There is no need for a rate move next year either. There are still risks, but they have lessened. The worlds biggest ipo opens with a bang. Is or isnt saudi around court worth they need to cut costs. The eu unveils a plan to go green that has some businesses seeing red. You can see already there is pushback for a number of industries. It is all straight ahead on bloombergs best. Hello and welcome. I am Rosalind Chin and this is bloombergs best. The most important Business News and analysis from Bloomberg Television around the world. It starts with a day by day look at the top headlines. Another week began without a trade deal between the u. S. And china. Fresh data released show the trade balance shifting between the two superpowers. Chinas exports fell last month as Global Demand continues remainsand a trade deal tantalizingly out of reach. What are the Key Takeaways from what has happened with the trade data when it comes to the trade deal . It is a reminder of how punishing these tariffs have been on chinas manufacturing sector. We have had that highlighted again with the data. Exports overall from china, falling 1. 1 percent. To the u. S. , experts were down 23 . That was the 12th straight monthly decline. The expectation has been that retailers and companies would be loading up on goods from china ahead of the shopping season. That does not seem to have played out. Rosalind bloomberg reporting effects. Tariffs taking sunday will be delayed according to chinese officials. Meantime, House Democrats said they will back the usmca trade deal and are planning a vote next week. Dr. There is no question that if this trade agreement is much better than nafta. Day and a remarkable what is a heart a highly partisan washington when we see a bipartisan agreement on a trade deal. Trade politics are tough, the democrats today backing donald trump although insisting that they really fixed the trade agreement that they called fundamentally flawed. The second piece is the more market moving news we have seen, which is the chinese tariffs. We know that the president we are told has not made a decision on this. He, for a long time has been looking for a way out of these tariffs. He has advisors around him and a lot of people in the Business Community warning that these could be a huge disruption for the economy going into an election year. Rosalind House Democrats revealing two articles of impeachment against President Trump. Walk us through what happens and how quickly this could unfold. The very next step could be what is called a markup. Or thursday,ow judiciary members would actually write up the forms of these articles that will go to the house floor for a vote. That goes to the floor next week, perhaps as early as tuesday for a historic vote. 10 in its jumped debut in india. Givingadvanced to 35. 2, company a market value of 1. 8 trillion. What were the highlight what were the highlights of the debut today . 1. 8 trillion dollars from a base supply evaluation of 1. 7 trillion. That is a big jump. It gets us closer to one of the most controversial topics of the last year. Irancorpst saudi worth trillions of dollars . Part of that includes offering as many shares as originally thought. Company is being operative. There is there is plenty on the upside. For 450e an option million shares that they can exercise in the next 30 days. That is going to be critical. Awaitingiting the final decision of 2019 is the central bank fomc is expected to keep the Interest Rate unchanged after three cuts this year. No change in rates today. The dot plot shows the consensus is no need for a rate cut next year either as they stay on hold for the 2020 election. Nobody is calling for a rate cut next year. Only four of 17 see the need of any rate increase. If developments emerge that require a material assessment, we will respond accordingly. Policy is not on a preset course. This is increasingly confident that three cuts was the magic number. They are going to sit back. The hurdles are high for additional action even though the dot plot shows the next move will be a rate hike. At the current time, the hurdle for a hike is higher than additional easing. What the fed told us today, we will see you on inauguration day. The ecb rates and policy Christine Lagarde plus first meeting at the central bank. About the message economic slowdown. She says there are risks to downside but they have lessened. The uncertainty has loosens. Lucinda. She seems to be more about she should she seems to be more optimistic about rate inflations as well. She talked about the review they are going to do. The strategic review. She said it is about time. They have had 16 years since the last one. They know that she knows they were vague that she knows they were very busy but it is about time to do it. She wants to be done by the end of 20. The president treating earlier on the following . Indicating that we have a very big deal on the way. Getting very close to a big deal with china. And so do we. It is that last bit that is important. Stocks moving on the back of that, it sounds like we have a deal. The markets have been positioned for a delay in tariffs that are due to take effect sunday. We know trump used the word deal today, that sent a signal that the most bullish scenario for investors might play out. By the looks of things, any escalation in the trade war will be put on hold, and a deal will be announced. We have markets closing. The s p and nasdaq closing at new alltime highs on the hope that there will be a resolution to a trade deal. Negotiators have reached terms of a phase one trade deal with china. That agreement, now awaiting approval from President Trump. We know President Trump signed off on the deal. We know they have an agreement in terms of the outline for this deal, but we are waiting for it to