>> good morning from berlin. this is bloomberg daybreak: europe. these are today's top stories. rising power. saudi aramco raises $26.5 billion in the world's largest ipo. the kingdom teases beautiful news from opec today. yesterday's meeting leaves markets underwhelmed. the magic number, november's job report should reaffirm the resilience of the u.s. labor market even if the end of atm strike gives the reading and artificial boost. political pressure. democrats sital out demand to remain in the government.

the biggest strike in years. ♪ matt: good morning from berlin. oh isadh, saudi arabia out with the numbers behind its ipo. the price tag values the state owned oil giant as the world's largest company by market cap. here with the details is bloomberg's dani burger. than $25 billion, saudi aramco has closed its deal. it is the world's biggest ipo. this is very different from the $100 billion deal the crown prince had first envisioned. , theyearly big promises

listed only in saudi arabia. a price at the top end of its range. $8.52. the equivalent of the share offering was more than 4.6 times oversubscribed. profits, oilig companies are out of favor with some investors worried about concerns about the world -- worries about climate change will curb demand. some of that is behind why the listing didn't hit the desired $2 trillion valuation mark. this is a whopping number at 1.7 trillion. aramco's profitability overtakes microsoft and apple in terms of the biggest listed. matt: thanks very much. joining us now is chief as itgist at tictoc management.

we've been waiting a long time for these numbers. is this the kind of ipo that the kingdom wanted to see for aramco? >> yeah, i think so. the numbers are pretty much what everybody was expecting. i don't think we had any big surprise here, to be honest. it is in line with expectations. i don't does will have a huge impact on the oil market overall. matt: what do you think about the opec meeting we will -- meeting? we will talk with manus cranny in a minute. it doesn't seem to be the kind of magic meeting that the kingdom was expecting or forecasting. luca: of course. we have to wait for the announcement. what we are talking about is a very cosmetic change. what we are seeing here is the usual negotiations. i think the big messages that supply continues to be at a same level as before. the question is about demand

now. the economy is getting weaker. thisig question is, is cutting supply enough or not? we have to see how the global economy will evolve over the next few months. matt: what do you think about demand? now, the global economy is getting weaker. we just had a meeting in madrid. we have a new climate package here in germany that the spd wants to boost even further. how do climate change concerns affect demand in the coming year? luca: if you look over the next few years, that will have a big impact on the oil price. if you look over the next 6-12 months, the key driver for the oil price is going to be the dollar. we expect the dollar to get weaker. the global economy is a bit tricky. on one side, really weak numbers.

on the other side, some indications that it might pick up. where, see a situation with the u.s. supply going a little bit down, potential demand in the global economy picking up. some upside to the oil price. in the long-term, all the environmental issues will be negative for the oil price. months, more6-12 upside risk than downside risk. matt: hang on a minute. we will keep you with us for the hour. i want to get over to manus right now. manus cranny is in vienna at the opec meeting. oil is down right now, hovering near $58 a barrel on the w -- wti contract. finalizetion failed to the details despite spending six hours in talks at the summit in

the austrian capital. for more on what looks like a disappointing outcome, we get to manus right now. nothing has been finalized. is this an ominous sign? say it's a sign of a lack of cohesion. i have seen various reports. a meaningless meeting, vulnerable and uninspiring. the proposition of 500,000 barrels is cosmetic. the new saudi oil minister said that we should prepare for a beautiful day. that is the sum total of communication from this group. i have attended many opec meetings. this was quite fractured. it depends on, where are you drawing the 500,000 down from? the 2018 baseline level? 2019? in which case, it would mean something.

the point about it is, there's a new sense of control on the flow of information to the market and to the journalists. it's a very strange atmosphere. this, a wonderful phrase, profits, heal thyself. if you are leaving on a global trade deal and inventories, which are important, but you can't keep your own house together, that sets a new tone for the first quarter of 2020. matt: so people are saying this is a big fudge, this meeting. is it all about the theatrics surrounding the aramco ipo? manus: i don't know that it is all about the theatrics. i believe they are tied. --di arabia once a note wants a robust oil price.

importantly, it's about this. it's about a message from the house of sud, do your bidding. in other words, to the rest of the nations, comply. you must comply. we have done our bit. we have done more than our bit. that responsibility now lies with the non-comply or's, iraq in nigeria. the risk is that we go for a new baseline which is 2019. then we are talking about something that might mean a movement of substance for the market. matt: thanks very much. manus cranny, dark and early in vienna at the opec meeting. we will see what comes out of it today. more talk a little bit about what's going on in the news. let's get the first word news with selina wang. selena: thank you.

over in washington, president trump is on track to be impeached before christmas. there is no chance he will be convicted in the senate. nancy pelosi saying the house will draft articles of impeachment against the president for abusing his office by pressuring ukraine to help him win the 2020 election. president trump remains defiant. north korea may be preparing to conduct engine tests at a long-range rocket site. satellite imagery shows activity at a base kim jong-un said he dismantled as a concession to president trump. they put a year and deadline on diplomacy with washington. they want the u.s. to ease up on sanctions. 3000 allegations of sexual assault, that's what were found involving its drivers or passengers. trendsort was on u.s. last year in response to public safety concerns. customers took 1.3 billion journeys in 2018.

