this allows them to move on to formal coalition talks a coalition paper says the cdu and spd want totrengthen the eurozone by partnering with france it says germany is prepared to boost contribution to the eu budget and germany's domestic budget will be balanced without new debt we've seen quite the reaction in euro/dollar. we had a bounce in the currency pair following on from the hawkish ecb minutes. you can see again euro/dollar is having a strong day today, up 0.7% in trading. breaking through the 1.21 mark for the first time in a couple of years now, let's get out to annette in frankfurt. what can you tell us about the so-called break through we are just reading about in the talks? >> actually, if you look into the details of that break through, when it comes to the talks in berlin, it's a clear win for angela merkel. there's no spd topic which was pushed through against the cdu martin schulz's spd wanted higher taxes, more refugees into germany and a commitment to a united states of europe. nothing of that is in that blueprint which now serves as the basis for the coalition tal

>> i think for the cdu, what they're going to try do do, they need to be showing to their banks thathey're doing something about immigration. interestingly, it looks like immigration, conversely, this issue that has dominated politics, of the last six months, a year, two years, has dominated these coalition negotiation talks, and it's the elephant in the room the whole time actually may not be such a high point on the agenda within a few years. >> thank you so much for your comments that's george dyson, he's an analyst for germany at control risks. >>> coming up on the show. heavy snow disrupt operations. president trump will actually join them at davos >>> welcome back to "street signs. a two-day terror attack over the weekend in a hotel in the afghan capital of kabul has left more than 30 people dead. officials say that number could rise as security forces continue to sweep through the damaged intercontinental hotel looking for survivors. all five attackers were killed when security forces stormed the building after a 12-hour siege the taliban claimed responsibility having mounted

and the spd blamed having been in the grand coalition with the cdu for their poor showing.der said i don't want to do with any more coalitions so he has almost been dragged kicking and screaming into this position. so as ben said, the next thing is to have the detailed coalition arrangements decided, then it has to go the membership, that will be march, which is six months after the election, what a mess, and the membership may throw it out. merkel looks an incredibly weakened leader, interestingly enough, because of her weakness macron has managed to come in and look as though he is the golden boy and almost the leader of the european union. but it has certainly helped france that jeremy are so certainly helped france that jeremy are so weak. when we had a coalition here in 2010 we were frustrated it took ten days to sort it out. this is incredible, such a powerful country can be without a government. the germans are a lot more used to cogses, the nature of their constitution and political system. this is abnormally long, even by german standards. and it does, it is, it is

analyst: i think both sides, the cdu and csu, know exactly where their differences are.re is a certain sense of satisfaction in the csu that the german chancellor has departed over the past two years from what became known as her open arms policy towards migrants. we have seen a whole succession of tightening of the laws. of course, nowhere near the approach that hungary is taking, which is shut down its borders, and has refused despite a european court order to take in its share of migrants. basically, that kind of solidarity in europe simply is not working. it definitely is not working with the eastern states. and what the csu sees as a potential success is that they seem to have extracted from victor orban that he might help humanitarian efforts in regions like syria, to help honor humanitarian levels. this is not making it easy in berlin right now. anchor: in the report, angela merkel's perspective coalition partners, the spd, do not like this. tell us more about that reaction. analyst: this is kind of interesting. we did hear the csu basically formulate what they ex

us is willem marx from london with more >> so, essentially what's happened here is the spd and the cduave agreed that there will be a coalition they had a media blackout for the last five days over these preliminary talks. we're getting a slew of headlines now coming out of those discussions. those include a lot of the spd wish list items they have been pushing for. angela merkel's party and her sister party, the csu, agreeing to those terms key things like switching germany's energy sources to 6 5% renewables by 2030 fresh tax relief they will end arms exports to countries involved in the yemen conflict primarily targeting saudi arabia there's going to be a ban on genetically modified plants. this is one of the real big sticking points, refugee numbers coming into the germany. the spd wanted to leave the open door policy, by they are now agreeing to a limit of 180,000 to 220,000 refugees. the big milestone is the 21st of january when martin shuchulz wil be trying to get approval from his members to pursue formal coalition talks with merkel. >> what do we expect the position to be betw

