the u.k. because they recognize that those people are a positive contribution to the u.k. economy. the issue we have to deal with his people with low skills competing for entry-level jobs. >> you know as well as i do that migration tends to be another sign of a healthy economy and now we're going to put -- britain is going to put a stop on that. does not limit the speed of the economy? even for political reasons you've explained. >> it may limit the nominal growth of the economy but what we've seen in the last few years is an economy that is growing but gdp per capita has hardly grown at all. is aat we need to drive growth in gdp per capita. we need to see our economic expansion coming from an improvement in productivity, not simply from bringing ever larger numbers of low skilled people into the economy. we will need some low skilled people. the uk's demographics are different from most if not all of our neighbors in europe for various reasons including patterns of historical migration into t

market, the u.k. was called aircraft carrier at the u.k.nd the japanese carmaker is looking for entry into the european market. of course they will be positive for thought. >> for now, and i have one, it shows exports and the weaker pound really helping asked towards. let exports has skyrocketed as the pound has fallen. at one point to the chickens start coming home to roost? click through the course of the backend of the year and into 2017, we start to see the timetable clarify unfold. it is still unclear what actually brexit means. i go to a common i'm it earlier. when we have read -- rhetoric coming out from european leaders, suggesting a soft return and not the hard return, sterling starks to root -- recover in a better growth rate may respond to that. i think we're in for a time of volatility and with risk on the --nside >> you have got to report out tomorrow. to the unknown. i will let you debate it. not telling you they will vote on it. the court case tomorrow. what does the soft brexit look like in your eyes? >> it would have some t

and the long-term prospects of the u.k. the u.k.est business. 25% i joined 10 years ago, of our group's business was in the u.k. and it is 27%. so, back to our underlying growth in portugal was 5% and it is 3%. it was the eye of the storm for brexit. what i don't expect is significant improvement in the u.k. there will be very tight control for the next two years. none of know what the final trade deals will be. that will determine what is the long-term impact for any potential damage on the u.k. economy. when you go away from larger businesses, you are coming to small businesses and it is almost like nothing has happened. which is a positive. anna: you care about what happens the financial services because you supply those services and you care about access. what about from a hays business perspective? and whether it matters much to you that the trading relationship -- paul: it makes it much easier. we don't want restrictions let's slow the pace of your business. if a client in the u.k. says we need to hire 25 engineers, and some o

is it different for the u.k. echo -- u.k.? or should u.k.ians look at switzerland and say this could happen to us if we are not softer? mujtaba: the swiss doesn't like their relation to europe. i don't think the u.k. is looking to converge on that as a template. it is a the spoke agreement, limiting immigration while still getting access to the single market. that is where the medical conversation will focus. --ncine: wished obama states mujtaba rob munn stays with us. --next, after five weeks five weeks until america goes to the polls, what will donald trump's tax returns mean for the white house? will bring you the latest from europe's banking sector -- we will bring you the latest from europe's banking sector. this is bloomberg. ♪ francine: welcome back to "the pulse." markets a little bit flat. let's head to the bloomberg with nejra cehic. nejra: if we look at the stoxx 600, where up .2%. the german markets are -- we are up .2%. the german markets are closed today. that brought a little relief to asian markets. in europe, where up .2%. -

shery: u.k. still strong by u.k. stillcaroline: strong by brexit. martin: yes.are in a latta moment, but july, august, and september, not as strong as the u.k. used to be. pretty good considering the circumstances. a cheap pound and probably a cheaper pound is good for exports if we can do as good a job as the germans do in terms of exports. the germans do a spectacular job. the reason the economy is so strong is because of the trade surplus. a cheap euro subsidizes german exporting. it is interesting talking to people here. there are a lot of concerns about what brexit means the eua itself. president putin came here to see the chancellor, angela merkel trying to forge stronger relationships between germany. first madewhen we our due diligence in russia in 1997, when i first looked at buying a company of significant in russia, i was absolutely amazed by the penetration by a german multinationals in the russian economy, and it stems from the relationship with putin. there were very close. --oline: martin: it is difficult time to run a business when we have a sort

signs that the u.k. economy has been more resilient than expected since the brexit vote might be lulling people into a false sense of security. britain could tumble out of the european union without a trade agreement in place. this has driven the pound to a 31 year low. the uncertainty means companies are likely to scale back investments and hiring plans. we will speak with martin beck at 7:15 u.k. time here on "daybreak." u.k. property lending was cut. u.s. and canadian market letters' marketshare dropped to 7% from 40%. -- 7% from 14%. the chinese president has warned andglobal economy is weak motor ball to problems that could trigger a new financial crisis. he said the underlying causes of the 2000 a crash have not been fixed and the threat remains. china, the world's second biggest economy, is set to host next year's summit. china's policymakers are facing problems over the yuan. they are issues being posed for the nation's policymakers. they are trying to shore up an economy that is at its weakest s

