>> good morning. from bloomberg's european headquarter in london, i am nejra cehic to react this is bloomberg erupt, and today's top stories. new reports suggest the u.k. prime minister may be facing a cool back home while the eu failed to answer her calls for help. anada frees the huawei chief financial officer on bail. and, to hike or not to hike? could pause in 2019 and 2020 due to market issues. ♪

nejra : good morning, everyone. it is just 3 a.m. in london to riyadh we have some breaking news coming to you. we have third-quarter numbers coming through, third-quarter -- nine months first, who have that is upbeat there on the nine-month a bit the. 3.1 billion euros on the bit.-month i well to a beat their as read there are looking at nine-month net income of 2.4 4 billion euros, versus the estimate of 2.4 million year-on-year.

analysts wereat looking for, they were looking for reassurance on second-quarter guidance to riyadh we will see if any moments come through -- any comments come through on that. but at the moment, beating the nine-month figures to riyadh looking at markets overnight, we are getting positivity coming some quite riyadh significant gains on the industries in the asian sessions. nasdaq futures are higher. s counter onnew china and auto tariffs but had an impact on the u.s. session. before we continue with the market, let us look at news on credit squeeze best credit suisse. confirming,isse that it is approving its 2019 buyback of up to 1.5 billion swiss francs, crossing now. approving its 2019 buyback of

shares, up to 1.5 billion swiss francs, also to increase its dividend by at least 5% from 2019. it is also confirming its our ot tangibleeturn on equity target for 2019 and 2020. hours talking about a bit of a risk-on session perhaps coming through later in the europe and the u.s., judging by the futures. some positive sounds on trade, perhaps giving a lift to equities. we are also seeing a move on the yuan. if we look at what is happening, the yuan strength basically heading for its best month this year. we're also seeing debra hi again for a second day, largely to do data.pi the brexit talks thickens, as we talked about.

more details are in a second. coming up, my coanchor, manus cranny will be speaking to the united states treasury secretary, jack lew, in a dubai. juliette saly is inch singapore, with more -- is in singapore with more on the asian session. >> great to see you. we have the msci asia-pacific index up for the first time in three sessions, up 1.5%. the nikkei is leading the gains, closing hybrid over 2% -- closing high by over 2%. the hong kong market also looking good, up by about 1.5% as well. the australian markets are also up. also, looking at what is happening in india, the index is up by 1%. the new r.b.i. governor was announced after the close of trade yesterday. still a little bitter of

weakness coming through in the rupee, but indian bonds and stocks are russell order today. we have heard the news today that china may be moving to from tariffs on u.s. cars, .40% to 15% you can see a lot of the japanese automakers are doing very well on that today, yamaha up. let it share index in hong kong has a joint venture with daimler come of this company does, it is kong. about 3.2% in hong the hong kong casinos are also coming under pressure following a note from deutsche bank of us as winter is coming. growth gaining revenue will decline by about 5% in 2019 by their -- from their 4%.or growth of so there could be a weakness for the casinos in 2019. nejra: thank you, juliette saly instant or. we are asking the question on

the mliv. can the yuan rally from here? how far? whi head to th sarah share. coming up next, we went to get your first in the morning on this question. how much further can the rally go after the past couple of days? >> it is versus it is to the headlines, slightly positive headlines overnight over the u.s. china trade war to my own views are limited to riyadh part of the formulation for the chinese administration to deal with the risk, will be the weakening of the john, so i expect that to return -- the weakeningl be of the yuan. nejra: someone french will be staying with us to riyadh first, we get the first word news with

debra mao in hong kong. >> theresa may is facing renewed leadership threats at home as she tries to secure runs that concessions are broad. on the brink are forcing a confidence vote in her leadership. meanwhile, the eu is not. budging on the brexit deal as officials fear that there will be no concessions. i rest of huawei chief financial officer man when show has been -- i rest chief financial officer a man whe meng wanzhou was granted bail. this on grounds that she surrendered her chinese and hong kong past hurts. at least three people have been killed in a shooting at a christmas market in the eastern french city of stress work best

local media said he is a 29-year-old man who was a ridiculous interview security theat authorities to riyadh strasbourg city center was closed from pedestrians and traffic, and parliament was on lockdown, but lawmakers were unable to leave. indian prime minister narendra modi has endured a dramatic than four hours thomas being an opponent sees political -- seeing and the anent sees political momentum to riyadh it is seen as his biggest setback since taking office. meanwhile, the new governor of the reserve bank of india was named today, he oversaw the controversial cash than two years ago. in an exclusive interview, the ceo of the bombay talk exchange welcomed the appoint went the new governor and said that invest as can be reassured of the central banks and and and

