theresa may once business to back her brexit plans as markets brace for a possible no-confidence vote. will they be more receptive than her own cabinet? was in disarray. and, pressing out the comments from the vice chair richard clarendon on the dollar. is a market reading too much? ♪ francine: this is bloomberg surveillance, good morning everyone. if you arenoon

watching from asia. let us check in the market area bu. . stoxx 600 is higher, some investors still cautious of the are more and more signs of the trade war may actually linger. crude at 57.20, falling into the dynamics and politics for saudi arabia. the pond, 1.2867, rising of it as two resumes about to talk to the cbi and a to business deliver.o halt her brexit deal she has a pretty unsurmountable mountain to scale when it comes to parliamentary approval. islowing reports that ghosn to be arrested, nissan fallen, this news coming from japan. you can see that the stock 6%.es down some coming up a little later, we speak to the former, david davis. we will talk about parliamentary and also leadership challenges,

which mr. davis is said to be mounted. we will ask him whether this is true. that interviews coming up shortly. now to the bloomberg first word news. >> hey, fran. and without a joint communique, the first time since 1983. at the summit, vice president -- he calledocked on nations to avoid lines that would leave them in that to beijing. w that the united states offers an better option. we don't course or compromise your independence. fairly.openly and we don't offer a constituent road to the one felt one

road. we all prosper. >> by trump administration will issue its report on the murder of saudi journalist jamal khashoggi on tuesday, amid increasing indications the killing was ordered at the level. there are reports the cia concluded that the crown prince, mbs come up from the murder. but the real details of the killing may never be confirmed. >> will anybody really know? will anybody really know? he did have people who were reasonably close to him, but were probably involved. you saw that we put very heavy sanctions come a mess of sanctions on the of people from arabia. but at the same time, we have an ally and i want to stick with an ally who has been good to us in many ways. >> the uk's high and properties are seeing even more weakness. were one point 7% lower compared to october, the biggest drop in a month since 2004.

the property market in britain is weakening after a three decade boom. brexit uncertainty is also making buyers more cautious and costing sellers to be much ambitious with the selling price. president trump said he would not stop acting attorney general matthew ricker if you were to curtail that investigation it into the russian meddling. whitaker has referred to the investigation as "a witchhunt." italy's populist coalition said it is ready to talk to the eu about its rules busting budget. but the major spending issue must remain in place. the prime minister said the government is ready to eradicate wasteful programs, the planned reforms will stay. brussels is expected to reject it when it issues a review of

the euro's spending plans on tuesday. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm does a humphreys. this is bloomberg. francine: thank you so much. we are getting breaking news out of nissan, we understand they will hold a press conference later tonight, according to a spokesperson. this is on the back of the news fromasa -- then resignation and news from japanese mother newspaper, regarding the resignation of the ceo. the report from that is super is saying that carlos ghosn maybe arrested in tokyo. japanese media agents are following the story,

so there can be little doubt that it is coming from this prosecutors's office. as the step of this tends to break in japan. in terms of what he is accused off, it is not very clear at the moment. it seems to be related to underreporting his income. the seems to be -- underreported amount could be in a be hundreds of millions of yen according to the report. nissan has said they will hold a press conference, but they have not put a time on it yet. to be someseem substance to it, but i exactly what it means right now is unclear. >> do we have these kind of reputation could be heard, or do think he would have to step down? i know it is early days, but can you keep us up to date -- how often do they go after chief executives in japan? >> chief executives would be rare enough. on thisinly, someone level, cannot immediately think ofa very recent example

someone at the top of a blue-chip household name company like this. >> in terms of the implications or where the chips will fall, i elected to make any stage.ations at this >> having said that, if he does get arrested, he will be a huge reputation.s >> you would have to wonder, a country such a japan, whether he would be a little continue in his position if he was arrested. know,iously, we prosecutors in japan tend to not make arrests until they know conviction.t a the conviction rate is something like 98% or 99% of cases that are brought to court. so there would have to be some meat in this, for the prosecutor to be taking this step. come our thank you deputy tokyo chief. we will continue to follow the developing story, on the possible arrest of carlos ghosn.

theresa may says her eurosceptic opponents have no numbers to remove her. car numbers of birds that have has toreatened and she critics that removing her will not change her situation. planill be presenting her to the annual cbi conference later this week. we are joined by julian chillingworth, chief investment officer at rathbone unit trust management, and catherine haddon, from the institute for government. up to the leading possible vote in early december, we will see a lot of volatility around the pond and we are using that as a barometer of how to resume is faring, whether there were will assess whether there will be a vote of confidence or not. ,here were 17 extra votes letters that may have been written. there is one of the super that takes the total to 42. >> she needs 48 to have a lot of

test to have a vote of no-confidence. catherine, what are the various possibilities happening right now? do we have a precedent for things like this? catherine: we do have precedent. there is nothing it that these kind of circumstances, the scale of what they are trying to do with brexit, the volatility in the country, in parliament, the divisions in both parties, there is a precedent we can cms to go back to the 1930's or the 19th-century commander they don't really compared to what we are going through today. francine: so who are the real leaders in all this? who are the players we should be watching for? group,european research he is the one who has really tried to get a leadership in.lenge but if they cannot get the 48

letters they needed to trigger a vote, the big question is whether or not they can get the 158 mps to vote against her. if they don't manage to do that, she is secure in her leadership for another year some of which puts her in ho a much stronger position with her party. francine: looking at the parliamentary arithmetic, does the pond move on any noise or mp that could go one way or the other? >> yes, sadly. i think the currency will be volatile. disappeared over the weekend, but in actual fact, things are moving in the prime minister's favor. there were new servers that said that there may be 42 at mps love ridden a no-confidence vote. francine: but if there is a vote of no-confidence against the prime minister, what are the exit moving

altogether? catherine: that is difficult to say, given that fact that it has movefined the numbers to against her. if they make a move at this moment and she survives, they are in a much weaker position in terms of getting her out. but there are also all the problems. then havea move, you a leadership contest where we have no idea what the policy would the. what the different positions very simple are in. how does that affect the brexit table, negotiations, that could be a few weeks or months of the leadership contest. somehow that leads up to march 29. francine: thank you both for joining us. up next, the interview we have been waiting for all week. we stay to the form of brexit secretary, david davis. we also look upon reaction. this is bloomberg. ♪

♪ finance, economics, politics. this is "bloomberg surveillance." we just got breaking news, the chairman of the nissan, according to asahi newspaper, he may be arrested in tokyo on a suspected breach of financial trading law. we just cover that story shortly with our report on the ground. the stock is down some 5.7%. not to our top story, brexit, of course. theresa may will be presenting her brexit draft plan to the cbi conference. the embattled prime minister be fighting almost unsurmountable opposition in

parliament and a possible challenge. joining us now for an exclusive conversation is a conservative member of parliament and former brexit secretary, david davis. he resigned because he did not plan.e in theresa may's he just returned from washington. welcome to "surveillance" mr. davis. you are one of the main people really at the center of everything that happened. have you submitted a letter ?alling for theresa may to go enda: no, i haven't. if i were ever to submit it, they would be -- i would tell her myself. lot of sound like a people want her go, like over 40. it is seems to be teetering close to getting over the 48. we will only know when it happens. francine: if there are 48 letters, do you think she will pass the vote of no-confidence?

david: that is really hard to tell. is, thele truth argument is not valparaiso, it is about her policies. i have been running a campaign for three months are trotted get her to change it unsuccessfully. it depends on how she response. she has a delegation which has been trying to get her to change the policy. five members of her cabinet, supposedly, we are told, tried policy.he francine: if the policy does not change, do you think we need a new prime minister? david: i think that the likelihood of her changing her mind. on it is pretty small she doesn't often change her mind. so they might go into talks. advice, ito give her would say, put to this proposal to the house of commons straightaway. you have 500-odd pages of it.

francine: they have to go to brussels first, don't they? david: no, why do need to brussels first, why not just come straight to the house of commons? if she goes to brussels and they say yes, we like it, and then it comes back and is defeated in the house, what does that do for you? i think what is driving a lot of the campaign for no-confidence letters and so on, is that we will run out of time. you showed the graph earlier , and said, deal or no deal of the no-deal vote these two chaos -- no, it doesn't. francine: if there is a leadership challenge now, is that not too close to time? the besteither between deal and a possible stay in the eu as a brexiteer, i would support as a prime minister. david: it depends on how long it takes. who knows.

