>> good morning from london, i'm nejra cehic. manus: and i'm manus cranny in dubai. this is bloomberg "daybreak: europe." these are today's top stories. ,ejra: cabinet crisis averted at least for now. tories plot to kill her brexit deal. trade compromise, beijing may outline is here is a possible concessions for the first time since the summer. manus: let's get into brexit.

the pound has gained since news that theresa may has secured the banking of -- backing of her cabinet for an e.u. divorce plan. maria is in brussels, straight to you. theresa may may be able to get a deal cleared in her cabinet and i think the phrase is, it was a collective decision, but what about parliament? maria: that is still the big question. yesterday what we saw is the -- the entire conservative party. at one point we were told she was not in a position to give a statement can she did, but friendly did not look happy. the was supposed to be brexit deal that she said came down to one choice, take this or go back to square one, no deal. speculationhearing

there could be a leadership challenge. again, it looks very shaky for theresa may in london. nejra: let's turn to you in brussels, for the e.u. is it now a simple case of signing off on a deal late this month? there is reaction from brussels that has been positive, we've had the chief of the e.u. commission, jean-claude juncker saying there are signs of progress in the e.u. chief negotiator said negotiations have been extraordinary and there's a chance to extend the transition on -- if both sides agree on it. now we have a summit coming up wheressels in november the deal has to be formalized.

how it isdepends on supported by the u.k. parliament. there was a warning that both ,ides have to be responsible they have to take responsibility for what happens next. thank you to our reporters for joining us. let's get to the markets, and we solve it cap declined for u.s. equities yesterday. the s&p 500 dropping to a two-week low, concerns around trade and economic growth and also around tech. u.s. futures trading flat as we look at the s&p 500. a bit of a waiting game for sterling, are we going to see any resignations from the cabinet or elsewhere in the next few days? will we see theresa may's position challenged? whether theuestion deal she struck with the e.u. can get through parliament.

station --nded the the session where it started. , jumpingthe aussie after the data was up .6%. and you'rein focus also looking at oil. if you thought yesterday was a reprieve in the oil market, the problem is made in america. back on the downside, talking on nymexr supplies crude. we have run the numbers here in the middle east. our chief economist basically said 80% of the drop is down to demand. worry, let's roll it over and look at some of the currencies. the dollar is only a slight drift this morning, down 0.8%.

you have jay powell's comments to contend with, he talks about headwinds, bond yields, lots of stories on the bloomberg in regard to the deficits in the .nited states juliette saly is standing by. we've seen a bit of a turnaround, it's been a volatile session here in asia. the msci asia-pacific now in the black for the first time in five sessions, lifted by what you're seeing in hong kong and china. pressure mainly on yen strength. we've seen the australian market close, pointing out the strength in the aussie dollar and unemployment at a six-year low. elsewhere you're seeing a nice reprieve coming through from a lot of the em. bank of indonesia philippines in focus today with rate decisions.

let's look at some of the stocks we are watching. part of the reason are seeing strong omentum in the hang seng is tencent, it's earnings came through with it be. .- came through with a beat mosta indonesia rising the . it will acquire a stake in another airline. to the downside we've seen korea air come under pressure after in order to raise concerns about its third-quarter earnings. it was one that companies focused on the fluctuating oil price. manus: thank you very much, juliette saly in singapore. that's get the first word news with debra mao standing by in hong kong. is claimingme victory in her fight to win her brexit deal, saying she has cabinet backing for her e.u. divorce plan after marathon five

hours of talks with senior ministers, she described approval for the deal as a collective decision with some vote was saying the not unanimous. at least two senior ministers are said to be considering whether to quit while scores of lawmakers for the conservative party are lining up to vote against the agreement. >> these documents were the result of thousands of hours of hard negotiation by u.k. officials, of many meetings which i and other ministers held with our e.u. counterparts. i firmly believe the draft agreement was the best that could be negotiated. now it is for the cabinet to decide whether to move on, if at all. agree to create a single customs territory. we may remain in the same territory as the rest of the u.k.. in addition, the northern island

would remain a line to those rules that are essential to our voting body. >> jay powell says the u.s. economy is strong but could face headwinds next year as policymakers way how far and fast to raise interest rates. listed slowing growth abroad of the effect on the economy a rate rises since 2015. he also warned on the u.s. trade dispute with china. >> with the arising course of concern, it has not shown up yet in the data. of course it will be hard to see it in the data because you don't know what the data would have been without the trade issues. but in theory you could see a little slower growth, to the extent that more and more products are subject to tariffs. you could see higher inflation and lower growth. hille changes on capitol

after the midterm elections could pose problems for president trump's new north american trade deal. the leading house democrats at the so-called u.s. fda agreement needs changes and must be renegotiated if the administration wants the parties support. china said to of late out a series of potential concessions to the u.s. for the first time since the summer and ahead of talks between president trump at the g20.t xi sources say the talks have been constructed but fall short of the major reforms washington has been demanding. global news, 24 hours a day, on-air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. debra mao in hong kong, thank you so much. today were asking the question, will the next 2% table to move be up or down? join the debate, reach out to the team on your bloomberg.

