Regulations. Going public. Saudi arabias oil minister says a full aramco ipo is on track for 2018. A very warm welcome. This is bloomberg daybreak europe, our flagship morning show. I am anna edwards. Matt and i am matt miller in berlin. We are getting headlines of fourthquarter net sales at 2. 1 billion. Also seeing fourthquarter gross margin around 44 . Just a couple minutes ago, came out with this net sales for the Third Quarter. That is the reporting quarter. 2. 45 billion, beating the estimate. Margin,arter gross 42. 9. It is the forward numbers that matter and make a difference. Fourthquarter outlook of sales for 2. 1 billion, gross margin of 44 , and it sees fiscal year net sales at least 25 higher than they were last year. Anna. Anna other breaking numbers. Chemicals and coatings company, akzonobel, reporting numbers for the Third Quarter. The Dutch Company exiting the chemicals at the moment. It has been a tough 12 months. We had a profit warning for them which adds to the complexity of interpreting these numbers. On the face of it, they look to have underperformed expectations. Some of those expectations have been brought down because of the previous profit warning. Fourth quarter ebit well below the estimate. The revenue number for the Third Quarter, coming just shy of estimates as well. The are talking about future of their Chemicals Business and a supervisory board. Akzonobel reports changes to the supervisory board, making dominations to the board. They are talking about the separation of the Chemicals Business. They say that is on track. They continue to be significant there continues to be Significant Interest in that part of the business. We will have plenty to discuss when we talk to the management of the company. The ceo joins us for his first interview of the day at 7 00 a. M. U. K. Time. He was brought in deal with chemicals. He finds himself as the ceo, trying to dispose of chemicals. We will talk about that and special cash dividends. What has beenout going on in china. Lots to discuss in terms of the chinese story. Let us remind ourselves of where chinese stocks have been. In volatility in many fields 2017. I have got a chart which shows, on the bloomberg. This shows the tightly controlled nature of the chinese stock market in this particular conference. Increasingly, in 2017, we have not seen Much Movement on this particular index. In the past, the shanghai compass and lost more than 3 during these conferences and in the five days after the conferences. We are looking at sue whether we will get any clues on deleveraging and the like from the chinese this week. Some we have already got of movement in asia. Take a look at the msci a littlefic eking up bit, putting gains that to the alltime high we reached a couple days ago, continuing its upward trend in asia. You see the s p 500, emay futures emini futures. We are 9. 5 hours away from that. And then you see the pound dollar trade down a little bit. The Real Movement happened yesterday. 1. 3188. 120 fivewn to a handle. The movement after the Inflation Numbers came out of the u. K. And after connies testimony as well. Let us get the first word carneys testimony as well. First word news with Juliette Saly. Juliette chinas president has warned of severe challenges. Hile laying out a roadmap xi jinpings comments came as he kicked off a twice a decade hisering expected to cement influence. In a speech that ran more than three hours, he declared victory over many difficult overdue problems since he took power in 2012. Withindevelopment is due a great situation. Our prospects are bright, but our challenges are tough. Juliette donald trump has claimed that his tax reforms would be worth 4000 per year to the average American Household. He asked for help in getting legislation passed by years end so he could give the country the best Christmas Present. Donald trump said he plans to choose from among five finalists to be the next Federal Reserve chairman, and will make his decision soon. According to a person familiar with the process, his selection will be unveiled before he leaves for asia and hawaii on november 3. U. S. Senators in both Political Parties to say they reached agreement on fixes to stabilize obamacare just two weeks before americans start signing up for 2018 coverage. The twoyear deal would allow crucial subsidies, potentially insurance premiums for those in the program next year. The Trump Administration said last week it was cutting off the payments, and on tuesday, the president called the agreement a shortterm solution. European Union Countries are seeking to create their own preparatory work on a future relationship with the u. K. This year. According to officials, the council of the e. U. , which represents member states, will start working with the European Commission. Hope aliveuld keep for theresa mays government as brexit negotiations remain stalled. Global news, powered by more than 2700 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. Anna thank you very much, Juliette Saly, with the latest. Let us check on how that is moving around the market. Sophie kamaruddin in hong kong. Sophie. Sophie we started the day with muted reaction, but it was the open of chinas Party Congress and xi jinpings marathon that dominated the market today. Bearing in mind beijings directive, chinese stocks are snapping a two day drop, on the losing end of the spectrum. Xinese bond held steady as spoke of reformed Interest Rates and forex markets. Elsewhere, the momentum petered out. The nikkei 225 looking relatively flat. It is