Talks continue into today. The s p global is in advanced talks to buy ihs mobile markets in what would be one of the biggest deals of the year. A very warm welcome to the program, everybody. Just under one hour away from the start of cash equity trading for European Equity markets. Good to be back in the studio. Thats have a look at the future is and what they tell us about where we are headed this monday morning. Futures dont look great. European features move to the downside. The Asian Session has been fairly negative. These have been record months for global stocks. Rebalancing at the end of the month perhaps is part of the story here. We will talk to the market live team about this shortly. Lets take a look at what is going on on the gmm. Some of the weakest in the weakness in the Asian Session, down one point 3 on the msci asia pacific. Indonesia under pressure. A host of emerging markets under pressure. China outperforming a little today. The Manufacturing Activity we referenced in our headlines came in better than had been anticipated for the month of november so that is strong, but looking at the oil price, you see the effects of the indecision around output cuts and certainly, we will be focusing in on that. The oil price is on the move on the gmm. Over crude down 2 , just 2 , at 47. 14 right now. Headline coming through on Lloyds Banking group, i want to get those for you. The management of this business, anything that has been named the nnoups ceo charlie nu named as the chief executive officer at Lloyds Banking group so we will continue to focus in on that. Back to the big picture, it is the final day of what looks set to be a record month for global equities. They have been driven higher by clarity, plus vaccine optimism. Big thing to remember. The first doses weeks away from distribution if granted emergency approval. We will watch closely whats going on in the u. K. And u. S. With that in mind. Lets get to the markets with lower cooper, who joined laura cooper. When you look at the face value, the futures picture for europe and the u. S. And the asian trading session, things dont look great. They look negative. Is thise monthnd rebalancing is this monthend rebalancing . Laura yes, which should not be surprising given the outperformance we saw and stocks through the month of november. The msci all country world index is up about 13 . When you compare that with bond performance of less than 2 , clearly, we will see some flows as portfolios shift back to keep in line with mandates so i think that that is weighing on price action today. That looks to be carrying over into europe as well so we look across most european indices, november was the best month on record so the stoxx 600 is tracking about 15 higher over the period and you know, we saw euro area index bonds about. 5 gain, so i think that this is going to certainly weigh on stocks today but i do not think that necessarily it really is a catalyst to change the narrative and it is likely just a speed bump in what will continue to be stocks kind of in this Holding Pattern through the yearend, awaiting the next catalyst. That is clearly what investors are likely shaping up to see for the month of december. There seems to be a number of narratives that keep running and tonight is no different. One of those is uncertainty around the u. S. Election and one of those is vaccines. That has been the narrative of november. Another narrative has been the strength of china and thats getting further confirmation over the weekend with manufacturing data, better than estimated. This is setting up the eastwest divide in terms of the ability of economies to bounceback and we have been talking about that for many months. Does that continue . Laura that certainly is the case. The pmi did beat expectations, just confirming that we are seeing just this manufacturing lead recovery continue on an upswing and this is being increasingly supported by the consumer whereas they contrast that with what is happening in the u. S. We are facing nearterm challenges. The economy is stumbling. Theseow, below prepandemic levels. Ultimately, we are going to see that potentially play out and continue to play out potentially in the currency so its likely we are going to see the chinese won it will continue to be supported around that level Going Forward and ultimately, crucially, it depends on what happens in the u. S. In terms of fiscal stimulus, in terms of whether we see the strong Retail Consumer component heading into this busy holiday season. If those can remain supportive, perhaps the u. S. Outlook is going to improve and we could kinda see this usedwest divide begin to kind of narrow a little bit through 2021, further supported by vaccine progress that most Market Participants now anticipate. Divide ineastwest the oil industry, certainly a focus for those oil prices. We sit here with oil prices down by more than 2 on brent. 47. 18. We see a lack of progress in terms of a green agreeing to suspend what had previously been agreed to so i wonder how that will be viewed by commodity markets. We still have more talks to go today. Laura the fact that we are seeing oil on the back foot, i think it does signal that Market Participants largely anticipated the cartel to delay the planned increase in output. In january. 1. 9 Million Barrels would actually be delayed and that was reflected in the price given the fact that we have seen this sharp runup in oil prices. Now, that was also driven of course by vaccine optimism, driven this demand outlook. In the near term, this potential disagreement among opec certainly adds to the supply challenges. We are already seeing elevated supply inventories and that is going to be, you know, kind of continue to dampen oil prices in the near term. Contrast to that, we are seeing a relatively favorable demand outlook. For 2021, vaccines are clearly behind that but when we look at u. S. And europe, the restrictions we are seeing in place on account of markdowns is much less of your now then back in the spring so High Frequency gauges of oil demand are much less now than it was back then so that does provide some further support to prevent a sharp selloff in oil on the back of these. Anna thank you so much. Laura cooper, accra strategist. Just a bit more on the breaking news we brought you about the new appointment, the new ceo at Lloyds Banking group, details on charlie nunn. He is the chief executive at hsbc currently, joining at this time. Consulting the 13 years of nonsense yeah and at mckinsey for some time. We look forward to hearing more from charlie as we go through 2021. The pboc injects 30 billion into the Financial System. This pushes the factory gates to a three year high. We discuss that and what it means for the broader investment scene. This is bloomberg. Anna welcome back to the European Market open. Futures point to the downside but what amounted has been. Looks as if we are on set for a record month in november. Lets get a bloomberg first word news update. Here is laura wright. Laura iran says it will not fall into the trap of suffering future talks with the u. S. Over the assassination of a Nuclear Scientist killed on friday. He played a major role in Irans Nuclear research. Theas not commented on allegation, but previously accused the scientist of masterminding a project. Brexits trade deal could be done in days if the e. U. Is willing to compromise on fisheries, according to dominic raab. It is an upbeat assessment as talks continue in london. If negotiations fail, millions of businesses and consumers could face higher costs and disruption to supply chains. Voters have rejected two proposals that could have altered the corporate landscape in the country. Investing in Defense Companies. A second measure to hold multinationals responsible for human rights and environmental lapses also failed. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna thanks very much. Laura wright in london here. The latest reading on chinas economy shows its recovery is gaining momentum. Pmi data both topped forecasts with the factory gauge facing a threeyear high. The pboc injected 30 billion into the Financial System to address concerns of liquidity tightness. We are joined by the cio of saxo bank. Very good morning to you. I know you have been thinking a lot about inflation. I remember the times we used to hang on every print of factory gate inflation out of china because they had this ability to export their inflation story around the world and we still did not get much global inflation, certainly not in developed markets. What is your focus on china and the length china plays in the inflation story . Steen they are the biggest commodity importer and oil importer in the world. What we have seen through the later part of this year is how the metals, the industrial metals, how oil demand in asia is up and how if we look at inflation and the way inflation is measured by Central Banks, we are looking in the wrong place. We do not have any price discovery in the financial through governments and Central Banks want to to control wanting to control everything so if you look at the Financial Market as a gauge for where inflation is, thats classically what you and i do. We are getting the wrong reading. If you look at the actual businesses, let me take an example which is well loved by many investors. Onlinetforms, the delivery companies. If you look at the last delivery of marginal cost over the space of this year, they are up 60 . Fedex cannot even get vans to transport their goods out anymore. The shipping rating is up 180 s year so clearly, china just going back to where you started, if you look at the eastbound china to the east side of the u. S. , its the most expensive one we have seen ever in history. In other words, the consumer is loaded with the money he got from support for the fiscal spending of governments and china plays and continues to play a very big role in that and as you know, one of the main sort of inputs to the actual cpi is ppi out of china. The export prices china gets to send to the rest of the world. Anna when we look at chinese Inflation Numbers, they look pretty downward recently, but is your point then that that simply servicespick up on the inflation that we may be are experiencing in the west . Steen absolutely. We have a tendency think about it. The reason why the Online Companies and Technology Companies do well is basically they are immaterial assets. 80 of the value in s p and nasdaq is immaterial. That means its a guessing game of the ability to sustain free cash flow. Its not about physical delivery. We continue to measure mainly inflation through the physical through the production lines and instead, as you say, there is a service aspect. That is an input that has been made worse by the supplyside being able to keep up for underinvestment and to some extent mall investment malinvestment. This epoint that you point to the 20 costs. Where do you get reliable livedtors about a real, inflation experience in the west . The best and only phd in economics you need to listen to. Copper is up 35 . Iron ore remains at the top. To me, the last mile is really the new addition to this inflation and that also is into the data you see out of cpi. If you look at durable goods, the consumer side of demand is up 5. 5 yearoveryear so slowly but nicely, we will start to see that these Inflation Numbers will come in to the cpi but it will be much, much, much too late for the markets to react because the market remains under this narrative that Central Banks keep hammering out that we are in a big crisis. Things are not working. And we need to do more of the same to extend through fiscal and monetary easing. You suggest they are not pricing in what you see as the inflation reality. What is it markets get wrong . This is an expectation and shows us expectations. Whys it so wrong . Steen because it fits the narrative. Remember the technology, the momentum stocks, which has been the majority of the gains we have seen for the stock market, not only the last 12 months, the last five years. Technology stocks have interestrate sensibilities. To zero. Close dividing by zero discount rate made a huge difference so in the case of the company, not making any adjustment on microsoft. See itosoft were to higher, that would take it immediately about 250 billion on capital values. The expansion we have seen in the Technology Company has entirely been driven by Financial Engineering through lower Interest Rates. Earnings in the Technology Sector over the last one he performance has been flat so we have a high Interest Rate sensitivity into an environment where inflation is underestimated by my data at least. Anna thanks very much. Steen yet the percent steen stays with us for another conversation. Its time for a greener portfolio. The bank says that is the first time in decades governments will prioritize climate overgrowth. We discuss strategy in that sector with steen. This is bloomberg. Anna welcome back to the European Market open. Under 40 minutes to go until the start of cash Equities Trading in futures continue to point to the downside, by. 5 for european futures. U. S. Futures also lower. November has been a strong month for global equities. Saxo bank says its time for a greener portfolio. It argues that for the first time, since the second world war, governments and citizens will prioritize climate and the environment overgrowth. Steen is still with us. Do you think that we have to choose between green and growth . Governments like to tell us its possible to choose a green growth path. Opposite. S the what has really changed over the course of the pandemic is we come from a world of focusing on Financial Stability and that is really the trickledown effect, the wealth effect, so to speak, and that is really just making the rich richer so the pandemic now traces another environment. You can see in the rhetoric that you get from the prime minister, from e. U. , from everyone, that you need to have this social stability in place. We need to work together. We need to be united in how we do things. Fighting inequality on one hand and green transformation. It is infrastructure. Green transformation