manus: good morning from dubai. nejra: from the city of london, here are today's top stories. boris johnson's general election lead is cut by more than half. the most critical vote in decades is over 24 hours away. officials expect donald trump to delay a tariff like. larry kudlow says he cannot confirm that what patient tries to shake the narrative. saudi aramco shares begin trading in over one hour. it is the world's biggest ipo in

the culmination of a four-year saga. we are live in riyadh. manus: a warm welcome by where we are expecting nejra to cross to react -- riyadh. it could be the narrative the changes the global perspective. billion.ised $25.6 what they make trillion dollars today? way, the day alibaba ipo, they racked up 38%. we are all lined up to support the kuwaiti and i would be sovereign wealth fund and there is an army of institutions in saudi arabia. they are mitigate the risk and

wanted to go well. it to doting want well. nejra: the saudi's are doing everything they can. and in the u.k., the focus is all on tomorrow's election and people -- erp poll has made the risk of a hung parliament alive for markets. manus: it's amazing how we have pivoted so quickly. ipo's, have amco look at oil. peter navarro,om no indication of december tariffs. are we ready for that risk? that's the question you have to ask yourself. dollar-yen, is it really a safety valve? look at dollar-yen.

fx pain index is back to zero looking at dollar-yen. there were some comments on the dollar last night. we could debate that through the next hour, nejra. nejra: not seeing a lot of direction today. a mixed picture through the asian session. futures are dead flat after some weakness yesterday. cable, fallingt from an eight month high down .2%. we got there after this msrp poll showing the conservative lead narrowing. but crucially, it is indicating a conservative majority, showing there are still risks alive. talk more, today is the last day of campaigning and party leaders will crisscross the country.

pollly anticipated opinion suggests the race for number 10 has tightened significantly. this final poll says the conservative lead has been slashed. win 339the tories will of the seats, a majority of less than 30. joining us is the head of strategy at bnp paribas. great to have you with us. concern in cable after this poll. your base case is still a conservative majority. >> that's right. the market is bullish. one is to look at our propriety position model. it shows us that the market investors are currently holding close to their longest position in the pound. that tells us that, on election

day, the bigger move is on the downside. we believe the probability of materializing is small and is still good enough to stay long cable into the vent. -- event. manus: breaking news on credit suisse, all about profitability. tidjane thiam restated the narrative, cutting returns on tangible equities. they still see a stable performance in international wealth management. they continue to up the dividend and it remains unchanged. gm, significantly better performance third they expect the ibc and business to be lossmaking.

returnpect an equity greater in 20 19. this is about cutting forward guidance, all about profitability within the banks and a negative rates world. that causes pressure. sam, let's bring it back to you. part of the discussion is about sub 340 in terms of a majority. perhaps, more, anxiousness into the trade discussion? it's interesting you mentioned that. i think the impending is a factor likely to cap sterling upside relative to where it would be trading u.k. hase know, if the

not asked for an extension of the first of july, it becomes procedurally more challenging to extend that transition. is to somed argue extent, it is now a case of the boy who cried wolf. the market believes that if there's a will, there's a way. though it will be more procedurally challenging, i believe that the market will look through that and perceive it to be something achieved for the benefit of the pound. nejra: you think that is the area you would want to take profit on those long in terms of uncertainty. how does your view impact trading cable? spreads couldte

tighten quite significantly. we don't expect the bank of england to hike. but when we look at what is priced in, they are priced for 10 basis points of easing. that easing is likely to be priced out entirely. at the same time given our economist expectations for some slowdown in growth, we think yields could becoming lower. that move combined with a move up implies a 40 basis point compression and swap yield frontals. -- in swap yield differentials. manus: you have a view on the dollar narrative. bys is ultimately driven u.s. outlook and your dollar perspective, isn't it?

>> it is indeed>>. we have a view that the dollar is likely to weaken moderately. the problem for volatility across exchange rates is that it is very low. factors -- twoo factors. an overvalued and dollar -- overvalued dollar. expensive valuation limits the scope for a trend move lower from here. the prevailing's of negative valence -- prevalence of negative rates in europe is leading to structural demand for the dollar is likely to persist. sam is calling interest

rate differentials at bnp paribas. he stays with us. we will bring you special coverage right here on bloomberg tv. let's get straight to first word news in hong kong. >> thank you. are expectingals the u.s. to delay the 160 bollen dollars, butllion peter navarro says there are no indications the duties won't be imposed beijing and washington are in almost daily contact. rather than removing existing tariffs, the focus is on reducing the level of payables. articles trump the two of impeachment delivered against him are quote week. house democrats are calling for his removal for abuse of power

