tion of the bond market. brexit breakdown. no clearlay forward -- way forward for brexit. trade.na talks of global a forum promoting multilateralism and opening up the economy to foreign investors. welcome to "bloomberg daybreak" on this thursday, march 28. it is not friday yet. i'm here with lisa abramowicz. david westin is off this week. we are taking a tiny break with the bond market, but yields were --ound the: delete economist for ecb having this to say about mitigating negative effects from

negative rates. >> the economy is slowing down in the rates are low for longer, so i think it is fair to say that we have to go into this issue, but we need to have a convincing monetary policy case to do that. lisa: so interested in possibly slowing the effects of negative yields come about noncommittal. --will have to check it out yields, but noncommittal. we will have to check it out. alix: in the markets you are having a pause of all of the drama we've seen over the last couple of days. my concern is how long would this last. the cable rate down by 2/10 of 1%. still a mixed dollar story in the g10 space. consumer sentiment fell to the lowest level since 2016. yields up one basis point, but that is still around the lowest we've seen for about a year and a half.

lisa: meanwhile, it is time for your moaning brief. we will get economic data, including the read on first quarter gdp and weekly jobless claims. get jobswe will numbers. throughout the day, more fed speak. we hear from the vice chair richard clarida, the atlanta fed, new york fed, and st. louis fed. i'm sure they will have lots of new things to say. alix: i think they should say who's not talking today. time for the bloomberg first take. we are joined by jackie and sarah. the big thing that happened overnight with brexit is they vote on like a million motions, and two of them actually performed better than theresa may's plan b. that is staying in the customs union and potentially looking at

a second referendum. jackie, you live over there. talk to me. >> i do. i can tell you what business is thinking. it is a bit of a breather they've got this extra time, but someone described as waiting for a wedding that is not happening. you just don't know. businesses are stockpiling things. some of the banks are making their employees sign contracts to say you are out of here in case of a no deal. there is still lingering uncertainty about the finality, and it is still wracking nerves. alix: i think it is called "waiting for godot." [laughter] mayormeanwhile, london's is talking about a second referendum. let's hear what he had to say. >> it is clear we have a partisan gridlock. ishink the best thing to do to give the british public a say

in the deal that's got the most support in parliament with the option of staying. lisa: how much of an overhang on markets is brexit on markets? >> it is an overhang because you have that uncertainty. even companies based in the u.s., fedex for example, when they posted results last week, blamed exit for disappointing forecasts going forward. lisa: it is a helpful excuse. >> yes, people can use it as an excuse, but at some point you have to take it pretty seriously as well because we've been talking about this for so long now. it keeps going on and keeps coming on, and it feels like we are getting nowhere over and over again. we are in the same place and we have to wait for another extension. it just raises the uncertainty, and even in the markets, we are seeing the pound a little lower today. it is an overhang, but we are

just where we started, it feels like. alix: so the deal goes through and may loses her job. it doesn't go through and she keeps her job. explain that to me. >> i don't understand any of it. yieldseanwhile, global definitely taking a pause in their dramatic trajectory downward, but still at their lowest levels in more than a year. right now you are looking at average yields on global developed market investment grades and sovereign debt, at the lowest levels since february of last year. it just raises a question talking about not being able to get anywhere. does this indicate, and it's is pushing people away from riskier assets finally? sarah: in december there were a few saying stocks are actually the smart asset class, and may be leading the way, because when

we had that meltdown in the fourth quarter, it was very much about recession fears. now all of we have the bond market signaling the same thing. now we have a bit of a flip of the switch. if you look at an intraday chart of the 10 year yield in stocks, they are moving completely together, with yields leading the way. if we have a day when the s&p 500 is higher, stocks soon follow. there is clearly a correlation, and the worries are the same. it is about global growth. alix: what interests me is what businesses do with this information. if it is risk off, you want to entrench. jackie: from the company side there is this move toward bonds and away from equities. it raises questions, what does the mix look like for dealmaking? for instance, we had the centene deal yesterday. it could change how companies are approaching deal flow going

forward. lisa: we saw yesterday saudi aramco saying they were going to borrow $10 million for their deal. it is interesting they are turning to the bond market because things are so easy. alix: good job, saudi aramco. the other top story is china. you have the forum kicking off premiermier -- and the speaking earlier about overall markets. >> world economic growth has remained in positive territory, but it is being weighed down by factors like sluggish trade and protectionism. the global economy is losing momentum, and uncertainty is on the rise. basically, the really interesting thing as we saw this glencore unit freezing

imports of canola, there is some concern that if you have that happening with u.s. companies, , does thatying well companies? you can see the starbucks of the world, some big u.s. company's being impacted in that way. so the prospects of a protracted ,ituation can really go poorly and certainly for chinese manufacturers who depend on the u.s. market. alix: i am struck by a story that came out about grindr, the dating site for gay individuals. the u.s. is demanding that china sell its stake in the company because they are worried about potential blackmail. it sort of is raising the specter of just how intertwined the ownership structures are of companies in the u.s. and china. sarah: i haven't seen that yet. i was curious how you are going to weave grindr into the

u.s./china trade story. [laughter] sarah: but everything is so interconnected. that is the issue with these trade talks. the u.s. wants to make sure that china is actually going to double down on its promises, but when you have situations such as those, how do you make sure they are actually going to keep their promises? that is why now it seems like the u.s. is saying we are going to leave the tariffs in place. alix: grindr, huawei, trade talks. thank you so much. you can find all the charts we just used -- well, we didn't use any, but we will use a lot -- at g tv under terminal -- on your terminal. coming up, the surge in developed market bonds -- bondsg fears about

stoking fear about growth. this is bloomberg. ♪

viviana: this is "bloomberg ."ybreak saudi aramco is reportedly planning a $10 billion bond issue next week. aramco was seeking funding for its acquisition of petrochemical giant sabic. it would be saudi aramco's first forcingional offering, it to disclose accounts to investors for the first time. some top players have plans to get pg&e out of bankruptcy. pimco is said to have met with lawmakers and other stakeholders

about the proposal. bloomberg is learning the pitch involves a $14 billion cash trust to pay for claims tied to the deadly wildfires in january that forced pg&e into a chapter 11 filing. chairman of a japanese electronic giant will leave after 30 years as the company. he served as ceo before being replaced at the helm last april. that is your bloomberg business flash. alix: the global bond rally taking a little but of a pause. u.s. yields near a 15 month low, at one point following but joe -- falling below jgb's. joining us is frances donald, manulife asset management. guest: everyone suddenly realizes we need to be in safe

