e can .do we're here to make life simple. easy. awesome. ask. shop. discover. at your local xfinity store today. ♪ manus: good morning from dubai. i'm manus cranny. nejra: i'm merrick a pitch in the city -- i'm nejra cehic from london. oil techs hire as a rectum barely stops work in a key oilfield. in libya, the national oil company declares force majeure. holds as she goes, basing crime rates under data. today.ocks don't trade it's martin luther king jr. day. going beyond good intentions, and delegates give meeting behind stakeholder capitalism? we'll find out.

that's across bloomberg television and radio. ♪ manus: nejra, very good morning to you. it's daybreak europe. there is only one topic. what is going to be discussed in davos in regards to climate change? there's a wonderful piece. central banks, does this week set the table for central bank policy? what will the shift in gears from the ecb really tell us about the outlook for inflation in europe? nejra: yeah, there's a fantastic piece on the uber talking about peak decade. this is something that will be talking about peak globalization, peak cars, lots

of different topics where we can get some direction, not just for 2020, but the whole decade ahead. looking forward to those conversations. us go inside the markets. to the dollar, first of all, and this is the important part. ch bears are back in arge. they're pushing short positions back to the highest levels since may, 2018. is it the end of u.s. exceptionalism? do you fight back against yield differential? we have a major story we're tracking, oil. what matters more, iraq or libya? oil production is halted to the lowest levels since 2011, 800,000 barrels come off the market. that's incredibly important, disruptions in iraq, as well, the second-biggest producer is critically important to the market. roll it over and you have a look at the yuan, the longest gains

since 2018. 2.7% in eight6%, weeks, pushing into the asian fx markets. there's a lovely piece this morning. good morning. nejra: speaking of the peak decades discussed in davos, peak markets in oil, as well as peak capitalism. look at what happened in equity markets. we're building on gains in the msci asia-pacific index, 7% below the peak. friday, record lows. euro stoxx 50 is pointing higher, u.s. futures flat, stock and bond markets in terms of cash trading closed in the u.s. today. cable on the back foot, below 1.30 after two weeks of declines. jobs data tuesday. towards the end of the week, like opposite pmi number, which could shift the pricing for rate cuts on the boe. the markets pricing a 70%

possibility of a rate cut this week. manus? manus: to our top story, i mentioned it in the oil price. the industry was caught in a crossfire of libya's civil war. the porters of the eastern exports command block under his control. the upper plunge forced the state national oil corporation to declare force majeure. the clause can allow opec nations to legally suspend delivery contracts. the country's oil production will be limited to 72,000 barrels, down from more than 1.2 million. nejra: another opec nation, iraq, temporally stopped work as political unrest escalate. local media reported protesters shut down border crossings with erin. with more, stephen potential key joint just -- stephen bacsinszky joins us from singapore.

not huge moves we've seen. of course, the issues of libya have been ongoing for many years. what should we expect from oil prices the rest of the week? are going see gains fade quickly? pool of there is a thought along -- among analysts that these risk events cause a quick pop, similar to what you saw when iran-u.s. tension took off. quickly afterwards, you'll see it will pare their gains and prices will go back down to normal. whenever there is headlines of tension in libya, when there's something happening in iraq, we'll see a quick camp and prices. we saw at the beginning of the year, even though prices jumped significantly, they fell down to mid-december levels. we're going to be seeing volatility as the market tries to assess what exactly is happening in the region and exactly how much supply is taken out of the market. reporter, energy

thank you for joining us. joining us is a senior fund manager. welcome to the show. great to have you here. we have just had stephen give us the context to what happens on supply risk. what we were concerned, about the conflict or the tension between u.s. and iran, we saw that ripple through risk assets. where do you sit here? what are the implications for risk in libya and iraq? guest: talking about the energy piece and a second, but the market seems complacent. everybody has gotten used to the january rally. there's a lot of studies people throughout, that is if the year starts off with the previous year up in double digits, you're always up. the reality is, i would argue the markets are getting stretched here. both in the credit markets, a little on the equity side as well. the energy piece is interesting. there's two schools of thought.