has become the go to action from government. In other words, what we have seen is that green transformation has become government sanctioned. There is a tailwind both from the set up in terms of the macro under, but its also what the e. U. Budget is alluding to. Boris is trying to reinvigorate his premiership, and its clearly what the world wants to do. Let me put that into perspective in terms of where we are. Of allles constitute 18 of the Energy Consumption we have in the world. Electricity is 28 from renewables. In 20 50, governments and International Organizations want to be at 80 . Ween now and 2050, but between now and 2030, we will spend between 1 trillion and 2 trillion to upgrade the system to be renewable so of course, green transformation will mean that the compounding in those sectors will be significantly larger. Is there already a frothy market . Absolutely. I agree with that assessment as well. You have to remember, governments want this to happen so in other words, where the last two decades have been not just the Central Banks, the next decades will be not to fight the government on green. Anna do not fight the green initiatives. Where does that lead oil prices . Does that mean Oil Prices Fall because they go out of fashion and we increased the pace at which we find alternatives . Does it mean oil prices go higher because we dont have the alternatives and oil is underinvested . Steen absolutely. Its easy to draw the conclusion that will is finished. Renewables leave us with a Technology Issue of not having enough energy density. We need renewables to improve in terms of facilitation of electricity generation. Take your own iphone. Its getting bigger because your consumption of electricity through the batteries is increasing more than the Battery Capacity has increased so in other words, there is a mismatch between the political aspiration of reaching 80 renewables and the delivery and identity of energy, which means to me and to my analysts that we are going to see a grinding Higher Oil Price throughout this because basically, the solution for all energy in the world, all electricity, distribution, lies between the energy world and the new renewable world. In other words, they need to go handinhand. In that respect, the oil industry, with being 2 of the s p 500 today, is one of the most undervalued businesses out there. Anna does that mean if you want to play these green initiatives, you dont necessarily go to the pure players . You might be going to the mixed Energy Businesses that may be navigating this pivot away from carbon intensive production towards a greener future . Steen that is the case and that is certainly what we have seen in the mining space where they have taken the green esg approach two years ago. Their price inside the Mining Sector is doing some of the best and i think you saw them in europe coming out with contributing to renewable energy. Bige guys are operating facilities and networks. Electricity grids and the likes. That is definitely where its going to be because the consumption of electricity is going to increase significantly. As i said, just look at your own iphone. Anna thank. Steen, cio of saxo bank. 7 26 in london. 8 26 in paris or berlin. One of the biggest deals of the year, s p global, ihs markets for 44 billion. We will talk about consolidation in this particular industry, next. We will talk about the broader m a scene perhaps because we have had many conversations if interest stays so low, what does that mean . Plus the excitation of vaccines coming on the horizon. More on that. This is bloomberg. Its down to the wire, the teams been working around the clock. Weve had to rethink our whole approach. Were going to give togetherness. Logistically, its been a nightmare. Im not sure its going to work. Itll work. I didnt know you were listening. Anna welcome back to the European Market open. 30 minutes until the start of cash equity trading. Lets take a look at some of the things we are watching for this week. Consumer trends should be decided today. Opec and its allies are meeting virtually to discuss supply. They have not reached a decision as to whether to extend production cuts. Tuesday and wednesday, watching for comments from Steven Mnuchin and jerome powell. Friday, the latest u. S. Jobs report. Will any of that manage to move treasury markets . To a close,comes equity indexes around the globe track let me get to dani burger. What is the story . Dani in a month when we have seen more lockdowns and restrictions and coronavirus cases, we are seeing a lot of equity indexes posting record gains which is pretty remarkable. A lot of that has to do with positivity over the vaccine. The msci index up nearly 13 . Hillary clark points out this is double the average over the last 30 years in terms of monthly gains. In europe, a record as well as in italy. And the smallcap index. On withinconcentrate these record gains sure to get people worried are things overheating. Have we gone too far . When you dive into the charts, value stockshat have led the gains. By outperformed percent, the biggest gains going back to the aftermath of the dotcom bubble. This is value catching now. It perhaps had further to go given how much tech and big cap names have rallied. Anna what does all of this mean for month end rebalancing . No real substantial change in the narrative. Futures point to the downside today. In the treasury market as well. This might be the month end rebalancing. Portfolios need to do some windowdressing to get back to reach their targets. According to jp morgan, we could dollars 0 billion 300 billion in. A little weakness today. Perhaps some rebalancing affect but it seems appetite is still strong for risk assets. Anna thank you for that look back to november. Lets get a Bloomberg Business flash. Has namedyds bank hsbcs charlie done as the new ceo. He joined hsbc in 2011 and became the head of wealth and personal banking. To start date is subject agreement with hsbc. His base salary will be just over one million pounds. Bloomberg Group Sources say it is still in the early stages of reviewing the necessary changes to appease regulators. With so much work, Officials Say it may not happen before 2022. Hsbc is considering a complete exit from u. S. Retail banking. Bloomberg sources say the Lender Management is looking at the move. Review the review is likely to suggest reducing banking activity to focus on International Clients in asia and the middle east. That your Bloomberg Business flash. With thecking corporate agenda, as empty global is in advanced talks to buy ihs markit. 