this is the ecb balance sheet.nue to climb at the current rate or do we start to see a shallower trajectory? one that has longer duration attached to it? what effect will that have. the yellow line is core euro area cpi and that line has been trending up as well. what is the correlation between those two factors? we'll may have one needle in our compass -- we only have one needle in our compass. we work our way towards that announcement later on and the press conference of mario draghi. stay with matt and i throughout the day. up next, it is bloomberg surveillance. join me on bloomberg radio, daybreak europe. we are live. it is decision day. it is qe day. all of that, coming up. this is bloomberg. ♪ ♪ francine: all they want for christmas is qe. the ecb mates -- meets. a tapered timeline. and longer buy. the crimea tries to quit again. how long before the italian job is someone else's. forces to my and $11 million stake. surveillance,erg i am francine lacqua in london. we have a great show today. we bring you an ex

heavy into that ecb decision. the board, thess italian 10 year yield is backing up by six basis points. david? david: here's what you need to know this hour. draghi's decision. everyone is counting on an extension of the quantitative the italianam as lender, monte dei paschi, is said to be asking for more time. we are expecting the news conference at 8:30 a.m. eastern time. china, lift. chinese imports surging on strong demand for raw materials, snapping a seven-month losing streak. deal maker, russia selling an $11 billion stake in its largest oil producer to glencore and the sovereign wealth fund. the russian president went on national tv to tout the deal as one of the largest acquisitions in the oil and gas sector in the world and -- in the world in 2016. that's what you need to know at this hour. let's turn back to our main story, the upcoming ecb decision. we turn to our bloomberg team in europe, with our colleague, matt miller. looking rather cold over there. and paul gorton, who leads the coverage overall o

we have the ecb out of the way yesterday. we were doing the rate decision yesterday, looking at the markets afterwards, not holding ton that positive reaction today. and people probably repositioning now or thinking heading into the weekend that we have less than a week to go before the fed is upon us. the ftse mib and xetra dax off by a bit. the mib being dragged down by some banking stocks in italy. >> let's recap the ecb, lower for longer. that's the new asset purchase policy that the ecb introduced at the december meeting. the central bank trimmed its bond buying program from 80 billion euros to 60 billion euros per month. it extended the length until december of 2017. mario draghi insisted that the reduction in asset purchases should not be seen as tapering. >> first of all, the governing counsel is acting in a pragmatic and flexible way to risks that may materialize in this time. second there is no question about tapering. tapering has not been discussed today. >> annette is in frankfurt. we had adis cushion about this

heavy into that ecb decision.ng up by six basis points. david? david: here's what you need to know this hour. draghi's decision. everyone is counting on an extension of the quantitative the italianam as lender, monte dei paschi, is said to be asking for more time. we are expecting the news conference at 8:30 a.m. eastern time. china, lift. chinese imports surging on strong demand for

we want to turn out to the ecb.io draghi laid out in detail what the ecb would do the next 12 months and why. but even after an hour of answering those questions, some were left wondering if this was a hawkish ease or dovish raise. >> this was not a taper. as saying wetaper will have a steady step function going down. they said they have not decided that. they could do 60 forever. >> what we are is important is marketshort and, when participants know they will not raise rates, before they are while they are buying bonds, so they said they will buy nine more months. that gives three more months then we thought. they will probably continue for a long time. they can bid yields down. at the short end, they look at this as being dovish. than 80.certainly less i see this as tapering, to the extent it is open-ended. if there are some dovish elements to it, they have put in language to their two increase the duration. clearly, draghi has turned the super tank qe to the exit by cutting the run rate down. i see it more as a h

. >> it's all about the ecb today. it's preparing to set out the next steps in its qe program as policymakers decide whether it's time to extend the central bank's massive bond buying program. >>> italy provides a distraction with rome demanding more time to rescue monte dei paschi, as former prime minister matteo renzi officially resigns following the failure of his referendum. >>> tui travels higher as the tourism group's full-year core earnings growth gives the shares a boost in early trade. >>> the gamble doesn't pay off for uk betting firms as the stocks sell off on a report that mps will demand stricter controls over certain betting machines. >> good morning, everybody. welcome. we're being told today is the most important day of all time for the ecb. >> it's always the most important day. >> exactly. european equity markets gearing up for the most important ecb meeting with a slightly higher attitude. up by a quarter percentage point on stoxx 600. asia gaining overnight. a wall street rally. europe higher for th

fresh action from the ecb.io draghi warning the newest stimulus might not be the last as it strives to reach the inflation goal. cutting deals to shake up economy markets. they join forces to buy a stake. we are awaiting a statement from the u.k.'s attorney general. mark: have a look at what

