manus: good morning from dubai. >> these are today's top stories. historic vote, donald trump becomes only the third president in u.s. history to be impeached. the senate will hold a trial early next year where he is likely to be acquitted. >> we did nothing wrong. supportave tremendous in the republican party, like we've never had before. way, almostthis five years of negative rates today.

after theor joins us decision. and holding tight, the bank of england will follow the boj in holding rights steady, the first .ictory ♪ a warm welcome to daybreak europe. ready for all systems go, i found it fascinating that this gentleman referred to timidity and risk when managing his own money, but not when he was managing other people's money. it's a fascinating insight into the psyche of the fund manager. is long on equity and currency. income.t fixed good morning.

nejra: he certainly remains bullish into next year but he even use the word coward to describe himself at one point, but still staying bullish into next year. a fascinating one to watch, he thinks the fed has gone too far the other way in terms of cutting rates, whereas previously he was saying they shouldn't have gone into that hiking cycle. he does think they should be hiking now. there are three things he said could actually kill the bull market. marketsf in the credit and also perhaps an acceleration in inflation that prompts the fed to suddenly have to hike. manus: absolutely. the since he gives, this is the push and pull for the markets. negative real risk everywhere and negative absolute rates in a lot of places. that will drive the investment pieces into 22 -- into 2020 into

the pound. the politics, not technicals will help the market. bank of england, will they lean more to a dovish stance? that is the question. brexit.it, slow dollar-yen, no change. when it comes to global risk, in 2020 it could be a dogfight. we'll discuss who says that and why, later in the show. nejra: 10 year yields about four basis points higher in today's session. some dataicture now, coming out on the aussie. after that better than expected jobs data. the korean won has been on a tear, some of the technical suggesting we could continue to see it strengthen as it is doing in today's session. manus: a lot to chew on this

morning. the u.s. house of representatives voted to impeach donald trump for the abuse of power and for obstruction of justice in congress. it makes him only the third u.s. president to be sanctioned by lawmakers. the articles of impeachment will now be turned over to the senate is trial where his acquittal all but assured. this lawless partisan impeachment is a political suicide march for the democrat party. have you seen my polls in the last four weeks? house speaker nancy house said she wants the managers to ask as prosecutors in the senate trial. we will see what the process is on the senate side and i , tod hope that will be soon

describe what the process would be. so far we haven't seen anything that looks fair to us. manus: let's bring in our senior editor. derek, what is next in this pretty surreal theater? >> it was an absolutely historic day in washington with the president, as you say, becoming just the third president to ever be impeached. he follows andrew johnson in the post-civil war era and bill clinton in the 1990's. in both of those cases, both of those men got acquitted in the senate. donald

there is no indication that when this goes to the senate he won't be acquitted, but it's not as smooth as you might think. democrats will meet tomorrow late morning u.s. time to plot the next phase of their strategy. there is some thought that nancy pelosi might hold onto the articles of impeachment and not immediately send them over to the senate to try to game play in terms of the procedure that will be. one of the questions coming up will be what sort of witnesses might be called. will mick mulvaney be forced to testify? let me leave you with this factoid, a lot of this is an election season. there will be an election next year. bothon and clinton were replaced by presidents who did not agree with them politically. donald trump is coming into that remains to bet seen what will happen in that case. changed after wall street

will to hang onto gains. >> administration was wondering -- wondering about where the next bomb is coming from. it doesn't allow me to take some of the positions where a one-way bet. binary and aalways two way bet. there's a lot of steps we have to jump through and were looking ahead to an election just a little less than a year away. how do we factor in this political drama into the outlook for the u.s. economy? janet: for us, it's not a huge risk, even though president trump is impeached. majoritylicans had the

so we think it is highly unlikely he will be pushed out pivot we are not worried about the impeachment risk. hasn't had a direct relationship, so we are more watching economic growth, fundamentals, rather than focusing on the presidential impeachment. one of the things asked was what would cause a bear market in the united states. ae response was, noncapitalist person could cause a bear market. it would knock everything offkilter but that may be the political risk we need to start to attune ourselves to. there was a lot of

volatility since his election as president. after all, equities are to record high the moment and he has indeed negotiated a trade deal with china, although it is a preliminary one. it is quite positive for markets and the economy has been pretty strong. as long as the economy remains strong and job growth remains solid, we don't see a recession risk going into next year. nejra: the question is more what it means for the democrats and their -- i mentioned the possibility of a left-wing democrat being elected president as one of three events that would in the decade-long full market. when you look ahead to 2020, what is your thinking around the prospect of a democrat when, perhaps even having a more left-wing democrat in power?