and preventing congress from exercising its duty. the resolution also accuses him of ignoring and injuring national security. the impeachment vote is suspected to pass in the house but stands little chance in the senate. the new president of the european commission is to set out targets for the world's single guest market. she says the transition will start next year. among the proposals are stricter omission limits for industries, energy taxes, and a possible environmental import tax. and in new zealand, the death toll has risen to 14 after a six victim died- sixth overnight. 30 survivors are being treated for severe burns at hospitals. the volcano is still dangerous

and waiting for an improvement in conditions. global news, 24 hours a day on air, on quicktake, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. nejra: coming up, we bring you the events you are looking out for today. the much anticipated trading debut. the french finance and assert lays out the new pension system and the fed's final rate decision of the year. in israel, parties have until midnight to reach a coalition deal. this is bloomberg. ♪

bloomberg: daybreak. ipoa: the world's biggest

is here. saudi arabia will overtake apple as the world's biggest listed company, but barely any shares will actually trade. in fact, they only sold a 1.5% stake. joining us from riyadh is yusuf. -- yousef. what are the last key milestones as we count down today must mark -- today? a shortwe are just while away from a special election lasting 30 men it's longer than usual. that will probably give us some level of price guidance going into the start of trade which commences at 10:30 locally aired that will be under usual trade conditions and a 10% downside limit.

you mentioned the small percentage being offered going to institutional investors aired you look at non-saudi investors being allocated, 23% of institutional trends are at $3.9 billion. the government has of course tried all kinds of tools to make sure the launch goes as planned, including incentives for retail buyers and guaranteed dividends. told usscaramucci earlier that he would be a buyer and would be willing to hold for 10 years. manus: let's see what happens. 14 minutes until that opening auction begins. host in europet from bnp paribas. when we look at the oil market,

i was in vienna and they did everything your they pulled out all the stops to create this floor of 60 bucks. transfer that into commodity currencies. is there upside in commodity currencies in your view? sam: we think there is. when we think of commodity currencies, capex is the first to come to mind. ironically the canadian dollar exists a less than stable relationship with crude advantage does with yield. but that is at the top of affects and super important we come back to the point earlier about the low volatility environment. that environment suggests carry trades outperforming which suggests it does well. nejra: what are your preferred carry trades? you have any involving the

norwegian krone? sam: for us, dollar-swiss is the most attractive. for us, it has the most positive absolute carry and the most positive carry in volatility adjusted terms. comparedas the benefit to a short or long. the problem with being longer dollar versus low yielding currencies is that they are very cheap. while it's ok to pick up a carry now you are running valuation risk. what are the other major trades? you wrap this into the global trade theme. he said there are diminished risks which helps the carry trade. perhaps? other trades i spent a lot of time talking about egypt and turkey. but just take me beyond the bandwidth.

sam: the view from our emerging markets team is that high-yielding em will perform. they think the backdrop we have of low yields in the u.s. is likely to stay supportive for those currencies and that the balance sheet expansion is going to be supportive. so when they look at the currency rates market, they believe they have still lacked the rally we've had in court yields aired -- yields. nejra: what does that mean for the indian rupee? we have covered it a lot in terms of the r.b.i., that is an oil importer. sam: it's interesting you mentioned that and it ties in sort of on the other hand to a currency like norway.

although norway is an oil exporter, the currency has underperformed. so the link across to oil has largely broken down. and central-bank decisions have become much more of the key driver of exchange rates. sam from bnp paribas stays with us. let's go to your business flash. this man is quitting his own advertising agency over a dispute of how to address accounting problems. last week, shares slumped as m&c as they found irregularities were extensive. the company has vowed to rebuild and restore performance. butas taken 11 months,

boeing has recorded the years first official orders. the playmaker says it has looked 30 sales of the grounded aircraft. orders remain underwater for the year, currently standing at -73 claim -- planes. barclays says ride-hailer's are well-positioned to make a profit. billionlyze almost 2.5 trips and decided the pair could charge more to make an operating profit with only moderate impact. profitable byo be 2021. that is your bloomberg business flash. manus: thank you very much. coming up about mixed messages on trade. volatility surges.

