The start of equity trading. Here in europe, but as ever, our coverage is global. Lets check in with what we need to be watching for. We are live in hong kong and paris to give a rundown of the stories you need to focus in on. We have Global Coverage coming in from the team as we focus in on the weekend events in hong kong. A budget to talk about in saudi arabia. An protest activity in france that matt was just referencing. Lets go first to stephen engle, who joins us with the latest protest activity. Give us a rundown of what has been happening. Question is how long will these protests continue . Ongoingeen six months with violence over the weekend and late yesterday we had the first major march again from the ch rf, the organizers of those large million plus person marches back in june. They have had their applications for marches denied by the police up until this weekend. It has basically been carried off without incident. There was some vandalism at the high court and some graffiti at the bank of china tower behind me, disparaging the communist party of china and the local police. There was also vandalism further down queens road and kings road here on the island in causeway bay. Other than that, hundreds of thousands of people turned out of all generations, the kids, the parents, and the grandparents. They are saying they understand their pursuit of greater Civil Liberties or the preservation of their Civil Liberties in hong kong. They dont necessarily condone the violence, but that is where we turn the page, perhaps. While there have been radical elements, vandalizing yesterday, the most part anywhere between hundred 83,000, that is the police estimate, and 800,000, the organizers estimate, turned out for mostly peaceful demonstrations. The question is, will this end . Prodemocracy lawmakers that we showspoken to say this that the pressure is on carrie lam to concede on some of their demands. Matt thanks very much for that. Youssef, lets get over to you in saudi arabia, releasing their budget today. Can we expect . What can we expect . Yousef it is a massive week for the saudis. The expectation is we will see a reduction in fiscal outcome, so less fiscal spending rather than higher fiscal spending over the next three years with a balanced budget still targeted for 2023. Gdp growth is expected to come in at 2. 3 in 2020. That has implications for the region, but tuesday we get to the gcp summit. The key question will be as to whether or not we will see the gulf bring qatar back into the fold. The diplomatic standoff has been underway since the summer of 2017, and with big events like dubai020 and by and in and of the world cup, they are making clear the region needs to get its act together to gain confidence across the board. Wednesday, it is a big day for saudi aramco. At the moment, the proceeds billion. At about 30 the final price is 32 reals a share. Hat is a small offering. It is unlikely to make a big dent in terms of the wider transformation, but the government is leaving no stone unturned to make sure the launch results in an upside. Anna i heard some voices suggesting they are confident they will get to the 2 trillion valuation. You. Ina, lets go to another week of protests. Have protesters managed to make any grounds . Reporter we expect the new demonstrations tomorrow, and chaos throughout the week in france. As far as i can remember, this has never happened before. Metro lines were closed over the weekend, with five highspeed trains running. The situation is better for international travelers. We have planes running almost as normal. But this new mass demonstration could be a problem tomorrow. At the moment, the french government is Standing Firm on its reform. On wednesday, we will hear about the details of this pension reform. The question is how long they will be on board. French support it, but this will depend on whether it lasts until christmas and impacts christmas holidays. Much. Thanks very Boris Johnson goes into this weeks election on the front foot. On course his party to win a majority, which means parliament will vote to leave the eu, probably. Joining us now, the ceo of its soft to talk about the last week of pulling and what we can expect for thursday and friday. I am trying to write a list of things that could stand between Boris Johnson and a victory on thursday. Quitely, i imagine it was confusing, but the polling suggests he could be victorious. And tacticalency voting could come into play also. Ben we have 17 of people who say they might vote tactically, which is high. I think it is priced in. The polls are asking people, who will you vote for . We are getting quite close to thursday. I think surprises are likely. A small chance of a hung parliament, but nevertheless a chance. If we do see some late swing. Is what we have not seen what we saw in 2017, the making of grounds and ending up 2 or 3 behind. That has not happened this time. Matt i wonder what the chances are we have seen some indicators that Jeremy Corbyn is narrowing the gap. Is there a possibility he gets close enough on election day . Ben hes got no chance, i think, of getting a majority government, given where we are. There is a chance of a hung parliament. It would need more movement in the polls then we have seen in the campaign so far, given the unpredictability of politics, we cannot rule anything out. But Jeremy Corbyn started with a satisfaction rating of 60. He started the last one at 40. He is currently at 44. He has made of ground, but not like last time. Anna let me ask you about the last few days of campaigning. In the north, we have seen strength from labour over decades. I have been looking at pulling from north