anna: political objections have been overcome in the u.k. the u.k.ent has allowed this in northern england. kelly: there are a lot of bands where france it is banned, and the netherlands it is banned. in 2011, thereer were too small earthquakes that were caused by fracking in the u.k. you did see a very strong fear reaction going across europe. anna: edmund, do we look broadly at the energy markets? the big story coming out of algeria on what we finally saw from opec coming together in a way that many people did not expect. what is your strategy around oil assets at the moment? edmund: avoid [laughter] . from the u.k. perspective, -- they don't want to be beholden to the russians or norwegians. it makes sense they allow production to replace and becoming more replace of. investor, what is the interest in natural gas today, pretty low. .il, i am not a big believer they are not going to stick to any quotas they set. they will tend to cheat in time. even if they prevent -- they begin to stick -- we know there's going to be leakage. -- that demand which

as far as the u.k. might change its corporate tax rate, we pride ourselves on our consistency. if you can lower your tax rate one day, you can raise at the next day. we have had 12.5% for a number of years and will commit to that that. how are you coordinating the regulations will be abided by and attract business? >> we are not interested in brass plates but we want to create substantial growth in the irish economy. a committee that involves central bank and industry to look at how we best prepare ourselves for this new environment after brexit. the message is out there as to our opportunities for international financial services. vonnie: where do you feel this is all coming from? >> contacts have been made directly but also with the department and the government of those potentially interested in relocating to ireland. we saw this before brexit. individual companies were already coming to ireland to see our capacity. since the decision, that has just accelerated. vonnie: can you accommodate that kind

the u.k. exit from the eu. the prime minister and opposition leaders speaking at the house of commons live at 10:30 eastern on c-span. on the road to the white house hillary clinton will campaigning in new hampshire with massachusetts senator elizabeth warren. we will take you to manchester live scheduled for 12:30 eastern. tonight at 7:00 debate in pennsylvania for the u.s. senate between maps to me -- pat toomey and katie mcginty. another tossup state is north carolina. the l.a. times reporting on hillary clinton's strategy in the battleground state. here's more on the race from this morning's washington journal. to this work -- >> talk with experts and people who are watching the races not only in the presidential side but the senate races in other races as well. we start today in north carolina. tamara will focus on iowa, pennsylvania will be our next stop on wednesday. on thursday we will take a look at florida and on friday, the state of ohio. joining us from winston-salem come to set th

yesterday, the u.k. business secretary backed the canadian, saying carney has done a tremendous and fantastic job. not everybody within the conservative party shares those views. let's get the views of our guest, mouhammed choukeir. we've seen the pound coming under pressure. there's tremendous uncertainty. how damaging would it be if carney left even for personal reasons? mouhammed: if carney was to leave right now, it would add another element of uncertainty. there's still a lot to go through in terms of brexit negotiations. ee's seen to hav navigated the economy reasonably well. guy: he has become, some argue, too political, that he played too big a part in the brexit buildup, and was on the wrong side of history, some would say, and certainly that would be the view of certain conservative politicians. as his credibility been damaged? mouhammed: some people criticize him for being political. others would say you was prudent. there was quite a big voice saying that brexit will cause uncertainty in the

nejra: u.k.r philip hammond speaking to bloomberg's editor in chief john mickelthwait in washington. let's talk about some of those problems and opportunities for the u.k. as it seeks a new future out of the european union. with me as simon wells, chief european economist at hsbc and jane foley. simon, i want to start with you because you have been writing for a while about this idea of hard versus soft brexit. what has changed for you over the past couple of we -- over the past week? simon: we first wrote about hard and soft brexit in 2015 before there had been a general election. union wouldustoms be a pretty hard exit back then and now liam fox is talking about no customs union at all. i think what has changed is at least now, it looks like we are on the cards for a harder exit. the debate up to now has centered a lot around paris, and the work we have done. of course paris is important -- s isorists -- tariff important. we have identified thousands of these things. those could really slow tra

u.k. futures are in the green. caution affecting european traders. germany is closed. everyone else is enjoying their holiday. overall, the dax will be shot. -- shut. still some nervousness, some risk aversion out there, as we build up whether a deal will be struck by deutsche bank this week. guy: lots of pmi data out of europe this morning. -- 820 ofayed 20 attention. the british pound firmly in focus, dropping on the back of news we will get a trigger on article 50 before next month. we will hear from philip hammond -- hammond later on, chancellor of the exchequer. the bond market will probably respond to what happens with the data throughout the morning. here is the bloomberg first word news with rosalind chin. rosalind: the pound fell after the british prime ministers said she will pull the trigger on brexit by the end of march. theresa may will invoke article 50 of the lisbon treaty, starting a two-year process of taking the nation out of the european union. confederation of british i

