Plane was shot down by an Iranian Missile. Boris johnson agrees with that view while ron dismissed the theory as not possible. Weekassets and a volatile with futures pointing to gains again today. Gulbis trading back where it was before u. S. Iranian tensions flared. Clearer picture today the payrolls number can show a rebound after a strike at gm skewed results in october and november. December is typically a job losing month. Larry kudlow joins us after the event. Jon ferro will talk to him. 2 30 p. M. London time. We are just under an hour away from the start of cash equity trading in europe. Lets take a look at the futures. They are up across the board after we saw gains on almost all european indexes yesterday. The ibex 35 was down. Everything else had green arrows. A new high on the s p 500. We still see u. S. Futures higher as well after those records were hit. It looks like investors are willing to go further into risk on territory. What you see on the gmm . Gmm, before we get to the i want to tell you whats going on with breaking news. Ryanair raising their full year 2020 guidance to 950 million. Raising their guidance. They are part of that conversation about the 737 max. It will be interesting to see how that develops. How they transpire. Of course, the Airline Sector has been pushed around by a spike higher in oil prices. We see some confidence from the aviation sector. Ryanair raising their net Profit Guidance 950 million. They had seen 900 million. We will cover that later on in the program. Lets get back to the gmm function. We see something flat to positive coming through on the asian equity session. The overall number for the asian equity market is higher on the msci asiapacific. There are some areas of red coming through as well. We touched new alltime highs on u. S. Stocks yesterday. Tech in asia touching a new alltime high for that sector. The focus today will be on the jobs report. Well be back to the data after the adp number. What does that mean for jobs report . Will we be able to talk about global trade . That will be part of the conversation. That will be a real focus. Higher afteroves the central bank suggest they will not stand in the way of gains for the currency. The aussie dollar is up. Retail Sales Numbers beating expectations. On conversation has moved with all of the wildfires. Lets get to the bloomberg first word news. Was the likely cause of the ukrainian jet crossing and around. Thats according to World Leaders from the u. K. , canada, and australia. It was likely an Iranian Missile that accidentally. They are calling for an international probe. We have intelligence from multiple sources including our allies and on intelligence. It indicates that the plane was shot down by an iranian surfacetoair missile. This may well have been an accident. House has voted to limit president trumps authority to strike iran. The Resolution Says congress should be consulted before the conflict with the Islamic Republic escalates. It is a mostly symbolic move. Itats say defense defends constitutional congressional powers. A brexit bill has cleared the u. K. House of commons and puts an end to the parliamentary gridlock that cost theresa may her job. The bill now passes to the house of lords. Johnson wanted to become law before the end of the month so the u. K. Can leave them it you on january 31. 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. Matt thanks very much. Now, lets get into the markets. Is bloomberg mliv manager here. It is incredible on this friday that it looks like gold is going than it waswer before the u. S. Iranian tensions flared up. Oil even is going to have a loss for a week. In such a week, it is pretty amazing. Thehat do you attribute sanguine attitude of markets . Onk as we discussed wednesday, many markets are interpreting the reaction as being the best possible outcome. We had this big middle east flareup last friday. We help will have the fact that arendt managed to thread of retaliating openly and publicly and not causing any u. S. Casualties, providing an offering for the whole situation, was good for markets. We managed to price out that risk premium immediately. The u. S. Feels they have removed a major threat from the region. It is good for u. S. Assets. We have the escalated the situation by removing that threat. Many people are buying into the narrative that we are in a better place than we could go. Its a very optimistic narrative. This is a dominant narrative right now. It will probably remain dominant into we get another severe flareup and incident. That could be many weeks away if it all. Anna Oil Prices Back to levels from middle of december. Let me ask you about the jobs picture. We will get a payroll picture later on. Would be about to get back to talking about these underlying economies . Does that set the market up to expect something strong . Mark i think this is the jobs data weve had the list amount of excitement for any long time for good reason. We have trade next week. I forgot it was the weekend of jobs data until this morning. That is quite rare in jobs week. This is not the driver of markets at the moment. We have trade, geopolitical events. The other big driver of markets is Monetary Policy. In this regard, we know the fed has an asymmetric method. Theyll be lows to hike rates again. If we get bad data, if we see the close picture slowdown, they made it clear they are willing to act again. We in a positive risk environment. The jobs data doesnt matter that much today unless it is a big shock either way. It will largely be a nonevent. I will not care what the jobs data says. Matt i hope it is a relaxing evening and i case. I want to ask you about trade here. Do you expect a phase to deal to be firmly in the markets right after . Mark we are already starting that conversation. The progress will be a big driver this year. What is quite a positive thing right now, expectations are very low in the