assets. we are headed toward the elevated potential of a recession. where do you go when you are nervous? back to bonds. this could continue over the next year to two years. that said, markets don't move in straight lines. if we were to get a good retail sales or jobs number, maybe stabilization in europe, we could see a pause here. lisa: are we seeing a japanification of global bond markets? dhe german ten-year bund yiel fell below that -- bund yield note fell below that of japan. guest: economists have been asking that question for years now as we botch, graphics and continued gdp -- as we watch demographics and continued gdp continue to fall. this is a cyclical reaction to growth concerns. investors that mean

should stay away from risk assets? guest: that depends on your timeline. my personal view is we are going to have another three to six months where economic data does we accelerate, and some of those recession fears come off a little bit. i like risk assets. if you are looking 12 to 24 months in the future, that is where i get more nervous. alix: barclays had a note today talking about how they are reluctantly upgrading u.s. equities. here's what they had to say. equities are now unchanged from earlier levels, but bonds are unchanged. it forces us, somewhat reluctantly, to recommend equities over fixed income. you have to rotate was an asset classes even if you don't believe it." guest: this is a market where you have to be extremely tactile, extremely noble.

someone told me if markets make you want to retch, it is the right time to buy. this is a much more tactical, short-term market then i have seen in my career, and it is consistent with being in cycle and knowing if 20/20 is a recession, do we sit on the 2020ines for a year -- if is a recession, do we sit on the sidelines for a year? lisa: if you decide now is the time to sell, and everyone else does, good luck with that. so how much is liquidity an important factor? guest: absolutely a key component to the story, but in this case we are talking about investors making moves based on three to four weeks. we are in cycle. all of these are going to come back into play and result in more volatility, more sharp corrections. alix: if you have a shorter timeline you will to take on more risk, where do you do that? guest: i like u.s. equities.

i still think this is the cleanest out there. alix: but where in equities? guest: i actually like homebuilders. i think housing has a little tactical play here as we see the rates component come up a bit. this is a sort of counterintuitive place to be even as we get worried about cyclicals. thesis does play out, does that mean people sell bonds and yields go substantially higher? guest: let's see what the fed can do. end?hey anchor that front can they move any conversation about the fed may be hiking again? what i am worried about is as the eta comes out a little better, does the market say we got ahead of themselves? nine orose dots become eight. as economic growth looks a little better, that is a lovely recipe for risk assets. lisa: frances donald sticking

with us. thank you. , we hear about the potential impact of brexit on thenesses from the ceo of country's largest pension fund manager. this is bloomberg. ♪

♪ lisa: brexit remains the focus as members of the chamber of commerce meet. anna edwards joins us from the event with the chief of one of britain's biggest asset managers. we are keeping track of all of the latest brexit developments. legal andon is of general group, the ceo of that business. we heard about business is

frustrated with a lack of answers on brexit. do you share that frustration? guest: yes. we've been determined not to be either a lever or a stayer. we had two years of uncertainty, and that is just too long. michael: how'd no deal --anna: how'd no deal ready are you? guest: we've been ready for quite a long time, but we don't think it is a likely outcome at this time. anna: what measures have you been taking? guest: we don't have to take that many big measures. the regulators and bank of england have been a great job getting our industry ready if it does happen. the europeans have been pretty amenable. paying pensions to european clients, no problem. we come to some very amicable solutions off the radar. anna: you seem quite relaxed about which type of brexit outcome we end up with.

guest: i am totally relaxed about it. the u.k. economy is growing at about the same rate as europe over the last four years. employment is at a all-time high. anerest rates are at all-time low. investment opportunities in britain are at the all-time high. somehow we just have to created environment which allows people to step up and invest more and copy what we've been doing the last few years. anna: are you feeling like brexit has just been a big distraction, or have you managed to not be distract by it within the business? guest: we've not been distracted by it at all within the business. a lot of towns and cities outside of london have accelerated their planning processes. they've encouraged industries to step up and invest more. that is why the economy has continued to grow on average about 1.5%, which is been a pretty good performance on the european basis. anna: leaning into brexit, what

are the upsides that parts of the u.k. can grasp? guest: for many years we've had a nimby-ism, not in my back yard, that we've applied to many things. that's all changed in the last three or four years. people have recognized we need to take things that are going to counteract the negative impacts of brexit. brexit is going to cost us 0.5% to 1% of gdp growth. that is a very sad outcome so far. but lots of people have decided, actually, it is time we did try and solve the infrastructure deficit which plagues both america and the u.k. anna: there is a big mismatch at the moment, isn't there? a lot of money floating around the global economy, a lot of investment opportunity in infrastructure. how to the two meet? guest: people have to have the confidence indicate ability to do things. if the politicians stop creating

this unbelievable area of uncertainty and let business get on with trying to do the right things, our economy between when brexit was announced in 2015 and when we are likely to implement it by will change profoundly, whether that is electric cars or renewable energy or massive changes to the environment, making our universities more venture capital friendly. all of these things are going to happen between those periods. took 75 toeneral make our first $1 billion -- took 75 years to make our first $1 billion in profit, seven years to make our second billion. anna: financial services is hard to do through trade deals. guest: everybody's got the same problems now. we have this massive ticking

demographic timebomb, a massive under serving for pensions, under provision of housing accommodations and health services for an aging population. china is the absolute growth area for that. they've got the biggest problem. america's got a problem. we've got a problem. britain could lead the world in solutions because we could experiment so much quicker because we've got the national health service in here, which is still a great asset. anna: thank you very much. nigel wilson, ceo of legal and general, joining me here in westminster. back to new york. alix: thank you so much, bloomberg's anna edwards. deutsche bank apparently is muddling raising up to 10 billion euros for a commerzbank deal. that comes from "the financial times." again, great time to say it at 0.5% for you. lisa: i would be interested in seeing the premium given the fact that deutsche bank, which has its own issues, now is

raising questions about commerzbank's loan growth, saying their possibly having -- alix: well, in the same way that commerzbank is saying we are questioning you and your investment banks. you also have yields falling. maybe it is not the worst thing in the world. we will see. coming up, china's li says the domestic economy is stabilizing and is hoping for a u.s./china trade deal. we will hear from that next. this is bloomberg. ♪

alix: this is "bloomberg daybreak." i'm alix steel. a little bit of a risk off now and the markets. selling stocks, buying bonds. who would have thought? i did want to highlight european

banks, off by over 1%. deutsche bank reportedly worried about the bad loans in the loan books for commerzbank. ft"lso have news from "the that they could be mulling about 10 billion euros in equity to fund the deal. let's not forget, negative yields. germany, negative seven basis points. you are seeing unchanged in germany, but still negative nine is where we set. cable rates are the one to watch. what's going on in the house of commons? i have no idea. spreads points is the s, the five thirties. lisa: viviana hurtado is here with first word news. viviana: u.s. negotiators are back in beijing to continue trade talks.

