Philippines down quite substantially today, around 1. 4 . Not really feeling your sort of risk on mood we had several days ago as well. Not to mention in case you missed it, the tie chin pmi numbers a little soft. I mentioned dollaryen. Dollar, the loonie was actually under a lot of pressure. Dollar, dollar, dollar, canadian dollar. Pressure on friday given the move we have seen here. The aussie dollar dipping below your . 70 level. As promised, very quickly, have a look at brent which is now back above 70. You have gold pushing 1600 an ounce. The entire crude your futures curve, you can look at it almost by the hair from the floor on friday. The longer end, and the reason i am pointing, the longer end of your japanese bond market seeing a substantial lift and the move back into haven place. These. Track all of yvonne our top story, the fallout from the killing of a top Iranian Military commander is widening. Lawmakers have voted in iraq to expel american troops and iran says it will no longer abide by the nuclear deal agreed to in 2015. Our editor joining us with the latest in singapore. Tell us how this topic is going to be evolving in the coming days. Trump just landed in washington. He spoke with reporters on air force one and made some somewhat incendiary comments, as you all have shown, impacting markets already. He said he reiterated the threat in very stark terms, that if iran does anything, the u. S. Will retaliate. He said over the weekend that he reserves the right to attack to retaliate disproportionately. The other one, and i think it adds new risk we have not seen before, is following the iraq vote you mentioned, President Trump threatened to sanction the u. S. Ally iraq if they kicked out u. S. Forces and did not reimburse for costs spent on base construction, which is billions of u. S. Dollars. Billions plural of u. S. Dollars. Iraq is a very fragile country just generally in that space. One the u. S. Has spent billions and billions of dollars and hundreds of lives to prop up. Ask tod be a very big sit there and say, well, u. S. Troops are going out and you have all these foreign allies as well. David why is it a big deal on iraq . Second question first. Do we know what he is threatening . No. President trump said sanctions would be a degree of magnitude larger than those put on iran. He did not say exactly what sanctions might be, but did quantify them to say they would be quite large. New . Rms of why is that iraq is a u. S. Ally, quite frankly. It is in a tough position, cut theeen iran on one side and u. S. Is its principal western backer. U. S. Has from the early days , the u. S. Am hussein has done everything from send advisors to tell iraq how to run the government to throw money at the situation to have troops there to keep the peace to every single time that iraq has started having stability issues, sending more troops to keep more of the peace. A lot of what iraq has been able to do so far has been with u. S. Support. If that changes materially, it adds a very big new risk in an already volatile region. Derek, thank you. Our Senior Editor joining us out of singapore. Michael, you mention in your notes, you have a reputation for being bearish about geopolitics. We are seeing a hit when it comes to risk assets, but not a lot of panic out there. Why do you think this is misplaced . I think the panic, or the lack of panic we are seeing, because if we are talking about equity markets down around 1 , i dont see how that sets alongside the headlines im seeing in the Mainstream Media talking about risks of world war iii. Those do not sit comfortably aside one another. 1 . Hould be down 10 , not the market is being driven by this belief the central bank will bail them out over absolutely everything. The Central Banks continue to keep that support in the background. The market misinterpreting the fact that Central Banks cannot protect us if anything bad does happen on the geopolitical front. Ironically, and as someone who is bearish on geopolitics, i think it is more noise than significant action. What trump did in assassinating soleiman, pressing a redline as it did, is upping the ante with iran so significantly that we either go to full on war, which i think is unlikely, or iran is going to have to back down and realize the u. S. Actually has the trump cards to play here. Iran cannot possibly fight back against that. They dont have the physically ability the physical ability to do it. Even though we are seeing headlines about world war iii, i actually think we are further from that scenario now than we were before. Yvonne Michael David michael, you mentioned the Central Banks might not be there to salvage the markets this time around. I wanted to bring up donald trump. He does not like markets selling off as well. He would strike a balance i imagine between the iran story and also keeping Market Sentiment in an election year. Your thoughts about that . I agree. This is trumps one great achilles heel, if you will. He is trying to shake everything up. If you are looking at china, with iran, with north korea. At the same time he expenses he expects equity prices to rise and thinks the market is a reflection of whats going on on main street, which of course it is not. That is a real quandary. We have seen him be incredibly aggressive and then suddenly do something completely unexpected to put the markets up. I will say if he continues to rattle sabers like this, you are going to see the Federal Reserve cut rates in 2020, something we expect them to be doing. That will give markets a lift. The key points i want to underline for viewers is that a push comes to shove and something terrible were to happen on the geopolitical front , god for bid it should and i dont think it will, but if it will, forget Central Banks. They are irrelevant. Look at the fires in australia. Do you think anyone choking on smoke cares what the cost of borrowing is . It is irrelevant at that point. Yvonne how do you price that risk, then . Are there tools in the market