Of expedia said there were strategic differences with the current leadership and the ceo and the fo are now gone cfo oregon. Down 3. 1 percent, the worst performer in s p 500. Higher,opean stocks are the pound trading north of 131 against the u. S. Dollar. We have a stronger rate against brent crudel, moving higher, up by nearly 4 in todays session. Opec is just around the corner. We will talk about that later on in the program. Lets talk more about the trade story, affecting markets over the last 24 hours. Economist is a senior , we have been jostled by the trade story. Todays story is maybe we are inching closer. The president talking about the idea that it can wait until after the u. S. Election. If we dont get a deal by the 15th of december, if we dont get additional tariffs what does that do to the Economic Data . I think the Economic Data improves beginning next year into spring if we can contain the current trade tensions. If we get a phase one deal before or after christmas that is a bonus. In a globalpricing recovery in trade and Industrial Production. You dont need further escalation from here, we will learn to live with the current tensions. Guy what if we get further escalation . We get worse in global trade, markets probably start to think that donald trump is pursuing a policy despite evidence that it is weakening the u. S. Policy, does that mean he could reach to the eu ahead of the election . Matters next year is which way donald trump wants to go heading into the election, does he want a Strong Economy or does he of the antion trade ante on trade . Vonnie what are you doing in terms of modeling for those scenarios . It is a confidence game. We have lived for a good decade in an age of caution. It seems to be developing into an age of anxiety where economic fundamentals are actually pretty good. You can see across the advanced world the mastic services and consumption are home holding up. If the trade tensions escalate from here we will get further Political Uncertainty that will depress demand for industrial goods and tradable goods. For the stuff that goes into machines. Over time the industrial producers around the western world which are holding onto their labor will decide things are not going to improve from here. They start to get rid of employees, that would lead to higher unemployment and you would see knock on effects through consumption. You would get a slowmotion downturn that turns from an isolated issue in Industrial Production to a broadbased recession. Base case is things do not get worse from here. Whereas Retail Services remain pretty stable we get a bit of a catch up in Industrial Production and trade, that means for Major Economies you can get in placesck to growth like europe and east asia that are trade oriented. Vonnie that sounds positive. If we see a bit of a rollback button on an entire rollback of the tariffs is that scenario play out . Does the economy stay healthy . Kallum i think so. I dont see any reason despite 10 years of Economic Growth are at for an economic downturn. We dont have the signals that we are due a recession. Good threeare a years away from a genuine economic downturn. What i worry about this the way markets are pricing. Lets go back to a year ago, we had a big selloff when we anticipate in trade and production. A little help from Central Banks and we seem to be not asking will there be a recovery but when will the recovery come . If we are disappointed by trade data or Political Developments that sets the stage for a Market Correction and a Market Correction can be an economic event especially when the underlying economy is showing signs of agility. We are starting to see manufacturing bleeding and services in germany. Isn data outices of the u. S. On a downward trajectory. We are getting payrolls on friday, the consensus is 190 but there is a down turn consensus when it comes to payroll. Why do we not see a continuation out of manufacturing into her mrs. And look or Consumer Holding up the u. S. Economy and the Global Economy . That is aallum political bet that theyll politics stabilize or do not get worse. If we have an escalation you will see a seepage from manufacturing into services and you would be worried about a broadbased downturn. Looking at the data it looks like a generic downturn in industry and trade, much like the downturn in 2011 in 2012. This time it is for political reasons. We must make a political call. When the politics suddenly go right confidence improves quickly and the economy can bounce back. Guy in order to get Energy Markets to stay where they are now we need the bottom line to improve. We need earnings to pick up. In your scenario do you see that happening . Do you see next year ending this earnings recession we are in at the moment . Kallum it depends how much inflation we get. Play out yourio to need the politics not to get worse, to avoid a hard brexit in the global need macro data to improve, then markets can stabilize. I doubt very much that even if we get a positive scenario where the politics go the right way and the global macro improves markets can rally into next year because the good news is priced into this year. We are setting ourselves up for a fall in markets. We meet our own expectations. Vonnie you are not exactly anticipating a downturn, what does that mean for Central Banks . With the ecb are we on hold . Also the federal reserve, will there be a reason to ease further if there is not a downturn visible . Kallum that is a good question. On Central Banks, dont worry about Central Banks not turning if market start to panic. There is no inflation in wages or prices for Central Banks to worry about