year on how much their liabilities would be, they would have to get another cap from the legislators, and it is not certain that they will do that. so this is interesting, as to whether a company like pg&e and edison, whether these companies are too big to fail to react a lot of blame is being put on them right now, whether rightly or wrongly, as to whether there their whyhether is started the fires. david: yes, jerry brown can back and said, the federal government owns more for slander than the does. alix: and of course, governor brown has also brought up climate change, talking about the changing environment. in the property damage already has been tremendous, so that

also -- the insurers will be doing with that for months. >> totally great point about the climate change. alix: guys, thank you so much. bloomberg's peggy collins and romaine bostick. a reminder, you can find all the charts we just used on the bloomberg terminal, g tv . of the day,avorite the wti in a bear market. coming up, a conversation with the marc chandler on oil. this is bloomberg. ♪

♪ alix: mrs. bloomberg daybreak, i

am emma chandra with your bloomberg news flash. a sale of this international for eight billion dollars. it's as if these largest ever deal. the company makes software for surveying customers and analyzing employee sentiment. softbank wants to raise a staggering $21 billion in the ipo of a domestic telecom operation. the company's founder, messiah she son, wants to -- messiah she san was to raise capital. of british american tobacco are plunging today according to the wall street journal. u.s. regulators are preparing to ban menthol cigarettes, which would hit a business that generates about a fourth of the companies profits. drug administration

has been campaigning about the cigarettes. alix: thank you, mi. did you ever smoked mantles? >> never, smoked cigarettes. alix: menthol, it hurts just to even think about. [laughter] david: they say that the youngsters love them, which is the issue. alix: and never liked mantles, when i was younger. not young anymore, but. the slightest move back to oil. come inside the bloomberg, deborah g.i. falling 21% from the high. you heard romaine bostick saying that opec called the bottom, trying to solve that this weekend as they met in doubled up be -- abu dhabi. for saudi arabia, the answer is cuts.tion the saudi oil minister saying that while the adl he would not like to cut, they will see a persistent supply glut emerging and some of it coming out of the u.s.. cautious.much more

here is what energy minister, alexander novak, told bloomberg. >> we want to focus on for production cuts, it is not the ultimate goal. we have to wait and see how the market unfolds, because our ultimate goal is market stability. as i have said on a numerous there is a toolbox which allows us to either increase or decrease production. and you have seen in the past two years, we can go either way depending on what the goal is, and the goal is market stability. alix: joining us now, marc chandler, but not burn global forest -- bannockburn global forex chief strategist. why did you make of this? marc: it is clear they are getting increasingly worried about being able to stabilize the market area you saw the scale of the drop of a the past month, it has gotten very concerning. that is you pointed out, there is reaction from different

sides, different reaction. moment of the supply glut come i think there is disagreement about when the that might disappear, and what they can do about it. saudi arabia is reassessing its role as a swing producer, saying that they will go first, cutting production by half a million barrels next month. alix: there is no indication that there producers will be interested in any production cuts? stuart: that is fair, but i think credibility is at risk more to opec itself, the smaller groups, perhaps more famous. it seems to remain committed to the idea of unity, or at least it.ng voice to russia, the assumption is always been within the market that they will do what is in the best interest of russia. it will not sacrifice market share for the benefit of everyone else or sacrifice production to get everyone else's prices up. they don't need. the prices to be very high.

david: so what does it mean for russia or the in -- or the economy? the relationship between the ruble and oil teams to have broken down somewhat? marc: i think it undermines emerging markets as a whole. most emerging markets are not oil importers, so a drop in oil prices -- they have been under pressure lately, so a drop in oil prices is a good relief for some of these emerging-market countries. trying to import oil in the face of a rising dollar. but for russia, it is probably a negative thing. good thing for india and china come a good thing for most exceptg markets, maybe for latin america, oil producers like colombia, mexico and brazil. east asia, not oil importers, it is good for east asia. alix: it feels like there was a question they had to grapple with this weekend, u.s. oil

production. i have been confused as to how estimates in the iea continue to shales. production wrong. how did that happen. >> i think because it is unprecedented in . . i tell people, this is a market that up until really recently years and decades, because that is how long it would take for new projects to come on. with shale, it brought the timeframe down to quarters, and you have the opec and the opec plus group, having to contend with dramatic changes with supply. they haven't quite figured out how to respond to that. so the mechanism they have now gives them the ability to tweak production here and there to balance out. so far, they have been woefully unsuccessful, shall we say, about doing that. alix: so nice. david: one thing that is happening, what is the u.s.

underestimating shale production? it hardly inside there will be reduction.n shale . >> we get the surge in production, perhaps a shale in the price of -- a surge in the general.oil in is a as is dropping oil prices, it is like tax cuts for consumers. that is how we will experience it and the way the federal reinstate.ks to they will not look at it as a drop in inflation, they will start raising interest rates. that would be a european argument. they want to stop buying assets at the next month. when they raise rates, they say, by -- at the end of next summer is the first opportunity. a drop in oil prices means a drop in headline inflation. they look at that more than the it. looks at low inflation in europe will make it harder for the ecb to raise interest rates theoretically. it is another way to the euro besides these other factors. david: so does president trump get the interest rate cut he wants?

