nejra: good morning. nejra cehic. manus: i'm manus cranny live in dubai. these are the top stories. nejra: china's gdp slows to its weakest since 2009. signs of stabilization supports stocks across asia. u.s. futures trading lower. they are said to fall short on ip issues ahead of a round of talks this month. equities and treasuries are shot down for a holiday. brexit plan b. theresa may said to give up on cross party talks as she presents plan b to parliament later today. ♪

manus: warm welcome to daybreak europe. what is driving markets this morning? you have the bits from the olive branch from the chinese are missing to close the gap, followed by a little disappointment in the yuan. intellectual property still a stumbling block. the market is buying the most forwards on yuan since 2014, nearly $20 billion. s&p futures are on the move, a little bit lower. it's martin luther king day, so not the same level of liquidity. but of course, we have bounced back 14% since december 24 after crushing 16%. the third since 1938. is there enough in the market? crude up .2%. rig count lowest since may. talk about the black swans in

the market later. nejra: one thing that struck me this morning was the ambivalence of cable. theresa may is bringing plan b later today, but the fact she's not having cross party talks, does that mean is she trying to placate the heart brexiteers? i want to put up what is moving. dollar-yen is moving. yen is strengthening. it is gaining against the dollar for the first time in five days. on concerns this is taking the glass half empty view on talks, a bit of a delay in the stoxx 50 futures getting underway. some issues with your ex, so perhaps we are playing catch-up. we are tracking u.s. features. we could get a negative opening in europe. the 10 year yield moving higher with u.s. equities, futures look like it could be a little bit big. we could see the yield take lower, but -- tick lower.

softer would be the form of brexit, according to goldman sachs. they will be one of the strongest g10 currencies of the year. let's talk about the mliv question. they circle the other big question. china data, good or bad news for global equity markets? depends on which piece of data you want to read. weakest growth since 2009 in the quarter. and of course, growth for 2018, 6.6%, lowest since the 1990's. good news for the equity markets? we discuss. let's get the market rundown. juliette saly is with us. juliette? juliette: certainly good news for the asian markets. seven-week high on the msci asia-pacific index. that is because the bad news has been factored in. you saw industrial production and retail sales numbers china beat expectations.

chinese markets marginally higher. the nikkei is up .25% on the close despite the yen strength. a little weakness coming through in the korean market. we saw the extra and share market close -- australian share market close. some good moves coming through despite the data, and despite export data out of south korea, the weakest in two years. in terms of stocks we are watching, interesting poll in south korea with most saying they want the government to remain with nuclear power and against that moved to exit from atomic energy. up 2%.e it this company here falling the most since 2002 after saying profit could drop 61%. then we are watching the alcohol companies in china on a bit of a tear. forget the run on money ahead of the lunar new year. people are buying up all.you are seeing distillery

companies rise ahead of the lunar new year heart of the days -- new year holidays. nejra: too early to talk about alcohol, but thank you. let's get bloomberg first word news with annabel. annabel: thanks. slows to itsmy weakest pace since the financial crisis amid growing demand and trade war with the u.s. gdp grew 6.4% in the fourth quarter from a year earlier, down 6.5% in the previous three-month period. in december, gauges of output accelerated. hold.ing to take u.s. china trade talks are said to be falling short on key issues. sides are making little progress on the issue of china's alleged intellectual property theft. the nation's practice of forcing companies to gain secrets to

have access. huawei's founder has warned of job losses. this is in email sent to staff friday, as several governments banned the company from their five g networks. the trump administration worked on a second summit with kim jong-un, expected to take place in vietnam. the white house announced the two would meet late next month in ho chi minh city and denying being the most likely venues. nether side of a braided on what was discussed -- elaborated on what was discussed. be european union is said to split over delaying brexit via year. this would give the government and of time to find an agreement that would win backing of parliament. theresa may is said there is little possibility of a cross party agreement. she will now six changes to the

irish negotiation with the eu. international trade secretary liam fox says reaching a workable deal isn't a given. first trump has made his offer to try to end the month-long government shutdown. the president said he would extend protections for dreamers for three years and make other concessions in exchange for the money for a border wall. nancy pelosi rejected the proposal this weekend hours before trump outlined it in the nation. but the democrat in the house has called the two sides to reach common ground to find a permanent solution. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. nehra, manus? manus: thank you very much. china has a seeing its slowest pace of quarterly growth since 2009. trade blows are mounting. haswhile, president trump

combed investors and claimed trade talks are making great strides. bloomberg understands the two sides have made little progress on the big issue, ip, intellectual property theft. tom mackenzie is with us. good to see you. what are the key takeaways from the data? tom: the key takeaway is they have their finger on the slowdown. we talked about it coming in at 6.4%, in line with expectations. get things like retail sale and production and fixed asset investment. there has been concern about the health of china's consumers. what you saw things like electronic items, things like furniture and food being bought up in great quantity as auto sales continue to shrink.

