barnier.nier. across the political parties most mps accept this. parties most mps accept this. think it will give uk businesses time to adapt to what is coming. time to adapt to what is coming. and something they do not think theresa may should accept. theresa may should accept. and they think maybe we will walk away without a deal. away without a deal. they want to take back control. take back control. rules for almost two years goes totally against what they wanted. totally against what they wanted. made the point it was an negotiation. negotiation. that was the opening remark from michel barnier. remark from michel barnier. deals with other countries during the condition period. the condition period. all down to brexit or to do with other policy areas? other policy areas? all to do with brexit and that is why it is so dangerous for her. why it is so dangerous for her. the lack of progress on domestic policies. policies. they say she is not showing enough vision. they want more from her. wil

of michel barnier and others, a re interested likes of michel barnier and others, are interested in dealfor financial services? i do not think thatis financial services? i do not think that is even the discussion now. the european union have heard what the uk government does not want, because theresa may decided, on her own, really, not with parliament with the we discovered afterwards, this idea not to go for the customs union or the single market, so what the european union is waiting for — in brussels, germany, madrid, paris, everywhere — is to hear what you want. as soon as she defines that, they will stop the discussions, but there are around 53 or 63 weeks, i think, to brexit, not a lot of time! eu officials have been writing to company bosses in key industries, warning them that britain will effectively be a third country if this deal is not done, it is a stark warning for them. britain will be a third country no matter what. but without automatic access to the single market. there can be no single market. there can be no single market. there can be no single market access ta

market access in contradiction with the hard-line previously set out by the chief negotiator, michel barnier. us, peter schaffrik. let's talk about the bank of england.

does michel barnier understand why britain voted for brexit?derstand why britain voted for brexit? what answers did you get from michel barnier to the three questions posed by your listeners, particularly that one as to whether he understands why britain voted for brexit? well, he said the british people were told a pack of lies, they were told there was £350 million a week for the national health service. i said, well, 0k, do you not understand that, actually, open—door immigration was the key driver that pushed turnout up on the day of the referendum? pushed turnout up on the day of the referendum ? the pushed turnout up on the day of the referendum? the answer, very clearly, was no. he looked at me with some degree in convention. did you talk to him about the no deal scenario? i did. said, look, when it comes to it, you sell us a lot more wine, motorcars, cheese and chocolate and we sell to you. there is an annual deficit that averages about 80 billion every single year. isaid, you know, if about 80 billion every single year. i said, you kno

uk really is in its weakest position. position. to argue against what barnier and the eu are postittingchanges. adjust to one set of changes. longer have any vote, any say, any place at the table. place at the table. acknowledged but even david davis doesn't seem ready to accept. willjust leave, let's tear up the agreements and go, will win the day? agreements and go, will win the day? the finish line to sufficient progress. progress. was no real solution on ireland, for example. example. and catastrophe that might follow if there is a disorderly exit. there is a disorderly exit. and the slim majority she controls becomes more evident. becomes more evident. ironically that may be some advantage that the uk has. advantage that the uk has. david, thank you very much. thank you very much. we will let you get back to filing for the website. expressed reservations about donald trump's behaviour. told bbc news the president was a "work in progress". to blackpool later this year. he's been speaking to our religion editor martin bashir. i donald trump do solemnly swear... billy graham, led the

that's the model proposed by michel barnier, the chief negotiator of the european union.avis saying existing free trade agreements with the eu provide the floor, not the ceiling for their future planned agreement. akiko, this is some interesting developments in terms of david davis' position on some of this stuff. he says this is not a deal breaker. we have heard from michel barnier he wants the transition period to go no later than a year and a half after the formal end of british membership in the european union so the idea they'll try to restrict that transition period is something british business don't want to happen something that david davis does not see as likely. >> yeah. what's interesting, and what strikes me about that, there's still perhaps maybe a little clarity on the timeline here, but no real clarity on the specifics of that. that's been weighing on some business leaders we've been speaking with in davos we had a chance to speak with inga biel from lloyds this morning, she said we're not in position here to make certain what the presence for lloyds will b

