i don't think the ecb wants to get to dovish. ey want to normalize monetary policy. ,egardless of today's meeting it is still a milestone meeting, the end of asset purchases, so it is an important milestone in terms of the ecb moving on, but in terms of reaction to today's event, it might not be huge, but it is an important date. david: we looked at the economic numbers, but what about the geopolitical issues? how much has the world change the last time we heard from them in terms of brexit, italy, and now france having some real difficulty? >> it is the latter one that ought to be concerning for the ecb. brexit has been going up and down for the last two and a half years. on the pathto be everybody was expecting them to be once the market and forces a little discipline. they may come out with a new fiscal target of 2%. the french situation is different. fuse thatlong-burning will not blow up until 2022 and the next elections in france, so the ecb has a lot of time to raise interest rates and generate the cushion the fed is lookin

the ecb should communicate on reinvestment and forward guidance, but, no the ecb can have time to thinkunicate until the end of the first quarter next year. >> okay. thank you very much for your ideas about today's meeting. >> thank you >> with that i'm sending it back to you it will be a very interesting ecb meeting for a change today perhaps we get more information about how 2019 might look. >> i have to challenge you on that, annette. every ecb meeting is an interesting meeting. i look forward to linking back out to you in a couple hours time join us from 13:30 cet for our ecb decision time special. >>> the swiss central bank held interest rates at record low levels they flagged the situation in fx markets. let's get back out to julianna in switzerland following this story. looking at some of the headlines, the snb has a dovish tone, especially on the inflation forecast they cut that forecast this is not a central bank anywhere near hiking at this point. >> nowhere near hiking that's the message we had from our economists earlier on in the show, to go through the reaction of today's

there's anybody think the ecb hikes interest rates next year? -- greg: no, it is not in the price. the market believes they are trapped. there is a change in leadership next year. theuncertainty around steady institution of the ecb is also changing. draghi isear how going to set that up for his successor. but i think that is the uncertainty that is new. markets do not like new uncertainty. that the federal reserve pauses, the ecb does not think? subadra: i think so. we have discussed this in the past. even if the fed were to go to war three times, the fear was that if the ecb was thinking they're going to be able to hike rates in the second half of 2019 , it would be a difficult proposition given the fact that the u.s. economy is slowing. now there is a real chance that the fed might actually pause meeting andcember that, with its policy for the ecb. jon: german ten-year, 25 basis there a real chance of the german 10-year yield's lower this time next year than it is right now? >> definitely a chance. >> yes. subadra: i hope not. [laughter] to me,

jonathan: you mentioned the ecb. think it is interesting to think about the european central bank can actually hike interest rates through 2019 20 federal reserve and money market people isn't doing much at all. week --joined last >> even if the fed work to go two or three times, the fear was as the ecb was thinking it was going to be able to hike rates in the second half of 2019, it would be a difficult proposition given the fact the u.s. economy is slowing down. now there is a real chance that the fed might pause after the december meeting and that complicates policy for the ecb. jonathan: luke hickmore, if the fed will struggle, what does it mean for the ecb? luke: it is difficult for them. i guess they would like to start hiking rates before the fed start taking them down again, and the risk is that doesn't happen. by the time we get an ecb rate hike, mario draghi will be gone. growth will be gone in europe. this doesn't feel like an environment where you get a rate hike at all next year. i actually don't think we

i think the ecb has some things it needs to sort out on the agenda for next year. it does not feel like an environment where they need to tighten up. you could run into a credit crunch in the next year, certainly by 2020 in italy and a tough economic environment in italy today anyway. and the data from france today did not point towards an economy that can really live with much tightening. the ecb moving towards more of a dovish stance in the next few months seems like a pretty easy call from here. >> you are going to stay with me. coming up on the program, the auction block. the drought in high-yield issuance. reaching a level we have not seen in a decade. that conversation is coming up. this is bloomberg's "real yield." jonathan: i am jonathan ferro and this is bloomberg "real yield." i want to head to the auction block now, where more than $220 billion worth of treasuries were auctioned off this week. i want to focus on the $16 billion, the offering received strong demand and had a primary dealer award of 22%, the second lowest on record. elsewhere in corporate,

