>> good morning from bloomberg's headquarters in the city of london. >> here are today's top stories. >> wall street takes a beating. higher afteredged positivity from china on trade. brexit endgame. theresa may loses three key votes in parliament. day one. yet to reach a deal on production cuts.

♪ manus welcome to daybreak europe. you have seen a number of american markets close in respect for mr. bush, the former president of the united states of america. you are looking at 10 year government bonds collapsing through the 200 day moving average. that is the critical point. that relationship between the crumbling equity market is back with a vengeance. of,thing you should be wary we saw an absolute drop on yields by 48 basis points.

are seeing a huge squeeze in these bond markets. this is premature to presume the cuts are done. we are bringing you the breaking news. there is oil over the past few days. trump wants 50 bucks. the saudi's want $73. the russians are happy with the $65. the next few months will be critical for this oil market. for what is happening with equity in bull markets. i am so glad you brought up that correlation between falling bond yields -- yields and equities. dow, dropping almost 800 points. up andare waking

searching for reasons, you are not alone. the inversion of the yield curve in this some parts of it has to do with concerns about global growth. so many questions. u.s. futures are pointing a little bit higher. we have had positive headlines from china on trade. the aussie dollar has been whipsawed around a little bit. this is the worst-performing g10 against the dollar. we are seeing dollar strength in today's session after two days of weakness. this was after theresa may lost three key votes in parliament. what does this mean for the future of brexit?

most of the markets are closed out of respect for former president george h.w. bush. we will have coverage at 10 p.m. new york time. let's look at coverage for the markets in asia. an extraordinary session in u.s. markets. financials taking a big hit. what is the picture looking like in asia? >> the yields are down. curves are flatter. when you look like -- at a market like australia, you can mention the aussie dollar. the lowest levels in about a year. 80% of large caps are lower at the moment. utilities are following right now.

within the damage you are seeing here, have a look at tech. the apple story is the other story. 2.5 did -- 2.5% declines here. one of the stocks is what you guys want to be watching on this report. i see the chinese carmaker here. the largest deal this year. david english with the very latest on the markets from hong kong. we have our mliv question of the day. you can pick your choice in

terms of who the grinch is. by, egg nogstanding in hand. let's go to the first word news. a: theresa may has lost a series of votes over brexit in a dramatic session in the u.k. house of commons. lawmakers voted to give parliament the power to shape the final brexit settlement. -- prime minister will minister was also defeated over the publication of secret government legal advice. the parliament will vote on whether to accept or reject the withdrawal agreement on december 11. think what itto what it would mean for them to come out and vote for these first time in decades in many cases, if their decision

were ignored. debra: special counsel robert mueller is recommending no prison time before michael flynn. he cites substantial assistance from him in the russia investigation. a federal judge will sense him on december 18, more than a year after he pleaded guilty about lying to the fbi about contacting russian officials on behalf of trump. calls were reiterated for the and a penaltyato government after the seizure of three ukrainian ships from russian waters. >> i hope international pressure

will help me to give back my 24 soldiers. >> leaders in washington say a classic cia briefing has convinced them the crown prince of saudi arabia played a role in the killing of journalist jamal khashoggi. to consider a case against the crown prince, it would convict him of murder within half an hour. theyork city has become first place in the united states to set a minimum wage for lyft and uber drives, marking the first time lawmakers have imposed salary rules on ride-h ailing companies -- just over $17 an hour after expenses. global news 24 hours a day, and at tic toc on twitter, powered by more than 2,700 journalists and analysts in over 120 countries.

>> thank you. the biggesthas seen slide in almost two months yesterday, with all three major indices closing down more than 3%. said its trade meeting with the u.s. at the g20 was very successful. question ong the mliv. name the grinch that stole the santa rally? rick, what happened on wall street yesterday? >> growth expectations have been priced down. in terms of interpreting one-day moves, it is very difficult. >> a very good morning

2-year-old. i think we went from rational exuberance, to a bit of a reality check. we saw volatility spike and traditional relationships come back to life. do you buy volatility for the next three months? >> we have portfolios where we can buy volatility. it is not the reaction we are having right now. we are continuing to be well diversified. diversified. but we are also buying insurance. goldman has had a lousy 2018.

