>> good morning. from bloomberg european headquarters in the city of london, i am anna edwards with manus cranny. these are today's top stories. jones as saudi arabia signaled its intention to keep supplies constrained and urges opec partners to stay the course. russia's energy minister sends mixed signals on future production. >> we are considering various options. market demands that and if there is a deficit we need to cover. anna: frozen out. techtech firms -- top firms cut out huawei.

companies and tumbling. sent tumbling. polarized europe. a scandal brings down the government. angela merkel says voters have a dark choice to make -- stark choice to make as voters head to the polls. good morning, everybody. welcome to the program. 6:00 in london. very pleased to be here with manus cranny. he is keeping track of the oil story, which is very important. flat,r seeing broadly full year 2020 profits. a 700 million euro buyback. on pricing cautious

and that is interesting because we heard from the ceo over at easyjet just last week, talking about how the pricing environment was very dynamic, suggesting there was a lot of pressure on pricing. there were a lot of good deals for customers at this time, and in particular in the u.k., demand has been down. uncertainty around the brexit story. good morning. good morning. good to be back together again for this morning. nejra is taking a day off. the message is very simple. do not be fooled by high oil prices. stay the course. that is a message from khalid al-falih. we will hear from mr. novak, suggesting the ability to demand flexibility. andaid things are fragile it really is the flip of a coin that could deliver a move to the left or to the right. the one message which came

through from what i would call the most aggressive scrum i have ever done at opec is that it was piling in. al-falih made it clear we don't want our collective action to be undermined. they will fill the gap but they it at this stage on the iran story. good morning. anna: the most aggressive scrum. that is saying something. a quick word on ryanair saying there is no negative brexit debate. oil prices, manus, take us what is going on in jeddah. staying the course has been the messaging we have heard. that is part of the reason we have got oil prices up by 1.4%, the bryan price. -- the brent price. trump tweeting about the official end of your own over the weekend -- iran over the

weekend. also, taking on concern the run global growth, which could have weighed things to the downside. australian assets in general are stronger. indian assets in general are stronger. the indian exit poll, all of that pushing asset higher. equities pushing through some of the year-end targets analysts had in amongst all of the political tension. markets look set to open flat. futures entirely flat. they do point a little bit higher. bear that in mind. towait for the next salvo come on the tray conversation. the market in on here david ingles in beijing. david: good morning. good afternoon from beijing. a couple of things to tell you about in the asia-pacific. exit polls in india. that is the last market to open up at a screening higher in the equity market, poised for the

best day in over three years. the banks benefiting from the policy support they may get as high as funding is concerned. over 3%. a lot of strength coming through in the currency. that is a 12 year high. best day since february. some strength coming through in the currency. flip the board. have a look at china. you talked about huawei and the sort of filtering across the supply chains to give you a sense of what those are. a partial list, i should note. shanghai composite down 21 points. it takes you to levels seen before the gap up in february. we are stuck between two gaps. picture across the region, don .4% for the asia-pacific. as topix index is doing this well for the last hour of trade. the kiwi is bid.

a decent day across these equity markets so far. back to you. manus: thank you very much. david ingles in beijing with the very latest from currencies to equities. pushing higher after saudi arabia and other key producers in opec signaled their intention to keep these supplies constrained for the rest of the year. but also pledging to prevent any genuine shortages. we got the view with khalid al-falih in jenna after the group's press conference ended. khalid: saudi arabia will not go for deviate for our targets july in anticipation for either a decrease or an increase, but we are going to commit and take an extra month on our own. and my other colleagues will do the same. will not jump the gun. manus: despite the comments, there were mixed signals from the most vital non-opec partner,

russia. alexander novak told bloomberg and is too soon to discuss further curves. i also caught up with the nigerian oil minister in jeddah. he said the opec plus group genuinely supports rolling over the collective production curve after june. take a listen. >> we will wait until june, look -- in support of a rollover. manus: was it unanimous? >> largely. no one has spoken against it. manus: we are hearing the russians have recommended to reduce the cap at the moment. what can you tell us about that? emmanuel: it did not come up for discussion. manus: the russians did not have to reduce the cuts? emmanuel: they did not. wait until june.

the june meeting. manus: and you and i caught up earlier, sir, and you said to me, manus, i support extending the cuts until the end of the year. consensus is building that is the baseline scenario? emmanuel: it is. manus: what would it take to extend the opec cuts? what needs to happen for that to actually happen? numbers are very fuzzy. ofe numbers are supportive stability in price. some members are supportive of the production levels. and so, our feeling is that, right now, there is a bit of uncertainty. flip that causes major disruption -- it can go both ways. iran embargo.