you said saudi arabia is protecting its position as the swing producer. is it the swing producer anymore? every time there is a swing, it seems like the u.s. shale has something to do with it. >> you cannot think of you as shale as a swing producer, they don't have a mandate to a just overall production up and down, based on what market conditions are. saudi arabia can, and they do act unilaterally. it certainly has the discipline to add or remove barrels when it needed. from the point of view, it is if you are swing producer. what we have seen on the other side of the atlantic, it is hard to see how many barrels will come out of the shale patch any given point in time. alix: what we haven't hit on is demand. i would like to hear what the ceo of bp had to say about next year. >> i think the global economic growth is starting to deteriorate a little bit, so the to --s are likely going

there is big uncertainty. venezuelan production, libyan production, and you have what could be faster production out of the permian basin. alix: i think global economic growth is starting to decelerate. what he think about that. >> i think there are some demand issues, the chinese economy slowing down. japan is going to -- there import contracted. the german economy, the fourth largest in the world, has probably submitted in the third quarter. i think the fact that when the saudis announced they would ask word, not produce less, but export less oil, we so oil prices jump up. but that is not sustainable, because the market suspects that 500,000 barrels is not enough to absorb the excess. i think you're right, we have to watch the demand hikes. alix: thank you both so much, you will be sticking with us. to franciscolking

blanche, bank of america merrill lynch head of global economic research, for more on oil. . coming up, blazing wildfires in clutter for new have killed 30 people, forcing thousands to evacuate. , charles the damages watson jr, anti-research modeler will join us. this is bloomberg. ♪

♪ david: deadly wildfires continue to burn in california, the hammered it caused at least 31 fatalities and forced thousands to evacuate. when all is said and done, they could cause at least $19 billion in damage, some estimates are higher than that. joining us for more via skype from savannah, georgia, is charles watson enki research, , disaster modeler. i understand you are estimating more like $25 billion. >> the 19 billion is he a commission through last night, but there is $100 billion of

infrastructure within five miles of the current fires. of course, a lot of them are under control. the weather does not look good the next few days, there is more wind and no rain in the forecast , so getting the fires under control will be really tough there be a expect the fire to rangep to about 25 or so and it can get even worse than that, i hate to say. david: boy, that is staggering. locations,d that two in the north and down in the south, around malibu. where is the greatest risk to property? charles: down south, in the area. a hundred billion dollars within five miles of a fire, that is an is auditioning figure, and it points to one of the issues -- that is an astonishing figure. people are talking about it is climate change, it is something say,-- that is hard to because it has been so much

development in california in the last 25 years. these fires are getting closer to human structures and to our infrastructure, so it is easy to rack up the dollar values, hard to you apart how much is due to limit change in how much is due development.dous david: let us talk about where we are in the process right now. we always get numbers -- 30% contained, 20% contained. where are we in terms of containment and with respect to firefighting? charles: the containment come i'm not too sure about, i know it was around 30% yesterday, but i do know the overnight numbers. the weather for the next few days through thursday, we have santa ana winds, coming off the interior. the humidity is very low, zero rain in the forecast. so it is not a good situation to get under control. alix: the video we are looking at is unbelievable, i mean, really staggering, the velocity of the best the ferocity of the

fire. how do we pay for this? charles: that is a good question. last year, there was an that debate under $12 billion in thems, 25,000 claims due to wildfires. the insurance industry has seen a lot of stress, particularly in the state of california, and this will make it worse, it will easily top that number in terms privatets for insurance. fire is mostly covered by private insurance right now. a lot of these catastrophes, it is hard for companies to set rates because it is hard to figure out what it will be like from year-to-year riyadh it is a tough insurance environment. i expect you will see the market go in a similar direction like the hurricanes. to put it into context, this fire is roughly the equivalent of hurricane michael or hurricane florence, we are getting into that territory in terms of damage on losses. alix:. david:. david: there were reports

released that ug and esau it destruction in their power grid in the north, a short time before the fires were reported. do we have in a sense that she do we have in he says that he might've been caused by wiring?al charles: the same thing happened last year, that it might have been electrical wires that caused the fire, this points to another issue in america today. a lot of our infrastructure is aging and not in a good place to some what the levels of development we have, and out there, it doesn't take much to trigger a fire. , a have dry conditions transformer exploding and throwing off if used works good trigger a wildfire with billions of dollars worth of impact. yes, pg&e will probably take a hit as well. emma: charles watson, thank youo much for your time. onset, we still have marc chandler. numbers, $100 billion worth of infrastructure, they are really big numbers.

is that a government thing, a public thing, a private thing, how do you deal with it? marc: i think from an economic rent of view, the destruction will hit to the economy. california, our largest state, if it was a country, it would be one of the top 15 countries in the world, a serious economic unit. i think was the fires go out, rebuilding -- we saw this last year with the hurricanes, we lost almost one million vehicles to in texas and florida, which sales. auto so this is another thing come other human tragedy, destruction thing.erty, horrible but if you look past the tragedy, it means that it will boost that u.s. economy by early next year. david: so in effect, we have a short-term hit in a gdp and then economy gets triggered again. when do you think that will be? marc: i think that will happen earlier. some people need their vehicles replaced immediately. we saw a big increase in auto

sales area some of these things have to be done immediately and some could be dragged out. those also construction, thousand of structures in needs rebuilding. alix: the one thing that would come up with the infrastructure. what is your first case on some kind of agreement in washington on that? marc: there is this policy in the u.s., fiscal policy has to be tighter -- i am assure that democrats will find that fiscal austerity plays well in the polls. i think infrastructure, mick in the middle class tax cuts permanent, these are things that democrats may be able to get behind. i think we will get a policy mix of expanding fiscal policy, tighter monetary policy, which is why i am so bullish on the dollar, even with the gains today. alix: we will get to that later on. marc chandler will be staying with us. the markets, on

equity markets are up and features up by about one point. it was a former close into the end of the trading session friday. mightind of followthrough we see today? european stocks are up, the dax in particular up to one point, because of the euro getting slammed, the weakest levels we have seen for the euro-dollar since june. breaking below the support level of 1.13. you also have the pound getting hit. the euro and the sterling both getting whacked. political issues in the country, we will talk about with marc chandler in just a moment. you could make the argument that 10 year yields are not badly high, but it is above the three went three-level for the entire month, it took four years to go higher than 3.3. it shows the ferocity of the change we have rain. up overt crude is also 1%.