out of those, uber is reporting 50 eight rd deaths. -- 58 road deaths. kpmg.ey by it says demand for workers is rising at the slowest pace for a decade. companies are canceling hiring plans and people are hesitating to take on new jobs amid confusion caused by brexit. luca: -- global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪ matt: thanks very much. coming up, could the payroll number disappoint? we will preview key data on u.s. jobs. kudlowerview with larry at 2:30 p.m. u.k. time. when you are traveling to work this morning, tune into

bloomberg radio live on your mobile device. this is bloomberg. ♪

♪ matt: this is bloomberg daybreak: europe. how far will slow u.s. growth weigh on the pace of hiring? we will get an update later today on the november payroll number. forecasts rebounding due to the resolution of a strike at automaker gm. lubitz of scribe or's take a more pessimistic feel -- bloomberg subscribers take a more pessimistic view. if you run the whisper function, you will see an average of 140,000 jobs as the estimate. people whohave 152 have taken part in this contest.

you can take part, too, if you put your estimate in there and submit it. you can see how you do against your peers on global wall street. let's get thoughts from luca paolini in the london studio for us. what do you expect from the numbers today? luca: if you look at the numbers you have seen from adp, it suggests downside risk. in the last few months, we have seen a deterioration in the labor market. not only in terms of job creations but other indicators. the job market feels solid. indicators --ll job growth is 1% higher than year ago. that is the lowest since 2010. this trend will continue for a little bit longer. i don't expect any shop numbers today, to be honest. matt: what about overall? do you expect a u.s. recession next year, as we have heard some predict?

socgen has predicted it. is the trade war going to hit the u.s. economy hard? underpricingket is the risk of a u.s. recession. it is unlikely that you will get a recession in the u.s.. look at investment. investment is already in a recession in the u.s.. earnings have fled. the risk is definitely there. to get the u.s. into a recession, you need to have a shock on the trade war side. otherwise, the fundamentals are relatively ok on the consumer side. the u.s. should be able to avoid a recession next year. matt: how do you measure the strength of the u.s. consumer? clearly, the jobs number says something. it doesn't tell you the whole picture. a lot of these jobs could be low-paying jobs, jobs that workers aren't satisfied with.

they may not support strong spending power. luca: if you look at retail sales and consumer spending, we are about 2.5. that is ok but not great. we are seeing a deterioration the last few months. consumer confidence is quite solid. let's not forget that what you consume is based on what you make. that is why today's numbers in terms of wages are important. we have seen a peek and wage growth -- in which growth which is not a good sign. leverage is low. the spending ratio is a mistake percent. for the u.s., that is very high. the risk from my per -- point of view is a deterioration in investment spending. at some point, it will have a negative impact on the job market. it is too early to see that. it is a story for next year, potentially. matt: bloomberg users don't expect the fed to cut rates next

year. there are clearly views out there that differ. what do you see coming from the fed to help support the u.s. economy? luca: first of all, i don't think the fed that -- can always save the u.s. economy. we have already seen a lot this year. i expect a rate cut in march. u.s. growth will be close to 1%. there will be one additional cut. will it make any difference? i don't think so. you will see the fed cutting again next year. matt: luca, we have a lot more to talk about with you. luca paolini is our guest cohost this morning on daybreak. don't miss our interview with larry kudlow after we get the u.s. jobs data. we will speak with him at 2:30 p.m. u.k. time to get the white house spin. let's get the bloomberg business flash with selina wang in beijing. selina: thank you.

glencore being sued. the move is due to share price decline from recent bribery investigations. that is following overlapping investigations in u.s. and canada. to comment.lined phoenix group is in talks to acquire your a swiss u.k. insurance unit. it is the largest ever -- ever acquisition. they called off an ipo in july. they were aiming to raise as much as 3.3 billion pounds. no comment yet on the news. the message from city to address clients, stop being so nervous about stocks. next year will be brighter than ever. that's according to its 2020 outlook. the bank is predicting expansion will continue. anticipating corporate earnings will rise another 7%.

what are the areas of opportunity? cybersecurity and clean energy. that is your bloomberg business flash. matt: thanks very much. now, germany's social democrat party laid out a list of demands to stay in chancellor angela merkel's coalition. the grand coalition is the ruling government. they want a massive increase in infrastructure spending, a higher minimum wage, although only the 12 euros an hour, and more action on climate be on the package that the coalition put out a few weeks ago. the demands will be put to a party vote today. this comes as the latest ard opinion poll saw the spd losing even more ground than it already has. joining us now in berlin is chad thomas, head of our bloomberg western bureau. what do you think we will see today at this spd conference?