be codified into a legal text. We are waiting for the details, but usually significant that trump has signed off on it. Havee december 15 tariffs been held back for now. Of the official conservative party has secured a majority. Bojos victory will allow him to carry out his main promise to get brexit done. Bojo it is at its highest since may 2018 against the dollar. With this made it in this majority, we will at last be able to do what . [indiscernible] offended inolitics this election. We have a conservative majority of the likes of which we have not seen since the heyday of margaret thatcher. A disastrous night for Jeremy Corbyns labour party. He announced he will be stepping down. Mr. Johnson now the most powerfulpolitician, conservative leader for a generation. We will get his brexit deal through parliament quickly. He needs to get it done by the end of january. He has 11 months to negotiate a trade deal. The arrangement, for practicality of being outside the eu. If we get through the end of the year without it, he is either going to crash out and we are back to no deal brexit, or he has to negotiate a deal that is accessed able acceptable to brussels. How will his new government be greeted by brussels in the coming weeks . . The sense here is relief. He finally has the majority. He promised he was going to deliver, and europeans are expecting to does deliver. This is not really about Boris Johnson, this is not about the european now magically liking Boris Johnson thinking he is a great Prime Minister. This is pragmatic. They feel that with them they are going to get theyre going to avoid chaos. The europeans do not want to be undercut by a u. K. That does not play by brussels rules. Chinese officials saying we have reached an agreement with the united states. They decided to complete the last phases of the phase i deal as soon as possible. They say the u. S. Will remove some tariffs on chinese goods in phases. This is the first time we have seen President Trump, who has called himself tariff man, rollback tariffs. That is a pretty big confidence building measure. The big problem with this agreement, and we are already seeing folks point to it alluding chuck schumer, that is this does not address some of the big longstanding american complaints about the chinese economy. That is things like industrial subsidies. President trump says the tariffs that are in place will give him the leverage for a phase two of the negotiations, but we do not know when that phase two is going to start, and we have folks telling us they do not expect phase two to include conclude anytime before the 2020 election. Rosalind as we review the week, Deutsche Bank ceo says his firm has had to deal with Interest Rates. Mitigating measures shows us there is potential to offset. We work plus, the cleanup continues. Goldman sachs is involved. Mayhem in the repo market. The findings are alarming and so is the timing. This is going to make people more nervous. Rosalind this is bloomberg best. Lets continue our global tour businessis top headlines. The European Commission rolled out a Business Plan to combat the climate crisis. Will present her green deal in brussels today, aiming to turn the eu into a climate neutral block within the next 30 years. Her pitch will include a timeline for various laws to be put forward between now and the end of her term. What do you expect . This could be huge. We are talking about a green deal that could change the way Many Industries operate. We know she has said she wants to make europe climate neutral by 2050. That goal is ambitious. The deadline is also very tight. We also know this could change many aspects of the european economy. The way that carbon is priced, the way that taxation is being implemented. She has also promised one trillion euros to pay for this. Is going to need European Companies to play along. That is the question mark at this period. It is not going to affect everyone the same way. The European Commission saying this is something we strongly believe in. In hong kong, we have protesters calling for a general strike. That happens as during the biggest protest march sunday. People is what organizers are saying. This went all the way here to the central district. It was very much a deja vu where families showed up as well. Perhaps they were prompted to come out after police, for the first time, approved this rally. There were some nerves heading into this event. Overall, pretty calm. Chinas consumer inflation accelerated to a sevenyear high, fueled by a 110 year on year search import prices. Corn inflation, which excludes food and energy came in at 1. 4 . Factory prices extended their run of declines, complicating efforts to support the economy. Walk us through the divergence we continue to see, manufacturing deflation versus food price inflation. Food prices coming in at 4. 5 , well above forecast. Sunday is the highest number since 2012. The flipside, the reduced prices. They dropped 1. 4 for 1. 