that is the crux of what the ecb was solving for the entire time.hat is a more important factor. jonathan: a good point. we are going to wrap it up with the rapid fire around. quick questions, short answers. slight inversion on a specific part of the yield curve, a lot of people say it is different. is it different? greg: no. subadra: no. colin: no. jonathan: pricing out inflation, quite a lot in the u.s. tips are now a buy? greg: no. subadra: yes. colin: no. jonathan: a december rate hike, i can't believe it is seriously in play, we have priced out rate hikes through 2019 and now it is a real debate of whether the federal reserve goes december or not. rate hike, yes or no? greg: yes. subadra: yes. colin: they are going to do it and it is a mistake. jonathan: thank you. great to catch up with you and a special thanks. that does it for us from new york city, we will see you next friday at 1:00 p.m. new york time, 6:00 p.m. in london. for our audience worldwide, this was bloomberg "real yield." this is bloomberg tv. ♪ ♪ david: he went from farming map

. , if the: luke hickmore fed will struggle, what does it mean for the ecb? ke: it is difficult for them. i guess they would like to start hiking rates before the fed takes them down again and the risk is that doesn't happen. by the time we get an ecb rate hike, mario draghi will be gone. this doesn't feel like an environment where you get a rate hike next year. i actually don't think we get anything from the ecb until we are well in to 2020. jonathan: you have got to talk about this relative to the market. we have cleaned out a ton of shorts in the treasury market. we are just half of 290 -- just south of 290. cork government bonds are going looking rich and pricing in rate action. does that mean we are primed for a move the other way? goshren: forecasting rates is difficult. jonathan: tactically speaking, are we set enough? goshren: i think the volatility will be a cause of what happens in the equity market. for a long time with nominal growth both 5%, why does it make sense to have a yield at 3%? if you think you are going to get nominal growth of 25 basis

that really complicates policy for the evp that ecb. -- for the ecb. jonathan: if the fed is going to struggle what does it mean for the ecb? luke: yeah, really difficult for them. i guess they would like a hike -- like to start hiking rates before the fed takes them down again, and the risk is that doesn't happen. by the time we get an ecb rate hike, mario draghi will be gone, growth will be gone in europe, this doesn't feel like an environment where you get a rate hike at all next year. our view at the end of next year is many places -- i honestly cannot think we get anything from the ecb until we are well into 2020. jonathan: you have to talk about this where we are relative to the market and price positions. we have cleaned out a ton in the treasury market. in the 10 year yield, we are on 2.19 on the u.s. ten-year. on the german ten-year we're around 25 basis points. looking pretty rich. pricing out a lot of inflation, a lot of rate action. does that mean we're sort of primed to move the other way? kathleen: -- gershon: forecasting rates, as you kn

the ecb down six basis points. lowest since the end of september on that bcp yield after italy offered that deficit target, and perhaps a concession to the eu, u.s. futures pointing higher. we may see a strong session there. ecb is said to lower its 2019 inflation forecast in an updated outlook. we have been asking ourselves how the outlook might change given some of the softer eurozone data we have had, whether it makes any difference to the prospect of the ecb hiking rates at the end of 2019, and whether that prospect gets pushed even further out. today is the day we expect them to end net asset purchases. the euro erasing its gains. now, let's get a look under the surface at some of the stock movers. gam, a big mover to the downside, down nearly 28%. if it holds up this level, it will be the biggest drop on the record for this money manager. they are reporting a very disappointing full-year earnings . profits dropping by $900 million. there also completely removing their dividends. they're going to cut their wor

