On that. Lets check on the euro. 117. 5,nce coming in estimation was 116. 7. You can see the leg up for the euro at 11858. If you break it down, he will have the current confidence. You have the Business Climate to get that pretty much in line, a touch better. Thats why we are seeing a bit. F an impact on the euro 118. 50 one. 1858. Nine 30 a. M. London time, we talk about the housing luxury ceo in london, with a thats a 9 45. Lets get straight to bloomberg first word news. Here is at ludlow. Germanys Opposition Party is opening talks on backing a government led by chancellor Angela Merkel. Social democratic secretarygeneral says the department of ready two start the discussion. The is it and eight hours of talks at the s of the leadership that wrapped up this morning. U. K. Officials have tried to accelerate brexit negotiations by suggesting that rather than wielding a veto next month, ireland could hold fire and block a final accord. Avoid a hard avoiding a hard border and island is one of three key issues before the eu will allow future relationships with the blocks, as theresa may will be in brussels today. Theresa may we will see the president today talking about the positive discussion, positive negotiations we are having, looking ahead to the future. These negotiations are continuing. What im clear about is that we must step forward together. This is about the u. K. And European Union to move on to the next stage. Ed irelands opposition Political Forces have stepped up pressure on the government, is the called on the Prime Minister to resign over a whistleblower controversy. An issue is raised over the possibility of an election within months. Really party member has said the Prime Minister will refuse to fire them. The party has helped keep him in power. U. K. Consumer confidence tumbled in november, reaching the lowest levels since the aftermath of brexit the brexit vote. Optimism suffered its biggest monthly decline is the month after the referendum, with all eight measures that make up the index falling. The financial situation in the past 30 days trucks to its lowest level since january of 2014. The legal team performed the National Security adviser Michael Flynn has stopped sharing information with Donald Trumps lawyers about a special counsels investigation and russian interference in the 2016 election, according to two people familiar with the probe. Of somee in discussions kind with Robert Mueller, investigating possible collusion between Trump Associates and russia. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im at ludlow, this is bloomberg. Francine . Francine thank you so much. China will make further cuts to import taxes on a wide range of consumer goods, in a bid to boost consumption. The average for 187 products, raging from ranging from baby diapers to blue cheese, will drop to 7. 7 . Lets get to beijing and our partner, and that and our reporter, and a bright. M up right. Emma. There seems to be wo overriding reasons two overriding reasons for. Ago, trump was beating his drum about the trade deficit with china. That could be a signal from china to the International Trade community that theyre are willing to take this issue of deficit seriously, and do things to allow more imports in. Also, there is this factor of trying to deepen and boost consumption markets the consumption market here. Chinas trying to pivot its economy away from external being drivers, a way of reliant on exports. That involves getting people in. Hina to be buying things if you can make the products from overseas more accessible, cheaper, then that goes away to helping with that. Francine when you look at some of the stocks, we have done on, diageo. , diageo. E danon our internationals partners going to benefit . Emma emma weve seen a selloff here in china. There potentially disadvantaged by the fact that the tariffs are as high as 20 on some baby formula product thats been reduced to zero. Some companies you mentioned, danone, nestle, abbott , itratories, may johnson hasnt been a good day for those guys. We will see more reaction this list it was over 180 products that some reductions is digested by the market. As you said, it covered a wide range of things ski equipment, copy machines, bidets. The tariff on bidets was reduced by 2 3. Alcohol for saw the biggest reduction in tariffs. 60 , down to 14 for the martini ingredient. Francine i was reading a story on cosmetics actually, which is why i was asking the question. It seems like a lot of china citizens per more popular chinese prints. I dont know whether it is a problem of price. Is it easy to say middleclass consumers in china prefer goods that stand with brands, or are they still looking at price . Emma it depends on the product. It comes to things like baby formula, definitely after the 2008 formula scandal, its International Brands all the way. When it comes to cosmetics, its more of a mixed bag. The korean and japanese brands are popular. We didnt see a huge amount of ,eaction in those stocks today but maybe down the track once it is settled in. Francine emma, thank you so much. Just how significant is this move on china . The head of european economics and Credit Suisse joins us. Great to have you on the program. I dont know whether you can pick this against what we have heard from the huge amount of debt, whether actually by opening up consumption in china. It went for the fact that this was the regulators, and people in charge, trying to make china more of an economy. Think thats right. This couple aspects i find interesting. The fact that this was clearly could be chinas freetrade, at which the u. S. Administration or into reports, heres to be preparing to take more aggressive stocks trade effectively, this is trying to head this issue at the past publicly and visibly. Theres a range of goods produced in the