up next, we bring you the chart that matters. nejra: and tune in to bloomberg radio live on your mobile device. this is bloomberg. ♪

nejra: this is bloomberg daybreak: europe. let's turn to china now. the yuan is surging as we get mixed messages on tariffs. for all the details, juliette saly joins us from singapore. >> we have seen a lot of assets in a tight trading range as we await whether or not the tariffs will come into effect. what has been really interesting

is the week volatility in the whatfrom afar outpacing you are seeing. this is showing that traders are not willing to take too much of a risk ahead of december 15. says, itrk cudmore shows the yuan really remains in play. we are also seeing calls come in from analysts. we speaking to david, wealth manager, saying the yuan is offering a good credit level while others speculate it will depreciate further aired but this speaks to what you've seen in the week implied volatility, showing this is still in play as we count down. manus: -- nejra: thank you so much. not much a surprise that's happening, given the mixed messages we are having on trade. sam is still with us. bloomberg is reporting chinese

officials are respecting a delay in tariffs. but then you get members of the administration saying there is no indication of delay. as you go into the end of 2019, how are you choosing to express your view on what happens in phase one? sam: the key point is what is priced. we think the markets are priced quite optimistically the postponement of tariffs and a phase one deal involving limited rollback of tariffs which came into effect. alreadyw the market is priced, we think the bigger move would be risk off. the cleanest trade from a currency perspective is long yen and the reward is further amplified the fx positioning. turnedket has recently

quite bearish and that's heavily linked to trade expectations. if they are wrong, we think it could move towards 105. manus: interesting. this trade is back to virtually zero. yuan, anded about the the risk is that, if there is no it could completion, test the upper foothills of 7.3 or 7.4. do you see that as a real risk or a tail risk? sam: more of a tail risk aired we also have turnover that fx is relative. remember that fx is relative. willis week and a trend also limit upside in dollar renminbi. manus: sam stays with us. nejra: coming up, it is fed

decision day. we'll talk more about. bank of america is bracing for surprise news. all the details next. this is bloomberg.

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♪ nejra: good morning from bloomberg's european headquarters in london. i am marriage a pitch with manus cranny liver from dubai. this is "bloomberg daybreak: europe" and these are today's top stories. manus: the pound dips as boris johnson's general election lead is cut by more than half in a key opinion poll. u.k.'s most critical vote in decades is just over 24 hours away. credit suisse cuts its main profitability targets for this year and next, as trade tensions and negative interest rates affect the outlook. a long debut. saudi aramco shares begin trading in the next few minutes. biggest iporld's

and the culmination of a near 4 year saga. riyadh.live in ♪ nejra: markets moved around by some mixed messages on the u.s.-china trade front and the prospect of a pause on the december 15 tariffs. good lack sees the risk of recession next year dropping to 35%. not a huge amount going on on a headline level but lots of detail below the surface as we go around the world, manus. manus: it is indeed. blackrock says those extraordinary market returns are over. let's put it in context. juliette saly is in singapore and in london, it is dani burger. good morning to you.

debut,ramco's trading the opening option is underway. >> it is -- auction is underway. >> is. it has begun -- it is. it has begun. it is 30 minutes longer than usual. actual start of trade is less than hour away, 10:30 a.m. local time. what happens after is the usual trading conditions. limit to the upper by 10% on limit downside at 10% as well. they implied evaluation is $1.7 trillion. it is one of the big questions of the day and has been for a very long time, whether the $2 trillion mark is going to be were. into the bag, as it the optics are very important. sachs'n

de-stabilization manager. a lot of incentives have been dished out for retail investors and the very size and scope of this ipo means the company could be on the fast track to include potentially even more support. manus: shock and awe. aramco bids that 32.5 in the premarket auction. this is where we are. we are up 10% in the open market auction. let's see where it goes from there. the bids are in. 35.2 in the premarket. it was 32 in the ipo. cracking day for aramco. nejra: let's get back to some of the big themes elsewhere in asia. juliette saly was looking at the yuan in reaction to these trade headlines. right now, you are looking at a

worrying report from the asian development bank. juliette: that's right. it has cut its growth forecast for the year end and march 2020 and the following year. what we have seen is a downgrade for two of the biggest economies in the region, china and india. they now see china's economy expanding 6.1% this year and 5.8% in 2020. they have downgraded forecast for india to 5.1% for the year and the following year should 7.2%.5% growth down from the trade war will weigh on china's overall economy. what they are seeing in india is that consumption story and credit crunch. and little bit of i guess more bad news coming through for growth forecast for developing asia. manus: thank you very much. i misspoke. it was 35.2. don't ever forget about the .2 versus the ipo prices.

dani burger, good to see you. we are a bit nervous, aren't we? dani: a bit nervous might be an understatement. it seems that investors are just snapping up anything that can give them protection from pound puts, to volatility in the s&p 500. the s&p 500 realized volatility is just not there. i think the best way to capture this is what wells fargo has done, looking at volatility by time slice. that is the day after the u.k. vote, also heading into the tariff deadline and central-bank decisions. that has a traders pricing in a clear event risk, a clear macro risk. this is the market saying the s&p 500 could move by nearly 3% should the tariff deadline come and tariffs to be imposed.