44 billion. Making it the second biggest mna of the gear. Joining us now to discuss is sam. Take us know what we know about the deal so far. Good morning. A couple of interesting things. Parts one is the size of the deal, the second largest deal of the gear. The other part is that it is a complete surprise. It seems to have come out of nowhere. And one other thing to take into is willwith this deal s p take over ihs . Where will it be a full merger . I think that is what people are watching. Anna this is the second big deal in this industry. Deal is likely to get a lot of comparison. That d. L. Had a lot of regulatory scrutiny. There were more m a opportunities created. This deal is a very large deal broadly in companies the same industry. Have arefore, likely to lot of regulatory scrutiny. Fit the broader theme about m a . Vaccine guest said the news might convince Senior Executives about doing deals that now would be the time before risk assets reprice fully around the vaccine news. Is that something driving further m a interest . I think that is exactly what is happening. , we havetember or so seen a real pickup in m a act committee. In m a activity. Companies looking to pick up these assets at the moment. They may look quite cheap. Togetherbe able to put and put it to work in the market. Also, companies are looking to companiesre before raise again. These stocks may well reprice on that vaccine news. September, we have seen a number of deals including amd, the Dutch Telecom company. And in the u. K. , there has been a slew of deals. Possible that this will continue and certainly into the early part of 2021. Anna in the u. K. Context come if we did get more certainty about brexit, that will change things postbrexit. Sam unsted joining us with the latest. Bloomberg competes with ihs markit. 7 38 in london. Coming up, oil uncertainty. Crude retreats after opec plus members cannot agree on the output hike. We discussed the outlook next. This is bloomberg. Anna welcome back to the European Market open. We are 20 minutes away from the start of cash equity trading. Futures point to the downside. Down by about 0. 5 . Oil has dropped to 45 per as talks i had of the Virtual Meeting failed to meet a consensus on the output hike. Joining us now is Cornelia Meyer from lbv asset management. Good to speak to you. Let me ask you what you are assuming will come out of this meeting . What is the base case . Does production go up . Cornelia they had a premeeting yesterday. Kazakhstan were not happy to keep production cuts at the current 7. 7 Million Barrels per day. If they go down to the trajectory of 5. 8 Million Barrels per day, that would be very bad because that is an extra 2 Million Barrels per day on the market at a time when europe and the u. S. Are just not doing well. Anna this is the eastwest divide. That you and many others in the oil market reference. How difficult is it to assess the demand story at this point . There are very to virgin pictures there are very divergent pictures. Cornelia east of suez, it is a good story. The virus has a mind of its own. East of suez is a good picture and west of suez is a bad picture. When you look especially at the International Energy agency, there is a good idea of where demand is going. They are very concerned. They have adjusted. We are down a. 8 Million Barrels per day this year and 3 Million Barrels per day next year. If we are down that much, putting another 2 Million Barrels per day on top of that, we should not forget that libya which has come from out of nowhere from about 100,000 Barrels Per Day in august and september to 1. 2 Million Barrels per day. Libya has come on and if the u. S. Will speak again about the may fallear deal, some the way so by midtwo end of next year, we may have an extra we may have extra barrels on the market again. Anna membership of opec, how secure is the entity right now . We hear signs of discontent from some members. What are you hearing . Cornelia i hear the same thing. Especially the uae has become incredibly assertive. It says look, we are not happy taking the brunt of all of the cuts together with saudi while others are just overproducing and not compensating for their production. The uae is considering what to do and that would be a big blow. Nigeria have a rack and you also have iraq and nigeria who do not like this one size fits all. They say we have real domestic challenges and we cannot afford to cut to as much as you are asking us to cuts. It is not a happy family at this point. Anna if you think about where prices go from here and we have talked about the uncertainty around demand and the latest dynamics on supply i was looking at a chart with the rent one year spread with the brent one year spread. This year has been really volatile, a big drop in the spring and a rally in oil prices more recently. What did you expect to see as we head into next year . Cornelia looking at the rally, for we are now at 45 wti. 60 70nowhere near the beginningre at the of the year. Im not as optimistic as Goldman Sachs which says we will be at 65 next year. Im not there. I think we will be hovering between 40 50 for quite some time. We rid ourselves of the uncertainty regarding the vaccine and when it will be rolled out. I look at the High Frequency chart especially west of suez. People are not traveling. They also are not traveling by road. The what do you make of role of russia in the opec grouping at the moment . How is it approach to managing oil supply how is it shifting . Cornelia russia has been surprising because up until now, remember atys the beginning of the year they walked out of the meeting because they did not want to do the supply cuts. A few weeks ago, Vladimir Putin said we definitely need to play all with opec. Play ball with opec. Russia has been very collaborative over the last few weeks. However, we should not forget that russia is cheating. Wherere producing above they should be producing and because they are so powerful and big, no one can do anything. That is the first thing. This,condly, if i look at russia the higher the price, the better for russia. Cornelia meyer, chairman and chief economist at lbv asset. Lets get a bloomberg first word news update. Widen president elect to has built a Senior Communications team composed entirely of women. The face of the administration as White House Press secretary. She was previously director of communications under president obama. That role will go to joe bidens Deputy Campaign manager campaign manager. Regulators have started an accelerated review and bloomberg sources say clearance could be possible as early as this week. Iran says it will not fall into the trap ofs scuppering future talks with the murder of ang the top iranian scientist. Israel accused the scientist of masterminding a project. This is an upbeat assessment of brexit talks. If negotiations fail, millions of businesses and consumers could face higher costs and disruptions to supply chains. Swiss voters have rejected proposals that could alter the corporate landscape in the country. Almost 16 opposed the initiative. The holdmeasure multinationals responsible for human rights and environmental lapses also failed. 