so i would expect them to step in if markets started to roll bad like they did this year. What Central Banks cannot do anymore because of political wrist and low Interest Rates is stimulate the real side of economy. Central banks are important because they can contain Financial Markets risk. That is largely why Financial Markets have benefited and become risk on over the course of this year. Is on hold,he fed the ecb is on hold and its Economic Data worsens they will step up that it will mean a big improvement in Economic Data of inflation and credit risk for Central Banks to sound hawkish. With the one exception of the u. K. Where, if Boris Johnson wins the majority in december, we get an orderly brexit and a fiscal stimulus, i think they may surprise the market by turning hawkish. Vonnie hiking later next year. I guess we have to get through a few months before then. In the meantime, what happens to the dominant currencies . Does the dollar hold onto its strength . Kallum the dollar holds onto its strength so long as we stay riskaverse. Save haven currencies, bond markets seem to be taking the stress of the market anxieties. Equity seems to be creeping gradually higher. The dollar is interesting in so far as i think it is probably the best measure of the Global Markets risk appetite. Lets take you through the last three years. Hike in the u. S. Economy is doing well but the dollar is weakening. 2018 the fed hiking and the dollar is still strengthening. We worry about the Global Political risk in 18 and we seek the safe havens that are usually denominated in u. S. Dollars. What needs to happen for a strong signal that we have become more risk on is for the dollar to weaken and for money to flood out of the europe, morse the dollar strengthening is a bad time and the dollar weakening is a good sign. Guy staying with us. It is definitely a risk on day. Stocks staging a recovery after three consecutive days of losses. A bloomberg report that the u. S. And china may be closer to a trade deal than we ought. The s p 500 and the nasdaq are both higher while the stoxx 600 is enjoying the rally higher by more than 1 . Are rushing into riskier assets and not as interested as safe haven assets like u. S. Treasuries. Seeing a sizable move upward on yields on the u. S. 10 year. Stocks, we take a look at a few individual movers. Semiconductors are very vulnerable in the china trade narrative because china is big market and it is integral to their supply chain. Higher to the tune of two or 3 . Google, a management shakeup at alphabet. The google ceo taking hold of the entire umbrella company. That does unwind the on bella structure that was created in 2015. If you hop on the terminal you can see how stocks have performed. That was put in place in 2015. You we are looking at it can see that it has been range bound in the past few months. Another asset class higher. On oil, wti soaring up 4 . Part of that is the trade narrative, good for assets like oil. We are looking at the opec meeting in vienna. Remind ourselves of what we saw for oil last week. Friday was an ugly day. With the move higher today oil has recovered. About 58 ang at barrel on wti. Vonnie up more than 4 . Go to the function gtb go on the bloomberg. Save your favorites for future reference. This is bloomberg. Vonnie live from new york i am vonnie quinn. I am guy from london johnson, this is the european close. Lets check in with the first word news team. Added then companies fewest jobs in payroll and six months according to an adp report for november. Business hiring rose by 67,000, the Second Lowest figure since 2010 signaling pullbacks in Corporate Investment and pointing to a firstquarter slowdown. President trump firing back at Justin Trudeau at the nato summit outside of london. Trudeau was captured on video joking about the president s extended remarked the poor reporters remarked to reporters. He is twofaced. I find him to be a nice guy. I called them out on the fact that he is not paying 2 and i guess he is not happy. The president was referring to the amount of canadas gdp devoted to defense. Revived hisrump rocket man nickname for kim jongun and brought back the threat of military action. Newsding to the staterun agency kim jongun is displeased with President Trumps remarks. It willpean union said likely miss its targets for reducing Greenhouse Gases by 2030, a blow to efforts to be a leader in the fight against climate change. The European Environmental agency says it is on course to cut emissions of Carbon Dioxide and other climate warming pollutants by 30 in the next decade, on par with 1990 levels. Global news 24 hours a day on air and on quick take by bloomberg powered by more than 2700 journalists and analysts in over 120 countries. Vonnie courtney, thank you. Back with callum pickering. On brexit, your base case is that johnson wins and in the mediumterm you say assets rise, yields drop and sterling rises. Is that all down to fiscal stimulus and what kind of fiscal needed . Will be kallum it is not all down to fiscal stimulus, it is a confidence effect from more political certainty. Thee get the majority for conservatives on the 12th i would expect january 31 you get an orderly brexit and in spring there is a big fiscal announcement, probably equivalent to two thirds of a percentage point of gdp, the flipside of Boris Johnson winning the election is Jeremy Corbyn loses the election. And his policies present the risks to longterm potential growth. Significance confidence rebound and a focus on Consumer Spending on the business side. Businesses might remain hesitant because there is a risk of a hard brexit at the end of 2020. You can see u. K. Growth at 1. 