industrial production came in above expectations. some views that is a result of the pollution, the mining sector doing well, for example. fixed asset examples in line with expectations. there's a view you will see ramped up infrastructure spending to put a fall under the slowdown. where do we go from here? that depends on which economist you speak to. robin shing thanks the turnaround will happen in the second quarter. is a bit more optimism as some of these measures kick in. nomura says the worst is yet to come. they are concerned about the real estate sector and the health of the chinese consumer. most agree, in terms of support measures, you are likely to see a step up in terms of tax cuts. and from the pboc, potentially another rrr cut. nejra: there seems to be a push and pull in the market today.

asian equities bid on china data, but u.s. futures pointing lower, taking the glass half empty view of the trade talks, at least for today. should we be surprised to china is digging its heels in over ip theft and forced tech transfer? tom: well, to some degree, no. china watchers will say certainly it's no surprise china is not going to be making advances in terms of key structural issues, intellectual property and forced tech transfer. but when they had the meeting in buenos aires, a week or two they started to see signs they were addressing the intellectual property regime here. we have sources telling bloomberg news they were looking at a new law to restrict tech transfer and they were looking to change industrial policy, as well. it seems like, from trump's perspective, because he has been talking positively about the stocks, maybe he's a

sugarcoating a bitter pill. certainly what we heard from discussions was that there was three days of back and forth over ip with not much headway. that takes us to the end of the month, where we expect the vice to go extend the talks. if he can get anything tangible, if he can could beat the americans -- can convince americans the changes will be on the ground, the brunt of some of these issues. that is where the focus shifts to now. manus: thank you very much. tom mackenzie, our china correspondent in beijing. joining nejra and myself is the head of fixed income research at nomura. great to see you. the debate is this, whether the policy response we have had is manifest yet. most people, i.e. morgan

soundly, goldman's -- morgan stanley, goldman sachs, you will not see the real consequence until the second quarter. is there enough juice in the china tank thus far? guest: i think right now, no. i don't think there is enough juice in the tank. i think one of these things that is evident during this recent iswdown in chinese data, that china is in stimulating the economy as much as late 2015, early 2016 or earlier before that. there are cautious about how to stimulate the economy. they are tactical. they are trying to stimulate the private sector. they are unable to turn around the auto sector, property sector. this is a different trough in the chinese cycle. they are looking cautious in trying to call a loan to soon. isra: one of your key traits cnh. is that based on your outlook of where trade talks go from here? guest: yeah, one, that's more

for tactical trade. but also its trade talk. the u.s. i think we'll push for the dollar to be weaker against the remain be. there are different moving parts. the chinese would like a weaker remove be, but there's a tug-of-war between the two. manus: i mentioned the forward at the top of the show, we are seeing yuan gather momentum. this is forward trading. the net longs are the most since 2014. if policy steps remain as they are and we get a trade deal, where could yuan rally to? guest: well, i think we could move below 670 if we were to see a trade deal announced. the one issue then is where the chinese economy is, because the chinese authorities would want

too much room in the strength, so they would try to limit the strength below 670. but we could be 670 in the coming months. nejra: has the market got a full grasp in terms of pricing the trade war? one thing you been writing about is the structural issue of ip theft we've had headlines on over the weekend. we've had conflicting views in different parts of the market on what you to take on the trade war from here. his dollar u.n. pricing it correctly? guest: it is difficult to get this correct. the short-term dynamic pushes it forward, and then there's the long-term tech story. the issue of ip theft, if china is complying with u.s. requests, in the end it comes down to trust. do you trust the authority implementing these restrictions on tech transfer? only time will tell.

the market wants a resolution right now, but the market won't be able to get that right now. there's a challenge of finding here that the market is struggling to time. manus: obviously, commodity currency is in focus. for me, the juxtaposition in australia is the obvious slowdown in the housing market and the policy issues around the market versus the trade conversation. which is the more dominant force for the aussie in 2019? guest: well, i think, in the end, i think the domestic story will be coming more important. what we have found with the australian dollar and the kiwi, is over the past year relationship with the chinese growth cycle, it has weakened somewhat. part of that is rebalancing the chinese economy, china growth driven less by property and import of iron ore, and much more by domestic consumer sector. i think there's a reorientation

of the chinese economy, which is having an impact on the economy, as well. the aussie domestic story will become more important. generally around the world, the domestic stories in every country will end up becoming the more growth engine. nejra: briefly on chinese growth, do you see it being a threat to global growth and 2019 given you said they are not pulling the same policy levers? guest: i think absolutely it will. already, we are seeing it is impacting europe, the global economy. we've learned that when china does slow, everybody else slows. this will be the biggest swing barrel before global growth. nejra: head of fixed income. the daily coverage from the world economic forum begins. we will speak to the ceo of credit suisse and bank of america as the chairman of ubs. manus: and if you're traveling

to work, you know to do. bloomberg radio live on your mobile device or dab digital radio in the london area. this is bloomberg. ♪

manus: this is bloomberg daybreak: europe. on the manus cranny in dubai. nejra: i'm nejra cehic in london. we are seeing gains in asia, equity markets focusing on positive indicators out of the china growth data, even though we have seen a slowdown to 2009 levels. s&p futures also on the back foot. showing a divergence in asia. it seems for s&p futures, the focus is the trade talks and the sticking point of ip theft. manus? manus: yeah, it is.

