yousef: this is "bloomberg daybreak: middle east." manus: the u.k. is staring down ,he barrel of a no deal brexit the parliament rejected theresa may's plan. there is 16 days until britain is due to leave the eu. yousef: the key measure of inflation. manus: u.s. aviation regulators down despite nations across the globe taking the opposite view. boeing stocks suffers its worst two day drop in a decade. yousef: united arabs added to a blacklist of tax havens, what

are the implications? this is bloomberg "bloomberg daybreak: middle east." i am yousef gamal el-din. manus: i am manus cranny. the plan was defeated in the house of commons. the margin was not as bad as the previous one. volatility hitting levels we have not seen since november. brexit, are we facing a second referendum? can you call sterling stoicism? u.s. stocks getting out of a five day funk driven by health care. they are talking about tug-of-war between weaker

cyclical indicators and much improved monetary indicators. a lot to consider for investors. tech stocks having the best two day rally in five weeks. look out for boeing, it is a mover on the nasdaq. currently lower on teachers. a asian equity session taking sentimentrom positive , that is fading. we have a lack of fresh data. losses led by the japanese nikkei. manus: confidence is getting slapped in australia, the lowest since november 2017. what happens next? does this lead the rda in a delicate position in regards to rates. parents, university coaches,

and a college admissions counselor are among dozens of people charged in a criminal conspiracy. to elites win entrance schools like he a lot and the stanford. bribes up to $200,000 were paid to help their kids cheat on entrance exams. george powell has been sentenced to six years in prison for sexually assaulting choirboys in 1996. he was given a non-parole. e period of three months. he is the most senior official in the catholic church to be convicted of child sex abuse. his lawyers have appealed. top u.s. trade negotiator says washington must keep the option on tariffs. robert lighthizer says the u.s.

must haven't the ability to have higher duties. his comments pushback on speculation that an agreement would see the side lift tariffs immediately. after thee slightly faa repeated its backing, saying there is no reason to ground the plane. stocks did plunge. dayaw its biggest two decline in a decade after india .uspends flights european union finance ministers are adding the united arab emirates, oman, and eight more countries of a black list of elected tax havens. the list includes 15 jurisdictions and comes over a year after the eu agreed to name and shame a small number of nations to fight tax avoidance by multinationals and

individuals. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. manus: u.k. lawmakers will the later today on whether to leave .he eu without a deal after rejecting theresa may's latest plan. may took a revised deal to mps hoping new language around the irish backstop would win them over. clear.me be voting against leaving without a deal and for an extension does not solve the problem we face. eu will want to know what we need to make this extension, and we have to answer this question. manus: her voice ravaged by

brexit discussion. let's go to london. sebastian, tell me the choreography of the next series of votes. >> we get the vote today on nother or not to rule out deal. if they rule it out, then we get a vote on delaying brexit. this one expected to pass, the attorney general saying yesterday the extension is all but inevitable. the u.k. needs remission from the eu, both sides have to agree. very much the ball in britain's court. is aeresa may says, this short-term solution of that does not solve the overarching problem of brexit, and there is a chance we get an extension, and there is another cliff-edge if nothing is resolved. these are statements of intention, parliament could vote

to rule out a no deal brexit if it wants, but that does not mean it will happen. if we get to march 29 and nothing changes, the u.k. will crash out of the eu. we stacked inre terms of the likelihood that brexit may not happen? it is a remote possibility still, it is on the table and notably it is something that may included yesterday. in terms of the challenges the house could face in the coming months. it wish to revoke article 50? does it want a second referendum? does it want to leave with a deal? these are unenviable choices.

the decision the house has made this evening, they are choices that must be faced. passionate boos and cheers show just how divided they are. threatll, it was a despite ruling it out so many times, she mentioned it to get the right-wing hardliners on board to back her deal. that clearly did not work. they fear her deal more than they do a second vote, and maybe they are justified in that response. there is no evidence people have changed their mind, if we get to another vote and britain says brexit, then we are no more clear then as it stands. manus: it rolls on, the great brexit train. great work. let's bring in our guest from

our capital, saed abukarsh, co-founder, ark capital management dubai. unenviable choices that must be made. what we focused on this morning, you may vote for a delay and that seems to be the consensus, but it needs to be credible and justifiable for the eu to grant that extension. it is a new series of risks for sterling. saed: what you are seeing is brinksmanship. the u.k. has to pay the eu 39 billion pounds, that is being held by the british that they can get extension by default from the europeans. the europeans do not want to lose that money, and getting an extension, we need more time to talk and discuss, that is something they can always say and probably get.

what will change in three months? it does not look like there is much that will change on the british side, unless we have a new referendum in place. yousef: we saw cable volatility surging, not just for the cable but the other crosses as well. before we get to keep trade recommendations, is the prime minister running out of time? is this the most important thing from yesterday's vote, issue running out of political capital? will the british government have to make -- right now we have a situation where we need up to eight months with the europeans and parliament. the actual risk, we start discounting a hard brexit which is a back-seater.