will it be a make or break moment for the coalition? chad: two new leaders were voted in last week. they are government critics. that has pacified a lot of people within the party. have dialed, even some people have said they should get out of government. now they are saying, we will stay. we have a list of demands. now they will vote on those demands today. it will surely go through. they will take those demands to angela merkel's christian democrats. whether they go along is another question. for today, it looks like they will vote to stay in the coalition and bring these demands to merkel and her party. matt: i'm sure they will ask for more than they expect to get. hopefully meet somewhere in the middle. let me ask you about the spending. that is the important redline

for the cdu csu he or. how important is the infamous black zero that the government wants to hold? chad: the interesting thing about the spd demands, they dial them back a little bit from some of the draft proposals we saw earlier in the week. they did not mention the black zero. they seem to be getting -- that would be very hard to dialback from that promised that they have been making to voters for many years. that will be the area where you see the most contention between the two parties. merkel's christian democrats, they had a funny post on twitter where they said that black zero is a fetish. it shows the degree to which they really are committed to doing that. matt: it wouldn't be the only fetish here in berlin. it is the twilight of miracles

time and -- merkel's time in power. ak ise get there, supposed -- akk is supposed to take over. do they have a better chance of taking over? an interesting question. these two are not known internationally. they are not that well known in germany. there is some discussion around what role she is going to play. some people suggested that he would step down as finance minister because he was running for the party leadership and lost. havee last week, they said, no. he will stay on as finance minister. he is still quite popular across germany. not as much so within the party. it would be really hard for them to break through. akk has her own problems and

challenges within the party. the real potential winner here is the leader of the greens who is the most popular politician in germany. matt: it's a really fascinating aspect to this whole thing. they have gained so much power so quickly. thanks for joining us. chad thomas, managing editor for western europe. berlin. my boss. luca paolini is still with us in london. what do you think about this change? it was slightly unexpected that schulz -- he is so popular throughout germany. .e lost of these two upstarts how does it change the calculus as far as the german economy is concerned? luca: it was a surprise. we should not forget that the vote was with party members. it is always a little bit different. it will not change much. we are talking

about a 50% share. that is incredibly low. i don't think the spd is in a position to start any conditions. it is fair to say that the expectation of higher spending by the government is displaced. look at the german government. it is increasing spending by 3% year-over-year. something is happening. the risk for the market is more that there will be a snap election early next year if the new leader is pushing for things that they cannot deliver. when you look at the polls, it is not impossible but you will get a coalition of spd, greens, and the far-left. that is probably what can change something. otherwise, more of the same. some kind of stimulus but not enough.

slow --an economy will grow but slowly. matt: the problem as i hear it from berliners is that germany has a ton of extra money. they have a lot to spend it on. infrastructure badly needs help. that is not the kind of spending that europe needs to avoid a european recession. how does that box get ticked? luca: the thing is that, it's very difficult for the german government now to go on a spending spree. they said, they want to have a balanced budget. to get this kind of fiscal stimulus that would make -- make a huge impact to the european economy, you have to go into a deep recession. as we said, the german economy exports.ecause of if you look at domestic demand, retail sales continue to be solid. i don't think they are in any hurry to do anything dramatic. break in.ve to

we are headlines out of china. china will waive tariffs on some u.s. soybean and pork. we will give you the impact of that on markets, next. this is bloomberg. ♪

matt: this is bloomberg daybreak: europe. let's check in on the markets around the world. joining us from our bloomberg partner in mumbai is niraj shah and over in london is dani burger. after a disappointing economic data and a rate hold, how are the markets ending the week? you.: good seeing thanks for having me. we've had aftereffects of what i is not the economic data. the markets in late trade

corrected. in today's session, a bit of red on the screen for all. a bit of a disappointment. i don't know if it is short-lived. we had rallied a little bit and gone on to all-time highs. a little bit of a technical correction in play as well. certainly, that seems to have been the trigger point because the market was pricing in a rate cut and that didn't come in. will this disappointment continue next week or will it be a new one? back to you. matt: thanks very much for that. dani burger, you were looking at the action in the u.s. dollar ahead of today's monthly jobs report. what do you see? dani: today, not too much. over the week, a clear trend of declines for the dollar. it declined for six consecutive days. it will be the longest losing streak for the dollar since 2017. analysts said that there is a chance that the payrolls data

today in the u.s. disappoints. that's part of the reason behind those declines. when we look at what the weekly numbers have done for the dollar, it is declining 1%. that would be the biggest loss since june. the dollar is still a high-yielding currency. it is not even the jobs today, we look to next week with the ecb and the election. both things will boost sterling and the euro. it is hard to see a scenario where the dollar sees any strength against its g10 currencies. they all gains this week versus the dollar. matt: thanks very much for that. great to see you. .hanks for joining us let's get bloomberg first word news. we go to beijing and we are joined by selina wang. selina: thank you. saudi aramco finally prices its shares. the offering will be at 32 riyals, over $8.5 apiece.

