reserves to an all time high and they use this period of e.m. sort of the e.m.e years ago and increased their rates aggressively and closed the current debt massively. this time three years ago india was one of the so-called fragile five and it's not any longer. in fact the current account is pretty much in balance where it had a deficit of 35% g.d.p., it's in better condition than it was. the weakness we see at the moment is a reflection of two things. the first thing is the rate hike and the second being the dedeamortization of the rupee. what will happen is we're likely to see weak q-4 g.d.p. data and see how it comes out and may be carryover to q-1 and may have an effect to lead the r.b.i. to cut rates a bit more aggressively than people thought and consequently more rupee weakness but won't be excessive by any means. francine: you're not expecting defaults, i think but are were there antonio in lima, peru and one of the warnings for stability was the fact you could see something that was ugly because they can fund themselves [an tone joe: one of the best ex

that is away from the e.m. and back into the u.s.here any way a stronger dollar may be better for the e.m. in any way? positive iscan be what may bring this on. if the stronger dollar is brought by infrastructure spending than you might see it pick up in commodity prices. that could be good for e.m. if it is because the u.s. economy becomes more protectionist, that is not good for em. you need to see what is behind that strong dollar. joe: how challenging is it for emerging markets, people who oh who oh money in emerging markets. how much tension will there be and do they have the balances to a stain that? pablo: what is the right asset location between local currency. joe: that's a better question. pablo: i think the answer is that you have seen emerging markets getting ahead in this environment. you have seen duration affecting spreads in hard and local currencies. you need to make a call on the dollar. joe: that is what it is about remaking a call on the dollar. in thewhere are we correction and duration? we think part of the stor

is the price a weaker currency in e.m.? >> currencies and e.m.nder the rising dollar, but so has the euro and the japanese yen. tom: so you pile in? >> no, you need to have a strategic and tactical view. occasionally you get christmas presents, when the market over react to certain global events. francine: like last week. >> absolutely. it's interesting -- i have done quite a lot of analysis on this. if you have a simple rule that you are only allocated to emerging markets when the index spikes by 10 points in one month, you would have outperformed the index consistently. all asset classes since the inception of the industry. there is a tendency in the markets to overreact and oversell e.m. during periods. of risk aversion. we just had a 10 point move. francine: they get a quick question -- if trade deals are in question, 2016 feels different because he can do a lot of damage and foreign policy or trade relationships? >> he could, but all u.s. presidents enter into office with one single objective, to get a second term in order to get a second te

because the only openly gay athlete in any of those xx is currently believe publicly e.m. athlete price to make their are some that have teammates that have boyfriends the weave the public don't know or don't talk about it. so right now the only one is rodney rogers and there has only been one other in history and he never made a regular-season roster there only two openly gay men ever in only one right now. >> this is a tough question for our movement because of course, and it begins the personal journey and ends that. i want people to come out because it helps to change the conversation of america america, to be held up as the bastion of masculinity to have a game and come outt has helped to change the conversation what it is to be masculine and a gay man but the bigger reasons that i advocate people coming out in sports is what it does for them personally.of every single athlete we have written about, a tiny fraction literally a couple of exceptions have the same exact story. scared to death to come outtheyr to their teammates. once they do it, they are shocked by the s

e.m. will be left without a positive catalyst for reevaluation. picture coming out of emerging markets right now. francine: thank you so much. global strategies. he is in new york. the problem when you look at the emerging market selloff and we go back to what tracy was saying, how much does this have to do with fundamentals? how much does it have to do with donald trump and trade? >> the two major influences a tracking the selloff, they had been worried about the fed rate hike in december. we remember what happened last december. there was a massive outflow of capital from china and the second half of december last year. global equity market correction. that was a worry in itself. chinese have been weakening. it is now weaker than it was during the financial crisis of 2008. tracy spoke about the turkish leader and the mexican peso has been very weak. we knew theat, donald trump election would have a double whammy in terms of what it is. it's not going to go away quickly. with rate hikes, if they continue into 2017, it will be a correction, but a

winds,tell you, if trump my e.m. bullishness will be slapped down.e.m.rump bullishness will be slapped down. i think, if you looked at the china numbers you are telling me about, commodity prices are going up and stabilizing, what is not to like? it is performed beautifully against all these things you are saying because they are offering me the kinds of returns i need in this environment to buy emerging markets. anna: me ask you a little bit about the pound? i am trying not to segue. you cannot help it sometimes with the volatility. i listened to another of conversations recently from those really interested in the manufacturing sector in the uk who have finally been pushing the case that maybe we should not be in the sbr or have reserved currency status, maybe that is historically less overvaluation in the pound and we should leave that behind to help manufacturing in the uk. is that hold any water? david: this is not about sterling. maybe if we were addressing victorian costumes and came here -- we are not in reserve currency. the reserves help ce

