nejra: good morning. this is a bloomberg daybreak -- europe. jra: trump talks of more china tariffs. he says iphones could get hit. trump weighs in on brexit. parliament votes on december 11. we hear across the spectrum upon and doves today. ♪

manus: welcome to the show. oil is at the bottom of your screen. you saw a heck of a route yesterday in wti. on monday. inventories, we expect those for the first time in 10 weeks. we saw jockeying in between microsoft and apple. this is just nipping a little bit lower. this is the gentleman who point the rolling bear market.

he says there could be an earnings recession. how are you doing? good morning, manus. i am doing great. got mentioned in trump's interview he gave to the wall street journal. nasdaq futures are actually leading the losses. down 3/10 of a percent fair. led the retail stocks rally in yesterday's u.s. session. we saw dollar-yen hit a one-week high. saw that safe haven bid in the session. have a date now for that crucialntary vote, that vote on theresa may's brexit

deal. that deal will be pushed to the public. today, anlater exclusive interview with the european commissioner after 1:30 p.m. london time. let's get a check on the markets in asia. juliette saly in singapore has more. we are seeing asian markets doing quite well thanks to gains in japan. you can see the nikkei on the close, up by 6/10 of 1%. see markets in korea being boosted by the carmakers they are. here.e carmakers ter you are still seeing weakness coming through in hong kong. the csi in chinatown down a quarter of 1%.

-- in china, down a quarter of 1%. upon high in taipei down for tenths of 1%. the other apple suppliers are higher. we are hearing that a news conference is scheduled where they could announce payment with hong kong's tencent. and then weighing on the malaysian stock market is this casino maker. it is suing disney and fox for a billion dollars in damages. is due to fit -- to the fact that they pulled out of plans for its resort. manus: thank you. let's take you to our question of the day. really ought -- in the eye of the storm. apple's worst drop in a

decade? what does it mean for global markets? let's get your first word news. debra: president trump has could the brexit deal jeopardize the uk's ability to strike a trade pact with the united states. trump called prime minister theresa may's agreement a great deal for the european union and urged the u.k. to reopen negotiations with brussels, something both sides have declared they would not do. theresa may embarks on a tour of the u.k.. december 11 has been set as a decisive vote in the u.k. parliament on that final agreement. may said she is ready to

debate with the opposition leader in a televised showdown, provisionally set for december night. an adviser told bloomberg markets would react negatively to a hard brexit. >> i think the market still expects there to be a deal, by and large. there could've been a hard brexit that was devastating. markets would react negatively. wax president trump is likely to push forward to increase tariffs on 200 billion dollars worth of chinese goods. a trade deal is not produced. that americans could very easily handle a 10% duty. an italian newspaper is reporting the populace to

government is planning three .6 billion euros of cuts to bring its deficit to 2% of gdp. money.y to save >> after a crackdown on a growing a year ago, number was seen trying to move their money outside the kingdom. and have top domestic investments. that is according to people familiar with the situation. this trend may harm the crown prince's reform. special counsel robert mueller wrecked amanafort has plea deal by repeatedly lying to authorities.

pleaded guiltyad to a range of charges, and agreed to cooperate to avoid spending the rest of his life in prison. -- judge will consider his plan, which paul manafort denies. the probe touchdown after a high-speed to send through the atmosphere. there was a program to -- as it reached the surface. the probe aimed to find out more information about the surface of mars. global news on air, 24 hours a day and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. nejra: thank you. are trading mixed after president trump indicated he is likely to go ahead with tariffs on chinese imports if

talks fail to produce a deal. be either 10 or 25% if he cannot make progress with china's leader. that apple's iphones and laptops could be hit by new tariffs. joining us now is bloomberg's chief asia economic correspondent. was there anything new in what president trump said? demonstrates just how far apart both sides are from a substandard trade agreement. lot writing ona this. someeaders can agreed to kind of framework for future negotiations. that helps sentiment for investors.

started.ck to where we trump will go ahead with implementing new tariffs. that will hurt a much wider part of china's economy. >> the numbers are already slightly daunting. what does this mean? is that what this is about stage managing? >> it is difficult to say. a lot of the economists out here today were making the point about it. it is all about negotiating and about keeping the pressure on china. flipside, china would not

want to be humiliated. there is quite a fine line -- it is one thing for china to offer butessions to the u.s., they will defend their plans to create or become world leaders in high-technology areas. be some kind of a deal, but they are a long way. nejra: thank you for joining us from hong kong. this is our chief asian economic correspondent. is john.ng us now great to have you with us. the big focus has been reaction in apple.

