the ecb policy consensus is wavering in a bloomberg's group. 26 ecb canceled its october meeting.en heavyweights spoke. in an interview with bloomberg memberion, and ecb board confirm she was part of the dissent. >> i made my position clear in october. i would have liked see a clear exit. there was a different decision made. we will see, in the next year, how things are developing. mark: while the ecb stays its course, extending qe will be hard in the future. for more, let's bring in bloomberg's ecb reporter. these heavyweight dissenters, how difficult could they make it for draghi in 2018? >> i mean, the main issue draghi will have to deal with is inflation. if inflation picks up, there will be no problem, no doubt that qe has to be eventually wound down to the question is how to do it. right now, the ecb has committed noturchases if inflation is on a path to growth, just under 2%. so what is a heavyweight to do -- they are saying let's tie our guidance so we are not tied to the fact that we have to buy more bonds. but we can say we will remain committed to rates. this will be a

misra: the ecb went so slow, they recalibrated.e technically still not tapering, which implies they are not hiking at all in 2019. i worry about the italian election, some point the market is going to say political risk is hard to price in and maybe i want to step away from that. jonathan: matt, i see you nodding your head, you agree with that? mr. hornbach: on the front end basis markets, and you look at the demand that coming from investors in japan, it actually pays to go into euros these days. from their perspective, rather than pay 200 basis points of spread to go into a treasury, you get paid to go buy europe. so, of course, absolutely agree. this is a carry trade, there's a lot of money out there. jonathan: i never thought i would hear you say people have gone long over a credit rating upgraded. i thought there was something we did 10 years ago with em, not with developed market countries like italy. what's going on? mr. gartside: when you look at a country like italy, you have to treat it like a credit, don't you? because i

political risk around the corner and the ecb around the back. mr.ide: the one thing investors don't talk about economic risk and a really critical thing for italy was the upgrade. it was the first time in 22 years of the s&p had upgraded italy. and therein lies the tail. when you look at european aggregate, is probably the international economic success story now. and even a country like italy when you look at european that's been afflicted by low growth has a much stronger growth trajectory now. that's what investors are focusing on, that means the spread to germany can contract another 25 not 30 basis points. jonathan: what are your thoughts on what's happening with italian spreads? ms. misra: the ecb went so slow, they recalibrated, i think they are still not tapering, which implies they are not hiking at all 19. i worry about the italian election, some point the market is going to say political risk is hard to price in and maybe i want to step away from that. jonathan: matt, i see you nodding your head, you agree with that? mr. hornbach: on the

the ecb is close to the action there.t they are not keeping extensions, they're really trying to keep their options open as to how far this is open, possibly because of political tensions in germany and italy. >> i wouldn't say it's political -- the ecb's operating here, and there simply not sure if there scaling down qe, scaling down monetary similar to it. jumps --re if market there keywords here. the careful action by the ecb is warranted. they will march forward for ford and scott -- forward guidance without underwriting the foreign guidance with the purchases of bonds. this is definitely a good, healthy step. >> this highlights the eurozone story, but also the french story , and strong growth story with this coming through with that. at some point, where is the better data from the eurozone i don't know if you call a boom or just a recovery. where is this -- with the ecb at the moment? >> there still a lot of slack in the eurozone. when you look at the labor france,n spain, italy, what we are missing the most with ca

i do link the ecb -- i do not think the ecb as a whole is dovish. what we have ended up with is that grand european tradition to compromise. rather than announcing a taper down to zero, we have got the promise of some kind of decision next year. no decision is a division ii taper 20 abruptly, or they announced a taper to zero. i think this was a compromised deal. draghi is pushing out this easing as long as he can. the northern europeans are saying, no, we have got to slow this down. so, they halve the bond purchases. francine: there was a change at the top of the fed announced. then, we had a resignation of bill dudley. anseems 2018 could be inflection point. paul: yes, we have got a change at the top, as you see. there are three vacancies in the fed for governors. and four, if yellen resigns as a governor, which is not guaranteed. it is likely, but not absolutely guarantee. if yellen became concerned about the independence of the fed, she might try to stay on as a governor. dudley is not a presidential nomination, not a congressional appointment.