they're not responding-- and sensors show unusual e.m. signatures along their hull. the runabout's on auto pilot. life signs? four. very weak. disengage the auto pilot. bring the runabout to within transporter range. dr. bashir to transporter room five. emergenc y. check the aft compartment. he's alive, but there's an excess of neural energy in hisiserebral cortex. what does that mean? i'm not sure of that. can you revive them? [captioning sponsored by the u.s. department of education ( sighs ) show some dignity. look at you. no wonder the cardassians think we're animals. get up. get up! if you're going to spend the night taking chemicals stay off the promenade. we don't need another cleansing today. what happened? not here. i couldn't agree more. there's a high level of neural activity which suggests that their conscious minds are still active and yet there's no response to external stimuli. what's the word on the runabout? a class-two plasma storm which irradiated the vessel. computer, are the neural readings for subjects odo, sisko, dax and garak consistete with t

look for plasma emissions or e.m. displacements-- anything that might indicate another ship. nothing out of the ordinary-- hydrogen, helium, space dust. there has to be something out there. shuttles don't just vanish into thin air. it's a gravimetric shear. source? unknown. red alert. helm, full ahead. it's pulling us in. the gravimetric shear's increasing. go to warp. i can't establish a stable field. then we need more power to the impulse engines. that won't be enough. we've got to find a way to counter the gravitational pull. vent three million isodynes of plasma from the nacelles. chakotay, reverse shield polarity. ( sighing ) we're clear. secure all stations. i'd say we have a pretty good idea what happened to that shuttle. the anomaly is approximately 600 meters in diameter. it's out of phase with normal space. even after recalibrating the sensors it barely registers. seven: the distortion circumscribes a subspace zone that includes a type-g sun and three planets. any sign of the shuttle? no. it's say it's time to break out the multi-spatial probe. what the hell is that

which raises the potential for some mean reversion that could be quite painful if you are bullish on e.mtracy alloway in every dobby, thank you very -- in dhabi. to a diplomatic take on the presidential race, it is exactly one week until the americans decide who will be their next head of state and polls tightening after that fbi e-mail probe of hillary clinton has been reopened. -- jamess is game bins bindenagel. think you for joining us. market seen perhaps the making a more use that hillary clinton is going to win. they right? james: i think that is correct. she will likely be the candidate, however everyone should not take that for granted because there is a short possibility mr. trump could win a narrow victory in the swing states. caroline: how much does it matter in terms of who carries the house? we have to not only workout who takes in terms of president, but if we saw a clinton victory, but the difficulty if she does not see that easy a negotiation with the house. james: if hillary clinton wins the presidency and senate, she still needs house of representatives to pass any legi

over to the bloomberg very quickly, this is the e.m. story. dollar peso, this is the complacency of a good nine or 10 years. this is a big deal. where can it go? three standard deviations out, it's an interesting point. right there, we are not there yet. a little bit of an unraveling. we are looking at others as well. francine: from what i've heard about policy, the last two or three days is this definite finance spending we are expecting plus tax cuts, there is a resemblance to the reagan era physical policy. where are taking us back to 1976. i know you like history. deficit as percentage of gdp is the underlying. you can see what we've done so far. it's a good chart. it's the reagan chart. this is something -- can he really do it? let's get more on the president-elect we are joined by michael mckee. first of all, let's start with you. what we learned in the last 24 hours? michael: we haven't learned a lot. we learned that he can bury the hatchet with barack obama. beyond that, we don't know where donald trump is going other than he is going

also e.m. is going to fall. what is oil going to do? they are an oil-based e.m. and you have seen worrying relations. >> people talking about the political changes as a result of this election rather than domestic change in the u.s. >> if you're worried about the u.s., one thing to make yourself feel better about about a trump victory. >> plenty more to get through. revenue was in line with expectations at 5.8 billion euros. our guest is on the phone from zurich. let's get the latest news here out of the way in terms of the im, this ongoing uncertainty the u.s. election is having on your business. >> i would say that we are pleased with a good po performance in the third quarter. we had a continued to slow growth in europe with pockets diplomat of double growth in italy and spain. regarding the u.s. we have a flat situation. still the professional staffing performing well. we had more than double diplomat growth in medical and science. good figures in finance and legal. and then in the rest of the world, we are growing with 7% so steady growth with japan still al

