this is "bloomberg daybreak: middle east." theresa may's brexit plan torpedoed as the speaker refuses another vote on her deal. she now hopes to seek a long extension. the fed its dovish stance fedrrow but former new york president william dudley says tightening could be back in play later this year. oil holds gains near 2019 highs. partners commit to continued cuts but is there strain in the saudi-russian alliance. the boeing controversy deepens.

that u.s.has learned authorities began a criminal investigation into have the 737 max was certified to fly customers before the latest crash. ♪ it has just gone 9:00 a.m. across the emirates. welcome to the show, i'm manus cranny back in dubai. some interesting things are happening in the interest rate market. yes, we are waiting for the federal reserve but the aussie's, you've got three year paper trading below. this indicates that the market is probably expecting another rate cut, although there is no sign of that coming through just yet. yes, we've had the minutes from the rba. they talk about how investment will reduce growth.

we are waiting to see what are -- excusends me, to your papers below where the fed funds are. how does this transfer into our global funds map? sterling is a risk. equities a little bit cautious ahead of what is happening in the u.s.. rising,d is at the top, as we see theresa may's brexit deal met one man, a brick wall. it is called the speaker of the house of commons, mr. bercow. says volatility is going to rise as the u.k. government is now painting itself into a corner ahead of the eu summit. is soft brexit rising? is really hard brexit off the table? let's get your first word headlines. >> police and the dutch city of who tracked say it is -- of

utrecht state is not clear why a gunman opened fire aboard a tram , killing three people. the man is said to have had a criminal record and was known to the authorities. the attack comes days after a man opened fire and 50 people were killed in a mosque in christchurch. the u.s. agricultural secretary says china could triple its purchases of american farm goods as part of a trade deal between the countries. sonny perdue told bloomberg that the trade talks are very dynamic but there are still concerns over how to make the trade talks enforceable. he says any tariffs would be binding. >> there is one tool for enforcement and hopefully the chinese will understand that. you have to follow it and if you don't, there are consequences. bandance will eventually

protest rallies in high profile areas. the government decided to act after shops were burned and after on the avenue violence related to the so-called yellow vests movement. written to airlines confirming it is working on a software upgrade for the 737 max , saying it should be released soon. shares tumbled as the approval process for the 737 max came under investigation. we've been told the transportation department inquiry into boeing came before last week's fatal ethiopian airlines crash. powered by journalists and analysts in more than 120 countries, this is bloomberg. manus: theresa may looks set to seek a long extension to the

u.k.'s european membership after the house of commons speaker torpedoed her plan to seek parliamentary approval to leave the bloc. -- john bercow refused to allow her to bring a twice defeated bill. what theercow: government cannot do is submit to the house the same proposition or substantially the same proposition as the one last week that was projected by 149 votes. manus: let's get a little bit more with our fx and rates reporter. david, we made a decision not to throw the -- not to show the "the sun," but it then't show the angst of

country against one man. .r. bercow david: it certainly can come back again, it just has to be eight different version to come back. longoks like it may be a one. of course, it is not guaranteed yet. the option does lay on the table. at the moment, i think the investors are sitting on the sidelines just waiting for that deal extension to be finalized before they rejoice too much. a whole lot of houses have put out notes in terms of what you can do. the political declaration is something that could be materially changed. we will see what options arrive.

there's another issue, the bank of issue has the rate hike to decide. what about the context of a long extension? the x -- theange decision? david: they've got some key data coming out, employment, retail sales data coming out. given that there is an extension , certain uncertainty, which is a positive. the markets are definitely going to be looking to how hawkish or dovish are they. they were saying the market was underpricing the boe's rate. a 38% chance of a hike by december. are they overestimating or underestimating? one of the risk with the

near-term, even if theresa may , if thatextension happens, the question quickly becomes who replaces her and how probe rags that are they? they? pro-brexit are and fxdavid, our rates reporter, thank you. monica malik is standing by, the chief economist of abu dhabi bank. what do you make of it? market for now reads this as a long extension in the making. good morning. >> i think it is exactly that. even though this was an unexpected twist, i don't think it fundamentally changes anything. theresa may was looking for a

andd meaningful vote consensus view was even though there would be more support for the deal this time around, it was unlikely to have passed. given the 10 days or so until we reach the brexit deadline, we bury -- we believe that theresa may will have to go back to the eu and ask for a larger extension. there will be difficult questions from european partners as to where she will take the country, where the country will go. manus: we use the phrase, that she will take the country. but i think david has raised a fair and valid point. ,an theresa may continue decried by the house, the biggest defeats in history? do you think we are moving toward a leadership challenge or would that be a long probability at the moment?

