>> good morning from bloomberg's european headquarters in the city of london. i'm anya edwards. >> and i'm alex lye in abu dhabi. this is "daybreak" europe and these are the tom stories." the i and s.c. microas european opened. president trump criticizes saudi cuts in production and we'll hear from a c.e.o. and brexit talks enter the final stage and italy faces a budget deadline. which assets will blink manage

first in the days ahead? break. crude can't cut a all the talk about production cuts has done nothing. look at w.t.i. the longest losing streak on record so all the talk about the possibility of reducing production by a impact barrels is doing very little to give succor to this market. shale is a risk. that's the message from the nigh jeernl c.e.o. and the sauna trek c.e.o. oil just simply cannot catch a break and donald trump is tweeting. he's not happy about the

prospect of a cut. coming up, we're going to talk the oil minister from the conference right here ined a dab. that's in about 20 minutes' time. anya, good morning. anya: good morning. plenty to talk about regarding the oil price. asian equity markets are weaker but s&p features, interestingly, do trade higher so we're expecting those concerns around technology. that started in the united states in the sense we got a selloff on the nasdaq and apple stock yesterday. it spread into asia and we've seen asian technologies weaker. also another dynamic going on in asia and that's to do with

trade. some optimism about the visit to the united states later this month. i put in here the euro and the pound as well. both of them bouncing this morning. both of them sold off yesterday on tensions around becks be the -- -- brecks and i am the this morning we have a trio of better model music, if you look -- like, around brecks it. there is an outline of the deal we're told but no deal has been don't. we're continuing to watch the politics there and in italy. yvonne has more from hong kong. >> you were talking about how things are ugly here in the asian session but we are off those lows here right now after we got that headline about china's economic advisor said to be meeting with the secretary treasure on trade.

to pave the way for the g-20 when president xi and president trump meet in buenos aires. we saw stocks jump a little bit and the dollars coming off those seven-months highs. still 225, we are lowing -- lower to end the day but the hang seng and the large caps still in positive territory. 33%.hang seng up about . we're down 2.3% in taiwan. luke look ahead to japan display. this is one of the biggest movers today, down 9.5%. apple does have a plan b. they could easily drive up their prices of iphone and rely more

on services for apple suppliers that rely so heavily on the hand sets. 50% more than that of their review knew comes from apple. certainly that's one thing to look for as we look ahead to the tech selloff in the u.s. and what the trickle effect has been in this part of the world. >> thank you very much. yvonne with the latest in hong kong. let's get our questions of the dame. which asset will win out from the italy e.u. game of chicken? take your choice there. equities or bonds? you can debate that with the eam on mliv plus tv go on your bloomberg. let's get the first word news with deborah, in hong kong. >> tensions between u.s. and longtime ally saudi arabia are rising after president trump

slammed the kingdom's proposal to curb oil production next year. he tweeted that should not happen and that prices should be much lower based on supply. they said opec and its allies should reverse about half the output earlier this year. u.k. prime minister theresa may says the final stage of talks for brexit is proving immensely difficult. in london she said gorkses are now in the end game but that significant problems remain. both believe they only have until tomorrow to sign off on a deep. >> it includes the new rhythm will -- we will forge with our your off-season allies as we leave the european union. the negotiations for our departure are now in the end game and we were working

extremely hard through the night to make progress on the remaining issues in the withdrawal agreement, which which are significant. both sides want an agreement but what we are negotiating is immensely difficult and i don't shy away from that. >> it -- italy has until today to send a revised budget to the european commission. officials in brussels are prepared to implement a disciplinary process unless the italian government makes changes. italian energy producer n.e. has won the rights to.com major natural gas drills in abu dhabi in a deal that could be worth $20 million over 40 years. adnox's government run second run on the industry.

>> i think it's a temporary situation. we need more supply. -- [indiscernible] it's not good for the consumers and it's not good for the producer. >> global news 24 hours a day on air and on twitter. powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. anna: deborah, thank you very much. most asian stocks lower following a tech-led fall on wall street overnight. and china in a trade dispute so there are a up costly things going on. but broadly we are weaker in

asia. chris joins us on set to make sense of it all. let's start with the tech theme and the tech selloff. i have a charlotte here that shows the tech-centric fear and volatility around tech stocks, in the united states, essentially. is the tech story the center of things for you? is this about overvalued tech shares in the u.s. and asia or is it something else? >> the tech sector has been a lightning rod for markets many times in the past and this year it's been critically important. it's been the one tech -- factor driving the market that has continued to rise so it's gained even more importance as a consequence of that and it's gotten more and more isolated in terms of the valuation base. so we were observing this a few