that is the worst case. this shows us that investors are doing that. they are trading, purchasing hedges like the world is about to end. those are the words used by patrick hennessy. nejra: dani burger, thank you so much in london and thank you to yousef gamal el-din and re-add an juliette saly -- in riyadh an juliette saly in singapore. let's get the bloomberg first word news. >> forced johnson's lead has halfslashed by more than -- boris johnson's lead has been slashed by more than half in a u.k. opinion poll. the prime minister's conservative party is on course to win a majority of less than 30. if the research is accurate, it suggests the race for number 10 is tightening significantly. chinese officials are said to expect the u.s. to delay the new tariffs due on sunday.

peter navarro says there are no indications the extra duties will not be imposed. beijing in washington are in almost daily contact. we are told that rather than removing existing tariffs, the focus is on reducing the level of duties payable perhaps by as much as half. to naftatten successor is being welcomed by house democrats and will be voted on next week. speaking just minutes after unveiling impeachment charges, speaker nancy pelosi lauded the changes her party has been able to negotiate. the deal is seen as a political win for the president as he goes into an election year. final approval from the senate is not expected soon. the new president of the european commission is set to set out targets to become climate neutral. she will see the yo -- she says the transition will start next year.

there are stricter emission limits for industries, revamped entergy texas, greener farming, and a possible environmental import tax. in new zealand, the probable death toll from the volcanic eruptions has risen to 14 after a sixth victim died overnight. eight more people are still missing on white island and are presumed dead while 30 survivors are being treated for severe burns in hospitals. the volcano is still dangerous and police are waiting for an improvement in conditions before they can reach the island. global news 24 hours a day, on-air and on quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. thanks for the roundup. here's what you need to know for the day ahead. billionaire bond manager jeffrey of aach sees the chances recession in 2020 falling.

joining us now to discuss, bloomberg's dani burger. dani: 35% is the odds that he sees that we have a recession by the end of 2020. he said the chance was 75% during a call in september. this is definitely a significant reduction. he says the consumer is still strong, consumer confidence is there. all of the economic indicators he has been looking at have not fallen below zero. that needs to happen, he says, for there to be a recession looming. he points to the risk that a lot of analysts have been pointing bonds and fears that a lot of these will become fallen angels. he says and a lot of them deserve to be junk rated. should a lot of them become junk rated, there are a bunch of fund managers who will essentially be mandated to sell these. if you are an investor who rates your bond portfolio or

constructs or bond portfolio based on ratings, it is a troubling time. should the cycle turn, should there be a whole lot of fallen angels, it will be difficult to sell. it might be time to look back and see what exactly the rated bonds you hold are. manus: i am worried about the fallen angels. thank you very much. dani burger with the very latest on jeffrey gundlach. the fed in its final rate decision for the year today with policymakers all but certain to hold. many expect the event to be a snooze event for the markets. bank of america strategists see an outside chance that the a fomc's dot plot might signal a rate increase in 2020. let's get to bnp paribas' mark 360 guest host. goldman goes on to say that you have other risks which might be

at a pretty high bar. what do you think the risks are of a hawkish dot plot? plot mediumthe dot for next year will be left unchanged but the medium will cover up that 17 of 17 -- seven of 17 will be looking for rates higher next year. a higher chance of hikes going forward. statement today, we think only moderate changes. perhaps when characterizing the job market, the language could be changed statement today, we k only moderate from solid to str. on the consumption side, perhaps from strong to solid. we would really argue these are minor changes. more important is how u.s. data evolves heading into q1. the view from our team is that we are going to see a slowing of data. they think the employment market actually could soften a bit in

q1. they think monthly payrolls average could come well beneath the fed's breakeven and that 25 point rate cut in march. nejra: when does that actually cause the dollar to turn? you have said you expect dollar weakness but when? >> we think the fed will cut in addition to the move in march also in april. points of cumulative easing which is 40 basis paonts more than what the market has priced in. we believe the dollar is on a weakening trend but we think that trend will be quite moderate. although the base case is for moderate weakening in the dollar, i think what is important to emphasize is the risks around the base case. we think there is a higher probability you could have a big

weakening in the dollar rather than a trend strengthening. the cost to hedge a way that currency risk falls and with falling currency hedge costs, we may see some dollar selling from investors. nejra: sam stays with us. it is the fed's last official meeting of the year end of the decade. don't miss our coverage on bloomberg tv. this is bloomberg. ♪

♪ polls take away from the is that the tories are ahead but that the gap is narrowing. we don't know how much more it will narrow between now and thursday. >> surprises are unlikely. we hope for at least that there will not be a hung parliament.