david: we turn now to europe. more than 60 world leaders get it yesterday to commemorate the centenary of the end of the first world war. but president trump seemed almost the odd man out, as president macron and others rented out the risk of the america first policy. we welcome from paris, bloomberg's annmarie hordern. i must say, president trump is even tweeting out this morning, he is happy to be back. what was the reaction to president trump over there? annmarie: good morning, the reaction has been one of -- as you say, augment out, a bit isolated from the other world leaders. the main event was just behind me, when the french president took aim at president trump's nationalism, saying patriotism is the exact opposite of nationalism, also saying that all demons are reawakening.

he did not mention trump by name, but certainly took aim. and we also had chancellor merkel out the peace forum yesterday as well, talking about rejection isolationism and nationalism. president putin and president are t erdogan were in the audience the . we heard president trump this morning talking about defense, when he landed in paris on friday, he took aim at president macron in twitter, talking about his statement on a true european army as being insulting. emma: so there may be some dissension -- david: so there may be some dissension on that, and europe. today, we are on the italian budget. how big of a risk is that the european union overall? --marie: of course it is populism throughout europe, you

see it as you say, in italy. the fact that italy has been under pressure from the european union because of the budget, is roles line with european there we -- european rules. many of the populists that came to power in italy campaigned about leaving the european union, so of course we have angela merkel leaving the cdu championship and become basically a lame-duck, brexit happening in the u.k.. the one that is seeming to be lasting best the one that seems to be lasting with it international ideals is president macron, really the one left standing when you look at europe as a whole. david: that was our colleagues, annmarie hordern, reporting from paris. marc chandler, we talked about paris. lowert is a good thing, oil prices, but there, not such a good thing. talk about the euro, down significantly today.

marc: interesting thing about the euro, there is talk in the market, it is not that verified, but there is talk about there's -- the price of the euro, trading at 113, the option might have been in a week.index hired last some people think it is the chinese central bank that had this large option at the 113 level, we bounced off that several times since mid august. so one, i say that the technical micro market type of issue. the other issues it brought up, brexit. the idea that the u.k. could leave without an agreement is bad for the u.k.. and also for europe. .he continent and emu then you have the italian issue, tomorrow is a big day because it have to respond formally to the request to revise their budget. it looks like they made some offering somes --

minor revisions, but that may not be enough for the european commission, and that good to an excessive deficit procedurep it to a sanction,ad they cannot sanction on projections. they could only sanction it with a 22% of gdp fine, but only after they know the results, which is not until late next year. so this will be a drawn out struggle for a while, for the .est of this yearp . italian bonds, i would not expect them to come back and spread very much. like a low-grade fever, rather than an urgent crisis, like greece was. david:. alix:. alix: rusher on italy to force them to change. the bgp bond spread, not where we have been for example. is there actually enough pressure, even if it is just doubling, to really force anything? marc: i think it early, the

maturity of their debt, the average is seven years. that means that a short-term are rising yields will not be enough to give italy the kind of pressure you think the markets are headed toward. an interesting thing here is that not only is italy's deficit projected to be larger, but we saw that pmi's last week. the composite pmi was below 50. not only do you have a larger deficit, but you have a stagnant and perhaps contracting economy, dynamics that would force the respond. alix: we heard from the ecb vice president earlier, about the contagion. >> italy is the most prominent case at the moment in light of tension.ls of the the strong market reaction to political events have triggered -- wed concerns about

although contagion has been limited so far, it remains a possibility. for fiscal discipline and absorbing and applying fiscal rules in europe. alix: so what is contagion look like? marc: it could be what we saw with greece, the best case was that when a greece sold off, we had a very three of europe. but it is not just italy, there are several other countries who when submitting their budget proposals, asked for a deficit -- a higher deficit. including spain and france. so there are these fiscal agreements, versus what the governments, these new in france,-- macron he is extreme the unpopular, about 25% popularity or so. given what happened to angela merkel, not being chair of the party, she is obviously the

lame-duck. emmanuel macron is weak, spain has a minority government, italy has a mixed, populist government, in some ways, it is like the california fires. any tender, any small accident could explode into it take consideration. same thing in europe. there are not positioned to deal with this. david: we have gone from being concerned about contagion. from people trying to quit the european union after brexit and now deciding to stay in and just spend more money. populist governments tend to like spending more money. what does this do for mario draghi? marc: i think what people are talking about, the ecb will stop buying their assets this year, but what are they going to do? mario draghi said they still need monetary policy. targetedd have another long-term repo operation, like a three-year loan, that would allow the italians, who used it

quite a bit, to extend their maturities. the real key, i think, is who will the next ecb president be. if it is a german, everything , it couldhi said to be something that the german says no to. david: if he has italy, followed by spain, followed by france, going into substantial deficit spending, his problem will be the reverse. marc: exactly, which is one thing that mario draghi has kept arguing about. his monetary policy, which people do not like, is designed to allow governments to do their structural reforms. maybe if italy spends more money -- in the u.s., you talk about the government spent this, and does this mostly economy, x plus why. what about in italy, it could be a negative multiplayer best

multiplier. emma: how can he be more constre on the dollar is of the euro? marc: one of the things we , that italy cannot do, we can print dollars. they come ahead of euros, but they don't have a printing press. a way tohat gives us coordinate fiscal policy the way it really cannot. david: but when you talk about spending more money, it depends what you spending on. like writing a check to every citizen, which is essentially what italy is saying. but is that going to help productivity? marc: and when you talk about populists, they want to roll back the pension age. increasing, the pension age goes up, and they are saying that that should be reversed. thingsre the kinds of that repel investors, rather than attract investors. alix: for the dollar, we're seeing tightening liquidity, and the federal reserve will be for

forced in some way, to keep easing in 2019. what is your view, what is a bullish part? marc: for me, i look for countries that have a policy makes. certain policy mix associated with a stronger currency that is what we have. in the u.s., it tighter monetary policy and a looser fiscal policy. this is what germany had when the berlin wall fell, which led to the uber mark overshoot and eventually led to the eu. what is europe have, they have loose monetary policy and loosening fiscal policy. that is typically associated with a weaker currency. alix: marc chandler, great to see you and catch up with you, thank you so much. david: now let us get to what is making headlines outside the business world. return to emma chandra with the first word news. emma: good morning, david, more bad news from california, another six dead have been found in northern california, raising the death toll to 29.