months ago that the technical picture generally was detear rating worldwide, except in the u.s., except in tech. what if that then failed? it would have global implications and that's exactly what happened. >> good morning, it's manus in abu dhabi today. i noticed that there was a tweet from donald trump last night where he said and our opinion columnist said it isn't completely bonkers. the democrats' goal could be about more investigations. big headaches for the stock market. our analyst maintained, yes, that could be big headaches for the stock market. is that tweet bonkers or real? >> well, i -- >> this is the tweet suggesting that is -- the selloff is to do with concern that the democrats are going to spend a long time

trying to take legal action against president trump. >> donald trump has been lining up quite a number of fall guys eventuality in the e that things do take a turn for the worse. we've had opec and now we have the democrats. if the real question is does that bode ill for the stock market, these talks of investigations, i'm not totally convinced. i think markets are pretty good at looking through political noise. when it becomes problematic -- when it's just another reason to sell markets and quite often that happens too. in that case it could be problematic. if you get a bad political tone against the backdrop of deteriorating growth then it's magnified. >> thank you very much. chris wyllie.

develop -- deal to rights for natural gas in abu dhabi. the deal is for a second pimm for producing gas. the c.e.o. said the company is seeking to transform the united arab emirates into the next ex pors -- exporters of gas by 20 30. >> i'm calling for everyone to depart from business as and you shall this is exactly what we've done over the past two and a half years. we had to come to terms with the realities on the ground. technology today is a central part of how we're conducting business. and we cannot allow for our

industry to continue being -- we have to take ownership and championship and as such i am simply calling for everyone to step out of their comfort zone, to step out of the box and take real action towards being progressive as well as advancing their businesses in a way that is compatible to the technology development. >> can i pick up on the technology piece? you talk about that as well in your speech. do i need to look at companies hike yours and say there is a new company expenditure line that is going to -- going to grow and that is technology? >> technology and digital transformation is going to be an integral part of how we conduct business in adnoc and i say this simply based on real experience over the past two and a half

years. we've been going through a digital transformation in the company and that has resulted in real august and robust results in a way we're very comfortable and happy and excitemented about the fact that following -- technology and digital transformation can unlock the full potential of our business. >> you certainly see who's unlocking potential. they keep coming. and we got the effort n.i. deal this morning. what comes next in 2019? >> what you should know, everything we're doing is simply centered on our adnoc 2030 strategic growth plan. and that is mainly around the more upstream, the more valuable downstream and we want to continue investing this in gas in order for us to supply our

economy with a sustainable source of gas as well as looking for new ways of marketing our product so we are more adaptive and more proactive when it comes to marketing. having heard about these deals over the past two days and over the past double -- couple of years, what i can tell you is everything we do today is centered around value max myization. e are in the business of getting value and to continue investing smartly. >> is that going to mean more international ambassadors? i mentioned total. and aramco. where's the focus for you? >> in fact, the most recent concessions that we have awarded is a very clear evidence in terms of our interest --

investing more in new strategic partners and investors. the art of strategic partnership is what will help us propel and progress in this 2030 smart growth strategy. and the fact is we have new investments in our onshore and offshore concessions and the facts we have invited many european and asian partners and others. some are existing and some are new. that's a clear evidence of our interest in attracting a new type of investor. >> much more to come from sultan sl-jaber. coming up, the egyptian oil minister joins me right here in abu dhabi and if you're traveling to work, don't weir

worry, you're not without anna and i and the

anna: good morning. :20 here in london. let's look at the market, where we stand right now. let's take our minds back at the close of wall street. we had a tech selloff yesterday on wall street. that led to a tech selloff in asia. chinese assets doing better because of some homes around tirade trade conversations. so s&p should point a little higher. we do, though, see generally pressure in asia because of the tech selloff and the concerns around apple and those companies that supply apple.

die next crude oil price is down another 4%. all that cut about cuts in production in abu dhabi. t's go to bloomberg with deborah in hong kong. tumbled the acks most since 2011 after malaysia's government wants a full repayment. a multibillion dollar fraud has been centered on the investment fufpbled. the prime minister said a short time ago malaysia must be more aggressive in pursuing its goals against the bank. shares of major apple iphone suppliers have fallen as investors fret that one of the most important products in the tech sector is seeing weak emand in asia, japan slashed

sales growth. one of its largest suppliers asked to meaningful reduce simments. apple is the company's biggest customer. >> oil has fallen for the 12th consecutive session, the longest losing streak on record for w.t.i. that was after the u.s. esident trump criticized the plans to cut production. in abu dhabi at the conference. the plans have been made. ministers are meeting with producers. k eleptember with us is ture -molla. egypt's oil minister. we'll get to oil in a minute.

