>> good morning, i am nejra cehic. is "bloomberg daybreak: europe." these are today's top stories. nejra: the british government survives a vote of no-confidence brexit deal in the dust,? where does the u.k. go? huawei said to be probed by the u.s. for allegedly stealing trade secrets. and sources say tim cook will .ut back on hiring for apple

watch for first-quarter guidance. manus: 71 days to run until brexit. what is the latest? she survived. teresa.o reza -- >> the government has survived a no-confidence vote but it is going to be a delicate and difficult time for theresa may. she has until monday to come up with a plan b. if we look at what labor is going to do, that is going to be the main thing. what are they going to do? how is the eu going to respond

to this? fact: inherent is the theresa may will have thus far not dropped of the process -- prospect of no deal. a couple of things to get out of the way. bigan semi conductor, a tech piece. in terms of profitability. they come in with fourth-quarter operating, lagging with the market expected. had penciled in 99.06. you are seeing a number of lines come through. the gross margin missed estimates. operating margin, 36.8. these are things the market will be focused on. sentiment, you

don't want to read too much into the fact taiwan semi conductor hit all the key analyst estimates for the fourth quarter. it is going to be about the outlook for the futures. demand. let me give you a quick snapshot. oil drifting lower. arabia, reducing it shipments to the u.s. for the third week last week. 10 year government bond yield. night --e base last beige book. 19 references made to interest rates. what the real businesses of america are worried about. let me leave you with a real -- view on the yuan. series to another calm.

a little bit of a shift in the y uan still to come. nejra: we did see a rally in the u.s. but it was not as strong as before. what seems to weigh on system it -- sentiment were headlines about huawei. u.s. futures have taken a softer stance. the same in european futures as well. dollar-yen has been weaker. only three times in the last 10 days. well.ocusing on cable as we haven't seen huge moves. until it becomes extremely clear in the market whether any of the options, no deal, an extension 50, whether any of

those get ruled out. eurosterling weaker for five days. in on the markets in asia. juliette saly has more. we have been near the six-week highs. are we still there? >> we certainly have. it has been a choppy session. we mentioned yen strength. we have seen the nikkei close-out lower. most of the major markets we track are higher. csi 300 up about 0.1%. a story is market had a good session as well. market -- australia's market had a good session as well. in terms of some of the stocks we are watching in the session, byd has been the biggest laggard.

this electric car vehicle maker. stanley cutr morgan it and lowered its price. and hoping tous support the hang seng. it is going to be the sole provider of the game of thrones mobile game. we are watching this company in korea. the companystake in that made the baby shark video go viral. if you like that here worm, there could be more on the way. -- ear worm. i cannot take any more of baby shark. it is official. juliette saly in singapore. what level puts the fed hikes back on the table.

interesting inverted question. let's get your first word news with debra mao in hong kong. reports from washington say federal prosecutors are pursuing a criminal investigation against china's huawei. we are told it involves the legend theft of business secrets from u.s. companies. isrces say the inquiry advanced and could see an indictment soon. huawei has previously denied wrongdoing. may is prepared to blur her red lines to find a brexit compromise. minister held discussions with other party leaders about a way forward for leaving the eu. the leader of the main opposition labor party refused to take part, demanding may rule

-- a >> i am to some when it the leader of the labour party has not chosen to take part. our door remains open. it will not be an easy task. have a duty to act in the national interest. reach a consensus and get this done. hashe greek prime minister challenge to his government, winning a vote of confidence. in a vote triggered by his landmark accord with a neighbor to the north. the government coalition partner hold out in protest. -- hold out in protest. ulled out in protest.

the government shutdown drags on. the house passed another bill to reopen federal agencies, but does not include money for the border wall. the white house is considering setg $14 billion previously aside for the army corps of engineers for the wall. m a crowd say that would be illegal. nejra: debra mao in hong kong. theresa may survived a vote of no-confidence, but with her deal all but dead and the eu saying they will not renegotiate, what comes next? reopenme minister has negotiations. but will these talks there any fruit? newsng us to join is our director. let's start with you.

