>> good morning from london, i'm nejra cehic. this is bloomberg "daybreak: europe." and these are today's top stories. the market take the policy but will the fed, goldman and jpmorgan still betting on vibrate hikes by the end of 2019. hikes by the end of 2019. and last-minute -- to brussels. theresa may fights to keep the summit on track. nejra: good morning, it's 6:00

a.m. in london. here is what is happening in the markets. we've taken a pause in the market selloff. we for energy and tech shares lift the s&p 500 to some modest .3%., up u.s. stock and bond markets are closed for thanksgiving break today so there is no cash trading in treasuries, no trading inequities, but futures are up and running and u.s. futures are slightly higher across the board. .1 percent on s&p futures. ten-year treasury yield ended prematurely started. a touch of dollar weakness, holding on to some losses from yesterday as crude oil up by .4%. coming into little bit of pressure because of inventory data out of the u.s. and also comments from president trump. coming up later, we speak with the socgen chairman, that conversation is at 11:30 a.m.

u.k. time. in's check on the markets asia. juliette saly has more in singapore. a bit of a mixed session at the selloff has taken a pause in asia as well. slightly yes, we are higher on the msci asia-pacific index after two sessions of losses, japan leading the gains by .7% on the close. health care stocks will support it. chinese market still under pressure, csi 300 down by .3%. a little bit of data coming through in singapore where gdp was a miss. low, not just because of thanksgiving, but japan going on a holiday tomorrow as well. look at some of the stocks we had been watching. nissan focus, rising for a second session ahead of a board meeting this afternoon to decide -- carlosf carlos go

ghosn. there have been reports of the u.s. probe into sunday and kia motors recent recalls. ands down by almost 6% strong gains for japan's market. this as we saw a rise in the number of chinese tourists to japan in october. despite all the earthquakes and natural disasters, still seeing chinese consumers coming in spending on cosmetic items. juliette saly, thank you so much. asking, what do traders have to be thankful for this thanksgiving? much,ht feel like not given what we've seen over the past couple of days, but nonetheless, join the debate and reach out to us on your bloomberg. there is always opportunity out there. that's get the bloomberg first

word news with debra mao in hong kong. >> brexit negotiators worked through the night in brussels after theresa may and jean-claude juncker said they make progress on last-minute talks on future post-brexit trade agreements. may announce she will return for last-minute talks on saturday, just before the new leaders are due to sign up on the deal. she warned the u.k. parliament that voting against her draft of could mean brexit does not happen at all. >> the point that has been made by a number of my colleagues in relation to the votes that will come before this house on a meaningful vote on a deal from the european union is very simple. if you look at the alternative to having that deal with the european union, it will either be all uncertainty, more division, or it could risk no brexit at all. >> the commissioner said the deal is the best one possible.

>> we prefer by far because we believe it is the highest of the u.k. and europe that there is a deal and we also believe the deal which is on the table is the best possible. that is the scheme we are working on and we are dedicating all our strength, all our forces to that. may learn hisn fate later when the board meets to discuss his arrest for alleged financial misconduct. the ceo has artie said he will be dismissed, vitor sources say directors are split over what to do. he is accused of underreporting compensation and misusing company funds. he hasn't commented on the allegations are been seen in public since his arrest. expanding american crude inventories are adding to negative sentiment in the oil market with u.s. stocks increasing for nine weeks, the longest rising streak since march 2017. in a tweet, president trump bank

saudi arabia for lower oil prices but also said let's go lower. concerns over potential supply glut. reachoal still far out of . consumer prices excluded fresh food rose 1% in october, in line with forecasts. earliergovernor said this week that he remains confident downward price pressures will receipt and the banks inflation target will be met at some point. global news, 24 hours a day, on-air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. mao in hong kong, thank you so much. goldman sachs and jpmorgan are sticking with forecast for the fed to hike interest rates five more times by the end of 2019. even as financial markets shudder. at goldman, the team acknowledge

the recent rout in stocks but said that since 1994, the fed only response to stockmarket selloff that happen at the same time as widening credit spreads or growth significantly below potential. other investors or poor doubtful if the fed will be so aggressive. economist at morgan stanley among those who only see two hikes in 2019 after the december increase. john, great to see you as always. we will get to the fed in a second but i just want to reflect with you on the market selloff we've seen. we've seen it in equities and credit. meanwhile the ten-year treasury yield hasn't moved much. what are equity and credit investors seeing that bond investors are not? everything has essentially move back into line. see often the case when you a long rally going through

correction. we do think it is a correction. it will change fed thinking to a degree, but essentially we think it has come back into line with where treasury yields are. if the markets to settle down, the fed will think it is still on course and continue to hike at the rate it has been doing. nejra: a lot of people say credit leave everything and send signals for what is going to happen. i took a look at where we saw the 10 year yield jump to that seven-year high most recently. -- in november we saw equity selloff. has the ten-year treasury yields been leading the market? john: it seems to have settled at this level and if you look at credit suisse, we run models and able sometimes overshoot or undershoot.