tomorrow, within the cdu, we will work together, and then quickly enter into joint discussion with the today's decision of the spd allows. jenny hill in berlin says talks to form a government could begin straightaway. his view is that if they can pull this off, if they go into government, in his view it is the responsible thing to do to try and form a government, but that it is possible in his view to renew the party within that coalition. but their task is going to be huge, they are very low in the polls and are going to have to distinguish themselves from angela merkel‘s conservatives if they are going to try and rebuild their electorate, many of whom disappeared off the boat afd, the far right party. there isa boat afd, the far right party. there is a lot of work to be done in years going to have to do something to unite the party. —— vote. worth just pointing out that when it comes to these talks, which as i say will take place later this week, even when the two sides can get some kind of deal drafted, the party base, all 440,000 members of the spd will have to approve it via posta

the cdu already cleared the way for coalition talks last week after concluding the exploratory talks,ome that the spd did so today at its congress. today, we are preparing for this coalition negotiation. tomorrow, within the cdu we will work together, and then quickly enter into joint discussion with the social democrats. that's what today's decision of the spd allows. jenny hill in berlin says that with party leader, martin schulz, convincing the conference to support the idea of a coalition, talks to form a government could begin as soon as tomorrow. his view is that if they can pull this off, if they go into government, in his view it's the responsible thing to do to try and form a government, but that it's possible, in his view, to renew the party within that coalition, but their task is going to be huge. they are very low in the polls, they will have to distinguish themselves from mrs merkel‘s conservatives if they are to try and rebuild their electorate, many of whom, of course, disappeared off to vote afd, the far right party. there is a lot of work to be done, and he's going t

cdu and sps -- spd have commented.erkel 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. bill gross is worried about the flattening curve. the fed is not. who is right? >> the field -- the yield curve -- there were 66 quarters of and theng yield curves 40 seven quarters of steepening yield curve have averaged 1.47%. it is a much better an

is the name of that coalition -- it is political slang for the grand coalition the tween spd and the cduarty. the vote was extremely close. it will be remembered as a moment in german politics. it saved germany from having to go back to the polls which would have been a disaster for the country. it is a statement on the waning popularity of angela merkel. >> how has the german press been reacting? >> they have been pretty critical -- one paper says -- the general feeling that the other party averted what could have been a disaster -- the spd .eader won but not convincingly one tabloid went further and said this is a total loss for sc career. the party leader finds himself weakened after the congress and his career as leader is uncertain. only a few days away from the games in south korea. a popstar made a visit to south korea. >> she is not just any popstar. she is the leader of the north korean spice girls. they have been dubbed that. -- she was hand-picked by president kim jong-un. they are rumored to have had an affair dating to their teens and it only broke up because kim jong-un's f

there was a statement issued by the cdu?orrespondent: the message of that statement was progress has been made clearly but we're not going to tell you on what front and what issues. the parties do not want to make a mistake and present in results until thursday and the official end of exploratory talks. there were a couple of leaks to day. the rumor that both groups had agreed on abolishing germany's goal of reducing carbon dioxide levels by 40% by 2020. we can tell you there is an effective working relationship by both parties and they are expected to come to a conclusion by thursday. both parties have been working together for the last four years efficiently. brent: thursday is the crunch day. there is a lot at stake fir te -- for the german chancellor. correspondent: everything is at stake. angela merkel will have to convince her christian demococrs to m make some compromises and moved towards the social democrats and make this grand coalition to .0. if the talks fail, the situation will be dire for her. what is left is t

they're meeting today at the cdu party headquarters. but there is a news blackout also.ly said from yesterday they were constructive, serious traux. and that's about it. we're going see by the end of the week if they have another common ground to proceed. >> so chris, what will it take to pull germany out of this political crisis? and can merkel survive it? >> well, that's the big question. can merkel survive. and she did say she wants to find common ground. she even said in her new year's eve message and said again she is optimistic they can find common ground. it is interesting, even though they were quarreling, also over immigration from both sides, the csu, the sister part of the cdu from bavaria, he made a lot of tough comments recently about immigration. even met with victor orban, the prime minister of hungary which has been very, very tough on immigration. and he said in the opening of talks yesterday, he said we must find a way to get along. because he knows that if this does not go through in this grand coalition talks, there will be either new elections. and w