you have this route in e.m. backed up by risk markets. something has to give. when does the e.m.outes become a problem for the risk rally. watch the s&p. as long as that is stable or higher, that means the market is outlook in ther u.s. and tighter fed policy. if the u.s. equity market suddens a lot, all of a the fed is out of the picture in december and that is a natural slowdown for the dollar. alix: when does this filter into financial conditions? financial conditions have stayed loose since the election. daniel: we have a little further to run. i am watching the equity market closely. we think the dollar can go higher versus the major currencies. with the euro-dollar should be at 108 relatively soon. dollar-yen at 108 as well. we think the fed is facing an fx headwind again like they were last year. it is still pretty flat. jonathan: we can look at this on the bloomberg. we can capture the performance against the d10 look at that. sterling outperforming. what is going on? daniel: yesterday when the dollar was strengthening probably, sterling squeeze tire. as you noticed, the

proxy for e.m.. francine: coming up shortly is america's."you most excited about? alix: a commodity rally -- we will be digging deeper into that. what is the state of political risk over in europe, and what is the state of political risk here in the u.s.? we will tackle that in a for mental that in a fundamental market perspective. we would talk with bob doll to give us that perspective. and peter kierkegaard will be taking deeper into what is happening with the french elections coming up in 2017, with merkel deciding to run for fourth term. u.s. regulations better than nicholas burns? we will speak with him as well. there withlix steel the latest, coming up shortly. the former french prime minister has become the new front runner in the 2017 election. first of all, this upended the 2017 race. very few people expected this. sarkozy is out of the way, and fillon could take the lead in 2017. >> he has been making an impressive comeback over the last couple of weeks, since the election of donald trump in the u.s. no one was expecting him to be t

me, to stopkey, to e.m. turning from underperforming into a crisis.mark: great to see you, thank you for joining us. vonnie: coming up, theresa may will say that changes in the air in her first speech since donald trump's surprise victory, last week. this is bloomberg. ♪ vonnie: live from london and new york, i'm vonnie quinn. mark: this is the european close. 14 minutes until the end of the monday session. the u.k. prime minister will give her first major her firstlicy speech, in-depth comments on donald trump's victory in last week's presidential election. what should we be listening for? joining us with a preview is bloomberg's brexit editor. is trumps victory a problem or an opportunity -- donald trump's victory a problem more and opportunity? opportunity?or an >> it creates the likelihood of a trade deal with the u.s. if europe is worried about security concerns stemming from a donald trump presidency, -- the uk's military might be able to get them some concessions from the europeans. bethe flipside, and might that the europeans double down on th

markets, a seleka currencies and bonds and equities that you stay clearly, it is very wise to split the e.mworld into three types/ . >> brazil, south africa, russia, donald trump is not worrying about them because they do not really compete with u.s., maybe a little bit on oil which not is the focus, brazil, south africa, russia, great asset if you can do with the politics which a lot of people can't. they are separate, then look at global traders, korea, taiwan, to a certain extent china, they have industries that will be hurt by donald trump if he can do anything like what he says, steel automobiles. they have areas where donald trump does not care, the u.s. has never made high end smart people there is no crying out for their smartphone production facilities back. taiwan and korea have areas that will do well. you can be -- you can distinguish a little bit. genuinely emerging markets, demographic story, the long-term, they will come good, india, indonesia, they are isolated. they have a young demographic, they have growth, solid politics. that is somewhere where it will not become good i

on friday, which raises the prospect of a fed rates increase, which is good for the dollar, bad for e.mes, it's mostly about the prospects of trump. let's be frank about this -- and the uncertainty of what a trump presidency good look like. you see investors headed into the safety assets -- gold, precious metals, silver. treasuries, the yen -- not the dollar. what cells often that environment? investments, the emerging markets. manus: everyone is getting very skittish. justin kerrigan there. bankg up, the world applauds these moves to free up international funds. more on those measures. this is bloomberg. ♪ tracy: welcome back. bloombergtching markets middle east. live from dubai, i'm tracy alloway. manus: and i manus cranny. theing us now, we have capital of dubai ceo. thank you. we were waiting, waiting, waiting for devaluation. don't worry 5%. down the sky captain. where do we go next? is there more to come from the 45% devaluation? >> it is a float. it is how much the central bank will interfere in this. i expected to overshoot in the short-term. you look at the evaluation, everyone