is the big concern for you tech stocks, how they could possibly get hit? there is the impact on the u.s. economy that is not massively large. this is even if tariffs are moved to 25% on all chinese trade. there is a much bigger concern for us, the size of the impact on china. to some degree, trump is right. he could not win a trade war with china. the impact of the u.s. economy might be several tenths. we worry about tech stocks. a lot of investors recognize , recognizing ought -- recognizing the largest tech stocks. manus: i am fascinated by the

fact that you use the word win. it can be constructed as where we are. you talk in your notes about late cycle, late stage. we are back to 2016 levels. with these kind of intrinsic levels, what is the value? we are pricing a significant slowdown. , nothing is added to the s&p. the latest cycle gets jerky or. jerkier. it is a gradual process.

it does recognize that we are running out of space. there is a pickup in average hourly earnings. does a risk like trade served to extend to be cycle in the long-term? >> as long as it doesn't go too far. if china recognizes that and opens up the economy somewhat, it could mean the u.s. far along the path. it could be a positive for recognizing the potential for growth and increasing globalization in the future. if you would actually go through with the full tariffs, the impact on the chinese economy would be difficult. this is a new iteration

-- this is what is said about the risk. the rolling bear market is tired from all of the morning that has been done this year. from likely to be resting its hibernation. he is talking about a recession in 2019. he is saying that earnings are going to drop. is that my risk? there will be a mathematical fall in earnings. there is very little chance of that being extended. it is almost certain there will be this drop in earnings, with the potential of an earnings recession. what we tend to find with equity markets, they don't peter out. they don't actually rise up into that recession. i hope we are hibernating now on this bear market. let's talk a little bit

more about tech. we would love to put this to you. there are a panoply of things around this. what does apple's rout mean for markets? means that increased regulation of tech is a bigger problem. the self-regulation of the tech market has not done the job. >> thank you so much. coming up, december the 11th is

the date. day for theresa, when the house of commons votes on her controversial brexit deal. we will chat all things brexit and the u.k. have an exclusive conversation with andy clark at 7:30 a.m. this morning. work, pop driving to onto the radio. dab digital in the london area. this is bloomberg. ♪ >> look get a check on the

markets. in the green for the msci asia-pacific index. then equities shrugging off trade concerns from the latest comments from president trump. lower as well. the biggest gain in two months for oil yesterday. we are back to the downside again for wti. if you look ahead to u.s. crude and inventories, they are falling for the first time in weeks. check out the iron ore futures. is a big no doubt this morning from citigroup, saying this is the last to law.

last hurrah. ftse futures are down by 11. futures, a nice rally in the markets yesterday. the bear market is resting. let's get your business -- business flash headlines. president donald trump is pressuring general motors to move production back into ohio after the automaker announced it would close a factory as part of a plan to cut jobs and a shutter facilities. it is planning to lay off 13,000 workers and close several factories, including one in ohio. apple gave up its crown as the world's most valuable publicly

trading -- traded company for part of the u.s. trading day. president's reported threat of a 10% tariffs on iphones hit after hours. apple market cap was $829 billion. google is expanding its mountain view headquarters, spending a billion dollars on a 52 acre business park next door. the arrieta is bigger and that the existing complex. to a mammothadds property expansion google is undertaking in both california and new york city. that is your bloomberg business flash. nejra: here is a look at what you should be watching today. watch for any reaction to the

recent polling of budget tensions with the eu. cooling of budget tensions with the european union. brexit is at the top of the agenda, again. failure to win an agreement would mean missing out on bidding for government contracts. we will get a readout on consumer confidence in the united states later. we will watch for any reaction to ongoing trade tensions. manus: president trump has dropped a brexit bomb on theresa may. says this could hamper a trade deal with the united states of america.

donald trump is talking about a 21 month transition. could this prevent him from doing a trade deal with america? columnist suggests this that markets -- could force politicians hands. the marketthink would move far enough for politicians to rethink the news on brexit is a result of this. they are representing their constituencies. they were able to offer special interest to individuals in the u.s. administration. this is much more difficult under the system.