to hedge those risks . Goldhad goldman saying seems to be the better hedge than oil. How do you see that playing out . Michael i think oil is a good shortterm move. That spike today has taken us beyond where we were on friday. At the risk of sanctions on iran, a major oil exporter, saudi and iraq and iran in different conflict, it gives you nearterm upside even if demand is weak in the background. That may come back down going further forward. In terms of gold, i am bearish. I think what trump has done by killing soleiman is dollar positive. I dont want to say that in any flippant way. But you have to remember the u. S. Dollar is top dog in terms of ethics because it is top gun in terms of the military. Use had you just had the u. S. Showing if you tweak their nose continuously, which is what iran has been doing for decades with its asymmetric warfare, eventually the fist is going to come down. Remind everybody the dollar is top down top dog for a reason. David we will continue the conversation with michael every. In the meantime lets get it over to new york and su keenan with an update of your first word news. We are going to start with the latest on two prominent central bankers warning the u. S. And the European Union face daunting economic challenges in the world of low inflation, saying policymakers cannot that is the message from mario draghi and janet yellen. He said the euro zone faces the well sheapanification said the u. S. Is struggling with stagnation. China is pledging more support for Small Businesses this year while vowing to stick to prevent Monetary Policy in the face of its slowing economy. Make it says it will easier for businesses to gain access to financing. To diffuses also aim major threats by focusing on longterm regulation for real estate lending. One u. S. Service members and two defense contractors have been killed in an Al Qaedalinked to raid on a military base in kenya. The group says the group that theied out the attack u. S. Has used kenya as a key base for fighting alshabaab, which it calls a terror organization. Ceos of the largest u. S. Companies take three days to earn the salary of the ordinary worker. A report from the High Pay Center finds the typical ftse 100 boss would only need to work 33 hours to reach the average yearly paycheck. It is based on the average ceo earning 3. 5 Million Pounds in 2018. Global news 24 hours a day powered by more than 2700 journalists and analysts in 120 countries. This is bloomberg. Ahead, a closer look at the longer term effects on the oil market. David and we discussed whether Central Banks should be worried. The strong part of the economy is the consumer side. Labor markets are strong. Wages are growing. That consumer site has offset the weakness on the manufacturing side. The economy has been moving in a good direction. Im surprised by the week number. Number. Manufacturing has been struggling and contracting recently. Trade policy uncertainty has been part of that. The gm strike was part of that, but that is over. It is a bit surprising. Yvonne that was Loretta Mester and Charles Evans sounding a cautious but optimistic tone on the economy. David still with us out of bangkok is michael every, head of Asian Financial markets at rabobank. I guess you are not cautiously optimistic . Michael since when am i ever cautiously optimistic . As i made clear in the previous segment, when you contrast headlines saying world war iii all over the place, i look cautiously optimistic by comparison because i think they are overblown. The risks are there of Something Like that happening at some point, but i dont think it is going to be started by the issue in around. In iran. I hope that is not going to be a historically famous silly statement. I am cautiously optimistic. Risk isdo you think going to be more geopolitical or more on the economy side of things . Michael they interweave, really. The trade war issue with china we only believe will come roaring back at some point. That will affect the real economy and the markets and geopolitics all at the same time. Taking king away ticking away in the background. The economy in most parts of the world is limping along. The consumer is doing ok in the u. S. , but that is about all. In asia it is slowing down even if we get a temporary pickup. Geopolitics is what worries me particularly, but i must admit, i dont think 20 20 is likely to be the year all those chickens come home to roost. I am more concerned about 2021 after the u. S. Election. David it is so far away. 12 months where people can be investing. I would imagine staying out of risk assets in this window, the opportunity cost would be quite high. Well, absolutely. That is logical. To be a little flippant at the same time, if you are reading between the lines and thinking, dont worry about 2021, that is when you will have world war iii, enjoy the next 12 months, you can sit on that stockpile when everything goes up in a Mushroom Cloud 12 months from now. What you have said is correct. There is still going to be a wealth of opportunity out there. I think the current risk off move we are seeing is not going to last that long. When it does come back, it will really come back, but i think this is a false signal at the moment. Yvonne you mentioned dollar strength. In light of this crisis we are seeing in the middle east, the dollar seems to be the long play. What does that mean for em . Is em going to be vulnerable this year . Michael we think so. We think it is going to be a volatile year for emerging markets. Pretty rocky start, isnt it, for 2020 . We expect other emergingmarket currencies out of the middle east to have continuous periods a really severe volatility similar to what we saw in 2019 and previous to that. The dollar is going to be the driver along with local video sink receives that might undermine a particular currency at any given point. David where would value be . To sayare going treasuries, do you think treasuries are set for a better year compared to last year . Last year was