and if you look at the underbelly in the data of china, maybe not as tortured as we think. you've got the hang seng in the high. wti there having shale slowdown. cable, flat as a pancake. we need to find out what plan b is. we've been rising for week six of agreeing on the scene for cable. we'll find out what plan b is later on. in regards to that data, good or bad news for the global equity markets. join the debate with id plus tv on your bloomberg. let's get bloomberg business flash. annabel: thanks. italy's communications regulator turned down telecom italia's plan to separate it's in line record .china's economy slows to

of -- analysts estimated the value of the network at 15 billion euros. the model three across europe. deliveries are expected to start next month. europe is priority for elon musk, twice as large as the u.s. he cited sales in europe and china as the main reason he isn't concerned about a potential setback in the u.s. following tax credits of electric cars at the start of the year. blackrock, the world's largest asset manager, posted confidential information about financial clients on its website. addressesd names and of black rocks ats on behalf of clients. they appeared to show management each advisor had. that's your bloomberg business flash. nejra, manus?

nejra: thank you so much. u.k. prime minister theresa may will return to parliament for brexit plan b. she attempts to win over some of the 118 conservative lawmakers who voted against her last week. international trade secretary liam fox says compromise is vital. >> across the conservative party, they either voted for the prime minister's deal, or they didn't because of the issue of the backstop. that was the sticking point. that seems to be the area we are coalescing around. if we are able to get agreement on the backstop and the future agreement with ireland, both ireland and the united kingdom have both said we don't want to see a hard border, and the irish prime minister has a said, in the event of a new border, he wouldn't want to see a hard border. given we are in the same place, that should be the area we need to look to find compromise.

nejra: head of fixed income research at nomura is still with us. given we are hearing theresa is giving up on cross party talks and she is trying to take the heart brexiteers and her party, do you believe there are enough forces to avoid hard brexit and give into sterling strength? guest: i think it is really difficult to be so clear on the parts here. the main issue now is a question of time. we are running out of time and if we don't get some movement by the rebels in the conservative party, we could have a cliff edge problem for the u.k. i think that's the big issue here, is really theresa may seems to be running down the clock. that seems to be the new tactic rather than coming up with a new variation on the deal. manus: we had goldman sachs earlier in the day. they say it will be a later and softer brexit than we presume, and that's going to give sterling, the strongest, biggest

winner in the g10. that's a heck of a call. would you be part of that camp? guest: i'm sympathetic to that call because if we do end up with a softer brexit, i think the pound will do very well. the issue with that view is that it's very hard to find probability to that, whether it's the timing or whether that it will happen or not. our base case is that we do think we will end up going down the path of a delay and some kind of softer brexit. but with politics, anything could happen. nejra: you prefer to trade via eurosterling rather than cable? guest: eurosterling is the best way in the price of you. we have dollar, as well. if you pay through cable, you get dollar weakness as part of the package. on brexit, you might be right dollar weakness. adding cable would be the best way of playing it. manus: we seemed to convince

ourselves that will be a request for an extension today. but liam fox really gives a no deal prospect of life. thatnted very clearly until no deal goes away should we be anxious. guest: absolutely, because by default, the only thing parliament has agreed on is that the u.k. will fall out of the european union by march. so if nothing happened, the u.k. falls out of the eu by then. we have to keep that on the table. but i think in the end, there's enough support in parliament for some kind of delay. the question is if europeans agree or not. nejra: there is some disagreement. he's a staying with us. coming up, earning season kicks into high gear. why something is spreading to wall street forecasters. we find more out about that next. manus: if you're traveling to work, bloomberg radio on your mobile device or dab digital

radio in the london area. this is bloomberg. ♪ amazon prime video is now on xfinity x1.

so when you say words like... show me best of prime video into this... you'll see awesome stuff like this. discover prime originals like the emmy-winning the marvelous mrs. maisel... tom clancy's jack ryan... and the man in the high castle. all in the same place as your live tv. its all included with your amazon prime membership. that's how xfinity makes tv... simple. easy. awesome. comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?"

"all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. manus: what are you going to trade on? you going to trade on the possibility of a china-u.s. deal? for the fact that consumption of factory output has accelerated underneath headline numbers? that is the debate for your world markets. the market seems to be focused a little more under the hood of the china data. rather than intellectual property theft. nejra: i definitely agree when you look at asian markets. a lot of green on the screen. you was futures are pointing lower. you are seeing the yen strongly bid. that tells you those markets are taking a glass half empty view in terms of the trade issues, particularly around ip theft.

yeah, that-- manus: ueaj will roll on. you've got consumption of factory output. they are accelerating. our guests havs said that will be more to come for china. an seems like a fairly measured response. nejra: in the short-term, he does see yuan strength up until trade resolution. the on than, we could -- beyond than, we could see weakness. bloomberg economics sees those both on the monetary and fiscal front. let's check in on markets around the world. joining us from mumbai's divinity and annmarie hordern. how our markets in india positioned today? are they all in with optimistic sentiment?