tos the level we expect them trade at going forward. we have had some volatility as things settle down. i have a chart that poses and talks about the fact that things would have to get a lot worse than where they are now and that actually the chart shows we are not yet at that point in terms of credit spreads and manufacturing pmi where we would need to be for the fed to pause. do you agree with the chart? john: if you go back a few weeks , we would say that was a bit too exuberant, more in line with a fair value. the fed would not be expecting a correction. when they look at the macroeconomic variables they will see roughly what they expected to in the context of the path they had laid out. so they will take it into

account that they will not be knocked off course by the correction. nejra: the market pricing has come down significantly, so despite what economists might say, the market is changed it views, you could argue about why. are there not any reasons for the fed to actually pause in 2019? we had a rough day yesterday, for example. it could cause some concern. john: we are between those different views. it's not because of the correction in asset prices we have seen, not directly. it's more because we think the trade tariff situation is going to exert a bit of drag on growth now and the first quarter of next your. -- wegh the december hike think they will pause in the first quarter and wait to see

how the care of situation evolves, if he does what we expected to do we think it will get back on course and hike three times in the following three quarters of next year but there is ground for them to paul's the fairly near future. we think in q1 next year and once a quarter after that. nejra: so it sounds like you think the market is underpricing the fed for 2019. how much of an aggressive move higher could we see in yields? john: we wouldn't say a dividend , the market would be right to think that things will slow down a little bit on the monetary tightening front. we think the fiscal stimulus still has some room to play out. adjustmentseen the the tariff situation should become less significant. we think the market will need to price in a slightly more aggressive path for the fed if they go at that pace and keep in place in expectations under control. it should just be fine in yields that buys a bit.

the curve will flatten a bit but that is typical in a hiking cycle and the fed will become trouble seeing if that is the way we go. nejra: let's take a look at the question of the day, we like to ask our guests every day. happy thanksgiving, if you are going to celebrate at all. what do traders have to be thankful for this thanksgiving in the markets, and apart from seeing us on tv this morning. think, i suppose the fact in that teacher, the fed has raised rates repeatedly over quite a long time. they have done so when there has been a lot of external influences which made it complicated as the fiscal stimulus situation with trade and the eurozone and so on. thus far, although there has been volatility around growth

picture, they seem to have been going at the right taste. monetary tightening from an unprecedentedly low level of rates seems to have been conducted in a timely way. nejra: so traders have the fed to be thankful for, i guess. john stays with us. coming up, the nissan board will vote on its chairman state today. we are live from yokohama. plus south african inflation reached 5% for the second time this year. what is it me for the reserve bank rate decision later today? we will discuss that later. this is bloomberg. ♪

nejra: let's get the bloomberg

business flash with debra mao in hong kong. biggest aorld's similar of iphones has become the latest apple supplier to warn of anemic demand. an internal memo from foxconn seen by bloomberg suggests that expenses will be cut by almost half next year, reducing spending by almost $3 billion. the manufacture said it is facing a difficult and competitive year in 2019. goldman sachs's malaysia is intensifying with two investment funds claiming they suffered losses from the banks role. international petroleum investment and another have rightsuit saying goldman former officials to manipulate and mislead claimants and to miss use information to further the criminal scheme and to benefit personally. spokesman said the company fully expects to contest the claim vigorously. google will rollout new policies in europe to offer more

transparency around political ads. yearnnouncement followed a scrutiny over how internet platforms for use to spread misinformation during elections. a lack of disclosure about who pays for the ads have become a sore point. google will require advertisers to apply and be verified before they can pay for political messages. amazon says it has mistakenly shared customer data with unidentified third parties as the holiday shopping season gets into top gear. it has been to a number of customers to say there in males and names have been inadvertently share due to a technical glitch that has now been fixed. amazon says there's no need to change passwords. anusands of don't you end of of products have been pulled from china's biggest shopping website as opera group escrows over an advertising campaign. they face a growing storm in the country after video campaign was criticized as racist and insensitive. it shows the chinese model struggling to eat spaghetti with chopsticks.

