Welcome, this is countdown. They did it, the iranians and saudis got together and got on the same page. This is what has been agreed. A new corridor or for production. , the bandwidth. 33 Million Barrels a day. If we take it to the extreme, they agreed for november. 700 50,000 barrels of production per day taken out of the market. The question is how does it get allocated. It ran looks as if it may have an exemption iran looks as if it may have an exemption. The detail is one question. Who is going to produce what exactly. How will the russians respond . And what will the shale producers say . That was the fear from the saudi side that if the deal was agreed, would that encourage more u. S. Production. We are on you where various acids including oil prices. Saw increases in oriole yesterday. This is where we are now. Both have moved up considerably in the next 48 hours. Currency sachs has said it is probably worth 10 a barrel. That takes you into 55. 60. It is going to provide shortterm support. The saudis are gambling that increased improv production will have a compensating effect on prices. We will see whether that happens in this environment. China creating a potential headache for Deutsche Bank. A 9 million stake in a chinese lender and moving proceeds off shore. They are reviewing application to move mouse amounts of money on a casebycase basis. That is according to people with knowledge of the matter. Deutsche bank working closely with regulators but declined to comment further. They havent received any relevant application. Janet yellen says lawmakers are looking into disturbing compliance failure at the u. S. Banks. Breaches,investigate including manipulation of interest rate. Yellen was responding to questions about wells fargos scandal would not confirm the fed breaking up the bank. Patrick will give his first interview here on bloomberg at 11 00 a. M. U. K. Time. Said event driven hedge funds are most at risk of shutting down. Speaking to bloomberg, the head of the Worlds LargestHedge Fund Manager said complacency will lead to outflow. He also discussed the impact of Central Banks on potential economic shock on the industry. In the world of these very low rates. The reality is we start the year somewhere in the hole. It is difficult to take the right amount of risk. You need to be tolerant otherwise you cant make money in this environment. Spains mainn Opposition Party could help end the ninemonth deadlock that has highlighted the countrys politics. The 35 person executive committee that steps down. Sanchez led lawmakers into voting against lopezs candidacy. He ceo of wells fargo says would like a settlement with the u. S. Department of justice and civil authorities by the end of the year. Bloomberg, he also said he wants the settlements to have a solid planning basis. It is too big whatever it is. We made a huge mistake. We admitted it. We are going to pay for that. But i cannot give you a figure. We will have to see. Export boom and Foreign Investments have helped vietnams Economic Growth in the third quarter. 6. 4 from a year earlier. Up from 5. 6 in the previous. Previous period. News 24 hours a day, powered by more than 26,000 journalists and analysts. You can find more stories on the bloomberg cap. Emily chang, bloomberg. Manus lets see what is going on in these markets. Last oil rocked in the 24 hours on the upside. That is good news, they say. Definitely. The fact that Energy Prices will , now gaining 1. 5 on that. Analysts say that japans Energy Markets is not that big but risk onhey are showing sentiment among japanese investors. The mensch mark of 1. 5 benchmark up 1. 25 . China, 6 10 of 1 . At energy,e a look leaving the game in hong kong. Emerging markets, currencies gaining for the third consecutive sessions and taiwan up 1 after being closed for two days. They shut down because of a typhoon. Australia also gaining as much as 1 . Not surprising. Australia has been shares in Energy Stocks and you can tell that petroleum, for example, gaming gaining 7. 5 . Oil prices, opec preliminary deal, in plain markets. Oil importing countries, malaysia currency aiming about 4 10 of 1 . Holding two days of decline. Thank you. Oil has stabilize this morning after its just advanced since april. As a the deal came an iranian administrators said he was pleased with opec. Very good argument. Excellent argument. I am very happy. Had a2. 5 years, we have productive argument in opec. That means opec can overcome to the many very difficult situation. Bloomberg in algiers, the deal has been a long time. Long time coming. Very few expected the saudis and iranians would be on the same page. Finish, a remarkable you could not have scripted a more exciting ending. Is, there was too much oil in the market. This is what we had heard from a lot of ministers ahead of that team meeting which took four hours and went late into the evening. They realized the market would not balance itself after all and not fast enough, so they had to take steps to try and bring that in. The devil is in the details. They decided to bring production ofn slightly to a range 30. 