it has been harder to get returns across assets. jpmorgan says cash is better than equity. this? the question is whether the concerns are substantial enough and justified by the facts. it strong enough to justify .he equity valuation we think we are paid enough to take the equity risk. a number has said they quite like taking more china risk. that?o you say to

what is the call on china? >> china is cheap. emerging markets are generally cheap. it is too early to make that big bet at the moment what we have this cloud of uncertainty hanging over tariffs. there is enough uncertainty to hold us back from that value trade. we have been searching for reasons for what has happened in markets. this is perhaps why equity have re-parked prices over the past 24 hours. is hearkening back to 2015 and 2016.

what does that mean for your bullishness on risk assets? >> we are concerned about china. hardave always had a non- landing expected on china. does depend on getting a trade deal done. i think fixed equity markets are telling you that investors are very concerned about growth prospects in 2019 and beyond. >> we will dig a little bit deeper into that. the bond market is repricing on rates. coming up on the show, to cut

or not to cut? global oil hangs in the balance. russia and saudi arabia gather for a crucial set of talks. join us. look out for our exclusive interview with a ceo. we will bring you the best of this conversation throughout the day tomorrow. to bloomberg radio, live on your mobile device in london. this is bloomberg. ♪

>> let's give you a quick check on the markets. a temperate view of the world from the markets.

it has been the worst year since 2011 for this stock. this is really driving the losses and asia. we will really begin to understand what shifts the dollar market for oil. for itstill on track best week since september. what happened on wall street yesterday? was it the market repricing growth expectations? hit.w a benchmark taking a financials are coming under pressure. the equity markets are playing catch-up to be bond markets. we have u.s. markets closing for the funeral of george h.w. bush. we did see a flattening continue on the 210. may, losing three key

votes in parliament. let's get the bloomberg business flash. >> to cater has received shareholder approval for its $62 billion acquisition. takeda has received shareholder approval for its $62 billion acquisition. shire holders will vote later today. jpmorgan ceo says fourth-quarter trading revenue is on track the roughly equivalent for the same time one year ago. banks budget for technology spending will continue to increase and the bank is continuing to improve its efficiency ratio. a new phone with a camera will take three-dimensional pictures.

princeton, it will be announced this month. accuratelyogy can measure distances by bouncing light off services. >> thank you. is retreating after the biggest two-day gain is since june. minister isn'ty sure if the cartel will stabilize the oversupply to the market. joining us now from the, is our reporter. great work on the interview and great to see you. >> good morning.

the countries can really put their cards on the table. these are really the two big leaders of the group. delegates have told us there are negotiations involving how much they should cut and how they should share the burden. these are things that have not been decided and this is really coming close to the wire. i also asked him about the one million barrels a day. he was really pouring some cold water on exactly what kind of

deal we would get. >> one of the obstacles to is the cut deal done the russians and opec might take. >> it was telling when they said, we will not bear the burden alone. they were looking for a bit more of an equal playing field. russia does not really feel the need to cut as much. putin have said they are ok with the price at $60. where we are now. get a deal done for

the saudi's, everyone needs to be on more equal footing. it that is why this cut is so critical. they are coming so close to the deadline. we may have to have a call with putin ton the nbs and get something done. >> we have our guest host this morning. i am struck by what i see as a butterfly market. the russians want a goldilocks. where is goldilocks for you, from the equity side? >> we don't want an uncontrolled

slide in either direction. a challenge when you think about the emerging world. you can over interpret the data as well. people think it is not a supply issue, but it is a demand issue. think this is appropriate in this case. does this actually support your growth story and your view on equities we were talking about earlier? >> i don't think it supports the growth story. it signals problems on the growth side. the u.s. has enough momentum and to be will reach a deal. we will have recovery in emerging markets next year. >> i am looking at more of the relative value.

are -- areelds 5.66%. 6% on royal dutch shell. do you think the kindness by ceo's is bearing fruit in the oil market? when you think about integrated oil, you have to think about the very long-term cash flows and the decisions people are making. you have to think about whether people are making good decisions for shareholders. you have to think about boosting the return on investment capital. some of the decisions that were

talkingeral years back, about the most expensive projects were smart in the long run. interpreting them in the short run is very hard. wondering what the oil prices are doing week to week is really not what those oil management teams can do. >> what is the biggest question you want answered? >> a lot of this is about geopolitics. in light of what many see as a divided world, policies have become more nationalistic. can you get across the geopolitical divide that results in more stability? >> stability is the golden word

in vienna. stay with us. we will talk brexit next. this is bloomberg. ♪

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leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. u.s. markets yesterday has moved through to the asian session. let's check in on the markets around the world. dani? dani: i am starting off with the hang seng. it is one of the worst-performing regions in asia. it is down 1.7%. the selling might not continue. i have here are index on the hang seng.

