With brexit continuing to be constructive, but any potential deal with the eu could be upended at home. Talks continue today in brussels. Strong countermeasures. China threatens retaliation if the u. S. Passes a bill opposing the situation in hong kong, and carrie lam had to prerecord her address after it was interrupted wise. And it gets better and better for roche, the drugmaker raising its outlook for third time as new drugs that boost sales, and we will talk to the ceo, severin hwan, about doing deals. That is at 8 00 a. M. Hello, matt. Matt about half an hour away from the european open. I am looking at the pound. We could see movement. We pretty much flatlined yesterday. There was the spike we saw at 4 00, right now hanging out just under 128. Lets take a look at futures. Kind of a mixed picture, not as red as we see in america. In europe, the dax futures are down 1 10 of 1 . Meanwhile, cac futures are showing a green arrow although unchanged, ftse futures solidly down. You see a more consistent drop in futures, although it is very early, obviously, in trade. We still have quite a few hours to go until the u. S. Opens, so we see nasdaq, s p, and Dow Jones Futures down about 1 10 of 1 . What else do you see, anna . Anna i am just wondering. What comes from us almost daily that are finally starting to catch up with u. S. Equities in u. S. Futures, when you look at what the chinese have been threatening to do in terms of trade negotiations or retaliation if Congress Goes through with some of the bills that the chinese sea are being favorable to the protesters in hong kong. That is part of the dynamic, isnt it, matt, because over the last few hours, there has been optimism around earnings, whether it is jp morgan or others, with the s p 500 closing at a fourweek high or not far from it. This is what we see on the gmm, catching up on the earnings story. In singapore, higher. On south korea, the cost become a we are higher, south africa, as well on south korea, the kospi higher, south africa, as well. Focusing onou were what is going on with the pound, because there is the potential for a lot of brexit headlines as they edged towards a deal. One official said progress was made after talks continued late into the night, but any agreement risks being jeopardized by the Northern Ireland party. The pound trading slightly lower though still above 1. 27. Mariaining us today is tadeo. We heard talks of them going into the Early Morning hours with the lights on, so where have we got to . Maria that is right, anna. This is a long negotiation, and ongoing negotiation, no breakthrough yesterday. We were told there would be one, but, of course, there was none. We are told there was a everyone staying at the table, but they have not been able to turn this in to a legal text. We are expecting Michel Barnier to brief ambassadors, and from that point on, eu leaders will have to decide whether they want to endorse the text and provide headway for a brexit on thursday. What is clear now is they are running very close to the deadline, and there are still gaps between what the europeans want to see and what Boris Johnson is prepared to offer. Of course, from the United Kingdom, the position has not changed. They will tell european leaders that they want to leave, and they will not ask for an extension. The United Kingdom plans to leave in a two weeks, deal or no deal. Time, deal or no deal. Matt this looks like the theresa may backstop. How is Boris Johnson going to get that through parliament . Maria that is the big question, and europeans do not want to be seen as moving too much until it seems they have the numbers together. Every time it comes to a vote, it has been rejected. Something we were told last week, the final deal will look very similar to that of theresa may. There will be changes made to the union and applicable question, can Boris Johnson convince the dep that he succeeded in areas that theresa may was not able to, that he is and thatbrexiteer, they should back this deal. Otherwise, it will be a cycle perhaps of mini extensions, and we cannot be in the same cycles forever. They do understand that this comes down to Boris Johnson, whether he is able to turn that into some kind of political spin that can help him back home, and i am sure you have heard already, suggestions at this will come down to the money, the dep wanting to see billions pouring into Northern Ireland. Anna it has happened before, hasnt it, maria, and we know the timescales, the time they were negotiating the support for the theresa may government. Thank you, maria. Picture, asian stocks follow their american futuresgher, but u. S. Are dropping as tensions over hong kong klein. Lets get into the markets. Our Bloomberg Markets asia editor in mumbai. It is interesting, futures dropping on concern of hong kong. This is finally being joined with what has been going on in hong kong for a long time and what happens on wall street, it may be a little premature, but do you think the hong kong story will influence the trading day in the u. S. . Reporter that is somewhat doubtful. Between hong kong and the markets, the issue is the u. S. Congress, because they have not really moved forward with a bill that is raising the issue as something that the u. S. Will act upon, which, in this instance, is the is far less interventionist. We do not like to see things taking an unfortunate path, but we also think that this is xmething, if only president i could sit down with the leaders in hong kong, he could probably find a solution. Is what hasthat happened. The hong kong situation has blown up a little bit as far as markets are concerned but also because we are at a very delicate situation regarding with what is going on with the trade talks. We had phase one agreed, the u. S. Sounding very enthusiastic, and then china saying, yes, we have made some more progress,t to walk closer towards it there