the real risk is the next few weeks aced on the estimations that we run into a hard brexit scenario. can we dig deeper on the possibility of a hard brexit? you are not taking hard brexit off the table. why? is that tail risk rising? saed: i think in the short-term, and the next few weeks that is in play. i think the hard brexit scenario comes in after we have european elections. the scenario that europeans will allow the u.k. to participate is unlikely at this stage. why will want reassurances they should allow an extension. if we still have a good reason and a limited amount of time

prior to elections, hard brexit can come on the table, that is the real risk. there is the point made that so many people have become stressed out and anxious about trading around the u.k. because of brexit, it has brought up real opportunities, look at u.s. -- u.k. stocks. is that on your radar? to theou see them rise brexit issued, the thing is you have asset managed outside that are looking at u.k. assets and seeing a positive story in case there is a resolution. there is value out there, the problem is you might have value today and risk no value tomorrow if we have a hard brexit. that is a solid drop in sterling and the ftse. have trading opportunities,

investment long-term is not there yet, but trading, you definitely have that. manus: barkley says you by the dividend. you stay with us. saed abukarsh has more to give us on the show. u.s. regulators are doubling down on not grounding the boeing. across the globe, they are taking the opposite view. yousef: the fed gets another key measure of inflation unexpectedly eases. on the recentnk rally. this is bloomberg. ♪

yousef: let's get you the latest business flash headlines with debra mao. debra: bankrupt california e will get its next

ceo. he is the front runner. the former ceo quit in january as the company headed for collapse. we are told the final ceo decision has not been made, and other figures could enter the race. uber has added several banks of andrwriters who will help anticipated public offering. the ride hailer could be listed at $21 billion. uber is working with bank of and barclays. the offering is expected to be the top five of all time. the maker of budweiser is turning leftovers of the brewing process into snacks. anheuser-busch is backing a food start up that is working to turn the protein from grain into edible bar treats. new technology will let the

company turn it into a higher grade product. toyota is reaching for the stars with its latest car design, or at least the moon. it is teaming up with japan's aerospace agency to land a vehicle on the lunar landscape. astronautsrry two 10,000 kilometers. it would be sent ahead of a human expedition and meet them on arrival. 2029.ing is expected in the federal reserve has more room to stay patient on raising rates, a key measure of u.s. inflation unexpectedly eased after falling prices for cars and prescription drugs. bulls have the fed to thank for the rebound. he said jay powell's appearance "50 minutes."

commentary with talking about modern monetary nonsense about more weakness ahead for the u.s. dollar. how do you react to that? this i am not sure at point the market has a view on twin deficits. we have that every year in january and february, then we realize it is better. right now the dollar is the king , even if it drops by 1% it will be last year where it is right now. , it is still very strong. i have a hard time arguing why i should move my assets into euro or other currencies simply

because what is the alternative? argument that has been made, but right now we saw the adding liquidity to the system. i do not think the fed is there yet, i do not think they will cut rates anytime soon, i think ify will hike rates in q3 the data is still solid. i do not see the dollar falling off a cliff. dollar, let's talk about the data. the data validates the other side of the trade which is the cpi. it was drug prices that dropped off, and the headline, the

smallest rise since 2016. with a vindicated said and one rate hike for the rest of the year. saed: we sell weaker retail sales. we have seen all these things. there is a stutter in the u.s. data. at the same time we are seeing the tailwinds of the fiscal stimulus. behind all of that, there is a great deal of bond issuance is happening in europe in u.s. corporate funding their requirements to europe. the dollar has a decent yield. really no reason to move out of the dollar beside the stories we hear about twin deficits. i think you have a solid decline in the u.s. and a strong unappointed rate, a strong inflation on wage,

the way. relative to everything else, this is the year, the dollar is fine. the u.s. economy is better than everywhere else. yousef: you have the u.s. rates volatility creator, we put a graphic together to tell a story of how the selloff is more aggressive and setting up for a second consecutive session, volatility down to the lowest point on record since 2005. the treasury yields, not much range bound, what will be the real catalyst if the other events in the last few weeks didn't surface? saed: the issue is debt, the more debt and the more rates you have to rise. in theory, but as we approach new talks with the house

regarding funding in the u.s. in ceiling, i and the think we will see rates rise again. most people do not look at the short term, that is the story for rates. rates have been in range for the last two years. we are at the lower end of rate. u.s. isy with the better relative to trade, relative to inflation. manus: to what level? saed: 285, 290. manus: saed abukarsh, co-founder, ark capital , great to havei you with us. coming up, the faa doubles down on the decision not to ground the boeing jet even as other nations suspend operations. this is bloomberg. ♪