there will be some majority in favor of some decision-making process. >> there is a lot ahead of us but i think a workable majority in the election on friday gives angel of confidence to the financial markets, -- gives a jolt of confidence to the financial markets, the currency markets. >> -- the more authority the prime minister will have to take britain forward. i think it is important we have a clear mandate after this election to get written moving again. -- britain moving again. nejra: those were some of our guests reacting to the u.k. election. joining us now is anna rosenberg atead of europe and u.k. signum global advisors. [audio drop]

anna: going down somewhat. a few weeks ago, the conservatives had a chance of winning by about 60 seats. i think we are now in the 30 c trajectory -- 30 seat trajectory. johnson's chances were dented. the result of a majority will remain at that kind of level. manus: one of the things we are debating, good morning to you, is the size of that majority and the consequences of policy. sub 340 seems to be something that irks the market. would it be that the smaller the majority, the higher the voice of erg, and perhaps the harder the brexit risk 2020? anna: yes. i think there is a risk to that. overall, markets are some too optimistic on a johnson

majority, whatever the number. i do think we are going to see quite a positive market reaction once a johnson wins power, whatever the number. i think over time it will dawn that there will be significant change and significant short-term disruption whatever the size of the majority. i think -- do not think there is a lot known today about the plans of the new johnson administration. we believe there will be substantial change, and overhaul of civil service, and the plan u.k.ally overhaul the economy both from a political and economic standpoint. we believe it means that the next johnson administration will be in for accepting short-term disruption for more of a medium-term gain. once that dawns on the markets, there will be somewhat fading off in terms of the pound strength we have seen. nejra: interesting. a will get anna's view in

second of what she thinks if we will get a labor coalition. if we were to see any kind of labour coalition or even a labour majority, does that automatically mean sell the pound? >> to the extent that a conservative majority which the market believes will lead to more uncertainty more quickly and therefore it is bullish for the pound, i think any outcome other than that at this point will be quite materially negative, particularly when we look at how the fx market is positioned. it is very long the pound that we see from our positioning models. if we don't get a conservative majority, there would be some real scope for downside in the pound perhaps towards as well as 1.25. manus: let's see the results. i picked up on one of your themes, which is this presumption in the erg or brexiteers that they want to create --

that may clash with johnson's populist and protectionist tendencies. take me through your thinking around that wrangling of deregulation in the u.k.? -- u.k. anna: that is trueanna:. the free traders have quite a bit of influence right now in the government. we think over the next administration, they will remain quite influential. at the heart of it, what is the key driver for boris johnson? he is really in it for the legacy. he wants to be a church hill type leader that brings the country through a crisis and gets it out of and tries to unify it again. that means it will eventually clash with what the free traders want. people have a tendency to -- he will have a tendency to protect jobs, protect the free economy. we think there will be a bit of a clash there. it is going to have another layer put on top, which is the real dynamics of trade

negotiations. that really means that the u.k. after brexit is going to be somewhere in the middle between protectionism, free trade, and the reality of free trade negotiations. nejra: finally and briefly on you said while sterling could additionally -- initially youan, you think -- weaken, think the weakness could be short-lived. policies, i know it is not your base case that we get any kind of labour victory, but if we did, how would the policy shape up versus the rhetoric? anna: with think there will be quite a delay to anything meaningful happening. the market reactions would be negative. very soon, there would be the realization that there will not be a labour majority. it will be a hung parliament with a labour prime minister. nothing else really getting through in the meantime.

most of the parties that labour would get into power with the would not support a lot of the radical labour policies. the result of that is not going to be as scary as a lot of people are making it out to be. after six months, i think we will see the power of a labour government fading. there will be close alignment with the eu in a labour government. manus: thank you so much. authoritative response from anna rosenberg, head of europe and u.k. at signum global advisors. sam stays with us. don't forget, we will bring you special coverage throughout the night on bloomberg tv as soon as those polls close. you don't want to miss the show. it is at 10:00 p.m. tomorrow night. ♪

♪ manus: this is "bloomberg daybreak: europe." i am manus cranny in dubai. nejra: and i am nejra cehic in

london. as environmental issues increasingly take center stage, we will be looking ahead to the green deal that the european commission president is presenting today. this will affect companies like airbus, which has just been downgraded by jeffries. >> jeffries downgrading airbus because of eyebrow mental concerns -- environmental concerns. they say that soon airlines will be pressured to reduce emissions whatever the cost may be. they say a lot of the airbus story has been predicated that the return, their free cash flow to investors, all of that in effect. additionally, they say airbus along with environmental concerns see other geopolitical concerns like trade. any benefit they might get from the 737 max ground will take years before those consequences become clear. manus: thank you very much. dani burger there.