were grounds to expect a little bit of a pullback, some profit taking, and the shares have gone pretty far pretty fast in a situation where we still do on have definitive peace trade or brexit, so maybe that is giving some an excuse. ,att i wonder about the brexit garfield. Yesterday, it looked like Global Markets were trading on brexit progress for a moment, and that it made me question, how closely are you there watching the brexit negotiations . Garfield i like to watch the brexit negotiations, but do not touch. The real driver of bringing brexit home to the rest of the Global Markets is the impact brexit has had on treasury deals. For a long time here, it was a underlying part of treasuries, the sort of brexit haven flows, but it was not really showing up on the surface, but what brexit progress has done to bund yields, treasuries have become impossible to ignore. Earlier this week, we had a day when treasury yields fell sharply in the asian day because of trade concerns, and then the brexit happened, and treasury yields popped back up, so that has an influence on the treasury market, and that has an influence on the stock market, too. People are selling out of the treasury market because they see yields rising. Anna ok, thank you, our markets live asia editor, garfield reynolds, on the market move, a lot of news around trade and, indeed, round brexit. Up next, the imf downgrades its projections for the lowest in a decade. What impact will that have . A guest joins us next. This is bloomberg. Anna welcome back to the european open. 7 43 in london, mixed on the futures, the ftse going the way as you might expect with the intensity of the brexit negotiations. They continue. U. S. Futures a little bit weaker at this stage of the trading day, and slashing the output, cuts to the 2019 forecast, a broad deceleration of the Worlds Largest economy compounded by ongoing trade tensions, and Bloomberg Economics says any recovery year will be narrow and uncertain. How does the oil market perform with that as a backdrop . L. Ts talk to nei we have seen these downgrades this week from the imf, which makes me wonder if there is further Downside Risk, less demand, or are you already uptodate with what the imf is saying . In the last report that we published on friday morning, we did actually downgrade our expectations about growth, the headline figure down for 2019 and, indeed, for 2020. We have two some extent anticipated a downgrade from the imf without knowing what the full details will be, but i think what the imf numbers are doing is confirming a picture we are seeing as 2019 has developed, and we are now looking at the possibility that the demand growth could get a little weaker. We just have to wait and see when we run the final numbers, but it is not just a question of the imf numbers themselves. There is, of course, real data from the oil market as we go through the year, and in the second half of 2019 so far, oil data has been stronger than we might have otherwise thought, so the jury is still out as to whether we are definitively going to cut the growth any further. Anna ok. Matt how elastic is it . When we saw the attacks on saudi arabia, there was a brief spike, but, really, prices came under control quickly, and it makes me think that, certainly in the shale areas of the u. S. , but in other places around the globe, too, it is really to ramp up supply to meet demand. Is that the case . The i think the issue with attacks on saudi arabia was that the initial fears that we had was that it was a very severe disruption that would disrupt the oil markets materially for a long time, and saudi arabia did a very impressive job in dealing with the disruption. They have managed to maintain the supply for their customers, so that was impressive, and that explains why the oil market was able to adapt, and prices fell back to paris attack levels relatively quickie. Quickly prices fell back ck levels relatively quickly. Overall growth estimates being reduced as we head out of 2019 and into 2020, while we are thinking about that, what we are also seeing on the supply side is an expectation of a wave of new supply growth from the United States, which will continue to grow at fairly impressive levels, but crucially, we are also seeing very big expansions in production next year from brazil and norway and to some extent canada, so demand growth, the jury is out on where that is heading, but what we are pretty certain on is that there is supply coming into the market, and that suspects that the opec countries and russia working with them to manage the oil market, they will face a serious challenge as we move into 2020 to keep prices at the level with which they feel comfortable. Anna how much geopolitical risk do you think is currently in the prices west mark as matt said, the prices did not is currently in the prices . As matt said, the prices did not change often, and saudi arabia acted quickly. The saudi infrastructure. It is in some respects quite extraordinary that the prices did not rise higher than they did. Number one, wet, established that the attacks were not quite as devastating as first thought, but second, the World Reserve has a very large volume of stock. It is probably up to one billion or so in china, another 1. 