nejra: good morning from bloomberg's european headquarters in the city of london. >> this is bloomberg daybreak: europe and these are today's top stories. nejra: risk assets fall after the u.s. and china call for a tariff cease-fire at the g20. is it short-term relief or the start of a battle. saudi arabia and moscow continue regular plan to markets. and u.k. politicians demand the prime minister published the internal detail behind her brexit deal.

manus: welcome to daybreak: europe. oh what a circus, oh what a show. up we went. 5% of value.d a new tweet this morning, no tariffs on cars coming into china from the u.s.. we are pumping it out. ground zero for the commodity trade. you see the u.s. to immediately see the china purchases of american products. soybeans. just president gee and president trump, it was putin and mohammad bin salman.

this market has the lowest positioning in five years. under love, under owned, we get ready for vienna. good morning. yes, you take a can, you give it a good shake, you kick it down the road, you open it up, the frog will come out. is that we are seeing? morgan stanley basically upgrading its 2019 china stocks. they see the trade cease-fire as enough to do that. others see it as a short-term fight against risk. copper of 2%. still down by double digits for the year. dollar catching the bid. the gains have been cap the little bit because we have seen house prices fall.

nonetheless you're seeing dollar weakness across the board. you're seeing emerging-market currencies rally. meanwhile, weeld, saw draw below 3% on friday. up the ghost today, a meaningful bounce of six basis points. ceo of theth the world bank from the u.s. annual climate summit. let's check in on the markets in asia. juliette saly in singapore. great to see you. tell us about the risk on rally in asian markets. canned may have been kicked down the road but asian investors don't seem to care. the msci asia-pacific index having its best gain in a month. a list like that weakness we saw in the latter part of october has been wiped out. very strong gains. about three and a attitude asian

equities. we seen asian currencies as a whole rally. on have the south korean you at a twokorean wan month high. a little bit of weakness in india coming through with economic data missing expectations. let's look at some the stocks we are watching in detail. through fromt come president saying china will reduce and remove car tariffs. you seen a big move by a lot of automakers. steel rallying on the back. also it has announced a share buyback. it's down 20% year to date. going to tax, tencent supporting the hang seng.

raise or tong to file for an ipo of $1.2 billion in value. -- manus: the data might begin seeding of the euphoria around the potential of the deal. team.he mliv how long we trace -- trade truce rally last? we will put that proposition to our guest very shortly. let's get to our first word headlines. deborah? president trump china has agreed to remove tariffs on cars imported from the united states. of the two-way pledge to halt any new trade measures for 90 days. washington has been said to raise duties on tuna billion

dollars of imports on henry first with the white house the bank to tax all goods from china. now that beijing has agreed to reduce tariffs from 40%. canada's finest member says his government is in negotiations with the u.s. over the goal of eliminating steel and aluminum tariffs. american trade deal bring stability and confidence. global have to happen into a have to sit the table to get to the best answer. our view is these tariffs shouldn't be there and it would be much better for all of our business interests to get rid of them in their entirety. that continues to be our point of view. we are in discussion towards those answers. havessia and saudi arabia agreed to extend their deal to manage the oil market in 2019 but of yet to officially confirm any new output. opec plus extension was announced after meeting with

mohammed been solid at the g20. canada's largest oil-producing province ordered an output cut of 9%. this will take effect from january. south africa's finance minister says the government is prioritizing regrading -- regaining an investment rating on its debt to revive the country's economy. speaking to bloomberg he said south africa has spoken about lowering debt and showing restraint with fiscal support for state-owned companies. >> private is number one. we have to get out of the status we are in. back to a proper investment rate. we are working hard at this. if the change will not happen because he simply want to be the case, the change will happen

because of the things we need to do. >> israeli prime minister benjamin netanyahu is facing new corruption accusations with to standying he needs trial for bribery a third case. more evidence that he traded influence for favors, something the prime minister denies. will indict him as the attorney general who still hasn't ruled on two other cases against netanyahu. at tictoc on twitter, powered by more than 2700 journalists and analysts in what order 20 countries. nejra: vicki so much. markets moving strongly to the upside after the trade truce between the u.s. and china. promisingtrump and xi to pause tariffs for 90 days. bloomberg's reporter has all the details from windows areas. >> if all you -- from windows ares. -- from buenos

standoff inchina the digital for a breakthrough or deal overshadowed everything here and when jose reyes -- in ares.ose reyes -- buenos in placece already have forced many countries to absorb higher costs and to rethink supply chains. mediahinese state reported late saturday over steak and salad agreed to a 90 day cease-fire, it was the breakthrough and for many sunday to celebrate. tariffs will not raise to 25% on january 1. they will stay at 10% for now. china for its part, agreed to start buying more american agricultural and industrial goods and also to crackdown on fentanyl, pledge hailed by president trump.

