♪\ >> our top stories this morning. tensions between beijing and washington continue to rise over the arrest of the always ceo in canada. china is threatening grave consequences. factory inflation came in at the lowest pace in two years, signaling weakening demand despite stimulus measures from the government. as opec delivers bigger than expected cuts. the russia energy minister says crude oil prices are suitable but calls for less volatility. and qatar is said to be skipping today's meeting in riyadh despite indications from the saudi king.

we take a look at what it could mean for markets. ♪ >> 8:00 a.m. across the emirates, i'm yousef gamal el-din in dubai. what a week it has been for u.s. stocks, the worst week since march. let's get you a quick recap. tech stocks were in focus, along with trade tensions. the latest batch of economic the adding to concerns, position toward equities has moved from by to sell. opec is delivering bigger than expected oil production cuts and it will be interesting to see how it ripples around the globe,

especially in emerging markets. 2.85,0 year yields at numbers came in slightly softer, bank of america forecasting 10 year yields. the bloomberg dollar index, jobs haven in thee current scheme of things but lower. still, fairly resilient throughout the week. let's check in on the first word news with christine burke. >> thanks. the white house chief of staff will step down toward the end of the year. white house advisers believe that vice presidents chief of staff will be named acting chief of staff. the opec coalition delivered a

bigger than expected oil production cut, defying the presidents cut to keep it open. after a meeting in vienna, the group agreed to remove 1.2 million barrels per day from the oil market in the first quarter of 2019, more than 1% of global production. i ran got a verbal assurance that it wouldn't have to take part. of 2019, more than 1% of global china has threatened canada with grave consequences if huawei ceo is not released. beijing called her arrest on reasonable, unconscionable. the founder is spending the weekend in jail after an agreement on bail was not reached. her arrest on allegations of sanction violations have roiled markets. advisor president's thinks it will not affect the trade talks. >> i see them on different tracks. i think the trade negotiations, which have a lot of momentum,

those are going to continue. i do not believe they will be interrupted by the huawei enforcement action. >> china's factory inflation slowed further while gains in the consumer price index moderated. it fell 2.7 percent in november, the slowest rate in two years. bigger factory prices signally further deceleration of industrial profits. the consumer price index rose 2.2% in november, which was also slower than estimated. qatar will not attend the summit being held in riyadh today which cited turkey, a qatari official he did not identify. the king of saudi arabia invited them to the summit and the sign of a potential thaw, but bloomberg was unable to verify

the report. yellow vest demonstrators clashed with police in the latest round of protests against president emmanuel macron. armored vehicles rolled through paris. the turkish president use the protests to point fingers back at europe, which often criticized his handling of protests that home. global news, 24 hours a day and at @tictoc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. burke.istine this is bloomberg. ♪ >> thanks. let's get our top story. the worsts plunge, week for the s&p 500 since march as the trump administration presses its trade war with china, the latest batch of economic data adding to concerns.

the trade outlook appears to take another negative turn after huawei's ceo was charged with conspiracy/ the federal reserve struck a hawkish tone at a conference. let's put all this into perspective. joining us on the set is the president and founder -- welcome back to the program. before we went to air, you are telling me that the arrest -- it's a game changer. it's negotiating in bad faith. the real chinese reaction is yet to come. >> there are a number of issues. you are talking about the reality of u.s. law. congress passes the law and you arrest somebody in a country on the basis of a u.s. law. that's a big issue because it means anybody in the technology sector could be arrested under the reality of u.s. law.

but the point with respect to quality, that this is a major building block of technology for china. from a chinese point of view, the arrest means that this is the beginning of an economic war, trying to present technological development in china. it goes way beyond the current negotiations of what happened in buenos aires. it turns out they knew about the arrest of the cfo. from the chinese point of view, this is devastating. >> let's assume you are sitting with policymakers in beijing. what would you advise them to do? how do you expect them to respond? kudlow -- i larry don't think -- i think the chinese will look at this badly. they will rush and say

