Is a december hike a done deal or is the market right that he would be a policy mistake . Riding the rails to a european merger. Siemens agreed to merge their business, is this another airbus mess . Matt we will find out given the test of time whether it succeeds or not. We are less than half an hour away from the cache open, a lot less time between now and then. Looking at gains in futures across the board, this after a couple of days of losses at least for the ftse. The cac and the dax eight at again but they were unchanged. The ftse has been down for two days in a row. Take a look at the bund trade, i have three days of the bund trade here. After the big drop we sought monday and a day after the german election results, we have stakes a little bit of a recovery although it should be tight range and barely budging. Up to basis points this morning, 242. Guide the pound under pressure for a number of reasons, the most obvious one is that comments we saw from donald tusk indicating it is unlikely he is going to [inaudible] and enough progress has been made to migrate to the second phase. He is not completely in the drivers seat. The message that came across yesterday and you have the labour party wargaming the possibility of a run on the pound. We hear from jeremy corbyn. The real story is this turn, it feels tentative, need something to back it but it does appear to be happening in the dollar. The bloomberg dollar index up. 2 of them percent. Yellen on balance hawkish talking about the fact she should not wait for that 2 line to be hit on inflation. The dollar is going to be one of the major themes that branch of the market. We continue with this risk off same, swiss franc, japanese yen trading lower. Lets talk about what is happening with the other markets. I want to focus on what is happening in oil. Oil is one of the big stories, oil, bothd heating rising and brent trading up and the beauty i dashed of uti trading up. Brent begins to on thehem a this is bloomberg talking about that. This is an ongoing story surrounding the energy complex. Lets catch up with Everything Else we need to know. Here is juliette saly. President trump says he is prepared to use devastating military force against north korea, financing new sanctions against the nation, the american later said his preference was for the world to Work Together to end program. Nuclear were totally prepared for the second option, not a preferred option but if we take that option, it will be devastating, i can tell you that. Devastating or north korea. It is called the military option. If we have to take it, we will. Backede the candidate by donald trump has lost the republican primary. And come in senator lugar strange was beaten by judge roy moore. Face a democratic opponent in the december election. Moores victory is a blow to donald trump and Mitch Mcconnell whose efforts to boost strange his campaign tale. The Spanish Government is doubling down on its efforts to hold an independent referendum on sunday. That is as the Prime Minister one Donald Trumps support. He is canceling his plans to attend a European Union summit this friday. His budget minister has pulled his 2018 spending bill saying it did not have the vote to pass. Chinese industrial firms have extended this years earnings surge in industrial profits, increasing from a year really are, the most in four years and compares with the 16. 5 percent pace earlier. It suggests resilience in the worlds second largest economy thenduring even with slowing factory output at investment. Saudi arabia will allow women to status as ending its only country in the world to add half the population from driving. It will they will be entitled to driving licenses next year. It is the most are manic move to open up dramatic move to open up saudi society. Soon holdingay be the worlds biggest ipo. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Is as cableou, this falls below 134. You have theresa may and the comments coming out of her office, a statement been released talking about the fact that she is disappointed with the bombardier ruling, this relates to the Cseries Aircraft and the case that was brought by boeing. She is going to work she says with the authorities to protect jobs and northern ireland. Another factor that could complicate the relationship whether or not she is able to deliver on the industry side of things, it is something that people will be questioning in westminster this morning. Lets talk about what is happening on the other side of the atlantic. Fed chair janet yellen striking a hawkish town saying it was imprudent to keep Monetary Policy on hold until inflation reaches the 2 target. A gradual approach is particularly appropriate in light of subdued inflation and a low neutral interestrate which implies the fomc would have limited scope to cut the federal funds rate should the economy be hit with an adverse shock. But we should also be wary of moving to gradually. Fed chair janet yellen. President trump is planning a 20 Corporate Tax rate and a maximum personal income tax level of 35 . Details are said to be unveiled during a speech which he will deliver in indiana. Lets join mark cudmore, joining us from singapore. Lets talk about janet yellen first of all. She is pretty clear that she has put december on the table. She is talking about the fact that she is not too worried about inflation, she does not understand what is going on so she will crack on. The market seems unconvinced. Is that the right trade . Mark they will regret being unconvinced. The fed was definitely hawkish down to data moved dependence and said it ignore the fact there is no inflation. The economy cannot cope with the rate hike for them not to hike. Janet yellen reiterated that point and yet the move in rates and the dollar has been subdued. In the last couple of hours we getted to see the dollar more of a bid and u. S. Rates tick up but this morning was surprising, i was reading one comment in the news going all these get more of a bid and u. S. Hawkish g the speech and you look at your monitor and go markets are not reacting, what has happened so there seemed