manus: u.s. regulators have reiterated their support for the boeing 737 max despite growing nations grounding the jet after its second crash in five months. joined by our asia managing editor. walk us through the latest, the faa came out and double down on its call on the 737. coming into are that, doubling down and saying they do not see safety issues at this stage with the contentious boeing 737 max. we have been seeing regulators and airlines around the world falling like domino's, barring this jet or grounding the fleet. the latest this morning, new zealand joining australia, and

of course india in grounding the 737 max. yousef: you try and find an historical precedent of where the faa the verged so significantly from its important world.round the do we have examples of that, and what pressure is the faa under? >> there are not really toparisons that measure up this. this is unprecedented territory. in faa has led the world being a body that regulators looked up to and taken heed of. it is interesting that they almost seem to be repudiated here, and why that is. we saw china trigger all of this at the start of the week when they acted within hours of the ethiopian jet crashing.

since then we have seen a number of asians joining the fray. ,he one exception being canada canada has not joined the grounding which is significant for the big u.s. airspace. yousef: thank you very much for running us through that. that is, o'brien from the bloomberg -- emma o'brien with the bloomberg team. ahead, the biggest risk to the oil market. we have had significant moves in the last trading sessions in the brent crude oil trade. we had the initial reports indicating interesting moves in u.s. crude inventories. currently, we are lower on the msci pacific index. we will give you a sense where we are with sentiment.

a lack ofere is catalyst to drive the rally we saw earlier in the week higher. this is bloomberg. ♪

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whatf: it is currently -- time is it at the moment? 1:30 a.m. in new york. the bloomberg dollar index is a bit higher at the moment. again, risk sentiment evaporating just a little bit. a lack of catalysts in the asian equity session. let's take a look at where we are with some of the nasdaq futures. knowing weighed heavily in the last -- owing weighed heavily in the last -- boeing weighed heavily in the last two trading sessions geared more and more companies will be grounding their 737 max fleet.the faa is holding onto that, currently lower.

let's check in on headlines and cross out to debra mao. they u.k.k. -- fell to a heavy defeat. mp's are expected to vote against a no deal scenario on wednesday and the attorney general says an extension beyond march train ninth is inevitable. she told them a second referendum may be one of the options left to the u.k. with her deal now dead. a college admissions counselor is among dozens of people charged in a criminal conspiracy that sought to help applicants when admissions to elite schools. they are alleged to have paid bribes to help their kids cheat on entrance exams and to have coaches designate would be students at as -- as athletic recruits. washington must keep the option of raising tariffs on china in

order to ensure beijing sticks to any trade agreement. robert lighthizer told the senate finance committee the u.s. must have the ability to counterigher duties to any potential violations of a deal. his comments pushback at speculation that an agreement would see the two sides lift tariffs immediately. bankers hasan sachs been banned from the industry by the federal reserve for their roles in malaysia is missing scandal. the pair coordinated bond offerings that allowed cash to be stolen from the state investment fund, 1mdb. andtner has been fined pleaded guilty to charges including conspiracy and money laundering. the chrysler building could be reborn as a hotel after its latest change of ownership goes through. sources say the tower is being for 151by rfr holding

million dollars. it is significantly less than the $800 million the abu dhabi investment counsel paid in 2008. they say they would consider me then of a new -- consider renovating the hotel. 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. i am debra mao. this is bloomberg. let's get over to juliette saly now for a look at the markets. juliette: we are seeing a week session in asia. .retty much a lack of any data also, the data we have had today weake region has beenw including machine orders coming in weaker than expected for january. reed for consumer confidence. you can see the aussie down by .3%. australian stocks also weaker. japan's nikkei index leading the declines in the region amidst movement into the again, off by

data addingthe weak to the ongoing concerns about how much the trade spat between the u.s. and china is playing into the region. also worth noting, we have chinese stocks under pressure today. they have been on a very strong rally. the chinext leading the clients in china. in china.s yesterday, a member of a-shares in china formed a golden cross on the close. technical signs of a lot of those stocks rallying even though today is certainly risk off. some oflet's look at the specific stock names that the airline industry has in focus. we had cathay pacific reported. blackte: yes, back in the after two years of losses. we saw them come in with $2.35 billion, driven by higher fares and strong demand for its

premium segment. looking at the function here, and you can see its shares are rising today. there has been a lot of strong demand on social media for cathay, and that plays into what we are seeing with the ethiopia crash. let's look at other airline stocks in the region. india and yet not will be rounding the max 737s. groundingtnam will be the max 737s. vietjet in vietnam off by .9%. worth noting that it had ordered some of these planes with the first deliveries scheduled in october, but at present, no current aircraft are being used by vietnam carriers, although the country has suspended all 737s. >> thank you very much. juliette saly on the markets and the impact from the boeing