us is the ceo of wealth management as our guest host for the hour. will the next 2% move be up or down? >> what theresa may has been able to do is come out with an agreement she structured with the e.u. and she is just about managed to get into the cabinet. few aroundanimous the cabinet table. it would be surprising if we get through the next couple of days without some cabinet resignations. it will be surprising if there isn't more talk about a challenge. that makes it look more likely but that's where the volatility is going to be. my instinct is that it won't really impact on the gilt market or equity markets until we see a longer-term direction. manus: there's a great deal to and when iten now

goes into parliament, great deal can happen. it's anybody's guess, really. but in terms of failure to make it through parliament, you can look at a number of different outcomes. at what point does the bank of england be forced to raise rates? what is the drop in sterling that could force the bank of england's hand if we go to a crisis draw? chris: i think that the bank of -- i think the bank of england is in a tricky position. it will not want to be seen to be interfering in what is a political negotiation. i think it will be roundly seencized if it is being to prop up the government at any point by raising interest rates. the u.k. underw, brexit is reasonably slow compared to other countries around the world. even though unemployment is relatively low, actually the

idea that we could be in a rate rising environment when there is so much uncertainty out there is hard to imagine. at the same time, as we always talked about, the largest companies in the u.k. or big exporters. to some extent it's not a bad thing for them. saying we are likely to see this playing out in sterling and we will see more startling volatility. it sitting in hong kong, dubai, all of the world. if you're looking at the u.k., i understand all this matters if you are trading sterling, but other than that, is it just becoming an idiosyncratic story with no consequence for the global market? chris: absolutely. i was in your studio a couple of weeks ago saying exactly that. i was talking to one of our u.s. fund managers yesterday. this is a sideshow. the deal is what is happening in terms of the u.s.-china trade negotiations.

brexit is something we are accessed about in the u.k., not surprisingly, it's the biggest political change in a couple of generations, but in terms of the impact on global trade, the impact on the global economy, it is relatively small. investor was-known here a few weeks ago and he said not only would jeremy corbyn short u.k. banks, he would short everything. our global markets underpricing the systemic aspect to brexit? it is quite substantial, even know nobody talks about it here in dubai. -- even though nobody talks about it here in dubai. are we pricing in the -- underpricing the systemic nature of this? chris: that's a great story to pursue. you've got to look at the dynamics of this. i really wonder at the logic of

conservative party members trying to oust theresa may at this point. if the conservative party goes into a general election in complete disarray, because different parts of the conservative party are not ireeing with one another, find it hard to imagine, despite the pressure they put on theresa may, that the conservative party would want to get into an election at this point in time. i think if that is the case, and it looks like jeremy corbyn will get in, but remember the polls are not showing the labour party is actually in the lead at the minute. it would turn to what that means to the u.k. position in the global economy. nejra: is it through buying sterling volatility or betting on bank of england rate hikes?

what exactly are they doing? met with fund managers yesterday and they were saying they are coming through the u.k. and in deed into europe because they see opportunities in companies that are performing really well. they want to get this brexit behind them that there is an awful lot of opportunity in undervalued u.k. equity markets. if you look at the 10 year performance of the ftse 100 compared to the s&p 500, i think it is about 8% over 10 years versus 40% for the s&p 500. businessesome great in the u.k. and those are the businesses they want to buy. manus: maybe that will clear a path for a return of capital. coming up, oil resumes its decline after a record losing streak. later, warren buffett says

farewell to his last walmart shares after a 20 year relationship. bloomberg radio is on your mobile, on your device. this is bloomberg. ♪

>> we consistently said that we don't want bo porter on the island islands. we also don't want a border on the irish sea. the trading arrangements during iod are veryon per welcome for our business is trading with the united kingdom. delivers on which the voters a referendum which brings about control of our money, law, supporters, protects

jobs, security, and our union. >> a very much hope that theresa may will get the necessary support in her, but also in parliament because the result is a good one. it guarantees that we avoid a hard brexit and therefore avoid damage to great pit -- great when -- great britain and the european union. he guarantees the basis for negotiating a new agreement. ofra: after four days declines, the msci asia-pacific index in positive territory. the 10 year yield not really reacting. we heard from trumpâ line got the u.s.data out of yesterday. a fifth appetite for u.s. equities. the s&p 500 hitting a two week low but perhaps we will see a rebound in today's session, judging by the futures. and cable is focused also. where she goes really is

anybody's guess. we saw that deal come to the table last night. europe is in a slow math -- slowdown mode. we have our chief economist here, 85% drop in the price of oil has been down to dissipation of demand. the question of the day, join in. where is the next move in cables? is it that are down? -- is it up or down? let's get to debra mao in hong kong for the business flash. utility pg&ernia plunge the most in 16 years on the possibility that its equipment sparked one of the catastrophic wildfires ravaging the state. shares plummeted after the company and mated it has