what else is at play, because not all e.m. is created equal? >> absolutely.s time around it is very different from what's happened in january when the market had literally no clue about what the pbs he was trying to achieve, whether there was going to be a regional or global currency war, a retaliation to what the central bank of china did. but this time around things are far more predictable. the pbo c has communicated one way or another what it intends to do. they will step in at some point to control declined in the currency, although this time we see the yuan slipping faster to the lowest level since 2008. however if you look at the figures, the pbs he has weakened, which controls daily -- on either side by less than 1% since trump won the election. in that time, the bloomberg dollar spot index rose about 3.1%. if you analyze that, you see that the pbo c hasn't quite let the yuan go completely. it's controlling the decline, to an extent, but there will be some depreciation in the short-term. manus: absolutely. it could be, perhaps, the biggest weapon of a

. >> you have said you thought e.m.'s are doing just fine. we have seen them come under pressure.relentless dollar we have seen. thatof that protection, is more inward looking? are you still constructive on emerging markets? if so, which one? more of a component of internal demand, india for example than those that are more vulnerable to the global economy? >> your last question first. we still like india because of the internal story. but also because of good companies we have invested in. these sort of companies. i think the protectionism in the u.s. is going to be more difficult to achieve then perhaps people think. if you does go for a tax cut, they are going to spend. that is going to go into the u.s. which should theoretically be good for emerging markets. i'm not as negative as a lot of people. but i have to be posited on emerging markets. , i think they are fine. the growth is still there. >> coming up on the best of bloomberg markets, donald trump takes two youtube to offer his first indication of what he intends on day one in office. a closer look, next. this is bloomber

the prognosis for e.m., next. this is bloomberg. ♪ a quick check of the latest headlines.perator of the casino has had its credit rating put on review at movies because -- moody's. the hong kong-based imperial pacific's best sunshine casino on the u.s. territory has posted her with the ip revenues far in excess of the grandest resorts. that has alerted american authorities responsible for highlighting suspicious financial disclosures. onie: from resorts fell speculation of the casino company has put a proposed restructuring on hold. bankers andiew as lawyers stop working on the multibillion-dollar spinoff of its international asset. they said today it is partially because china retained 18 crown staff last month in a crackdown on overseas operators. china's biggest sports media companies says the company's lavish spending spree may not be enough for it to realize its goal of world cup glory. the vice-chairman of the sport told bloomberg there needs to be more investment in the grassroots games. >> i think the right way for chinese is not only the buy and sell. how it'so co

some asset classes like e.m. are short the dollar. a lot of attention to postelection is the incredible, unprecedented outperformance of the small cap index in the s&p versus the e.m. these things sit on different sides of the interest rate and dollar ledger. our view would be that one of the things you want to pay attention to is a spread from a momentum standpoint. we would actually suggest that it is time for that a 16%, 70%ch has had outperformance to reverse a little bit. francine: i am looking at my w iop -- at my wiop function. deal?a done is it 100% or 105% of the goes above 100? if they do not do it, does it put into question their credibility? dean: it will be difficult for the fed to undo the strength of the handshake that these probabilities suggest that the market and the fed have acted on. it is as close to a done deal as you can imagine. we could get a massive geopolitical event and the fed would maintain the flexibility. it citing pickup in inflationary pressures and expectations that suggest that it is going to be mov

jonathan: that is how it patches in the e.m. space.d world, looking at it to your spread, trading at 190 basis points. a key ask is how much water can that get -- how much wider cannot get? is the conversation you two are having right now over the averaging one tape policy -- diverging monetary policy stories that have come up again in the last month or so? janet: a lot of it comes down to the issues of timing. we agreed that their big structural factors over the coming years, which still .2 a point to a real low rate world. i think the rate will still be quite low, but short-term, especially with a love of the support coming through for fiscal policy, we have actually put in one more said rate rise into our profile. it means that short-term you can andaps have more separation monetary policy that has been the case over the course of the last six years or so. that is why i think steve has a much sharper fall back in bond yields that perhaps some of our economic implications might point to. nejra: one spread i've been watching closely o