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. Anna laura wright in london. We have European Equity market futures to the downside. S p futures also suggest downside in the u. S. We also saw weakness in risk assets in asia though the Chinese Market outperforming the rest of asia he has of support coming from authorities. Fish which was promised by some of the u. K. Reporting u. K. Newspapers over the weekend. Keeping an eye on developments there. Minutes away from the market open. We will get you the stocks to watch up next. We will get a focus on that next. This is bloomberg. Anna welcome back to the European Market open. Of0 to go into the start cash equity trading. Opening to the downside. Runup had a very strong in global stocks and risk assets. Lets get the individual stocks were watching this morning. We start with the Banking Sector. Dani burger, you have been looking at abn amro. Dani they are planning to reduce 15 of their workforce as they look at the big parts of their Investment Bank deciding to retreat from there. We spoke with the dutch lenders cfo earlier about his plans. That 15 represents our plan on reductions through 2024. It is a material amount 700 million to the of cost savings. It is roughly what we have executed in the past few years and we will do it steadily through time with patricia. We will retrain our staff. It will be as daddy and erateder it and deliveb move. Dani third quarter, they did return to profit. Anna Defense Companies. They have a skate the negative escaped the negative news flow out of switzerland. Dani the vote in switzerland on two parts a ban investing in Defense Companies as well as Holding Corporations accountable. Both of those were rejected. Impacts of the economic it would have. Had this past, it would had this passed it wouldve had to est of ashares. The pricetail that was much talked about over the weekend. Dani we expect them to filed for insolvency which will have massive impact on jobs. 15,000. Mike ashleys Frazier Group may come into help them. Upy have offered a loan of to 50 million pounds. They have made the offer and drafted terms. Even if it doesnt happen, they say they want to participate in any sale process as well as buying up some of these assets if arcadia does enter into administration. Said arcadia has already they do not consider this loan offer from the frasers as a serious offer. Global wafers 4. 5 billion. A german deal to mention later. Coming up in the program, the market open is next. This is bloomberg. [announcer] imagine having fuller, thicker, more voluminous hair instantly. All it takes is just one session at hairclub. Introducing xtrands. Xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. Theyre personalized to match your own natural hair color and texture, so theyll blend right in for a natural, effortless look. Call in the next five minutes and when you buy 500 strands, you get 500 strands free. Call right now. upbeat music anna just a minute to go until the start of cash equity trading for this monday morning. Futures slide after a record month. Investors monitor the progress towards a coronavirus vaccine. Opec plus representatives fail to agree on prolending output prolonging output cuts. Talks continue today. Abn amro. Good morning, everybody. European equity market futures have been consistently pointing to the downside. The futures picture looks negative. Ftse futures down 0. 5 . X as well. That should not distract us from what has been a very strong must by historic standards. U. S. Futures point to the downside. By zero point 3 . Lets have a look at where these European Equity markets are opening down. Down by 0. 3 . Stoxx 600 come down by 0. 25 . Themes to talk about. We have a lot of news flow around the Banking Sector. Investment data coming out of china. More certainty regarding appointments from the biden administration. Filling in the blanks. Haveg to the narrative we been running with around more political certainty in the United States and the future with a vaccine. All of that looks to be fairly intact in terms of a big picture narrative. European equity markets continue to open up and opening down. The dax down by 0. 4 . Down by more than 1 this morning. Focusing on the Banking Sector there. Opening equity markets to the downside. Final day of what looks to be a record month. Joining us now is paul brain. Good to speak to you. We have seen a continuation of the same narrative for november. Pushing risk assets higher. Today, a different appetite. Equity selloff. Is this just month end windowdressing . Will fixed income pick up at the expense of stocks . Paul i think it is a bit of windowdressing. Month forn a strong risk assets. This could be a Good Opportunity to take some profits. Sense to bank some profits but the trend is still improving. Anna we dont wake up with any new information around vaccines although a lot of focus in the u. S. And the u. K. Around the timing of approval if that comes from regulators. Assets me and risk do they have the capacity to move forward on the vaccine story . Have we fully priced this in in terms of when we get approval from regulators and details around distribution . Will that all have the capacity to push risk assets higher . And the reverse for fixed income . Paul what we are looking for now is not just new news regarding vaccines. But do we see fewer restrictions and more mobility. That is the followup that we need to see. I think we are still 23 months away from that. Markets may anticipate that. But it will be important to see if the vaccine will change the way people are living their lives. Followup to come. That means risk assets can still go up. We need more hard evidence that we are returning back to normal. It will be interesting to watch the way they rub up against each other. Europe has decided to pay for some of the spending with the euro bonds. Are you involved in European Social bonds as the head of fixedincome . Paul very much so. S g. It comes down to the e there have not there has not been a lot of issuance in the social area. We prefer to focus on the ones that have more value. Things geared towards housing for instance. That would be more attractive than a government backed bond because of the value there. We see that driving yields lower. Anna when you look at the the recoveryn, funds they are trying to secure boost it has served to do you see that continuing to be the case . That is the case. It is a feature in European Markets now and i think it will continue. Italys for a couple of years. The markets are manipulated by the issuance. That the recovery central fiscal bank actions [indiscernible] the fed will come through and the money will get out into the markets. Any fiscal stimulus would take time to be voted on and to get through to the real economy. And looking at some of the programs in the u. S. , they are temporary but they have to be voted on. That is not always straightforward in a political system where there is much debate. The Recovery Fund is a good example. How do you assess what is going to happen with gilts . Banking the central narrative around qe and even possible negative Interest Rates. Next year, there are elections coming up in scotland. The move towards another independence referendum is something markets might start to talk about more and more. What you watching for in gilts . Paul you summarized the risks. The amount of Foreign Ownership or involvement in the gilt market is a little but of a concern but essentially the bank of england support, the gilt bound. Will stay range updont see them moving rapidly. Brexit andnce is supply to push the yields higher gradually over time. Anna paul brain, Newton Investment management, head of fixedincome. Coming up on the program, all quiet and the treasury market while global stocks head for a record month. This is bloomberg. Anna welcome back to the European Market open. 10 minutes into your trading day. The ibex leading the way lower down by 1. 