and number four, whatever the ecb says it is please vote now. you have nine seconds. >> must be interesting, how some people vote there. [ laughter ] so they knew you wanted to hear that, president draghi i will pass this on to miriam webster, the new definition. the other ones i took from the dictionary, that one is not in the dictionary i would like to stay with monetary policy and go right to the audience with the second question as know, mr. draghi was praised as a master of guidance. he's given us some guidance once again. he has announced the very gentlest of exits from the taperer, perhaps the gentlest of recalibrations of asset purchases. yet many would say he's not yet off the hook and the question is whether the taper which is not a taper may provoke tantrums or other adverse consequences in the future deutsche bank has said the great unwind could trigger the next crisis ladies and gentlemen, here's our question what do you think is most likely to trigger the next crisis could it be the great unwind, the phasing out of accommodative mo

ecb, bank of japan. the ecb has promised us they will do that until september of next year.ll of this money is hurting duration and credit risks. they ultimately end up in the u.s., and that is a very important driver. >> one of the weirdest things as -- about the curve flattening here is we are doing it against the backdrop of the fed and potential tax cuts next year. you got hundreds of billions of extra supply coming into the u.s. treasury market next year. my guess it will be much more difficult for the curve to continue to flatten in the next year. pickupe don't get some in inflation and the fed stays on its hiking path, in two years years it will go higher in the curb will go flat. jonathan: joining me in new york is vishwanath tirupattur, lisa hornby, and coming to us from london is iain stealey. we want to go straight to a chart of the 2/10 end of the curve -- and the curve rolling over and getting flatter. what you see is how supportive the federal reserve has been at the front end. the two-year it has inched -- has inched higher and higher. the 10-year has stayed i

as a huge consensus that the ecb will never move rates again.eality is when you look at it, you have superstrong growth in europe. the risk is the ecb actually pulls forward the possibility of rate hikes. jonathan: what is the bank of england doing hiking this week? mr. gartside: they did the right thing in terms of hiking rates. current look back, the post the referendum was clearly a policy mistake and the suggestion then was the u.k. would fall into recession. it absolutely has not fallen into recession. they've done exactly the right thing in raising interest rates. when you look forward, the risk against that the banks are a lot more hawkish than anybody expects. bloomberg,cross the was the probability of them hiking in q1 next year? over 50%.de: the data to watch is in the u.k., we have a budget. the statement is in the next few weeks and the lesson from the election in the u.k. was that we are not tolerating austerity anymore. there will be a political reaction to that, which is to increase the deficit. fiscal loosening, that's what gives

you have others at the ecb conference. u.s.data includes cpi and earnings from walmart as well. with me around the table is henry peabody, subadra rajappa and ashok bhatia. subadra, earlier this year it felt like the guys were all on the same page. some got together in portugal for the last ecb conference. they all came out a little bit more hawkish than people expected. is it coordinated or market chatter that doesn't count for much? subadra: i don't believe this is coordinated. it will be a conference about communication and communication strategies. communication has been a struggle. if you look back at the last two decades, we have seen an evolution of the communication strategy of the fed, between greenspan, bernanke and yellen. the market tends to overreact sometimes to even small things they say. we saw a large selloff after the taper tantrum in 2013 when ben bernanke spoke in jackson hole. we saw recently the bund market sold quite dramatically after draghi's comments at sentra. i think communication is more art than sc