exhausted its revolving credit line, a sign of growing financial stress. citigroup said damages from the fires may total $15 billion. that is far more than pg&e has on tap. warren buffett has renewed his bet on banks. berkshire hathaway has bought stakes in jpmorgan and pnc financial and boosted its investments in other institution. the jpmorgan holding deepens ties between the two companies. a top deputy is on the bank's board of directors and berkshire is already working with amazon on a health care venture. his longested in losing streak in more than six months as investors reassess its growth prospects amid waning demand for iphones. shares extended their slump losing 11% over the last five days and erasing more than $100 billion in market value. apple's year-to-date gain is now about 10%, down from almost 40% in early october. fell in the first time

since august, reaching its lowest level in more than he year. the world's largest cryptocurrency dropped as much as 15% with most of the loss coming within a half-hour window. other clients also fell, smaller rivals seeing sharp declines. fromin is down about 70% its record in december. that is your bloomberg business flash. manus: thank you very much in hong kong. where are oil prices heading next? if we had a crystal ball, we would all do very well. against the prospect of opec and its allies cutting production, oil prices have resumed their decline. today snapping a record losing streak. the biggest fall in nearly three years. chris, i used the words made in america, that is shale, it

really has the feeling that this market is telling me something much more evidential about the state of global demand. how do you interpret this? chris: there's a couple of aspects, if we see global growth demand forn, we see oil on a global basis will decline. , whennventory levels inventory looks as though it has got to levels where there's plenty of spare capacity of around, it's not surprising we see a decline in the oil price. becausetical fray, president trump appears to be putting pressure on the saudi arabians not to cut too much because it is obviously particularly beneficial for him to have lower oil prices, and

therefore lower gasoline prices for consumers in his core voting area in the united states. dynamic,nd and supply and at the minute there is slightly weak demand with the on explicit cuts and supply meaning pushing prices down. biggerif we do get output cuts from the opec meeting in vienna, how much could that actually lived crude at this point, given how far we have fallen? becauset's interesting, if you think about the way supply could be held back, even from the saudi arabia and though that supply, even venezuelan production has collapsed and there has been difficulty exporting from libya and nigeria with the iranian sanctions, there's all sorts of reasons why the global supply of oil should be lower. dips toward $50

a barrel, then it's really hard for the shale producers to think about oil in terms of anything practical. it does feel as though we must be getting to a level where oil will probably bottom out from here. and that supply will get to the point where oil will recover a bit. manus: we got to see whether they reduce production. they went into anaphylactic shock with the word production cut. brent longs are dropping. i get the sense the market really has stretched itself on the downside. would you agree? agree i think you would with that and it would not surprise me at all if we see a bit of a bounceback from these levels. ,s well as the bigger picture there is probably some underlying trading activity being undertaken by markets. it would not surprise me at all if we see a bit of a bounceback. stays withs ralph

us. jay powell says the u.s. economy but policymakers way how far and how fast to raise rates. this is bloomberg. ♪ [ phone rings ] what?!

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"all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. nejra: let's get a look at the world map. asian equities snapping four days of losses. the msci asia-pacific index in the green. let's check in on the markets around the world. agam.start with you, indian markets looking a little quiet today. they did start on a quiet note, in fact absolutely flat. both trading higher by about .4%. mixed cues coming in, especially

from private owned banks. when it comes to the u.s. dollar, at this point it's around 72 against the rupee and the u.s. dollar has weakened to but it's muchnt lower than we saw last week. continue to track the movement of the oil and the impact it has on the indian rupee as well as the indian market overall. it looks like volatility of u.k. banks -- we've had this conversation in the past. what is going on, what are you looking at? annemarie: a big day pre-brexit. looking at the ftse 350 banking index and the historical volatility of the 30 day and 90 day, you can see on the white line the 30 day, the more near-term volatility has been much higher. u.k. banks are becoming much

more anxious and one thing to note, the city of london is far finishing, they will continue to prepare for talks to go off the rail. chart isfew weeks this going to be important to know where the banking industry is in this entire deal. btilook at the brexit spread, five minutes ago it tick higher into positive territory where the u.s. benchmark is lower. if you look at the spread, it is pretty huge historically. theis the spread between two. we have traders looking at the possibility of more u.s. inventories rising. looking at the fact they could 1.5 million barrels a day, but that will that be enough to get the prices even higher? manus: we've moved from the

discussion of a million barrels. breaking news coming through now , if you looking for detergent [indiscernible] nearly 18%.gin of when it comes to the numbers, a drop in the third-quarter from estimates. market had penciled in $930 million in sales. a little bit lighter than they had estimated. it's about adhesives and the guidance remains pretty much in check. nejra: nine-month sales up 6%, 25.2 billion euros coming in net versusnine-month