it's been a long tradition with the cdu to have their social values. m lookinlooking at macron just as an investment banker does not do him justice. what we are witnessing at the moment are intelligent politicians in europe realizing the way globalization has been conducted in the past, and that the challenges of the future are such that you need to do something to ensure that you have people on board in the european union. otherwise, you will just feed populism. brent: max hoffman and simon young, thank you. here are some of the other stories making headlines around the world. a brazilian court upheld the conviction of the former president on corruption charges. the three judges confirmed the verdict in increased the sentence from nine to 12 years. supporters rallied ahead of the decision, which could see him barred from running for office again. the disgraced former u.s. gymnastics team dr. larry nassar has been sentenced to up to 175 years in prison. or than 100 women and girls, including olympic gold medalists, described decades of sexual abuse. he

the sdp is reluctant to get into bed with angela merkel‘s cdu party because the far—right would suddenly to have won the right to chair the powerful parliamentary budget committee — another illustration of the growing influence they have. earlier today, i talked to the cdu mep david mcallister, a close ally of mrs merkel and himself involved in the coalition talks. these times are challenging and i would have liked to have seen a so—called jamaica coalition be successful with our party, the liberals and the greens but it wasn't possible. and now we will continue, hopefully, the grand coalition and we need a stable government in germany, not only for national reasons but also because we have two is our responsibility for the future of element of the european union. afd will then be the official opposition and i regret that they got such a good result at the national elections but we will treat the afd according to the rules but we will also make sure that the german parliament will never be a platform for racism and extreme nationalism again. weird as the sleeve angela merkel? —— where do

and the pd -- the cdu and the spd.ood -- gibbons spring conference -- >> i went to the bundesbank conference. immigration is a key factor. if you look at the immigration numbers into the labor market from the rest of the you -- not from the africa or from the middle east, we are now up to and have 300,000 immigrants per year into our labor markets. this is very significant number of people that enter the labor market. that is what you want. you want people from countries where unemployment is higher to move to germany where there is more employment. that keeps the lid on wage growth at this stage. this is pretty distinct from the whole discussion that the politic -- the political system is now having on basically migration from outside of the eu which often is not entering the labor market, at least not in the first five to 10 years. it is a pretty different story that we are talking about. ask aboutram, let me the people involved. i heard so much on german media about marshall's. if he doesn't get this through -- abou

so tonight's meeting here at cdu headquarters with martin schulz, the spd, and the conservative leaders, is just to set the agenda, set the timetable for talks we expect will begin later this week. brent: we have heard the spd party leader martin schulz says he wants to revisit all the key issues in these formal talks which are about to begin. how much pressure does this put on these negotiations? simon: there is a lot of pressure, because we have seen such a division within the spd. so many people very unhappy about the fact that being in grand coalition is essentially seeing them loose support over the years in successive terms. but it is also -- they feel buried, the social democrat agenda. that is the danger for them. that strengthens martin schulz's hand. he can say to angela merkel, i have my people waiting at home. they are going to begin in a vote on this coalition deal, if we put one together. if there is no red meat for social democrats to get behind, there has to be something in terms of policy on the labor market, on the health care system. some of these key areas that have

she needs to come up with a solution, and all eyes really in germany are on the cdu party headquarters those negotiations have been going on throughout the night to see what they can potentially come up with this morning. what happens if they can't come up with a deal? there are a range of different scenarios. 0ne of the options is that he might say we need more time to crunch this deal together. the second option is mrs merkel might say if we can't make this coalition work, let's go back and see if we can't go back and talk to our previous coalition partners, and see if we can't get that off the ground again. there is the option of a minority government, thatis the option of a minority government, that is not something which is common in germany, it is not mrs merkel‘s third option. it is not generally speaking a popular option. so that leaves the prospect of fresh elections. again, that is not something that anyone here really wa nts. m ost something that anyone here really wants. most of the parties involved suspect that the result would be similarto suspect that the result would be