ek,coming off of us we today is not a bad start. nothing great, but we are sort of stable. more consolidation in the markets this afternoon. you've got the mifid index trading higher. the banks last week were a no show. looks like contribution on the lower side. they were underperforming the benchmark indices. on the flipside, you've got ip extremely strong. good earnings momentum, which have driven up the pricing action. 1.5%.ve the icy index of you've got more big banking's reporting third-quarter numbers today. all eyes out for that. manus: thank you very much. you are looking at the gmm function. is, hostx column, it

of em meetings this week and announcements. what stands out for you in the columns you are going to look at? annmarie: first, i want to kick it off with equity. you would imagine the weakest growth is with chinese data since 2009 would mean a bearish tone in equity. that's not what we are seeing, china msci up .4%, hong kong up .3%. this is risk on for the equity market. maybe they are looking at production that was more poignant. foreign-exchange, as you say, currencies are down. this has to do with the japanese yen. you can see the strength of the yen not just against g10 major peers, but extended majors. this might be the fact that they are saying when you look at foreign-exchange, they are pricing on what is going on in trade, less the uptick in china data. according to washington, not making progress on intellectual

property. i want to leave you with one chart. i couldn't help myself. fastest start, stronger start for the vti, u.s. oil, in 18 years ago. where were you 18 years ago? nejra: i'd rather not say. [laughter] manus: where was i 18 years ago? let's just see. i was running a leveraged business, making people very happy in the equity market. there you go. so i was battered and bruised and it a lot of time entertaining. a lot of champagne, a lot of rugby. davina and annmarie hordern. don't do that to me. that's hard work. let's get our first word news. annabelle in hong kong. annabel: thanks. u.s. china trade talks are falling short on key issues. the two sides are making little progress on the issue of china's

alleged intellectual property theft. the nation's practice of forcing companies to hand over foreign technologies to have access to their markets. huawei's founder has warned of job losses. this is in an email sent to staff on friday, as several governments banned the company 5g networks. the trump administration worked on a second summit with kim jong-un, expected to take place in vietnam. the white house announced the two would meet late next month in ho chi minh city and da nang being the most likely venues. nether side elaborated on what -- would be diluting twitter account due to suspicious activity. he was known for his outspoken views and uses twitter account to express his opinions. it is unclear what activity he

was referring to. he said when he sets up a different count, you can continue to follow him. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. nejra, manus? manus: annabel, thank you very much. it is longest u.s. government shutdown in history, now in week five. president trump's latest attempt to end the closure was panned by both democrats and republicans. a new proposal is circulating from the number three name on the democratic side of the house, who is seeking a remnant solution to the so-called dreamers. the latest was with our international jody scheiner. he's standing by -- jodi schneider. these standing by. -- he's standing by. what is sending the path of the

shutdown? jodi: it has been criticized by the democrats. his proposal includes a three-year reprieve to dreamers and exchange, and a few other concessions, in exchange for money to build the wall. democrats said they will not be providing wall money and say it -- it is in the president's camp that he caused the shutdown. meanwhile, it's the republicans in the senate said they will take a vote on this. they are trying to force some people to take vote. could be difficult votes, saying either end the shutdown, here's the shutdown -- here's the proposal. let's end the shutdown. it is a complicated proposal, but there is not a path to end it with this particular proposal. nejra: ok, so with that particular proposal, perhaps not. but is there going pressure to

end the shutdown? how could that not happen now that we are in the fifth week? jodi: there is a lot of pressure, and about a hundred thousand federal workers will miss their second -- 800,000 federal workers will mr. second paycheck this friday. there is going -- growing pressure. overwhelming, the president is blamed, but there's plenty of blame to go around. one proposal is from jim clyburn, who is saying let's look at a proposal to more permanent give a reprieve to the so-called dreamers. yes, let's reopen the government, debate for a few weeks, and see if we can come up with something that will satisfy both sides. we'll see whether that gets traction. in the house, they are not going to vote on the president's proposal. they will vote on spending bills that will reopen the government. the two sides are very far apart. but there is going pressure --

growing pressure as this enters the second month. we will see more pressure as the second paycheck is missed later this week. manus: really, really does become a real-life story. jodi, thank you very much. jodi schneider with the latest. sticking with the u.s. and amid a slew of fed speakers, policy uncertainty has hit a record high. while few predict a recession, companies are most bearish since 2016. international trade war, government shutdown. head of fixed income research at nomura, we have a host of issues to deal with. when we saw this magnificent rally that came through from the s&p 500, one thing i noticed is this. the very beginnings of a repricing of the fed.