is still a lot of time between now and next year when the election happens. it's really up in the air, but according to the presidential approval rating at the moment, is rating is still pretty solid. if presidents can when election based on economic fundamentals, and the economic trajectory is right at the moment. in this kind of situation, the probability of being reelected is high at the moment. move do see the u.s. toward a more left-wing government, that would be a concern because it would mean more regulation, more antitrust enforcement and companies like the tech sector. investors would be right to be concerned about that and you

will see a move to the left. manus: there is a variety of risk that could potentially come to us. this time last year we were hunkering down for the doom and gloom as we were going into january 2020. we were quite battered and bruised. here we are going in with melt up mania. have a look at this, ratcheting higher. our u.s. full of bullish zeal as the melt up market mania? janet: historically, with timing at the potential turning point in markets, it is stretched at the moment. this is only one of the indicators that we look at. theexample, you look at indicators and they suggest that investor sentiment is bullish,

but not at extreme bullish levels. it's not very stressed at the moment. janet, thank you very much. let's get you up to speed read the first word news from annabelle. england looks at interest rates on hold today amid mounting speculation policymakers will ease in 2020. around 80% chance of reduction before next december. that's today's decision as of mid day. -- providingence audio to other clients. the bank said the unauthorized

used is being investigated for the. in sweden, swimming against the tide of global easing. the central bank is expected to hike by 25 basis once, ending almost five years of increased rates. it may signal caution for the years ahead. in the u.k., prime minister boris johnson will layout his government's priorities today. intends to put the nhs alongside delivering brexit. it will be a more low-key affair than the queen speech in october with the queen arriving by car instead of carriage. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. thank you so much. coming up, the bank of japan leaves policy untouched. we discussed the central bank's guidance, next.

, a historical day for markets. this is bloomberg. ♪

nejra: this is "daybreak: europe." let's get the agenda set up for the day. it's all about central banks. them on the had table ready to leave policy unchanged. the government stimulant -- stimulus package progresses. trade talks showing signs of bottoming out. banks,avian central expected to hike by 25 basis

points with five years of negative rates. that decision at 8:30 a.m. u.k. time. nejra: a half hour later we will economistsdecision, expect norway to take a more cautious approach. england ishe bank of expected to remain in its current holding pattern. mexico's bank is forecast to cut its key interest rate by .25%. theme,staying with that our guest spoke about negative rates. >> we have negative real rates everywhere. with that kind of unprecedented , it's hard tolus

have anything other than a constructive view on the markets in thed the economy intermediate term. so that's what i have. go, janet isyou our guest. the worldo you that of central banking is changing. the bank of england unsure in the fed on pause. is it qe thatmic, sustains me into 2020 rather than a developed central-bank policy mix? janet: were actually not expecting further rate cuts from major central banks. we think they are pretty done, especially the fed. week, wesustained q. don't expect more. qe should be able to support markets. investors want to see a

material nation of that, and that will probably lead to a sustainable market. we actually don't see the central banks cutting further this year. nejra: bloomberg economics thinks we will see nothing through 2020. they also think the ecb will not cut further. exit negative rates for the first time in five years. saying inflation has managed to pick up in sweden. we might talk about the negative impact of negative interest rates, but is there any prospect where inflection -- inflation stays subdued elsewhere unlike what happened in sweden? all, the ecb is concerned about negative rates. christine lagarde mentioned negative rates and they are

doing a strategy review potentially on this issue. don't prefer to stay in the negative interest rate environment. if the economy does start to turn next year in 2020, then we potentially may see normalization. however, that could be a bit difficult. inflation is projected to be below target in the foreseeable future. it really depends on how the economy does and what the ecb perceives about how negative the rate policy is. how they'reesting prepared to go to zero on the inflation rate. christine lagarde doesn't think that is close enough to the boundary line. , it wouldk at this

come from asia over the u.s. in terms of growth drivers in 2020. do you agree with that? is that in your model? janet: actually our economic assumption for next year is that the emerging markets are going to do better than valent economies. solventwth will remain but it is on the slow down momentum, primarily because of the easing of the fiscal stimulus. we think the announcement of the first phase of the u.s. trying -- u.s. china trade deal leads us to upgrade our forecast. that will potentially benefit the emerging-market asian economy that is central to trade. .e agree with that assessment nejra: we've had a couple of headlines coming through saying china is issuing a new lift on the tariff exemption on the u.s..