i think probably, if you had to have a leadership challenge, it could be will it short. i think a better option is to the house now. what is driving people is the atr that they will end up christmas with this vote, and that would mean we are really out of time. and you have no time to ratify up.f it comes one thing that happens in london very often with media is they tend to take of the brussels assertion as god-given truth, and it is not, it is a negotiating start. deal, it wouldo be a lot more uncomfortable for the other countries, ireland, holland, belgium and parts of germany. so they will talk. francine: what are the chances -- what other chances do you see , or inadvertent no deal? if there is a constitutional

crisis, parliament does not approve and it gets messy, and ends up being a crash, is there a high chance? david: the very fact that he have a ratification period come by gives you a three month warning of no. deal my view is that the government should give you -- the government should be ramping up preparations for a no-deal anyway, as a matter of standard procedure. but there are also a variety of no-deals. people keep talking about aviation risks. that will not happen, we will sort that out. data risks, i think we will sort that out, too. francine: if there are not enough letters and not a vote of confidence for the prime minister, would you support her? either unseat her now, or stick behind her? david: in my view, the deal is no good. it is actually, from some points of view, it is worse than membership. if it comes down to it and it is

between this deal and no deal, i would rather go for no deal. she is talking to the cbi today. they will say, we like what you've got come up because she is pretty much freezing everything in place. but it is just one arm of industry. the businesses they should worry about. businesses,n, eu opportunities that could be shot down by this deal. francine: there was just one uncertainty, right? -- markets do not want uncertainty, they want stability. david: big business wants stability, no doubt about that. new businesses don't. if you were sitting here with innovators,reat james dyson, he would say he wanted opportunity, not certainty. francine: but you need capital to go into your business if you are small, big or medium there

we had david: yes, but capital pursues opportunity, not certainty. the danger of this proposal is that it would shut down opportunity future. life sciences, genetics, we are good at those and we are world leaders in those areas. if in five years time, brussels is controlling regulations for all those areas where we are suppose and world leaders, will not be leaders for very long. they will rid of the regulations against us, as i have done in the past. francine: so you are -- as they have done in the past. francine: so you're asking to resume to put this away. do you think parliament would vote for the deal out of fear? david: that was misinterpreted. what i said was that both sides of the negotiation were driven by no fear of no deal. , not parliament. that means that both sides would come tossure on them to a conclusion. which is why i say, if she goes back after losing in parliament

-- francine: you think she would lose? david: i think she would lose, whether it is now our in december. i think she would lose. francine: the brian bright was right to resign? david: he was right to resign because he, like me, recognizes that the deal is not the right thing. i am the last person to criticize that, i resigned at -- st the exact same francine: yes, but would you support his candidacy? david: he has not declared his candidacy end of the famous line is, there is no vacancy. see.e will that minnick is an old friend of mine, he was my chief of staff, i brought him to politics? david: does the reshuffle on friday change anything? no, not really.

i think of the driving feature here is not about the details of who is doing what. steve is a good man but he has , and has beenic confined in the press coverage, to future preparation not to negotiate. if anything, it is slightly more 10 moreized in number than it was. so i think that no, it doesn't change anything at all. the dynamic here is. -- is the deal good enough? answer: no. francine: do you think it is the ?est deal theresa may could get a david: no. , i have hadnown concerns about the whole strategy, whether it is agreeing on the wording of ireland in the wording of ireland in december, whether it is allowing the commission to undertake their

is allowingether it this vague future partnership issue to go through, and effectively pay for 39 billion p an old poke, -- english phrase -- brussels is not made of titanium. it will flex if its own interests are pressured, and we should pressurize them even more. francine: was it trigger article 50, i is time not on the other camps side? david: time plays both ways. only if you behave as a nervous cat. the simple truth is that many people are arguing back here, frankly, undermining the governments that was shooting position, are saying that we are afraid of no deal.

the truth is they have more to lose -- francine: then go for a leadership challenge, if you think this is lousy negotiation, challenge the prime minister, when not. david: what i have said all along is that she is a good prime minister. just on this particular issue that we disagree. francine: there are more pressing issues. david: of course, there are a few other pressing is going on, health care reform, pension reform. francine: so how do you see it going. a parliamentary vote against shutdown and then a second vote that gets passed through? david: i think the vote would get rejected, probably emphatically. it would not be a loss of a couple of votes, it would be a large number of votes. than she gets back to brussels and says, i cannot deliver. then they have to choose, do they want to know deal, or do they want a deal?

they will decide, i am sure. whatever they say today, they will decide that they want a deal. francine: what if they don't want a deal? david: they do. in a negotiation, you have to make judgments. up until now, the commission has been allowed to get away with every pressure play. of thee time comes people like the dutch, the belgians, the irish, the german industry, when they see there is a risk, then they will move. , only four weeks ago, said, we can have a deal. francine: thank you so much, david davis. this is bloomberg. ♪

♪ francine: economics, finance and politics. this is ""bloomberg surveillance. ." first stop on the tictoc, a

global new feed built for twitter. the entertainer has bought out eisure liner athl from the top shop owner. falling immigration is a squeezing statistics and a weak pound is driving costs. that and more stories on our bloomberg tictoc. the vice president has hit out politics,ina's trade and top stocks are mixed on trade tensions. those are our top five stories. now we get to the bloomberg first word news. >> shares of this company have plunged on the reports that the chairman is going to be arrested and prosecuted. that is according to the japanese newspaper, asahi, which did not cite anyone. he is suspected of a legend violations in relation to and

the reporting his own compensation. the newspaper said that a , also saidor nissan of the company would hold a press conference later today at the headquarters in kyoto. theresa may's uphill struggle continues as she tries to sell her brexit deal. she will address the confederation of british industry today, trying to win the support of business leaders, as members of her cabinet are openly discussing rewriting the deal and some of her own cabinet members are camping to get rid of her. resent thursday, said he still supports the prime minister. .he uk's higher and properties drop for thegest month since 2012, and the property market is weakening after a three decade

boom. brexit uncertainty is making buyers cautious and prompting sellers to be less ambitious with asking prices. president trump said he will not general,ng attorney matthew whitaker, if he curtails special counsel robert mueller's investigation into interference in the 2016 presidential elections. whitaker has been a critic of the special counsel's investigation. he has previously blasted the investigation as a "witch hunt." italy's populist coalition says it is ready to talk to the eu about its role-busting budget. leader and a deputy prime minister, luigi demaio, sent the government is ready to eradicate wasteful programs. brussels is expected to reject that when it issues the review of the eurozone spending plans on wednesday.

administration will issue its report into the martyr of saudi journalist, jamal khashoggi, on tuesday. amid increasing indication that the killing was ordered at the highest level. the cia is reportage and have concluded that the crown prince approved the murder. but, president trump says the real details of the killing may never be found. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm deathly humphries. this is bloomberg. francine: chinese smartphone maker, xiaomi's shares are falling since it's evzio in a july. due in part to concerns that its internet services business is falling under expectations. they are hoping to allay those fears with third-quarter results. the company's said in the earnings call -- well, the earnings call has been delayed.

we are joined by someone who writes for tech for bloomberg opinion. what do you make of the delay? me -- xiing about show ami, is to always expect a surprise to riyadh they have delayed the phone call, they have said that they might have something major to share. of company that can be hard to predict sometimes, so it is anyone's guess the riyadh francine: do you think it is something that is good to share, or something bad. what you expect in terms of earnings? pacificn terms of this news, the stock was up of a 5%, but as you pointed out in the intro, they are down more than 20% since the field -- since the ipo.

we are looking at a slight increase in revenue from the prior quarter, about a 5% to 10% increase. it is not bad, but it is not fantastic. it should be quite large, year on year. we also expected to turn profitable, but that is also hard to predict. analysts are struggling to get ahead of that. it is just a difficult company to get a handle on right now because it is quite new and has so many moving parts. francine: into so much, tim, joining us from taipei. speaking in the region -- sticking to the region, the apec without the issue of a joint communique. apparently china objected to the use of the language on trade. summit, the u.s. vice president sharpe and the u.s. attacks on the rose second-largest economy while keeping the conversation on china. , am joined by the next guest .ary owens thompson

thank you both for sticking around. the do you worry about with trade concerns, do you think they will escalate or reducing them dampening down a bit? >> obviously, it is hard to now. a personal feeling would still be that with the trump administration a likely coming under increased scrutiny under congress, it will be increased hostility towards a better administration, and that they will probably want to lash out at again. where would they better lash out against us than on the trade issue. so my feeling is that it is like you to escalate and become more scrimmage aren't. francine: in terms of gdp, does it was putting everything that a downturn? marie: for sure. at our thing there are any major threats to the business cycle compared to the threat of protectionism. it impacts the world economy even before any of the other

measures are put in place to rid we saw that in the first quarter of the year already, trade volumes are done. people make contingency plans or they refrain from planning, so we have negative impact whether the measures come through or not the riyadh francine: julian, how .o you see this panning out julian: i think any likely meeting would be a cease-fire on tariffs, we thought of that that was being priced in as we went up to the g20 conference. now, things got hostile over the weekend and i suspect that analysts will become a bit more nervous heading into the g20. the s&p could also be quite that.le heading into francine: do you expect tariffs on carmakers? are there any dangerous things out there that could happen as president trump is campaigning for g20? marie: that is something that has artie been showing up in the markets.