let's stick with that first of all in terms of dovish fed speak last week. as we get to the end of the week, we saw this very small in of a potential rate hike. what do you make of that? that was some extent, a reversal of the pessimism that hit markets last week. the market moved too far in trying to price the cuts, given the data in the u.s. it is more reasonable the current pricing of a small chance of a hike this year. the u.s. economy itself seems to be doing well. we saw the labor market reports. other indicators do suggest the u.s. is not falling to recession. that seems reasonable. there ision is whether enough good news for the market to price one or two hikes, as it was several months ago. that is less likely. if that happens, it would be more likely. nejra: the market is correctly

reflecting what is going on, you point to the fact we should be watching for a liquidity crisis, not a credit crisis. as we talk about central bank tightening around the world, is the challenge for markets to correctly price the liquidity premium? guest: correct. this is the biggest story we've learned. markets may simply be moving or weakening to reflect about banks aren't as liquid as people thought. you could buy as sell, not as good as a few years ago. we've seen with the dollar-yen, triggered by a move in turkey. what should turkey affect dollar-yen? that tells you markets aren't as liquid as people think. many of the moves may reflect a repricing of liquidity rather than telling us u.s. is in a recession. there's a distinction you have to make between the quiddity cycle and credit cycle -- liquidity cycle and credit cycle. manus: there could be more

consequences for that structural change. a lot could be to do with prop market in the past 10 years with regulation. join the fray. david bloom over at hsb says, triumphantly said, the least ugly, talking about the dollar. if you look at the risks on the global table, does that stymie the rock for the dollar? or is that a structural goodbye, good night irene for the dollar? guest: well, i think overall the big picture is a big picture story for the u.s. is quite negative. i think the fundamental issue here is the u.s. has a large deficit. europe has a large surplus. japan has a large surplus. european and japanese investors have been huge buyers of foreign assets. if things go wrong, they will bring money home. the case of dollar weakness against the euro and the yen is

quite compelling even though both have issues. there is a case to be made the dollar could do well against emerging-market currencies. if they do go poorly, the dollar does get that bid. the case for dollar weakness against the majors is less clear. nejra: i understand your dollar weakness call and i know you want to play that against the euro. what makes you think the eurozone growth can't get any worse in the second half of 2018? guest: that's a good question. the way i look at european growth, we've had a terrible second half of last year. europe was almost in recession. but there's enough underlying drivers which could lead to european strength this year. one is oil prices have fallen on average, the past six or seven months. also, you have to remember europe has had an austere fiscal policy. we are seeing lots of signs europeans are loosening the fiscal strings, whether italy,

now germany talking about cutting taxes. macron reversing taxes. -- reversing tax hikes. those could see positive turnarounds. nejra: some of your notes, actually too late to be bearish. good to have you in this morning. he will be continuing the conversation with us on bloomberg radio at 7:30 a.m. u.k. time. as earnings season kicks in, groupthink is spreading among wall street forecasters. outcomes are looking more alike between analysts. rather than offering solace, the unity is posing a threat to market tranquility. to explain why, we have dani burger with us. what are you looking at? dani: analysts are agreeing about the companies will report. this is from bank of america. they called this problem clustering. it has been getting thinner. last quarter, finished since

2000. it hasn't budged since. the macro uncertainty, analyst increases.s it there is one clear outcome i want to point out, volatility. if there are any surprises that deviate from what the consensus is, we could see fireworks. options pricing indicating this. this is the implied move for individual companies, the average around earnings data. those option triggers see an average 7.4% move. the average, now the highest since 2009. the issue here for banks last week, surprise to the upside. volatility went higher for stocks, but it could also be negative, especially as we head into one of the busiest weeks this week for earnings. manus: yep. the're going to have to deliver. hope there are no more apples. thank you.

we are counting down to a cluster. the great, the good, the powerful, the gathering of the world economic forum starts tomorrow. we join the finance minister of singapore. that conversation a little bit later today. nejra: that will be on tv, but also on radio. remember when you're traveling to work, tune into bloomberg radio on your digital device or dab digital radio in the london area. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ bloomberg. ♪

developmentould be the over the last week as pointing to a later or softer brexit, or potentially no brexit at all. the distribution of risk you would think is becoming more

favorable. still plenty of uncertainty, but we think there's a lot of upside risk to the pound. we think it will be the highest performing g10 exchange rate this year. nejra: that was goldman sachs cohead of global effects and em strategy. the pound is going nowhere at all. i have been struck by this ambivalence. we've heard theresa may might be holding back on cross party talks, perhaps to placate the heart brexiteers in her party. the eu thinking about extensions. overall, the pound doesn't know where to go. manus: the pound really is jumping around. slightly stronger. does that to you about concerns over intellectual property theft, the prospect of a trade deal between the u.s. and china? yuan, nomura said on a trade deal, they want to be short on yuan.

that they reckon that's what they want to go. so we will just keep an eye out. a little breaking news on casino. we will bring that to you in just a moment. let's focus on the u.k. the pound is important. goldman sachs talked about it. asking prices for london homes dropped to its weakest in figure five years in january. asking prices slipped 1.5% from last month, when they were spooked by brexit, holding off from listing their properties. the picture was last week, asking prices rose .4%, the biggest gains in the north of england. who better to make sense of this? right moves commercial director. this is a reality check. prices are down. but if you not out the right place -- knocked down the right price, you will get a sale. are we seeing a bottom or do you need something to happen to

brexit to create that bottom? guest: brexit could give a spur to the market, but someone is always looking for value. they are saying the market, with interest rates, very cheap historically, there's an opportunity to negotiate hard and, particularly in some sectors, if you look at the cost of renting in the london market, if you can get a five-year fix for less than 2%, buying is actually cheaper than renting. there is an opportunity, but one has to have the deposit, which is hard to raise given the prices in london. but as you say, prices below the 600,000 pounds price bracket, on average in london now for the first time in three years, from nearly 650,000 years ago. -- six years ago. nejra: does your number -- guest: absolutely.

