top stories this morning, the united states and china agree to a phase one trade deal. morning, boris johnson wins the largest consecutive majority in the era. proveis decisive victory a turning point for the u.k. and u.k. stock market? we have discussions with saudi arabia about amending the regional risk. talks have not happened with the uab.

the house judiciary committee recommends the impeachment of donald trump, who is charged .ith abuse of power it is now up to representatives to decide whether to pursue. it is just got 9:00 a.m. this is "bloomberg daybreak middle east." risk, whoy rating of is a believer? it is the yuan. that is the market that believes in the veracity of the trade one -- phase one trade deal. the bond market is a doubter. the angst or motion sickness

ratcheting to 1.95% on the trade deal. it has the veracity of the phase one trade deal. the bond market rolls all the way back to 1.82. there is the chart, a little bit ahead of me. 133.31.d trades out -- 1.3331. buying and short covering on the count, can you trade at 1.40? morgan stanley says the higher grounds are open to consideration. that is the context of markets. we have the first word headlines from around the world. qatar has held discussions with saudi arabia about the mending of a 30 month regional diplomatic and economic risk.

that is according to qatar foreign minister, who spoke to bloomberg at the forum. some progress and we started the conversation with saudi. what we are looking at right now is to have a forward-looking arrangement that this kind of doesn't discount the stability of our region. we are all for discussion. >> in the u.s., the house judiciary committee has recommended the impeachment of donald trump. he is charged with abuse of power and obstruction of congress. the president planned what he called -- the president called it a witch hunt and a hoax. president trump: it is a horrible thing to use the tool of impeachment, which is supposed to use an emergency. it is a scam.

it is something that should not be allowed. it is a very bad thing for our country. you are trivializing impeachment. >> north korea says it has conducted what it calls a crucial test at a long-range projectile launch site. detailsot provide any about the exercise. the news follows a north korean announcement last week that it held a very important test. china's abbasid or has threatened germany with retaliation if it excludes millions ofg the vehicles german carmakers sell in china. angela merkel policy was challenged that would included band on untrustworthy 5g vendors. it is the latest sign of just how difficult a time automakers

are having with replicating tesla success. will stockpiled the crossover in 2021. global news 24 hours a day and on air -- on-air and online powered by 2400 journalists and analysts in 120 countries. this is bloomberg. manus: two of the biggest clouds over the global economy, the growth entering 2020. the u.s. and china struggling, partial trade deals. including prospects for braggs it -- brexit. we have the former german ambassador to the united states and the united kingdom. wolfgang, ray to have you with me this morning. the phase one trade deal has us all breathing a sigh of relief. what is the sentiment you are hearing?

is there a great deal of trust and a great deal of relief that it has actually happened? they have yet to sign it, good morning. wolfgang: good morning. obviously there is enormous relief. those whoood news for believe in free global trade. there is no country in the world that is more dependent on a free global trading system than my own. from a german point of view, this phase one hopefully will be followed by a phase two. that there is an end to escalation is of course most welcome. what do you think the europeans need to learn from the discourse between china and the united states?

let me bring that down, what have the germans learned? wolfgang: obviously what we really want to avoid is after fight over these types of tariffs, we don't want to see the same thing happening across the atlantic. important jobst here, the challenge is to discussionsinuous between the eu commission, the mandate from the 28 member states. very soon it will be 27. hope that there will from exculpatory measures

the united states vis-a-vis the european union whether it is against france or the entire eu. are perturbed about earlier statements by president trump regarding the automobile industry. the automobile industry is a key component of germany's prosperity. these are very important issues. manus: you mentioned the imminent change, why do you johnson will get his brexit deal through the parliament? they willistic that be able to negotiate a trade

in the nextrope year? i have great confidence in the professional capabilities in my british friends whether they are in the or otherinistry departments of this government. negotiating a comprehensive trade deal is not something you can do with the push of a button. it is not something you can do in the course of some weeks or even the few months it takes a long time. not prepared to bet on this. i am almost prepared to bet on this. that it will not happen within the period of a year or so.