. >> michel barnier insisted that british financial firms will not receive general passporting rights to do business in the single european market after brexit now he is conceding some could be treated equivalent to the eu after they leave next year barnier reiterate the once more that any free trade agreement struck between the two sides would not carry all the benefits of remaining in the customs union. >> translator: let me say this clearly. there is no revenge, no punishment you'll never see in my behavior any kind of punishment or revenge feeling, but only the mere fact that we want to stay in control of our rules and control how to implement them. as the united kingdom wants to retain its autonomous decisions, it has to respect ours >> barnier's comments come as phillip hammond and david davis travel to germany to secure a brexit deal. ahead of the trip the two ministers wrote a joint op-ed there a german newspaper they acknowledged barnier's stipulation about losing some benefits of eu membership but appealed to business leaders to embrace the most ambitious economic partnershi

on monday, and he is now convinced that michel barnier will not "give us a good deal". he made earlier. there has been a backlash for nigel farage, the man getting that referendum and who has long advocated the uk's departure from the eu, suggesting that he welcomed a second referendum. a lot of leading brexiteers have said that is the wrong thing to do, even members of ukip, of which nigel farage the former leader is still a member of, they say that is not part of the policy. on his radio programme tonight, he has said that he does not want there to be a second referendum but after his meeting with michel barnier, as you say, he came away thinking that uk wasn't going to get a good deal and in that eventuality he thought the british parliament would say rather than walk away from the eu that there should be a second vote. he suggests that leavers, those who want the uk to depart from the eu should not be complacent but gear up for the possibility of another referendum, he said that there could be another dramatic battle go to come. alex, talk about political odd couple

barnier said at the press conference.stice. force during this period. include new eu rules entering into force. force. interests, we need a mechanism to deal with that. deal with that. guidelines say, pretty much, you got to take it on the chin. to take it on the chin. saw a potential conflict. potential conflict. talk about phases, does that mean phase one is sorted? , no, it is not. border, we will hear a lot more about that as the year goes on. about that as the year goes on. quo transition really did mean the status quo. status quo. —— the eu thought it had this agreement. this agreement. have to be cream, the same thing goes through. goes through. influence, in other words, voting rights. rights. about what of role britain will play, what can we say today? play, what can we say today? european union, we are living clearly into any relationship. clearly into any relationship. and pastors meant over them, which is what is going to happen. is what is going to happen. institutions or participate in any of the decision—ma

barnier! you now play for arsenal!rifying its position on a range of issues. but by the end of august, the eu seemed to suggest it wasn't enough. to be honest, i'm concerned. time passes quickly. with the clock ticking, theresa may made another speech, this time in florence. she said there should be a transition period of about two years after brexit and that britain was prepared to pay a financial settlement. clearly people, businesses and public services should only have to plan for one set of changes in the relationship between the uk and eu. the uk will honour commitments we have made during the period of our membership. let us be creative as well as practical in designing an ambitious economic partnership that respects the freedoms and principles of the eu and the wishes of the british people. a month later, another dinner, another kiss with jean—claude juncker. and another german newspaper report. this time it said the pm had "begged for help" when they met, and she seemed tired and politically weak. he denied th

well, the barnier—davis talks are in abeyance.right now, in order to avoid a cliff edge, the uk falling out of the eu in march 2019, without a deal, they have to agree a transition phase. and they aim to do it very quickly, over the next few weeks. it's urgent and it is a high priority on the agenda. and we're hoping that that's going to be negotiated in the next couple of months. it's not entirely straightforward. i think we understand that the terms on offer are... it will be basically a continuation of the status quo. although, of course, the uk would have left the eu, and therefore won't have a vote or seat at the table in future decisions. to avoid the fabled cliff edge and secure a transition, theresa may's florence speech already conceded many principles. her brexiteer mps may not like it, but the extension of current eu rules, ongoing budget contributions and loss of voting rights were all signalled back in november. now eu states also seem to be moving, yielding some important ground on the future trading relationship. mi

prime minister theresa may believes michel barnier is bluffing.ays there will be no special post rex a deal for financial services. they think barnier is faking about rolling out an agreement that will let banks move freely across the you -- the e.u. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am taylor riggs. tom: we are going to do a brexit update later in the hour. i need to get caught up on the barnier battle in europe. francine has been watching that. futures up four. dow futures up 79, putting them at 24,987. huge emotional landmark. curve flattening to near record flatness, and the huge trend we have seen through late 2017, the euro does not tell me the story. oil is elevated, and there is the vix. we were at a 10 level just a few days ago. earlier, thatr that is an extraordinary level. anything below 8.6 is a huge deal. the two-year yield elevated up two basis points. i threw in bitcoin just aggravate francine. francine: thanks, it worked. what about the new year's resolution

