Driven by a weaker dollar. Whereturn to istanbul, bloombergs Turkey Bureau chief is standing by, and chris reiter is in berlin. President erdogan has sounded out again, ahead of the central bank decision. What can we expect today . There is a universal expectation that there will be a cut in Interest Rates later Turkish Central Bank Monetary Policy convene committee convenes. What we dont know is how much. If the decision is in line with estimates, which predict around thet of 150 basis points, rate of return on the turkish lira adjusted for inflation goes down to 1. 9 . Thats a crucial number, still above the average of real return e. M. s, which turkey is considered part of, but below countries that turkey is usually judged against like russia and south africa. We have seen anxiety in turkish markets over the last week. The lira has been weakening to levels not seen in about two months, and the decision at 2 00 p. M. Will determine the Market Reaction later today. Matt more Central Bank Meetings today, outside of that. Nb, at the ecb, and the s Swiss National bank, is meeting. Do they take their cues from Christine Lagarde and co. . Snb is expected to keep policy rates on hold, but that is likely where similarities and. They will likely take the opportunity to reiterate the need for negative policy rates because they are struggling in an environment of deflation and trying to keep contained a quite high value currency. Now, Going Forward today we would expect to see possibly some upside to the currency, if we do see a hold. A bit of a pricing for a cut is there, but really Going Forward what we would expect to see is a decoupling occurring between the ecb and snb. When we look at the currency, since september, after strengthening most of the year, the swiss franc has lost some of its value, so this does provide some breathing room for the snb to keep rates on hold or even possibly cut next year, but ultimately we do expect them to continue to keep negative rates, the lowest across the world. Angela merkel is meeting the new members of the social democrats after they asked for a series of concessions, so what can we expect . Chris it will be a process. Angela merkel has been very adamant to say shes available, to serve out her term. But the question is if the Coalition Goes that long. The bigger meeting will be next week when they meet with the social democrats, and shes more of a wildcard, in the sense that shes more in line to be the next chancellor, and might be more willing to push the social democrats. She has taken a hard line so far. Angelaings develop, merkel still has a lot of authority, and if the democrats can push Angela Merkel and get her on their side, they have good chances to make some concessions, but the real wildcard is what the rest of the party wants to do. For neither side is an election really a desirable outcome, so you will have to watch this space for the coming weeks and months. Thanks very much. Chris reiter covers all things germany for us in our berlin, capital city bureau. Turkey bureau chief for us out of istanbul, and laura cooper in london. We will check in later with laura to continue to monitor whats going on in these markets. Frances labor unions are keeping the heat on president macron this winter, urging workers to strike again on december 17 in a protest against the elysees pension reform plans. Disruptions have hampered public transport, rail and Airline Traffic and fuel deliveries throughout france since last week. Joining us to discuss more is a senior fellow at the european think tank, the Peterson Institute for international economics, previously an advisor to frances labor ministry. What do you think about the damage being done to the French Economy . Has, is it significant yet . Olas i dont think the damage from those demonstrations is significant at this point. I should say that i was a advisor to the minister 20 years ago, so not very recent, but i keep an eye on this. I think macron and the french government are going for a big reform, very structural, about making this is to make sense, built over a decade at this point. Incredibly complicated, and it no longer makes sense for people, so hes taking this gamble that streamlining and clarification of the Pension System will ultimately be something the french electorate and Public Opinion would be grateful for. At this point, it looks like an incredibly audacious gamble, because you have all these demonstrations and strikes and colorful images on the screen, but it might still payoff. We are at the early stage of this issue. Nejra nicolas, great to see you. When is this likely to pay offer macron in the economy . Nicolas macron has been doing structural reform according to the promises of his campaign since the beginning of his term, so this is part of a sequence. To beects and wants reelected, and expects the payoff to come gradually over the next year, not in the next 12 months. Now, the next big election deadline is 2022, which gives him almost, more than two years. Not a lot, but enough time to recover from his current, unpopular position. 20 years ago you were advising the government. You have a lot of experience in these things. Do the french unions have a history of being able to really make changes, effect change in policy . Face careerending protests . He doesnt seem to be hit that hard, at least he has handled deftly the yellow vests protests. Nicolas you use the right word. Hes very deft. French unions have a culture of hard bargaining. They also have to make sure they are not overwhelmed by the aspirations of their base and the anger at the grassroots, so its a difficult game to play for the unions. A bargain is a better solution for them, but a bargain is something that will make debate, and thats the balance. Macron is very strategic. He will negotiate in the spirit of hard bargaining also. At this point, too early to say, very difficult sequence of opposition with the yellow vests, and hes handled it very deftly. Nejra one other area where you have been very influential is your advocacy of european Banking Union. An ecb banking meeting, giving us a chance