one, oyou're looking at produces like libya. the other piece, some excellent research on this, looking at the u.s. shale production in the u.s. these believe in some of energy companies in the high-yield structure -- sector, when you're under capital pressure, the best wells you are going to drill are your best wells that have high yield, or in the best locations, etc. but as you draw, production -- drill, production declines. some people make the intelligent argument that if you look forward, the u.s. shale production can actually decline very steeply. that would certainly change the dynamics back into perhaps into the hands of opec, which certainly could be a risk for the markets, and could be positive for the energy. manus: lale, good morning to you. it's manus dubai.

we track opec. we will be in vienna in march. let me take you back to the credit markets in the united states of america markets. the upstream energy components 50%pstream 15% -- more than of what they did for 2019. do you buy part of those credits that have been issued? are you tempted by energy credit, which is your domain? lale: yeah, certainly when the capital is cheap, and you are a capital sector, this is the time you should hit the markets as fast as you can. we never know how long it will last. as it relates to high-yield energy, to be perfectly honest, i'm not a believer in high-yield energy. the majority of those companies have been terrible shepherds of capital. they have huge capital spending needs. as a result, is a debt holder, if you look at upside and downside, you're just finding

their capital plans, the best you get is par plus coupons. and the rates are questionable. it's not much. if you really have a strong view on the oil in the companies, you are much better placed playing on the equity market than the credit market. nejra: interesting. you were saying both of those markets have gotten overstretched. in some ways, the credit market has been shielded from the risk of sentiment we saw at the start of the year. does that fill you with concern, or does it reassure you? lale: someone who spent 20 years in fixed income markets, i'm always paranoid. i think that's the nature of being a fixed income investor. if you look at equity markets on the margin, to us they scream better than fixed income, which is odd to say this late in the cycle. but a little mid-single digit earnings growth, 2%-3% in yield growth, that is still deliver you some where in the 5-7%

stocks, and that would be a normal return. the credit market, if you look at valuation, i find it extremely stretched. i think it's more of a trait happening, which is risk on -- trait happening, which is risk on. there's a reason high-yield is on the junk market. you have to get paid for the risk and today, you're not getting paid for that risk. manus: don't be afraid. it's just a rebranding. junk is junk. lale: you tell my mom that. manus: i'll tell mom that. don't worry. i wasn't insulted 30 years ago. tell me this. as default rates, let's get to high reels -- high yields. if we have a strong u.s. economy and no exception. that's the caveat. lale: sure, it's fine. whether you have a strong

economy weak economy, it's going to remain low. there's no point in looking at default rates. it's very hard to default when people are throwing capital at you. the only way you default is you realized there's no assets left or cash left in the bank, which will haunt investors in terms of lower recovery. when you look at historical default rates, the correlation is not we think. .3%, very low week correlation -- a very weak correlation. what i would encourage people is to look forward into what's happening from the upgrade-downgrade ratio, and that has been increasing, i.e. seeing more downgrades, which tells you there's fundamental deterioration. manus: goodness knows what will happen if you have a rate hike. just throw that risk at you. let's get you up to speed now

with first word news. annabelle droulers is with the team in hong kong. annabelle: thanks, manus. as the global elite gather endeavors for the world economic forum, the u.k. prime minister boris johnson is staying in britain to remind voters of his focus on the people's government, and to reinforce that, is looking to move the house of laws and the london. the top candidates, york or birmingham. staying in the u.k. as prices increase for the most of any january on record. values increased to an average of nearly 300-7000 pounds. a separate report shows luxury markets seeing a surge in sales. that's despite a rush to snap up homes. in china, at least three people have died and 200 from the new virus. it's due in part to increased screening and testing.