what is it going to produce this year and what can you tell us it's going to produce next year? >> we've been importing oil for the last three years and with the discovery of -- we made sure that we put together with our partner as plan for the development of this as quickly as possible and we were able to reach 2 months, which is a world record, from the discovery date to the production date. and by which we are now today we billion cing about two kubick feet per day from that alone. >> what can that scale up to in stpwhoinlt >> it will scale were to about

three. 1/3 plus of what it is currently producing. let us say 50% of what we are producing currently can be increased by next year so we'll reach three billion kubick feet a day. >> what would you say to the defactors who would suggest with the population growth you'll still have to import some gas. is that a fair gesture? >> yeah, of course. w what we are doing is increase efficient lip. exportporting l.n.g. and gas and this will be reflected on the well -- well-being of our foreign currency. >> can you talk about the deal on the nor gas. is that going to be approved and

is that approval coming before the end of the year? >> normally and this is the byte beauty of having good partners like that. such partnership, our transaction that was announced their taking shares in the concession. that has been spoken to us before. they came and they -- the government because it has to be approved by the government so now what we are going to do is just formality to give them this little bit of time to get approval. >> are there similar deals in the pipeline? >> not usually, no. nothing new in the pipeline. however, as we go and as we expect more concessions to be -- we have, i

think this will happen soon. >> opec has been suggesting that we need to see a reduction in production of about a million barrels a day. it's not stopping the market from dropping at the moment. what is it going to take to stop this drop in the market? more than a million barrels in production? >> i cannot tell you that this would be just a physical -- but it has to give assurance. when the markets seem confident that there is no threat, this -- there is nothing -- everything geo ble, there is no politics affecting the decision of the price, i think the price will stabilize. at the end of the day what should prevail is the correct balance between the supply and demand reflected on the price.

minister for gy egypt. thank you very much for joining us. much more to come with the executive director of the i.e.s. ♪

anna: good morning, everyone. 6:30 here in london. in asia we have a mixed session. china and anything related to china going higher on optimism about a u.s. trade deal or something like that. the other story in asia, much more dominant, it seems is a tech selloff. in particular about anle and suppliers to apple. we have breaking news coming through. manus, you've been poring over the details there. manus: you're right, anna. baya is confirming their outlook for 2018. the sales numbers slightly below where the market estimated.

9.1 billion. the market estimate was 9.99 bill. it beats 2.0. 1.19 in terms of earnings per shares. there's a number of different issues at play for bayer but looks on first outlook, the outlook is confirmed and the numbers on earnings per share are quite impressive in terms of .99..19 europeos and anna? anna: coming up on the next program, we'll be speaking exclusively to the c.e.o. of bayer on the company's earnings. that's at 8:00 london time. let's get a check -- check on the markets there and around the world. india first. let's come to you over there.

let's talk about what's going on in the asian equity space. talk us through things. >> it is performing a lot better than the asian markets and maybe part reason because we completed -- trade yesterday while the asian markets were doing ok. i think oil is the principal reason. oil pulled back a little and the b. and c. oil index in india has done ramp well and helped prop up the markets. which is why you see the two benchmark key indices right now trading rock solid. not correcting, which is important. no tremors that the dollar was giving to emerging market currencies and confidence, oil and gas are right up there. so no problems at all in the

markets today. a stark contrast to what's happening in the rest of the markets today. manus: anne marie, oil cannot cut a break, can it? down to 12 days in a row. we haven't seen a run of losses since 1983. how are you? >> good morning, manus. unfortunately i wasn't alive in 1983 but oil prices, 12th consecutive day, longest losing streak on record and i'm thinking to myself. we have the president of the united states tweeting that he doesn't want saudi arabia to cut production, saying that there's not enough supply and demand in the market and prices are still too high. we have prices lower but i'm looking at what's happening at the pump which really matters to the president of the united states and of course matters to americans. gasoline prices in the white are not falling as quickly as we've

seen w.d. -- w.t.i. apple splirlse today, they're plunging. investors worried about weak demand in the space. the first one, momentum shares, a supplier used for producing the technology behind facial recognition. they fell almost on record 33%. one of it largest customers asked to meaningful reduce sipments -- shipments for previously placed orders and sky works tumbling. broad weakness in the space as a whole. manus, anna? manus: touch that. -- thank you very much. that's our bloomberg reporter in our london studio. let's get to our dubai studio. lesley standing by with first word. good morning. >> good morning, thank you. vice president mike pence reinforced support for the u.s.-