west. The second aspect just as important is this is important for chinese growth, in the fact that it is clearly a tax cut for consumers. Its also potentially marginally positive for growth as well. Could be a global globally economically economically beneficial. I think it is net positive, in the sense that it potentially helps reverse a trade war, it helps growth. Francine do you worry about that . We heard from the pboc governor, who said he will set bounds. What kind of economy does his successor inherit . The debt issue is still there. This potentially helps mitigate some headwinds that chinese authorities will have to deliver in order to slow the accumulation of debt that has gone on for the last several years in china. Its going to be economically tricky. Weve seen financial conditions tighten and a way. Theres clearly something going on to try to slow the pace of that acquisition down in the moment. I guess this is a separate Economic Policy that tries to keep chinese growth running at somewhere between 6. 57 percent rate. Francine when you look at china, the lack of inflation in the u. S. , which has all sorts of concern for the fed and academics, could this be imported from china . With this be a boost, and wash over the rest of the world . Yes. To the extent with what you look at chinese pbi inflation, its been high for a while. Generally, thats a good and later good indicator of supply chains and developed economies, which in time, find their way through two good Price Inflation. If you look at the state of global economy, one Price Inflation in europe, you are hard to see anything in europe. Economy, you look at some of the pricing components of pmi surveys. You start to see some pricing pressure there. Francine thank you so much, never will hill stays with us. Up next, the biggest shopping day in the western world. How confident are consumer feelings . We discussed the next. This is bloomberg. Francine this is bloomberg surveillance. Im Francine Lacqua in london. Our barton has mark barton has been watching the market action. Mark markets are a great piece today. Speaking tentative corrections have the fed falling below the support line that has been in place since may. A drop on yesterday shows the national team. As far as the ongoing bond markets, there could be equity. Rade that the commentary from them ilb. There is ath china, plan to slash import taxes on a wide range of consumer goods, promising to boost the prospects of multinational Chinese Markets many categories will drop to 7. 3 . There is a plan to eliminate tariffs on some type of milk powder, which will help Companies Like damon and nestle. Devon shares up by 1. 2 today. Fallingsumer confidence in november, reaching the lowest level since the aftermath of november last year. You come mike theres the biggest monthly decline since the last referendum. This will help develop a better picture. Quickly, argentina, pakistan, egypt, turkey. Wall street got run with a break in picks. Will the get it wrong with the fragile five . Francine. Francine thank you so much. After thanksgiving is known as black friday, even though it is hugely significant for retailers and growth in europe. As choppers to send on choppers to set defend on stores, retailers experiencing something in short supply optimism. Is isoliday spending expected to climb as much as 4 from last year. Who will be the winners and losers, and how strong is this . Neville hill from Credit Suisse is still with us. Thank you for sticking around. You look at the fed conundrum, they are struggling to see the voice of inflation. I dont know whether expectations of inflation will move if we have a strong retail sale, or even what people spend, it is these prices. One of the reasons we can expect a good black friday in the developed world is because the underlying fundamentals of Consumer Spending look good. One of those is that inflation is low. Costs havent gone up. At the moment, were still waiting for vigorous demand, which may well strengthen in the next two months to have a Material Impact on inflation. I think, you know, in terms of are we going to get an inflation spike that might spook the fed, that doesnt seem likely. Over the next 612 months, we may see low rates of inflation in the u. S. And europe start to tread up. Also, vigorous Economic Growth. Francine talk to me about wage growth and retail. Fundamentals, the spending in the u. S. Or europe, you need to look at labor incomes. Theres jobs times pay minus inflation. Payhe moment, jobs times looks very healthy in the u. S. And europe. The headwind against that, of high inflation, youve got supportive income fundamentals, relaxed financial conditions as well. Youve got optimistic consumers. You put all those together, i think you are in for a good retail season, perhaps with the exception of the United Kingdom. The problem when you look at my chart, when you look at the quarter, neville, when you look at this spread of the u. S. , suggests something ugly. Technically, we have only seen a recession at some point after the yield curve. His time is different you have the qe suppressing the long end of these yield curves, particularly given you so have untilb undertaking qe september of next year, and the bank of japan putting their 10 year yield to zero. This would rise significantly. Of course, you do have the slow timing of u. S. Monetary policy. Statistically, we are having to something you might be worried about. Objectively, i think its thanks to part of the financial repression we are seeing from Central Banks. Francine thank you so much. Now, make sure to keep it here on bloomberg tv. Jeff jeanette joins us at 2 30 p. M. U. K. Time, what black friday means for his business. Next, the ecb leaves flexibility for bond reinvestment. Details next. This is bloomberg. Francine youre watching bloomberg