wales suggesting that some places could go tory. What kind of expectation should we have in the brexit voting northern english and welsh state . Ben i thing there will be a swing to the conservatives, whether that mean labours this debatable. It is vital for trade and business my and here we are. For most ordinary voters, brexit is number seven on their list of priorities. Veryoters, it will be important, but the tribal thing matters, too. Control doesh Boris Johnson have over this majority . Angered a lot of people by throwing them out of the party, and they have come back. Ben he got rid of the one nation tories who were for a soft brexit. How he governs as opposed to how he wins on thursday may be completely different. I was at university with the guy. We have no idea exactly what is going to happen. He is mostly out for Boris Johnson. I wasit is a brexit election. He has all of his candidates saying they support his deal. He says he will have a vote before christmas. He is miles ahead of the labour party in terms of who is most competent to handle brexit, and ahead of Jeremy Corbyn. So, we will see. It should be a conservative majority, but it should have been a lot of things in past elections. Anna he could reshape the scene around him, which might have a bearing on where he heads. There is a long time until thursday. Morii. E, ceo of posis a 1 trillion war chest could boost their ability to fund Climate Friendly projects. We will speak to the president of the organization next. This is bloomberg. Matt welcome back to the european open. We are 17 minutes away from the start of cash trading across europe. Indo see some red arrows terms of futures, but remember that we had this big rally on friday rolling across from the u. S. After the jobs numbers eat estimates Beat Estimates through asia. Lets get the first word news with Annabelle Droulers. French drug giant has agreed to buy their competitor for 2 billion. It doubles the companys last market price. The agreement underscores their efforts to build a portfolio in innovative therapies. Considering seizing operations in china. Tesco is the largest market chain and the company, with only 2000 stores. The operations are reportedly 9 billion. Internationa flavors and 9 billion. Internationa flavors and fragrances emerged as a contender to buy a nutrition business. According to sources, iff is challenging for the 25 billion division. That is your Bloomberg Business flash. Matt thanks very much. Annabelle droulers with your business flash. With5 continues in madrid, envoys from nearly 200 countries looking to build on the fouryearold Paris Agreement on Climate Change. This as the new head of the eu plans to unveil the most radical overhaul of its economy in years. The Green New Deal will see the zero Greenhouse Gas emissions. Joining us is the president of the European Investment bank. , one of theand it biggest investors in Renewable Energy businesses in the world. Good morning, first off, then talk to us about your investments in nonfossil fuel energy. Investmenteuropean bank has been active for decades, and we are the largest lender in this field. However, we have seen this year it has brought about a fundamental change. Detecting Climate Change as a real threat, and therefore action is needed. Decided we are going to move away from fossil fuel financing and moved to alternatives, and to make sure the job is lost when we depart from fossil fuel energy will be replaced with other jobs. We have set up an Ambitious Program and want to drive that because this is an issue we can only do together. Anna good morning to you. In terms of your investment strategy, as you say, put out a couple weeks ago, it did sound radical. Do you think you will be setting a precedent for the bulk of the Investment Community . Will they follow . Dramatic sounds more than it was, but psychologically there is a fundamental change. Last year, it was relatively low. But it is quite a step to say that over is over. We hope it will trigger development that will have consequences. It must have consequences because we only have 10, 15 years to go before the trend for the worsening of our planets situation will not be reversible anymore. We need it now, and we believe the time has come. Matt one thing that is not radical is the German Climate bill. They only want to put a tax of 10 euros per metric ton on carbon in missions. The std wants to triple that at least. Theseo you think about relatively low taxes the germans are trying to use to steer behavior . Doesnt it have to be much larger . Hesitate to comment on domestic issues. On the other hand, i see this is a big first step in germany. I dont think it will be the last one. Professionals over the weekend were going in this direction with more an ambitious climate goals. I sit here in london, a few days until we see an election here in the u. K. In terms of the European Investment bank and questions unanswered through the brexit process, is there anything you are still seeking clarity on . Guest this is a terrible situation that the british people are living in. Obviously, there is a probability that it will take place. It will take place and do harm to all of us, but particularly the people of the united kingdom. There will be a future after will figure it very soon across europe. Matt pleasure having you on this morning. Thanks for your time. Hoyer is the president of European Investment bank. We have breaking news coming through on china auto sales. Their preliminary passenger retail vehicle sales dropped 4. 