x good morning. these are today's top stories. trump-pence at a trade truce. ints at a trade truce. and reinforcing a compass still. -- dovish tilt. cut oil nation production? ♪

nejra: good morning. it is 6:00 a.m. in london. looking at these markets, prevarication and perhaps a lack of conviction. little bit of weakness come through in the u.s. session yesterday. a lot of the anticipation ahead of the g20 meeting in argentina. are we going to get some kind of agreement on paper? could there be more complete agreements out of this? dollar-yen, on tenterhooks. against theakness dollar. we have seen quite a bit of dollar weakness this week.

at one point, we dropped more than 1%. gust 2017. , around back up again 5145. we speak to the u.k. international trade secretary later today. brexit still rumbles on as well. let's check in on the markets in asia. juliette saly in singapore has more. >> we are seeing some take on some risk. we have the msci asia-pacific index virtually flat. you see the nikkei close, higher by 4/10 of 1%.

this does not seem to have taken a dent to hong kong and chinese equities. some of the emerging markets did well yesterday. it has been a great november for asian investors. that's the first monthly gain for the msci asia-pacific index. let's look at some of the stocks we are watching. they are really trying to stabilize the share price. there is a very popular selfie app. have is concern it may taken too much. from its consumers. it has -- data from its consumers.

lost $480 million in market cap over the last two sessions. >> thank you. today we are asking the question on mliv. what asset will move most on a trade ceasefire? you can join the debate and reach out to us. now let's get the bloomberg first word news. : federal reserve officials have signaled a more flexible in their interest rate increases after a hike. said their language

regarding expectations for gradual increases may need to be modified at a coming meeting. in an interview with bloomberg said it is ready for brexit, set to take place in less than four months. we have been hoping for an organized separation. with contracts and capital. >> china's economy in november shows factory activity continues to worsen.

contrast, japan's factory output expanded. there is a recovery in autos and electronics powering the expansion. in korea, the central bank raised its key rate for the first time in a year. the bank lifted the seven day 1.34% --e rate to 1.25%. has ordered a 150% increase in the monthly minimum wage. the country is in the mist of its worst ever economic crisis, with shortages of food and medicine. new minimum wage

comes out at $9.50 per month. 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. argentina is hosting heads of nations,m the g20 where the real show is happening on the sidelines. the main effect will be between the u.s. president and the chinese president as they try to hash out a trade war. great to see you, mike. thanks for waking up so early. let's get the big question out --the way mike: the question kicks off with the usual ceremonies.

the american president arrived here late last night. does this mean a deal with china? there have been reports the u.s. and chinese are negotiating on a deal. it would lead the administration to hold off on tariffs for a while. the two sides would agree on a framework for their talks. but president trump sounded optimistic -- said there was very little chance a deal would be reached, not sounding

optimistic. >> i really don't know if we would do it. i think china wants to make a deal. i'm hoping. i like the deal we have. decisiontrump's on whether to do a deal will come saturday night. trump had a breakfast meeting with the argentine president. the president of mexico will finally signed the new nafta agreement after many months/ -- will finally signed the nafta agreement after many months. what else are we expecting to happen today?

mike: vladimir putin is meeting with the saudi prince. european leaders are holding their own mini-summit. theresa may is the last of the -- was the last of the european leaders to make it in last night. she found herself invented familiar territory. this is the thing she has been doing a lot of, lately. nejra: thank you for joining us. we just got headlines on softbank.

annemarie: shares today are outperforming their rival. this telecom unit ipo price of ¥1500. many people were getting close to this target. other headlines said the group is set to raise ¥2.65 trillion in this ipo. of ¥18s a market cap trillion. this is the broader picture for softbank. have become a huge investment company after starting as a telecom company. we have the pricing today. we should get the final details on december 10. nejra: thank you.