an independent report says as many as 1700 people may have been affected -- infected. china says the outbreak is preventable and controllable. global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. nejra: thank you. if swings in developing nations may lead to a stronger yuan. we have your chart that matters next. this is bloomberg. ♪

manus: this is daybreak europe. i'm manus cranny in dubai. nejra: i'm nejra cehic in

london. here are the details and the chart that matters. here's dani burger. dani: basically anywhere you look, volatility is disappearing, and that's especially true in emerging markets, where implied volatility is the lowest since 2014, and the related historical is charting lower. what i have in the white, flip so you can see how correlated it is with the currencies themselves. we have volatility moving lower and the msci emerging market index charting higher. leading this index are gains in the yuan and they expect to continue as volatility drops. december readings showed stronger growth, as well as a phase one trade deal. if this is any guide, we might continue to see a stronger yua n. manus: thank you very much, tracking the volatility there. lale is the senior fund manager. jra and i.h ne

with this trade deal, that has gone through major numbers, $50 billion worth of energy, what could go wrong? what is most likely to go wrong? many people are questioning the enforcement aspect of this. what have you questioned the most? highlighted how you how big the numbers are. that's the signature for president trump. he likes numbers to be big. one of the other aspects of the deal is whether that amount of buying is feasible by china. if you think about the u.s. economy, if you look at productivity growth, is not growing by much. it's growing by .3 or .5 per adam. let's say china meets their requirement for these deals, somebody has to lose. this is a zero-sum game. so, i think but the market is trying to figure out is whether

a, if china can meet these assumptions, and b, who loses? i think europe loses the trade deal if china buys more. it can have different consequences for the market. what i would say from the trade deal perspective, i would still take the enforcement mechanism with a grade of salt -- grain of salt. what also really matters to me is if you pay attention to the demographics and the fact anna is going to double their older population within 20-2 any five years, -- 25 years -- 20-25 years, the road and belt initiative is critical to them. there's no way they are going to back away from building their pipeline. that can be a dealbreaker for trade deal number two. nejra: you could argue for those who say china did back down that they took a step back from the battle with the war in mind. if you think about that, if there's any kind of snapback, if

the enforcement doesn't work and beget further escalation, you're more on that side, whether phase one is done and we can get back into risk asset. where would you want to put your money if you are taking the cautious view? lale: the cautious view sadly, just means you go into cash. yield on cash is attractive. it's liquid. it enables you to deploy capital at pockets of volatility. and then on the margin, some of the cyclical, sometimes down too much on trade, that can prevent opportunities. what i would say about trade is, bear in mind, this trade issue is self-inflicted. compared to a year ago, the tariffs are still in place. we are actually in a worse place. it went live in september. while part of this is factored in the gardens, it is just now

coming down the pike. he will feel it this year, along with a -- you will feel it this year, along with a slowing. manus: i saw one of the most read articles this morning, that tones on china. i want to ask about the bonds. you've got this yield on 10 years at the top, which is over 3%. then on the treasuries. what i want to know from you, the article says you can see a 10% return on chinese bonds if you have peace. i know you're risk skeptic, but go with me. do you think chinese bonds can run higher? do take chinese risks on a relative basis? lale: that's actually not our area of expertise. as a firm, we have em specialists that have been bearish on china for a long peri od of time with the view that economy is slowing and there's not sufficient value. nejra: on that slowing economy,

do you think that's going to have ripple effects to the global economy in 2020? a lot of people were optimistic in 2020. lale: it can. and if you look at the numbers, and perhaps by nature, humans are optimistic, there is not a whole lot of data that suggests that we are necessarily trough in. the data can certainly disappoint on the negative. positive isreally the notion that central banks are here to support whatever happens in the markets. i think that's a very strong narrative. however, i strongly believe, at the end of the day, i think the fundamentals will matter. the question is whether the earnings and the fundamental momentum will catch on to what the market overall sentiment is. nejra: lale stays with us.