environment and puts us under more pressure to increase supply. but then if you look at the numbers coming out of the united whatever, they are boisterous. production is improving, doing much better, so if you knock away the ties to crisis, as it were, the numbers are as they are. returning the current status. in theertainties political environment continuing to increase. all of those are going to roll over. manus: joining us this morning is the head of microstrategy at state street. it is almost as if job done. oil is up 1.3% this morning.

they will fill the gap but they will not turn on these spigots. they cannot afford a rerun. like it andot sound they don't have any reason to. we have a lot of questions over global growth and right now, those questions do not seem to be that serious. we are still relatively constructive on global growth but that is all the more the oil's benefits as well as the fact that be much every central bank in the world has taken a tone,eutral or dovish supportive of the commodity complex. it feels like more of the same to me. anna: there are so many different, conflicting forces exerting themselves on the oil price at the moment. allow me to look back to friday. this morning1.3% and this is the net long positions and this is brent net long positions just falling, the final bar of this chart. you can see it being caught off

guard by this morning's move higher. in terms of the demand story, when did it start to catch up with oil prices? to do witherything supplies, much more of an impact at the moment. tim: supply curves have been the big driver. the demand story is a little bit underappreciated in that sense in that you do have a consequence of the slowing in their own economy, china introducing stimulus measures with the potential to do a lot more. i think that is underappreciated. india, a massive oil importer, has had an election result that will guarantee -- it was somewhat expected -- guarantee continuity for the foreseeable future. anna: unexpected? tim: you would not know that by the market moves, but it did seem like we were headed in that direction so you have some oil friendly fundamentals that are coming in on the demand side, i suspect. but as you say, there are a lot of unknowns, but for now, it is the focus on demand that will

win the day. manus: tim, you talk about it through the fx. we were looking at charts this morning. you quite like those plays. would those be the two dominant place you have in this -- plays you have in this space through fx? tim: it has been a consistent this -- consensus trade. a lot of us have not gotten it right. the terms of trade look fine. the domestic economy looks fine. they hiked rates once this year and they will do it twice this year. i suspect over the medium term, that wins the day that is the one we prefer and there is plenty of catch-up to come. have reduced your exposure to emerging-market equities a little bit in favor of high-grade u.s. corporate bonds. does oil high and was that inflation story -- tie in with

that inflation story? tim: it has been a big problem. certainly the last few months and for me personally at least. partially motivated by that. the inflation outlook -- the consensus is we are headed for disinflation and everything is terrible. you have commodity price movements in oil that look absolutely fine and where inflation protected securities would offer decent risk reward in this environment. manus: would you lighten up on em risk?s? -- personally, i have my own exposure on that. such a good start to the year and you have the introduction of trade uncertainty, which when you speak about em equities on an index basis, you're really

talking about chinese and east asian equities. they dominate the index. from that perspective with trade uncertainty back to the fore, and with sentiment having deteriorated back to levels we thought last june -- saw last june when the follow-on tariffs were introduced by the u.s. -- demographics favorite -- but for the near-term, east asian equities look a little bit vulnerable for the coming months as this persists. anna: tim graf from state street stays with us on "bloomberg daybreak: europe." let's get the first word news update. debra mao has that for us in hong kong. >> austria has called a snap election after he dumps his coalition partner as a video shows it the vice chancellor offering government contracts in exchange for campaign funds.

he declared the freedom party unfit to govern. this despite praising the pulse of -- the policies they have helped him put in place. european voters face a choice values anderal destructive nationalism according to angela merkel. this as she sets out the state for this week's european parliament elections. centrist leaders are campaigning against anti-e.u. parties from the u.k. to poland. they hope they will not win enough seats to disrupt the block's policymaking. narendra modi's ruling coalition is poised for victory in india's general election according to exit polls. this would give it another five years of running the world's fastest-growing major economy, but polls in india has been notoriously inaccurate in the past. they wrongly estimated modi's party would win reelection in 2004. a fight for the iron throne has come to an end. don't worry.

no spoilers. the finale of "game of thrones" leaves hbo with a programming void. it has a number of high-profile shows in the pipeline including a deadwood movie, but finding another hit will not be easy. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am the -- this is bloomberg. manus. thank you very much for that roundup. we are asking the following mliv question. the weather you want to join the team. -- see whether you want to join the team. it is on your screen right now. and you can reach out. you can have a go at that. with the host of elections around the world this week, where will the potential impact last the longest? will it be india? where will it come through?