union willeuropean not want to delay. we are happy to negotiate this as quickly as possible. it is very complicated. my next guest, his headline is that the team led by boris johnson's government will have the upper hand. what do you think of that? wolfgang: our problem so far brexit issue is the united kingdom was not capable of coming up with a decision. there was no clear position of the british government that we were able to deal with. now, on the face of this election outcome, there is a majority. we can expect -- this is a

relief. we can finally expect to have a brexit deal between the european union and united kingdom. if britain leaves the european union in an orderly fashion, as planned, then we can -- as soon as we start discussions about the future, about the trade deal, their relationship insecurity and foreign policy. from my point of view that is almost as important as the one on trade and other economic issues. the important thing to keep in mind is whether britain is in the eu or not in the eu, we need to be friends. we have a very close relationship. that is what we are looking for. we don't want a conflict

situation with britain. let's negotiate, let's get it done. let's get back down to business. of issues to deal with in 2020. this is the former german abbasid or to the united states -- ambassador to the united states. washington enforces sanctions against tehran. we have ongoing conversations with the u.s. special representative. boris johnson wins the largest conservative majority since the a turning point not just for the u.k. but the entire european stock market. this is bloomberg. ♪

manus: let's get more on the u.s. china trade deal in the impact it could have on the markets.

two of the biggest hurdles have been removed. what jp morgan had to say, we cyclicalmajority, apology risks received in 2020. it is difficult not to accept the higher equity exposure. are we in that mode? are you raising the risk at the moment of these markets? key risks were somewhat cleared last week, now we see some caveats. there is a very strong head wind happening on the fed side. he news last week with the balance sheet spending. a very strongsly headwind. with unlikence this the start of this year, the

sentiments are much better at the start of this year. the two components we need to take into account. if we look at last week, it was very positive. talk about people the liquidity issue at the end of the year. , we had peak recession searches, google searches, then it faded and dropped. we are seeing the same thing this year. couldu worried at all that be the canary that we are choosing to overlook? is demonstrated in many ways with importance -- i think we try to anticipate that. weeks, weon in four are going back to $4.5 trillion

in terms of the fed balance sheet in quarter one. the size of this balance sheet -- i think they understand there is an issue. risk manus:. war you worried about in this youe deal -- what are worried about in this trade deal? than $200 billion worth of imports based on the 2017 numbers. you're talking about doubling the imports. d?nvince thiago> ,> you mentioned agriculture $40 billion needs to be compared with $10 billion this year. it is a very high hurdle. something that is seldom used on friday was the decrease in

tariffs in aggregate is 10%. some were banking on 20%. negatives, that was a very high hurdle. market, we here we are getting very close and vice versa. manus: i don't think anybody disbelieves there is a risk of rhetoric. i started the show talking about the believers and the doubters. the believer i would say is the yuan. from an ethics perspective, does the yuan struggle in 2020? what happens on the back of that potential? does that continue? >> there is the relief. tariffs, thether

value of the yuan, the fact that we are clear of that is indeed the relief. that is probably why we are seeing some on the yuan. ofwill learn a lot in terms chinese economic numbers this week. that is a driver for the yuan as well. they are all intertwined, as you said. they will be critically important in the next move in the market. tv function is tv . you could pick up the charts, interviews, the past interviews we have done. join the conversation, we are available on itv. your destination for bloomberg, tv . this is bloomberg. ♪

manus: it is time for boris to

get to work. clears the path for brexit to finally get done. are approved by the prospect of progress. >> degrees no hard border between north and south. guarantees the protection of the travel area. the citizens rights will be protected. getting the executive assembly up and running in northern ireland is absolutely critical. >> we are pleased it is a clear outcome. make headway in either direction. >> the clarity has come. it can be ratified as soon as possible. for an exit on january 31. therefore, i welcome this moment. >> they won the election by

telling everybody he wants to deliver. it is time for delivery. manus: the voice in europe this morning. would say the u.k. has more leverage than the eu them before, why? the u.k. parliament, thanks to the majority. aboutis some willingness the eu leaders to get through this. it thinks about a very important the need to find compromise on this. yes, it is a relief. brexit. hard we will get an

extension beyond the end of 2020. you going to recommend any shift in the u.k. a? seeing quite an explosion in terms of money into them. much would you recommend? >> it is a very interesting trade. from the pound weakness into small caps and realistic stories. that is an interesting trait for next year. we are desperately looking for value. the u.k. assets for more than three years, probably some red flags.