parts of london saw prices rise 80% on average over the last five years until the last year or so. affordability is stretched. wages haven't gone up nearly enough amount. we've seen the peak of the market, and now we are looking for the bottom. people are looking for value, and the regions in the north of the country still affordability not a stretch their. but they never saw the rises that london and the southeast communities. manus: some of the numbers that are peppered through here, the heart of west london down 20%. was spencer down 25%. we played you sound -- westminster down 25%. we played you sound of him reckoning a softer brexit. what are you seeing of the big international buyers that could come in the multimillion pound

brexit? are they present? are they supporting the upper end of the market? what is going on there? guest: they are very canny. they are sitting back and watching, to a degree. some of them are board, for the last few years. exchange rates have a lot to do with it. depends on where they are holding their assets. obviously, the pound very cheap compared to some currencies. according to your previous reports, the pound is going to strengthen. now could be the right time to buy and negotiate a good deal in london. obviously, there are more punitive taxes on buying being brought in. that's all the major effects -- having major affects on the markets, as well. if you discount, london silla state haven for international -- still a state hav -- safe haven for international money. it really depends on how

realistic you start to begin with. there's an array of asking prices. some people are too ambitious. the county sellers, their agents are pricing realistically. youou price realistically, are probably not going to have to discount on that. if you start to high, a larger discount can be negotiated. it's a question of knowing local markets and judging value available. nejra: thank you for joining us this morning. we've got breaking news. manus: we have indeed. this is the big retailer in france. they are divesting some of the property portfolio. worth 500 and one million euros. they will sell it to fortress investment. they could receive an additional 150 million euros. the focus, all about cutting the debt for them. that's the key thing for them. you seen a high for markets.

10 casino supermarkets. all about debt. getting worried about debt. i'm worried about the house prices. nejra: i'll leave you with that worry. there's a lot of worries in the markets, not least issues around china trade and ip issues, which we'll discuss more in the next hour or so. asian equities taking the positive view engines of chinese economic data. coming up on bloomberg, lots to look forward to. we speak to the founder and chairman of terra firma partners. you can catch that interview after 1:00 p.m. london time. manus? manus: yep, and in terms of bloomberg users, all the charts are there that we use throughout the show. nejra and i put them together, along with the chart team. it's on bloomberg tv . you can get everything that you need there. we'll take you through the open of these markets and see how the reaction is to everything.

it is martin luther king day. liquidity might be lighter than normal, flat on the ftse, lighter on u.s. equity features at this juncture. if you're traveling to work, join us on radio. ♪

manus: good morning from dubai. this is "bloomberg daybreak: europe." nejra: these are today's top stories. manus: crisis era growth. china's gdp slows to the weakest since 2009. stabilization and other economic indicators support stocks across asia. u.s. futures trade lower. trade talks are said to fall short on issues ahead of another round of talks this month. u.s. equities and treasuries are shut today for martin luther king day. theresa may says to give up across party talks in an effort to salvage her brexit deal as

she presents plan b to parliament. nejra: it is just on 7:00 a.m., just under an hour from the start of cash equity trading. let me bring you data from germany. there keeping an eye on producer price index, down 0.4%, worse than the estimate of a drop of 0.1%. also weaker than expected year on year. we are seeing futures take a bit of a turn lower. we had some issues with euro, but they seem to be lower. cac 40 futures by about the same. we are seeing a lot of ambition in cable this morning. this is reflecting what is happening in u.s. futures. u.s. stock markets will be closed today. we saw four days of gains.

the s&p 500 closed at its highest on friday. why the negative sentiment? it seems perhaps these equity markets in europe and the u.s. are taking more of a worrisome view of the trade talks, particularly as we have heard of big issues around the discussion on ip theft. that is according to bloomberg reporting. manus: breaking news on lebanon in the bond markets. atar plans to buy half $1 billion worth of lebanese government bonds. if you look at the lebanese -- lastnt bonds, they week lebanon's finance minister told a newspaper the country may restructure its debt. they would of course meet all of

their obligations. stocks are nervous on the intellectual property theft story on the headline data from china. the bond market is a little bit stronger this morning. it is martin luther king day. you're going to see less liquidity. 10-year futures up 0.8. we do not talk percentage terms on bonds. there you go. let's get to juliette saly in singapore with your market wrap. juliette: a pretty good start to the trading week. we did have the s&p 500 on friday give us a good lead. asian stocks holding at a seven-week high despite the fact we did have week data coming through out of china. we did see industrial production retail sales beat. the csi 300 up six point -- 0.6%. gains in australia.

weakness in south korean stocks. a miss coming through with exports dropping the most in more than two years. let's have a look at the currency moves. saves seen a slide in to haven currencies on the fact we do not have a clear indication what is happening with the u.s. and china trade talks. the yen up 0.2%. a little bit of weakness in the that is really just adding to this story of how the trade dispute is starting to impact other asian countries. similarly a south korea, that fall in exports. we saw 20% drop in shipments to china in january. the korean yuan the worst-performing asian currency. nejra: thank you. today we are asking the question on mliv.