the u.k. we are a british bank. there's a lot of cap dal in u.k. which is put to work in the european union. we would hope, as the brexit negotiations go forth, that the politicians and the regulators keep up the free flow of capital and continue to allow participants in europe to have access to -- participants in the u.k. to have access in europe, to help europe grow. >> he helps oversee 344 billion pounds. thanks for joining us. has the negativity, the bearish sentiment towards the european banking industry hit its lows, do you think? >> that's a difficult question to answer. possibly but maybe not. i would say clearly deutsche bank and a number of the european banks need more capital and it really is a function and question how they get that capital and what they do with it in terms of repairing their balance sheets and putting their businesses back on an even keel. it's a fragile business and confidence business. banks right now, especially deutsche bank, is a pretty wounded animal. . we h

would make the u.k. less attractive. it was only after receiving specific assurances from the government nannie san decided to keep operations in sunder land. >> in the long term, we need to assure that britain gets the right deal with europe. >> the u.k.'s government's assurances could prove costly. the u.k. arm sells vehicles worth six billion euros a year. around 55% of which head to europe. potentially 320 euro trailed riffs without a free trade deal. other carmakers like toyota said they now expect similar aassurances for their u.k. operations. >> a crackdown on money who make money on the sharing economy by cars parents ir or cars. they should therefore be taxed on those earnings. >> homes, cars, and even tools. nowa days, everything is for hire. thousands in france of making billings out of something they own without paying tax. this student rents out her car to pick up a bit of extra cash, announcing -- amounting to several thousand euros a year. >> it cost quite a bit of money to run the car. petrol, maintenance

u.k. 10 year yields at the highest pre-brexit vote. np, all topping profit estimates. but how high was the far? the pound sees no gains from a u.k. gdp beat. we bring you our weekly show, "frexit: what's next." this is "surveillance." i'm mark barton in london. the stoxx 600 is down for a fifth consecutive day. worst losing run since september 4. this is a weekly decline after two weeks of gains. the german 10-year yield is up to 18 basis points. the dollar is falling against again. it was rising earlier. fellmer prices in japan for a seventh month today. household spending slumped. u.s. gdp data expected to increase. oil is falling for the first weekly drop since september as the opec committee meets in vienna to discuss output quotas for members participating in an agreement to cut production. this is my chart of the day. yesterday'sr stronger-than-expected gdp number. there's a greater chance of the boe raising rates then cutting 2017.n the second half of this is according to overnight

anna: the u.k.ernment will decide today whether to expand london's main airport whether it be houston or gatwick. -- heathrow or gatwick. manus: avery refocuses on the chicago fed president. charlesevidence -- evans says it may be appropriate for the fed to raise rates 3% -- three times. confirming the target for 2016 and the numbers look to be broadly in line. 3.59 7 coming in at billion come abruptly in line with the estimate of third-quarter revenue. aren't is key -- orange is keeping their outlook. pricinghis is the new cap in terms of roaming. anna: let us move on to another topic but sticking with the french corporate world. emes has reported third-quarter revenue slightly ahead of estimates. company's ceo joins us. welcome to daybreak. --l me how you see the world glass half-full or half-empty. a nice dynamic in asia especially in china as a matter of fact. on the innovation side. i think they are taking it very seriously. we are seen in the last 18 consultationicant in chinese companies in t

the u.k.s expected to account for more than a quarter of rain air sales this year. has reported the slowest third quarter sales growth. they said revenue increased 2.1%. at the same time total sales fell for the first time in six quarters amid a slowdown in baby food. one of the company's fastest growing businesses. netflix surged 20% in extended trading after reporting its streaming service signed up 3.5 million subscribers in the third quarter. that helped quell investor concerns about slowing growth. reed hastings told shareholders that the company will become more profitable in the next year. i.b.m. has said profit margins shrank for the fourth quarter in a row missing analyst estimates. profit margin was 48%, down 2% interest the same period a year earlier. underscore the challenge to shifting to cloud services. mark schwartz will step down at the end of the year from goldman sachs. he has worked at the firm for 27 years and is based in beijing, will become a senior director. goldman sach

we'll be looking much more across the board at u.k., the u.k. banking sector.let's talk about barclays. the whole banking sector is beginning to shift lower, and i think that's interesting. earlier on we spoke to jeff staley and asked him about the figures. >> we're very pleased with the results. we set a couple of financial targets and laid out the double-digit return on tangible equity for the core part of the bank. we delivered that again in the third quarter. we're on target to hit our cost 2016, continuing progression and capital build. we like where we are, given that we have taken some provisions for ppi and had headwinds from our pension. resultseased with the and we have a long way to go. lead to close in 2017, and then we will deliver what we set out on march 1. manus: and that will be your barclays? that will be a bank shaped in euro vintage? we will talk about that alone let more ppi, not a charge on ppi. let's get the u.k. issue out of the way. is this the last major charge on ppi, mr. staley? >> give it everything that we know, we feel that we are

this is the u.k. official saying the u.k.stablish something new, a new version, which is different to passporting. how would that fit with you in terms of your perspective on brexit any ramifications for barclays on the ib side? jes: having access to europe is very important for us. leading underwriter for european sovereign debt in the continent, the leading underwriter of the supernatural -- supranational entities in europe. we have a tremendous client franchise in europe. one of the important things is that the regulator's post financial crisis through the d 20 have been very faithful to the principle of not inhibiting the free flow of capital. there is a lot of capital in the u.k. which is put to work in the european union. we would hope as the brexit negotiations go forth that the politicians and regulators keep up the free flow of capital and continue to allow participants in europe to have access, participants in the u.k. to have access in europe, to help europe grow. those let us hope some of arguments are indeed hear