to talk about issues broadly facing europe. Is the process of a Banking Union, while you might advocate for it, something you see realistically happening . Nicolas Banking Union has happened in europe. In 2012, there was the establishment of the single supervisory mechanism for all eurozone banks. It is still a halfway house, and the aim of a Banking Union, to break the vicious circle between banks and sovereigns, which almost drove the euro zone in 2011, has not been achieved yet. I think we are seeing red lines eroding, becoming maybe yellowish in a number of member states. The germans used to say no way, to discuss deposit insurance at the european level, and now say they are ready to discuss with a hard position. The italians said no way we discussed a regulatory treatment for sovereign exposures moving away from their previous exemption from capital regulations, and now say they are ready to discuss, together with things like so this is another hard bargaining proposition, not an easy negotiation. There are a lot of special interests, and french habits, and difficult things politically, but i think it is in the next 18 months. Not the next two weeks, but theres a deal to be made they could be good for everybody. Im not predicting this will happen, but i think its within the scope of possibility. Nicolas, great to get time with you. Thank you for joining us. Nicolas veron, senior fellow at a very influential think tank from brussels, bruegel and pe terson institute. U. S. Xt, nestle sells its ice cream business to a joint venture with a private equity firm. We get details on the 4 billion deal. And remember, Bloomberg Radio is live on your mobile device, or on dab digital in the london area. Tune in. This is bloomberg. Nejra this is the open. We are just under 15 minutes away from the start of cash equity trading in europe, and futures on the front foot. Lets get a Bloomberg Business flash. Leanne saudi aramco might hit the much touted valuation of 2 trillion today. Premarket bids point to the move. The stock rose to the 10 limit yesterday on the first day of trading. 2 trillion was a value much touted by saudi arabia before the ipo, but it eventually had to settle for a lower offering as International Interest waned. Predictions of another 15 deadly crashes over 45 years, from an faa Risk Assessment into the boeing 737 max released by congress, put together after the first of the two deadly crashes that claimed over 300 lives. Faa administrators said officials acted in good faith by not grounding the plane until after the second fatal accident. Itsconnect financial cut ipo target nearly in half, one of several businesses banked by softbank. Instead of raising over 500 million, it is now targeting around 250 million. They opted for a new york listing despite u. S. China tensions. Thats your Bloomberg Business flash. Matt thanks very much. Your business flash. Lets focus on todays biggest corporate story. Nestle selling its u. S. Ice cream business to a joint venture with private equity firm tia partners, valued at 4 billion, aiming to create a stronger challenger to unilever. Joining us is duncan fox, bloomberg Senior Consumer staples analyst. Take us through how the deal works first, selling the u. S. Brand to a joint venture in order to take on unilever . Duncan thats correct. The western european businesses in a joint venture years ago, and formalized that in 2016. So if you look at the global ice cream market, number two and number three, so putting the u. S. Business in there will give them a 10 share against you know levers 18 unilevers 18 , but that gives them a chance to bring out new products, which is essential in that market. Nejra what will they do with the cash . Duncan good question. They have a buyback already in place, so i think it will just be investing in the core businesses. Pet food, coffee, water and nutrition basically, so any opportunities there, they would invest. Matt it sounds like part of an ongoing plan, which leads me to ask, are there other things they want to sell . Whats the future of m a look like for nestle . Duncan i think i just mentioned the four key areas. A couple years ago they have really focused on that core, so another 20 to 30 of the business, they have to clear up where they are going or it could come under pressure, and that was one of the key ones, with cereals, general mills, to the confectionery, number one and number two, which is what they want, so they have strong businesses, strong markets, but not a complete business. Those have been the areas where they need a clear plan of how to grow, or frankly they may well take the cash and invest somewhere else. Nejra duncan fox, Senior Consumer staples analyst, thank you so much. Up next, the morning calls, including a warning of a liquidity crunch in the s p 500 from bank of america, and j. P. Morgan talking about buying equities and shorting gold into 2020. This is bloomberg. Matt welcome back to the european open. We are currently about 10 minutes away from the start of cash trading across europe and in the u. K. Right now, i want to get a story out of israel. That country is heading to its third election in less than a year. The countrys parliament disbanded this morning, after failing to find a lawmaker to form a coalition. The political crisis is closely intertwined with Benjamin Netanyahus own legal troubles, with the Prime Minister under indictment, his chief rival benny gantz balked at the idea of a powersharing deal. Joining us is the bloomberg chief for israel and palestinian territories. Ist me ask first, why is th going to a third election now . Are the voters not just likely to put you back in the same place where you already are . Good question. Look, the story begins and ends with israels top two contenders for the Prime Minister, netanyahu and gantz. Neither one has enough support on his own to create a government, and they tried a powersharing agreement but could not reach it. Netanyahus indictments are at the center of the dispute. Defendhu wants to himself in court and remain Prime Minister, but benny gantz has long insisted that anyone facing