it has prompted calls for boycott of the brand. that's your bloomberg business flash. let's look at some of the biggest market moves we have seen this year. 300, thatith the csi is in a bear market. the s&p 500 is now in negative territory for the year, down .9% . ,ust to give you some context it's down 1.7% this month, heading for its worst november since 2008. in may become the only down november in seven years for the s&p 500. the stoxx 600 heading for much better annual loss. in europe, down almost 9%. market and a bear heading for its first annual drop in three years. bitcoin has really taken a battering this year. with so much negative sentiment

in the markets of far this year, we are asking the question, what do traders have to be thankful for this thanksgiving? join the debate, reach out to us and the team on your bloomberg. the nissan board will vote on whether to oust carlos ghosn today. company is said to be divided over the decision. board members have been said to want more detail on his alleged financial crime after tensions have been rising after nissan's biggest shareholder stopped short of firing carlos ghosn. joining us is stephen engle. good to see you. tell us what is expected from the board meeting in terms of what they are divided over. >> the board is going to be convening there in the building behind me at the global headquarters in about one hour's time, 4:30 local time.

from what the ceo has alluded to earlier on monday, they will ask the board to vote on whether to oust carlos ghosn as the chairman. there are normally nine board members but there are only seven in attendance because two of in aare still in detention tokyo detention center. they could be there until next friday when prosecutors could issue an indictment. only then would carlos ghosn be available for fail if the judge allows that. that is the side story. what we decide today is his fate as chairman of nissan. we are also hearing if shareholders revolt, they could ask for an egm which could then perhaps call for another vote to have him reinstated. so it's a very convoluted issue, but right now at hand today is the immediate fate of the

factions within the board. then members -- does he get necessary vote, a simple majority is needed today to oust carlos ghosn from the nissan board, for the time being. nejra: what has the local media been saying about the drama? stephen: they have been coming out with a lot of interesting scoops. one big question is the future of the alliance with renault. we are being told renault was kind of caught off guard by this in the investigation into the alleged financial improprieties conducted by carlos ghosn and fellow board member greg kelly. the future of that alliance is very much in question. we are hearing from various newspapers that nissan is mulling asking renault to review the capital structure and according to one executive at

nissan, he's quoted as saying unnecessary -- a necessary condition, a revision of that shareholding structure in the alliance is a condition for the alliance to continue. so we are not only dealing with the issue of whether carlos ghosn's career will survive, but will this alliance survive as well. about we are also talking when of the best paid executives in both france and japan. has that gotten any focus? stephen: that has gotten a lot of focus, absolutely. the pay of ceos and the western-style levels of remuneration very much in the crosshairs. you can tell from the ceo who had the press conference on monday after the allegations were revealed, he is very much controlg that one man too much power. with that power came

western-style remuneration to $15 millionbetween and $20 million from renault and from nissan per year. that dwarfs the other big japanese carmakers like toyota as well as the head of honda, some upwards of 10 times more that carlos ghosn was paid than those ceos at the other two big japanese carmakers. inra: stephen engle yokohama, japan. thank you so much for joining us. us. is still with let's talk italy. we do have some headlines coming through. opposing cuts in resources for possible budget modifications in parliament again. yesterday we saw some conflicting headlines coming through but the bond market

shrugged it off. without the 10 year drop 15 basis points. i have a chart here just for you to look at. other markets assuming there will be some agreement or compromise on both sides. john: i think so, ultimately, yes. but clearly there is a big standoff going on here and no one is quite sure how long it's going to go on and how serious is going to become. so yes, things yesterday stabilized somewhat, but clearly from where we were, spreads have widened significantly. in the longer term they are not at sustainable levels. so the question is how much pressure the market needs to put on to try to resolve the situation to a degree. clearly if the standoff worsens then ultimately the spreads will push water at some point. nejra: not enough pressure

coming from the market. something for you to look forward to, italy's prime minister to present an urgent report on the dispute with the e.u.. you said the spread could go wider. what will it take to bring it back down? more concessions, ultimately, from the italian side. we think because of where , yields willdy are stay around these sorts of levels. it is a drag on the italian economy. 1% this year, next are, and the year after in italy and the high unemployment rate will only come down gradually. that is a difficult political backdrop. this is a situation that would take some time to solve. john stays with us.

, president trump thanks saudi arabia for ramping up production but says let's go lower on prices. this is bloomberg. ♪

nejra: thin volumes in asia with the thanksgiving holiday. the got low volumes overall, the indexs asia -- pacific lower. let's get the first word news from dubai. >> brexit negotiators worked through the night in brussels after theresa may and jean-claude juncker said they made progress in last-minute talks on the future post-brexit trade agreement. may announce she will return for last-minute talks on saturday just a day before e.u. leaders are due to sign off on the deal. she earlier warned the u.k.