5 million to 33 million per day. That is quite a softening. The allocations have yet to be set up. A committee will discuss this for further. Individual countries will be set in this meeting later on. Now the other question is the timeline. Is this going to last six months . A year . What are the parameters of operation . What are the benchmarks you are going to use for this . Finally the role of nonopec supply which has been a big headache for these opec producers. The resilience of nonopec, they are going to have to sit down with russia. Russia willing to do that, we will see whether that conversation gets further to bring supply under control. That is going to be the challenge of 2017. Great work on bringing us all the news from algiers. Joining us in the studio, smith, head of strategy for equity strategy at j. P. Morgan Asset Management. Great to have you. When you saw this deal, many were surprised by it, there has been some expectation. It caught many off guard, does it change your attitude right now . Certainly, as you said in beenpiece, opec has not opting Market Cartel for some time. The devil is in the details. Not be as material as the original reaction suggests. Step back a little bit. Most oil majors, the major damage, earnings was down last year. Residual damage this year. A lot of people speculating on whether it is sustainable. It isonly reinforce good news for majors. It is also good news for the irations, much more viable volatile on the way down. Got a chart of the tracking in the u. S. Hammered every time we see a spike above 50. The fractures in the United States of america coming back. ,hen you look at this, the u. S. That particular sector. They have a risk problem that is coming back to life. Next,ms of what happens does this open up a signaling that there is capitulation from saudi arabia . There a acceptance that finances are so screwed we have no option . Myit is slightly outside of gambit gamut. Clearly under pressure. I want to finesse it a little more eloquently. Int does it mean to you terms of ramifications . Will it bring inflation to japan . Question, to me is interesting. If you look at it from a european point of view. Europe has suffered with low levels of inflation. Negative inflation for some years. If you look at the correlation between them, from the ecbs , a very important view of Market Sentiment of future inflation. Before the sovereign debt crisis of 2011, there was zero between inflation and the old price. After, there was a. 8 correlation. Not clearly the ecb theerned with correlation, influence on other parts of the economy is minimal and the major inflation dynamic is shaping expectations. It would have to have an a on oil prices first. Use to her this youre the slime that, if they cut production because of the supplies demand situation, it is not clear whether that would push up rising all that much. What we think of the demand side of things . That they cut production of it, and it does tell you it should push up the price. You look at the shortfall for earnings, a lot of it is coming from shortfall. It is holding up. America is europe is recovering fine. ,hen you look at nominal because inflation is so low. We get some kind of a return to a more normal inflation cycle, forecasters in return toation will 1. 8 over the next few years. Theminal gdp mentality of the consumers and investors. Manus thank you very much, stephen. Ahead, highlights. Unemployment numbers followed by u. K. Market approval. Manus half an hour later, the eurozone conflict and 1 00 u. K. Climb, german inflation data. 9 00 u. K. Time, video link at a forum. We also hear from other federal speeches. Manus coming up, full steam ahead. We are hoping japanese consumers just with the click of a button. Behind the wheel and battling accusations in technology to buy car emission standards. We are at europes biggest car show. Manus a dovish tone struck by the minneapolis, but he is not a Voting Member just yet. This is bloomberg. Welcome back, this is countdown 1 19 in the afternoon in hong kong. Ceos for the automotive sector gathered at the Paris Motor Show. Manus that comes almost one year since the diesel emissions cheating scandal that rocked the industry. We go to the french capital where bloombergs Caroline Hyde is standing by. General motors had a european division. Caroline, good morning. Very good morning. Here, the headn europe. Nit in fabulous stage. Give us a sense of the car behind us. What is the salesforce expecting . First of all, this is a big premier. It is a car we could announce twoy has a range of kilometers more than any other competitors. You dont have to have any range anxiety. We think it is big what we are announcing. Interesting on a date that we are expecting opec to come up priceskind of deal, oil rally, will that help demands for the vehicles . That get people buying them in europe . It is a coincidence. Butll know they will go up it is not a main drive. The main drive is the co2 reductions and society really wants us to go electric. We need to get them excited. This car is trying to not only address the minds and heads but the hearts. It is fun to drive, wellconnected. Take range excited he anxiety away. You can really buy this car. Featurestalk about yet, but for this to be this is not a luxury car, it is something everyone can use every day. For 2016 to target break. Is that the case . You had to withdraw somewhat from russia. Brexit concerns. Any of that 2016. Even the first half of the year. It shows our plan works. Unfortunately brexit came our way and that is not helping because the pound. Every fourth car we sell, we sell in the u. K. It is a big draw. We are aiming at breaking evening, seeing how we get on. When it comes to brexit, are you feeling Consumer Sentiment has been didnt it . We dont know it yet. A lot of stopped being sold off. We will see. What else is in concerning you in terms of Global Outlook . Many people worrying about growth when it comes to regional european economy. Where are you seeing outperformance in where your sales are going . At the show we also announce an upgrade of the previous car. Segment, a crossover of a u. S. Suv, still a lot of accessibility. We have the debt become very successful in this field. Give us a sense of a , francehip with persia is relevant to talk about. How is that partnership evolving . Are you adding more vehicles to the project . Whichhave these two cards will be along soon and are making good progress. These programs are important for both companies. We are very satisfied and look forward to these cars. After that, we can always see how we can extend the partnership. Who do you see as your competitors nowadays . Talking about