1 . Take a look at some of the stocks on the market. That stock gaining on m a news. We brought you the lines at the top of the hour around global wafers. Also down by almost 5 . Lets get a Bloomberg Business flash. Lets go to laura wright. New ceo. Bcs joined hsbc in 2011 becoming the head of wealth and personal banking. His start date is subject to agreement with hsbc. His base salary will be over one million pounds. S p global is said to be in advanced talks to purchase ihs r 44 billion. An announcement could come as early as monday. Andmarkit provides research was valued at just after 37 billion as of fridays close. Bloombergs lp bloomberg lp compete with both companies to provide data. Hsbc is considering a complete exit from u. S. Retail banking. A full exit from other businesses in the u. S. Is unlikely. The review is likely to suggest reducing investment ranking activity to focus on International Clients in asia and the middle east. That is your Bloomberg Business flash. Anna. Roundup of get a what is happening in global banking. For the moment, lets talk about u. S. Bond markets. Global stocks may be on track for their best month in record that it is eerily quiet in the u. S. Bond market. To near the record low reached in september. Paul brain, head of fixed income with Newton Investment management is still with us. That may be a relief to some investors and a lack of opportunity to others. When we look at measures of future volatility, they suggest that could be subdued. What would kickstart the treasury market . Is quite spooky. Things are very quiet. It has to have something to do with a concern that we still have a virus hanging around with the potential of another wave to come through the u. S. On the other side, you have the optimistic view regarding the vaccine. Two opposing forces are suppressing volatility. Signs of recovery coming through. With the yield rising. Of constant biting treasuries is going to remain for some time. If you are preoccupied by concern regarding the Northern Hemisphere economies in the shortterm, but more optimistic about 2021 because of the vaccines and how they look to be coming, how do you play bond markets if that is how you see the next year and a half evolving . Government bonds are a hedge to risk assets. On yield available government bonds in particular means it yousuries could lose money. It is an expensive insurance policy. The thing that gives us comfort. S Central Bank Activity policy that is ok to have for now. If there is a drop in volatility and the expectation that things could be better economically coming yields could rise. It is a little more risky because of the yields available on the insurance policy. Strategy. D income a lot of guests talk to us about dollar weakness. It has been a haven at the height of the pandemic crisis in the spring. Since then, with the vaccine news, seems to be losing momentum again. How do you tie in what is going on with the dollar . We have switched u. S. Dollars into a variety of countries. We expect the dollar to go down because of the creation of a lot of u. S. Liquidity. We are in the second phase now which is more about economic growth. That phase should last well end of next year. We are using the dollar as a funding currency to own other currencies. That is what we continue to do. The dollar will probably change direction when the Federal Reserve stops suggesting it is going to raise rates or suggesting that the Monetary Policy will come to an end. Anna that does seem to be something that not many guests are talking about now. You mentioned commodity prices. Opec plus is Holding Discussions about production cuts. What are your expectations around oil prices . Paul it is one of the weaker economies. It is one of the weaker commodities. Other commodities such as copper, iron ore will continue to do well. Price will be mixed because the demand for oil is still a lot less than the supply that has been held back for months. If they continue to hold back supply, rings might remain balanced. Things might remain balanced. There are different types of oil out there. Moment, transportation, particularly air travel come is travel, ised air so suppressed. Anna good to speak to you, paul , Newton Investment management. We will be making our way to bloomberg radio. 15 of itsans to cut employment base. And hsbc is contemplating an exit from u. S. Banking. We will discuss that next and discuss the latest in european banking. This is bloomberg. Representspercent our plan on reduction through 2024. It is a material amount 700 million to the in cost savings. It is roughly what we have executed over the last few years. We will do it steadily over time. It will not be all at once. It will be steady and deliberate. Anna that was the cfo from abn amro about the job cut plan. Giving further context around that. And otherscuss that opean banking news is, cap tom metcalfe. What do we know about the abn amro job cuts . 700 Million Euros of new savings and 15 of the workforce those are the details we have. It fits in with the wider industry picture we are seeing. There has in around 80,000 job cuts in the industry this year. Everywhere you look, particularly european lenders, costcutting seems to be the order of the day. I think this is just the start. Anna costcutting a big focus in the sector. Lloyd bank has named charlie nunn as a new group leader. To have come as quite a surprise. We knew lloyds was looking for a new cia ceo. Quite interesting. Not a namen was commonly throw it out commonly thrown out by analysts. This news has caught a few people by surprise. Interesting that lloyds is bringing in the person that headed up hsbcs wealth unit. That may be a sense there they will try to have some margin there. Anna let me ask you about hsbc. Ais is a business that has global presence. What is the latest with what they plan to do with the u. S. Portfolio . Is thelatest chapter management is looking at completely exiting the u. S. Retail market. It is difficult to maintain. They dont have the skill to compete with jp morgan or wells fargo. Tothey dont have the scale compete with jp morgan or wells fargo. We are also hearing that it is not a complete exit from the u. S. They may be leaving the retail side but they will still be on the institutional side. They will still be serving clients throughout the u. S. Bloombergs tom metcalfe with the latest on the Banking Sector. On whatickly check in is going on with the markets. European equity markets moving to the downside. Down by 0. 