parliament that voting against her draft deal could mean brexit does not happen at all. >> the point that has been made by a number of my colleagues in relation to the folks that come before this house on a meaningful vote on the deal from the european union is very simple. if you look at the alternative to having that deal with e.u., it will either be all uncertainty, more division, or it could risk no grexit at all. nissan boss carlos ghosn may learn his fate later when the board meets to discuss his arrest for alleged financial misconduct. the ceo has already said he will be dismissed. aresources say directors split over what to do. he is accused of underreporting compensation and misusing company funds. he is not commented on the allegations are been any public since his arrest. japan's long waited for goaltion drag with 2%

still far out of reach. consumer prices exclude fresh food rose just 1% in october come the same as the previous month and in line with forecasts. theboj governor told national diet earlier this week that he remains confident downward price pressures will receipt and the banks inflation target will be met at some point. global news, 24 hours a day, on-air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. nejra: let's bring the numbers from cointreau. is coming inofit at 138 million euros. the estimate was 132 million euros so that is a quantum -- comfortable beat. the earnings beating analyst estimates as the cognac maker has shifted toward higher end saless and that fueled

growth to let's check in on the markets around the world. some listless trading in asian markets, seeing the same thing on the 50-50. but interesting things are happening below the surface. >> good morning to you. positively toting the crude price. the rupee has gained significantly. we had an off day yesterday that the currency targets have gained really well. thenthusiasm on the back of price fall, so the markets are remaining listless. you mentioned some interesting things happening, a bigger talking point is what is happening to the i.t. index after falling 13% or 14%, and

the stocks have been battered over the last couple of months. in thes some traction indian technology stocks today. investors are hoping it will last a little longer. u.s. stock and bond markets closed for thanksgiving today, but the calls are out. what does socgen say? >> they are saying 2400, that's where it will end next year. about a 10% drop from where we are now. we've seen the s&p 500 dropped as the bankptember says the economy will be approaching a recession. the president keeps tweeting about lower oil prices. mean oil prices may not

lower prices at the pump. thanksgiving, prices are the highest in four years. americans are paying four cents more than last year. prices have dropped $.20 at the pump since october and september highs. the silver lining is maybe we will see higher prices at the pump but it's a cheaper thanksgiving dinner this year, the cheapest since 2010. nejra: thanks so much. questionare asking the , what do traders have to be thankful for this thanksgiving? join the debate, reach out to us on your bloomberg. let's get more on the oil story as crude trades below $55 a barrel is expanding american inventories added to the market bearish sentiment. president trump publicly thanked

saudi arabia for lower prices, tweeting let's go lower. stewart wallace joins us now. getting wti and brent confuse, but let's get to this lori. it's a great one, written by your team. monsterped create the that haunts its fleet. tell us more. next this is a rare occasion when he's not taking credit for what he is done. he is behind the oil drop one way of or the other. of the uranium waivers, it effectively knocked $10 off the oil price. it means opec has a big headache coming up in the next couple of weeks.

the basically cannot win, if they cut production and raise prices, they can just about balance the budget. they are going to lose market share, probably. or they can raised reduction and lower prices. let's see which way that plays out. i don't see an easy solution for any of those issues. nejra: how much higher can production actually go? it's not just about production because you can get the oil out, but the issue is exporting it, and that is a separate question. >> it comes down to ingenuity. it's the same with the bottlenecks in the pipelines. they will be resolving those in probably six months and everyone expected it would take two years. it is happening much faster than anyone expected. think of 15y you

your time frames for things to come online. in shale, we are talking about one or two quarters. how my saudi arabia react to those tweets? yesterday that output with surged to a record earlier this month. >> they are producing close to a record. having said that, saudi arabia will be pleased with that tweet. that ifwhat it means is they can have a little bit of wiggle room, they can operate on a month-to-month basis. .e are not seeing the demand they can do that and they have been doing it. said theyly what they were going to do.

nejra: john, based on two assumptions, that you're going to keep seeing u.s. production ramping up and that demand growth will slow, it's hard to see a trajectory higher for oil prices. do you see one higher? john: we think the decline is overdone, around $70 a barrel is where we think oil will settle in the medium-term. it sounds as if the more isxible supply backdrop something that will keep the price more stable. we think growth continues ok in the u.s. and demand on a global reasonablyd be stable. we think about $70 a barrel is where it belongs ultimately. nejra: thank you so much for joining us, and john from ubs stays with us. africa's two biggest economies as to announce rate decisions today. bloomberg intelligence expects

policy tightening. south africa faces rising inflation and a currency that has weakened more than 11% this year. jury,-- meanwhile in a data showed inflation of more than 11%, well above the central bank's target. joining us is robert brand. great to have you with us. let's start with south africa. what can we expect today, given some shift in dynamics recently in the oil price. call.going to be a close the inventory came in softer than expected, it wasn't enough to change anyone's mind. the market is pricing in about a