another two people have died in fires in southern california. more than 6700 homes and other buildings have been destroyed, and almost 250,000 people remain in vacuum it it. high winds again in the forecast. in florida, the senate and governor elections have gone into recount, setting off outcries by the republicans, led by president trump. thepresident tweeted that democrats are trying to steal the election, but offered no evidence. acting attorney general matthew whitaker signaling that some of the worst fears about him would come true. withberg news has come up a story that whitaker had said the robert mueller probe could be halted by withholding funds in riyadh global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries.

i'm emma chandra. this is bloomberg. david? david: thanks, m a. coming up, former goldman sachs , please guiltyer insiderole in trading scandal. this is bloomberg. ♪ this is bloomberg. ♪

♪ daybreak, iloomberg am emma chandra. the bank of america merrill lynch had a global commodities research joins us. this is bloomberg. ♪ >> this is bloomberg daybreak, i am emma chandra with your bloomberg business flash. private equities firm, barrett is capital is close to a deal --

veritas capital is close to a company thatase a provides online business services, including billing for health care providers. opec and its allies are laying the groundwork to cut oil supplies next year, investing in almost year-long expansion. saudi arabia is leading the way, saying it will export half a million fewer barrels a day. that is putting pressure on the so-called oh group to act -- opec group to act. york, of auction in new begins by the sale of a picasso that depicts the artist young lover, selling for $29.6 million. bloomberg has learned that the anonymous seller was the last eo of merrill lynch for its merger with bank of america. that is your bloomberg business flash. emma, thank you so much,

that was a nice sale, there. first up this morning, goldman culture to blame? , says the culture of secrecy is what made him conceal his long doing -- wrongdoing. a spectacular single day for alibaba, as jack ma prepares nextep out -- cap down year -- step down next year. david: 1mdb, this story keeps on going. ,im lesissner has spread guilty but said, you know what, goldman made me do it. >> right, it is pretty remarkable the twist and turns, this ori is taking. if you remember, it had sort of quieted down, but in the past few weeks, it has come back with a vengeance. a lot of this owing to documents that came out on august 28, where he started to give

details. there has been reporting about it, with lloyd blankfein said to have been at the meeting, with the malaysian prime minister in new york area here comes tim lesissner saying, that this is a lot about the goldman culture. which really gets to the heart of goldman. david: yes, another is the italian partner who was suspended last week, this really goes to the culture. $4 billion, and basil from this world fund. but goldman got -- and basil from -- $4 billion was embezzled from the fund and goldman got a lot of that in fees. >> fees that now the malaysian government is a that they want them to pay back. alix: he is kind of right, right? was no oversight, there was a breakdown in some kind of managerial structure. david: it is a good point in

that something went wrong. alix: so which is it, either you missed it, or it is a culture. >> something went wrong. >>, other people were looking the other way, or compliance work down. somebody along the way was willing to let this get away. this is obviously going deeper and deeper and it has not yet been contained. alix: let us talk about robots, our second story. i did not even know some of the statistics. this company is upgrading its virtual assistant, abby, she can now suggest the bonds to buy, how easy it is to trade, she can now help mine all the data systems, look at the research and give recommendations. >> i love how you say she can do this. alix: she can totally do this. [laughter] guest: it is amazing. we have heard of artificial intelligence on wall street a lot lately, even investment story inthere was a

the bloomberg a couple of months ago that maybe even investment bankers, could be at least in intelligencedal out. kit.is a real-alive david: the question is, will it work or not? i talked to charlie unger a few days ago about whether equities could work like this, and he said no. smart guy, but maybe he is wrong. >> right, and it does feel like the question about artificial intelligence on wall street, it is not binary, in a lot of ways, it is really a matter of -- the argument here with a lot of companies is, does it make the better? does it help the human focus? maybe i'm just saying that as a human. alix: to your point, it might not overtake it, but if you look

at the qualifications it has, you could make a lot of money, in terms of looking at your best adjusted return, your risk. david: as you say, it is not binary. before you get to artificial -- virtual reality, you have to get to augmented reality first. alix: and every sense nice. i think that counts from -- alix: don't ruin my thing. ! [laughter] now,: let's get to alibaba 31 billion come i think is what they did. but it is slowing down. still, eye-popping numbers, $31 billion in riyadh such a moment. i was in strict with the story, the story about the whole origins of singles' day, which started as this university holiday that celebrated the idea of -- there are people who are

not in relationships yet. [laughter] 111111 -- exactly, november 11, but it is not limited to singles anymore. [laughter] guest: the other interesting thing is that they are talking more and more -- this brings us back to a lot of stuff here in the unit is days, the blend of online and retail, and their ability of alibaba -- amazon is also doing this as well, getting into the physical retail stores. alix: there was a great bloomberg opinion piece that revenues of their sales, and of their net income v, the totalmp value of merchandise sold over a time frame through customer to customer exchange, and that is totally outpacing their net revenue. that is weird, there is a big gap.

so one day does not make a company, it does not make the net income. david: they are making it up on volume. other big the question here, is what are they selling? one of the things you hear, it is not the big-ticket items. david: many thanks to bloomberg jason kelly. tune in to jason on boomer business week and bloomberg radio every day at 9:00 eastern time. up, congress returns to washington on tuesday for a lamb duck session. more on what we are watching next. this is bloomberg. ♪ is is bloomberg. ♪

♪ it is not the midterm election, it is the lame-duck session, aptly named . they need to get some stuff done, believe it or not. december 7, they have to shut down the government if they don't have is running bell. the president needs funding for the wall, they could shut that down.

the agriculture bill needs a renewal, it hasn't been done for five years. alix: let to mention, the people who did not get reelected, they will start --. david: they are out of there. , it is interesting , aied in the spending bill subsidy for autonomous vehicles. something in there for autonomous vehicles, which you and i both care about. alix: something for everyone. coming up, we talk to the bank of america merrill lynch head of global commodities research. this is bloomberg. ♪ [ phone rings ] what?!