as the chinese government wants a permanent deal on trade, it's going to have to do much more. china has 90 days to show it's willing to address the troubled registrations biggest these including the systematic theft of intellectual property, subsidies for state-owned enterprises, and cyber espionage. president trump was right when he told reporters aboard and force one -- aboard air force one because many people are doubtful china is ready to abandon key parts of its economic strategy. to abandon key parts of its economic strategy. manus: that's the take from g20. our guest this morning is lena komileva, director of tsipras economics. question of the day, how long can this trade truce last -- of g plus economics. question of the day, how long

can this trade truce last? semiconductor rolling over, tragedy, korean next boards china dissipating. pmi's our weekend out of malaysia. it's not a good backdrop. how long can the rally run? lena: not at all, you're absolutely right. the short-term story is a catastrophe has been averted. we have delayed the escalating tensions between the u.s. and which has been one of the cost of a political concession from china. the key issues are still unresolved. the deficitoblem, is not going to disappear. in fact it's up to 5 billion on the year. that means tariffs will remain

the first weapon of choice for the u.s. administration going forward area the second point is the technology transfer. the next phase of the u.s. management is to increase nontariff barriers by creating on intellectual property transfer, technology-related imports and exports. and that is ultimately, yes. the third is the hegemony. -- digit worry that u.s. and eu leaders have. that china is protectionist and using liberal trade order to create a winter take all situation and take over from the u.s. as the leader of technology over everyone else. manus: to the point you make -- wera: to the point you make, have a truce but we had a big gap in the two separate statements.

have a great graphic showing the differences between the u.s. statement. when chinese statement said the 90 day deadline wasn't mentioned at all. more detail in the u.s. statement dealing with farm and energy products and less detail the chinese statement. morgan stanley is upgrading china stocks, boosting to overweight its allocation because he says -- they say even if matters escalate again, this should help bring about the end game. do you agree with that? even with further escalation? we willsuspect that have to have further escalation before we get the positive outcomes. risk, we arearket in reprieve but nowhere near the end. the point you make is probably the most important take away.

but i would like to have seen giving the structural drivers behind attention is some kind of coherent negotiations that can show us the roots of the free trade agreement. we didn't get that. china hourly rejects the u.s. position. china is a state-controlled economy. it's rained back control rather than liberalized capital. the most important fact is amongst the people there's a growing emancipated impatience. chinese political leadership desired to drive the economy towards the middle income economy is not for negotiation with the u.s.. maybe this will rattle a few of the negotiators mines. data and facts for china are evident. domestic demand is slowing.

the overall system is going to be the slowest growth in nearly a decade. are the chinese and are more pressure to do a deal in the united states? -- chinese under more pressure to do a deal than the united states? i think the fear here is that markets may be underpricing chinese risk. the helicopter view from servers has been china's concerns about a hard landing are nothing new. know, is it as you is quite a potential slowdown in domestic growth. thealso, when you look at regional breakdown of china's some regions are on the brink of negative gdp growth.

ok, that means for policy officials there be this balancing and focus away to supporting targets of growth. but the capacity for that is limited. the structural deficit of government is somewhere in the range of 4% of gdp. a percent by some measures. in excess of two and 60% of gdp. really, the ability to push on a means there are no easy choices here. no easy choices for the markets have made a choice for today. mina staying with us. coming up, theresa may faces challenges from lawmakers over the legal advice underpinning her brexit deal.

start facing the court tomorrow. and later we have the ceo of the world bank from the un's annual climate summit in poland. manus: and you are traveling to work, tune into bloomberg radio. dab digital radio. this is bloomberg.