join us there. we are both there. india, australia, plenty of countries to choose from this morning. european elections loom on the horizon. we will be speaking with newsmakers today from ryanair's fedto the atlanta president. he will be joining programming later on today. stay tuned. this is bloomberg. ♪

manus: this is "bloomberg daybreak: europe." i am manus cranny in jeddah for the opec meeting. anna: i am anna edwards in our european headquarters in london. cooler in the studio than it is for manus in jeddah. the asia-pacific session, a few market closer to be aware of. we are tentatively higher, waiting for the latest salvo on the trade story to come through. u.s. futures dewpoint higher. a little pause, a little change in direction for the dollar yuan, which is in interest.

look for the morrison effect and the modi affeceffect. checkices higher as we opec and friends. that is sending the oil price higher this morning. let's get a bloomberg business flash. here is debra mao in hong kong. sprint arebile and reportedly planning concessions to get there are over $25 billion merger over the line. bloomberg have learned these include asset sales and service guarantees. it follows talks with the federal communications commission. they should help ease the process for regulatory approval. the sec and department of justice both have to sign off on the deal. -- fcc and department of justice both have to sign off on the deal. -- that is according to the new york times. moves occurred in 2016 and

2017 and also involved the president's son-in-law, jared kushner. recommended the matter be referred to the treasury department but bank executives rejected their advice. past withud gaming microsoft surprised the industry but none were reportedly more surprised than the employees of sony's playstation division. fightingt two decades the software giant. they also spent seven years developing its own cloud gaming offerings with limited success. and that is your bloomberg business flash. anna: thanks very much. debra mao with the business flash for you. let's turn to other business news specifically around trade. top u.s. tech companies have reportedly close in the supply of critical software to huawei to comply with a trump administration crackdown that threatens to choke off china's largest technology company. trump says he is very happy with the trade war, signaling he is in no rush to get back to negotiating with aging.

inflaming trade disputes. it needed my front of trump's favorite criticisms that beijing weakens its currency to eight exporters. let's speak to you tim graf, still with us -- to aid exporters. let's speak with tim graf, so with us. seemingly caught off guard by some of the chinese retaliation. what is your base case around trade? we do this until the end of june and then get some resolution at g20? or not really? tim: i put a low probability on that. it is clear, with the stories around huawei and security risks , not just in the u.s., but elsewhere, that this is not just about the u.s.'s bilateral deficit with china. it is maybe more of a struggle for global primacy. i don't suspect it will get wrapped up with a few bows in the coming six weeks. this is one of the reasons why i

am a little less optimistic on e.m. asia for the near-term, simply because i think this has the potential to drag on much like it did last year. we have weak sentiment around trade for six months so it started to improve and we started to think around g20 and when is our ace -- when a series -- this country, it would be resolved. it is going to get perhaps even more complicated. i think we could be in the foothills of an fx war, but more on that later. put it in the gtv library. foreigners are bailing on china. as you look at the blowout in chinese equities, is it an opportunity or to you think there is more volatility and downside to come in the near-term? tim: volatility does seem to be the most likely result. i mean, chinese equities are always very difficult because there is, you know, a sense of intervention in those market that make them a little more difficult to trade, so i am wary of that.

but same time, i am also, as i said before, quite cognizant that a lot of these headline risks and dampeners on sentiment can stick around with us for a long time. it is one for me to step away from. em equities look attractively valued. at the same time, the uncertainty that surrounds them, the uncertainty we were taking for granted a few months ago, i suspect, does look to return to the fore for quite a long time. anna: a weaker chinese currency? last week, we were talking about whether we would get to seven. is it a symbolic number? tim: markets become obsessed with symbols. the narrative can drive the market as it has done for the last several years, so even though it is relatively an arbitrary number, i don't think it is worth dismissing simply because i think back to 2015, when they were devaluing the remedy and one-off -- renminbi in one-off fashion.

the chinese authorities do not want to repeat that. inasmuch as it is an arbitrary number, it doesn't signify the markets of being maybe more troublesome as what we see on the surface. i am well aware that they want to avoid us and all you where you had capital flows where they had to expend a lot of reserves to boost the renminbi. an evaluation you get as a framework like it will be limited because they do not want to undermine confidence in their own market. very briefly, i looked at the data. the short on yen are dropped by 30%. you like volatility in dollar-yen. is that what you are loading up on? tim: volatility in x has a lot of -- x have a lot of catch-up. it is really getting back to long-term average. volatility is still very low, but especially so in fx vol, and dollar-yen epitomizes that. when you get these episodes of

volatility, the yen will do well. manus: ok. from state street, our guest host this morning on daybreak europe. coming up, you don't want to miss our interview with raphael bostic.

>> despite my sympathy about the technical issues, i would like them to stick with their current production voluntarily. options, including relaxing limitations. the uncertainty continues to increase. >> the consensus between many of us is to look at, to see what on the price side and demand side, trying to balance the market.

