Replacee house could Rex Tillerson with cia chief mike pompeo, according to people familiar. Less than half an hour till the european open. Lets look at where futures are trading. The indications are that we will have a positive open on the butinent, a drop in london, really very little change as you can see. 01 on the1 dax futures. Anyones guess. Lets look at the gmm screen. Yesterday, there was a lot of Movement AcrossAsset Classes. If you look at equity indexes, the s p 500 had a fantastic way because it looked like there was going to be Real Progress on the tax reform debate until the evening last night when we hit stumbling blocks. The markets were bullish into 500. 8 , the ftse was down. 9 . We saw such a strong pound yesterday. Currencies, the Canadian Dollar is a gainer up. 25 against the greenback. The Swedish Krona a big gainer and the bloomberg dollar index down against all of the pairs we look at. You will see that theme throughout markets today. Dollar weakness. Lets see what the other Asset Classes were doing. We see equity indexes in forex. Lets look at sovereign bonds. Updish bonds up, the yield even though the panel is red. We do that with bonds for some reason. Australian bond yield rising. Japanese 10 year down on inflation data that impressed in november. Keep an eye on japan today. , a little less important to have protection on japanese debt. Lets go to david england for the first first word news. David u. S. Diplomats have reportedly dropped plans for donald trump to make a trip to britain in january. The president had been penciled in for a working visit at the start of next year to formally open a new embassy in london. However, according to the Daily Telegraph citing a senior u. S. Diplomat, the trip will no longer take place. No new date has yet been identified. This comes in its public spat over trump retweaking far right videos retweaking u. K. Far right videos. Long production cuts into the end of next year in an effort to bring a global glut. The mymonth extension was a step through the inclusion of nigeria and libya. By keeping the 1. 8 billion barrels a day of cuts in place, the group aims to return stockpiles to the fiveyear average without overfeeding the market. , although also agreed this is a scheduled event, to hold another ministerial meeting in june of this year, which will give us another chance to get together in a large group of countries, ss the market situation and also give us an opportunity to assess what else needs to be done, if anything, based on Market Conditions, based on the progress to rebalancing. David in the u. K. , the breakthrough in brexit talks that negotiators have been fighting to clinch has been risk. The Irish Foreign minister has said the question is a big stumbling block amidst that means negotiations are not where they need to be. The democratic unionists have more clout because they allowed theresa may to govern in london, threatening to withdraw their support for her government if she fails to back their position. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt . Matt thanks for that. The u. S. Senate has suspended votes on its tax bill following the collapse of the key compromise needed to win a majority for the legislation. Mitch mcconnell has said voting will resume in washington at 11 00 a. M. There. The white house is weighing a plan to replace secretary of state Rex Tillerson with cia director mom picked mike pompeo according to three unidentified officials. With kathleen hunter, covering all things washington for us out of our london hub. Thanks for joining us. Lets talk about the tax reform bill, probably the most important for markets. It looked like yesterday, we were making Real Progress with john mccain coming over, and that boosted markets nicely. Republicans have such a small minority majority in the senate, they can only afford to lose two. John mccain was really an thingaging sign, but one i was watching yesterday and made me very is the details of what they were trying to do were fluid midday yesterday in d. C. What ended up happening was this lastminute trigger proposal that they put into the bill to try and bring in some other support ended up running afoul of senate rules that allowed them to do this without getting a 60vote majority. The problem when at the last minute you are trying to switch stuff around. You can run into lastminute issues that arise and that is basically what happened. Markets are concerned, we saw a turnaround in Asset Classes what are the chances that they can get it together . Kathleen the thing is, if they had the votes, they would have voted last night. They do not have the votes. When you have the votes, you vote. The fact they punted it until this morning is not a promising sign. They have already been trying to lower expectations by saying votes can do want throughout the day today, they might go into tonight. I would not be surprised if this goes into the early hours of saturday. Ted cruz now has some concerns about it. There are conservative republicans that are voicing opposition now. Questiont is a really at this point whether they are going to have the votes at all. , likels a little deja vu Obamacare Repeal all over again. Maybe they will be a multiple it together this time, but that is an open question at this point. Matt i was also thinking of the comparison, i am old enough to remember when Ronald Reagan was cutting taxes and everyone was freaked out about what it would do to the deficit. Or 30 ofht us to 25 gdp and now we are at over 100 when you look at it. It is understandable where the concerns are coming from. Less important to markets is the Rex Tillerson news but still important to the geopolitical situation. Where has he gone wrong . What is the divide their . Kathleen Sarah Huckabee sanders, the white house second press secretary refused to rule out the possibility that trump was considering replacing tillerson or to say these reports were incorrect. She said it is just true of anyone