flight going down. the bpce says geopolitical ies are the biggest threat to the oil market. , heking to bloomberg 's plansd his company for the permian basin. >> we made a purchase. a little bit of bottleneck in. we are going to focus on the -- there are good properties next to what we have there. we are going to get the bottlenecks going and then really study it. we have big plans, but not anywhere near yet to be able to make a projection. , doo you feel the numbers they sound right to you? bob: maybe not in size because their investments are bigger in the permian, but it sounds right

at the right price of oil and the cost structure, so if things were to stay where they are today, i would say that that it's very possible. but at the price -- if the price of oil really drops, then it is a different matter. no reason to think either one is going to happen. i am sure they sharpened their pencils really well. >> so what is the range that you like? bob: for bp -- >> for permian? bob: breakeven costs are going forome down $40 per barrel those that have the skill of operations, which the companies you mentioned certainly do. the basin itself -- is not all a perfect place. it depends on where your acreage is as well. technology is moving really fast. bp, we planned 50 to 65 dollars per barrel.

we have a lot to do around the world. we can do more but we will remain disciplined in that. it is a big step for us. >> do you scale up even more? you mentioned that you are not the same scale as chevron and exxon. do you want to be? we are going to remain within the discipline. we are not going to open up the checkbook and do things at large scale. the permian exchequer boarded with -- is checkerboarded. there will be more efficient to put into it. certainly, we want to be part of that. >> what is the biggest risk you see for the oil market today? bob: i think there is uncertainty right now with the geopolitical uncertainty. venezuela is a real human tragedy. production is off in libya. you can feel a tightening of the market right now. the u.s. has to make decisions

on whether they extend the sanctions to iran or not. it could make it a volatile year. the way they are now, i think we will end up in this fairway of 60 to 65. it might be 50 to 70 this year and i think that is healthy for the oil industry, but i do not know. you can never predict the price of oil. >> you can't. you are bp, bp, -- how confident are you that you can handle that and not have to scale back? to $17 billion dollars billion. we will probably invest $2 billion this year in the offshore of the u.s., so that gives you some perspective on the size. we have lots of levers to pull. what will you -- what we will not do is be involved in big projects around the world and stop. permian and u.s. shale gives a flexibility which

big projects do not let you do. yousef: let's stay with oil. crude prices regained momentum after an industry report shows an unexpected drop in u.s. feel surprise. -- fuel supplies. they show commitment to the deal to reduce production. declines.venezuela let's bring in the managing director at merrill lynch international. thanks for coming back on the show. we have quite a bit of revisions from the likes of ubs and morgan stanley. everyone has been refreshing their oil price you where do you stand? >> we're still going with $70. we expect oil will rally into the summer. we think a number of factors will see the oil market tighten in the coming months, and as a result, as we head into the summer, we should expect oil handle,o have a seven maybe even higher, depending on a number of other factors. as things stand, we are looking

for $70. that is a $72 average from today onwards. manus: we have a look at the volatility. yousef went off on bond volatility and it brought me back to oil volatility. this is vol, the daily trading range. we have a lot of moments, but it seems to be that what happens at the next opec meeting could be the trigger point for volatility if they go for deeper, longer cuts or even longer cuts in april. is that the tipping point for the next move in oil? hootan: i think it could well be. but look, we are expecting opec production to be down 1.6 million barrels per day year on year, 2019 versus 2018. we are expecting that supply growth of 400,000 barrels per day. it means the market is going to move into deficit. and that is going to come around the summer time. if the cuts are deeper than what we are expecting, and ultimately, we see the market in

a bigger deficit than what we are expecting, there is scope for oil prices to be higher than what we are expecting. but let's wait and see. absolutely, the next opec meeting could be a should appoint. yousef: we are getting a line from saudi basic industries to merge the petrochemical company and every be in petrochemical, so a little bit of movement -- arabian petrochemical, so a little bit of movement. petrochemicals and material plays are not there at all. the story ofells consumer services, the story of banks. the food and beverages story. is it time to move away from some of the trout it -- the crowded trade? coal earlier this year, we went more negative on that petrol chemicals and focused on two in particular.

and really, we downgraded the balance of the main names. primarily because of the headwinds for demand in that sector. and because we felt that we had seen the peak and some of the margins. move towards a negative stance, and that has been absolutely right. if we look towards q1 earnings, the petrochemical sector was a very disappointing one. you have seen 30% year on year overall,n earnings where as if you look at the banks, we have seen them beating expectations and overall earnings being up 15% year on year. what do we think about that for the balance of the year? we stick with the banks. i think there is a lot more in terms of volume momentum, more loan growth than people thought. maybe there is a lot more margin expansion coming through despite the fed taking a more dovish tone. we believe there is scope for further margin expansion into the year. manus: are there any headwinds?