>> we are going to take an extra month on our own. i hope my other colleagues will do the same. listening to the ministers at the meeting in saudi arabia. other key producers signaling their intention to keep the oil supplies under constraint for the rest of the year while pledging to prevent any genuine shortages. russia's position is a little less clear. we will hear more from alexander novak in the next hour. i have written down in the midst willl that, the kingdom not be fooled by higher prices. we are seeing higher prices in brent and wti. nejra: both up by more than 1% this morning. really interesting to see other assets preoccupied over the last couple weeks. trade tensions and the threats to global demand that those

might lead to. oil prices have not been caught up in that. they have been focused on the supply side. tim telling us earlier he expects demand supported policies from the likes of india shortly. >> i also caught up with the nigerian oil minister. he said it is very stable, it is very fragile. he said i see prices in the range, 60 to $70. everybody is holding their breath. nejra: maybe that limits the upside. let's talk about what's going on in india. .e have seen some stellar moves joining us now from our partner in mumbai is niraj shah. stocks saw the biggest

jump of 2019 after exit polls, which have been wrong in the past, show a win for modi. thought we should have of what happened in australia when the polls were wrong. indian markets are not doing that. what the markets are doing today, they are doing well. the bank lifting up a thousand points for both the fin tank and the nifty bank. the money markets have started off fairly well for themselves. all, all asset classes are doing well for india. keep in mind, the market has started showing positivity. 250 points on the benchmark, the , you ahead of this event can see in the near market buildup in the session today.

it has been a strong last three or four-day day performance, about 5%. for thes will be hoping exact number that comes out on may 23. the rupee is certainly flying on heavy-duty expectations. sebastian, let's take it to you. stocks are on the move. a shock election outcome and the aussie dollar and the aussie dollar in the stocks related tickets heart. absolutely. investors cheering this stock outcome. the question now becomes, are gains sustainable? i've got australian stocks here in a white line. they are just above the 12 month target which suggests that we are going to be lower than where we currently are. other things to factor in, we have to slow the economy and corporate profit downgrades as

well. not just the political risk, but china as well, chinese stocks dropping after a fourth week of declines. trade war fear is still playing out in investors' minds. foreigners losing faith in the market. $2.8 billion of a-shares were sold last week. this is a record. nejra: thank you very much for taking us through many dimensions of political risk and political effects on the market today. we are asking our markets live question of the day. with a host of elections around the world, where will the political impact last longest to? do you see it lasting in australian assets? do trade tensions catch up with the aussie dollar? reach out to us in the markets live team, ib+tv on your bloomberg. let's get your bloomberg first word news update.

morrison's center-right government will command a parliamentary majority after a surprise win according to the australian broadcasting corporation. the prime minister's pitch for economic stability was at the heart of the coalition's successful bid for a third term in office. he may be the first prime minister for more than a decade to survive a full term. president donald trump has warned iran not to threaten the u.s. or face room consequences. ruinous consequences. this as tensions between washington and tehran have been mounting. the u.s. has deployed an aircraft carrier to the goal -- to the gulf. japan has delivered a surprise recorded first quarter growth figures that smashed expectations. the economy expanded in the first quarter of the year with gdp rising 2.1 percent.

economists predicted a contraction. this may cool speculation prime minister shinzo abe will delay a fors hat tax hike set october. the fight for the iron throne has come to an end. no spoilers here. the finale of game of thrones leaves hbo with the programming void big enough for a dragon to fly through. it does have a number of high-profile shows in the pipeline, including a deadwood movie. finding another hit on the order of game of thrones will not be easy. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. isra: does that mean winter not coming? what a relief. turning to europe, austria is heading to the polls. a snap election after the center-right government was thrown into crisis. it follows the release of a video showing his coalition

partner promising government contracts. in return for campaign funding. he is seeking a bid to govern alone. simple one.s a i would like to work for our beautiful country using my political approach, following my course, and also with the support of the majority of the population, but without any individual cases, incidents, or scandals. rv vienna bureau chief joins us now. great to have you with us. kurz betting on the collapse of the freedom party and is that a bold bet? >> he has to bet on that. otherwise he will not have a majority for governing alone. z got 30% in mr. kur the last election, so he has to

and a substantial part of the freedom party voters to govern alone. yes because i think it is safe to say the freedom party will suffer after this scandal, but you have to know similar to voters for brexit, voters for trump, the core of those voters will construct their own conspiracy theories around the video and be absolutely unphased. it is by far not certain he will succeed. indeed. the press over the weekend said it is a big issue. what is going to be the biggest issue as he goes to this snap election? what kurz is trying to do, he says we governed over the last 17 months and our policies were popular. the polls are good for his government.