2 point yearoveryear. Slumpingee chinas passengers sales have been going on for well over a year now, and that just continues here to the detriment of global automakers that have targeted that market as their biggest Growth Market for years now. China auto sales falling one more time. Coming up, canned europe find a way out can europe find a way out of the japanification . We will bring you the outlook of someone with a rather unfashionable take on the argument. This is bloomberg. Anna welcome back to the european open. Eight minutes until the start of the cash equity trading day and trading week. Lets get a first word news update. Heres Annabelle Droulers in hong kong. Annabelle hundreds of thousands of people joined hong kongs biggest demonstration in months and a sign that popular unrest will continue into the new year. Organizers said 800,000 people marched the city on sunday, but police but the number around 180,000. The rally was first permitted by the promoted by the civil rights fund. The mayhem in the u. S. Retail ket the bias warns structural problems reduces their ability to supply funding at short notice. Of thek to the Head Department at 9 30 and time. Matt thanks very much. Annabelle droulers in hong kong with your first word news. Can europe save itself from being stuck in a protracted japanification . Many investors think it is unlikely to find the escape route anytime soon, but there is someone out there with a very different call. Here is dani burger. From davidall comes owen, who says the euro area, despite being a very fashionable call, will it escape the path laid out by germany. He said, look at European Companies moving back to a deficit, which means there will be more spending. The second thing he points out is the strength in the labor markets specifically, with quality jobs as well as a rising wage growth. Both of those things means there is more disposable income, which means 2020 europe is looking brighter, despite concerns in the area. Largely onll depend the result of this weeks election. Anna dani burger with that interesting call. Lets take a look at the stocks we are watching. Five minutes to go until the start of equity trading. Bid as the food livery war intensifies. Now listed in the never lends in the netherlands. They are trying to get their hands on just eat. Pence pers is 40 share, valuing it at about 5. 1 billion pounds. I know you have been keeping and i on the renewed guidance been keeping an ey one the renewed guidance. Matt that is a nice way to put it. To load says production will be below expectations. They also have suspended their dividend and the ceo and director of exploration have resigned at tolo oil. Production will be significantly below views, and they have suspended their dividends. Hopefully that is not one in your portfolio today. Anna lets talk about a couple of others. Tesco considering the sale of its asian supermarkets. Synthorx. I buying we will get you started with the european trading day. A little bit of weakness in futures at the start of the session. This is bloomberg. [ electrical buzzing ] [ dramatic music ] ahhhh ahhhh elliott. You came back are one minute from the opening of cash equities trading. Who is hurting the most as the price drops in chinese exports shows the trade war is still biting. Despite the bullish read across from u. S. Jobs data in asia, europe points lower. The final stretch. Three days away from the u. K. Election and the conservative party is ahead in all the polls. But one influential Analysis ShowsJeremy Corbyns labour party narrowing the gap. Biotech tieups have agreed to purchase another company at a premium of 170 the total value of the deal. 2. 5 billion. At futurese looking that are mixed across europe. Butdax barely above water, european futures otherwise down 2 . H ftse futures off 0. Anna lets take you to the market open. Futures suggesting a little downside for some of these markets. The pound is on the move, up by gainingce again momentum, heading up to the 132 level. Debating taking place between Boris Johnson and Jeremy Corbyn. We see the conservative party sustaining the lead in the polls. We spoke with ben page, and he suspects it is too late for labour to stage a resurgence. How is that playing out for markets . The ftse 100 is retreating on the back of the stress in the pound. But we also see weakness coming through in europes in the euro stoxx. The bloomberg dollar index relatively flat, as is the euro. Lets take a look at the sector picture. We have a mixed picture coming through on equity markets. Financials look to be mainly in the red. Health also in the red. Telecom is in the red. I. D. Systems in the green. Utilities looking pretty mixed. Not a good deal of information in terms of the sector perspective coming through as to where we are. A big question hangs over these markets. Come next sunday, will we see the tariffs being imposed by the u. S. On china . That remains the preoccupation of many investors. Matt i am looking at the stocks that are moving. Just for fun, i decided to do it your way. I am looking at the actual percentage change rather than the point contribution to the stoxx 600, because there are so many interesting individual stock stories today. You can see right there at the top, tesco is the biggest gainer on the stoxx 600 in percentage terms, up more than 4 after selling off its asian unit and moving back to more of a u. K. Focus. Rexall, 2. 5 . It got an upgrade to 13 euros. Morgan stanley is trading at 12 euros. It still has some way to go. You have been talking about the increase offer for just eat. Just eat now gaining more than 1 . On the downside, take a look at the losers. You can see that there are not a lot of big losers. Its an falling the most in years as it has cut equal weight at barclays price target. 81. 