there really is room for some catch up. just showing the board there, you're looking at cbil. lowest in ahe decade. can i ask you about the end to austerity? we will spend 55% of the gross to mastic product. below pretty much where spain is it will be below france, below finland. this is product of spending. it is been in the dark on that side. we could see more coming. the story will be on u.k. assets. especially for the currency. when you thick about all the

, if they accelerate , there could be a slightly more open stone. market has been a little bit lower from the rate cut. we have gone to about 80% probability. does that make sense to you? we look at inflation, the big factors. the higher the pound, the more dovish it is, on the other hand you have the confidence, which is improving. that could be a driver. manus: how does it play with the flow into european stocks? we saw not just the u.k. equity flow but also on the european side as well. to au think this movement strong majority rewrites

european equity as well? if you look, from the start of phase one dealings, u.s. that means brexit plus the trade war deal phase one already being nicely priced by the market. numbers.o see good we need to see earnings picking up. there is some clarity which is needed. very important for the banks to turn around. see what 2020 brings with the new year and some new trades. , the nation has held --

qatar has held discussions with saudi arabia but no talks yet have happened with the uae. this is bloomberg. ♪

manus: it has just gone 9:30 a.m.. a few minutes away from the start of the trading day here in the middle east. there is one new headline the world will absorb over the next 12 hours. that is that china has decided to spend additional tariffs on certain goods of the united states. that is around $126 million worth of goods on auto and auto parts. detail.his is in leslie humphrey -- deadly humphrey -- leslie humphrey as the news from around the world. lie: china says it will

suspend tariffs on additional goods. that is after they agreed on a phase i trade deal. chinese officials said the benefit will be felt around the world. >> the downward pressure on the world economy, the agreement will also help to boost global market confidence. stabilize market expectations. create an environment for normal economic trade and investment. leslie: the house judiciary committee has recommended the impeachment of donald trump. he is charged with abuse of power and obstruction of congress. the president has plan -- the president has called it a witch hunt and a hoax. president trump i think it is a horrible thing, it is supposed to be used in an emergency. it is a scam. it is something that shouldn't be allowed. it is a very bad thing for our country.

you are trivializing impeachment. leslie: china's abbasid or has threatened germany with retaliation if it excludes huawei as a supplier of 5g wireless equipment. citing the vehicles germany sells in china. angela merkel's coalition will have challenged her china policy which would include a broadband on 5g vendors. itsedes-benz is putting off first electric vehicle by a year. it is a sign of how difficult a time automakers are having replicating tesla success. the luxury brand will start sales in 2021 rather than earlier next year. dayal news 24 hours a online and on air, powered by more than 1400 journalists and 120 countries.

this is bloomberg. qatar has held discussions with saudi arabia with the diplomatic and regional risk. talks are not currently happening in the uae according to qatar's foreign minister. colleague at the forum. tell me more. >> good to see you. i happened to catch the minister of foreign affairs, i wanted to get his take. some analysts, some diplomats were disappointed they did not attend the summit last week. he put a little context on this suggesting talks might not be as far along. the uae has been one of the thef impediments to finding embargo. take a look at what he had to say. a conversation

with the saudi's. stalemate to a line of communication. what we are looking at right now is the ability to have a forward-looking arrangement to make sure this kind of crisis props the stability of our region. we are hopeful for discussion. simone: some progress here but maybe not enormous progress that some of us wanted to see. also spoke to the u.s. special representative to iran. what did he have to say about the current policy pressure? up this policy of maximum pressure that is still the u.s. viewpoint. he took issue with the idea that u.s. sanctions were causing a humanitarian crisis in iran.