trade representative robert lighthizer and treasury secretary steven mnuchin hope to nail down a deal with china, but a chinese spokesman says there is still a lot of work to be done. a major sticking point centers on enforcement of u.s. intellectual property protections. meeting wednesday with president trump and top pentagon officials, the agen da centered on national -- the agenda centered on national security. giant alsohe tech declined to renew a defense department contract. he president later tweeting is "totally committed to the u.s. military." with brexit dragging on, some of the u.k.'s top civic leaders want to give their people a vote. london mayor sadiq khan speaking with bloomberg. mayor khan: it is clear there sopartisan deadlock,

the best thing is to give the british public a say with the deal that has the best support in parliament and the option of staying. viviana: now the parliament has signaled it is willing to back a softer departure from the european union, but no single option managed to commanded a majority. prime minister theresa may must now decide if she will bring her divorce deal back for a third vote. 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. i'm viviana hurtado. this is bloomberg. alix: thank you so much. soundedese premier optimistic at a keynote address in a form in china. he said the economy is showing signs of stability amid a targeted stimulus support. sound economic performance is not the result of quantitative easing or massive stimulus. some fluctuations in economic growth from month to month or quarter to quarter are hardly avoidable.

nevertheless, we will continue on with our policies as long as the major indicators are kept within an appropriate range for the whole year. alix: joining us from hong kong is bloomberg's enda curran. what were the major takeaways from this speech? : one is that the planned ceva hundred billion dollars u.s. -- the planned planned fitsu.s. the broader market view that perhaps china has found its feet a little bit on growth and should accelerate in the coming months. he warned about the global trade story, the global manufacturing slump, and rising protectionism. those comments were especially timely giving the u.s. delegation arrived in beijing today. lisa: robert lighthizer has had some comments recently that

haven't been optimistic with respect to reaching some sort of deal. what is the mood on the u.s. side? a: the overall view in this is clearly both sides want some givenf deal to be done the pressure in china and the volatility in the u.s. this is the real crunch time now . chinese foreign ministry spokesperson make the point that they still have a lot of problems to resolve. the signals coming out of beijing are positive, that would suggest movement is positive. but a roadblock might start to cause the market to reconsider just what kind of timeframe the u.s. and china are looking at for securing a final deal. lisa: thank you so much, enda

curran, for that update. stephen mnuchin say he was pleased to be in china when he arrived and was looking forward to productive meetings. for more on the trade talks in beijing, still with us, frances donald of manulife. jacob tanner's of bank of america merrill lynch is joining us as well. given trade in everything we are seeing, how do you position around that? markets are getting more excited about the possibility of a good deal, and in my view that is good news. it is part of the reason why we have seen risk assets come back a little bit. there's a lot of good news in the price here. i also worry that if we do get a good trade deal, it might mean we get a little less stimulus from the chinese government. in the longer term that probably means slightly lower growth. lisa: you are saying buy the

rumor, say the news. could there be a trade deal that is better than the other? guest: certainly there could be one trade deal that benefits certain sectors over the other. but from a global macro perspective, i need to see certainty. if we get that, i do believe we have a segment of demand that could be unleashed as business owners begin to say i know the framework, i can write up my contracts, i can put the money on the sidelines to work. it is a short-term rally. alix: part of the issue is working out trade deals. the other part is existing tariffs. what has that done for u.s. steelmakers, good or bad things? >> clearly prices spiked, and were corrected before tariffs were put in place. i think it created a bubble in the market a bit, such that steel mills were emboldened to go ahead with some big investments.

we've been talking a lot about this. we have gotten so convinced of an excess amount of steel coming, we've given it a name don, down theaged road in about three years. for now, prices are ok. manufacturers are the ones being punished, but we do expect a big shakeup. lisa: the chart we are looking at shows how steelmakers have actually underperformed in the u.s. since the tariffs went into effect, which is actually counterintuitive given that this was supposed to benefit them. in the long run, do you think it come or do you think they will continue to suffer? na: we are seeing probably a stabilization, but as far as if it was good or bad, investors clearly looked through it as short-term. now the fear is that investors

will be looking ahead to two or three years from now and say this is a major correction, do we need to be there. alix: we spoke to representative tom reed yesterday, and he talked about the steel tariffs. here is what he had to say. >> i am seeing manufacturing coming back to life, the u.s. steel industry coming back to life as we go through this adjustment to the trade agreement. mexico and canada and the u.s. have to approve this updated agreement. alix: who are the winners and losers as it shakes out over the next three years, and what are the revocations of that? timna: part of the design was to improve employment. i think a lot of that has already happened. in the near term, the steel industry is restarting some capacity, so there's also been location. goinge next move, you are

to have more to mystic capacity, which will be good if that is your goal, but if you are looking at steel prices, you are going to oversupply the market to the tune of 20%. may be better for customers down the road, but not for the steel market. lisa: we were talking about how uncertainty makes you step back. the tariffs that have gone into effect are not uncertain at this point. have you made any trades based on that that you wouldn't otherwise have? frances: i am canadian. we spend a lot of time modeling steel and aluminum tariffs. -- what a lot of time we found is that we could model the first order impacts. we had a lot of trouble measuring the second and third order impacts. how does this disrupt supply chains? how does this change confidence? our thesis was this is a

probably longer term, deeper impact, and that makes us very nervous around that particular sector. alix: quickly, consolidation. who's left in 10 years? five years? of theyou will see some older capacity have to get shut down. i think some existing producers will get bigger. the existing producers making the investments will pick shares , so it is the natural order of things, but it is going to be a substantial shakeup. alix: all right, thank you very much. stay tuned later today. coming up at 1:00 p.m. eastern, i will be covering all things commodities, including what is happening in houston and the unbelievable ellisville that can't ash unbelievable oil spill that can't seem to be cleaned up

-- unbelievable oil spill that can't seem to be cleaned up. more coming up in the wall street beat. this is bloomberg. ♪