the ecb says it is monitoring that. have seen eu financials take a hit because of low rates and political uncertainty. dominate theanks global investment banking environment. when it comes to total trading revenue, the u.s. taking a huge chunk of it. >> one of the big unknowns is on the other side of the break, what happens to the u.k. as a financial capital? financiale u.k. is a capital has been integrated with european banks, there has been a seamless flow of capital. we are seeing banks move into the european market. the longer-term question is do we see the capital migrate to germany away from the u.k.? it seems clear that american banks are not waiting around. they are pressing their advantage on every front they can. stick with europe because the european central bank is announcing an end to their historic -- stimulus push after four years of quantitative easing. rates will remain at record lows through the summer of 2019. for more let's bring in our guests. at the last meeting, a slowdown was dismissed as being tr

the key question is how fast the ecb moves after that. euro area going to go into the next downturn with the ecb still having rates in negative territory? i guess you really cannot exclude that. it is not our pace case. we stick to what the ecb said and we expect the first rate hike not before september next year. it's not even september but october. the more difficult question is when will we see the first hike in the main refinancing rate, and will we have the deposit rate at zero anytime soon thereafter? there, our level of conviction is less high. we don't think we will get the hike in the main refinancing rate in 2019. for now we expect there will be some hike in 2020, but that is based on the assumption that the economy will grow around potential, but there is a lot of political risk. brexit is still a looming issue, so therefore i think the risks surrounding the base case are quite high and our expectation is that the ecb will acknowledge this and in any case, will be very cautious in raising rates. in referring to the bond market

for the evp that ecb. >> if the fed is going to struggle what does it mean for the ecb? >> really difficult for them. i guess they would like a hike in rates before the fed start taking them down again. the risk is that doesn't happen. by the time we get -- well a n ecb rate hike, mario draghi will be gone, growth will be gone in europe, this doesn't feel like an environment where you get a rate hike at all next year. i don't think we get anything from the ecb until we're well into 2020. >> you've got to talk about all this relative to where we were in the market and priced where we are positioned. we've cleaned out in the treasury market. on the 10 year yield right now we are just at 290. on the german ten-year we're around ten basis points. -- 25 basis points. looking pretty rich. pricing out a lot of inflation, a lot of rate action. does that mean we're sort of primed to move the other way? >> forecasting rates as you know is very, very difficult. jonathan: >> practically speaking. >> i think we're going to set up a lot of volatility. i think it's going to cause much m

let's begin with the ecb. how much of a difference in language was it? dominic: there was a major shift at the margin, probably more dovish in terms of the headlines. i think there is still interesting stuff that we are going to need to find out more about, reinvestment's are going to be a big issue, going forward and there are a couple things he mentioned, such as concerns of bank profitability which could mean they do something strange on interest rates earlier than expected. he was sincere in the fact that this is not the beginning of tightening. at the same time, the downgrade for next year's inflation rate is worrisome. dominic: i think the elephants in the room for the ecb is how do they do a proper normalization of monetary policy when there are a lot of big ?ssues yet to be resolved that is the major problem, so we know that bond yields are very low -- bund yields are very low. market cannot see through its current resolution. guy: you just mentioned the ecb a little concerned about what is happening in the banking center and understandably so con

elsewhere in europe, it's going to be a challenge for the ecb. ey are looking at modest growth and very low core inflation. the only thing they can point to is headline inflation is at their target. it's not going to be there much longer. guy: the market is pricing out. we found out more about this over the weekend. out,e market is pricing would you be on board with that? firmly believe the ecb needs to get rates up to give themselves ammunition. , i don't i worry about think europe is going into recession this year or even the year after that. when that downturn it comes, it's likely the ecb will have zero ammunition. the idea that need to create ammunition for themselves for the next downturn would be quite interesting. the euro zonemes economy can withstand higher rates. the impressionte you are worried about, that they don't have any ammunition. michael: let's remember the starting point. below starting with rates zero. we could debate where it is in the eurozone. it is not a zero. even pessimists won't have an zero. it's a question of them cr