cooking a deal is the job of michel barnier. we have a very dedicated organisation.tart a negotiation country by country. it would be ridiculous. and the best way to dismantle the whole eu. i think what we have to do, and what we will do, is firs to take the decision in march regarding the mandate we want to give to michel barnier for the negotiations. after that, he will have to negotiate, with your negotiator. and they will decide, and it depends on the proposals made by the uk, but, for sure, full access for financial services to the single market is not feasible, given the functioning of the single market. so by definition it's not a full access. so in concrete terms some form of passporting deal is off the table in these negotiations, as far as you're concerned? i'm not the one to negotiate, and i don't want to close doors, but it depends on what you're ready to put on the table, in terms of preconditions. if you respect the precondition to get access to the single market, it's feasible. but there is no cherry picking with the single market. i mean, if i had to

the negotiations will be led by michel barnier, but it does mean that the access that it will allow will be equivalent to access as if you are a memberof the equivalent to access as if you are a member of the single market. you can choose between norway or being the equivalent of a current member of the european union. then full access. what i set out in the lancaster house speech and indeed in the florence speech was our desire to develop, to negotiate a comprehensive free trade agreement with the eu 27 for a deep and special partnership in the future. we recognise that as we're leaving the european union we will no longer be full members of the single market. we recognise that. there will be a different relationship. in future. a different set of balance of rights and responsibilities and we've been very clear about that. i believe that it is actually in the interests, not just of the believe that it is actually in the interests, notjust of the united kingdom, but also of the european union, as it goes forward, to continue to have a good economic relationship and partnership with the u

barnier gave some hope yesterday. we might get equivalents but probably not as much as the u.k.rtainly the information that we had from here in berlin didn't go into that kind of level of detail. appreciate thed german government -- the parties in the german government are busy trying to form a new government but what was very clear was that berlin is backing michel barnier quite strongly. while they are looking to try and guide his approach on brexit ahead of this crucial eu summit of leaders in march there behind them as are the french. that is quite strong support. is this all games ahead of the serious stuff when the trade talks begin? that seems to be the belief here in london. thatrtainly we have seen the german government in particular has been pretty consistent all the way along and have not really been playing games at all. . they are quite literal when it comes to these kinds of negotiations. not said i think there is doubt that there has to be some kind of compromise all around. we have heard from other governments, i was in rome earlier this week and they were holdin

and she has very little time because mr michel barnier is have —— has had christmas with his family andll this as well as brexit. downing street has said that all of the speculation in the sunday papers is just speculation. they are saying it is all guesswork but we are expecting a reshuffle all guesswork but we are expecting a res huffle o n all guesswork but we are expecting a reshuffle on monday and tuesday. there has to be, because there is a va ca ncy there has to be, because there is a vacancy created by damian green moving on. you have to get that in place. there have been a lot of complaints from civil servants and other parts of the non—brexit policies that brexit has taken over. maybe brexit has to? it is the most scary thing we are doing. and you will work the —— you are working with europe with europe who have never done before. the daily mail, pm's never done before. the daily mail, pm‘s discussed at sordid tweets. toby young has got a position on the new office for students watchdog. it shows how social media can haunt you for years. it is the advice given to university st

the backdrop with brexit discussions and the push back that we've heard recently from the likes of barnieri find the timing strange. >> i think you have to remember, fundamentally britain has always said brexit will have no impact on the security cooperation with the rest of the european union i'm sure that's something that theresa may will stress to macron when they meet later this week >> you will be covering that story. >> i will be out in calais for those meetings >> from politics to gender equality citi group is raising pay for women and minorities to close pay gaps in the u.s., uk and germany. the bank said the move follows a compensation survey which found on average women and minorities are paid 99% of what men and non-minorities are paid. citi will report fourth quarter results today. analysts expect earnings of $1.19 per share on revenue of just over $17 billion. the numbers could be overshadowed by the impact of the tax overhaul which citi last month warned would result in a 20 billion one-time charge >>> kpmg could be in the cross hairs of an investigation after giving carillio

the eu's chief negotiator, michel barnier, has been clear britain cannot cherry—pick which benefits ofmembership to keep, and there will be no special deal for its financial sector. it is a concern echoed by the head of the german—british chamber of commerce, who spoke to the bbc late on wednesday. i think they're trying to get the best deal for britain. whether they will succeed remains to be seen, because from the german government's point of view, and also from the european union's point of view, yes, of course individual deals might help individual businesses. but for germany and the eu, it's also important that the single market remains intact, and therefore it will be difficult to negotiate bespoke deals. as we recall, just a few months ago, everyone was talking about "no deal is better than a bad deal," and now they're trying to do individual deals. now they're trying to convince german politicians and the business world that might be an option. with me is arnab das, from invesco asset management. good morning. so where are you on this story? are you confident philip hammond and