♪ viviana: this is "bloomberg daybreak." coming up in the next hour, manulife's chief economist. ♪ this is "bloomberg daybreak." i'm viviana or todd a with your bloomberg business flash. fired.k's ceo has been the bank is in the grips of allegations it was used to launder billions of dollars in russian monday under her watch.

the cfo taking over on an interim basis. goldman sachs uk must pay a record fine of $45 million for failing to provide accurate and timely reporting relating to 220 million transaction reports between 2007 and 2017. that includes nearly $10 million that weren't reported at all. designed toon is make sure markets are safer and more transparent. after spending more than a century selling baby formula, nestle is turning its attention to moms. the food giant is expanding offerings for expecting and lactating women. the head of nestle's nutrition business says the new products will help her aloof -- will help relieve pressures related to motherhood, saying it could generate $1 billion in 10 years. lisa: thank you. nestle discovered women. [applause] [laughter] alix: slow clap. breast-feeding is kind of hard.

thanks. we turn now to wall street beat. first up, layoffs on wall street. jp morgan and tomorrow both planning -- and no more a -- and mora both said to be planning job cuts. a former executive in charge of social goods allegedly found to have cheated his son's way into usc. lisa: joining us is new york's bureau chief. reporter: it was interesting what you said leading into this segment out of the last. spring cleaning. the banks are sort of saying there's nothing too huge going on, but we got to get rid of some people. ok, not a great sign. business is booming. we will see how this plays through. in the lira's case, it does feel

like this is a real religion of business. jp morgan is just saying we kind of do this every year. alix: let's move onto to another bank, deutsche bank. they may want to raise 10 billion euros. they are also worried about commerzbank's loan book in the merger. what i found funny is when you , deutschece like this bank, we don't like your investment bank. well, we don't what the loans you are making. [laughter] lisa: so commerzbank is worried about deutsche bank? that makes sense given the fines. but deutsche bank sand we don't think you have good lending. this highlight how this really is a forced marriage between troubled banks that both would have to be

ultimately bailed out or supported by the different government -- by the german government? jason: that is ultimately what this shows. angela merkel setting up the table and being like, figure it out. alix: and qatari investors are in both. lisa: but they are not happy with this. alix: no. not many people are happy with this. alix: you had the privilege of talking to the co-ceo of ppg. here is what he had to say. >> when the news first broke, it was, as you might imagine, pretty shocking. this is something we had no knowledge of or no idea this was all happening. so any time something like this happens, it sort of takes your breath away for a minute. it was an interesting

conversation. some of the news he brought to the floor that ppg was investigating bilbo caution -- bill mcglashan caught up in the usc admissions scan you will. he is starting to mount his defense. at the meantime, they are having to go to their investors and say we are investigating this. they will come back with a readout to ensure that none of this behavior infiltrated anything related to the business. lisa: it really raises a question as the socially unconscious funds takeoff. what is the higher onus on employees at firms that do offer to act in socially responsible ways, and how vulnerable these firms can be? jason: ice i'm sure you've been talking to, people are saying are we doing this?

are we vulnerable here? lisa: are you guys bribing your people to get children into colleges? jason: seriously. . of theseises all questions. he was out there promoting this fund. he was in business with jeff's "vanity bono fair," raising money for this fund, and at the same time allegedly this behavior didn't quite jive. on "businessweek" on bloomberg radio. china may allow foreign tech firms to own data centers. that is interesting, coming from "the wall street journal." we heard about them opening up their investments. lisa: stephen mnuchin, u.s.

secretary, as well as robert the trade, representative, arriving in beijing. it will be interesting to see whether this is the beginning or the end. some basically you can buy of our tech firms, but you will have to buy -- but we will hav -- but you will have to sell grindr. next, what has happened with the lira. we will break it down. this is bloomberg. ♪

alix: the turkish lira declining today. the drama has been about the local elections over the weekend. turkish authorities want to prevent shortselling. that has reached havoc in the market, where they are looking at the offshore swap markets, the bond market, and other emerging markets.

short-term,g to be or is this a real shift in the turkish markets? guest: i think part of it is a shift in emerging markets in general. overnight swap rates at over 1000%, but it is not even the weakest currency on the date. 2/3 of 1%. down about brazil is down 6%. south africa is down 1.5%. investors cannot hedge -- and they are not crying -- not trying to leverage, what they are doing is selling turkish assets. they want to ensure themselves liquidation, and that is jumping up interest rates. you talked about the other currencies performing even worst.

how much contagion are you seeing from the turmoil in turkey into other risky emerging-market currencies? guest: i wish i could take you on the emerging-market contagion story, but i thicket is coming from the developing world -- the developed world. it is coming from u.s. and european rates because i think they are more excited about growth in a global recession then is justified. week.a driving force this it is not so much about emerging markets, but the drop in g10 yields and, on the growth concern, that has become important for emerging-market interest rates fair -- interest rates. fair -- interest rates. alix: fair. i think the hiccup is in

the short-term, but here's the long-term problem they are burning the bridge for. over the next 12 months, something like $180 billion of turkish foreign currency borrowings are going to come due. they want to do what china did in 2015. they are spooking investors in the long term. they've got this longer-term challenge. lisa: do you think turkish assets are a buy because ultimately politicians and policymakers will reverse courts because -- reverse course because they need capital markets? i wouldn't do it today. dler: thank you, marc chan of bannockburn. an incredibly

volatile political situation, but their bonds are coming due. they will have to ask international markets again and reverse course, which is why it would be a huge policy error on their part. if they reopened markets, would turkish assets ba -- turkish assets be a buy? alix: i am also curious if it is in the short-term. ubs asset management's head of strategy. you are seeing a little bit of risk off coming back into the markets. those yields still here to say. this is bloomberg. ♪

♪ alix: fixed income gone mad.

it is the japan evocation -- the japan-ification of the bond market. and no clear way forward for brexit, with a second referendum and soft brexit slightly more likely then theresa may's plan. increases the price range for its ipo as the clock ticks towards its nasdaq listing. we speak to kathleen smith of renaissance capital. i'm alix, alongside lisa abramowicz. always., as lisa: breaking news entree discussions. china saying it will -- on trade discussions. china saying it will allow the u.s. to purchase data centers in china, according to a "wall street journal" report as the u.s. delegation does arrive. interesting to see what they will ask in return. alix: also interesting paired with another journal article that talked about the fact that

the u.s. ordered a chinese company to sell grindr, a dating app, saying that could pose real risks in terms of blackmailing security. you continue to have a national security angle like grindr and h uawei paired with trade. lisa: you have to wonder how much china is going to allow the u.s. to go cherry picking on how they want their national companies to sell or not have a stake. very hairy zones as they try to work out some kind of agreement. alix: in the markets, a little bit of a risk when it comes to the equity market, down 1/10 of 1%. it is emerging to be a stronger dollar day as a typical trade. a stronger dollar starts to emerge at the margin. on the 10 year, the risk off somewhat being led by oil, down by 1%, as u.s. equities start to roll over.