instance,makers, for have already been affected just by simply talking about these things. in the 2018 -- in the 2008 crisis, we had a 10% drop in trade volumes. during the great depression, we drop.60% now, we still have 2% growth in trade volumes, so we are not talking about recession yet. but if volumes really start falling, clearly, that would be really bad. francine: but is there china can session is there anything china can give the u.s. to appease them? maybe reforms on must expending, ?an they accelerate that julian: i think that -- should havenk this been dealt with under the wto. so for me, this is a hatchet to strategy which i don't think is constructive for world growth in general, and for these countries

involved, in particular. how would you want to respond to those kinds of tactics? for sure, one would hope that everyone involved in international trade would want to respect international trade rules. i am sure there is an issue regarding china on that score, but i am not sure that this is a way to go about it. francine: how do you play the trade tensions into the market? what happens when the renminbi reaches a certain level, how do you look at it in the market? julian: if you take the negative view, you think that there is not likely to be some form of accommodation at the g20 summit, then you probably go to the renminbi. if you are feeling optimistic, it toou go bearish on riyadh i think that the point that marie made, that donald trump with the political order we know have in the states, he doesn't have many levers he can control. so i think there will be a lot

of noise around trade and i think that will continue into 2019 and 2020. francine: we are just getting some breaking news out of nissan , on the back of concerns that the ceo will be arrested. nissan it from nhk, to propose dismissing him at the board meeting. ofwill get the share price the riyadh it was down from 6% when we started about 40 minutes ago. proposing dismissing carlos ghosn at the meeting. to get comment from spokespeople and also expecting a press conference from nissan a little later on. the alliance between mitsubishi and nissan-renault is complicated. the each own shares that also integration of the supply chain,

they are very connected, so that is something we need to keep an eye on. carlos ghosn was supposed to be the linchpin, the reason for the success of this alliance. julian and marie stay with us. stay with surveillance, plenty is coming up including looking at the pound and a dollar. we talk all things fed, next. also, how to strengthen the currency. hot topic.so another live in brussels. this is bloomberg. ♪

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francine: this is ""bloomberg surveillance." i am francine lacqua here in london. . we are getting an update on the story that took many of us by surprise this morning. carlos ghosn apparently being arrested. . we now understand through this media outlet that nissan will propose dismissing him at a board meeting. what we know so far is that they will speak to the press a little later on. i think there is a press conference in about one hour and half. 8.78%.ck now down the fed chair says policymakers need to focus on raising interest rates, while keeping a close eye on slowing growth abroad.

his remarks sent the dollar tumbling as well as yields. my couple of guests are still with us. julian, are the markets overreacting? julian: i think the markets are slightly overreacting. . what he said was that they may , as thebeyond neutral chairman powell said, as well. first of all, let us establish or neutral is. 3%.t 3%, or is it more than the current range is probably two point 5%, or 3.5%. about 3.2e be talking 5%? the bond market is currently predicting 1.5%, 2%. francine: marie? marie:? marie: we have had a softer view on the fed for quite some time, thinking that the september rate hike would not happen. so i feel, unless it is my

personal bias, i feel that the fed is saying that this might be the case. howell said in dallas, that riskighting the downside to the u.s. economy and so on. so i am on the fewer rate hike side. francine: limited you a sense of what we are talking about on our markets live blog. if you are your bloomberg customer, you log on to mliv . pricingyou, if you are signals for assets, what do you think, julian? julian: i think, three. francine: does it mean you are a ?uyer of treasuries, dollar a julian: i would be a buyer of dollars, and i probably think that the equity markets will be happy with 2% come i said of 3%, s&p.would be good on the

francine: what about the emerging markets? be ahink it would beneficial consequence, right? marie: absolutely. a weaker dollar is good for everybody except for the europeans. we are not talking a weaker dollar, i agree with you, but if there are fewer rate hikes, then the relative advantage for the dollar will be shrinking, so to speak, compared to consensus views not long ago. francine: what is the dollar do from here? julian: i think it will slightly appreciate. we were talking earlier about tariffs. i think the noise around tariffs will mean that leading up to g20, the dollar could be quite volatile particularly against the asian currencies. francine: or do you see the dollar going, and what does it mean for ecb policy compared to world?t of the

marie: we are dollar positive, we have a positive interest rate differential, we think it is likely to rise even though he might not rise in a december. we have probably peaked in terms of growth differential between the u.s. and europe. i think the second quarter of this year was at the peak in the u.s. business cycle. throughout 2019, the dollar support should be waning. francine: what about you, julian? julian: i think we still probably see a strong dollar in 2019. francine: to what kind of level. . i know it is tricky, but the the thing to get right is dollar? julian: it know, what you need to get right this year is a combination of dollar, rates, and it should tell you where the market should be on as well. francine: very ago, thank you both for joining us. julian chillingworth and marie owens thomsen, both staying with us. up next, you're a group of ministers meet in brussels to

. we are live in brussels next. ! >> this is bloomberg. ♪

♪ francine: this is "bloomberg surveillance. one of our top stories right now, carlos ghosn chairman of nissan, expected to be arrested in tokyo over bridge of finance laws according to asahi. newspaper we know that nissan will give a press conference. , and carlos ghosn is expected for manipulating financial filings. the violations seem to be related to him under reporting his own compensation, according to asahi. they did not say where they got information. we also understand from the newspaper that ghosn voluntarily went to prosecutors. we are also doing our own reporting and checking everything on the ground, but as the day goes on, you can see that renault shares are down

about 6%. the chairman of nissan. the meeting at the cbi today -- italy's meeting today in the eu could be the hot topic there we are talking about their bulls busting budget. the deputy prime minister said the government is ready to make major cuts to programs, but some reforms will stay. brussels is expected to reject about as it reviews the eurozone spending plans on wednesday. let us go back to our conversation with julian chillingworth and marie owens thomsen. marie, i don't know if it means telling voters that they will take it badly and turn a little bit euro skeptics, or whether brussels will be a bit more accommodating. marie: perhaps i am the more eternal optimist, but i think it has to end well somehow, with some kind of face-saving

sides.ise on both . also, if you look at the fiscal situation in the world, we know have the world's highest debt level ever. all the mature countries have record levels of debt, basically, with very few exceptions. so i feel -- why are we picking on the little guy? the u.s. is the country that has issued a third of global sovereign debt. we need to keep it in perspective. excess spending in this kind of situation is honestly not the correct fiscal policy, but it is certainly -- nor were the spending increases and the u.s..ts in the francine:. francine: we will get back to euro in just a moment. we just heard from nissan, they just put out a statement and we are also waiting for the news conference. ghosn saying that carlos 's income was underreported for a number of years.

shares of nissan are now down 12.4%. nissan also said that he used the company for personal reasons, i imagine this is company funds. this is the headline, but of course, it will have to be investigated further. nissan saying that they had investigated him for serious breaches. we understand now that nissan has been internally investigating him for party by chairman carlos ghosn, and the house confirmed that they are proposing removing him as chairman. this has huge implications for the alliance as a whole, because it is not only mr. vichy -- mitsubishi, but also nissan have some facilities including some of the supply chain shared among the three companies. they propose removing carlos ghosn from the nissan chairmanship, i wonder whether that has implications on renault

. we will have plenty more on that throughout the day. it looks like something will happen in the next hour or so as we await the news conference from renault. thank you so much to our local gusts, julian chillingworth, chief investment officer at rathbone unit trust, and marie owens thomsen, chief economist at ca indosuez. we spoke to david davis a short while ago, he was telling us that he is not thinking of doing a leadership challenge to theresa may at the moment. later, we speak to the leader of the u.k. labour party, jeremy corbyn. this is bloomberg. ♪

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? ♪ francine: the prime minister wants to finish businesses to back her exit plan from brexit.