70. Ow trading at it is off to. 8 this morning. You see wright move. On theot of huge losers stoxx 600. Lets talk about where we are in the broader picture for European Equity markets. We are opening a little weaker this morning as u. S. Tariffs are hurting china at a time when the Global Market is already week. The markets dropped from a year ago, and shipments to to to the u. S. Plunged. It is the 12th straight monthly decline. Lets bring in our guest, senior multiasset strategist. Good morning to you. Great to catch up with u. S. To your latest thoughts on trade tension and the data we have seen. This is chinese exports to the u. S. , in the big drops we have seen coming through that. This goes some way to support president trumps strategy. If he is trying to address the level of imports the u. S. Takes from china, there is some proof things are moving in that direction. Where is this hurting most . Guest absolutely. Not a pretty picture to commence on for monday morning. An optimistic person, every cloud has a Little Silver lining. We can take some solace that collapsed, but imports are holding up in china. 0. 3 increase year on year, but at least the chinese consumers are spending. We see some demand for metals. We know that trade tensions hurt. Fall in exports is a confirmation of what we already know. What is somewhat positive is imports are coming in. See a little bit of promise there. Anna and we can look ahead to other parts of asia into china. We will look to korean data for that. Lets bring matt into the conversation. Matt i have a chart here as well showing the u. S. China trade deficit. The reason i look at this is because this is one of Donald Trumps driving forces since he came into the white house. He has been concerned about the trade deficit. It got to more than 500 million in 2018. But it seemed to be getting better. The problem from an economist effective is it has damaged the u. S. And the Global Economy so much that maybe everybody would have been better off without this trade war. This is what drives the white house and it seems to be getting better. Do you still expect those tariffs to go into effect on september 15 since they are achieving what donald trump wants . Guest that is the billion dollar question. From an economic point of view, as you noticed, it is bad for everyone, so we should not have those tariffs or the trade war. But it is politics. Who understands the terms of politics . I expect from economics, it shouldnt be. It is a rather important component of this, the tariffs coming mostly on investments from capital growth, which is one side of the u. S. Economy that definitely does not need the hit. We are seeing manufacturing slowdown. Any hit on investments will be disproportionately bad for the u. S. From an economic point of view, we should not have tariffs. But politics is politics. Anna you do not have to look too hard for a Silver Lining on the jobs data, because it looked very strong. One of my colleagues describing it as a walking set of data. The wage numbers, the unemployment levels, the job creation. Is it a stretch to talk about goldilocks with the fed on hold . Guest it is absolutely in a goldilocks situation. The u. S. Economy it is not rocketing, even though some data suggests that. The u. S. Economy is carrying on at a decent pace. Accommodative policy. The models suggest that Interest Rates in the u. S. Are about 150 basis points below where they should be, based on real economic data. We are having a situation where the economy is doing ok. Probably would not go further away from ok. But we have super accommodative policy. Talking about connecting to the previous question about trade, even if we dont get tariffs it is probably a stretch to see the trade war is finished. We probably will have this uncertainty over trade staying time. S for some insurance companies, given the uncertainty, will probably have accommodative policies Going Forward as well. It may potentially stay with us. Matt you are going to stay with us, our guest cohost for the hour, senior asset strategist at state street. I want to quickly talk about tullow oil. We were talking about that is one of the stocks to watch. You may not want to hold onto this one at the start of trade. If you like bargains, you might want to take a look now. It has dropped by half after saying production was below expectations. The ceo quit and the dividends suspended. Tullow oil falls by half. This stock was trading for more than 250 at the beginning of the year, and is now below 74. That is a stock that has dropped significantly in on session. Up next, the final stretch. Boris johnsons conservatives lead the polls with three days to go until election day in the u. K. Ken Jeremy Corbyn close the gap . We will discuss. This is bloomberg. This is bloomberg. Welcome back to bloomberg markets. This is the european open. We are looking at red arrows across European Equity indexes and in the u. K. Right now. The ftse down by 0. 2 , the dax down about 17 points. Lets get the Bloomberg Business flash. For that, we go to Annabelle Droulers in hong kong. Annabelle thanks, matt. French drug giant sanofi has agreed to buy synthorx. The deal doubles the companys last market price, and the anofiment underlines s supporting innovative therapies in cancer. Haves in tullow oil plunged after the ceo quit, following poor performance at its flagship site in ghana. This comes after a year of disappointments from tullow. The companys director has also stepped down. Tesco says it is considering selling its operations in thailand and malaysia. Is u. K. Biggest retailer reconsidering after it received inbound interest. Tesco thailand is the largest market chain in the country with almost 2000 stores. The operations are reportedly worth as much as 9 billion. Annabelle droulers in hong kong. Talk u. K. Politics. The conservative party on course to win a majority, which would mean Parliament Voting to leave the eu by january 31. But pollsters have been wrong before. The senior mosi asset strategist at state street is still with us. We spoke with ben page suggesting that the conservative party does still have this fairly solid lead in the polls. You look at the Financial Markets around this, seeing the pound rallying once again, up another 0. 