best central banks check or independence. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. .. nejra:. debra mao and hong kong, thank you so much. theesa may could be on brink of a vote of no-confidence come out lawmakers could be able to topple the prime minister. that terry and theo. controls the process of a no-confidence vote has kept quiet as to whether or not he has received the 48 letters needed to trigger the contest, but there are reports that he could speak this afternoon. for now, we go to maria in brussels. what a week. and it is only. wednesday. does the speculation of a --confidence vote, does it in the eyes of russell's? : i think every european official in every

european capital of the very close eye on this read it is not the first time we have heard the prime minister was on her way out. but this time, as you point out, regulation is indeed wild. when it comes to the european union, i would say that we have to go back to square one. the u.k. really needs to figure wants.t it is it what we see again with months to go until the exit day is at the u.k. is still fighting within itself to get a clear idea of what kind of brexit a want. . that au will tell you right now, nothing will be renegotiated. to think you can open up the renegotiation that took a year, 600 pages, in a matter of days, it is not credible. it is not the way business is done in the european union. and that was reflected yesterday. theresa may went on the tour to the netherlands, she met with angela merkel, she met with others, and we heard that they want to help her, but what she wants at this point, she cannot

get to riyadh if for the renegotiation is not possible at this pointp the fact that she could be challenged with all of the main european leaders will just say, we will have to look forward to january. nejra: thank you so much to bloomberg's maria today or in brusselsp let us bring back salmon french, panmure gordon chief economist. theere talking about no-confidence vote earlier and you said the numbers do not add up. you think the numbers add up now? simon: they certainly duet up in terms of letters to trigger a no-confidence vote. it is hard to call now with her they will get the 158 number. you have the graphics a few ago.ts i think that is hard to see, whether enough mps will see a material change i voting out theresa may. that whatclear yet the hard brexit tears are calling a true believer exit would make it into the final a,

because what the mps vote on, is whether they can first two candidates forward to the membership. we reckoned at about 110-115 votes to get one of your credit is the final two. it is not clear to me what other hard-line lawmakers can get an individual into the final runoff to and with any can have someone who has broadly this name views as theresa may to negotiate a settlement that is needed. nejra: we are talking here about a sort of confidence vote on the leadership rather than the government. if we were to get a no-confidence vote in theresa may now, what impact would it have on the aspect of a meaningful vote in parliament actually happening before march 29? simon: i think it was still happen before march 29, but i think it does all than of a

question as to whether the eu will look at this period and suggest that if the u.k. feels is need for an extension will be amenable. i think there are less amenable to all for an extension if the political situation remains unchanged but if you get that kind of flux, you may see a settlement to move article 50 to the right or something in the order of three months. nejra: i will come back to you with your thoughts on sterling. salmon french, chief economist at panmure gordon, stays with us. up next, we sit down with u.s. treasury secretary jack lew. he has been a critic of the trade war. we will look at the efficacy of tariffs. and when you're traveling to work, tune in to bloomberg radio live on your mobile device, or on the digital radio in london area. this is bloomberg. ♪

♪ nejra: asian equities climbed after positive signs on u.s.-china trade, and trump told reuters he would consider intervening in the huawei situation, if it would lead to a deal. up next, the man who does not believe a trade war is good for the u.s. economy, jack lew, former u.s. treasury secretary. he is meeting with michael anchor in dubai, manus cranny. manus, good to see you. manus: or to see you as well, nejra. that as get straight to the former treasury secretary. i want to start with the big issue. welcome to bloomberg, jack lew. >> good to be with you. how take of a global risk for -- could a hard brexit for the eu if that is the case?

jack: from the beginning i have theys got the brexit affect economy of united kingdom, secondarily the economy of europe, than on the third level, the global economy. i was not in favor of it, but i think that to say that it would cause a global crisis would be a bit of a stretch. the banks of the u.k. are well and capitalized, there could be on, but i think the question really has to do with the general health of the economy in the u.k. and the integrity of political alliances in europe. i think the challenge going forward is to find a way to maintain economic and political unity in a world where some of the current arrangements are coming under such scrutiny. and it is not just in the u.k.. manus: if it is not just in the u.k., you have great experience in trade in the united states.

this morning, we heard china may auto. tariffs on what i want to understand from you is just how damaging these trade war's can be to u.s. growth in 2019. jack, my answer here would be similar to my as on brexit. if you look at the arithmetic of chinese exports to the united dates, from the u.s. to china, and what the impact is, it drives things in the wrong direction it was countries in. and it does not drive other economy into crisis in another house. the question is, what does it do in terms of the psychology and the ability to work together and work through differences in a peaceful way? i think the risk to trade wars is twofold, one is the direct impact economically, which are think is bad. you are seeing it in the clan in