what he is telling voters is if you liked what we did the past 17 months, do it without the scandal and these incidents that happened, not just the corruption, also links to far right neo-nazi groups, et cetera. if you want that without the scandals, you have to vote for me. that is his pitch. i am not sure whether it will be enough to get the majority. manus: thank you very much. sticking with coverage for the 28 memberor the states going to the polls, the u.k. in the netherlands vote on thursday. the majority of countries are voting on sunday. let us get to our bloomberg reporter. she joins us from brussels. we have a big week for europe.

the question is very simple. will the center hold? is right. a simple question, it is difficult to answer. what kind of coalition can they form after the election given the fragmentation we are seeing in europe? two things will heat up the campaign. the collapse of the austrian government, which to some extent equips matteo salvini, remember he had a big rally on saturday, it does not make them look good. secondly we had angela merkel finally on the campaign trail. she has been very quiet. or a timid. saturday,t there on saying do you consider -- continue to foster european values or go for self-destructive nationalism? it does look like we are going to get a lot of political fragmentation for european voters.

it is not a black-and-white vote. much. thank you very maria tadeo gauging the political discourse. let us get to the head of macrotrategy at state -- strategy at state street. to equity markets priced populism as a result of the elections this week? >> that is a good question to ask. i do not think so. lagged. equities have we are starting to catch up. my suspicion is they are not priced for further disruption. is ancal disruption inevitable outcome. it has been a process the past few years, this fragmentation you and maria spoke of. i do not think so would be the

answer. are not pricing for, pen,ou suggest salvini, le you find that more alarming than the rise of the brexit party and what nigel farage is likely to do? >> if you look at the gains the brexit party -- ukip has lost support, but they have certainly picked up support the past five years. the pickup for the greens et cetera, that offsets it. in theory the u.k. is not going to be an eu member much longer anyway, so we are told area -- told. salvini, le pen, are part of the euro zone and have far greater potential for disruption. it is not losing traction. whether it is the u.k. for europe. you brought up

brexit so i'm going to run with it. euro sterling had the longest run of losses since the euro was in septage. a lot of this is to do with for roche. -- nigel farage. we seem to be moving in the paradigm of risk for sterling. tim: it does seem that way. the probability of no deal or a very hard brexit is certainly rising in consequence. not only do you have the brexit party story taking place in the backdrop of the european elections. what you have is a rising likelihood the next prime minister will be a hard brexiteer. more than the european election story, it is the negative that is getting focused on. when you look at things like sterling options, they have moved a little bit. sterling has moved up a little bit. not to the extent you might think in light of the fact that

you have a brexit party that is going to win the european election in the u.k. and a prime minister very likely to be a hard brexiteer. is thei see the pound worst-performing g10 currencies against the dollar month to date. the past 20 or so days. how are you playing this? i think this skew does not represent periods of uncertainty similar to what we were seeing at the end of last year. it is not going to get there. last year, when it was a chance of hard brexit rising in markets, you had far greater risk premium attached. idea: jumping on the brexit doesn't happen more than the idea no deal brexit happens under a new tory leader? >> it is more likely the latter. the probability is still pretty low. it is a nuclear option that will

destroy politics in this country. you can say they are destroyed already. it adds fuel to the fire. you just have that sense of grievance that will be at the heart of british politics for decades. manus: as salvini calls for a fiscal shock, he wants to provoke the european central position. you like btp's. what makes you like btp's? it is a bit of yield. i suspect you get a lot of these not just volatility in these headlines, but the outcome will be one of two things. ploy, whichlection i suspect it is an salvini backpedals, that is the most likely scenario. you have a repricing of btp's

that allows for attractive yields to be gained as a consequence, or you get a much more pro-fiscal spending european government and the authorities start to look the other way as they have done for the last several years with france. either scenario, it is counterintuitive. there is volatility on the horizon, but the outcomes i suggest are possible are not the for italy themselves to really interfere. anna: i read over the weekend the eu was going to write to italy on the subject of debt clarification. tim: a strongly worded letter, yes. anna: thanks for joining us this morning. tim will be joining the bloomberg radio team on london dab digital radio to carry on the conversation. up this a lot coming day here on bloomberg tv.

