Transcripts For BLOOMBERG Bloomberg Markets European Open 20240713

Social elect leaders that favor exiting the coalition with the cdu. Narrowing the lead, four of the five latest polls show the Uks Labour Party closing in on Boris Johnsons tories as President Trump visits britain for a nato summit. 7 30 in london and 8 30 in paris or berlin. 29 minutes from the start of the European Equity trade for monday morning and things look flat on the European Equity markets, but that is not necessarily the global picture overnight. U. S. Futures, looking a little more positive. Probably, we are reacting on the Positive Side of things to the data out of china, the manufacturing pmi coming in higher than estimates. That seems to be something that could lift equity markets in the United States later. Futures look more positive for the u. S. Lets get to the Asian Session and the gmm shows us where we are on asian equity markets on the far side of the screen. 4 , indonesia doing strongly and the russian market, not bad. A slight cleaning for the on equityrisk on mood markets. Investors, buying equities and selling fixed income. Sovereign bonds, entirely red. Deals going higher, france, australia, italy. We had u. S. Treasuries moments ago in there. We are seeing rotations away from sovereign debt. We havent got any progress on trade. In the last few minutes, we had china, further action taken as a result of President Trump signing legislation around hong kong. As a result, questions about what happens on the trade front. We got moves higher in wti, essentially a number of the metals also bouncing on the global trade story. In the case of oil, keep in mind we dropped more than 5 in fridays session and heard from the iraqis there could be production cuts to come. We have an opec meeting later this week. Lots to talk about. Weve got the Bloomberg Markets live asia editor joining us from sydney. Garfield, good to have you on the program. Of me ask about the balance risks, because as you wrote this morning, december dons with equal part open fear in the asian sector. There is still reason to because shifts. Edging and fear seems to be a sleeper little bit a sleep a little bit as investors gauge that the trade deal situation is a bit teflon in nature. For all the huffing and puffing that is occasionally issuing from the global times out of trumpreports that thinks the china deal has stalled, there still seems to be this base case that at the minimum, they will keep talking, trump will put off the december 15 tariffs, and that breathing space is all that is needed provided that we continue to get these relatively better numbers. We still have a lot of indicators that arent that great. There were some dreadful south korean export numbers that came out over the weekend and a lot of the asian pmis are either still in contraction or failing to contraction in one case. Bag, butixed investors see more interested in the positive data points than anything that would speak against this yearend rally that almost seems we are determined to get. Anna determined to get. It seems we are happy to ignore the latest lines coming out of china, the markets. China takes further action as the u. S. Interferes in the hong kong issue. That, combined with the fact we dont have any firm progress on trade, the latest reports suggest china may be tempted to play hardball on the rollback of tariffs as we approach december 15. It could leave some nervous, i suppose. Garfield you would think there might be some nerves out there, as i said, as long as long as nobody thinks trump is going to increase tariffs or thereis going to respond, is a feeling out there that the two sides have exhausted a lot of their ammunition for a hot trade war. Perhaps we are going to end up with some sort of a trade det ente and attacking give businesses enough reassurance to stop making more decisions and something of a stabilization in global data to turn into a recovery, away we go. If you think Interest Rates in a lot of places are in record lows or near record lows, there have been a lot of rate cuts over the last year, weve also got a lot of fiscal stimulus out of the states, some fiscal stimulus elsewhere, talk of germany considering fiscal stimulus, so if youve got fiscal and monetary stimulus and dont have a hot trade war going on, assets should be going up, especially if we actually get some recovery in economic momentum. Anna when you look at the balance of the risks. You mentioned germany, we see news over the weekend around the change in leadership of the coalition partner. We will talk more about that with our colleagues shortly, but in terms of market reaction, we havent seen that sticking to the euro yet, halfway . Garfield have we . Garfield havent, but the euro, especially in asia, has been blocked by what is going on with the pound and the euro pound. All of these polls suddenly showing that the tories might not get such a straightforward victory as some have thought, so the euro inen place. It is a bit of a mixed bag for the euro outlook. There is uncertainty, but the uncertainty around what will replace what comes once merkel does was already there and even at the margin, you think this might increase chances for a gradual move toward the sort of stimulus a lot of people have been saying germany needs to pursue. That could ultimately be seen as euro positive, so i think that helps to explain some of the hesitancy so far in currency markets in response to what happened over the weekend in germany. Anna