Against the dollar. The bitcoin bounce. The cryptocurrency surges more than 7 as trading starts on the worlds biggest futures exchange. Are we heading for another new year selloff . Matt were less than a halfhour away from the european open. Lets take a look at how the equity Index Futures are doing with no comment from the on the bitcoin news. You see futures down a third of down. 2 . We saw big gains for futures earlier, so if we have red arrows across the board on futures, that is interesting considering how strong they were this morning about 10 minutes ago. How it is interesting things are starting to turn around, because friday we saw be s p 500 trading up by. 9 . The nikkei overnight is up. Matt i am going to say that those futures were somehow incorrect. I still see strong gains on my bloomberg. The dax futures are up. 8 . I am going to say those should have been green arrows. Guy always believe the bloomberg i think of the message from this. That is the takeaway. 9 . P 500, up the nikkei up. Overnight, australian markets up strongly. That is a more consistent picture. Eye ony, keeping an brazil. The other thing to mention is the british pound up. 2 . It is a reasonably big week. Ofl they decide what kind brexit they ultimately want . I want to show you the second part of the gmm. We have a moving oil. We have a move in oil. We are getting a decent move in oil this morning. Futures are higher. Asia is having a solid day. It is maybe about the tax story. We will get mark cudmores take in a few minutes. Juliette donald trump has said he is not considering firing Robert Mueller in response to a reporters question about whether he intends to dismiss him. Daycomment came on the same that cornyn said it would be a mistake for trump to fire Robert Mueller. Putin has spoken to donald trump for the second time in four days. The latest call was to thank the president for a cia tipoff that led to the breakup of a suspected militant fell. How to target a group that was planning explosions around st. Petersburg. Seven suspected followers have been arrested. You keep Prime Minister will set out her plan for a proposed brexit transition period. After march 2019, she once britain to leave the au several market and Customs Union while retaining most of the benefits of the membership. Sebastian pinera has slept has left to victory, winning by a wider margin than expected. He has pledged to more than double economic growth, create jobs, ease industry regulations, and narrow the budget deficit. His probusiness agenda helped push the index to a record before the first round of voting. Sebastian pinera the latest latest the latest the star wars is ahead of last years movies opening weekend. The latest installment also did well overseas. It opens in china next month. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Guy thank you very much, indeed. Speculative long positions in the euro are the longest since july 20 july 2007. The eurodollar is testing the trendline on the upside. That and the onemonth low could be a painful followthrough. Lets get our take from mark cudmore. I will point is the market going to be taking a step back and going, we are long, but this isnt coming through, this is delivering . This isnt delivering . Mark it needs to work very soon. If it doesnt in the next 24 hours, that trendline will creep higher and the market will get nervous. Liquidity will decline every day at the moment. At this time of year, you start looking where there is positioning. Where the positions that might be vulnerable if not working out . Makesome of the sense. The funding squeeze may have already seen its extreme already, so than the dollar could see an ease off. I think the tax reform bill is not necessarily positive dollar as we were thinking. Maybe people are long dollar for the wrong reasons. The dollar can follow a little bit, and that will help the euro. The eurodollar trade can work. I can see it being painful around businessweek. Matt why are we bothering even talking about tax reform . The interesting trade is the turkish lira, South African rand. I have got it appear. I have got it up here. It is one of my favorite charts. Em trade is fascinating right now with what happened with the Turkish Central Bank last week, what is happening with south africa. Is this not the hottest story on the terminal . Mark i think it is absolutely the main story today. With emerging markets, the big stories do affect everything, whether tax or whatever else, but they take so long. Emerging markets come into the limelight for a day or two days, and the whole story can play up quickly sometimes. Suddenlyafrica, it came on the radar in the middle of last week. Suddenly there is this big election. The whole direction of the economy will be decided this morning hopefully. Exciting story. On fridayid very well and is doing well this money. There is still a lot to be decided. Again. Elayed there is going to be a lot of nuances around receiving the results. Will the result, clearly or will it be challenged will the result, out clearly or will it to be challenged will the result, clearly, or will it be challenged . Think there is still follow through for randy gains in the shortterm your through for rand gains in the shortterm. Guy bitcoin. Are we heading for another break lower . I cant believe matt didnt ask this question. Mark im surprised as well. Every january we see this painful correction in bitcoin. A seems to coincide with couple weeks leading up to Chinese New Year. China used to completely dominate the bitcoin trade. It made sense for some deleveraging to buy cash for Chinese New Year or buy gifts. This year, no longer to china dominate trading bitcoin as much. It has become more mainstream, particularly u. S. And japan. Maybe they wont see the direction in january. My colleagues point out because it is not so easy to sell or trade, people tend to buy and hold. Affect, my a wealth bitcoins have multiplied, they might use that wealth affect at christmas, but then they will have to pay it back