is the government secure after quote --ast night5 last night's vote? win.e did fairly comfortably considering she has a minority government. however, that doesn't mean mr. corbyn can't propose another vote in the future. in the coming days, she is going to come up with some sort of exit lan. if that means, i don't know, a customs debate, that is going to infuriate any inside. it is possible mr. corbyn is going to find another opportunity to drive a wedge in

her own party. the upside is there is a whichssed time at wish -- point she must come up with a plan. >> this cannot last longer. at the moment, all the options are out there. she was asked repeatedly when she is going to give it away from some of her big red lines like the customs union. as you have heard, officials are privately saying she is on the lines of blurring some of those. there is the question about the customs union. that is going to enrage many in

her own party. that is a dangerous game to play. this crossng to get party consensus. labor are not taking part. it is hard to see which kind of plan could come about when corbyn is staying away from the table. >> will theresa may rule out that prospect? meanwhile in brussels, we are standing by. next move, eu's particularly in extension of article 50? it is soon for them to make any concessions. they want to see a plan b. it clear there is nothing that can flip 200 votes. this is something that needs to

come from may. of article 50, it is an interesting question. the u.k. says they are going to leave in march. they are operating on the basis they will have to go beyond march. thatare winning to get request from the k which will have to be agreed by the rest of u.k. which will have to be agreed to buy the rest of the eu 27. some say it should be very short. others saying perhaps we need to wait until the end of the year. manus: time is of the essence. westminster, the chief economist. always great to get your contribution. tell me this. theresa may need to do

to bring a consensus and that parliament behind you? shifthe need to dramatically on two of her big red lines? >> it is it possible for her to get a consensus in parliament. she gains more labor support. in a way, a plan that could have a plan is obvious. for the u.k. to stay in a customs union so the irish question does not even arise. the entire u.k. and the eu do not need any hard border between them. may will have to do that. significante conservative support. the question is whether she goes that way.

forges not a consensus but an agreement with the majority of labor. her whether she faces another vote of no-confidence. nejra: he wants to hear her rule out that no deal brexit. perhaps some of the relief is down to no deal not been as great as it was before. looking less likely than other options like a second referendum or a softer brexit? >> we said the possibility of a no deal hard brexit is 20% and in more. if anything, the risk is going down. deall the options, the no nod brexit is one that has support in the house of commons. it is up to her to admit that is

the case and let it happen. she needs to do that in order to get labor and s&p support. soft brexit. which of eu would sign up to. manus: how quickly with the u.k. if that playsr out? >> the u.k. economy could recover quickly. it could be taken soon. whether it extends beyond the 29th of march, a technical issue which will not bother markets under those circumstances, i would expect the u.k. economy to after suchm the week

a solution was announced by theresa may with the labour party going for it. the risk is we do not get this obvious solution. economy, we see a significant upside. in the u.k., there is penned up demand for business investment, consumer incomes are strong. if the politics finally gets it right, which is a very big if, the u.k. economy would be ready manus: ok nicely soon . that is a bullish call. a quick recount. it is 10:17 here. taiwan semiconductor, the bill

whether. the numbers are in line. net him for the fourth quarter met the average. -- income for the fourth quarter. the gross margin will be 43 have and 5%. the estimate was for for 7.5%. the capex this year will be 10-11,000,000,000 dollars. to track everything, we are on the tliv. she says the company can continue to set new revenue words -- records. reach but trillion dollars thanks to strong demand. that is all set. got?politics, what have we >> absolutely. taiwan semi conductor matters to global investors.