ecb is very involved. are not seeing global central bank purchasing winding down. >> between 50 and 0 is the flashing sign. things are starting to get a lot more challenging. above 50 you can kind of explain it away. >> equities are doing well, credits are doing well. the economy in general in the u.s. and globally is doing well, i think they will be some willingness to look past the flatness of the curve. jonathan: joining us is lisa abramowicz, rob waldner, and joining us in a moment is alan higgins from london. i want to begin with lisa. look at the chart we have been talking about from some weeks. pick your place on the curve. 60 basis points. how much signal is in that? lisa: a lot of people will say this time is different. this does not indicate a slowing of the economy but rather a fed that is saying this is typical. that said, bloomberg intelligence noted this is pricing in a policy error. right now this is saying a long-term economy is not accelerating. end of story. period. the more the fed hikes

online retailer lowers its profit guidance citing weaker trading in october and profit margins so the ecb president mario draghi is due to speak at the forum on banking supervision in frankfurt. he hasn't quite started this speech yet but joining us today is nick guardside from jpmorgan asset management nick, thanks very much for joinings just before draghi gets to it. i want to ask you, as a fixed income investor here, how focused are you really on the banking sector in europe right now. clearly a couple of years ago, we were very focused on the sovereign finance linkage. does that still play into your framework or do you think that draghi has succeeded in severing the linkage between the two? >> no, draghi has done a great job. when you think of eurozone banks, they're in great shape now. if you think of the broader euro back drop, the eurozone is the international economic success story in terms of growth when you look at banks themselves, they've done a very good job of deleveraging and raising a lot more capital so eurozone banks are in great shape and from that, they can the really

the key think the ecb is targeting.g central bankers but specifically in the eurozone, why do you think inflation is picking up? , our forecastsr are we have lower inflation. this is because of fax from energy policy. our core inflation, without energy, is coming up. developmenteady towards high inflation rate. i think we are moving in the right direction. we have to observe these things. whole does not see inflation returning to target before the end of 2019, when do you see it at that target and what will drive it? >> i think inflation rates in 2018 maybe higher than anticipated because we see energy prices coming up. this is one element with regarding core inflation, the most important element. we have had in europe and the u.s., a strange development and it takes a long time for wages to react to unemployment. the phillips curve conundrum. a matter of is lags. after sometime, wages will keep up. look at the developments in sermany, we have wage substantial, we will have the same in austria. that structural changes,

why wouldn't we have it at the ecb? it's a broad group of people ofresenting a big economies -- so it should not surprise anybody we get this level of debate. i think there is a consensus amongst the board and i think they have been able to bring in viewpoints and come up with a consensus but the debate itself i think is a healthy development. mark: on the fed, there's clearly the debate about the part of inflation and what it means for policy. how does that affect the part of rate hikes in the next 12 months? >> i think the debate amongst the fomc will probably see the migrateut what happens closer to what the market is saying. to interest rate in 2018 but three or four that thedot plots are calling for his little too much. event in theer big last 24 hours was the budget in the u.k. which seems to have been given a thumbs up especially when it comes to philip hammond's performance and what he gave away given his constraints. today we had gdp data, business netstment was strong and isde is attracting -- subtracting the

the ecb is continuing. jonathan: typically with rates as low as they are and yields, you have a decision. you go further along the curve, or you go further along the risk curve, which means, lowering quality. in europe, that will be really difficult to do. high-yield already trades so tight. if you wanted exposure to this positive story in europe on a fixed income side, how are you going to express yourself? rt: european credit is much tighter at 4.3%. the ecb is still doing qe. the fed is still -- the growth is still good in europe and in the u.s. we think that should be supported for credit overall. one of the things we are concerned about is if we got the u.s. yield curve to a flat, to be completely flat. that is typically the way that you would get some sort of disruption in markets. a 10 year we are at 120 basis points in the u.s., that is a level where we still have quite a ways to go before we get to a flat curve. in our mind, that means that a big disruption credit is unlikely in the near term. cert