stanley,e from morgan e.m. currencies will likely threat.k isus now from new morgan stanley's head of emerging market strategy. explain it to us. the reaction of the emerging market bonds was negative. you think there is more to the stories and that. basically, you mentioned the externalities we have highlighted, the triple air threat of interest rates. we will think they will go up in the 10 year. we have the dollar correcting i about 6% next year and on top of that, we have the uncertainty that has been created through the election. 2016 was a record year in terms of influx into the asset last. we think investors are exposed. to, a fundamental respect currencies look at her now. countries have done their homework and they have adjusted area we see current accounts the climbing. from external vulnerability perspective, the men -- e.m. looks healthy. we can avoid a disastrous selloff like we had seen earlier , as early as 2015. david: there is a race going on between the fundamentals and certain em countries and the results of the election o

overall, looking at e.m., does this make sense? have seen in brazil and in south africa, there has been unwind of that. rates go up. sure that is really enough. theink yellow will derail trade. she doesn't need the high rate super aggressively. that actually keeps that trade in place. some countries are just and effective. egypt. there is no local foreign money. >> no logical reason why there should be a connection. >> egypt looks quite attractive from here. joe was referencing this new report. u.s. dollar is a near fear gauge. a shocker dollar can depress demand for credit while reflecting less appetite for risky assets. the surge should not be interpreted as a sign of confidence. argumentk there is an the u.s. economy is going to have a stronger growth story next year. markets are going to reward that growth. in terms of equity markets. i don't think it is a negative trade. we have seen parts of that. joe: one more question before the break. know the frontier markets better than anyone else. do you have to study governance in tho

mexico emerging >> e.m. is a big place, so probably avoid mexico, brazil, south africa.so much for joining us. appreciate it. trump's surprise victory shocks markets and the nation. we will dig into how he paved his way to the white house next. this is bloomberg. ♪ matt: time for the bloomberg , a look at some of the biggest business stories in the news right now. the british day trader accused of causing the 2010 flash crash is set to plead guilty in chicago according to his lawyer. he lost a year-long battle to avoid extradition from the u.k. he's accused of making $40 million on spoofing cme group's stock markets futures including on may 6, 20 10, when a trader frenzy briefly wiped out almost $1 trillion of value from american equities. mexico's wealthiest person lost $5.1 billion after donald trump's stunning upset to hillary clinton. he shed more than 9% of his after the peso dove as much as 12%. the 10 mexican billionaires on the index dropped a combined $6.5 billion in early trading. finally, jack rivkin, ceo of money manager al tager's, has died after a battle wi

mamae if we vary the e.m. stress parameters the warp field dynamic would ininease. excellent idea, captain. and if the warp coils were rephased it would increase power to the nacelles. there is an additional problem. we must compensate for a subspace induction drag on the engines. pardon me, captain, mr. neelix. computer, freeze program. you're supposed to be mixing and mingling not working on engineering problems. you ordered me to participate in this program. you did not specify topics of conversation. . you know very well what purpose this program is supposed to serve. i find t tt it serves no purpose whatsoever. because you're being intentionally perverse. holodecks are a pointless endeavor fulfilling some human need to fantasize. i have no such need. in your self-expression. of good taste begging for your acquaintance. i find your self-expression ponderous. i can't put up with this another month. we can avoid one another. you have to report to me four times a day to keep me informed about the crew. we can minimize those reports. computer: warning. emergency pro

the dollar shows some signs of weakness; there has been buying coming through into these e.m.toakata up, malaysia having a good day . hong kong closed at the lowest level in three months. a bit more conviction in the property stocks being hit hard, and banking stocks are also doing well. investors are searching for yield. in shanghai, the market is down by .1% today. the index data hit a 10 month high during monday's session. and there's a little bit of fluctuation coming through in japan, the nikkei closing pretty flat. we had quite a bit of moves coming through against the dollar. the weekend session coming down by .4%, but new zealand looking quite strong. the other big action of the day has really been in the bond space. the yield on the 10 year japan rose above zero for the first time since september 21, a very small gain of .02%. investors are very much wondering how long or how high it will be allowed to move higher. in australia, there's a little more action, but you still have the 10 year up 2.66%, the highest level since april. we have seen some money coming out of t

premium think the risk has changed both for e.m. and for the u.s.f you are looking at any bond market, you would have argued that because of the amount of liquidity in the market, the very dovish stance before the , how unlikely it was that we would have significant fiscal -- the risk remained was holding rates down, and that has flipped. that is what we are seeing getting repriced into markets. thes probably correct in long, but in the short term, the fed guys do not want to see the next three quarters with weaker housing because of the mortgage. weaker activity because of the rate. they do not want to see that dragging the economy before the fiscal stimulus comes in. --: we mentioned the rich the risk premium. let's talk about the political risk premium. the italian 10-year yields over germany. the periphery this morning is getting crushed with btb's very much in focus. my question to you -- there is an fx channel to look at, the euro weaker. great sums up. but on the other side, spreads are wider. how do you manage that situation in the months to