the u.k. economy is defiant in the face of the brexit vote. a global selloff after today's gdp report left virtually no chance of an interest rate cut in britain. qualcomm looks to buy -- the largest maker is looking to diversify beyond the smartphone industry. we talked to qualcomm's ceo this hour. singery's ceo says the is close to pushing the brexit relocation button. having a look at the european equities. 30 minutes away from the end of the thursday session. you know the function. bonds, andaren c, commodities falling in europe for the fourth time. down against the dollar despite stronger than expected gdp data. the yields on a whole array of higher since the 23rd, the day of the referendum vote. what a busy earnings day we have had among the busiest so far. this seasonapb shed 7%. -- apb shed 7%. deteriorating markets could pressurize the company, which is facing pressure itself from an activist investor. it's been pushing the company to spin off power grids. the world's biggest maker po

u.k. prime minister theresa may loads up her cabinet for brexit talks with the european union. it is looking heavy on those that are pro-exit. is it a sign they may be planning a clean break with the eu? clues from afor speech by janet yellen. we will tell you what to expect from the fed chair. have a look at european equities, under 30 minutes left in the friday session. we are rising today. look at the equity gainers today, greece up 2.5%. belgium up 1.6%. do yesterday were chinese exports slumped the most since february, pushing risk appetite lower. factory is about inflation rising for the first time in almost five years. this is sterling. this is pound-dollar. ons is pound-dollar 2016, schedule for our second weekly drop amid brexit concerns. mark carney is touring the country. deutsche bank, you can see it there. germany's biggest lender forecast a decline to 1.15. bank of america, based on its current rates of decline sister lynn will drop to 1.05 by the end of next year -- sterling

and u.k.atory investigations, they aren't going to be allowed to pay a dividend, because they do not know how much they will have to set aside to cover the cost. i wouldn't see anything, at least for the next couple years, but there are still loads of headwinds. if rbs is able to achieve what i'd say itng to do, is a more prosaic banking operation. eventually, investors may think, well, we have a sound business, and as long as they can stay away from any type of consumer misconduct, it should be ok. nejra: is this quarter pretty much the best it gets for banks, given how unusual it has been with the volatility and things like brexit in the u.s. elections fueling debt trading? >> well, given those headwinds, in has given a pretty decent performance. some of the headwinds should drop out. q4 could be another decent earnings spell, given some of the headwinds that will drop out. in the short-term, it's very difficult to call, but we like the momentum. 's gotms like it traction, but to quote mysel

the weaker pound is helping the picture for u.k. equities. it will also help u.k.er, but the uncertainty is significant and inward investment is likely to be damaged over the next two years. we do expect the pound -- we are not surprised to see the pound at this low level. it could go further. manus: can i pick up on that thing. this is the ftse 100, 250 and three 350. more domestic focused markets have improved as well and sick patient. the consumer has not been battered as much as we thought. the 250 is above the brexit level. does that challenge what you just said? are the markets ahead of your thinking? apologies, your thinking is more head of the markets? euan: sometimes the market is ahead of my thinking. -- more than half of the voting public voted for brexit. the consumer doesn't necessary think they have done it damage to the kid economy. we are not seeing the weakness come through -- done damage to the u.k. economy. we are not seeing the weakness come through. we are is not -- we're seeing a retreat from investment. we had a chat on the show, i was pointi

the u.k. buys a lot from the eu. eu thehe u.k. obviously -- the eu obviously needs the u.k. as well. that is the story of brexit vonnie:. . mark: mr. scattergram takes it today for bringing something new to botc. we have never had a scattergram. well done cory johnson. i do love vonnie's chart. take a look at where european equity markets finished the tuesday session. this is bloomberg. ♪ noon in new york. i'm vonnie quinn. welcome to bloomberg markets. from bloomberg world headquarters in new york we are covering stories from new york, london and beijing. we are live from bloomberg's the year ahead summit where business leaders convened to discuss the key issues for 2017. our bloomberg businessweek editor is speaking with the ceo of tiaa. you aboutl tell clinton's secret weapon in florida. we are just two weeks away from the presidential election. are swapping corvettes for comfort as sports car sales fall. julie hyman joins us with the latest. julie: we are seeing more of a pullback. we got

the u.k.basis points. the equity market -- it increases correlation. caroline: talk about the credit is you are buying. we are seeing the druggy effect not only driving sovereign bonds below the deposit rate, but equally corporate. are you going into investment grade, or are you chasing it down the credit curve. we are long investment grade and high yields, both in europe and u.s.-based portfolio. clients are also interested in spread. many are facing troubles from qe. they are trying to avoid markets that have that kind of distortion. if you look at truly free markets -- caroline: are there any? rick: emerging markets, some of the troubled ones have inflation-linked bonds that have real yields in the 4% range. where you do not have central-bank intervention, you can see real risk premium. this chart is meant to be the basis of everything, every investment portfolio. and it is a difficult thing to do. rick: it should be. guy: yields are going higher in the states. how much higher do they go an