interesting to see, and you mentioned europound and we should be mindful of what you said in terms of the Asian Session, but we see cable hasnt moved that much. Having said that, retreating down. 1 or so. You might have expected more response given the way the polls have narrowed. We see more response in the euro versus the pound, but not extreme levels of movement. The initialt taken polls too seriously, you dont need to react too much to these ones. Garfield i think a lot of people might be more interested in staying away for now or exploring things to her options through options rather than getting into the spot market. Years, itwo or three has been laid out that getting involved in town positions on coupleof a tussle or half a dozen political polls is a risky business, indeed. Anna garfield reynolds, bloombergs market live asia editor. Follow the thoughts from the markets live team, mliv is the function on bloomberg. Coalition in crisis. Party electser antiestablishment rivals. Isember, Bloomberg Radio live on your mobile device or on dab Digital Radio in the london area. There is plenty of analysis of the german political story. This is bloomberg. Anna welcome back to the european open. 7 40 two in london, 18 minutes till the start of equity trade. Looking for a mixed to flat start for the european session. Lets get a first word update. Lets start in the u k. Boris johnson is painting his party as one of law and order after the terror attack in london that killed two people. It has cast a shadow over the election campaign. Opposition leader Jeremy Corbyn is blaming a decade of spending cuts to prisons. Johnson is blaming the previous labour governments criminal justice legislation. Another weekend of unrest in hong kong. Police fired tear gas as thousands marched in the tourist district. Protesters, expressing gratitude to the u. S. After President Trump signed legislation supporting the demonstrators. Later, a group of protesters blocked roads and set fire to a subway station entrance. Bank of England Governor Mark carney has accepted a new job after leaving threadneedle street. He will become the u. N. Special envoy for Climate Action and finance. His pay package, one dollar and a year. He leaves his current job january 31, but his successor hasnt been named, which has boosted speculation he may be asked to extend his term. Black friday hit a record in u. S. Online sales. Nearly 7. 5 billion of sales were made by a smart phone or computer in the second biggest Digital Sales date in american history, behind 2018s cyber monday. Today could be even bigger. It is likely to outshine the record by around 19 . Global news 24 hours a day, onair and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna thank you very much. Germanys government has been thrown into turmoil after the social democrats, a partner in the coalition, elected new leadership to voice opposition. Bloombergs editor birgit jennen. What do these new leaders stand for . They have been campaigning that this government hasnt done any good for the social democrats and they havent been clearly saying they want to go out, but have made clear they really want a change of policy. It is interesting, and crucial for the next weeks, that we hear that this Party Leadership isnt united. It is divided over whether to stay or whether to leave. While one would like to stay and thinks it would be good to enter the new elections, his running mate is a lawmaker and she is really an ideologue and she thinks it is better to leave now. What they have come up with is a strict criteria, really high demands which are really difficult for the cdu to meet. The where does that leave relationship between the cdu and his Coalition Partners . What are the possible future scenarios . The picture you paint is one of some confusion within the spd, perhaps, but difficulty for the cdu to comply with the criteria being set out. In the short run, we probably see the convention will pass motions were they say, look, you sit down, negotiate with merkels cdu, where the you get a better deal and if the deal is fair, we will leave. Inwill have a difference that the party will say this is enough, we will finish the term. The other scenario is the government will enter into a minority government, which means the ministers will leave the government and the lawmakers willstay in parliament and occasionally vote alongside the cdu to keep this government going and to avoid new elections, and the other scenario is new elections may be already next year. Anna where doesanna this take us in the short term . Weve got next week a Party Convention taking place or the end of this week, in fact. Where does that leave the spd . Birgit the party will meet, and i think the Party Convention is not going to be as contentious anymore. For example, if schulz would have been elected, because he is unpopular. He is from the conservative wing , so there was the risk the party would rebel and this rebellion would result in a sudden departure from the grand coalition. I think this risk has been diminished. The party will not decide straightaway to leave, but they will attach very strict conditions, and the spd leadership has now called into andtion the balanced budget we do know for merkels cdu, giving up the balanced budget in the current Economic Situation where they say we are not in a recession and there is no crisis near is just a red line. Berlinour colleague in described that to us last week as a berlin fetish. Bloombergsn, German Government reporter with insight into what is happening at the top of german politics. Here is what we should watch out for this week. Plenty of things to discuss. Worlds largest Climate Summit begins today in madrid. 