we need to talk about europe, the is he be -- about europe and the ecb. ls will be sticking around with us. this is bloomberg. ♪ ♪ vonnie: it is time for the bloomberg quick take where we find back on issues of interest. for the past few weeks, paris has been angry and violent. tomorrow is expected to be no different. a supporters of yellow vests hit the streets. this started over plans to increase feel taxes -- to increase fuel taxes. french president win oh macron scrapped it. scrapped it.acron the unrest is beginning to dent france's economy. on top of all that, macron's reforms will likely call france reach the european union's ceiling. about this onore bloomberg. pointet's pick up on the and talk about what we have been seeing in france. the unrest is showing up in the data. we have pmi data for france. falling below 50. joachim fels is still with us. joachim, we are seeing the spread widening out. is this just a temporary move as france go through this convulsion, or is something broader here? joachim: there is something broader here, guy. europe is

without some kind of coordinated fiscal response, it is hard to see how that changes or how the ecb canes. jon: in the spring when everybody started coming on the program and saying that the risk in places like emerging markets was idiosyncratic, and then i got sick of that word within a couple of weeks. the surge of idiosyncratic risks very quickly became a pitch for systemic risks for emerging markets. that was the tell, it was the leading indicator for the global marketplace, the tension in emerging markets. how does that play out? noelle: these two points are related because the european domestic market has been the place. employment is stronger, wages are building, internally, dealing with uncertainties. we think the next year, they are going to focus more on fiscal policy and that is going to stabilize growth in china, thus stabilizing growth in em and europe. at least from the external side. jon: can we get that turnaround in em in the way that noelle thinks we can? tony: i think it is possible because we will hopefully see stabilization in energy prices and global growth. that w

its qe at the ecb end and start hiking by next year. he way you play emerging markets is through etf's. do you buy the currencies? patrick: there is no currency in particular i like right now. if we have to have currencies, we would put them on brazil and mexico looks relatively favorable. equities, the asian ones look attractive. we do have bonds that you are getting a real yield of about 3% right now, which typically in equity risk is about 4%. you are getting an equity-like risk to buy inflation linked bonds right now. francine: german bonds? patrick: we are short. francine: at some point, they have to re-price. patrick: they have to at some point. francine: but they haven't. patrick: they haven't. we will see how that changes into 2019. all of a sudden, you were going to the market participants who a real recession or breakup of the eurozone, then you could be attracted to yields. as an investor, you are not getting compensated for any inflation risks. inflation is running much higher against the bond yields. other than that, there i

the ecb is taking a dovish turn following the fed and bank of canada.leen: the ecb might even they took a dovish turn. how dovish is it? he isdraghi would say concerned about the economy but has confidence in the consumer. they have raised a question but have not sent a strong signal yet. this is how traders see it. let's get to the ecb. and $3 trillion worth of bond purchases, mario draghi confirmed it is over. about politics, protectionism, trade war, fragility of emerging markets. so he is still confident in the consumer pushing the economy forward. let's look at the bloomberg so you can see the big picture view of what we have been seeing in the euro economy. we are seeing these green bars getting smaller this year. growthe quarterly gdp has been on a downtrend, as is the euro zone purchasing managers index. a gauge is manufacturing but it is tied to the overall direction of the economy. bloomberg economics says that these were dovish and this means this is a september rate hike we could see the ecb waiting until december to make a move. as for othe

we have the ecb meeting next thursday that will come into focus. lly i wanted to take you to u.s. futures and see how the u.s. is looking to open up to put this in context of what we saw yesterday, we had a recovery yesterday which saw u.s. indices end the day off their lows today firmly in focus is that non-farm payrolls report, which is going to give hopefully investors some clue about the direction of the labor market and some clues about where we go from here in terms of fed policy >> so much volatility in u.s. markets. another thing people are watching for is this opec meeting, the results of day two of the opec cartel that are meeting together we had some comments from the saudi energy minister who says he is not confident there will be a deal today. this echoes what he told hadley yesterday in vienna when she asked him about a threat of no-deal. he said it is something that could actually happen. the oil market has not really reacted that well. again, just to go back to this, the expectation was they would cut production up to 1.5 million bar