these serious charges is not fit to lead the country and should step aside. Knessetnd so, the approving a bill this morning to disbanded self and set an election for march 2, does that mean that by march or spring 2020 israels political crisis will be coming to an end . [laughter] night, peopleast were talking about a fourth election. So it, at this point it doesnt really look like thats the case. The polls recently show gantzs overincreasing slightly netanyahua likud, but the overall numbers point to another stalemate. The question is, who is going to blink first . Who is going to give in to the other side . Until now, netanyahu supporters have been very loyal, but will they throw up their hands and say enough is enough, defect to the other side, or conversely would netanyahu woo some people in gantzs corner to join him in government . We will only know in march. Yaacovfrom tel aviv, benmeleh. Thank you so much. Lets get the bloomberg first word news. Today the u. K. Goes to the polls, the nations fourth election in a decade and the second since the brexit vote in 2016, also the first december vote in nearly a century. Polls close at 10 00 p. M. U. K. Time, and dont miss our special election coverage. Another rate cut is looming in turkey. President erdogan says Interest Rates will move to Single Digits for 2020. Most economists disagree with his views, after lowering borrowing costs brought down inflation, but everyone in a Bloomberg Survey sees the policy continuing. The decision is due 11 00 a. M. U. K. Time today. Brazil lowered its benchmark rate by 0. 5 , cutting to a record low 4. 5 . Many analysts also expect policymakers to signal an end to the easing cycle, but the Central Bank Left the door open for additional cuts. Trouble sees deepening in north korea, potentially provocation,pther saying they could launch a vehicle using longrange Missile Technology and could test launch Intercontinental Ballistic Missiles designed to attack the u. S. With nuclear weapons. Global news 24 hours a day, on air and on quick take by bloomberg powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Nejra thank you very much. Leighann gerrans, with your first word news. Ankamerica is warning of liquidity crunch in the s p 500 as the year comes to a close, as trading dries up in typical fashion for the final week of the year. Lets get the morning calls right now. Dani burger is here with that. Dani bank of america says investing at the end of the year is an extreme sport, because illiquidity at the years and threatens to amplify any selloff we may get. Specifically it is because banks have stepped back from marketmaking roles, and heightened regulation has made it difficult for banks to carry out the market function. This isnt that dissimilar from what we heard on sunday night, when they said this is the cause for repo market flareups. Bank of america alters also says etfs have stepped in the place, and they disappear whenever there is any sort of market stress, and that makes it more difficult. Wework it or not, factors into this. Pension funds may need to sell liquid assets like stocks into the market because they took such massive writedowns with wework losing so much value. Nejra thank you so much. Great ground up. Another morning call, jp morgan singh short gold and buy equities into 2020, expecting Global Growth momentum to pick up, and that the u. S. President ial election is seen as the biggest risk next year. Coming up, its the European Market open, and some ftse futures pointing to a little bit of green, but elsewhere we are absolutely flat after the fed yesterday. N rates this is bloomberg. Nejra one minute from the open of cash equity trading in europe. Here are your headlines. Markets mixed as the fed signals it will stay on hold next year. Now the focus shifts to the ecb. We are live in frankfurt all day. Aramco shoots for the moon. The Saudi Oil Giant hits a 2 trillion valuation on its second day of trade as it searches again. And nestles slimming regime, selling its u. S. I scream withess to a joint venture a private equity firm valuing the business at 4 billion. A look at how futures are set up. 0. 2 ,00 futures up interesting because at the same time cable, the pound trading above 1. 32, dax futures struggling for direction and cac 40 moving into the green after trading flat for a lot of the asian session. We saw gains yesterday in the u. S. After the fed decision to stand pat. Lets see if we get another day of gains here in europe. I just talked about the pound, up 0. 2 . Ftse 100 as it gets going, looking dead flat, in the great, not living gray, not living up to what futures were showing, but we will see if that picks up. We saw dollar weakness yesterday, particularly in yen. Stoxx 50 opening flat. Not a lot of movement. Ftse 100 up 0. 1 , but not in the green yet. We will see if we get any lift here. The getrman dax opening almost 0. 2 higher. Gaining a little momentum upside, and looking to the ecb to see if we get any momentum from Christine Lagarde. The fed on hold for 2020. Industry groups, in terms of the green than red. Even that we may not be trading strongly to the upside, more Industry Groups are on the positive foot today. Interestingly, Communication Services and utilities are more green, so a skew towards the defensive sectors, but really a mixed picture, because tech and banks are two of the strongest to the upside. Not a lot of readacross in Industry Groups telling us whats driving gains today. A lot of it might be down to individual equity stories, matt. Matt absolutely. We can see a lot of individual movers today, but the question is how much are people going to be trading on this ecb decision . Im standing outside the European Central bank here, awaiting Christine Lagardes first policy meeting as president , first policy meeting as a member of the ecb at all, coming from the imf. Also going to be interesting to see the first strategy review here in 16 years, the first ecb strategy review since 2003, so that could certainly make some headlines. That sheguest says wont be reinventing monetary and fiscal policy at todays meeting. Joining us is