ends in disarray. the contentious words between as president mike pence and xi xi ping. nissan will propose dismissing carlos ran -- carlos ghosn. i'm francine lacqua with tom keene in new york. awareing everyone he is of the alliance. is supply chains that are the same. this is what we know so far. let's recap what we found out. nissan will have to propose dismissing carlos ghosn is

chairman. they are confirming that carlos ghosn was under investigation usednally and that he money for personal reasons. tom: it is interesting to see. i have seen the oddity about newsbreaks in japan. it is very, very different than the rest of the world. this came out to the japanese press as rumor. business insider picked it up and we waited for confirmation. we only got not in the last few minutes. i believe nissan will hold a press conference at their time at 9:00 p.m. i have seen that headline. and his colleague mr. kelly and an american who was a council of some type. francine: right. let's remind everyone. a paper. first in

they said carlos ghosn would be arrested in tokyo. nissan stepped in with their own personal story said he was investigated internally, and the fact that great kelly has also been investigated -- greg kelly has also been investigated. here is taylor riggs. taylor: theresa may will ask leaders to back a plan to feel -- a plan that few in her own party support. some of her lawmakers are campaigning to get rid of her. it is another sign of the trade were between the u.s. and china will not end soon. summit in new guinea ended in disarray when the two countries cannot agree on my goat in a final statement. that lowers expectations for the upcoming meeting between

president trump and china's president xi jinping. stopdent trump will not whitaker's robert mueller's investigation. before whitaker was appointed to the job, he criticized the probe into russian election meddling. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. tom: thank you. equities and commodities turning the market. futures negative. steepeningt of curve in the euro-dollar. the dollar is weaker. plays.reen, looking at the giants over the weekend.

the new york giants. is the dow and the friday close, entrancing, the single surprise of last week and into this monday, the u.s. lower yield on the 10 year yield. higher by two basis points. francine: yeah, that is a big deal and it is re-pricing some of the assets. what i am looking at is pound. treasuriese move and are longer. there are two stories -- the pound on the back of theresa may to help deliver her brexit deal as she fights a difficult parliament tree opposition. the second one is the trade tensions in the fact that trade tensions between the u.s. and china are set to linger. back to brexit. theresa may will try to persuade business leaders about her brexit deal with a speech at the

cbi annual conference in an hour. earlier, we spoke with her former brexit secretary, david davis, who says the deal is no good and doesn't expect parliament to support it. >> in my view, the deal is no good, and it is worse than membership. if it comes down to it, it is between this deal that is being proposed in no deal, i would rather go for no deal. she is talking to the cbi today. it is basically freezing everything at a place, but the cbi is one arm of industry. the businesses that should worry about what has been put in place are businesses in innovation. the opportunities we shut down by this deal. the difficulty now, and i think that is what is driving this, we are going to run out of time.

you showed a graph earlier, which said, you know, deal or no deal? and the no deal leads to the chaos. let's not kid ourselves. francine: let's go to our representative in central london. what do we know about leader supporting theresa may's plan? >> good morning. well, the proceedings at the confederation of british industry conferences getting underway. we are hearing opening remarks. what we know is this particular side of business deems a cautious welcome. this is the low friction auction, i guess. it doesn't mean that business would have chosen to leave. which davidoice, davis was giving, cbi suggests they would back theresa may's deal.

she is due to appear later on this morning to pitch this business. how much do we know of how many folks have called for the resignation of theresa may? there was such a speculation over the weekend. one of the u.k. newspapers reporting and suggests that 14 have sent letters to the chairman of the committee, her resignation. we don't have confirmation of that. until we get to 48, we will not know what the situation is with the letters. brady knows the exact total -- only graham brady knows the exact total. one thatare the only

understands the 14 flavors of .ori in the united kingdom here is boris johnson and the telegraph. a wildly percent by minister and we are -- a wildly prime minister and we are betraying labors and remainders alike. i don't even know -- page after chop smacking page. down area we go five-nil down, and if we on like this, the second half will be worst. where are we in the soccer game was to mark -- where are we in the soccer game? anna: boris johnson is no

stranger to flowery and fired up language. he was never going to like this deal. that is not surprising or new. every week, he uses his column to stir up those who back his vision. david davis says if we vote for a no deal, it will not lead to chaos, it would just lead to going back to the table. others are worried about what roadsoes to aviation, our ' system, all kinds of things. our own bloomberg economics's team talking about how it would be 24% smaller. that is not an argument that sticks with anyone. they don't fear and no deal brexit necessarily. they say that is part of the

complex negotiating between theresa may and her party behind the scenes. francine: thank you so much, and edwards. stay with us. we will -- and i will be speaking -- anna will be speaking with jeremy corbyn later on today. minister's the prime efforts, we are joined by eric. you use the don't mince words. know what that would mean for the economy. eric: it would be bad. i share the view of the bigger industries. continuation of this until you get something better in place?

deal, allout with no the trades, services and goods and the rest of it will have tariffs and it has to be inspected and all the rest of it. problem.ind-boggling i cannot believe to hear the cattiness that you hear political leaders talking about it as an option. francine: is it an option? votes,they need 3, 4, 5 but is it a bet that it will go through? or do you take a step back and look at the consequences of no deal? erik: it is easy for economists because we are just talking. plans for theke itst-case scenario because is not 1%. the consequences in the

, it is thendustry clearing and all of these things, you cannot sit and hope, right? this process has injected enormous amounts of businesses already. there is this uncertainty. francine: iq, erik nielsen. -- thank you,ll erik nielsen. theresa may will have a speech coming up in 45 minutes from now. this is bloomberg. ♪

♪ >> this is "bloomberg surveillance." i'm taylor riggs.

a move over the weekend underscores the influence of paul singer. the company named formal merrill lynch banker its new ceo. the board is now stuck with directors representing his elite management and taking a radical overhaul. talks with the oil and gas field with a billionaire. they put down a deposit in return for three months exclusivity in negotiation. ratchet up toould $3 million. -- $3 billion. thati reported estimates analyst's estimates. francine: thank you.

we are getting breaking news. the general public is about to get a closer look at the key protagonists attached to the money laundering scandal. we are getting headlines from howard wilkinson, the whistleblower who used to work there, and he will testify before lawmakers today. he said he was offered money by the company, and that the danish representatives failed to contact him. we will keep an eye on it. tom: it is and a lot of other major banks. there were other major banks possibly involved with this. the first number of scale which

units wention through a large europe bank, according to the whistleblower, mr. wilkinson, as well. this tempts me to ask about erik butsen's copenhagen bank, we are not going to do that as he represents unicredit as well. erik goeddel, i want to begin on a monday with an important -- on the want to begin monday with an important question. has there been a nielsen shift that your will do over the next five years? erik: no. i would not say so. the numbers have been weaker, but in the third quarter, you have a number of special events around german autos. trade, talk about global

it is impacting europe more than the u.s. softe a little did of a patch, but european growth will fewse through the next quarters at a good pace before we get hit by a slowdown in the u.s., where i think the next lowdown will start some time mid next year. is easy to talk about business investment between mississippi and montana. we do that less so in europe. what is the confidence across the many nations of europe? erik: they have been picking up very nicely in this recovery. they want to see demand for the products. up quite niced say, so we have in my story about business investment, but the forward-looking indicators fromhey are easing, and

anecdotal evidence, we think this has a lot to do with donald trump and the trade restrictions and tariffs and risk of a trade war. some a, you are saying the outlook -- suddenly, you are seeing the outlook being -- if that will be a more cautious outlook. tom: very good. erik nielsen is with us. and our next hour, a good conversation to get your monday going. teamed with catherine of citigroup. this is very special. a headline coming to us. the chairman of nissan, carlos ghosn has been arrested according to sources. the headlines in japan and in copenhagen, this is bloomberg. ♪

♪ tom: busy monday morning here on "bloomberg surveillance." i'm tom keene and new york and francine lacqua in london. nice own -- nissan's carlos ghosn has been arrested according to japanese media. in copenhagen, and extra narratives to money by wilkinson. mr. wilkinson was the baltic trader for denmark's copenhagen bank and he's testifying about large amounts of money moving from europe to the united

states. stephanie baker is with us, bloomberg's sr. writer. oh my word, it is quite on the robert mueller front. what does it signal that nothing happened on friday? [laughter] there had been some talk that matthew whitaker did ask for a pause to allow him time to get a handle on what robert mueller was doing. that may be part of what we are seeing. the last week, we saw this mistake by the eastern district of virginia, which leaked inadvertently that julian assange had been charged. i think that indicates that people around julian assange, this is where mueller is focusing now, a lot of speculation around this new york talkshow host that had been in touch with roger stone, the trump campaign advisor, he is being pulled back for additional

questioning. movement some sort of from mueller, probably not this friday because it is thanksgiving. tom: oh, come on. robert mueller, the grinch, will come in to go in your friday. if he isour take on finishing up the investigation are not? do we know what it is? stephanie: the interview yesterday on fox, indicating he has finished his list of written questions to mueller about collusion, it appears it is only about collusion and not obstruction, that it is nearing the collusion aspect -- it is nearing the conclusion part of the collusion aspect. commented, itve is like reading -- there have been so few leaks from the mueller investigation. stephanie baker, speaking

to you on friday. stephanie baker, the senior writer at bloomberg. this is a really important interview. begane presidential derby in the democratic party, the idea of how many candidates, , talking about a presidential run for 2020. look for that with david westin on politics at 12 noon -- at 12:00 noon. this is bloomberg. good morning. ♪ [ phone rings ] what?!