clearly in favor of some of the process we have seen lately. take a look at what he had to say. beene united states has open to sitting down with the iranian regime for years now. i don't think the foreign minister has the permission of the supreme leader to talk with the united states. we are open for dialogue. this regime has met our diplomacy with military force. it keeps making bad decisions. let's talk about some of the things causing this tension in iran. of has been the import pharmaceutical drugs to iran. they think united states should have complete oversight and control. our sanctions regime makes exceptions for food and

medicine, medical devices to get to the iranian people. this phenomenon of over compliance. the over compliance is in large part because iran's financial sector is dark. they are under countermeasures. the have been dropped from swift financial messaging system. its banking sector has always been dark. rule ofthe first banking? know your customer. they have been setting up fake companies that look like humanitarian organizations but they take the products, sell them on the black market, and diverse them from the iranian people. simone: the diplomats who have said the u.s. is deliberately stalling meant to facilitate the import of medicines to iran, is that true? make much sense

for us to announce a mechanism and not implement it. we are working with the swiss closely to finish the final details of the mechanism we think will help deal with this problem of iranian opacity. we will be asking banks and governments and corporations to a fairly high standard of diligence so they don't wrongfully or unknowingly support terrorism and support money laundering and finance of terrorist. we are hoping our mechanism will be underway as soon as possible. simone: people are starting to trickle into the forum here behind me. discussion isis the foreign minister of iran will be here at the end of today. the bloomberg reporters on the ground will be bringing you any response to the statement. track him down, hunt him

down. great work. deal looks toade be an assurance between the u.s. and china. translate? phase one in the making, it just needs to be signed off. doubting of of the the phase one trade deal. what does it mean for our market? >> it gives positive sentiment across the board. when you look at the tension we have been seeing across the , it hasom mid last year always translated into a weaker economical condition overall. also for a global economy outlook. that impacted aggressively much of the positions for the active traders and long-term buyers.

they would have preferred to stay towards the yielding assets like the fixed income rather than going into equity markets where there is more volatility and risk of tensions impacting the prices. manus: you are trying to get me to aramco, let's go straight there. a number of guests last week all basically telling me that i need to look at aramco as a dividend yield play. what yields does that make around? around 4.5%-5%. attractive as it was before the ipo. whole will not a only benefit from a yield play, it will benefit from the inclusion to a higher percent.

hostage for the past two years, the regional markets. and tradingflow activities happening over the past two years were always related to the flow from msci. manus: i want to get your estimate. we get the inclusion story this week. $4 billion of inflow into saudi arabia this month. on ms inclusion which goes december 17. it goes further up the list. do expect that level? >> i expect the focus but i don't have the exact numbers. these numbers are extremely high and the expectations to benefit from the regional market will be huge. focus on the main plays.

, edc be and there was another one. -- endb.e that, youonclude start getting more passive inflow into your shares and into your market. helping the overall liquidity of the market that has been in a tough situation. manus: you would also say what is going to happen with china as you would say the review shares including china's would have consequences to our region. we don't get a lot taken away. the rate currently now is not substantial.

an offset because of the foreign ownership increases. in conclusion, you do have a high outflow but you also have a lot of inflows coming into specific names. that is the main catalyst that will drive the market forward. , the: in terms of kuwait inclusion story, how much more kuwait are you taking? if you look at a relative -- marwan: it is outperforming. we go back to the same phrase we took at the beginning. hostageet has been held with the passive inflows over the past two years. kuwait has benefited aggressively, qatar has benefited aggressively. in 2019s were coming and 2018. in the outflows