martin malone, chief economist at alpha book, formerly at mint. Let me ask what you expect from Christine Lagarde. Is she going to continue the same policies we saw from mario draghi over the last eight years . Martin yes, i think so. Shes got to be optimistic, that is sort of in her nature. Needse reboot the ecb with only start in q1, and will probably be led by the chief economist for the plane. Phillip lane. You saw yesterday that jay powell was very dovish, good news for trump. Nejra in terms of the fed, lets pick up on that. We saw the impact on the dollar, erasing 2019 gains. When we spoke before, your outlook was dollar strength, and generally you are positive on u. S. Assets. Does that continue through 2020 based on the fed on hold, or heading towards a hike, not a cut . Martin i think the fed has very subdued inflation, and the uber dovishness from powell yesterday, the main point was they dont think theres a tightness in the labor market. Theres 160 Million People in america who have a job, but 100 million who are not in the labor force, and they are quite concerned the extra supply of labor will keep inflation subdued, and Interest Rates will remain very low. One of the big problems with the u. S. Labor market, so many people have jobs they do not like, or jobs with which they cannot sustain or support a family. Is that the same problem, do we have the same problem here in europe . Martin yes, i think theres significant slack still in the european labor force. In america, the main part is that wages are on aggregate over 3 , but the low to middle sector of the labor market, we have 4 , 5 , 6 gains, and this is going to suck in a significant amount of the labor force and the nonlabor force. This was the main take away from powell yesterday, that the tightness in the labor markets is not an issue and they will have to see significant deterioration in job numbers if they will cut again. Nejra based on the outlook for the fed, ecb and perhaps other global Central Banks in 2020, what he prefer to allocate more to equities or bonds . Martin equities is our main play. That is because we have substantial monetary easing, 60 Central Banks cut rates this year and emerging markets will continue cutting rates. Fiscal easing, we have 3 trillion of global fiscal easing. The last six years, the average was close to 2 trillion. That monetary and fiscal easing combination makes us very bullish on u. S. And Global Equities. Our 18 month outlook on the s p is 4000. Martin, what do you think about u. S. Equities having risen already 25 yeartodate . Dont you think investors should take some of that money off the table, heading into christmas . Martin not at all. Investors should not be trying to time small market issues. They should be trying to take a sector, Structural Assessment on where Global Equities will be, particularly u. S. Equities. A decade ago, u. S. Equities were 30 of the Global Market, and today they are 42 , and that trend can continue, simply because of the factors i mentioned. U. S. Equities have performed very strongly this year, but that is just reversing last year view, thetwoyear last two years u. S. Equities are almost flat, and people should be looking to, the call options are probably one of the best ways to play if you dont actually want to purchase at this level or to look at call spreads over the next 12 to 18 months. Nejra its interesting. We see traders with a lot of hedging, a few indexes wanting to cater to that. Would you still want to be positive on u. S. Equities regardless of what happens with Global Growth . When we talk about structural factors, some see a real inflection in 2020 and others are not so optimistic. What is your view, and do you hold u. S. Equities whatever that view . Martin we hold u. S. Equities no matter what the outlook, and the main reason is the Political Risk we feel next year is actually going to go down, not increase. U. S. Recession risk will go down, not increase, and these are the two major issues that are keeping people away from u. S. Stocks. The participation in u. S. Stocks is very low, and there was a hight from ubs about their net worth clients over the last 12 months, 27 of their position is in cash, and we call it the pessimistic bubble. Everyone is talking in a very pessimistic way on the economy, on politics and on trade, and we think that pessimistic bubble will be the main story of 2020 and it will burst, and we will have a very solid 2020. Nejra all right. Matt this is fascinating, martin. Glad you get to stay with us, because we will talk a lot more about that and trade later on. Martin malone, chief economist at alphabook, our guest cohost for the hour. Up next, a 2 trillion valuation achieved, aramco jumps again on its second day of trading, taking its market cap past the target that alienated Global Investors and prompted the kingdom to focus on a domestic listing. We will discuss the ramifications of that next. This is bloomberg. Nejra this is bloomberg markets, the european open, 11 minutes into the equity trading day in europe. The ftse, dax, cac 40 up at least 0. 2 . Lets get a Bloomberg Business flash with leighann gerrans. Leighann nestle is selling its usa screen business to a joint venture. They will now own brands including heloise and drumstick dazs and drumstick, growing the business to challenge unilever, the global ice cream leader. Of more deadly crashes if nothing is fixed, from the faa assessment of the boeing 737 max, which was put together after the first of the two deadly crashes that claimed over 300 lives. Faas administrator Steve Dickinson said officials acted in good faith by not grounding the plane until after the second fatal accident. Its ipoct financial cut target nearly in half. The fintech platform is one of several ping an business is by softbank. Million,f raising 500 it is targeting around 260 million, and seeking a new york listing despite u. S. China trade tensions. A sprint executive says the Wireless Company wont survive long without a takeover by tmobile. The testimony was in a federal trial that will determine whether the merger can indeed proceed. Federal