the ecb saying it can thought ecb saying it-- can buy below the positive rates.e that has steep and the bond curve across europe because the ecb will also reduce or .aper its bond buying program hence the steepening of the yield curve. morgan stanley will continue. >> i sound like a broken record. we are talking about records. they are not up by that much. them onough to bring the record. the s&p has the distinction of rising for six straight sections -- six straight sessions. continuing be this positive sentiment surrounding growth. reading.hat confidence it is not just records for these guys. there are sub indices. it is amazing. the dow jones transportation average also touched a high before pulling back to some extent. we are watching the dollar-yen. of course it is lower on the year. month high as 10 the dollar continues its tear higher. this is one to watch as well. for now, they are rising together. bloombergk in on the first word news. courtney has more from the newsroom. courtney: president obama has told intelligence agencies -- the report will examine

this reminds me of last year's ecb where ecb eased and the euro skyrocketed because of guidance. >> thateresting relationship now between currencies and stimulus. less than a week now. next wednesday. thank you. good to see you. kathy lien. >>> to today's top trending stories. the material girl gets her shot at carpool karaoke. madonna hopped in the passenger sheet of james corden's show. ♪ they had style, they had grace, rita hayward gave good face ♪ ♪ bette davis, we love you ♪ ladies with an attitude, fellas that were in the mood ♪ ♪ don't just stand there, let's get to tshit, strike a pose, vo. >> madonna opening up about her relationship with michael jackson saying they kissed. she also shared how she had been excommunicated by the vatican three times and said she is square living a predictable life. outstanding stuff. >> really square. >> really square. >> just, again, i say this every time. so much respect to james corden. >> he has. he gets them to do things. >> it's a great thing. they're having fun. >>> nintendo's newest video game console getting a test run on the tonight show

it is of course, ecb day.onsensus of the meeting is for the six-month extension for the qe program beyond the current expression date in -- current expiration dtaate in march. volatility suggests hedging could be the name of the game. anna: the next-door is italy's credit outlook. -- the next story is italy's credit outlook. movieody's slow and halting progress. the country's rate stands at two sets above junk. manus: exports supported a surprise gain, snapping a seven-month losing streak in dollar terms. this is imported. this could be turnaround from exporting deflation to exporting inflation. imports rising 6.7%, the most in two years. and that was against a projection of the decline of nearly 2%. anna: absolutely. let's get a look at the markets with nejra. nejra: yes, fresh records on the s&p 500 and dow jones have lit a fire under the asian session. the msci asian-pacific, up almost 4%. this chart shows u.s. stocks were lagging asian stocks before the u.s. election and now they are int e the driving seat

concern, but not one the ecb console.le to no economic justification of extending the asset purchase program. in the eurozone, we don't have high growth, but steady growth. it has been growing for 14 quarters in a row. we have unemployment declining, rising inflation, even the ecb is expecting inflation to rise to 1.7% by 2019. exactly the objective of 2%, but it is close to it, so there is little economic justification. when it comes to political uncertainty, i think the ecb is not the right expert to handle that. in my view, the ecb -- sorry, i was going to ask a do think we will see the euro take a dive here? does the euro see further weakness as the cap increases? is onecurrency channel of the main transmission channels for the ecb policy. the ecb hopes to spur inflation in the eurozone, and that is increasing import prices. i would expect the euro to weaken further given the backdrop of diverting monetary policy in europe and the usa. i could expect the euro to fall to our below territory -- parity in 2017 come also

case the ecb couldn't do it.cal policy in a number of countries and the ecb have a bit more there. jonathan: we really appreciate your time and insight on the situation in the eurozone. from the peterson institute for international economics. -- commenting that global markets is shedding 300,400 clients --300,400 3400 clients. the number largely circulated in the press late last week, the confirmation in that memo. becomingfor 2020 is more complex as markets are shedding 3400 clients. let's move over to abigail doolittle for some movers. : a stock that has been over the map, now up slightly. all of this as the company has announced it has extended its agreement with mentor graphics. is up nearly 200% year to date on big hope that the ceo -- on big hope under the ceo. we will see how trading finishes out on the day. well -- goldman cut its rating to a cell. .nalysts marked delaney he thinks all the catalysts are priced at this point. he cut his price target to $12 per share. here, 50.41, showing the stock has been