the u.k. voted to leave the european union. traders speculate that may have been caused by human error with algorithms adding to the pressure. global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. tom: let's look at equities, bonds, currencies, commodities. sterling front and center. yields up over the last three days. this is the likelihood of a december rate increase priced into the market with oil lifting as well, that is american oil at $50.61. the strength -- dollar strength and the euro weaker. the equity markets in one big churn. two-year yields showing the move from about 2.78. stirling is more critical that 1.2430 then all the razzle-dazzle of the flash crash. euro-sterling not moving the same amount, euro weaker versus dollar. francine: today is u.s. jobs day and i wanted to start with pound because we saw that, because of the algorithm flash crash. we will ask erik nielsen how he wants to quantify it

the u.k. chancellor philip hammond -- an audit by german regulators shows the think it may have mismarked as many as 37 deals, including colluding with italy. emerging markets may have been outperforming this year. it has been the asset class du jour. to one strategist at jpmorgan who says there are risks longer-term. l, we are 30 minutes from the european close straight let's have a look where european equities are trading right now. 600 intraday.xx down 2/10 of 1%. if you take a look at what is happening across the sectors, it is banks leading the down 2/10 . gain. what's interesting is that usually -- the stoxx 600 has moved in lockstep more than any time since 2007. 600 fell for the first time in seven days. --could be these concerns heading for the biggest three-day gain in a month while the overall benchmark is down. if we take a look at this, i want to show you what's happening in on markets. -- bond markets. we are seen yields move higher in some parts of the space. basically, this spr

u.k. what it tells us about the post brexit economy. this is the picture for the markets. they are little bit of subdued. we have ok figures out of china. gdp 6.7%. what people have been wearing about chinese debt for a while but it seems to be coming to the forefront more. this is bloomberg. ♪ . ♪ francine: this is "bloomberg surveillance." let's get straight to the first word news. >> china's economic growth remained stable, gdp rose six or 7% from the year-earlier matching an estimate of economists are made by bloomberg. that all but ensures the government's growth target will be hit and tasty way for a policy switch to reigning in financial risk. china's holdings of u.s. treasuries fell to the lowest level since november 2012, the world's second-largest economy draws down its foreign reserve to prop up the u.n., the biggest foreign holder of u.s. government debt have 1.1 $9 trillion in bonds, notes, and bills in august, down over $33 billion. the biggest drop since 2013 according to th

in the u.k., why? we ask so many of our citizens who are dissatisfied and you are telling us that they are to satisfied. the second thing, i think, and here, in the sense of an official negotiator, a negotiation has not started. which means that i would say -- if i were not a diplomat, i would say there is some chest banging. it is normal that before any negotiation, all sides are saying that they are not going theympromise and that don't compromise on principles and so on and so on. so i think we are in a normal status before the opening of the negotiations. you know, people say they won't compromise. of course, there will be a compromise at the end of the day. said, we don't know what will be the compromise. has its ownion momentum. its own logic. and especially with this negotiation, where you have 28 of 29 with the european commission, you have a lot of negotiations. we have a lot of different interests. i think it is totally impossible right now to know first whether we reach an agreement. we are

., the u.k. financial services industry, our clients will persevere. europe, an important client for us, we are a global business. the u.k. and the u.s. and japan and australia are important clients to us. we cannot just be looking at brexit as a defining moment. it is a number of geopolitical risks that will happen over 20 years. that was the henderson group ceo andrew formica earlier. later today, we will hear from capital ceo. both of those companies absolutely rallying on this news , stocks up in double digits. henderson up by the most in seven years, up by 20%. janus also getting the most since bill gross was hired in 2012. vonnie: a big day for those two companies. coming up, european banks are preparing a fresh round of job mean as much as 20,000 positions. we will take a look. this is bloomberg. ♪ ♪ vonnie: from bloomberg world headquarters in new york, i'm vonnie quinn. nejra: live from london, i'm nejra cehic. down to the european close, about 15 minutes away. european banks are prepari

>> have we seen the trough in u.k. deficit chart. u.k. defined pension plans. a bit of a mouthful.ounding a .6% in september. pensionaccording to the fund. 460 billion. the white line is the deficit. the funding gap has ballooned from 260 billion at the end of may 2 before the referendum. the blue giant -- blue line is the yield on the u.k. 10-year. since august 12, we've seen the yield rise. that is why we have seen deficit narrow. >> the problem getting worse now with so much negative interest rate out there and so much low interest-rate product out there. i will give it to dme, because i think it is the most interesting trend we are watching today with new products. the question is, do they really work? important to a lot of our viewers as clients and creators. take a look at where european market and of day. this is bloomberg. ♪ >> welcome to bloomberg markets. ♪ from bloomberg world headquarters in new york, here is what we are watching. morgan stanley joining other top u.s. banks in being expectations for fixed income trading revenue. we break down those results. the countdow