he has written pieces. he is questioning the profitable trajectory. in other words, a replication of what you saw in 2018? the potentialning will profitability outlook. you don't see those kind of headwinds dropping down to lower single digits in terms of growth? hootan: i don't think we will see the same level of growth and 2019 that we saw in 2018 necessarily. but i think the key about 2019 is we are going to see a shift away from margin expansion to volume growth. there will be some margin expansion because of the delayed repricing of loans. is on volumes. we see scope for volumes to grow this year and that is where we might be a little out of consensus but certainly discussions with management teams and looking at having had discussions with the ministry of finance, looking at what the plans for the saudi government are this year, we will be very surprised if we do not finally

see this pent-up demand for loan growth start showing is solved particularly in the second half of this year. it moves from margins to volumes, but we think there is a story there. manus: that is what makes the market. two sides of the calls. managingzhari, director at merrill lynch international. thank you very much for being with us. up next, we are going to dig into why the etf focused on -- since 2014. ♪

yousef: let's get you another quick check of the latest business flash headlines with debra mao.

iphonethe trends for the are going from bad to worse. that is the assessment of shawn harrison. he affirmed his mutual rating on apple and says that multiple iphone price cuts did not stop chinese online search trends for the device from weakening. bloomberg data show almost 1/5 of apple's revenue came from china and the iphone making up, at least 60% of owning's -- making about a 60% of earnings. as chairman as the company moves on from the carlos ghosn era. he is already on nissan special committee on corporate governance. the alliance is making changes to executive operations am a streamlining decision-making with one single board to oversee their collaboration. want to give a new impulse to the whole organization. more efficientbe

and simplifying the whole structure. debra: morgan stanley has cut its price target on tesla from $283 a share to $260. they expect the electric carmaker to hit an air pocket in demand sooner than expected. morgan stanley had its first quarter delivery forecast for tesla by 23%. and that is your bloomberg is this flash. -- business flash. manus: thank you very much. there is an etf focused on egyptian equities, and it has enjoyed a spectacular run. biggest weekly and pleasant 2014. foreigners increasing their bets. let's get more with our middle east markets reporter. they are buying. they are rushing and gushing in. now momentum, can we sustain that kind of flow? >> probably. i would say that right now, we will see this etf, best week in

terms of inflows since 2014, as you just mentioned. this is treated in new york as an etf with around $52 million in assets right now. that may not sound gigantic, but it is a very good indicator of how foreigners are joining is very bullish moment for the egyptian stock market. if we look at the holdings of this etf, their biggest holdings are real estate and chemicals. those are two sectors that are on the top of the list of many investors here in the gulf that are actually tracking the egyptian market. we hear a lot of people saying that the macro fundamentals are there right side and that are several stocks trading at -- we had a guest who was particularly bullish on a mid-cap health care play in the kingdom. everybody seems to be piling into this trade. filipe: yes.

is one of the names we heard from a group that includes morgan stanley, saying that this is one of the best ones he can find in the saudi market just before the country starts to be included in major benchmarks.ket i think that what we hear a lot is people complain that the saudi market is trading expensive ahead of the inclusion, which is true. but at the same time, if you dig deeper and look for the stocks that are actually going to be part of the indexes, and up their valuation levels, a set -- at their valuation levels, you can find good bets. the stock is trading at very cheap levels and with very good fundamentals on their side. a very tough industry. very competitive. they seem to be well-positioned positioned. it could be good. >> thank you very much for

sharing those insights. filipe pacheco. coming up next, israel's encz with- energy minister plans to get into the natural gas game. the interview is coming up. this is bloomberg. ♪

yousef: it's been nine years since israel made its first discovery of offshore gas. it created the potential for the country to transform the energy market. -- spoke to bloomberg. for energy.as toe of the gas that is going enrich in egypt in the next few months will go to those energy facilities and will be liquefied and shipped to europe. the others are for constructing the longest and deepest subsea pipeline, the east mid pipeline.

or as i call it, the mediterranean pipeline. it is 2000 kilometers long, 3000 kilometers maximum depth, and it will allow us to export israeli gas to europe directly. >> who have you specifically spoke? -- spoken to? companies in the private sector to make the final deals. i had an -- i can tell you that -- >> have you met with>> -- who have you met with? yuval: energy minister's anti-ministers from serbia, greece, romania, slovakia, italy, austria. all of them are already speaking to us about the export of israeli gas to europe. ago, i raised the

issue. we're going to find hopefully more gas than expected and a lot more gas than in existence today. we will have to export not just words europe, but also maybe towards india and the east. and we spoke also already with the indian government about the possibility about building an energy facility in the gulf of aqaba. it will bridge the mediterranean to the red sea. liquefying it and bringing it to india. the representatives of the european union said do not even think about it. europe will not buy any drop of israel toble from egypt.