there was some very bad u.s. job numbers that came out in between the two votes. this really encouraged people to understand how bad it was. brexit is a slow burn. we will not get that kind of crash impact on day one. we are more likely to how -- had discontinued problem of how you square any result being chosen? we are adding to sterling because there is some signs of overbearinshment. the first vote is very unlikely to be successful. what happens from there? is it a second referendum? is at an extension with an attempt to renegotiate the deal? you stay wtiith us.

up next, we get fed minutes at the end of the week. expectations of rate increases next year or falling. this is bloomberg. ♪ ♪

manus: check on the world map. just beginning to impact our asian session a little bit more. perhaps this morning is weighing on. may -- by the way, the credit suisse global cio it this morning saying it is time to get involved in china. we have the team standing by. own annmarie hordern

in london. trade is a little bit lighter this morning. weakness in the commodity markets. it is a flat day of trade. as things staying -- stand, absolutely flat. large-cap names in the mental markets have connected quite strongly. anne marie, a last

hurrah? annemarie: 2008, a high water mark for mental prices. as you can see toward the end, since may, every month we have seen a drop. is what isng on this going on geopolitical he. citigroup is also saying we could see some short-term relief , depending on what happens on the trump meeting with president xi in one is eris. aires.os ukrainian assets have been under

pressure. trade tensions between the two countries kicked off on sunday. last night it resulted in ukraine. this will be a another big topic at the g20. the credit suisse is saying this could mean the finance ministry is being forced to cancel its weekly bond auction. nejra: a number of canceled bond auctions in russia throughout 2018. mliv: let's get to the question of the day. rhetoriclook at the from donald trump in regards to more tariffs, what does this mean for global markets?

is it something more prescient in regard to trade? get into the debate. join us at tv . let's get the first word news. president donald trump has warned the brexit deal could jeopardize the uk's ability to strike a trade pact with the united states. trump called prime minister theresa may's agreement a great deal the european union. have declared they will not renegotiate. >> we have to take a look at whether -- if you look at the deal, they may not be able to trade with us. i don't think the prime minister meant that.

hopefully she will be able to do something about it. >> president trump is likely to put forward plans for $200 billion of tariffs on chinese goods. this will happen if negotiations with the chinese president failed to produce a trade deal. trump told the wall street chinese made iphones could be hit by tariffs. an italian newspaper is reporting the public governor -- .here could be cuts the government may try to save .oney the hong kong housing market is suffering its worst decline since 2016. to to be the

lowest by volume since the start of 2016. home prices have fallen for eight weeks, the longest losing streak in more than two years. global news on air, 24 hours a day and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. thank you. losetors could be about to after a relentless eight week retreat. the recent pain may be just a taste of what is two,. glenn august spoke exclusively to bloomberg about high-yield investments. i think overall spreads could widen a bit from here. energy, i would

be really surprised. that includes lower quality names. possible, given the scenario you are painting, a lot of anxiety in the market? at the same time, a strong economy and the possibility the 's efforts to deliver on his promises will make some changes. maybe the risk is underpriced and there could be a rally in 2019. -- see a spread that tightens between 50-100 basis points. i could definitely see some spread of tightening.

you have to put everything in context. compassion -- compression is 2-3 points. you buy a little lower quality credit. 20% when youe start with something yielding 7% in a four-year duration. that does it mean it cannot be a solid piece in the portfolio. most investors don't have the luxury of saying, i am going to go to all cash. most investors don't have that opportunity. you have to put together a basket.

we reduced our high-yield exposure throughout 2018. high-yield was slightly negative for the year. that's move made cents. sense. move made days, weast couple of have seen some names that have gone down in price. we are starting to take some of the lower risk, high yield maturing inare 2021, 2022. they have not gone down at all. we are replacing that with names that have gone down more. isra: that was glenn august beginning exclusively with bloomberg.

let's bring back in john. we heard august talk about moving into high-yield names toward the end of the interview. is this a sign that investors should be moving higher up? this has been one of the better performing credit asset classes. we saw high-yield outperform relative to investment grade. the bigger question, why didn't it correct earlier? corrected, its starts to look more attractive.

given where we are in the economic cycle, we have some concerns about the tightening of spreads. high-yield is no longer where we've been staying away from. what we do like is a lack of liquidity. if you can wait until it is happened, there is more chance of an overshoots. this can offer liquidity providers better entry points. when you try to get out and there is a lack of liquidity, does that not worry you?