the employment in the very sectors which the policies are supposed to be supporting. but in terms of the risk, it dampens sentiment for investment, it creates higher probability of conflict, and the follow-on effect of trade wars is that you think you do with the other party will do, but you miscalculate. and things get out of control. we have seen that in history. manus: do you think we are edging out of control? the g20 was quite dysfunctional, some would say. jack: the g20 plays different roles in terms of crisis and in times of no crisis. it is hard to have collective governance in the body where you ways.t landed in formal in the other hand, it is the first time the g20 that the united states has been the source of the uncertainty and confusion in the the process. i think that is very troubling. for seven years, one of the sources of u.s. power has been

to put it simply, most of the world wanted to be more like us. that was how we moved markets more toward openness, how we put together an alliance system that made the world more peaceful. as it trusted look like the u.s. maybe playing a different makes it a very uneasy presents and creates uncertainty about the future. manus: let us go deeper into uncertainty. mr. bullard over at the fed want about cracks appearing. the new york fed survey on inflation outlook and arsenal wages, it does not bolster. how worried are you about it week in a growth in the u.s. -- a peak in growth in the u.s.? jack: we are in the 10th year of recoveryp. i am glad to have been in office for seven out of those years, we left a strong economy behind. periods of growth don't just timeout, but they also don't go forever. and we are seeing policies that actually make it difficult for

growth to continue. whether it is deficit policies in the unit is dates at a time of economic growth, or trade war's that are man-made problems. i think you're seeing a lot of uncertainty and disruption put in an economy that is already late in the cycle. blowinghat deficit is out, $1 trillion is what the cbo did did a year earlier. when does the debt pile really begin to matter? jack: i think if you look at the debt, both the deficit and the accumulated debt, we made a lot of progress in the time i was in things.in stabilizing we went from the deficit at 10% of gdp, to 3% of gdp. we stabilize the debt in the mid-70's. are putting in place policies that are driving it to hit 100% of gdp faster. growth.e in a time of first of all, you know that when a business cycle ends, they will

be the need for government intervention. if you have already spent your fiscal resources during a period of growth, you have the resources to spend when you need economy.ate the secondly come at a cost of servicing that debt will squeeze out important things like investing in the future. from infrastructure, research and development, things that would help the future -- paying more debt ailes doesn't help the future. manus: when we talk about italy, when you talk about greece, what is the risk of real activism or indigestion in the u.s. bond market, with issuance at this level? jack: i think the u.s. treasury market remains the most liquid market in the world. words are used in an official capacity. manus: you really believe that? jack:? jack: i think the issue will be access.e, not the when you look at when there is a flight stewards safety, it is toward the dollar. i do think rice will go up. up.rest rates will go

we are seeing the spreads between the u.s. and other yields ahead of policy. i think the idea that the u.s. cannot borrow is actually not the right way to think about it in the short-term they react i think the right way to think about it is that if you are concerned about the trade deficit, when you spend more and borrow out more, the deficit was. all the things that are creating tension now will go up because of the deficit. plus, our ability to invest in our own country goes down. manus: we have the possibility of infrastructure spending, the one in this is to be coalescing out there in the marketplace. do you think that will happen, between the democrat and republican's come a around and infrastructure will? jack: there is partisan consensus that we need it. on the other hand, there has not been the ability to bring the parties together on how to pay time. for a long

if it had been part of a tax bill, it would have added to bipartisan support. now that we have added $2 trillion to the debt over 10 years for the tax will, coming in saying that we will pay for it is a different proposition, and i don't see a likelihood of agreeing on how to a four -- how to pay for it. manus: what is your biggest risk for 2019, what do think the biggest risk is for the u.s. economy? jack: i think late in this cycle, with a lot of dead end investment grade debt out there, there is a lot of are into. what makes me nervous -- a lot of uncertainty. the oversight of where the answer and to develop ring, it is not as high as it was at the height of the financial crisis. there has been a reduction of the radar. that more you see a problem coming, the more like a you are able to risk on defectively. at all. i hope there is no

complacency happening, so that we will be a majority want to the problem. manus: former treasury secretary jack lew talking about the crisis in our rearview mirror back in 2008. live at the dubai arab strategy forum. we continue to have a conversation. morning.od nejra: we are all missing your in london, manus. thank you for joining us. manus cranny with former treasury secretary, jack lew. a lot of the conversation was focused on a trade. we are seeing some risk on coming through in equity markets and futures. , let using up, also bring you back the headlines from credit suisse. a buyback of up to 1.5 billion swiss francs of shares in 2019. a similar amount extracted in 2020. they are all such. intending to raise their dividend by 5%.

coming up, don't miss our exclusive interview with the credit suisse ceo at 7:30, london time. this is bloomberg. ♪