surveillance. Im Francine Lacqua here in london. Is there willing to show greater flexibility in how the economy is supported. Will neighbors extend members, to qe, till least september they said money from the debt would be reinvested in the same countries. Would about the ecb to better control market Interest Rates. Will they go along the east with ecb hopes, or they in for temperature interim . The ecb seems temper tantrum . The ecb seems to be the last difficult bank. Is that right . It pretty much is. They told us what theyre going to do. They are not going to raise rates until past this. That gives a huge amount of clarity uncertainty for markets for what they will do in 2018. The one thing we dont know is one they will start communicating to us in the second or Third Quarter of the year, or when this could definitely stop, and pushing well past, what that means in terms of how long they will keep Interest Rates the armed end of qe. Bring up to my chart, on. Nflation this is the inflation gauge and yellow. In blue, ecb inflation. In white, the fed. This is at 1. 4 . I know the target is this redline, 2 , but why did they not give an end date so like its would mark markets would latch onto something . If you look at the experience of not just the year european economy, but global over the past 10 years, we have been consistently hit by negative shocks that have slowed the economy down. Given what the ecb can tell us in june, july, or august, this gives them the optionality of the moment to respond to a downside shock. The issue as i see it is if you are looking at what happening to europe and the global economy, we are seeing an upside shock to growth trade growth. Thats a risk to markets next year. There is very little at all for timing. The ecb had been committed until the end of 2018. The risk for me is that markets at some point next year, latch onto the fact that roof is vigorous and in europe. Toa need to get you back on talk about my second chart. I love this chart. Next on the ecb as a bounce sheet. Thank you for joining us today. Up next, the brexit show, where we will be joined i a former leader of the conservative Party Iain Duncan Smith trade the irish border, and how much the u. K. Should be willing to pay. Markets. Ave your is a lot going on with the euro, european drawn cash bonds dropping. Stocks struggling. This is bloomberg area francine this is our weekly brexit show from the european headquarters. Im Francine Lacqua. With get around above brexit news. Here is at ludlow ed ludlow. Days after theresa may was said to have warned backing from her cabinet, to raise the eu divorce payments, a meeting between the eus chief brexit negotiator and another member to prepare for the meeting i will talk about the positive discussions of the negotiations we are having, looking ahead to the future, a deep and special partnership i want with the European Union. These negotiations are continuing. What im clear about his that we must step forward together. This is about the u. K. And european money union to move on to the next stage. It comes two days after a budget was welcomed of cash by members of the ruling party. Prime minister theresa mays future remains uncertain. Want ancellor appears to reprieve from his colleagues. In the runup to the budget, he came under attack from his own party for unintended gaps and his pessimistic approach to the divorce from the European Union. Meanwhile, a prebudget poll shows most voters expect to pay higher taxes because of exit. Brexit. 69 believe the uks withdrawal from the eu will see taxes increase. 31 expect taxes to fall. Fell 17 etax profits to 408 million pounds, her eyes sterlings slide in the wake of the brexit vote. The Budget Airline also pointed to the european markets for the fall in earnings. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im at ludlow ed ludlow. As is bloomberg. Could have nd ireland could have an open ended brexit deal, according to people familiar with the talks, whose officials have off of the country the chance to block a final accord. Putting a hard border between ireland and Northern Ireland, one of key three key issues, as the ruby sufficient progress before the eu will allow negotiations, when it comes to violence opposition. Political forces have stepped up on the government, calling the Prime Minister to resign over a possibility of an election. Theres a lot going on. What are the chances that we get a snap election . Thats a very good question. I would say the odds tilting away from our election. On the ground, none of the big anties have won a note election in the next six weeks or so. The opposition is mounting resignation of a person, though the Prime Minister is refusing to allow her to step down. Its a manner of who will bleed first, to be honest. We know the danger of accident, they will have a surprise election by mistake. I would say the odds are slightly tilted away from this. For the next 4 few days, we shall see. Know if we dont have polls, but what would french elections actually bring . Thats a good question. Dara but to good question. Probably not a huge amount of change. The only big concern on how that might go ahead would be what theyre doing extremely well. Their strong on the border issue. They would probably bring along any moves and head into a phase two for talks to go ahead. The parties basically share common views. Im not sure it would affect the overall policy, but it could affect the timing of the decisions. Francine what will happen with the border . Pilots the 1 trillion question i know it is the 1 trillion question. Talking shortterm, in december, we are getting word that everybody can be here. In longterm, thats a good question. If you think of the sort of if you look at this privately, but they might say is this might be 56 years, and we are looking like