>> what types of companies have been interested in developing your fuel? yuval: i do not know if i can drop all the names, but i think i can say that many companies including some of the major companies. actually, some medium-sized companies like noble energy have been very well. i can tell you that we are also mobil and many other companies from the united states, from europe, from india, from south america. once we realized that countries in the region are cooperating rather thanher avoiding obstacles to each other despite the fact that there might be some competition, we decided in the region to work

exploit in order to these natural resources for the benefits of everybody. ♪

>> good morning from westminster. i am nejra cehic. and by manus cranny in dubai. this is "bloomberg daybreak: europe." these are today's top stories. >> up in smoke, the u.k. -- parliament rejects theresa may's plan. lawmakers vote on whether to tear them out of the e.u. with no agreement. the faa double is down on out of thethe 737s skies.

jeffrey gundlach criticizes president trump for what he calls the shocking growth in the u.s. debt burden. manus: they were welcome to "bloomberg daybreak: europe." it is the second biggest retailer in europe. they own the store where they have missed on their numbers for 4.6 billion. the headwinds were substantial for the company, however dividends aplenty. they have a 7 billion euro cash pile. they are going for an extraordinary dividend of one euro per share. it is amiss on the full-year miss on the full-year ebit. the net income comes in at 3.44,

fromtly below the estimate the market. there is a huge correlation of and theetween inditex euro. got significant ramifications for the likes of inditex. -- you are back in the green. another defeat for theresa may, but not as bad as the last one. there's some serious challenges ahead in the next 48 hours. good morning. nejra: exactly. another day, another defeat for theresa may. 300 91 votes. not as bad as that historic 230 margin of loss that in january but still, so many questions ahead. what is going to happen now? are we going to get an extension or even a second referendum? lawmakers are going to vote on the prospect of a no deal. if they defeat that, there will be another vote on thursday in

terms of extension to the march 29 deadline, but how long can theresa may hold onto her -- as well? it has been another stinging blow for her. manus: is that really off the table, neijra? whammy of risk. the brexit vote, the cpi that missed, and a strong auction. that is down to the lowest level of this year. we dropped by five basis points and we saw quite a significant move. strong signaling. bmo says this is strong signaling. vol is cratering. jeffrey gundlach says you want to own -- this is what we have got for you. of course, the uae oil minister warning you go towards litigation towards opec, and they will all turn on the taps.

nymex is strong. a relief rally on that. that is a particularly important point. ubs are lowering their price target for brent for 2019 and 2020. i leave you with a look out the dollar. in the long term, he says you want to sell the dollar. is the dollar still king? nejra: manus, it is a very different risk picture to yesterday. we did manage to get again on the s&p 500 in yesterday session even with the 10 year yield dropping below to 60. 0, as you said. you are seeing the aussie come under pressure after dates came through. that is one of the worst-performing g10 against the dollar in this session. the yen a little bit bid as well. yesterday was a good day for emerging-market assets. you are seeing them come under pressure. ever so slightly.

we saw losses yesterday, so it is sort of holding those losses but bouncing back just a touch. in's check in on the markets asia. juliette saly in singapore has more on the risk-off picture. great to see you. juliette: yes. really a lack of data alleviating those global growth concerns. you have asian stocks off by around .5% on the msci asia-pacific index. money going into the yen. the nikkei closing out the session, weaker by 1% and weak japanese data. machinery orders lower than expected. you mentioned the weak read. the aussie dollar and the aussie yields fell and we saw australian stocks lower by around .2%. china and hong kong markets coming off the recent rally, but when you look at the csi 300, only down by .1%, still outperforming. a lot of analysts holding on to

the bullish calls for a shares. it is all about the airline stocks. cathay pacific coming through with full-year net income of 2.3 5 billion hong kong dollars. the first time it has been in the black in three years, so it had two years of losses. they are saying that higher fares and increase in premium seats really are driving that. spice in india off by 2.7% as india joins a number of nations in saying it will groundball boeing mac 737's -- ground all boeing max 737s. it does have some of these planes on order. it says it will be watching the probe into the ethiopian crash to see where it goes in relation to that order. manus. manus: thank you very much. juliette saly in singapore. now, up in smoke. theresa may's plans were rejected by parliament again as was on the irish backstop failed

to win the rest of -- win the support of another mp's. >> i continue to believe that by far, the best outcome is the united kingdom leaves the european union in an orderly fashion with a deal. government has been defeated again by an enormous majority. they must accept their proposal is clearly dead and does not have the support of this house. clearly, no deal must be taken off the table. >> thank you, mr. speaker. this is a humiliating defeat for the government this evening, and this deal should not come back in any way, shape, or form again. >> with your vast knowledge of parliamentary precedents in history, can you identify a single case since the american war of independence in which a prime minister has been defeated and continues to make policy?