>> it does. it is not like you are buying into very long duration credit. high-yield, where you can get -- it wast rate, priced quite a lot in here. if we do get a slowdown in the you are not looking for a market to market exit. or leveraged loans of interest to you as well? >> not really. they carry a box of risk.

rather have a better idea of the liquidity associated with it. >> you said earlier in the equity conversation that the recession was overpriced. what kind of default rates would you expect? space, low point to, .3%. high-yield, they are more like two or 3%. >> coming up, the murder of a journalist has put saudi arabia under the microscope.

we have a special report. says heresident trump is likely to push forward with plans to increase tariffs on chinese goods. trade continues to weigh on the market. ♪ nejra: this is bloomberg

daybreak -- europe. manus: a very good morning. let's check in on what is trending across the bloomberg universe. claims he has made

the world's first gene edited babies, but the claim is fueling denials. market players see a bright outlook for emerging markets next year. private capital is said to have arabia longst saudi before the murder of a journalist, jamal khashoggi. let's get the bloomberg business flash. company is poised to pounce on the downturn in credit market. the ceo, glenn august, said the company is preparing for

situations, including a recession, which could be a buying opportunity. nn: i would say we have in excess of $5 billion of available capital. >> united technologies is toping months of pressure separate its aerospace operations and climate control divisions. the company will retain its aerospace business. provides air-conditioners and heating systems. donald trump is pressuring general motors to move back production into ohio after the automaker announced it

would close a factory in the state as part of a plan to cut jobs in shut facilities. the plan -- the company plans to lay off thousands of workers and close the facility that makes the chevy cruise. -- teheaudi arabia khashoggi murder has turned many of politicians against the crown prince. but capital turned against the kown prince long before the illing. saudis were detained last year. a growing number are trying to move their money outside the kingdom.

this affair was almost another mighty blow in the capital from the kingdom. how bad has it gotten? it is difficult to know how much money is coming out. buckets,udes a big also things like the sovereign wealth fund. it is very difficult to know how much money the wealthy elites and the big business families in saudi arabia are moving out. it is not a vote of confidence in what is going on in the country. nejra: good to see you. it is difficult to know how much money we are talking about. do we know where the money is

going? matthew: there is a big focus on moving into the mature investorshat saudi already have exposure to, places like the u.k. and europe and the united states. asset classes like private equity and real estate. investors typically always favor real estate. they are also shying away from some of the big headline g rabbing purchases we saw a few years ago. they are trying to do things a bit more under the radar and discrete. manus: this is not capital control land. -- our chiefnomist

economist has concurred on this. you say this comes in different forms? matthew: there are no capital controls. there are limitations on moving out of the country. there may be a call from another senior official, asking questions about what this money is going out for, how it can be used. more some subtle pressure, to kind of probe what is going rather than saying these

forms of transfer are not allowed. manus: this is a great scoop. we have had a few of them recently. john is our guest host. he manages asset funds at legal and general investments. the bigger issue for the world is really around commodities and oil and what the swing producer of the world does at opec this week. how over-burdened is the oil world at the moment? where does this pop up the most for you? >> it is great news. the 30% in the oil price is a boost to global consumerism. it is nothing like the price fall we have found in 2014 and 2015.

-- 2015. this is really positive news. this is one of the things that could help extend the cycle. it is another boost for developed markets. don't expect an opec reaction after the upcoming meeting, but we do expect the iranian sanctions to pulldown production more quickly. choice, -- we expect them to tighten up, both for the g20 and going forward. you say to lower prices support your equity position. you are concerned about higher price spikes? energy stocks is a clean way of pricing. it changes the longer-term outlook. a deterioration of

conditions and saudi arabia. back and really impact global markets equally. -- that could really impact global markets equally. ands adding to energy making sure we have a combination of consumers and the producers of oil. does the drop in oil prices after the rest profile? : we would need to see something like $20 before it became a real problem. it is quite nice at the moment. the longer the combination of can keep others producing, the better. continue the conversation

with us on bloomberg radio. coming up, and exclusive interview with a bank chairman. this is bloomberg. ♪

manus: good morning from dubai. nejra: these are today's top stories. manus: trade threat. trump talks of more china tariffs, he says iphones could get hit, apple shares take a hit after hours trading. and trump weighs in on the brexit debate, he said the deal struck by theresa may could have plans for u.s. trade accords. four, we hear from across the spectrum today. well they clarify the u.s. rate hike, how will it emerge?