nejra: -- manus: qatar to withdraw from opec in january according to the energy minister. what does it mean for caps on's contribution to the world production of oil? opec constitutes approximately 1.83% of the overall production. as we debate the reduction in production from opec and non-opec. this is breaking news as we had

the vienna. qatar at 1.83%. this is the energy minister giving us this news. they will draw from opec at the start of the year. let's take you to the mega wall. the biggest move and of uti in more than two years. 53.4%. no doubt about it. the total positions are the lowest in five years. under loved, under owned. that dinner with trump and she coming up rather well. and news that there will be no further auto tariffs on u.s. production. msci asia up on tech. take it away. how is your evaluation? >> the rally continues.

around 3.2%. it's close to the midpoint of the annual range. futures pointing high to how long the rally will last. 2019n stanley upgrading is china stocks fall on the trade cease-fire. 3% to the downside on friday. up nelnet 10 year yield. let's get back to oil. we talked about that red headline. cats are to withdraw from opec. let's get back to oil surging. nothing to do with this headline. rebounding from the biggest monthly loss in a decade. saudi arabia and russia extending their deal. some news out of canada. the two countries, saudi arabia and russia, have yet to officially confirm. president pidgeon said they had reached agreement.

alberto taking the unprecedented step from forcing its oil producers to cut production. let's bring in the chief economist at two plus economics. we have this rally today following we got out of the g20 from saudi arabia and russia. what going to be important as the details. among other things, the baseline. clearly the volatility we have seen shows that the market is struggling to find a level. have concerns about global growth, absolutely. the pace of global growth or deck -- projections don't really change. it's been stemming from a lack of visibility. meansthing, the headline that visibility will not improve.

i want to jump in and keep our viewers abreast of the lines coming through from qatar. this is the potential. qatar says they are not committed to the opec agreement after equities. they might commit to whatever this agreement is that we would have coming through on thursday and friday. the question is, what do we need? to put in context or anybody that might be unaware. there is this isolation of qatar by the uae, by saudi arabia. this coalition of freezing of qatar. theiresire to drive efforts to develop their own natural gas production. the question we will be asking ourselves as we go to the next couple of hours. it certainly would strike me as being a political pushback by qatar on to the rest of the gcc

members. that's the debate. let's take it back to you. it looks as if trump wants $50. mohammed bin solomon $170 in this. wants $70 in this. how important is it that we stabilize the oil prices in a tighter bandwidth? lena: it's very important but it's extremely difficult. so many variables. oil is the litmus test of the transition we have seen in the global economy this year. down in ao slow of the shift from negative real interest rates in the u.s. to dollar deleveraging in emerging markets.

this is across the credit spectrum. all of that will feed into the markets desire to hedge volatility and is the kind of driver that if anything, since we have geopolitical risk, we have a slowing global growth level led by china which is difficult to manage. we are talking about long-term secular forces. declining productivity group -- growth. ant financial tightening. she stays's -- nejra: with us. as the un's annual climate conference kicks off, we speak to the ceo of the world bank. if you want to step away from us and you are traveling to work, tune into bloomberg radio live on your mobile device or dab digital radio in the london area. this is bloomberg.

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nejra: -- manus: the oil story just trump's trump. cap are to withdraw from the opec cartel. qatar to withdraw from the opec cartel. be changingo longer anything from january. they will withdraw from opec and they will not be committed to opec agreements after exiting. that's according to the energy minister. is this to do with gcc politics? is it to do with their own way forward?

brent perhaps has a bigger constituent part when talking about qatar and the gcc. the devotee i market, you can see, is very under positioned. opec and non-opec potential agreeing to cooperate next year. erin clark is our energy editor in tokyo. this is really quite stunning. major fracturest in opec. yeah, it's pretty significant. basically qatar says their withdrawing from opec. there are very few details. another thing they said is they want to focus on gas production. qatar is also the world's largest exporter of natural gas. this is to look at contextually what is going on with opec. over the weekend, we had the crown prince of saudi arabia and russian president vladimir putin agree to extend this agreement