it holds 13% of equity portfolios. it is the most widely held stock in asia. coming up as well, american authorities said to be investigating huawei for allegedly stealing trade secrets. we will bring you the story. this is bloomberg. ♪

frenchking news from the banking giant in regards to the fourth quarter. a stable dividend. marketre messages to the risk they were hurt in the fourth quarter. socgen, fourth

quarter. we have seen this in some of the american trading numbers. termsening the horses in of the horses away from the market. in line with the guidance. this is up date on the challenges of the fourth quarter. the dividend looks to be safe. mood.e a risk off it is about dollar-yen as well. >> it is also concerned about trade, a bit of a mixed session in asia. u.s. turninge lower. concerns outweighing corporate earnings. lot --ot doing a whole

even though theresa may's government did survive that vote. back to markets, asian stocks trading mixed. offset signs of a better than expected earnings season. in a move that could inflame talks, prosecutors pursuing a criminal case against huawei for allegedly stealing trade secrets. it is interesting because we are getting so many calls from the markets and market participants and economists recession is not a risk. risk.ey see it as a big how much of a risk is the tensions get even more intense? >> the risk is there.

sides are feeling enough economic uncertainty and pain to do something about the risk. there is a silver lining in the not so good news about the u.s. economy. namely, it has driven home to the u.s. the economic weakening we see across the world is something we see in the u.s. as well. case astake this huawei in your tent. both sides will look beyond it and simply focus on let's get this trade dispute which is hurting both sides out of the way. i would say chances are good we will get some deal and we will of her the recession. trade talks work to escalate,

then even we will have to use the r word, risk, recession. it will not materialize because policymakers know about it. i have you at a blind advantage. it is at the highest level since 1997. lead forwardto with normalization? or is it off the big agenda for 2019? i think the word normalization is largely off the big agenda. it is for central banks to see and need what -- see what they need to do. for central banks, the weird thing is this recession risk does not arise from any economic factor. it arises from what other policymakers, trump does on

trade and the like. he stays with us. and we have more to discuss around the markets, around the head, around europe. ♪

nejra: you are looking at a beautiful shot of new york. we are asking the question, what s&p 500 level puts fed hikes back on the table? you can join the debate. reach out to us. manus, i want to talk a little bit about the milk we have seen. 9%have seen something like a gain. is that going to pop at any point? perhaps of things,

putting recession risks on the back foot. ceos very worried about recession risk. in terms of interest is it aboutis what for me. we have run the numbers. they say there are going to be more to come. a floor.ll part of another hundred basis points. they reckon we are in for more cuts. let's check in on the markets around the world. joining us from mumbai, and also in london, good morning to you both. the rally in risk assets, is it fading or not? still moving within a narrow

range. how is it looking? very narrow. currently trading marginally in the green. we have not seen any movement whatsoever. one might say these are the gains but they are not substantial. advancing by less than 0.1% at this time. there is no help from the banking index, either. with the broader market index, the 500 index, not providing any help. onm going to keep an eye reliance industries, one of india's largest companies. expecting a lot of volatility to come, the big moves include we can expect some strength as far as earnings go.

get annemarie. some would say we are perhaps a little stoic in our reaction. orovernme f england said as much. >> it has been quite resilient. the euro is higher. potentially we could see it not last. this is of course yesterday, we saw the pound higher. theresa may staying in the room 10. the fact she is looking for initiatives, is pound positive. remember the analysts saying we could see it as high as 135.

115.uld sink as low as i want to show you what is going on in bullet tillery. and thetreasuries volatility index. down 40% --it is 47% on volatility since the peaks. many are thinking the fed is going to cause. better earnings than expected. the cfo of bank of america striking somewhat of a cool tone,'s day and all the data, nothing suggests to him an economic slowdown is imminent. let's see where the pound goes. counting down to see what theresa may's plan is. sc,'s talk about the tm

taiwan semi conductor. in terms of how the market is reacting. it is about the guidance and it does not look good. 43-45%. lower than the estimate of 47. operating margin, lower than the estimates. the presser is happening right now. we brought in our opinion columnist. i am looking at the blog. every line is that news. he is trying to put a positive spin on it but they are so many problems right now. are they trying to put lipstick on the proverbial pig? tsmc is just a normal

company. all the numbers disastrous. industryl shipping grows only 1%. the foundry industry will be flat. high-performance computing will fall. there are a lot of problems. one thing we have been talking about for the longest time, infantry, they have not:, they keep rising. there any upside at all question mark we have gone through a lot of the negative news. it is hard to search for the upside. there are a lot of companies that are not profitable. the revenue will not fall this