the ecb will be seeking to increase confidence and shore up investors.do have some critics of the program questioning the marginal benefit against the back drop of a rapidly rising cost. that is expected to reach nearly $2 trillion by that end march date. still at this point we do expect the central bank to stay on the path of continued accommodation for the economy. >> lindsay, that's the important point. the marginal benefit that we get from such late in the day attempts to extend these policies. is this not a bigger negative than it is a positive? it's highlighting the need for extra help, but really little that can be done anymore by the central bank as a whole. >> well, i think central banks, particularly the ecb, is going to have to walk that delicate line between continuing to increase confidence, but also falsely increasing the notion that any further improvement in the you're reuro region is goin dependent on further central bank stimulus. some banks talked about a compromise. maybe announcing an extension of the program but at a lower clip than

awaye fx markets, 24 hours from an ecb decision.al outflow for china's foreign currency reserves, the world's largest, dropping the most since january. the yuan calling to a new low. this as donald trump names terry branstad as ambassador to china. in the u.s., jpmorgan and bank of america are forecasting fourth-quarter trading gains. the ecb begins its last meeting of the year today. most it will extend its bond buying program past march. we are relatively flat against the dollar. jonathan: for the latest on china, let's bring in the ceo and president of omam, peter bain. also joining us is john, our executive editor. let's talk about what's happening on the political side. the u.s. sends his ambassador to china, talk to me how important that role is to begin with. >> extremely important. diplomacy matters now more than ever. it looks like we were in for a pretty rocky relationship between the u.s. and china -- we will see how this plays out -- but in an environment like this, a personal touch matters more than ever before. it is s

meanwhile, the ecb -- what you expect the ecb to do this week? bring -- economists bringing forward -- expecting more this time around? >> he will probably have the ecb fromng the current length 3-6 months but send a signal about tapering. there are likely to get a two-point message. want to bewe expensive but this will not tapering very long with deflation out. anna: a two prompt message. thank you very much. up next, more about italy. we're live in rome. ♪ taylor: holding on. renzi will put his resignation on hold until next year's budget is signed off as italy's president seeks to minimize political instability. monte dei paschi successfully complete one part of its capital increase plan, with the debt for equity swap of just over one billion euros. the bank will decide in the next few days whether to proceed with the capital raising, as it is still seeking anchor investment. setting the stage. german chancellor angela merkel's cdu is said to issue a tough stance on migration as she prepares for her reelection. we are alive from their national

fresh action from the ecb.resident mario draghi warning the newest stimulus might not be the last as it strives to reach the inflation goal. cutting deals to shake up economy markets. they join forces to buy a stake. we are awaiting a statement from the u.k.'s attorney general. mark: have a look at what european equities in trading under 30 minutes until the end of a session. go. it will extend until the end of qe 17. the caveat, the ecb can expand or extend if the outlook worsens, it can buy assets below the deposit rate if needed and abide bonds maturing between one and 30 years come a whole load of measures. look at the move in the market come equities are rallying and we see the euro fall and bond yields are rising. let's look at the other big stories. it is a month since the u.s. election, the $2 trillion shock is what some could call it because since last november 8 a month ago today we have seen global stocks, the blue line is risearket capitalization by $2 trillion and the bond market, the bloomberg glo

the ecb is here stepping up support in more than one way if need be. and it would be at the place to invest. do you think it's too early to get into these penny stocks? >> across the banking sector, you're looking at 15%, which is about consistent with where the economy is. if you were getting some sort of growth or seeing traction from ecb policies into there, you would be seeing the banking sector catch up. there's been a lot of focus on the fact that the european financials have rallied over the last few months while the italian financials haven't. there's a lot of uncertainty and a clear measure how much uncertainty is there. that gap has to be made up once italy puts into place the proper policies. >> what about the shift to the right as well? how much of a consequence will that have on trade and markets? are we going to see pulling back in terms of investing? or will the trump trade continue? >> i think the issue is sort of protectionist trades are the same as free trades, in that it takes a long time to see any of the drags and whatnot going thr

the ecb decision also led bond yields higher in the u.s. let's turn to other markets open across the asia pacific. we are seeing australia gaining, that's up by .3%, but we're seeing the kospi down .25%. we'll see the markets open in just under a halfen hour. >>> executives at two japanese power companies say they're going to start importing shale gas at the end of this month. a joint venture between the tokyo electric power company and-oez the fund plans to import up to 700,000 tons by january 2018. the gasoline will be used for a thermal power plant. import prices of natural gas usually are linked to crude oil but they fluctuate based on their own supply and demand. other trading houses are planning to import shale gas. she'll she'll -- shale is a type of gas that can be -- >>> india's cash based society are continuing to struggle one month after large bank notes were taken out of circulation. the government suddenly announced early last month it would abolish 500 and 1,000 rupee notes the next day. they said it was an attempt to fight co