to to be a diversions and traders will regret that. Trump will have to have this narrative of a strong dollar, strong u. S. Rates. If he starts detailing tax time, that is a narrative of fiscal stimulus and also Monetary Policy both supporting a stronger dollar in higher rates. Matt the tax news to me is a little bit, i am nonplussed by it. Saying you will have a maximum rate of 35 but there could be a rate above that is pretty bogus to say the least. As far as the Corporate Tax cut, i find it hard to believe that they are going to be able to bring the actual real rate down that much. Why is the market so excited . Couple ofe is a things. The tax plan might not get through congress and everyone is aware of that and you are right to point out why are we getting so excited about a few of these details . There is a couple of things to note. Expectations are superlow and were making another step of progress toward this tax plan, you have to raise the possibility it might go through congress. Yesterday we have no tax plan and by the end of tape today we have a tax plan. One positive. Another point is it ring in brings in the topic, free patch ration of corporate profits abroad. No one knows if the reaction of to certain taxbe levels. That means investors will need to price in that probability a little bit higher than they were yesterday. These things, they are not like a massive game changer, that will not happen until the tax plan is passed but enough to provide a shortterm boost to the dollar in rates that should last for a few days. Guy shortterm boost that should last for a a few days. Point, this is the inflection phase of the dollar, the dollar will bounce from here or it is unlikely to go down much further. We have been through a very long phase of dollar weakness and people are starting at the margins to talk about that may be reversing and some of the notes i am reading. Have we reached that point . Remain a structural dollar bear. It is still not offering attractive real yields, growth is not brilliant, but they are longterm issues. Point awe hit the couple weeks ago. It is struggling to get much more meant momentum on the top side. We will see a bit more of that today. Lasts a few weeks or maybe a couple of months, i do not know but this will provide levels where a lot of the real money individuals or people who are over allocated the dollar structurally will look to trim their positions. This does shift the story for the next couple of weeks. Over the dollar up 2 last week and the trend is pretty good. Mark cudmore, you can follow his live insights on the bloomberg. Just type mliv. It is a great way to get started and get ready for your market day. Macrons message on europe gets a mixed reaction. The check billionaire running for office saying it could trigger lots of brexit. We are live in paris with the details. This is bloomberg. Matt welcome back to Bloomberg Markets, the european markets. I am matt miller. Alling emmanuel macrons vision for europe not a good thing. He is favorite to become the next check Prime Minister and says the french president should take care of his own country instead of focusing on deeper eu [inaudible] he called for unity in the euro area. A budget can only go forward with Strong Political commonhip, led by a finance minister and strong parliamentary supervision at the european level. Stronge eurozone with a International Currency can offer europe the framework of an economic world power. More, kerley caroline joins us. What are you hearing . Macron tried to be cautious, he did mention the budget but he did not give details about the size and scope of the budget. He did not want to put Angela Merkel in a difficult situation before she forms a coalition. He wanted to talk about the vision and that is different. If you look at brussels the speech was praised in brussels. We heard from the spd, the Prime Minister who said he it was a bold and passionate play against nationalism but a very different approach from the check, saying that the future Prime Minister possibly running for office saying this kind of speech could lead to more brexit, more countries exiting the eu and macron should concentrate on france. We had criticism and journey and germany including from the csu where one member said macron wants to turn the eurozone into and on limited transfer unit stabilityspecting the pact. We will see how he responds when he delivers the budget. How is france responding and how is progress being made, we get the budget later on today , what is going on in france and how is france seeing mr. Macrons speech, how is france seeing mr. Macrons efforts to reform the economy . Already passed the labor reform last week, this was the first test that he wanted to show he is able to pass that kind of reform for the european partners. In terms of the budget what we expect today is he wants to keep the deficit below the 3 target as required by the eu commission. We do not know exact the what kind of spending cuts and details he is going to announce today but we know it will be somewhere in the range of 20 billion euros of spending cuts and at the same time he wants to reduce the tax burden on the french around 10 billion euros. This is a chart of payroll taxes and we do not know exactly if the spending cuts will be sufficient. Is hoping thaton the recovery, the growth of french gdp is expected to be at 1. 