monica: i don't think you can rule it out. as with all of the brexit developments we have seen, there are certainly lots of moving parts. it is difficult to see that this is the part that will take place. what we have seen over the past few months is that parliament has taken control. they want parliament to have a greater say in how they move forward. votestion of indicative to get a clear idea of what parliament thinks brexit should look like. maybe less controlled by theresa may but early elections, leadership changes, even another referendum cannot be ruled out. up 1/8 of 1%. up to anotherens

-- still ahead, oil is holding onto its gains, near the highest level of this year, after opec and friends agreed to go beyond their pledged curbs in the coming months. but is there tension between saudi and russia? next, investors are counting down to fed day as dovishness sweeps the central banks. one former official says tightening may come back into play later this year. this is bloomberg. ♪

manus: it is dubai. it is not raining. it has just gone 9:13. this is breaking news. a beautiful day for the oil

market because there is a coalescing of extend the curbs, do better, make the compliance better. just getting back some of the initial gains. arabia we willi talk a little bit later on in the programming. . we are live to hong kong. deborah meyer has it. putting about 10% of its managers on notice. martin lau said that the lowest performing general managers would have to leave the company or be promoted. -- or be demoted. chinese regulators froze gaming approval. apple has launched a new mid-level ipad with a larger screen and introduced the first

mini update since 2013. the new ipad air brings back a model that was phased out when apple offered the ipad pro. the mini continues with a 7.9 inch screen. the debuts come a week before apple rolls out a media and entertainment package designed to challenge netflix. the abu dhabi company is announcing plans to sell a swiss bank. the singapore unit was shut down for failing to flag more than $1 billion in suspicious profits. --adala commerzbank is said to have hired goldman sachs and rothschilds to advise on merger talks with deutsche's. they have worked as a team on other takeover offers. -- it would

create europe's fourth-largest bank by assets. the german government says it will accept job losses. delta airlines is now the front runner to take over struggling italian flag carer alitalia. they are considering an investment of $113 million and start with an initial 10% stake which would double in a few years if it goes well. they have branches in france, mexico, brazil, and china. manus: thank you. tomorrow, it is fed day. no rate hike or cut is expected. that is the starting point. however, the former new york fed president william dudley says he thinks tightening could be back on the table later this year. >> the economy picks up speed again, inflation picks up higher, then the fed will be back in play as early as the second half of this year.

dovish world central bank has helped spread rallies. monica malik is my guest. from abuabu dhabi, dhabi commercial bank, the chief economist. not that we need a taper tantrum, but i put it to you that what we do need is the fed to reinject some two-way risk into this market. we are far too complacent that it is all going to go flat to zero on hikes this year. >> i absolutely agree. a lot of economists believe that as well. there's a difference between what the markets are pricing in, a small rate cut in 12 months time, versus the consensus of economists of one further rate hike. tomorrow's meeting, we expect it

will remain dovish. think the fed remains very data dependent. at the moment, it has been a very mixed picture. whether the government is shut or other conditions. we think the economy will provide enough space for one further rate hike this year. manus: ok, so one further rate hike this year on the data dependency. this chart is a thing of beauty. the indexes at the lowest level since 1988. are we sleepwalking into i suppose the risk that you could get an event that really moves these markets? i just get the feeling that this refreshed -- this repressed

volatility is really falling at the moment. monica: absolutely. i think there's a lot of uncertainty, which is also why central banks are in a very watch and wait mode. we are seeing global growth slowing and a number of risk factors. we do believe that a number of governments around the world, china et cetera, are looking to support growth. other emerging markets are expected to have further rate cuts. while we fix that at the moment targets are being quite complacent -- markets are being quite complacent, we think that governments and central banks are looking to support growth. we think we will see some stabilization as we move forward. is interesting that maybe we have all reached too far on our expectations for global growth.

is it that we need absolutely a solid china-u.s. trade deal to, as it were, reestablish the confidence that the global economy needs? monica: i think that will be a key factor. there have been positive talks but with the signing of the deal of two presidents being delayed going forward. at the moment, markets are expecting it but they aren't really pricing it in. chineseen though the policymakers gave quite a strong signal of both fiscal loosening and some targeted monetary loosening, i think global markets will want to look at signs of how that will really be played out and ejected into the economy. i think another area to watch as the euro zone because that has been one of the key areas that has economic weakness, and has been a front runner of the global slowdown.