to manage the oil market which essentially means they are very likely to reintroduce that next year. qatar has been withdrawing and as of generate first, they're toing they won't be beholden any opec rules or cuts. it's quite an interesting is situation though the details are still emerging. thank you so much. let's check in on the markets from around the world. london, it's bloomberg's dani burger. the indian market seems to be a tail of three charts today. take us to the details. >> sadly we are not doing as well as the oil markets would support. week wasrally and last very strong. if you look at the numbers

today, it's very flat. one reason could be the bounceback. it has an impact on the currency. believe that the indian rupee is strongly reacting. i see no other reason then decide the factors been a bit of a rally. getting a bit of support to markets, are two factors. one is the kind of market we have and the others buying private sector banks. those banks were not doing well for the better part of september and october. they are bounced back very smartly. the banks are doing really well for themselves. ,n the last when i want to make not just drug makers and pharma. suggesting that a trading probe should be opened up. that has led to a sharp downtick in the stock.

7.58%. more so along the technical parameters. those the three charts will be talking about today. manus: -- nejra: you are looking at chinese stocks. china index boosted to overweight its allocation. that itkes sense received an upgrade just recently. this big rally not only has it msci, up to 77 16 and the it's now broken past its 50 day moving average and just with a stone's throw away from the hundred day moving average. this is a really impressive show of momentum for the index which earlier in the year had a hard time holding above its 50 day moving average on the red line here. this is a big pickup. it can indeed breakthrough that

100 day moving average. the other market which is a painting is oil. higher than $53 a barrel. that's a more than 5% increase. qatar stepping out of opec. oppen's traders -- options traders are really pricing and a lot of volatility. look at how it really surges here. this is the trade price of geopolitical risk. this in the past. the options pricing does tend to be a leading indicator. this would indicate even though volatility is happening to the upside, we expect more pricing to calm. nejra: thank -- manus: thank you very much. let's get first word news. right here in dubai. president trump said

china has agreed to remove tariffs on cars imported from the united states. washington had been set to raise duties untutored billion dollars of imports from january 1. with the white house debating whether to tax all imports from china. has agreed to reduce or remove tariffs from the current 40%. the relationship is very special. the relationship i have with presidency. i think it's going to be a primary reason why we will probably end up getting something that will be good for china and good for the united states. france's president has held an emergency cabinet meeting after 400 people were arrested in paris. movement, yellow vest what began as a protest over fuel taxes has grown into general anger at higher living costs.

there is also violence outside leon. and in other regions. has canceledsident -- has gone against or was he died with a post on facebook. this follows his five-month absence will country receiving medical chairman from abroad rid he said, i can assure you all this is the real me. i'm still going strong. global news 24 hours a day on air and at tictoc on twitter. however more than 2700 journalists and analysts in more than 120 countries at -- countries. nejra: thank you so much. activists and scientists have gathered in poland for the united nations climate conference. it will seek to transform pledges made in paris three years ago into an international bulwark. bankat event, the world

announced it will double its five-year investment to fight climate change. is for selena -- is the ceo of the world bank. welcome to the show. thank you so much for joining us this morning. this $200ounced billion over five years for climate action. 2025funding for 2021 to includes a significant boost for adaptation and resilience. does that mean that you're concerned the climate targets will not be met which is why you need to provide money for particularly poor countries to be more resilient against the impacts of climate change? >> we are convinced that the climate story is a developing story. that there already are climate impacts that are affecting the most affordable

countries and the most horrible people. severelycting them so that we ought to act to build a resilient future. our conviction is, we have to strongly address the causes of climate change but we also have to deal with its consequences. placing in we are our public sector, mitigation and other solutions on equal footing. it is not new that we have to adapt to climate change. throughout our history we have been adjusting to differences in whether, different climate circumstances. is the scope of adaptation we have opted to pursue. we are definitely doing it.

a very warm welcome. when i read doctrines from the world bank and the hopes and aspirations of the ceo like you, the media question i ask myself is, how will chris selena achieve are targets without the u.s. on board? shift from theny united states in terms of climate change? kristalina: we are seeing steps in climate action everywhere. it is a matter of good business sense also for u.s. companies. cities seen that many and spaces in the united states have stepped up with mitigation and adaptation actions. i am confident that the human race will have the smarts to recognize that for our children

and our grandchildren, we are determined to act. that we at the world bank are doing something. toething very important boost this action. it is the work we provide two countries that show that climate ation is not necessarily cost. it can be a tremendous benefit for economies. nejra: i'm sure you follow the developments in buddha saris over the weekend -- in buddha's aries over the weekend. you think it will become more difficult to have real coordinated efforts on climate change prevention?

