It is 8 00 a. M. Across the emirates. 4 00 a. M. In london if you are up early. This is Bloomberg Markets middle east. I am yousef gamal eldin. What a momentous two weeks we have had in the first of 2018 and bulls have been in charge again, Consumer Discretionary pushing up some of the industries. Of a p 500 up 7 10 percent, the eighth advance in nine sessions and the nasdaq showing strength. We saw a soft spot in some of the property stocks. The story. O year was we look into that trade. Rosengren says that this does not indicate a recession, is that the case . We have quite a bit of weakness. A key scene for the markets going into a fresh week. They are at their lowest since september and basically dropping against all of the g10 peers. That is feeding into other key Asset Classes, eurodollar up. The strongest in about three years at the news the Angela Merkel reached a preliminary agreement for a coalition government. Cable come up 1. 4 against the separate news flow here. And Officials Saying that they are agreeing to push for a soft brexit. That is helping cable to raise a ties against the dollar since june 2016, all the way back when they voted in favor of brexit. And we are up 9 10 of a percent. We have a lot to digest in the energy market. And we have a special guest later on. And in weaker dollar feeding into the broader picture, up 9 10 of a percent. First word headlines from around the world, kicking off with a story out of hawaii. The governor has apologized after an Emergency Alert, claiming an imminent missile attack was accidentally triggered. Residents were told us he can immediate shelter by a text message that said this is not a drill. It appeared on local television stations before being canceled about 38 minutes later. Emergency Officials Say it was the result of human error and they have pledged a full investigation. Today was something that i regret, because i except responsibly for this. This is my team. We will look at the processes and a study so this does not happen again. Yousef iraq has joined the united arab immigrants calling for opec and allies to stick with their agreement to cut oil output into the end of the year. That despite recent price gains. The deal to rein in the production until the end of 2018, about 70 a barrel last week. Iran is concerned that the price rise could spur a push from u. S. Shale producers. Saudi arabias biggest Construction Company says that shareholders may have transferred stocks to the kingdom to settle outstanding dues, but the Company Remains private. A member of the closely held firm and halfbrother of Osama Bin Laden has been swept up in the nations corruption crackdown. Detained men have been afraid after paying settlements settlements. Aying finance ministers pushing for a brexit deal that will keep the u. K. As close to the European Union as possible. That is according to a person familiar with the situation. Both nations have investment ties, and they are concerned about the impact of tariffs and ilosing conservation is to the eu budget. Turkeys Foreign Ministry has warned citizens to avoid travel to the nine states, citing the growing risk of terrorist attacks and risk of violence. The u. S. Departments of the same about turkey. The recent deterioration in relations between the nato allies. And now that was a quick round of up top stories. We will talk about a roller coaster week. Bonds back in focus. Two year treasuries jump in about 2 on friday, marking a rebound. Sankas the United States into the very deep end of the financial crisis, almost a decade ago. The move came after the United States released strong inflation data, spurred really spurring traders to go to the likelihood that they will follow through on the three rate hikes for 2018. More on this story in terms of what is ahead with aberdeen of investments. The approach to Asset Allocation is no longer the best option for many investors. We are joined by mike brooks. Welcome to the program. Interesting times for the markets. We put up the chart to showcase what is happening with the bond yields. Two yeartreasuries tod spread widening again levels we have not seen since about 2011 or 2012. As you go into that year. In terms of wider implications of the moves and some of the yields, give us more context of the story, are we firmly on track for three rate hikes in 2018 . Mike expectation is for good Global Growth this year and we expect in the u. S. , they will be leading that come and we think there could actually be four rate hikes this year from the fed and we think that that is perfectly fine, given our expectations for inflation. We think that it should be offset by fiscal easing as welcome, in terms of the impact of the economy. Inflation issks is not as subdued, we do not think there is capacity around, and that could lead to further rate hikes, which could have a bigger impact on the markets. Yousef march, are you baking that in . Beyond the market rate hike, it has risen to 85 , are you one of those . Mike yes. Yousef in terms of u. S. Equities, the record has metadata is nothing short of ecord, the the r data showing that this is nothing short of a phenomenal. 92nd percentile of momentum, that is from the data of the last 20 years. She says something has changed in equities. 