juliette saly went through the data. was the china data that or good news for equities fiasco you can join the debate. ib+tv on your bloomberg. now let's get the bloomberg first word news. >> the trump administration is working on a second summit with kim jong-un expected to take place in vietnam. the way has announced the two would meet next month. im's seniornt met k eight on friday, but neither side elaborated on what might be on the agenda. first trump has made his offered to end the government shutdown. the president said he would extend protections for dreamers for three years and make other concessions for money for a border wall.

nancy pelosi rejected the proposal before trump outlined in a speech to the nation. the house democrat in has called the two sides to reach common ground to find a permanent solution. be european union is said to -- by delaying brexit vote by is much as a year, giving the government time to reach an agreement. have toldy is said to her cabinet there is little hope of across party -- the international trade secretary says reaching a deal is not a given. congo's congressional court has confirmed opposition leader as the nation's next president. his rival has declared himself the rifle head of state. rightfulrs -- as the head of state. the nation is a major reducer of

copper. he would beh said deleting his twitter account due to suspicious activity. he is known for his outspoken views and is often used his twitter account to express his opinion. it is not clear what activity he was referring to. asked if he would be setting up a different account, he said now. -- he said no. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. manus: thank you very much. pace has seen its slowest in quarterly growth since 2009. the trade blows and debt -- trade woes and that cleanup are starting to weigh on the economy. donald trump claiming his trade talks could make great strides.

bloomberg understands the two sides have made little progress on the issue of ip theft. the fx and global macro strategist at our terra is with us. good to see you. congratulations on your new job. got tradechina, with discussions. intellectual property might be shaky ground. we have poor headline data. my question coagulates around the pboc response. there is not in the stimulus to have a brisk recovery. is there more on the ego side stimulus wise? >> with beijing greasing the policy wheels when you have the narrative on u.s.-china trade talks shifting from barely negative the somewhat stable and of have got a large chunk negative global risky assets -- investors may be looking for an opportunity to say may be the

worst is behind us, at least shifting toward that sentiment. all these factors combined could draw a line under the global risky assets. in particular, it creates a small window of opportunity for e.m. fx to recover. think e.m. fx you is going to recover, whether you therefore see a lower dollar for 2019. is in there quite a high bar for the markets to flip? there is quite a lot of boxes to take. >> this is a slightly different weak dollar trade environment. the environment of 2017 was marked by monetary policy normalization stories. it is slightly different this time. we might need to see real signs of shifting. either you get an ongoing economic shutdown. the second is you get stability.

that is key to watch out for. maybe china sentiment is reflected in that. maybe you get independent recovery in china or the eurozone. -- fromust get ongoing u.s. institutions. certainly, those are the things we're looking out for. you are talking about a lower dollar, the quid pro quo would be how much more bang for my yuan am i going to get? have seen the market go long on the fall of the yuan. look at the 5% drawdown in the dollar. what is the momentum for the yuan? >> the dollar has been front running a lot of economic risk. lower., it moved sharply

maybe it is moving slightly lower. those slow down fears have actually receipted for the time being. for the time being. there is good news for peripheral suspects, chinese currency in particular. stability is probably the best bet rather than looking for a big rally. that stability is really good news for the rest of the world. what does this mean for the yen? strongly bid, outperforming other g10's. >> we may see a pause in the and rally. has come a long way. a lot of negative noise in global markets. 100 seems off.n maybe 102 is the low we see in dollar-yen this year. it is going to be slow going

especially if negative political risks fades away. manus: we've got south korea and malaysia this week. we had big central banks last week. in,erms of the cycle we are are we at the top of the e.m. rate hiking cycle? >> potentially. the risk to at e.m., it is a global story. it is not the greatest news that the u.s. economy is slowing down. it is not the greatest news the eurozone is slowing down. there is a lot of negativity still out there. what we are saying is some of these things are largely priced in. the story for e.m. will be local stories. politics still remains the biggest risk to e.m. you don't want to be chasing

countries with election risks this year in europe and south africa in particular. you're going to be tactical. if you look just broadly at the asian index, still 5% lower relative to where they were. there's a lot of value stocks to be extracted. nejra: focus on the local stories. it is really do this, but we have put your name on a chart. you talked in your notes about the bloomberg dollar index sitting pretty near the 200 day moving average. you have talked about the various catalysts we need for the dollar to turn more negative, or sentiment turn more negative for 2019. is the catalyst more likely to come from the u.s. for the rest of the world? >> right now it's probably the rest of the world. i think it's more about the sentiment picking up. rather than the actual headline data. that's going to stay soft. a lot of that is priced in to

currencies and markets right now. it is waiting for that sentiment to shift. investors going, maybe this is an opportunity to extract value. the negativity has exceeded. it has hit the peak levels. pessimism. a little bit more to go through. morning. host this coming up tomorrow, geely coverage from the -- the world economic forum begins. when you are traveling to work, tune in to bloomberg radio live on your mobile device or on dab digital radio in the london area. ♪