50% increase but there's not a lot of conviction there. they could expect the ran to strengthen in the shorter term but there is a lot of scope for disappointment. what sort of rhetoric could we get alongside a rate increase if we get it? >> that is what people will be watching for. there are good arguments both ways. inflation rate is creeping up toward the limit of the target range but moving away from the center of the target range. they would argue that you would hikeso raise now to avoid next your. given oil prices now, it gives the central bank some breathing

room until maybe march. people [indiscernible] nejra: briefly, what can we expect from nigeria? robert: nigeria's quite different. the central bank has been on hold for 2.5 years. inflation is well they are target range, keeping an eye on the oil price and i don't think they would do anything at this stage to further weigh on the economy. nejra: robert brand, thank you so much for joining us. john is still with us.

through this turmoil we have seen in equity markets, emc held up ok. what is the ubs position on e.m. right now? sanguineare reasonably . in the context of what we've been seeing up to now with u.s. iticy changes and so on, and it a bit next year will be more the asian economies that will potentially slow down. we think growth will remain reasonably stable. john stays with us. and the primexit minister is set to return to brussels this weekend to finish hammering out her deal with the e.u.. that's on the future relationship. the real fight in westminster is yet to come.

we speak with a minister who supports theresa may plan. that is next. this is bloomberg. ♪

london.:47 a.m. in so u.s.nksgiving day stock and bond markets are close, but futures up .2% after we did see modest gains in the u.s. session yesterday led by tech and energy. ,oday were asking the question what do traders have to be thankful for this thanksgiving? join the debate, reach out to us on your bloomberg.

let's check in on what is trending across the bloomberg universe. the number of unsold homes in london is at an all-time high as brexit uncertainty and affordability issues dog the market. canada's prime minister justin trudeau unveils $10.5 billion in tax cuts to keep up with trump. signalspplier foxconn cost cuts as iphone demand ways in. and the uproar over dolce and gabbana's advertising blunder in sitesrages on as shopping halt the brand. and the meeting in brussels to finalize the brexit agreement, this is on the future relationship. a handful of issues remain outstanding in the agreement.

in a surprise move, they announced she would return to brussels for last-minute talks on saturday. whatever happens in europe this weekend, theresa may returns to westminster to face it divided cabinet and a hostile parliament. staunch rakes a tear see the deal as a betrayal of the brexit vote. some are still backing the prime minister. the u.k. minister for children and families joins us now. great to have you with us. thank you for being with us this morning. , the withdrawal agreement, going to get through parliament? >> i hope it is going to get through parliament. i hope colleagues on both sides of the house will look at the deal very carefully. , almost 580thy pages long, plus future

principles of what the future would look like as well. i think if they put the national interest ahead of everything else, then this is the right deal, rather than a good deal. it is an comfortable for both sides, if you look at the details of the deal. you have an implementation time that lasts until 2020. at the end of that, we have a choice, we either extended if we don't think a future free trade deal is in place, sort of a good friday agreement, that the border remains open with northern ireland, and then we can extended, or we go into a backstop. details, yout the

can go to a backstop, but it's for all of the u.k.. they want it to be northern ireland specific. only northern ireland is in the backstop, it's not a big deal for the e.u., but the prime minister said no, it has to be for the whole of the u.k.. therefore, why are you in favor of it, given that you voted to leave? into thentinue to pay e.u.. if you go to a backstop, you still have access to the market. it's an comfortable for the e.u. in many ways but much better for us. ,f you want to come out and say it does not allow for the backstop to be permanent. it says that is not a permanent solution to the u.k. leaving. after that, let's say we have

done everything to keep the border open, we can then effectively go to the e.u. together, there's a conference that can look at alternative provisions to the backstop as a way forward. go to the independent panel and say we have done our bit, we have done everything we said we would do. an independent panel would adjudicate. is not ways, this deal advantageous for us or the e.u.. to, in an orderly way, that is why i am supporting it. nejra: the question for the market is whether this will get past parliament, even know you are laying out a very cogent argument for why it's a good deal, many people don't agree with you. if it doesn't get through, what

is worse, no deal, or no brexit? >> i campaigned and voted for brexit. think there is no to gote in parliament, for a no deal brexit, a disorderly brexit, i don't think the numbers are there in parliament. they need to be careful what they wish for on that side. on the flipside, a second referendum, there is no appetite for that either in parliament. so both extremes will not get through. nejra: will some members of the conservative party be able to engineer a second referendum? anything could happen, they may not get there brexit here it can this actually be engineered?