>> this was included in the short end of the u.k., there was a lot of crowded positioning playing for lower nate -- lower rate. i think that far out the curve it is difficult to say what is going to happen. the next move is more likely a cut than i hike. beyond that i think there is a bit of confusion out there, a little bit of uncertainty. the trend is -- guest: i think the 2% call on 10 year makes sense if the current trend continues. if you are to rewind one year ago today or to the end of last year, even those elevated deals are lower than what most people on wall street and london were calling. much higher than the lowest we saw this year, but still lower than what everyone was expecting. >> thinking emerging markets, i think -- i'm thinking other places. guest: it is tough to say how it is going to play out. there is no recent to think he became a lot more disorderly. i think there is enough nurses investors that something could lead us to the state of calm we have now. >> busy week for central banks. not much is expected to ha

johnson on the u.k.'reign policy strategy as the nation begins to extract itself from the european union and continues its fight against the islam state militant group in iraq and syria. this is about an hour and 50 minutes. >> order, order. welcome to this morning session of the foreign affairs committee and our first session with the new secretary of state. welcome to the committee and congratulations on your appointment. >> thank you. >> obviously this first formal session with the committee. and it's a desire in that sense to be more open session than it might usually be, inquiring into particular subjects obviously associated with everything that is going on. and, of course, we are rather limited in the time you have available for the committee, so that is going to limit the subject coverage to a degree. and we will also then want to come back. this is going to be a long game relationship. hopefully for both our sakes for sometime. but i thought it would be appropriate to invite you to give us an ope

the u.k. are now in -- affected by politicians which are suggesting, proposing shortcuts to the electorate and the electorate is buying it. we have a trade war between the u.k. and the eu. clinton presidency in the u.s. is a very good thing because it creates -- does not create a second front of trade protectionist wars. but there is still a conflict situation in europe which we have not solved and we have an italian referendum and german and french elections in the coming months. the populist threat is still here. we have been reading your piece in the financial times this morning. give me a sense of what you think the impact is going to be on fiscal policy and how that will be affected and whether or not the market is turning to price in the idea that maybe actually the democrats can take congress as well, both houses. it is not a huge possibility but it is becoming a possibility as the republicans increasingly the intoette -- disintegrate disarray. >> the good thing about having an aligned

it is in the interest of the u.k.that we continue to work closely together, including at the summit. >> to the leaders will be able to hear more from theresa may over dinner tonight. she will have 10 or 15 minutes of the dinner to present her views on how she sees the process is going to go. mark: let's like we have lost caroline. apologies. ,e will try to get back to her but a big night for theresa may during the official dinner where she will essentially get 15 minutes to tell the latest on the brexit process. vonnie: they will be speaking about russia as well. coming up, we will hear from cap staley -- jeff staley. how his bank is handling the comeback plan. this is bloomberg. ♪ mark: live from london and new york, this is the european close on bloomberg markets. time now for the bloomberg business flash, a look at some of the biggest business stories in the news right now. retail sales in the u.k. stagnated for a second month in a row. rising prices and warm weather led to a drop in closing sales. food was down al

that is a lesson to be learned for the u.k., isn't it?isters are saying, at the moment we have free trade. they will have to impose tariffs on trade. it is a fairly simple argument, but one they believe in fervently. matt: there is some difference in services. trading goods, there is no doubt that the tariffs and taxes are the key issue. services, it is much more about achieving equivalents with regulators. being deemed equivalent and therefore able to provide those services. mark: from day one, we are equivalent. that is part of their argument for why they think there is not so much of a risk. equivalence is something that is granted and can be withdrawn, particularly as regulations in the eu may change. that is a fairly shaky foundation. mark: i couldn't agree more, but they think the withdrawal is not in the eu politicians' economic interest. francine: because they have more to lose than the u.k. does by withdrawing. mark: and the ministers responsible for negotiations, they are convinced on this. they are not just spinning a line. the

talking of the u.k.ing pricing, let us turn our attention to sky, up about 5/10 of a percent. it seems to be benefiting from sterling. >> it benefited from the currency translation. its revenue0% of from the operations, and 5% -- if you look for the like for like resulting -- result excluding the revenue growth, the fact that they have provided the guidance range of 5% to 7%, they are within that range, so this i think, adds to the confidence that the company may get guidance. guy: if im as a british consumer spending more on marmite and petrol and all the other things i have got to buy, how important is the premium package of sky for me? >> i think it will be less important. disposable income will be taken by those necessities, and i think people will be considering options.ices for lower it may be a consolation for the consumers, so i think eventually, that may be an economic impact seen on sky's results. guy: watching that one. tesco, do people trade down? is this good news for the hard discounters? i

