Weekly inventory numbers coming out in 30 minutes. Materials are under pressure as well. The commodity selloff we are seeing is not just in oil. We are also talking inflation as er we got the numbers this morning. Inflation very slightly hotter than estimated Committee Even as wages continue to be under pressure. Here is commodities and the inflation outlook. What expectations for inflation are being priced into the market. This is the 10year breakeven. We have seen that come down. Come down as but applicable along with of the commodities, the commodities index. Speaking of commodities and pricing inflation, we have target in focus this morning after the company said it has been cutting prices to better compete with walmart. However, that has put pressure on its margins. Some of the numbers missed estimates, including its forecast, which it raised, but the midpoint of which is still below analyst estimates. Target shares are trading lower. Kroger under pressure as well. The other news in the supermarket industry this morning is that amazon and whole foods are cutting prices. In particular, they are targeting items for the thanksgiving holiday, but other things like greek yogurt. Of theseeing supplies food items under pressure. Hershey, general mills, and kelloggs are lower this morning. Something else adding insult industry insult to injury, excuse me jim chanos saying that supermarkets of the next major industry of pain. He says there is too much square footage, too much competition, too low margins, as target illustrated today. Mark, what are you seeing over that . Mark lowest since september 13. Only telecom rising on the stoxx 600. 4 below the level we reached november 3. This is the highest in over two years. Ere is the great stat since november 6, a week ago, basic resource gauge has fallen 8 . The post the highest in almost five years. We will talk long and hard about commodities later in the show. Uphad wage data come on limited in the u. K. Today. Unemployment holding at a 42year low. There are signs that the labor market is slowing. The number of people at work felt. 4. 2 . S average the biggest drop since july 2015. Basic wage growth state at just about 2 . Blue line, 2. 2 , well above the rate of inflation. If you remember, yesterday it came out at 3 . There is a gap there. Bill bridges negative. Real wages negative. Gd. Erful function, if you have a bloomberg, use it. Airbus announced the biggest commercial plane deal in its history, securing an order at nearly 50 billion. S, dramatically overshadowing the deals won by boeing. Indigo partners gets the upper hand in the air show, where it has been trailing its u. S. Rival. This function can wonderful function, gd, tells you everything you need to know about airbus, such as the stock price come such as the volume, reportswhen it next earnings, such as its valuation. Absolutely wonderful. Gd, do not forget that function. I talked about commodities, as measured by our own index. The bloomberg Commodity Index is down. Down for theuge is fifth consecutive day, worst run since june, after falling most in sixmonth since yesterday. China tiles back on that pledge by president xi to focus on the quality of expansion rather than the pace of it. It has been hurting metals ,se, the Oil Market Production cuts opec come were talking about here. To inventories are expected reach a record. That is why we are seeing another decline in the bloomberg Commodity Index. Mark indeed. Julie indeed, im seeing my rd, under dashboa pressure. Lets get back to the latest Economic Data out today. U. S. Inflation exclusively excluding food and fuel, accelerating for the First Time Since january. Retail sales rose after a bigger september advanced than previously estimated. That could indicate resilience heading into the Holiday Shopping season. Onning us for more insight the economy is the senior economist at wells fargo. Thank you so much for coming in. Looking at the cpi figures and seeing the yearoveryear advance of 1. 8 , it is progress. 2 . E still not at do you think it is progress for more do you think it is qualified progress . I think it is progress. We need higher inflation. Everybody needs higher inflation. Comet, it seems, amazon with the supermarket sales. But we do need higher inflation, and those were good news. The Biggest Issue is probably on the wage side, how it is coming about. We have not seen that much from that point of view. Expectations are still very, very low. It is good news, but it will not change the fed policy right now. Julie right. As you mentioned, wages, you mentioned the wage issue in your most recent note as well. These are for real pc to strengthened and we need more support from the income side of the ledger. Hourly earnings suggested for inflation, when 4 yearoveryear. 4 yearoveryear, which is a deceleration. Went are you looking for change on that front, if at all . Eugenio yes, at some point in time, everybody was thinking that inflation will remain low. But at some point in time, with all the news from employment is ,igh, productivity is still low but we needed to see Unemployment Rate is very low, close to the alltime low. At some point in time we have to see some pressure. For now, americans have been bringing down the savings rate, but that is not sustainable. We need to see more wage pressures in order to generate sustainable growth. The u. S. Consumer has been the. Riving force of the economy we need to see some help on the consumer. Mark what does the yield curve tell us . Flattest in a decade. It has not been talked about the last few weeks. Does that tell us about expectations in inflation, or is there some things going on . , i vacation on inflation