Not a 3 or 4 economy. Maybe the dollar should not be as strong as it is now. Scarlet and opec has a deal to curb oil production, but they have more to do. Were looking to do better. Scarlet it is all straight ahead on bloomberg best. Scarlet hello and welcome. Im scarlet fu. This is bloomberg best, your review of the most important Business News, interviews, and analysis from Bloomberg Television around the world. Lets start with a look at the top headlines. The week began with change at the top in italy after voters rejected their Prime Ministers proposal for political reform. Italian Prime Minister matteo renzi says he would wait in the early hours of this morning after losing a referendum. He called to push constitutional changes. I think the expectation that the result of this referendum would have a disruptive impact on italy and possibly even on the eurozone were grossly exaggerated, frankly. It was not comparable to the brexit referendum or even to the vote in the united states, which indeed signaling much more fundamental political change. What would you be asking of the new government of italy . Basically that the new government continues to reform. We have significant public debt. Not in such a difficult situation as in 2011, where 50 of the debt was in the hand of international investors. It is not so huge like in 2011 soit is not so huge like in 2011, but they have to continue the process of reform. And to add a reform on the recovery, that absolutely must be completed. Donald trump turning up the heat on boeing. In a tweet, donald trump said boeing is building a brandnew 747 air force one for future president s. Costs are out of control. More than 4 billion. Cancel order. What might have brought this about, and where did this 4 billion come from . I am not sure where the 4 billion came from. Lets get this out of the way where this may have come from, first. Why this is front in mind for donald trump could be a Washington Post article published last night that talked about 125 billion worth of administrative waste at the pentagon, which is a large portion of the defense budget, which is 600 billion. I think this is interesting. Donald trump, he is returning to the campaign discussion he had about getting rid of waste at the pentagon. Boeingill not just be that will be in the crosshairs on that. There is a whole defense establishment and other programs that could be saved. Ceo visitedtbanks the trump tower today. He has now tweeted that Masayoshi Son has agreed to invest 50 billion in the u. S. Towards businesses and 50,000 new jobs. He made a comment about how he would never have done this if the trump ticket made the election. We do not have the details. He pointed to deregulation as being behind this. The deregulation expected under a trump administration. But we do not really know what the whole back story here is. He is trying to say that the act createaking is going to jobs and new investment in the u. S. Economy, and he is trying to show cause and effect. Mark big stories out of the Banking Sector today. The eu was fined. A total of 521 million for collusion. The e. U. Says the banks conspired to rig the rate. More costs cuts are coming. How may times will mr. Thiam have to adjust his turnaround plan . This is number two. Yes. He laid it out in october 2015 and came back in march with more aggressive cuts. Here again saying the markets are not exactly cooperating with our push to increase revenue, so we are going to have to be more aggressive. Mark thiam, if he has more time, will he have more focus on cost costs than worrying about Revenue Growth . Michael i think you have some skepticism from the outset when they laid out this plan a year ago. Some analysts saying they were looking at optimistic growth assumptions and you are seeing the bank come back on those and walk back on those a little bit. We also had headlines that there is a settlement in the fixing probe. How do the fines measure up with what is expected . How severe are they . Michael the fines are not the biggest we have seen, but they certainly are of reasonable size. The banks have said that they may appeal these. They may fight these. Obviously, jpmorgan and credit agricole, their statement were perhaps stronger giving hsbcs fine was lower. So this may not be the end of the story. There may be some appeals. The ecb is leaving its deposit facility rate unchanged. No surprise. It is also leaving its refinancing rate unchanged at 0 . The ecb will buy 80 billion euros of assets until march. They will keep going until april. Then they will go at 60 billion euros until december. Alix the ecb does say if the outlook becomes less favorable, they will increase the programs. Is this a dovish take . Or a hawkish ease . Good question. 60 is certainly less than i see 80. This as tapering to the extent that it is openended if there is some dovish elements to it. They have put in language in there to increase the run rate, increase the duration. If the situation deteriorates. Clearly, draghi has turned this towards the exit by cutting the run rate down. I see it more as a hawkish move. You know, confidence on their side that they are reaching a goal. Although we look at the average inflation rate. They are forecasting to 2014. 2. 5 . Only i really see this as backing away a little bit from there 2 target. 1. 