200 nations are working on a pathway to rein in fossil fuel omissions. Tuesday and wednesday, focus in the u. K. For the 29member Nato Alliance meeting north of london as it faces concern about its continued purpose and durability. Ive heard more colorful language from its members. Wednesday, the house impeachment inquiry with the public hearing in the judiciary committee. President trump has been invited to present a defense but declined. Thursday and friday, opec and allies meet indiana, indicating oil markets are on call doesnt plan deeper production cuts. Overlay that on top of what we heard from iraq. Friday, the u. S. Jobs report comes out at 1 30 u. K. Time. Nonfarm payrolls rise 190,000 in november and accelerate from that number we saw in october. Futures, European Equity fund its not expected to move at the start of trade or the cac or the ftse, but in opposite directions. We expect a mixed picture. Interesting to see cable, not reacting much to the latest polling, but euro pound is reacting a little. That is where the focus appears to be. Next, we will look at the stocks to watch at the start of trading, including Deutsche Bank, denying reports the u. S. Danske. Ing a probe into this is bloomberg. Anna welcome back to Bloomberg Markets the european open. Eight minutes until the start of the session. Lets get the stocks we are watching. Dani burger is looking at the latest from Deutsche Bank, sam instead is covering interesting news in inventories. Annmarie hordern is focused on dsm. A name attached to the business has long as i can remember, what is the story . Dani he led 13 years of the company and transformed it. He is stepping down. Transformed it from a chemical to health business. The ingredients in supplements and baby foods. Andl be stepping away cochair the ceo role. To sam instead, who is focused on ted baker. Whenever you see overvalued at hatch to inventory for a retailer, you dont expect positive reaction for the stock. Thats right and we expect not has a reaction. Calls for 20 to 25 fall for ted baker. It already down 74 this year. This began at the end of last year with their founder, some allegations around the conduct of the founder, who later stepped down. They have been missing Sales Estimates over the year, so a stream of bad news over the year and today looks to get worse, by the look of it. They are one of the first birth worst performers in the ftse. Anna Deutsche Bank, this is danskergit jennen bank. Annmarie another headline on the laundering scheme. According to a warriors report, the doj is investing Deutsche Bank investigating Deutsche Bank, looking at did they help danske bank move tainted money into the u. S. . Deutsche bank has said they are not aware of expanded investigations nor any new investigations, so denying those reports. We are seeing shares called down, slightly weaker, but it might be that markets need to wait for more details before they really send these shares lower down. Anna thanks very much for the latest on the stocks we should be watching. For the latest stock stories, go to first go or via the mobile app. Those are stock specifics but today could be driven by the broader narrative, and that comes from china. Chinese pmi numbers, coming in better than estimates and as a result, we saw a positive response in the Asian Session, up. 4 on the msci asiapacific. To be a futures look little more muted, so we are not expecting such big moves perhaps, but the cac has woken up and the ftse waking up to the other side. We expect net something flat. The u. S. Futures, pointing up 2 on major indexes. Anything tolook for do with the china story, mining, autos, all that can move on chinese data. Kongan eye on hong exposure. We saw further violence over the weekend. Oil stocks in focus. Up 1. 5 in london after they fell by more than five in fridays session. Coming up, the market open live from london. This is bloomberg. When you move homes, you move more than just yourself. Thats why xfinity has made taking your internet and tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. Anna a minute to go until the start of cash equity trading this monday morning. Let us get the weeks arden in europe. Take a look at how the markets are doing in asia. Readingsata, the pmi coming in better than anyone expected. As a result, a positive response. S p futures factoring that in come up 0. 2 . We saw the pound markdown at the start of the asia session though it has recently recovered despite weekend polling. A narrowing of the conservative party lead in the polls. Oil prices down by just shy of 2 . Sorry, a move higher. After we 1. 5 percent saw losses of more than five birth and in fridays session. Look at futures. A mixed art to the trading day in europe. See a bitse 100 we of movement in the pound but not extreme. More movement in eurosterling but not in cable. A slightly Higher Oil Price. And some of the mining stocks might be reacting to upgrades and the chinese data. A mixed bag for london. By 0. 1 . 