not before the summer and investors think it could come in 2020. we will have a new ecbdent after november. picture is slowing growth but enough domestic demand to support steady growth in 2019. -- you bringg up up the issue of a new president. yeare going to spend next examining who is in the running? will we examine their speeches? if it's a northern european, what will be the expectations? this process has already started. the speeches have already been parsed for signals of what kind of ecb president there will be. this process will not really start until next june. there are european elections of the end of may and in june, a whole new raft of positions to be assigned. the present of the european council, the meeting of the heads of the european governments and the new ecb president but in june, the horse trading is negotiations to find the right candidate who comes from the north and promises to reverse course from mario draghi but not too fast and be ready to reverse course of there is a new crisis. thank you very much indeed. let's go to first word news. courtney

wasall, the big problem that the ecb said they wouldn't hike rates until next summer. were looking forward to that first rate hike and immediately they went to the red and have stayed there. lot of debate over what it means. now it seems a be further away still. banks did look nearly as bad as oil has looked in recent weeks. the drop has been unbelievable. moreere more pain to calm opec calm or will these collusion's affect the price? since has been crashing september. brent is down about 40%. that, oil stocks have been under pressure as well. this year, oil was the sector with the most growth in europe. is expected to go down. adjustments, still these oil services company's are going to be hurt by this. to be a's going difficult one for the oil industry next year. what about the trade team? it was so dominant. -- dominant. , there'sbanks automakers. that's the second worst. that's typically a trade story. unfortunately because of crazy trade talks and negotiations, china's slowdown and auto and miners have been under a lot of pressure this year and that will likely co

era.xt, the end of an the ecb and its bond buying program. bloomberg. ♪ >> welcome back. 30 minutes into your trading day. this is bloomberg markets. sales fall for the third straight month. lvma agrees to buy a hotel and travel operator for $2.6 billion. may leaves brussels empty-handed. european leaders step up plans for a no deal departure. welcome to bloomberg markets: the european open. we're talking about u.k. politics. we will see what today brings. matt miller is in the city of london. because today is one of those days where almost all of the iocks are trading down, thought it might be nice to take a look at year to date performance of the stocks in that broader european index. if we take a look at the winners, the oh caught a group has more than doubled so five this year. is right up bund there. these are the biggest gainers we have seen the year to date. you take a look at the biggest losers year to date. your -- pandora, tehe jewelery maker, very interesting. ins a stock is down 11.25% 2018. bra: the european leaders have pleas for

debated and will be the ecb role will be one of the seats allotted.les, you cannot have a german ecb president. the new president will be decided in the context of this topr decision on the prospects. there are some front runners, the french governor, the former finish central bank governor, who is the expert of all things, too early to tell. francine: thank you so much. still with us is diana amoa of jpmorgan and kit juckes. when i woke up, i forgot we should be celebrating the 20 year anniversary of the euro. will it be here in 10 years? kit: it will. , think it has got deeper roots emotional baggage but deep roots. things have lots of wrong with it but it will be here. do you expected to be here and when it comes to fixed income, is there anything you like at the moment? diana: i agree. the euro will still be here in 10 years despite headwinds we have seen in the past with peripheral debt with italy. they have shown an ability to muddle through some of these. outcomergue whether the has been optimal and there have been winners and losers in the pol

we have the ecb ending in qe, withdrawal of liquidity. ere is a lot in the background markets are worried about. and the markets don't like it. but i think for now, the market has gotten ahead of the economic fundamentals that we see. manus: it certainly has, which as you are speaking, i was thinking where do we go next? let me do something to my screen. when you're driving the bus and changing the gears, it can be hard. these are the stock markets of 2018. i want to take your island down to the bottom -- i line down to the -- eye line down to the bottom. do you think the flow of money -- by the way, the flow of money out of china was stupendous this year. we saw the biggest outflows in a number of years. $2.3 trillion was wiped off the market value of china. do you think we see a flow of money back towards china on trade and policy response, 2019? i think the underperformance of chinese stocks is not surprising at all given the economic hit to china from trade tariffs. think potentially money could come back into emerging markets like chi