600's 89 million euros. that is a beat concerning the outlook given in october. desley: theresa may is claiming victory in her fight to win a brexit deal, saying she has e.u.et back from her divorce plan. she described approval for the draft deal as a collective decision, which some observers say requires a vote of unanimous. lawmakers from her conservative party are lining up to vote against the agreement. >> these documents were the result of thousands of hours of hard negotiations by u.k. officials. which arengs government has held with our e.u. counterparts. i firmly believe the draft withdrawal agreement was the

best that could be negotiated. the cabinet to decide whether to move on in the talks. >> we have agreed to create a single customs territory. the northern island will therefore remain in the same customs territory as the rest of the u.k. in addition, northern ireland will remain aligned with those rules of it single market that are upholding our border. the changes on capitol hill after the midterm election could pose problems for president trump's new north america trade deal. leading house democrats of the so-called agreement needs changes and must be renegotiated if the administration wants the party support. china set to late out of series of potential concessions for the u.s. for the first time since the summer and of the talks between president trump and president xi at the g20.

sources say talks have been constructed but were told ideas fall short of the major structural reforms washington had been demanding. oil snapped its record losing streak on more signs opec an independent producers will implement output curves next your. the cartel said all sides are discussing deeper than anticipated restrictions to balance the market as demand for oil slicks. meanwhile an industry for with it to show you a stucco rose 8.8 million barrels last week, more than doubled the forecast in a bloomberg survey. is toolton's top deputy leave the white house a day after the first lady called for her to be ousted. she was number two on the u.s. national security advisers. she clashed with the first lady staff over mrs. trumps africa trip. the move follows an unusual public statement from the first lady demanding her removal.

global news, 24 hours a day, on-air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. thank you so much. jay powell says the u.s. economy is strong but could face headwinds next year as policymakers way how far and fast to raise interest rates. during a question and answer session in dallas moderated by dallas fed chief robert kaplan, he did point to potential challenges. >> there are challenges that are typical of this point in a cycle. howave to be thinking about much further to raise rates and the pace at which we will raise rates. i think the way we will be approaching that is to be looking really carefully at how the markets and the economy and business contacts are reacting to our policy. nejra: joining us is chris ralph. he did see a huge amount of

reaction yesterday or today in terms of treasury yields, but this chart shows basically expectations cooling on fed hikes in 2019 with the market expecting fewer than two in 2019. mrs. lined up with what you are expecting from the fed next year? chris: what i've seen is that people are talking about two or three rate increases in 2019. if you think about increase once a quarter as we go through the , after thecrease meeting on the 18th and 19th of next month, as we go through the first half, probably continued rising environment. as we go into the second half, the fed will be looking closely at the data, whether the fiscal stimulus is beginning to decline and its impact on the u.s. economy, whether global growth and slowing growth will impact the u.s. economy and therefore whether there's a steady pace of rate rises. there's a danger of , it's beenon

suggested at the last fed meeting that there will be further rate rises but i think there are pretty to people who expect rate rises into 2020. manus: the other thing you pickup from the conversation between kaplan and powell, you talk about credit spreads, powell is not overly worried that credit spreads. scott maynard in his tweet talking about the sliding rate of investment credit has begun. what do you make of this debate? powell being sanguine about credit spreads. the situation as i see it is that we have seen some widening in investment grade credit spreads, but considering how tight they were at the lows, that is hardly surprising, as

some companies are beginning to report a more challenging trading environment. i think what we have to watch is whether rates in company start picking up and what impact that has in terms of the relationship between investment grade and high yields. what we haven't seen is high-yield spreads beginning to widen substantially, apart from the energy sector with the recent weakness in oil prices. that is what i will be watching really closely. nejra: so the crack's starting to show in the credit market, is it just a question of being selected that what you look at rather than worrying about systemic risk at this point? chris: absolutely. active management beats passive management. we have active managers -- managers that will be looking at the opportunities within high-yield or investment grade. i would much prefer to be selective, to be identifying

opportunities rather than just to be buying the default index. night warren buffett last saying goodbye to the likes of walmart. he's beating up his position in banks, that is very clear. other people dying apple. but that -- other people buying apple. eating up your bank position, is that something that jibes with you? chris: certainly we have seen a lot of asset manager saying they want to move away over time and look at the long-term attraction of amazon, facebook and the rest. what i find fascinating is if you look at procter & gamble, which could be described as being sort of an old economy stock, trading at an all-time high.