he made it clear to the prime minister that it would not be as repeating as michel barnier, the eu negotiatorsaid, about cherry—picking eu negotiators said, about cherry— picking and eu negotiators said, about cherry—picking and bespoke deals. he was obviously making a big deal of rolling out the red carpet to british bankers, desperate to have them there and pinch them from us. you can't blame him. not desperate. he referred to it. he said that this is healthy competition. that is, that our two countries have, and emphasised, as did theresa may, what the countries have in common, it was notjust defence and security, it was about science, it was about research, medical research and new advances there. and a young generation getting to know each other, so economy there as well. but an important sentence that came out very much in the press conference in response to questions was the french president and i had not heard the line in that way before saying: i am not there to reward or to punish, i'm there, obviously, to defend french interests. it is very much as pa rt french interests. it is very

he said i am not doing the negotiating, it is up to michel barnier, but he is clearly going to be a figurerkel are absolutely pivotal is that this is where the language of the brexit debate gets confusing, he says bespoke deal but it doesn't mean this bespoke deal that a lot of people who support brexit are hoping for which is a very, a lot of services involved and special carveouts for the u. k.‘s. services involved and special carveouts for the u.k.'s. it could mean anything from what i have described to a very limited deal which is what canada has, certainly far below what brexiteers and brexit ministers are roping. in —— are hoping for. he has been very clear about this, which again is refreshing. if you are not the eu you cannot be in the single market in the way that you previously were. you don't get the benefits of the single market unless you are in the single market unless you are in the single market. that is a pretty sobering message for people hoping for a very good deal of getting the same benefits. all down to negotiation. as far as i am concerned, a bespoke deal doesn't nee

well, theresa may does not have a lot of time, because mr barnier is probably celebrating christmas andeely available for brexit talks. so you have to get your reshuffle in fast. a p pa re ntly have to get your reshuffle in fast. apparently they did research in the set one of the reasons the tories did not do well at the election was that people were very unhappy with the schooling of their children, which i think there is a feeling that schooling, we never come out anywhere near the top of the list is of children who have got mathematical knowledge or reading and writing skills, all the rest of it -- and writing skills, all the rest of it —— lists. so we are going to change all the people round and have another go. well, that would mean, then, as it says in the sunday telegraph, that greening fights for job as theresa may wield the axe but some teaching unions have felt she understood them a great deal more, which of course may be problematic to the conservatives. indeed, and this is interesting, because we all thought it was the nhs which was in crisis. when you read these reports, it

in december when the brexit secretary met michel barnier, they hugged.ure to encourage home ownership and improve education and health and leave this country and a better place than when we found out.” leave this country and a better place than when we found out. i have to say he talks about passionate embraces, i do not think he has had the case that he once asked for. —— the case that he once asked for. —— the kiss. we are determined to deliver a britain fit for the future and that means we need to get brexit right but we need to do a lot more. we are committed to building the homes this country needs, that is why we have put £15 billion of new financial support over the next five yea rs, financial support over the next five years, why we have scrap stamp duty for 80% of first—time buyers. we are also improving school standards, 1.9 million more children and good on outstanding skills today and we are protecting our natural environment. we are building a britain that can look to the future with optimism and hope. could i wish you and all the house and

we've heard michel barnier saying that financial services won't be included in a free trade agreementrning. what are you going to do to change the eu's mind? translation: first of all, please allow me to be very clear. i'm here neither to punish or compliment. i'm here to make sure to neither to punish nor reward. i want to make sure that the single market is preserved because that's very much the heart of the european union. so the heart of the european union. so the choice is on the british side, not on my side. they can have the no different access to the financial services, if you want access to the single market, including the financial services, be my guest. but it means that you need to contribute to the budget and acknowledge the

nigel farage is actually talking to michel barnier.the same blue as the u.s., tom reed we will have to dig deeper. -- u.s., tom. we will have to dig deeper. tim: he is representing himself and has a radio show these days. he's interested creating drama. tom: wait a minute. you know what that will do to people. when you get your own radio show, that's a bad thing, mr. ross. tim: i love radio. particularly bloomberg radio. 25thit's our 20th -- anniversary. francine: we might send tom to figure out if he can talk to michelle barnier. on a serious point, if you look at the serious players, who does theresa may have to fear within her own cabinet? is boris johnson a viable alternative or is there no one who will challenge her at this point? rupert: i think theresa may will survive the year and i think there will be an agreement at the end of this year. i think the policy to reconcile the hammond vision and the boris incrementally is edging away from europe over time once the benefits of trade agreements are bankable. within that, there's a