china alliance. he said the u.s. is less committed to the reaming under president trump. they're submitting a draft report. japanese automakers slumped on news. >> the united states has had a trade imbalance with japan for too long. american products and services too often face barriers to compete fairly in japanese markets. it's for that reason that we welcome the steps that have been taken to address these issues. >> brexit negotiators are working through the night in an effort to reach a deal but prime minister theresa may said the final steps are proving "immensely difficult." in a speech she said negotiations are now in the end game but that significant problems remain. both sides believe they only have until tomorrow to secure a

deal if it's to be signed off next month. >> as we leave the european union. negotiations for our deparcommur are now in the end game. and we are working extreme hi hard through the night to make progress on the remaining issues in the withdrawal agreement, which are significant. both sides want to breach -- reach an agreement but what we are negotiating is immensely difficult and i do not shy away from that. >> two u.s. pilot seniors say the potential risk of safety features on the boeing 737 max aircraft weren't significantly spelled out in their training. the design against pilots losing control has been linked to a deadly crash in indonesia. a crash last month killed all 189 people on board. the force behind marvel comics

has died. stanley was 95 and i see work provided lucrative deals for hollywood such spider man and ironman. he started as a writer for 1941. he made his mark in the 1960's by creating superheroes with troubled lives and transfer remental personals. global news 24 hours a day on air and attic tock on twitter. ♪ anna: thank you very much. theresa may has warned that significant issues remain on the table as brexit talks reach what she called the end game. officials believe they only have until wednesday to form an agreement if it's to be signed off by an e.u. special unit this month. let's bring back chris willey.

we have the pound trading a little bit higher this morning and there did seem to be better music from the d.u.p., from the theresa may and even from michelle barn yeah. what is your best case around brexit and is it changing, sit developing or sit quite static? chris: ooh, a base case of brecks it? in many ways i think that it was always going to come to this moment. really from the moment of the referendum itself. i'm not sure the real dynamics behind that have changed. we're going to end up with something which looks a little bit like a mash-up of call it a norway option. some way of sort of staying in the customs union, although the language around that keeps getting changed, or a no deal. that's where we are. i think all of this noise coming

out is -- it's complex because it's a diplomatic dance. it's actually quite in theresa may's favor, ironically, to have all this noise at home. i'm sure she didn't wish for joe johnson to resign but she can use that in brussels saying this is the consequence. look at the pressure on ups. at some point this deal is going to break cover and when it does, that's actually the end game because then we'll have to see how the politics in parliament play out. right now it doesn't look so good but i think may is gamble on the fact once the deep is on the table, then the model music will change. because people will have to realize that's the only deal we've got. it's going to be fluid and that's why the pound is trading in such a volatile way around every piece of news today.

manus: i love that phrase. that when it breaks cover. we could possibly run for cover. 1/3 of small and medium enterprises see the pound dropping at least 10%. of course they're referring to breaking parity with the euro. that would be a new record. they're not doing much about it. between those two things, do you think we could break euro even on a trawledry soft brexit or a rough and tumble soft brexit? >> we're dealing with the pound figure. we've been range trading the pound for a little while now and clearly right now nobody is prepared to take up a position either side. there's a clear narrative on both sides and we're right in the middle of that wilder range at the moment.

i think if we get a hard brexit, that's clearly not priced in de facto and that's when you think -- ink you talk about those sort of parity numbers. if we get a deal and looks as though it's going to go through parliament. the first reaction will be relief and i could see another 5% to 10% on the upside. as for guilt, they are where they are really balls they're still a certain safe haven appeal. we don't find them very appealing. we'd rather have treasury. i can see why some people still find suc crve or in gold. >> the game of chicken has been played here. a number of chicken games going on. one with the u.k. and one with

rome over the bunt. interesting headlines ow of -- out of italy. the finance minister would like a 2019 growth goal below 1.5%. they have a message that's partly conciliatory, according to the ill italian paper. how do you expect to make money out of italy? is there an opportunity at moment? chris: we've charlie seen the banking sector in particular get hit extreme hi hard on the story and the sort of outcomes in the banking sector which you normally associate with a bad debt criticize, which isn't manifesting there at the moment. there definitely is an tunnel. we wouldn't play it directly through stocks. we're looking at strategies around that. this is a really big story about what's happening in italy at