year by the look of it. that is a positive sign. if you are looking for a sudden turnaround in the chip industry, you are going to have to wait until the second half of the year. there are promises to make it good, $50 trillion mark but that is going to take quite a shift. ambitious promises? market facingone all sorts of headwinds. everyone facing these problems. if you are looking for something positive, those kinds of niche industrythe hardware may show some growth. overall, the big-ticket items

such as computing seem week. -- weak. horrific guidance coming home taiwan semi conductor -- coming from taiwan semiconductor. cryptocurrency. for a lot.accounted the beige book came back. there was a cautious tone. economy is u.s. growing. the market, volatility, trade and politics are weighing heavily. book is one small piece we use as a backdrop understanding what is going on in the u.s. economy.

are you part of the group that believes interest rates are off the table? the latter part of 2019? it is pretty clear the fed is on hold for now. one ratehey may be hike higher. in a way, it is not a negative is notingige book concerns about trade concerns. adds to the pressure of the trump administration to do something about one of these root causes. we have talked about

global equities. circulars a bit of a question. what level would put fed hikes back on the table? the december selloff has probably shaken the fed. that, that would be an argument the fed would be looking at. it would not be the only argument. if it were to be reversed in line with great economic data, that would put the rate hike question back on the table. the latest line, 60 9% probability of a recession in 2020. thank you, stay with us. to wall street now. we have given you the number, $100 billion. season, profits

jpmorgan reported a record year. the lender is the only u.s. bank so far to report a drop in annual revenue. we saw goldman sachs come in. 8:00 its biggest earnings day gain since 2008 after beating estimates. bank of america shores soared. morgan stanley is left, which will likely add to the record quarter for u.s. banks. bloombergr more's the opinion columnist. great to have you with us. why have investors reacted so positively to earnings? >> it was in a pretty quarter record.year was a you have to put into context the re-rating of u.s. bank shares.

they are looking for signs the valuations are justified. when they look at particularly the quality of credit, they are not seeing concern just yet. they are re-rating with the view , there may be an obsession but it is not happening just yet. credit quality remain strong for the time being. bank sharesche rival -- rallied, didn't they? did that circumvent a lot of regulatory hurdles? the narrative of there being potentially a merger down the line for deutsche bank is still alive. there is no indication there is a deal going on. regulatorsropean expressing their preference for

a merger across borders. to reinforce -- it creates a larger, more diverse institution. there is nothing in the works in terms of dealmaking. nejra: we have had some headlines from socgen this morning. tell us what they are trying to convey. it appears the bank is proposing a script dividend and shares. that would be a way to preserve their capital buffer which of course has been under pressure. it is telling us the fourth particularly difficult. the market revenue is going to be down, 20% or so. what they are offering is a

paper dividend, share dividend. they are taking a $270 million charge. it must have been the bad volatility rather than the good full attila the. we speak to the former atlanta fed president. you can catch that at 7:30 a.m. u.k. time. you are traveling to work, tune in to bloomberg radio live on your mobile device in the london area. i will be joining you later there when i make my way back from westminster. this is bloomberg. ♪ . ♪

let's take a look at some e.m. currencies. in china, the story is about the central bank guiding down those costs without actually cutting rates. we are keeping an eye on the indonesian rupiah and the south african rand. both expected to hold rates. thes: sticking with emerging markets, the main opposition candidate says he would appoint a new central bank governor if he was elected. >> you would change the governor if you became president. >> if i became president, why not? manus: nigeria is africa's

largest economy and set to elect a new president. seriousquite a proposition. is that consensus? is it that radical? >> it is very radical. it is the kind of thing you would expect from an opposition candidate who has been contained in this tightly controlled regime. which has been prevented to any great degree. there is a sense it is very overvalued. allowing it to float, it needs to change.

currency toow the find its natural value. it is a function of how like we he is to get into power. that is an open question. nejra: great to talk to you this morning. getting a rate decision from indonesia. they were one of the biggest interest rate hikers. will they pause? >> if you ask anybody what they 6%, do, the current rate of they were one of the more proactive aggressive central banks. ,ne of the first measures raising interest rates.