weakness in the faang stocks. reporter saidew there's quite a lot of worry about the short-term performance in those companies that have done really well through the first half of 2018. manus: strange that we should finish on the conversation, thank you very much, chris ralph. the fangs are certainly under pressure. thanks for sharing your thoughts with us this morning. reports are a key opportunity for us to lean trading ideas and look at trends. our reporters have been lifting the lid on the details. warren buffett is the sage of omaha. where are you going to start? annmarie: we are starting with him, he wrapped up his bet on

banks, and added oracle to his list. he boosted his stake in apple, bank of america, goldman, and dny, but he ditched walmart. you can see how much she put in and out of that trait since he first begin investing in 1998. facebook did not see much love last quarter from hedge funds. one reverses course on his stake in the second quarter, slashing it to just $3.6 million. let's keep it in the social media tech sector. alibaba came out strong, hedge ,unds losing, global and tiger cut the majority of their stake

in alphabet as did maverick capital. others/their holdings and netflix. buys fromomed new tiger global. a bit of a mixed bag for tech. up, theresa may gets her draft brexit agreement passed the cabinet. now she faces revolt from conservative members. when you're traveling to work, stay with us, tune in to bloomberg radio live on your mobile device or on digital radio in the london area and we are always with you, even when you are on the move. this is bloomberg. ♪

nejra: this is bloomberg

"daybreak: europe." i'm nejra cehic in london. manus: and i'm manus cranny back in dubai. let's get the bloomberg business flash. pg&ey: california utility lives the most in 16 years on news it could have caused one of stateldfires ravaging the . a sign of growing financial stress. citigroup says the damages from the northern california fires may total $15 billion. that's far more than pg&e has on cap. cells that uber are dramatically slowing is the company spends more on feeling is global growth plans, particularly in its food delivery business. to $2.95revenues grow billion in the third quarter. almost half the rate of growth six months ago. the company plans and ipo next year. theost $1.1 billion in

latest three months. apple is mired in its longest losing streak in more than six months. investors reassessing growth prospects amid waning demand for iphones. shares extended their slump, losing 11% over the last five days and erasing more than $100 billion in market value. is downyour today gain from almost 40% in early october. that is your bloomberg business flash. nejra: thank you so much. prime minister theresa may is fighting for her political life as a growing tory revolt threatens to kill her brexit deal. let's take a look at how newspapers are covering the story in the u k. the daily express is leading with her warning that britain could remain in the e.u. if they vote against her brexit plan. it's this deal or no brexit is what she said. manus: it's a collective

decision and it will be an uphill battle for theresa may. she intends to sell the brexit deal to parliament today. 11 mems of the cabinet are said to have spoken out against the deal. quite dramatic, according to our sources. >> dramatic and emotional. the times leading with tory mps areas that clash against her the primeion pick the minister managed to push her deal through after a marathon five-hour meeting. big question is whether we will see resignations and if her position is still tenable. manus: let's bring in one person who can help us, a u.k. law member and member of the house of commons brexit select committee. they get so much for joining us. -- thank you so much for joining us. when you look at the use of language, the choice before us is clear, it's this deal or leave with no deal or no brexit

at all. uphilla heck of an struggle for five hours yesterday. where do you expect the next shoe to fall in this story, resignations? >> we are obviously very early days. we haven't seen the brexit text on a so i don't exactly know what the detail is. clearly, what is coming out, what theresa may has gone four , which wein name only it's aways pointed out stupid outcome of it all to give away all control and have nothing in return. so how she is going to sell that hardrd exit tears -- too brexiteers is unknown. as you probably know, we have been calling for a people's vote

once we have a deal on the table , and this remains the only sensible option. nejra: before we get to that people's vote, and thank you for joining us, how likely is it that this deal we currently have, which is the only option according to theresa may, is actually going to make it to a vote in parliament? wera: we are meant to have a vote in parliament, so we will get a vote. the labour party has said in the past that they will respect the will of the people, but at the same time, they also want the same members -- same benefits as measures of the european union. they clearly go together. they are looking at this symbolic brexit deal as a way to getting to new elections and that is really their political aim. let's wait and see what the labour party is going to say. the tory party is clearly split.

brexiteers feel really betrayed. the only way she has held her position is by saying she is delivering on the will of the people. but voting on a deal in name only gives nothing in return. it's a very idiotic outcome. in terms of the outcome, the city of london, it looks as if that is going to be downgraded, pretty much as expected. this tentative deal does very to hunker down the city of london as well. results inbecause it very little. the final and see

deal after we left the european union, what it's going to look like. saying if we can wait and overturn all sorts of things. staying in the single market, how much -- i think the european union, those guys will rub their hands because they think they have really got the u.k. in a trap. no longer at the table but we have to follow all the rules and regulations and continue with all the economic arrangements as before. i can see them beating airy .appy, but -- being very happy i know that you are calling for a people's vote, but giving the development of the past 24 hours, is a second referendum actually more of a material possibility now? hope,i haven't given up

and particularly because i ultimately think the solution is with the people and the momentum of the people's vote is clearly with us. we had nearly 700,000 people marching in london for a people's vote. -- if shey cannot cannot gather people around her, she herself might come to the conclusion that this is the only way out. she has said no to it so far but she has said no to a customs union for two years and clearly she has gone back on her word on that one as well. i am ruling nothing out. manus: you really nothing out. we understand there is a suggestion of a leadership challenge. do you think that is a real possibility? wera: that is really not for me to judge because i'm not a member of the tory party. feelly be hard brexiteers