a central uses a moving day indicator to get this measure. this has reached its highest level since january. this is down some 1.8%. there is not much conviction in that selling. other big market story is the treasury's on the u.s. market close. you can expect a immense pressure as soon as it is open. we have reached a 200 day moving average -- moving average for the first time in weeks. followers,tic trend this is a really important indicator. been ferociously starting to shorten u.s. treasuries. you can expect that pain to continue. -- runks for the run down. let's go to mumbai.

asia is in the red. >> yes. we spoke about the bank of india decision today. the u.s. markets have started off half a percent lower for each of the key market indices. the currency is a bit muted. there is the crucial r.b.i. decision today. the bond markets have gained some steam. breathwaiting with bated for the next couple of hours. we have been talking to people out here. don't expect the r.b.i. to believe change the stance too much. >> thank you.

as we approach the end of the acid forecast survey is now open. where do you think assets will end the year ahead? we want to hear from you. ballots go to the first word news. -- let's go to the first word news. has described as trade meeting with the u.s. is very successful. will start to implement a specific items where there is a consensus and will push forward trade negotiations with the united states. there was no mention of u.s. threats to raise tariffs. special counsel robert mueller is recommending no deal time to transit and trump -- two president trump's former national security advisor, michael flynn, more than a year

after he pleaded guilty to lying to the fbi about contacting russian officials on trump's behalf. a classified cia briefing has convinced republicans in washington that the crown prince of saudi arabia played a major role in the killing of jamal khashoggi. bob corker said if a jury were to hear the case, they would convict them in half an hour. top energya's official has made it clear that an oil deal remains unresolved after the russian president and the saudi crown prince pledged to extend cooperation. minister energy mr. -- said the market is caution to

all members of opec and that they need to come together for a cut to go ahead. there would be a million battles of oversupply. the road to cross is whether all countries are willing to come on board. global news 24 hours a day, and at tic toc on twitter, powered by more than 2,700 journalists and analysts in over 120 countries. >> thank you very much. may is locked in a power struggle with the house of commons over brexit. parliament now has the potential

to decide on a business plan b. joining us to put this all together is our government managing editor. thank you for joining us this morning. what was theresa may's biggest the last night? the one that no one could -- could quite see coming. the parliamentary endgame will hit reverse these heavy losses. that could be devastating. it puts the power to parliament. does this mean that brexit

isn't the deal or no deal that theresa may promised? >> it could go a number of ways. it is looking very bad for her. there is sort of a silver lining. this is the best that you can do, given the circumstances. she could say to the brexiteers is that your choices are this deal, or you will have no brexit. there are two sides to this. interesting. is

the state of play was really lambasted. this is worth a read, the op-ed in bloomberg. what does this mean for next week's brexit? >> it seems like the next step would be a vote of no-confidence. then we are in general election territory if she loses the confidence vote. ,he could be entirely powerless in power, but not in power. >> thank you so much.

let's turn to the new york fed president. he says the u.s. central bank is to adjust itself after he was asked about expectations for only one hike next year. chance the a 50% economy performs faster or inflation picks up a little more than we expect. we are in a good position to adjust to that. we are in a good position to adjusted to the path of our interest rates. >> that was the new york fed president speaking at a press briefing. our guest is still with us. shows the market is now pricing in cuts from the fed in 2020. speak we of the fed

have had, i am getting the fed is just retaining optionality's. the bond market is telling a different story? this has really collapsed very significantly, the 3.3 peak. it is correct they have told a little box. the tools are not easy to find. you have a trillion dollar deficit and reasonable growth. it is true they got some symmetrical optionality's. >> i want to get to the market action.

there has been no letting up in the short positions. this is a crunch. ais is a short squeeze, with moving average on the yield yesterday. billionst is closing of dollars worth of short on bonds. is this worth a capitulation? >> in what sense? >> in terms of short covering. we see the equity markets under pressure. we see the bond markets dropping yields. the market has been so short.