47 companies and s p 500 up 10 this year, compared to only two down as much. I mean, talk us through how sustainable that kind of started 2018 is . It has only been two weeks. Mike there are a lot of behavioral aspects. As long as the economic picture remains good, we expect continued returned from equities, but valuations are increasingly stretched. So if the risks materialize, whether it is a risk to inflation overshooting or whether china raining in credit growth faster than expected, or others, there is not a lot of support for equity markets on the way down, so we are concerned about those risks. Yousef what does that do to your current recommendations in terms of allocations, what are you telling clients, perhaps not the u. S. s story, but looking at global Opportunity Partners . Mike in terms of our portfolios, given where the bond yields are we do not expect good returns from them in the next five years, we do not typically invest in government bonds, similarly we are not seeing the attraction and equities. We think in the fiveyear rise, they are likely to be on a scenario basis given the downside that we could see. But more traction in a range of other areas. Whether it the end the various forms of credit, or return assets. Yousef if you had to rank them in terms of recommendations, it would be emergingmarket credit first, or even commodities, because there was thinking that commodities have been underperforming and it would give them reason to rally off of the back of global secret eyes growth in 2018 . Mike the bonds are a more favored Asset Classes the moment, 6 as the yield is attractive, a really positive outlook for emergingmarket economies which will lead to a real currency appreciation, so we see that as a positive story. Class, this is not something that we feature in our portfolios, but there are other Asset Classes, like infrastructure that we can get exposure to that have longterm cash flows. And i think the very challenging time for us, for the multiasset investors, given the key Building Blocks of bonds and equities with risk associated at the moment. Yousef yousef what are you most yousef what he most anxious about, the market getting the fed wrong, inflation not living up to expectations, where political risks, whether it is iran or north korea . Ise memos concerning issue my most concern issue is on equities, they are susceptible to a range of different risks. I think the risk of inflation is coming through more strongly and therefore the fed will have to raise Interest Rates, that could be at the top of the list of Different Things out there, but we know from history that markets will tend to continue going up into one of the risks, then they can in the best conditions. Yousef it was good speaking with you. Thank you for stopping by, mike brooks from aberdeen. We will give you a preview of what is to come. We have a lot to get through. Cracking down on cryptocurrencies. The u. S. Treasury secretary on why he wants to stop them. The physical equivalent of an anonymous swiss bank account. Keep up the cuts, more of that nations call for the curve to be continued, despite fears as rising prices go up. The u. S. Show market, we break it down shale market, we break it down. This is bloomberg. Yousef this is Bloomberg Markets middle east. We are live on bloomberg tv and radio. I am yousef gamal eldin. Lets get you up to speed, starting with a Construction Company planning lastminute talks with the u. S. Government to avoid going into cash as early as monday. Builder hasden reportedly come up with a plan that would allow it to borrow new funding from existing lenders if the government agrees to guarantee payments that are at a certain stage of contract. The u. S. Trade Representatives Office has but alabama on the list alibaba for county cap selling counterfeit products online. The move is considered a blow to their Global Expansion. They have called the process deeply flawed, bias and politicized. Jeff bezos and his wife are donating 33 million to a fund that will have to Pay College Tuition for young, undocumented immigrants. He says his father came to the u. S. At the age of 16, alone and unable to speak english. His donation is the largest ever received by the organization. Now back to our top stories around crude oil, iraq has joined the uae in calling for opec and i led producers to stick with their agreement until the end of the year, despite the recent price gains. The deal to rein in production until the end of 2018 helped to lift crude above 70 a barrel, but iran has expressed concerns that this could bring a renewed push from u. S. Shale producers. Bloomberg spoke to administers at the Global Energy forum yesterday. Andoday oil is about 70 looking at the year 2018, in the next months, we say it more like a blast market. And the global output will increase about 1. 3 or 1. 