we start in berlin where coalition talks continue between chancellor angela merkel‘s cdu/csu party andmaining member states will meet to discuss the ongoing brexit negotiations. and beginning just after, israeli prime minister benjamin netanyahu will deliver his annual address to the foreign press injerusalem. now it‘s time to get all the latest from the bbc sports centre. hi, i‘m nick marshall—mccormack and with your sport briefing for wednesday where zidane wants real to be zealous in the copa del rey and stevie g sheds a tear for coutinho. zinedine zidane has some problem—solving to do at real madrid. his side face segunda division team numancia in the last 16 of the copa del rey later. real have a 3—0 lead from the first leg, and zidane is demanding a convincing victory but back in the primera division they are struggling. a 2—all draw with celta vigo at the weekend means that the spanish champions are now 16 points behind leaders barcelona. but zidane won‘t give up. translation: i know i am translation: i knowl am only temporary but i am going to work 3000% and i will give everyth

campaign, to convince members to vote against a new grand coalition with german chancellor angela merkel‘s cdueral anti—racism demonstrations planned in various cities across north america. the markets were shut in the us for that holiday. in vancouver, foreign ministers from 20 countries are gathering for a meeting hosted by canada and the united states, with talks on north korea. the countries not participating include russia and china. it's the opening day of the australian open and already there's been two major shocks. the fifth seed venus williams has been knocked by the 20 year old swiss belinda benchic. also out at in the first round is us open champion sloane stephens. she lost her seventh consecutive match in going out to chinese number two zhang shuai as she continues to struggle to recapture the form that took her to a grand slam title last year. now it's time to get the rest of the sports news. hello there. coming up in your mondays sports briefing. the show in a continues with the first night session under way shortly. manchester city are beaten domestically for the first time th

tomorrow, within the cdu, we will work together, and then quickly enter into joint discussion with the's decision of the spd allows. stay with us on bbc news. still to come: for a second day, women around the world have been on the march. in las vegas, they're protesting donald trump's presidency and trying to persuade more women to stand for office. the people of saigon have just heard that, at last, there is to be a ceasefire. the reaction of american servicemen was predictable. i'm going home. demonstrators waiting for mike getting and his rebel cricket team were attacked with tear gas and set upon by police dogs. anti—apartheid campaigners say they will carry on the protests throughout the tour. they called him the butcher of lyon. klaus altmann is being held on a fraud charge in bolivia. but the west germans want to extradite him for crimes committed in wartime france. there, he was the gestapo chief klaus barbie. millions came to bathe as close as possible to this spot, a tide of humanity that is believed by officials to have broken all records. welcome back. this is bbc news. ou

gathering of the christian social union party, which is the bavarian sister party to angela merkel‘s cduvernment. cricket and in the ashes test between australia and england in sydney, england scored 346 in their first innings after some entertaining hitting by the tailenders. in reply, australia have scored 131 for 2. now it's time to get all the latest from the bbc sports centre. hello. coming up on your friday sport briefing: we look ahead to a real heavyweight local derby as liverpool and everton face off in the english fa cup, the world's top two test match cricketing nations, india and south africa go head to head and look out for the three year old step son of a seattle seahawks nfl player who's decided his future could be in another sport. there's only one place to start and that's with the fa cup. because the third round of football's oldest competition kicks off in some style on friday night, with a merseyside derby. everton travel the very short distance to face rivals liverpool, who could involve defender virgil van dijk for the first time since his record $100 million move f

democratic party changed its mind and said it would now hold talks with chancellor merkel‘s conservative cduit could mean big changes for what is europe's largest economy. over the past two years, germany's economy has been growing consistently. rising incomes have helped to boost tax revenue, but mrs merkel‘s government has been criticised for not spending the extra money. germany remains the only country in the g7, the group of seven major economies, that earns more tax than it spends. in fact, germany has the largest budget surplus of any country in the world. the social democrats want that to change. they're pushing for a cut in taxes for low earners, and an increase in spending on schools, pensions and housing. pepijn bergsen is the germany analyst at the economist intelligence unit, which is a business advisory firm. thank you for coming in. we are expecting this coalition deal to go ahead in days, if not weeks. what is it going to mean for the german economy? more of the same, or all change? i don't think the deal will have that much impact on the german economy itself. there are a fe