they have had about six since then. it has recovered to some degree. we will probably see them stay on hold. perhaps even a cut in the second half of this year. much. thank you very we will be tracking them. be top of the agenda. report forinflation the whole of the euro area. economists forecasting 1.6% on the year. later today, opec issues

its -- that feeds into the .urope story concerns are building whether europe will become the epicenter of the next recession. solid bidave gotten a but how long will that last? you are the perfect person to discuss this with. low.ng a five-year bad are the prospects in 2019? german five-year low in growth is a fiction. the bigger point the economist looking at it. there is at the moment to

with an economy like the german economy. fundamentals are solid. we saw a strong gain in employment. with companies looking for qualified labor, they are unlikely to lay off people in a temporary downturn in demand. growth will remain solid. facing a short-term recession. trade issues we talked about our taken off the table by the longer prospect for the german economy and the

eurozone economy will be brighter again. since you have tempered our numbers with germany, how exuberant are you about italy? for is it going to fare worse than germany? italy is a long-term structural story. with the government going terms of the government the wrong way. trouble inading for the long run. the overallt of cyclical story. at the moment, it is bleak. if the global environment improves, they will manage to avert recession. their fiscals

target. in environment where the start of the year was pretty weak. the eu will let italy get away with some fiscal overshoot. it could be half ok. the longer-term future is not bright. has the ecb missed its chance to normalize policy by hiking rates? not put it that way. if they had hiked last year as a i what we have downturn, the entire world would have said, you made a big mistake. it is good they kept on hold last year. the chief economist, great to have you with us. the cold.for braving breaking news. there is a line in this

note from ahlstrom. uncertainty around the possibility of the deal. numbers, number deal 3.39 billion. those are the numbers. commission deal is expected by february 18. closing in theal first half, subject -- if you trains rolling stock, huge projects like that i'm a that is essentially with the delivered. is what the market is going to focus on. sales, 2.0 one billion. orders 3.3 9 billion. stocks to watch. biggest activist fund.

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♪ manus: good morning from dubai. this is "bloomberg daybreak: europe." anna: i am a dust nejra: i am -- nejra: these are today's top stories. manus: the british government survives a vote of no-confidence, but the prime minister tells the brexit deal in the dust. that's the question, where does the u.k. go from here? we are live in westminster and brussels. asian shares come off the highs. to be probed by the u.s. for allegedly stealing trade secrets. could this inflame trade tensions? societe generale headwinds. a quarter of a billion dollar

chart challenging global markets and the revenue slump. we will break down the numbers of the french banking giant. ♪ nejra: 71 days until brexit. i have in westminster the morning after theresa may government survived a no-confidence vote called by the labour party. theresa may now entering into dangerous and delicate discussions. she needs to come back to parliament on monday with a plan the. in the meantime -- plan b. in the meantime, she is planning to hold cross party discussions, but jeremy corbyn of labor wants theresa may to rule out that no deal brexit first. manus: will she be prepared to move on her red lines? bushy be prepared to move on customs union -- will she be

prepared to move on the customs union? we will discuss. let's show you the bond markets, first of all. we had the fed survey last night. the beige book, and in and there were 19 mentions of interest rates. you have got a very clear disc insertion in the u.s. -- disconcertion in the u.s. in regard to the interest rate discussion. volatility below its today 2average-day. we don't think we are going to get a great deal of variation in terms of what's going to happen with rates at the short end of the curve. you have got the tighten government bonds fairly flat at the moment. that's the state of play on the bond markets. equity markets for you, what's on the agenda? markets, we equity

have had positive news in terms of the corporate earnings season out of the u.s., particularly with the banks. we got a modest gain in the u.s. session yesterday but what seems to be when a little bit on u.s. and european futures -- weighing in the u.s. and european futures is perhaps some concern that we could get a little bit more of an escalation in trade tensions around those headlines from huawei. that is one thing to bear in mind. there's also the question of whether this melt up we saw in global equities is just running out of steam. let's check in on the markets in asia with the juliette saly in singapore. before we get to her, you have got some breaking news to bring us? manus: just confirmations. we will look at whitbread in a moment. the details were confirmed of a capital repayment. cash dividend, $1 billion, will