it is the largest ipo in history and values the saudi oil giant at $1.7 trillion. that's a far cry from the $2 trillion valuation. north korea may be preparing to conduct engine tests at a long-range rocket site. activity at a launch facility that kim jong-un said he dismantled as a concession to president trump. pyongyang put a year and deadline on diplomacy with washington. they want the u.s. to ease up on sanctions. citi, stop from being nervous about stocks. here will be brighter than ever. that's according to its 2020 outlook. predicting expansion will continue, anticipating corporate earnings will rising other 7%. what are the areas of opportunity? cybersecurity and clean energy. tax,it comes to a digital the ball is in the u.s. court. that's according to france's

digital affairs minister. we need to create -- if the americans don't want it, we will do it for europeans. global luca: -- selina: news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries.. this is bloomberg. matt: thanks. had some breaking lines on china. the country will waive tariffs on some u.s. soybean and pork imports. donald told members of the un security council that washington and beijing are having very good discussions on trade. >> we will have to see. we are moving along. we are having major discussions on december 15, something could happen.

we are not discussing that yet. we are having good discussions with china, however. matt: it is not just the trade deal that is worrying investors. we heard from blackstone's ceo on wider risk areas. issuess the geopolitical , they are the great unknown. it could have very substantial consequences. in the face of those geopolitical risks, the global central bankers are said to keep pumping out cash through 2020. bloomberg economics predicts the combined monthly balance the growth of the fed, the ecb, and the boj will end this year at the highest level since 2016. luca paolini is still with us. a little bit earlier about the possibility of fed rate cuts in 2020. that's an open question. what we know for sure is that

they are out there in the market buying bonds. the ecb is doing the same. we see a lot of action out of the boj. how far can this go? luca: for next year, we expect major central banks to -- $1 trillion. it is less than what we have seen on average in the past 10 years. there is some kind of easing fatigue. you see that in the u.s. and the euro area. the general perception is that central banks have to do more. dramatic because the fed went from hiking to cutting rates. one trillion looks like a big number. i don't think the impact on markets will be anywhere close to what we are seeing this year. matt: what will the impact be in terms of bond prices or moral hazard?

does that concern you, when the fed -- when the ecb gets back into markets on an open-ended basis? , the what is concerning markets are getting addicted to this. time of abnormal monetary easing, this will end up being too much risk-taking. it is something that you may not see right now. you may see it in the future. that would be very difficult to reverse. there are some downside risks for this long period of easing. here is more of the same. the only difference, there will be no suppressed by the fed. almost everything is priced in this time. it will be a much more difficult year than it has been this year. matt: where do you see yields? i saw one forecast for 10 year yields at 1.2%.

by year end, we see bund yields still deep into negative territory. what is your forecast for sovereign yields? luca: when you look at the nlobal bond yields, we think i any kind of scenario, bond yields will rise. in the u.s., we expect bond yields to move to roughly 2%. for germany, i wouldn't be surprised if you had yields close to zero. in the euro area, it will improve. the level of bond yields is very low. a lot of negative yields priced in. that is different from the equity markets. we see bond yields moving gently higher in the next 12 months. matt: thanks very much for joining us. luca paolini is our guest cohost for the hour on daybreak. it is friday.

equity markets head for a weekly loss. traders who bet on trends beneath the surface were also website. it was a roundup is dani burger. of factors isk indicative of a market that is largely risk off. look at this big red bar on the bottom. this is trade activity. these are stocks getting traded back and forth a lot. it is a clear sign of stress. traders are quickly offloading different positions. when you look at the top winners, this is back to the old reliable momentum trade. a couple months ago, momentum got wrecked in favor of value. cheaper stocks selling off this week 3/10 of 1%. look at size, profit, those gained as well. those are very safety-esque trades.

investors looking for more reliable factors to invest in. as i said, momentum coming back. values, the opposite. traders whipsawed this year, investing in these factors. it is showing through in the hedge fund returns. that's the white line. they have declined 1% this year versus the global benchmark, gaining 6% of equity hedge funds. this has been problematic for these equity qualms. they were able to beat out the benchmark. when you have these trends that quickly rotate, unless you are very diversified, it is hard to capture some of these gains that have happened this year. thenitely a tough year in way that this year is shaping up in december. it doesn't seem to be getting any better. matt: thanks very much. dani burger with your factors to watch on this friday. let's get a quick update on what's going on in the u.k.. the pound is getting again.

gaining again on increased confidence that the tories are going to win the election and bring boris johnson's brexit deal through. let's get back to luca paolini. our guest cohost for the hour. what do you think on the strength of the pound -- pound? the longest-running of gains since june on this confidence that the conservatives are going to win. luca: it is not surprising. weakound was already very and has been week for a long time. investors were short. on the u.k. economy, the numbers are not right -- great but not as bad as people expect. it comes when the dollar is showing some signs of weakness. i think that will continue. ,he combination of the polls the valuation, the positioning, and some economic data supports the view that the pound will

have more upside. we expect 136 for the end of yet -- next year. this trend will continue for a little bit longer. matt: what do you expect in terms of brexit and the sort of trade negotiations that come after? i've had some fx traders come on here and say, we could get a pop when we get to brexit. after that, it will be tough going. luca: i think what will happen is that if the conservatives when the election, brexit will happen in january. all the negotiations will take a lot of time. brexit will come in a few months. the focus will be on the u.s. election. we have one year of relative calm and then there will be negotiations to come. the difficult ones probably at the end of next year.