as social democrats, we are happy to be able to host the cdu and csu here today, but one thing is clearough as much red politics as possible in germany. this is the longest period of coalition building germany has ever known. it's not a crisis. the economy is strong and germany's caretaker government can keep things ticking over in the short—term. but no long—term decisions can be made, whether about the future of germany or over europe. so pressure is growing on angela merkel to form a government. if talks succeed, a new administration could be in place by easter. if they fail, mrs merkel would be weakened and voters may be asked to go back to the polls. plans to create a new "northern forest" stretching across rural areas from liverpool to hull have been announced by the government. the woodland trust is running the project, which will cost £500 million over 25 years. most of the money will need to be raised by the charity. the government is providing £5.7 million to cover woodland spanning manchester, leeds and bradford. our correspondent roger harrabin has more. the bare hills of th

if the cdu wants to enter into a coalition, this is an issue that will have to be confronted.'t see this will be a big obstacle. therefore, i expect the outcome of these negotiations will be a coalition government. that will be a strong vote of approval for a united european vision that is couple mentoring to what macron set out -- complementary to what macron set out. mark: three ecb policymakers in the last 24 hours have mentioned the euro. to what extent does the stronger goalcomplicate the ecb's to get inflation towards that just below 2% level? dennis: the ecb has a big problem and it has had this problem for a while, which is that there is a conflict of objectives. it is meant to keep inflation under control so that inflationary pressures start taking off. at the same time, it is meant to make sure that financial stability is restored. when interest rate pressures are , the interest rates tend to rise. those two goals may come into conflict. whether the ecb opts for inflation fighting or financial stability is something that is a big question to be answered. at present,

social democrats we are happy to host the cdu and the csu here today but one thing is clear for the social drawing any red lines, but we want to push through as many politics as possible in germany. this is the longest period of coalition building germany has known. it is not a crisis, the economy is strong and the caretaker government can keep things ticking over but no long—term decisions can be made, whether about the future of germany or of europe. so, pressure is growing on angela merkel to form a government. if talks succeed, and new administration could be in place by easter. if they fail, angela merkel will be voters and voters might be asked to go back to the polls. a 60 year—old man in sweden has died in an explosion outside an underground station. the incident happened at the varby gard metro station in stockholm. a woman nearby was also hurt. a police spokesman said an object exploded when he picked it up. the incident is not believed to be terrorism—related. some of the uk's biggest retailers including b&q, wickes, morrisons and the co—op, have agreed to stop selling acids and

democrats agreed yesterday is that the party leadership is authorized to begin coalition talks with the cdund when this coalition agreement will be found, the party membership of the social democrats will decide on whether they want to move forward, so another potential stumbling block. it was a cliffhanger yesterday. change orat does not worried you about how this might impact german economic momentum or confidence and governance? >> it does not. the gap between the parties is narrow. they have their differences. in the domestic policy debate, there is exaggerated stress, but compared with other countries we follow around the globe, there ina huge consensus centrists germany. whatever coalition emerges and whether there will be elections between what we have is a fairly predictable policy framework. program orin this pre-coalition agreement is not revolutionary. i want to cross over to the brexit negotiations. yourds the end of 2017, were convinced this was likely to be a harder brexit than a softer brexit. issue, partlyig because it is not reversible. when emmanuel macron was shown on the

angela merkel seeing that step towards a new graham coalition between the social democrats as well as cduit will be interesting to see as those talks continue, where the dollar goes. we have been talking about the dollar potentially following -- falling over the course of next year. been astounding is the resilience, the sense of durability to the rally. largelyarkets really flagged as we got closer and closer to the deadline at the end of last week. it is worth pointing out the morning note saying, the last three shutdowns in 1995, 1996 and 2013, we thought games for the entire period for the s&p. it being thet sentiment. when itook at the setup comes to the monday morning session. new zealand with trading underway, wellington has a public holiday. stocks up by 3/10 of 1%. kiwi dollar trading at 70 to 84. -- 7284. the sydney open, we are looking up positivity if you take a look at the future session, about four about 5%. pretty light when it comes to the data calendar. keep in mind that the aussie has been pushing these highs. it was up by over 1% last week and also a sixth straight week