regulators approved the deal but several states sued on antitrust concerns. That is your Bloomberg Business flash. Leighann gerrans with your business flash. Saudi aramco jumped for a second day, pushing the oil giants value beyond the 2 trillion mark that was part of the alienation Global Investors felt, part of what prompted the kingdom to enbd of focusing on a domestic listing with such an incredibly small flow. Ofhabook is part of bjc, one the largest brokers in the world. Great to have you with us, martin. I wonder what you think about this. I find it so fascinating that now the Biggest Company in the whole world has one of the smallest free floats in the whole world. Of the top 1000 companies by market value globally, its the third smallest free float behind only audi and embw. Do you expect aramco to grow, in the coming years, and become a hugely significant part of the equity market . Martin the quick answer is yes, and the main reason is if we ofk at aramco, they have 10 global oil revenues. Global oil revenues are down sharply over the last decade, but they will probably do very well in the coming decade, simply because chinas demand is going to remain very strong. They are importing around 11 billion barrels per day, but i also think the main issue about aramco, the domestic listing in riyadh. But in 2020 we would expect they will have a global listing, most likely based in tokyo. There is a reason for that. Over the last 50 years, japan is saudi arabias largest customer. Actually, they have paid 1 trillion for the oil revenues delivered into japan over the last 50 years. The Tokyo Stock Exchange is very global. Around 30 to 40 is owned by Global Investors, and that is a way for aramco to get a global listing and see an increase in passive funds having to purchase aramco over the next 12 to 18 months. Nejra here is the counterargument. Aramco investors, bernstein says they should cash yield,th a low dividend the Political Risk of the government running the company fairil prices point to a valuation for saudi aramco 28 lower than the 1. 8 billion they reached on the first day. Admittedly, the dividend and free cash shield show the trade at a premium, and compared to other oil majors its not necessarily an interesting proposition. If aramco wants to go for a global listing in tokyo or elsewhere, would there be appetite from International Investors in the way we have seen with the local listing . Admittedly, the shares have been propped up by saudi arabia. Martin first of all, it is basically on the outlook for global oil. 55 tobal oil outlook is years,r the next 510 but we have had very strong tightness of supply. One of the main increases in supply over the last few years was the dramatic increase in american supply, but american supply next year is going to be much more subdued, because the rig count has collapsed and shale has cut back on investment. They are heavily indebted, so they have decided to build up Free Cash Flow and pay back down debt. So we have tighter supply from america next year, and also from opec and opec plus. This supply deal we have between russia and saudi remains very significant, and will continue to be the main way to tighten opec plus supply for the next few years. Were neutral to bullish on oil prices, but in the next 12 months positive. Matt and then, you think as s oon as western investors find a way in, they should buy aramco shares . Intin the reason to list the Tokyo Stock Exchange, japans investors have 25 trillion of private sector financial assets. Japans investors will be the largest buyer, outside of the thise east for aramco, and would be both Public Sector funds and pension funds, significant buyers over the next 12 to 18 months. Nejra martin malone, chief economist at alphabook, stays with us to discuss. Bringwe ring you you stocks on the move this morning including ocado. Are trading slightly higher, up 0. 2 . 18 minutes into the equity market open. This is bloomberg. Matt welcome back to bloomberg marketss this is the european open bloomberg marketss. This is the european open. 20 minutes into the trading day, looking at green across the board. N up up 0. 25 , ftse mib mila 0. 4 . This is not a christmas special, although there is a Christmas Tree behind me, and behind that is the European Central bank. Waiting for Christine Lagardes First Press Conference to kick off. We have more media here than i have ever seen at an ecb meeting, probably because theres so many french media participants this time. Madame lagarde of course hailing from that nation. Our top stock stories, back to london and dani burger. Dani the biggest mover on the stoxx 600 is balfour beatty. A trading update, now at the highest price since the summer. Fullyear operational profit is ahead of their previous view, and revenue should search about 5 . They said their order book at the end of the year will be in excess of 14 billion. More on the move up than 2 after Morgan Stanley had some of their top 2020 calls, and adyen, they called it a best in class at valuation looking good. They noted partnerships with alibaba and ebay. Ocado has been all over the place this morning, at one point over 1. 3 . It felt a little bit, now back up. Fourth Quarter Sales about 10. 8 . The partnership with Marks Spencers has been a bright spot , and they are looking at cheaper options versus what it currently has. But still seeing shares up only 0. 2 . 10. 