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see the grinch in theaters by saying "get grinch tickets" into your xfinity x1 voice remote. a guy just dropped this off. he-he-he-he. ♪ good morning, everyone. "bloomberg surveillance." francine lacqua in london. tom keene in new york. lots of moving parts, francine.

breaking news out of japan in copenhagen. let's tell them right now, francine. francine: we will have plenty more but we have a news conference of carlos ghosn of nissan. this is what we know so far. i have been looking at this. we have put together this really shortly. carlos ghosn is facing the removal of nissan according to a newspaper. he has now been arrested. let's get plenty more on that door deputy editor who is in japan. thank you so much for joining us. we had an coming to you every day to see what the implications of this is. just to recap, what do we know? where to rethink carlos ghosn is right now? >> he is not in a very good place right now from what it seems. these reports broke very late in the day in japan. to comeas very quick out with a confirmation of what was going on. what we know now is it has been

reported that he has indeed been arrested. , but they come out have not said where he is in a legal standing, but they are dismissing him from the board over serious breaches over the years, which includes underreporting his income, and also personal use of company assets and possibly company funds as well. carlos ghosn is not in a fantastic position right now. francine: do you think he will be removed as chairman? >> unquestionably. i think it is a procedural aspect right now. they need the board to convene and to make that official. there is no way a board could stand for these allegations they have uncovered. tom: not only have you been with our tokyo bureau for a good nine years, but you have been a student of japanese culture going back to your time in

sheffield. fit --oes mr. go sean were dismissed or ghosn fit in -- where does mr. ghosn fit in japanese culture? discuss the celebrity among other business executives. over an extraordinary extreme long period of time, he has been one of the most high profile executives in the country. he came in initially when the sun was doing very poorly, and is fairly regarded as the man who saved nissan, who pull nissan out of the fire they were in. so, for this to happen to someone who is so high profile. most japanese executives are not household names or well known. they keep things under the surface. ghosn is something everybody -- ghosn is someone who everybody

would know. in that respect, it is absolutely shorting where he. tom: he was on top of the business world for 12, 13, 14 years. or did dissent sudden, you see this coming? i have to say personally, i did not see it coming in the slightest. there were some reports last year, that i will not go into for legal reasons, there were some reports and a weekly magazine about some of this conduct, but that did not turn out to be anything of consequence. but until this was happening, we were waiting for him to come out with his grand vision for the nissan alliance. that was supposed to be something on the heels of something extraordinary. tom: please explain this odd alliance, mr. ghosn covering the

sun -- covering nissan. we see the stock plunging today. within this odd alliance renault and to be she. that hasa hodgepodge resulted over a number of years. no coming in many years ago -- renault coming in many years ago and carlos ghosn made his name with nissan before, but on the international stage, he made his name on turning the company around. now, what we have is this alliance between strategic assets from the japanese asset and mitsubishi motors that has tagged on, which nissan ticked up on the cheap years ago and mitsubishi motors had their own scandal.

i don't think anyone is terribly satisfied with the condition of where these companies lie. ghosn was working on a restructuring of the alliance. it would be something that would take someone like him to do. the japanese and french governments and not interested in a merger between the two countries, or giving up control to what -- control to one entity or the other. this will remain to be seen. francine: we had a pretty lengthy conversation with mr. ghosn where we talked about the possible alliance, merging further together and becoming a proper m&a consolidation story. we did try to speak to the french government. they seem to have taken -- they seem to have been taken by surprise by mr. ghosn's arrest.

what does it mean for the various entities right now? gearoid: i would say, i should an expert, but for the meantime, about all the plans of heaven going forward in , thatof the restructuring will be put on hold for some period of time. you know, we obviously don't quite know if he wasn't forthcoming on what his plans were in terms of how they were going to reform. he was plain that close to his chest. it will take a brave executive that follows him to want to pick up and run with the same script that he had already written halfway through. gearoid, thank you so much. francine: gearoid, thank you. let's get the taylor riggs. taylor: the whistleblower behind allegations at a danish bank helped funnel millions is

testifying today. that donlkinson said ski bank offered him money -- danske bank offered him money to keep quiet. says u.s. will issue its own report on the killing of saudi journalist jamal khashoggi by tomorrow. they made a judgment on the matter according to media reports. intelligence agency has concluded that the saudi crown prince mohammad bin salman ordered to market showed he to be killed. search crews are going house to house and the burned-out city of paradise looking for remains. are listed asople unaccounted for. firefighters make it or break later this week. the forecast does call for rain. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.

i'm taylor rates. this is bloomberg. tom, francine? francine: taylor, thank you so much. we are getting live pictures. fromis michelle barnier the european commission speaking in brussels. still has to decide the process for extending the transition and says the beginning of a future relationship, and said extending the transition would require u.k. payments. trump says it is a critical week for theresa may. she speaking to business leaders at the cbi to muster their support. we do not think there are enough letters from parliamentarians to call for a constant vote for theresa may, but we are keeping a close eye on it. it is unlikely she gets the majority to pass this deal through parliament, sell again, a tricky situation, tom for theresa may and the whole conservative party that will play out in the markets. tom: our guest erik nielsen of

unicredit, there are two timelines, 3, 4, or five timelines. where are we next summer with this ballet? does anyone have a clue? u.k. out, we have the of the e.u., and in a transition ofiod, probably to the end 2020. ifis very difficult to see it will be a longer one. that in the agreement, they can extend it, and i think they will. by next summer, they might not have agreed on it. on -- in my opinion, there is virtually no chance that this will be canceled and they stay in the e.u. unfortunately. erik goeddel, when you look at some of the collateral damage of the hopes that the erik, whenhalf, --

you look at some of the collateral damage or the hopes that the brexiteers have, what do you see? erik: their chances are wrong. this is about -- the e.u. is about the e.u. you are not going to cut some special deal and the cherry picking story. it is all about how you transition in the most orderly way and then it is about the future relationship that has not been discussed. francine: do you think that because of this deal, it locks the u.k. into a custom's? union is that fair -- into a custom's union? is that fair? circleltimately, it is a where you cannot get out. reinstated in this agreement is that there will be no hard border. if there is no hard border, you have to have both sides.

tom: i go back, erik, to something i saw for five days ago. it is incredible. prime minister may scheduled to speak in the next hour. erik nielsen with us from unicredit on a most busy, monday morning. we drive the conversation forward with erik nielsen in the next hour. .onus round catherine mann a citigroup. this is bloomberg. ♪

♪

francine: this is "bloomberg surveillance." and london ande new york. you are seeing live pictures out of saudi arabia. the first address since the killing of the washington journalist columnist, jamal khashoggi. we are getting reports about the cia and how they are treating the death. council addressing the in saudi arabia on internal and a policy matter shortly. we will keep a close eye on that. joining us is our middle east's editor. what do we know so far about the jamal khashoggi killing? we had this report about a phone call between the crown prince and his brother, the ambassador to the u.s. will that implicate the crown prince in the killing of jamal

khashoggi? >> the saudis will say, no it does not. the saudis have been actually insistent that the crown prince did not know about this. whether it is a phone call, they will argue that the two brothers are in regular contact and it does not have to necessarily be about jamal khashoggi. you are referencing to the post story and others, reporting over the weekend that mohammad bin salman was involved because the people who were being accused of having committed this crime are people who are extreme a close to mohammad bin salman. francine: ok, what is happening in saudi arabia right now? is there still an investigation? people whoheard that will be found to be the culprits will be executed? >> well, the attorney general has asked, or said they will

seek the death penalty for five of the accused. 11 in total are being taken to court over this and to prison. the investigation is ongoing and there are people who will be charged. they are taking it so sears say that there has been talk about -- they are taking it so seriously that there has been talk about executions. the one thing that people disagree on is that the crown prince has not been involved, and on the other hand, the turks are now the cia. you have people and the usa questioning that the crown prince had to be involved and there is no way that he did not know what was going on he should be held to account. so many things in terms of u.s. foreign policy, and indeed was saudi arabia is trying to do, will slow down the chain and the division that the crown prince is striving for,

and will damage the u.s.'s relationship with saudi arabia and their policies with iran, for example. tom: riyadh is important. the king is 85 years old, the founder of a nation. 30, and hasnumber returned to saudi arabia. is this speech today the beginning of the take back by the older generation of what the crown prince has brought? >> there is a lot of speculation about that. what does it mean that the king's younger brother has returned after he was in london for a long time? is some speculation that there is a move to kind of limit some of the powers of the proud -- powers of the crown prince, but many are saying he cannot be removed from his position.