rather than the inflow. i don't think i could publicly say what it is. on the $2 trillion valuation, i can't disclose it. it is one of our viewers that has come back and said the eu story little bit -- the yield story. marwan: we are not saying that. we are saying it is more of a passive flow from the inclusions into the national embassies. clarityood to get around that. you are a good sport. we will see where it goes. it is a good news story. it brings flow, revenue, attention. that is a good news story. high net worth. thank you very much. up next, back to the form where

we will be joined by the president of the united nations general assembly. this is bloomberg. ♪

manus: leaders are gathering in war, to discuss the trade sanctions, and climate change. the president of the united nations general assembly is at the forum, great to have you with us. thank you very much for giving us your time this morning. the winner of the award this greta, regards to climate change. how much of the discussion in doha is climate change? discussion has been very engaging.

i have spoken about the only agreementot on climate change but also action in the direction that is helpful. they have underlined the importance of the global challenge. one of the biggest global challenges is trade i want to give you -- get the sense of the agreement between the united states and china on this phase one trade deal. does that give you optimism going into 2020? it will impact the world, even in related to trade.

, we hope the broader framework eases the between two of the biggest economies in the world. it is a good feeling we have the sense of optimism in the sense of trade. trade is key to our peace. may i ask you, if we look at the world of politics at the moment. if we look at mr. trump as the president of the united states, he has challenged that multilateral framework, whether , wto,climate change tariffs, or nato. in many ways the united states has pushed back against multilateralism.

it is the very core of what the united nations is. it has forced you to look at the united nations and how it works. think is not about one country. countries have the right to ask questions -- having said that, systemnion on how the especially as it is evidenced by the united nations should work. that no one has said that we could dismantle the

order. listen and too continue to remind ourselves why the order is important for us all. the new technologies of war and peace in the interconnection of the economies and cultures -- and the connections. especially young people. the flow of ideas around the global order and around culture. i think it necessitates that we keep in mind that not so long idea created imbalance

that the repercussions have been felt terribly. [indiscernible] created andtion was it has provided a framework for relations. terms a positive force in of peace, writes -- rights, technology. manus: we are going to have to leave it there. thank you so much for joining us. we wish you well. that is the president of the united nations general assembly. ,p next, a partial trade deal there is one man who always has the you -- view. this is bloomberg. ♪

the partial trade deal between the u.s. and china has been reached. the ceo of the italian energy giant thinks it could help make the global oil market more stable. speaking at the doha forum, he also discussed the company's business in qatar. the agreement means that could be positively impacting. >> is the full-blown trade war still a risk for the oil demands? [indiscernible] , we have some slowdown in 2019. we saw the price. the price went down with the

demand. issues witht of sanctions. [indiscernible] this brings some stability and a clear future. >> where you see oil prices being in 2020? claudio: we think it is still in the transition. the industry in general if there assume ther war -- i price will be $60 or $65.

[indiscernible] that should be the price for 2020. to naturalo switch gas. we are here in qatar. it has been reported that you have been part of the bidding for the northfield expansion product -- project, where does that stand? :w we bought gaza already from them. [indiscernible] expect to present the offer sometime in the next two years. project thatgood

-- say with no certainty [indiscernible] market. the it has been quite difficult last year. a lot of the price went down. the marketing will be the most for this beautiful and wonderful deal. the eni ceo speaking to us. a live shot from london. the question for markets is what will the complexion be on the new administration. the biggest majority since 1987. have we traveled and arrived on sterling? upc suggests you can create

-- trade up to 1.40. three big events this week globally. the bank of england, bank of japan, and star wars. ♪

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lisa: i am lisa abramowicz, in for jonathan ferro. bloomberg "real yield" starts right now. lisa: markets assessing the contours of a partial phase one trade deal. a swirl of conflicting headlines and tweets continuing to whip-saw risk assets. keeping investors on edge, looking for more detail before the closing bell. we start with the big issue, markets debating what 2020 has in store for the u.s. 10 year. >> it should eventually be a good year for bonds. >> we think yields go higher. >> bond yields moving sideways. >> we need them to be cheaper. >> still attractive, but not