lisa: at 8:30 we will get economic data, including the third read on u.s. fourth-quarter gdp and weekly jobless claims. pending home sales for february should be interesting given some of the weakness we have seen. treasury, the u.s. will sell $30 billion in u.s. notes. finally, fed vice chair richard clarida, the fed governor, atlanta fed come up new york fed, st. louis fed. anybody else want to speak? we are going to get an update on what has been making headlines outside the business had world. blocked a federal judge kentucky and arkansas from requiring some medicaid recipients to work for their benefits. medicaid covering more than 75 million low income americans. the program is jointly funded by the federal government and states. it costs about $580 billion in 2017. the head of idc making his first

public appearance -- of itc making his first public appearance since a massive chemical fire in houston started , spreading panic throughout the nation's fourth-largest city, disaster gulf coast for the nation in 14 years. all of us are profoundly upset the incident happened, and very sorry for its impact on the surrounding communities. viviana: local officials are criticizing what thet identify s his lack of transparency since the fire began. now to a fire that broke out in a high-rise office building in the bangladeshi capital. you can see the flames. officials say many people were

trapped. there was no immediate confirmation of the number of casualties, but there are reports some people fell from the building while trying to escape the flames. 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. i'm viviana hurtado. this is bloomberg. alix: thank you so much. the global bond rally taking a touch of a pause. u.s. bond yields still near a 15 month low. low.n bund yields joining us is ubs asset management head of intrinsic 's chiefnd manulife economist, to set up a discussion. is this confirming the narrative the market is telling us at this point? >> it may, actually. third-quarter growth isn't what is going to confirm it. it is going to be first quarter

growth, and that is going to be ugly across the world area -- across the world. will be a jumping off point, but we should continue to see bunds really low. alix: as we see yields drop wildly in some cases, the banking sector in particular in the u.s. as underperformed dramatically. i am wondering, is that an opportunity, or do you see low yields pressuring profitability in the banking sector and other sensitive areas? >> it is really kind of incredible because low yields are usually driven from real wood this in the economy, which couples with -- real weakness in the economy, which couples with weakness in the consumer. we are not seeing that in the u.s. if you are cautious, you want to invest with rocksolid balance sheets. the strongest we've ever seen,

no bad loans in the last seven or eight years. the evaluations are trading at pes they normally trade at in the depths of recession, and we are not in the gaps of recession. if anything, you adjust your rates and this is fantastic for equity investors. the banks are the most attractive places within equities. lisa: which particular banks, and how much of a buy? are these the top performers for the next 12 months? >> this is kind of interesting because you have the regionals in the big diversified financials, but also the financial sector overall. i like exposure to consumer finance. companies like synchrony on the credit card side, jp morgan, u.s. bancorp. a lot of banks look really attractive at these levels. , but you canr bet be idiosyncratic and picking out the best opportunities as well. alix: what bond is going to

outperform? globally, or in the u.s.? alix: globally. >> it might be in the u.s. still because deflation is still the tail risk in the world. it seems like investors finally capitulated on that point. at the very end of the business cycle when you are most like to see inflationary pressure, but we haven't had any inflation in this cycle, and i don't think we are going to. that means long-term bonds are hedge.t equity risk alix: coming up, britain's political standoff over brexit escalates. we will hear from one of the most influential labour politicians in the u.k., mayor sadiq khan of london. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." lost a second trial of claims its roundup weed killer causes cancer, adding pressure on the company to settle thousands of similar lawsuits. a san francisco jury awarding more than $80 million in damages to an elderly man sprayed to the herbicide on his property for decades. scientificnding studies show the product is safe. job cuts ining europe and the americas. the brokerage is set to be struggling to make a profit overseas. the business has reportedly lost

billions of dollars in the past decade. jp morgan also reportedly dismissing hundreds of workers, but in its asset and wealth management division. bloomberg has learned the bank is reducing the number of employees in support roles. jp morgan employs nearly 24,000 people. reductions are being made globally. that is your bloomberg business flash. lisa: thank you so much. brexit headlines continue to move markets. taylor riggs has a look at what is moving the pound. taylor: as we wait to see what theresa may does and if she does step down once brexit is delivered, you are seeing heightened volatility within the pound. come into my terminal here in held elections. then you see increased volatility during the first and second vote. as we await the third vote, we are seeing increased volatility. the pound is still trading in its narrowest weekly range we have seen all year as currency traders stepped to the sidelines to see what happens next.

the volatility doesn't mean bad performance. the pound is still one of the best performers in the g10 currency, strengthening about 3% this year. analysts are forecasting the pound to strengthen a little bit more. it is hovering at about 1.31, the year end target at about 1.36. alix: the british chamber of commerce is having its annual meeting at westminster. earlier, anna edwards spoke to london mayor sadiq khan, whose has the best thing to do is to revoke article 50. han: no matter what you feel about brexit, it is clear the process is been a complete and utter mess. what is clear is the option that got the largest amount of support from mp's was the one that gives the british public a so-called confirmatory vote, where whatever deal was passed by parliament, the british public gets to say whether they would accept the option or stay

in the european union. what is clear is the partisan gridlock, and that is why the best thing to do is just withdraw article 50 to take the rush away, and give the british public a say with the option of staying. anna: you have been calling for that, for revoking article 50. it doesn't seem to be part of your party's policy. is it too late for that policy? mayor khan: reversing article 50 instead of extension after extension, we are rushing an agreement because of an artificial deadline because the prime minister decided to invoke article two years ago today. we should have worked out what deal we want and then done article 50. the way to remove all of the rush is to withdraw it. that now thatis we know the terms upon which we would leave the eu and do business with the eu, the