his dad is 85, that means he will remain the person to become the future king , and as such, ultimately hold the power in saudi arabia. tom: what will you and your team in riyadh will listen for in this important speech by king salmon -- by mohammad bin salman? >> mohammad bin salman has been more visible in recent months. he traveled to more conservative areas of saudi arabia. it is not like he was trying to rally support. yesterday he was going to say anything about jamal khashoggi, or anything to announce changes, but if he would use his speech to a announced changes, that is what we are looking for -- use his speech to announce changes, that is what we are looking for, that the crown prince's powers

are being limited or toned down, that would be mixed -- that would be surprising news. there is no expectations that the crown prince would be removed. most of those we have talked to stated he will remain the prominent power in saudi arabia. francine: thank you so much. erik nielsen from unicredit stays with us, and bloomberg users can use some of our charts. tom had a great treasury chart. it is up there. this is bloomberg. ♪

tom: incredible breaking news. our team in tokyo following this ghosnic story of carlos who has been arrested according to japan officials. we will have this at the top of the hour. in copenhagen, they are in recess. the whistleblower, mr. wilkinson, a baltic trader is in recess and i love, francine,

wilkinson gets a round of applause for testifying at the danish parliament hearing. extraordinary events this morning. francine: extraordinary. we have headlines saying they replacing a chief executive is a are facing multiple legal challenges. ministers arence meeting today in brussels. croatia has talked to the e.u. a deputy says the government wants to make major cuts. but the plan reforms will stay. brussels is expected to reject that it issues a review of eurozone spending plans. erik nielsen from unicredit is still with us. are they the new greece? erik: definitely not. italyonomic imbalances in are not to the magnitude of greece, but it is a never effect

of what we saw -- it is a mirror effect of what we have seen. is anne: i mean, it uneasy coalition. will it get better with the french elections, or do we have to see how the european parliament elections go? erik: my guess is what you are saying is -- what you are seeing is creating the enemy in the e.u. after the elections, my guest is a government will disarms itself with trickery. but you will see a different coalition. these are strange bedfellows to be honest. francine: does this impact the currency if we seeing a lot of uneasiness? >> it is amazing how little contentiousness it has been so far to other countries. sector isn private being impaired.

europe will get through this. that theymost feel hope the market will sort of sand a signal -- sort of send a signal to the italians. francine: but not enough to change their tactics? erik: i don't think so. these are complicated reforms. you cannot in six weeks put all of this in place. numbers,of the actual if you get a your ford, you will have seen -- if you get a year forward, you will have seen -- tom: erik nielsen, thank you so much. greatly appreciate it. erik nielsen of unicredit. in our next half hour, what a wonderful opportunity, conversation with luigi zingales and catherine mann will join us.

all of the tension over the weekend between vice president pence and the chinese leadership right now, three major stories as well. riyadhlmon will speak in and in copenhagen, a $150leblower talking about billion of money laundered from a european bank to the united states. many headlines out of copenhagen, and finally, in tokyo, the bombshell of the chairman of nissan, chief executive officer carlos ghosn is arrested according to reports. let's look at saudi arabia. ♪

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"doomed toriffs are failure." turn a surprise with the 10 year yield flounds. the fed meats december 19, enter -- the fed meats december 19. good morning. narrator morning. -- good morning, everyone. let me begin. in saudi arabia and in riyadh, king salman will speak. he is 85 years old. he is one of the final leaders of the regime, moving generationally onto the crown prince, who is under so much pressure.

as prince is there as well -- the prince is there, as well as the king. francine, other breaking news? francine: this is on nissan saying they will see the removal of carlos ghosn after uncovering serious acts of misconduct by the chairman, who is set -- who was said to be arrested in tokyo for violating many policies. we are expecting a news conference one hour from now by nissan. ghosn is one of the most prominent auto industry leaders and is the chairman of renault. he has been arrested. so a huge down 12%, application for that market. let's go to taylor riggs. taylor: british prime minister theresa may last leaders to back her plan that few in her own party support. she space today at the confederation of british industry's. some of her lawmakers are

campaign to get rid of her. many members in our cabinet are talking about re-writing three proposal.he brexit , the summit in new guinea two countries could not agree on language and a final statement that lowered expectations from the upcoming meeting between president trump and china's president xi jinping at the june 20 summit in argentina. president trump will not stop acting attorney general matthew whitaker -- investigation. the president told foxnews he but not get involved before whitaker was appointed to the job, he publicly criticized the probe into russian election meddling. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. francine, tom? tom: in the data quickly with

our guests. .utures down oil trying to get a bid. move on to the next screen. the yield gets my attention, 3.08, a lower yield across last week. francine, what you have? francine: treasuries are declining. we are looking at the pound is we are expecting theresa may to appeal to business leaders to help deliver her brexit deal as she fights almost unsurmountable opposition. i am looking at european bonds. peripherals rising. tom: very good. thank you so much, francine. we really planned on this monday to give you a reset and a few forward to 2019. we do that by going to the charles river in massachusetts. no, not the college. you go downstream to the land.

luigi zingales is the foreign advocate of american capitalism within all of economics, and joining him today's catherine mann, who simply change the dialogue country dynamic, and she is a global economist. different from any other economics? catherine: the difference is it is very practical. our theory, but it is applied in the real world, and we have a lot of representation of people who have gone before us, who have applied the theory into the real world, recognize how the theory has to be adjusted for the real world. zingales, speak to the president right now. how is american capitalism

working? what is the scorecard next year? luigi: i think the economy is doing relatively well. the capital is not doing that well, and i think the latest was offeredmazon billions of dollars is what is wrong with today's capital. tom: the new york and virginia lose? luigi: not exactly. the system loses. if we don't change the conditions for every business to succeed, i think that is generating a lot of attempt to , the, and eventually benefits of this are wasted largely, and it really creates -- s. francine: what does that mean, luigi, effectively? doesn't mean we will have an escalator trade war between the u.s. and china?

luigi: we have conflict within the states. when virginia competes with new york, we basically have value states competing to increase benefits to all of its large businesses. i would like states to compete to get the best business conditions to everyone, not just one big business, but to everybody. i think this competition does not exist in the e.u. it is provision -- it is for bid in under e.u. laws. prohibits discriminating across states or businesses. but you can compete in subsidies. catherine, do you ever see this changing in the u.s.? the competition like

this is not been applied. the question is, we get to the point where the disparities between a large companies and everyone else gets so large that it ends up being a political force behind it to change -- to reapply the loss we have regard to competition policy. it is also the case that competition policy is international, so in the past, we used the european competition law, which is tighter than the u.s. to limit the extent to which we have across the border acquisitions. but you need to have both. you need to have both pillars of competition policy working together in order to create the environment that luigi is talking about. tom: give us the backdrop for these chinese meetings. what we saw this week and what we will see november 30 and december 1 at the g20. is this attribute into the global slowdown? catherine: the global economy is

slowing, but we have to put this in context. it is not like we are in a recession. it is slowing in the trade wars is having an impact. it is creating a self-the filling prophecy. that is a problem. francine: finish her thoughts. catherine: it would be nice if we could get beyond a peck to get some traction between xi and it wouldthe g20, but be nice to have a statement that comes out from the g20. i have done those statements. i have been in the office, or in a conference room on my to try to get estimate that everybody can agree to. and itn important factor underpins the notion that countries can work together in order to create an environment

to improve global trade. -- thank 50 so much, you so much, catherine mann and luigi zingales. theesa may will address parliament. --will get her speech live we will get her speech live. this is bloomberg. ♪ this is bloomberg. ♪

yourank you, carolyn, for leadership at the cbi. welcome john adams who has taken up his role as president since i last addressed you. i know he will make a fantastic contribution as president. there is one paramount issue facing our country at the moment , and i know it is the number one concern of the cbi, so let

me get right to it. last week, the cabinet agreed the terms of the u.k. withdrawal from the european union. analso agreed to draft outline of the political declaration on the future relationship between the u.k. and the e.u. with a result of many hours of negotiation between the united kingdom and the european union. together, they represented a seismic breakthrough, but are not the final deal. we now have an intense week of negotiations ahead of us in the run-up to the special european council. us to that time, i expect hammer out the full and final details of the framework that will underpin our future relationships. and i am confident that we can strike a deal at the council, but i can take -- that i can take back to the house of commons. agreement has been agreed in full, subject of course, toy final agreement being reached for future framework.