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saudi arabia says it will export less oil helping to support prices. russia is not yet on board. sap to buy cloud -- we speak to the ceos. political uncertainty rattles the market. theresa may might have to abandon her brexit divorce proposal while the ec is ready to start a disciplinary process with italy as budget process escalates. avid: we watch these terrible california wildfires. really quite dramatic video of what is going on. over safety 700 structures destroyed and estimates, we just had an estimate more like $25 billion.

alix: hundreds are still missing like you mentioned. what is going to help put it out? the second question is how do you pay for that? , i find staggering pg&e corp. and edison could still be on the hook even if they did everything right. followed allpment, the safety protocols, they could be on the hook for this and it is serious cash. david: there was a bill in the state legislature to try to relieve them of that but it did not get past. they can issue bonds to help protect it. some of this is aging infrastructure. it only takes one spark given how dry it is. in terms of fixing it i think mother nature ultimately has to lend a hand. alix: what is going to be the private public relationship? where is that going to come from? does this help at all, congress

coming in -- david: whether it is wildfires or hurricanes with increasingdavid: climate change and extremes in whether, we will have to rethink the breakdown of who bears the cost of this. we can have private companies bear all cost of climate change. alix: some sort of graphic that shows how much the state was in drought. we will be following that. here is what we set up. three. are down by about a firmer close into the friday markets. euro-dollar down 6/10 of 1%. the lowest level since june of 2017 tracking down cable as well. a brutal day in the fx market in the european currency. italy yields up by about four basis points eying across the bond market. crude up by over 1%.

kendo --barkindo, always super positive. we will talk all the time. everything is great. david: i can't rumor the last time i heard him have doubts. a look at the week ahead. asia-pacific leaders gather in papua new guinea. vice president pence standing in for president trump. italy to submit a new budget to the european commission. home depot reports third-quarter results. markete get monthly oil reports. on wednesday the u.s. will release consumer price index inflation numbers for the month of october. with retail sales numbers coming in on thursday. alix: oils plunge into the bear market hung over the opec meeting in abu dhabi.

21% within just a few weeks. for saudi arabia reduction cuts are going to be the solution. while they could not ideal cut the could see a persistent supply glut emerging and seeing signs of that coming out of the u.s. russia, a little more cautious. here's what alexander novak had to tell bloomberg. >> this is not the ultimate goal to cut or not to cut. i think we have to wait and see how the market is holding. our ultimate goal is market stability. there is a toolbox which allows us to increase or decrease production. we can use it either way depending on what the goal is. the goal is market stability. alix: joining us, francisco

, benjamin mandel. opec has: i think always reacted to prices. we had a big run-up in prices. we've had a very meaningful pullback in the past few weeks so now they are reacting to it. what's interesting is shale and opec seem to be reacting competitively. one of the things that hasn't been mentioned, i just came up with this stat on friday, october 2018 is america's energy independence month. last month america became fully energy independent. longer a net energy importer, it is an exporter.

huge surge in u.s. production in the past couple of months that has really come under the radar and one of the reasons prices have topped off quite a bit. david: i have to say one of the best things to me, not too long ago, it was all about iranian sanctions. does this play into president trump hands? low oil prices and being able to punish iran. francisco: he has a pretty strong hand. lower oil prices. i think opec increased production in june and july because prices were rising. at the same time the u.s. industry responded. so we find ourselves with a bit of a glut. going into december oil refineries started ramping up. that will be seasonal pickup. lower prices encourage more

demand. markets seem more stable, so all those factors will help. he has a pretty strong hand. alix: the chart we pulled up shows opec looking at supply arabia was019, saudi saying what the thesis was. 6l demand will be below million barrels a day. what is the demand picture like? challengesone of the -- we've talked about this before, you have a world of higher tariffs and higher interest rates. at the same time this is something liquidity out of emerging markets. emerging markets have benefited from high liquidity. now we have lose policy but equally we have tighter monetary . that is effectively reducing the amount of money for emerging markets. we've seen that with turkey,

argentina, south africa. particularly worried about china . china is facing headwinds at once. they are the world largest oil importer. chinesees go up, the are in a relatively weak position. the cheap date in the next few weeks -- the key date in the next few weeks, do the agree on something or was he a full-blown trade war genera first? david: tell us what this means for the u.s. economy. this is bear market and oil really helps on the inflation front. prices are aer oil net benefit to the u.s. economy. i think this is interesting in light of the comment that u.s. is oil independent. it is still the case that the countervailing effects, lower real income, the squeeze on

consumer, versus the ramping up of shale, these countervailing forces. what we learned is actually the consumption part is more important. even if we are not a net oil importer anymore what it means is that the timing is such that we view the consumption effect is more important. lower oil prices and the fact that they came off, touching 85 at the beginning of october is a good thing. we think it alleviates a source of vulnerability for the u.s. economy. david: pick up on what francisco was talking about. the meeting coming up at the end of the month. this would strengthen president trump's pans. does that give him flexibility to take the hit on trade? ben: a political economy of trade. creates a well entrenched

conflict into the beginning of next year. one thing that has become obvious on the trade front, there's not a lot of political will to be easy on china. on a biggest-- and political wind to be tough. i don't see the meeting changing that. it does potentially lay the groundwork for the beginning of the year to reengage in constructive talks. it's really the balance of those political forces weighing against agreements and economic forces gradually ramping up the cost that only come into balance sometime next year. alix: what i found interesting of oil signs in the bear market, the higher market for energy, 4.5%. the opening market did not follow oil lower. francisco: america is energy independent. i look at energy collectively. importing crude oil.