moment. one story feeds into the other. the story of national sovereignty. anna: john also makes the point this is much more significant from an effort u. perspective and certainly from a euro significant. >> it is. also, the british have always been on the primpry, reluctant participants in the european project but this is the heart of it and the test case. this is the moment when the rubber hits the road. what does happen when a government says this is what we want to spend and the effort u. says no, you can't do it. the outcome will no doubt be the classic e.u. compromise and we'll get through it but it is a fascinating moment for europe. manus: chris, tell me whether you think -- christian was with

us yesterday and she said g.m. morgan management, base case is soft brects -- brexit. they said europe doesn't have as much macrolegs to stand on as they had one year ago. that's an interesting take. do you think that will come to bear? stagnation in italy and a little it of a slowdown in germany? chris: the story that european growth has started to philadelphia and is shithely less robust. the same is true of the u.k. and i think that was always the risk. that the brexit story would play out but when it's against the backdrop of robust growth, nobody took a great deal of notice but now with perhaps a weakening growth, it magnifies this impact. probably for the europeans it's beginning to rise up the agenda

a bit more that actually, as we've seen over the last few days with both the euro and the pound in tandem rising falling, we are still joined at the hip. anna: chris, thank you very much. with us this morning for the first hour of "dray break europe." coming up, apple suppliers swoon n signs of the detear your outlook. plenty more to come. asian supplies being particularly hard hit. what will that mean for the european sector? we'll talk about that next. this is bloomberg. ♪. bloomberg. ♪ .

>> good morning, everybody, this :40 oomberg day brake, 6

here in london. eni raising their guidance this morning. they've raised their forecast to 950 billion yen from 850 billion. also giving us a backward looking second quarter. but as often with the case as japanese corp rats, it's the forward-looking guidance that is important, flashed across as a red headline across the public school berg. ticktock reports there are more well ill in the cannabis industry -- in the -- women in the cannabis industry than in average american businesses. applications interest irish passports from northern ireland have surge -- have surged since brexit. and the most read stories across the bloomberg terminal, a business week story about elliott management into steal.

trade talks are said to have sumed between the u.s. and chinese minister. iphone demand waynes and apple has a plan b but there's no backup for many of its suppliers. let's get more details on that. major suppliers to apple's iphone fell as investors sweated that one of the most important lines in the tech sector was seeing weak demand. manus? manus: that's no doubt about it that that hamill story i think added completely to the wall of worry in the markets. you have the g.e. and goldman sachs stories. the u.s. equity market run and translate that into programs an emergencying market contact.

is our guest with anna this morning. $4.5 trillion came off the markets last week. wall of worry -- this seems to be a rise in the dollar. how do you look at the effort n.i. is there more to come? chris: i think there probably is in our portfolios we're almost completely out of emerging markets. although we've had a lot of pain, there's a lot more to come. the reason, because of the strength of the familiar, the three-man apock limbs. the dollar, interest rates and the oil price. some of those will beginning to crest but they're also still

percolating through the system, particularly these higher u.s. interest rates. no, the pressure hasn't come off there. maybe a bit in terms of oil but not in terms of interest rates. there's a shortage of dollars. dollars are getting sucked back into the u.s. as the economy is heating and that's beginning to ripple through the system and then we have the tech overhey, which is the heart of the valuation problem, which also is beginning to crystallize. for all these reasons, we are still on the sidelines but of all the markets, they're probably the closest to having completed its correction because we've seen a sizable correction. moving into next season, if we hold, i see the tech think that would be a sign and i don't think we've gotten there

yet. nna: amazon and apple in the blue. the market cap of amazon and apple in blue and on the white we have the entire s&p consumer staple sector. so we have two technology companies where the market cap for a breach period was larger than the entire consumer sector in the u.s. including all kinds of household names. that plays to the valuation story that you mentioned. that has in some senses corrected a little. chris: absolutely and it's one of the things we engaged in a few months ago. amazon was an interesting one. it took them 2 years to get to $500 billion and one year to get to a trillion. adding that extra 500 billion in a year showed you the magnitude of what was going on.

the correction has to be seen in that context and it's still very small in terms of what's happened to these prices and the run-out. so i think tech is still a problem because it's just not cheap enough and once that momentum turns, it can be quite savageful the big question for markets is that just an excuse for rotation or does it take down the whole markets? manus: that was the pacing the stock has taken. chris, that much. hat's chris wyllie at connor bradley for joining us this morning. let's continue that k about apple. we have our bloomberg opinion expert. we're talking what you make of the most recent selloff.

