Johnson forced onto the defensive as the debate turns its attention to the National Health service. Manus a very good morning to you. Definedl about the jgb the gravitational pull to the downside. Waiting on at zero, the option results to come through. Much biggera question about the stock of negative debt. Will that diminish 20. Good morning. Nejra good morning. That is a great question. It seems to be driven about what is going on globally. The prospect on the optimism of some sort of resolution to china trade. Something the move to the upside is going to be limited because where we are now is going to pull the japanese buyers back into the market. Manus absolutely. Lets look at the jgb performance. You have the 234 billion dollars stimulus coming into the market from the japanese government. Level way growth above what the market had anticipated. For the firstero time since march. Blackrock. I like a bit of dr. Copper. You know what i saw . I cant tie that together with a sub 6 growth level. Nejra in that china story, they have the big months where they are going to talk about the growth target. We are digesting the china inflation data as well. Headline might be spiking, but the ppi still in focus. We have the asiapacific Index Trading in the red. Futures not getting a lot of direction. Ecb, though not much is expected from the meetings and the december 15 deadline, cable steady. We did see Boris Johnson hit a bit of a stumbling block in terms of the National Health service. The gap narrowing between label and conservatives. A hung parliaments to let prospect, but alive. Fact i can tell you for a that i am that contrarian. Tos turn our attention inflation that has accelerated to a sevenyear high. Producer prices extending their run. The cultural secretary says the u. S. Is unlike the to go ahead with the extra tariffs on another 160 billion worth of chinese goods on sunday. Lets bring in our guest host this morning, the chief Investment Officer good to see you. If i was a glass halffull man or woman, i would be saying, the u. S. Is making good noises, they are working aroundtheclock, and the chinese have rolled back tariffs. Good news. There is some good news coming out of china. He macro data in tariffs, lets look at it objectively. They were a bit hawkish in trades. I think it is interesting with the numbers this morning. It will probably force china. Just being positive that. Accommodate to offset these higher inflation that they are facing. Nejra good morning. Will they still stay accommodative in terms of policy . Overall, you could say that what they are really battling is deflation. This difficult dichotomy we can observe. Anything in the consumer side is doing well and in the business manufacturing side, it is struggling. The fiscal leeway, the currency. They still have ample room to act. They can look at volatility indices. Manus it is an eerily low volatility environment. It is the lowest since 2018 in shanghai. You have a rye smile on your face. Maybe im misreading the data. Where did we see the pop in a phase i deal . I get that you believe that it is too quiet to be true. I would tend to agree. We probably will not see that same increase in volatility. It is more interesting in the risk side. If we do not get a deal by december 15, i was looking at the macro, where basically they tried to see, where should the renminbi trade in case of the phase one . The december 15 not being achieved, that could create a cap on the markets. Nejra manus how risky could that be nejra how could that be for Global Equity markets . Equity markets already pricing the global upturn in equity pmi. That is true. We saw that over the last few weeks, that there seems to be a trump put in the market. We can see mr. Trump softening his stance on trade and vice versa. If we have some bad news on the , a more dovish fed. This has been the case for the last few months. That is currently the game in the markets. Was equityavorite markets being egregiously high. Do you think that is true . What does the u. S. Stock work at need to deliver plenty for next year. We know that this year is about earnings. To see some earnings growth. The s p 500 has been a tale of two markets. You have a lot of stocks which have been underperforming. It is an interesting chart which is the equal weight relative to the s p 500. Think about cyclicals. Think about value stocks. , theu go be on the s p 500 midcaps have been underperforming. The type of companies that lead the Market Going Forward, maybe that is a best Case Scenario, we breathee better Market Going Forward with more possibilities to the upside. Staying with us for the hour, thank you. Lets get the bloomberg first word news. Thanks. Two days ahead of the u. K. Election, health care has taken center stage with Boris Johnson having an awkward encounter with a reporter. The Prime Minister was confronted with a picture of a sick child forced to sleep on the floor because of shortage of beds at a british hospital. The paul puts his conservatives 10 points ahead of the labour party. Is embarking on three years of spending cuts as the Government Faces up to a widening deficit. It marks a shift away from the stimulus that has powered nonoil Economic Growth. With opec output cuts still he drag, saudi arabia will earmark less for subsidies, social benefits, and the military. Finance minister Mohammed Aljadaan told bloomberg keep plans to finance the government shortfall. We will have local markets and international markets. We will look at the market conditions. We will look at alternative government financing. We are making sure we identify the sources of borrowing that we have. It all depends on the market and the timing. In france, president emmanuel twoon is bracing for around of protests over his reforms of the labor Union Pension