let's negotiate before the deadline i think is a wrong one. it chinese will approach from a strategy point of view, not a transactional basis. think of this as being a long, drawnout matter. as well as a hostage crisis. >> in terms of how this does or doesn't affect the fed -- larry kudlow spoke about expectations that trade talks will stay on course. but he also spoke about what he expects from the fed, and we saw some interesting repricing of expectations. let's take a listen to what he had to say. >> what i'm looking at, i think they are signaling that they will do something later this month but that will be all for quite some time and i would add to that, my boss, president trump, that is very much in line

with his thinking. let's go straight to a chart that shows how we are stacked in terms of financial conditions. >> the most important thing is the inversion of the yield curve. this inversion of the yield curve is suggesting that there will be a recession within 19 months, average over the past five recessions. fed, contrary to what kudlow was saying, is following yellen and bernanke policy, smooth as she goes. we will continue to have a rate hike in december, the question is 2019.

it looks like you are late in the cycle, u.s. growth is starting to slow, you have wage growth to slow pressure on prices, if you look at exports they are down substantially. you take a number of those factors in the outlook is lower growth. the market has two things on its mind, recession, and also the impact of the trade war. that is looming large, because if the two biggest economies of the world enter into a major trade war --that affects global growth. >> jpmorgan think that the latest selloff really over prices some of the risks. shortlyget into that and we will talk about opec and

their big move to pull 1% of global oil from the market. plus, our interview with the russian energy minister's later this hour. but first, the odds are heavily stacked against theresa may's brexit deal heading into the vote on tuesday. we will discuss that, and what it means for key assets. this is bloomberg. ♪

♪ >> we are live on bloomberg. i'm yousef gamal el-din. let's get you a check of the latest headlines. uber technologies has joined their rival in filing are an ipo. uber submitted its ipo filing confidentially to the u.s. securities and exchange commission. it could be the largest next year and one of the five biggest of all time.

uber could be worth $120 billion on the public market. qatar has entered into an agreement with exxon mobil affiliates to require a participating interest in three offshore exploration blocs in mozambique. interest have a 50% and qatar petroleum has the remaining 10%. -- is set to announce as soon as monday the departure of its ceo, removing a hurdle to further talks. the imminent exit comes a little more than a month after the firm reached an agreement with activist investors. sources say that they are open to re-engaging with glencore and abm. and that is your bloomberg business flash. christine.

let's get to the story around brexit. prime minister theresa may could be forced into a brexit that keeps the u.k. inside the eu single market if she loses that crunch vote that will take place on tuesday. according to reports, administers expect her to announce that she is delaying the house of commons vote, with the odds stacked against her in parliament, administers saying there is no plan b. founder -- yound don't think they will pull this vote, you think it will happen, and it is going to bt to buy what margin she loses. >> delaying the vote will not improve her chances. she is between a rock and a hard place. this is not something she wanted, but if she loses by more than 100 votes then she has lost the confidence of her party and she will likely resign.

there will be political uncertainty, if not chaos in the u.k. so what are the potential outcomes? you could have a new conservative leader trying to therenfidence again, but is time to renegotiate another deal so the majority of mps in parliament are remainders. so either you asked for a delay from the eu -- there's nothing -- youabout march 20 19 could go back to the eu and ask for an extension, giving you more time to get a different deal. the other possibility is a and that will go in that direction. referendum,irst people are now aware of what the costs are >>.

that may be the case, but they are adding up the uncertainty, the lack of clarity, businesses are pulling a lot of staff and redeploying them across europe. what kind of damages possible from this point onward? what does this mean for government bonds? is going to suffer, investment is suffering,'s drilling is suffering. the bank of england put out a study at the request of the treasury showing what the potential impact of brexit could be. hard brexit is where you get thrown out and that is the most costly. that's unlikely to happen, i don't think either the u.k. or you would want to see that happen. however, if you wanted to make a

bet, if sterling starts reaching 120 to the dollar, it might be a buy. in terms of the rest of european politics, you look at the map, we have yellow vest bringing their grievances to paris. seeimages are quite rare to in an economy and country the size of france. what's your read on that? should investors be reading more into this? >> well, macron came with a plan to transform france. time, very welcome at the however when it started touching the labor markets and started to raise taxes, particularly in relation to climate change, his springtime ended.