it is quite remarkable how strong the message is on climate action quote thet want to primus or of jamaica who clearly weights around climate is behind us. it is action that we have to follow. the comments that came around the table were individually we cannot win this fight. collectively we can do it. two very important points. one on stepping up mitigation. the understanding that we are in the new climate economy. generatedly have tremendous benefits for investment opportunities and jobs. and we are faced with a critical uncertainty to be resilient to

more shocks that are to come. alsoresilience building is in positive development story if we do it right. voices around the table in buddha saris echoed that message that we are the first generation that has to live with the consequences of climate change and the last ones that can do something about it. year -- manus: you are in that room. what was the commitment from the u.s. and russia? if you had to go around the room and judge the commitment, what with the commitment of u.s. and russia in terms of the responses? what we have seen is that in the end, this g20 summit was successful to come up with

the communique. directions in collective action. while we all recognize that not everybody is on exactly the same page, or exactly in the same place on the page, there is that wey a willingness as the international community of what we do. let me tell you this area and we at the world bank are very often in a seat seen the impact of climate change on the most affordable countries. always see in small island economies or in the horn of africa is so category. -- categorical. have 100 million more people in extreme poverty by 2030 unless we act to mitigate

but also to adapt. thank you very much for joining us. cr the world bank. join us from poland. let's get back to the political hubris in the united kingdom. theresa may faces another grueling brexit battle. politicians from all sides are calling on the prime minister to justify the divorce that she has agreed with. they are demanding the government publish the internal legal advice underpinning the accord. the opposition party has --naled it will let's bring in the chief economist the tsipras economics. what is most important? a possible defeat and therefore

no-confidence motion? is it the size of the defeat we should focus on if that is your base case scenario? i'm always looking to the endgame and the in game in my mind is that the eu will want to negotiate with dashes who the eu will want to negotiate with next. they want to avoid a hard border in ireland, crashed brexit because that would be damaging for you industries. the eu is not a single economic area. nobody wants a disaster brexit scenario. the day after the u.k. parliament votes on the deal, the eu will have to make a decision whether they want to continue to negotiate with theresa may or talk to boris johnson. or really allow for a delay, article 50.

i think ultimately the endgame peakis for a hard brexit is optically it decreases the chances of a deal. it demonstrates how may objections there are in the u.k. parliament. a weak minority government in a hung parliament means a hard with some kind of a diluted backstop and no agreement on the future relationship. let me show you this chart. options on demands for big swings in sterling. as an economist, you said you look to the endgame so what is the endgame for sterling? lena: i suppose the endgame is will we have a negotiated brexit , withdraw agreement with

diluted backstop and a harder brexit at the end of this are we going to have a minimal skeletal agreement? i've been telling my clients this year to going to dollar cash the coup date. get out of exposure to financial volatility and we are going to be facing that in the u.k.. one thing we have not been pricing in his there is no central bank input. there will be no bank intervention in the unmanaged brexit. that is risk negative when you think about it. we are probably underpricing inflation risks. comenflation that could from the back of this volatility. that, together with the

end of frictionless trade to the meanse endgame scenario we are still unprepared for the stark reality that sterling will bring. manus: thank you very much. lena komileva stays with us. coming up, goldman sachs and jpmorgan stick with their forecast for four hikes. what that means for investors. this is a conversation you want to stay tuned for. vice-chairman of the u.s. federal reserve joins the bloomberg team. 11:30 london time. this is bloomberg. ♪

nejra: let's check in once

trending across the bloomberg universe. drones are being used to replant trees in california where wildfires earned more than a million acres. largest water network is teaming up to expand the use of whatsapp in the country and create a new massive customer base. a fresh battle for theresa may because demand for publication of the government's legal advice behind her brexit deal. on news that saudi arabia and russia would extend their packs to manage the market area and top story, president trump says china has agreed to reduce and remove tariffs on american cars from 40% currently. goldman sachs and jpmorgan are sticking by their forecast of the federal reserve will raise interest rates four times next year. what impact will this have on