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leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. ♪ nejra: the power of these headlines. take a look at the green on the screen, the msci asia civic index and across asia, the benchmark headed for its biggest drop, when the market reacted to the dinner between president trump on president xi jinping in buenos aires the riyadh asian stocks are being lifted from a six-week low. here is what you should be seeing today. beethoven prime minister unlikely to put forward a new deficit target when he meets with the eu commissioner, jean-claude juncker later. and theresa may answers questions from lawmakers. and brazil central bank makes a

policy announcement, expected to keep its key rate at 3.5%. now we get the first word news with deadly a humphrey -- that we humphrey in dubai. >> theresa may is facing the threat at home as she fights broad.concessions are lawmakers from the conservative party are on the brink of forcing a no-confidence vote on her leadership. arrested huawei chief financial officer my wenzhou hasn't granted bail in vancouver. the judge said he is concerned with the possibility of flight atk, but granted her freedom 11 million canadian dollars on condition she surrendered her passport.d hong kong president trump told reuters he would be prepared to intervene in her case if it would help china.a trade deal with

at least three people have been killed in a shooting at a christmas market in the eastern french city of trusstrasbourg. the suspect is said to be still at large. he is said to be a man who was already considered a security threat authorities. the city center was closed off from pedestrians and traffic. lawmakers were unable to leave the parliament's traffic after he was placed on lockdown. president trump has been involved in a dramatic oval office confrontation was a near democrats where he again threatened to shut down the government if his border wall was not funded. speaking with nancy pelosi and chuck schumer, the president said he would be proud to close things down in washington. . in a meeting with waiters, trump urged the federal reserve not to proceed. malaysian prime minister has been charged over the tempering in a state audit into the troubled 1mdb

fund. he is accused of trying to protect himself from legal action. the ex-president of the fund is accused of aiding him. both men denied the charges, which carry potential present terms of up to 20 years and heavy fines. credit suisse will be buying back up to one point 5 billion swiss franc's of shares in a 2019 and is in vermont in 2020, also saying that they intend to year.dividends by 5% a and don't miss our exclusive interview with credit suisse .eo, tidjane thiam the conversation is that 8:30 a.m. london time. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. nejra. nejra: does a humphrey integer by, thank you so much. we are asking the question today, how far can the yuan rally go from here?

reach out to us and the mliv team, and you can also had to shis to give us your opinion. let us look at the rest of the world. joining us from our bloomberg earner in a dubai is our next guest. danny, you are looking at chinese equities. we are seeing a broad best rally -- broad-based rally in asia. looking? >> so far, and does not look like much conviction in the trade. volume levels on the shanghai composite as we get the site up higher today, you can see volume levels have dropped, about the lowest so far this year. trading at their lowest since 2014, save for 29 minute circuit record here, where volume stopped. we will put that aside for a bit. it basically shows that perhaps there is not much conviction in today.ly

when much headlines coming out about trade tensions improving, maybe it means that all the bearish bets, anyone who is going to sell, has been washed out of the market. the hope is that retail investors will step back in. the yen is also trading lower today, like chinese equities. not seeing a bit. really for haven assets. with that, we have seen of the itanese yen, the euro trade, has not moved to 1% in 59 days, the longest streak in this range 2014. with all the concerns in europe with france and italy, one analyst says to short that there. nejra: thank you so much. now we go to divina from our bloomberg partner. we are seeing bond yields in india falling, a weaker rupee and to make him at that as a mixture of concern around about state collections coupled with

perhaps an outlook that we might have a dovish central bank governor. is that a fair interpretation? right in the are way, but the markets right now have disregarded the risks surrounding the state elections and the exit of the prior r.b.i. governor. we have a new governor now in the form of mr. dass, and the event risk, the election risk out of the way. all the events in the system have been pushed out, which is why you're seeing the rally we have right now on the equity market. the sensex and the nifty are holding comfortable positions, one-odd percent of peace. the rally has been led primarily by stocks on the back of the currency. we saw a big move in yesterday's session. some of the defensive names have taken charge in today's trading as well. remember, you have the

concerns regarding what the r.b.i. will do, and the issues that were earlier on highlighted, the tussle between the r.b.i. and the government, but that is something the market is watching. you will be watching that, but currently, the tensions of cooled off quite . nejra: thank you so much. us.t to have you both with with the shock exit of the recent governor of the reserve and statedia, election fueling market volatility, i sat down with the ceo of the bombay stock exchange. he welcomed the new central bank appointment, saying that investors should be reassured of the r.b.i.'s independence. >> he is a bureaucrat coming from the top your credit service , where most of the

administrators you see coming from india come from that dre. he was also a secretary in the department of economic affairs, and also secretary of revenue before that. he was in charge of the seenetization, so you can the kind of experience he brings. . i think he is a brilliant choice going forward. those what will be required to take an organization like the r.b.i. along with the policy framework, as well as keep foreign investors in the loop, because he was secretary before. when he was there, part of his job was to interact with the veggie 20 countries and so on and so forth, so he had an illustrious career, and a lot of us regard him very highly. nejra: does that mean foreign

investors can be less comes and about eating closer political ?upervision of the central bank for foreign investors, it comes down to central bank independence. can they billion short best can they be reassured of its independence? ashishkumar: the tradition of the secretary retiring from the ministry of finance, there is a long tradition of them being employed as governors of the r.b.i.. before the previous governor, before i tell, there were two or three secretaries of finance were appointed one after another in the r.b.i. governance role, and who retired from the ministry of finance. one of them was considered one of the best r.b.i. governors we had.