electric vehicles, technology connected. Is it the apple, the teslas . More than your auto sector . Where is the hottest competition. There are new players like tesla, this car does compete with new cars that might come up in the future of tesla. , wethe googles and apples are in competition with them. Appleroduce android and technology into these cars but in the same area, we also have them as competitors. The Auto Industry is on the move. What is the sense of what you want to see from Global Leadership right now esther mark a sense of more global the overp . How will rounding environment help you in 2016 to make your greek breakeven . Thatople have to learn these are cars for everyday use. We need infrastructure, incentives are good because they help people over the barrier. Good help there. We should not expect these things to happen too fast. Not only in the minds of our customers, they need to know they want these cars. But also for us, a transformation. We have a touch of the entire company. This is a big change. Thank you very much. Joining is bright and early on a bright stage. It is all about the electric vehicles, all about the suvs. Thank you caroline. , suvs,tric car definitely will be in focus. Up and running for the Paris Motor Show. Anywhere in a half an hours time. We will have live coverage on the latest models as they are unveiled and hear from Key Executives in the industry. We have got breaking news on electric cars, but you have to stay tuned for the rest of content. Have a look at gm and if you want to understand what risk is going on. Oil rallying by 5 . Look at the stocks. Above 1 . Risk bornedefinite appetite. A dovish tone struck by minneapolis president neil. That story ahead on bloomberg. Manus it is 6 30 in london. Shot in tokyo of the emperors palace. The high for yen, dollar rising, again dropping risk on outside the markets. It is daybreak. Look bloomberg and take a at the front cover. Oils new don. A paradigm shift. Agreed an output deal, the cartels agree to limit production for the first time in eight years. The deal still to be worked on. Isunderstand that iran allowed to produce but is this a boldface . Anna what will russians and americans do . , in itraghis interview he said rates can rise when higher wages and stronger growth bring inflation near the ecbs goal. The fiscal latitude that he thinks the German Government has. Manus can you imagine the new ining fiscally email Economic Data with german regional inflation and the bank of england secured lending data that prevents andy any followup from the brexit vote. Is the market slowing for real people . I am talking about the real economy quest economy. 2016 not going to be a vintage year for investors. Charts. With good morning. We are talking about stocks going high, bringing up the gmm throughout the morning. One area is not producing such a risk and that is what is happening with chinese equities, projected to be down 30 this year. The sellout we saw years ago could be felt. Is people by equities, in china there is an alternative call the property market. When china is still going andlutely through the roof the chinese authorities are going to have to react. They are keen at the moment to be below the radar but the chinese Housing Market has strengthened. Ago, whenttle while we saw that trouble in the chinese equities market, then bubbles and barriers commodities. People calling in waccamaw where the money has to go somewhere. Now it seems it is property again. Yes, clearly. Given how poorly stocks outperformed. Have does that whatmore to do with investors busted . Push to trade elsewhere in other others with rebar steel, reinforced steel and they are staying away from the equity markets in a world with we are not seen this anywhere else. Investors look at it policy as opportunity. The linkage that exists between hong kong and various markets. Volume has been pushed out. Makes you wonder when that money stops and maybe flows in the opposite direction. What can happen again . We saw the Chinese Market shoe for the stars and come down very hard. Anna the chinese story has the ability to grip the rest of the world. Thank you very much. Mario draghi says the financial industry must stop blaming Central Banks for their problems. The focus on internal management. Ecb president was asked about accusations by some in the financial industry that the ecb is responsible for some banks close. I do not share this view and you said why. Represents a threat to the eurozone, this cannot be because of low Interest Rates. It has to do with other reasons. Ceo ofluke ellis, the the largest headphone hedge funds said he has a larger outlook on Deutsche Bank. If you look at it as a credit risk, not at all. Germany,ged the law in 60 billion in debt is bad. It comes before any of the depositors. Billion, which becomes equity in a crisis, that is more than enough for Deutsche Bank to be healthy for a long time to come. Anna Stephen Macklin smith from draghi says itt, is not the fault of the ecb, Deutsche Banks suffering more than others. Of work is still a lot to do. I am afraid germany showed up not particularly well in that chart, about 73 . One of the worst in the eurozone. If you look at what has happened in Banking Sectors across europe i country over the last 67 thes is a reaction to sovereign debt crisis. So there has been emphasis on making sectors more fit purpose. They think europe is over banks. That is a healthy project projection of the markets. The issue is capital. That is what the markets focus on. You heard 60 billion of tier one capital, for a number of institutions. Deutsche bank lagging its. That is the critical issue. Deutsche bank was lagging its here group. In relation to some of its major fears. Credit wellness is not relative to your peers. It is relative to your business. ,f we think about Deutsche Bank they compare that to the Market Capital of D