dollar to the e.m. and the u.s. dollar to asia. do you look at it wrapped together?e seen in the past is a gradually rising u.s. dollar. not a brutal move. the dollar is rising because u.s. and global growth are improving. that has been an environment in asia,rging markets specifically, have done very well. tips into ait' disruptive environment is the dollar as a safe haven environment as trade tensions increase. and the rise in the dollar, that is one of the risks that asian markets face, going forward. if we look at asia, one of the key methods for investing for some time was to focus on the markets that were less vulnerable. a domestic with recovery story under way. in india, you actually have a very important reform story under way, as well, and potentially avoid the areas that are exposed to global growth. tom: one more question off your new book -- what would charles de gaulle do? to president elect trump? jonathan: he would have a few choice words to say at home and then he would probably go to washington and offer his advice on the state of the world. .rump i

. >> initial reaction at this trump victory is to focus the risk borrowing on e.m.. we are bullish gold. they are talking about gold gettingwhen you think about the ingredients that trump could bring in a goal perspective is mostly bullish. good to see you. minister, former prime francois lond leaves the field and france. what could it mean for president-elect trump? this is bloomberg. ♪ >> this is "bloomberg daybreak." coming up, please head of strategy with his outlook for the market. head ofg up, barclays strategy with his outlook for the market. the french presidential election took an unexpected turn with a surprising strong showing from france law in the republican primary. joining us on the telephone from washington is jacob kierkegaard from the institute of -- let's start with france and what is going on in france? obvious exhibitionist populism coming back to the floor. is that in your view? seen.s is what we have cois is the most reformed candidate in the primary. he is out of the mainstream enduse he is advocating an to layoffs of large numbers of public

tom: i would agree that the adjustment we have seen has been profound for e.m. wonder what the next next is if mr. trump makes uniquely domestic decisions without paying attention to form dynamics. francine: yesterday, we were tongue-in-cheek, the trump tantrum. the billion dollar question which we have not asked is how much does the fed hike by in december? expecting 0.2 percent, maybe 0.25 percent come if we get a , whatike, and the re- does that do to emerging markets? >> it would be a significant upset for emerging markets as investors were to react to such a surprise and the fed is not going to do it. isolationist, they have looked more at the world than before. they will not spring such a dramatic surprise. tom: let me bring up a chart. ,his is a broad rated chart most of the charts within international economics on dollar used, this up as a the reubenllar, dollar of innate -- late-19 90's. you can see the brutal move from 18 months ago on the right of the chart. to be clear, you are not calling for a brutal move in the dollar holger: not at all, we will n

it is not as positive for e.m. as other g4, gtn economies.ok good on the board of finance. he will continue. rochester, he of has been outspoken on television a new monetary america. this is bloomberg. ♪ tom: stay with bloomberg through the day on politics. the granularity of elections, writing in the washington examiner the -- i find it that is stunning. -- i find that stunning. francine, that is a great compendium of early analysis. with us.man some of this about the spirit of american consumption. way out front about a dampened american consumer. with a better look on inflation, can there be better american consumption? dr. kasman: it can, there are headwinds. if we can get growth growing and labor in, moving up, an opportunity for some of the post traumatic stress disorder that has been with us as the financial crisis has an opportunity to fade. there are gains from house prices going up and from equity values going higher. francine: i look at charts and they are not looking that badly. i understand some people have been left behind are c

we were ahead of the e.m. selloff.bout a week, even as rates started to creep up. we don't think rates in the long into the u.s. curve specifically have crept up solely because of this trump growth and inflation narrative. there are other reasons that we don't have time to talk about. but it held up for a little while it has sold off. they are probably caught up for the cola relation to the two-year yield, which is what we look at. now we are waiting to see what happens. we'll yields continue to rise or will they not? if they do not, ian might be ok? . scarlet: there's a sense that the fed will have to move come december. this is the world was a straight probability. if you look at ois, we're basing off here. rate0 6% odds of a increase. if you look at fed funds futures, this is remarkable. 100%. that gets your attention. we are looking for a rate hike in december. what about 2017? people are talking about three rate increases in 2017. that'schini: i think highly unlikely. this is a question of whether the narrative is