so we have a lot of finance ministry administrators moving over to rba governor's -- r.b.i. governors. on thed not give up independence and policymaking for the r.b.i. they wereriction, but that way.icably going these administrators know how to ring with signs to the table -- table.oth sides to the nejra: should be investors be concerned that the government could get some of the things it wants, for example, extracting more capital from the central bank to plug its budget deficit, and also loosening the lending curve to its weakest banks? ashishkumar: i think both events are not connected to the rbis governors role in a way to rid if the r.b.i. has a larger

amount of capital than it needs, it would rather give up at some point. this is not a short-term activity. the committee has been formed to decide on what should be the ideal capital that the reserve bank should have, and how much should be returned back to the state.ent in what soy is not that this government would be of little use it instantaneously or immediately, it is basically a framework being talked about. that was the ceo of the bsd, the bombay stock exchange, speaking to me exquisitely. now, we bring back someone french area you heard ticking -- him taking a rather sanguine view. seeing thezuho currency weakening throughout is there any relief from the root the coming under pressure with this new central bank governor

in place? right nothink he is to prejudge an appointment, because although the new governor, although he has close connections to the government, he has a fairly impeccable track record. so we don't a bit really in for a compromising of the rbis independence. what i do think we have is we have a four-month, five-month period ahead of the general election where you are looking for signals that some of the issues you brought up an interview on financial stability , the capital release from the central bank, whether those rings, and also monetary policy, start eating soft and with an attempt to run the indian economy hotter than it needs to be before the general election. i think before investors start prejudging the future half of them are the will want to look for little signs in the communications coming out in the early days of the new governor, as to whether those fears as yet and accounted for actually

start to crystallize. nejra: this is a wide ranging interview that i had with him. i asked him about the prospect of foreign investors coming back in 2019, and he said he was positive for indian assets, because what matters for them is external factors like the oil price and the fed. is that correct as well. ? simon: i think he is right in terms of the two major factors that impact the indian economy, and have infected it in the 2018. they have started to take a more favorable turn. . we saw in the earlier interview with jack lew, the potential of a softer rate path from the federal reserve in 2019 a result of the slowing u.s. economy, and then of course, we have the recently weakening oil price. we expect a bit more downside to come, if that is sustained with weakening global demand in 2019 -- those two factors may into the indian economies favor.

therefore, international investors will take a slightly more up beat sentiment. nejra: i just got a headline coming through, china says it is maintaining consumer communication with canada. toldso says that huawei the u.s. and canada to release among on -- to release meng wanzhou. the instigation that might have for trade tensions -- let us go back to the equity markets, we saw a rally perhaps on optimism on the trade story. let us take it to the equity markets. we talked about the fed's impact on emerging markets. we had a comment on a webcast that with the treasury market, this is not as much as a rally we have had. given the carnage in the global stock markets and the real got wrenching moment in the s&p 500, one of the reason for that is supply, which will continue to be an issue. should treasury yields below are

, given the market expectation around the fed in a 2019 and the turmoil we have seen in equity markets? simon: i certainly think so. at the long end of the u.s. yield curve, we see that moving 8, and it does tell you that there is plenty of nervousness that will a -- bring a flow of liquidity, if we see a fairly broad-based deterioration in of the global economic outlook. and of the fights to safety. some of the trucks you showed earlier, some of the others this havens have not really worked out, but the market has shown a nervousness around growth, and therefore, a rotation to risky asset. nejra: he also said that the bond market thinks the fed will not tighten at all in 2019 and 2020.

simon, do markets not want the fed to tighten? that is the interpretation i am ticking from everything we've heard the past couple of weeks? simon: i think the markets will be happy with the fed taking a very gradual path, given the divergence the in attitudes of other central banks. i know we have to to about divergence for a while, some of your viewers may be getting tired of it, but i think what we have is we are reaching the limit of how much of the divergence can happen. therefore, a gradual. as for the fed in 2019-2020 is a recognition that demand spills over from the us economy to the rest of the world, which is still some are. nejra: simon french, you are staying with us. coming up, could theresa may be facing a no-confidence vote? we discussed what that means, speaking to the liberal democrats spokesperson, thomas brake. tune in to bloomberg radio live on your mobile. this is bloomberg. ♪