25 . The ftse 100 though now in positive territory. The possibility of a brexit deal. Speaking at an interview in ireland saying there is more than fish to be sorted with the brexit talks. This on the back of comments from the secretary of the u. K. , a recognition about u. K. Sovereignty by the eu side, the u. K. Perspective is that a deal ought to be perspective optimally possible. Oveneytovey simon kobc saying a brexit deal should be done this week. He says they can negotiate a balanced deal. Onare keeping another eye hungry and the eu regarding ace hungary and the eu. Anna welcome back to the European Market open. 30 minutes into a trading session that had been negative. Now in positive territory. That is one market moving to the upside. Dax down. D tehe plus has failed to agree on a delay january output hike for todays meeting. Say many sources members support keeping production at current levels. Kazakhstan oppose the move. Iran says it will not fall into cuppering talks with the u. S. Over the killing of a top iranian scientist. Iran blamed israel for the attack. It has not commented on the allegations but previously accused the scientist of masterminding abomb project. A bomb project. Bloomberg sources say clearance is possible as early as this week for a vaccine in the u. K. 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. Eu stimulus talks are on the home stretch but a major confrontation with poland and hungary could delay a sign off on the package. Toy oppose the requirements uphold the rule of law in order to receive financing. Joining us now is minister hidveghi. Speak to you. Let me first ask you about the signing. Do you still think a deal is possible with hungary and poland siding up . Min. Hidveghi i think it is still possible but it depends on the negotiations ahead of us. Hungary and poland are not opposed to talking about the rule of law. We are not even opposed in treaty ofchanging the the European Union if the majority wants to do that. But it should be done in a proper way. What we are opposed to is political blackmail. Biased usesed to a of rule of law. A sneakingccept change into the treaty that is contrary to what is written. We are totally committed to protecting the financial interests of the union that was agreed to in july by the european council. That is what was torpedoed by the radical left in the European Parliament in particular following that set of agreements. Anna from what you have just sent out, where is there an area of compromise . Do you see a specific area where you could see that compromise is possible . We could talk about adding in another mechanism. Where is there a compromise . Min. Hidveghi let me be clear come in the treaty that is in force, there is already a mechanism that is supposed to be dealing with rule of law concerns or a debate. Let me also remind you and the hasers that the mechanism been launched against poland and hungary and there are ongoing negotiations in the council. That is how it is supposed to happen. What they are trying to do is to implement a new mechanism fundsy the use of the would be tied to a rule of law concept that is not really defined, that has been politically misused and used as blackmail by certain governments that goes against the brussels mainstream. That is not acceptable. If we go back to the compromise of july, we said clearly that all Member States are committed to this interest. Everything must work legally. No problem, no debate there at all. To if the eu wants to decide further strengthen this rule of , that can be done as an intergovernmental conference. And that could lead to modification of the treaty. That is the way to do that. We are ready. We reject political blackmailing as it has been waged against us over the past few years. Europe do leaders in not see it as blackmailing. They see it as holding up the rule of law. Let me ask you about the political repercussions in hungary. Ofit means you are cut out funds distributed by the European Union, what would be the political repercussions in hungary is that is the case . Min. Hidveghi we are in the middle of negotiations. At the current time, what we should be focusing on is the its economic repercussions. That itlso underlined is primarily the mediterranean part of the European Union, those countries are in real trouble. Economicof competition, they are in trouble and need quick support. Iss political quagmire presented is preventing those economies from getting quick help. Central and Eastern Europe are in a better shape economically in comparison to the mediterranean part of the European Union. The hungarian economy is on stable grounds thanks to good economic policies and the will of the hungarian people. We stand ready to negotiate. Hungary is not getting help from the European Union. Funds. Tes get basedas to be objectively and cannot be in any way part of the political blackmail as we have been seeing. Anna if you dont need the money in a hurry that others in be eu do, are you happy to cut out of any distribution of funds as has been suggested by some politicians . Min. Hidveghi the European Union can only be successful if it goes back to its original idea of Mutual Respect and corporation. It wont be working if you use. Lackmail that is not going to be the way forward. Is theopean union entirety of all of its Member States. You have to find a way to agree on things that bind us together. July was an agreement in among all the heads of state. Hat was a good agreement i think we need to get back to that agreement. If you want to talk more about yourule of law coming should do that but in the right context and framework. Anna does this fall output eu at risk . Thathidveghi think those are totally of using such an important concept, i think those are harming the European Union. This is going against european interest and weakening the eu. You cannot build a strong European Union if there is mistrust among the members eight. You can only do that if there is mutual recognition. That differentt Member States have different governments. They are democratically elected. We need to accept that there is Member States have different ideologies. We need to get back to the normality. Europe wouldin suggest that there are common european ideals that need to be upheld. Min. Hidveghi i agree with that and Mutual Respect is one of those. I agree with that. Anna thank you very much for joining us. Minister hidveghi, a member of the European Parliament. Thank you for your time. One of the many inequalities highlighted by the pandemic was its impact on different age groups. We will have that conversation. We discussed a new report from barclays about sustainable opportunities as a population gets older. That is a different conversation coming up here on bloomberg. Anna welcome back to the European Market open. A trading day where the ftse 100 making some decent gains. Dax getting its head above water as well. 0. 