100 opening fairly flat. No big moves here in the European Equity markets as expected. U. S. Futures not expecting big moves but perhaps something more positive. Session, therea was an appetite for risk assess. That remains the story. The sovereign bond column on the gmm suggesting that to be the case. Less appetite for sovereign bonds and hence the yields are going higher. Look at the sector picture. On a day when we see more risk appetite, you would expect to see a great deal of green and that is what we have including health care stocks. Utilities also moving higher. Financials uniformly higher. Energy seems to be a big mover to the upside. Interesting for what we can expect for the london market. Bydo see the ftse 100 up 0. 1 . Stocksrgy and materials moving to the upside. Smallmouth function in the graph perhaps. But us look at the individual movers. Still early on monday. One minute into the trading day. Optimistic around the equity story. Moving to the upside. A grand total of 0. 1 to the upside. 211 stocks moving a little lower. Tullow oil is the biggest mover. The bank of ireland also positive, up by just over 3 . And another irish bank, aib, up by 2. 6 . Banking in the irish sector. Let us move to the downside. A mixed bag. Lpp is the biggest loser. And we also see some movement to the downside for loreal and nestle. Not a lot of story coming through. We do have a good story to talk about when it comes to the data driving asia market sessions. Opening market marginally higher. Increasingly higher. Decidingtse 100 also to play ball, up 50. 25 . Meanwhile, Chinese Government to beit wants tariffs rolled back as part of the phase one trade deal with the United States of according to a tweet from the global times. Ben. Morning to you, london market deciding it is going to go with the upgrades. , and thening sector Higher Oil Price and the chinese growth story. As a result, the market is up i 0. 3 . London just settling down. And fear for hope the start of december. Are you feeling more hopeful or feel full fearful for december . Benjamin hopeful. Is somethingfear that has characterized markets all the way through 2019. And that has meant that investors have struggled to get conviction and the calls over the air because it has been a difficult year. A lot of geopolitics. A lot of macro uncertainty. Against that, you have Central Banks easing and a narrative shift towards more fiscal using around the world as well. And of october, beginning of november, and the chinese numbers the manufacturing slowdown is not as bad as many had feared. Anna many are looking at stabilization. Is this what we have been looking for . We do seem to sense a bit of an uptick, looking at the charts is not very convincing. Where are we on the global story, if you will, on the uptick . Why people are increasingly optimistic about the numbers. Benjamin it is not just china and the u. S. , it also in germany, we have seen an improvement in manufacturing, automobile sales. I think this is a sign of green shoots of improvement. I am not saying we will have a vshaped recovery and growth in 2020 but we dont have those recession fears being borne out that we were talking about in the early part of this year. It is a stabilization. Not a rocket fueled recovery. Anna what are you hearing from clients in terms of how much cash they want . Quiteere has been spectacular levels of volatility. Benjamin we do here that investors have a lot of cash on the sidelines. Showed a lot of money going into mutual funds in the last 18 months and that made a lot of sense. The yield in the u. S. With the Money Market Fund was the equivalent to what you could get in the 10 year. I Money Market Fund made sense a Money Market Fund made sense. If you were and overseas investor and you did not have to hedge the currency exposure, Money Market Funds made sense. Our impression now is that the flows are starting to reverse. There is a lot of cash on the sidelines that can now go back to work. If people have more confidence in the better growth story and easing in the trade situation and an easing of the geopolitical fears as well. Anna and if we do see an easing in the trade tensions, where do you put that money . Attractive pairs if we get better news around trade or more concrete news as to what the trade deal will look like and when it will be signed. Benjamin i think you have to wait until some of that concrete data comes through first. Ening upo expect lightning on the trade pressures. And i think we will see a bit of paring back. Look at taiwan and korea. There has been some improvement in the data there. Up onave really been been the back of the trade story. And if we get more concrete data, the trend gets extended further into 2020. Stay with us and let us talk more about hopes and dreams. China is heading back at washington for its support of hong kong protesters saying it will sanction some american nonprofit organizations. Joining us now is jeff black. The market hasng been wrestling with ever since we saw President Trump signed the bill. To the extent of which this will impact the trade story. Do we see china joining the conflicts together the trade tensions with what is going on in hong kong . Jeff that is what they appear not to be doing at the moment. The response looks a moderate on the face of it and specifically what they are not doing is walking away from the phase one trade deal or making more threatening noises about what they want from the trade deal with the u. S. In response to, by what all accounts would suggest was meddling in domestic affairs. China is still at the table and still focused on getting a phase one deal done. Anna and where is the data that we got over the weekend where does it leave us . Atf it leaves us possibly the beginning of what could be a moderate recovery