be paid on february 19. running an eyeliner down the whitbread numbers, they are actually saying consistent profit. whitbread a big pup operator in the united kingdom. whitbread says an initial half a billion share buyback program will commence today. all the drinking during christmas did not do much to bolster the retail environment. third-quarter sales come in 2.5%. byrd quarter u.k. sales down 0.6%, so there is a lot of moving parts in these markets. whitbread, and akzonobel. does get to juliette saly in singapore. it's all about taiwan semiconductor's. juliette: yes, that was one of the numbers that came through earlier in the session.

what we are actually seeing is a bit of a downturn the coming through in chinese markets as they go into the close. the csi 300 now down 0.6% and weakness in hong kong. we saw the developers hit hard today. that has reversed the fortunes of asian markets, which were looking like they were going to continue to hold on to those six-week highs. 0.2%nikkei close lower by on stronger yen. singapore markets lower. we had a disappointing export number today. in terms of the currency markets, we have been mentioning resurgence coming back in the japanese yen, leading gains in the fx space, up by 0.2%. raising itsng citi forecast for a cheap yen. when you look at southeastern asian currencies, the type of art the winner, best the thailand barth -- the thailand barth the winner, the indonesian

rupee at the loser. rupiah thendonesian loser. nejra: now of course in the last hour we are bringing you the headlines of huawei reported to be the target of a probe for trade secret theft. in terms of the news flow around trade, we are now hearing that china is confirming the vice premier to attend trade talks in the u.s.. is this progress? are the markets going to take a positive move higher on headlines like this? it's one of the dynamics playing into global equity and fx markets. today we are asking a question on mliv related to equity markets, manus? manus: we are indeed. it's actually flipping around. at what level, i suppose on the upside, puts rate hikes back on the table? we talked about the tragedy on the downside.

what does it take to move the fed for a rate hike sooner perhaps than the market thinks? news get to the first word in dubai. reports from washington and say federal prosecutors are pursuing a criminal investigation against china's huawei. we are told the case involves alleged theft of trade secrets from u.s. business partners, and a robotic device. huawei has previously denied wrongdoing. theresa may is said to be prepared to blow her red lines to find it by the compromise that could get through parliament. after surviving a no-confidence vote in her government, the u.k. prime minister held discussions with other party leaders about a way forward for leaving the eu. however,the meter -- jeremy corbyn refused to take part, demanding theresa may rule

out a no deal brexit before talks. she must return to parliament with a plan b by next monday. >> i'm disappointed that the leader of the labour party has not so far chosen to take part, but our door remains open. task, butt be an easy mps know that they have a duty to act in the national interest, reach a consensus, and get this done. the french finance minister is calling for the dismissal of carlos ghosn as chairman and ceo of renault. he says the french carmaker needs new and durable governance. most important shareholder. carlos ghosn, who denies wrongdoing, has been in jail in japan since november on allegations of financial misconduct. >> the main opposition presidential and eight in nigeria -- in nigeria --

presidential candidate in nigeria says he would place the central bank governor just replaced the central bank -- replace the central bank governor, and it is the country's stake to i marty -- a minority. nigeria will collect a new president on february 16 -- elect a new president on february 16. >> [indiscernible] >> you think you can do it? >> of course. why not? we have the political will. the founder of vanguard group and lifelong advocate of low-cost index based investing has died at age 89. under his leadership, the company introduced the first flex retell neutral on -- fund.