forecast previously the ecb was 1.2%, 28 teen, 1.6%.r bloomberg intelligence team says when they are looking at the economy, they will have a forecast that is weaker for inflation than the ones they have here. rishaad: tell me something, ecb will updating its economic forecast as well. what do we know about that so far? >> bloomberg intelligence saying not too much change. in the third quarter, area gdp year,3%, 1.2% year over maybe they will be looking at something like 0.4% in the fourth quarter. withight be surprised that surprises politically that they're not be more cautious on gdp, but here is what they are suggesting. dentt has not made a big in the u.k. or european economies as people thought it might. trump's election has led to rising bond yields, but not such a big hit yet, and even though t in the u.k. or european economies as people thought it might. italy has upset the political applecart by voting no, there is a long way between that and something as drastic as leaving the euro area. when you step back, nyu economics prof

ecb: that is something the is very aware of.he italian banking sector has been the focus of concerns about the banking sector although there are other parts of europe to worry about also. ecb has a role to play here away from their -- monetary policy. jeremy: we have to remember that the ecb under the single supervisory mechanism is the guardianship of the banking system. and the weakness of the banks has been one of the concerns as they think about the euro and the perception of their performance of the euro. it was notable that when you looked to those ecb decision's week about the adoption or the desire to get -- about the the banking system across europe is exceptionally weak. provide some impetus to the banking system and a boost to the balance sheet. manus: looking at what is on track for the balance sheet. the ecb is going to use -- is in termsusurp the fed of the size of the balance sheet by the middle of next week. the ecb is very much in participation mode despite the debate last week about paper. what does that do to

manus: we will talk more about the ecb. let's go to juliet who is standing by. 1.5 trillion added over the past 30 days. what did you contribute? [laughter] >> not much, i haven't been doing much at all to lift the economy, but we been seeing some great buying coming through in equity markets in asia. focusing on the fact that the bond program could be pushed out past the march deadline and the strong likelihood of a december 14 rate hike. you seen a lot of buying coming through in banking stocks across the region today. austrian financials leading the gains, closing up by almost 1%. in hong kong, a lot of strength from the banks. hsbc has embarked on a share buyback program but it shares lifting in line with the overall strength in financials. actually holding at its highest level since august 2015. good movement coming through from retail stocks and despite a bit of a shaky start, the shanghai composite also of by .4%. pushing theg in nikkei higher by .7% on the close. interesting to watch the bond market because it's bee

for the year 2016 the ecb had a set phase at 10.76%.y are saying they must keep the phase of the ratio of at least 9.5% from january. this just hitting the wires that the new capital ratio requirement is 9.51% for 2017 is below deutsche bank's current level required. so this coming, of course, after the settlement deal we got in principle between deutsche bank and the department of justice to settle mortgage backed securities, the u.s. saying that sum coming in just above 7 billion. that was shy of the upper limit of 14. they are gets a bit of a break considering they have to pay the sum to the u.s. authorities. as you can see deutsche bank shares off 1.2%. and rather quiet day trade. >>> dan collins is with us. looking at some other things you think can be worth watching. you talked about tesla and how they are raising prices in the uk. >> 5% set off by currency fluctuations which means they think it will be more expensive because of brexit. but they are going forward because of a variety of issues. >> consumers saying they are not exa

the ecb is expected to extend its program.t are they going to do with this rising political risk around the world? areet: hopefully they beginning to realize that their policies are not working. they have been pushing on a string, so to speak. and so probably the systems have to be given up. they cannot continue them. i think you will see japan, europe moving in a direction the u.s. is moving. yousef: i would like you -- to take you back to the region. how are you navigating the middle east at the moment? mark: we have to assume that oil prices probably will go do 60 but not much more than that. you will be in that range. and from that base, that price base, you have to calculate what the budgets of these countries are going to do and they realize they cannot continue to -- the kind of spending they have been embarking on without substantial change in the way they run their economies. that means more diversified economies and of course, abu dubai, united emirates, have begun to move in that direction. dubai is a good example.