let's get a bloomberg business flash with annabelle droulers in hong kong. annabelle: thanks, nejra. airbus is offering writers a new way for fares. the aim to help sustain growth and jet orders. clans will be able to trade futures and options on indexes across the industry. deutsche bank is cutting the bonus for investment bank by about 30%, this after a tumultuous year that saw the lender embarq on a huge restructuring. it's a fine line to walk. they are going to cut costs, but retain top talent. that your bloomberg business flash. manus: thank you very much. week, up, it may be davos but that's not where all the action is happening. the bank of japan, along with the bank of canada, amongst

others. we are across it. nejra: the road economic forum in davos. it is a big week. for the first time ever, the top five long-term concerns our environment of. we'll -- environmental. we'll be speaking with the top names. this is bloomberg. ♪

manus: this is daybreak europe. i'm manus cranny into by. -- in dubai. nejra: i'm merrick a pitch in london. christine lagarde will begin a once in a generation review of monetary policy treasures -- strategy. meanwhile, in tokyo, boj officials are poised to keep their monetary stash on state -- unchanged. lale, we kicked off the show talking about pick decade being

discussed. one element. what are your strategies in 2020? lale: i joke that there are numbers in qe's. i think around the world now, we sort of created this bubble where it's really hard to pull back the stimulus. i think part of it is every central bank has its inflation target, but combined with what's happening in the world with demographic changes, affecting pretty much everybody, specifically develops nations, -- develops nations, there's an argument to be made its shifting from managing inflation to managing volatility to support asset prices. i think that's what you're seeing. it's a dangerous game to play. i never underestimate the central bankers. they're very smart people. they come out with all sorts of different tools that can survive the market. the biggest risk in my mind is

the risk of policy error. if there's a policy error, then the ball that can be induced in these markets can be very, very large. manus: you talk about central bank managing liquidity. is that how you see what the fed is doing with this expansion of their balance sheet? lale: yeah, i mean that's exactly what they're doing. if you look at the real rates, it's taking a nosedive. inflation is nowhere to be found. and clearly, every time the s&p 500 drops 5%, which really isn't that much, immediately says rate hikes come into play. there's already people talking they are going to do another hike, which i think is really, absolutely crazy. manus: ok. thank you very much. i love a bit of crazy. lale, senior fund manager at

jail hamm bro capital -- jo habr mbro capital. coming up, the story you need to know. boris johnson at davos. ♪

nejra: good morning. i'm nejra cehic. these are today's top stories. manus: pressing risk. oil takes higher as erect higher as -- ticks iraq temporarily stops work. a military commander stops exports under the port under his control. beijing holds china's when your loan prime rates steady amid the pickup in economic data. asian markets paint a mixed picture, but u.s. stocks don't trade today. it is martin luther king jr. day. and going beyond good

intentions. can davos delegates give tocrete meeting -- meaning the concept of stakeholder capitalism? we'll find out across bloomberg tv and radio. ♪ nejra: we kick off the week with green on the screen, asia equity markets as european equities hit records on friday. stock and bond markets in the u.s. close for martin luther king jr. day, and the pen on pressure with rate cuts building. we get the mark -- market from around the world. manus: we do indeed. we've got to take the oil risk into consideration, central-bank action, and davos. juliette saly is in singapore.

we have one in dubai. dani burger is in london. juliette, we have an uptrend for you. gotette: yes, because we've the signing of the phase i trade deal behind us, it turns to earnings season, 300 companies on the index set to report earnings the next couple of weeks. we have seen asian stocks holding at 18 month highs. you can see the earnings outlook for companies in the index has been trending higher since the end of last year, particularly relative to benchmarks in the u.s. and europe. we've been running the numbers on what we've been expecting, and south korea is expecting to post growth of 2% in 2020, one of the best markets in asia. hong kong no surprise, expected to be one of the worst, with negative earnings growth, around 7%. nejra: thank you. it is about earnings.