market. Im sure it will be like last year. Issues will ebb and flow. Trumpl most likely see making optimistic comments. We will start getting excited about a phase two. We will get a setback and disappointment later in the year. I dont think we will get to a phase two quickly. We will have optimism and setbacks. That will ebb and flow. Anna thanks for your time this morning. Mliv managing editor from singapore. Up next, look at the stops to walk stocks to watch. Ryanair did quite well. We will talk to about that and what it means for the sector. Bloomberg radio is live on your mobile device. They will have the latest on ryanair and other corporates this morning. As is bloomberg. Matt welcome back to the european open. We are still 45 minutes away from the start of cash trading across it europe and u. K. Phil surfing a is covering the u. K. Has for you. Markets reporter is focused on the ryanair surprised today. Lets start with fail. What we know . Bit of ares a tugofwar going on today among analysts about one name in particular, barrett development. In the u. K. , hold builders had big runs last year. Investors realize that the brexit cloud was going to be passed Pretty Simple to we are on the brink of it. Brexit will be behind us soon. The stocks have had a huge run. Analysts are still bullish on the fundamentals. The u. K. Is a strong housing market. Given how far the stocks have run, how much further do they have to go . Barratt developments up 61 last year. That is pricing and a lot of good news. City is cutting stock from neutral. They say the company is in great shape. Theres not that much upside left. Morgan stanley is out with a similar note, raising estimates on the entire sector. They say very development is one of the topics. Ais is a stock that has had great run after getting crushed in 2016 when the brexit photo happened. The question now is how much farther it has to go. That should be pretty active today. Anna lets go to you on ryanair. Surprisingly strong holiday time for the local airline. Christmas, they see their fiscal year net profit at the highend of the range, coming in a one billion euros. Previously, their highend was 900 Million Euros. Along with a stronger holiday time, the forward bookings for january to april of this year is 1 ahead of this time last year. One of the negatives they point out is there off chain unit. It is underperforming. Matt thank you very much. Looking at the ryanair surprise. You can get all the latest stock stories from are equities team. Type first go on your bloomberg to rear terminal. Sovereign bonds smashed expectations in the last decade. There will be more joy in 2020, according to hsbc. 2019,had a bumper year in driving a record amount of debt into negative yields territory. Demand has been strong for higheryielding and longer dated europe area Government Debt in the early options of 2020. Joining us now is kristof reader. Is this bonds demand a result of the end of the bull market in stocks . Investors looking for safe havens. Kristof not really. I think there is still a lot of cash chasing a limited amount of safe assets. As we have seen this week with a lot of issuance hitting the european markets, there is still more money chasing spread products as we have now half of the european markets at negative yields. Yes. Investors are clearly looking for alternatives. Anna if supply is going to be back as a theme, as geopolitics andpushed to the sideline supply remains the big theme, what does that do to yields in the eurozone . Still ini think we are what i would characterize as an issue is market. Even though the volume it coming premiumsrket is large, are being compressed. Supply is being soaked up quite well. This is not really an effect of pushing yields higher. What is really required for this is a change of Monetary Policy. In europe, there is speculation this could be coming. Certainly in the u. S. , there is more chances for lower rates rather than higher rates. Other easing of the geopolitical concerns. These are factors that could push yields somewhat higher. Are limits given this global backdrop that we are facing. Matt we are going to talk about europe in a bit. I want to talk about the global backdrop first. Are you concerned about the economy . We are in a time of relatively slow growth. With hotspots in the middle east flaring up, if we get in oil spike, that is a bad newts situation. Christoph yes. Clearly. Im not concerned about the economy with regards to whats happening in the middle east. The only factor that could be a game changer is oil prices. I cant really see how we could enter into an upward spiral of of price and less the street strait of hormuz gets blocked. No party has any interest in that. Sorry. I dont think this will be filtering through into any of economic variables outside of the region. What is more important is the trade conflict. There are also signs that macro sentiment looks set to improve over the coming months. People over the first half of the year should be seeing the glass as halffull when it comes to describing the global macro situation. Anna thanks very much. We will pick up on the conversation around europe. Speculation over a rate hike at the ecb. Could that growth next year . We will discuss that further with kristof. When you are traveling to work, tune into bloomberg radio. Bloomberg. Anna 40 minutes to go until the start of the equity trading session. We are expecting another bounce at the start of trade. The bank of friends governor has stressed flexibility in policy approach two weeks before the ecb launches a review of its methods. He argued for Interest Rates to stay low for longer, but not lower. Still with us is kristof rieger. He is a member of the ecb Bond Market Contact Group contributing to key analysis of europe denominated markets for the central banks. Great voice on this topic. What are your expectations next from the ecb . Suggest withyou stabilization