now is aare having reformulation of the political map of europe. you have an end of an era in germany, although i think you will have much more stability in germany. german politics are not exciting politics, you will have a smooth transition within the cdu. i don't expect anything in terms of germany. france i think is more troubling, because it is the second biggest economy, and you need germany and fred to be working together. things like fiscal policy -- >> plenty to consider. we still have a little bit to talk about. to delve deeper into the story around crude oil and hear from the russian as he put sanctions on iran with a huge impact on the old mike it

-- the oil market. ♪

♪ >> opec and allies have made a decision and delivered a bigger than expected oil production cut. the russian oil minister said they will need a few months to reach the full level of cuts. >> [speaking russian] goalswill be reaching our over a number of months, not immediately, which connects us to the fact that we have some difficulties and challenges which we will have to navigate, unlike our partners in the southern countries. we will try to reach our goals as fastest possible. i will not give the exact it right now because we still have

to finalize some calculations but we need to finalize the schedule. >> will this last till the end of june, or will you be looking for any adjustments in the second quarter? >> [speaking russian] >> as of now, the decision is made for six months. if needed, if the market needs us to continue, we could extend it. but at the same time, we have all the instruments in place to make adjustments. a lot will depend on how the uncertainties we spoke about -- how they develop. one of the questions is sanctions against iran, where there are uncertainties and lack of clarity, trade wars, protectionism -- that will have an impact. unfortunately all these factors are difficult to forecast, that the same time -- if we go back

to november and try to remember what the situation was like back then, we can see that the market was expecting a deficit to 2018, but nowmber the situation is completely different because that uncertainty isn't out of the market. i wouldn't be surprised if in 2019 the reality differs. >> i want to ask you about iran. meeting -- it seemed like you played a crucial role for him to make a deal within his own organization. whether you to talk about? >> [speaking russian] >> yes, we did, we did have a and we did discuss a number of topics and of course we focused on bilateral

relations because we have quite a lot of mutual cooperation. we had to same time discuss the market situation. by supported the notion that iran should be exempt, because of this subject to very harsh sanctions. it's a special situation. production is ari fallen significantly. but at the same time, we have come to a mutual understanding that corporations need to continue, that countries need to act together to prevent further destabilization of the market and a much worse situation in the future. iran, in november, you were sanctioned by a unit in iran -- is this still happening? is iran still able to sell oil? >> [speaking russian]

>> a russian company was indeed subject to sanctions recently. we strongly believe that this is illegal. iran and russia have been at odds for a very long time so this relationship is developing and they will continue developing. we support iran to further strengthen trade ties and we will continue doing so. >> that was the russian energy minister. let's get back to our guest. i'm looking at a piece by will profits and he says the of doom were wrong, opec still works and can even surprise markets. but you disagree. >> i disagree. opec survived because of russia, let's be clear. russia,saudi arabia and

they could control production at the level of opec. but opec's share of the global oil market is 40%, much less than the past. there are two issues, in terms of the production cuts. one is that global growth is slowing in 2019, and opec is anticipating that. if you look at europe, the u.s., china, you have a slow downgrade in economic growth. the other issue is u.s. shale, which is doing extremely well at any price over $50 per barrel. >> is this move going to help bring prices above $70 per barrel? that's what the saudi's need? barrel toed $84 per break even on the fiscal side. it is highly unlikely you will reach that. probably something between $60 to $70 per barrel is likely over the short term. long-term it is downhill.

>> always great catching up with you, inc. you for your time. here's what's coming up. we are just getting warmed up. qatar is said to be skipping the gcc summit today in riyadh. this is bloomberg. ♪

♪ >> 8:30 a.m. in dubai. plenty to consider, the soaring oil price is one thing, the geopolitical developments in riyadh. what kind of progress, if any, can be made in terms of the standoff between qatar and the rest of the gcc? let's check in on the first word headlines from around the world. christine? >> thanks. the white house chief of staff will step down toward the end of the year. white house advisers believe that vice president mike pence's chief of staff will be acting chief of staff. he emerged as