i wonder if there is this kind of turnaround in the positioning and if that is what we mean my capitulation? there are tens of billions of dollars behind that trade. i think real yields have peaked. mean we are expecting that kind of short covering capitulation on the long end. when you get an opportunity for a rally like that, you can maybe see it overshoot. this is something that is going to spill over into expectations. regard thee to -- bond market as an infallible measure of economic growth and it is not infallible. >> you were saying you get paid

to take the risk and equities. there is a position for the cycle end. you are staying focused on quality. reason you are looking at high yields to do the cycle, or that you are not paying enough to take the risk? the most loosely issued bond in high is something we would have to recommend. it is a bit of a movable feast. writing the one your outlook in the markets is difficult. coupled with this kind of end of the cycle field, we have gone up in quality. this is the short end of the yield curve. if you would at the flattening yield curve, we will couple that with an -- an attractive

spreadsheet at the short end. interesting an playground, to couple with that long equity position. >> thank you very much. up, ukraine asks for a greater nato response against russia. bring you our exclusive interview with the ukrainian president. watch out for another great exclusive with the ceo of rbs. we will bring you that conversation all day tomorrow. tune in to bloomberg radio. listen live on dab digital in the london area. this is bloomberg. ♪ >> we are in our to buy studio.

>-- dubai studio. sayse ukrainian president the clashes of his country with russia are reuniting -- we igniting tensions. he spoke in an exclusive interview with bloomberg. >> i want to thank all the leaders of the world for supporting up -- supporting us in this difficult time. the statement of the united states, the statement of the , is definitely the strong support of ukraine.

the western partners have made a strong statement to impact the situation. we should have a donation to act. that means to not begin war. we are a country of peace. we want to protect our integrity. the new block of sanctions would other presences in the black sea. this is the new type of war, the hybrid war.

there is a disinformation campaign. they have been trying to attack these different countries. there has been an embargo on buying ukrainian goods. there is the use of military force in independent countries. have the ports opened? you might be able to end martial law earlier. what is the status? we are the objects of

unprovoked aggression against the russian federation. we are not covering any smokescreen about their presence. we have intelligence information we share with our western partners about the russian alongside the ukrainian-russian border. i think that there might be a quicker reaction if that makes a decision.

to have a break for freedom and a right for democracy. -- right for freedom and democracy. if we postpone the presidential election, there is only one winner in the situation, and the name is mr. putin. we will increase the capability of our army. there is the democratic rights of the ukrainian people. that is why i ask the parliament to vote on the date of the 31st of march in 2019.

the you can be in constitution will promise and protect the const -- the election. constitution will protect the election. republicans emerge from a cia briefing more convinced of the crown prince's involvement murder. khashoggi's >> last week was all about deutsche bank, wasn't it? nejra: it was. how gold may have hidden -- ctory on ares vitor battle,er a long and a special counsel robert mueller recommends no jail time

for michael flynn. these are our most read stories on the bloomberg. manus: weeks of protests in france. the prime minister announced a moratorium on tax increases. the change is not enough to stop the demonstrations. the budget keeps raging on in italy. conti may be willing to cut deficit targets. ick, you look at the pressure that is piling on europe. this is where the bond market volatility is perhaps the best response by germany versus italy. the government laid down a mantle.

what does this take for you to take italian risk? >> we don't. if we want to spread assets over we will be looking at different markets within europe from a sovereign perspective. we could be looking at the market -- emerging-market debts within local currencies. the popularity of those institutions is high. the backward step on structural reform is most troubling for investors. i think president micron the greatest example of that. you are defensive on european

equities. do you see in europe's problems going deeper than just political risk? >> all of these things are in swing. pmi is down. i think that justifies the risk premium that investors have built in. we are really looking for some sort of catalyst. >> thank you. we had that demolition on the growth story. assistant and on the money. money.intct and on the nejra: rick, continuing on radio. next, asian stocks drop. u.s. equities suffered their

worst day in almost two months. how long will this last? this is bloomberg. ♪

manus: good morning from dubai. i am manus cranny and this is "bloomberg daybreak: europe. nejra: i am nejra cehic in london. wall street takes a beating and asian equities drop. u.s. futures edge higher after positive signs from china on trade. how equity and bond markets turned sour on global growth. the wheels start to come off, theresa may's brexit strategy and she loses three key votes in parliament. plan b? eu ever accept as saudi its advance