we see initial signs of stabilization in the euro zone. i think if that sort of develops further and we feel the worst is behind us, that will be positive. let's carry--manus: forward on that view. briggs it or -- briggs it is t is perhapsrexi under-spoken about. we focus less so on its impacts on europe. monica: absolutely. i think that is why, even though we won't have the third meaningful vote, the end of the week will be critical, where european members will come together and decide the degree of the extension. we don't believe that really it is in their interest to not grant an extension. a no deal messy exits from the eu is not something that would be wanted on either side by the

majority. we do think there will have to be a large, meaningful extension area again, it really comes back to the question of what will be done now. we've had over two years of very little movement. we don't want a situation where this continues indefinitely as well. yous: ok, monica, thank very much for joining us this morning. bank commercial chief economist. the airline ceo saying that upgrades and pilot training are on the way. this is bloomberg. ♪

written tong has airlines to confirm it is working on a software upgrade for the 737 max saying it will released -- saying it will be

released soon. shares tumbled is the approval process for the 737 max came under investigation. we've been told the inquiry began before last week's fatal ethiopian airlines crash. dave, just how serious is this inquiry? give me a sense of the gravity. typically, a crash investigation would focus on the cause of the crash and try to come to grips at the regulatory level on how to prevent the next one. in this case, we are talking about a grand jury subpoena to present evidence. this is very serious. an alarming note is that they seem to be focusing on the approval process and how the software for this plane was approved. that raises the threat that this could go horizontal, that they could begin looking at other

approvals as well because they are burrowing down into the process of how this plane got approved to fly. how did it get there in the first instance? should we see it get there soon? dave: the software issue is one thing but the training of the pilots could take some time. given what has happened now, they would want to be very careful, be absolutely certain to have tested that software update to make sure the training is complete and comprehensive. it is hard to say how long it could be before those planes are flying. i wonder what the company means by soon. they may well roll out the software soon but what about the approval, the testing, the training, all that. it could be some time before we see those planes flying again. manus: thank you very much,

dave, for the very latest with boeing and the investigation. we are going to talk about oil very shortly. commitment to production cuts. but, is there a strain in the relationship between saudi arabia and the russians in terms of that aligned -- that alliance. anne-marie is on the case. a quick snapshot of markets. we've gone from red to green on asian stocks this morning as we are one day out from fed day. to a certain extent, these markets have run very aggressively on the upside. they need a reaffirmation of dovishness from the fed. the dollar prevaricate it's between this. $11.90 is where we are at. yield, need -- 10 year the narrowest calendar year

since 1965. i wasn't even alive in 1965. the s&p 500, 28.42. are you selling into the rally? this is bloomberg. ♪

>> checking in on the first word headlines from around the world. police in the dutch city of utrecht say it is not clear why someone opened fire on a tram, killing three people. 37-year-old man has been arrested after already having a criminal record and being known to authorities. this comes days after 50 people were killed at two shootings in mosques in christchurch. theresa may seeks a long extension to the u.k. -- to the leaving theof the u.k.. refused to allow the prime minister to bring the

twice defeated departure deal back for a new vote. speaker tilray: -- speaker bercow: what the government cannot do is to resubmit to the house the same proposition or substantially the same proposition as that of last week, which was rejected by 149 votes. japan's longf pursuit of 2% inflation has left some policymakers thinking that level will remain out of reach for years. pessimism is growing as the governor and his team prepare for next month's quarterly outlook. it will provide the first estimate for inflation and economic growth in the fiscal year starting in 2021. the pentagon has compiled a 20 page list for projects that could be cut to fund president trump's boarding wall. list -- it shows

the president is willing to cut defense spending and make the u.s. less secure to fund his wall. lawmakers are likely to override the president's veto. the warner bros. ceo is leaving aidst allegations he had sexual relationship with an actress he helped promote. more upheaval for a business acquired by at&t last year. -- the company said he put them at risk. global news powered by journalists and analysts in more than 120 countries. this is bloomberg. that's get over to juliette saly for a check of the markets. a little bit more of a cautious turn. the msci index fairly flat as we await the fed's policy meeting.

up for a seventh session in a row. adding to this very strong momentum we have seen in indian equities and the rupee. a very strong call coming through from goldman sachs, saying they are bullish on indian equities. i also want to point out the bond space. the 30 year off by five basis points. we have seen on the three year, below that 1.5% of the rba cash rate. this, after we saw a dismal read coming through on the australian housing market. manus: in terms of the biggest gainers on the market, again, it seems to be dominated by chinese names on earnings reports. >> it certainly is. we heard from chinese telecom in the last hour and a half or so. 3.8% above estimates.