about a quarter of the nifty 50 have reported, based on market cap. how is the market digesting this? niraj: yeah, good morning to both you and manus. india not computing. one fourth came from the fourth market on friday. some internal valuation concerns. each of these three have corrected in the session. this is important because it started well for each of these stocks, and then have come off. it looks even worse. as a result, because of the weight these stocks have on the index, while the bank nifty and three quarters in the green, we are have a percent down. % down. as a result of which, showing in the markets. back to you. manus: thank you. dani, you are looking at

positioning ahead of the ecb decision. dani: that's right. on thursday, christine lagarde will ask colleagues to do a strategic review. one of the centerpieces is a review of the central target they hit. the last time they did this was 2003. heading into this week, we've seen investors play it by flattening on the euroyen skew. s gettingsee i closer, still below zero, means is overall bearish. this is only bearish since 2017. it's clear investors are expecting movement. nejra: thank you also much. let's get the first word news with annabelle droulers in hong kong. annabelle: thanks, nejra. libya's oil industry caught in the crossfire of civil war. forces of the military commander have shut down an oil pipeline and block exports. will be thes output

lowest since 2011. it gets underway in germany. in iraq, work has been halted in an oilfield, that's widespread on exports on opec's oil producers. there's also a risk of closure. local media reports its shut down border crossings across iran. around 600 people have died and thousands wounded. they are pro se sting government -- protesting government corruption. in china, at least thousands have died. it's due in part increased screening and testing. an independent report says as many as 1700 people may have been infected. china says the outbreak is preventable and controllable. twice the world and rest of humanity combined.

just over 2100 people have more money than 4.5 billion. the u.k. based charity says governments are under taxing individuals and corporations, and underfunding services. global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. manus? manus: thank you very much. u.s. stocks hit fresh record highs on friday. that comes as the former white house economic directorate gary: says he sees -- airy c -- gary cohen sees no recession on the horizon. >> i think the u.s. economy is in a good place. manus: joining us to discuss markets, it is phil from private bank. welcome back to the show. we're in a good

place. does that convince you? extension of the balance sheet, do you want to load up more on u.s. equity risk, or do you think we'll see a moment of a shakedown before you go along again? phil: morning, manus. so yes, i think will be look at the u.s., ans we're building the narrative toward q4, we did to the rise of conversations towards recession for u.s. markets. this is something we've been looking through at quintet and we believe there's a stronger underlying narrative to the u.s. going forward. we do believe that household wealth and household income has increased, probably the largest in a decade. we're also looking at arnold clement rakes -- on employment rates. the underlying consumer is in good health.

monetary policy is relaxed. there's no reason to what we see, for us, risky assets. we're going to continue to drive market assets, notwithstanding volatility and headline risks coming from an election, and/or middle east and geopolitics in trade. nejra: great to see you. how does that impact your strategy in the u.s.? do you by the benchmarks on the assumption it's going to go higher and higher? do you look at value overgrowth? do you look at credit? phil: i think you're starting point is fundamentals. whether regional is causing fundamentals to strike growth. once you get to that point, we're confident it's a positive growth in 2020. 2019, it forget, in was the 10th consecutive growth

in united states. we're heading into the 11th year, which is an all-time record. how do we feel about risky assets? we look at starting off bond markets later. from an equity perspective, we still like the tech narrative, the technology sector. we think this narrative is building and continues to be positive momentum. stocks, semiconductors, is strong going forward in the best part of 2020. the margins of the tech sector much larger, and we think investors will tolerate much more expended multiples of valuations going forward. tech, iust touching on was going to go in one direction, but i put this into the gdp library. in, all in excess

of $1 trillion. softech -- heart tech,, softech -- hard softech, what is the bullish call? bill: we think it's soft on the hard tech. i think 5g, semiconductors is very keen. electrification story is interesting. we see. collision industries. that is going to be a huge scope for revenues and drivers and earnings going forward. nejra: bill staying with us. here's what you need to know. boris johnson snubs davos. the british prime is boycotting the summit to push his people's government agenda. he will reinforce vision of a global britain, treading freely outside the eu, when he hosts