5 is the new 2 . The ecb has said to refuse italian bank monte dei paschis request for more time. Jonathan the question everyone asking is why . Imagine the ecb did not see any advantage in giving monte dei paschi more time. They recapitalization plan has been in place for a long time. Private investors have not stepped up. It is a very small likelihood someone will step in and in the next 20 days given the , instability there is right now in italy. Which is very difficult if it will clear by the 20th of january. Italian officials telling the government telling bloomberg the government is continuing a decree law for the rescue of the bank. Shares of the bank tumbling today. The italian government, this caretaker government, if you will is moving quite rapidly , after the decision by the ecb not to grant the Bank Additional time to put together this capital increase. So they are trying to put together a decree, obviously, that would have to be approved by the italian government. That would essentially provide a rescue for the bank. We do not have a lot of details yet. We do know that obviously, bondholders of the bank are going to be affected. Presumably, the Government Strategy is to soften the potential blow for retail investors. Some of whom have claimed that they were not provided sufficient information to make their Investment Choices in the past in buying securities. We do not, however, know the mechanism that italy is going to use to try and engineer this rescue. Scarlet still ahead on bloomberg best, much more on Global Politics with the bellmans rocking governments from australia austria to new zealand. Plus markets seem to like the , prospect of a donald Trump Presidency. Prominent investors tell us how much they think the honeymoon will last. And up next, more of the weeks top business stories. Vladimir putin cutting a deal with glencore. This is bloomberg. Scarlet this is bloomberg best. I am scarlet fu. Lets continue our global tour of the top business stories with yet another tweet from donald trump that struck a nerve in beijing. Donald trump has taken on china via social media, hitting back on criticism of his decision to take a phone call from the president of taiwan. Athe has been hitting back china over what he sees as the devaluation of the yuan, what he sees as import taxes on products to china and the south china , sea. The question really is whether this is more empty rhetoric from trump or whether he will be taking a more confrontational line with china. Very much the word out of beijing is he is not president yet. And also perhaps that he has been badly advised. They are doing everything they can to play this out. Does this show they need for the president elect to nominate a secretary of state as soon as possible who can, a, advise him and b, explain his thinking to foreign governments . John i think yes on the one hand. People are keen for him to appoint the secretary of state. Someone who can decode trump for the rest of the world. Then the question that comes from that is even if you did get an articulate secretary of state, the question would still be out there to what extent could you believe what the secretary of state says . You have the trade balance widening out in october, coming at 42. 6 billion. In fact the september revision , was revised slightly better at 36. 2 billion. But the trade deficit continuing to widen. There seems to be an escalation between china in the one hand and the Incoming Trump administers and on the other. Yesterday china came up more , powerfully. Did this escalate . Probably not. They are probably feeling each other out like two boxers at the beginning of a match. Interestingly, yesterday, we were talking about how trump had the whole idea of may liberating manipulating currency backwards. Look at what happened in the trade data today. Our trade balance with china is actually lower on a yearoveryear basis. This is the first time in many years this has happened. I have a chart that shows we are starting to see the trade allens go in the other direction. And the American People have that in mind. Politically, it is a good move for him. Economically, it doesnt square with the facts right now. The stock link connect hong kong here giving Foreign Investors access to more than 800 chinese stocks. From a Foreign Investors is thetive, shenzhen story of growth. If we look at next years growth expectations, we are expecting the average citizen to grow about 20 . Versus shanghai roughly flat. That really drives the momentum in stock. Definitely, there is more of a small and take cap, which probably a foreign investor would shy away. I guess the most significant change is really the removal of the overall quota. That quota, initially, was put there because there was a pilot, and there was not a clear certainty as to whether it would work, whether it would create unintended consequences. I think the removal of the quota is really the manifestation of a great confidence that this program is going to be great not only for investors to be able to trade easily but allow the Risk Management to work. Is reportedly ctelion,g a bid for a challenging a move by by u. S. Healthcare giant Johnson Johnson to acquire europes largest firm. Why would sanofi be stepping in now . It seems Johnson Johnson was far along in the process to buy it. We think this is the case. We obviously report this kind of thing 10 days ago. We think those two companies are still in discussion. I think potential buyers, sanofi the most obvious, are trying to work out does this fall apart . Sayntially does actelion what j j had to offer is not quite what they want, and they will see if other people want to bid. 2. 