i also want to show you chinese literature in the hong kong session. it's four-year adjusted profit beating estimates. shanghai came through after forecasting a surge. to the downside, there is a little bit of weakness coming through, particularly in some of the japanese stocks today. also, some companies coming through with downgrades. an online shopping site dipping after jp morgan cut its outlook for these companies, saying its model of having a premium membership isn't going to work. byis the biggest laggard, up 11% in tokyo. with theliette saly very latest on the markets. now, to oil. after opec and its partners committed to production curves until at least june.

good to see you this morning. not all of the countries at the meeting have been cutting production according to plan. who is on the naughty list? >> well, there are three that are exempt. they are not exactly on the naughty list in terms of not complying, but they are exempt due to external factors that are hurting their country's production. two are venezuela and iran, given u.s. sanctions, and the third is libya due to in terminal -- due to internal turmoil. the minister and we talked about what they are doing to boost production. their bread and butter oil field just came back into play early in march. this was after it was occupied for three months by armed militia. take a look what he had to say.

>> two weeks ago, we left -- before two weeks ago, production was around 900,000, now in the 1.2. of >> what about the outlook for the future? do you think you will get it up to the height of like 1.6? 2019, ourlook for partners, including production, for both the oil and gas. this year, we have a fantastic program for gas. comparedction for gas to last year's going good. our plan,ve plans --

we are ambitious to increase production. >> you said the country plans to and tryh the pipelines to reach that 1.6 million barrels a day. are you going to be working with the pipeline networks in refurbishing? we have to work on infrastructure. we have many oil fields that have not had rehabilitation for a long time because of embargoes. the ambitions to make the rehabilitation of these oil fields and also for infrastructure. service facility, pipeline,

tanks. many takers are out of operation due to the war of the last few years. another oil was damaged by an ttack.e tack -- an isil a >> i wanted to ask you about the field that is really your bread and butter of output. when do you think that will reach maximum capacity we saw before the destruction and the looting? protection, $260,000. -- production, 260,000. our maximum, 800,000. .ur staff are working on this

, we expedited so they can go and make the requirements. many things were damaged by sabotage actions during the destruction. there,security situation are you happy with it at the field? >> now, there are no malicious -- no militias. they are not going to let any civilian to the fields in no militia will be entering the field. we have to review. we are going to make an adjustment.

so far, we are happy. the sameo have condition. on our ownve worked action plan in the area, including making sand barrier, cameras. working to enhance this. >> that was libya's oil minister and the chairman of the national oil company. another thing that was very important here was the fact that they decided to scrap this april meeting we were both supposed to go and attend. they are just going to have a june opec meeting. many are saying that the russians were the ones asking to get rid of this april meeting. they said they didn't think it was enough time. it was a bit of a consensus from the kingdom, given that they

.ere open they said that putin is the global energy czar. we still have more coming up. is going to be interesting what he's going to say in terms of the atmosphere. back toit takes my mind when we were in vienna just a couple of months ago. it was the russians who brokered that deal. sort of brought the whole thing together. it will be an interesting one. maybe go to the gym a bit more for the next scrum in june. i will beat you to the table. joining me now as my guest on this subject is the senior vice president and head of high net .orth and retail equities

it looks like april is off the table. do you think there is a discordance between opec and non-opec? now in 2019,ently they have most of the power. there's a lot of constraint coming in. that is taking a a lot of toll oilressuring the stock, prices. supply is limited and they have most of the control. for the time being, they are in control of the game. manus: saudi, they are the biggest player. they've done the heavy lifting. he really is showing leadership in terms of the game. is what has given a real support to the market. marwan: i agree.

when you give that kind of theiative, the players on ground start following suit. manus: they do indeed. let's pivot to the equities story. we have inclusion is one of the biggest events. think that there could be a tailwind as well. some people are saying to me, headwind, and you are pitching it as a tailwind. it fromhow we look at our perspective is slightly different to how the market is looking at it. it will increase china's percentage on an overall perspective, and that should take away from the allocation coming through the region. at the same time, you have this saudi inclusion, which is bringing a lot of influence.

it is actually very exciting. you are seeing that the inflows are coming in. you have a region that is actually very underpriced. manus: do you think that continues? are you saying saudi is underpriced or the region? marwan: no, the region. the region is very underpriced. with the inflows coming in, it makes this region in the spotlight whether we like it or not. access to not only saudi but other markets around the region that give you potentially very low multiples in terms of yields dividend stories. as soon as the foreign ownership limit opened, the stock just flew. these investors were standing in line for a very long time.