importantly, the u.s. has become independent but also more interdependent because now we are trading with the rest of the world. america's energy sector is becoming more interconnected with the planet, including china. hands.ng to use my two years ago we had the contango in the market. above the flipped forward. in june they said prices are too high. they flattened the front end but because they reduce spread capacity the back end went up. now we've been doing this the whole time. flatter. opec is all what opec is saying, the need to

start tightening inventories again. -- there going to see market in high yield and equities as not been bothered all that much. market prices today are higher than they were a month ago even though the front is lower. that is why instruments are not affected as much. we will see the front and going up again -- the front-end going up again. to?: what does that get us 85? francisco: i don't think they want to get back above 80 because of all the pressure from trump. but i think it'll took a little higher and make sure inventories don't ill. they will unwind the work developed in the last two years.

alix: sign language, whatever. benjamin mandell and francisco blanch sticking with us. how trade lays into global growth. this is bloomberg. ♪

alix: earnings season almost wrapping up. reviewed earnings calls 98% of companies reported finding the top area of demand weakness. europe, china, cars, the u.k.. and then blanche

ben mandell.d what is the biggest risk? ben: we are in a global environment that is less friendly. taking one step back u.s. growth leadership has been the dominant economic narrative globally. environment where the u.s. is poised to decelerate into 2019 and there is no obvious candidate to help you got the slack. global growth environment is less friendly. you want to see the u.s. pushing forward at elevated levels unlikely given that the school policy is peaking and monetary policy is tightening and you look elsewhere in the world and , youook at europe, china don't see a lot of acceleration that gives you confidence there would be a balance. from the perspective of an investor you have to look in terms of relative value and less at the top line. the u.s. consumer as being

relatively well supported as an aspect of the u.s. economy. income has been growing. part of that is the labor market. part of that is wages accelerating. when we look at that part of the market and companies geared toward the u.s. consumer i think .e see more opportunity as we move our way through late cycle that is something which should create a rotation from income as firms to households. david: does the drawdown of personal savings give you concern? savings is an interesting example. that is something we look that a year ago. one of the shock absorbers households have to absorb a negative shock in earnings and keep spending is low. what ended up happening was an arcane statistical exercise at the agencies were they found more income on examination of

the u.s. economy. savings rates are actually higher than we thought they were. if the trend is somewhat lower they are coming off of a higher base which makes us think vulnerabilities are lower with respect to shock. and hadrch around enough change in the cushions. alix: a really interesting note out on friday talk about how china can help but it's not going to be the global growth driver. ben: we are a little concerned -- francisco: the reverse of 2006, 2008. back then we have u.s. economy with a lot of debt that had been allocated to the wrong sector. the fed was cutting rates aggressively. china was accelerating. now we have the exact mirror image. .ot a lot of imbalances

we do have a chinese economy that is quite frail trying to put up measures that will potentially support copper market. chinese currency goes down corporate goes down with it . that is a risk. we see terrace of 25% -- tariffs of 25%. alix: we can pull up that chart that shows the index. can you explain the relationship? francisco: financial condition measures credibility and a number of indicators that suggest which way the chinese economy is going to move forward. effectively what this is saying, presumably if conditions loosen up, which is what the government willying to do, copper

pick up in value because the economy will strengthen. there is no agreement on trade. chancehere is a financial conditions tighten again. a weaker currency tends to tighten financial conditions whereas a robust currency tends to keep conditions more steady. that is my big worry in china. , thankfrancisco blanch you for being with us. be staying with us. s calip -- as california wildfires spread, more on that next in today's bottom line. this is bloomberg. ♪

david: the bottom line where we look at three companies worth

watching. british american tobacco shares because% in trading reports the fda will stop menthol cigarettes in the united states is young people are attracted to menthol cigarettes that is a quarter of american tobacco's business. our of an ongoing attempt to curtail youthful smoking. alix: maybe it takes a while. particular unit of .heir -- that is not right david: their wireless business. alix: huge ipo going to be about 21.1 billion dollars. david: stillman like 33% of the company. alix: 85% of net income will be paid out. david: it was to back investment funds. alix: and pay off some debt.

pg&e corp. we have been talking about this morning. brooke: not great numbers about these california fires. at least 31 people killed three at 6100 structures damage. apart from just being heartbreaking that represents potential liabilities for pg&e and edison which provide utilities to southern california where we've seen those fires in malibu. pg&e is dealing with a significant liability overhang from those fires in napa. we don't yet have a report from investigators on exactly what pg&e corp.'s liability is. california has a law it does not matter if they were negligent or not. they are on the hook for those liabilities. those 2017 liabilities are

estimated to be $17 billion. is start talking about another $10 billion, a pretty significant balance sheet hold. toid: there was a move change that law. customers to try to pay off the bonds is that going to help them? brooke: there is a strict standard area they have to prove they were reasonably maintaining their equipment and also that the cost would be so significant .s to financially bankrupt pg&e they're still a significant number of hurdles they have to clear. alix: you have a chart that shows the damage from last year as well? brooke: you can see the drop in prices. edison stock the big dip around october last year. the napa fires i was talking about.

trending down ever since fires from last year which i think underscores how much of an overhang this has been on the stock. alix: in a world where utilities should be the safety investment. in theory, that is an extra hit. and then that happens. brooke: that is the utility push back. that they should not be held to such a significant standard because some of those changes are due to climate change. alix: political risk the escalates in europe. euro plunging to its lowest level in 16 months. more on that, next.