♪ : today's newspaper front pages are dominated by brexit. let us look at the guardian. as theresa may embarks on her whirlwind european tour, she faces a renewed threat of home. the paper says that her grip on power appears to be slipping. the daily mail -- the prime minister is braced for a leadership battle. and, the prime minister had trouble getting out of her car when she wants to visit the german chancellor. some have said that the mishap is a metaphor for the brexit. says. theresa may could be on the brink of a vote of no-confidence. there are growing reports that conservative lawmakers could be about to top of the prime minister. that tory mp who controls the process of a no-confidence vote has kept quiet as whether he has received the 48 letters needed to trigger the contest. but there are reports that he could be meeting me this

afternoon. rake,ng now is thom b member of parliament, and previously deputy leader of the house of commons and during the coalition government. and still with us, someone french of panmure gordon. tom, you have a lot of knowledge around the process of what could happen here. if we get the no-confidence vote triggered, walk us through the steps of what would happen next? jack: what would happen is that number of potentially conservative candidates, conservative party leadership would come forward. there would be in the limitation process that would reduce the number down to 2 possible tory leaders. that is in in the nation process that happens within consecutive members of parliament. when the end up with. two candidates, that is handed over to the membership of the tory party. so all the party members around the country would then vote on one of those two.

and wherever get the most votes becomes the tory party leader. nejra: you say that the candidates are really key to how the eu response to all this? simon: yes, and it would be interested in your view as to whether the hard brexit years in the back of -- in the consecutive party can get the candidates. estimates said just that they need about 120 was to get it through. do you think they have the kind of numbers to put a true believer in brexit in position, on the assumption that the membership would vote for such a candidate? tom: they might be able to have a candidate emerge, but i think at the moment, the feeling is that theresa may will still win. therefore, all of this is going to create further confusion, have a, destabilizing the government even more, while the leadership contest takes place. i am assuming they will use a process. because it cannot have a process going on for weeks and weeks and weeks, in the middle of the last

apple of my best last couple of months of the debate on brexit. so i think the prime minister would still win that , and all is really damage her. nejra: and what would that mean for the meaningful vote? we still don't have a day for that? tom: what i am hoping will happen as a result of the prime minister doing her european tour is that frankly, she will hear eu.ing very new from the she will then, i hope, come back next week and put her deal to a vote, the one she was supposed to have brought to a vote yesterday. i think it will be defeated, but then at least we will know that her deal is being defeated and parliament can now try to work on what happens next. because it is not quite clear what happens next, apart from the fact that if we get to january 21 without a deal, we are theoretically going down the route of no deal, which would be u.k..strophe for the

nejra: to that point, a potential catastrophe for the united kingdom, i want to bring in this chart. it shows up on all most as the mexican peso. three months inside volatility, they are converging at the moment. i was talking to you about this at the break -- i don't feel the market is fully pricing in the downside risks of the cable, but you think that we could see a balance? simon: i have been their insurance turning all year -- i have been there huishan trailing bearish -- i have been on the sterling pound all year. i think that a no deal outcome is highly unlikely. inmas's colleagues parliament, i think there are very few who would sanction a no deal brexit, i think legislation would come forward to avert about outcome. if you eliminate the downside risk and you think the market is being short on sterling, i think it is a balance of risks year. to the upside, you may see significant bounds as investors

reassess probability of a no brexit is not quite zero, but close to zero. nejra: so no deal probability is low, according to simon. what about the probability of no brexit, tom? tom: clearly for the liberal democrats come of that is what we aim for, no brexit, but through a people's vote. that is an increasing possibility, i think, because theresa may's the deal will get defeated. no deal, as someone said is completely and acceptable to parliament. she cannot get a new deal from union.opean so she is a must left with the vote.ct of a people's put her deal to a public vote and also as an alternative to staying in the european union. nejra: and with the people's what be a good thing to the markets? simon: except for the fact that there is concern in the market hearam quite keen to people who have a progressive idea of how we move forward. is there a formulation of the question that parliament can

agree on? tom: that is a moot point, because there is parity for me, that remain should be the option on the ballot paper. there is also their argument as to whether it should be the prime minister's deal, or no deal. you could even have a more complicated scenario, where you might put an initial question, which is the best the want to remain or leave? and if people choose to leave, then you put comedy what the prime minister's deal, or no deal? so there are a number of complex things to be resolved. nejra: thank you so much, brexit spokesperson, we could talk about this forever. and someone french, chief gordon.t at tranmere up next, trump trade exuberance in the market today, as asian stock traders are hit by , welcoming fans that beijing and washington me lead trade tensions. tune in to bloomberg radio live device mobile

the riyadh i will be joining you there from it a.m.. this is bloomberg. ♪ this is bloomberg. ♪

nejra: good morning. these are today's top stories. the brexit plot thickens. the eu fails to answer theresa may's calls to help. canada freeing huawei's ceo on bail. can the rally continuing to 2019? and to hike or not to hike. the fed could posit in 2019 and 2020 due to market jitters -- pa 2020 due toand

market jitters. good morning. 7:00 a.m. in london. europeanway from equity trading. the bond market, we brought you comments on the 10 year yield. supply, yields are not as low as they should the given the turmoil we have seen in markets. one10 year treasury, up basis point. showing what is happening as the bond futures open up in europe. we could see some tightening. attention tong the what is happening. und spread -- adding to the litany of risks