i think we will have a few months of relative calm that since support the pound -- should support the pound. that is our view. matt: thank you very much. luka paolini. i want to give you a look ahead, a crude plan up next. opec's has a great quota adjustment in principle, nothing has been finalized. we are live in vienna throughout the entire day. we have manus cranny on the ground. annmarie hordern is somewhere around there. we have a full team up and running in vienna to cover this opec meeting. starting monday, we will bring you a new show lineup on bloomberg television in the mornings. daybreak europe will fix that your mornings from 6:00 to 7:00 a.m. u.k. time. the european market open brings you to full hours of coverage, as equities start trading across europe. anna and i will start at 7:00 u.k. time, 8:00 on the continent.

you through the open and beyond. this is bloomberg. ♪

matt: this is bloomberg daybreak: europe. good morning. oil is hovering near $58 a barrel. opec agreed cuts in principle to adjust its output target. the coalition failed to finalize the details despite sending sick -- spending six hours in talks in vienna. manus cranny joins us from vienna with a guest. manus: good day. toare lining up the analysts see what they think of this proposed 500,000 barrels a day.

i have the energy analyst and strategist at citigroup. good morning to you. you are one of the first ones to give me your version of this proposed 500,000 barrel cut. we don't know all the details. what am i looking for today? >> [inaudible] the russian energy minister said -- [inaudible] in the first case, it would not be a meaningful shift. group which opec 11 of the 500itty be

cuts proposed. [inaudible] manus: october 2019. 500,000 barrels. is it the proportion that russia takes? who wells takes the pain of 500,000? >> absolutely. how will this be shared? saudi arabia is signaling that it is no longer willing to accept cuts. equal burdenre cuts for the opec 11. the remaining 150 will be for the non-opec. the other thing is how long the 500,000 cuts will be kept in place. me it novak suggested to would be until the end of the first quarter.

that is when the opec plus deal runs out. perhaps that was a subtle use of language. he means it will last until the end of the second quarter. he could ask if it is based on october 19 levels to heighten the market further. 2019, if it is october that's more of an impact for nigeria and iraq. they have -- they are the non-comply or's -- non-compliers. is octoberaseline 19, it would mean an extra cup. and grow was already over cap. they threaten to leave opec. that's like an additional cut for them. .t is not really fair of them what you think this says about the new regime?

i am talking about the new saudi minister. do you think this is opec on his mom -- watch? don't communicate, quite tight. the new saudit oil minister is definitely a technician. he is more focused on the technicalities of the oil market. the old one was more enjoyable with the press. it was more keen to have a discussion. the new regime shift is focused on getting things done. manus: that's a fair take. i saw novak, i was interested. he stopped on the way out and spoke to the russian press corps and ourselves. he got condensates taken out of his numbers. he was happy. said --s the kaunda

condensate exclusion mean for the market? they will be taken out from the current non-opec crude. that means that from now on, they can produce more. this is bearish. manus: a lot of people in the bowels of opec kept saying, the market is tight. why is it tight? imos?owes -- >> prices are fair. the physical market -- when you now at the structure, it is $.80. brent markets are quite tight at the moment. margins are not

really representative of what is going on in the market at the moment. when you look at physical indicators, they are suggesting that the physical market isn't tight enough. manus: what happens to the curve? you are saying it is tight. curve andrough the your forecast of the curve. >> for next year without any further business, oil markets will get looser if there is no further action. we forecast prices to be a bit down from where they are now probably -- now, going below $60 a barrel of brent. definitely not a crash. ,anus: 500,000 barrels of a cut october 2019. where do i see the market? does it squeeze higher? do we break 62? what does that scenario plan to? >> that will put more upside pressure on the bread prices.

a negative price at the moment. it will suspend the prices above $60 per barrel on brent. manus: what does it take to get brent above $65? >> there's a lot of geopolitical risk at the moment. shape,volatility investors have been willing to buy. positioning for upside and downside, should something come back. an?us: from a ramp -- ir is that an underpriced tail risk for 2020? >> it is not underpriced at the moment. you have seen the shape of the volatility curve increasing on both sides. investors are aware of the risk at the moment. manus: well done. getting up early, joining us here in vienna. that is my first analyst of the day. energy strategist at citigroup. that was his first time out on

bloomberg. you are welcome. we will get you another maki auto. acchiato. matt: get leader hose in and warm-up. usk at how any is still with -- luka paolini is still with us. we talked a little bit about oil already. what gets you most excited when you come in to work every day? in terms of strategies, in terms of investments. what is your high conviction right now? luca: our biggest conviction is that we are going to see a significant change in the trend for the u.s. dollar next year. also for u.s. equities. we will get a significant rotation away from u.s. equities to special european equities and u.k. equities in particular. we expect the dollar to peak in september.