david: how much can we expect of the ecb?re underlying fundamental economic factors that have europe diverging. are verytterns different. you sent around a map, the average people work in the different countries in europe. there is a substantial range between germany and england, more than 38 years down to less than 33 in some other countries. can the ecb still knit that together? headache is that they were all trained about macroeconomics. now there are so many other things, there are structural issues that remain unchanged. there are a number of political issues. what is the willingness of different countries to stay around? it will hang together because there are many good reasons for investors to believe that. when we have these political events, that is when investors what is thestion cohesiveness of the european project. want to switch gears from the duration of the working life of people in the european union to the duration of the job recovery in the u.s. focusing on wage growth specifically, considering we are seeing

we had the flow on effect from the ecb decision.i surprising markets with that lower for longer qe program. we had a good pop from asian equities, but you are seeing weakness, the casino stocks, pulling down the hang seng by .6%. .lso worth looking at is korea we are seeing it likely that president park geun-hye will face an impeachment vote. the kospi has been up 3.5% this week. some yen fluctuation, the yen quite significantly weaker at the moment against the dollar, so the nikkei up by .9%. index tradingpix at highs of 2016. australia's market getting a good boost on that rally in energy prices come up by .25%, but their casino stocks coming under pressure, and the story of dollar strength weighing on emerging markets, jakarta coming online, down .3%. shanghai is positive, that inflation data beating expectations. having a look at currencies, the againstening further the dollar, pushing past that 114 to the dollar handle. also worth looking at, the offshore and onshore renminbi. , thatfshore down by .1% dollar strength. this is a

how do you expect the ecb to navigate these waters?e have the reflation story on going with a higher oil prices and broader commodity prices as well. if you had to pin it down as to how the ecb is going to deal with that, what would your call be? >> i think in a way, the ecb sets at the table really nicely at the december meeting. tapering, but they've kept it very flexible. if they need to increase because political uncertainty is too high, they can react. themselves a lot of flexibility to adjust to the economic conditions. the results you describe there are what we heard from the ecb and from the fed. and the contrast between the two, let's get back to the chart restarted this hour. it seems to be gathering momentum. a lot of this is the u.s. dollar story, the fed story expectations around where central-bank policy goes in the united states. there's also the contrast with what were hearing from the ecb at the moment. what is driving a lot of divergence between 10 year yields is also the contrast in terms of the policy mix between th

the ecb has been very happy with the announcement yesterday.ng 60 billion a month all the longer end of the and theelds rising removal and deposit rate, yield moves fall. manus: the german first, you know, it is the biggest steepen are in must eight years. to your mind, does that momentum continue? michael: i think it could. the implication of it, if you have lower short-term yields, that could weigh on the euro. the ecb would be happy and euro.e with a weaker the other impactor of this reflationary trade and steeper yield curve is that it wavers the banks. they clearly -- it favors the banks. if you see medium-term, long-term bond yields continue to rise and in other parts of europe as well, that would continue to favor european banks. i think the clear takeaway from the action yesterday is to favor value stocks over the more defensive stocks in europe. manus: it is interesting. to what extent does the italian -- also stories. denials, decry also, whatever. we are not looking for an extension in monte dei paschi getting our cash in an capital

creating all the headlines at the ecb.i bringing down money they are going to be spending on bonds. when is a taper a taper? it is not a taper. others say and, if it looks like a taper, it is a taper. called also at a company carousel, coming bit later. the amazon of south asia, a consumer to consumer marketplace. idea of where the company goes next. how is it expanding across the asia-pacific? how well it is doing their. there. that is coming up as well. that is a look at what is coming up. ahead, thank you. taiwan is a potential flashpoint in u.s. china relations after donald trump broke protocol by speaking to the taiwanese president. taipei also reasserting its claim over contested territory in the south china sea. stephen engle reports from the tiny contested island. alert in thed south china sea. the chinese coast guard quickly coming to its aid. the crew abandoned ship and had to be plucked from the sea. inare right there with them what is of course a drill, but one that is critical to the taiwanese claim to the lar

the ecb will buy $80 billion of euros until march. david: and then they cut it to 60 and keep going. alix: ecb does say the outlook becomes less favorable, they will increase the programs. is this a dovish take? or a hawkish views? >> good question. 60 is less than 80. i see this as tapering to the extent that it is open-ended if there is some dovish elements to it. they have put in language in there to increase the run rate, increase the duration. clearly, mario draghi has turned the qe towards the exit by cutting the run rate down. i see it more as a hawkish move, confidence on their side that they are reaching a goal. although what we look at the average inflation rate, they are forecasting to 2014. i really see this as backing away a little bit from there 2% target. 1.5% is the new 2%. david the ecb has refused : italian bank's request for time. shares plunged on the news. >> the question is why? >> the ecb did not see any advantage in asking for more time. the recapitalization plan has in the cards for a long time. private invest