the ryanair ceo put numbers at. the atlanta fed president, minutes from the fed later this week. this is bloomberg. ♪

manus: this is "bloomberg daybreak: europe." here is a look at what you should see this week. it is going to be busy. mark carney testifies to parliament. watch for any comments on how brexit could impact policy. maybe his successor might get a mention. wednesday, the eu holds and events in honor of the chief economist. he will be replaced on june 1. agmerzbank holds its followed by deutsche bank on

thursday. watch for any comments on the failed merger talks between andsche's and commerzbank consolidation in europe more generally. later, elections for the european parliament. the majority of countries voting on sunday. let's get more on the brexit story following the collapse of cross party turks -- talks, theresa may said she will make a bold offer to improve the deal as the u.k. prime minister prepares an attempt to get her deal through parliament. the leader of the u.k.'s opposition labour party has moved closer to fully backing a second referendum. there corbyn now says should be a vote on any deal to leave the union, including one proposed by his own party. the goal of the general election was to try to get a europed relations with in the future. if we can get that through parliament, i think it would be

reasonable to have a vote to decide on that. anna:anna: let's discuss brexit and the sector. great to have you with us as always on daybreak. help me understand what impact brexit uncertainty is having on financial services. a lot of conflicting headlines from different sectors. housing markets seem to be hurt. in real estate we seem demand remained good. -- real estate we see demand remain good. what is the financial services story at the moment? >> from day one, we operated on the basis the u.k. was going to leave the eu on the 29th of march. years,ut 2, 2 and a half the company has been working back from that point. what we have seen, and the brexit tracker is where we are

seeing this in real time, the number of jobs have moved, assets have moved, companies have done what they need to do. fallstely, some of this down to regulators. there are certain rate reaction. we need contract continuity. the rest of the u.k., the financial services industry, has done with a always due -- done what they always do. see you thiso morning. brexit, maybe even a hard brexit completely. what would that do? has expected ary hard brexit. it has hoped for a softer brexit. what has done is make sure -- we have aens

terrific relationship with the regulator wars. -- regulators. have to all intents and purposes gone through hard brexit. there are things we need to do with europe's regulators. you: banks have talked to about the possibility of a corbyn victory and what that means for them and whether they are having to take action to prepare for that. he has been critical of the banking sector. any industry, you prepare for political outcomes. withve had roundtables senior companies. exchange,d very frank a very constructive exchange. recognition of a

close relationship with europe. there are things we disagree with very strongly. can i ask you which jurisdiction has the greatest appetite to take systemic risk away from london? >> when you look at the cities that try to draw business to and from london, paris is the one everyone is conscious of. there has been a real effort there by the regulators to try as much as possible. aearly the aim is to create full spectrum of european international financial center. when you look at the more successful consensus, i am thinking of luxembourg, of frankfurt, the first two europeanular as a

footprint for your u.k. operation, that has been more successful. manus: thank you. the city u.k. ceo. coming up, much more with this trade secretary liam fox. ♪

manus: good morning. cranny with anna edwards in london. stories. today's top the cuts that bind. oil jumps as saudi arabia signals its intention to keep supplies constrained and urges opec partners to stay the course. russia's energy minister sends mixed signals on future production. >> various options, including relaxing production limitations

if market demand needs to be covered. top tech firms cut off supply of critical software for a while way. president trump's -- send the supply chain tumbling. lit -- theomes the latest company to warn of the months ahead as lower fares way on earnings. ceo later thise morning. welcome to daybreak europe. markets are higher this morning. brent and wti are higher. the message is very clear. we will help, we will do whatever we need to do to make

up for any loss of supply, but we are not turning on the tap. stay the course. the kingdom is not fueled by higher prices. all the ministers speak to bloomberg along with mr. novak. he is looking for flexibility. harmony of oil prices between russia and the king most saudi arabia. good morning. anna: good morning. a little bit cooler in london, but it is the midst of the opec scrum. let me talk about equity markets. this is the picture on futures. european futures not very decided. oflook ahead to the start monday's trading session just on 7:00 in london. or berlin.is something fairly flat at the start of trading. i am more interested in u.s. futures. they suggest it will be higher at the u.s. equity session,

although they come off a little bit from earlier highs. we are between a quarter and 0.3%. on the bond market, we will see if there is any reaction to the unexpected collapse of the government over in austria. a little bit later as we get bond markets, all of that reflect it in terms of spread. certainly this is what we have got right now. futures,ten-year bond political risk certainly to the four. very positive impact coming through in equities and risk asset from the australian election and from the indian exit poll. we look to all of that political news flow. such a happy thing over the last day or so. we get the european elections. david ingles has an update from beijing. >> good afternoon. as you were mentioning, perfect

segue. have a look at india. themeve your election across the asia-pacific. the latest market to open, you have india, and one of the first to open up, which is now about the close in australia. a 12 year high. having pared back now. friday, those bets were roughly 77%. that is back to 55%. in the aussie currency as well as the indian rupee. so far, we will see how we close for the indian equity market going back to march of 2016. let's have a look at china. a three month low here. the huawei effect playing out across these markets to give you a partial list of some of these things getting dragged out, listed in hong kong and also shanghai.

