Ignoring the geopolitical risk . We are talking about north korea. The oil market holds yesterday, big gains in the treasury market has the bloody catchup. Matt miller has an exclusive interview. Live in frank for that event. Cash trading lets take a look at what the bloomberg has only consolation this morning. We follow a positive session, not a great upswing gains continue to be made. Up by. 3 . This spanish market looks like it will be up around. 5 . Lets see what is happening out there. This is the picture on the gmm. There is an oil story there, it is rising very sharp with this morning into trade, up 1. 5 . The yen is lower, part of that factor, we have seen the Australian Market through x thousand, close above 6000 this morning. Something to Pay Attention to. Continues toarket provide a turbo boost for the emerging markets. Lets talk about what else is happening around the world, interesting pray interesting trade. The index coming off a little bit, oil trade remaining front and center. Washington the house taxwriting committee has begun four days of work to hammer out the details of the tax cut land. House republicans adopted a package of changes offered by kevin brady including a measure to limit the carried interest tax break. Broke the provoking serious reactions from democrats. 5. 5 hours into an allday markup. Donald trump has about four saudi arabias leadership after last weekends anticorruption crackdown. Trump tweeted i have great confidence in the crown prince of saudi arabia. They know exactly what they are doing. Princes, four ministers, and dozens of warmer ministers as well as is this man were taken into custody. New zealands Prime Minister has said her nation will benefit will benefit from the transpacific ownership. She indicated she will not let concerns scuff the trade deal. I make sure i maintain these negotiation editions of i will continue to do so. Preempting our negotiators around the table. There are clear benefits in this agreement. Sales fell. K. Retail the most in seven months in october, indicating caution among consumers weeks before the Christmas Shopping season. The British Retail Consortium fell 1 on a basis and we are up 2. 1 in total terms. And Household Spending slowed to 2. 4 from 3 in september. That was the weakest in more than one year. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. Guy thanks. Trump is in south korea. , press conference coming up the timing is flexible. We could be a few minutes away only to be one hour away we dont exactly know when it is going to stop. Nikkei closing at the highest level since 1990. Msci hitting a 10 year high. Lets bring in mark cudmore. He joins us out of hong kong in london. Cudmore, the risk that north korea becomes a big issue this week is certainly there. Why are equity markets riskon . That is one big risk on the radar. Were talking about the fact that the bull market and equities, good Growth Continues great earnings. The best year in global earnings ever. There is endless liquidity out there. Therefore, the structure arguments, bullish equities remains strong. What are the risks that could really derail this . Apart from a complete black swan. North korea which has been under the radar this week. One left where worried about and that is the possibility of getting closer to a Government Shutdown and negotiations in the u. S. Even that is looking unlikely at the moment. Just told you what mark was saying there. The black swan event has faded quickly. Think about when the nick i went down ive percent on brexit. U. S. Equity markets, it rallies on the day. These events are not enough to stop the Global Equity a rally. Endless liquidity from central banks. The only thing that really topless it is real rates that should tire. Signalingry is not that you will have a selloff from this. Whenr credit becomes marginal costs gets too high, the earnings season we have had, new grexit some rights go higher. Inflation higher if the oil rally keeps going. In terms of basic effects, it had a negative outlook for u. S. Inflation. Gains at 65, 70, the Energy Impact will stick higher. It makes the Federal Reserve less dovish. Is the market and are pricing the fed at this point . Talking about the idea that if we do get this tax bill going, the deficit grows, the fed has the rate into that. I think they will but that is a very big if you we are going get something past passed. A lot of obstacles and changing. Hardnk the makes it very to see what the impact will be. Will completely change the game and that will mean higher real rates. That will be a risk to other assets if we see that tightening. We are a long ways now at the moment. They are correct to be bullish and not play the outcome. It is not even a likely if outcome. Guy what are commodities signaling . Commodities almost like playing catchup at this point. Oil rallying. This seems like a big piece in the puzzle. Depending on which time from youre looking at you get a very different picture. The last couple of months you suddenly even last week or so, commodities are playing this new global theme. They are roaring away. The other way of looking at it is stocks have been rallying for years. Commodities are now playing Global Growth story. The whole situation with yields is important. We talk about this before. There are structural issues that also regulatory issues at keep up with the demand and keep yields lower. Overall the whole relationship between yields and equities has shifted in the last decade. It is not mean it is permanently shifted and wont revert to the old teradyne. We are in a slightly different world would ban warmer or. On fx. Ts focus this lets talk about the dollar. Draghi, interesting to see what he will have to say. Does the dollar continue . We have oil potentially adding to the emphasis. Deficit story. It may end up adding to the momentum as well. The japanese