arabia's oil minister tells bloomberg exclusively the cartel has yet to reach a deal on production cuts despite mbs and putin's agreement at the g20. nejra: good morning, just an hour from the european equity market open. european futures pointing lower, down almost 1% on dax futures, cap futures down 1% and ftse futures trending lower. we are seeing the virgins between european futures and u.s. futures. also, the bloodbath that was the u.s. equity session, the s&p dropping 3%, the dow losing almost three points. is this the market the rating on derating on global

growth for 2019, is the equity catching up to what the bond market is saying? we spoke to the cio at state street in the last hour. he thinks you are still paid to take risks in equity markets and is overweight equities the first half of next year. how much hq are equity markets -- a cue are equity markets taking? this is something to highlight given europe is following asia right now. manus: we are playing a catch-up game. the american equity cash market will be closed today for the funeral of george bush, but the bond market -- they are closed. yesterdaye demolition on the yield, dropping the kind -- below the 200-day moving average. a huge day of buying in u.s. treasuries and that is similar

to what you saw between march and april 2017. the speed with which we have moved in yield is something to be cautious about. lots of notes, nine basis points yesterday. treasuries remain the insurance of choice in a stock market meltdown. of the board, look at btp's. the headlines coming through, the finance minister more tempted to resign. nte, the deputy prime minister saying -- the prime minister saying time to carry out reforms. he speaks, he is in charge of the talks with the eu. this is tough times for the italian market because the cio at state street says i don't have much italian risk at the moment and i find there are areas i want to take risk more steadily and the economy is

shrinking in the three months through september. are we on the cusp of a recession in italy? what happens in the bond market, don't think you will be spared in the bunds. david inglis is in hong kong. david: let me pick up where you left off in the bond market before i talk about this. the theme of global yields, falling. a good example is australia and china, where you had 10 year yields falling to the lowest level of 2017 and in the boj of japan, 10 year jgb's lowest level, closest to zero once the summer. out consistently across the asia-pacific. that led to substantial gains in the u.s. dollar. not a goodstory is one, down 1%. take japan out of the equation, 1.5%.

within the equity story, you have tech, financials. looking at big movers, it is fairly consistent with the bond yield theme, with lower yields, a flatter curve in australia, a bigger than expected miss gdp. within tech, i mentioned this earlier, hardware, chips, apple story, slowing prices on one, the other concern about slowing iphone demand. we are down 2% on that story across asia. a timeless story here, looking to take the majority stake and the big deal getting approved by shareholders. lots of subplots across asia. it is a fairly risk off session this tuesday. nejra: risk off is the word today. david in less in hong kong,

thank you. today, we are asking the did the on and live, grinch steal the santa rally? coming about the selloff yesterday in the u.s. and important to note, could this have to do with markets being closed in the u.s. today? how did that affect positioning? mliv out to us and the team. let's get the first word news with desley humphrey in dubai. prime minister theresa may has lost a series of the votes over brexit in a dramatic session in the u.k.'s house of commons. lawmakers gave parliament the power to shape the final brexit settlement if may's deal is defeated next week. the prime minister was defeated over the publication of secret government legal advice on the eu withdrawal deal. parliament will vote on whether to accept or reject the 585 page

withdrawal agreement on december 11. >> i asked them to think am i asked them to think -- i ask them to think what it would say to the 52% who came out to vote for the first time in decades, many cases, if their decision was ignored. what would it do to our politics? desley: china is said to be preparing to restart imports of u.s. soybeans at liquefied natural gas after the commerce ministry described its trade meeting is very successful. beijing says it will push forward on trade negotiations with the u.s. within the 90-day timetable and roadmap. the first official confirmation of the talks window, though there was no mention of u.s. threats to raise tariffs again. saudi arabia's top energy official has made clear the terms of an oil deal remain unresolved despite crude prices surging after russian president

vladimir putin and mohammad bin salman said they would extend cooperation. in an interview, the saudi energy are -- energy minister said he saw and oversupplied market but cautioned members of the opec group needed to come together for a cuts to go ahead. >> what we see from abu dhabi is projections are there will be a million barrels of oversupply and we will wait until we get to and certain what the number is. cross isroad to whether all countries are willing to come on board and contribute to that cut. leading figures in washington say a classified cia briefing has convinced them that the crown prince of saudi arabia played a role in the killing of journalists jamal khashoggi. if a jury even said