multi-assetenior strategist with state street. let's get back to the trade discussion. we heard michael outlining what we can expect. whatever markets priced in at this point -- what have markets priced in at this point? at marketking valuations, it seems investors don't expect flows. the market is quite pessimistic. argue there is a bit of upside potential. if we don't get the deal, that's

expectations. in a way, it makes sense to take some risk. having said that, people are not positioned for anything. they don't try to minimize risk. n and how meaningfula long lived would the bounce be for asian equities? we'll get ahink deal. if you get a ceasefire, you will see a bounce. we've already seen on ethis -- one this week. markets have recovered already

due to trump administration talks. youou have negatives, could see a pullback on monday if things happen. nejra: would you see divergence between regions? rallythis be a broad base nuance? you look for the japanese market followed suit with the u.s. market. i think we do get a bit of a cease-fire. there is a bit of weakness in the market.

valuations were very attractive. >> what markets will move the most on a trade? there is really a place where the majority of investment companies are going. should there be a big risk on move, that's the direction for the market to go on. dollarif we see some weakness, there is a consensus view we could see a dollar

weakness this year, where would you be looking to take your opportunities from that? at fallen look angels, what has not worked in months. couple of nejra: you mentioned u.s. tech. is this one of the most vulnerable sectors if we don't get a positive outcome out of this meeting? >> the sector has corrected quite a bit. there is a lot of hardware tech trading 12-15 times earnings.

there has been a bit of correction. but you have to be selective. we focus on valuations. there is quite a number of tech names. those are areas where investors should continue to focus. marija and ken stay with us. the fed says another hike is warranted as soon. -- soon. setting isays it is yen.po prize at 1500 if you have to step away from the tv, tune in on bloomberg radio. this is bloomberg. ♪

nejra: let's get a check on the markets. we are struggling for direct and a little bit. -- direction a little bit. u.s. futures, not giving a lot of indication either. we are focusing on oil as well. we had quite a bit of volatility in yesterday's session. the 10 year yield moves lower by a basis point. we are asking the question on mliv go.

what assets will move most on a trade cease-fire? you can reach out to the team on your bloomberg. let's get the bloomberg business flash. is facing more scrutiny over accusations that -- internalodged a control while helping 1mbd raise money that went missing. the fed can sanction people involved in banking scandals. said it believed the money it was raising for 1mdb would be used for development. regulators are being warned to take heed of the corporate debt market. if credit quality were to

deteriorate in the u.s. or bonds could be downgraded to the lowest level of investment-grade debt. if there were to be a deterioration in credit quality junk markethe doesn't have the capacity to absorb that sitting above them in the triple b markets. . softbank has set the preliminary price for its coming telecom unit ipo. this is after reports softbank hit its sales target at $21 billion.

it is listing its cash cow business as telecom and wireless services. that is your bloomberg business flash. reserve officials are signaling a more flexible approach in interest-rate increases. almost all participants agreed another great hike was likely to be worry and said -- warranted very soon. let's bring back our guests. people have questioned whether powell was dovish. could argue him saying we are bloelow mutual is fact. asianch would we see

markets pick up on a slower pace? ken: asian currencies have depreciated quite a bit versus the u.s. dollar. you had so much outflows coming from the asian markets this year. you could see a bit of a reversal in 2019. most markets look attractive. valuations today are cheaper than what they were. we have solid earnings growth across the board. nejra: will we see more

repricing in the u.s.? -- in the bond or equity markets in the u.s.? look asif we longer-term futures, we have been discounting close to neutral rates already. fixed income markets are where they need to be. nejra: marija and ken stay with us. next, barclays chief says wat ch bonds sitting right above junk. we will bring you more.

when traveling, tune in to bloomberg radio. this is bloomberg. ♪

>> you can see china outperforming to the upside on the asian equity markets. this is something to bear in mind in context. let's look at the headlines around the world. annmarieloomberg hordern. a fifth day of gains. investors could not ask for a better and to november.