in the emerging-market world, we spoke to someone earlier this but who still held china were shifting to other parts of emerging-market asia because they saw a prospect of improvement in the u.s.-china dynamic. would that be the ships you're making below the surface as well within emerging markets? janet: we see that in the long term investment in futures are still appealing. and we are still seeing that china could unveil more stimulus measures. the momentum is still there, they still want to support the economy and the trade deal is going to be supported. however, i feel that the more cyclical agent :00 -- economy, south korea and taiwan, could benefit from the trade deal. hold those thoughts, or

going to pick up on a few of those thoughts in just a second. asia as it translates into trade 2020. good times are ahead. explore the chart with us right here on "daybreak: europe."

nejra: this is "daybreak: europe." manus: i'm manus cranny in dubai. we got treasuries, pushing the u.s. yield curve into territory it has yet to breach all year. are a far away from august when we had the inverted yield curve that sparked those

recessionary fears. , yesterday at see one point they reach the widest level since last year. when we look at what it's doing now, there was a big selloff yesterday when we look at the options and futures market, there was a big lock trade sold, about 8000 contracts, to be specific. are seeing the bullies treasury bets being unwound. the recessionary fear dissipating thanks in no small part to trade negotiations what seemed to be improving, and better u.s. data. the treasury yield curve giving us the all clear. like: janet, does a chart this prompt you to want to take more risk? more: we turn slightly positive on risk assets. that's primarily because as this chart suggests, the risk of recession has turned even smaller.

we had not been expecting it anyway in 2020, but it does seem it's not going to happen. we do think there is more risk on next year. phase one of the u.s.-china trade deal is pretty significant. we expected a delay but i think it's pretty significant because president trump has it been promising it, but if it did happen, their positive surprises that prompt us to upgrade our growth forecast. that's why it could be a positive environment and we are more positive. manus: interesting because yesterday we had a conversation about 100 basis point cut from the fed next year. that we can debate in the next 30 minutes.

the glass is half-full going into 2020. we'll talk about the pound and volatility returns on a trifecta of central banks thursday. this is bloomberg. ♪

nejra: good morning from london, i'm nejra cehic with manus live from dubai. this is bloomberg "daybreak: europe." these are today's top stories. becomes only trump the third president in u.s. history to be impeached. the senate will hold a trial early next year where he is likely to be acquitted. >> we did nothing wrong. supportave tremendous in the republican party, like we've never had before. manus: exit this way. poised to leave with almost five

years of negative rates today. tight, the boj holding rates steady in its first meeting since boris johnson's election victory. nejra: on a big day for central banks, asian stocks drifting lower. u.s. futures not giving us any direction in the 10 year yield halting private all the market action from around the world -- the 10 year yield holding. manus: juliette saly is in singapore. anne-marie is in hq in london. you're looking at some of the potential christmas cheer for

the rba. >> absolutely. nearly 40,000 jobs created in the overall economy down under in the month of november, enough to send the unemployment rate back down to 5.2% from 5.3%. we knew look at the chart, you can see that inflation is very much below what the rba is looking for. holding at around 1.7% at the moment. bloomberg economics says if you look under the hood, the aussie labor market is still slowing and that's reflected in the participation rate. that will put pressure on the .overnment looking at money markets, pricing in a 45% chance of another rate cut when the rba next meeting february. unemployment ticked back down to 5.2%. nejra: you're looking at bond

yields in india with some weakness in the equity market, but yields are moving higher. why? agam: bond prices have fallen, snapping a gaining streak with an increase in yields moving up to around 6.4%. rbareason is that governments have indicated a possibility be a -- of a wider fiscal deficit. gdp growth has been slowing and they want to go ahead and push growth which is why they are taking in the possibility of reducing the fiscal deficit by as much as .5%. the indian rupee is largely 71hanged, just shy of around dollars. you,: let's bring it to