50 is the news that bloomberg said j j would pay. What is the knockout figure . Its a good question. I dont know there is a knockout figure. There is this unusual set of circumstances where you do not know. Is it about money . Is it something completely different . Like him keeping a portion of r d or him deciding that he loves the company and will keep it and no one will buy it for any price . The u. S. High court upheld an insidertrading conviction. Lets start with what the court decided. What were they asked to decide on and how did they rule . The issue was whether somebody can be convicted of Insider Trading when the insider , the person who provided the tip, did not get anything from value of it. Whether the insider was just giving it to a friend or relative as a gift that was. Enough to support a trading conviction. The Supreme Court said yes, it is. David what does this mean for regulators to go after those they think are guilty of Insider Trading . It wont revive any cases where courts have thrown out convictions, such as in the newman case. But certainly, it puts the law back to where it a lot of people thought the law was, at least in one key aspect. At ts boss defends his companys 85 billion deal for time warner. He says it will challenge cable and hasten the development of 5g networks. He testified before a subcommittee on competition. For your constituents, we believe the benefits are substantial. David what power does the subcommittee have . They could raise issues or concerns that the regulators might get into, but the reality is this is more of a show. It is a little theater, if you will. I do not think anyone in the market the leaves this is going to get blocked, despite what then candidate donald trump said in october, that hes going to block this deal. Ive talked to the bankers and lawyers. I talked to the investors. None of them really feel like this is going to get blocked. I would say it is a in 80 , 90 likelihood it is going to go through. Chinas exports rebounded in november. Demand held up. And surprise numbers. The one to focus on is 0. 1 . It does not sound too glamorous. That is the export number increase in november year on year. The reason is is it is important is it compares to a drop of 7. 3 the previous month in october. Prior to that, exports were down 10 . So that 0. 1 is looking very healthy indeed. It is a sign the Global Economy is healing. We have had a weak period for industrial production. Of course, china starts stands at the center of the worlds factory system. It is a sign that things are looking better. Russia sells an 11 billion stake in its Largest Oil Producer rosneft to glencore. Vladimir putin went on national tv to tout the deal as one of the largest acquisitions in the oil and gas sector in the world in 2016. What is in it for russia . What is in it for glencore . Glencore, what is important to remember is this is a company that was founded on this kind of trading. Outecent years, it has lost in pole position, so this is a big signal for glencore that it owns russian oil. Or at least the International Trading of russian oil. For russia itself, it is obviously a huge win for them in terms of getting Big International names into the sector. It gives them an injection of Foreign Exchange to the point where they do not have to sell off the ruble. And it is starting to chip away at this notion that russia is isolated. These are big names to have on its side. Scarlet this is bloomberg best. Im scarlet fu. Oil prices began the week at a 16 month high after opec members made a deal to curb production. But the rally stalled on the rose inhat output november as well nonopec nations would agree to the cuts. We spoke about challenges ahead in exclusive interviews at the most influential summit in abu dhabi. If Oil Prices Continue to decline, would opec act again . I think it is premature to answer that question. We have studied the level of production cuts needed for the market recovery. I think it will be enough to achieve the market balance. If we remove the 1. 8 Million Barrels per day, i dont think the market will stay at the lows for the average of the 2016. If we truly achieve the 1. 8 Million Barrels. Are you confident russia will deliver its promise . We are very confident. If you look at the track record, it has not been very accurate. I think, historically, we have not done what we have done. To lead thesition market first, to balance. And then react when the market is about to balance. This is also a new phenomenon. So i think were looking at a new world. A new dynamic. Youhis is a scenario that probably do not really want to have to deal with. You make this move, take oil out of the system. Amandas weaker. Shale recovers faster. Oil prices combat down. Does opec flex its muscle even further and followup with further cuts . It is hard to predict. Months oking at six outlook position. Lets see what happens. Nothing too dramatic is going to happen in six months. Have you seen what has happened in november . But that is a lot of hedging. In terms of real effect, youre going to have some of that in shale. Focus on the issue,hich is cutting the volume working collaboratively with nonopec members, we will get there. It is not as predictable as it used to be. Keep watching the envelope as we were going to justkeep watching the envelope as we go. What is that going to do to your outlook for oil price in the first half of 2017 . It is around 55 . Better. E hoping to do were hoping to get towards 60 towards quarter one. Remainparties disciplined to the cause they have committed. Scarlet coming up on bloomberg best, a look back at an eventful week in Global Politics. Plus, some renowned investors look ahead to a donald Trump Presidency and what it could mean for financial markets. The three industries you would expect Immediate Reaction would be the financial sector, the defense sector, and the bioscience sector. Scarlet this is bloomberg. ,l i understand that Donald TrumpsTransition Team has requested that you and the president elect hold a conversation shortly. When is not going to happen and what do you expect to talk to him about . It is going to happen within the next couple of days. And the message from my side will be, my dear president elect, please think about the small and midsized countries of this globe. They need open markets, and an open market philosophy based in the wto as an opportunity. And i hope that trump will realize the opportunity to discuss about the need of the and the might of the future economies. I am looking forward to speaking to him. Was switzerlands nresident johan schneiderammann speaking with guy johnson about donald trump. We discuss the outlook for Global