barnier?here and give him cheddar cheese and a whatever.sh wine, or what do you need to hear from the eu? steven: i am hoping to hear from mr. barnier that he understands firstly that we are working towards leaving the european union and there will be no turning back from those on the remainers. secondly, that he is open-minded to include services and particularly financial services within a trade deal in with the government to ensure that happens. but also that he fundamentally understands there is a zero-sum game if we cannot achieve that by moving towards the no deal scenario. we are not frightened of medicine oriole. we will not allow our freshly won freedoms to be harmed by a bad deal, but i hope yohe realizes a no deal will incur huge penalties and costs for europe, which will damage them. we must avoid that. francine: with the success of movie, ih helill want to ensure trade is protected on churchill champagne. francine: i am sure when we speak to some government ministers in davos, we

yvonne: i guess the progress was --was involving the barnier bombardier.into the decision-making right now? michael: it's interesting to see how the ambassador president trump view that, is it a loss for the united states that hurts our competitive position in the world or did boeing bring a bad case? analysts tend to think the latter is true, boeing did not sell the same size jet as bamb ardier. -- bomb if the boeing does not appeal, it probably won't have a major impact on these talks but he has made -- but it has made canadians happy. yvonne: thank you, mike mckee there joining us from montreal. you can get a round up of the stories you need to know to get your day going in this edition youraybreak," it is on number terminal and anywhere app. you can customize your settings so you can look at the industry's and assets you care about. this is bloomberg. ♪ ♪ this is "daybreak: asia." yvonne: a quick check on the latest business flash headlines. the sunday telegraph says softbank is close to selecting citigroup and modelo as he -- as key advisors for its m

a revival of orders will help them barnier add momentum to its comeback.st powerful union -- wages and flexible hours with a strike that threatens to hit major companies. talks with ig missile that represents 3.9 million workers in europe's largest economy broke off without a deal on saturday. the union, which has rallied thousands of people across germany for one hour protests says it plans a daylong walkouts that would be much more disruptive. that's your bloomberg business flash. anna: thank you very much. they meet in brussels to discuss their position on a transition could, but theresa may face her biggest challenges on the home market. critics inside her party are calling her to show more leadership. joining us to talk the financial of --es, the ceo miles, welcome to the program. today, we get the eu giving marching orders to michel barnier. his negotiating brief. this is what you want from the transition. what is your message when it comes to transitions? miles: ultimately, you need it as soon as possible. the greater the clarity, the sooner the cla

theresa may believes michel barnier a is bluffing.he chief brexit negotiator is faking a hard-line stance in rolling out a deal that would allow banks to continue operating freely across the block. that comes as the u.k. negotiates its post-brexit ties with the eu. cdu and sps -- spd have commented. merkel has said she wants explore terry talks to be by the end of this month and negotiations to take place after that. thegems were on show at palace and a gang seized a jeweled brush and a pair of earrings. the collection is a renowned exhibition of indian jewelry and precious stones. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. guy: thank you. let's talk about what happened yesterday with fed minutes. the fomc remains unconcerned about continuing flattening of the yield curve. the spread has narrowed to 50 basis points. at the lowest since october. let's talk about central banks and get an idea of what 2018 will bring. income. a fixed let me start with you.

cooking a deal is the job of michel barnier. we have a very dedicated organisation.ake the decision in march regarding the mandate we want to give to michel barnier to negotiate. after which, he will have to negotiate with your negotiator. and they will decide, and it depends on they will decide, and it depends on the proposals made by the uk, but for sure, full access for financial services to the single market is not feasible given the functioning of the single market so by definition, it's not full access. so in concrete terms, some form of passporting deal is off the table in these negotiations as for as you are concerned? i'm not the one to negotiate and i don't want to make those calls but it depends on what you are ready to put on the table in terms of preconditions. if you respect the preconditions to get access to the single market, it is visible but... if i have two wrapped up visible but... if i have two wrapped up the full philosophy, no... of the single market because it is not feasible because otherwise, that is the dismantling of the single market and

