Of 1 . The Treasury Curve off the back commentsllen steepening just a little bit. Alix a little bit of a risk on feel except in portions of the currency market. The yen gets a good bid. , stephansshocker just a touch over 60 basis points. South of south of 58, 57, a lot of people denying what the yield curve could mean. My question is at what point did the yield curve become real for the deniers . The is it the number or speed . Crude prices are more expensive now than in two months. An interesting phenomenon. Time for your morning brief. The u. K. Delivering its autumn budget. The data dump, jobless claims, durable goods, and it 2 00 releasing the minutes from the last Monetary Policy meeting. Breaking headlines for you, Rockwell Automation rejecting the unsolicited proposal trump emerson. Rockwell rejecting the emerson. Ed bid from we heard potentially we would hear a bit come in as emerson tries to change its business. Cavalli put success of the deal says a than 20 as he different structure. It looks like rockwell is saying no thanks. We will see if there is a revised bid coming in. Jonathan should we get to the news everyone has been talking about . A massive data breach at uber. The company paid the hackers to keep it under wraps. Hackers stole data of more than including people, names, emails, and phone numbers. The bloomberg tech reporter. What a story. When did this happen, and can they guarantee the data has been deleted . December of 2016, but they are just chosen to tell everyone about it, even though they had illegal obligation to tell regulators at the time and in some states an obligation to tell customers their data had been stolen. They didnt do that. In terms of if that has been assures us it has been, but we have no way of independently verifying that. He has said this should not have happened. He has apologized. One of many apologies he has had to make since taking over at uber. Apologized to customers and regulators and saying he is trying to change the culture at the company. Jonathan we caught up with the Strategic Cyber ventures ceo. Believesonally dont they lived up to the credit card cybersecurity standards that would recommend more proactive measures being taken across their supply chain to include their Developer Community as a whole. At thecked underinvestment or lack of attention being paid to Cyber Security in general. Illustrated by the fact the cso was a lawyer. Jonathan we knew he had an important, difficult job at uber, but the kinds of things mr. Kellermann laid out, the guy the head of cybersecurity was a lawyer . The amount of money they have to spend on cybersecurity now . When is the Company Going to go public . Could that be pushed back more . Jeremy right now you have softbank in negotiations with uber about taking a large percentage in the company. This will give softbank some leverage to use on the valuation, the terms of the deal. 1. 2 billion, can they push that down and what that means for uber . Jeremy it could push the evaluation down. There were talking about around the 50 billion mark. Already a decent hit from what 18e claimed uber was worth months ago, near 70 billion. It could fall further below the 50 billion mark. Alix Travis Kalanick is still on the board. Does he keep that seat for long . Anythinge has not said so far. Travis is still on the board. He controls 2 other board seats as well. I dont think he is going anywhere. I think he is holding on to his board position. Whether he will be forced to make a statement about the hack, im not sure. It is possible he will make some kind of statement in the coming days. Jonathan i want to bring in steve wood. Where would it be trading in after hours . I assume it would be down 20 or 30 . Kneejerk reaction was it is a good job they arent public. Do they need to get public . The discipline of the market might be a good thing for this company. Steve it could be. The market is very disciplining. This is part of what we will see as they struggle through a lot of internal issues and how they will price this. I would agree that this is going to give more leverage to external offers then internal players right now. Alix what is this doing for the private versus Public Market valuation. What does that say to you . Steve they will be sharpening pencils on blank pieces of paper to find out what will be done. In cyberspace, it will be critical. When i look at uber and i cannot the stockn specifically, the phenomenon, going to be uberization we can buy today given the effect is much higher. The valuations we will see in the space will spread across the market. Jonathan it seems when we talk about uber airbnb and tech unicorns conceptually, a lot of them still lose money. We have no idea what is going on behind the scenes. It seems like he comes from a Public Company into a private one and find issue, after issue, after issue. How widespread could this be . Steve you look at it from our perspective, security selection is important, but also Asset Allocation and strategic discipline will be important. That is why we are multiasset and global. You dont want one asset to drive that much of your portfolio return. The specific name, what does this mean . The flattening of the yield curve, looking at inflationary, this is a key component of those dynamics as well. We cant look at it just in the context of the company. Alix is this an uber issue or a broader right cheering issue . I think this is probably an uber issue. This company has had a slew of problems that have not hit other Ridesharing Companies or companies that are private tech companies. I think uber had a particular culture that was throughout the rules if necessary. Now we come up with all of these instances in which the rules were broken and they tried to sweep things under the carpet. I think it is an uberspecific issue. And lawsuits investigations trickling out in new york and the u. K. . The new York Attorney general saying he will investigate this. You had uber immediately hit with lawsuits trying to get certified as classaction