stock market does not reflect the u.k. economy. the u.k. stock market has a great proportion of its earnings coming from under sees. the more sterling is weakened, the better the earnings like in u.k. currency. so the stock market has reacted very rationally to the weakness in the currency market. in terms of the underlying economics, we are in a couple -- engagement. it is like someone asking what your married life is like when you have just gotten engaged. nothing has changed other than a little bit of sentiment about whether instability in the political environment will reduce investment. nothing has changed, and you saw that from theresa may's comments yesterday with the rest of the e.u. leaders. we should not be too frightened about what is going on, nor take comfort in the fact we have not seen a direct impact yet. francine: what have you learned in the past two months? i do not know if it is something politics or a function of the market. anne: i think the thing that has been most evident over the last two or three months is, i think

you stay away from the u.k.? john: for us, the u.k. is about fair value with the pound is now, reflecting future lower productivity and the shocks from not being in the free market, which seems inevitable given the comments on around a hard grexit. -- hard brexit. janet yellen has been right, there is space in the economy in the total unemployment. that would increase participation of allowing her to hold off on future rate hikes, but it will not carry on forever. there is still up side potential. in europe and areas like that, to focus on nominal assets because the chances of escaping deflation are lower. we think there will be preferred action from east tv and are positive on things like peripheral debt. mark: and stocks, this is a chart showing where we are with the ftse, where the record is, and where forecasters say we will be by the end of the year. we survey 9 of them in a project a drop in the ftse by the end of the year. we know it is linked to sterling, but with so many uncertainties, have we reached the high in u.k. stock? d

rosalind: the u.k.ousing market strengthened in september, after the shock inflicted by the brexit vote faded, and sales continued. that is according to the royal institute of surveyors, who says value continues to climb, the priciest real estate in the country. chiefl speak i economist today. and the thailand government is warning to ignore rumors about health licking. they cut short a provincial trip to bangkok, preparing for a audience with the crown prince. they should rely on official announcements concern over the mark. has bond weakening. global news 24 hours a day powered by 2600 journalists and analysts in 120 countries. you can find more stories on the bloomberg at top . i am rosalind chin. this is bloomberg. anna: thank you very much, roslyn. the hang seng in hong kong under pressure. chinese trade data. juliette saly has the details for us. juliette: anna, that is right very sluggish export data out of china really play havoc with asian markets today. we have been seen earlier in the sec

the u.k.hancellor of the to the treasury committee, the retention of passport into the injury will be -- into the industry. >> i think they are also realistic and looking at other passporting to protect their interest. we are obviously working closely with industry on looking at all the options for the future protections of luncheons financial services district. the december fed hike is .ikely but not a done deal the columnist said central banks have the started -- distorted those paying to close attention to the tightening of interest rate moves. >> the market is obsessed with the wrong rings. the market is already upset with the timing of the next hike and his not fully understood that regardless of when it comes, this is a very different cycle. this will be a shallow interest pointycle and a terminal well below historical averages. what the market should be looking at is the cycle as opposed to pricing the exact timing of the next hike. cutrazil central bank has its interest rate for the fi

the u.k. will be leaving the european union. we are not asking ourselves what it is membership or want to retain. we are saying what is the right relationship for the u.k. to have the maximum underside of our economy and country. >> mr. speaker, there's a danger this government appeared to be turning their back on a single market market which was indeed a commitment and a conservative party manifesto. the reality is since the brexit but the trade deficit is widening forecast being downgraded, value of the pound down 16% and the chamber of commerce confederation of british industry, british retail consortium and trade union congress have all made representation to the prime minister demanding clarity. is the prime minister willing to rest a brexit just to appease the people behind her? >> what the conservative party committed to this manifesto is to get the people referendum on whether to stay in the european union. they have given their decision. we believe the european union and in doing that negotiate the right gift for the u.

and u.k. suggesting faster inflation will be tolerated. 90 minutes into the trading day in the u.s.. let's get to the markets desk. >> to the rally in europe, things -- u.s. stocks, the three major averages nicely higher, including the dow, s&p 500, and nasdaq, outperformance by the nasdaq. .elped by the technology shares the nasdaq on pace for its best day in a month. it has not been a smooth ride up. an intraday chart of the s&p 500 , already looking at volatility. try tooff the highs and recover, it will be interesting to see how this day trades out. one potential source of volatility for u.s. stocks, crude oil, it had been hire earlier in the session but took a dip and tried to move higher now but we see it going down and that could be ian taylor says they do not think opec could not make big enough cuts to balance the supply out there. it will be interesting to watch oil and see if they can recover from the decline. the 10 year yield, intraday volatility, within a more than three basis po

you can't get away from charts like the u.k.ven with has been on an upward stretch since the referendum. as you can see, on the chart today, we are still trading here at the highest levels in more than two years. that is the highest since 2014. how much theow pound has declined since the brexit referendum has impacted. .ark: tomorrow is a biggie it is going to show the consumer prices, but not get close to 2%. the projections are, how soon are we going to breach 2%? what is the impact going to be? >> it stems from the commentary we have seen from mark carney today,ek and earlier they are preparing themselves for a shoot in inflation. it is a matter of time before we get that filter through the gilt market. it is only a matter of time until we actually see it in inflation measures. it seems like they are expecting it. they are seeing it on the horizon. 19 basis points now as the yield on the two-year. you get 19 basis points for it. marketh is the domestically for this and how much is it looking at it outwardly towards the fed or