sam is our guest house from bnp paribas markets. l for us,the death nai december 15. lots of notes about the aussie dollar. if there is a phase i traded trade deal, what does it do to aussie? sam: we don't think aussie dollar will benefit much. if we go back five years, the australian dollar yielded 2.5% more than the u.s. dollar. it now yields 1% less. that absence of yield we believe will really cap aussie appreciation, even in an environment where trade tensions eds leading -- are d escalating. sam: currency number one would be the yen. we think that is where the market is positioned too optimistically at the moment. nejra: great having you with us

today. coming up, it is only the world's biggest ipo. aramco will shortly make its trading debut. we are live from renminbi -- we are live from riyadh. the european open is not -- is up next.

♪ morning.d welcome to "bloomberg markets: european open." we are live from her european headquarters in london. i'm alongside matt miller in berlin. matt: good morning. today, the markets say hope for the best. stocks traded higher on a morning of mixed messages involving trade. europe appoints to a positive open. the cash trade is less than 30 minutes away. actually, it is an hour away. cash trade is an hour away. ♪ anna: saudi aramco shares gain

10% in premarket trading in the world's largest ipo. we will be live all morning from riyadh. credit suisse cuts profit goals. the swiss lenders/is its target for this year and the next as trade tensions and negative interest rates cloudy outlook. the pound dips as boris johnson's general election lead is cut by more than half in a key opinion poll. the uk's most critical vote in decades is just over 24 hours away. ♪ matt: good morning. we have got breaking news this morning on aramco. those shares rising temper sent in the premarket -- rising 10% in the pre-market of their earlier. -- in theicials premarket earlier.

these shares start trading. up 10% in the premarket. it will be one of the smallest free flows of any of the big companies listed globally. in fact, of the top 1000 companies by market cap, aramco has the third smallest free flow enbw.audi and i think such a huge company, $1.7 billion market cap. it still raises $26 billion for saudi aramco. an hour away from the start of cash trading in europe and over in the u.k. let's take a look at what futures are pointing to. gains at the open on the dax up .1%, gains of almost 0.25% on ftse futures this morning. taking a look at u.s. futures,

we see a mixed picture. dow futures are down a little bit while nasdaq futures are rising. s&p 500 futures still unchanged. 7.5 hours away from the start of u.s. trading but not a lot of direction from those futures. anna? anna: yes indeed. not a lot of direction from u.s. futures. ahead of the u.k. election. this is one of the most important votes in decades. we seem to have had rather a lot of important votes in recent years. they seem to come frequently. the polling is tightening. that is the headline overnight. that explains why i am outside in the cold in london. we will -- it will emerge in the gloom behind me. we are looking at the polling data from overnight, the yougov poll.

the lead that the tories have it has shrunk from 68 down to 28. partyws the labour getting some ground but still far from any kind of majority. we will be speaking later to the shadow chancellor about how the labour party is faring just a day before the u.k. goes to the polls. we cannot talk much about the elections tomorrow so we will do quite a bit of it today. the markets have been reacting to this yougov poll. market cranfield is in singapore for us. we saw a little bit of a slump in sterling. as a result of this polling data. how is the market set up do you think for tomorrow, tomorrow night into friday when we start to see the results? k: traders are skewed

towards expecting a stronger pound to the election. the fact that the polling has narrowed, that's why you saw the pound dropped. it has not dropped -- as you say, it is not really a huge draw. -- drop. what it probably means is that it will need a substantial onnservative party win thursday in the election for the pound to have much more upside. maybe it can still go up to 1.3 5, 1.36 or something like that. if there was a hung parliament or even a labour party victory, the downside for the pound could be pretty substantial. we have a story on bloomberg that illustrates some of what can happen. the skewe is already expecting the poun to be stronger. there is room for a little bit of movement. the downside is really where we could see a lot of action if the

results come out either against boris johnson or heavily in favor of the labour party. matt: is it not likely that we see the pound drop on a conservative win? because of so many traders have bought the pound assuming the party wins? >> there is still room for some upside. what has happened over the last olls, the actual results came out so far away from where the polls were predicting. a lot of people are holding back this time around. positioning is slightly in favor of the pound. there are a lot of people on the sidelines waiting for those final results to jump in and do whatever they can after the vote comes out. you always get plenty of room for some momentum trades in the first few hours after a boat comes out. there is definitely -- vote

comes out. there is definitely room for people to jump on whether it is a good or bad result from the election. a lot of people are waiting for that to happen. anna: thanks very much, mark. we will talk to some of our guests about those themes. market cranfield in singapore -- mark cranfield in singapore. we were talking there with mark. interesting to see how the pound performs in the very short-term. there is a difference perhaps between the short-term and long-term reactions. if we see the latest polling come to pass, if we do see a substantial lead for the conservative party, does that mean attention focuses on the end of 2020 and where brexit negotiations go from then? we will talk more about the u.k. election, the other themes around the fed and around trade as we go through the program. we will take a look at the stocks to watch at the open, including credit suisse.

we have heard from that business around some of their profit forecast. the bank is cutting its profit goals as negative rates and trade tensions. they are counting you down to the u.k. election, now just a day away. this bloomberg.