very betrayed and it depends how angry they are and how many people they can gather to their side. a labouruld you rather party government than this deal we have on the table? wera: what i really want is a people's vote. at the end of it, i want people to come to their senses and remain members of the european union. nejra: thank you so much for joining us, a member of the house of commons select committee for exiting the e.u. thank you for joining us. asking the question, will the next 2% cable move be up or down? join the debate, reach out to our team on your bloomberg. up, will speak with gina miller who took the british government to court. if you're traveling to work, you , stay with the

bloomberg team on digital radio in the london area. we are with you every step of the way. ♪

manus: good morning from dubai. this is "bloomberg daybreak: europe." nejra: i am live from the city of london. these are today's top stories. manus: cabinet crisis averted for now. theresa may faces difficult days as tories plot to kill her brexit deal. jay powell signals the december rate hike is a lock despite recent market volatility. beijing may outline a series of possible concessions for the first time since the summer.

nejra: good morning, everyone. let's get more on the top story. the pound gaining on the news theresa may has gained backing from her cabinet for the divorce deal, but maria tadeo joins us from westminster. the big question, whether she can get her deal approved by parliament? before that, questions of resignations. are we likely to see any in the coming days? that's right and we need to take a step back and look at yesterday. the cabinet meeting went on for five hours. at one point, it was unclear if she would give a statement. all we have is deal, no deal, or no brexit. -- no one has done this yet and there is speculation we should see a

leadership challenge, but none of this yet. it is wanting to keep an eye on. be ina may will parliament today carried the sense from the prime minister yesterday is at this point, this is all we have. the european union will not offer a better deal. manus: we just had a conversation with the liberal democrat who said brussels and the europeans are probably rubbing their hands with glee this is after the a miss. -- mess. what is going on in brussels? will there be a special summit now that it is past the cabinet staging the united kingdom? maria: we heard from michelle barnier who said progress has now been made. that was a keyword. the european union has said no summit until there is could progress. -- clear progress. that means getting it done before the cabinet and sealing the deal in.

brussels -- in brussels. donald tusk is the man who called the special summit. the date thrown around his november 21. barnier's, michel tone shifted. brusselshe point is doesn't want to say anything that can kill this before it gets them. -- done. nejra: what kind of access argue k banks going to get in this divorce deal? has the city learned from yesterday? , 600: we do have the deal pages long, a big stack. the european union will now use this term they like called equivalents. the way you do business, regulations, does it match the european union criteria and if not, he won't have full access. i think banks they -- new this

was a central scenario. we see indication in dublin, paris, and someone. inus: maria tadeo westminster. let's see what the news flow brings us today. james bond, he works in her majesty's service, aston martin. we've got the numbers for the company. they are reaffirming their outlook, full-year sales target, the top end of the guidance. third quarter -- a revenue of 282 million pounds. a couple weeks ago, we wrote up this story that you are seeing. a huge amount of short interest in aston martin. maybe 6.6 percent was the latest update in terms of short interest. the market is betting against it. shares tumbled by more than 20% since it started trading on

october the second. you've got ferrari out there. where'd you want to put your money in the luxury part of the market? this is the guidance from aston martin for the year. that is at the top end of the market in terms of aston martin. they are a dime a dozen out here. let's talk more broadly about the car market and basically, another difficult month for european carmakers in october. car registrations dropping once more, dropping 7.4%. not as bad as the previous month, but a drop on the emissions test. carmakers battling multiple fronts on trade and emissions. a is putting to the test fourth quarter bounce back projected by volkswagen and daimler. that is the picture for european car registration. on futures, five days of declines for u.s. equities.

u.s. futures are pointing higher. we saw a drop in european equities yesterday, closing down .6% on the stoxx 600 but we could see a higher open in an hour. ftse futures higher by .4%. cac and dax pointing higher by .5%. europe could follow the rebound we saw in the asian session with the msci index gaining today. manus: checking on the bond markets, the italians -- there is no plan b. they are going right to the nail with the eu. german bunds -- these equity markets are hanging their hat on the concessions from china in regards to a global trade deal. pips there. it is laying down the gauntlet to the bond traders. 400 basis points is where he has challenged them to go. you are looking at in your five-year high in the spread

between italy. billion, to you $100 that is the deficit in the united states of america. on year in 60% year october. that is the challenge in terms of the u.s. fiscal situation. , buthat anyone is worried it gives you a real sense of the size and scale of deficits. is that something that weighs on bond market 2019? low bar to the powell put going live. we started to see a strong turnaround in asian markets, which were in the red earlier, but look like he will rise for the first time in five sessions, led by china, potential concessions in the meeting between president xi and trump, but the premier spoke at

the summit in singapore, giving reassurance to market investors. the csi 300 over 100% in late trade. we do have a weaker dollar. the 200 closed flat after being in the red most of the session. the aussie stroller -- dollar, strong with low unemployment. the only major market in the red was the nikkei. concern over the u.s.-china relationship, but a stronger yen playing into things. veryorean won looking solid when you look at the asian currencies today on the likelihood we have seen a little reprieve between the u.s. and china relationship and in brexit. also, better than expected jobs data in south korea. the peso, up .5%, the best-performing asian currency today. the interest rate decision, we're expecting a hike.