is very low, continues to be low. It is not help the trump, because the fed is try to push the long end of the curve fire, and markets are not convinced that is going to happen anytime soon. So it doesnt help the fed, but i think the fed is looking past that right now. They just want to be on the other side of, lets say, of the street, just in case there are problems in the future, so they can take care of those problems by lowering Interest Rates. So for now, you are still thinking about the Federal Reserve is going to continue to go through the pace. We are actually expecting a december increase, plus 2 increases next year. The fed is going to continue on its way. Mark you are not too worried about the division we have got within the fed on the part of inflation . You think that isnt enough to deter the fed. What about the everchanging face of the fed under a new fed chair, a number of other positions need to be filled . Could that have an influence . Should it have an influence on how the fed will look at inflation . Eugenio yeah, i always comment on if we follow every single explanation by any governor of the Federal Reserve on how they are looking at inflation, Interest Rates should be 20 today. And they are not. Every time they look at the data, and they see what is happening, you know, they make the right decision. I think that even with the changes at the fed, the same positions will come through, because they will look at the data and they will take the measures that the economy needs. Julie all right, i datadependent said no matter who is in charge. Thank you so much, eugenio aleman, for talking inflation in the fed with us. Lets check on first word is with us. Emma chandra has more. Emma Senate Republican leaders may have made tech support a little more complicated. Theyve decided to add a repeal of the obamacare individual mandate to the tax cut package. That will help them to the fiscal target but it changes the vote calculations in the senate and house. Senatehis year, republicans tried and failed to repeal obamacare. Russia is giving venezuela some breathing room. The two countries have agreed to restructure 3. 1 billion in a venezuelan debt. That is rescheduled over the next decade in a way that requires only minimal payments for the first six years. Venezuela now faces a difficult job of restructuring the debt it goes to private creditors. Military hasthe seized power and is threatening the rule of longtime president Robert Mcgahn a. Robert mugabe. The head of the armed forces forces said it was necessary to prevent violent conflict. Mugabe and his wife were taken into custody. Mugabe had fired his Vice President and given his wife control over the party. Australia has said yesterday seems a catch. Said yes to samesex marriage. Prime minister Malcolm Turnbull has called on parliament to legislate Marriage Equality by christmas. Global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. Chandra. This is bloomberg. Mark thanks a lot. Oil flipping, trading around 55 a barrel ahead of the heat u. S. Inventory data. Futures and focus is next. This is bloomberg. Julie live from new york and london, i am julie hyman. Mark i am mark barton. This is Bloomberg Markets on bloomberg television. While extending instructed 55 a barrel on signs that u. S. Crude stockpiles rose. Joining us from the cme, the strategist atrket r. G. How do you focus in 15 minutes time . Well, mark, if you look at oil, 21 on the quarter here. He did have the international demandagency lower its outlook, which looks like something that easily happens. We saw the decline in the winter months, the driving season over. If you look at a position like a trade strategy coming into it from we have the expiration for the december options today. Expect oil to remain at the lower levels. You can look at the january crude oil options. Putr fiji dollar a 52 runs 400. Look at the contract high of 57. If we close above their we will run up to 60. Really, i think we are trapped in this range between 55 and 50 on the downside. Mark phil, it seems as if russia is yet to be persuaded to join the party and maybe agreed to extend the opec production cuts, when opec meets in a record to time. If opec in a week or 2 time. If opec were not to extend in november, what would we see . Phil we would see crude oil most likely continue to sell off. Russia is in an interesting situation because they are renegotiating debt with venezuela. They do have to coordinate their efforts together, so they do me the debt payments. I think russia it is in the best interest have oil of the at the higher levels. They want to lower at the moment. Checking gold come a little lower today. It has been stuck in the 30 range and steve end of september since the end of september. What is going to break it to the upside or to the downside . Phil keep an eye on the equity markets right now. The russell led the charge lower yesterday. Trend traders got short on the muscle. You are seeing a bit on the gold market. A weaker dollar, stronger gold, weaker equities, stronger gold. Gold will eventually break out, but some of the geopolitical tensions have really come out of the market recently in north korea contest firing a missile that has a test fired a missile in 60 days. I think north korea has not test fired a missile in 60 days. I think youll see it again and 5000 will be the level of support. Rjo Phil Streible at futures with todays futures in focus. Julie time for the biggest business doors in his right now. Target is getting squeezed by a price war with walmart. Prices of the discount retailer fell last quarter, and target posted a disappointing outlook due to investments made in lower prices. Those shows are tumbling. There is a big investor in deutsche bank, which is starting to stage a turnaround. Servers Capital Management is taking a stake in bet on an letter, 2nd german bank this year. We will be discussing this much more at 11 00 a. M. New york time. Billionaire investor Warren Buffett has added to his stake in apple and reduces ibm holdings. Regarding to a regulatory filing, Berkshire Hathaway bought another 4 million shares and apple, the stake valued at 21 billion. Its stake in ibm is valued at 4. 