♪ nejra: welcome to daybreak europe. theave under an hour from start of equity trading. we had a strong session, gaining more than 1%. communications and energy shares leading the rally with oil prices popping yesterday, back down today. we have to talk about cable. we dropped below 128. it has gained momentum to the downside, .41%. we have the date for the vote on the december deal, december 11. now the work begins for theresa may. futures pointing lower, apple shares take a hit in after-hours trading around concerns about trust comments on trade and -- trump comments on trade. will we see a lower opening for europe? we are struggling a bit for direction.

very muted in these equity futures for europe. in on the's check bond markets, focusing on italian government bonds, a two-month low in terms of them. the lines coming from messenger. ,he italian prime minister change could be 3.6 billion, a spending cut from the original plan. 2019, the deficit am a certainly would be reduced to 2.2 from 2.4%. and they are convinced it is not worthwhile going to war with the european union, those headlines from press reports. that has given a town to the italian government. we hear from a host of fed speakers, these are the speakers of the day. you will hear from everybody, esther george.

let's get to juliette saly. dive into asia, how are you doing? we have seen quite a bit of resilience coming through, despite the trade tariff threat from president trump. he -- you have seen the markets move higher, the csi 300 down by .1 of 1% in late trade. the nikkei having a good day, 1%, a rebound in iron or helping out the australian share market and flat movement in india. we have seen quite a bit of resilience coming through which should set of europe for a better session and was expected when you saw the decline in u.s. futures. in terms of currency markets, let's have a look at some of the moves in asia. we have been looking at the end gaining a little bit at -- as president trump talks about i meeting.ead of the x

fromeso has taken a hit tariffs and we heard from bloomberg news saying that this is one currency you should be keeping an eye on down by .41% and getting close to its 200 day moving average of 52.9. and weakness coming through in the indonesian group, we heard from the central bank in the last hour, they will maintain the policy stands and they see the group as undervalued. juliette saly in singapore, thank you. we are asking the question on mliv, what does apple's worst drop in a decade main for global markets? we saw the shares drop in after-hours trading yesterday, nasdaq futures pointing lower. you can join the debate, reach out to us and the mliv team on your bloomberg. let's get the bloomberg first word news from dubai. eslie: president trump has

warned the brexit deal could jeopardize the uk's ability to strike a trade path with the u.s. departing the white house for rally he called theresa may's agreement a great deal for the eu and urged the u.k. to reopen negotiations with brussels. something both sides have declared they would not do. president trump: sounds like a great deal for the eu, we have to take a look at seriously whether or not the u.k. is allowed to trade because right now, if you look at the deal, they may not be able to trade with us and that would not be a good thing, i do not think they meant that. i do not think the prime minister meant that and hopefully she will be able to do something about that. as theresa may embarks on a trip to sell the brexit deal, december 11 is the day for decisive vote in the parliament on the final agreement. speaking to the sun newspaper, may said she is ready to debate

brexit with jeremy corbyn in a televised showdown provisionally set for december 9. in an exclusive interview, the ceo said markets would react negatively to a hard brexit. market, by and large, still expects there to be a deal. and if there truly was a hard that was devastating, i think the markets would react negatively. >> president trump is likely to with plans forward to increase tolerance on $2 billion -- $200 billion of chinese goods if negotiations failed todent xi produce a deal. iphoneshe -- said that could be hit by tariffs and americans could handle a 10% duty. nasa is celebrating the successful arrival of its insight lender on mars.

the probe touchdown after a high-speed descent through the atmosphere described by mission control as seven minutes of terror. inside -- insight was programmed to decelerate from 20,000 kilometers an hour to just eight as it reach the surface. the probe aims to deliver more information about the martian interior. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. manus: thank you very much. they traded mixed after president trump indicated he is likely to go ahead with higher tariffs on chinese imports if talks with president xi failed. apple laptops could be hit by tariffs. always good to get you into the hot seat this morning. you always have good opinions.