alix: dow jones futures down by

80 points. european stock decidedly in the red but the dax getting hit the hardest down by over 1%. interesting commentary over the weekend. and x chancellor saying merkel will not survive her term. the other part, we switch of the board, euro-dollar at a 16 month low. the budget showdown 24 hours left to go. cable down 8/10 of 1%. what will theresa may do? cabinet just flee and resign? in italy you see yields up by four basis point. yields holding higher over that 3.3% level. crude up by 1%. kindo saying it is good.

we are working it out. david: it looks like they are going to cut. alix: i think they're going to do it. david: let's get an update on what's making headlines outside the business world. mma: more grim news from california wildfires. another six dead found in the northern part of the state raising the death toll to 29 matching california's record for a single fire. ,ires in southern california another two people died. almost 150,000 people remain evacuated and the weather is not helping. high winds are in the forecast. in florida the senate and governor's elections have gone to a recount. setting up outcries from republicans. now wants to be senator. -- acting attorney general

whitaker -- he will not cut the budget for robert mueller's investigation. mueller'sas said probes could be halted through funding. global news 24 hours a day on air and on tic toc at twitter powered by more than 2700 journalists and analysts in more david: weountries. have breaking news about athena health. and elliotttal management will be buying athena health for $135 a share. elliott management had taken a position seeking to get athena health to sell itself for a while as an activist. we can confirm they are going forward with the transaction. about 8.4%.

alix: also kind of a cloud play. athena health has cloud services. david: we've interviewed them before. david: you can access across various providers and things much more efficient. so it is a cloud play. everyone in the health care environment knows this is the future. weiott management has said like a piece of it. alix: this is where you will see all of the consolidation. promise iswhat they it's going to bend the cost curve as we go further into the cloud with all of the services is going to get cheaper. it could be deflationary the way amazon is. alix: $5.5 billion.

cash -- 135 ae in share in cash -- 135 a share in cash. political uncertainty is back to haunt investors. italy's first draft was rejected. -- what ism to its your case for italy? ,en: the base case for italy some procedure at some point. a lot of uncertainties around the depth of how much budget deficit they will have at the end of the day. i think it's fair to say the economy is the arbiter of all that uncertainty about italy. the economy stalled. pm eyes in october plunged. financial conditions are

tighter. you can see that in the yield and in spreads. there has already been significant feedback from markets into the economy regarding this issue i think is something that ultimately limits the extent to which they can push on this. you see a slog as a base case scenario in the ebp but also one in which italy's chips are numbered in terms of how much they can play for. david: what is the bigger risk, that italy is brought to its knees or other countries say i can get away with it too? ben: that response markets a similar path. that is a cautionary tale. from therally i think

perspective of an investor we've been taking down risks. as a global outlook. part of it is the balance of risks. in that in europe, it is brings it, uncertainty. david: if there is a clock ticking with respect to the first rate hike, does that move forward the clock a bit? raising rates higher, faster. ben: tightening in financial conditions move in the opposite direction if anything i would say if you have a significant economic disruption that would push back the clock. the ecb is a difficult call to make. when we look across major central banks that would be the intuitive hawkish move.

you have inflation at up to gradually moving upwards. fundamentals are suggesting through tightening labor markets that you continue to get support for prices rising. transition at the end of next year for draghi you don't anticipate to be anymore dovish that he is. have italy moving in the opposite direction. it's a tough call to make on the ecb and the next six months. alix: we heard from the ecb vice-chairman earlier and he was talking about the contagion risk but here is what he had to say. >> italy is the most prominent case in light of the old that level and political tensions. strong market reactions to political events have renewed concerns in parts of europe.

although contagion has been limited so far it remains a clear possibility. this underpins the call for fiscal discipline and applying fiscal rules in europe. points reflected back into 2011 we're nowhere near those highs. ben: it is not just italy or europe. develop market economies are showing very little inclination to deal with debt balances that are rising. you have a structural trend. it is pretty much across the board. debt to gdp has been rising with no indication of any meaningful rainterrain that in -- to that in. long-term projections that's actually a downward force on interest rates in the long-term.

if they're becoming less disciplined on debt does not mean bond yields will rise on the whole? abouttually if you think fiscal authorities having less firepower to deal with subsequent downturns will be back in a situation in the next recession where all of your pressures on central banks in terms of stimulating the economy is actually a lower for longer outcome you'd expect be more prevalent in coming years. david: when you just describe sounds like a falling knife. are there any places you want to go in and say there's a bargain there? ben: you don't view this as a full-blown debt crisis in economies like the united states where you have exorbitant privilege to run higher debt to gdp than fundamentals suggest.

trade invoice currency, save haven currency. all those factors, we are less concerned about that type of crisis dynamic emerging. i don't think that is a falling knife situation outside the euro area periphery. what it says is an investment strategy, you are more inclined in fixed income versus equities. fixed income looking much better not just because duration losses because of this year have been borne out but also because we see downward pressure on yields as a result of debt accumulated over time. maybe you are leaning toward fixed income as a result. david: thanks for being here. now turning to sap, announcing qualtrix, it is buying

valued at 20 times its revenue. the ceos of both. want to hear from both of you. bill, let me start with you. give me a sense of sap's want to view -- point of view. does this change her company fundamentally? cohan the jewel and the crown t does change is fundamentally. a huge new category called experience management. customers want to protect their brands, customer relationships. you want to inspire the people to be focused on what is going on outside the company. they want to understand the sentiment analysis of everything that moves across the value chain. this is experience management.