in the macro picture, there is room to have a conversation about higher rates from the ecb. Is that right . Christoph yes, i think what we are seeing since the september meeting is what we have depicted as easing fatigue. Everyone was getting tired of more and more easing and negative rates have a more qe. The resist deep rift in the governing council. Tasktine lagardes first was to mend this rift. It has become clear that the hurdle for further easing steps is quite high. So this easing fatigue is spreading into the new year. I see some chances there that sometime this spring, we could be getting a discussion about normalization. So actually even a rate hike speculation. Also, looking at the experience from sweden which has enacted negative rates in december without causing undue decline in breakeven inflation or depreciation of the currency at a time when the economy was still quite week. Conspires into more they couldng, well, be taking a similar route. Matt is it easier to get out of negative rates than unwinding your Balance Sheet . It looks like quantitative easing is order to end. Absolutely. Especially with Forward Guidance of the ecb linking qe to the first rate hike. I think it would be very difficult for the ecb to execute the exit. Im saying there will be speculation about the normalization sometime this spring. I dont think that the ecb will follow through on this route and that ecbim afraid rates will stay very negative at 50 for quite some time to come. , thist comes to kiwi linkage between Interest Rates and qe and Forward Guidance. The bond buying net asset purchases will stay with us for many years to come. So we take that into consideration. The ecb will be talking about Monetary Policy. People suggest that more needs to be done on the fiscal side. When you are giving advice about what the bond markets are saying to the ecb, when they ask how the markets respond to fiscal spending, what do you say . Interest rates are stay are set to stay so low for so long, there is room for fiscal spend. The discussion about fiscal space in germany will stay with us. Thatnk we need to be clear the zero in germany might go. About 50ese talks billion packages the year are very unlikely to materialize. Keep in mind, we still have the constitutional debt. Any budget needs to follow this rule. Fromu look at the numbers the fiscal space for germany this year, 7. 7 billion. That is 0. 2 of gdp. Clearly not a game changer. Clearly not what the ecb or markets are hoping. Should we get 50 billion or Something Like that if you are getting a new government, yes, this will be an important signal for the rest of europe. This will be very important market mover. I dont think it will materialize. Matt 10 seconds. What is your expectation for balance at the end of this year bunds for the end of this year . Christoph lower yields. Higher yields and to spring. Minas 50 tenure boon deals for the end of this year. Matt we will keep you with us a little bit longer. Up next, we will take a look at what you need to be watching today including airbus delivery numbers, key especially considering what is going on with boeing. U. S. Job data, a very important Economic Data point. Election in taiwan. Plus, eu Foreign Ministers to discuss the nuclear deal and around. And iran tune into bloomberg radio. Matt welcome back to the european open. Let us take a look at what you should be watching today. A few things to note. Airbus is likely to release its deliveries and orders for 2019. Especially with the boeing situation right now. Eu Foreign Ministers will hold an extraordinary meeting in brussels to discuss the fallout and the Soleimani Killing the future of the iran nuclear deal. Europeans still want to keep it. Is1 30 p. M. London time, it the first u. S. Jobs report of the year. Watch for that. Just after the report, and interview with larry kudlow. The Unemployment Rate is forecast to hold steady at a 15 year low of 3. 5 . Way, weekend watch for an election in taiwan. News for that coming out saturday in the evening. Monday, the determined winner. Of ourets get to one top stories. The continuing tension between the u. S. And iran, and in to thatar, what happens aircraft that went down in iran. The iran story is that a meeting of Foreign Ministers is taking place in brussels today. Maria tadeo is in the ground. We have is on the graph. What have we heard so far . The conversation really has shifted because of the information that came out from canada. Justin trudeau overnight shot down,he plane potentially not intentionally by iran. Part of theot European Union, but has a very close working relation with the European Union and they will want to find out what happens , how it wasat plane shot down if it was. Made the decision. Who made that decision. To number one goal is deescalate tensions in the region. They feel at this point everybody should take a breather from this. To stop any kind of escalation on the military front. The criticism when you look at the eu is that it has taken a week for Foreign Ministers to get together. They have not decided anything and they have been very slow when it comes to taking action. The europeans will tell you this is a very delicate balance. They were caught off guard by the actions taken by the u. S. They are not naive about this. Iran has really crossed a number of red lines over the past few months. They have been trying actively to provoke reaction from the west. On the plus side, they waited for the situation to solve itself. We have seen the escalation happen before the eu gets together to call for it. Typical Angela Merkel ammo Angela Merkel m. O. What do you think they are going to be looking for, in concrete terms . That is also a good question. What can the European Union do at this stage . Both iran and the u. S. , and you have to be clear about this, these are the main actors in the deal. They are saying it is dead. We are not going back to the ta