2 . You think that sterling is overvalued . Guest it is not overvalued, but it is fairly valued. It is very interesting. We have spent the last almost three years talking about how cheap sterling as. Not anymore. Is he market has done it is removing this no deal uncertainty. What i find very interesting is the possibility of a future relationship with europe and america is wide open for the rest of the world. It would not take a lot for the market to start pricing in what should happen next. Whatthe question will be, if this opens up again . That will have a potential negative effect. Richard jones is going to come on later and tell us this rumor facta buy the situation. Up into the election come up Boris Johnson and the conservatives get a majority, then we see a drop on friday . Guest i would not be surprised at all if we see Something Like that. We will probably see sterling respond positively. What is next for the has more promises and expectations. Anna the fiscal story could be interesting moving forward. Both parties want to spend more. The labour party much more ambitious for the Spending Plans they have. What is your expectation for how much difference that would make to the underlying u. K. Story . The ftse 100 is very international. In terms of how far u. K. Stocks have gone, the key driver will probably be the sterling. Spending, a really big story in europe next year is something we are thinking about a lot. We are already seeing some spending in japan. I would not be surprised if we Start Talking about it in the u. K. As well. I really hope so. I suspect we will. New green initiatives probably would be away to get fiscal spending in europe. Anna thanks very much. Marija stays with us. As we get to the general election, we will bring you special coverage right here on bloomberg tv as the polls close. Watch our Election Night special. That starts just before 10 00 in the evening on thursday. I will be joined by guy johnson and jonathan ferro, coming all the way from the u. S. For the occasion. That will be the lineup on thursday. We will bring you the stocks on the move this morning, including tullow. The oil company plunging after it ceo quit and production comes in below estimates. Less than a month since we last heard bad news from this business. This is bloomberg. Anna welcome back to the european open. 20 minutes into your trading day. A negative bias to trading in europe, but not off that much. U. S. Futures pointing down, but pretty flat actually. Lets get the individual stories. Dani burger dani has the rundown. Dani one of the biggest dani movers to the upside, we see them clenching the 4 billion takeover of the german business. They have tendered about 55 of shares. Thatinal step is shareholders need to approve the debt needed to take on this buyout. Also, tesco moving to the upside, up five percent. They are focusing more on their core u. K. Market, given some of the issues. That deal could fetch a whopping 9 billion. Tesco says it has received a lot of inbound interest, and one of the biggest stories and plunges is tullow oil, using more than half its market value losing more than half its market value. They have seen performance below expectations. They have had to suspend their dividends, and at the same time, their ceo and director of exploration have resigned with immediate effect. This is the biggest selloff at record. Matt thanks very much. Dani burger looking at the biggest movers, and one that lost half its value in the last 20 minutes. First to the idea it was japan, then the euro area, then the scorch of negation may have spread further. The u. S. , the u. K. , and australia are likely candidatess to next fall victim to japanification. Central banks are running out of ammunition after more than a decade of crisis fighting. Nz chiefe, allia executive told us what will make this a big year moving forward. We have been living the dream in 2019. We have higher equity prices. We dont have to pay for mitigation. Bond prices went up, and we have virtually no volatility. It is a concern that it is not easy to have mitigation. Cash gives you one added characteristic, and that is and that is agility. I do believe we will end a period of greater volatility. Matt marija is still with us. What do you think of mohammeds take . Guest for hundreds of clients i spoke to, nobody felt like it was a dream. Everyone said it was a very challenging year. Looked at concern this year very long. In hindsight, it has been a great year. Know from that quiet , a lot of people wanted cash. People may have been to pursue mystic people may have been too pessimistic. That is probably one of the reasons markets have rallied strongly and why we are optimistic looking into next year. 25 the s p is up yeartodate, so somebody is in this market. Guest absolutely. Are in this position for most of the year. That is how i would characterize the current market structure. Anna why has it fell so hard when you look at the gains in bonds and stocks . Hard . S it felt so is it because it is difficult to square the geopolitical tensions with the outcomes . Every obviously, strategist