8 and 2. 1 the year after with annual growth as high as 2. 5. That would bey your base case, what about the rest of europe . Do you get fiscal stimulus out of germany and where did the funds come from for the fiscal stimulus . Kallum that is the big question. There was a big shift in discussions at the end of the meeting from what will Central Banks to to what will central governments do. And the brexiteers in government are committed to improving the pessimists wrong if they can get an orderly brexit in january. Europe it really depends on which countries we look at. In germany, the one country that can afford big fiscal stimulus is already doing slow motion stimulus focused on Green Investments and infrastructure. You have very tight labor markets in germany. The infrastructure deflated that and deflation is running high. You dont want to get in inflation problem. Doing a lot of supply side reform where you may get fiscal stimulus. Elsewhere things are looking tight. The only real fiscal stimulus will be in the u. K. , perhaps in the u. S. And a little from germany. In the u. K. , the bank of england governor, we will probably get a new one quickly after the election. How will the bank play this . You will get fiscal stimulus coming out of the government, the government will pick a governor, presumably Boris Johnson wants to prove the brexit detractors wrong and he will pick a governor that works with him. The u. K. Hasnt inflation has been inflation problem, inflation is higher in the u. K. Than it is in the u. S. U. K. Will grow better next year and the year after but it will be focused on the demand side, supply side will be soft. They are building inflation risks. It matters who you get as the bank of england governor in the sense that it is the committee that sets Interest Rates. The leader of the committee can suggest going for a hike or a cut but eight members have to agree. The council of banking want change too much. Just like in 1997 when they gave the bank of and in bank of england independence because they wanted to spend on the fiscal side and not have markets worry about inflation, a good pick for the bank of england would be someone with hawkish tendencies. Chance the Prime Minister has at borrowing to spend, because markets will get in inflation problem the bank of england will not let it get out of hand. Guy we are told there is a lot of money on the sidelines waiting to coming to the u. K. Howoris gets the majority big a difference in terms of the flow to the u. K. Will there be . Kallum potentially it makes a difference for a big reason. The big risk in 2020 is that the u. K. Or Great Britain could get a hard brexit. You have a transitional period onn the u. K. Leaves the eu january. Unless the future agreement is activated in january you get a hard brexit with the caveat that if parliament decides to go for an extension of the transitional period you give yourself more runway to negotiate the future relationship. With the majority of 10 Boris Johnson may be subject to the fringe of his party, the euro skeptics want a brexit as soon as possible. A majority of 40 he might be able to isolate the fringe and have enough numbers to back an extension if that makes sense. My bet would be if the economy is riding high next year and boris need six months or 12 months more to negotiate you might try to go for it, to go for some kind of fudge to eliminate the hard brexit risk. Guy thank you for stopping by. Senior economist joining us. This is bloomberg. Latest time for your Bloomberg Business flash, the biggest business stories. Uberayor of london says if wants its license back to operate in the city it cannot expect special treatment. Are other examples where drivers who had been suspended or dismissed were allowed to use somebody elses identities are drive people are around. There are other concerns from the regulator. Is the sameto uber i give to any business. You are welcome in london if you play by the rules of the game. Plans to appeal the london regulators decision. A shakeup at expedia, the ceo and the cfo resigning immediately. They clashed with the board over the direction of the company. The chairman and vice chairman will take over while the directors look for longterm leadership. That is the latest Bloomberg Business flash. Look at wheree a european markets are trading as we head into the close. A much more positive day than yesterday. Trading higher today, up by 1. 1, 1. 2 . This market lagging today but take a look at the pound and sterling chart today, you will see we are through 131 on the table rates. Taking a shine off the london markets. This is bloomberg. Guy 30 seconds to go in till the end of regular trading in europe. A positive session. London underperforming a little bit, but it has been a strong day for the british pound. Some of the scandinavian markets doing well today. Norway, finland, sweden, all trading up. We are inching closer to a phase one deal. We are back above 400 on the stoxx 600, up by around 1 and ok volume today, which considering it is december is worth paying attention to. The quick look at the individual markets. You can see the difference in terms of what is happening on either side of the english channel. The ftse 100 only up. 3 today. The pound has been strong. Dax up 1. 1 . The cac 40 up 1. 3 . Luxury stocks coming back. Lets take a look at what it looks like from a sector point of view. Every single sector is in positive territory and it is the risk on ones doing better. Minors doingvices, well, industrials have had a solid session and chemicals and technology doing well. Bottom end of the market is the bond proxies being r