for europe here. france as well as italy. ofare seeing a little bit money coming into those italian bond markets. that is the picture here. an hour.t open in that in focus with the drama around exit. ftse futures up 0.3%. board. higher across the the same picture with u.s. futures and the asian section. some positive noises come through. yesterday and overnight in terms , negativeogress noises in terms of the trade discussion. let's take a look at how the shares are looking premarket. we have had news from credit suisse this morning. what we have heard to update

you, they are buying back to 3 billion swiss francs in 2019 and 2020. do not just our exclusive interview with the ceo. -- miss our interview. how is it looking? seeing asian investors trade off those headlines that granted bail.wei giving a bit of a reprieve to the tensions. 0.3 percent. , its biggest gain in a month. the australian sharemarket continuing to rebound. despite some dissipating -- disappointing data. we are watching closely what is happening in india.

the new central bank governor is prolific tweeting, saying he has y to take on that role. let's look at indian assets. thehave seen me ruby -- rupee declining. foreign investors wondering what the new mantra will be from the central bank governor. a strong move in indian bonds. the yield, falling 10 basis points. he is seen as a bit more dovish on rates. rising.seen the yuan japanese yen a little weaker against the dollar. hopefully that will set up the european sessions as well. thank you. for investors wanting to take on

risk, let's talk about activist investors. seeking better governance. anting to continue constructive dialogue. economic interests, 2.5%. we will be keeping an eye on that story as we head to the equity market open on bloomberg tv. let's get the first word news. >> thank you. leadership facing threats as she attempts to secure brexit concessions. lawmakers from the conservative party are on the brink of forcing a confidence vote. the eu is not budging on the fears deal as there are for calls for concessions into the new year. the arrested huawei ceo has been

bail in vancouver. president trump told reuters he would be prepared to intervene if it will help secure a trade deal with china. at least three people have been killed in a shooting in a christmas market in strasburg. suspect is believed to be at large. he was a 29-year-old man already considered a security threat i authorities. placed onenter was lockdown. modi will have to -- faced a dramatic 24 hours.

meanwhile, there will be a new governor of the reserve bank of india. president trump has been involved in the oval office in a confrontation with senior democrats. he threatened to shut down the government if his border wall is not funded. and chuckncy pelosi schumer, he said he would be proud to close down washington. what we want, get one way or another, through you, the military, anything you want to call it, i will shut down the government. i am proud. i am proud to shut down the government for border security, check. -- chuck. this country don't want criminals and people with lots of problems and drugs

pouring into this country. global news, powered by 2700 journalists and analysts. nejra: thank you so much. cfo has been granted bail. she will be allowed to stay in her vancouver home as she waits for a possible extradition to the u.s.. president trump said he would intervene if it will help secure a trade deal with china. joining us, our asia managing editor. we have had quite a few headlines coming through in the past hour. update our global audience on the latest. >> she got bail. be in herng to vancouver home. attention is turning to the next diplomat from canada -- ex-divs

ex-diplomat detained in china. they are not even confirming is detained, although we are waiting for a statement that would do that. this has canada concerned there is some retaliation now against its citizens. it remains to be seen how that will impact executives traveling the country. you so much. asian equities have been climbing with u.s. and asian futures. rally.shore yuan now, the global macro strategist.

great to have you with us on set. we want to update you on headlines. china saying canada should write the mistakes on the huawei case. told the u.s.awei and canada to release her. is the market reaction we are seeing right to interpret positive signals on trade today? dissect some of the shorter movements. in the short, of course, the market takes it positively. if trump is tweeting something that makes a difference on the opposite side, but the bigger picture, we do see a slowdown globally which is impacting us in europe. which has to do with the impairment of global trade. that does not seem likely to stop anytime soon.

even if they contain the current spat. nejra: volatility has been the name of the game. use -- traders having to get on board. years.est level in three further out, it looks like traders are expecting volatility. does that mean right now, you should be making the most of this full authority? >> -- volatility? ? >> all authority is a double edged sword. overall, not necessarily a good thing. we have to analyze, where is the volatility coming from? from relatively poor sources. in paring the economic activity. -- impairing the economic

activity. nejra: let's talk about the yuan. our question of the day focuses on this. it poses the question whether the rally is going to continue. how far can the yuan rally run? medium-termover the , there is much more downside. if you look at the economic performance currently underway, the internal problems, international problems, it does not bode well. the authorities have thrown a lot of ammunition and it is not really helping. it is probably more risk for the downside rather the upside. nejra: is that against the dollar? primarily against the dollar. when you take a broader look, it is going to be a broad basket of