4 Million Barrels a day. New Oil Production is coming from the other states, from brazil, from lesser africa, from canada, and it puts a lot of oil in the market. Market, unless we have some surprises. I think that that is a point of discussion, because the focus of our has been on the supply side. And we often dont discuss the demand side of the equation. And maybe we need to do some more work, because all reports are suggesting that 2018 there will be drops, both on the gdp worldwide, that will trigger a bit of demand. I think we have a responsibility for that demand. I think the discussion is to look at both sides. We often discuss about the supplyside, shale in particular, as if it is an unlimited, infinite resource. They have a limitation as well, like the rest of us, although i do not know what the limit is, but i have a suspicion, and i think yesterday we had from a speaker here, saying that shale is going to have a peek production peak production. And we forgot how to spell it in the last couple of years. But there is a peek production even from peak production even from shale producers. Yousef we want to get more with the managing director of the markets at citigroup. You were in abu dhabi, you saw the ministers hustling, as it were, what were other key takeaways. We heard from some, but what were some of the highlights . Good morning. The point that the opec ministers were trying to make, was just tuesday the course. That this just to stay the course. That this rise is not a lasting thing. They are saying, be calm, we will stick with the cuts. And they are really starting to look at demand now. Demand wereates for coming in higher than what we are hearing from analysts, from some of the iea, but we are seeing a lot of challenging shale Oil Production coming from the u. S. And they are banking on the fact that rising demand will be able to accommodate that shale, as well as the production they are bringing onto the market. Yousef did you sense a shift from the Energy Minister now that he has taken over as president . Not really, i think he has always been even killed when approaching the issues keeled when approaching the issues, and now even more so, saying that we are going ahead with the cuts, we have committed for a year and we will go ahead and keep that. He did seem to be indicating that we might see a price decline, back from 70 in the third quarter. He said demand is up now because of the winter demand, so we might see them fight back a little bit. Yousef we will cross over to ed, in terms of the opec reaction going into the later part of 2018, could we see more tangible moves to talk to the price down. Which would be unusual for them. Ed there is incentive to price it down, and they are fearful of not only the shale response, and i do not know why they ignore it, but of deep water and oil in canada, after all these are three Unconventional Resources that have seen the cost of structure implement. We have plummet. We have welker term projects as well as shale, up and down as a response to prices. Yousef we put this up on a chart, the risk of shale. You can see it again up ever so slightly in the data late on friday. At what point does it become critical, at what price point does opec need to react . 70 is making a lot of people and couple, when do you expect to see more action . I do not know what action will happen from opec, but we have heard from the russian oil minister, just before the weekend, he reiterated the point that was made at the last opec meeting, mainly that we have to stick to the agreement to look at when the countrys meet again in june, jesse whether it is to see whether it is time to ratchet back production. These countries are aware of the prices and prices are too high. And the central bank is already active, planning 5 billion or more of intervention in the market, buying dollars to get the ruble depressed, and the high price makes it a hard job. Yousef you look at Money Managers and they are betting on ti, how gains in w sustainable is that . How much more gained can we really have gains can we have for either of them . Ed it depends, the risk of the u. S. Not waiving oil sections on iran has passed, that was part of the speculative activity. The Winter Weather is part of that. I suspect posed to come as was the case a year ago, we will see Something Else more attractive as an asset class for the money coming into it. And this is really speculative money at a record high level, ever, both in terms of the number of barrels of oil equivalent, and in terms of the percentage of open interest, so it is not stable. Yousef we heard the uae Energy Minister talk about their agenda fundamentals and a market where we have the increase in demand and they do not have to worry about the supplyside of the equation, versus 2017, which was geopolitics. Do you agree, or will we see if the other way around, where geopolitics are more in focus . It is really the Financial Markets and their impact on oil and other commodities. You were talking about the u. S. Dollar and what that does the commodities. We have had not just an increase in oil prices, but the increase last week was accompanied by iron or prices. It was a kneejerk reaction to the slippage in the value of the dollar. So we have had a number of factors that have lined up. I think we will see that 2018 will repeat a lot of what we had in 2014, 2015 and 2017, namely a very wide band in which oil is trading, probably the same toy five dollars a barrel as last year. Yousef love having you on the program, ed. From citigroup. And anthony, thank you for coming on the program. We will give you a preview of what is coming up next, Steve Mnuchin who wants to ban cryptocurrency from becoming like a swiss bank account. This is bloomberg. Yousef u. S. Treasury secretary Steve Mnuchin has put criminals using bitcoin on high alert, speaking at the economic of washington dc he did plans to stamp out the asset. What about