>> the global markets are not doing all that bad. a fifth straight day of gains. the currency is gaining almost every single day. a lot of key benchmark indices. the macros for india are looking very favorable. this bucket of stocks is actually doing really well for itself. no complaints, whatsoever. you could not ask for a better november. >> thank you.

we have the first official reading of the chinese economy in november. what are the deal markets telling you? it is at 45.2. if you look at the steel prices, they are really working in lockstep. this is almost a bellwether for the industry. more pain could come from the chinese economy. there is possibly a holiday discount. beenean it shares have not this cheap since july of 2 -- 2013. shares are ending the year a little bit lower due to a pessimism in the market.

talking about the holiday season already. thank you. today we are asking which assets will move the most on a trade cease-fire? now let's get the bloomberg first word news. >> donald trump says he is very close to doing something with china. countriesfrom both have been working for weeks on the contours of a possible deal to be announced. deal, china is facing higher tariffs in january on $250 million of exports in the

u.s.. -- the plane landed heavily in cologne on the runway. there could be a serious issue. a more flexible approach has been signaled due to gradual rate increases. he said at the language regarding expectations for gradual increases may need to be modified at coming meetings. factory activity has continued to worsen.

factory output expanded at its fastest pace in 3.5 years in october. the central bank raised its key rates for the first time in a year. lifted the seven-day repurchase rates to one point -- 1.25%. 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. need to take heed of the corporate debt market's fallen angel problem. deterioratety may in the u.s. or europe. we beat out our minimum capital requirement by 100 basis

points. could have been economic shock far greater than what we saw in 2008 and 2009. the bank of england approved are capital plan. reiterated our ratio at 13%. it is how the regulator can dynamically manage risk. i think there is a healthy between the fed and the bank of england. i think people do have to look at what is in the stress test. having an economic crisis to

that degree is pretty remote. central bankers are morning us there is damage to the system. our own leveraged loans getting dangerous for the system get-go are long position on a balance sheet is down. we are not making underwriting anywhere near 2006-2008. if there were to be a real deterioration in credit quality in the united states and europe and you start having a significant amount of the

issuance into high-yield, the high-yield market does not have the capacity to sit above them in the free market. how much resides within the banking system as such? it's by and large held by non-banks. funds andcredit pension funds and insurance companies. sheet isn the bounce significantly less than insurance like this. you can catch more on bloomberg.com. ken. bring in marija and i want to take you to this chart. it is showing the triple be

spread over aaa widening -- bbb spread over aaa widening. tight, weds were heard that the extra cost of flipping a few ratings was nominal. widening,here is a this could be more expensive. if you translate this to the equity markets, wouldn't you be favoring companies with stronger balance sheets? >> yes. paying more puts pressure on cost of capital. the stronger balance sheet is something to look at.

money is being returned to shareholders. a stronger balance sheet is something to look for. nejra: as a bottom up investor, how does the credit space impact what your''re looking at in the asian markets? ken: we are much more focused on the spreads. we look at cash flows. those things are important for us. you have to look at what is happening in 2019, potentially. there is a sustainability with earnings growth. those look fairly interesting.

you have fairly attractive valuations and expectations. you could get a policy bump. >> what about financials? you could see a brief rating around fed expectations. flat yield curves, lower rates, lead to big negatives. now we get to some improvement. to watchd

without negative news coming from politics and european banks. there were lots of discussions. it is the sector in tnhhe crossfire of negative news from every angle. nejra: thank you for your time< ,. now softbank has set the preliminary price for its upcoming telecom unit ipo. the japanese tech giant is listing its cash cow business.

it has 34 billion subscribers. what are tech investors attaching to this ipo? it was going to pay out 85% of its income in dividends. japan, havingike stock of this deal is very appealing. that is why they are very much aimed at the retail investor. 85% of this is going to be index retail investing. this is usually going to be different in this case. has gone through some unique methods. tell us about them. softbank -- a smart could buy

the shares. you have to buy one individual share at ¥1500. the does break up shareholder experience quite a bit. >> what can we expect from softbank after this? this will become very much an investment company. the investment fund may start pursuing some of these investments. the japanese telecommunications

business may be very confusing for some people. >> thank you so much for joining us. trade up, we will discuss and the hotly anticipated trump-xi meeting. this is bloomberg. ♪

even the conversation of tariffs and trade wars can bring instability and unknowns. andlack of stability unknowns is not a good thing for business. >> this will pass it on to consumers and make it very difficult. we are producing the products

in the main market. the majority of those cars will go to the united states. >> so far, in the chinese-u.s. --uation, >> we have seen an increase of , like the 911 or 718. those were some auto executives commenting on the spat. back -- trade today we have our mlviv