substantial losses for that part of the market. ok. is doing have a look at the benchmark here. , flat, 0.3% close better. volumes are on the lighter side today. the kiwi seeing the love come across from the aussie dollar. is ok across equity markets. given the election and policy support when it comes to china. back to you guys. manus: thank you very much. to's turn our attention back the oil story. saudi arabia and other key producers have signaled their intention to keep production cuts in place for the rest of the year for now. that means tighter supplies. pledging to prevent any genuine shortages. it was less clear how russia shared the view.

the nation's energy minister spoke to annmarie hordern in china -- jeddah. a we are always viewing number of options based on where the market is heading and what is happening at the moment. we need to time, continue cooperation with our partners in order to ensure market stability. the parameters which have governed our actions will only be -- in a months time. assumptions can say including production limitations , there is a deficit we need to cover. >> russia just came into compliance. it also correlated with contaminated oil in russia.

tothat how russia was able reach their quota and comply? because of these lost barrels of oil to europe due to the contamination? >> know, this is absolutely not so. reacheday that we have april ands back in the russian companies operating in our markets are in accordance with what was agreed. annmarie hordern spoke to the omani oil minister. supply is sufficient. decided,appened is we but maybe the question is why did we decide june? thatt feeling tells me there are so many unknowns in

the expectation is by june many of the unknowns will be known. >> do you think we will get an extension of the current deal with the same quotas for each country? >> this is no prediction what will happen in june. if you want my production that is a likely scenario, but what will happen between today and until 25th of june will define the decision for june. unknowns, we really don't know the effect of the sanction issue with iran. theeally don't know how bad problem spots like libya and venezuela will emerge in the next four weeks, if anything can happen. the consensus between many of us is to look at, to see what will the supply-side

and demand side trying to balance the market come june. >> everyone is focused on the supply-side. where their proposals about increasing production? >> there is a proposal for those willear the next few weeks make the market more tight. impactedy-side will be to the extent we will seem undesirable rise in oil price. if that happens, yes, i think there would be many of us who would want to put more in the market. .ll that is not known the inventory and the other signs, we might have signals tell us that there is enough crude in the market and do nothing is the best option as of now. manus: a series of voices.

can i ask, we spent a lot of time talking about the trade wars. we will continue to. we have not given much credence to the risk from the really sustainable high oil prices. the high-end year model at the moment? medium-term, fundamentals for oil are quite weak in my opinion given that there is this challenge for the economy to move to a lower carbon impact. however, in the meantime it is clear oil prices will be sustained. i do not think oil prices will go to past highs or $100 per barrel. inlong as they are contained the $60 to $70 range, they should not cause a significant

problem. i hear you are saying about the longer-term picture, the demand and growth story or lack of growth in the demand story around oil, but it seems supply concerns keep pushing oil prices higher and also geopolitical tensions. donald trump argues for lower prices, then he tweets around iran. never threaten the united states again. he is adding to the geopolitical tension that is driving oil prices higher. we see them up over 1% this morning. do you expect a spike in the short-term? >> i'm not penciling in at the moment. i agree there are several supply issues. we have geopolitical situations in iran, libya, venezuela. quite of that, opec is comfortable with the current practice and they really want to

adjust supply significantly to accommodate the market. my base case is still that oil range will stay in this from $60 to $70. as an economist on your side of the business, to what extent does this momentum play in places -- it just does not seem to be one of the big -- of that story. , i was morehis year dovish on the inflation story. we were praising to be very well contained. now, the drag on inflation has appeared. let's say the central banks can be comforted in a world of low inflation by moves in oil

prices. however, inflation looks fundamentally soft in my view. therefore, once again, i am not particularly concerned in terms of upside risk inflation. anna: thank you very much. shortly. silvia we go to debra mao in hong kong. >> austria has called a snap election after the chancellor drops his coalition partner as a video leaked online showing the right wing vice chancellor offering government contracts in exchange for campaign funds. he declared the freedom party unfit to govern. this despite praising the policies they helped him put in place.