asset classes? join us now is cristoph schon from axioma. he has conducted historical research on this question. great to have you with us. continueeing equities their gains because of what happened at the g20. let's start by talking about the fed. given the research you have done, how much does the equity rally have go from here in the u.s.? cristoph: i think it's got some way to go still. suggestsl evidence equities can still rally. what we are seeing is that towards the end of the cycle, the curve tends to invert. it's something markets are very concerned about. in particular, if we are getting those four hikes, this a good there will be a slow in

the curve. but equity still have some way to go. are we as the neutral rate? sunday show said yes. would you agree? are we at the neutral rate with one more hike? that's a difficult want to say. even jay powell when he said this, there were so many interpretations of the market of what this actually means. onre's a debate going whether this was just one more hike or three more hikes. it's a lot of discussion going on. nejra: what does this mean for

yields? we saw the 10 year yield dropped on the risk. currently we are at the level of the 10 year yield. three to four hikes. in the best case scenario, let's assume the u.s. economy keeps going. i think the 10 year yields could be a bit higher. if you were to see a slowdown in the curve would invert, and we could easily go 5275 basis points lower than the current levels which is what historical evidence suggests. we are one point away from inversion. .ristoph schon from axioma

stocks soar in asia and the very latest on how markets are reacting to the u.s. china trade truce. join us on radio. ♪

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simple. easy. awesome. click or visit a retail store today. this is "bloomberg daybreak: europe." nejra: these are today's top stories. manus: risk assets soar after the u.s. and china call a tariff cease-fire the g20. is it short-term relief of the start of a year and bounce? .atar leaves surges following a deal between rhiannon moscow. on may.ssure

u.k. politicians demand the prime minister published the government's internal legal advice behind her brexit deal. nejra: we are just under an hour away from the european equity market open. it looks like again we have seen in asia with u.s. futures moving higher will be repeated with the european market opens. tax futures up 1.7%. up 1.8%.res a rally across risk assets. it's all was as if you take a can, you shake it up, you might kick it down the road and the frog comes out. is that what is happening in markets today? u.s. equity saw strong week. we are up some 3% on the year.

what is interesting is if you look at u.s. futures, nasdaq futures showing the strongest gain of the three u.s. benchmarks. interesting given the lack of details. we have not had any detail on anything like ip, technology transfers, or anything like that. tech stocks have been leading the rally in asia as well. that rally is quite stunning. how does this all transfer to the bond market? it's a huge week. without testimony happen on wednesday? the funeral will take place. will markets close in capitol hill will delay? this is the state of play on the markets.

bonds seeing yields rise. to that end, jay powell will attest to the jobs data before the end of the week. btp's are rising. the pm willing change. the prime minister taking over the chief negotiating role. that may change the inflection point. billion hit the market. billion hit the market. it's the beginning of the shift in the curve. the skit to juliette saly in singapore with the markets. juliette: we've seen a strong

session coming through. msci closing higher. session inbest around a month. now back to level since we haven't seen since mid-october. we saw that huge selloff towards the latter part of october. today's gains adding to the overall positive. australian market closing higher from around 2%. most of the emerging markets looking good part from india which is down by about 0.1%. crude pricesgher way to things there. going today are about 145%. let's have a look at currencies. we been talking about the aussie being a proxy. it's risen by about 0.9%. if you look at emerging-market currencies, dollar weakness helping them. won at a two month high.

chinese currency rising as well. thea stronger fix from pboc. but we have seen weakness coming through the indian rupee. pre-much the only asian currency under pressure today. we did have some slightly weaker than expected data out of india. also higher crude prices. nejra: how long is this trade truce rally going to last? is it one day, it's a 90 days? we checked on your bloomberg. going to bring you some breaking news. rpc is a design in plastics company, using -- in its talks with pain. they mutually agreed to terminate.