question. sachs says the continued escalation of the u.s.-china trade war would be the most likely outcome between trump and xi at the g20 tomorrow. trump explored the prospect of raising tariffs on imported cars. we have our guest that was the former minister of commercial affairs at the u.s. embassy in beijing. president trump is thinking about something on china. what sort of outcomes are you preparing for? -- are companies you speak to

preparing for? >> the trade relationship is so complicated. we cannot expect a huge breakthrough from these talks. the chinese are celebrating the 40th anniversary of reform. for china to take advantage of this opportunity, to announce sweeping, comprehensive openings , not in the name of responding to the u.s., but in the name of celebrating reform and opening up. towarduld go a long way changing the conversation. logjam adislodge the bit and start us in a positive direction for the talks.

are your members getting any positive signals on the ground in china that something like this could happen? we are not getting a lot of positive signals from our chinese counterparts. ,e talk about this every day all day, every day. chinese administration seems to be very set on the party taking more control of the economy as it is of the rest of life in china. going against the direction the party has gone in the last five or six years. we are weighing control over what it -- are in the economic interests of china.

>> president trump has talked about these tariffs. the arguments is that production will come back to the united states. you have talked about a very small proportion of companies actually thinking about leaving china. all in theifted at last couple of months? 's most of the companies are going to change anything, they are talking about their supply chain. a third of the companies are thinking of moving supply chains out of the u.s.. amount of the number of companies are thinking of moving operations talk to the u.s.. mind, these keep in are executives based in china,

and what they want to do, moving an auto plant from china to the u.s. would be a decision made. that, i think it is not very practical for most of the companies that are operating in china to move back to the u.s.. most of the companies are in china, producing for china. it would be china, difficult for them to be competitive. >> you mentioned supply chains, -- perhapsto get some are hopeful this will be put aside toward the g20 on the weekends. that could develop some real supply chain pain for asia, particularly if it would cover asian made phones and laptops.

what practical steps are companies to connect this point. are looking to buy gifts -- diversified their supply chains. most of the companies have not taken significant steps to do that. companies are looking at the producing, of whether it is southeast asia or india or elsewhere in the world, whether it is even the u.s., and decisions are not being made right now, whether it is diverse applying supply chains or further investment in china, people are waiting to see what the situation is when the dust settles. everyone is waiting. >> there really is a waiting game. meantime, is this a

uncertainty, or other -- are there other issues around china that worried them all? >> what has been worrying us for years isa in the regulatoryrea itin the regulatory area, is the protectionism of chinese domestic markets, it is the unlevel playing field, the lack of reciprocal treatment for foreign and u.s. companies. nejra: thank you so much for joining us. later, we speak to the international trade secretary. this is bloomberg. ♪

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leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. in london, i'm nejra cehic. these are today's top stories. trump-pence at a trade truth ahead of his meeting with she -- ucetrump hints at a trade trce ahead of his meeting with xi. a dovish tilt to policy. prices hinge on saudi arabia. will the nation cut oil production or keep pumping and risk ultralow prices blowing up its economy?

good morning everyone. a.m. in london. we are just an hour away from equity trading in europe. interesting details below the surface. let's talk about how europe might open. futures taking a little bit of a leg lower, down 0.25%. struggling. cac futures ever so slightly higher. markets do seem to be in wait and see mode ahead of the g20 today. we got the fed minutes yesterday. they pretty much confirmed what we heard. not a huge reaction to that. we did see some weakness in the u.s. session yesterday. u.s. futures have been struggling for direction as well. the g20 highly anticipated, but has markets already priced in a bad outcome? which means that we could see a

big more of a bounce afterward? that is what our last guest said . or is it a big divergence in terms of what markets across the spectrum are pricing in? let's switch up the board and see what is happening in the fixed income market. the-year treasury yield briefly dropped below 3% for the first time since of timber 2018, then a move back up. we are looking at the 10-year bond futures. we have seen the 10-year yield come down ever so slightly, about one basis point. the focus very much is on the global dynamics happening at the g20. with that in mind, let's check in on the markets in asia. more from singapore. juliet, what are we seeing below the surface? stronglook at the very gain on the close-out by 1.1%.