>> i think both extremes are bad. both the country itself and parliament are divided. there was a big hole of 26,000 people. the people who voted for brexit remained wanting brexit. the second referendum will make it even more divisive and more uncertain. and a disorderly brexit will immediately cause uncertainty in the markets. happened, retailers got hit the moment people thought that it was not going to get through. think they will come to the same conclusion i have which is it is the right deal for our country. >> assuming everything falls into place, there may be a vote in the second week of december.

lost, would be there be another vote in january where certain things might change and there would be a second go at it? >> my fear is if the voters loss, as we've just been discussing, there is no appetite for either a second referendum or a wto brexit. just walking away and saying we don't want to deal with you on the terms the prime minister has set out, which i think just creates more uncertainty, because there is no majority for either side. of where toat world we go for here type of thing. that is not a good place for us to be. which is why think the deal will get through. the chips are down, colleagues will look very carefully and say do i want to leave the european union? there is a majority in my party

the say they want to leave european union, but we want to leave in an orderly way. john: i think the markets are still sanguine. it's the same level as it was straight after the referendum. marketssuggest the think it will ultimately play out ok. nejra: thank you so much. john will continue the conversation with us on bloomberg radio at 7:30 a.m. u.k. time. coming up later, we speak with the chairman of the international chamber of conversation, that at a: 30 a.m. u.k. time. remember, when you're traveling to work, tune into bloomberg radio in the london area. i will be on there at 8:00 a.m.

london time. this is bloomberg. ♪

i am a family man. i am a techie dad. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome.

>> from bloomberg's european headquarters in london, i am nejra cehic. this is "bloomberg daybreak: europe pause, but the fed is betting on five rate hikes by the end of 2019. a vote on the chairman today. will the ottawa lions stand

united behind him? last-minute -- a crunch summit on track. good morning, everyone carried 7:00 in london. just under an hour to the european equity market open and we saw the gains in europe outpaced the u.s. session. 600 s&p closed higher and the closed higher by .3% lead by energy and tech. we have been seeing u.s. futures edge higher but the european session looks like it could be lackluster. ftse futures, flat. dax futures unchanged. cac 40 chain -- edging into negative territory. no real exuberance today. in the bond market, yesterday we saw btp yields, 10 year yield dropped 15 basis points. the btp-bond spread tightening. .e could see more of that today more money moving into those italian bond futures than the bund once. we had -- ones.

yesterday, but perhaps there might be some compromise or discussion. we have been hearing it wii's -- italy's conti to address. , u.s. stock and bond markets are closed because of thanksgiving, but futures are trading. not doing a lot if you look at the 10 year bond future. coming up later, we speak with the socgen chairman. that conversation is at 11:30 a.m. u.k. time. for now, let's check the markets in asia. juliette saly in singapore has more. thin trading because of thanksgiving. juliette: yes, very low volumes across the board in asia. in fact, volumes on the hang seng in hong kong off by almost 50%.

coming under some pressure, consumer stocks being hit that elsewhere, fairly positive in the asia region. we have seen the msci asia-pacific index rise for the first time in three sessions, up .4%. that is thanks to strong buying and consumer stocks in japan. the nikkei up .7%. in australia, .9% up. indian and also a number of emerging markets doing a little better today, as well. in terms of currency markets, mark cranfield says you should be watching the aussie dollar. the aussie and kiwi are lower today due to shorter -- in the gilt curve. mark cranfield said if we see more of a truce coming through between the u.s. and china, we could see the aussie a beneficiary. is a littleupee stronger against the dollar

today. that dollar weakness, lower oil prices helping the rupee and ruby bond. singapore, a miss with gdp coming in at 3% versus estimates of 4%. this is a currency that doesn't move much, but it is the weakest year -- currency today. nejra: juliette saly, thanks. today, we are asking the mliv question, the selloff has taken a pause and what do traders have to be thankful for this thanksgiving? let's get the bloomberg first word news with desley humphrey in dubai. brexit negotiators worked through the night in brussels after theresa may and jean-claude juncker said they have made progress in talks on the future post-brexit trade agreement. sheunexpectedly announced will return for talks on saturday come a day before eu leaders are said to sign off on the deal.

she warned the u.k. parliament that voting against her draft deal could mean brexit does not happen at all. >> the points being made by a number of my colleagues in relation to the vote that will come before this house on a meaningful vote on a deal from the european union is fairly simple. if you look at the alternative to having to deal with the european union, it will either be more uncertainty, more division, or it could risk no brexit at all. eu economic advisor said the deal is the best one possible. far, because we ,elieve the highest interest there is a deal and the deal on the table is the best possible. we are dedicating all our strength, all our forces to that.

desley: carlos ghosn may learn his fate later when the board discusses alleged financial misconduct. saikawa has said he will be dismissed but directors are split according to our sources. he is accused of misusing company funds. he has not been seen in public since his arrest. crudeing american inventories are adding to negative sentiment in the oil market. the u.s. stock increasing for a night week. the longest rising streak since march 2017. , president trump thank saudi arabia for lower oil prices but also said let's go lower. crude entered a bear market earlier this month on concerns over potential supply glut. malaysia headache is intensifying with two abu dhabi investment funds claiming they suffered losses from the bank's role in the 1mdb case.