is looking year ahead. At the beginning of the end of last year, the fundamental the tradeowdown, tensions would not resolve, protests in hong kong, unrest in chile. Would you expect the market to be that strong . I personally wouldnt. The concern is enormous. Show oneen here on this thanksgiving, and we are thankful for the Central Banks. The rest of the Central Banks slowing down the growth and that supported Financial Markets. With thehe disconnect Financial Markets and the real economy. Matt do the Central Banks continue to blow up asset values . Guest it is probably too naive to expect it to go up in a straight line, but as long as uncertainty is there, i suspect Central Banks will probably be more accommodative than not. Anna thank you for your time this morning. Marija veitmane. She will be continuing her conversation on Bloomberg Radio at 9 00 u. K. Time. Up next, could there be more repo chaos . Could the september mayhem pointed structural issues in the market . We will get the lowdown on that next. Another factor that may be made the market feel more stressful than the overall outcomes in terms of asset Price Movement would suggest. Though lets not count our chickens. It is not the end of december. In terms of where we are, we have moves gradually to the downside. Not by big amounts. 0. 1 percent on the stoxx 600, around 0. 25 on the french market. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. I halfhour into the trading day, lets take a look at what is going on into european trading. Europeanee the broader benchmark index, the stoxx 600 split just about 0. 1 . In terms of the individual movers, we have some big gainers and a very big loser. More than 13 on the ams takeover. That is because more than 55 of the shareholders have tendered their chairs in that takeover offer. That is an m a story. Another company has a new price target, up to 123 euros. A big price target jump. Hey are the maker of lenses you know the tesco story. We have been talking about how they will sell their asian unit and focus on the u. K. Grocery market. As far as the losers go, nokia down almost 4 . It is a fairly volatile stock. You have the erickson story from friday that they have settled. Ipson also a huge loser from friday. It has lost a lot of ground last week and continues to lose ground this week after some of its drug studies were put on hold by the fda. Tullow oil is the big loser. It has lost more than half its value in 30 minutes of the session now, after saying production comes in lower than expectations. The ceo and other executives are quitting, and dividends have been suspended. Anna lets pick up on that story, the story around tullow oil. Our managing editor is with us on set here in london. Good morning to you. What is it that is most devastating . The Production Cut no doubt the big story, but management is dropping out of this business. Was one of the biggest e p stocks in london. It built a very significant African Business, but the problem is African Business based in ghana was not performing like it was supposed to, and they have cut guidance. That will be a problem because they have a very large debt pile. Its equity is now worth 1. 5 billion. Its debt is approaching 4 billion pounds. With lower revenues, servicing that debt will be more challenging. The board clearly decided it was time for new management. Matt what is the outlook for tullow now . It certainly does not help much when your stock loses half its value. This is a company that was trading for over 250 less then 11 months ago, and now we are looking at 70. Will and in 2012, it was trading at 14 pounds. This company has been through a roller coaster. It was a superstar. It found oil all over the world among but that story has changed in the last few years. They have made attempts to explore elsewhere in the world and they are not finding oil like they used to. They have discoveries in uganda, but that has never been able to be developed because of political problems. Kenya has also been developed. It has been stuck with this debt pile and without the growth opportunities. The longterm future of the countr company will be interesting. Bloombergsennedy, managing editor for energy and commodities with the latest on tullow oil. Lets get a first word news update. For that, we go to Annabelle Droulers in hong kong. Annabelle Prime MinisterBoris Johnson is returning to his key election method that only he can deliver brexit. Polls show his party on course to win a majority in the u. K. Election. Johnson will urge supporters to not be complacent, with opinion polls wrong last time. Though labour party will put money in your pockets and power in your hands, they say. Unrest willign that continue into the new year in hong kong. Organizers say 800,000 people marched on sunday, but police that the number around 180,000. The rally was promoted by the civil human rights fund. Eruption by an offshore new zealand volcano has killed one person and injured dozens. On or50 people were around white island as it sent a plume of white smoke and ash into the air. The island is about 30 mylans off about 30 miles off the coast of new zealands main island. Legislation is being approved to prevent muslim immigrants from getting citizenship. Some say it is going against indias secular constitution. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna, matt . Matt annabelle, thanks very much. Annabelle droulers with your first word news. September mayhem in the u. S. Repo market suggests there is a problem in this corner of finance. The incident was not just a temporary hiccup. That is according to a new analysis. The market was upended in part because the big u. S. Banks, the ofr big banks, whole more their liquid assets in treasuries. Joining us is our bonds and fx reporter liz mccormick. What are the structural issues that were blamed in this new bias report . Is a really it interesting take they have. It is a mix of a lot of things. Not only are they putting a focus on the four biggest banks, the key players in the repo market, but like you mentioned, in their structure, since they hold more of the treasuries in the reservesystem, are the quickest to get cash to drop in the repo market. They think that underlying structure was part of the problem, why banks were slower to take advantage of these high repo rates. Think thisthe bis trouble is over . Liz they dont say it definitively, but they say with the fed has done. The fed has done a lot to end this. They have added liquidity on a daily basis, on a term basis, they have started buying treasury bills. The bis says what the fed has done is combed things, is calmed things, but people are wearing. The fed has been doing these term operations, but some of them have been oversubscribed. Whatever the fed is offering, people are asking for double or more. We have one today, so people will be focused on that. It is questionable. Dealers are quoting rates higher than we are seeing in the market now. Matt does it seem to you like the markets have a good handle on this . When this whole thing erupted, it almost created a new culture. I saw a repo twitter, and some of the smartest economy and Money Managers arguing with each other because everyone thinks no one else understands the situation. Is it so complex it causes a huge problem . Liz i think that is a great point, because i always joke that everyone and their brother is talking about repo now. You might have seen in the report that the bis brought up, which i thought was interesting and i heard people mentioned, having bought so many securities all these years and being so many reserves that almost the banks are not as savvy on reserve management, whereas in the old days they were. You have younger staff, people who are not experienced with this. For a while, there were trillions of reserves. I think that was an interesting point, too. Everyone is weighing in what they think. Anna really fascinating. Liz mccormick. She was big on repos before it was fashionable. Next, we bring you the stock movers this morning. More on that next. The stock up by 7. 4 . This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. Almost 45 minutes into the trading day right now, and there are some red arrows across the board. Not that substantial, although the cac in paris is down more . An 0. 25 france is gearing up for a new week of protests. They are vowing to stick to their guns in light of the new reform of the pension system. Unions have been emboldened after more than 800,000 protesters took to the streets on thursday, almost one million people, the biggest demonstration sends macr since macr took officeo. Joining us is our guest. How much of a disruption has this caused . When anna gets by 4 00 euro star, was she have time to check dinner by to ou 8 00 . Guest the euro star has not locals effective as the trains, so there have been some canceled. If you are coming to paris, you should make sure your train is running. It has caused a lot of disruptions. A lot of the metro shut down and trains are shut down. The unions have been emboldened. There was a big protest last friday, another set for tomorrow. The government will unveil formally this Reform Program for retirements on wednesday. Tomorrow and wednesday will be key days for this. Anna back to the real world, my life is not quite as glamorous as matt described. Lets talk about how long this will last. How long is this all set to last . Poll that came a out this weekend that had a lot of french people worried that it will last all the way through christmas, which is possible. The last time the french government tried a deep reform of the public retirement system was 1995, when i first moved to france, and it lasted almost a month. People are worried it could be the whole month of december. Things in france can be a little unpredictable. It could end in a few days. But with the success in getting people out on the streets that they had last first day, it could last a while longer. Matt allen, thank you very much for your time today. Allen katz, after spending a quartercentury in paris reporting on the situation live. Lets get to our top stocks stories. For that, we go to dani burger. Dani carl zeiss is rallying today. The med tech company up more than 7 after an upgrade from deutsche bank, whos says strong growth will continue for the next four years at least. They say the market is undervaluing their margin potential, considering new product launches and approvals in both the u. S. And china. Wirecard falling. The ceo says he wants to expand in payments, and offer banking accounts with up to 1 interest, but the market not taking the new plan kindly. Ams declining. They are gaining in todays session, clinching the 4 billion euro takeover. The next step is to bring capital raised plans for this takeover. But we tend to see that on the acquisitioner side, just because of the costs that come with that. Anna thanks very much. M a monday has begun with another big deal in the biotech space. Sanofi has agreed to buy aboutrx in a buyout worth 2. 