currencies, really. i want to get your thoughts on where that equity markets go from here. we had comments talking specifically about the bond market saying, if we were looking in isolation at all the yields should be lower than where they are. >> it depends whether you think the economy is going to slow. we think if anywhere in the globe the economy is halfway sheltered, it is probably going to do well, in the u.s.. what the market prices for fed policy, we have priced it all out. iscertainly think the market probably very likely exaggerated with the fed is going to do. december hikehe

and that is it. there must be a risk. another rate hike or more. i would be a bit cautious, to be honest. guest stays with us. great to get your thoughts on a number of topics. theresa may searches for help. her position could be under threat from hardline conservatives. and france's concession of new spending puts italy between a rock and a hard place. when you are traveling to work, tune into bloomberg radio. this is bloomberg. ♪

nejra: 7:17 a.m. in london. 42 minutes from cash equity

trading. asia, headlines coming out around trade giving a bit of a lift. an strengthening. oil bouncing for a second day. api data showing a drawdown. in april 2017 low. a question of whether they could be a no-confidence vote. ftse futures, on the front foot, painting a similar story. u.s. futures higher as well. back to brexit. reports conservative lawmakers could be about to -- italy populist have been helped by an unlikely source, emmanuel macron. the friends president has announced new spending measures which could help in their

challenge against eu budget rules. -- french president. bestthe part aspect prospect of a no-confidence vote weekend theresa may further? a european capitals will keep close eye on the news. we are getting from london. not the first time we her have heard the prime minister is about to be challenged. is a weak prime minister. it goes back to the fundamental point. the eu, the u.k. at this point needs to decide what it is they want. it is difficult to negotiate when you have so many voices and factions. they need to decide what is it they want. nejra: does france's announcement of increased spending cause a headache?

it is a big story in brussels and could turn into a bigger headache. if you remember, the italian government and the european commission for weeks have been thealks to bring down deficit. the italian government wants to spend more money to fuel growth. they were told no, you have to stick to the rules. the problem is macron has decided to go on a spending spree to tame tensions. the italian prime minister, they are thinking if the french are spending, why should we not? applied toave to be everyone. this will be a headache for the european union. nejra: thank you so much. let's bring back in our guest. it seems to me, you do think the

situation in france is going to help italy. is there a trade to be made? >> i don't know about the latter part. we have seen quite a bit of widening. short-term, when you look at the funding angle, the repo market is rock solid. you can fund at -40 for up to a year. when you work out what the implied forward is, i don't think italy is going to default. i think there's stuff on a trade to be made. nejra: in france, you have said we have seen the yields move out, would you be buying o.a.t.'s? what is your take? >> you can have it in your

portfolio. relativelyis still small. it looks a bit more attractive than it did two days ago. is that one of my key traits? nejra: are you making key traits around brexit? guestsof your earlier said, volatility in sterling. i am looking at bond markets the most. you look at the volatility of shape the short sterling, doesn't make sense to me. since you are talking about the bond markets, yesterday i was talking about the potential some people were pointing to. is that something you see as a realistic prospect? >> not really. going back to what i just said to aead if we came

scenario which implies a hard brexit in march of next year, i would be almost certain the short term -- rate cuts. facing downward pressure, making it difficult for the curve to invert. i think it is a tall ask. nejra: what about cable? is sterling underpricing the downward of risks? >> i don't want to dodger question. i don't really like to look at table and that since. that, we are trading in a narrow range. we are sitting on the weak side. is it possible we break out? yes, absolutely. the key thing is what is going

to come next? the next step in this iteration? hardat is indicating a brexit is more likely -- i think that would require a very high degree of probability. of the mpsard one earlier. it seems to be very clear parliament wants to undertake every possible step they can. i think it is too early to price that. nejra: thank you very much. great to have you on set. a activist investor has taken step in -- they are seeking better governance as the company has lost market share. joining us now is our reporter in hong kong. great to have you with us. talk us through what we might

see from here in terms of what he heard. activist their campaign has been announced. it has been the flavor of the month, the flavor of the year. being part of it. he has been so activist. he might push for action. changes in management, at the board level. trying to run up the value as they invest -- the investors said today. been prettyat has dormant. they have done a number of smaller deals but nothing significant. he is coming in and trying to shake the tree and boost value.

>> is it going to work? >> some play very nicely for the investors, others not so much. we have seen it both ways. europe really is super active when it comes to activist investors. whether or not he succeeds, remains to be seen. bring a lot of value and they put the company to work really hard. thinking about the next level in terms of strategy. are deals reporter, thank you so much. here are some of the names elliott has stakes in. vesta. hyundai motor group.

that is it for daybreak europe. the bloomberg open is next. when you are traveling to work, tune into bloomberg radio. this is bloomberg. ♪

>> good morning. we are live from our european headquarters here in london. equities popping higher as u.s. china trade tensions seem to dissipate. also rising,ds the cash trade is less than 30 minutes away. ♪ credit suisse spivack.