4 for the fifth straight month. The question is, does the central bank look through this inflation, which as you said remains relatively stable, or does this now by combined their hands to make it difficult to rural quest a stimulus should they economy continue to slow . Saudi arabia released its latest budget. What we have learned about spending and revenue increases. The think the kingdom is embarking on three years worth of spending cuts which is a uturn. They are confident they can start relying on the private sector to pick up the slack. The float the folks at Bloomberg Intelligence have crunched the numbers, he says that this budget is a little more realistic. Down from 85 a barrel from the budget basis assumption to about 61 a barrel. As we go to 2020 for median forecasts. Banker International Settlements says septembers mayhem in that repo market was not a temporary hiccup. Of anknow repo is more issue when there is this windowdressing around balance sheets, and therefore more demand for cash balances. At this time of year, people are sensitive about what might be thus squeeze. Suddenly, we get this report that says there is a structural problem and may be that temporary hiccup will not be fully resolved with the feds recent operations in the market. One of the conclusions were that people are less familiar with managing these type of data transactions. There have also been views from the banks themselves. Saysrgan ceo jamie dimons it is regulations that has prevented his bank moving in to provide more liquidity when we did have that below in september. There are a lot of issues. This report is coming out, even though it could have come out at any time of year, it was not time sensitive. The fact that the starts and december is going to make people more nervous. In turkey, a surprise from the central bank. It cuts Interest Rates from 14 to 12 . Policymakers were emboldened by the stability of the lira. They were urged by president erdogan who calls for more aggressive easing. They have had to endure a lot in six months. Erdogan his governor. The new one has seen a whopping 1200 basis points over rate cuts. The central bank did suggested foods slow down the pace. The real base rate commit taking , taking into account inflation is down to 1. 4 . It does notat that, seem as if the central bank has more room to cut rates. Unless it can pull down inflation. Bank chiefr central has launched a staunch defense of Interest Rates. The president of the Swiss National bank insisted the policy is the only way to keep the frank in check. The current policy is we have no reason to change policy. Isyou look at inflation, it very low. Almost at 04 1. 5 years. The growth rate at roughly 1 , maybe 1. 5 . Region we have no reason to change to a smaller trade policy. Israel heading to its third election in less than a year, that is after Benjamin Netanyahu failed to form a majority. The problem is, another election might also might not also resolve the political crisis. What is at heart of this impact. The heart is the Prime Minister himself and the indictment he is under. The Opposition Party saying they would like to go into coalition with the ruling party, the ruling party saying we want to do this coalition, but the issue is the Opposition Leader saying not as long as netanyahu is under indictment, they dont want to do the deal then. Time, the party is saying basically sticking to netanyahu as their leader. Rosalind youre watching bloomberg best. Said this week that their latest Restructuring Plan is on track. Since income trading is up this quarter from last year, it also announced the ecb has reduced its capital burden for next year. Ceo kristin serving told going to the bank is reduce the impact of negative Interest Rates. In termsk swift action of passing on negative rates to our clients come up particularly in the corporate side, but also in the worlds management. We have initiated other mitigating action. The first fiveom months, how much potential is there on the revenue side, but also on the cost side. All in all, looking down the road the next three years, that gives us hitting all the goals of the last five months, the comfort that we can achieve despite these challenges, our 8 return equity in 2022. Therefore, we are confident we can achieve that, recognizing clearly the challenges, but with the track record we have we have seen no reason to adjust. You talk about passing on the are takingsay you substantial measures to offset negative rates, can you elaborate . It is a flower of measures. On the one hand, it three or four weeks ago we started to pass on negative Interest Rates to certain client segments on the corporate side however, we focused far more on an optimize advisory to change deposits into other investment funds. We have been successful. Assett what we have an management, and also the private bank, a lot of work has been done there. Also, to make sure our clients have been benefiting. We do get the benefit from the , we have also in a conservative way started to increase the one or the other segment in order to offset. It is a flower of mitigating measures. It shows us there is potential to offset. Can you imagine Interest Rates staying negative . Are you prepared for Interest Rates to stay negative . Taken ank we have conservative outlook on the Interest Rates. Changed oure also underlying planning. Been lower for longer. That is part of our overall plan. We have prepared for that. We need to adjust in this regard, our business model. We have started to do that in july. Coming up, more news from European Banks. A profit warning from credit suisse. Also, the actions of the new policy plan, and Monetary Policy. Might the ecb take negative rates lower . The efficacy of further negative rates is questionable. [ dramatic music ] this holiday. Ahhhhh ahhhhh a distant friend returns. Elliott. You came back and while lots of things have changed. Wooooah woah its called the internet. Some things havent. Get ready for a reunion 3 million light years in the making. Woohoo yeah rosalind welcome back to bloomberg best. Time now to revisit some of the weeks top interviews. Lets start with a conversation about risk and return. Indictment capitalists putting almost one third of its macro fund into investment profits from socalled black swan events. We spoke exclusively with danny young. He thinks markets are underpricing some significant risks. Easinghe moment, the that china has on the rates front, it has been small. Partially because china wants to maintain a stable for the moment. If all else fails, my view is china needs to cut aggressively this stimulus. Come up with the equivalent of th