>> it really comes down to one specific company that sparked this latest selloff. everyone has been getting nervous and then they kind of forget and pad it up again and someone reminds them that maybe the party is over and they should not -- stop drinking champagne. in this case, the company came out monday morning in the u.s. nd said we're going to have to decrease or economy outlook. we've had decreases by one of our companies and everyone knew that company was apple. they outlined it wasn't them losing share of apple. they were basically keeping their supply of shares of apple and it was an apple-specific problem. they didn't mention apple but am is their largest client.

it's an inventory issue, in that there's too much inventory in the supply chain but at the same me a problem where apple was expecting more sales than really were coming through. so apple has dialed back in the last few days their own estimate of what they expect and that flowed through the rest of the economy globally and everyone gets worried and tart to think it's time to stop drinking champagne. anna: we'll see. tim, thank you. we'll see how those apple suppliers open up in europe as well. tim, thank you. later this morning. a conversation with bayer. they ajusted the number ahead of estimates. the numbers look strong. we'll have a conversation exclusively with the c.e.o. of bayer on the company's earnings.

the numbers look strong but what do they expect from the business model? how much sense does the business model make as it has grown so big so recently? this is bloomberg. ♪

anna: good morning and welcome. live from our european headquarters in the city of london. these are today's top stories. doubts about the iphone drag arc it's down in asia. st micro at the european open. crude resumes its slump, president trump criticizes saudi talk of company production, any -- the ceo spoke with us and said more must be done to avoid $100 oil. eu game of chicken. brexit talks are at the final stage and italy faces a budget deadline. which as it will blink first in the days ahead.

-- which will blink first in the days ahead? daybreak:loomberg europe." we are expecting to go higher as the start -- at the start of the european trading day. on the downside we have the apple story, the fact that apple, there are plenty of soap -- headlines around suppliers. we see those companies trade lower in the asian session. that was after a selloff on the nasdaq in relation to that story. slightlywith that the more resilient story we are seeing in the chinese stock market and the australian dollar and the new zealand dollar, all of that slightly more buoyant because we have headlines surrounding a visit by [indiscernible] to the u.s.

and expect nation that some progress can be made on the trade conversation. dhabi, futures pointing higher for equity markets in europe. manus: that is an interesting turnaround from the pacing we , indicator is up and we had an inflation day in europe on the german front. let me break that down for you. by 2.4%the cpi rising year on year. that gives you .41% in terms of the month. this goes back to that conversation that we have been having with guests where the inflation is and the targeting still the most important things. you have that breaking news from germany and regards to their market. let's have a look at the first, a look at opening prices. you are seeing an indication higher for the equity side of the market.

let me tell you, we have they month for december, down i 12 takes. are lower and how about those italian btp's question mark we are going into the final, getting you december btp's. we are off by .9 on the december btp's. you have vodafone breaking. .51%, giving up by number,t half ebitda against the estimate. the estimate is on a million miles away. the backstory is quite an interesting one, there is a new so he is newly in the hot seat but he is coming up with

some kind of strategy update and the stock prices trading at its arest since 2009 said they under considerable pressure. we will watch to see what comes out from the update and perhaps they are under activist pressure, a challenge from elliott management. we will wait to see any details. let's get a check on the market. looking better as you mentioned, sources telling us our the treasury secretary meeting. we certainly did see some sentiment boosted a little bit, sentiment looking more positive and we saw dollar reversing the game -- the gain. 697ere getting close to the for the renminbi. a 230 pit move.

that was helping to put a floor and equities in the region so you do see japan lower by 2% but we are going as low as 3%, the tokyo session and the kospi down market back and bear territory. 1.8% in sydney. china bucking the trend, we see the large cap up 1%. the semtex in india looking good. taking a look at the movers, you mentioned apple suppliers, apple concerned about reduced demand with the apple iphone. and 2.3% ahead of earnings japan downdown and 9.5%. 50% of revenue comes from apple itself, it is one to watch. also looking at the automakers as well in the region. after sources telling bloomberg the white house is circulating a draft report on whether to impose tariffs on auto imports

due to national security concerns. we did see the carmakers fall off at 2.5%. this is mike hence, the u.s. vice president arriving in asia speaking to pry minister shinzo abe and ripping japan and saying u.s. companies are unfairly treated in japan to compete. not exactly helping the trade discussion in japan. manus. thank you. let's get a first word news update. >> tensions between the u.s. and longtime ally saudi arabia are rising after president trump slams the kingdom's proposal to curb oil production year. should notthat happen and prices should be lower by some supply, he posted the message hours after saudi arabia said opec and its allies