manus: today, lawmakers will vote on whether or not to take the no deal option off the table. if that passes, as is expected, the house of commons will be asked its view on extending article 50 and delaying brexit. joining us for more, our executive editor for international government, ross and matheson. another day of high drama set before us. how did things go so wrong for theresa may? we were thinking the attorney general was set to endorse the new deal and that might bring more lawmakers over to vote for it. he did not do that. as you saw, the magnitude of the defeat for theresa may was significant. at this point, you also need wiley coyote and his rocket to get over the gulf you see just by the comments you are showing a minute ago. the divide is not just betweenleavers -- between

leavers and remainders. what kind of deal would we need? nejra: exactly. in that sense, what are the options now if the no deal option is voted down today and what is the most likely scenario? rosalind: that is expected to not pass. people do not want to have the no deal brexit option on the table. that is the one of businesses and markets fear the most. what we will then have is a vote on thursday where parliament will seek to get more time for get done for an extension. that creates significant risks for theresa may because hard brexiteers are likely to be that.by they fear the longer this goes on, the greater chance there is of a softer brexit, a softer exit from the e.u. we could see a second referendum come back onto the table which

would raise risks for those hard brexiteers. there is personal risk for theresa may in the vote on thursday even if that extension is granted or parliament does allow her to go to brussels to seek that extension. theresa may's government itself does face direct risk. manus: thank you very much. our international executive editor, rosalind mathieson. joining us is the founding partner at -- governance. good to see you. a roller coaster for brexit. i suppose the issue is this. there seems to be a sense that we go for an extension. it could be what the europeans ask for and the price of the extension that could force hard brexit back onto the table. >> i think hard brexit will be on the table as well, but if the parliament votes with a strong majority against it today, i think you will see the hard and theill be weakened

united kingdom, which will provide more room for the europeans to be harder with the conditions for an extension. where do we move from now? i think everything is on the table, hard brexit included. at the results of the fundamental flaw from the first referendum, it was brexit and staying in the european union. staying in the european union is one solid known outcome. brexit is not a known outcome. brexit means different things to different people. two years later, the u.k. parliament, the british parliament, has still not decided what brexit actually means. i think the only true way out of through another referendum where you have one specific solid brexit m the option to remain, where the british public in the side. brexit and the option to remain, where the british public

can decide. thank you for joining us on the show. if you think the best option from here is a second referendum, how likely do you actually think that is? as you say, everything is to play for year, tables bouncing back a little bit in today's session. there is a sense it can go higher given how short the market is at the moment if you do see that short squeeze. marios: it is a serious possibility that we cannot ignore. the parliament has so far failed to agree on what brexit is. we have had the statements from theresa may two years ago that brexit means brexit, but two years later, we are none the wiser of what brexit actually means. if parliament fails to define brexit, and it looks increasingly likely, if the parliament fails to reach an agreement with the european union, i think it is only fair to come up with a possible deal. .aybe theresa may's deal

and put it against the alternative of staying in the european union. i think it is likely. uncertainty is still there, buddy think it is the only way we can clean up this mess. parliament has failed to reach an agreement. brexit means different things to different people, and i think it is only right to have another referendum to ask the electorate to come up with the final decision. manus: my last guest in the last potentially in the hard brexit scenario you suggested is sterling could dropped by 10% and ftse could drop by 20%. we debated this with another guest. this is the dividend yield. is there anything that makes you sufficiently brave enough when you talk to clients that they want to put money -- this is ftse 100 dividend yield at the top relative to the euro stoxx 50 -- is there anything clients are saying we will put money to work in the u.k.? there are opportunities even in

the form of a dividend yield? marios: i think there will be opportunities. i think, eventually, there will be a deal, and eventually, the hard brexit will be avoided. thet now, everything is on table, including the hard brexit. i think it is wiser to wait before you position. my view is that we are going to have a resolution. there will be a deal. written will stay close -- britain will stay close to europe and markets will react positively into that. there will be a deal dividend, but you have to be very brave to position yourself today. nejra: marios maratheftis, chief economist and founding partner at cree governance stay with -- stays with us. thank you so much. let's get the bloomberg first word news with debra mao in hong kong. india has become the latest nation to ban boeing 737 max 8 jets from its airspace. the global standoff over the airworthiness of the model has

intensified as investigators try to understand why an ethiopian onlines plane crashed sunday. the european union, new zealand, and the uae join the list of territories excluding the max 8. u.s. regulators reiterated their support for the aircraft, saying the 747 max shows no systemic performance issues. opec officials are said to have warned u.s. investors that attempts to crack down on the cartel could bring about chaos in the oil market. according to bloomberg sources, the uae oil minister told a group of u.s. financiers that if theyo-called nopec deal -- would raise it to maximum capacity, sending prices plummeting. parents, university coaches, and college admissions consular's are among dozens of counselorsdmissions are among dozens being accused.