manus: where is the strongest dividend you can pick up? marwan: the banking. until now, it is the banking. you are seeing a very interesting thing. the banking sector, after distribution, is actually closing the gap on distribution very quickly. yesterday, the spike you saw on the saudi bank, you saw that that coverage was very exciting. we haven't seen this in the past. we usually expect to close that gap but it takes around two to three months. not the next day. that shows you the strength of the banking sector. manus: where is the strength of dividend flows? will it be uae banks, saudi banks? marwan: for the time being, we consider uae to be the most attractive for the dividend yield and banking sector but saudi has a lot of potential as well. well.onomy is doing

that trickles down into the banking sector and supports overall systems. strong.ing to remain if you look at what happened in 2018, the banking sector was the spotlight, whether we like it or not. manus: there are some big issues that come to play with emirates mbd over the next months. thank for being with us. coming up on the show, we are going to continue that conversation. foreign investors sir john saudi stocks. momentum endure? this is bloomberg. ♪

middle east markets are

to some people on fire. the index rose 1.7% yesterday, the most in six weeks, closing at the highest level since 2015. tracking the stock moves. we just finished speaking with marwan. he thinks this market move can go higher. it's quite a good move, the highest since 2015. >> we hear a lot of people saying the same thing, that it can go higher. we have heard similar things yesterday and the end of last week. this was the first stage out of five. then we will have msci in two stages, may and august. that's when the biggest chunk of money is expected to flow into the saudi market. we talked about how foreign investors were flowing into this market, and we do have the numbers for that. it was the best week for foreign

influence in saudi. most of that was coming from qualified foreign investors, the institutions that track the benchmarks and the big professional money that is now joining the saudi market. marwan mentioned how this tends to put the whole region in the spotlight. that is true. but we have to remember that the uae and qatar are already part of those same indexes that saudi is joining. what we are hearing here is a lot of people aren't rebalancing their portfolios to add exposure to saudi. thes: you mentioned qualified foreign investors. we have another chart on that in the gtv library. you pointed out to me earlier, he a lot of the run is from retail and government rated entities on the way up. to what extent is foreign investor ownership going to be the next leg of this story?

seet is important for us to how this shifted ownership is going to happen in the saudi market. we spoke to our colleague yesterday in riyadh. she was there with the ceo. qfi'sd, we have 730 registered to trade in saudi. they are the ones who welcome all of the reforms, all of the organizations that bring the saudi market backup to the biggest emerging markets up there. they said that they expect this market to double next year after the inclusion happens. it is quite ambitious. they still own like 1% of the market, still very little. if that increases, we can have a reshuffle. sanus: back on marwan' comment, which was for the whole

region, not just saudi. thank you. next, the warner bros. ceo becomes the latest top executive to be ousted in the face of a sexual scandal. all the details from your daybreak editor. this is bloomberg. ♪

>> we still see demand very strong this year despite concerns of the global economy. manus: it is your morning briefing. mobile, dayb is your destination. another sex scandal claims another ceo. >> warner bros. ceo and chairman kevin tsujihara joins the growing list of hollywood figures who have been now toppled by sexual scandal. in his case, this relates to allegations that he had a sexual relationship with an actress who he may have been showed favoritism two.

there are reports that he may have used his connection with for films done by warner bros.. after his decision to step down, warner bros. is now in even more of a state of flux. it has already been in this period of transition and overhaul after at&t acquired the company in the time warner deal. questions about what will happen here, we do not have news on a replacement for kevin tsujihara just yet but we are expecting we may see an announcement on that coming at some point today. lyft is onsurprised, the roadshow. i've never known anybody to produce a 24 minute video that people watch for 24 minutes. team is out there on the roadshow. manus: you were supposed to say that you would watch a video for

24 minutes. >> it is quite a long time. this is a video to show to investors to get the energy going ahead of the company's trading debut later this month. what lyft really does, it takes a swipe at uber. it said it is the only company out there solely commuted -- solely committed to transportation. it also talks about some of its favorite metrics. increasedto 2018, it active riders by more than five times and revenue per rider to more than double. we will be looking for more developments as the team is out there this week. new york, san francisco, as it targets that massive valuation. manus: it is all very well that we are saying we are focused, and till the investors are saying, what are your other revenue streams?