is lead negotiator michel barnier says the twenty the twenty seven other members must unanimously approved any such agreements u.k. prime minister theresa may faces rising discord within her conservative party as pro and anti breck's that factions jostle for influence and rival rival maneuvers that to succeed may as the leader of. the federal reserve's open market committee begins two days of meetings today it's the last f.o. and. the meeting run by outgoing chair janet yellen who is completing her four year term sell the reserve governor jay powell was selected by president trump to replace yellen and the u.s. senate has confirmed him to be the new chair there are a lot of questions about what it will take not only now but this year and going forward by the federal reserve regard to the economy plus other central barks are charting their own course while they stick to their plans admits some signs that an economic correction is on the horizon we'll get into it all the more with danielle de martino booth as the f o m c wraps up. and it has been just over a year into the trumpet ministratio

it is key to the british economy, but then michel barnier, who is the face and voice of the 27 eu membersaid that the city of london and the banks operating there will lose their passporting rights. that hasn't changed, so now it is a question for the british government and therefore the tory party to come together and decide what they want in order to have just one line. they go to brussels and say, ok, this is the kind of agreement. it is a total mess, isn't it? the new thing is that we now seem to be willing to pay to secure additional rights for our financial services, so we would have to pay a financial penalty. whether any of this can be sold in the british parliament or to the british people, i have no idea. but it is a fantastic mess. what is interesting to me is that, day by day, reality begins to intrude into these negotiations. so, the french are only too keen to take over our financial services. i can see mr macron rubbing his hands at this very moment. the fact is, this country, it's not mad, in my view, never has been and won't be now, and the conservative party, in theory,

mr barnier said the uk would have to respect rulings by the european court ofjustice and would not beew trade deals with other countries. and there are more possible flash points. duration — the eu says the transition should last a total of 21 months. the uk may want more time. freedom of movement — brussels insists eu citizens have the right to move to the uk and apply for permanent residency throughout the transition period. 0bserver status — the uk will have to pay into the eu budget during transition and observe all eu regulations, though it will no longer be a decision maker. in all the fraught brexit negotiations, this was supposed to be the easy part. after all, the uk requested a transition period from the eu. so the warning here now is if talks get too tricky over transition, that could eat into the precious time left under eu law to discuss eu—uk future trade relations before the uk leaves the bloc in march 2019. the message from here once again is the ball is in the uk's court. katya adler, bbc news, brussels. stay with us on bbc news. still to come: the state of the union'

party's position, which is very divided on this particular issue, now we have the eu telling michel barnierir position is in what they will negotiate on. it is a negotiation. nobody goes into a negotiation knowing what the end will be. they knowing what the end will be. they know what they might want out of it. i think that is perhaps theresa may's problem here. there is never to cliett correction from her as to what she wants in the end. investors are desperate to know about that. -- clear direction. business bosses have different ways depending on what they do and how they operate in europe and elsewhere. until they know what the terms are and how this transition phase will work on what they can and cannot do during the transition phase, it is hard to know what to do. and very costly. they have factored it into semi— deals with their pricing of things. if that changes in any way the uncertainty will lead to cost lyness and a lack of investment. we have seen global growth figure suddenly investing —— italy to expense. it is a very important day in some respects. it is quite interesting. la

to negotiate a pact with third parties during the transition but the a use lead negotiator michel barnier says the twenty the twenty seven other members must unanimously approved any such agreements u.k. prime minister theresa may faces rising discord within her conservative party as pro and anti bracks that factions jostle for influence and rival rival maneuvers that to succeed may as the leader of. the federal reserve's open market committee begins two days of meetings today it's the last f.o. and. the meeting run by outgoing chair janet yellen who is completing her four year term federal reserve governor jay powell was selected by president trump to replace yellen and the u.s. senate has confirmed him to be the new chair there are a lot of questions about what it will take not only now but this year and going forward by the federal reserve with regard to the economy plus other central parts are charting their own course while they stick to their plans admits some signs that an economic correction is on the horizon we'll get into it all to morrow with danielle de martino booth at the f

i could turn around to michel barnier and say, 0k, around to michel barnier and say, ok, i will pay your events put—mac thing about this is that we are a fantastic country with a proud future as well asa country with a proud future as well as a proud past. i don't think we will be paying. some banks have previously said, we may have to look at relocating some of our staff and services into europe if they can't be any special arrangement. mr davies's response seems to be, there is no need to panic because european countries need london, need the city, so they won't want to damage it. another interesting thing in the hearing was the hard time mr davies got from jacob rees mogg over the fa ct got from jacob rees mogg over the fact that during this transition period, this two—year transition period, this two—year transition period, nothing much will change, including the fact that we will continue to take rulings from the european court of justice. jacob rees mogg said that leaves us like a vassal state. you get a sense that there real are tensions on the tory side about this transition pha