♪ matt: welcome back to "bloomberg markets: european open." about 50ght now minutes away from the start of trading but we do see futures pointing to a slightly positive open here in europe. really, all attention is being paid to the ipo of what will be the world's largest company. it will be the world's largest ipo as well. saudi aramco makes its debut in riyadh and about 20 minutes.

shares are up 10% in the premarket auction. yousef gamal el-din is standing by. what is the mood like ahead of this -- i mean, it is going to be the biggest ipo in world history but it will be one of the smallest free floats of any of the biggest companies in the world. >> absolutely. this is a historic a day, not just for capital markets in saudi arabia. major implications for investors world.the the people we have been speaking to say there is a lot of potential for upside and we have seen that trickle through in the premarket trades. openaudi market is already but the premarket will last 30 minutes longer. 10: 30 a.m. local time is one saudi aramco shares actually a.m. trading -- 10:30 local time is when saudi aramco

shares actually start trading. you are already up to $1.88 trillion. a lot of the conversations we have had have been around whether a $2 trillion valuation is actually realistic. clearly, the saudi government is leaving no stone unturned to ensure the stock continues in an upward trajectory. fundsf the government they might be active as well. bear in mind the sheer size and scope of this ipo means that there will be a fast track to inclusion in major indexes. stabilization' de- manager with the options. anna: thank you very much. nice to see some of the glitz and glamour of that ipo process coming to us live from riyadh. you can follow all the latest, go ono to our tliv your blog -- your bloomberg.

let's get our stocks to watch from around the newsroom. dani burger is focused on credit lavelle is also with us and discovering the u.k. stock picture. inditex, the numbers just hitting this lavelle morning. what kind of picture do they paint? >> that's right. released their third quarter numbers a few minutes ago. periodor the nine-month were higher than last year. they confirmed their like for like sales growth estimated. we will be watching as it shares open. they are up 28% so far this year nm,sus a 50% increase of h

which is reporting earnings later this month. matt: you have the story on a profit warning out of credit suisse. >> their main profitability target they have lowered and have lowered their forecast for next year and have said they are set to make a loss this year. weighing on this is the trade outlook as well as negative interest rates. they say their target will take longer for them to hit than they originally assumed. they also said this is on the heels of their three-year restructuring. the issue here is that the slumping markets and a reduced flow in terms of dealmaking. nnna: we will keep an eye o credit suisse. tom, let's go to you on u.k. assets. some of the big international names could be on the move as a result of a little bit sterling weakness on the latest polling. tom: yes. av poll showed

narrower than expected victory for the conservative party and tomorrow's election which raises the risk the tories might not get a full-fledged majority, which complicates the formation of a government and therefore for businesses, the terms were brexit. sector,tilities national grid. an eye onwill keep those u.k. names. you can follow along with all of the stock stories from our equities team. u.k. stick with our conversation and are u.k. election buildup. just a day until u.k. voters go to the polls. joining us now, erik nielsen, chief economist at unicredit group. let me get your base case as we see the polls tightening, the tories with a lead but not as high as it was. what is your base case now for

tomorrow's vote, for the thursday vote, the results come in on friday? erik: it is a tough one. the polls don't break them down correctly in each constituency. because of the u.k. system, it is really difficult to know exactly what is happening. we do not have any information that we can't read. i think your base case has to be that boris johnson gets a majority and then the u.k. leaves by and of january or of january-- end or maybe he brings it forward. going tothe brexit look like one that you are comfortable with? it certainly does not seem to be the kind of hard brexit that many remainers had feared. erik: that's right.