that agreement is a good one for the u.k. if the phils the wishes of the british people expressed in the 2015 referendum. i have always had a very clear sense of the outcomes i wanted to deliver for people in these negotiations. control over our borders by bringing an end to free movement ands and for all -- once for all, control of our money so we can control how to spend it. boards, and our ensuring that our laws are made and enforced here in this country. getting out of those e.u. programs that do not work in our interests, like the common agricultural policy. and that is exactly what we are going to deliver. that may say more about the first of those items getting baffled control of our borders, because i know this is an issue

of great importance to the british people. the united kingdom is a country that values the contribution that immigration has made to our society and economy over many years. , immigrationture will continue to make a positive contribution to our national life. but the difference will be this. once we have left the e.u we will be in control of who comes here. there will no longer be the case at e.u. nationals, regardless of the skills or expense a have to offer, can jump ahead of engineers from sydney or software developers from new delhi. instead of a system based on where a person is from, we will have one that is built around the talents and skills a person has to offer. that only will this deliver on the verge of the referendum, it should lead to greater opportunity for young people in the country to access training and skilled employment. immigration system

for the future that everyone can have confidence in. yes, a system that works for business. that allows us to attract the brightest and the best from around the world. more streamlined application of the interprocess. actionre ready taking into that regard. it also needs to command the confidence of the public by putting them in control of who comes to this country. that is what i am determined to deliver as i look for to working with you to achieve it. thatw, we have agreed withdrawal agreement and it is important focus on the new relationship we want to build with e.u. that new relationship set us on the path to a more prosperous future. to do that, it needs to work for jobs right across our economy. because we are not talking about political theory, but the reality of people's lives and livelihood. jobs depend on us getting this

right. and what we have agreed to put futureure's -- puts our economic success in -- at issue. to provide the certainty you need to invest. on this, the future framework agrees to the creation of a comprehensive free-trade area with e.u. up against the goods market. no tariffs, fee charges across all charges. it respects both sides legal borders. that is what might deal will deliver. that is the right thing for the future of our country because while the world is changing fast, our geography is not. europe will always be our most proximate goods market and having free-flowing borders is

crucial and skilled jobs rely on it. take the automotive industry. since 2010, our manufacturing output has increased by 9%, but in auto manufacture, the growth has been 60%. honda, right girls -- these firms support thousands of jobs directly and indirectly. they all rely on parts being able to flow across borders to support the supply chain. the same is true for our food exports and supermarkets. the deals will work for all of us and sustain the livelihoods they provide for working people across the u.k. formethod that works best goods will not be the right one for services and investment. of changesng made up

in technology prevents different opportunities in the services sector, and that requires a different approach. because the u.k. is not just the european hub, but it is a global hub for services. dependsfuture success on us continuing to be so, so we have agree with e.u. to negotiated trading relationship in services and more ambitious than any free trade agreement. it will deliver the level of liberalization that goes well beyond wto terms. it will remove substantially -- francine: that was a u.k.'s theresa may speaking at the cbi in london. we are waiting to have someone tell us whether they are happy with what theresa may is doing or not. theresa may is saying she wants to ensure the free-flowing borders with europe.

this is a blueprint for a future arrangement. they will have to decide if he will happen. that is theresa may speaking. let's get back to cap for man and luigi zingales -- let's get back to catherine mann and luigi gonzales -- and luigi zingales. do you think they will get a better deal if this gets voted down in parliament? luigi: e.u. coming together seems like an oxymoron. think they will give a better deal to the u.k. to some extent, they want to create a precedent. any improvement, unanimity is easy

to will out, so i don't expect anything better. francine: catherine, how do you see this going? do you see it getting voted through parliament? we're seeing impacts on investment within the but ioint of u.k. gdp, found one of the most interesting things, clips that you had were theresa may was speaking. she was arguing for a more ambitious services agreement with the e.u. that is a bit of a stretch given the e.u. is supposed to have a single market in service. they don't have that, so they will negotiate a more ambition trade agreement on services. i wonder if the e.u. is looking a transition in their own internal market with services, so they are using these trade negotiations to get

what you want to be doing on your own and need a little help. -- dr. mann, is 1 your book is one of the classics and economics. myth and the common six -- common sense, could london go off on a new trade with a have a nostalgia of the 19th century? it is almost a list fullness to this, a new global trade united kingdom. is it feasible? catherine: the issue is we always have to deal with where we are starting from, and we don't get to start, clean slate. businesses are located where they are in a have their supply chains, so we have to be working within that context. the problem is that there are a lot of people who would like to have a clean slate. they would like to have, let's start this all over again, and you cannot do that.

you have to work with what you have. that means there are adjustments and it will be very costly to move to this new equilibrium, whatever it is. tom: what they have is an island nation with limited resources. people and intellect has been their resource in excess of 500 years of modern capitalism. can britain effect the change it wants given the limitations of its geography and resources? influencely cannot them by leaving the e.u. i think the u.k. was a very positive force inside the european union, and i think they are going to create much less of this force. i think their hope is to create a bigger version of singapore, hub with all this legislation, and this may attract a lot of business. i am not so sure it will work out this way. francine: the ouija, how would she -- luigi, how would she

justify it? we were talking having more accessibility to the families that make it. they want to have the society fairer. had you go from that to a blueprint like singapore? luigi: the combination of the two is a challenge because the vote for brexit was a vote for people who felt disenfranchised by globalization and were left out of that globalization, and they want a control of borders and theresa may just repeated in the speech that we will re-take control of immigration because we don't want immigration -- because it isn't that we don't want immigration, but we want to control it. trying to be an open society and attract foreign

talent is a bit of a contradiction, so i don't know how they can have it both ways. francine: catherine, how do see the pound moving in all of this? does it mean we will see a lot of volatility in the pound, or if the trend downwards? catherine: i don't think you know the answer to that because we don't know exactly how this will be treated in parliament. we don't know the next step for the agreement. many don't seem to like it. but that is a recipe for volatility. once things become clear, you can find a trend, but right now, it is a unitarian distribution. you do not know if it is going to go one way or another way, so volatility is what happens in those cases. tom: one of the advantages at , -- roup the king saudi arabia has

concluded his speech and he talks about oil policies and instability. give us your view on the price of oil. catherine: the price of oil is very much effected by the marginal producer. the marginal producer is u.s. shale as well as other technological advancements in energy delivery. they are confronting that. they're confronting the fact that they no longer control it completely. arethe marginal producers the ones that do. with the technological change in terms of actual supply out of the ground, but in terms of delivery in the pipeline and so forth, this is what matters for determining the final price on oil. hardpart of chicago -- the of chicago economics, are you a gross optimist -- are you a

optimist on shale? are you an innovation optimist? luigi: i am a tech optimist. that it is harder to find new or innovation, but there are more people working on it. extremelyy has been successful on that front. i am more like a political pessimist, and a technical optimist. francine: i like that. what does that mean, luigi? with the pessimist win for the optimist? the political denial, look at the u.k., i don't think it is a problem -- it is a political problem. the political system in the u.s. of the country into a corner,

and now they are trying to get out of this corner. any exit does nothing to be that appealing. francine, as prime minister may space, i thought the discourse in the united kingdom was wonderful. we saw tony blair last week. francine: coming up, we will have plenty more from catherine edwards willt in be speaking exclusively -- but anna edwards will be speaking to the labour party's executive jeremy corbyn. we will see if he is asking for a second referendum or a fresh election. this is bloomberg. ♪

tom: good morning, everyone. i'm tom keene in new york. we have a quiet washington dc.

all of that around a quiet washington dc. quickly here with kevin, our chief washington correspondent. maybe it's the lame-duck thing going on. it's quiet in washington. give me your calendar for this week. kevin: you've got lawmakers that are back on thanksgiving break. the big thing is what about the mueller investigation. we don't really have a clue who he will indict. hates the rick predicament with his approximation to paul manafort is something we are watching. outink trying to figure areas of bipartisanship in the leadership elections next week for nancy pelosi, that's

something to watch. term, he'sthe short under a lot of pressure to not make any significant changes. there are republicans who would go against him should he try to read deal -- derail the program. you have leadership elections next week and the potential for a government shutdown december 7. that's a lot of high theater. the mueller indictments are coming at any time. are a lot of political uncertainties. francine: you think the president will talk tougher on trade because it's one of the only things he has control over? kevin: i think you've seen the divide between secretary ross and navarro. you can see that as well. in terms of the president's perspective, they view that tough talk on china is something that helps them.