african leaders. is another.ow what is the strategy of a global britain in africa? huge continent, of over 50 countries. are you targeting specific regions or industries? guest: thank you for having me on. we've got 21 countries represented, 20% of africa's economy. say is an opportunity to they are the partner of choice. africa is a growing economic powerhouse. got 15,000 economies in the world in africa, a lung -- young population. 52% under the age of 25. by 2050, one in four consumers

will be african. there's an opportunity for us, showcase what the u.k. has to offer in terms of innovation, tech, infrastructure, and finance. i'm talking here from the london we're exchange, where e going to be doing a dual listing. i was at the listing of the green bond precisely a week ago in nairobi and please it would happen this morning. it shows the city of london is a huge financial center of the world, and there's an opportunity to do more in terms of investors from here getting into africa. manus: good morning to you, manus in dubai. and $100up with phil, billion in new investment, $16

billion done, but one of the big issues that has been the devil issues and africa is corruption. he is intent on doing down capture and on corruption. is that the biggest real risk when i go to invest in africa? or is it overplayed and overdone? alok: you mentioned that particular issue. the u.k. is opposed to any form of corruption, and we work hard with developing countries to reinforce strength. working with them in terms of improving rankings when it comes to doing business. coming back from kenya, kenya has gone in the world bank to doing business rankings from 113 in 2013 256 in the last year. part of that is the u.k. government provided in terms of helping provide tax systems in

terms of helping better clearance for customs. those are the issues, very practically, for the u.k. government is helping developing economies, where we can make it easier and better to do business. nejra: china has used development funding to help build influence, across not only africa, but the caribbean does this pose a threat or inspiration to have the u.k. will impose it in africa, as well? one of the big, areas for us, we have a big advantage, is the city of london. i talked about the fact we are supporting the development of currency bonds. it's worth pointing out that aide's $140 billion of

money that goes in every year from around the world in developing countries. the yuan estimated there should be an estimated two by $5 trillion a year, up to 2030 every year, to meet the development bills that we've signed up to. that money will have to, in my view, come from the private sector. that's why we've had a unique role to play as the center for financial excellence in london. manus: the other big driving force that will come into play this year is the african free-trade, the largest in the of $2.51.2 billion, gdp billion. do you think investors are cognizant enough, if they harness that free-trade agreement, and it's going to be at harness just challenge to harness that, -- challenge to

harness that, is that the price? alok: yes, it is, and that will be one of the challenges discussed today. it represents a huge market, where free-trade inflow. -- can flow. there is a huge opportunity for us. we've already got a trade agreement with 35 countries. with another 11, we've got trade agreements in place, the represents 40% of trade agreements in africa. they represent opportunities for the international community, particularly u.k. investors. that's with the summit is all about, the department of choice. of course, showcasing what africa has to offer the u.k., as well. nejra: how much will the u.k. be looking to invest in the countries, as well as

parliament? alok: you have a range of countries. got represent've all regions of africa. people we have closest economic ties with, the great economic potential. you will see announcements of a multibillion-dollar deal in total. the breakdown will be available. we've been very clear the summit is about talking to the whole of africa. manus: indeed. we wish you well. sharma joining nejra and myself. avoiding junk. junk.see the liquidity we have the morning call. that's next. this is bloomberg. ♪

nejra: this is daybreak europe. i'm nejra cehic in london. manus: i'm manus cranny in dubai. the lowest rates in corporate bonds have been on a turn. but that could soon change. here with the deal -- the details, dani burger. dani: just as we think it can to look more attractive, investors pour into it. spreads her tight. the index is at its highest levels ever. but according to schwab, this isn't going to last forever. when it turns, it's going to get ugly. there isn't as much liquidity as most investors believe. whenever we see a fire sale, we're going to see a rush to exit, and investors will have a difficult time exiting positions. many managers say we have the toughest companies, but it is a matter. when there's a fire sale, is difficult for everyone,