system. Last weeks demonstrations brought more than 800,000 people in the streets. Day onnews 24 hours per air and twitter. Powered by more than 2700 journalists. Thank you very much and hong kong. The latest round up. We are gearing up for the u. K. General election. We will bring you our special coverage right here. Dont miss it. Atis a program that starts 10 00 p. M. On thursday night. That is the update for you. The events and data points you should be looking for in germany. Deutsche bank hold its investor day. In the u. K. , the Fourth Quarter gdp figures out and the Prime Ministers do to collect the noble peace prize metal, but not without controversy. Radio tune into bloomberg , tune in in the london area. This is bloomberg. Manus im manus cranny in divide. Nejra nejra cehic in london. The french government is mulling a delay in the pension reform implementation the backdrop is Emmanuel Macron bracing himself or a new week of protests with the government and labor unions stick sticking to their guns and the battle over the reform of the pension system. They are now mulling a delay. s challenges mount, dont they . More pain on the pension side. Lets turn a retention to Deutsche Bank. Concerned about a protracted decline in revenue. Lets speak to our bureau chief. Today is a pretty big day. Definitely is. We are not going to expect any major changes to the targets or the strategy. Will have a lot of questions to put to the ceo because five months into the biggest restructuring in decades , there are a lot of doubts about the progress they have made. Movedare price has not since all but one of the named for future growth. Losses in revenues in the third quarter. He has already had to soften his Revenue Target for 2022. Investors are doubtful about the profitability target and the cost targets for the midterms, so saving is going to point out that he has made some progress, particularly in selling down unwanted assets, but investors will still be doubtful and there will be one big question looming he over it which is, will actually be able to stop the bleeding in terms of the revenue losses that Deutsche Bank is feeling . The headwinds from negative Interest Rates, as well as the slowdown in the German Economy has even more increased since he announced the new strategy in july. Nejra it is all going to come down to growth and it might be a day of fine tuning, rather than big changes. Our Germany Bureau chief, thank you so much. Coming up, dont miss our interview with the ceo of Deutsche Bank just after 7 30 am u. K. Time. Deutsche bank holds its investor day and the germans eddie w survey is out german zew survey is out. Still with us is the chief Investment Officer you were talking about equity markets, about there being an sort ofity now for some mean reversion and perhaps rotation out of some of the equity trades that have been popular recently. Is europe an area you would want to allocate to . Even as european equities have done well in 2019 . They did very well this year. Forward could see going is some kind of rotation in terms of sectors. You were just talking about banks. Banks is obviously a very important sector to watch because they have been a massive under performer the last few years and probably the biggest from the ecb policy. So, it is obviously in terms of of theon, one area markets that is that the cheapest compared to the u. S. That is a big question for the year to come. Will we see some rotation from these defensive stories . Some performance that is the big question. More aboutill talk that story, but i want to get a question about the bomb story. Inextricably linked to the banks is the repricing in the curve. Higher in movement bond yields and across europe . It will be be, but seen as three phases. Phase in the u. S. Was also pushing a recession. Then we moved to not a recession, but we are currently in a low growth mode. Are we going to see some acceleration . In the Manufacturing Business sides. Stabilizationome in the numbers. Look at the pmi for instance. The secondary is improving. We need to see this for the yield curve to start to steepen. Ecb bring in terms of creative policy for next year . Manus lets see what creative policy madame lagarde can deliver. Charleshenry stays with us. Lets get you around up of the business flash that we have. In hong kong. Thanks. About stanley is cutting 1500 jobs around the world as part of a yearend efficiency drive. It is weighted toward tech and operations and will affect staff and stales sales, trading, and research. Goldman sachs is being asked to raise new financing to revive wework,. Softbank is pledging 5 billion in funding. We are told that in order to make the deal more palatable to other lenders, softbank will be listed as the borrower and the company will be a coborrower. And that is your Bloomberg Business flash. Nejra thank you so much. Coming up, climbing back. Japans 10 year yield rises to zero, boosting the case that the easing program is sustainable. This is bloomberg. Manus it is bloomberg daybreak europe. Im manus cranny. Nejra im nejra cehic. Lets go to singapore. The chart that matters. Juliette i certainly do have that. The first time we have seen it happen since march. Very exciting in the bond market in japan. Due to waning demand of safe havens amid this likelihood we will see a phase i one u. S. China trade deal, also the slashing. So the boj we saw the yield at 0. 