when the credit card bills become due. We might still see the painful january correction. Maybe we will get the same this year. Guy thank you very much. Mark cudmore joining us. Go blog. E mliv go follow mliv the mliv blog. Reach it isid trading at an alltime high. Almost 20,000 is where it traded during todays session. It could still go back there. It hasnt come down yet. I want to stick with the bitcoin story, the worlds biggest exchange. Started trading last night on the chicago mercantile exchange. This comes a week after chicago rival a chicago rival introduced similar derivatives. For more on this, a reporter joins us from hong kong. It is significant in that you mentioned the cboe started trading a week ago. When they announced their it isannounce to start tradinge corn futures matt perked up the attention of mainstream investors. Everyone watching the performance of the new bitcoin futures, and so far what we are seeing is the trading premium is narrower. It is looking so far, so good. Why five to one rather than 121. One . O eric the cme is dealing in price volumes, larger data set. Kind of in all respect you are dealing with a product that is larger than what you were dealing with her cboe. With four cboe. Matt it is five times the contract size, and a lot more people can access this, right . Not everyone was able to trade and the website wasnt able to handle the traffic. We havent had any pickups and we have broader reach. Hiccupsickups any and we have broader reach. Eric we also have an cd price halts we have seen we also havent seen price halts of we have seen. Biglso havent seen the price liens we saw with cboe. The premium was 2 from the futures future from the futures versus the actual bitcoin price. Who knows what will happen when it hits 20,000. Thank you so much for joining us. Up next, we will turn our attention to politics. A rocking tax plan. President trump thinks so. Christmas is coming. If you are on twitter, follow the first Global Network built for social media powered by bloomberg. This is bloomberg. Guy good morning. 13 minutes to go to the start of cash trading. Its get a Bloomberg Business flash. Thales has knocked out the. Ompetition to buy gemalto it comes less than a week after the bid, which gemalto rejected as undervaluing the company. To sell tos agreed kkr. Worstal is for one of its performing units. The private equity firms of purchase is the biggest leveraged buyout announced in europe your in europe this year. Atlantas mayor has said power has now been fully restored to the airport. A major outage at the airport forced delta and other carriers to cancel over 1000 flights and led to the diversion of many others. Local utility Georgia Power set a fire may have caused extensive damage in an underground facility. Bitcoin futures started trading last night on cme. It started it comes a week after a chicago rival introduced similar term it comes a week after a chicago rival introduced similar derivatives. That is a win. Canadian Police Continue to weigh whether to open a Homicide Investigation after the death of a billionaire pharmaceutical executive and his wife. The bodies of the 75yearold and his wife were found in their home in their toronto neighborhood on friday under what Police Called suspicious circumstances. That is your Bloomberg Business flash. Thanks very much for that. Asian equities rallying today, as President Trump says the u. S. Ng to start toi the when they pass republican taxcut plan. Closing in on his first major policy victory since he has become president. For more, we are joined by kathleen hunter. What are the remaining roadblocks . What could hold this victory off for the president . Kathleen we have seen that there have been all of these stories coming out and about, lastminute provisions added to the bill as of last friday. We have a story on the terminal that the daily provision benefits real estate investors, including potentially trump himself. Some of the optics of the lastminute changes could give some members of congress pause. The real question is whether the momentum for this is so great overshadows the other considerations for this. I think that is probably the case. Pushingthere is so much in favor of this legislation at this point that it is likely going to get done in the next 48 hours or so. Expectationas this that getting this done is good politically. Im wondering whether the expectation of how good it will be politically will actually turn out to not be so true. Kathleen i am having a jeanluc the end of9, president Barack Obamas term. That year there was a lot of frenzy over lastminute legislative activity at the end of december culminating in a Christmas EveEarly Morning senate vote to pass obamacare. Democrats lost, control of the house. I bring that up as an example. It isnt a perfect parallel, but just passing legislation, just delivering your campaign process is half the battle. If they are successful, they will have to make the case to voters that this is actually benefiting them. A lot of it will hinge whether voters feel that impact in their pocketbooks and what the political narrative is. Matt thanks very much. A very busy week for kathleen hunter. We are minutes away from the open. Up next, we will talk about a cyber battle that may have been decided already. Outbid for gemalto by Tim Craighead by thales. , the board has built a the board has backed a bid from Tim Craighead gemalto, the board has backed a bid from thales. Guy watch ig group this morning. On what is happening with equities generally. There will probably be a tax effect coming from the u. S. Aian equities have been on strong session. Here in europe, the fair value regulations point to a strong start to the day. This is bloomberg. Guy we are one minute to go until the start of cash trading in europe. Watch the u. S. Tax at that story watch the u. S. Tax affect story. You have seen it in the nikkei this morning, appeared you have seen it in the nikkei this morning, a. The s p up by 9 10 of 1 . A solid backdrop for the start