i want to talk about the ecb and aftermath.chart represents every day on this index2008 and as you can see, today's move at the very right and of the chart is the biggest jump in the spread since 2008. it really sort of speaks to how investors have interpreted this move, which means higher rates more growthterm for and inflation and stuff like that, but not nearly as high in the short-term as this stimulus is going to continue. taperlly the thought was and then people reinterpreted that move and actually, it looks like a lot more bond buying for on for aould got while. lower rates in the short term. scarlet: "what'd you miss?" european central bank will add money to its bond buying program and extended to the end of next year. mario draghi stressed these measures are intended to maintain the ecb's accommodative presence in the market with draghi repeating that it is not tapering. andrew said that the ecb's reduction of asset purchases is a hawkish move. >> it is a stealth rate cut. they are cutting rates without actually cuttin

european equity markets gearing up for the most important ecb meeting with a slightly higher attitude. up by a quarter percentage point

former ecb board member.e will have plenty more coverage here throughout the day on the referendum. he's keeping a very close eye on the bank. he sounded very much like a former ecb official. what strikes me the most is the significant lack of urgency. a lot of people looking into italy. it doesn't look like anything is going to happen quickly. is there a sense of urgency or is the perception correct? francine: i think there is a sense of urgency. if you look at what the officials have been saying and some of the leaks in the italian press they talk about a plan b. i don't know if this is a good thing or not. paschiat mean that monte don't think they will get this capital raising. i think behind the wings a lot of people are talking about what they can do. renzi is staying on does not mean they are not looking for a cake taker. for the moment we have continuity. great to have you with us, francine lacqua. this was meant to be a three-pronged recount. another one was the capital raising stock offering. the oth

u.k., ecb?the central bank's recently, still too early, we have an economic situation, if it improves in europe, we depend on european situations, all decisions that help the european economy to grow, to be stronger, that is something that is beneficial for switzerland. matt: thank you, we appreciate your time. tom keene, back to you. tom: as he speaks we see the a 1.0ollar breakdown to 475. we will continue with stephanie flanders and steven saywell. i want to speak to them about what the pros watch in switzerland, euros-swiss, a most interesting description of the tensions in europe. peso,n, wow, philippines 50. this is bloomberg. ♪ ♪ this is what it is about, smart church and smart guest. stephanie flanders jpmorgan and steven saywell with francine in london. we heard mr. miller speak with mr. jordan. an historic moment, massive swiss franc strength. against an irresponsible europe, the red trend is the management of euro-swiss and steven saywell , this blue curve, i would suggest is -- sugge

the ecb adjusts qe. open a stock markets little lighter. >> we have seen the offshore you lower since these tweets. monthhas been a monster since donald trump's election. investors tell us what they expect when he takes office. >> the consensus will be good for some markets and bad for others. >> i'm looking for a 2% economy. 3-4% economy. >> we are hoping to do better. it is all straight ahead on bloomberg best. scarlet: hello and welcome. i'm scarlet fu. this is bloomberg best, your review of the most important business news and interviews from bloomberg television around the world. let's start with a look at the top headlines. the week began with change at the top in italy after voters rejected their prime minister's proposal for political reform. the prime minister says that he would quit in the early morning after losing the referendum. thatthink the expectation the result of this referendum would have a disruptive impact on italy and possibly on the eurozone, were grossly exaggerated. it was not co

ecb meets thursday.isks to the eurosceptic elements of society growing stronger. france is coming up again. marine le pen is anti-e.u. and antihero. are we back thinking about the breakup of the euro as a result of these polls? >> i do not think we should. the italy vote was mainly a vote about renzi. it was not a populist reaction against the mainstream. it was not a vote about the euro. guy: but you extrapolate. >> i think we should be very careful about that. have a secondll round of electoral system in france which will likely minimize the worst scenario of a marine le pen victory. now, if you look at it historically, there is no french president that has managed to win an election by relying on their own votes. you have to reach out to the center. his ability to do that is much higher then marine le pen's. matt: wolfgang, we saw in austria what some have taken to heart as a turning point. a pro-european candidate beating a right-wing populist. on the other hand, it was only 52-48 which is not a reso

the ecb has rejected a plea by italy's monte dei paschi bank to raise more capital.ost more than a billion dollars in the first quarter. manufacturing increased 3.3% in november, which exceeded all estimates in a bloomberg survey. meanwhile, china's consumer price index rose 2.3%. brexit secretary gary davis says he does not want the transition deal with the eu to cushion the impact of britain leaving the bloc. that is according to a meeting with business leaders. despite attempts to underplay the report, it threatens to undermine theresa may's desire to keep plan secret until formal negotiations begin next year. julie: it is time for our bloomberg quick take, in which background on issues of interest. qualitative easing or qe has worked in the u.s. and other countries that of used it, including japan and the u.k., but will it work in europe as well question mark it has been difficult for the 19-nation euro area to do the same thing, but after the central bank tried other measures, if pressed at with full-blown qe. begun by mario draghi, they began buying bonds in 20