and theresa may believes michel barnier a is bluffing. she does not believe the eu's chief negotiator when he says there will be no special deal forexit settling. this wiki banks operating freely across the eu. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm emma chandra, this is bloomberg. alex? alix: it is time for our daybreak first take, where we discuss the top three stories of the morning. first is this monster global equities rally that we have been seeing, all of this synchronized global growth moving out of different fronts. and the chip problems at intel, what do you need to do to secure your phone? and we know it is called, but what about flight cancellations, train issues, and commodity prices? joining us now are carey price and lisa abramowicz. we will start with the global growth rally, but to me the highlight was hungry, selling , sellingebt -- hungary 10-year debt under 2%. it shows the risk on feel that we are seeing. crystallizes the whole story. i love that

when they say there will be no special post-brexit deal for financial services and they think that barniers faking about what will allow banks to keep operating freely across the eu. powered by 2700 journalists and analysts in more than 120 countries. i'm emma chandra. coming up, a new twist in the very public break between president trump and steve bannon. responses, rebukes, what it means for the gop and potentially markets. next. this is bloomberg. this is bloomberg. ♪ is bloomberg. ♪ mark: live from london, i'm mark barton. york, i'md from new vonnie quinn. another public twist in the very public rate between donald trump and mark bennett -- steve bannon. for cease and has been sent to the publish ller of "fire and fury. -- publisher of "fire and. ." josh, also the author of a book about steve bannon, the devil's ."rgain thanks for joining. first off, it's not clear if this season and desist letter will result in the book not being published later in the month. >> it's hard for me to imagine that would happen. the book comes out next week and there are already copies at booksellers. it

status as europe's leading financial center that comes after the eu's chief brexit negotiator, michel barnier, warned there would be no special day for the city. >>> a report by recruiting firm morgan mckinley said brexit is to blame for a 37% drop in the number of new jobs available in london's financial sector. findings show the number of vacancies dropped by 1800 in december, compared to the same period last year the report says uncertainty over the status after brexit has left many city firms reluctant to hire >>> on to germany. the spd leader, martin schulz, says there are sheeveral hurdles to clear before forming a grand coalition with the cdu he said his party will take all time it needs. merkel appeared to back the views saying she sees a number of obstacles both parties will need to decide by today whether to move on to formal negotiations on establishing a new government. >>> in the u.s., a federal judge is supporting the trump administration's efforts to take control of the key financial regulator. the court has denied a request for an injunction that would prevent trump administra

why did michel barnier come out with that our heart is open?sic. but what he said was music to the ears of a small number of remain supporters who are seeking to reverse brexit. what they need is brussels to say, we would like to have you back and the reason why they need that is by the time of the autumn when we will have this deal, they want the british people to see two options — the new deal or the existing membership and they're talking about ways of defeating brexit. is this going to happen? i was speaking to a member of the cabinet who supported remain, who said you couldn't see it happening unless public opinion shifted dramatically. 60—40 in favour of remain, it not really shifting. one of the most most vocal supporters of brexit has been the tory backbencher jacob rees mogg. he was rewarded for his work in this area today by being appointed chairman of the party's influential european research group — a sort of internal lobbying grouping which works to push for a hard brexit. i spoke to him earlier and i put it to him that despite pre

they do not want the global financial systemic risk as the -- barnier says no to passporting.the landscape of financial services? mike: we had to understand that everyone around the world is frustrated and does not understand why we decided to leave the european union. u.k. is still important, a country of 65 million people. banking is extremely important. the wholesale market is extremely important. many across the european union sensiblee to see some resolutions to these issues. this is not just a question, if handled badly for negative implications, there will be costs whatever happens, but there are negative implications for the european union and the world as a whole. is it a hollow threat that there is a block to the deal? mike: no. there are still 400 40 million people without us. economies are growing. they have the ability to create some of the financial structures need, but it would be a loss to not retain the skills of london. most people agree we will retain an important financial service in need, but it would be a london, the question is what will its role be? it

the eu's chief negotiator, michel barnier, outlined the proposal >> as part of the transition, the uk will be bound by the obligations stemming from all exiting eu international agreements for instance, for trade and aviation this is crucial for the good functioning of the single market and the customs union. we can agree on this in article 50 agreement between the eu and the uk but we cannot ensure that the uk keeps the benefits for this international agreement our partners around the world may have their own views on this >>> in italy the five star movement announced its list of candidates for the general elections. the party's mainstream rivals have been accusing it of inexperience ahead of that ballot in early march. according to latest poll, the five star movement is set to win the most votes as a single party but no one party is expected to win a majority and the center-right coalition headed by former prime minister silvio berlusconi looks to win the most votes in aggregate. i'm happy to say that steve sedgwick joins us from florence. how does italy's current economic situation