8 , lower than what they had last year. Nejra dani burger, thank you so much. Jp morgan Ceo Jamie Dimon expects a phase one deal between the u. S. And china, but if it doesnt happen and further tariffs go ahead, it will hit markets and u. S. Economic growth. China is expected to offer details on its Economic Strategy for 2020 today, and we will watch for signals on how it plans to tackle slowing growth, the trade war and manage financial risk. Its expected to target growth of around 6 . Martin malone, chief economist at alphabook, still with us. What happens on december 15 . Martin there might be a chance trump imposes the sanctions or increases sanctions, but i doubt it. If it does happen, it will be a small road bumps early next week on monday or tuesday, which will give a good buying opportunity if that happens, but i dont expected to happen. Matt so you dont think that trump with impose tariffs on december 15, or if he does, you think it will be shortlived . We get a phase one deal, you think in december, in january . Martin i think we are very close to a phase one deal, and theres a lot of reasons why china also wants a deal. An alignment of trade policy with america. China will release today that they will probably have a growth target for 2020, slightly below 6 . They are using monetary easing, very aggressive on fiscal easing, and their growth for the and 510 yearsis quality, they need an opening up of the markets, they need reforms. That means getting the trade deal done with america. The phase one trade deal, a key thizer wants,ligh an enforcement mechanism to make sure china sticks to promises in a phase one deal. We see the democrats have come back into congress to try to get the new nafta passed. To get also a stick trade deal done with china. Nejra we know you are really positive on u. S. Equities. Does what you are saying also make you positive on chinese or other emergingmarket equities . Martin absolutely. If we see the global gdp downgrade in 2019 which forced ease, it was a trade decline, investment decline because of the trade. Getting these deals done like nafta, phase one china, e. U. U. K. , these are critical, particularly to change sentiment. That is the main takeaway, getting these deals done. It has been great having you with us. Thank you so much for your time. Martin malone, chief economist at alphabook, talking about a number of topics on this huge day. And decemberecb, 15 the sunday deadline for those trade tariffs. Will be fascinating to watch. Up next, we talk about a sweet deal. U. S. Icelling its cream business for 4 billion. This is bloomberg markets, the european open, 30 minutes into the equity trading day in europe. Struggling a little for direction on the stoxx 600. We saw gains yesterday in the u. S. After the fed state on hold. Now, we look ahead to the ecb, gaining, partly due to dollar weakness. Even group split. Carmakers, commodity producers and tech stocks leading the downside, Financial Services and food and beverages underperforming along with utilities. We have seen a little rotation through the session, in terms of what is outperforming and underperforming. Lets get the bloomberg first word news with leighann gerrans. Leighann the Federal Reserve expected to stay on the sidelines in 2020. Last night, the fomc kept Interest Rates on hold, forecasting no changes through next years president ial election. Chairman Jerome Powell says current policy remains appropriate unless the outlook changes. Another rate cut looming in turkey. President erdogan says Interest Rates will move to Single Digits in 2020. Most economists disagree with his view that Lower Borrowing costs bring down inflation, but everyone in a Bloomberg Survey sees the policy continuing. That decision is due at 11 00 a. M. U. K. Time today. Brazil has lowered its benchmark to aby 0. 5 , cutting record low 4. 5 . Many Analysts Expect policymakers to signal an end to the easing cycle for the central bank and leave the door open for additional cuts. A potential end to political deadlock in spain. King felipe has asked the Prime Minister to try to form a government. After last months election, his socialists emerged as the Biggest Party but fell short of a majority. Hes now in talks with catalans separatists for their support. The u. S. Sees deeply troubling indications north korea might be poised for another major publication according to the u. N. Ambassador kelly craft, saying the kim jongun regime could launch space vehicles using longrange technology and could even test launch international Ballistic Missiles designed to attack the u. S. With nuclear weapons. Global news 24 hours a day, on thanowered by more 2700 journalists and analysts in more than 120 countries. This is bloomberg. Much. Thanks very leighann gerrans in london with first word news. Lets focus on todays biggest corporate story. Ice creamling business to a joint venture with private equity firm pai partners. Deald at 4 billion, the aims to create a stronger challenger to unilever. Joining us is eric pfanner, Bloomberg News european Consumer Team leader. Its confusing, because nestle ownelling its assets to its joint venture it set up for its western european ice cream business, so they are basically just shifting around the assets to a different Holding Company . Eric thats right. Its kind of a step away from the category. They already set up this joint venture with the private equity firm three years ago, for the european operations in ice cream, and now they are selling, the whole u. S. Business sncluding brands like hagen daz and handing that over. Nejra how well does this set them up to be a stronger challenger to unilever . Martin it sets up this venture in a stronger way, with a 10 Global Market share compared to own ben unilever, who jerrys and brands like that and is the market leader. Matt does this strengthen nestles Balance Sheet . They were arguably already just as strong a challenger to u nilever when they owned the european and u. S. Ice cream brands under their holding rather than shifting them do this joint venture with private equity . It definitely strengthens the Balance Sheet. Nestle has done a series of divestitures lately. Sold the u. S. Confectionery business, skin health, their insurance business. The cash is piling up. The big question, what are they going to buy . Where do they get the growth . Nejra you wonder whether its in the areas they want to focus on like pet food, water and coffee. In terms of share price reaction, we are not moving a lot. What does that say about what investors make of the move . Eric kind of muted. Company, a 4ive billion deal is not that huge or surprising. The question for investors, wh ere do you buy, look for growth . Coffee, therer, is a lot out there to look at in those categories, or other ones. Wet whats, first of all, shouldnt fail to mention