Expect sluggish growth. He said he wants to take that think about and rates. Oil is currently unchanged. It has been bouncing around all morning long. Yesterday falling to as low as 42. 75 a barrel. It is entering a bear market, the 21 to its peak, and dollar coinciding somewhat with oil. That is holding your a onemonth high, gaining as much as 1 over the past two weeks. Lets get an update on what is making headlines outside the business world. We are checking in with them on first world news. Has won theel special election for the house seat in georgia for the gop. She took 53 of the vote against democrats. Democrats have hoped to capitalize on debt President Trumps low approval rating. In london, the queen said the government will try to maintain its subtle relationship with european allies. She outlined Prime Minister theresa mays legislative agenda in her annual speech department. Queen carried on without her husband, prince philip. He was hospitalized for an election. In saudi arabia, mohammed ellen solman has replaced his cousin as heir to the throne. This is bloomberg. Scarlet . Scarlet and we have some breaking news. Bank of englands chief economist is now reaching toward joining the hawks on the Monetary Policy committee. Boe isthe b. I. We split when it comes to what to do next when it comes to Interest Rates. This is the cable pounddollar , and this is a cross euro and the pound, the euro losing strength versus the andd. It is now off by. 3 , the twoyear yields are moving higher, so selling in the u. K. Bond. David so yesterday this indicated that they did not want to raise rates anytime soon. And we want to turn back to the saudi arabia kingdom. For more on the changes over there, we go to bloomberg managing editor tracy alloway, coming from us coming to us from the by. This is not a total shock, the deputy prom prince crown prince is being promoted . What has come as a surprise here is the timing. There has been a lot of crown princebout mohammad bin salmans ambitions in the kingdom. He was the architect of the the0 2030 vision for saudi economy, some of the investments he has made, a lot of people have speculated this is because he was harboring some ambition, some deep ambition when it comes to power in the kingdom. These people woke up in the morning and saw those ambitions appeared to have come to reality. David is this a vote of confidence on the part of the king in the direction that mr. Been solman has taken there been solman bin salman has taken their . I think it is difficult to read it as anything but a vote of confidence. Remember, they are related, as well. The deputy crown prince is the kings son, and he has had to offer some concessions to other rulers in the saudi regime. They actually change the law, saying that going forward, the king and the crown prince cannot be from the same branch of the royal family. It is ok this time around, but in future situations this kind of situation will not be able to happen. When it comes to actual reform efforts, remain they remain controversial on the ground in saudi arabia. We have seen some grumbling about this, saying the king is giving away his crown jewels at a sensitive time, and some grumbling about austerity in the kingdom. It is interesting to note that part of todays announcement came along with a separate announcement from the king, saying they were restoring some of the salaries and bonuses that had been cut for publicsector officials previously. Scarlet that is interesting how that comes the same time. I would like to ask about foreign policy, because the inwn prince has led the war yemen against the run back troubles. What does that say about how the kingdom will position itself . That is a really good question. The deputy crown prince has been aggressive not on just the domestic front, but on the foreignpolicy front. This is one of the reasons people have a controversial take on him. He is deemed aggressive himtarily, and we have seen take a relatively hard line when it comes to iran recently, and also to catch our guitar qatar. What this means going forward, this will be an interesting question, but at the moment a lot of people are questioning whether some of those tensions are set to rise. Scarlet tracy alloway, joining us from dubai for an important perspective there. We spoke yesterday with Goldman Sachs is jeff curry, and curry said he is confident about worldwide demand for oil, despite the drop in price. At the demand picture, globally it is ok. I will put a check box there. Im not too worried about it. Joining us now is the chairman and chief Investment Officer of government and lies ares government , welcome. Advisors thank you for joining us. When we look at the drop in oil prices, it is moderated today, but what specifically has pushed down to 42 dollars . 75 42. 75 and is it matters that there is so much negativity . Have seen traders give up the ghost on oil here. This is the lowest level in 2017 over the last two weeks, and well see a bailout on those positions going forward. Money is flying out of the oral market and means oil prices go down. On the fundamental side, we have an absolute death march of u. S. Oil producers who continue to it being cash negative. Everybody loses money at 40 oil. Saudi arabia, nigeria, u. S. Oil companies, everybody uses that loses money, and we still see increased amounts of reduction from most of the Major Oil Companies here in the United States, and when they cannot drill a well, they put it into storage in a duct, which leaves on thef excess inventory market for when oil does rise. Every time you see a push forward in oil, they will come into edge and see some of these ductsockeds come into play. That negativity has