suits by customers. In the u. K. You had the information commissioner, chief data regulator, say they are concerned about the breach and will launch an investigation. I think you could see uber hit with substantial fines. In the u. S. It is a criminal matter. In europe regulators have the levy to substantial fines against uber. Jonathan moving towards banning uber. Their i assume would not help their case . Jeremy it is definitely not going to help their case. It will be another thing that will make those people on the transport for london taxi licensing board think maybe we were right to yank the license. This is not an issue of Data Security that they were looking at, but this route help them. Alix thank you so much. Steve wood stays with us. We talked about the Regulatory Oversight in europe and how they are coming after tech companies, this is another facet that will grow. Jonathan consumer protection. This company paid hackers to delete the data to protect themselves, not employees and customers. That is a strong message to send. Alix it sounds like a tv show. Who does that . Jonathan a bit of a soap opera. Who would play Travis Kalanick . You work on that. Alix is the fed concerned about the flattening yield curve, and luz, british Prime Minister theresa may just spoke at parliament ahead of the release of the u. K. s autumn budget. This is bloomberg. It is dangerous is because of expectations are down. I dont some evidence think it will be down very much, but there are some suggestions that after many years it will slow inflation and even drifting down. That would be very a very undesirable state of affairs. Jonathan janet yellen speaking in new york. Joining us in new york, the head of u. S. Rates strategy. Steve russell is still with Us Steve Wood is still with us. Does he take over . Ambitions will be very interesting. I presume they would have different styles in the way that they communicate. What stood out in her speech yesterday was the fact that she was not sure inflation was transitory. She seems to be thoroughly back her thoughts on inflation which are aligned with our view. That inflation could go up in the first half of this year, next year. Over time we might end up where we are right now. Jonathan what stands out for me led by janet yellen worried about inflation would do nothing. This fed seem story about inflation, then hike, hike again, then hike again. I am concerned these are signs we are about to see inflation drift. Im worried about an extra session and we need some space. Subadra absolutely. By the time and extra session comes and you dont have the ability to cut rates. What you need to to provide more accommodation. I think central bankers world over are concerned about, you are moving accommodation, yes, but having room in case of a slowdown in the future. Jonathan the flatter yield curve makes whole percents. The market has the same concerns come along and coming down. They are saying they will carry on rate and rates and the front end should come up. The flattening, with that argument in mind, makes sense. Steve the chair of the fed, paul, coming in, they are weighing two different priorities. It is not the mandate of growth and inflation, it is where they inieve there is a softness the inflationary data. The institutional requirements saying they will have a high enough rates or when the recession hits there something to lower. There is a dual mandate, but it is an institutional requirement to raise while the gettings good. The Economic Data is less compelling. Europe will be a very good counterbalance because the data is less clear. The European Central bank split the hair down the middle. They cut their policy but extended the time. They guided both ways. There will be a global softness in the inflation data and probably a lower for longer. It will go up, but lower for longer is the general statement. How flat can the curve get . Subadra what is troubling to me is how fast the curve has flattened. A couple of weeks ago, the market was flattening in december. A be one or two hikes for next year. Now we are fully pricing in march and the pricing for another rate hike by the end of next year. I would say their prepricing has been quite dramatic. Also, you have important technicals on the backend end of the curve. A lot of demand from pension accounts. The stripping activity in the long end, where you take a bond and strip the coupons and the principles, that activity has picked up a lot in october, mostly driven by demand from tension and pensiontype accounts. Youre seeing the dynamic where there is technical in place with most apply coming in on the front end, then technical on the back and with demand coming from asset Liability Managers at a trying tothe fed is raise rates. There is a signal that you should be taking from the flatness of the curve. Last when i asked the couple of days, credit risks or duration risks, they are saying duration risks. Is that a hedge . It is a hedge not a risk . Subadra i completely agree. That is the way i look at it. The treasury market is becoming a place for hedgers because it is a safe haven asset. If you arent equity holder you probably want to have some treasuries in your portfolio. If you are a credit or highyield holder you probably one treasuries in your portfolio as a hedge case of a downturn. Jonathan you mentioned the pace of the flattening. It doesnt indicate the crowded trade spirit usually they get sticky in that direction. How crowded is this . Subadra it is a consensual trade. The flat makes sense when the fed hikes rates. Whenever offense too much the market will be concerned. Steve i dont think it is too crowded right now. It is something that will be more crowded into 2018. We were always at a toss of a coin in december, now we think it is a 2 3 probability. We are always at 3 rate hikes in 2018. Jonathan when does a get real curvee rea yield flattening deniers . Or people come on board and say this mean something . Subadra the curve could remain flat for a while as long as condition jermaine accommodative. If equities are doing well, credit spreads are doing well, if the economy in the u. S. And globally are doing well, i think there will be some willingness to look past the flatness of the curve. Over time this will feed through to the broader economy. That is what i think everyone will be paying attention to. Jonathan do we see zero before 100 basis points . To zero than 100. I will be a good economist. On one hand closer to zero. Will stick with us. Thank you very much for joining us. Coming up on friday, catch bloomberg real yield, 30 minutes dedicated to fixed income. 