should reverse -- reverse half the increase that they made this year. brexit negotiators are working through the night in an effort to reach a deal but theresa may says the final stage of talks is proving "immensely difficult to go may said negotiations are the endgame but the significant problem remains. they only have until tomorrow to secure a deal if it is to be signed off by a special eu summit this month. >> it includes the new relationship we will forge with our european allies as we leave european union. the negotiations for our departure are now in the endgame. and we are working extremely hard through the night to make issuess in the remaining in the withdrawal agreement which are significant. both sides want to reach an agreement but what we are negotiating is immensely difficult, and i do not shy away from that. to send has until today

a revised budget to the european commission after the first draft was rejected last month. officials in brussels are prepared to government a disciplinary process unless the italian government makes changes. the finance minister has said he will stick his spending plans come what may. two u.s. pilots union says the 737 of safety on boeing's max aircraft were not spelled out in the manuals are training. the system designed to offer extra protections against pilots losing control has been linked to a deadly crash in indonesia. it crashed off indonesia last month killing all 189 people on board. in california have now claimed at least 42 lives making on -- them the deadliest in the state's history. the cause is not known but wildfire experts say nature and humans share the blame, not

forest mismanagement as claimed by president trump. he approved a request from jerry brown to clear the fires at major federal disaster. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. anna and manus. anna: thank you. in our first interview since being named of the san francisco daly tolddent mary bloomberg u.s. policymakers should be lifting interest rates. she said that will help bring an economy that is running above potential in for a soft landing area she voted for the first time at the policy meeting this month and will vote again at the mid december gathering. officials are expected to hike for the fourth time as the economy looks strong and wage pressures creep up. joining us now is the senior u.s. economist at [indiscernible] let's talk about the wage pressures in the u.s.

we saw in the latest payroll numbers that they were creeping up. is that an area where you consider a threat to the trajectory of fed rate hikes, did it change your thinking? thomas: wet -- wage growth has been creeping up and we are around 3% on the average of the earnings this year so that is after a few years where rate growth was on the soft side. we are not back to 4% where we were before the financial crisis so i think that is more room before the u.s. economy is overfeeding, but the fed will welcome those wage developments, they are believing this relationship between wage growth and inflation even though the link is not that clear, dropped, but the fed will look at gdp growth and gdp growth in the u.s. is strong on a year and year basis. quite 3% so that is strong and payrolls are also good. the fed will continue to hike rates gradually but they will

hike rates. good morning. the debate is not whether the u.s. economy is running hot, if you look at wage is breaking for percent, there are those who say when you break three historically the four is on the way. is there a bigger risk of policy mistakes in over tightening by the fed by jay powell versus not tightening enough? thomas: i think the fed is wary about financial markets and valuations in markets and that is one reason why they are hiking rates. even though they will not say that way. they want to see market valuations coming down a bit. so far, what we have seen with volatility in september and valuations have come down. the fed on that front could be a happy camper, if you will. the fed as long as gdp growth is

above potential growth, they will continue hiking. what the fed has told us this summer's they are not likely to stop at the neutral rate, the so-called neutral rate which they say is 3%, they may go past it and continue hiking rates. sque is a greenspan-e fashion and hiking rates. from --he playback playbook from alan greenspan. anna: thank you. let's update you on some headlines crossing the bloomberg in regards to brexit. chance of alittle brexit deal according to the irish broadcaster, the role of a brexit deal and we see impact on the pound as a result. the pound falling off session highs having up some of its gains but it is stronger on the day. this comes after michel barnier i said he saw the outline of a deal but no deal was gun -- was done.

the sources were close to government were pushing back against that kind of talk from brussels saying they -- there had been strong storms previously. perhaps you should not get excited about what is achievable this week. when we were talking to our correspondent he said anything could happen but this week is crucial in terms of brexit. this currency will move on everything, every single line views, small and medium enterprises, they believe they could go through parity. for the newsbattle flow. another conversation we had this time in an exclusive with the ceo [indiscernible] whose book to me, we will hear what he has to say right here in abu dhabi. this is bloomberg. ♪ ♪

anna: this is "bloomberg daybreak: europe." 44 minutes until the start of equity trading. that's check the markets. u.s. futures pointing higher, s&p futures up by .3 of 1%. the dollar is weaker and the u.s. 10 year yields, 3.16%. we saw no trading in treasuries yesterday and the pound still up this morning. green, 28 .71 is where we are. -- 28.71 is where we are. hopefulare right, the comments from michel barnier, that dropped, btp's are there is well on the board. just a little bit lighter this

morning. we are going into furlongs of euro orrama and italian, i do not call it a crisis but confrontation and they have not got as long a losing streak. saudis are talking about reduction of production by one million barrels and have done little to [indiscernible] and trump saying i hope they do not cut reduction for the kingdom of saudi arabia and opec. the white house not pleased about the prospect of a cut. >> goldman sachs shares tumbled 20 11 --in -- since 2011. prosecutors have indicated three of its staff in a multi- billion-dollar fraud centered on the state investment fund. the protester said malaysia must be more aggressive in pursuing