the coin a bitcoin . Are you comfortable with the currency and what do you think the government should do about it . Do you own some . I do not. I do not own bitcoin. I do not know it is really. [laughter] i know i missed the boat on that, but is that something that you are worried about that could replace the dollar as a currency . We arelet me say i very focused on cyber currencies, cryptocurrencies, cyber currencies, we are very focused on a and actually at the last meeting we set up a working group. We are working with the regulators. So really the biggest issue, i have two issues with them that we are focused on, one is we want to make sure that bad people cannot use these currencies to do bad things. So in the United States, and people may not realize this, under our laws if you have a thatt to own, bitcoin, company had the same obligation as a bank to know your customer. In the United States we have rules that for money laundering, for all different types of things, we can track those activities. The rest of the world does not have that, so one thing we will onworking closely with g20 is making sure that this does not become the swiss bank accounts. The other concern i have is that there is a lot of speculation in this. I want to make sure that consumers who are trading this understand the risks, because you know, i concerned consumers could get hurt. Orried, thereer was a russian report, maybe fake news, but russia is thinking about coming up with their own cryptocurrency to get around sections, is that something you are worried about . I do not think that is a concern. There are countries, again this is something that i have spoken to the fed about, so there are cryptocurrencies like a bitcoin, which effectively instead of euros or dollars you have a different currency. There are Central Banks that are thinking of, instead of issuing cash, physical cash, issuing a digital currency. So the fed has contemplated and looked at, i do not think they have any intention of doing this in the near term, you could issue digital dollars. The fed and we do not think there is a need at this point. Yousef lets give you a preview of what is coming up. President trump threatens to scrap the nuclear deal with iran, unless europe agrees to new restrictions. He says this is the last chance. We heard from guests earlier his specifically pointed out the any escalation with iran could present serious risk for the markets going forward. More on that next. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Yousef i am in to buy. 90 minutes away from the market open. The dollar index closing at the lowest level since september, dropping among g10 peers. Today losing streak. We will get that in shortly, but now look at first word headlines. Kicking off with a story from hawaii. The governor apologizing after an Emergency Alert claiming imminent missile attack, was accidentally triggered. Residents were told to seek shelter by a text message that said this is not a drill. It appeared drill. It appeared on local television and was canceled later. Today was something i regret, because i sectors possibility for this. This is my team and we made a mistake. We are going to process this and a study it so it is not happen again. Yousef and iraq has joined the united arab immigrants, qatar, and others in coin opec producers to stick with their agreement to cut oil up until the end of next year. Or until the end of this year, despite the recent price gains. They want to rein in production until the end of 18. Iran is concerned that the price rise may spur renewed push from u. S. Shale producers. Saudi arabias biggest Construction Company says that shareholders may have transferred stock to settle outstanding dues with the government, but it remains private. The halfbrother of Osama Bin Laden has been swept up in the nations socalled corruption crackdown. But some detained men have been freed after paying settlements. Finance ministers agreed to push for a finance for a brexit deal that would keep the u. K. As close to the European Union as possible. Both nations have investment ties with britain and are concerned about the impact of tariffs and losing conjugations the eu budget. The news push the pound to the strong as level since the referendum in 2016. Storiese of our top around geopolitics, President Trump has warned allies that they must work with him to reband the Iran Nuclear Deal or risk u. S. Withdrawal. This comes as he gave a reprieve on friday. Here is our executive editor for africa and the middle east. Welcome back. We have talked over the last year about the u. S. Iranian tensions, but it appears that is running out in terms of the u. S. Side. The u. S. Is trying to get the europeans onside with what they want, to relieve negotiate to really negotiate a deal as it was. But their position is, look, we have the deal, and iran is complying and there is no reason to change it. The europeans are also the ones, their companies are going in trying to strike these deals, and you have russian and Chinese Companies doing the same, so from their perspective they see no reason to comply with the u. S. Position. Yousef the concern i am hearing from investors is, if the u. S. Goes alone. Right now they are trying to pull the europeans along, but it appears that the u. S. Is also considering going ahead with unilateral