the ecb, was it more hawkish? >> the ecb is trying to give everybody something.rs of the justice department. what an opportunity. >> yep. all right. we'll see you in under five. when we return, we'll have some more with our guest host and final thoughts from richard. stay tuned. we'll be right back. a basketball costs $14. at team spiritorth a basketbheers)sts $14. at twhat's it worth to talk tyour mom? whate valuofalue of capil is to ea,s? not just wealth, but things that matter. mo stanl >>> our guest host this morning is richard lafrack. it's been awhile since we played your theme song. you used to come on just to hear it. >> that's right. freak out. >> since the election, have you done anything with any of your property, said i got to do this, buy this, sell this, anything? >> no. the only thing i did was i said i got to make sure i finish all my refinancing because interest rates definitely moving a little north. >> what we try to do with some of the sacred cows, whether it's mortgage interest or charitable or any of those things to get rid of these deductio

the ecb adjusts qe. china's stock markets open a little wider.nd a few trump tweets make a lot of news. >> we have seen the offshore yuan versus the dollar trade slightly lower following these tweets. >> we do not really know what the back story is here. scarlet: it has been a monster month for market since the election. investors tell us what they expect when he takes office. consensus breaking down will be good for some markets and bad for other markets. >> i'm looking for a 2% economy. not a 3% or 4% economy. >> maybe the dollar should not be as strong as it is now. scarlet: and opec has a deal to curb oil production, but they have more to do. >> we're looking to do better. scarlet: it is all straight ahead on "bloomberg best." scarlet: hello and welcome. i'm scarlet fu. this is "bloomberg best," your review of the most important business news, interviews, and analysis from bloomberg television around the world. let's start with a look at the top headlines. the week began with change at the top in italy after voters rejected their prime minist

in the eurozone, it is being proper by the ecb. bob: didn't we see that from the ecb last week?hand, they taper, the other hand they extended by nine months. they are trying to figure out how to wean the markets off of these unconventional tools. i think what is important is to look at europe more broadly. growth is the starting to pick up, so the currency adjustments they have gone through over the past couple of years is starting to have an impact. of anyre you a buyer kind of bond in this european market? bob: there are part of the corporate market that i like. does the part that the ecb or does not buy? bob: the are a lot of corporations that are doing well that are industrial companies that should benefit from global inflation. jonathan: i will ask you and unfair question. you started by saying this is not about price, and yet you have to tell clients what is in the portfolio. if they ask you how you price it, and you tell them you do not know. how do you do that? bob: you tried to think what is the proper level for the ecb get to and where should government yields be. i th

the ecb has to stand behind that as well.s long as we have that faith that we have not reached that -- the kitchen seat moment -- at least the increments are getting smaller. a billion here, a billion there. but the negative emphasis is fading. getould be nice to actually to that point where we feel like we really know what these numbers are. anne: what with this and legal settlements in the u.s. around allegations in the united states , the banking sector is not a quiet end of the year, is it? investment officer stays with us on the program. minutes away from the open. up next, we look at the movers in today's trading. bp secured a deal viable worths -- a deal by woolworth's network of australian gas stations. this is the sunrise over london. 7:55 here in london. anne: welcome back. 7:54 in london, 8:54 in berlin or paris. minutes away from european equity trading. let's look at stocks. bp in focus, buying woolworth's australian gas stations for 1.3 billion u.s. dollars, around 1.79 australian dollars, billions of course. mo

what does that do to the ecb's proclivity to extend qe? probably hasn't changed all that much. they have already signaled that they will extend, and certainly this has given them a reason to continue. the real variable is are you likely to see any tapering or is it less likely? pre-trump, people fight you would get 6-9 months, but at a slower pace. that is much less likely. i think you will get the extension of the same pace because of the uncertainties in the market, giving italy all the more reason. manus: you know, the thing that i did on risk radar, the aspect i showed, was the euro trading at a 21 flow. low. months you have qe, but it may taper. but on the other side, i have deutsche bank, socgen, goldmans, already talking about euro parity. does the currency help -- it helps mario draghi, doesn't it? fundamentally it helps him counterbalance the extension of qe. >> yes. one of the challenges they had was that the fed was so dovish, and the dollar was not all that strong. now with much higher expectations for next year, stake in the p