international petroleum investment company have filed a suit claiming goldman bribed former officials to "manipulate andmislead the claimants" benefit personally. spokesperson said the company expects to contest the claim vigorously. global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. nejra? nejra: desley humphrey in dubai. goldman sachs and jpmorgan are sticking with forecasts for the fed to hike five more times by the end of 2019 come even as financial markets shut her. at goldman, they acknowledged the rally in stocks that said since 1994, the fed only response to stockmarket selloff that happen at the sink time as widening credit spreads were growth below potential. other investors are doubtful of

whether the fed will be aggressive. economists at morgan stanley only see two hikes in 2019 after the december increase. joining us now, the head of ishares at blackwell -- blackrock. those are differing opinions among big houses on wall street. marketook at expectations on this chart, you can't help but notice the precipitous drop in expectations for rate hikes in 2019. a market, pricing in one height and 40% probability of a second. have you changed your views on whether we will see a pause in hikes in 2019 given the turmoil? >> i am inclined to look through the market turmoil in at the end of the day, the fed would respond to inflationary outlook to growth outlook. on both fronts, we continue to see further upside versus consensus and where things are why wemoment, which is

think over the next 12 months, we will see the rate hikes. december, more than pricing -- priced in and a two more for the first half of next year and from then on, it is data dependent. weeks, in the last few and focus on fundamentals. the equity selloff is one thing, but it is what has been happening in credit. i have a chart that shows the spreads, not just in the u.s., but on global investment grade corporate bonds at the highest since 2016. you could argue it is only the highest since 2016. it needs to get worse before the fed gets concerned, but what are the etf flows telling you about whether this could get worse? flow intorms of credit, we are seeing inflows into investment grade throughout the course of this year, especially in the u.s..

we have seen demand picking up additional yield. gradeflows in investment has been in cap -- accompanied by outflows from high-yield. as you point out, we have seen market selling off and spread widening in recent sessions. we actually think of it as opportunity to get that additional allocation to your portfolio, which is why a few weeks ago, we upgraded our view on european investment grade from underweight to neutral in light of the spread widening out and presenting more attractive opportunities. what other opportunities do you see given what you are seeing inflows after the recent market turmoil, whether that is in equity markets, the u.s. versus europe or anything else? wei: our biggest position sits specificallyes and

u.s. and emerging-market equities are overweight at the moment. having said that, we appreciate that we are entering late cycle, late phase and as a result, it is even more important than before to build for 4 -- portfolio resilience. we are advocating a barb belling approach where on one hand, you have safe haven exposures like the u.s. government bond market or even cash and on the other hand, you really use your risk trades whereinto you think you are paid to take risks. emerging-market equities and u.s. market equities. nejra: let's turn to the question of the day, because it was a bad couple of days. the selloff has paused. thinner trading in markets today but what do traders have to be thankful for this thanksgiving? market you look at

returns this year, equities in the negative territory, bond market in the negative territory. think ofid that, you where fundamentals are, there is a dislocation between price action and fundamentals. what i am thankful for is the fundamentals are still holding some of thed headline risk around geopolitics, political uncertainty alleviate, even incrementally, we could see this dislocation converging to the point of strength. i am thankful for the robust fundamental picture that should allow for risk assets to come back if headline risk goes away. nejra: talking of headline risks, we have headlines coming through on china. china is evaluating the u.s. tech export restriction's impact. it is very concerned about the ip. tr report on china

theft. --s is coming from off, coming to yesterday. if we see any of those headline risks go away, the sentiment driven selloff could update -- abate, but you can't predict headline risks going away, so you are saying the markets are basically a slave to sentiment at the moment? wei: we definitely see sentiment and flow momentum driving some of the actions we see, more so than fundamentals, especially at times of volatility. specifically with regards to u.s. and china and trade tension, we are seeing headlines the next few days pointing to potentially deteriorating direction but we're also looking at g20 of the sign for potential incremental relief in terms of headline. it is impossible to predict that, but where locations are

happening, one needs to question if markets have overshot on the downside, pricing in worst outcome than what could likely happen. wei: -- atra: nejra: --wei li blackrock talks with us. theresa may a week before leaders are due to sign off on a deal. when you are traveling to work, if you have to step away from the tv, tune into bloomberg radio, live on your mobile device or dab digital in the london area. this is bloomberg. ♪

nejra: 7:17 in london, which means we are 30 minutes from the market open but let's look at

the biggest market moves we have seen this year. the csi 300 and wti in bear markets. the s&p 500 only just in the red for the year but this would be the first annual drop for the u.s. benchmark since 2015. the stoxx 600 heading for a bigger drop so far this year. cable has come under pressure with all the brexit drama and bitcoin, in freefall. with negative sentiment this year, we are asking the question on and live, what do traders have to be thankful for this thanksgiving? join the debate, reach out to us and the mliv team. let's get the business flash with desley humphrey in dubai. the world's biggest assembler of iphones has become the latest apple supplier to warn of demand. that demand will be

cut by half next year, reducing spending almost $3 billion. the contract manufacturer said it is facing a "very difficult and competitive year in 2019." standard chartered shares in hong kong rose the most in three weeks after reports the bank is preparing a share buyback. the plan may be announced with february results in and any fine paid over u.s. sanction violations. -- has mistakenly -- amazon has mistakenly shared with third partikes. number oftten to a customers to say there is nails and names have been interviewed -- inadvertently shared due to a technical glitch that has been fixed. there is no need to change passwords. that is your bloomberg business flash. nejra: desley humphrey in dubai. here is what you should be watching today.