they own drumstick. In the u. S. , its an incredibly important brand. As a kid i would eat them by the box. [laughter] i believe in the u. K. You would think of them as a cornetto equivalent. Is the ice cream is an is changing a lot . Obviously people are at least becoming more healthconscious, if not actually making healthier decisions, and i believe in the u. S. You have healthier ice cream alternatives that have stirred up the market. Eric thats right. I think nestle shares just moved on that comment about the whole box of drumsticks. [laughter] that aside, the category is shifting. Brands like halo top in the u. S. Vegan ice creams, things like that, sort of newworld flavors, ingredients, doing really well. You see the likes of unilever adjusting to that, adding lower fat options. That is where growth is. Nejra eric pfanner, thank you so much for joining us. Up next, we bring you some of the stock movers this morning, including metro. This is bloomberg. Matt this is bloomberg markets, the european open. Nejra 39 minutes into the equity session in europe, picking up some themes in the green on the screen. Ftse 100 up almost 0. 5 , along with pound strength, cable above 1. 32. 40 the same2 , cac and the ftse mib also in the green. The Swiss National bank, a hold is what we got. Remains the franc overvalued and they are willing to intervene in fx if necessary. Euroswiss, steady following that. They say the risk to the Global Economy remains tilted to the downside. They dont see the inflation rate above 2 in their forecast. What they are monitoring is the mortgage and real estate markets closely. Lets get back to saudi aramco, jumping a second day and pushing the oil giants value beyond the 2 trillion mark. Lets get more with Matthew Martin in dubai. Great to have you with us. Whats driving the stock higher, this second day . We know ahead of the first day of trading, a number of steps were taken to make sure the stock was supported, so whats been driving the stock the second day, and how likely is it the gains will continue . Matthew well, as we look at the price now, its been a fairly turbulent start to the trading day. It opened up 10 , sold back quite sharply, and now back up about 8 . Still hovering around the 2 trillion mark. What a lot of people in the market expect to see is Government Funds coming in and supporting that. Weve got some hedge funds as well that are likely coming in and betting on the index inclusion story that will happen in around another weeks time, expecting a fairly good gain from that process, as money has to start coming in chasing that story. As to how likely it is to hold valuation, that will be the big question Going Forward. We have a few days of limit gains, 10 each day, we will see some Retail Investors looking to cash out on the stock, and that could start some downward pressure on the aramco price into the new year. Matt what is the story with the green . Option, Goldman Sachs can sell extra shares, but if you already need the government to buy the shares to hold the valuation above 2 trillion, probably the kingdom doesnt want its Investment Bank having to sell a whole slew of extra shares into the market . Matthew exactly. It will be a tough call they will have to make, Goldman Sachs, as the stabilization additionaling the 450 million shares that could be sold into the market. So i think if you look at the volumes we see today, volumes are pretty high, so theres some expectation shares could be offloaded while the price is high. But the flip side, is the government selling these back to themselves through various means . Some funds, the government itself as a shareholder looking to sell, when other Government Funds are acting to support the price. A lothink as they talk aobut the circular economy in saudi arabia these days, and this could be one example of that. Matt matthew, thank you so much for joining us. Matthew martin, middle east finance reporter joining us on day two of aramcos public trading. The Biggest Company in the world gets even bigger, now worth over 2 trillion. Lets get the business flash now, back to london and leighann gerrans. Leighann good morning. Nestle is selling its u. S. Ice cream business to a joint venture with pia partners. Froneri will own the brands including haagendazs and drumstick, seeking to expand froneri, to challenge unilever, the Global Leader in ice cream. Redicted 45 more crashes 25 more crashes in 45 more years if nothing is fixed, the Risk Assessment from the faa given to congress after the first crash. Faas administrator says officials acted in good faith by not landing grounding the planes until after the second fatal accident. Oneconnect financial cut its ipo target nearly in half, one of several ping an businesses backed by softbank and celebrating over and instead of seeking 500 million, it is targeting 260 million, opting for a new york listing despite u. S. China tensions. A sprint executive said about the Wireless Company that it wont survive long without a takeover by tmobile. The testimony was in a federal trial that will determine whether the merger can indeed proceed. Federal regulators approved, but several states sued on antitrust concerns. Thats your Bloomberg Business flash. Nejra leighann gerrans in london. Thank you so much. Turkeys president erdogan is taking deeper Interest Rate cuts for granted, and so is the market. Erdogan sounded off again before todays meeting, and said Interest Rates will move to Single Digits in 2020. With us now is bloombergs Turkey Bureau chief in his temple to save me from my to save fit istanbul me from my coughing fit. What will we see today . Theres an expectation they will be a rate cut when turkish Monetary Policy makers in about two hours from now, but the question is how much. Ation isral expect to basis points, compared consumer inflation of just over 10 , bringing the new rate of return to just under 2 . Curious,n you, im on the ground, what does inflation feel like to the average citizen in turkey . What are things you notice getting more expensive by the day, when you are shopping around istanbul . When you look at the breakdown