his formula turned vanguard into the largest u.s. manager of stock and bond funds. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. nejra and manus? nejra: thank you so much. global equities are headed for their best months in a year, better-than-expected corporate earnings, and support from central banks has kept risk appetite alive. even so, sentiment remains fragile. rising u.s. china tensions and cracks in the growth picture keeping market on edge. joining us now to discuss all this and more is laura cooper, head of fx solutions and strategy at rbc investment management. i want to start with these trade tensions. we are hearing that the china vice premier is going to go to the u.s. for discussions. you get atually --

sense of a stimulative bias. do you get the sense that china at the moment is wanting to stimulate its economy through any means possible, except weakening the yuan, for fear that might derail the trade discussions. laura: we don't expect them to use it as a policy tool at this stage to try to stimulate growth. , if anything i would expect that to be a last resort for them. as we expect, we could see some kind of risk appetite improved on the back of these trade discussions. that in the near term should -- remaining relatively where it has been. if we do see an escalation, possibly later this year that we could see the chinese central bank begin to use currency more so. manus: a very good morning to

you. it's manus in dubai. we have also run our numbers at bloomberg intelligence, and they suggest another trickle. they look at the excessive reserve ratio. that's how much extra capital the banks have got to put aside. would say they need to reduce the err again. we just had a move a couple of weeks ago. laura: i think they will be on hold for now, just until we see what is coming out of the trade tensions. it's a little bit premature at this stage for them to embark on further stimulative measures. i certainly would say it remains on the table. it's likely we will see something later this year. that's likely more reflective of the growth story in china. they are really turned to stimulate that growth and continued this expansion, and less about the trade impact at this stage i would say.

nejra: a lot of people have pointed to the fact that the stability and strength of the yuan has recently been helping risk appetite globally. let's talk about brexit. you are not seeing a huge move in cable or the past three days, at least when you look at the closing levels. you get a sense investors are not too sure where this goes from here. what's your best guess on the way brexit evolves from here? laura: that's a tricky one. i'm think we may look -- i think we may look back to a month ago. when we look at where we are now, really nothing has changed. that's why we are continuing to see cable remain relatively range down. i would say that currency is going to take its guidance from the probabilities that markets are assigned to the various different outcomes that could occur. one of these does remain a no deal outcome which is possible, although we do assign a very low risk to that.

that keeps is relatively cautious on the pound at this stage, just until we get clarity on what's next. , we haven i ask you asked a number of fx analysts how you vicariously hedge or protect yourself. some people say go to the nordics. i am looking at pretty big calls on the yen this morning. that's perhaps more to do with the break of japan, but how would you hedge yourself in terms of if you don't want to trade what some say is a highly untradable currency at the moment? where do you go for a bit of protection in the bread is drama -- brexit drama? wera: i think given the fact are seeing these geopolitical tensions, trade risks coming back to market sentiment, that that will be supportive of those traditional safe haven currencies. we are seeing this play out in the japanese yen, and the swiss franc as well, because it tends

to outperform when we do see the european risks escalate. the --ndies as well -- as well could be quite favorable. that is supportive of the currency there. at this stage, stay away from sterling. that's probably the smart play. nejra: although you say that, you actually think the two most likely outcomes are a second referendum or some modified deal on new terms. that surely would point to sterling upside? laura: absolutely. that they wait and see kind of mentality. when we have planned the -- that's a wait and see kind of mentality. we don't expect plan b to be material different from plan a. this will allow for more time to try to get an amended withdrawal agreement through, or raise the risk -- the chances of a second referendum coming through.

those would be pound positive, but that's not something we are seeing at this point in time, but probably further down the road. manus: can i ask you, is the first most important thing for the sterling bulls that labor comes in from the cold, as it were, and joins the discussions? would that be the building block one to a more progressive sterling traded? -- trade? laura: i think yes, that would probably help the currency trade to a certain extent. that would potentially limit the downside risk of a no deal brings it materializing -- brexit materializing. we don't necessarily know what's going to happen on the political front. when it comes to the currency, we do expect to see really just with thend trading volatility on the back of these different have life we see playing out from what's going on in the government. nejra: thank you so much, lori

cooper, head of fx solutions and strategy at rbc investment management. up next, we will continue to talk about brexit, this time through the prism of the uk's housing market. this is bloomberg. ♪