caused oil to sink pretty strongly. This has been a big shift in the oil market, but someone is already ready to come in. You have libya, nigeria, somebody on the fringes coming in. It is it all shale at this point . What has changed over the course and were think ive gotten it wrong in terms of this particular oil bust, it is not like 97 1997, it is not like 2000 seven. This wholesale reconstruction of the Oil Companies that we saw during the two previous busts, and a lot of these Companies Going bankrupt and out of business, and they do not. They have not been, at least until the money runs out, they will not. For now, yes. The oil therells are on the hands of the americans right now, and that means until some of these companies decide not to continue marching down the road, we will have a top on oil and will not see that constructive move forward is that we would have seen by now. Scarlet nevertheless, jeff curry says it does not bother him right now. I also think of the seasonality at play right here. This is the chart from the last four years, and things have changed a lot since opec has collapsed. , to seasonality even matter anymore yakov the whole idea that there will be increased demand before the summer driving season . We were talking and i in the green room before we came on set. We had some great in conversations conversations. We talked about demand was rising. If you have a longterm rising trend for demand, all of this volatility in both directions you get shocks investor actions, in both directions, and we have a swing producer in the United States. Arabia thatin saudi has an enemy on the other side of the persian gulf and the most potent weapon the saudis have is a low, low oil price because that is how the shutdown iran or make it harder for iran and their military. To what extent should we blame janet yellen in the sense of there is not a shakeup because it is so cheap that until the money runs out it is not running out. The fed is talking about using reserves and getting serious about it. Number two, ima defender of the fed. I never saw janet yellen on an oil rig. Drillst think the fed for oil, they drill for money. They stopped, the Balance Sheet has been frozen for four years, they published the first indication at how they would shrink excesses, and will do it sometime before the end of the year. Im not shocking the markets. The pump is now in neutral. Actually, it is the financing of the tragedy treasury and the deficit, which is the problem, in the next six months the fact that current uses rising all the time currency use is rising all the time, we could dip into a rental mode with doing nothing. David coming up on friday, we will have special coverage about the oneyear anniversary of the brexit vote. Live from new york and from london, this is bloomberg. Scarlet just last hour, Queen Elizabeth addressed Parliament Outlining theresa mays agenda. This marks the start of a twoyear parliamentary session. My government priority is to insecure secure the best possible deal of government leaves the European Union as the country leave the European Union. [indiscernible] we want to build the widest possible content since consensus on the countrys future. Scarlet joining us now is anna edwards. Pretty consistent message from the Prime Minister and queen, the best possible deal. Interesting is that there was less pageantry associated with their comments than usual. Can you tell us why . Pageantry is still considerable. But yes, less pageantry. She did not arrive in a horsedrawn carriage or wearing a crown, she wore her regular clothes, not the cave and crown she would normally be wearing. This ceremony was supposed to take place on monday, and now it is wednesday. Were doing it right now because of the Hung Parliament that and of course, there is a somber mood in the country, so that makes it appropriate also. That is not the reason that was given by the Parliamentary Organization or the government when we heard about the arrangement. The queen herself was referencing recently the somber the in the country after tower fire and devastating attacks. Did we learn for about the queen had to say on behalf of theresa may, and what did she not that . Say . Anna that is important point that you make, that this is not the queens speech, but it is written by the government. It is the agenda for the next and, the next two years, what was left out with some of the more controversial domestic policies around social care and education that are proving very controversial in the election campaign. That theysuggested are relative to expectations at least because of those parts. Subparts along that domestic straight are left out because they need to get this to the vote next week. David . David thanks, anna. Still up next, david kotick of Cumberland Advisors, and Deutsche Bank head of European Equity strategy. Sebastian, we have just been talking about the queen and brexit. Lets start with the side and moved to europe later. Aboutoes brexit tell you investment in the u. K. . Sebastian there are three investment conclusions. The first is that there will still be pressure on the pound sterling, and that is a positive flow as opposed to the European Equity market. Secondly, we have a townsterling weakness, so the domestic we focused best of ethically domestically the monitor her brexit going on, it should keep microns certainty macrons certainty elevated. Scarlet we recently broke the headline that it might be prudent to tighten policy in the second half. He has been pretty clear about how he wants to stay on watch to see how things play out. What is the best course of action for the bank of england . Scarlet ive david i think they are and if you go. Were