mistake, either from the fed, which may tighten, but the ecb as well. aghi is expected to cap the qe program tomorrow. is that likely to prove with hindsight to be a policy mistake? bilal: well, i think -- one thing i would say is that we have been very cautious this time around about the way they have done everything. they won'thindsight be judged as harshly as they 2012, or when011, they did the actual rate hike. we have to remember that although they are ending qe this year, they have a large reinvestment that will mop up a large amount of bonds over next year. the policy mistake would be they were to become very firm around hike next year. if they would soften the language around that they would reduce the chance of the state. -- mistake. guy: thank you very much indeed for braving the cold down here at westminster. vonnie? vonnie: we have a nice little rally for ourselves in the united states. up 1.5%. -- dow is united rentals is up more than 8%. crude oil rallying, up 1%. you can see the dollar index is just shaving off some of its gains as sterlin

is the ecb going to be able to raise rates before the end of 2019? shamik: i doubt it very much. oing to announce an end to qe this month. that in itself is going to be quite difficult for some of the reasons i've outlined already. you're right to say the eurozone economy is slowing. core inflation is below target. the risks are they will have to relaunch qe at some point. i personally see very little chance of european rates going up next year. manus: if we take europe as the example, and the u.k. to a certain extent, the ambition to raise rates, get a brexit deal done, are you looking at the potential for the biggest market incident being the policy error from central banks hiking into perhaps the decentralized growth cycle? shamik: i'm hoping not. i still have some faith in central banks. i think markets are right to be concerned. there's conflicting information. at the end of the day, central banks are data-driven. u.s.,ngs slow down in the arguably more in the eurozone, my guess is the likelihood of the policy error goes down. these guys still respond to what's happening to g

the ecb moving to more of a doveish stance seems like a pretty easy call from here. coming up on the program, the auction block. reaching a level we haven't seen in a decade. that conversation coming up. >> i want to head to the auction block now where more than 220 billion worth of treasury were auctioned off this week. i want to focus in on the offering received strong demand 22% which is the second lowest on record. also tesla planning to offer 800 million of bonds. it found strong demand for its inaugural bond sale in february and the company plans to become a regular issuer. finally, high yield, there is a severe drought. as it stands now december would be the first month of tho issuance since november 2008. still with me. kathleen your thoughts? >> where's the supply? >> there is no supply and the high yield managers are feeling the pain and reaching for yields. there jurnt aren't a lot of choices out there. that makes it for some not so great decisions in the long run. >> the issuance in the past couple of years has gone two places. yields were low, spreads wer

whether that would mean the ecb could not raise rates, too? everything said, are european equities your preferred space for the u.s.? william: over the rest. if you look at 2019 and profits growth around the world, it is not inspiring. the world economy should slow a little bit. you should see low growth around much of the developed world. in europe, you have got a dividend which is a little bit more attractive. the valuation story, more attractive in europe. you should see some of that sentiment move a little bit more in favor of europe. the advantage we have got in 2019 over the state we entered this year, that is sentiment. we are not jubilant in any way, shape, or form. sentiment is much more depressed. that gives you much more scope to absorb the inevitable actions that you will see ahead. our preferred region and the world is still p.m. -- em. nejra: euro traders still opting not to take out call options on the currency. we have seen the euro, and the pressure this year. does it recover in 2019, and to where? william: you have not got a b

the ecb being more cautious. ne: i know you're not crazy about europe, you prefer other parts of the markets, but what we are trying to figure out is where is the best 2019 trading opportunity in europe? with think of this from a sector perspective and we look at two that i've you are attractive right now. the industrial sector, a lot of risk is now priced into industrials. they typically get a lot of the revenue from outside of europe, benefit from still strong growth in the u.s. valuations are attractive in a world of low interest rates. them a look at the health care sector. sectors which are less dependent on whether the economy gets better or worse and racy sustained cash flow balance sheets going forward. still many attractive opportunities within the european market. francine: up next, what will 2019 bring? blackrock expects trade tensions to continue and slowdown in global growth. we really break down richards report on 2019 next. this is bloomberg. ♪ francine: this is "bloomberg surveillance." let's get s