4 in a slightly more defensive fashion. Lets get a Bloomberg Business flash. Here is laura wright. Laura the chances that jack relistt group will next year is looking slim. With so much work and the rules not spelled out, say it may not happen before 2022. Abn amro is cutting a further 15 of staff by 2024 to save on another 700 Million Euros in cost. The dutch lender is retreating from large portions of Investment Banking. That 15 represents our plan on reduction through 2024. It is a material amount contributing to the 700 Million Euros in cost savings. It is what we have executed over the last few years. We will do it steadily over time. We will retrain our staff. It will not be all it once. Laura that is your Bloomberg Business flash. Anna. Something a little different. The pandemic has brought generational inequalities into sharp focus with senior populations disproportionately impacted. In a new report, barclays has assessed the impact of an aging population of across 14 sectors including lifelong learning, long cavity tech and silver support. Iral to join as is her patel. Good to speak to you about this thematic exposure. Is this part of a shift that investors should make . Periods about extended of social engagement and productivity. Does that just mean keeping people longer in the workforce . Believe the investment agingten associates the population as overly negative to the economy. Society has failed to capitalize on longevity benefits. Looking at market opportunity, that may encourage extended periods of Labor Productivity and social engagement. If you think about it from a policy perspective and look at asia gh lessons from i think in the future, it will be an increased time in the labor market. The Investment Opportunity we are looking at is increasing the possibility of us being able to live that healthy life expectancy. Additional years spent in good health. Anna for some of us, our education is a little long to go. Lets update our knowledge. Ofs used to be a story developed markets. I sent that is not entirely the case. China is a different case. Where or what is the latest information we need to be aware of in terms of how the global population is aging . Hiral if we take the aging demographic many statistics has shown that the number of people 65 years old or older is growing. When you look at it at the country level, we are experiencing rapid growth in the number in the senior population. We also see growth in extreme age. Those over 85. In some countries like japan what we are seeing growing age to population, over 100. There are around 15 countries where not more than 20 of the population is over 65. That number could grow to 44 by 2030. We are seeing rapid growth that the country level to the point where now is some countries are at risk of restricting the population. China is wondering how they can qualitiesmore relating to the aging population to minimize the risk. The variouslk about opportunities for investment theme. This ofk to me about the role technology. Tell me about the serious investment perspective around social robots and longevity tech. The marketughout ,pportunities that we highlight we see growth in technology. Already asia, we are seeing this in place. You mentioned medical and social robots. Upcomingcern is the social care crisis. It is not just funding shortages but also neighbor shortages. We could see medical robots in the hospitals. Social robotssee in the home. It is also about making sure the senior population is not impacted by loneliness. And, ore extreme extreme end, we see a disruption in the biotech world. Longtermre of a matter of opportunity compared to the upcoming opportunities we see in medical and social robots. One area in the developed a market when if you combine it with a growing aging population, is health tech. Hiring. Atient that also suggest that we will have to take greater ownership of our health care. Anna really good to speak to you. An interesting piece of research. Interesting to think about the opportunities it throws up. Up next, what does not kill bitcoin will make it stronger. Bloombergsview of market live, eddie. Anna welcome back to the European Market open. 52 minutes into the trading session. The dax fairly flat. The ftse 100 up 0. 3 . The defenses are leading it. Doing asd leisure not well. Down by 0. 3 . He admits the cryptocurrency may have a role in asset allocation. Lets talk to the markets live team and specifically markets live editor, andy eddie. Too worried about the relative volatility of bitcoin . Eddie bitcoin showed over time that it is a volatile asset. It is a wild asset. When it does these things, you get someone that says bitcoin will go away. We have had a look at the history of bitcoin. And we look at the various booms and busts. Algorithm,ten by the it cuts the amount of bitcoin supply. That happened earlier this year. Every time in the wake of this, we see bitcoin have a runup. And then a crash. And everyone says its going to go away. I think it has proven that there is a demand to basic for it and it will be with us for the longterm. Anna that is a longterm story around bitcoin. You aboutwe talk to havens, gold. Old has been suffering in november as you might expect given the optimism around the vaccine. What do you take from the most recent price action with gold . Eddie gold got overextended earlier in the year. People were worried for good reason. There is a lot of haven demand. It is unwinding now. Sellinghe etf markets off a lot. And when they start selling off, those above 3000 tons are selling off and when that happens, gold is looking very vulnerable. It is looking like it is going to trade lower for a bit here. Anna commodities focused on the opec plus talks. What will you be watching for their . There . Eddie for me, looking at oil, it is nearly impossible to predict what opec is going to do. What we have seen is a recovery from the lows. People are hoping for a resolution there that will bring that will keep prices in check. Whether we see that from opec is anybodys guess. Thank you very much. A good place to leave a conversation. That is it for the European Market open. European equity markets recovering a little from their earlier losses. Real strength in equities. Arounde more certainty u. S. Politics. And the vaccine news flow. We may see some rebalancing at the end of the month. Of november. E 30th in the u k and in the d in the u. K. And the dax, moving to the upside. Up next, you have surveillance. This is bloomberg. In a land not so far away, people are saving hundreds on the most Reliable Network with xfinity mobile. They can choose from the latest phones or bring their own. And because they get nationwide 5g at no extra cost, they live happily ever after. Again, again. Your wireless. Your rules. Your way to stay closer together this holiday season. Switch and save up to 400 a year on your wireless bill. And get 300 off when you buy the Samsung Galaxy note20 ultra 5g. Learn more at xfinitymobile. Com. Francine ending with a win, stocks slip at the end of a record month as investors ponder progress toward a vaccine. Dr. Fauci says light at the end of the tunnel. Chinas economic rebound gathers pace with manufacturing pmi at a twoyear high. The u. K. Foreign secretary says there is a brexit deal to be done potentially within days, but both sides must continue working in good faith
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