5 billion barrels of emergency stocks, a lot of stock out there, which clearly was available if necessary. Of course, in any emergency, the market, the private companies are the first responders, if you like, and the market springs into action, with the saudis leading the way, and we did not need the stock that the iea manages, but without being in oil shale general, you think maybe it can happen again, but the market seems for the time being at least content that a serious disruption can probably be dealt with by the market, but, of course, we do not know the nature of these things. Thank youright, neil, for joining us this morning. Son at the International Energy agency. For the bloomberg first word news, lets get to oanh ha. Oanh Democratic Candidates met last night for the fourth democratic debate in ohio. Former Vice President joe biden defended his son over attacks, and senator Elizabeth Warren faced criticism over how she would pay for her governmentbacked programs, but the candidates were united over one thing, the need for an impeachment inquiry into president trump. And pressure is mounting on ankara to end its incursion in syria, with accusations of war crimes. Now, moscow has come out to say the military operations are unacceptable. A former military chief under president obama said these actions could lead to the return of Islamic State in syria. Stopped j. P. Morgan from claiming the repo market, according to chief executive jamie dimon, saying they have the cash and willingness to steady shortterm funding markets. They went haywire back in midseptember. Dimon said jp morgan did not redeploy due to liquidity. Raise ang the fed to stake in bank of american, Berkshire Hathaway, to more than 10 percent, which often triggers a regulatory review. Iny hit their threshold back july. Its filing with the Federal Reserve said Berkshire Hathaway would remain a passive investor. Global news, 24 hours a day, on air and tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. I am oahn ha. This is bloomberg. Matt, anna . News outr first word of hong kong. Minutes away from trading. A look at stocks to watch at the open, including roche, boosting their outlook for a third time as new treatments gain traction. Severintalk to the ceo, schwan. This is bloomberg. Welcome back to Bloomberg Markets european open. Trading this wednesday morning, your stocks to watch. We are looking at roche. And we have also got a focus on the tech sector. Lets talk about roche first. Reporter this stock up 2 . Third Quarter Sales beat the analysts estimates, for the third time this year, raising estimates, they are starting to move outside cancer drugs, and that is gaining traction. And i know you will be speaking to the ceo. Matt yes, we will be speaking to severin shortly after the market open. Withhen what is the story Online Retail . Report good morning. This is pretty much in the middle of the guidance they gave with a profit warning in july, sending the stock troubling, so there could be a bit of relief today, with a solid end to the last quarter, sales up around 15 , and a good start to the new year. Margins fell 250 basis points, but a lot of that was probably already priced in due to the previous warning. Anna all right, we will look ahead to that. Morning, and people look at the outlook for q4, this is now valued at 100 billion euros, by the way, and they had sales whatbeat estimates, but analysts are looking for is the orders, and it is the strongest ever, and a big chunk of that is machines,ocalled euv valued at 100 million apiece, the latest generation. Matt all right, cool. Annmarie. , and you can get more on bloomberg. Anna a minute until the start of cash equities trading. Lets look at how we are positioned as the headlines around brexit, waiting for the new one. This is the picture on the msci pacific, up. 6 . The earning story, delivering positivity to u. S. Stocks and jpmorgan to johnson johnson. We are a little firmer. The pound showing volatility in the mornings session. From u. K. Briefing officials but nothing concrete in progress. Lets look at the s p futures. We are expecting weakness at the start of the u. S. Trading day, further push back from china around the u. S. , or congresss position on the progress of activity in hong kong. There seems to be more tension reflected in those futures as we look to the start of u. S. Trading. European futures, also looking a little like this morning. A little to the light. A little to the downside expected. As is the case in these brexit times, the ftse could go its own direction because of the movement in the pound. The ftse, fairly range bound at the moment but we will see what the rest of the european markets managed to deliver. Thee is the volatility in pound, producing a downward move of. 25 for the reddish currency. British currency. The euro, a touch stronger against a flat dollar, up by. 1 . The ftse opened not that far out of step with the others. The dax, north of the flatline, the ftse south of it. Not moving anywhere quickly. Clarity on what was included in phase one of the trade talks and what was behind that handshake between the chinese and president trump. That is part of the narratives the Asian Session has been dealing with and the european will deal with. That and earnings season. We will get a speech. Health care is trading to the upside, firmly in the green. Basic materials, and anything to do with energy and mining. That is in the red. Consumer discretionary looks mixed. Financials mixed with a bias to the upside. What are you seeing, matt . Matt if you look at the winners and losers, a pretty even split. 270 stocks are gaining, 311 are down. Is the biggest of the winners this morning, adding the most points to the stoxx 600. Roche with a gain of almost 1 , helping to hold the index back from bigger losses you see also. Losses. You see novartis, astrazeneca rising as well as consumer staple stocks Like Unilever and reckitt, and nestle. Take a look at the losing side of the ledger. You see asml taking the most points off the stoxx 600 hsbc, trading places right now. Even though asml had a robust Earnings Report for in the Third Quarter and sales in the Third Quarter. We do see the stock was at a record high, basically, yesterday and some analysts, including those over at citi have said you can expect profittaking today and indeed, that is what we are seeing now in terms of asml. You see hsbc falling as well as rio tinto, louis vuitton. Anna European Equity markets, opening fairly flat this morning. We are wa