week of 2019 with jay powell coming up, the most interesting central bank will not be the fed, but the ecbw on earth does president draghi plan to raise interest rates before he heads to the exit? tony: you are right. he cannot do that. right now, the economy there cannot sustain higher rates. he is going to have a communication issue as well to get the market to be comfortable with what the ecb is going to do. and the ecb is going to have to display patience given what has happened in growth in germany and globally. jon: the best measure of the european economy is the german ten-year. to think about the confidence that we had coming into 2018, that it would end the year lower than when it started. ira: that shocked a lot of people. one of the challenges for europe is how do they get out of this growth malaise? what is the way they get around it? at this point, there is little that monetary policy is going to be able to do. they have literally negative interest rates and that does not seem to have done the trick to get lift off for the economy. you have had little bumps. things have not de

the ecb has been buying government bonds as part of its quantitative easing program. that was later expanded to make financncing cheaper r for compa. the e ecb has spent a staggering 2006 euros on bonds. -- 2000 6 million euros on bonds. >> they have been for filling the mandate that it has. it is now pulling back from financial relief to fulfill its mandatate for both northern and southern european countries. the ecb has proceeded with caution, allowing the markets time to adapt to more financial -- extensive financing. the question is whether they will raise the rate next year. >> the japanese have been flocking to retailers to stock up on one of the new year gastronomical rituals. it is all about boxes packed with notices s such as caviar ad troubles. they sometimes have two or three layers. the most luxurious ones can sell for nearly $1500. you are watching dues of a news from berlin. we will have more for you in the next hour. see you then. [inaudible] one is on front front. i'm from front even old old old home. he ran for his decision. he says that government can

noon, the halftime report. >> a new warning of a global shutdown this time from ecb chief mario draghihe news >>> the call of the day, jp morgan steven tusa saying the bottom is in on general electric the halftime report starts right now.

the ecb, everyone has been focused on when they are ending qe. it is happening, the end of the program is happening at a time when european growth is not looking great. it is not just the problem initially, the recent collapse of the reforms. also slowing down aggressively. chinese comments on the outlook for growth may be the most interesting part. that is where we will see the real swing on the euro. suspect he will take a more positive tone and imply it is temporary. no doubt he will be pleased brexit stays on the front pages that is one of the questions they want to help answer. where do you think the assets will and in 2019? let's get a first word news update. theresa may is headed back to brussels after winning a confidence vote among fellow conservative members of the house of commons. more than a third of lawmakers voted to ditch may despite an emotional concession when she said she would not lead the party into the next to election. with may safe for a year, she returns to the task of getting her brexit deal agreed to by parliament. i am

that really complicates policies for the ecb, in my opinion. : german tenures, .5 basis points. is there a real chance that the german ten-year yield is lower this time next year than it is right now? >> is definitely a chance. >> i hope not. to me, 25 basis point is extraordinary given the fundamentals in europe. so yes, i would like to believe that things do actually improve over time given the fact that they are ending qe. it should technically push yields higher. 25 basis points. >> i'm not going to say there's just a chance, i'm going to say they will be lower. it's more important, i think, were italy, portugal, and spain are. i think that is really the crux of what we were solving for the entire time. i think that is a more important factor. jonathan: we are going to wrap it up with the rapidfire around. short answers if we can. slight inversion on a very specific part of the yield curve. is it different this time? >> no. >> no. >> no. jonathan: inflation by quite a lot in the united states. >> no. >> yes. >> no. jonathan: a december rate

. >>> banca carige pop as the italian lender's largest investor holds talks with the ecb. >>> investors seek safety in the yen and gold as global growth worries persist >>> it's broad based, it's decent, it's green that's what the rally looks like in europe. stocks across the board are joining in this global rally triggered by wall street we got 1.25 on the benchmark in europe we are in lockstep moving higher let's take you to the individual bourses. some are leading the charge more than others. the swiss market is up about 2%. of the core markets, we're trading up roughly 1.3%, 1.4%. when it comes to the ftse, we're well and truly off the highs in 2018 we're trading at 7,800 points as we look to wrap up for the year, we are around the 6,600 level. so we have come back from those highs in what has been a turbulent year for uk stocks around brexit and gyrations in the currency when it comes to the rest of the market, trade is impacting some of these economies and problems domestically in france the yellow vests destroyed some of the confidence in macron's ability to change tact in that m