perhaps investors expecting we will see some kind of truce between president trump and xi because that is one of the front runners in the region. also a little bit of positivity in hong kong. starting to dissipate somewhat. india just slightly higher. red today.d in the doing very little to assuage concern about the overall economy. weakness in australia. the asia-pacific index ending flat. the seven look at how it is down over the month of november. if we can switch the board over, it has been a very solid move for asian equities in november. up close to 3% on the asia-pacific index. that is the best game we have seen since january. i'm looking at one month over by more than 5%. we are expecting the central bank will keep interest rates on hold the next week.

the indian and hong kong markets have been the best performing over the month of november. the hang seng up by 6.4%. the indonesian rupiah up by almost 6%. the bank of indonesia is going to allow the bank -- rupiah to strengthen. we know it has been a very volatile year for asian equities. nejra: thank you so much. today, we are asking the question on mliv, what assets will move most on a trade cease-fire? will it be equities, the dollar? join the debate, reach out to us. on your bloomberg. let's get the bloomberg first word news. debra mao as that in hong kong. debra: federal reserve officials have signaled a more flexible gradual on their interest-rate increases after a lightweight december hike. minutes they almost all

participants agreed another rate increase was likely to be warranted fairly soon. they also said the language regarding expectations for further gradual increases may need to be modified at coming meetings. barclays says he is confident the bank will be about to continue doing everything it does today even if the u.k. crashes out of the european union without a deal. in an interview with bloomberg, he says barclays is ready for brexit, which is set to take place in less than four months. anwe have been hoping for organized separation, but we have been preparing for a very hard-won. whether it is contracts are capital, we are set up so comfortably ahead of march of next year if there is a hard brexit, we will be able to do tomorrow everything we were doing today with our client base across europe and the u.k. debra: first official gauge of china's economy in november shows factory economy continued to worsen. divide to write on the

between contraction and expansion. japan's factory output expanded at its fastest pace in more than 3.5 years in october with a recovery in autos and electronics powering the expansion. in korea, the central bank raised its key rate for the first time in a year, choosing to focus on record household debt and the widening gap between korean and u.s. rates. a hike of 25 basis points. global news 24 hours per day. nejra? nejra: debra mao in hong kong, thank you. argentina is hosting heads of states from the g20 nations for a summit where the real show was happening on the sidelines. the main event will be a planned meeting between u.s. president donald trump and chinese president xi jinping as they try

to hash out a cease-fire in their trade war. is at the summit in buenos aires. great to see you again. let's get to the big question first. a question that may not have an answer. will trump do a deal with china? mike: you are absolutely right. we don't have any kind of answer to that yet. we will have to wait until saturday night yet when donald trump does sit down with the chinese president and trusts his gut, as he said. the president arrived here and when azeris last night -- in buenos aires in a flurry of tweets, one canceling his bilateral meeting with president putin. another praising himself, saying the american people would be very well represented. the question as you put it is will that mean a deal with china on trade?

the two countries apparently have been negotiating one in which china would agree to buy more u.s. stuff and the president would agree to hold off on additional tariffs and the countries would agree to a framework for further negotiations. president said yesterday on leaving the white house that they are very close to a deal, but he's not sure if he wants to do it. we will find out at that dinner on saturday night. mr. trump joins the president of mexico and the prime minister of canada this morning for a signing of the long negotiated nafta 2.0, the usmca. the u.s. is still refusing to lift the steel and aluminum tariffs on canada and mexico. the mexican negotiator told us last night that the two countries decided to go ahead in the hope that those tariffs will soon come off. >> i really thought that should have been eliminated by now. it won't be the case.

>> how long does it take to resolve? how long until the united states reduces or eliminates those tariffs? >> for me, given that it won't be before the signing, there is little time between now and then , let's say the calendar year. mike: the rest of the leaders are gathering here with the exception of angela merkel, whose plane ran into some emergency problems. she will take a commercial flight and arrive later today. theresa may, the last to arrive last night. today, she will hold a minisummit with her counterparts from the eu, a very familiar position for the prime minister. we may see some more brexit headlines before this is all over. nejra: yes, as i said last hour, it is very difficult to get away from brexit on any day here. , are there any other subplots going on at this meeting?