5 billion. Our guest joins us here in london. Good to speak with you. Lets talk about sanofi. U. S. Biotech does not come cheap. Hundred 70 premium being paid. Is that a good deal for this kind of sector . It is phenomenal. I think they want to grow in that space. It is a very good deal. Matt what is the latest . In berlin, my food delivery choices have been dwindling. Now i see there is some sort of deal going on with just eat. What is the story . Iest as a fellow berliner, feel your pain when it comes to the food delivery market. There is a bidding more that has with splnsifying raising its bid. Eat haveers of just been encouraging prosus to increase their bid, but they are in a bidding more with takeaway. Com. Anna let me ask you about tesco. This one not food delivery. Lets talk about what they are doing with the big asian part of their business. The company putting out a release over the weekend, talking about the future and structural review. What is the logic of considering selling the asian business . Biggestritains Supermarket Chain put out a statement over the weekend saying they are reviewing procedures for their asian business. The asian business is a profitable market for them, but they want to realize some of the profits, which analysts have said could reach as much as 9 billion, and use that money for its core restructuring efforts in the u. K. , where they have lost a ton of jobs. They want it to be a Self Checkout business. They would use the money to reinvest in the u. K. Market. Matt finally want to mention a housekeeping note. They have enough shareholders to make this deal go through. Guest that process has been a painful one from a deals perspective. We have been chasing that for a year and it has been a roller coaster ride. Finally amf, which has put in three different bids, or decided that they wanted to make a bid, i think it is successful for them, so their plan to grow further in that space. Anna we might talk about crossborder m a in the banking sector. We talked about the possibility. With that in mind, worth indianing the bank in offered from a canadian bank. Maybe we will talk more about that toward the end of the year. Thank you very much. Butiashe is normally in berlin, with us today. Should marcus be pricing a 2020 fed move . We will put that question to Richard Jones. Ahead of the som c meeting, it is a busy week. This is bloomberg. Looking back to bloomberg markets. This is the european open. We are almost an hour into the trading day and looking at losses. Not huge losses. Some are very little change, but we do see a quarter percent drop in france. To policy. Election decisions from the fed and the ecb, this is going to be a very busy week for markets. Joining us is Richard Jones, our mliv, fx, and rates strategist in berlin. Lets kick it off with trade talks. You can see more tariffs going into effect, 160 billion in goods do for the u. S. Do you expect that to happen . Reporter the market base case is that is not going to happen, that they will come up with some agreement to avoid these additional tariffs. I think we have a lot of good use priced in. A lot of that is on the fact that we are going to get some kind of trade deal and we dont get this new tariffs. If that does happen, i think all bets are off and we get big reversals. If this does happen, there is so much priced in, we have to buy the rumors, sell the fact. You what youask expect to see on the u. K. Front . The pound is rallying this morning, once again up. Do we hover around these levels until we get some clarity around the term thursday into friday . Reporter not long to wait now. We have been inching higher over the past six or seven sessions. What is happening is we get another buy the rumor, sell the facts for sterling. We have the price of the asset, and if we dont get something where the conservatives get a majority and are able to pass a Withdrawal Agreement, that is where the big surprise lies. The conservative majority, the Withdrawal Agreement passes, they start the transition period. Anything that upsets that would be a surprise. Otherwise, i think the rally we are seeing in the sterling now is the rally a lot of people expected we would see after the election results. Matt we dont expect many surprises for the ecb meeting on friday, but it will still be a great one to go to, because it is Christine Lagardes first meeting. Reporter i dont think the messaging will be different, but we will get to see how she sets out, how much she talks about trying to push for additional fiscal stimulus, how she will transition from the previous ecb under mario draghi to her own. I think it is too soon to get anything definitive from christine lagarde, but it will be worth watching. She will also have the staff economic forecast. That will provide a decent underpinning. Richard, the mliv question of the day, should markets be pricing in or out of 2020 fed rate cuts or any kind of move from the fed in 2020 . Reporter i think we still have some loosening or easing priced into the market. It is not as high as it was, but the money market calendar spreads are still inverted. That tells me the market thinks there is a chance for the fed to cut rates next year. Matt richard, thank you for joining us. Richard jones, mliv fx and rates strategist. He is a subject of the queen. He is a member of the commonwealth. Anna good, i am sure that is apropos of something. Nk for Richard Jones thanks to Richard Jones for his thoughts. Touch,markets down a down in the london market, down in the french and german markets. Matt and i are off to radio. Surveillance is next. This is bloomberg. Francine brent again. A report says septembers repo prices were fueled by banks and hedge funds which seems to be authors of the research. Thanks to the u. K. Election, the conservative party the labour party closed the gaps. Chinas exports drop in november. Welcome to bloomberg surveillance. I am francine lacqua. These are your markets. There are a lot of catalysts out there it com