the ecb is taking it down a little bit.s jeffreynow voegeli, banking reporter for bloomberg news. >> this is good news for deutsche bank. i would assume they would like lower interests. one, this is not a surprise. we are expected to lower the requirements for the bank next year. s have dropped down to 8% by 2%. maybe deutsche bank is better off now but it didn't sustain as much as others. vonnie: why is the ecb doing this? how does its criteria work when it comes to the different banks? why does the ecb have a lower ratio than deutsche bank? >> i don't have any insight into how exactly it is calculated with each requirement. the reason this has dropped is the european central bank has decided to make a hard requirement public. and the other hand, there is a so-called guidance, where the bank will get a phone call from the regulator telling it to do before this is hit, which would have an impact with bondholders and shareholders who had to forgo a dividend. vonnie: is there anything to suggest that deutsche bank will actual

the ecb is looking for 1.2% yearly rate of inflation next year. that will be quite arise. 2018, 1.6. bloomberg intelligence pointing out that when we hear from the 2017hey downgraded those and 2018 forecasts. >> we are looking for an update for those forecasts. what can we expect? we have had so many surprises that could hurt growth and yet they are not changing. the expectation is they will not. brexit, that was supposed to hit the u.k. and europe, not so much yet. donald trump could ring lots of stimulus but so far all we are seeing is rising bond yields. italy voted no to its constitutional reform. all kind's of questions about its future in the unit -- in the eu. now, in terms of the growth that is expected, i want to show you another chart. things,ooking at two gdp at 0.3ine is percent. year-over-year, one point 4%. not bad but not great. the turquoise line gets a little bit of hope area the purchasing managers index, at 53.9. the reading that could be taken as a good sign. one more thing bloomberg intelligence points out. some want to extend

another round of stimulus by the ecb. what a wonderful chart. let's finish off with this. palladium versus the old. a new order in precious metals. palladium may be heading for a price correction while gold, which has had the worst returns over that. , so says, thanks. this is gold relative to palladium, an 18 month low last week. 90 minutes into the trading day, how is it looking today? julie: not a lot of action for u.s. stocks. we have the dow and nasdaq trading a roughly unchanged fashion. the dow put in another record high earlier today. yet another closing record high in the s&p 500 is joining the dow. one of the top sectors once again is the financial with citigroup reiterating what some bank of america and jpmorgan , so you areay looking for those trading revenues to be up 20% in the fourth quarter. they have been on fire since the election. look at #btb. this is the s&p 500 bank index. we see it up a little more than 21% at points but it also suggests the rally may falter. it is well above 70 for the longest period of time this year. strategists have used it as a

we had an ecb meeting today.ollar has overtaken some ground i would's covered before so we'll talk about mario draghi, his press conference, the ecb. does he have all his ducks in a row? i'm not sure. but we has four dack snshgs a row. no matter how the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. >>> coming up today on "the halftime report," the s&p hit levels that are frightening. one longtime marketer watcher, robert schiller, is saying stocks are partying not like 1999, like 1929. and why morgan stanley's may be a wild year for stocks, and what you can learn from an amazing trade jon najarian made in lieu lu lemon. see you in about 20. >> najarian has had some good calls lately. >> the lulu one is unbelievable. he's buying lunch. put it that way. >> exactly. let's get to rick santelli and check in with the "the

the ecb needs help.hey need help from politicians, particular you on the fiscal side in countries like germany and the netherlands. france needmes like structural reforms. they also have to clean out the italian banking sector and start doing more struck for reforms as well. that is obviously now one difficult, but this all has to happen over the next few years c. the ecb's policies are broadly working, but it's very slow. the eurozone is recovering and moving in the right direction. the problem they have is that inflation is not picking up. on some measures, it has actually rolled over slightly. that will concern them, which is why they need to continue what they need to do. julie: i want to move to the u.k. for a moment. in the wake of the vote to exit the eu, we have seen relatively benign market reaction. do you think there is still a recession risk and the u.k. given how the various possibilities for help brexit could be handled? david: the high risk now is just after we triggered article 50. that i

julia, where would the ecb come in here? >> the ecb has been saying to them we need to see a recapitalization. the deadline given was the end of this year. the question is in light of the political instability we're seeing here, will they give banca monte dei paschi more time or the deadline holds and you have to make a decision here, either a private sector solution or we need to go to extreme measures. that will all be part of the discussion. >> thank you very much for that. >>> head online to our blog, worldmarketslive to vote in our poll. should the world's oldest bank in operation, banca monte dei paschi siena be protected from going to the wall? let's discuss this further. joining me now are dave lau lafferty, and igis. let me kick things off with you, dave. do you think banca monte dei paschi should be saved? >> coming from the american side, i think that's a little harder to make that argument. one of the advances that we've had in the u.s. was that we forced some recapitalizations on to the banks. we forced some los