at this white house, when they fall out of the favor of the president , they will not be here anymore. That is kind of the issue and one interesting thing i would pay money to be on the fly in the wall for this, this has apparently been planned for a defense secretary mattis and Rex Tillerson are both scheduled to have lunch at the white house. I feel that could be an awkward lunch. It would be fun to be a fly on the wall. Both are not on incredibly level footing with the president. Kathleen exactly, it is not that unusual for the present to of hisnch with members cabinet, but to have all of this news coming out yesterday and for them to have to sit down ,oday and eat and make niceties it will be interesting to see if any details come out of that. Matt maybe they will sort it out over a reuben. Kathleen hunter, washington reporters here in london. Thank you for your time today. Next, jumping on the bitcoin bandwagon. We hear Lloyd Blankfeins thoughts on the cryptocurrency from his interview with bloomberg. This is bloomberg. 17 minutes until the open of equity trading across the continent and in great britain. We are looking at a very unchanged pictures as far as future. The same for bitcoin. It has been a wild week, the cryptocurrency smashing through 11,000 before plunging by a grant. Lloyd blankfein says it is too early to need a strategy as he remains skeptical of its volatility. Speaking aside michael bloomberg, he told alex still he doesnt consider it to be a value. It is not for me, but there are a lot of things that werent for me in the past that worked out well. If you told me it worked out, i could tell you why it did, but based on what i know, i am not guessing it will. I am not going to stay there and be strident and say it is a fraud because it might. Michael people also confuse bitcoin with bit chain block block chain. There is a technology where you can have different accesses to data, different people can control it, you can see who is doing what and there are places where that is a useful thing. Bloomberg system is a block chain. Just instead of having the users control it, we control it but it has all the attributes of that. Bitcoin is something different. Whole bunch of cryptocurrencies that have been started. Every day you have a new one. That is something that is different. Whether or not the governments of the world will lose control of monetary policy, i skeptical. They will not let that happen and shouldnt. Something that moves up and down 20 in a day doesnt feel like a currency. Maybe not a currency, but i was told it was a commodity. That goes to your expertise, you grew up in a commodity business. What are the unregulated trading world of bitcoin . Where will the fraud come . The whole concept is first of all, is it buyer, seller, price discovery . What is the risk . It is a vehicle for perpetrating fraud because you cant trace it. So is cash so is cash, but it is higher hard to accumulate cash. Go look in china where they are basically getting rid of cash. Everybody is paying with their smart phones. People who are begging in the streets have a little sign next to where they are sitting in the streets, people who really need help from society, instead they are sitting there begging for money, they have a sign with a code on it. To give money, point your self phone and they have a bank account. China is heading in that direction and in a large way, h as has india. One of the reasons is you can stop the black market and the drug dealers and track where all the currency is going. We are not going to go in a different direction. America may not be ready, although we will be left behind if we dont because this is a more efficient way of paying for goods and services. Lloyd we will also know what everyone is doing with their money. Inga beale of course, d michael of course, but google already knows. You have to be thinking about it. To. Dont have we will see. If it works out and gets more established and it trades like a store value and doesnt move up and down 20 and there is liquidity in it, we will get to it. The original question was, when to Small Business people have to think about their Bitcoin Strategy . About opening the doors, producing things people want to buy, dealing with their business planning. Matt that was daybreak anchor alix steel with Goldman SachsCeo Lloyd Blankfein and michael bloomberg, founder and majority omer owner of bloomberg lp. Sterling was the Top Performing currency among the g10 in november as investors foresaw progress in the brexit talks. The pound index is trading at its highest levels since may of this year. If the virus border issue remains unresolved, how vulnerable is sterling . Joining us, garfield reynolds, bloombergs mliv strategist. What are the main concerns i saw a lot of talk about the fact that Downside Risk is not trading at a premium to investors arent as concerned about it. Garfield no, in fact the pound was the best performing g10 currencies, arguably one of the winners of the best complacency award. How much risk there already is, which we have already seen overnight. You are at assuming that Northern Ireland can agree about their border and do so cleanly and without having any impact on theresa mays government. And is a lot of assumptions as you said, the pound index is at the highest since may. Risk reversals show options traders are just not paying anything to protect themselves against pound risk. Worried,e pretty especially when you have a currency that has got a very strong record of surprising traders. Look at brexit, look at the recent election when everyone thought theresa may was going to get an increased majority. I would keep a strong eye on the pound. Matt i like to listen to mark cudmore on irish politics because he is irish and was saying this morning on the blog that people outside of ireland there is nod way the Northern Irish or the republic of ireland is going to want to go back to a hard border. There is no way they will agree to