this trend will continue and will have significant implications for emerging markets. we see a lot of value on the bond side in mexico, russia, and for equities in asia. i think we will see a significant change in some of the trends. this will take investors by surprise. this is the story for next year. matt: the mliv team is asking the question, which mazer -- major assets will move most in 2020? what do you think? luca: when you look at the big asset classes, it will be week before equities and bonds. if i have to mention one, the biggest surprise is going to be on u.k. equities and emerging-market equities as well. matt: thanks for joining us. , our guest cohost. we appreciate your time this morning.

coming up, don't miss our interview with larry kudlow. that set 2:30 p.m. u.k. time, right after the payrolls numbers. he will give us the white house spin on that. this is bloomberg. ♪

matt: good morning from berlin. this is bloomberg daybreak: europe. these are today's top stories. pricing power. saudi aramco raises $25.6 billion in the world's largest ipo. the kingdom also teases beautiful news from opec today. yesterday's meeting left markets on -- underwhelmed. the magic number. november's job report should reaffirm the resilience of the u.s. labor market even if the end of the gm strike gives the reading and artificial bone. political pressure. setany's social democrats out demands to remain in chancellor merkel government over in paris. macron's planned reform stokes

the biggest rake in years. ♪ -- strike in years. ♪ matt: we are getting german industrial production numbers out right now. drop of 1.7% in the year-over-year number. we were looking for a gain of 0.1% in german industrial production. sorry, that is month over month. we got a drop of 1.7%. in terms of the year-over-year number, a drop of 3.6%. we got a drop of 5.3%. german industrial production numbers look very bad. yesterday, we saw german data that also looked really

disappointing. this is two days in a row. yesterday, we got factory orders that unexpectedly shrunk or contracted. we were looking for expansion. today, industrial production is contracting as well. it does not look good for the german economy. joining us now is senior portfolio manager for fixed income at aviva investors. although today's data point is a surprise, it is not a surprise that the german economy looks unhealthy. what do you expect for the engine of european growth? >> you are absolutely right. this data point is a continuation of the trend we have seen for the past 12 months at least. germany remains very exposed to the current slowdown in the global economy. it is focused on trade, industrial sectors, and germany has some idiosyncratic issues in the auto sector could best to contend with as well. it remains a bellwether for

global growth going forward. so far, the best we can say we've seen is stabilization at low levels in terms of the pmi. we have weak industrial production data today. the previous manufacturing pmi bounced, still in contractionary territories, signaling contraction. the picture remains quite week. it is why we are getting much more of a vocal conversation around fiscal in germany. it remains to be seen whether or not the germans will be willing to let go of their concepts. matt: i have the boones up on my screen here. this is a year-to-date chart of the german yelp. the zero bound isn't even on the screen. we dropped down at one point to -80 basis points back at the end of the summer. now we are back up to only -29. do you think this is priced right considering the data we are getting?

why the rise in yields here for the summer? jub: i think that collapse in bond yields in the late summer was really on the back of trump threatening to increase tariffs towards the end of the year. if we get tariffs coming on in december, it is likely that we will be headed back down to lower yields influence -- in bunds. we think it will be relatively stable in the near term. we have the ecb on autopilot, doing 20 billion a month and qe and signaling they have a state dependent policy. meaning, they will not stop doing qe or start raising interest rates. until they hit their 2% inflation target, they have been undershooting that target consistently. europe,d income in things are likely to be quite stable unless we get a material shift in the data in another direction.

so far, we are seeing more signs of stabilization. matt: you will stick with us and we will get more from you throughout the hour. our guest cohost. i want to get to the saudi aramco story. finally out with the numbers behind the ipo. the price time values the state owned giant as the world's largest company. he with the details as dani burger. dani: it is the world's biggest ipo. this is different from the $100 billion deal the crown prince had first envisioned in 2016. it did price at the upper end of its range. this is the equivalent of $8.52 a share. saudi arabia did pull out all the stops to ensure the ipo success. times,the tax rate three promised the world's largest dividends, and offered bonus shares for retail investors. the share offering was more than

4.6 times oversubscribed. total bits of $119 billion. despite saudi aramco's big profits, the listing was derailed by profits at home and a global investor base that hesitated at its desired to trillion dollars valuation. it did end up being at 1.7 trillion, relying on global funds. ofs overtakes the value apple and microsoft by about $600 billion. matt: thanks very much. dani burger talking to us about the numbers out from aramco. guest. talking with our i'm not sure that you can make a call on the general market from the ipo here, clearly at the end it has gone the way aramco -- we expected. it didn't go the way aramco would have wanted it to.