going into 2020. We would not get too excited on. He back of just the pmis they can over react in certain circumstances and there was a bit of a seasonal impact on the data. Pmi whichhe shenzhen came out this morning which is more focused on the private sector confirmed the trend which is encouraging. When they go in different directions, you worry but there could be some cautious optimism going into 2020. A lot of reasons to be cautious, especially the inflation story in china. Ppi numbers. Ed the and how it factors into europe. Thank you, jeff black for the latest on the news flow. Up next, we bring you the stocks on the move including ted baker. The clothing retailer of points a law for them to investigate overstated industry. The stock is down by over 10 . This is bloomberg. Anna welcome back to the european open. 13 minutes into your trading day. More positive than the future is had led us to anticipate. The stoxx 600 up by 0. 3 . Ftse 100 is also up. Chinese a little on the positive data and the oil prices. U. S. Futures looking more positive as we go through the trading day in europe. The new ceong from over at nissan saying incentivebased sales are hurting the brand. The alliance had been a big part of nissans growth. Watching that news coming in from the new ceo at nissan. He is speaking at a News Conference in yokohama. The polls are tightening in the u. K. Higher to the election. One poll suggested the country is heading to a hung parliament. Benjamin jones is still with us. Thesenger of relying on polls too much is ever evident. We saw the polls tell us one thing some weeks ago and then things changed about sector relief. Certain things would stick. And now, the polls look a little different. Still a tory lead but less of one. Benjamin as you have seen by the polls, this is an election impossible to read. Previously i have said that brexit is impossible to read. If you want to say you have taken a bet on politics, it it is better to stay on the sidelines. The worry with the polls is that a week or so ago, it looked like the tories were going to have a firm leitch. The polls over the weekend are saying something different. I dont think you will know anything until december 13. Anna politics is at the core of things for the u. K. , sticking to european stories. Spanish pmi looking better than expected. Dani burger has a break down of what we will see in europe this morning. Estimates which is a good sign for the entirety of europe. The trend we want to see is european pmis have bottom. Spain has reached the lowest of the lows. When we look at pmi. Spain joins the rest of the pack. The number was 47. 5. Was 46umber for spain. 8. Spain also trying to reach an agreement for an economic program. To be the pmis appear improving including italy and germany. We want to see the trend continue. And another thing to watch out for is the yen appearing weaker today because as the economy improves, the haven currencies taking a backseat. The numbers today might be confirming that the Global Economy is looking brighter. Anna we will get further data through this hour of programming. Benjamin jones still with us from state street bank. Showing signs of stabilization in the euro and manufacturing pmi. Have we seen bottoming out here . Benjamin i believe we have. There are is a stabilization, that is the best word to describe it. Not a sharp recovery. The one i would look at closely is the swedish pmi. Economy. Strial centric that pmi is recovering reasonably well. That is a signal that we are getting a stronger recovery coming through finely in europe. Sweden is a big exporter to germinate. Manufacturingo a hub for europe. Stabilization. Better than expected. Not fantastic. Anna it is interesting because i am trying to work out what caused that stabilization. Look at the auto sector in germany coming you have issues for the end consumer. Do they have enough convictions to go out and purchase these large vehicles in a fastchanging industry . That is just one part of the story. The rest of the Manufacturing Base there is not a problem with the end consumer. The supply chains shifting that is been so disruptive. Benjamin which is why companies are not spending as much on capex. It is more about the fear of the trade war, surrounding this uncertainty as to where the supply chains will need to shift. People are starting to say let us start shifting those supply means that we have had the worst of the slow down. Anna we will pick up on that next. Thank you, ben jones. Debt. Ng debt with how policymakers are betting more of the same. We tackle a decade of easing money. That is next. This is bloomberg. Anna welcome back to the european open. 21 minutes into a positive trading session. Equity market up 0. 