that comes out of 12:30 u.k. time.terms of the brexit and bloomberg report this week suggesting the central bank could be planning so-called tapering of qe. did that it into the official minutes? mario draghi doing the news conference, what took bund yields down to zero.because he said we did not discuss the extension of qe. that took us back to zero. anna: these conversations are happening at the governing council, where is this consensus voting? finally, daybreak looks ahead to a ruling about whether they can frack for natural gas in northern england, following a 2.5 year battle in many protests. this we watched by many other companies, who also have designs on fracking in the united kingdom. watched of course also because if they are allowed to do this, than a lot of people will get more detail on just how much potential there is in the u.k. the labour party send their conference they would ban it, if they were in power. let us a look at the markets now. ring of the risk radar. manus: risk radar says msci, on the bo

and u.k.overnment to put the economy if not first, then very high on their priority list, and that does nothing to be the case. i think the message coming from that conservative party congress was negative, negative to business, business interest for the u.k. and in the long-term, that could cost potentially jobs in u.k. i cannot understand why they take that approach. perhaps that is only for domestic purposes or inside party purposes, but in the long term, i think all of us need to put the interests of jobs and growth first for europe and for the u.k. francine: what do you think the european position will be? no negotiation on immigration? >> if the u.k. wants to remain part of the internal market or have full access to it, they will have to respect the four essential freedoms, including the free movement of people, which has become so politically -- a political hot topic in the u.k. i think that reality check will come. has been minister may presenting it as we can have the good bits remain

--ic the new u.k. chancellor manus: the new u.k.helved the -- a carefully targeted investment to offset the economic shock that is forecast because of brexit. >> when times change, we must change. we will no longer target a surplus at the end of this parliament. make no mistake, the task of fiscal consolidation must continue. anna: still with us, michael bell from j.p. morgan asset management. talk us through how your isitude through u.k. abscess -- how hard or soft it should be? michael: the news we had over the weekend just reinforces our view that u.k. assets look attractive but they look attractive only if you are focusing on the past. -- focusing on the charts. if you are domestic league long, versus internationally long in the dollar then you got a little more to worry about. investor, --aller we think the pound is likely to remain weak further downside. the main difference as we view it is within the u.k. stock market, 72 percent of revenues come from outside the u.k. .ou can invest in u.k. assets those of the companies would

thethe u.k. government -- u.k. government is set to decide on heathrow versus gatwick.em was contentious issues in british politics. the final decision. let us bring in kris bryant. he joins us from frankfurt. a bad decision if they go with heathrow? >> it is a difficult one. the u.k. does need new runway capacity. there can be little doubt of that. heathrow is europe's busiest airport. gatwick has also been growing very fast. heathrow has only two runways. gatwick has one. chicago has eight. some kind of expansion is necessary. it looks like theresa may will go with heathrow. you can see why she wants to. britain post-brexit needs to show that it is open for business. a new runway would be assigned that london is interested in increasing trade with non-european partners and countries like china. from the face of it, a good decision. the question is which airport do you go for? the decision will be extremely controversial, as you say. guy: gatwick has a number of things going for it. it has been growing quickly. the problem is that it does not say to the world that we a

the u.k. will be leaving the european union. we are not asking ourselves what it is membership or want to retain. we are saying what is the right relationship for the u.k. to have the maximum underside of our economy and country. >> mr. speaker, there's a danger this government appeared to be turning their back on a single market market which was indeed a commitment and a conservative party manifesto. the reality is since the brexit but the trade deficit is widening forecast being downgraded, value of the pound down 16% and the chamber of commerce confederation of british industry, british retail consortium and trade union congress have all made representation to the prime minister demanding clarity. is the prime minister willing to rest a brexit just to appease the people behind her? >> what the conservative party committed to this manifesto is to get the people referendum on whether to stay in the european union. they have given their decision. we believe the european union and in doing that negotiate the right gift for the u.

for u.k.tomers, because they have suffered a little bit of a downturn in their purchasing , they may look more toward domestic destinations for their trips rather than traveling overseas. you then manage this? do you try to forecast what sterling is going to do, for example? sortffer deals that might of hedge in a way the impact of something like a brexit vote and the weaker currency? fortunately, our technology and systems automatically change prices when prices change, so somebody is shopping for a hotel in their local currency, the pricing will reflect over time changes in that currency, so we are able to automatic the show somebody good when one currency becomes softer relative to their own. vonnie: google recently unveiled some new tools. given that you have about 10% of the online travel industry, expedia is about 10% of the online travel industry. are you becoming a little bit more concerned about the likes of google and their new tools? jeffrey: i think for us, even though we are simil