action. Separate sanctions or weakening the deal in any shape or form that they can. Right, and it is a real concern, especially when it comes to the banking, the u. S. Influence over the banking system, many European Companies especially are still hesitant about going all in with iran, because they are concerned about what it could mean in terms of u. S. Sanctions on banking, so there could be affects on them. Some may say i would rather not deal with it. The u. S. Could throw a wrench in the works because of this and a lot of Companies May say we want to wait and see how it plays out before making a move. Yousef what happens next . Who will lead the conversation at this point, is is the u. S. Who wants to change the deal, or will it be on the europeans or even iranians . Donald trump is trying to put this on the europeans, to join him, pressuring the iranians on the deal. The may think they are asking for is the removal of the sunset clauses, those that will run out after a few years. Also, americans want to link it to their ballistic, the Ballistic Missile program and iran, in which they have added additional sections already. Ball, know, i mean the donald trump is trying to put the ball in the europeans court, but donald trump is driving this. Yousef pleasure having you for the additional insight. The middle east and africa executive editor, riad. Now we will bring our man for credit with eunice and and worthiness, the head of islamic finance. Welcome back. Fromick up on comments earlier and anxiety around the tensions, geopolitics in 2018, will it be a main driver of credit worthiness for the gulf . Absolutely committed will be a main driver for the performance of the market and i think if you look at the report that was issued in early january, we spoke about political risk, geopolitical deter sentiment and push investors away from emerging markets, including in this part of the world. Yousef we do say that this is an escalation of geopolitical tension, whether it is in the gulf, iran, or elsewhere . I think the geopolitical tensions will have an impact on the market, but we we at this stage, at this stage we have not stated if the base case is an escalation of geopolitical or not . Yousef in terms of the fixed income markets and how they are holding up, it has been a busy year for those in 2017. Assuming geopolitics stay stable, the consensus is that there will be a lot more issuances in 2018, but will it be more on the side. It was conventional in 2017. Get such a big slice of the cake. I think what happened in 2017 is we as a fantastic performance of the market, increasing 45 , that was explained by the issuance of some countries like saudi arabia. Think that are based scenario, the volume will be dropping a 7080,000,000,000 dollars and that will be explained by the liquidity condition in the global markets. And we expect the fed to raise riches raise Interest Rates by five basis point in 2018, and it will work toward liquidity globally. That will result in high prices, and maybe a lower appetite for the investors. The second risk is the geopolitical risk, it is probably going to weigh on the investor sentiment, and the third risk, the third to turn to growth, is the limit of progress on opposition and i think the customization we have seen only a limited progress towards. Yousef in terms of where we are at with issuances, i have tried to put on the bloomberg, it is a popular function. With traders at least. Cc debt. , this is at here you have the sovereign issue, 2017, led by the kingdom of saudi arabia, followed by others. These are not that, but you can see the activity that is taking place. Saudi arabia taken the bulk of that. How will issue but the 2018 . I think it is uncertain, we do not know if saudi arabia lowered be the large deal that we saw in 2017. Qatar has also been an active issuer in 2017 and because of the sanctions on qatar we have also seen the country in 2018, and that is why we think overall the market is heading toward less performance than 2017. Yousef in terms of context in the global story, where we had that market, are we looking at corporate coming to market what is the biggest challenge . The changing external environment, is it pressure on the yields, what is it that could prevent the kind of growth that you are currently forecasting . I think the biggest challenge is liquidity conditions, because again the increase in the fed Interest Rate, and we know around 30 of investors are coming from developing countries developed countries, and with the increase in Interest Rate and delivery equity and a lower liquidity available, those markets will be impacted. Today, it is still more complex and more timeconsuming to issue and that is the tearing at deterring some of the new issuers, those who have been looking at the market you really , really deterring them. Yousef we want to get to other things, specifically on gulf finance. You will stay with us. Thenext, jammers h immigration debate wages in the unites states. And jeff bezos ways in weighs in. We have the details. This is bloomberg. Yousef 7 42 p. M. In the work, looking at a shot of downtown new york, downtown manhattan. Facebook a key stock, down 4. 5 in investors getting their head around the latest rule change. Mark zuckerberg, it cost him about 3. 