>> economists are watching infrastructure, as any pickup in government spending shows up first here. why we have seen ineffective halt on projects, that looks to be changing. targeting -- of budget is targeting a deficit up from 2.6% guidance 100 $20r with more than billion of projects announced over the past two months. dusting off the old debt playbook points to the urgency among policymakers who are also facing cooling global growth. a trade war, which hit exports in december in an unexpected contraction. weak consumer spending data.

firmlyonomic factors are in beijing's sites. more policies reportedly on the way, including tax cuts and measures to boost purchases of household appliances. the key will be getting the stimulus right in the midst of a rocky u.s.-china relationship. manus: let's take you to the mega market wall, give you a snapshot of the markets. growth in china the slowest since 2009. asian stocks, industrial output, retail price reading the estimates. you are seeing a fairly muted response there. there are still disputes over the international property. equity futures, it is martin luther king day. you're going to get big companies reported later this week. good morning. lower futures pointing

after we hit an early december high in equities on friday. european equities had four days of gains last week. we could snap that today. oil on the front foot after rally we saw friday with u.s. working. cable going absolutely nowhere. theresa may might be backing off from those cross party talks. the eu discussing extending the exit deadline. confusion in cable. we are asking the question on mliv. was the china data good or bad news for global equity markets? you can join the debate, ib+tv on your bloomberg. ethics and global macro strategist is still with us. let's get your take on that question. i know you cover fx, but was the china data good or bad news? >> when coupled with beijing's recent policy, one could say some stabilization here, any positive surprises going to be

somewhat good for a global equity markets and global risk assets in particular. there is a lot more still to come. we need to see more than one data point. manus: there you go. well done. an fx man responding on equities. that just shows the breadth and depth of your experience. let's get your business flash. >> italy's communications regulator turned down telecom italia's plan to separate its landline network. it argued a spinoff of the carrier's most valuable asset would not help boost competition. analysts have estimated the value of the network at 15 billion euros. tesla has won a green light to sell the model three across europe and deliver -- deliveries are expected to start next month. europe is a priority for elon musk.

china areurope and the main reason he is not concerned about a potential setback in the u.s. following the halting of tax credits on electric cars. blackrock, the world's largest asset manager, posted controversial -- confidential information about clients on its website. the data appeared on spreadsheets and included names and addresses of advisors. they also appeared to show the assets and the management each advisor had. that is your bloomberg business flash. manus: thank you very much. here's a look at what you should be watching throughout the week. tuesday sees the start of our coverage of the world economic forum in davos switzerland. talking about global leaders, business, culture. stay tuned. bloomberg tv has cracking interviews for you.

wednesday, the bank of japan rate decision followed by comments from kuroda. mario draghi speaks shortly after the return of the european central bank. with earnings season in full swing, reporting by friday. manus: let's get into brexit. theresa may will return to parliament today to set out her plan b. to be looking for changes to the irish tax that as she attempts to win over 118 conservative lawmakers who voted against her last year. the international trade secretary's compromise -- trade secretary says compromises vital. they either voted for the prime minister's deal or they did not because of the issue of the backstop. that seems to me to be the area we are around.

if we are able to get agreement and future relationship with ireland, the interesting thing is ireland and the united kingdom have said we do not want to see a hard worker. the irish prime minister said in the event of no deal, he would not want to see a hard border. that should be the area we look to find compromise. viraj, how would you describe what is happening in sterling? is it resilience? confusion? >> i have watched it for several years on a daily basis. the most important thing for sterling markets is the odds of a no deal brexit. everything else is really just peripheral. that is what we are focusing on. if you look at the actions of parliament, the rhetoric in recent weeks, what is clear is there is willingness to take that no deal off the table at all costs. the pound is really just reflecting that.

unless we get a no deal, there is a limit to downside risks. turns to,uestion just where do we go? how much potential is left? this idea of a soft brexit, that is equally as low as no deal. the question is, do we stay -- do we get an extension? if that's the case, the pound goes nowhere. --the tory exit tears for dup rally, the rally will be sharper and shorter. -- the road toof brexit is longer than one deal. i want to bounce forward a little bit. let's say we get a soft brexit. is that the end of this issue?

surely the back benches, the heart brexiteers, they do not go away. brexit risk does not die on a soft brexit, does it? >> i would agree. u.k. fiscal risks are here to stay. the level of risks and the amount of noise. if we can get any deal, that would be a significant risk in the long run for uncertainty. cable's gravitational pull toward 141, that is a multi-year story. it is how this structural brexit risk comes out of the currency. ,t is just looking for any news any sort of progress that would produce uncertainty. a deal in itself would be one of those. nejra: great to have you with us this morning. patel, thank you for joining us. if he is looking for news on cable, he is likely to get some this week. "bloomberg markets: european open" is up next.

manus: let's see whether no deal comes off the table. we are live on your mobile in the london area. join the team if you are traveling to work. ♪

anna: good morning. welcome to bloomberg markets: european open. we are live from our european headquarters. say buyday the markets the rumor. hopeful outlook for u.s.-china trade talks and asian stocks marginally higher. a lack of consensus on the intellectual property dispute injects a dose of realism into european and u.s. futures. both point lower ahead of the open. cash trade is less than 30 minutes away.