♪ with: markets are dealing 2 conflicting issues, taiwan semiconductor is telling us not such great news. you have asian stocks slipping into the mud. the $111 billion the u.s. banks have earned is being trumped really by the concerns about trade, and about those semiconductors. s&p futures down. let's see what the last of the banks delivered today. good morning. nejra: good morning. toneollowing that risk off , coming up a bit of pressure,

below 52 in today's session. cable meanwhile, turning a little bit negative now. noare done almost 0.2%, but huge moves here as markets try to assess where we go from here. theresa may's government survived a no-confidence vote. big questions ahead. the story seems to be what's happening in global equities and concerned around trade -- concerns about trade. let's get the bloomberg first word -- business flash. >> socgen expects to move a $240 million charge in the fourth quarter. that's as the french lender predict a 20% revenue decline in its global market for investor services division compared to last year. hurts byys it's being a challenging global market environment. deutsche bank's top regulators are said to prefer a merger with the european rival rather than with a local competitor, commerzbank.

the merkel government is keen on an all german outcome. according to a bloomberg source, the ecb favors a cross-border solution to drive immigration across the euro area's financial sector. deutsche's and commerzbank remain too weak to benefit. cute is said to be ready to back on hiring in some divisions after weaker than expected iphone sales caused it to miss revenue forecasts in the last quarter. ceo tim cook told staff earlier -- told staffut earlier this month. he does not believe in a general freeze, but some divisions would reduce hiring. that's your bloomberg business flash. manus: thank you very much. back to brexit and all of the uncertainty swirling around. let's take a look at the sector of the real economy that could be heavily impacted by the. outcome that's the housing

market. the bank of england has warned that in a worst-case scenario house prices could be slashed by one third. in some parts of the country prices are ready starting to decline and in prime locations that slump is even more pronounced. joining us now from the abington green is simon rubinsohn, the chief economist for the royal institute of chartered surveyors. welcome to the show. you bring us fairly tragic readings, which is that inquiries, sales, destructions declined in december. how bad is it, simon? think it follows the november report which was also quite downbeat. what it's telling to is that this uncertainty around both the political and economic environment linked to discussions of brexit is taking its toll on this market. i think the other side of this

is that sort of the existing market, the secondhand market is certainly seeing some weakness. it's also going to filter over into new builds. they are not going to be wrapping up sales. they are going to be pretty judicious. everybody is sort of on hold at the moment. . nejra: it's interesting we are seeing softness in the market while supply is tight and there are affordability issues. is a lot of this down to brexit uncertainty? simon: i think affordability issues is an ongoing one, for the country. certain classes of purchases, investors are now more cautious than they were. there is no doubt that the brexit issue has become the dominant influence. overwhelmingly linked to brexit. they may not have a particularly strong feel of what outcome they

want, they just don't want this to continue. uncertainty is the biggest issue , which really is a drag on something like the housing market. manus: that uncertainty, simon, do you think asking prices -- i mean, you take this survey forward by 12 months, it does not make such a battery in 12 months time -- bad reading and 12 months time testing 12 months time -- in total months time. does the market -- 12 months time. simon: i think it's a really relevant point. a vendor of a secondhand property or a developer community got to accept the reality. those realities depend on where in the country you are. we do know that some developers are increasing their incentives to get stock away. we know that's already happening in a new market.

again, in terms of the they repeatedket, the mantra -- the repeated mantra from our members is you have to be realistic. if you want to sell your property, you have to accept that the price may not be what it was six want to go. nejra: and who is going to increase that -- six months ago. nejra: and who is going to increase that supply? that's the big question. , great to have you with us on this program. government survived a no-confidence vote, but how can she have these cross party discussions with jeremy corbyn refusing to come to the table. manus: she has got to bring a plan b back by monday. certainly just a little bit like in their -- light in there.

will she drop the no deal as part of a proposition across the houses of parliament? daybreak europe, as the european market open is up next. ♪ amazon prime video is now on xfinity x1.

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"all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. ♪ the "bloomberg markets: european open live from our european headquarters. i am alongside anna edwards in westminster. european futures points out after theresa may narrowly survived a no-confidence vote in parliament. we will she have any luck with cross party tough -- will she have any luck with cross party talks? we will have all the latest from westminster. the cash starts must than 30 minutes -- the cash trade starts in less than 30 minutes. ♪