oh, pizza! maybe not pizza. the sec taking another swipe at elon musk. you do like an elon musk story. >> it is our producer, greg, he likes a good elon musk story. manus: what about elon today? >> what the sec did is they reiterated that tesla ceo elon musk should be held in contempt for violating its earlier agreement. the sec said it has learned that elon musk's tweets have not been preapproved as he said they had. remember, the court approved that tesla would appoint an attorney to preapproved musk's tweets. the sec learned they didn't appoint the lawyer until december and the lawyers only now monitoring the tweets in real time. with greg, the

producer of this show come on the way. i will leave you this from london. theresa may met her nemesis, his name mr. bercow, the speaker of the house of parliament. ♪

nejra: good morning, i am nejra cherish live with mask cranny live from dubai. these are today's top stories. isresa may plan -- plan torpedoed. renter a lengthy delay? we speak to german chancellor angela merkel. william dudley said tightening could be back in play later this year. committing to cuts, oil holds near i-19 eyes after opec and its partners pledged to continue production curbs, we speak exclusively with the secretary general live.

♪ manus: warm welcome to daybreak europe from dubai and london, straight to the bond markets, we have another day to run until we find out what the fomc has got to say. here are 10 year go dark -- term bonds. the lowest since 1988 and the tightest bandwidth, 22 bits. are we sleepwalking ourselves into unpreparedness for volatility? take your mind back to 2013. you will not see that type of two-way risk him back in the market area there is something interesting going on, fed funds yesterday, the two-year paper was below the fed funds and today in australia you're seeing three-year paper, trade below

the or b. the next leg is to rate cut from australia. one more rate cut to come. the consequence of that, what does it mean for the aussie dollar? trade deal versus yields will be a hard one. very shortly, there is a commitment to extend the cuts from opec and opec plus but what level of access is there between the two? good morning. about bondtalk volatility, the vix clark -- closed at 13. equity volatility also a -- suppressed. we have global equities moved to five-month highs, europe included. four days of gains for equities, futures flat in the u.s. and europe. fx volatility as well, if you look at g7 volatility, dropping to a five-year low.

-- you have seen that safe haven. and we had the speaker come out and say you can have a third meaningful vote if there is a substantial change to what you are putting to the house. we are holding onto the losses, 13267. in singapore has more. what are you looking at? we are lower in the asian session, just to give more context into what you have seen in the bond market in australia, we had a dismal read come through on the housing market with fourth quarter house prices falling one -- year on year, that did affect the bond market and you have seen a little weakness and aussie stocks, the nikkei closing out the session fairly flat. hong kong and china markets humming under pressure. technicals on the csi 300 very strong. we saw a golden crust formed on the csi 300 and worth noting,

gains in india's market continuing to rise, goldman sachs very bullish on that index -- semsex.ly the se china telecom is a massive player, full-year income coming in as a beat. rise up by 2%ome in the hong kong session. the stock here is a cold player -- cold player in australia. the company starting to see the impact of the trade dispute saying that they are starting to see coulter china diverted to other countries and then we have this news about the new ipad coming through from apple, one of its suppliers in taipei soaring the most since april 2017 amid this investor excitement. it is a supplier to some of that part of that new ipad which was flagged ahead of its release. thank you so much.

let's turn back to brexit and theresa may's plans for a third vote on her brexit deal have been thrown into disarray. now looking set to seek a long extension to the eu membership after the house of commons speaker ruled that she could not bring the same notion back -- motion back to parliament. vote is unlikely before the european unit -- union summit. great to have you with us. is a longer extension almost inevitable given the impasse? seem,t is what it would this was a change of strategy, clearly, her plans at been upended. this is a decision that leaders will have to take my we know the head of the european council will propose a long extension. no details whether it is one or two years but that is the

timeframe we looking at. i must say it comes with strength attached for the eu so it is a political headache. they may stay up to two years in the eu, they will have to run in european elections, probably elect the next commission president and pay into the new budget so this is a decision that is not easy for leaders to make. the choice they have is a no deal or an extension given that it is likely they will say anything the prime minister puts on the table will have to accept because we do not want to be lamed for a no deal brexit at this stage. manus: let's see what kind of extension is possibly rented or what happens next in the twists and turns of brexit, our guest here injoining me dubai. good to see you. -- against he has

17.4 million people and defied the prime minister. the rocket likes the concept of a lengthy delay. >> he is reasserting the power of parliament. being been accused of pro-remainder. maybe he is leaning in that direction. what he is saying is you cannot approach parliament once more. you have to do something else. what are the options? , hardve a new deal brexit brexit, that is not off the table given the votes we have seen. you will get an extension and the question is how long is the a technicalhort or extension until june? that will give you enough time to propose a new deal. we have not seen a lot of proposals coming through parliament. the other one is a longer extension.