british public all the wiser, give them a choice to accept that deal or the option to stay in the eu. alix: that was bloomberg's anna edwards speaking with mayor sadiq khan of london. megan, you were just in london. what is your base case right now? you can't have a base case. what we found was that the indicative votes didn't indicate much of anything. alix: they like something better than theresa may's brexit plan. [laughter] two things better, but it reveals they don't know what they want. nobody really wants a no deal brexit, but you could end up getting it because we can't agree on any alternative. it does seem like the chances of a softer brexit are much higher now as parliament has taken back some of the control from the government. no one can say they know exactly

where this is going. i think we will see a bunch more extensions and possibly a longer extension. lisa: tom, do you thing about brexit ever? >> as investors we deal with uncertainty, and i've never seen more uncertainty around something as brexit. i was actually in ireland last week, and there's 20 pages in the newspaper that changes every day. everyone is going to resign. they get dramatic about it. these politicians push things down the road until they are at the cliff, and then they try to build a bridge. right now i don't think they have the means to build that bridge. it is kind of crisis mode right now. lisa: what is interesting it is less expensive to hedge now -- alix: what is interesting is it is less expensive to hedge now. do you want to get into that play anyway? investor, a value what is the opportunity?

what happens in each scenario, the different types of brexits? some of the underlying companies, as we have more and more index investors, you have babies thrown out with the bathwater. i am not a u.k. investor, but there's definitely opportunities over there. their valuations look cheap relative to the rest of the world. alix: which leads us to how long it could actually go on for. wilson,g spoke to nigel legal and general counsel ceo. here is what he had to say about his timeline for brexit. nigel: we always had the view that we were neither levers nor stayers. we determined not to be either. we may well have another four years of uncertainty. alix: four years? megan: we could get more uncertainty. sterling assets are cheap, but nobody wants to get involved. we are waiting to see what the

path out of this might be, and i think we will have to wait a while to figure that out. lisa: thank you. coming up, surge pricing for one of the biggest public listings this year. lyft raises its target price to as much as $202 billion. we've got more on that next in today's bottom line. this is bloomberg. ♪

alix: time now for bottom line. we look at three comedies words watching -- three companies worth watching. deutsche bank potentially mulling raising up to 10 billion .uros lisa: it is interesting to see how deutsche bank and commerzbank come in either of them really want the deal done. they don't want to be married,

and neither does the german government, and yet, what are the other options? alix: much too early at this stage to make a good assessment. lisa: meanwhile, airbus is swoon benefiting from the we have seen with boeing and the 737. check out that divergence and returns. takingshares absolutely off. bowing down a lot. you have to wonder whether airbus will actually pick up orders. haven't seen the effect of the 737 max 8, some of the problems, and whether that has shifted the order books just yet, although china has certainly been pretty aggressive on this front. alix: china has a $35 billion plane order from airbus, number one. the third company we are watching today is lyft. to company upping its target

$2.2 billion. kathleen smith of renaissance capital ipo etf joins us now. kathleen, how well do you think it is going to go? kathleen: so far, so good. the price range increased 9%. we are at the early stages of the opening up of the ipo market after it was shut down since november due to very poor trading. we could see by the already public companies that have come , the returnsur etf have been very good. investors are feeling good about this category of the market, and we are seeing good reception to ipo's, including the first one pretty much out of the box, which is levi strauss. it just had a very entry into the market. it is trading well, up 30% from its ipo price. alix: bill ford, the ceo of

general atlantic, had this to say yesterday. >> i think 2019 is setting up to be the most exciting ipo year since 20 wealth. you've got -- since 2012. you've got some wonderful lyft, and maybe down the road airbnb, introducing consumers to the sharing economy. kathleen: i can make the point that there is enthusiasm for ipo's coming out. however, unlike bill, we are looking at it from an investor standpoint. it is great if you are already invested in these companies. we have to get these companies to come into the market and find some reasonable price. the lyft ipo is coming at a generous valuation for a company losing $1 billion recently in annual losses. it is going to have to find its way for investors. money-losing companies like this, you have to be a bit careful.

our studies show that can be kind of tricky for investors. lisa: is this a bad valuation year for ipo's for foreign investors? kathleen: i would distinguish between the unicorns and they're very high valuations in the private market and many other very good ipo's that are reasonable. levi strauss started out at a 14 times pe. we are also seeing really good ipo's on the calendar. trade wit is going to be coming goingand -- trade whip is to be coming soon, an electronic trading company, with a reasonable valuation. lisa: how concerned are you with some debacle where valuations follow for cliff? not disclose a lot of information that would be necessary to evaluate company. kathleen: i think it is important to remember that when facebook came out, they traded

down on the first day. alix: when they started trading. [laughter] kathleen: basically the effect that had was to shut down the ipo market for a month because investors were really put off by the performance. lyft is not in the pricing. it is going to be in its early trading. if it trades well and investors are comfortable, they are going to be ok. if not, investors are going to be a lot more cautious about the prices they are going to pay. sometimes these events help investors make money. that is the whole idea. it is fine to have liquidity for a private company, but if public investors are not making money, the ipo market doesn't work. alix: you mention profitability. which of these stories is most true, that public investors are willing to overlook short-term profitability for long-term growth, or the private market

venture capital money is getting tired of funding a company that doesn't have profit? kathleen: well, i certainly think that investors are interested in growth. we are in a time where growth is so important in a slow growth economy. however, investors have to look at some path to profitability, which is a little bit of a question mark with lyft and some of these others that look like it will take time to turn a profit. public investors are pretty impatient about that. on your point about venture, valuations appear very high from the private market. we think the reason these companies are coming out is they have been private to long -- private too long. investors are not going to be there forever. these companies are private so much longer than the companies have ever been. they are 10, 13 years old private at huge valuations.

that has to work itself out. the questionises about whether the dynamism of some of these companies has only been captured by private investors not accessible to public investors because of how long it's had to wait. this will definitely ignite that debate. hate thati always narrative because investors in the market are always going to find a way to make money. there is money to be made. it may be made when the stocks fall, but there is something. alix: and then you can shortage. [laughter] alix: thank you for joining us. 3% growth maymp's be at risk. 2018;s means for all of numbers -- 2018's numbers, next. this is bloomberg. ♪

alix: this is "bloomberg daybreak." i am alix steel. just moments away from the last read of fourth-quarter gdp. european banks still on the back foot.