looking at the queen, the pageantry, and the culture, and im here thinking about that image, the u. K. , what to do about Monetary Policy, and the Public Division in the Monetary Policy authority. That is something we do not see in the United States but we have, they just do not do it public way. And something we see with European Central bank, and also in japan. Julie think this governmental disagreement and put it into that seems tog . Be stirring the pot in the u. K. Scarlet i want to show you this chart on the bloomberg terminal. It is the state of the u. K. Economy as frexit negotiations have begun. Brexit negotiations have begun. Inflation has gone up and up and up, approaching 3 . Wage growth is sluggish, and the bank of england this was the rate cut following the brexit referendum of last year. As you look at the state of the economy, do you position yourself in any way for u. K. Stocks to make a recovery or is it something you want to sit out until he get more clarity from Monetary Policymakers and the ecb . On whatn it depends you are focusing on. If you look at the ftse 100, it has little to do with the u. K. Economy, so that is not so relevant. The main driver is what is happening to the currency and focusing more broadly on what is happening to the cyclical sources, because it depends it tends to be a defensive index. So this is positive for the ftse 100, and independent of what is going on for the brexit economy. You look at the domestically focused for two to 50 which we 250 referencing ftse which we were referencing earlier, what we see as investment is holding up well, but there is a lot of Downside Pressure now on the consumption side, partly because real wages and wage growth is slowing, and we will be certainly cautious there. The received wisdom seems to be leery be leery about the u. K. For all the reasons you described. The place tocks of go for all sorts of reasons. Is that right or is it overdone . Sebastian that is the key debate at the moment, and it is a very strong consensus. We are all about the consensus, and that fallacy is that u. K. Stocks have done tremendously well because it economically economic leaders have remained very strong globally. Fairly consistent with 3 gdp growth in the area, and this is on trend with gdp growth of 1 . So we are at a peak point cyclically, and the question is can it get any better . We think no. This is overshot. This should put downward pressure on european equities. Scarlet thank you for joining us from london, and david kodak of tamerlan advisors david kodak of Cumberland Advisors is sticking with us for the hour. Up next, we discussed china and where we see opportunity and growth across the world. This is bloomberg. Concern forlation a investors, not so much for the fed. How quick to proceed on future Interest Rate increases. Seeng up next, do you inflation staying low for a long time . I want to see how investors see inflation, and this is a big even for the 2, 5, and 10 year, and notable of course is that decline and big drop in the last couple of days here as oil prices tumble. Did the fed make a policy mistake when yellen stuck to her guns and said they are looking past the drop in oil and the slowdown or anything is transitory . Debatewe had a fierce about that on bloomberg. I watched it with both of you. They looked at financial conditions, they looked at excess reserves, ample liquidity, and think about some behavior is in Financial Markets in terms of pricing, and the raise gave them a shot to the rate on quarterpoint, and when you have a free shot, you take the basketball to the central bank in the rule is the same. If they get another free shot this year, there will take it again, because theyre trying to get to normal. But what they have not told us is what is normal. 500 million excess reserves, no excess reserves, rating it back, these are the things they have not said, and the reason is because they do not know. They have never been at a place like this to try and take a Balance Sheet down. This is a new experiment. And it is gradual . David safer, broadcasting it early, that seems to be what is in forming Monetary Policy. David coming up, the msci announces its latest additions and subtractions. And news all around, from china, to saudi arabia, to argentina. That will be coming up next. This is bloomberg. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. Tthats why at comcast,t to be connected 24 7. Were always working to make our services more reliable. With technology that can update itself. And advanced Fiber Network infrastructure. New, more Reliable Equipment for your home. And a new culture built around customer service. It all adds up to our most Reliable Network ever. One that keeps you connected to what matters most. Bloomberghis is daybreak. Lets get you a day to check right now as futures are lower, part of a global pullback. This is read all around, and the ftse is down by. 6 by a similar margin. Asia, you saw stocks pull back by. 5 , even as chinese shared gain shares gained. And oil prices right now it does not look like oil is moving enteredut yesterday wti a bear market. If you look at the trend overall, oil has been down five times in the past six days. This is exacerbated by pumping from a and u. S. Drilling. And the pound rallying, a racing the loss after the the racing erasing the loss. Boe a split on what to do when it comes to Interest Rates. The dollar slightly weaker yen, so i end, think even there. And what is making had one that headlines outside the business world. Emma . Emma democrats had hoped to trumpsze on president low approval rating, but karen handel captured 53 of the vote for the republicans. She raised less money than her