its claims against the investment bank. goldman sachs has previously believes them money would be used for development project. shares in major apple iphone suppliers have all and as investors fret that one of the most important product in the tech sector is seeing weak demand. cutting the elections for growth, and plummeting a record 2% after cutting its second-quarter outlook in one of its largest buyers ask to reduce shipments. apple is the company's biggest customer. 'surces say telecom italia board plans to meet to consider ousting the chief executive officer in a clash over plans to spin off the phone companies landline network. they want the carrier to keep control of the landline. elliott management, the 70's

second-largest investor wants to spin off more than 51% of the business. that is your bloomberg business flash. thank you. the italian energy producer has won the right to national gas fields, it will work with the abu dhabi national oil company. there is a clue in the branding. -- co discussed in the deal with me earlier. first big gas that weffshore field are going to put in production and develop and it is a huge deal. it is supposed to produce the top [indiscernible]

1.5 billion per day. it is a huge field. manus: how soon will you get to the reduction levels, give me a time scale. 2022, we can talk about 2023, something like that. we are trying to do our best to be fast and effective and efficient in this project, this very important, it is very important, last year we signed a intract for oil so we are oil and gas and very soon, [indiscernible] we are a refiner. we are going and we are walking very well with that and increasing our presence in the country. manus: you are going to say 25%. is there room for another partner, is it just you? guest: [indiscernible]

i am not in charge, that is the owner. presume [indiscernible] ble other second party. fors: what does this do your available production in the uae, what does this take it to? inst: we are now producing equity between 55, 60,000 barrels per day so that is a three timesat least more, we can get three times more production or four times more production than what we are now. it is a very substantial production in the next three or four years. manus: will you give me a dollar amount of what you think this project will involve in terms of commitment, what sort of dollars will you have to commit to get there? clearly ais

[indiscernible] project. we have to consider a contractual life for 40 years. 10 or 20 billion, something like that, more or less, i do not have a clear figure but it is something close to that. the ramp up would be around $1 billion. guest: some billion dollars. manus: speaking to me exclusively on his deal, couple billion dollars and ramping up over the next few years. let's get deeper into the oil market's deli -- story. -- oil market story. streak sinceosing 1983. where were we in 1983 question mark donald trump criticized the

plan to cut production. is our guesterg -- host this morning. here we are, oil is on an absolute battery on the downside. thatare the indications of because we don't seem to be able to find a floor for the moment in the oil markets. take me through to what it means for your words economically, it in your world. ,: what we have seen in the past especially when oil prices inpped quite a lot back then 2015, 20 16, that was bad news for global growth. i think now economists will say oil pricesgher because also it means the global economy is doing well. economy, the u.s. thing is, the u.s. produces around, the latest data is 11

point 6 million barrels a day, which is huge, they used to reduce only 5 million barrels a day before the financial crisis so that shale evolution has led to the u.s. becoming a major oil producer and for the u.s. growth, you need higher rather than loyal -- lower oil prices. anna: your sinks -- the last -- oil pricesing that have been falling, since the last time we saw higher oil prices, the the relationship between the u.s. economy and oil prices have shifted so that now the u.s. economy been a trip -- benefits from the higher oil prices. ,: you are right. what we saw in 2016 is adp growth went down to 1.6%. spending did not increase but you saw investment collapsing back then. i think we have to be quite careful. we are not at dangerous levels.

i think we should not, if we see oil prices going down to $50, that could start to be dangerous for u.s. growth since many investment projects could be cut. what we see with oil prices is that the state of texas, that is spreads.s. gdp, but it throughout the economy, capital goods and so on, there is no system around the shale oil story. anna: thank you. for us, the european open is next. we have the bayer numbers, we will be speaking to the ceo exclusively later this morning on the european art -- market open program. it is all about the chemicals and all about the downstream for certain companies. we have the adnoc ceo, picking

up his interview and more interviews to come throughout the day. joining us to talk a little bit more about oil. that is a conversation you don't want to miss. also you can hear everything on digital radio. we are never far from your ears.

anna: welcome to bloomberg markets, the european open. we are live from our european headquarters in london. i am anna edwards alongside matt brett -- matt miller in berlin. matt: asian stocks are hit hard by tech troubles as oil prices fall for the 12 straight session but european futures are pointing to gains. less than halfin an hour. ♪ anna: european equity futures point to a higher open after a te