7 this year will be enough to deliver this budget. Much,thank you very talking about macrons speech yesterday and the reactions. In saudi arabia we have got new plans to lift up ban on women driving ending its status as the only country in the world that has such restrictions. It is the most are manic move so far in the governments bid to open up the saudi economy. Fromore, we are joined dubai. What impact is this going to have to allowing half of your economy to drive must be a pretty interesting experiment. Absolutely. This is about setting the tone, anyone who had doubts about the speed of saudi reforms which includes investors, if you take a look at valuations in the markets, this is the answer, they are serious about reforms and tackling an issue that has been very sensitive and very controversial. In terms of context, there are a million drivers who in each saudi household, it would have each household would have a dedicated driver to ferry around the women based on needs. You have a million jobs that could be at stake. This is an important chunk of the saudi economic story. They have been coming down off the back of some of the other reforms that have been kicked into motion. The line in blue is the reference for what has been happening with brent crude prices. Think along the lines as well in terms of a more productive labor force. In terms of perhaps new car purchases, perhaps now instead of paying money to a driver you keep that money and spend it on other things so think along the lines of consumer confidence. This means going back to the drawing board and starting all most from scratch how you approach investing in this country. It is a fascinating story. I need to ask about what the reaction to the rise in oil is like in the region and what your sense is where we go from here. Seems to be driven by this idea that we are reaching or heading outrd balance, we have data on stockpiles. What is the next driver on the last story that will take oil to the question mark yousef a couple take oil to the next level . Is on the basis of an Industry Report that came out, suggesting a drawdown in stock inventory. You mentioned the eia data. Read asetting a better to what the refineries have been up to. Analysts joining the bandwagon over the last 48 hours, saying above 60 a barrel, that is their call in the short term but we are watching closely what is happening with the kurdish independence about and a possible intervention from the turkish side, and escalation of sanctions. Thank you very much. Joining us on what is happening in saudi and the oil market. Siemens ration agreement to merge businesses. Will antitrust businesses take the toll on the deal, is this the formation of another airbus as well . Monday foggy morning in london. The market open is seven minutes away. This is bloomberg. Matt we are minutes away from the open. Lets get some stocks to watch. Siemens merged their rail business. It is a 5050 merger of equals. I love it when german countries say in a press relief they believe it is a merger of equals. You can compared to airbus. Guy you can. We will see. We will talking to the boss of those businesses midday u. K. Time, looking forward to that conversation. Maybe we will get in at two to that question. A couple things to watch out for. Keep an eye on the european sports market sportswear makers. This is after the numbers came out. Keep an eye on adidas. Take a look at wei. By. 2 . A foggy london. This is bloomberg. What did we do before phones . They save us from getting lost, getting hungry, and getting nervous in places like this. Now phones can save us money too. Introducing Xfinity Mobile. With unlimited data for just 45. Thats the lowest price out there for one line. And you can get the same price on up to five. See how much you can save when you get unlimited on a new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Guy we have got about one minute to go into a cash opens in europe. Let me show you what we are taking. But for their planning is not exactly a riproaring start to the day. At least a positive start today. Looks like equities open on the front foot. Keep an eye on siemens. The big stories are mainly macro , what janet yellen has to say on the homicide, so we are anticipating a little bit of a move with the dollar. That will have an invocation at the margin. The oil stocks, isnt it, matt . Especially after what we saw yesterday. Take a look here at this chart in the bloomberg, g 9299. The white is the price of oil right now. 52. Is wti, crude at the green in stockpiles in the u. S. You can see them come down pretty drastically as the price rises. Guy absolutely. Here is the market and the open. Ftse 100 tracking back up towards the 73 level this morning. It will be interesting to see the driving factor behind that. Expecting similar performances elsewhere around europe as well. We will see the cac and the dax open up as well. The dollar is a big factor into the mix today. The oil story is not to be ignored. We get data later on today, and there will be a tliv on your bloomberg. Follow the release of those numbers. Let us find out what else is happening. Manus cranny come over to you. They do not want to halt anymore at the start. It comes through for macron today. Could be kicked that against macron end up as being for brexit or is for that desperation of some brexiteers out there . Oil bid as matt said. That will drive into these markets as well. New york. You have the bulls back there in the bull market. Brent has a golden crust. Let me take you to the eurodollar, because that has been the most part of the conversation on daybreak. This is the eurodollar onemonth risk reversals. From credite in suisse this morning and said a series of small pluses. The macron labor reform. More power of europe. The german political capital. How much capital will merkel have . We had a conversation with ing. Any drawdown on the euro is an opportunity to load up, walk in, and reload. They still call above 25 games to 2070. These are the gilts opening on december futures. Equities higher. Gilt yields of 1. 35 at the bottom of your screen. Were the next piece of the brexit story goes. Moderately positive journey on the back. Hard brexit following according to Credit Suisse this morning with michael osullivan. I am off to Digital Radio with carolyn have care. Thank you very much indeed. Looking flow into it. Let us talk about with the individual stock story is taking us this morning in terms of money index points. Hsbc. Siemens checking up around 1 . Et on the upside as well. Bid this morning. Some of the oil stocks bit as well. Certainly on the front of this morning. I want to show you what is happening. Galapagos on the upside. Trading up by 7. 76 . The Franco German deal looks like it has got the thumbs up in the market this morning in terms of the terms being negotiated on wha