i am looking at the markets, $1 trillion was wiped off the value of tech in the rise and we will pull this up on my screen. my question to you is the market rise, valuations back at 2015 levels. what are these indicators telling you? martin: those companies are going to have to manage the trade tariff situation as companies, multinationals like apple, their supply chain has dominated in china and ashman and apple are going to have to rebalance that if these trade tariffs and trade frictions escalate even further. countries in asia which are part of apple's supply chain such as japan could significantly benefit from this. it would depend on what the escalation as, what the outcome they siturday when down for dinner in windows aries.

it is not look like we would see too much of a negative. some suppliers have been hit in the asian session. what does apple's route mean for markets are broadly if a tech leader like that, if they continue to take kids? martin: everyone has seen the tech stocks down sharply over the past six weeks. i don't think this news is new, we have the tariff scheduled, the tariffs that will come in in january will increase the tariff from 10% to 25%. trump might expand that but it depends on how we get on in buenos aires. the markets are well aware of these schedules so i don't think one small hit because of trumps mention of apple is anything new for markets even though it took

a selloff toward the end of the day in new york. base caset is your were going forward in 2019, do we get a deal at dinner on friday, do get an abatement of ariffs, is there resynchronization of growth? martin: we have had significant meetings in the last three weeks. are significantly engaged in these issues. what is important is there is a xi is estimation that powerful. he needs a win. trump also needs a win. and trump did not actually have the best midterm elections compared to his expectations. and the second half of next year is the start of u.s. presidential election for 2020.

what i would say is that both leaders need a win. china,e is not a win in they will have to deploy a significant easing strategies on the consumption issues like vat cuts, income tax rebates, and issues like that. they do not want to go down that route, they prefer to get a deal done. -- wins,eaking of when you said markets are not set up for multiple wins, how are you setting out -- yourself up for wins do not come? martin: the consensus is we will not get a series of wins. we could get a win and if not we will have to counter that with other issues. we could get a win on brexit. the -- it could pass, the expectation could be wrong. we could get a deal, i supply

cut in oil when the opec trust members meet in vienna. we could get a significant policy action by china before the end of the year. the ecb and the fed are setting their policies for next year and the meetings in the second half of december. it also china is. there is a whole sequence of issues where there is potential , to bes and markets honest, are not focused on those issues. but political leaders are. there is significant focus for all leaders to get wins on these actions. manus: let's say a couple of those victories delivered, let's say on trade and oil. two huge ones. with the dollar softened, how should i position myself for many victories which could have colossal impact? is an excellent question. the issue is what are the market signals and you pointed out the

correct one. at the -- the dollar has had a fantastic year in 2018. that has pushed a negative spin on emerging markets. emerging markets structurally to do well would need a neutral to a weaker dollar. if we see wins in europe, italy, with exit passing in the -- in theith commons, we could see global economic conditions perform market expectations. the dollar would soften. the dollar is the key signal. if the dollar continues to marketorm strongly, trading conditions are going to remain tough. malone stays with us. an exclusive conversation with margaret [indiscernible]

and italy could be ready to trim its target. the populist coalition is prepared to reduce the controversial figure to 2.2%. with this be enough to satisfy the eu, what will markets say about it? and when you are traveling to work turned into bloomberg radio, if you have to step oil from me and manus, we are live on digital radio in the london area. this is bloomberg. ♪

president trump: we will not let them violate a nuclear agreement. >> investors will have to wait till number 29. -- november 29. manus: it is 7:17 a.m. in

london, we are 42 minutes away from the start of european trading. and taking a pop on the downside. and escalating on that currency. we will talk about that in more detail in a second. >> american conglomerate united technologies is to break itself up capping months of pressure to operations from elevators and climate controls division. it will retain its aerospace divisions and operate with two other divisions. united's otis elevator elephant -- business will be spun off. president donald trump said he is pressuring general motors to move production back into ohio after the automaker announced it would close a factory in the state. as part of a plan to had jobs

and shut facilities around the world. gm confirmed it plan to lay off 14,000 workers and close seven factories including one in ohio that makes the chevrolet cruise. top at the close although president trump's threat of a tariff on iphones affected effort -- after hours. microsoft was 6 billion behind. shooting games, fortnight has over 200 million players about the population of brazil and a 60% rise from the numbers epic games released in june. it is free to play and available videotiple devices from game consoles mobile phones. -- itmakes money for