5 billion, making amendments to the news feed. It was a mixed picture in the past in terms of corporate and personal stories, now the push will be toward the personal side of that and bad news for news organizations. And main street coffee shops and giant corporations who are trying to reach existing and prospective customers. I am reading the realtime analysis, those businesses will need to add just again to another version of the newsfeed and the rules of the newsfeed are not Available Online either, so a lot to get through. Writes, as weally speak, a stunning admission last month when facebooks on researchers concluded that a way that people use the social network, passively scrolling to the posts, makes people feel bad. Imagine if ford told people that taking long drives alone was bad for their mental health. That will be an important theme for the week ahead. Now the latest business flash, starting with the story from the Construction Company carillion, planning talks with the u. K. Government to avoid going into as early as monday. That is according to the sky news. The builder has reportedly come up with a plan that would allow it to borrow new funding from existing lenders, if the government agrees to guarantee payment at certain stages of Public Sector contracts. The u. S. Trade Representatives Office has put alibaba on is list for selling counterfeit products online, the body says the alibabas steps to clean up the marketplace is insufficient and this is a blow to the Global Expansion strategy for alibaba. They have called the process flawed and politicized. Jeff bezos and his wife are donating 33 million to a fund that helps to Pay College Tuition for young, undocumented immigrants. Jeff says his father came to do is unable to speak english and alone, this is the largest ever donation to be received by that organization. And lets get back into the conversation. Earnings in the gulf about the kickoff, s P Global Ratings says gcc banks should see stable footing in 2018 after years of significant pressure. We have mohammed with us. We talked a little bit about that, but now the banks. It is looking like a positive year for them in 2018, i mean, some of the provisions and margin growth, there are things to be excited about. Andes, compared with 2017 2016, the answer is yes. I think in 2018 we expect the banks to breathe easier compared to the last couple years, with asset quality with eight by the middle 2018 much of the deterioration, because of the change of the cycle, are already visible, and it is important to remember that banks are and we think they will take the opportunity to provision whatever is it needed on the existing stocks. Liquidity is also improving and i think that this is the biggest story compared with last year. I think liquidity has been improving because of long growth and because of the increased in the government related deposits, so there is less opportunity for growth and the inflow of deposits has been coming to the banks. We think from a liquidity perspective, the picture is better than 2016. Yousef as we look at the United States, where we see the breakout in the yields, lets put it up and see how it performed versus saudi banks. This chart, how much upside is there with the saudi bank stocks, versus the u. S. 10 year yields . We see they are closely tracking each other. How much of the yield story will feed into the gulf bank story of 2018 . If you look at the expected increase in the fed rates, we think that the gcc Central Banks will have to mirror that. And if you look at the saudi banks in particular, youll see a portion of the deposits accelerated and if you add them both together that means that interest margins are likely to increase, that means a high profitability. Low growth is definitely muted, so banks will look at the polling the liquidity in instruments that would yield a compared withe keeping the liquidity and money market inventory deposits. Yousef we have had those on the set who have said that qatari compared with keepingbanks look attractive, bi want to know from a Credit Rating perspective, do you expect surprises in the earnings coming out from qatari banks. Trading, from the trading perspective we think that they are under pressure because of the sanctions on the country and i think if you look at the funding profile of the qatari banks, it has been dominated from since the sanctions were imposed on the country. We saw significant outflows, more than 21 billion at the end of september 2017, but positively these were compensated by the injection of the funds from the government and government related entities, in excess of 39 billion. For 2018, we think the qatari banks are likely to the terry, and to, and the hospitality and construction sector will probably leave the show. Yousef a different view from others we have had over the last few days. Thank you for coming on the program, head of islamic finance. Here is what is coming up. We are just getting warmed up. We speak with this is bloomberg. Yousef family ofrcer has a Insurance Companies among clients in the middle is, how have their models been evolving and where are they came to the plate capital keen to deploy capital . We got more information from yesterday. Thank you for coming on. In your discussions with clients, run me through how they see allocating assets in 2018. It has become more challenging, i would say, for allocators over all, because