ecb is really involved.ou not seeing global central bank for dissing winding down. >> between 50 and zero, it is really the flashing side. things are starting to get a lot more challenging. above 50 you can always explain it away. >> equity is doing well, credit spread is doing well, the economy doing well globally, i think there will be some willingness to look back -- look past the flatness of the curve. jonathan: joining me is bloomberg news and bloomberg radio coming to us from atlanta. joining us, allen higgins from london. i want to begin with you, lisa. but's go to the chart i have been talking about for weeks and weeks and weeks and weeks. pick your place on the curve. how much signal, i always start with this, how much signal is in that? lisa: a lot of people will say this time is different and it does not indicate a slowing of the economy. as cameron said, this is pretty typical. as bloomberg intelligence noted, this is pricing any policy error. right now, what this is saying is the long-term econo

we had a french president of the ecb and an italian president at the ecb.german president of the ecb? first of all, i would say, it is not a decision to take necessarily. -- it is adate of mandate that goes up to october 2019. so he has time. he is there. he will continue to exert his own presidency and leadership over a long period of time. i would not embark on premature discussion. it is a decision of the heads of state and government. and experience has demonstrated that, i think, i should not say that for me, but a widely in-depth decision of the ecb. i have full confidence. but i will not engage in the conversation on the next president. francine: i want to ask you about bitcoin. what is bitcoin? , i have to say, i don't consider at all that they are currencies. any of they have not characteristics of the currencies that are essential, which is to keep its values on the business of sustained -- assisting the value. --on the business of sustaining the value. keeping the value is fundamental. you see very clearly that the bitcoin goes up and down, up an

political risk around the corner and the ecb around the back. mr.ide: the one thing investors don't talk about economic risk and a really critical thing for italy was the upgrade. it was the first time in 22 years of the s&p had upgraded italy. and therein lies the tail. when you look at european aggregate, is probably the international economic success story now. and even a country like italy that's been afflicted by low growth has a much stronger growth trajectory now. that's what investors are focusing on, that means the spread to germany can contract another 25 not 30 basis points. jonathan: what are your thoughts on what's happening with italian spreads? ms. misra: the ecb went so slow, they recalibrated, i think they are still not tapering, which implies they are not hiking at all 19. i worry about the italian election, some point the market is going to say political risk is hard to price in and maybe i want to step away from that. jonathan: matt, i see you nodding your head, you agree with that? mr. hornbach: on the front and basis markets, a

ecb is very involved. are not seeing global central bank purchasing winding down. >> you can easily say that between 50 and 0 is the flashing sign. things are starting to get a lot more challenging. above 50, you can always kind of explain it away. >> if equities are doing well, credit spreads are doing well, the economy in general in the u.s. and globally is doing well, i think there will be some willingness to look past the flatness of the curve. jonathan: joining me in new york city to discuss is bloomberg news and bloomberg radio's lisa abramowicz. coming to us from atlanta is rob waldner, chief strategist and head of multi-sector at investco fixed income. and joining us, alan higgins from london, of coutts and co. i want to begin with lisa. go to the chart we have been talking about for what i feel like is some weeks on weeks. twos versus tens. pick your place on the curve. south of 60 basis points. how much signal is in that? lisa: a lot of people will say this time is different. this does not indica

chatter from the ecb and the fed.is "bloomberg real yield." ♪ jonathan: i'm jonathan ferro, this is "bloomberg real yield." it is time for the final spread. coming up over the next week, it will be a shortened trading week in the united states with the thanksgiving holiday coming up. we will have details of the recent meetings by the federal reserve and the ecb. fed chair janet yellen will be speaking, and philip hammond makes his budget statements and the holiday retail shopping season kicks off in the united states with black friday. our guests are still with us. lisa, i want to wrap things up with you and get an idea of where you think the opportunities are right now. we have had a bit of a correction, bounceback. is there anything i should be looking at two pickup? lisa: we are cautious on risk generally, but right now it's about balancing, taking risk down and having some carry on in the portfolio. you can get relatively short dated maturity bonds, high quality, and pick up 80, 90 basis points over treasuries. th

we look at one morning from a major ecb policymaker. burberry gets a rescue line from brussels. a billionairehy is raising his stakes a day after burberry tumbled on concerns of its move and upmarket luxury. let's have a look where european equities are trading right now, just under 30 minutes to the close of equity trading. the stoxx 600 down some .5%. brought moresaw it than 1%, the biggest drop since august. it is heading for its biggest weekly loss since august. due to the distribution of industry groups broad-based gloss -- losses, energy and health care leading the decline. but pretty much every industry group on the back foot. it's only financial that were up ever so slightly on this imap. taking a look at the euro, we are seeing a little bit of euro strength in this section. if you look at euro-dollar one-month risk proposal, it's interesting. this is fairly neutral edging into bullish positioning on the euro. it talks about the pain trade in the euro moving higher. interesting to keep an eye on that. also, on peripheral spreads. as we see money moving out of equities, c

that being said, the ecb is still doing qe. fed -- the growth is still good in europe and the u.s.. we think that should be supportive for credit overall. one thing we are concerned about is a we got u.s. yield curve to a flat, to be completely flat, that is typically in past environments the way you would get some sort of disruption in the markets. we are about 120 basis points in the u.s. that is a level where we are a ways to go before we get to a truly flat curve. in our mind that means a big disruption in credit is unlikely in the near term, but you start of a saint yields are tight and they certainly up our. -- certainly are. they are low. jonathan: what is the most effective way of expressing that in europe at the moment in fixed income? alan: you have to be selective. within peripheral debt, portugal has come a long way. portugal is likely to get the full investment right very soon. the fundamentals look strong. the 10-year yield a little under 2%. not high but it is a government bond. europe, it is different from the u

when does the ecb think it can get to 2%?think it is going to be pretty difficult to put a timeline on that. it has been quite elusive during the entire course of the whole qe program, but they are probably looking at something ,dging closer to their target but just below 2% sometime maybe in 2019. i think that is when we probably see the first move on rates. maybe early 2020. around that time, that is probably what they are looking at. guy: good morning. richard, that is going to be a massive problem. if you take a look at the shape of the u.s. curve, you take a look at the extent to which this recovery can keep on going in the united rates, that can be the point at which the fed needs to cut rates and the euro is going to go through the roof at that point. richard: i suspect that as long as the underlying economic growth in the euro area remains as robust as it is now, i think they will be ok with a stronger euro. we don't get to have the movement we got this year. in september, we are on a 121 handle. that was probably too

what is the ecb doing? this is further evidence.bout data thatare survey may not translate into hard data, but they are getting stronger and stronger and stronger. rainer: they do translate into hard data. most of the time. the pmi's are one of the best leading indicators for gdp that you can find. i would expect the gdp numbers are staying strong and probably getting stronger, particularly once investment picks up. i think this is sort of the tension that is currently there. the data is strong and it is not there. a good part of the jobs that have been created recently have not been necessarily the best of jobs. a good part of that has been part-time. is theely, the ecb ultimate inflation target or. if inflation does not pick up, caught between a rock and a heart place. one thing, the data is strong. they are notd, moving for the main target. that is a tension that is going to stay with us for a wild. guy: you pointed this out earlier. up wrongly, but basically, we are in a situation where you take a look at the five-year five year

we are just so far away from that. >> the ecb will fall back on the mandate.xpectation.on but ifmight be strong you look at a forecast right now, i will be surprised if they can move back to 1.5%. tricky where it gets because do i have enough assets to buy. financialint, key positions, they hope to be pricing the upside of on inflation. what do you think about european stocks? the price-earnings ratio, they do not look terribly cheap right now. look at the forward expectations here in yellow. what do you think about european stocks right now? >> right now, we still think you want to be overweight stocks in general. now,wn investors right there is a growth case for the world. index as partthe of the diversified global portfolio. they could not get a conversation on europe because of political risk. if you want to look at the positioning driven, your a lot of benefits. an background. bsg. -- an acronym. bsg. during the bloomberg team at 8:00. this is bloomberg. anna: 6:30 here in london. the dollar against the yen at 112 .59. the dollar weakness and yen more bro

the ecb seems -- temper tantrum? the ecb seems to be the last difficult bank. is that right?y much is. they told us what they're going to do. they are not going to raise rates until past this. that gives a huge amount of clarity uncertainty for markets for what they will do in 2018. the one thing we don't know is one they will start communicating to us in the second or third quarter of the year, or when this could definitely stop, and pushing well past, what that means in terms of how long they will keep interest rates the armed end of qe. >> bring up to my chart, on .nflation this is the inflation gauge and yellow. in blue, ecb inflation. in white, the fed. this is at 1.4%. i know the target is this redline, 2%, but why did they not give an end date so like it's would mark -- markets would latch onto something? >> if you look at the experience of not just the year -- european economy, but global over the past 10 years, we have been consistently hit by negative shocks that have slowed the economy down. given what the ecb can tell us in june, july, or august, this gives them t

after the incident involving ben stokes in bristol, and now this, the ecb say they'll be reminding thequad of their responsibilities. we can't be naive. we need to be smart, we need to be measured. we need to understand what we can and can't do, while at the same time trying to enjoy one of the great tours you could ever go on as an england cricketer. but for now this tour seems far from great. england's ashes has begun in defeat and controversy. andy swiss, bbc news, brisbane. that's it from us. in a moment the news where you are, but we'll leave you with some of today's scenes at kensington palace. have a good night. when i walked into that room and saw her and there she was sitting there, iwas like, 0k, well, i'm going to have to up my game here! just an amazing surprise. it was so sweet and natural and very romantic. he got on one knee. have you heard, there is breaking news out of london this morning. drum roll, please. prince harry and american meghan markle are engaged to be married. it's fantastic. 0h, lovely! marvellous. my mom just texted me about it so we wanted to come and

this chart, the monthly ecb tracker).lue estimate.na in terms of the bigger picture, the extent to which they were able to deleverage the economy little bit without derailing the go story. i think that is about right. first of all, let's make sure we don't get such a headlining by showing in a very long ride. basically before 2010, 2009 and 2008 it was a totally different year. so, we have been in years of a structural slow down. that is natural for what happens with growth for such an economy. i think what we really want to thethat ties in with russian endeavor. perspective, i'm not getting worried. 10 is one of the places where if you want to find tiit, you can. anna: you can find it. >> reporter: no worries. r related to fea your ability to control the economy. matt: well, on the other hand, it is also a place where you can expect some state return, at casileios. what do you think about the currency effect of people who knew we were purchasing chinese assets. this year i think we've change imported churcant into how th

. ♪ ♪ later on, the ecb will be holding a forum on banking supervision. draghi has won the backing of his predecessor, who says policymakers are doing the right thing at the right time by planning to taper the banks bond buying program. >> the danger of deflation is over. it seems to me that all the indicators were justifying fully that they start tapering next year. , bill dudleyile has announced he will be retiring next year, but is confident the smooth transition from janet yellen to jerome will take place. is of current committee the same mind, so there is not a lot of discord going into the transition. i think it will be a smooth transition. i think this will be evolutionary. david: still with us from singapore is the executive director of client investment at taurus wealth advisors. you are recommending essentially that we reduce exposure, but can it be argued and light of the fed and ecb that we still have at least a year of this party left? this good macro backdrop will show up in earnings next year. apart from the fed, everyone will be staying pu

he is going to go over to the ecb and meet with mario draghi.teresting thing to me if anyone wants to concert action, it is the perfect time to do so. guy: that is where i wanted to go. we have the center story and we talked about that. for many weeks, that meeting down and portugal. as you start to see central bankers in the same room, coordination may be a step too far but i am looking at mines. event with thean market having sold off over the past few sessions, i can understand why there might be reluctance to get back in. i would expect by wednesday, we got the possibility of downside to the u.s. inflation. wednesday is the time when there is an appetite to buy. this event on tuesday is a reason to be cautious, just in case they come out with something that spooks investment. guy: these could put the guys in the same room. just kind of looking at europe, the way you play europe -- if you played that europe is normalized and if you believe that a you're going to be seeing a running off on the balance sheet. how do i play the trade? peter: if

luca: what the ecb is planning, unless we see core inflation moving up above 1%, i do think the ecb willo draghi is important. makes it more dovish in the ecb. it could be less forceful. i think it's an open secret he wants to be head of the ecb. he doesn't want to be to hawkish. the risk is positive, they will be more dovish in the short-term. i don't think the ecb will be the key driver next year. francine: thank you so much, edelman. stay with us. we will find the latest bloomberg businessweek. it has a thanksgiving theme had a delightful holiday dinner. don't miss it. this is bloomberg. ♪ nejra: let's get the bloomberg business flash. the energy supplier plunge the most in 20 years to they. profit was less than expected. the market share is shrinking. they're having to deal with government limits on the amount customers pay. germany's biggest dealmaker reported a 15% increase in earnings. it is forecasting higher profits. the maker of angry birds has some angry investors. 20% of marketost value. fell 29% from one year go. that is the bloomberg business flash. -- dollaryou stumble tum

the ecb has announced baby steps towards an exit of the ultra loose monetary policy stance this should speed up given the strong recovery. >> they just decided to diminish by half the level of monthly purchases. so it seems to me this is in line with the observation they made that the economy in europe is going faster than what was anticipated by the imf and by all, i would say, international institutions so, there is something which is going on in europe which is exactly what was -- what the ecb was aiming at. and i think from that standpoint, again, the decision was good now, we will see all the decisions of central banks are databased. we will see how the economy evolves. but i am reasonably confident on europe in particular >> i think confidence is back in brussels, it's back with people watching europe. looking at one of the reasons why confidence is also back is mr. macron of france how confident are you that he can really restructure france and really kind of follow up with all these reforms >> this is an immense challenge, of course, for france, because a lot of reforms are nec

was the ecb to dovish?what does it mean in the confidence of what they are try to do? peter: i think they delivered exactly what they wanted to deliver. they had to taper for technical reasons. what they have delivered it is something that prevented the markets from selling off big time. they were fearing some kind of attempt -- some type of temper tantrum situation. encouraged to rally and we see that coming down. periphery rally, the credit spreads rally. that is exactly what they wanted to do. they wanted to keep their policy as loose as possible despite the fact that they had to taper. francine: doesn't mean they are tapering because of technical reasons and there is no conviction? eric: i certainly think that is what is going to have peter: -- i certainly think that is what is going to happen. of course, the economy is in better shape. some members would argue for something more forceful. the bulk of the community, , pratt, theydraghi prefer staying loose longer. tom: what did you make of the headlines

the ecb, again, what can they do here? wage growth -- there is still room for companies to grow here. the number of low-wage employees in germany remains very high. pocketslly these global of growth. nejra: benedikt kammel, bloomberg managing editor for global business. thank you so much. vonnie: great stuff. let's check in on bloomberg "first word news." courtney donohoe has that. the house ways and means committee is expected to vote on its version of the legislation. a senate panel will unveil its own tax proposal. the senate plan may be a lot different than the house's. president trump's visit to china ending with few gains. the president will leave with no concrete concessions from china on how to deal with the issues. beijing, he spoke about his good chemistry with chinese president xi jinping. in saudi arabia, authorities estimate that at least $100 billion has been misused through embezzlement and corruption. so far more than 200 people have been brought in for questioning in the anticorruption probe, including bil

that tells us the ecb is probably about a year or two behind the u.s. why we are seeing this growth spurt and we will see two of the largest price insensitive buyers are government bonds walk away slowly from the market. it fits in with the bund move. it says to me watch out for rates. harp on that topic. jonathan: cap responsive will they be to the market moves we have seen in the last week? if credit continues to flatten. we had another deal today. canyon resource just called a deal -- pulled a deal. next week these guys take center stage, are the sensitive to was happening in the debt market? ashok: i don't think so. these moves are still in the grand scheme a blip. they arethe ecb, doj, looking at the real economy at thinking about if these moves will filter into the real economy and slow growth. i think it is premature to have that view and the central banks will see that on a fed path for the hike in december. what has happened this week is not sufficient to change. henry: i completely agree. you take a long-term chart of spreads, it is really jus

the ecb say they 110w about teen culture.understand the context of the incident and will follow up with management after this test. both on and off the pitch, this is hardly the start of the ashes they had hoped for. in scotland, celtic have won the scottish league cup, the first major trophy of the football season. they beat motherwell 2—0 at hampden park, james forrest with the opener and then a penalty as the visitors went down to ten men. it isa it is a fourth consecutive domestic trophy for celtic. manchester city restored their 8—point lead at the top of the league after coming from behind to beat huddersfield 2—1. but the game of day came at southampton, who beat everton 4—1. saints striker charlie austin with two on his first league start of the season. elsewhere, arsenal beat burnley with a late penalty to move to fourth place. it was a mercedes one two at formula 1's season ending abu dhabi grand prix. valterri bottas, starting from the front of the grid, claimed his third victory of the year. world champion louis h

would you like to see some changes in ecb policy? am oneu of the interested parties in the ecb policy. of low interest rate policy the ecb, zero interest rate , itcy does not help us does not help our clients, but it does help some other entities indebted southern european states. it does good for a lot of people. it does no good for our clients on both sides. number one, i do not believe that the low interest rate scenario really helps growth. we do have growth in countries that are not in the eurozone and have substantially higher tax rate. interest rates, and those growth rates are substantially higher in the eurozone, although lending rates are substantially higher, and it certainly does not help the average central european who has maybe a couple of hundred euros to invest amongst. there is nothing around that we can buy because state bond yield zero savings. life insurance is yield zero. bonds that corporate would be available are being chewed up by the ecb, so there is nothing left for the average citizen in our region to actu

is there a kind of -- are we underpricing the hawkishness of the ecb?robably in the long-term. bearing in mind the market has the first rate hike not penciled in until 2020. so, that's a long time away. we had the ecb minutes out yesterday and they said they wanted a little more flexibility than just having the first rate hike priced out until in. in terms of what drives markets over the next six months, the ecb will probably not be the main focus. i think we will see a policy change in the second half. yes, i would agree with that in terms of the fundamentals. yes, we are probably too devilishly priced, but i don't think it will be the main driver for the next six months. matt: we could see the ecb policy continuing to drive european stocks. -- it a chart that shows is in the bloomberg chart library if you want to click on that to see it. it shows the bond yield in blue, bunds are yielding 36 basis points right now, compared to the stoxx 600 earnings yield, which is 4.9%. our mliv blog argues this will be further reason to buy stock. how long with bund

it is debatable in australia and looking at other countries and ecb.hey look to be on their tightening path, look at the bank of england. raymond summarizing it for the fed means that the fed may be under pressure to continue this tightening path. how certain are you they are going to continue this path? bei think it's going to dependent as well. i believe korea's inflation is ok, it's not as high as i wanted to be. whether it's the bank of england, the canadian bank, and the fed, they have all been theng come i would say fundamentals are still not where the central bank is wanting it to be. they're making some improvements into policy. >> how big of a deal are rate for the this point emerging markets and developed markets in asia? i think in the background that's a bit of a concern, no matter , itmuch it to be priced in should be in the past. not just one rate hike and we stop and think about it. it has moved the currency and has moved the bonds. >> the last time we saw that , i feelcommunications like right now there has been a hike in december, they