were to consider a case against the prince, it would convict him of murder with a half an hour. senators say three add must accept -- riyadh must accept responsibility. global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. thank you very much, desley humphrey with the latest. wall street with the biggest slide in stocks in two months. closed down byes more than 3%. asian equities have followed suit. u.s. futures have regained their footing after china said its trade meeting with the u.s. at the g20 was "very successful" and it was confident it would be implementing the results agreed at the talks. today, the mliv question of the day, named the grinch that stole the santa rally. that is presuming the rally dissipates and there is no more

good news to come. nothing to invoke a spirit on the upside in the market. let's bring in the senior economist for how mays and mark landfilled -- mark landfilled -- mark cranfield. talking about the grinch who stole the christmas rally, you are very presumptive. what do you reckon? forcials said prepare resuming of soybean, liquefied gas. the grinch has been thwarted. mark: i think the grinch was mostly yesterday in wall street when donald trump was tweeting he's still the tariff man and is expecting to issue more tariffs. a mixed message and people didn't like that. it has been more encouraging today. the sound from china have been a

lot better than what we heard from the united states last night. that is probably why we have seen a halt to the selloff in asia today. chinese markets would be down further if it wasn't for china saying things like they will follow up on intellectual property theft and are ready to buy soybeans. it could have been worse today. we also had some nasty australian gdp data, which hasn't helped the mood, but all in all, the fact markets are down 1% or so isn't too bad considering what we saw on wall street. nejra: if we look at european futures, and manus pointed out perhaps something to do with europe catching up with what happened in the u.s. yesterday, but why aren't european traders recalibrating, given the change and positive sounds on the trade rhetoric? euro stoxx 50 futures, down more than 1%. mark: it doesn't help that wall street is going to be closed today, so it will be very hard

for people to get a real feel for what u.s. markets are going to do now that we have new information. have risen in&p asia, not very impressive, only up half a percent or so which is not a big deal when you consider the size of the decline yesterday. for europe, they are trading in the dark. they are trying to guess how wall street will behave. are trying to look ahead toward thursday and friday to see whether or not we have a better finish to the week. there is always the risk that we get some more tweets from donald trump that are not very constructive. it is a bit of a touchy feely situation. maybe things are better, but we need more evidence to get people excited. will beeantime, people defensive and if european markets only fall on percent, that would be a decent result considering what we have seen on

wall street overnight. manus: you are right. let's go to facts and factual. i want to bring you into the conversation, the senior analyst at hermes. nejra and myself are having the debate. this is about growth. signaling aets debate about growth in 2019? this is the china and eurozone gdp pmi's and they are falling over in china and the growth in europe is under pressure. rb repricing a fading of growth -- are we repricing a fading of growth in 2019? >> talking the about the rally, i think it is a combination of factors that boils down to the realization that growth is really fading globally. there is at

repricing of the growth story for 2019. he mentioned the pmi's, we got some fresh numbers for november and final numbers from manufacturing and a signal that growth continues to slow down toward the end of the year. is still u.s. outperforming, but the outperformance is starting to crack and looking at 2019, we have other negative signals for the u.s. economy and that there won't -- won't be another sugar rush from business stimulus while risks from protectionism are still rising. nejra: our markets right to reprice growth to such an extent in the u.s. that if you look at this chart, we can see the market is pricing in fed cuts in 2020? has the bond market gone too far with this prediction? silvia: that is how financial

markets typically move. it is not linear movement, but more like bumps. it is possible the bond market has gone too far, but the direction is probably the right one. as for the fed, i expect another rate hike in december, which is almost fully priced but looking in 2019, the fed might be able to hike another couple of times paushen might be forced to e because u.s. growth is slowing down. --us: but if you look in listen to what the blackstone ceo said, he said what we crying about? 3% growth in 2019, think of the past eight years. 1.8%. mark cranfield and silvia dall'angelo, senior economist at hermes stays with us. oil holds its climb as the

minister says opec is yet to reach a deal on production cuts -- cuts. we are live in vienna. theresa may loses three votes in parliament in a huge blow to her plans. we'll discuss what it means for the u.k. and for europe. are travelingyou to work, tune into bloomberg radio on your way to vienna, live on your mobile device or dab digital in the london area. this is bloomberg. ♪