of turkish consumer inflation, surely food prices have been a huge thing going up. Official inflation figures, the issue is when inflation slows, we face an expectation that things should get cheaper, but that is not how it works. Because of the massive inflation over the last 18 months, the costs have gone up considerably in istanbul and elsewhere in turkey, part of why the ruling party has been losing so much popularity, which we saw in an election earlier this year. Nejra erdogan is known for having a somewhat unorthodox view on the relationship between Interest Rates and inflation, so how is the market bracing itself ahead of the decision today, and what are the prospects for the lira . Onur thats really a key question, and a lot of people who invested in the turkish lira were looking, trying to answer. Could be a scenario early next year where the central bank would be caught in a dilemma. We think inflation will spike normallyst quarter, limiting room for lower Interest Rates, because real rates could turn negative. The problem, as you mentioned, the turkish president erdogan, a very powerful leader, has an unorthodox view and believes that lower rates will control htflation, and that mig lead the central bank into a dilemma over whether to listen to signs from the economy or Political Leadership when making Monetary Policy. Matt onur, thank you for joining us. Onur ant, our Turkish Bureau chief in istanbul, talking about the central bank and the power of the turkish leader and his influence on the central bank, a very interesting relationship. Lets get to our top stock stories in todays market, back to london and dani burger. Dani one of the biggest decliners on the stoxx 600, m etro, falling the most in two months, 4 . Earnings for 2019, jeffries says there are no surprises, even though they saw profit falling despite planning to sell hypermarkets and their china business. Those transactions should be completed soon. Falling, a totalrelated story, french authorities opening a probe into totals plan to sell a 30 stake in a pipeline. The company it is selling to is partially owned by cnp along with credit agricole, swiss life. The sale is now thrown into question, and it could increase the price of transporting oil, some concerns leading to the decline. Ingenico down nearly 1 . Morgan stanley, ayden was one of its top picks, and its picks are moving the market. It said ingenico is one of its sell stocks. One of the biggest gainers on the stoxx 600 technology index, but they dont think those gains can continue. As one of the strongest performers, how much longer can it keep up the run . Matt great job, dani burger. Nejra an equity market open punctuated by my coughing fits. Up next, which markets will benefit the most from the 2020 fed outlook . We put that to laura cooper next. This is bloomberg. Matt welcome back to the european open. We are almost one hour into the trading day now, and looking at green arrows across the major equity indexes in europe and the u. K. Lets look at whats moving these markets. A lot it has to do with Central Banks today. Macroooper, strategist from bloomberg mliv is standing by. What do you see as the biggest i mean, you tend to focus not really on the equity picture, but i guess that is driven more than anything else by expectations on trade, day in and day out. So what do you see in terms of debate right now on whether or not donald trump implement these tariffs on sunday night, on china . Laura it is hard to speculate on whether we will actually see a delay to the tariffs coming through. If anything, i would say good news is already priced into the market, and so we could potentially see equities, may be a 1 to 3 bump if we do see the tariffs coming into play, sorry, if the tariffs are avoided. If we dont see that and do see tariffs coming in, we would expect to see quite a significant downside Market Reaction, at least in the near term. Nejra and that downside Market Reaction, is it likely to be exacerbated by the fact the fed clearly said it was on hold for 2020, eight ive are from what markets were pricing but perhaps a smaller divergence than we have had in the past . How does the fed factor into the discussion . Will that limit the upside for equities . Laura i think what we saw from the fed last night provides enough scope for Risk Appetite to be bid three yearend, because they are turning hawkish. If anything, it was a relatively dovish. Statement we saw last night yes, they are on hold. The bar for a rate hike was certainly elevated last night. But at the same time, the risks are tilted more towards a cut next year. That backdrop, if we do see uddle through the t latest deadline, i would expect that to support equity markets. Matt i am here outside the European Central bank. Very cold, but the markets are hot with anticipation, of Christine Lagardes first meeting as ecb president. What are you expecting on the mliv blog, from Christine Lagarde . Markets are largely in the dark at this stage about what to expect. The euro traded relatively sideways. German bund yields, similar range bound trading, so today the key will be on Christine Lagardes press conference, where the greatest risk evasive by risk of a surprise put emerges. Will she take the opportunity to continue the status quo of draghi and have a dovish tone dominate, or take the opportunity for a clean slate, and potential he tip the scales toward shifting the policy path . Bank of America Merrill lynch says any plans to get european rates back to sense might surprise the market, and barclays and sees a risk of lagarde unintentionally miss communicating to the market. Thank you so much, laura cooper, bloomberg and live strategist. Our coverage of the last ecb meeting of the year on tv with our matt miller. This is bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Ran oh lagarde did you. 2020 vision. The fed signals the same for next year and funding is underway. The uks first election in five years. Our special coverage this evening. Welcome, everyone. This is bloomberg surveillance. I am francine lacqua. 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