is that because markets are jittery? is that because of saudi specific issues? jub: you can put a lot of the blame to the fact that investors are pretty think we -- sanguine on the prospects of global growth going forward. oil is sensitive to that. we have not seen investors embrace more cyclical risk assets, whether it be commodities, emerging market fx, more cyclical commodity sensitive currencies. the rally we have seen this year in risk assets is primarily led by lower rates, central banks pumping liquidity into the market. you have seen a significant outperformance of defensive assets. environmentcult when people aren't bullish on assets of the moment. matt: is that going to change?

do we not see the demand picture for oil only going downhill from here? jub: for the demand, you have to separate the structural and cyclical. the structural over the long-term, with trends like electric vacation of vehicles, are much more focused on climate change and controlling the crisis there. demand for oil is likely to be structurally challenged. that is a decade-long trend. in the short-term on the cyclical side, it's a market were sentiment is extremely weak. look at high-yield energy in the ,.s. or u.s. energy equities they have been externally week this year. one of the most underperforming sectors. that is one thing that should start to make investors get more non-consensusm a type of positioning perspective. really, we need to see global

growth in a more convincing way. we have not seen that yet. we have seen early signs out of china that the soft data is stabilizing somewhat. numbers bounced into positive territory. china is the world's biggest importer of quality. if you want to look for a more optimistic spin, these are the leading indicators you would look for to get more positive. we have not seen it feedthrough into the hard data. industrial production still has a negative rate of change of the last three months. same thing for vista -- fixed asset. you would think china would be a little bit more supported as the economy migrates towards consumption. retail sales still look week. the picture is quite mixed. if you focus just on the leading indicators, you could get more optimistic. it is early stages to call the bottom in the cycle. matt: thanks very much.

we will keep you with us longer. our guest cohost for this hour. i want to go over to selina wang in beijing for bloomberg first first news -- word news. selina: in washington, president trump is on track to be impeached before christmas. there is virtually no chance he will be convicted in the senate. nancy pelosi saying the house will draft articles of impeachment against the president. pressuring ukraine to help him win the 2020 election. president trump remains defiant. north korea may be preparing to conduct engine tests at a rocket site at a launch facility at a base kim jong-un said he dismantled as a concession to president trump pyongyang put a year-end deadline on diplomacy with washington. they want the u.s. to ease up on sanctions joking its economy. gartman istor dennis

closing down his daily newsletter. his parting if eyes for investors, sell. he says president trump trade war means it's time to raise cash. critic of the administration. adding that skirmishes harm the economy and send a technet -- terrible signal. over 3000 allegations of sexual foundt, that's what uber involving its drivers or passengers. the report was in response to public safety concerns. u.s. customers took 1.3 billion journeys in 2018. out of those, uber is reporting 50 eight rd deaths. deaths -- 58 road deaths. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries.. this is bloomberg. matt: thank you very much. coming up, don't miss her interview with -- our interview with larry kudlow at 2:30 p.m.

u.k. time. he will give you the white house take on the u.s. economy. when you are traveling to work, tune into bloomberg radio. this is bloomberg. ♪

♪ matt: it is 7:15 in london. we are just about 45 minutes away from the start of trading across europe and in the u.k.. this is bloomberg daybreak: europe. i am matt miller in the german capital. let's get the bloomberg business flash with selina wang in beijing. selina: thank you. institutional investors are planning to sue glencore for billions of according to the loss or representing them. the move is due to share price decline from recent bribery investigations.

glencore disclose the u.k. serious fraud office was probing its activities. glencore has declined to comment. phoenix group is in talks to insurance unit. his largest ever acquisition. we've learned that a deal could be announced in the coming days after calling off reassures ipo in july. they were aiming to raise as much as 3.3 billion pounds. no comment on the news yet. a message from city to its roots clients, stopping nervous about stocks. will be brighter than ever, according to its 2020 outlook. the bank is predicting expansion will continue and anticipating corporate earnings will rise another 7%. what are the areas of opportunity? cybersecurity and clean energy. that is your bloomberg business flash. matt: thank you very much. earlier this morning, we had

breaking lines on china. the country will waive tariffs on some u.s. soybean and pork imports. this comes as donald trump told members of the one secret counsel, washington and beijing are having very good discussions on trade. >> we will have to see. we're moving along. we are having major discussions on december 15, something could happen. we are not discussing that yet. we are having very good discussions with china however. matt: it's not just the trade deal that is worrying investors. we heard from blackstone's ceo on his concerns about wider risks. >> geopolitical issues are the great unknown which could have very substantial consequences. of those dealace

political risks, central banks are said to keep pumping out cash through 2020. the combined monthly balance sheet growth of the fed, the ecb, and the boj will end this year at the highest level since 2017. our guest is still with us. right after the financial crisis, we started to charge central bank balance sheets. this chart has evolved into what i think is a work of absolute beauty. check it out. is in red.ance sheet the ecb in blue. 2008, it hash in just come off a little bit. are we set to get back to all-time highs? tracke are certainly on to touch those highs again. there's big debate about whether ,he fed is technically doing qe does this count as qe or not?