looking to snap an 11 day rally. A quick check on equity highlights in asia today. We can pull upf the board to show you the equity movers. We have drugmakers, green stock climbing in china and hong kong spoke of reforms. Health care was the bestperforming sector this wednesday. El scandale ste continues, that stock is under pressure. It has attracted the attention of the u. S. Department of justice, plus kobe steel is said to have hired mizuho to advise on a real estate scale. A last look at Crowne Resorts slighting 4 in sydney, losing the most since march. This amid whistleblower allegations. Sophiehank you, kamaruddin. A few threads on the u. S. Conversation. U. S. Senators say they reached an agreement on fixes to stabilize obamacare just two weeks before americans start signing up for 2018 coverage. Talks have been extended into 2018 as key obstacles emerge with canada and mexico rejecting what they see as hardline proposals from the united states. Joining us now in london, kathleen hunter, and with us for the hour, the head of Asset Allocation and market research. Very good to have you with us. Tax, the after, the nafta, tax, border wall. What is the significance of this deal . This is not trump saying you can keep obamacare. That is not the story. Kathleen it is a bit interesting because, this is Congress Stepping in to say we will give a twoyear stopgap solution to the problem trump created last week when he decided to cut off these reductions, subsidies that are given to lower income people to help them Purchase Health obamacare. Nder the idea was that these were necessary to help people, help encourage people to participate in the program and make sure they are going to be getting insurance. The system only works if people are getting insurance. Trump moved to undo those at the end of last week on thursday night and now, come with is stepping in to say we are going this. Einstall you have a republican president doing one thing and congress doing another. Republicans are saying the white house is saying that this is something that could provide some time for a more longterm solution to the problems in obamacare, but it is still a bit odd. In a it gives me deja vu little way. Let me ask about the fourth round of nafta talks. Wrapped up yesterday, but all sides agreed to extend the timeline. What is going on with these nafta trade talks . Kathleen it is interesting. They are going to extend the timeline. It looks like there is the u. S. Is taking a hard line in the talks and that is not leading to some Significant Holding up some significant breakthroughs in this. It is worth noting in a broader context. We saw the president last week moved to decertify the run nuclear deal. Nucleartify the iran deal. It has been any number of International Agreements with which trump has been looking to kind of either renegotiate them or scrapped them altogether or scrap them altogether. They are not able to meet their deadline they were hoping to meet. It seems significant. Somewhat significant. Continuing to move the peso around. Kathleen hunter joining us with the latest on the stateside news flow surrounding the president. Let us talk to christoph, at macro research. Good morning to you. I have been listening to these various news agenda items, if you like, from the united states. Do you have expectations for what the Trump Presidency can deliver . Is that part of your Investment Case at the moment . Guest it was a part. It was a part of our Investment Case. Unfortunately, we do not believe that it is the Trump Administration who can do this in the long run. What we need is not Obamacare Repeal but tax cuts to boost growth well above 2 . For the time being, both are subdued. Subdued growth, subdued environment. Because the is monetary policies are running out of stimuli. On the other hand, we need a strong fiscal boost. Anna you think we need a fiscal boost . The potential for the tax cuts ae diluted because we have cost of capitalism that is low. You have these factors in the u. S. Economy, and therefore, tax cuts would not have the same fiscal boost a fiscal boost would not have the same positive as it might otherwise would have done. Christophe what makes the Economic Growth system in the long run is to make it in a virtual cycle. We are not in a virtual cycle because corporate investment, productive investment is too low. The rate is low today, the revenues growth is a real os well. It is because the growth is not high enough. Anna and there is potential . Christophe we need to make growth sustainable in the long run, and the best way to do it is to make sure that growth and andstments are around 10 , when investments go up 10 , you are sure to boost Economic Growth. Matt listen, i understand, christophe i understand you are not optimistic the Trump Administration can deliver this, and really, nobody we talked to is, frankly, optimistic that the Trump Administration can get you the key reforms that are necessary. Nonetheless, u. S. Stocks continued to hit alltime highs. Every day, we have a new alltime high in the u. S. So are you buying u. S. Equities, and if so, what is the reason . Christophe the reason is because the Earnings Growth is despite the Economic Growth, it is in a virtuous economic cycle, opening to us. ,rowth is around 10 this year and we expect 10 again next year, and if we achieve this economic Earnings Growth, then we have leeway in equity markets. The situation is exactly the same for european markets. Growth is subdued, inflation is subdued, including in japan, but on the other