5 30 in london. Oil, the big story in the commodity markets, as it always is for alix steel. Traders are expecting opec will not disappoint. Market impact if opec does not deliver. This is bloomberg. Taylor this is bloomberg daybreak. I am taylor riggs with your Bloomberg Business flash. Rockwell has rejected the unsolicited takeover offer from emerson. The 29 billion bid is not in the companys best interest. No response from emerson. In saudi arabia a wealthy suspect detained in a probe has started to make payments for their freedom. Some businessmen and officials are starting agreements to transfer a portion of their assets to avoid trial. The saudi government is not commenting. Jp morgan Ceo Jamie Dimon called the coin a fraud and the buyer stupid. The bank is considering whether to help customers that on the price of the cryptocurrency. According to a person with knowledge of the situation jp morgan is gauging client demand and potential risk. That is your Bloomberg Business flash. Alix . About bitcoinalk and jamie dimon . I hate bitcoin, but we will help you trade on futures. Listen to what we do and not what we say at the end of the day. Jonathan does he think it may futures are a little bit more legit even though the underlying thing is maybe not for him . Alix it is a great story that we will follow through the next couple of hours. Oil heading to a twoyear high before opec meets in vienna. Javier blas joins us from london. The news was they are inviting 20 more nonopec countries to the meeting. What is the story . Javier the policy of restraining supply that they have implemented for the last year. How seriously will they take the new countries . I do not think they will add a lot. Maye two or three of them join the deal. I dont see any of them making a production cut. We could see production decline in those countries because the fuel is getting more mature and production is falling in any case. Brazil,the countries, norway, are saying they will not participate in the meeting. Tightthe market will be is getting a hotel room in vienna next week. They youm so bummed get to go and i dont. Wti, Oil Prices Hit a twoyear high. First month and second month contracts, it is an backwardation so we are tighter in the present month than in the future. Is that sustainable . Javier the main reason for that is where suffering in u. S. As the Keystone Pipeline is shut down. It links the production areas from canada to oklahoma for u. S. Crude. It was shut down on november 16. There was a leak. Were losing 1600 barrels a day. There is pressure to draw inventory from every refinery that was sourcing crude oil from the refinery. Wti slipping into backwardation for the First Time Since december 2014 and the price has gone to a twoyear high. I think that is related to keystone. Great to see you. Javier bloss. As. Coming up, the u. K. Item budget will be out. We will bring you the latest. Markets, two hours away from the opening bell. Story as follows. Equities a little bit more positive. Dow futures up. S p 500 futures up three points. Jonathan two hours away from the opening bell. A shorter trading week with enthusiasm for record high continues. Just short of 2600 on futures. Positive by. 1 , dow futures up. 2 . A bond curve slightly steeper after yesterdays flattening throughout most of the session. The yield to basis points higher. The fx market cable going into the budget in the u. K. Dead flat. 13 1. 3 239. We will bring you the highlights of bill a payments speech as we get them. Here is anna edwards. We await chancellor hammonds to Start Talking about what is in the box. What are you expecting . Anna thanks. Onare expecting him to talk tax and spending plans. We expect the office of budget responsibility will downgrade the potential for the u. K. Economy. They have been overoptimistic around expectations for productivity. That could tie the hands of the chancellor. He is expected to be more of the talking about the potential for the u. K. In postbrexit a postbrexit environment. Constrained, a constrained chancellor. The cabinet constrained because they lost members over recent weeks. They will be trying to avoid any scandals, uturns, or backtracking. In one sense there are many big and bold, on the other hand they are constrained and will be mindful not to do anything that further puts in jeopardy the precarious position the government is in with brexit hanging over them. Jonathan continuing the Prime Ministers questions at the moment. Were waiting for the markets. It doesnt seem to be an fx story at this point, but it could be a guilt story. The Management Office in the u. K. What they might need to borrow. Anna indeed. There has been expectation that perhaps they are going to say the gtmo does it need to borrow as much as they thought. We did a survey at bloomberg of those in the market who suggested they lower the amount of issuance by 720 million pounds. There is the potential that the economy had performed up to this point that it than anticipated. That is a possibility. There could be a lower than that issuance that could drive up demand for gilt. Bill longerterm story is different but the longerterm story is different depending on brexit and the like. Longterm markets, analysts suggested depending on the brexit outcome and trade negotiations we could end up between 120 and 140 on cable. It depends on a host of unknowns at the moment around brexit. Jonathan the situation from the outside loo