the first thing to say is that if the hard brexit is basically off the table now, so that's good news. the second thing, however, is to say that the deal that boris johnson has made is not in any respect as good as the one theresa may had from a british point of view. you have this bid for northern ireland on the backstop. that could be troublesome for the u.k. longer-term. the other thing that is very important is that it is not reasonable to say, as boris johnson says, let's get it done with. brexit is only the divorce and nothing about the future. we are going into a very riod where we try to find out what type of trade agreements we get with everybody. that will take a long time. this idea you can do this in a year is completely crazy. these things take 5, 8 years easily. we are talking about a deal that

also needs to include investment and services, if anything like the past is to be replicated in a way for the corporate sector. this is a long time coming of great uncertainty. anna: it is interesting that you say no deal is off the table. if boris johnson does not get a big majority,this is he could se beholden to certain groups within his party that might mean he is under pressure to do a wto 2020,brexit at the end of kind of going out without a deal. we will have to see what the results of the election show us. we got growth data which shows no growth for the last month for the u.k. economy. what is at stake for you when you get into 2020? what do you expect the u.k. economy to exhibit in terms of the growth story? erik: first of all, all of europe will probably do poorly in a sense. sorry. we have seen better numbers for

global trade and so on the last few months. it looks like they have a bit of a upturn. our view is that generally 2020 will not be a good growth here around the world. the u.k. will also suffer. the u.k. will almost certainly underperform the continent because of the uncertainty that will come into play increasing. people think it is clear that we get out, but we have no clue what the future trade will be and therefore, the investment in the u.k. will stay away until they get some clarity. the u.k. could underperform 0.25,nental europe by 0.5% of gdp. anna: the u.k. election very topical of course. boris johnson currently speaking on domestic radio in the u.k. and saying we need to stand up to the u.s. sometimes. that with all of the

conversations about u.k.-u.s. trade deals, of course on top of u.k.-eu trade deals. we will bring you special coverage right here as soon as the polls close. don't miss the action kicking off at 10:00 p.m. tomorrow. 10:00 p.m., we will be able to talk about the election with exit polls and we will have coverage throughout the night for you. eye on what isan going on with the aramco ipo. we expect a price around nine or 10 minutes time. we will see the largest listed company in the world floating for the first time on the riyadh stock exchange. this is bloomberg. ♪

♪ matt: welcome back to "bloomberg markets: european open."

we are focused right now on the open, because the largest ipo in the history of the world is about to begin trading. the largest company in the history of the world is about to .egin open, because the tradingh seven minutes to go until we get the start of trading for saudi aramco. company or7 trillion it will be once shares list and start to trade. it will be one of the smallest free floats in the world, i think only 1.5% of all shares will be trading in riyadh. that makes at the third smallest biggest capitalized companies in the world. of course, there is a lot more room to raise a lot more money later. so far, they will have raised $26 billion, and a lot of which apparently they will be using bd companies in the world to spend domestically. the fomc, the fed, is holding

its final two day meeting of 2019. a stronger-than-expected november jobs report will likely help bolster fed officials confidence in their decision to curtail rate cuts in december. erik nielsen, chief economist at unicredit group is still with us. you have said in the past that you think the u.s. is going to go into a recession next year. you think the fed needs to cut a lot more. is that right? erik: yes, that's right. they are done for this year. peters outtic demand in 2020 starting with fiscal stimulus. the job market looks strong right now but the openings are on a downward trend. we think it is a normal end cycle story that we will hit sometime in the second half of next year. we think the fed will end up

cutting by 100 basis points next year. anna: that is quite aggressive, to go from being on hold all the way through the first half of the year to cutting by 100. they are waiting for something material to happen to enable a material reassessment. what will create that material reassessment? do you think they will run out of space to create more jobs? erik: yes, that's right. it is an aggressive review from that point of view. if you look at the normal cycles, it has been -- we call it the late cycle blues we will run into in the u.s.. it is the longest expansion in history. it has been on steroids a bit because of the fiscal expansion at the height of the cycle. there is no more labor to find. there is a building pressure on unit labor costs. if you look at the corporate earnings in america, they have come down. if you put just corporate

earnings into a recession probability model for the u.s., you get like a 2/3 probability of a recession by the end of the year. maybe we are too aggressive when we say third quarter, fourth quarter. it could be fourth-quarter 2020 and then early 2021. the fed has shown itself to be much more proactive this time around. that will help, of course. it will not prevent the recession and slowdown. we think they will change. the real issue for the fed i think is how and when they start to change the communications. they are still sort of putting that nothing is going to happen. matt: it will be interesting to see the effect that has as well on the election. that falls right into november of 2020. erik nielsen is the chief economist at unicredit group. thanks so much for joining us. appreciate your time. i have a special programming note. provide expert

analysis to the fed's latest decision as well as chairman remarks at 2:00 p.m. new york time, 7:00 p.m. in london. this is bloomberg. ♪ ♪ here, it all starts with a simple...

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a half-hour away from cash equity trading. on the world. we are live for the trading debut of the biggest company ever. saudi aramco will start trading its first shares. in paris, we are looking out for pension reforms as strikes continue. newin brussels, the commissioners a green deal is in focus. to yousefoff