allegedly paidso to designate would be students as athletic recruits. 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. i am debra mao. this is bloomberg. manus: thank you very much. says oil markets can be in for a volatile 2019. we bring you our interview with bob dudley. that is next. this is bloomberg. ♪

manus: this is "bloomberg daybreak: europe." i am manus cranny in dubai. nejra: i am nejra cehic in westminster. let's get a check in on the markets. risk-off in today's session, so some losses in the asian spaces. ms yet asian-pacific index, u.s. futures lower along with european futures, too. msci asian-pacific index, u.s. futures lower along with european futures, too. parliament votes on the prospect of no deal today. the 10 year yield dropped yesterday, dropping five basis points. we got that inflation print and a number of comments from -- as well. manus: confidence has been knocked in australia. the aussie dollar taking the little bit of a knock. on nymex crude, the

inventories dropped. u.s. futures, little bit of slippage. yesterday holding above -- giving up their earlier gains. they hold above the 200 day moving average. saysow, bps ceo bob dudley geopolitical uncertainty including venezuela, libya, and iran, they are the biggest threats to the oil market. dudley also discusses company's plans for the permian basin. we made a purchase of bhp's assets in the u.s. ecause of a little bit of bottlenecking, we will focus on -- there is good properties. we are of course going to be investing in the permian, but we are going to get the bottlenecks going and then really study it. we have big plans in the permian but not anywhere near yet to be

a will to make a projection. >> do you feel the numbers that they are throwing out there, does that sound right to you to compete with that? bob: maybe not in size. their investments are bigger in the permian. it sounds right up the right price of oil and the cost structure, so if things were to stay where they are today i , would say that that it's very possible. but at the price of oil, if it really drops then it is a , different matter. no reason to think either one is going to happen. i think their forecast -- i am sure they sharpened their pencils really well. and probably said what sort of price structures they were -- >> so what is the range that you like? bob: for bp -- >> for permian? bob: for the permian? i think breakeven costs are going to come down. they are going to come down $40 per barrel for those that have the scale of operations, which those companies you mentioned certainly do.

the basin itself -- it's not all a perfect place. it depends on where your acreage is as well. but technology is moving really fast. production in the permian is going to rise as long as the oil prices stay in that window, and for bp, we planned bp at $50 to $65 per barrel. we have a lot to do around the world. we can do more but we will remain disciplined in that. it is a big step for us. $10 billion into the permian is a big step for us. > not to put more pressure on you, but do you scale up even more? you mentioned that you are not the same scale as chevron and exxon. do you want to be? bob: well, i think we are going to remain within the discipline. we are not going to open up the checkbook and do things at large scale. but in the future, i am sure -- there is a lot. the permian exchequer is acreage.arded with i would predict down the road there will be consolidation swapping and more efficiency put into it. certainly, we want to be part of that. >> a last question. what is the biggest risk you see for the oil market today? bob: well i think there is , uncertainty right now with the

obvious geopolitical uncertainty. venezuela is a real human tragedy. production is off in libya. i think you can feel a tightening of the market right now. the u.s. has to make decisions on whether they extend the sanctions to iran or not. i mean, all those things could make it a volatile year. as things stand the way they are now, i think we will end up in of $60 to $65. to $70 this year and i think that is healthy for the oil industry, but i do not know. you can never predict the price of oil. nejra: that was bob dudley speaking to bloomberg in houston. let's continue with oil. opec is said to have a clear message for wall street if the opec bill becomes law. according to people familiar with the matter, the cartel told bankers in a private meeting that every member would raise output to maximum capacity,

priceg an oil crash. joining us, a founding partner at cree governance. how tight a market do you expect to the rest of 2019? >> i expect an extremely tight market when it comes to spare capacity. possibly close to as tight as it used to be in 2008. for this reason, i am very constructive on oil prices. i think we will see oil prices continue to move higher. we had the perfect storm, negative storm, in the fourth quarter of last year, where you had extremely high production from opec in anticipation of sanctions on iran. i think opec has learned their lesson. they are going to manage supply a bit more prudently this time around, and given how tight the market is, given my view that the economy is not moving into

recession, and given my view that china is due for an economic rebound, i think we should be expecting oil prices moving higher. manus: let's just take that. let's be daring and take it back to what you do best, which is macroeconomic. that is a bullish call on oil. i have all be disinflationary impulse from china. here we are -- all the disinflationary impulse from china. marios: i don't think it will move that high to an inflationary pulse. i think we have a goldilocks range on oil prices. it is a broad range for brent oil prices. if we are within that range, it is high enough to be positive for investment, positive for the middle east, positive for the united states as well when it comes to growth, but not that high. cold whent, not too it comes to inflation. the biggest inflationary impact would come from wages in the

united states. nejra: marios maratheftis, chief economist at creed governance stays with us as a guest post. coming up on bloomberg, we will speak to the ceo of adidas. ♪

westminster.e another day, under the defeat for theresa may. this time, theresa may lost as in2, so not as bad january, but they said no. this am a question is that house behind you is going to have to make some uncomfortable decisions. the bo's and the claps?