that has pulled higher when he starts talking about political consultants. i anticipate heading into buena saris you will see a ratcheting up of redick -- rhetoric. this is just the first step. the administration's already push this into january. tom: thank you so much, our chief washington correspondent. we have eight ways to go with our esteemed guest. she is adding value to citigroup everyday. i want to go back to the formal football player michael corbett. can we bring that up question mark -- up? iran this essay last week. the debate on trade is goods

goods goods goods. it's about services as well. did he care you on this? did you really write this? nejra: he referenced a lot of my material. he was reading that on the airplane. here's the economist. u.s. runr year, the significance or classes on services. apple has the largest american export company last year, a complex exchange of multiple services. this was great. we get services so wrong. catherine: we often ignore them completely.

as it turns out, services represent 50% of the value added in goods. if you don't have competitive services, you don't have a competitive manufacturing sector. many don't have that. that's an important ingredient in the trade negotiations and it's often left off the page in the effort to focus only on manufacturing. the big issue, we do run a trade surplus in services with a number of countries in the sites. we run deficits with him on a bilateral basis. we are missing the whole picture. two of them are so intertwined. you really have to take them as a pair in order to become competitive in the global marketplace. companies know this. it would be nice if the trade negotiators appreciate it as well. francine: when you see a downturn? catherine: we don't see one in

our projection horizon. there is robust growth going on. there is emphasis coming through the system in 2019. there are changes in legislation going forward in the election year 2020. we have another one coming up. that changes the way fiscal policy is legislated. ourave to go well beyond projections before we are slowing dramatically. we will probably have five years of above 2% growth. that creates issues for the monetary policy. we will be looking at an unemployment rate we haven't seen for quite some time. labor force participation could pick up. there are some who were not participating. that will help on inflation a little bit. we do have to add to the question about what happens to the debt and deficits and interest payments if the

monetary policy interest rates start to rise as we go five years. francine: when do you expect a downturn? luigi: i know better than to answer that question. i am worried more on the european side. germany is showing signs of slowing down. i think that is the result of china slowing down. there is a softness this morning. it's more outside the united states and in europe. as long as the united states sort of is overheating, they might keep up with a large deficit and low interest rates. the economy might continue a little bit longer. francine: we will be back with both of you.

they are both staying with us. speaking athas been the cbi in london. we are joined now with an update. did that speech convinced businesses? didn't it make a difference in convincing businesses and the livelihoods depending on the deal going through parliament? >> good morning to you. it's really interesting to look at the dynamics of what going on. she is still taking questions from the audience. she is trying to recruit business to her cause. what would she say to those members of parliament who don't like to deal? she said don't listen to politicians. listen to business. cbi, she hasat the response and a

relatively cautious welcome. they have not gone from wanting to stay in the eu to wanting to leave. they preferred the steel versus any kind of no deal brexit. she is here with a mission, to convince business to recruit is this to be her spokespeople for the deal. francine: she seemed quite determined. she didn't seem like someone who was going to be challenged for leadership. >> we don't know the extent of the challenge. speech, shef her said parliament needs to come back with a deal. we don't know the deal -- date yet. she says parliament needs to do what is in the national interest. she said at the end that she is determined to deliver it. she does not sound like a woman who is deterring. far, we have no reason to

believe they've got 48 members asking for a leadership vote and saying they have no confidence in her. the only man who knows the answer to that is keeping tight lips on how many they have so far. tom: that was because everybody in the united kingdom was watching the john l lewis christmas commercial with elton john. you just had a conversation there that i believe i could have heard a year ago with some of the nuances changed. will we have the same conversation in 12 months? is anything actually get done? >> this is a very good point. part of what business likes about the deal on the table from theresa may is if it's passed by parliament and goes forward, it removes the cliff edge in march of next year. the cbi acknowledged earlier that it leaves a big fog.

there is still a big fog over the relationship across the channel. theresa may talked about the extent of that relationship and recognized trade deals with other people. we are geographically close to europe. that will be important in forging this future relationship. the timing gets kicked down the road a little bit. tom: anna edwards, thank you so much. ofon't know the complexities brexit. this is the latest from japan. there is an understatement of over five¥5 billion years. i have no clue what that amount of money is. the japanese love video. have we seen any television images of them being arrested?

far, none whatsoever. we are not 100% sure where they are at this time. we would guess they are floating around here presumably in the hands of japanese prosecutors at the moment. they have been formally arrested. tom: is this led by tokyo prosecutors? when you say japanese prosecutors, who is that exactly? >> that's right. the are the ones who special investigators will pick up the case and decide which cases should be taken to court, collect the evidence, prosecute their cases that they can. as you might know, the japanese prosecutors have a very enviable conviction rate. they only like to take cases to the judge that they know they

are going to lead to a conviction. francine: how much do we know about what happened? how bad does it have to be for this to happen? bethe allegations have to for the financial to look into this? >> in terms of in his job, we are waiting on the board to rubberstamp his dismissal. if he is in his job longer than tonight, i would be surprised. on the face of things, i've not seen aboard a statement like this in my time in japan. ofy found multiple breaches serious misconduct. he'd been using the company's funds for his own private use as well as for

underreporting his income by ¥5 billion. that's $44 million. who arepanese executive not paid what they are in the u.s., that's a substantial amount of money. tom: thank you so much. we calculated on the surveillance currency converter. we've got lots more coming up. withportant interview democrats lining up. he is a democrat from maryland. he is considering a run for the presidency. with davidy is westin in the 12:00 hour. this is bloomberg. ♪

francine: this is bloomberg surveillance. the euro area finance ministers are meeting in brussels. italy will be discussed. the bustinglk about budget. the government is ready to make cuts to wasteful programs. the reforms will stay. brussels is expected to reject that. of citibank is still with us. where does this end?

are we seeing brussels do everything they can to turn the voter skeptic? luigi: i fear that's the case. qualify fort several years. an excuse was found because the eu was. this government is not trying its best to do anything decent. i think the eu does not want to compromise either. moment.a final it's a game of chicken. i fear italy will be the first want to clench. we will see. francine: what does that mean for the fundamentals of the italian economy? isherine: the real issue they have to grow. italy cannot get out of this

debt situation without gdp growing. i hope that rather than the high noon moment luigi is talking about, they can stand them and recognize there are avenues that need to be taken in order to improve the likelihood that the policies generate growth. it's not so much about the top line number. that's important from the criteria and the rules. what matters is below the top line and how the policies generate growth. i think there is a little bit of movement. it's from the italian government when they talk about wasteful policies. if creates an avenue through which brussels wants to put that technocratic how on. they can work together. the economice problem to promote growth. you have a coalition

the has nothing in common. you have two parties that don't have any commonality. they are on their own, trying to keep campaign promises. catherine: that's a political issue. the two of them, neither one will achieve their objectives as politicians if the economy falls apart an interest payments go up and the markets punish the italian bond. it's in their interest to find whatever common ground they can. there is something between the three of them, the then diagram that represents the two of them and brussels. tom: there are a lot of plan diagrams out there. continue with luigi and -- catherine.al

chart,y don't care which catherine manna probably doesn't care. go to gene keady go. steel it at gtb go. this is bloomberg. ♪

tom: bloomberg surveillance, we begin the hour with luigi and catherine. we talked m.i.t., economics. they -- i don't know what that was about. single best chart, bring it up right now. this dovetails with the historic work. twinbout the gloom of the deficits queried this may be my chart of the year. the world is coming to an end. publishes this

right here and sells 12 copies. there we are with the vector coming down. do you presume a wider twin deficit? catherine: there's no question about it. we haven't in the data. -- have it in the data. we have a widening deficit because the u.s. economy is doing well. we are importing a lot of goods. we will get to work at it in her free time. should we fear twin deficits like so many people did in the late 80's? luigi: the united states is in a position where if you work in a different country that does not have the currency, this would be much more problematic. the united states can survive with a twin deficit.

i think it depends on what happens for the rest of the world. the rest of the world at some point will catch up hopefully. francine: what does happen in the rest of the world? how much do you worry about china and emerging markets? luigi: china is the big question. the economists have predicted that many times that china will enter a crisis. so far, they have been wrong. eventually they will be right. there is a softening. china in borders of the world economy today, a softening of china started with germany. the softening of germany is linked to china. that leads to the eu in general. all of the problems that you

see, if we enter a session, that's the kiss of death. recession, that's the kiss of death. free friday.ask come back on a busier newsday. we like that. it's an important conversation to drive forward the brexit discussion. the first conference in the 8:00 hour. this is bloomberg. ♪

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this right. the: theresa may goes on offense, trying to sell brexit to businesses. acrimony, there is no communicate for the first time in decades. there are fears of a cold war in asia. they look to remove him as the chairman of nissan and others from the board. welcome to bloomberg daybreak. happy thanksgiving week. david westin is off today. news is coming fast and furious. here's where markets are looking to open. futures are down nine or 10. this is a shortened holiday week in the u.s. on thursday, markets are close. we do see some movement on the fx front.