facto standard in this space. sap is the standard in operation management. 77% of the worlds transactions run sap. if you can marry operational data with experience data, you ofe the holy grail enterprise software. it is all about growth and the unique synergy of x data and old data toand o fundamentally change the world. david: you were going forward with an ipo. the price you got was substantially above the high end of that. did you go with sap because of price alone? do you think is more valuable in sap's hands than as a standard company? ryan: we were scheduled to ring

the bell on thursday. i think there's a bit of shift. i came home for the weekend and things moved quick. kudos to bill for acting quickly and have enormous vision. we never optimized for finances. we were the company that bootstrapped for 10 years. we have been cash flow positive. we have no financial reasons to do it. we were going because we created this new category and when bill showed up and said take a look at our business where we've got all of the operational data, what do you think if we added the experience data on top of it? the way weped how bring the customer and to building products with real-time feedback in the product development will if we change the way employees interact with ecm because we power a lot of the employee experience of the world is a once in a generation opportunity. 15,000 sellers overnight and go

global in a way that xm should be. every organization should have an xm solution and it's only being offered through snp. .t is just the beginning i woke up this morning and said i have not felt this way since we were in the basement. david: i have not read anything that does not say this is a good. . 20 times revenue is right up there. there were projected up 40% growth in revenue. what do you need to deliver with qualtrics to justify that price? growth?th, 100% what kinds of numbers did you pencil out? bill: first of all let me give you the details on the price. revenues5 times 2019

which is consistent with the benchmark for high profile cloud companies in this environment. 40% on agrowing at year-over-year basis. this is a pristine cloud company in the experience management category. sap is also growing our business in the cloud by 40%. --you combine 240 present two 40% companies -- let's add 904ther thing, ryan has revenue is outside the u.s. fuse all over the global economy and see what you get. we have 15,000 salespeople in 25

industries that are selling qualtrics day one. the business case can be in the future. sap doing the same. i told an analyst we will be the best business over company in the world. count on us for double-digit total revenue growth. total operating and income growth a double-digit at a rate greater than the revenue growth so the design of the company is built around that and all i need in the business case is for ryan andh, this fantastic ceo amazing company called qualtrics to just keep doing what you are allg and don't stop and use the infrastructure and power of sap to spread your world at -- spread your word everywhere in the world. he does that, this is the most successful m and a move

in business software. david: when i said 20 times, that is 2018 estimated revenues. you are saying future revenue baking in 40%. how long do you have to keep increasing that business to justify the price you are paying? bill: it would be hard for me to imagine him not growing double that. that for the business case if he maintains 40% growth for half a dozen years and does that synergistically on the top line with sap and even if after that it slow down a bit and he's got global scale, margins, renewals it's still going to be a growth juncker not. -- a growth juggernaut. at a renewal's and lower cost of sale goes down to 30 in those future years or even 25, it is still a home run move. i want to a knowledge ryan smith, his brother, his father, people.s of the class

i went into this with high trust. i believe in ryan and this culture. at any price this is the best asset in the world and i could not be prouder. david: it is not easy to get these big deals done. mcdermott, sap ceo and ryan smith, qualtrics ceo. alix: the future of money where we take a look at different aspects. our focus is on a company working to bring crypto currency communities. the company partnered with grassroots economics, the first ever digital currencies to fight poverty in kenya. , bancorp as

director of community currencies. also joining us let's break down what we are really talking about here. basically if i'm an entrepreneur in kenya and i want to sell my vegetables you're giving me the currency to do that. break down what you're doing. communities telling and entrepreneurs they are able to use their own production as the basis for creating a currency or token and put those currencies on entire market across the nation. for the first time in the block chain itself we had the ability to connect tokens together and back them by local production. alix: part of that in the beginning it was localized. you might have local block chain technology but that would not be able to trade with the community over here.

how fast can this grow? we are into the third generation of block chain technology. the size of this is pretty much unlimited. these networks are just about as visa is today. we are really building emergent economies out of the ability for local producers, local farmers, to create their own credit. alix: marina, you really studied this. what are the positives and negatives to something like this? think i wouldi like to differentiate of it between crypto currencies and the underlying technology that empowers them. the block chain we are discussing. it is really that ability to

have a ledger which is transparent, editable in real-time to all participants to the network where the data can be immutable once it's loaded on the chain and cutting a number of intermediaries because of the way the transfer of value is established across the network. i think that creates enormous potential throughout a host of financial services. trade facilitation, global remittances, etc. the fact that you can establish on the chain in a cost-efficient manner a digital identity, can have tremendous impact in terms of allowing individuals or entrepreneurs to access financial services that previously were not available for them. the potential is great considering we have about 2

billion people around the globe that do not have access to financial or credit services. from that perspective i think the potential is great in providing an infrastructure if you have it. secure digital identity which can lower many of the transaction cost related to the services themselves and also lowering compliant cost that has made many traditional players exiting certain markets. alix: the flipside is security. if one neighborhood or crypto currency neighborhood attracts more than others you will have an imbalance within the community. how do you deal with that? marina: i think there are issues that need to be established. in a particular collaborative ofdit system, you have a set

social relationships and off chain governance that has been established. it would be important when we scale on a block chain system beyond where the governance system exists to ensure that some basic rules regarding how you get data on the system to verify its veracity, how you resolve issues if there are conflicts, how you deal with ,iability, that those issues which are not necessarily technological but more governance, need to be addressed. we have to leave it there. thanks very much. good to have you. more on what i'm watching, next. this is bloomberg. ♪

alix: this is a 30 day chart that i wanted to show you of what happened to brent. we're sort of off the bottom. i feel it what we learned is what the ceiling is for oil and what the bottom is for oil for saudi arabia. david: saudi arabia and trump will join the band. alix: we've learned what kind of volatility we see is a different story. chris christie will be joining jon ferro. forbond market close veterans day. this is bloomberg. ♪

jonathan: from new york city, and jonathan ferro. the countdown to the open starts now.

saudi arabia potentially ending oil's record losing streak. the italian populace staring down another deadline. a fresh 2018 high taking the euro through 1.13. after a softer close to last week, futures -0.2%. the bond market, treasuries close for veterans day. there is your dollar strength. the u.s. dollar rising to its highest level since may of 2017. >> we are long dollar still. we don't see an end to dollar strength. everywhere you look, you are looking at stronger dollar. fx