5 billion. Mark great stuff. Still ahead, it is a zerosum game between airbus and boeing. We have the latest on who is winning the contracts. Plus, a look at boeings shares. Best performer on the dow this year, up 6 67 . This is bloomberg. Julie live from new york, i am julie hyman. Mark and from london, im mark barton. This is Bloomberg Markets. The dubai air show continues after this sticking loss of an emirates contract on monday. , withe roaring back today. Oeing clicking its wounds for more on the decadeslong rivalry, lets bring in the transport team leader. On monday, airbus were down for the count. I suppose it tells us, it is not over until the fight reaches the 12th round. Count airbuscannot out as long as john leahy is around. Lastis probably his big airshow. He told us out of his hat and no one was expecting it. It rescued the show for airbus. Biggest transaction in its history. What is indigo going to do with a lot of those planes . Indigo is a u. S. Based investor and their portfolio of lowcost carriers, frontier airlines. Lloris volaris. They will start these 430 planes around the various carriers, and it is another sign of the power of the low cost carrier Business Model right now. Much is financing of the various planes driving sales . There is data today to private Equity Investment and essentially leasing over these claims has been driving big orders. Well, i mean, there is no doubt that the money is cheap right now, and there are expectations that the money will get more expensive overtime as Interest Rates gradually rise off the bottom where they are at right now. And there is just a sense that it is twofold the financing situation on one side, and on the other side, still a sense that there is a tight market for airlines. Nobody wants to get caught in the situation where they cannot get access to planes down the line, because that drives the Airline Business and it drives money. If it is something that work in airbus favor and they took full advantage of it in dubai. Boeingwhen we talk about and airbus, as we frequently do, as being in this race to get give us the characterization of how generally the industry is doing right now, and if we are getting anything on the outlook coming out of the air show. Generally, the excitation into dubai expectation going into dubai was the Business Model, the play on globalization has come under a bit of pressure. Lower oil prices have not helped them. The fact that the orders came in as high as they did is a bit of a surprise, and it is more robust than people were expecting beforehand. That said, a lot of the areas like the big Indigo Partners order wasnt really from the gulf carrier. There is pressure on the gulf market itself, and the gulf market is a big indicator for the global aviation market, because these are the carriers planes, and isg mark mentioned before, the a380 order we expected to not materialize over the show. There was relatively subdued activity from that. There was an order from emirates for the 787, nice boost for boeing in the show. But by and large, the market is in the lowcost space and the Small Airline space. And the big planes are not selling as well as airbus and boeing would like. And so that kind of puts the pressure on these programs and where they position themselves, and how airbus and boeing position their activities going forward. Mark thanks, chris, great job. Reiter, transport team leader, joining us, julie, from berlin. Julie indeed. Coming up, we go to capitol hill, where the Senate Finance hearing on the tax bill is underway. Plus, we are keeping our eyes on crude. Oil inventories out in just under five minutes and crude prices are down. From new york, this is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Mark live from bloomberg World Headquarters in new york and london, i am a mark barton. Julie i am julie hyman. This is Bloomberg Markets. We are moments away from the release of weekly crude inventory in the united states. Surveys are calling for a drawdown of 1. 8 Million Barrels. As always, you can follow the police on the bloomberg at tliv. An Industry Survey reported an increase in inventories, which is one of the reasons oil is down today. Indeed, there was a built in inventories of one point eight 5 Million Barrels 1. 80 5 Million Barrels. However, that is not as high as the Industry Report thatapi reported last night. That could be a relief. In addition, we saw a drawdown in cushing, oklahoma, the kehoe for oil come down 1. 5 Million Barrels. Guess inventories unexpectedly rising. Distillate inventories falling less than estimated, 799,000 barrels. On balance, it looks like it could eventually be a slightly bearish report for oil. As you can see behind me, we are seeing a slight tick down in oil, or at least not any kind of recovery at the moment. We will monitor it and let you know if anything changes in the oil prices in reaction to the numbers. Oil right now is trading down by about 1 , just about 55 a barrel. 56 able to hold the 57 or dollar level we have seen in the past few days. As we watch that, we are watching what is going on in washington, and the debate over tax reform. The latest draft from republicans