4 . Emery hoarder has the breakdown Annmarie Hordern has our top movers. Some 4 . L up they are selling stakes in their oil fields in uganda. Today, upalso higher nearly 1 . This comes as they dodged a strike with their catering unit. Said they had approved an offer from the concept. Ted baker really plunging. Down nearly 10 . The company identified the value hadnventory on its sheets been overstated. They have outside accountants coming in for a complete review. They missed a number of Sales Estimates this year. A tough. Anna the threat of another default in argentina. A decade of easing money has left the world with record debt. As policymakers grapple with how to revive growth, many seem to be reaching the same conclusion. More debt. Ben jones is still with us. A curious notion fix a debt pile with more debt. What are your thoughts on where we stand with this record high love debt at the moment. Benjamin it is a record pile of debt. I am less worried about the headline numbers on their own. Once you put it into context, debt is part of gdp. Debtbility to service the is probably the most important factor to look at. The broadmes to numbers in the u. S. Anyway, the ability for corporate and households to service their debt it has never been easy. Anna because of low Interest Rates. Benjamin and look at the house household sector in the u. S. They have been deleveraging. People are moving less and paying down their mortgage. In the u. S. , corporate have taken on debt of much longer maturity. The average maturity for corporate debt in terms of andance is 18 or 19 years in some cases at a negative rates. If we get an environment where we get much higher Interest Rates, if Interest Rates go up to 4 , 5 , or 6 , that will become an issue for some parts of the economy. A talking about the jet talking about the debt to gdp do we need to rethink that number and whether the same percentages which look scary now with Interest Rate as low as they are, are they as scary as they wouldve looked 10 years ago . Where do we stand on how much we need to worry about the basic metrics . Benjamin you cannot just focus on the one number. You have to focus on the servicing of that debt and that cost. A lot of that emergingmarket debt, especially in places like china, is domestically held. Asiansues we had with the crisis in the 1990s, that was a problem because the debt was dollar denominated. Is not as big an issue as it was back then. I am less worried about that refinancing cost. Anna looking at the serviceability of the debt in the u. S. , you would think it would mean that debt is cheap everywhere but you are making the point earlier that there is a big disparity in the types of debt. If you are a household, you might pay one rate on your mortgage. Does that raise warning flags . Benjamin it does. Central banks are quite a bit impotent in their ability to get Consumer Spending up. Stronglyholders are into financing their costs. But auto loans or credit cards loans credit card loans rates are quite high. Anna thank you. A really interesting conversation. Benjamin jones will be joining me on Bloomberg Radio at 9 00 a. M. U. K. Time. Andext, we talk about nato the headwinds it faces. The nato conference kicks off this week in the uk. That is next. This is bloomberg. Anna 30 minutes into your trading day and here are your headlines. Data day louche. A risk on move after betterthanexpected chinese pmi data. Germanys social democrats elected leaders in favor of exiting the coalition but the cdu. In the u. K. Labour party looks to be closing in on Boris Johnsons tories and president this weekts the u. K. Of for a nato summit. I am here in london. You aboutk to what is going on in hong kong. 24. 3 , a year on year figure. The estimates were pretty low. We were expecting the numbers to drop by 22. 6 . A drop as expected. But dropping more. We have analysis from hong kong. Let us check in with erik lamb. The number coming in week as expected i suppose. Where does this leave the recession story as it is in hong kong . In weree numbers coming expected to be week. The consensus was that it would be well below 20 . The peak travel time did not materialize into any kind of istrus spending tour spending. As for the recession for hong entered aeconomy recession in the fourth quarter. The fourth quarter, consensus wise is that we will have an annual contraction. Said it willt has have a contraction and the numbers are tracking in that direction. Anna Hong Kong Retail Sales Numbers a 26 drop their. The estimate, 25. 6 . Let us turn our attention to nato and the meeting later this week. The events in london are meant to celebrate 70 years of what leaders are calling the most successful military grouping in history. But there are three significant states bringing conflicting agendas to the table. Joining us now is bloombergs senior editor. Governmenternational executive editor also joins us. Welcome to the program. The big question is the future of nato. Is it really in question at this point . It is going to be an interesting meeting this week. The nato secretarygeneral will have a time of a keeping the kids behaving. There are multiple disputes. The french president has called nato brain dead. It is on the table for this week what is the future role of nato in collective defense . The question of turkeys behavior with the syria. These are big challenges for nato. And of course the american criticnt is a frequent of nato. Through Turbulent Times before. There have been differences over the years including what the balkans. These are different states that have managed to stay together. Well this is a point of concern for nato and a point of serious discussion, is it the end of nato . Unlikely to be so. Let us get your thoughts on President Trump and what he brings to the conversation. I think President Trump is coming in here as the usual wildcard. He will be meeting with different leaders on the sidelines. Line Birthday Party celebrations are whatever, really. What you have to really watch for is the sidelines. Trump and erdogan. Live issues with the u. S. Regarding concerns over them purchasing Russian Security equipment. And turkish lira is also in play. Depending on the conversation. You can take that across the entirety of things with