in the u.s., cash treasuries and closed fore thanksgiving. anay, the ecb publishes account of its october council meeting. watch out for a rate decision from the south african reserve bank, divided as to whether the bank will hike this time. now to brexit and handful of tricky issues remaining in negotiations between the u.k. and eu. in a surprise move, may announced she would return to brussels saturday ahead of sunday's crunch summit. is it till he disputes that worries the eu? who will give ground first? -- salvini said he is sticking to his guns but alluded to a possible tweak in the budget. joining us now is bloomberg's maria tadeo in brussels. rates to have you with us.

we are talking about these ature agreements not being withdrawal. meeting inas a short brussels standards between theresa may and the president of the convention. sides sayas that both they want a deal and there has been progress, but in terms of the actual progress made, not very much. we have already missed a deadline. on the table is the future relationship, trade, someone. everyone wants last-minute concessions. is is making tweaks to the texts, it will be difficult with four days to go and that seems to be the point. the eu is concerned the u.k. could undercut the european union economically when andeaves the bloc,

gibraltar has turned into a sticking point over the past 24 hours. and now we are hearing from european countries that the summit may not go ahead. nejra: is the eu serious about canceling sundays summit and how serious would it be is the bigger question, if this deal isn't made on the future agreements now? we already have the withdrawal deal. that has already been agreed so the focus is about the future. for sunday's summit, we heard from people close to angela merkel yesterday who said the chancellor sees no point in coming to brussels. we basically got the same from the spanish prime minister. shows -- she is going to take this to the wire,

anyway that works for her. really, this has been a difficult process. you could argue it is not just bad news, but part of the optics . maybe november might not see the end of it. we might go to christmas to get this thing done. nejra: thank you, maria tadeo in brussels. wei li at blackrock is with us. let's start with brexit. your base case is the withdrawal deal will eventually be passed through u.k. parliament. why are you so convinced of that, because the noise of the politics in the u.k. suggests it is a real possibility it could not? wei: we see sterling being the sentiment barometer of brexit negotiations and currently, the handle points to negative sentiment building up. some of the tail risks events,

may have reason but our base compromise before the deadline, before the real deadline. some drastic exit, which is why we think rationality will prevail last-minute. whenid last minute because it comes to negotiation, oftentimes both sides go back and forth and it is when they have to make the compromise they make the compromise. as we see the first vote in the parliament not going through as be hoped for and back and forth before we reach the compromise. nejra: carrot parallels to be made with italy in terms of rationality -- there are parallels to be made with italy in terms of rationality and whether a deal will be released -- reached.

today -- steady today. what is your outlook italy in the coming months? wei: political headlines, we will see back and forth, either dampening or lifting sentiment. it is important to focus on fundamentals and when it comes to growth for italy, we see further downside versus consensus. which is why our view for italian assets and european assets are not as positive for u.s. assets. nejra: in terms of flows, investors are still negative european equities. wei: have seen net outflows this year from european equities. inflows contrast to net into emerging-market equities and depth info -- net inflows into emerging. nejra: in terms of the euro, will that remain under pressure while we see issues with negotiations in italy between italy and the eu? wei: headlines will drive the

immediate correction in their currencies are heading in the same way sterling is the sentiment barometer for brexit. in the medium to long-term, where central banks are heading on the policy front will driver currencies head. where thenk about u.s. and the fed is heading with in herkes cadence in turn, firmly priced in verses ecb and the rate hike, not encouraged them to late next year. the virgin's emerging and continuing to persist and that should drive currency in the medium to long-term care -- long-term. nejra: wei li at blackrock. that is it for "bloomberg daybreak: europe." the european open is next. when you are traveling to work, tune in to bloomberg radio live on your mobile device and on dab digital in the london area.

i'll be heading there in half an hour to take you through the european open on radio. this is bloomberg. ♪

anna: welcome to "bloomberg markets: the european open." from and edwards live european headquarters here in london. reasons to be thankful? asian stocks higher after a modest rebound on wall street. you are up point to a negative open. the u.k. prime minister plans a last-minute trip to finalize a brexitbr