a.m. int is 7:19 london, 40 minutes from the start of european cash equity trading. globally, the msci asia-pacific on the back foot. picking up from the u.s. session yesterday. the index on track for its worst quarter in three years. oil is taking a beating to the downside, below $53 a barrel on

wti. minister saying it is premature to talk about the production cuts at the opec meeting. u.s. markets will be closed today for the funeral of george h.w. bush, pushing ever so slightly higher. manus: let's move it along. u.s., wemarkets and have left the u.s. 10 year yield in their. -- in there. we have broken through the 200-day moving average and that cascading down in u.s. treasuries. it is the haven. cable, 1.2689, the worst defeat for a prime minister in years. does this mean tail risk moves toward a no-confidence vote, general election? those are all out there. euro stocks 50 -- euro stoxx 50,

down .1%. somebody could say that is not too bad compared to 3% demolition yesterday in the u.s. and asia overnight. let's focus on one of those stories, oil. after the biggest two-day gain since june as investors grapple with doubt over whether opec and allies will curb production, the saudi minister has told bloomberg the cartel has not agreed on production cuts. joining us from vienna, how are reporter annmarie hordern. how did you find his tone? it was measured in delivery, but what do you take away from the interaction? annemarie: good morning. i looked at the market reaction and we saw brent drop off the comments. seemed like he was pouring cold water on a definite deal. he said it is not done yet.

"premature," and this was one day before the meeting at vienna where stakeholders get a chance to put their cards on the table. let's listen to what he had to say yesterday. >> it's premature to say what will happen. stablese, an advocate of global oil markets. we need to get together and listen to our colleagues, here about their views, on supply and demand, projections of their own country's production. annemarie: a difference from abu dhabi when he said opec plus could need to cut one million barrels a day and he also mentioned that in principle, russia is going to cut. russia and the saudi delegation are in negotiations.

the obstacles that remain are how much should be cut, who should bear the burden and by what baseline? atober, july, it will all be different amount of barrels coming off the market, but we are down to the wire. the main meeting is tomorrow but today is all about the meeting in vienna. nejra: great job on the interview. you have outlined some of the obstacles to the deal. tell us about what you will be watching for at that meeting. one thing traders are overwhelmingly telling me is had ahe saudis complicated meeting ahead of them because they do not want to defy outright president trump's call for lower oil prices given that the white house has given such support to the crown prince falling the killing of jamal khashoggi, following that they have to walk a tight line

between getting a deal done with risking a tweet from the president of the united states. nejra: annmarie hordern in vienna, it will be a busy week for you. to brexit and theresa may is locked in a power struggle with house of commons. yesterday, defeats on three key votes in succession. the result, parliament has the potential to decide on britain's plan be if it rejects the divorce agreement next week. silvia dall'angelo, senior economist at hermes is with us. an economist earlier this week said always look to the endgame. does last night change the endgame for you on brexit? silvia: i don't think it changes the endgame for brexit. i still think that parliament will probably reject a deal initially for the first vote on the brexit deal. it will probably need to more

pressure for financial markets, for more businesses, which may eventually lead to a second vote in parliament and again, a purple -- approval of the deal. the only bigrday, development was the ecj opinion that was published and suggested the u.k. can withdraw unilaterally from negotiations. suddenly, the no brexit is an option. manus: and of course, that was utterly denounced by the government. a lot of things have been denounced, but that seems to be off the table. what shakedown in sterling does it take for parliament to vote through a form of brexit? sterling to take on force the politicians' hand? 1.20?

1.15? silvia: it is hard to say. that range, but other u.k. assets will come under pressure. for said, not just pressure financial markets, but also the pressure from businesses that want more certainty going forward. ok, there are a great many twists and turns in the road to be had in this. silvia dall'angelo, senior economist at hermes. the pound is again taking a little bit of a turn lower this morning and has been under pressure for five days. to what extent do financial markets have the ability to push this government? the top scenario, people have been talking about. with cable being lower, we are seeing dollar strength across the board. we have been seeing this risk

often markets. looks to follow through to the european session. the european open is next. they will digest the european equity market open. this is bloomberg. ♪

anna: good morning. welcome to "bloomberg markets: the european open." we are live from and european headquarters in london. i am an edwards alongside matt miller in berlin. futures turnock positive, but the optimism isn't matched in the asian session or european futures. equities and bond markets are closed in the u.s. today in honor of president george herbert walker bush. the cash trade is less than 30 minutes away. anna: