mario draghi: exactly.in, coming to the two options that you presented at the meeting, one is six billion -- what were the arguments in favor of the second option? why is it better to reduce the amount and run the program longer? mario draghi: well, to some extent, we went through these arguments before. we went back when we increase the size in march. and we asked ourselves, what were the conditions of the economy at that time, what were the prospects for a sustained return to the objective of inflation? what were the risks of potential deflation? and at that time, we thought that raising 280 billion would the way of the concerns that we shared with the governing council, what they had at that time. of in deciding the new scale 60 billion, we simply went back. analysis, the same and account given during the introductory statement in various parts of this. and we also saw that the risks of deflation and inflation, the deflation distribution was much more skewed towards the out of deflation. so that was the

our guest.to where is the upside for mario draghi today? it seems there is a potential for december the third disappointment. the market is disappointed. is there an upside surprise that draghi can deliver? >> i think we have to remember that central banks are very vain. they will take credit for the fact that five-year european inflation is not 1.7% to 20%, getting towards a target of 2%. 1.8%, getting to towards a target of 2%. inflation expectations is rising, which is what they have been trying to do with the qe program. to some extent, the market will be disappointed if they are looking for the usual dovish draghi. and the fact that the market has responded in almost the reverse way we expected, allows dragh draghi to take some credi. matt: we will not just here about qe and extension, but also about draghi's excitations were growth and inflation. do you think that the italian referendum plays into those expectations? where do you see his forecast coming out today? >> of course, the forecast is written in stone, in terms of the research

that is decision day for mario draghi.nvestors are widely anticipating that he will extend the asset purchases at the current pace of 80 billion euros a month. anna: the big thing to watch out for is whether mario draghi gives any signal as to whether qe will and. -- when qe will and. -- end. acts a difficult balancing perhaps ahead for mario draghi. matt: difficult because he has to decide how much to tell markets, convey to them that he is going to continue this qe and maybe tapering will not happen so quickly. on the other hand, he has to say as little as possible because he is not exactly sure how much support he is going to get from euro area governments. the most important thing is going to be how the tapering, that trajectory of that tapering is going to look. most economists we surveyed expect an extension of the qa program for six months at the current run rate of 80 billion euros. -- euros a month. the question is when that and, how quickly will he have to bring it down? manus: that is going to be the debate. it

ecb's mario draghi sent investors scrambling. the euro jumped and then plunged after the central bank cut monthly bond purchases from 80 billion euros a month. that is a nine-month extension. draghi thank you we was open-ended, noting the banks 1.7% inflation forecast is not close enough to the bank's 2% target. >> purchases of securities and the asset purchase program with a yield to maturity is below the interest rate on the ecb's deposit facility would be permitted to the extent necessary. the outlook for gdp growth is probably unchanged. -- broadly unchanged. the risks remain tilted to the downside. in the december 2016 euros system staff macroeconomic predictions in the euro area phich for see annual hic inflation at 0.2% in 2016. 1.3% in 2017. 1.5% in 2018. 1.7% in 2019. us bring our guest, bill street. he helps manage $2.4 trillion as head of their investments for emea. thank you for joining us this morning. i appreciate your time. first of all, let me ask you your take on yesterday's taper. was it a taper or not? bill: not

mario draghi. beforeng gains with gold that meeting.here is one more speculation that he will have to say he is prolonging his purchase. a couple other currencies, new zealand dollar, all strengthening oil. oil holding below $50 a barrel after search in u.s. stock. the vix index pretty flat. let's get to the first word news. premieran crime area -- renzi formally resigned yesterday. but the president still won't let him leave. he will delay accepting the resignation as he talks with the fiscal parties this afternoon. renzi is stepping down after a defeat in the referendum on constitutional reform. we obviously have to go through an internal transition that i think will be hard. it will be very hard as we have to be transparent, which is needed for a great democratic already to stand out. but that, that will need to come after we tackle the crisis of government that is about to formally begin. the u.k. prime minister has one lawmakers backing to trigger the start of britain's exit from the european union by march next year. after theresa

cutsis more, mario draghi bond buying, but warrants that this is not tapering.ains above the one dollars a barrel as opec talks with producers. rallies andan yuan the roads on the president's impeachment. ulists whous -- pop claim aanother one. ♪ guy: you are welcome. it is "daybreak." it is our flagship morning show from london. regain there is -- breaking news, yesterday trillions across the month from equity and bond. today, the guy has raised. manus: it raises its overall loss for 2016. but this great, global reflation trade, is it just as donald trump took the mark, or what is driving at? with fallinga prices and the question for markets is, we have had the third straight month of gains and advances in the ppi. you are looking at an 11th month high for the ppi. export -- is it going to the relation to the rest of the world? mining is up. it was nearly a percent last month. could they be in hike mode? that is what some people are saying. we will transfer this. stocks are trading and momentum is building. take a look at the top of the screen. up by more than

described mario draghi yesterday as masterful.ig fan of mario draghi. >>> apollo global management tapping gary parr. he will join apollo as senior managing director. parr has a long track record on wall street advising firms like jpmorgan and blackstone on everything from mergers to ipos. he'll take up that role. >>> coming up, president-elect trump continues his thank you tour in louisiana today. the latest from the transition team is straight ahead. >> before we head to break, here's the national forecast from the weather channel's reynolds wolf. >> well, good morning. let's look at that forecast across the country, bismarck going to minus 3. that's all they'll manage today. that's the air temperature. 3 below zero. when you bring in the windchill factor, it will feel much cooler than that. dallas, plenty of sunshine. dry air for the central plains. out to the west, rain, sleet, snowfall. snowfall in higher elevations. in the mountain passes, all rain. atlanta, 43. the showers belong to central and south florida. new york city

well, i think there was some confusion that seem to get sorted out after mario draghi started speaking. the confusion revolves around the word "tapering," and the definition. draghi was asked how he sees that and he says for the ecb, "tapering" means a diminishing of purchases, bond purchases of quantitative easing until zero and they did not discuss that, wasn't even on the table. he took a dovish tone during the press conference. if you look at a chart of the euro versus the dollar today, you will see a spike when the market took the initial "tapering," the slower for longer announcement as "tapering," if you will, but after the press conference started and he came out with dovish changes to the role -- he will be able to buy a earlier, shorter duration bonds than previously he would, they will be able to buy yields below the deposit rate, which was previously against the rules set for themselves, and he said the whole point was that the ecb would be in the market for longer and you would see the euro come back down, so buy the rumor, sell the news move with the euro and now they vie

through with measures to maintain substantial monetary support for the reason -- region, but if mario draghi not meet expectations, there could be a selloff in equities. most expect super mario took prolonged quantitative easing at the pace of 80 billion euros or $86 billion for another half year. other than the key measure of disappointment will likely be the single currency itself. in december 2015, mario draghi said officials will do what we inflation as quickly as possible, building expectations of a stimulus package on its way. when they came out with the small deposit rate cut an extension of qe instead, no monthly increase, the euro surged the most in six years. matt miller, bloomberg, berlin. yousef: the chief economist at global asset management is still with us. this is a huge day for the governing council we have put up this chart, hdmi. i really like this, because it shows the market impact and lays out the previous announcement for the policy decision. then you have the upper boundary respond and lower boundary respond, and the upper has been higher. what do you expect mario dra

mario draghi cut his bond buying program from the equipment of $85 billion a month to $64 billion. o added three more months of buying than expected. he says qe is essentially open ended. draghi: the two options are those started by committees in the preceding months. one is the option of continuing with 80 billion euros a month for six months. the other one is the one that received a very broad consensus. air isy: shanghai's again heavily polluted. internationally accepted safe level. days of suffered choking smog a week ago. young people and the elderly have again been warned to stay indoors. half of alls banned cars in the city and made public transportation free as it chokes on the worst smog in a decade. a paris pollution monitor says commissions -- emissions fell by about 10%. i'm courtney collins. this is bloomberg. yvonne: let's see how that asian markets are shaping up. haidi has more. haidi: another record close when it comes to stocks, particularly japanese markets heating up on positive sentiments. there's a sense investors are trying to digest what happened overnight. t

. ♪ >> mario draghi confounds the markets.nd we asked what he is up to. ♪ not --suries did declined, treasuries up after the ecb said it would slow its growth from april. -- they let's bring in says -- they say that it probably is a taper. >> a very good question, the bond market probably thinks it is a taper. the equity market does not see it as that and sees the open end of this. market that can do place, they seem to like it. it is a very good question. just because it >>, does that really make it a duck -- just ks, does thatac really make it a duck? they have been able to redirect it pretty nicely, but we will see in the next few weeks if it actually pans out. we will come back to the ecb again in a bit. any reaction to that? >> the whole story is really the wing the on devalue -- devaluing the as long as theyuan. dollar goes up, the yuan depreciates faster. they will try to keep currencies from a depreciating. about the dollar, what is your view on the midterm? if the fed rate hikes in december, what is that due to the do

now the other issue is the mario draghi tapeer, and people are trying to finesse this taper.an't do more and call it a taper. so what they're doing is they, traders, economists, they're saying, well, we anticipated an extension of the $80 billion euros so sfr january through september would be 720. it's a taper. 180 billion euros yes. nay, nay, i say. 80 times three is what? it was originally called the program was supposed to end in march. we're getting 60 billion euros times nine. it's 300 billion more, end of story. expectations is not what you base whether this is tapered or not. you base it on fact. finally, the final mantra, mcdonald's corp., and i want to read this because it's hot off the presses, mcdonald's corp. just announced that they're going to create a new international holding company, domiciled in the uk, pulling out of the eurozone. what does that say to brussels? remember after the uk decided to brexit? oh, nobody was going to come back in the uk. we could see that's not the case along with a lot of market moves. i bring it up because mario draghi is nervou

begun by mario draghi, they began buying bonds in 2013, 6 years after u.s. embarked on qe. hi overcame german opposition on the governing council and initially embarked on the asset purchase plan worth about 1.1 trillion euros. it now includes corporate debt to rid the latest adjustment takes the total buying plan to 2.8 trillion euros. cut the interest rate below zero in 2013, the first major institution of its kind to try such a move. here is the background. the treaty that founded the eu prohibits the ecb from financing governments and buying up government-backed bonds has tested idea. the german bund is bank has been particularly outspoken against this. -- bundesbank. the argument. fed style qe in europe has overcome practical and political challenges. companies get most of their funding from bank lows rather than selling bonds, which is more common in the u.s.. that makes the financial market smaller and less liquid. there is a debate about the effectiveness of qa and a concern that it yields asset bubbles is money flows into stocks and assets, instead of benefiting com

nejra: mario draghi speaks in brussels today warned me european leaders -- morning european leaders that explosive politics could expose the euro area's underlying weaknesses. vonnie: president obama bows the u.s. will take action to respond to russian cyber attacks attempted to interfere with the election. donald trump dismisses claims of the interference. we talked to policy advisers we talked to policy advisers this hour. about 30 minutes into the trading day. abigail: happy friday and we do have green for this friday. happy friday to all of our viewers. -- dow, s&p 500, nasdaq modest gains. asare on record watch perhaps a dallas marching higher toward doubt 20,000. it is worth noting that it has quadrupled.

most in the market thought and mario draghi would ride to the rescue.t thought the stimulus would remain. therefore, the picture has not really changed. if you dig into what is going on in the market, many feel, despite the risks out there -- you've got brexit, the italian referendum, elections coming in germany, netherlands, france -- you've still got this appetite to see europe flourish. money keeps on coming in. emily: so how can we view this in the context of the uncertainty around a trump election and his policies, the uncertainty following exit, the potential for tax cuts, deregulation? >> at the moment, we view it that the central bank has got your back. they are factoring in these risks. the money is still going to be cheap, but the punch bowl is still there, and therefore you are still looking to divest, you are still looking for yield, you are still looking for areas to get into. the funds being raised in europe, we have never seen such big funds. one in berlin just raised a bigger fund. some of this means the funding rounds are getting bigger

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 yesterday about what constitutes tapering. draghi's definition is if you take the asset purchasing down to zero, and he said that is not what they talked about. >> that's the case. when tapering came up first, i think never people heard about that word, taper. it's out of the barbershop, isn't it? i think what he really wants is not to use the word taper and also not to have market parties pants believe the ecb will unwind. he was stressing various times during the press conference that the ecb will stay in the market. they will keep on driving prices in the market. and that is probably longer also than 2017. i had to ask him why he is actually putting an end date to his program, as they have not reached the inflation target at the

can mario draghi rest easy?rd: the great thing about this chart, vonnie, going back 20 or 30 years of data there, and even with the recent rise that we have seen in italian yields from the lowest levels that we saw in the summer, we're still historically a very, very low levels. and this, i think, is something that is really important to the e.c.b. is keep a lid on periphery yields and that's why i think they cut rates this year. they have been very acome dayive. they have chosen to extend q.e. toward the end of next year. and i think one of the key motivations for this is to keep those periphery yields capped. italy is a great case in point. vonnie: there are many flies in the ointnant, not the least the italian banks, and also the u.s. and potential fiscal policy which could spur some more inflation and a stronger dollar, so what would be a potential path for mario draghi on italy if all of the above happened? richard: i think certainly concerns about the italian banks would be something that would probably ge

in my view, and the central bankers view, maybe mario draghi's view.ink italian referendum changes how mario draghi moves forward with policy? you suggested beforehand, whatever it takes in terms of potential negative reactions in bonds, aa tell you in five or 10 basis point moment but not much. point,t important obviously, are the situations with the italian banks and the stands that the eu and ecb jointly take in terms of bailing them out. positive for the italian economy. it is a smooth over. lots ofhink covers up problems in italy and perhaps in other countries as well. nonperforming loans that cannot be dismissed and swept under the rug. yvonne: dallas bill gross speaking earlier. -- dallas bill gross speaking . -- that was bill gross speaking earlier. i have a question about the gdp figures out of australia. third quarter, falling, contracting 0.5%. a 0.1%imate was for drop. quite a big mess. we did see economists revise down there forecast after that net export figure yesterday. a negative figure was a possibility. us for nowis it from but plent

eastern followed by mario draghi's news conference at 8:30 a.m. he is expected to announce an expansion of the qe stimulus program. at 8:30, we get weekly jobless claims. president-elect donald trump announcing several key appointments. he will nominate oklahoma attorney general scott pruitt to head the environmental protection agency. pruitt joined a coalition of other attorneys jengeneral in sg the epa over its clean policy plan. trump tapping retired jenlt j d john kelly to lead the office of homeland security. and linda mcmahon is trump's choice to head the small business administration. she is a former ceo of the pro wrestling company wwe. trump is considering turning over the operational responsibility of his real estate company to his two sons but will continue to have a stake in the company. reports say the plans are not yet complete and that trump will hold a news co s conference on december 15th. >> you heard part of that includes ivanka joining the administration in some role, also her husband joining the administration in some role. >>

nejra: mario draghi speaks in brussels today warned me european leaders -- morning european leaders that explosive politics could expose the euro area's underlying weaknesses. vonnie: president obama bows the u.s. will take action to respond to russian cyber attacks attempted to interfere with the election. donald trump dismisses claims of the interference. we talked to policy advisers we talked to policy advisers this hour. about 30 minutes into the trading day. abigail: happy friday and we do have green for this friday. happy friday to all of our viewers. -- dow, s&p 500, nasdaq modest gains. asare on record watch perhaps a dallas marching higher toward doubt 20,000. it is worth noting that it has quadrupled. it will be interesting to see what happens as the day goes on the averages can hang on to the games today -- gains today. 1% after thee than russian energy minister did say all russian oil companies will participate in a supply cut deal. gold is getting a boost, nicely 1%,er, down on the week of may have something to do what the dollar is up sharply. now one chart that really stan

president mario draghi warning the newest stimulus might not be the last as it strives to reach the inflationoal. 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 global aggregate market value, a tongue by $2r, but it has fallen trillion, one rising $2 trillion and one fallin

we will bring you live coverage of ecb president mario draghi. 10:30 -- 1:30 p.m. in london. julie: there is breaking news coming out. abbott laboratories has filed to terminate its proposed acquisition. there was contention between the ere'snies over al billing practices so that argument some questions about whether this was going to go through that abbott labs is filing suits to terminate the proposed acquisition. we will keep monitoring it. ♪ this is bloomberg. ♪ julie: from new york, i am julie hyman. mark: from london, i am mark barton. 12 minutes away from the end of the wednesday session here. two big stories today. chase has find jpmorgan $521 million for collusion. the eu says it conspired to rate the arrival rate. -- $1 billion in offenses. donate us now is michael, who covers the bank for us. how may times will they have to adjust the turnaround plan? >> he laid it out in october of 2015 and came back with some saying the markets were not exactly cooperating with our push for increased revenue so we have to be more aggressive. >> if it comes up, i suppose the share

mario draghi's attentions to not disappoint the market are pretty clear. it is just what he can get out of the council. not want so, he does to disappoint. he may extend the qe program because of the italian referendum. how much of the political turmoil we are seeing in rome will affect his thinking? kit: i do not think he is just going to -- if there were any other reason needed, the current political environment in europe is one which says, you know, steer as straight as you can. the italian referendum itself, there is still the issue of bank recapitalization, and french elections next spring. there is too much coming down the track. inflation is not a problem yet, going up in any way, shape, or form. what we need to do is not make any dramatic turns that could be interpreted as a turn away from easing policy, a way toward tightening, anything that could destabilize europe's markets and europe's economy. i think that is his guide. if i were him, i would try to offer as few questions as possible at the press conference. francine: i ensure he will. the spr

it is thought mario draghi will choose to prolong asset purchases at the rate of 80 months.euros fore ecb will update its forecast for growth and inflation -- airbnb admits that it softens its approach to regulators. the move comes as airbnb inches into the indoor must chinese market. -- enormousr miss chinese market. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: getting you to the market action, just having that break. yes, tokyo going in on that lunch break, positive as someen weakens, up .8%, very strong buying coming through, particularly tokyo electric power, one of the best performers in the region. i want to show you the australian market, rallying very strongly for a second consecutive session despite disappointing data we had. october trade data coming out yesterday -- today, i should say, but yesterday's data disappointing, but solid buying coming through. up .9%, andg is flat movement on the shanghai southeast asia markets looking pretty solid today. ,ome movers we are watching samsung

mario draghi is credited with doing whatever it takes to stave the euro.hat we have learned from the documents is the fed got there as well, i'll be at a little more slowly, to do whatever it takes the mandate. >> mario draghi said that in july 2012 and then you have the fed come out with open-ended qe months later. this goes all the way back to years before. price levelg, targeting. the difference between price level targeting and the targeted inflation rate is when you are price level targeting, if you are missing on the inflation objective, you make up for that later. whereas the fed has been under running the 2% target for several years. in a way, it is too late. a willingness to overshoot. >> at least we were until about two weeks ago. hear some of the members of the reserve bank residents talk about that. you hear them in their speeches saying, if inflation is higher than 2%, we should be ad for advertising that time. this is the proposal the new york fed and staff were suggesting in 2010, which ultimately was not taken up here at one of the big comp

coming up, we drive into mario draghi's decision.e've got some breaking news with casino stocks falling today. looking into what julie just pointed out, companies dropping nine, 10%. showing you three of the big ones. , las vegas sands, and mgm. these are companies that about a year ago people were short on. they were trying to figure out what xi jinping was going to do about cracking down on spending in macau. some of these traders will be on the wrong side of the trade. you are looking at revenue. scarlet: this is a backup for the casino names. casino revenue in macau has been rising could the trend is to the upside. this is courtesy of our analysts at bloomberg intelligence. the data just came out the start of the month. the reasons are multifaceted? multifaceted. you did have the impact of xi jinping's anticorruption drive pricking down those numbers. -- bringing down those numbers. joe weisenthal always likes a good casino story. you have been tracking the macau numbers for a while. i love a good indicator and there is a widespr

also, something else that mario draghi said yesterday that was very important.on, the risk of deflation, is pretty much off the table for now. jonathan: so for the markets, captured in that curve, also captured in this spread, germany bunds versus treasury. 186 basis, joe. you can see that historically all the way to the early 2000's. reserve, theyl have a different situation than a few years ago when we started talking about emerging monetary lsu. monetary policy. now fiscal stimulus is on the table. joe: it seems conceivable that at some point in 2017, a lot of these financial market signals are going to bleed back into the economy in some meaningful way, whether it is some tightening, the disinflationary impact of the higher dollar, which is partly a of a unction of that -- a function of that higher spread. it will be an interesting question. since the election -- release and the middle of the summer -- we have seen rates start to take off, we have seen the dollar take off. there has been reviewed view, as lisa pointed out, the deflation's tory is kind of ove

that mario draghi news conference which moves the markets at 8:30 a.m.nnette joins us from frankfurt with what to watch in the decision. good morning. >> good morning to you. well, there are three main factors we are watching here. it's an extension of the qe program, consensus here is 80 billion of assets they will keep on buying for the next six months starting through september 2017. so we should rather see that extension at the same run rate of asset purchases, then, of course, questions will be how they will handle political instability in the eurozone with the italian referendum having actually voted the government out, matteo renzi resigned so we have political instability back here in the eurozone. another big topic of course will be the inflation and ecb forecast which will give us more of their reasoning, whether we will see tapering as soon as next year. very unlikely we see them use the taper word today, but nothing impossible. back to you. >> thank you very much for that. i suppose i've already given my ten cents worth on the ecb. i think we

a week of mario draghi and ecb yields.arkets continue after this. >> welcome to bloomberg markets. david: we watching stories today out of frankfurt and johannesburg. they will economist meet next week in the markets is a 100% chance of a rate hike. executive steps down. we look at who will succeed him. and i visited the new u.s. flagship store for diamond jewelers in new york city. my interview with the ceo of that company on how uncertainty in the markets has actually been a good thing. we are halfway into the trading day. thatil: we have the news fox is in a preliminary deal to billion.or $22.2 to get

ec a catalyst and will that come for mario draghi?catalyst is probably do you have a referendum result that results in a resignation in government, a waffling of who is in charge, is a technocratic government, in, and is it easier for them to make decisions that hurt voters because they do not see themselves as appealing to voters? that could happen. francine: let's say renzi loses. the only good thing is we have been through this a million times. we have a president in place, largely a ceremonial role, but he chooses the government. would it really be the end of the world? for italy it is going to be some big challenges, yes. the question you are asking when you say the end of the world is how much does it spread to the rest of europe? i do not think there is a lot of contagion risk for the bank. the southern european banks, particularly a few in spain that have the same funding structure with a relied on retail for equity. francine: we are putting a lot of focus and doom and gloom on italian banks, a lot of german banks are not in a

mario draghi stressed these measures are intended to maintain the ecb's accommodative presence in thet 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 cutting rates. they are cutting rates because they are expanding the eligible universe for bonds and down into the one year area, and giving themselves the option to buy bonds and interest rate below the deposit facility rate. scarlet: it was a dovish move. that is what he meant. englander from citigroup joins us now. watching the reaction to the ecb this morning, there were so many interpretations. the first one was surprised taper, and then it got reinterpreted. this looks like an expansion. break us down how you read what the ecb did today. steven: i think first, once again, the ecb copper market off guard because my sense and i am guilty of this as everyone, was looking at this as a one-dimensional problem. did they do 80, 70? 80's ok, 70's hawkish. what the ecb advantage convinced the market

does it actually make the job of mario draghi a lot easier?f the margin, eventually it does because the currency -- pure interest differentials will help european exports, will help the larger european companies. so it probably does, but we are still waiting in europe on to tiey that will spark -- that was spun to tighten earlier in the cycle. crept back in.e we may start to see some of that come through, but it is a pretty tough call. francine: i have an inflation chart to show you, th 2% mark that mario draghi and the ecb want. this is at the 0 level. the headline inflation, which is the blue one, the white lower, two thousand 12, and it is nowhere near the 2%. will it ever go back to the 2%, or should we focus on growth? one: you have hit the nail the head. the fact that it is the only mandate is one of the problems. the fact that central banks need to have a broader mandate, and the ecb has been fighting the war. if you go back to the early period, they were the only central bank in the world that was really concerned with the risk. the ph

what do you expect from mario draghi/? -- from mario draghi? what will the payoff be tomorrow?this meeting comes at a very critical juncture. first of all, the ecb has left a very late to decide how to extend the program. it ends in march of 2017, unless it is extended. second, they have waited until after the u.s. elections. the data in europe has been stronger. we saw stronger forward-looking data and pmi's, and now we see stronger real looking data, so factory orders and five-year sales and five year inflation have gone up to 5.7%. all of those factors together make this meeting very critical. as bill gross was discussing, we have this marginal effectiveness going forward. the bank of japan has moved to a yield targeting perspective. the qe program in europe comes into focus at a critical time, against a backdrop of really much higher yields globally. the general expectation is that they will extend the program. there is a range between three months and nine months. the question about the sizes between 60 billion euros and 80 billion euros. there is the idea of how do they a

it seems like there's a lot of pressure on mario draghi on this one once again.hat if we get another disappointment that we saw in december 2015, it is not seem like we are setting up for that disappointment right now. howard: starting with the u.s. perhaps, we have [indiscernible] as compared to the first half where we saw earnings decrease drag by oil and other factors. the third quarter was evidently the first one since a while since -- that we see earnings growth positive year on year and that trend will accelerate. -- 2016omparing i-16 and next year followed by 8%. what the market does right now is to start pricing in and anticipate that better momentum and earnings. i think it is quite logical for the market here to follow the future ending trend upwards. yvonne: i you surprised by these impressive moves we have seen overnight? nine --ot exactly had headline news driving it. guest: it was fairly substantial move. we had this in the cards already. markethink also the comes more to grips with the trump presidency. being progrowth, being pro-inflation. it is a

drawdy next -- mario draghi next year to right size is ecb?bby: he has a problem in terms of what we see with other central banks as well, which is fiscal policy has been asleep, and he been largely inactive for most of the period since the financial crisis. we have seen more stimulus in the united states, 2009, 2010, then was the case other work, especially in europe where they had constraints that were very considerable in terms of deficit relative to gdp. mario draghiabout and other central banks, let's not do it in a vacuum. let's recognize that we have asked central banks around the world to do way too much. and that is because fiscal policy largely has been absent. going to be ecb is looking not just a interest-rate policy, but also in terms of their approach to qe, quantitative ease. what mario draghi said recently he doesn't plan to taper anytime soon. when you to keep in mind this is not a long-term opportunity. tom: this goes back to your work at the cfa institute. in conversations with deutsche bank and his work with all of the othe

we know that mario draghi has said, if we have a disorderly exit, the u.k. mark carney has said that the u.k. is the investment banker to europe. what we will see in 2017 is the possible triggering of article 50 and that is when the real uncertainty comes and the real challenge comes from the bank of england. francine: thank you so much, outside the bank of england. back with stephanie flanders and steven saywell, bnp global head of fx strategy. when you look at the bank of england, does mark carney have the toughest job because we do not know what brexit will mean for the u.k. them, ie: if i were think they do it share this view that they will be focusing most on the real economy as it works through the next couple of years and particularly the rise in inflation. we tend to say a rise in inflation put them in a difficult spot because they way that against the economy but they can give rise of inflation is one of the things likely to slow the economy next year because of the squeeze in consumers and so it dependent on the consumption side of the economy. the

announcement the ecb left key interest rates unchanged however ecb president mario draghi says he isulation for the economy there, and he put a date on it saws the market in germany up 1% dax 105 points higher ooimdz cac quarante s&p 1ion positive territory mary draghi speaking in frankfurt live picture. >> asia overnight top perform in korea nikkei average up 1 1/2% highest level since january lebron james cavs huge win in big apple last night wasn't done big shot at an internet by storm coming up but first backlash president-elect trump deal with carrier united steal workers 1999 president chuck jones blasting trump on causative tcavuto. >> governor trump and the pence taking credit for 350 jobs research development jobs, that were staying here, in indianapolis, indiana from the start i think taxpayers would feel better -- they are you need bfshl a highly about profoundly company -- >> with that, about trump fired back on twitter he said chuck jones president europiteed steal workers 999 has done terrible job representing workers no wonder companiesfully country second tweet says i

does the currency help -- it helps mario draghi, doesn't it?mentally 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 pressure from the currency point of view -- weaker euro is good for exports and growth and helps inflation. manus: does that make european equities any more appealing to you as you look through the prism of the fx? >> one of the factors that does make me feel it -- yes. the problem is where the exports are going to, and always one of the arguments for europe is that they have a bigger exposure to emerging markets. given the dollar strength, though, it helps, but who will be buying? manus: great to have you this morning, as matteo renzi is set to formally resigned. dan morris, senior investment strategist at b.n.p. paribas. our top story -- italian prime minister matteo renzi is set to quit in the early hours of the morning after losing the referendum. he call

it has been climbing as mario draghi indicated there would be an extension of stimulus over in the eu. so, interesting we have started to see that spread wide and out in recent years, and certainly over the past month or so. mark: 90 minutes left in the equity session in europe. we are awaiting the outcome of the two-day fomc meeting. we are down today after reaching the highest level since january yesterday. what do you care valuations look like -- u.k. valuations look like -- it brings me to this chart. the blue line in the lower half relative to the euro stocks 50, you can see the gap between the two. the valuation gap is narrowing. analysts expect profits in the ftse to jump 24%, relative to 5.9% to firms on the european measure. also, options trading pushing against declines in the british index in the lowest level since august forecast. the ftse headed for its first annual gain since 2013 thanks to a drop in the pound and a recovery in commodity prices. i love that chart. i want to introduce you to our new euro index. it is similar to the dollar spot index, the pound index. bask

mario draghi also has to figure how to deal with the defeat of renzi and the resignation of the nation'srime minister. ecb couple of days, the will be to evaluate its qe program to determine the right economic path for the eu. here are some perspective from david islands. is it a given that we will see an extension from the program? david: i think we will, but the issue is how long and by how much. there are some who think it will extend out to nine months and continue with 80 billion euros a month. that will take a long route beyond the german elections. in the last couple of days, spreads have remained sort of compressed. we have had a situation where things are blown out, but i think we would do 80 billion for nine months. this is where mario draghi will be trying to push away from the monthly number to the minutiae and these other measures that he can implement when looking at the long-term. what are those measures? david: the market has to get around the view that they will be tapering. 2018,ill not be until which is at the earliest. the other thing that is important to notice is th

election play a role in mario draghi's decision?s is bloomberg. italy rejected prime minister matteo renzi's referendum, it is what the ecb will do when they announced their next policy decision on thursday. economists are pricing an extension of asset purchases at the pace of 18 billion euros a month. say wee, i'm pleased to can head over to jeff black. he joins us from frankfurt and he has sat in on many news conferences on those ecb thursdays. great to have you with us on the program. let's talk about how the events of the last 24 hours may or may not shape that governing council meeting over the next couple days. jeff: good morning. the situation is simply that nothing very much has happened since yesterday. apart from being a little bit of an increase in the yields on italian that. it's not a major crisis situation for the ecb at all and nothing for them to do straight away. however, the vote does not help italy's long-term growth and that obviously feeds into the argument for the euro area. italy is the euro area's third-bigge

i welcomed mario draghi po's policy. it's not the same as the boj program, but i know ten-year jgbs won't go wildly everywhere. >> if we get to 3% on the ten-year you could start to see some real problems according to liquidity according to some. do you think that's a possibility and do you agree with liquidity fears? >> yes and yes probably. i think we could get up to 3%. that's a bit further out. i think we've already had a bit of a flash crash in the u.s. treasury market going back a couple years. the liquidity in the treasury market is low. it's the most liquid market. even their liquidity is lower. we've seen the pain trade as yields have gone up. there's been losses on bond investors balance sheets. if we do see yields push up to 3%, fear could start to grab and people could blindly sell. >> jordan, the last word on this. if we get a fed consensus decision, being 25 basis point hike and then really an indication of two hikes next year what do you think happens to the dollar? >> dollar goes up. most people are tryin

about whatill talk to expect from mario draghi when the ecb meets tomorrow.quantitative easing program will be reduced, if not eliminated, at some point. i think the market to a certain extent has begun to anticipate that. haidi: that was janis capitals bill gross on the increasing expectation that the ecb will have to rein in its bond buying. rishaad: we will get comments from mario draghi. us in singapore, from the dbs group. the pressure is on him after that italian rejection of constitutional reform to do more, perhaps extend qe. what is your view? >> absolutely. in as put the ecb balancing act. you have signs that growth is picking up. thenirst three quarters, inflation showing signs of life. political uncertainties in the backdrop. , and then we ok have the a time referendum. the way this will be interpreted by the central bank is to say yes, the recovery is taking hold, but we should be wary of what is happening on the political front and a broader china front as well, growth, and implications on demand, so that will be taken as external headwinds. tha

there's a good chance mario draghi will avoid using that term.e did say that qe would not be ended abruptly. that indicates that tapering at sign point will take place -- at some point will take place. at some point next year, you can see the tapering that is not called tapering introduced. manus: i found this other chart, the purple line is the ecb. it's doing the second-biggest quantitative easing, the ofond-highest to gdp ratio any central bank. if that continues into 2017, we have the fed in hike mode, what does that do to the euro? camp?u part of the parity >> no, i am not. you expect the ecb to go down and the fed to go up. our anticipation is that the market may have overdone the fed rate hike scenario. right now we're anticipating and and his -- and interest rate hike from the fed. a lot of the talk is overdone. it will correct a little bit from the movement we've seen after the election and that will have an impact on the u.s. dollar. , thewe've seen this year hasr of the u.s. market dictated where it goes. it's almost irrelevant, and th

mario draghi has a lot on his mind. what will the ecb do to help the eurozone? and the city of leon shines once again with the festival of lights after being canceled last year in the terror attacks. first our top story live from paris. ♪ genie: syrian troops have taken over 80% of the area back from the rebels who had held it for almost five years. it's the people of aleppo who are suffering the most. 80,000 have fled the city. but in our regional -- let's bring in our regional correspondent in beirut. talk us through what the situation is like on the ground. we are in the fourth week and most of the territory that was taken back was in the last two weeks. they suddenly made very rapid progress. they now control 80% of the territory formerly held by the rebels in eastern aleppo. that follows consolidation of the old city area which was abandoned by the rebels in the last couple of days. there are still tens of thousands of civilians left in the enclave. they are now used to living under conditions of siege but they are deteriorating further. they have very litt

and yes, mario draghi has been asking for help. think he has made that kind of request because he did not ask just for more pressure, more easing from fiscal policy -- he also asked for a different composition, and more growth-friendly, which has not happened. francine: all right, francesco papadia, stay with us for the next 40 minutes. over to taper or not to taper, the big question for 2017. coming up on "bloomberg surveillance," is 2016 the year that central banks reached their limit? we ask mr. francesco papadia. unlikely alliance, the greek prime minister alexis tsipras and germany's angela merkel. united front on brexit beginning to crumble? this is bloomberg. ♪ ♪ francine: "bloomberg surveillance." i am francine lacqua in london. let's get to the bloomberg business flash with sebastian salek. sebastian: alliance regulators are uncertain about getting approval. spokespeople for alliancz and generali declined to comment. this biggest verdict in u.s. as any, gilead opportunity to appeal against merck. similaraker is making -- g

mario draghi himself spent a lot of time discussing if that should be called tapering. he was of the view it shouldn't be called tapering. regardless if you call it tapering or not, i think it was a smart move in the sense that the situation has somehow improved. what we have to discuss is there is a radical limit how much ecb can buy and people have been calculating how many months we have left at 80 billion. i going back to 60 billion but having it in a contingent language, because he said basically if the market reacts negatively, we can always go back, i think they basically gained time. that is almost more important for the market. it is not so important if they buy 80 billion or 60 billion. it is important that the market has the feeling the end is not imminent and the european economy is given time to heal from here. on one side, we have made a lot of progress on many things. but if you look at core inflation hovering around 0.8%, you can't say the ecb should withdraw stimulus completely anytime soon. guy: michael, good start. we are going to talk about what you

keptresident mario draghi interest rates steady as inspected. based on buying program was due to wrap up in march. he is extending it at its current rate until april and then it will the reduced to 60 billion at the end of next year. that is tapering or slowly winding down a stimulus program. draghi said there is no end in sight for the quantitative easing program. >> is in the meantime, the outlook becomes less favorable, or if financial conditions become inconsistent with further progress towards a sustained path ofnt of the inflation, the governing council intends to increase the program in terms of size and or duration. kate: the european markets were somewhat surprised by that announcement. they bounce back to close upwards, banking sector rising 2%. the docs closing up 1.7 -- the dax closing up 1.7%. a record session on wednesday. the dow has jumped about 100 points to leading gains with about 0.4% there. the european union is preparing to sue seven of its own member states including the u.k. and germany for not cracking down on auto compa

mario draghi was quick to refute the interpretation. >> the council is acting in a callr and flexible way, to when they materialize. second, there is no question about tapering. tapering has not been discussed today. brian: german members of the saysal bank's council winding down will allow necessary reforms. mr. druggie is hedging his bets. if economic conditions worsen, aghi is -- mr. dr hedging his bets. >> markets are trading up slightly after hitting a record high after draghi's announcement. been -- markets have what is known as the trump rally, this has been compounded by what is known as the santa rally. shares often do well in december. finally, your flights could be getting a lot noisier. u.s. aviation regulators are leaning toward eventually froming in-fight calls airline passengers. "the wall street journal" reporter airlines would be able to choose whether to provide the service, and passengers must be informed where in the flight allows calls. offer kuehneready occasions over wi-fi. calls ony offer occasion over wi-fi. molly: i do not know if that sounds like a good thin