especially with duration risk getting so high, as well as valuations, saying schwab does not like the triple three -- triple c space. nejra: bill, earlier we were speaking, you had conviction in growth and tech. how much conviction do you have in high-yield? , if you do, how much are you leading? bill: i think the high-yield space is an interesting part. we need to have a broader conversation with clients about the fixed income space. portfolios are looking at a 60-40 blend of fixed income. i think when we have half of the world's government bond markets, that's not a great conversation to be having with our clients, guaranteeing negative returns. we take a portion of portfolios, bond proxies and high-yielding

'reidend stocks, and we also looking at high-yield in the bond markets itself. i think that constitutes 90% of high-yield market. they are quite different. we do like the european high-yield market over the u.s. there's a couple reasons for that. the european high-yield market has a bitter duration profile, their quality profile, and because of the ecb engagement with the ig space, it does have an anchoring effect into the high-yield space. we do see sustainability of spreads going forward. if you look at risk premium, you get rewarded. versus a realized default rate. you are still receiving a risk premium to investment. therefore, you're underlying fundamental trajectory of corporate fundamentals has to be

quite significant not to be concerned about significant knee-jerk reactions into higher yield. going back to the previous comment, the triple c space is probably one that will get the shocks first. we would recommend a highly diversified portfolio. we look at indexing, some of the exposures for daily liquidity. if you're concerned about it, you can short indexes. there's less sensitivity, and still giving credit spread into your portfolio. manus: you've done a nice round three, in terms of the whole bound despot proxy should look like -- bond proxy should look like. i was talking to blackstone. we have this at a flat settling in the world. they want slightly more seniority and security when they

talk about certain portions of credit. i want to get your sense of is their proclivity for private or direct loans? they've veered away from stress, and they want slightly more exposure to the leverage lawn market and direct lending. does that appeal, in any way, for you? bill: i think at this point, we're pretty comfortable with the high-yield space, a little bit away from the u.s. high-yield space. the u.s. high-yield space has got less policy and higher volatility, due to exposure to the energy market. depending on what's going on, in the oil sector the marginal producers like the fractures -- we're ok -- fractures, in this space, in the time being. we do have a leaning into the alternative space, rather than

leverage load space, rather than private equity space, provides proxy, ory, again, a proximity for bond holdings. looking ahead to a lot of data this week. the pan under pressure. how much opportunity or risk do you see in the u.k.? bill: we do look at the u.k. very closely. we've got a lot of u.k. clients that are interested in a narrative. we have an underlying positive perspective on the u.k. and brexit developments, especially when looking at underlying valuations of the bond markets. however, there's going to be significant volatility the next couple years to the u.k. markets. dinner line trajectory is pretty

good -- the underlying trajectory is pretty good. the monetary policy is going to become on the sieve the next few quarters. they are going to have to soft rhetoric towards policy in the u.k. will do think is interesting, and it goes beyond the u.k., is we do think 2020 and beyond will have a collision of monetary policy and fiscal policy. we do think there's going to be a rise of fiscal spending, the end of austerity, direct investment infrastructure, healthy growth investment into various economies. this goes into the u.s., the u.k., of his the johnson, who is committed to the election. i also think lagarde is going to raise this. nejra: great to have you with us. you'll be continuing the conversation with bloomberg

radio at 7:30. we're at davos for the world forum. the biggest risks the world is facing. ♪

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matt: good morning. this is the european open. i'm matt miller in berlin. like a number seven, stocks gain for the seventh straight week, as indexes hit record highs in the u.s. and europe. futures are pointing higher. the cash trade is less than an hour away. ♪ matt: pricing risk. oil climbs as political unrest in