-- there dollar rising for a third session and the weaker oil price rising -- helping. nejra: juliette saly in singapore, thank you. let's get the first word news with desley humphrey in dubai. theresa may is claiming victory in her fight to win a brexit deal, saying she had one thing cabinet backing for her eu divorce plan. after five hours of talks, the senior ministers, may described the draft deal. at least two senior ministers are considering whether to quit while scores of lawmakers from the conservative party are lining up to vote against the agreement. >> these documents were the result of thousands of hours of hard negotiation by u.k. officials and many meetings, which i and other ministers held with our eu counterparts. edfirmly believe the draft

agreement is the best that can be negotiated and it is the cabinet's decision to decide whether to move forward with the talks. desley: jay powell says the u.s. economy is strong but could face headwinds next year. policymakers wait how far and fast to raise interest rates. challenges include slowing growth abroad, fading fiscal stimulus, and the effect on the economy of the fed's eight raise rate in slate 2015 -- rises since 2015. >> we see a rising course of concern, largely through business contacts through the reserve banks but through our own contacts. it hasn't shown up in the data. he will be hard to see in the data because you don't know what he would have been without the trade issues. in theory, you could see slower more ando the extent more products are subject to tariffs. you can see higher inflation and lower growth.

after elections could pose problems for donald trump's nafta deal. a leading democrat said the agreement needs changes and must be renegotiated if the administration wants the party's support. oil snapped its record losing 's output curbs next year. all sides are discussing deeper than anticipated restrictions to balance the market as demand slips. an industry report was said to show u.s. stockpiles rose 8.8 million barrels last week, more than double the forecast in a bloomberg survey. global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. manus: thank you very much. this is our mliv question of the day.

i will tell you what is running in "the independent." better bid in opening london. cable movext 2% on to the upside or to the downside? join the debate as the team on the mliv, -- the consensus seems to be building at the moment. there is this reference that it will hit the lower side rather than the 200-day moving average on the upside. that seems to be one of the responses we have had so far. powellas lost between a rock and a brexit hard place. expected to revisit lows and rise to the 200-day moving average. have your say as to where you think it is going to go. join the mliv team. guest.et to our next he is the co-cio. let's start the conversation

with brexit. independent," number 10 has told opposition parties they are unlikely to allow amendments to be voted on before a vote on brexit. this is a departure because this could build a case to build a better coalition in-house of westminster to get the brexit deal over the line. what do you make of this so far? i think based on what we have seen yesterday, there is not a tremendous amount of clarity in the way forward. the proof of that is the sterling action. -basedok at the u.k. assets and we haven't seen the rally one would have expected with the announcement we saw downing street last night. that is a reason why we still believe cable will remain in a trading zone and it is difficult based on the lack of clarity going forward as to which way the pendulum will swing. nejra: a trading zone according

to you, but do we have a lot more volatility in the meantime and if so, would you be buying volatility? gregory: probably wouldn't be. you would probably be selling it but i know the main question on debt today is whether we see a 2% move upward or downward. we fallen the camp that we see a but whenlief rally, the market accepts the fact that there is no clarity, we will probably see further weakness. in therally and then medium-term, additional weakness. said u.k. last guest stocks were being held back, the economies being held back, the flow of money into u.k. stocks relative to other global markets is being held back as a result of brexit. have you help yourself back from key moves in the u.k. because of brexit? gregory: i mean, absolutely.

there is so much uncertainty revolving -- involving brexit it is difficult to take a stance on the gilt market, further complicated by the boe possibly having their hands tied. it is difficult to take on the u.k. property market with no direction in interest rates and the same thing in equity markets. even though valuations seem attractive, we think we can have higher conviction elsewhere in the world to make money as opposed to the u.k., where we will be in a trading range in the foreseeable future. nejra: a few months ago, you had u.k. property market and bloomberg wrote a story yesterday outlining the implications for different sectors in u.k. equities. i appreciate it is difficult to take a view, but are there any plays you might make on certain sectors in the u.k. equity market, given where we stand now? we have had a little progress. we can ekee way

out a profit is look at companies that have dollar earnings. i realize that is a well traveled path, but when it comes to allocating assets across traditional portfolios, we're focusing most of our energy and analysis elsewhere in the world like china, for example. you said you want to see a material event or material change before you might put more capital to work. what does it take? let's say it gets voted through parliament and we begin the nitty-gritty on the new trading negotiate na -- negotiation. what is immaterial change that actually invokes more pounds -- more currency to work in the u.k. market? gregory: ok, i think that is a very simple response. what would change our view materially is if we start to see management teams of u.k. listed companies coming out on record