it is continuing its talks with apollo. the talks remain ongoing with apollo global management. a potential offer and also a deadline extension saying the deadline extension is happening to the 21st of december. no later than 5 p.m.. let's get the bloomberg first word news. >> president trump says china has agreed to remove tariffs and cars. washington had been set to raise duties onto to billion dollars of imports. cap now says beijing has agreed to reduce and remove tariffs from the current 40%. members --nest minister says his government is in negotiation with the u.s.. bloomberg,sitely to

he said the north american trade deal brings confidence. be sitting have to at the table to figure out how to get to the best answer. our view is these tariffs should be there. and would be much better to get rid of them in their entirety. second use of your point of view. we are discussion to work towards the answer. >> france's president has helmet emergency cabinet meeting after former people were arrested in paris. what began as a protest of fuel ates has grown into anger higher living costs. there was also violence outside leon and in toulouse. south africa's finance minister says the government is getting rid of debt

to revive the economy. they have said south africa is focused on lowering debt and showing restraint in's fiscal support two-state on companies. >> private is number one. we have to get out of the status we are in. investment.oper we are working hard at this. the change will happen because he wanted to be the case. -- won't happen because you want it to be the case, it will happen because of what we do. pound on and 2700 journalists and analysts in more than 120 countries. manus: thank you very much. qatar will withdraw from opec on the first of january. that's according to the country's minister of state.

the decision comes as opec prepares to meet this week to review without book. this after saudi arabia and russia reaffirmed their commitment to manage the production to balance the oil market. our senior oil and gas analyst joins us. you are just showing the amount, the contribution of qatar to opec. if there is ever a magnificent example of qatar first, this is the personification of that. they have their own interest and are moving on from opec. 2% ofs only about production. it's not a huge amount of volume. but a significant step of moving out of opec. it's going to have a huge impact in terms of oil prices. muchs in terms of how

supplied as opec have to cut to balance the market up. how difficultly rest of opec make it for saudi arabia to cut in vienna? i think with qatar moving out, it's all the more reason. all of this is shocking. this is something that has been brewing for a lot of time. we seeing the decision-making has become very concentrated with saudi reading it along with russia. it has been influencing the decisions in terms of supply of crude oil. if you look at the increase in oil production in the last six months or so, russia and saudi loan have increased supply by about 1.4 million barrels a day. that has led to a correction in oil prices. the smaller member nations have not been able to do that.

they have not been able to increase production. and because of the collapse in oil prices, they have had to suffer on low revenue. in a way to has been a growing discontent of the smaller members not been able to control policy. nejra: thank you so much. equities in asia have been soaring along with european and u.s. futures after the u.s. and china signaled a trade truce at the g20 meeting. president trump and she agreed to policy introduction of new tariffs for 90 days on negotiation continues. elliott. is a senior currency strategist. is a seniorad currency strategist. has a key support been taken away from the dollar? elias: i think in the short-term

you will have a bit more of a relief rally. you have some currencies like the canadian australian and new zealand dollars with more upside. that's across the board especially if you add to the fact that the fed is acting little bit more cautious. in the near-term you have the ingredients for further near-term dollar weakness. manus: let's talk about how that impacts. let's start with the yuan. we are seeing a moderate strengthening in the one. people are questioning just how robust it is. the expect further sink -- strengthening in the one if this goes through? yuan if this goes through? elias: i think that is true. this is a positive. of tension the risk

escalating and that can be ruled out. first of all, you have the fact that chinese economic ambitions clash with the u.s. economic interests. specifically the u.s. government is concerned by the way the chinese government has taken to achieve their stated objective of becoming this global dominant in the high-tech manufacturing industry. inquiry intellectual property rights are putting trade tariff barriers. controlling key commodity markets. he will take probably more than a 90 day truce and perhaps more volatile trade talks for the chinese government to water down these ambitions they have.

nejra: we've got this rally across risk assets today. some already calling the intuit anything could happen between now the end of the day. what your top tactical short-term trade? elias: i like the australian dollar. it's an economy that is growing at potential. there's a small current account deficit and it's entirely financed by foreign direct investments. fact that you have the rba raising interest rates in november. these are all positive factors that will favor the australian dollar. another pretty important factor, the australian dollars cheap relative to its importance of trade. in terms of the long-term

structural trade, i would like to be short the u.s. dollar. i think it will weaken starting in 2019. that's his other major central remove accommodation in the fed is getting close to the end of the tightening cycle. this relatively modest -- relative monetary policy convergence means the path of reason -- least resistance will be for a lower u.s. dollar. manus: i think it just are the bucket with everything in it. the mexican peso, south african rand, these are the em personified. the relief trades coming through. in terms of em, where is your biggest desire for exposure? in terms of the em, you want to be countries that have relatively low current account