mike: definitely how the rest of the g20 reacts to vladimir putin and the ukraine situation. he is going to meet with some of the leaders on the sidelines here. he is also going to meet with mohammad bin salman, the controversial saudi prince. those are the two biggest oil -- two of theup biggest oil producers in the world. the oil world watching that closely. a lot going on. not much of it has to do with the formal proceedings, which do kick off today with a plenary session and a dinner tonight. nejra: michael mckee in when osiris -- buenos aires. joining us is george buckley. we have an outline from mike mckee over what might happen over the weekend. what sort of base case are you looking at? i know you have four different

possible scenarios. george: the four different scenarios, three of them have probabilities. of between 30 and 35%. it gives you an idea of how anything is really possible here. the base case is that the u.s. continues and goes ahead with the increase in tariffs from january from 10% to 20%. there is the possibility that come upnd mr. trump with something that allows us to delay the further increase in tariffs that has been threatened. there is a possibility that that could be delayed. nejra: we have yet more data out of china pointing to the slowing growth that a lot of people have talked about for a while. china in a position at the moment to really have a strong negotiating and into the year-end and the start of 2019? george: possibly not. we are seeing china slowing

because of various reasons. deleveraging, this move toward consumer spending rather than investments and exports. exports might actually pick up in the near term because if you do get worried about this tariffs being implemented at the start of the next year, you might front run exports. going intoweaken 2019. this has implications across all countries. i cover the eurozone. if you look at the eurozone countries, exports to china have also slowed. clearly, that is having an impact across not just china and the u.s., but elsewhere as well. nejra: some certainly have pointed to the slowdowns we have seen in the eurozone, one of the things possibly contributing to that is china. we are talking about the potential economic fallout from train. hamed el-erian has written a great -- muhammad ali area has el-erian hashammed

written a great piece about the trump-xi meeting. we have a quote here. he says -- is it still the most probable outcome? george: only just as you have seen by these forecast that we have. we do think that something will come out of this. they are going to meet. they will probably say something which will be useful and productive, but how productive is questionable. unfortunately, you can hear on one-day that he plans to do one thing and then a few days later

things changed beyond recognition. it is not guaranteed that even if there is a tentative agreement that it will last. nejra: that makes it very difficult to forecast as an economist. george buckley staying with us. coming up, oil set for its worst month in a decade. could russia agreed to cuts with opec? we set you up for the key meeting in vienna next week. when you are traveling to work, tune into bloomberg radio. this is bloomberg. ♪

it is 7:17 a.m. in london , 42 minutes away from the start of european equity trading. let's check in on the market. i'm with george buckley from numerous -- nomura onset.

there are for potential g20 outcomes set forth by nomura. dollar-yen not really going anywhere. we have had two days of strength against the dollar. you could say that the yen is holding onto that. aussie might be one to watch for monday, the proxy for risk if we get any outcome from the g20 meeting. yesterday, we saw some strength in europe. flat now, european futures , taking the same set of directionality as u.s. futures. today, we are asking the question on mliv, equities and currencies might not be moving today, but what will move most on a trade cease-fire? the dollar, u.s. equities, chinese equities? join the debate. reach out to us on your bloomberg.

let's get the bloomberg business flash with debra mao. goldman sachs is set to be facing more scrutiny over allegations that some executives dodged internal controls while helping malaysia's investment fund raise billions that later went missing. the federal reserve is stepping up its investigation of the bank and some individuals. fed does not have the powers of a criminal prosecutor, but it can sanction people involved in banking scandals. goldman said it believed the money it was raising would be used for development projects. 's morning barclays regulators to take heed of the corporate dekes market -- debt market's: angels problem. if credit quality were to deteriorate in the u.s. or europe, he says, rating agencies might downgrade corporate bonds, the lowest level of investment-grade debt. he warns the so-called fallen

angels could saturate the high-yield market. there to be a real deterioration in credit quality in the united states and europe, you start having a significant card of that -- part of that into high-yield, it does not have the capacity what is sitting above them. that is something that regulators and bankers need to be very focused on. debra: softbank has set the preliminary price for its upcoming telecom unit ipo. a level which would see the japanese company raise ¥2.4 trillion before its sales of over allotted shares. it has 34 million mobile service subscribers. that is your bloomberg business flash. nejra: thank you. next week, opec and its allies