3 and that raised questions as to whether the central bank had to tweet their policy tools. We had another federate cut. Growth. Had annualized nomura saying this climbing yields may not last because we may start to see investors snapping up bonds that no longer have a negative yield. Thes lovely rounding up big move on the day in the market. Health Service Funding has taken center stage with Boris Johnson having an akward encounter with reporter. A picture of a child forced to sleep on the floor of a hospital due to a shortage of beds. Still with us is charleshenry. The imagery of jeremy corbyn, the ongoing daily battles in the polls, i sort of jokingly set at the start of the show that i must be an utterly good contrarian at the top of sterling. If it is a substantial majority as opposed to just for the tories, how much more upside is there in your sterling, sterlingyen . About the cable. Majority, case of which you needed to break the deadlock in brexit, then a move toward 1. 35, 1. 37 is possible. Lets not go too fast. Yes, there is a lead in the poll , but it is still a close call. Up with a hung parliament. Our base Case Scenario is for mr. Johnson to get the majority. There is indeed some potential for more strength for the cable and then maybe the best way to play that is domestic u. K. Equities, think about housing, the upside. There is some upside in this part of the market in case of a majority for mr. Johnson. Nejra are you wanting to participate in that upside now or waiting for the result . Or maybe even 2020. The uncertainty will not necessarily be over even if we get the majority. As that is the time to look at undervalued markets, there are a lot of things in the markets, the u. K. Domestic , it could remain in the Global Equity markets. Manus what about credit . The credit is the tightest that it has been. Global credit, what is currently happening, the higher , think about that where there is indeed some upside some tightening potential, then the worrying part of credit is frequency diverging from the rest. I think the attention needs to be in the week part. Nejra charleshenry stays with else with us. We will bring you special coverage in the election. Good morning from bloombergs european headquarters. These are todays top stories. China inflation hits a sevenyear high as the pboc is inn sticking to its easing japan. Jgb yields climb. Your cuts. Morgan stanley will cut 1500 jobs globally as part of efficiency boosting. Deutsche bank will finetune its goals. We hear from the ceo this morning. Pressure builds with two days until the polls open. Boris johnson forced onto the defensive. The debate turns its focus to the National Health service. Nejra asian equities and u. S. And european futures in a Holding Pattern ahead of a big week. The big news in bond markets, that jgb yield getting to zero. All the action from around the world. Manus we have a full lineup. Joining us, reporter Juliette Saly in singapore, niraj shah in mumbai. Dani burger in london. Juliet, what are you focused on . Stoking that inflation story in china. Absolutely. 110 increase year on year. This is of course due to the african swine. 19 is pushing prices up by on the month. You saw that into the overall inflation picture as well, with a rise of 4. 5 . When you strip out those food prices, it was subdued, but the main factor is what you are seeing with this divergence between consumer and factory inflation. Bloomberg saying this is unlikely to sway the pboc and they expect the current easing policy stance. Nejra thank you. Eye on insurance in india. What accounts for the optimism in that sector . Soft, butkets may be they. 22 points. Point to two points. There are media reports about how they might be extension in the limits for investment into Insurance Companies, up to 75 . Keep in mind, if this move goes through, Insurance Companies might give a leg up. Expensive stock still moving higher. Back to you. Manus thank you very much. Where, if at all, is there stress beneath of the surface . There is certainly stress in the options market. Something strange is happening there. Indexeshe time we see move opposite directions. Over the past two weeks, the banks and the s p 500 have moved higher. While the macro event is on the horizon between the u. K. Election, you can see the stress very clearly in indexes. These are demand for traders hedging against extreme events. That has moved to the highest demand since october 2018. They are preparing for the worst. Perhaps they dont expect it, but they want to be loaded up on protective options just in case. Nejra hope for the best, prepare for the worst. Thank you. Lets get to the first word news now. Thank you. Two days ahead of you caleb, the cap ahead of u. K. S, the Prime Minister was confronted with the picture of a sick child forced to sleep on the floor of the hospital because of a shortage of beds. Johnson is 10 points ahead of the labour party. Saudi arabia is embarking on three years of spending cuts as the Government Faces up to a widening deficit. Helped to power nonoil Economic Growth with opec still a drag on oil experts exports, saudi arabia says it will earmark less money for the military. People may have been killed in a volcanic eruption in new zealand. Dozens more were injured after two explosions on white island. Five deaths are confirmed with eight people unaccounted for. The injured and missing include local people as well as tourists from australia, the u. S. , britain, china, and malaysia. Chinas consumer inflation accelerated to a sevenyear high in november. Cpi rose four point 5 last month from a year earlier, faster than expected. Pricesle, producer extended their declines, dropping 1. 4 from a year earlier. The fifth month in negative territory. Russia and ukraine say they are committed to a ceasefire by the end of the year after talks in paris. The conflict with Eastern Ukraine has claimed thousands of lives with russia annexing crimea and moscow becoming more emboldened in the region. Meeting also secured agreements on a Prisoner Exchange by yearend. Dayal news 24 hours a powered by more than 2700 journalists and analysts in more than 120 countries. Bloomberg. Manus that is the latest on the news. He