this is coming off the heels of an ecb yesterday where the interpretation was that mr. draghi was turning more cautious on the growth outlook. no doubt these pmi numbers will not be helping when it comes to that we'll talk about that more later on. >>> and theresa may has arrive ed for the second day of an eu summit leaders have told may the brexit deal is not open for renegotiation. willem is in brussels. the message for the eu all week has been that they're willing to help theresa may but not willing to renegotiate the withdrawal agreement. any signs emerging to the contrary today >> not so far. only a few leaders have been willing to address the press publicly the austrian chancellor over there talking to some other journalists. but the message has been quite consistent both from the european commission and from the european council members, that they're not prepared to open up this withdrawal agreement to make changes to the legally binding tek. they all seem to be respectful of theresa may's efforts, but they also think she's been given a good hand and it's up to h

we expected the ecb to catch up to the fed in terms of hawkishness.ning. i willll right, dani, give this to alex, maybe because i am a little obsessed with the u.s. oil numbers. alex, congratulations. ♪ . >> trade tensions rise bay jinx ambassador.american global stocks slide. vote on for now. big day tomorrow the prime as defeat that could plunge the u.k. into chaos. kelly is out announcing his departure. potentially aces unruly transition for a pivotal role.ship and good rning afternoon if you are watching from asia. this is

ed, thank you, this is fun >> good to see you >>> and the ecb decision came when we were talking takenyway, coming up, we'll have a check on what's moving, the markets, the unchanged ecb and plus much more from our guest host former defense secretary ash carter as we head to break, here's a look at this morning's premarket movers and the dow "squawk box" will be right back. >>> for those of you that missed it, the ecb issued its latest policy statement just moments ago. as expected it left rates unchanged and announced its bond buying program would end this month. there's a look at the euro versus the dollar. >>> time for a market flash. an interesting note this morning out on general electric. definitely, the management at ge can be back foot but if this one analyst makes a move the stock is actually showing signs of life because of this guy. he's a real ax as they call him. >> this is steven tussa we're talking about. he's had the weight on shares going all the way back to 2016 he's also been cutting, hence, the ax nickname. he's been cutting his targets over that entire time span s

some people are asking whether the ecb has missed the boat in terms of interest rate hikes.guest -- our guest yesterday said that wasn't the case. see -- if you, we look at what is happening in the interest rate market or the bunds market, germany has no positive yielding bonds as far as seven years along the curve when you look at government debt. it seems it is very difficult to get out of this negative rates environment we have in europe. ann-katrin: i think that when it comes to the yield curve as driven by growth expectation, inflation expectations which are more subdued in the eurozone compared to the u.s.. also, political uncertainty plays a role. a safe haven, particularly when we look at bunds. when i compare the u.s. and eurozone and when yields are curving, the fed has led the pack for years, moving ahead with rate hikes. other central banks have been reluctant in normalizing their policy. moveee that the ecb will -- continue to move, be on autopilot with its slow-motion exit, which means another rate hike in q3. moving forward, this means the policy divergence we

anna: we will talk about the ecb in just a moment.hink there are fundamental reasons for the stocks to retreat. see steve mnuchin blaming volatility on the volcker rules, computerized trading. but you think there are reasons to take a step back and sell off? >> yes. i would argue that expectations, particularly in the u.s., may have gotten carried away because of tax reform. think tax reform means i want to play half valuation to u.s. equities. , maybe look into 2019 there early consensus is just too high for an economy that will be slowing to a 2% pace year. -- next year. matt: what do you think about mnuchin's concerns? these high-speed trading concerns are ones i have not heard, to be frank, since the financial crisis. is that a problem? our algorithms a problem? the quad a complaint has been much louder and we have heard it from previously successful, wealthy hedge fund managers. >> the underlying structure is becoming more and more under strain. my handthe picture in shows that over half of u.s. equities are now traded by machine