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 administration bug budget director from taking control of the cfpb. the deputy director there had asked the court to block mr. mulvaney while she made her attempt at controlling the agency >>> and top business leaders are urging u.s. lawmakers to pass new legislation what would protect undocumented immigrants who enter the country as children more than 100 executives from companies including facebook, apple and gm demanded that legislators maintain the deferred action for childhood arrivals program known as daca they warn that ening the program could l

where senior members of politics have said they oppose the parliament deal struck with angela merkel's cduing to convince colleagues not to approve grand coalition talks with them. leaders on both sides alreadial agreed on a blueprint, you may remember, our colleague joins us down the line from frankfurt annette, who are the leaders and how influential are they >> reporter: actually, they're quite influential, you can say it's more or less the left circle inside the social democrats who are opposing any grand coalition or also opposing the results that we have seen from last week we have for example, the leader of hesson, in frankfurt is in. opposing those results also the vice chairman of the associate democrats opposing what we have reached in berlin early on friday last week. so, there are a couple of really strong voices out there saying this is not good enough. at the same time, we, of course have others like a very prominent figure inside the social democrats who are saying all of these critics should just shut up because they have reached a good compromise with a lot of parties so,

the editorial board referring the coalition talks between the social democrats and merkel's cdu allianceave vowed silence until they reach a decision expected thursday on whether they have enough common ground to started formal coalition talks. if they fail, ms. merkel has two options a minority government or new elections and further delays that that entails. clearly everyone is hoping they reach an agreement even if they do reach that agreement, that does make the afd, the alternative for deutschland and the far right party the opposition party then. they came third with about 12% of the vote. there would be a coalition between the first and two parties it would massively increase the expo picture and wh exposure and their opinion would get more air time and what jit legitimacy in that. >> i would point out markets don't seem to be taking into account any of it. the dax up 30% now over the last one year >> very tu >>> we're approaching the top of the hour the team is gretting ready for "squawk box. good morning >> hi, how you are, wilf >> very good how about you? >> i'm good. >> how ma

he did get the delegates voting for a continued coalition talks with the cdu.f weeks they will have to go back to the party members, 400,000 of them, and ask them if they agree with any deal that has been reached. the likelihood is not sure. up next is "surveillance." this is bloomberg. ♪ we use our phones and computers the same way these days. so why do we pay to have a phone connected when we're already paying for internet? shouldn't it all just be one thing? that's why xfinity mobile comes with your internet. you can get 5 lines of talk and text included at no extra cost. so all you pay for is data. choose by the gig or unlimited. and ask how to get a $150 prepaid card when you buy a new lg x charge. it's a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com francine: foot drilling, so. the progress they are making. the divisively with the oil ministers. then, ubs shares fall with a $1.2 billion by back. we hear from the ceo of sanofi this hour. good morning and welcome to "bloomberg surveillance. live from the world econo

the article looks at within who the cdu could take over. looks at mr.nn as a potential successor. and brings up the fact that martin schulz of the spd is also under pressure this current week of crucial talks could lead to a massive change if they can't agree at coalition, you could see leaders changing, you could see fresh elections with a spate of younger leaders that we have not gotten to know yet but the best case is that they'll reach that coalition >>> my pick is in the "wall street journal," more libel law bluster it discusses president trump's tweet about looking at our libel laws and what recourse americans have when someone writes something false about them it includes a quote from brian house, he says there is no federal libel law and the president does not have the authority to change state libel laws furthermore the first amendment provides strong protections against libel liability particularly with respect to statements about public figures or matters of public concern and i just found it interesting. i know sometimes folks will say when

congregates on sunday and votes on whether or not they should proceed with the grand coalition talks with cdu a lot of focus on those talks on sunday getting into sectors, basic resources are outperforming, up 1% some of the more defensive sectors, healthcare, chemicals to the down side oil and gas are lagging a bit, that's on the back of opec expectations for lower demand next year non-opec output will increase as for the iea. telecoms lagging a bit overall in europe, specifically the last ten minutes or so has been quite positive. >>> i want to get into a bit of commentary about what we've been seeing in the u.s. of course a lot of focus there on the potential government shutdown if a stop gap spending bill doesn't get passed by the senate today but all eyes on what's going on with the ten-year u.s. treasury. it's up almost 2.64. the highest level in a couple years time the focus towards the end of 2017 was all on the front end as the fed got into their hiking cycle. the ten-year really stayed between 2.20 and 2.40 for the most part of 2017 and it seems to have broken out of that range and