were never far from our litmus test on global growth. bull or bear, what do you find? >> the australian government says it will be bearish for prices next year. reinforcing the notion that prices are destined to fall. we saw the roller coaster with production shortfalls. look at the redline, output going to recover, chinese buying will flatline. the bulls have been warned. nejra: thank you so much. thank you all. to bank of england is likely remain in its holding pattern with mounting speculation that rockets will ees in 2020. an 80% chance of a reduction next year. manus: prime minister boris

johnson will lay out his governments parliament -- projections today. delivering brexit, it will be more below key affair at the queen's in october. for now, i want to talk about the prospect for brexit, first of all. bloomberg opinion saying we keep talking about hard brexit. the pound is reacting, down it went. it's a prospect of a low brexit or a slow brexit. a small trade deal rather than the big least we are expecting. , tradet of all

negotiations will be difficult. it always takes years to agree on something. relationship, we think it will take a substantial amount of time to negotiate a substantial trade deal. one year re-think is unlikely. at most an agreement in principle on some small trade deal. nejra: that's what hit the pound that boris johnson would extend the transition period between 2020. that might be why the market is still betting on potential rate cuts from the bank of england. hold is expected, but to do you think we will still get two or more dissenters on rate cuts going forward? >> we think the bias is probably on the dovish side, because first of all, inflation is not going to be a threat.

gone,ionary pressure is that shouldn't be a concern. secondly, although we are now said, thes you transition period will not be extended further, so markets will be worried and so will the members as well. hike,nditions on the rate it's hard to see how it's going the bankut so we think of england will be on the dovish side. manus: let's expand this a little more because many were expecting the return of investment. 2020, onow i judge whether it's turning? into a political success? in terms of u.k. business investment, is it the worst slump since the financial crisis? of the critical indicators i should keep and i

on? businesses are going to feel a bit more relaxed. boriss view that johnson's government is more economy friendly. i think the whole ship scenario is gone. that should prompt investors to start to recover. however, we mentioned the high risk has not gone away. you're not going to invest heavily in the u.k. at the moment. you may start to take steps to invest, but not huge. the negative growth rate will start to improve from here. nejra: i just want to ask about the queens speech coming up today and precisely, the government spending plan. one thing boris johnson is expected to focus on is the

extra on the health service through to the end of 2024. there are some great stats, that spending will only be 40% of gdp compared to europe. not unleashing a fiscal tax. with that context, what are the prospects in terms of the curve and how to position in gold? janet: we think there is upside risk. basically the government is ending austerity. they have already announced more fiscal easing this year already. aggressive easing measure. the government is still prudent in its fiscal stance.

there should be some upside risk . secondly, ultimately, the worst case scenario for the u.k. economy is kind of averted. we do factor in recovery in the u.k. economy next year. we are upgrading our european gdp forecast. with more fiscal spending we think it will be higher from here. manus: janet, thank you so much. upgrading the u.k. growth forecast. japan, getting ready for news conference. and that'smains high reflective of what the federal reserve has been saying. we need to keep a close watch on the u.s.-china trade talks.

also saying we need to remain cautious about the global economy. i don't think there is anything prophetic about what he is saying. what is it that moves dollar-yen? ? next?- moves dollar-yen shape of the yield curve actually moves in the next direction. bloomberg economics doesn't expect anything from the 2020.f japan through we know that dollar-yen plays a big part in decisions with the bank of japan as well. risk remain high abroad as well. we need to keep a close watch on u.s.-china talks. manus: absolutely. and other green shoots.

let's get you what you need to know for the day. tesla is on a tear, ending the day yesterday at a record clip. we've seen price cuts in china, but who cares about that? >> two reasons, we've seen momentum in the tesla stock since that surprise profit they turned in october. they also said they were ahead of schedule on a new car. and we heard from credit suisse, they are underperformed on the stock. they said tesla is really leading in the industry and credit is due or credit is due. but we are still a long way from that $420 mark where elon musk said he would take tesla private. much, andnk you very

marie. a quick check on the markets, three major central banks and play. let me show you, credit suisse joined the melt up mania in terms of london futures. and the euroown stoxx 50, where do you want to be position, american equities are european equities in terms of the flow story? nejra: a lot of people getting more positive on europe in 2020. is it enough that some of the bad news has been taken out of the picture? investors just seem to be waiting now. phase't have any of that one written down so we are still awaiting that and markets are drifting. december 31 will mark 30 years