maybe up to 20 one months, that is what is being circulated in europe at the moment. 21 months also means you could open it up to new elections. you could have a referendum. you could have alternative things happening in u.k. politics. to thisood to speak morning. thanks for joining us on the show. also three options -- all the three options you have laid out, what is most palatable for markets? e markets would like to see a norway type solution. theou laid out rationally ok'd chooses a norway option, it means it would be part of the european economic area. that would be access to a single market. and the most important part is we tend to forget 80% of output

in the u.k. is services. what really matters is what are you going to do to the services sector and that is about mobility of people and access to markets. so far, we have not had any voices coming out even from the tories or labor or the independents coming to say let's stay with the norway option. that is what the markets would like. manus: this is a complement to one of our editors, tracy alloway. this is the town volatility, it is on a 3-d map of volatility. the important thing here is when you look at where is the risk, it shows you the risk across time frames, this is one week, volatilityu expect among more volatility? the market seems to like what it sees at the moment in terms of softer brexit but do you expect this to ratchet higher in the new term -- near-term?

: it is dependent on the outcome of the vote. suggest to the u.k. what sort of options a perverse because part of the discussion that will take place in brussels is to ask the u.k. what is it that you want? these are like divorce proceedings. they have become rancorous and fractious. see a- the eu wants to clear option from the u.k. and so far we have not seen that. as long as you do not have that, you're going to see a lot of volatility in the pound. the market is looking for a good outcome and we are waiting to see. i speak to a lot of people who say that investors are waiting on the sidelines but waiting to put money to work in

the u.k. as soon as they decide to do so that could work out positively. at what point do these investors in your mind start to turn away from the u.k. and put that money they have got waiting to work elsewhere? think they already have. if you look at the gilt market, the housing market, it is a wait and see attitude. a lot will depend on the outcome of this sentence. fed policy in the following weeks because markets are very sensitive to what is going to happen at the fed. you also have a lot of attractive investments in emerging markets. the u.k. is a sideshow for the moment. the founder of president of [indiscernible] stay with us for the hour. let's get a louvered first word news with debra mao in hong kong.

debra: u.s. federal authorities probeploring a criminal into how boeing 737 max was certified before the latest crash in ethiopia. the investigation was prompted by information from the lion air crash in october. the justice department is gathering information including through a grand jury subpoena. nuclear submarines and a carrier battle group to the north arabian sea during its tense standoff with pakistan. a statement from the country's baby was the most detailed about the nation's military readiness after the escalation in kashmir. pakistan finance minister hopes for a more positive relationship going forward. believe [indiscernible] needed angn aggressive stance and we are hopeful that after the election regardless of who wins we will

get into a productive dialogue with india. could triple its purchases of american from goods according to u.s. agriculture itretary sonny perdue and would match up with the proposal to buy a next her $30 billion of american agriculture products a year. produces this increase is one of the easiest things for china to promise but wider trade talks are progressing. along ratherng rapidly, these are complicated and you want to make sure you get the details right area debra: global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. you, debra mao with the latest. we are asking the m live question, how low must the fed dots ? aggressivelyto

swipes the dots? on yourthe lift team, bloomberg. we will speak to the opec secretary-general, that is from -- that is shortly. bloomberge in to radio live on your mobile device or on dav digital radio in the london area. we stay with you wherever you go. this is bloomberg. ♪

manus: this is bloomberg daybreak: europe. i am manus cranny in dubai. cehic inam nejra london. u.s. equities hit a five-month high in yesterday's session, the msci pacific index struggling for your action. some hot -- frost coming out of equity market gains. at 22 basis range since january, low volatility. 259 mud down a basis point is where we are at and the dollar holding its two days of losses, weaker against the and in today's session. manus: where the fed goes over the next day is going to have a real impact on emerging markets. we are later on the em trade volatility isem

at a one year low. futures indicate slightly higher preston, a little 67.58.hter, oil is trading higher. let's bring that conversation our guest host. when you see over the weekend, opec agreeing to extend the cuts they wanteds as if to do more but they could not press it through. is that your take? willr: it is clear opec continue cutting through the end of the year because they are seeing a soft market and the saudi's are ok with that. it is not just till june, we will have an extension of the cuts through to december. global growth is slowing down. opec knows that. it is opec looking at slower growth and deciding to cut in