upon overall. the real -- a pause overall. the real action will be in the bond market. not a lot of movement. a pause after the risk off movement we saw yesterday. 64 basis points. the data dropping. the fourth-quarter gdp final read coming lighter. 2.2%. the prior read was 2.6%. that decline is somewhat expected. consumption coming your lighter and the core pce coming in stronger at 1.8%. i should point out that jobless claims continue around their trend low at 211,000 jobs. fourth-quarter gdp final read at 2.2%. donovan line with what we're expecting. -- kind of inge line with what we were expecting. of allhe most important

of these is the inflation read, the core pce coming in stronger giving a little bit of a boost to 10 year yield in the u.s. but marginally show -- marginally so. it seems like people are getting it right these days. alix: it raises the question what it means for the year and the 3% expansion goal the white house sets. greene.th us is megan how does that sit with you? megan: in line with expectations. we had the horrible retail sales figure in december. we expected a slightly softer gdp figure. whether this brings us under 3% are not, it does not matter. tom, as you look at this data, i'm trying to figure out inflation.

we are still seeing muted price increases across the board. this confirms that. from the u.s. equity standpoint, do you think where we are is a sweet spot or do you see this low inflation as becoming an issue? tom: i think we are still in a sweet spot. the tail risk is deflation. pce going up but not too much is a goldilocks scenario. the low inflation gives the fed reason to pause for a much more extended time. the fact there is a little bit of inflation is positive. you saw low unemployment. the economy not robust but moving forward. it is a sweet spot. it argues that multiple should be higher. interestingly enough when you talk about inflation it leads you to what is happening with oil. we are in lows on the session, coming in about $58.

president trump tweets on what is going on in the oil market, he says very important opec increase the flow of oil. price of oil getting too high. thank you. i understand you strip out oil in order to get your good read, but if you have oil and president trump is going to call the top that will end up infecting -- affecting inflation expectations. megan: core inflation does seep through into headline inflation. they translate much more's -- it translates much more slowly than it used to but oil certainly matters even when looking at core inflation. alix: we have trump making call on oil, can you ever invest in energy? i will not comment politically on who is a good president and who is not but i do not think he is in oil expert and i do not think the president tweeting oil is too high means

oil is too high. if you look at production cuts through opec and what is taking place in venezuela and the fact that if demand comes back stronger in the second half, i would expect to see much higher oil prices. alix: my point is not a comment on whether president trump knows about oil but the markets response. there is a transmission mechanism. the saudi's are listening to him. foryou make the case wanting to get into energy stocks if you have to deal with that geopolitical risk? tom: i do not think the oil market is listening to president trump. with the oil trade is saying is people have muted expectations around economic. they're worried about slow growth in china and how will china turn things back on. those are the things to look at more than the prognosticators. lisa: one thing i'm trying to figure out is to president trump's point, is higher oil

bades, is this a good or a influence on the u.s. economy? let's say oil prices fall down to $50 a barrel. will that be a boost to the u.s.? , but: traditionally it is the last time we had oil prices fall it was not much of a stimulus to the u.s. economy. oft we found that instead spending that windfall, households were repairing their balance sheets. it is a good thing. it just means there is not much of a stimulus. households continue to be significantly overleveraged but it is hard to guess how they will use that windfall if oil prices continue to fall. more difficult to see now. lisa: we have been talking about president trump tweet that it is important opec increase the flow of oil because markets are fragile.

the interesting thing is the u.s. shale production has been the swing factor in the oil market. it will be interesting to see how opec response to another salvo from the u.s. president. tom from ubs asset management, thank you for being with us. megan greene is sticking with us. alix: a recap on the numbers from gdp, core pce coming in at 1.8%. muted inflation. the question becomes is the muted inflation going to be structural or cyclical. one answer is you've seen too much m&a and that has eroded competition and hurt wages and hurt job mobility. this is a great's chart that shows the antitrust cases -- it is the orange line has gone down in the last decade. you have seen an increase in mergers and acquisitions. joining us is barclays global head of research.

walk us through your findings and consolidation and what that means for the economy. say higher concentration in the u.s. represents market power. companies have the ability to dictate prices and raise their profits. an alternative hypothesis is rising concentration is be nine, competition in the u.s. is healthy. it is difficult to disentangle those narratives. the reason is bigger is not bad. just because a company's successful does not mean it is not facing stiff competition. what we do is look at the symptoms of low competition, the side effect, things like lower investment, slower wage growth, and reduced dimon amiss -- reduced dynamism. that is when people change jobs less frequently. we find those trends tend to be clustered in industries that

have experienced rising concentration. that leads us to conclude that market power probably has risen but also that it helps explain some of these macro trends. wire neutral rates staying so low? lisa: are you advocating to break up some of the big conglomerates or not sign off on some of the m&a we have seen in order to increase productivity in the u.s. economy? jeff: i think we have to be careful about making blanket statements. when you look at individual industries, it is not obvious that just because concentration is higher that is characterized by low competition. lisa: are there industries where it is more prevalent? jeff: even within those industries it is not obvious that halting mergers makes competition go up. it is possible some mergers in tech are procompetitive. you need big companies to compete with the existing large

companies. it is a much more nuanced case than to just blanket say we should slow down the merger activity. up solidifying the position of today's incumbent rather than creating new strategies. there's aegan: narrative that superstar companies rise to the top because they are better. there is no question in my mind that market concentration is resulting in lower growth, lower wages. the share to labor is much lower because of this market concentration issue. even though i'm sympathetic to the view that superstar companies are better, i think we need to do something about it to get out of this world. lisa: when i am struggling with is i am not seeing a path out of what we are in from that perspective. if that is the case, it seems like this low inflation environment is not going anywhere because it does not

seem like there will be a remedy to this. low: absent remedy, you see neutral rates continue. it is also positive for the equity prices for these incumbent firms. i think high margins have been elevated for this cycle and maybe they would be resilient even in the face of economic disruption. megan: what may force the change is wages are incredibly low. when you get the pendulum swinging away from labor capital, you either address it with legislation or revolution. it could be social unrest that ends up forcing this issue to the wall. also affecting supply chains and affecting that realm as well? megan: that is certainly a piece of it but i think it is more that these companies have such incredible bargaining power. now that nobody is unionized the workers do not have power. a lot of the terms of implemented noncompete --

mcdonald's has noncompete in their contracts. that is a piece of market power increasing. jeff: some solutions might be more macro in general and target those issues like procompetitive policies to help people change jobs more easily and encourage companies to invest more sleep and encourage entrants into the industry where you do not target specific companies. lisa: other sectors were conglomerates have not led to rest -- led to less productivity. jeff: retail is a good example. competition looks very healthy and retail. dynamism is high. barriers to entry have fallen because new channels to market like social media as a way of advertising have reduced barriers to entry. --pite some of the bad plus the bad press the big retailers might guess, we think competition looks strong. recapi just want to