since vladimir putin takes power in russia. he will have a news conference later this morning. this is bloomberg. ♪

manus: it's bloomberg "daybreak: europe." nejra: let's get to the first word news from hong kong. >> president donald trump has been impeached. it sets the stage for trial in the senate where he will almost certainly be acquitted. the vote in the house went mostly on partisan lines. not a single republican voted to impeach in the president attacked the move, calling it political suicide for democrats. the bank of japan leaving policy unchanged. the central bank maintained its

target for rates and asset purchases. the bank can reach the end of the year without having to go deeper into its ammunition. party provider was supplying audio to other clients. use is beingzed investigated further. in sweden, set to swim against the tide of global easing. ofing almost five years negative rates. a slight uptick in inflation last month will provide justification. it may signal caution for the years ahead. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. nejra: thank you so much. russian president vladimir putin is gearing up to give his end

devere marathon news conference in a few hours. it will mark 20 years since he first came to power in russia. let's take a look back at his time in charge. manus: indeed, he spent billions of dollars to bring russian gas to markets including europe and china. 2005 and isdeal in weeks away from completing a second pipeline. his time in power includes a dispute with ukraine in 2006, a war with georgia in 2008 and the annexation of crimea in 2008. that brought sanctions and help send the ruble crashing. janet, when we look at the geopolitics of europe and the relationship with russia, how much risk are you assuming in

terms of the geopolitical stage going into 2020? i'm thinking about u.s.-russia -europens and u.s. relations. >> we think the geopolitical risk stay elevated. the u.s. china trade tension will persist and the u.s. will continue to exert pressure on europe in terms of tariffs also. the tension between russia and the rest of the world is always there, we think it's fair to say. geopolitical tension will stay with us and it will be elevated. nejra: what does that mean for the oil market? >> usually when you have geopolitical pressure in all market should -- what we are seeing in the past few years is that there is usually a

short-term boost in oil price when tensions get more elevated, but actually markets overreacted and then oil prices come down. more marginal supply from the u.s., we think event. geopolitical risk causeslly just short-term material impact and will not happen effect on longer prices. manus: one thing that comes to being longng about commodity currencies, you want to be long aussie and canada. is that something that? ? chimes forgive janet: that is really very risk on trade negotiation'sding because it will benefit from

better trade excellency in the region. for example, better growth activity in china, large stimulus from china. i think it is more play on the better economic growth out of the region. and currencies offer attractive yields in a world of very low interest rates. so we do see the appealing factor of these currencies, especially if you think local growth will pick up from here and you believe that interest rates will stay low in this environment. manus: interesting to see what we think is high-yield in 2020. janet stays with us. more markets to discuss. and losing more than half of their market value, we have your morning call. this is bloomberg. ♪

nejra: this is bloomberg "daybreak: europe." dubai.i manus cranny in cutting production outlook, removing the ceo and head of expiration. do the shares have any hope of recovery? that's good to the morning call. the outlook described with pretty strong words. has a solidrget ceiling on how much share prices can recover from here. last week after they cratered at about 70%, we did see some pickup and share prices. some speculation that maybe they would find a buyer, a jeffrey saying it's still too expensive.

also saying into years the company will run into some trouble. it needs a big change. that could be an increase in oil prices are may be a new commercial asset. if it doesn't, it will have a hard time meeting its notes that which are in 2022. discuss the, let's outlook for 2020. he said you've gotten a little more positive on equities. any region in particular where you chose to add? janet: we still like the u.s. market but valuations have gone a little far from other regions. we like the aspects of the economy and emerging-market, we like it because we think central banks will be dovish, it will the valuationand

is still more attractive than the u.s.. so we preferred those regions. and we are more positive on equities overall. we had knowledge there are still risks and 2020 that we need to watch out for. manus: how do you position for fiscal stimulus which we assume will come to bear in 2020? janet: first of all, we don't think that will be a huge fiscal stimulus coming from government, so we won't be investing heavily purely on the basis of more fiscal stimulus. that is positive, but we don't invest based on that. we don't see a huge stimulus coming out. japan says the benchmark

the bank.l about will go to zero? the governor from the bank of england joins us. ♪

anna: welcome to bloomberg markets: european open. the cash trade just an hour away. nejra: the bank -- anna: the bank of england is likely to follow the boj in holding rates steady today, but vets are growing that it could end in 2020. the rich bank