together in vienna at a key time for the oil market. yesterday, wti sank below $50 for the first time in over a year and is poised for its worst month in 10 years. >> thanks. i'm looking at the bloomberg for a thate survey of insight into what is going to happen next week. say we willndents get a deal and they will cut production. and a lot of this is stemming from the fact that saudi arabia is pumping a record $11 million -- barrels per day. they are under serious pressure from the president of the united states. moving on, if there is going to be a cut, how much? most respondents say we could see one million barrels per day. you can see that right here. that is what many are expecting. some other options could be 500,000 barrels per day or 1.5 million or higher. we also need to talk about the

prices. wti fell below $50 per barrel. we have brent trading just sub-$60. where are they going to be next year? the majority of respondents say between $60 and $70 per barrel. i have to say just two months ago, traders were saying $90 by christmas and $100 by the new year. now, no one is saying $90 per barrel in the new year. a lot of things are changing. present putin saying he is fine with $60 per barrel. one thing that has been a big theme in the oil market this year is the president of the united states tweeting about opec. more than half of respondents say he will tweet about the cartel four times or more before the end of the year, while nearly no one is saying he will stop tweeting about the group. nejra: thank you so much. federal reserve officials signaled a more flexible approach in their gradual aterest-rate increases of

likely december hike. minutes of the november meeting say almost all participants agreed and of increase was likely to be warranted fairly soon. officials also said the language regarding expectations for further gradual hikes may need to be modified at coming meetings. let's bring back george buckley at nomura. did the market in any way overreact to what we heard from jay powell? you could argue he was really just confirming facts in terms of that we are not that far away from the lower end of the neutral range. george: we will probably be there very shortly. assuming the fed raises interest rates next month, then the upper range will fed funds be exactly the same as the lower end of the neutral range. we are approaching the level of neutral. you would not expect the fed to just keep blindly raising interest rates when we are getting to that level. when interest rates are low, it is an obvious call to raise rates.

when you are getting for the neutral range, you've got to think a lot more carefully. toh one has got to be linked where the data is and what is happening to the economic news. nejra: if we see a cause in 2019, is this going to make it more difficult for the ecb to wind down stimulus? george: we think we will see some kind of pause. expecting a rate hike every single press conference. what we are expecting is that they will slow that pace of hikes. we are only looking at two hikes the next year. month, we could see the fed scale back what they are telling us. ecb, it is a bit different. we think a lot of the weakening of the economic growth has been temporary. admittedly, some of it has been permanent.

the sameot go back to growth rates we saw in 2017. the slack is much less in the european economies. even if you see a slowdown, it is still going to be a case that the slack is baked in the cake. inflation is going to rise. all of the indicators are pointing to inflation rising. it just has not happened yet. we do see core inflation starting to build over the course of 2019. we think that will generate enough reason for the ecb to raise interest rates before the end of next year. nejra: what about the inflation picture in the u.s.? we have seen breakevens rollover. does that support the case that the fed should go slower in 2019? george: inflation is probably around where the fed would be happy with it. i think it could be one reason why they should think about going slower. there is a risk is that when you are providing so much fiscal support this late in the cycle,

you have to worry about whether that is going to prompt and even bigger rise in inflation going forward. the positive is the oil prices. nejra: should we be talking about that? george: it might not be a risk at the headline level because oil prices have come down and that will push down on inflation everywhere. we saw that in germany yesterday. ,ejra: now we have the core pc as well. george: when you are operating above trend this late in the cycle and you are seeing so much support from fiscal policy and interest rates are still quite low, monetary policy still supported, it is still below neutral, that is still very supportive and could cause further inflation. nejra: thank you for joining us, george buckley, chief european economist at nomura. bloomberg markets: the european open is up next. tune in to bloomberg radio live on your mobile device. this is bloomberg. ♪

>> good morning, welcome to "bloomberg markets: the european open." london.ive from i'm anna edwards alongside matt miller in berlin. >> asian stocks are painting a mixed picture this morning after a rally in u.s. stocks faded late in the day on thursday. the question is, can president to thetrump bring an end trade war? the cash trade is less than 30 minutes away.