all the 237 memb7 members of thr doing that through michel barnier, the brexit negotiator if it's a good rapport between the two leaders, that can only help it will encourage the french to look for ways of being constructive in the brexit negotiations, and avoiding the kind of train wreck that is -- that would be damaging to both countries. >> just on the final point, mr. macron clearly persuaded mrs. may to send armed forces to africa i wonder what is in it for the uk if it's a quid pro quo, what are the uk getting out of that >> it's more than us doing something for the french we have common interests in africa there are islamist tourists there, that can be a threat to the uk and france. we had terrorist attacks if britain is going to be a useful, relevant partner to france, it's good we're helping them in an area of high priority to them. equally the french will be sending more troops, part of the nato operation in eastern europe, estonia, which britain is leading there's a bit of quid pro quo going on here, but both countries are looking to support the other. >> terms of your vast ex

over the next few months the british side want it done by the end of march that's something michel barnierd at. given the deal could last up to 2020, does that change the ability for people like liam fox to make these trade deals in that time? >> that's still an open question definitely at the moment we cannot negotiate our own trade agreements, though we can scope them out during that time it's unclear and probably up for negotiations with the eu whether we can sign on the dotted line so even considering this kind of uncertainty, what really must be put in place first and foremost is ensuring we can take advantage of the agreements during this transition period that we are currently party to and then look at potential new deals that we could sign down the line >> dr. fox talked to mps eventually he said there is no agreement with those countries to roll over the deals that they have at the moment he said there is an agreement on process. is that good enough for your members? >> not at all. we need more clarity we need to know that discussions have already progressed. it's important that t

the war has broken out again >> how bad -- how antagonistic a move is this from the eu and michel barnierlearly both sides should all -- both sides and all companies should be preparing for every eventuali eventuality, shouldn't they? >> that's the argument you've heard from brussels yesterday when they were forced to make a comment. they said, look, you have the uk preparing for a no-deal scenario, pe pthey put aside 3 billion pounds to finance studies, why shouldn't we be warning british companies they also face ramifications in europe if this happens yes, that's true, but it's a bit of strong arming tactics by brussels they're very good at this in terms of negotiations. so it is trying to sort of get british industry to put pressure on the british government to be more accommodating in the negotiations so, yes, it is indeed exactly what i would expect the commission to be doing, but it's hard-ball tactics. >> in terms of the strength of the government right now in the uk, clearly theresa may ended on a high note, some of the positive developments in getting the eu negotiations taken a

michelle barnier made that clear in a conference with eu ministers today. also defended the plan to have a brexit deal finalized by october. this is a major historic treaty, and it may take time for member state parliaments. it might take time for the bishop parliament -- ernest .

michel barnier will say nothing is agreed until everything is agreed, but we can talk about transitionwill not sign it. the one way i think about transition is it stops investment falling sharply. if we do not have a transition movement towards one in q1, firms will pare back their investment in the u.k. and increase it overseas. if we get movement towards a transition, we can continue along the tepid profile the u.k. has had. we avoid a downturn, rather than creating conditions for an upturn. ultimately, even with a two-year transition, what do you tell businesses? you say, at best i will give you two years visibility here? for business, how willing will they be to make investments in the u.k. with that sort of visibility? transitionnything, creates a floor from an economic perspective. , which inflation mystery we don't suffer from in this economy, we've got inflation, the wrong kind of inflation many people will say. you say wage growth is not going to accelerate in 2018. is that because we don't have a strong and robust economy to give the employee that ability to command higher wa

barnier talkchel about the u.k.ou're at a panel with me and francine and davos. and then i turn to you and say give us a primer on soft brexit versus hard brexit. what's the key distinction? i'm going to say there is a soft brexit, a hard brexit and a cliff edge brexit. the u.k. somehow remains in the single market. it is sort of the norway model. it is the idea the u.k. continues to follow automatically regulations set in brussels. the hard is brexit leaves the single market and has to obey those rules. it leaves the customs union. it will have a tariff barrier potentially with its trade. and the cliff edge exit is you leave with no deal and you drop straight to a wtf status without having worked out any deal. personally i think we are heading for hard. if you look at the politics of brexit and the negotiations are you starting to model a shift under jeremy corbyn? >> i think the hard brexit is the government's vision. and i think the december suggests thatade vision is going to be very difficult to realize which m