hand, Earnings Growth is very high because corporate margins are very high as well. This is thanks to low growth in wages. The phillips curve is broken, and this is why it is higher today. It is very low in the u. S. Matt i understand your Monetary Policy concerns. As it concerns actual investment activity, what would make you sell your stocks . What is going to end this rally . It is so long in the tooth. Christophe we expected continuation of the expansionary economic cycling. It is eight years old, expansionary as i said, investment productive investment is quite low compared to the previous economic cycle. The issue is a very simple comparison. You should look at the accumulative of added value of march 2009 compared to what we had during the 1980s. Economic growth. In the lovee leeway story with the expansion of Economic Growth. Anna the love story. Yes, you can say. Christophe donay stays with us on daybreak europe. Coming up, could islands be the key . We talked through the latest brexit developments, next. Later, an interview with the akzonobel ceo after the company missed thirdquarter earnings estimates. It is his First International interview since taking up the role. Plenty to discuss. This is bloomberg. Matt good morning. It is 6 20 in the morning here. 4 20 in the afternoon in sydney. A gorgeous picture of the opera house. Sydney, wherer to Juliette Saly has gone back home and brings us the Bloomberg Business flash. Good morning. Great to be home. The securities and Exchange Commission is preparing to give wall street a reprieve by telling firms they will not have to overhaul their operations to comply with you european rules governing Investment Research according to three people familiar with the matter. Expected to provide formal assurances it will not object if brokerages rate out the cost of Market Analysis rather than bundling it together with other services. Saudi arabias oil minister says the kingdom is still aiming to complete both international and domestic portions of the aramco ipo next year. Declined tolih answer questions on whether chinese investors are interested in buying stakes in the state owned oil giant. To callos calamitous deal in mozambique keeps coming back to haunt the minor, grappling with another african misadventure. Fileduthorities have fraud charges against the company. The former ceo and excfo violated saying they inflated the value of the call assets. It intends to vigorously defend itself against these allegations. Has left the board of three companies after making racist comments in his monthly newsletter. The publisher wrote that the u. S. Would look like zimbabwe if it had been settled by black people and not white. A frequent commentator on markets is bearish on what he called contrarian views. That is your Bloomberg Business flash. Anna. Anna thank you. Juliette saly in sydney. European Union Countries are owning to complete their preparatory work on a future relationship with the u. K. This year, a move intended to keep hope alive as brexit negotiations remain strong. Ireland is considering pushing for guarantees that no border will be reimposed on the country as the price for allowing brexit talks to move ahead. Y, still withna us. Your thoughts on where this will go . This,u someone modeling talking about the possibility that we get a no deal situation here . Christophe exactly. It is a very difficult situation for much longer. Two years, as expected by probably politicians today. To make agreement, to make sure the u. K. Are able to continue to deal and trade with the rest of europe, it will take probably a decade. It is a long story and painful echoes in the meantime we have some doves regarding the capabilities of the u. K. And the rest of europe to make agreements. Our side, we are quite skeptical regarding the capabilities of the u. K. To deal in a soft way with the rest of europe. As a consequence, we are quite negative on the Economic Trend for the u. K. Economy. Inexpect a slowdown both consumption and in corporate investments. For the time being, the u. K. Economy is quite resilient. Anna with a rate hike into that. Matt. Matt exactly. You can be negative on the u. K. Economy and want to buy gilts or the pound. Is that the case, christophe . Christophe it is absolutely the case. And just to complete what i was just saying one minute ago, what we expect is a slowdown in the u k Economic Growth, and probably the u. K. Slowdown in the u. K. Economic growth, which probably should be the weakest at 1 . What we expect is a sharp rise in the inflation rates, well above 3 , as we can now experience since a few months. This situation should probably continue for a while for the u. S. Economy for the rest of this year and probably for next year as well. And for this reason, the pressure is still there on the equity, u. K. The assets, including u. K. Equities. Anna what happened to the pound than . Chart is showing wage growth stagnating, Unemployment Rate coming down. We get an update later on today, btv 134, if you want to put it up on the bloomberg. How week does the pound get how weakesnt havewea does the pound get . Christophe we expect weakening sterling versus the euro. Our best forecast for the sterling versus the u. S. Is compared to 1. 20. We expect a weakening despite the correction behind us. Now, the pressure is diffusing in the rest of u. K. Can assets, including potentially the u. K. This is the reason why we are, globallys begin, quite globally speaking, quite negative. Anna Christophe Donay stays with us. Our next, the sec is set t