macron and urdu one. And erdogan it is like thanksgiving dinner and everyone will go there and have a fight but you are still all family at the end of the day. But you do wonder about the future of that family and holding it all together. This grouping was founded in the postwar period with a very bent. S. And antirussian and now there is a nato member purchasing supplies from russia. This sounds like unchartered territory. A goal of nato has been to keep russia out. Members from some nato including from Eastern Europe are concerned about that. They want to feel the protection of the european umbrella. Vladimir putin, if you give him an inch, he will take a mile. They say they are going to watch his behavior in some of the Eastern European states where they are quite worried. Turkey is turkey. An important part of nato partly because it is a gateway to you graphically. Erdogan is pushing the boundary. In syria and also with its purchase of russian assistance. Anna the war of words between erdogan and macron coming into the gathering is incredible to see. Talking about donald trump being a wildcard. And how much this could influence u. K. Domestic politics. And the nato circus comes when we are less than two weeks away from an election. It would be straight out of the trump playbook to go off script and talk about things that have nothing to do with nato. U. K. Politics is one of those things where donald trump does have an interest. A big fan of Boris Johnson. He has flirted with nigel farage multiple times. He could make a plate here, he could make his opinions wellknown here on what he thinks. He is coming into british territory and he will make a splash. You know that about donald trump. At the same time, there is a live issue and you talk about the u. S. Political scene. President trump is going to be making these moves on the global facingtage as he is impeachment inquiry at home. If you are sitting there and on a Trading Floor and used to waiting for the tweets to come in, tiled back your time. Dial back your time. Anna your thoughts on the u. K. Story because this could set up some moves for Jeremy Corbyn. Especially if donald trump weighs in on access to farmers or nhs. That was the headline last time. I think the tories at the moment have a goal to minimize interactions between Boris Johnson and donald trump. You dont want pictures of them together. Anna looking at yougov statistics and the impression of World Leaders and there is a 67 negative reading for President Trump in this country. Trump might be speaking positively about johnson which may end up hurting him. There are key issues at stake the nhs is really sacred to british voters. He needs to make sure, boris make surees, needs to that donald trump stays away from the election and the nhs but you cannot take his phone away. You need to minimize those chances. Is the closest thing we have to state religion in the u. K. Thank you very much. Looking ahead to nato development. Up next, we bring you some of the stocks on the move this week including eds. Commentary from morgan stanley. This is bloomberg. Anna welcome back to the european open. 42 minutes into mondays trading session. Positive moves. Much more positive than the futures suggested. The ftse 100 up by 0. 7 . And mining stocks getting a boost. On chinese growth specifically. The u. K. Election 10 days to go. Polls are tightening with the labour party gaining ground. One poll suggested the country is headed toward a hung parliament. Joining us is the head of bloombergs u. K. Government team. 10 days to go. Let us start with the latest polling. Because we have seen the conservatives have extended their lead and then we solve the labour Party Closing that lead. We saw this in 2017 and still the labour party did not win. How much are we thinking about parallels . That is an interesting question. The polls in 2017 were miles apart. They have never been that far ahead in this campaign. They are narrowing and you will are right to point that out. It remains to be seen how close they will get. At the moment, it looks like we could potentially be heading still for a majority. And the granular detail is in the seats. Anna and another tragic parallel the 2017 vote was held in the wake of some Terrorism Activity in the u k and once again, we sadly see that after the events on the London Bridge on friday. You might expect this to play into the polling. Asservatives might be seen law and order enforcers. But they have been in power for a long time. This is difficult. Boris johnson has not had an easy ride in his response to the attack on friday. When pressed yesterday, the tories have been in power for 10 years, that is what he kept saying. Why have they not done anything on tightening up the releasing of previous terrorists. Last time, it was clear that the terrorist attacks in 2017 did slow the campaigning and Jeremy Corbyn was able to capitalize on that day in the tories have not kept up with the numbers. Anna and we have heard him saying similar things already. Race. Ntioned to buy seat if we do see a Boris Johnson majority, the size of that might have implications for the brexit path forward. A large majority for johnson there are niche groups in the party. If he has a small majority, he will potentially the held hostage again by those conservatives who want a hard brexit. And when it comes to the votes in the future and the trade deal that the u. K. Gets in the helde, those ties will be tight as usual. Anna the Worlds Largest Climate