that and that could force a new election in london in the u. K. Over mays government. Why isnt that being priced in . Why dont people outside ireland understand that issue . Garfield well, i think they just assume that seeing as the eu and the u. K. Have apparently agreed on the divorce settlement blockshave these two big who have come to an accord, therefore it must be in the smaller political entities interest to go along. Even looking at catalonia were ultimately, the small separatists didnt have the but the dup,no, the Northern Ireland party, they have a lot of power because about them, theresa may doesnt have the government and the problem is brexit mandates there be a hard border and that hard border right or has to be between the two irish states or it has to be between Northern Ireland and the rest of the u. K. M and the Northern Irish wont accept the second possibility and the republic of first. Wont accept the there may be a solution. I am not mark cudmore, i am not irish, i am not an expert on irish politics. There may be a solution, but it wont be easy to find one. You cant click your fingers and say the eu and u. K. Agreed, so come on irish, pony up. Matt i thought one of the most interesting things on the mliv blog was what westboro goodman put in there. Stocks have been soaring, we saw the dow through 24,000, the nikkei at a fiveyear high. I have steven major to talk about rates at hsbc. As stocks get more expensive, andyield diminishes compared to treasuries through two point 4 , that is making rates and bonds look pretty good of bonds look pretty good. Reason for the talk of the bond a complex apocalypse has turned out to be just talk. Not just because 2. 4 percent is attractive relative to other bonds, but relative to stocks. People get worried about complacency and the idea stocks could fall off a cliff. We saw some fairly major disturbances when it came to the tech stock that had been making a lot of the running this year. Interested be very to see what happens to stocks overnight when the tax reform bill does or does not make progress. You can see the reason for bonds being attractive on that basis. You can also see how people have been talking that there is going to be something of a rotation into bonds next year. Funds aree pension looking very seriously at restoring some of the way to bonds they have traditionally held because of that yield and that even comes after i was looking at this earlier, and it turns out the Bloomberg Barclays global bond aggregate delivered a 7 return through the end of november. If it holds on to that, that will be the best year for bonds since 2007. Bonds are in a sweet spot and people can see that yield, that helps guarantee that if things go wrong, i am still getting that yield. Why not take a look at bonds . Matt very interesting stuff. Garfieldnerts reynolds, mliv strategist. You can follow insights on mliv. Open. Minutes from the we will take a look at the stocks to watch next, including rbs. This is bloomberg. Matt we are minutes from the open. Lets get your stocks to watch. Rbs will shut more than 259 branches amid a shift to digital banking. Pay attention to it. This is bloomberg. Matt we are less than a minute away from the open. Lets take a look at where futures are pointing. We had a mixed picture with futures pointing down in london and up elsewhere. First, take a look at these assets. Their girl yesterday was a fascinating trade. This is todays chart. Yesterday went down and up after the senate made progress. The senate has now lost that progress. The euro is gaining more strength. Take a look at oil, just kept off its longest monthly winning streak since the beginning of 2016. It has been doing well. This is brent crude. The dow piercing 24,000 for the first time yesterday. The s p had its longest again of monthly winning streak in a while. Highikkei, at the 25 year coming off a little bit after that tax reform concern. Matt here we see the markets just opened up. The ftse actually gaining right now. The continental index is not open. We see futures down, but they were only pointing down by a fraction. We see here, we expect to see gains across the continent when the markets opened. It takes a moment for them to pick up. The cac up. You will see little change of the equity indexes. The ibex up 1 10 of 1 . So can see the cac turning slightly ever so slightly negative. The dax usually takes the longest to open of the major indexes. We sign indication it would open positive we saw an indication it would open positive. Keep an eye on those indexes. We see gains in the industrials. Financials, losses. Rising, andaterials a lot of talk about materials rally we saw and the mliv blog this morning. Health care is a gainer. Consumer discretionary a little mixed. See we are very little changed right now as far as what we see on the breakdown of the trade on the stoxx 600. There are little changed as far as what we see on futures as well. We see the dax hasnt quite opened up yet, but the ftse is gaining a little bit more ground, about 51 hundredths. Still waiting on the other indexes. Very little change. Lets take a look at individual movers that have opened up. It has only been two minutes of trading so far, but if we look at the movs dream the mov stream, we can see which stock. Had you see novo nordisk is a gainer. Nordiske you see novo is a gainer. Since i am looking at index points, they tend to be on one side or the other. Another that tends to be on one side or the other, adding to gains. Lets take a look at siemens. Lets take a look at the losers as well. Senate seat at the top and nestle of law. And nestle up top. Volatile has been a stock of late. Some of the bank groups there as well, lloyds, barclays, ubs. The banks and financials and as we saw on the losing side of the equation on this very beginning part of trading this morning. Still seeing little change on the indexes. Federal reserve bank of cleveland president Loretta Mester has brushed aside concerns ov