already a pretty good year for them up until the end of the year when we had that sudden reversal. We think 20 20 is going to be another excellent year for 2020. We think the fed is going to be completely wrong and will be cutting rates aggressively in the second half of the year. Yvonne you are still thinking the fed could cut this year . Are people starting to price out the possibility that the fed could actually hike next year . I am wondering, how many cuts are we talking about . We have seen three we were not expecting last year. How much more room is there . Let me just qualify, we think we are going all the way back to zero. Happy new year, everybody. We think rates are going all the way back down to zero in the u. S. That is going to be a necessary step for the fed to take. They are wrong in thinking otherwise at the moment. I dont think iran is going to be the trigger. Would youy quickly, be willing to shave until the fed cuts to zero . Michael i will take you up on that. David ok. Live tv. Yvonne we are live. David is it qe five or six or 10 . Thank you very much. Very quickly, check of commodity markets. Brent topping 70. Gold in play. Palladium, we were trading around 2000. We are lower when it comes to futures. 70 a barrel for oil. Sooner ahead, we will drill down. This is uber. Bloomberg. David lets get your latest business flash headlines. End its Office EquipmentSales Partnership with xerox, turning companies from allies into rivals. ,ujifilm made another move spending more than 2 billion to buy out their joint venture. It will now rebrand that operation as fujifilm business innovation. Yvonne test ledger over tesla delivered a Record Number of vehicles in the Fourth Quarter and is projecting record growth in china. Tosays it will soon be able triple production at its shanghai plant to 3000 cars a week with the sock the stock soaring to an alltime high on friday. The market cap is now more than double that of ford. David samsung says it will launch new products in san francisco. A Teaser Campaign shows a rectangle and a square, prompting speculation of a potential new galaxy s series and a clamshell foldable smartphone. Firstg launched its galaxy phone 11 months back, but only went in sale in september because of delays caused by design effects. Competition is heating up for banking licenses with two more groups saying they have submitted bids. It includes one of asias largest massage chair makers and a storage value card company. Singapores also teaming up with a group of chinese partners. Lets have a look. Yvonne risk assets in the red in the region. It really is going to be the oil here with brent hitting 70 a barrel. Highs we have not seen since may. Miners given ald risk off move into bullion. Gold up 6. 3 . On the flipside, the airlines are taking a big hit. Like korean air down 4 in south korea today and China Southern airlines down more than 4. 5 . Certainly geopolitics dominating a lot of the moves here today. David the backdrop of risk pointing out here, your leftmost column, equities in japan worse off by 500 points. Several market openings in thailand and india in 19 minutes or so. Dont expect to see a lot of green on your screen except when you look at sovereign bond markets as well. As we get underway this monday, risk assets getting a mauling. We will get you more of your top stories coming up next. This is bloomberg. I am su keenan with the first word headlines. President trump is threatening iran with major retaliation if they do anything to avenge the u. S. Killing. He had threatened disproportionate strikes of American Interest were targeted. Iran has already said it will no longer be bound by the nuclear deal on enrichment of uranium. President trump is threatening sanctions on iraq if troops are forced to leave the country. Says baghdad can expect sanctions like never seen before if u. S. Forces are expelled. Hospitals have admitted seven more people in hong kong with flulike symptoms who had recently traveled to china. A total of 15 to the patients suffering who have pneumonia like system symptoms. The cause is still unknown. Tokyos famous tuna auctions have come close to a record sale with a giant loop and setting its the second highest price ever. Fish was bought by a corporation for about 1. 8 million u. S. Dollars. The sale up makes the fish second only to a similar move. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. David tokyo is just going into the lunch break. Futures continue to trade in singapore. Take a look at where we are. Lets change things up and look at the bond market. You have china there as well. The japanese 20 year is down. Your measures of volatility across the region on the way up. Thes not surprising given news flow out of the middle east and washington. Talk us through the price seen here for much of the day. The question your brain to viewers is about the geopolitical threat. Seems like at this point we are seeing some pain but not a whole lot of panic. How should assets price geopolitical risk . Looking for ae few issues. Oil prices and the outlooks growth. Inhave been used to spikes oil prices over the last few years. They have not usually lasted long. The effects of u. S. Shale gas seem to be quite quicker. See a lotly expect to more supply from the u. S. Side in the coming weeks. That will probably help to cap oil prices. What we are seeing now is probably relatively shortlived. It will not last that long. History tells us that those things dont tend to equate so much in asia. People are probably looking at the whole set of china pmis. This is a temporary jolt to confidence. It is the start of the week. What else are you guys cut tracking . Mark we have a few other bits of data. U. S. Employment as an this week, which will give us another read of what is going on in the u. S. Economy. 2019 was americas year. 2020 will be emerging markets in asia. We have already seen a soft ism number. We will see relatively better improvements. That will play out across securities markets. We