we are in what we see as late cycle dynamics, where Central Banks, to varying degrees, are going into a tightening cycle starting with the fed. Ecbextending as well to the and potentially we might see some of that happening, more of that happening in the u. K. For example. Reaching for some yield and i think that we have more investors against that, that it is not wise to be reaching for yield in this kind of environment where we are in the late cycle dynamics. A result we have seen a shift away from real estate, which has been a stable and really a staple in a lot of portfolios, ever since the prices to other income generating Asset Classes, such as private debt. Yousef is there more appetite in deploying capital abroad . Because we started getting into a phase where a lot of the investor class in focus, the Insurance Companies, in this part of the world were less kee n to deploy capital abroad. Will that be another theme, where getting those investors to pull money out of their pocket to put outside borders can be tricky . Yaser we have always advised investors to take a diversified approach, and a lot of the sovereigns do that. Amonge seen a desire private investors, some of the large institutions as well, to better diversify themselves and that includes adding exposure out of the middle east region. So it is an ongoing process, but opportunities the globally have improved, we are seeing a synchronized global uptick in growth, so it has the capital flows following them. Yousef has there been more discussion around the geopolitical theme in 2018 . Are you hearing more anxiety, because people in this part of the world are worried, so everybody should be worried, that is the take of it. Globally, we are seeing a rise of fragmentation, due to, it is not just the risk, there is north korea, as well as europe, with fragmentation and potential for populist things to happen. They need to be taken into account in these portfolios that have defensive assets in them. Yousef what are you telling them on one hand and what are they telling you that they are keen on in terms of asia versus europe. And the emergingmarket rally that we had in the asiapacific, so where are they keen to deploy this year . Yaser from a valuation standpoint we like emerging markets over all, i think that they are in the infancy of their cycle, of their credit cycle, relative to some of the other markets, where relative to the u. S. Less so in europe, europe is in the middle of the cycle. So we would, we have been advising, where one of our themes for 2018 and beyond is more focused on emerging markets, whether in equities or credit. We are a bit concerned about valuations in the short term in the u. S. Market, less so in europe, but these are the general themes we are discussing with clients. Yousef we had ed morse on earlier, in terms of the outlook for oil prices, where do you see that going in 2018 . 70, for some people it as high. Yaser we do not have an explicit forecast and i think that Forecasting Oil prices is more of a false errand. Yousef that is a bold call. Yaser a very difficult thing to get right. I think, obviously the higher price leads to a better fiscal situation for countries in this region and for in general exporters across the emerging markets, but it is important on a global basis to contrast between the countries that are more the importers versus the commodity exporters, and within the emerging markets that is a distinct and we work with clients with. Yousef thank you for coming on the program. Some of the key themes as we count you down to the market open. Here is what we are looking at. We are kicking off with , too big for energy rights. That is according to the ceo, who says iraq is vastly underexplored in terms of oil. Has been atana gas the center of controversy because of existing and that is still unresolved. Quite a performance for the stock, different from the bond story. And from an investment bank, they have appointed a new ceo, who is currently the general manager of schiller capital. They have been in focus for quite a bit of change on the corporate side over the last year. Boardtelecom has formed a for investment and it will help of potential opportunities for investment and partnerships across target growth areas. This is a company that does a lot of things, but it is interesting because on the investment side they have tied up, at least deployed or lost 100 million of potential investments, including an uber rival. The week ahead, it is a busy week. We have Martin Luther king jr. Day on monday, that will affect the u. S. Markets. Tuesday, looking at the u. K. Cpi. And more retail sales at of the u. K. A lot more guidance on that front. That is all we have for this edition of Bloomberg Markets middle east. This is bloomberg. Jonathan from new york city for our viewers worldwide, im jonathan ferro. With 30 minutes dedicated to fixed income, this is real yield. Jonathan coming up, core inflation accelerates, twoyear treasuries jump 2 for the First Time Since 2008. Some of the worlds most wellknown investors say this might be it. The bull market in bonds is over. In Credit Investors are not showing any nerves. Junk bonds with the largest inflows in over a year. We begin with a big issue, a shakeup in the global bond market. This will be a jagged period, the first quarter. It is not much about china