advance rather than the other way around. would you say they are as equally concerned about a slowdown in demand growth as they are about the supply side? isser: the demand side hurting because they are forecasting lower growth. the -- what you're seeing is a surge in u.s. shale once more and i would add if you look at it is creating space for greater shale u.s. exports. opec is hurting on both ends, they're going to cut but also losing market share to the benefit of the u.s. and the u.s. is using politics to create a bigger market for its own oil. manus: one of our oil correspondents, i liked what he

said. february is almost bringing us back to a time when saudi's wasrship of the market back, they are giving up a lot in there is really risk with that for the saudis, is in there? i agree. we are talking about opec plus, russia is also playing a role so yes, a much weaker saudi do we have seen in the past. has the proviso that saudi a lot of spare capacity so it can always intervene in the market if there is a need for a supplier. the main risk factor i think for is u.s. shale. u.s. is the biggest producer in the world and their ability in particular to ship and export to asia is the critical part. that is eating into one of the few growth markets opec has and that is china and asia. look out for a china-u.s. trade

deal along with sanctions which would open up more of china's market to u.s. oil. what about iran and --ezuela, how much is a risk of a risk do they pose? are different types of risk, the you rent risk is more of a geopolitical risk. you have access, who has access to any and oil and where does it pass through? the bailout -- venezuelan is more extended risk because it matters more for u.s. and latin america. different types of risks and you will see how they will play out. venezuela is going to be also a long story. you are looking for regime change and also regime change in iran. it is more likely to happen in venezuela.

manus: if we think about what trump wants to achieve globally with kim, with china, do you think that we are underestimating trump's desire to do a deal with iran? nasser: if you look at trump's advisers, there is not a great deal of strategy. there is the tactic to apply maximum pressure to get something out of the iranians. the iranians will wait and see, they are used to having pressure. there are a number of issues on the table including syria, and the role of karen and its future. i think trump would love to strike a deal with the radiance but bolton and pompeo around him, the hawks are unlikely to support that. nasser say with us,

aidi our guest for the hour. crude holding gains near its highest level following a decision by opec plus to continue the cuts until june when they will again discuss an extension. let's head back to emory. -- anne marie. and murray: i am excited to be joined by the opec secretary-general. thank you for joining bloomberg this morning. this morning and everyone saying it is off of opec, why do think this is, not that much was decided, it is just a committee. thank you for having me this pleasant morning after our very productive meetings of the -non-opec joint

committee that took place yesterday. what you are seeing in the market today is a positive response to the decisions and the recommendations that were taken by this committee. if you recall, yesterday, we had 14 countries that participated attending this committee meeting and the principle of equity, fairness, and openness, this committee continues to invite all participating countries who may wish to attend their meetings to participate and hence the large number of participating countries. the outcome was very positive. responding along this trajectory this morning. meeting inthis april

siena is being scrapped and the impetus seems to be russia. is the organization getting stronger? 24 countries came together and decided to work together and we are sticking together and we are taking this decision collectively and trying to implement it collectively. consumers and producers. russia is a key, very important member of the declaration of cooperation that has played a leading role in the run-up to this historic declaration. and the implementation, they have continued to play their part. they remain a cochair together

with the kingdom of saudi arabia and the monitoring committee. this decision for going [indiscernible] is a commendation to the conference of opec as well as the conference of opec and non- opec ministerial. made this recommendation to them. >> you had a closed our meeting with the minister, what did you learn from that meeting about venezuela's production and state of the industry as they deal with sanctions and triple electricity crisis? no doubt thate is venezuela is going through troubling and challenging times. blackouts that they practiced on been

their social life but economic activity, in particular, the production and processing of hydrocarbons. he assured me that they were meet these challenges as quickly as they could and normalcy has been restored. >> around one million barrels is what they are producing. have restored normalcy and the production fields and this process takes a while. because of the severity of the impact of the blackouts as he shared with me. >> the next big question is a rent. the waivers the u.s. granted have a deadline in may. in two months. are you worried that the u.s. state department will bring exports to zero?

keep hearing their objective is to bring down exports to zero. practitioners in this industry isw very well that it practically impossible to bring down the exports to zero. the waivers, the extension of the waivers continue to be one growing [indiscernible] in the markets because of the importance and the size of iran in supply and demand. >> what did you learn, were you surprised about the growth and production of u.s. shale? shale continues

to defy even the projections of the companies themselves area we breakinghird round of meetings with the companies. they continue to show some cautious optimism in their projections but looking in the last two years, we have seen that they have surpassed their own projections. and this has been attribute it to the sentiment and confidence in the market and the industry, following the sustained implementation of the supply and the declaration of operation that had held to bring back or to restore stability in terms of bringing supply and demand and balance by increasing stocks. appreciative much