deficits and surpluses. favorable monetary and fiscal backdrops. i think the mexican peso fits a little bit so these criteria. financed byy long-term stable for investment. positive real interest rates with central banks. the risk on the trade front with nafta is essentially abated. peso. the mexican plus the fact that crude oil prices have a bit more upside and opec members cut crude oil production. he stays with us. theresa may faces a challenge from lawmakers over the legal advice underpinning her brexit

deal. later he speak to the european commission vice president. don't miss that interview just after 7:30 a.m. london time. if you're traveling to work, we are never far. bloomberg radio is on your mobile device, dab digital radio. join us there. this is bloomberg. ♪

manus: it's just now 7:20 a.m. in london. just under 40 minutes away from the start of cash market trading. you're looking at the oil market. rallying the most in two years.

on the mega wall, you're seeing the lowest ownership in five years. under loved, under owned. tuan --st tweet from from trump, autos will not be subject to import duties by china. asian stocks trading higher. will there be resolution between the u.s. and china. that is good for the market in terms of sentiment. volatility, it's on the way. good morning. we saw a strong rally in u.s. equities last week. best week since 2011 after jay powell in the fed and if you watch the technicals, u.s. equities look poised to avoid a so-called bearish death trough. you see futures rise on the s&p and nasdaq. also look because you will see a higher open in europe.

futures strongly up. it is a risk on rally. we are seeing this bounce following what came out of g20. year yield dropped below that key 3% psychological level on friday. back about it. em has been rallying strongly in today's session. let's turn to south africa. the rand posted its best monthly performance against the dollar this year in november. ministerry's finance says he is prioritizing a better credit rating as part of his plan to revive a stagnant economy. you close with bloomberg. -- he spoke with bloomberg. >> private is number one. get of the status we are in. back to a proper investment

rating. we are working hard at this. happennge will not because we simply wanted to happen. it will happen because of the things we need to do. >> what you need to do to recover the investment grade credit rating? policiesd to establish that have credibility. we need to demonstrate action around state owned enterprises. we need to demonstrate action around fiscal stance. when he to show action that we are taking steps to reduce the debt that is accumulated. steps toeed to take show we are igniting growth. , the this practical things rating stages will look at us as

these folks being back in business. >> you are involved in negotiations. what were the stumbling blocks? i think one of the interesting things is in the trade issue. reinforce the to multilateral system of trade. rules-based, clear. at the end, the communique captures the essence of it very well. i think it's good for the total economy. the age of protectionism is really over. have open and integrated economies. openness toirit of

go through the g20 system and the global system. manus: the africa -- the south african finance minister speaking exclusively to bloomberg. let's turn our attention back to the u.k.. theresa may faces another grueling brexit battle this week. politicians from all sides calling for the prime minister the divorce terms she agreed to with the eu. they are demanding the publish its legal advice on the court. let's bring back in elias haddad . if we talk about the pound, this is fascinating. it's a punchl say up from the markets that will force the politicians to do a deal. the pound is already the second worst performing the -- in the g10currency space. already a battered institution. do you see much downside in the pound if they don't get the

brexit deal they haven't had next week? elias: if the vote doesn't go through in the brexit deal doesn't go through parliament, the only way at this point to unlock the political gridlock would be through a new referendum or new elections. does pan out,that we will see a knee-jerk upside a pause for because either a new direction -- election a referendum are still relatively tight and inconclusive, it will come under renewed pressure. on the other hand, if the deal does go through, expect the pound to rally towards 140. the bank of england probably ratchet up its interest rate hikes and normalization process. in speculators will unwind a lot of their positions. nejra: thank you so much for

joining us. great to have you with us. that is it. the european open is up next. risk assets today. oil spiking as well. this is bloomberg. ♪

>> welcome to bloomberg markets, they are in open. mattnna edwards along with miller online site berlin. the u.s. and china declared a truce. oil is surging and they will address a glut in global supply. the cash trade is less than 30 minutes away. ♪ anna: trade