and stating that they have renewed confidence that the deal that is currently being agreed will not thwart their businesses because if investors like ourselves can have greater confidence taking greater risk in the u.k. market. nejra: gregory perdon, still going to wait. the co-cio staying with us. coming up, theresa may faces the political battle of her life. tori's plot to kill her brexit plan as it comes to parliament. later, we will speak to regina miller. that exclusive interview at 9:30 a.m. london time. when you are traveling to work, tune into bloomberg radio on your mobile device or dab digital in the london area. this is blooming -- bloomberg. ♪

manus: 7:20 a.m. in the city of london. 11:20 a.m. here. it is "bloomberg daybreak: europe." nejra: let's get the bloomberg business flash with deadly --desley humphrey. competition was authority has started a probe against credit suisse, ubs, and three other companies. they are investigating whether they colluded in boycotting international payment services instead of -- pg&e plungeutility the most in 15 years on the possibility equipment sparked the wildfires ravaging the state cared shares plummeted after the company admitted it has

exhausted its credit line. citigroup says the damage from the northern california fires may total $15 billion. apple is mired in the longest losing streak for more than six months as growth prospects are reassessed amid waning growth from iphone. 10% downain is now from almost 40% in early october. warren buffett is renewing his bet on banks. berkshire hathaway has bought stakes in jpmorgan. investments in other institutions with j.p. morgan deepening its ties between the company. warren buffett's top deputy is on the board of directors and berkshire is working with amazon in health care venture. that is your bloomberg business flash. nejra: let's check in on the

markets. gainingeeing the cable steam, so higher on sterling. we had reports in the independent newspaper in the u.k. that number 10 could allow amendments to the brexit deal. yesterday, sterling finished where it started, 130.16. the euro bid is a story of dollar weakness across the board. yesterday, we saw a selloff in btp's with the entirely in government standing firm on budget deficit and growth targets. the 10-year btp yield has -- heads three basis points lower. manus: oil might turn around, but there you go. still down. made in america is the line oversupply, waivers, and tweets. oil, a shade lower. a toxic decline according to my chief economist in the middle east.

you got $100 billion of deficit there. trader matter to a bond as futures turn green? stocks may begin to respond to the u.s. gridlock. that is one to debate. some lines coming through on the european reaction to brexit. take it away. nejra: in brussels, we can see michel barnier, chief brexit negotiator, getting a press conference. he said this is a very important moment for the eu and u.k. at a agreement is fair and balanced. comments from him yesterday were interpreted as positive. he says the agreement ensures no and theyer in ireland have achieved decisive progress on brexit talks. let's move to trade and china is said to have laid out a series of potential concessions to the u.s. for the first time since

the summer and ahead of talks between presidents trump and xi at the summit. arbuthnotrdon is the latham cio. you said you would rather be looking at china than the u.k. is that because of trade? gregory: largely due to the policy response out of china, which has been significant over the past three months. collapse in trades the market, currency depreciate against the dollar by 10%. a tremendous amount of infrastructure bonds being issued. we have seen inter-asia -- manus: can you just told though stocks. we are going to focus on these comments at the moment. we have the stage set, mr. barnier. this is a 500-page document being referred to on press

reports in terms of the detail of brexit. you have michelle barnier who has made those comments and that the agreement is fair and it is donald tusk on the other side. this is donald tusk. the prime minister's statement yesterday, but i don't share it. at the beginning, we had no doubt exit is a lose-lose situation and our negotiations are only about damage control. given these difficult circumstances, i would like to thank michel barnier and his team, especially -- for doing work.xceptionally hard we all put a lot of trust in you and rightly so. you have achieved our most important objective.

you insured the limitation of the damage caused --brexit and second, you title interest and

european ministers will be involved in this process. the commission agrees about a future with the u.k. by tuesday. the the following 48 hours, member states will have time to have evaluated, which means that the -- the you -- eu should conclude this work by thursday. then, if nothing extraordinary happens, we will have a european council meeting to finalize and formalize the brexit agreement. sunday,take place on the 25th of november at 9:30 a.m. finally, let me say this to my british friends. -- i will doam

everything to make this farewell asshare theresa may's enthusiasm

for brexit, but praising the work done by michel barnier. the commission intends to agree on the declaration by tuesday, shareholders will do their work by thursday and the council meeting takes place on sunday the 25th. welcome to the program, everybody. this is "bloomberg markets: the european open." matt miller is with me from berlin. i am and it -- i am anna edwards in london. this has been a tunnel to in european politics over the last 24 hours. with learned a lot about what is on the table, but nowhere the endgame is. -- don't know where the endgame is. matt: it will