a survey reports that 60% of germans say the spd should vote to start coalition talks with merkel's cdu-ledc. only 10% were undecided, meeting 30% were against it. , let me first ask you about the expectations here. we did have saxony voting putting against the coalition. but they are in eastern state that maybe is not as important as a lot of others. do you expect it to go through? >> i expected to be a very close call. four years ago they had the same procedure, asking the party base. 2/3 voted in favor. now, the spd, having lost a lot of votes in the election, i have doubt. the agreement that was reached on friday really very modest. it does not give the social democrats a lot of what they asked for. they asked for a fundamental recall of the health system. they asked for the united states of europe. matt: you are naming a couple of things that sound are most -- that sound almost impossible. do you think the paper that came out -- referring to a doctrine the came out for the preliminary agreement -- does it lay out a good plan for germany because the economy already going very well. poli

as social democrats, we are happy to be able to host the cdu and csu here today, but one thing is clear any red lines, but we want to push through as much red politics as possible in germany. this is the longest period of coalition building germany has ever known. it's not a crisis, the economy is strong and germany's caretaker government can keep things ticking over in the short—term, but no long—term decisions can be made, whether about the future of germany or over europe. so pressure is growing on angela merkel to form a government. if talks succeed, a new administration could be in place by easter. if they fail, mrs merkel would be weakened and voters may be asked to go back to the polls. police in sweden say a 60 year—old man has died in an explosion outside an underground station in stockholm. the incident happened at the varby gard metro station. a woman nearby was also hurt. according to a police spokesman, an object exploded after it was picked up. the incident is not believed to be terrorism related. president macron of france has led tributes to the 16 people who were killed

right now, the union, the cdu, and the csu block, is negotiating with the spd to create another grand. angela merkel saying it will be a tough day in decisive coalition talks, and she is going to do everything she can for the possibility of success there. she is going to work for success because she needs that much more she she would prefer -- would prefer that much more than she would a minority government or new elections, and clearly, she is going to say it is going to be a tough day because even if negotiations are easy, you want to project that they are difficult to you so you can get what you want. guy: expectation management. we are going to talk about what is happening in south africa. will south africa's president be outed by supporters? he be the next leader of the amc/? when does that take place? that conversation is coming up. this is bloomberg. ♪ matt: welcome back to the european open on bloomberg markets. we are 45 minutes into the trading day. markets, equity markets at least, have yet to find a lot of direction here, but we are the bondclearly, on market. also, lookin

cdu and thef the csu as well as the german spd are said to reach a deal.rg has confirmed that. --do know that the next date the next date that is important it january 21 in the spd. guy: but what is interesting as what we are not getting is a big reaction. big leg higher. you can see the accounts when the account came out yesterday for the ecb. sessionrading close to highs. we stated that a little bit. be a bigot seem to currency story considering the data are so strong. matt: i don't want to speculate, but you may see a bigger currency story if the talks broke down, especially if they are expected to succeed. asymmetric risk, our favorite kind. guy: i just want to get a quick comment from tim on this. what are your thoughts on german political risk? is it an asymmetric story here? why does the market -- why is the market comfortable with more coalition, more grand coalition in germany? tim: first of all, it removes the possibility of a second election. it confirms the state's crow in germany, which given the way the german economy is performing, it's prob

bloc hasrkel's cdu led said the chances of successful conclusion to their exploratory talks have improved came after a meeting yesterday in berlin. merkel wants exploratory talks to be concluded this month and further talks to take place. speaking during his new year press conference, shinzo abe raised the issue of strengthening his country's defenses amid threats from pyongyang. >> provocations from north korea put japan and the worst security situation since world war ii. we are going to secure the safety of japanese lives. we must strengthen japanese defense capabilities and would like to propose a constitution that brings hope for a new interim. have: in venice, thieves stolen precious jeeves belonging to the qatari family. jeweledeized a golden brooch and pair of earrings before blending in and escaping. it is a renowned traveling exhibition of gold and jewelry. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am nejra cehic. longine: jeremy grantham known for his bearish views, said the market's next move could take stocks