in particular saying the inflationary impulse, we will not get there in a hurry. The dollarad basis is not the trade risk we are talking about you this idiosyncratic story so i can yen, inut the end terms of euro, draghis ninemonth guidance made it a killer. Difficult when you have the chances of them the reducing. If you look at the dollar traded, add goldilocks to the. Ollar, you had the u. S. It has not traded that well. Trump administration once a weaker dollar. That is a nice played fade. Guy interesting little brackets. Mark cudmore, thank you very much indeed. Mark and the rest. F the team on your bloomberg we will bring you the trump moon press conference as it happens. Timing tbc. The u. K. Opposition leader says british firms could come talk to labour party about the plan. More from that interview next. This is bloomberg. Guy lets get a business flash, here is juliette starling. Juliette bmw has strengthened the 2017 profit forecast as deliveries of the luxury suvs and sedans rise to record levels. The german carmakers will pose a profit compared with the earlier projection of a slight gain. Deliveries will rise slightly this year, reiterating early forecasts. Helped by a weaker yen and the three months to september. Toyota took a 15 share in america, the biggest market since 2009. Aboost from a july loss of camry sedan. Is putting they Global Workforce by almost one quarter as demand for wind turbine slows from the u. S. To the u. K. They plan to eliminate 6000 jobs in 24 countries, 23 of staff as the Company Expects sales to slump in the Current School year. It will begin implementing cuts immediately and expects to complete restructuring before 2020. The Israeli Company is struggling with declining prices for generic drugs. Facing significant operational stress at a time when it needs to reduce debt from the 40 billion acquisition last year. A spokeswoman declined to comment. That is your business flash. Guy lets move on. The Labour Party Leader in a speech yesterday to the british industry, jerry be corban says his party has Common Ground with companies on exit and investments. Reachedhe u. K. Firms out to his party. Have a look at our manifesto. Principles behind it, a fairer and more eat both society and investment in the future. Look at our plans on education and comment talk to us. Have a chat about it all. We are putting out a serious offer their of how the british economy and society could be much better and much happier if we actually spend more on the public realm in order that our economy can grow for the benefit of all. Should i price in a Labour Party Government in the u. K. Yet . Way too early for that. The scandals are making good headlines, but it is five levels of if. This is more than what we had announced. Level two, we need them resigned from their seats. Level three, they need to be in marginal constituencies or label have his chance for live of have a chance of winning. Win, ur, they need to it is still very far away this early. Start2021 then we will price in the possibility. You think it is underpriced in the u. K. . U. K. s debttoincome ratio started rising this year. Inflation was subdued as now we have depreciation. The same guys around the table predicting we get to 2 and maybe underneath by this time this year. We are seeing inflation overshot. 3. 2. Not follow a aspect is there back. They are making policy in a very bit a very difficult environment. They have no power over the longterm dynamics therefore they are data dependence. Convictions about the direction the bank will go when that mediumterm Event Horizon is so clouded in uncertainty. It is the hedgehog chart. Same with growth. If you look at the inflation forecast, they told a message. They target 2 . Very rare that those guys do not put 2 of the inflation forecast intothree years. Most of the time they say we are doing a great job. Is message they are saying actually, the forecast is 2. 2. Slightly above. More rate hikes to come even though they took out guidance from the statement. They still got that implicitly in their gas. Of the the taking away line in other words. Remove the line in the market and it was dovish. Tightening and you are in this weird scenario where the pound is bouncy. Ethics appreciation, is two or 3 and it is good reason for growth surprises. Pmi starting to pick up to the fx impact is upset by the growth numbers. The bank of england would be more with debt forecast on the horizon. This Time Next Year where are we . We are talking to more hikes next year. In may and six months later. Talk about winding down the Balance Sheet. But in five years time. Movinge fx strategist, to the market open. Weaker than expected october sales which is interesting sales dataman retail has been solid of late. Look at the stocks in just one minute. This is bloomberg. Guy go to my list of the stocks that may be on the move to the numbers look pretty weak, keep an eye on that stock. Bmw, keep an eye on its numbers as well. Imperial is interesting, others meeting targets. This is the tobacco company. Take a look at the anr. Stock price has come down really sharply. You wonder what it is going to take to get a real rating of that stock. I show you the anr later on. We talked to the cfo, he joins us for an exclusive interview 8 30 a. M. Be interesting to get his take on that. Tobacco, another area we should be focusing on. Stocks you want to watch out for, keep an eye on sky. That could be a stock that is going to be on the move big time this morning. That is certainly something to watch out for as well. Keep an eye on the energy sector, the Mining Sector as well. The commodity story is still with us. Early on earlier on daybreak, a stock you want to Pay Attention to. Keep an eye on the car rental stocks as well. You could see some movement in this session on that sector as well. Let me give you a quick heads at the 10 year high for the ei. Not compared with a kind of numbers we saw on the hang seng. The nikkei was up by nearly 2 overnight. A positive session despite donald trump being in south korea. Despite the risk of the north korea situation escalating. Equity markets still firmly on the front foot at this point in time. Europe looks like it is going to open. Kind of half of 1 . The ftse pulled up by 2 10 of 1 . The market open is next. This is bloomberg. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Guy five minutes to go until castrating. Go. Ive minutes to until cash trading. Look at europe, we are expecting around 0. 5 this morning. It isarkets are better, going to go up around 1. 5 . Eye onto watch, keep an car rental companies. This guy story is going to be interesting. That show you the numbers. This is what the picture looks like. We are expecting other markets to show similar numbers. European markets up. Lets wait and see exactly how that one opens. We will come back and look at the other numbers in a moment. Your to see banks their rates next year. The industrial numbers out of germany, they came up the fastest pace in six years. They are up. Tailwind coming to the asian session. If u. S. Consumer confidence mariotoday, and opec draghi is going to be talking about bank Balance Sheets. The earnings season is underway. That is where you are seeing the delivery. Complex this is where the real dominant force is. That has consequences for inflation. That has ramifications for your bond market. Maybe not today. Rising oil, the highest in two years. Boonre looking at a real in the commodities. Youve got fear and greed. Not in las vegas but in the pound market. Belowe seeing fear back zero. As a potential p. M. , there is a risk and labor could exceed the power. It is a small risk. It is there. The vicissitudes of brexit will drive the pound. Seeing a move by 10 basis points. Remain onhould you upward projection. Youve got hammond coming down for the autumn statement. You have a dysfunctional westminster for a whole variety of reasons. Lets turn our attention to what is happening with the market moves this morning. On the downside, jp morgan , we still that the tax credit story on the tax bill in the states. Sky is weakening. Are looking for that stock to drop sharply. 2. 5 . We are expecting more there is well. Its going to be interesting to see how other stocks trade. If you step back and look at the world, and you try to figure out what are the prime drivers that are going to shape the fx landscape, there is an amazing shift we are seeing taking place at the fed. The fed feels like it is in flux. If you take a step academic at the data, the u. S. Economy is ticking along. U. S. Data is running at highs. We think the terminal rate, a couple more hikes, in december into next year. Cycle, if you have his change of the guard at the fed, perhaps that is the risk. Unless we have an oil rally like we spoke of, unless u. S. Growth continues to be blockbusters, inflation is not going to reach the target. 4 is reallyree or unlikely. Patterns. Out cyclical this is good news. In terms of u. S. And u. S. Interest rates, you are using the treasury market where tax reforms are not going to be a big deal. It will have a small impact on growth. The curve hit a record low today as far as his flatness. Jordan people say that is a signal of recession. Theynk its more about dont believe we will have a high inflation for very long. That is the view in the treasury markets. Yieldsd higher real before you start it right about guy lets shift gears. That is significant up from the previous estimate. That speak to the cfo. Thank you for joining us this morning. Is this the last of the upgrades we will see . I think the cyber attack was the Third Quarter. The Third Quarter by any year we announced massive changes we want to break up the company and focus on transport logistics. During the Third Quarter, we have a good solution. Selling theounced last stake in the danish supermarket retailer in denmark. Disruption, it was a in the thirdquarter to have the cyber attack. We make good money. Maersk make the money in line. We have good macro economics. You bring up the issue of creating this new maersk. Thats the bit we can understand. Give me a sense of the progress you are seeing and, and the other options, what they look like. Gave ourselves 24 months. We will announce deals when they are in place. We have demonstrated we are able to find good solutions. We still have to see what solutions we end up from supply services at least in the Third Quarter we took a major step forward. It helps that we can now start focusing on the future of transport and logistics. We are also going to a transformation where we want to ofnge from being a number businesses and transport the just it to be one integrated business that provides a different more integrated solution to our customer. Guy what is happening with the chilling and supply Services Businesses . I am curious as to how far down the road you are. Decentgiven yourself a chunk of time, im curious how far down the road are you. . Re you looking at ipos is the story crystallizing in that direction . About theou tell us nuances of what you are thinking . What has served us well, we actually private equity. We look at various tracks and we find the best solution. A care about finding sustainable solution for those businesses. We are reviewing all possibilities and we will end up with the best possible solution. Fact that we have had to deals with a high cash ,lement is that we do not have we are not as push for finding solutions, and we will make sure that we take the time for getting the right solutions for the last two businesses. What do freight rates look like going into 2018 . We would already like to see them higher. It is fair to say supply and demand is quite well. Strong demand, and