scott morrison's government will command a parliamentary majority after it surprise when on saturday according to the australian broadcasting corporation. the prime minister's pitch for economic stability was at the heart of the coalition's successful bid. he may be the first prime minister in more than a decade to survive a full term. european voters place -- face a choice between liberal values and instructive nationalism according to angela merkel. centrist leaders are campaigning against anti-eu parties from the u.k. to poland. the establishment's hope is they will not win enough seats to disrupt policymaking. prime minister modi's ruling coalition is headed for victory according to exit polls that would give it another five years of giving -- of running the

world's fastest-growing economy. polls in india have been notoriously inaccurate in the past. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna: thank you. coming up, we will be speaking to a raft of newsmakers throughout the day, from ryanair's ceo talking about his results, higher oil prices maybe, from him to the atlanta fed president raphael bostic. a perfectly timed conversation. ♪

anna:anna: this is "bloomberg daybreak: europe." untile 41 minutes to go the start of the european equity market session. we could be a little sluggish. a little mixed at the start of the trading day. to jeddah.ome let's get straight to the business flash. debra mao is with the team in hong kong. >> ryanair says lower fares at its new austrian army sent prophets tumbling. it also forecasts earnings could arm sent- austrian profits tumbling. ryanair shares are barely changed this year, a better performance than some rivals. t-mobile and sprint are planning concessions to get there over $25 billion merger over the

line. this includes asset sales and rural service guarantees. they should help ease the process of regulatory approval. the sec and department of justice both have to sign off on the deal. transactions involving entities controlled by president trump aroused the suspicions of anti-money laundering specialists at deutsche bank according to the new york times. and 2017, they also involve the president's son-in-law jared kushner. specialists recommended the matter be referred to the treasury department, but bank executives rejected their advice. that is your bloomberg business flash. you. thank let us turn to trade. president trump says he is very happy with the trade war and that china will not become the world's top superpower on his watch. he is in no rush to get back to the negotiating table as top u.s. tech company google,

qualcomm, and infinium have frozen the supply of hardware to china's while way. joining us is bloomberg's asia tech reporter. why are u.s. companies cutting up sales to huawei following the instructions of trump, i guess? >> the commerce department under trump has effectively put huawei on this blacklist which says that any american companies that want to do business with while i have to get a special license and that they should start from the premise they are not going to get it. isry american company unnoticed. it also puts foreign companies that use a lot of american parts on notice as well. what does it do to huawei? how do they fill this need?

is it a slow death spiral? what is next? >> depends on who you ask. in the u.s., the thought is we are going to cripple huawei. that is because a large portion of their components still come from american tech companies like qualcomm, particularly semiconductors. that has to do with android's android operating system, google's gmail, search, things that exist on huawei's phones outside of china. in the short term, if this is carried through, it is going to have a crippling effect on huawei. presidentnk about the -- about it, the only precedent we have for this is last year. with zte.

it was used as a pawn in trade discussions and was eventually granted access to u.s. components. while way stockpiled all sorts of components and they think, ok, this can hold us over until trade talks are done and we will resume business as usual. the question depends on who you ask at this point. anna: really fascinating we see u.s. companies taking action and also other companies, non-us companies that use u.s. technology taking this action. just like the iran sanctions and the waivers, we see the extraterritorial impact of u.s. foreign policy. thank you. about the global trade picture and talk to sylvia, senior economist at hermes. we will not dwell on the details of huawei, although that clearly is in the process of bigger tensions between the u.s. and china.

what are you watching? what is your base case for trade talks or lack of talks right now? >> i have to change my base case two weeks ago when it became clear the momentum towards a trade deal between the u.s. and it nowas within reach, looks like that is not going to happen. is these kindsw of tensions will persist over the rest of the year. there will be stop and start moments. uncertainty will continue. basically bothe, sides are hurt. manus: when i look at the university of michigan sentiment index, add a 15 year high, you would make the point that the risk is if trump goes to all out

tariffs, it could be a very aggressive whipsaw on consumer confidence. it wouldn't be likewise on industrial confidence? be likewise on industrial confidence? >> confidence on the consumer and the business side. for the consumer, if the u.s. administration was to extend higher tariffs to all chinese imports, that mainly has consumer goods, it will probably see higher inflation in the u.s. and therefore increased real income and the hit to consumption. however, businesses might also decide to take a hit on prophets instead of passing through fits.r -- on proph about the way china manages risks? china has a history of selling

treasuries to buoy the chinese currencies. seen as a step too far by some. do you expect china to go down has road yeah i think china different ways to retaliate and u.s.,y in terms of the the u.s. imports more than $500 billion of goods from china while china only imports 120 billion dollars of u.s. goods. like lettingre their currency go for trying to sell treasuries. however, of all these actions have basically -- for china. china needs to adopt a measured approach. manus: we are going to have to leave it there, sylvia.

the risks from escalating trade tensions. oil prices are higher. we leave you with that from jeddah. "the european open" is up next. ♪

anna: welcome to "bloomberg markets european open peer, i'm anna edwards -- "bloomberg markets: european open." i'm anna edwards. commanding lead in the exit polls for modi send equities in india soaring as well as currency. european futures pointing to a mixed session this morning. cash trade is less than 30 minutes away.