Summit begins today as well in madrid. Nations. Nvoys from 197 Climate Change has moved to the center of the political agenda in many nations with wildfires in california and freak storms across europe highlighting concerns. Concerns that scientists have raised for the last decade. What are the main issues at this meeting for the next two weeks . The main issue on the agenda be these two weeks will article six of the paris agreement. That the parties were not able to agree on last year during talks in poland. They will be talking about article six this year which is basically a rulebook to create a Global Carbon market with the ultimate goal of reducing emissions. Anna no small task there. What can we realistically expect this convention to achieve . That is the second big question. What can really happen . Nationse 197 different represented. There are two possibilities. The first one is an actual agreement and that the rules are set and everything is ready for a Carbon Market to be set up within the next few months. The other possibility is that no final agreement is reached but that the groundwork or basic framework is achieved at the end of the talks and the more specific items or rules are discussed and agreed on in glasgow next year. Very much. You our Climate Change reporter in madrid for us as we wake for the two weeks of talks to kick off in madrid. Up next, can a lastminute m a surge push numbers to last years levels . This is bloomberg. Anna welcome back to the european open. 51 minutes into an increasingly positive trade session. French manufacturing pmi coming in. The worlds biggest natural gas exporter and one of the top consumers of the fuel is cementing the Energy Cooperation today. Russia is launching a gas link to china. We have what to look out for this week on the oil front. Annmarie hordern is with us. Is the president pivoting east . Yes. Russias Lucrative Oil business looking east to the power of siberia, a massive pipeline that is been in the works since 2014. The president s of russia and china are expected to unveil the gas link in a video today. Pipeline is a hedge for moscow against the worsening relations with europe. Most of the Gas Production has gone west. Moscows relationship with the west has worsened since russias annexation of crimea so this gives it another outlet. And on the energy front, china has increased its consumption and the last decade, up 33 in the last two years. Domestic production in the orange cannot keep up with the demand in blue. A vital new is source of supply for china and another example of their increasing cooperation with moscow. In the energy sphere. This comes at a time of heightened geopolitical tensions. Keeping an eye on that. And the oil sector getting a boost from Higher Oil Prices partly driven by the chinese data. That china linkage is very important. Let us take a closer look at some of the deals driving markets in europe. And we are joined by sarah from our deals team. Talk to us about this phenomenon. A bit of as been frenzy in the last few days. Last week alone there was about worth of deals. A lot of investment into the u. S. Showing a lot of confidence from european strategic sitting on a bunch of cash. Is theow much macroeconomic factor affecting the m a story in 2019 . Brexit is causing Corporate Board rooms to think twice or seeking cheaper options. We have trade tensions the 20 u. S. And china but not only them. I think a lot of the investors are sitting on a bunch of cash saying they run through volatility on a near quarterly basis. There is always something going on somewhere. If they stop investing, they would not be doing anything at all. I think this shows investor confidence. And despite the idea of a potential recession hitting, there is still real confidence from the investors. One could also suggest that it is year ends. You see a lot of deals go through your rent. People rushing through to get you see a lot of deals go through year end. People rushing through to get those done. Anna maybe some of this ent. Making is quite presci Global Growth has bottomed out. You have not seen these concerns around global slowdown putting investors off . When i ask investors if they expect a recession to head, they often say they dont have a crystal ball and they expect some sort of slow down or correction and the market. Whether that be a change in Interest Rates, a general slowdown, or a recession, they say these things cannot stop them from investing. Anna thank you so much. Our reporter from the deals team. Let us bring you up to speed with what is happening on the markets. November pmi coming through at 44. 1. Better than the expected number. So it is still very much in contraction. That goes along with a conversation we were having with ben jones earlier in the show. Marketget a look at the as we finish off the first hour of Market Action on European Equity markets this monday morning. Very positive one, stoxx 600 up 0. 6 . Same for ftse 100. Basic resources, oil and gas at the top. Up on newsbouncing about the wti and the better data out of china. Global growth related stocks. Banking stocks in ireland also going up with the sovereign debt upgrade story. This is bloomberg. Hong kong protests fight retail sales. Polls show the u. K. Labour Party Closing in on Boris Johnson conservatives. A government in crisis. The antiestablishment duo is a Ruling Alliance addressed. Francine welcome to bloomberg surveillance. ,hese are your markets treasuries sliding attach. A lot of the