because oil is on the move. it took another like lower, was already low but alike lower with president trump tweeting opec needs to increase the flow of oil. if you have a tweet sounding jittery about the overall market, that will not help global growth fears. president trump trying to talk down the price. this is bloomberg. >> people have a pretty good line of sight on what supplies to meet the market on what schedule and then the demand growth will end up the more robust. ♪

viviana: this is "bloomberg daybreak." private bankti chief investment officer. alix: time for follow the lead, a deep dive into stories making headlines and moving markets. today we take a look at the changes happening within the energy industry, in particular when it comes to lng growth. this is a number of lng vessels around the world. the extreme increase we have seen as demand from china and japan heats up. i spoke to make gentle, tellurian ceo, one of the companies hoping to make waves in lng. i asked her what is up with prices that have continued to trend lower? meg: this is an important year

because we have downward pressure on lng prices because we are bringing 40 million tons of lng supply to the market. that is almost 15% growth in the total lng market. that is more than we have seen, even though the last couple years have been 11% growth. almost 15% is significant. the lng prices are down, which is indicating oversupply. what happens when prices are down? demand expands and what we have found in the last round, 2016 was the last low-price environment, is that demand came in in an even more elastic way. -- acame permanent permanent demand foundation. , thishough we go into year will probably be until the winter we will have low lng prices. it is not an indication for what

is going to start the construction project. people have a good line of sight on what supply is coming into market, on what schedule, and then the demand growth will end up being more robust than people expect. alix: does that mean all the projects in the process will get built? meg: the u.s. needs 100 million times of additional capacity and everything we have under construction today is about 80 million tons. more than a doubling. -- that isiven driven by the supply side in the u.s. we will still increase production of gas another 25%. much of that gas is associated gas. when the oil producers are producing oil, there is gas coming out of the same well and that is coming no matter what the price is. alix: you mentioned negative gas prices in the permian.

does that change what acres you will buy or your strategy? meg: that is a great question. you know we've been pursuing resourceso purchase in a major shell basin in north louisiana. it has low acquisition costs and low transportation costs. that will supply about 40% of all of the gas we need to buy. our next major piece will come from the permian. it does not necessarily change but it probably accelerates how we think and are trying to contract that gas. it puts more priority on the pipeline we have designed becomes the 600 miles to south louisiana. alix: that was meg gentle, tellurian ceo. interesting looking at the gas prices in the permian where you are paying to take it away. lisa: it is for a longer-term

play given the increased demand. the question is can the increase production quickly enough to stave off the competition that is growing from china? alix: also want to recap the oil market. president trump tweets it is important opec increase the flow of oil and calls the oil market fragile. oil prices rolling over. i will be discussing the rhetoric coming out from opec and oil traders over the last week at 1:00 eastern time on bloomberg "commodities edge. edge."commodities this is bloomberg. ♪

lisa: here's what i am watching. turmoil in turkish markets. taylor riggs has allowed up --

has a roundup of some of the huge moves. taylor: i want to start within the currency market. you are seeing a stronger dollar and weaker lira even as the government is starting to step in and stop some of the losses we are seeing on the currency. we thought we would see an improvement in the weakness there after the central banks said their currency reserves rose. nonetheless, weakness of 4% in the lira. you also saw the cost of borrowing rise. 1.8 jumped up to 1000%. we are normalizing to get back down to the normal levels. things were under pressure not to provide liquidity of foreign fund managers. the government says those measures were temporarily -- were temporary. some normalization in the lending rate. investors are selling their bond and their equities. you saw the two-year bond yield jumping to 20%. the government had stepped in

the currency market and finally within equities posting big losses, dropped 11% in the last five days, sliding most since july and now back to year-to-date low. lisa: thank you so much, taylor riggs. for more on what is going on in turkey we are joined by bloomberg and why managing editor. i am confused because turkey wanted to prevent losses in their assets. the move they made cause the losses to widen dramatically. will they reverse course? what gives? >> you are right to be confused. they have followed short-term actions to prevent the currency weakening ahead of the elections this weekend. they raise the overnight borrowing rate substantially, basically removed liquidity in the funding market which caused the short-term funding rates to rise. that made it difficult for any foreign investors to sell lira, not just short sell lira but even those who were long lira

were trapped because it is too expensive to exit. that means the lira has not depreciated as much if it had just been left a normal market circumstances. alix: you are saying if the turkish government had not made this move, the lira would have weakened even more? mark: absolutely. we had weakened a long way by last friday before these measures came in to play, before they canceled the one week recall option. that is what caused the lira to rally on monday. that is why it held ok until today. today there has been more liquidity restored to the funding market and that has allowed more people to exit the lira position. it is likely is the funding

market continues to normalize as many people expect after the election on the weekend there'll be more lira outflows. what has happened is that erdogan has taken a short-term measure but he will tarnish turkey for investors for a long time. investors will not much -- will not want to turn to this market. is what he did not short-term anymore? will this have to be the long-term scenario? mark: is a difficult question of what will happen next. people are nervous to see what will happen after the weekend. there are a few that once the elections get out of the way, if wants -- as what he lot to watch next week in terms of what we have got. i'm concerned that if there has been so much damage in turkey's international reputation in the financial market it will remain difficult.

lisa: thank you so much for those insights. the big question, as you indicated earlier is what to do on it -- what does this do on a broader level to emerging markets, especially index funds that invest in the debt in particular. if turkey falls off a cliff to we end up with the contagion scenario? alix: and you wind up may be having a stronger dollar, what does that do? that does it for bloomberg daybreak: americas. schumacher will be joining us after the weaker final read for fourth-quarter gdp coming in at 2.2%. this is bloomberg. ♪

jonathan: from new york city for our viewers worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪

jonathan: the relentless bond market rally continues, driving treasury yields down to lows. u.s. trade officials heading to beijing on the cusp of a breakthrough. very little sign of that in the u.k.. parliament taking control of brexit and failing to agree on a way forward. 30 minutes away from the opening bell, good morning. here is your thursday price action. futures unchanged. reversing the losses on the s&p 500. the euro softer. 2019 lowsields kiss earlier in the day. we begin this program with a big issue. bonds rallying, stocks resilient. something has to give. >> this is a debate that has been going on for a long time. >> you cannot have your cake and eat it. >> there is been a huge gap betw