they are certainly putting liquidity into the market. they are soaking up bonds that would otherwise -- there's an opportunity cost for the private sector buying those bills. form of stimulus in there. the ecb is explicit and being in the market on the private side in credit and in rates. they have said they are not going to stop this policy until they hit their inflation target. after in a qe world again 2018 being the first year that we have seen that rate of purchases turned negative. this is a big deal for risk assets. this has been the primary driver on the global monetary policy regime for markets in 2019. not only do we have the big three major central banks doing qe and cutting interest rates, we also have many other central banks lowered interest rates.

we have over 60% or so of the global central bank universe cutting interest rates this year. that has been the primary driver. most of it is behind us. it is a supportive environment for risk assets. matt: the loosening may be behind us. the buying seems to continue. world? an mmt are they enabling more and more government spending? jub: that is the ecb's line of attack, if you like. dropped the mic and said, we put ultralow rates for an in place.eriod it is up to the policymakers to do something more aggressive on the fiscal side. can you get the political unity to actually deliver that in europe?

in other places, fiscal easing out of japan during the week. we are seeing ongoing fiscal easing in china. there is modest fiscal impulse coming in various parts of the world. a function of that is the fact that you have wealth inequality at multi-year highs. interest rates at multi-year lows. it looks like the next natural policy option should be on the fiscal side. matt: i never know if i should use btp, bund spreads, or look at spain or portugal. we saw them blowout. i have a chart going back to the 15th. 2018, they blew out and came back. has the ecb been successful in handling the so far? jub: i think so. heart of that widening and subsequent compression was related to the idiosyncratic political development in italy. when we had that big blowout

a possible new coalition that would work -- look at italian exit from the eurozone. that is now off of the cards. that is the primary driver of b2b spreads. the policies the ecb has put in place have a meaningful impact on all spread products in europe. btp's are quite high in the market. the other places we would like to be invested that we think will benefit is in the corporate credit market. they are directly buying this asset classes well. so far, even though it is early higherhis espp has been as a proportion this time around than it has been in previous easing cycle. we think that that combined with the fact that we are seeing a very negative stabilization at lower levels in growth, inflation is nowhere to be seen in the eurozone at this stage. you have ecb buying the asset classes. .hat is a benign environment

credit will be a major beneficiary. matt: we will keep you with us for a little bit longer. guest joining me for this hour on daybreak. let's get you back to oil. opec agreed cuts and principled but the group failed to finalize the details. they spent six hours in talks at the summit in vienna yesterday. joining us now is stuart wallace, bloomberg executive editor for combined energy and commodities. fudges look through the that we have seen come out of opec and tell us exactly what the market is getting? stuart: yeah, it has been one big fudge. the beginning of yesterday, we got wind that they would announce a 400,000 barrel a day cut. the market dutifully went up. transpired later, it that those cuts were taken nowhere. they are already over complying

with the cuts. it just reflect reality. there's a real question of whether any of this deal will lead to barrels coming off of the market. you have the complication of russia and other parties coming in and saying, there are certain types of crude oil that we would like to exclude for various technical reasons. they seem to be getting their way. that will have the effect, the production limits will just ratify what they are already doing. look at the price today, it is pretty much flat. the great excitement. matt: there was a great bloomberg story on the approach that riyadh is taking. if you raise production, we will raise, too. if you cut, we will take the lead. has that proved effective? stuart: not in the slightest. opec has no mechanism to sanction any member that decides to flout the policies. it is all very well if you are saudi arabia if you promise to

flood the market and drive down prices. you have tried that twice before. both occasions, you have crashed the market and almost bankrupted your country. it is not much of a threat. the nation that suffers the most from that kind of strategy is saudi arabia. matt: thanks for joining us this morning. bloomberg's executive editor for combined energy and commodities. meeting, surrounding the aramco ipo. our guest is still with us. we have talked about oil already. it's interesting. risingthe price of crude on expectations for a cut. everyone was saying, that was despite concern about global growth tapering off. the you think we will see the oil price come down if we don't get a good cut out of opec? jub: if opec disappoints, that will be bearish for the oil

price. over a slightly longer time per iod, it is difficult to see the supply being the main driver of oil price. it will be driven for expectations for global growth. as we have discussed, it is early days to get to bullish on cyclical assets. there is one way to play some upside to oil. that is through the inflation market in the u.s.. we think that inflation at the moment, if you look at things like u.s. breakevens, the are pricing a discount to wear inflation is printing in the u.s.. treatnk assets are quite -- cheap. the underlying impulse for inflation in the u.s., we think it is quite robust. wage gains running at 3%. excess of printing in the number needed to drop the and implement rate further.

the risen underlying pulse of inflation in the u.s. that is quite robust. a higher oil price will support that. matt: thanks so much for your time this morning. that's it for daybreak. the european open is up next. this is bloomberg. ♪

anna: welcome to bloomberg markets, the european open. we're live from london. i'm anna edwards alongside matt miller in berlin. matt: the markets say and now two jobs, asian stocks gained and european futures point two a positive open as traders await payroll data. the cash trade is less than 30 minutes away. ♪ anna: record in re at. set aramco raises