makes money by charging customers for props and costumes. manus: thank you. the budget deficit target will most certainly become too for -- 2.2%, we have been touching on this. we have a prime minister saying of 3.6ending cuts billion euros from the original budget. and also convinced it is not as well going to war with the european union. i smell capitulation, is that what the press reports are? good morning. kevin: i think the government really is backing down. they had been very bellicose, almost belligerent about standing up to the eu, but now the definite trend is the government is looking for some sort of compromise with the european union. tell us a little more in ato expect given that

recent bond auction we did not have a very good result from retail investors particularly. kevin: that is true, they are looking for a much stronger result today. last week's auction was a disappointment and some people interpreted that as investor wariness about italy and italy's future. manus: thank you very kevin costelloe with the latest on the latest headlines and messenger. let's get martin mullins opinion joining us from meant partners. the spread has tightened, is it the capitulation moment for italy were both these guys are saying in the papers we do not want to go to war with the eu? this is classic eu trade, isn't it? martin: yes, i think so. our recommendation would to be to buy their bonds by their stock markers.

the italian government is new and you have the far left and the far right unbelievably coming together and forming a coalition and they have budget plans and their budget plans upset the people in brussels. unfortunately for brussels, there have -- they have been to.mac -- two dogmatic about brexit and the italian economic policy. i don't think this is a huge change by the current italian government. they are perfectly entitled to -- 2.5% of gdp. they need a lot more. the main factories, if you look at the damage to the stock market and the bond market this year, the cumulative damage is around 500 billion euros. the small shift after dinner with juncker and conti in brussels on saturday night was 5 billion or 6 billion, that is 100 to one. this puts it in perspective, the policy tweaks that we are talking about are not the issue. the economic agenda is what the

issue is. and the economic agenda needs a reboot. it is underperforming. italy, iu say by btp's, buy stock, is this a tactical move based on where you think spreads will go or is this a buy and hold recommendation? martin: it is a buy and hold recommendation, the situation could get worse but i doubt it. that is because 2019, we have a significant leadership change in europe, the european parliament will see an election on may 26, all of the european leaders on the commission and the president will change and we will see a significant change at all levels of the ecb. the new politicians in rome will be dealing with completely different leadership set. if i was recommending anything to the italian government is to spend even more. let's pivot to brexit. i used the data you sent to me

yesterday and talking about a lost decade. we are fixated on the pound, the pound is down, breaking through 128 and trading lower, there is a drop. would say we are overly obsessed about the pound and you put it in context, this is a bigger economic argument for 2019 the penning on the outcome for brexit. averagenow, the economic growth in the u.k. for the past 10 years is almost 1%. a lost decade.s if it continues at 1%, there will be significant economic and social problems within the u.k. it is critically important that a growth strategy is action and in the u.k., therefore the post-brexit strategy is critically important. you can see from the chart that is up that the u.k. is and that hasng been severe and will continue to

be for the next five years without implementation of the growth strategy. we have seen a little light in the last two weeks on this, philip hammond, the champion of the exchequer has eased up on fiscal policy. this is a key signal and we would expect over the next four years, four budgets between now and the next fixed term element, the election in 2022, that we would get more easing over half of 1% of gdp per year compared to market expectations. nejra: to go back to your issues -- what you said about markets being positioned for wins, how would you position for a win on brexit? martin: the currency everyone is , iated is -- is looking at would be cautious about that. the pound is relative performance of the u.k. versus the rest of the world versus europe, versus the u.s., and we need more time about that. we also need more time about the bank of england hiking interest

rates. , an we see the u.k. economy growth action plan being implanted in the u.k., the u.k. gdp figures will start expanding. once we expect that to happen, we can start buying the currency. up withwill follow that rate hikes. in the meantime, getting the deal done in the house of commons means we should be positioning for u.k. equities. whether that is domestic equity market, the sheer index, or the ftse which is exposure to the external side. people can make their own opinion on that. u.k. stocks should do better compared to the currency for the time being. nejra: ok, currency stocks. from meantne is a -- partners. bloomberg daybreak is next. if you have to step away, you can turn in -- tune in to bloomberg radio live on your

device and dav digital. this is bloomberg. ♪

welcomeod morning and to bloomberg markets, the european open. alongside matt miller in berlin. matt: we are looking at asian markets rebounding although futures are down, the cash trade is less than 30 minutes away. ♪ anna: upping the ante, president trump threatens more china tariffs ahead of the g20 summit and i funds could