of european trading this money. We might get some clarity over the next couple days as to what britain once at of brexit. In terms of the fair value regulation on the bloomberg this morning, generally positive. You are going to see a solid start. London looks like it is going to underperform a little bit. The u. S. H story tax story front and center. Watch the banks. It will be interesting this morning. , rising out of the gate a little bit. The rest of europe is expected to do a little bit better this morning. Italy is turning into an interesting story. Lets see if we can get a number to see what the idea is for the rest of europe. There we go. A. 7 , as anticipated. Up. 7 , as anticipated. Its turn our attention to what is happening with the stocks story and how it affects the sector story. Take a look at this. The imap is definitely turning green this morning. Only a few areas of read this morning, but generally financials are trading strongly, industrials doing well. You will see health care companies, cement companies, but you will definitely see banks doing positively on the back of the stocks story. The stoxx 600, the big measure up by around. 5 at the moment. We priced a little bit in on friday for what was happening in the u. S. We are pricing more in this morning. Health care trading is strong. Matt, what are you seeing on the individual stocks . Matt i am seeing mostly gainers. Have 479 gainers and only 50 losers right now. We have highlighted the gainers for you. Total, hsbc, siemens, all big gainers this morning. Go, the retails sector continues to get hit. Unilever is selling i cant believe it is not better. Some of the defensive stocks down. Lets talk about the tax story. It is the driving force this morning. Weeks, lawmakers are scrambling to lock up republican support for tax reform. They added a lastminute perk as well. Votes planned in the house and senate over the coming days. President trump closing in on his first wager victory. His first major victory. With us iss Alexander Dryden. Is going we think it to get over the line, however there are a couple more hurdles. Of the interesting things is how the tax bill has changed in nature over the last will over the last week. Over the last week you have seen it change. It is now over the it is now about the individual tax bracket. It increases the chance of inflation moving above the feds target. Guy it is much easier to sell bill for the republicans. To sell though for the republicans. The republicans need the pickup off the back of this. Very hard to sell a tax cut for corporations. The dynamic has changed. Ant isnt it a bit of asymmetric risk . Everyone has priced in. We are at an alltime high for the s p 500. Doesnt go through, and without mccain voting, it seems risky. Stocks could get hit hard. Alexander whether it is quickly priced in is another matter. When we are talking to clients and they think and if they think tax reform will pass, there is still some reluctance. I dont think it is fully priced in, but you are right. If it were to fail at this final hurdle, you will see markets correct going into 2018. Going take the tax aspect if you take the prospect off the table, is that a correction . Perhaps no. It could trigger volatility at the end of the day. This would trigger some volatility in Financial Markets were to fail at this junction. It to fail at this junction. Guy i have the city surprised index here. City surprised index here. Do you think the last week will change that . If youre right in this ends up in peoples paychecks, they may spend it. You may actually searches see a pick up in the inflationary story that we havent seen. Alexander great. Going into agreed. 2018, the base case is that inflation remains benign. Markets have gotten complacent about inflation. Market, signsabor that wage pressure is beginning to come through, and tax reform, inflation comes back on the agenda. 2 , u. S. Re to move 10year trading at 2. 4 doesnt make much sense. Benign inflation is our base case, but it is a risk worth watching in 2018. Matt how would you change your Investment Strategy at that point . Alexander you are in a yield curve steepening environment. Something we think will play out in 2018, the yield curve gradually steepening. As Central Banks withdraw liquidity and inflation comes back on the agenda, the u. S. 10year and pulling out of that area be an opportunity. Guy alex, stick around. What do we got coming up . The u. K. Prime minister is set to address Parliament Today about the brexit transition period. This is bloomberg. Welcome back. We are 10 minutes into the trading session. Lets take a look at the world map, zoomed into europe heard Strong Performance coming through out of germany this morning. It is trading up over 1 . London is putting much in line with the rest of europe, excluding what is happening in germany. Story in the netherlands. Paris is up a little more, but it is not completely off in the way it was at the get go of trade. Generally, a solid start to european trade this morning on the heels of what happened in asia. The nikkei was up strongly. We thought in the s p on friday as well. Tax. Matt lets talk about the u. K. Prime minister theresa may will address parliament to set out her plans to to senator plans for the brexit transition period. Parliament to set out her plans for the brexit transition period. Alexander dryden is with us. What do you think is the most important part as an investor to watch . Is it her stability in government . Alexander for us, we are starting to see the brexit negotiations move past the first couple hurdles and really getting onto the meat of the negotiations. This is what investors and economists have been looking for, the trade negotiation and where the u. K. Will stand come march 2019 with the relationship with the e. U. This is where it will start impacting Financial Markets, and particularly the currency. The pound remains one of the most challenging currencies forecasting in 2018. Emerges, thety pound could grind higher in 2018, but