To very warm welcome bloomberg day break. Im anna edwards. Lets talk about some of the extraordinary price action that were seeing in this environment with regard to the euro this morning or in the middle of the trading day in asia. Extraordinary is the key word in all of this. You would have missed out on a 1. 6 spike on the dollar. Take a look at what were seeing here. Even pulled it back on four trade full trading days. 1. 6 . We spoke to some of the Foreign Exchange traders out there. They said you have algo rhythmic letters snow building a. That snapped out the liquidity that was there around the turn of the year. Bear in mind some of the traders had to move in there and take losses to cover the positions. We saw a spike in the euro swiss. Move saw this specific against the dollar. A bit of a weaker dollar but in the scheme of things in the scheme of the eurodollar trade, this was a big move, anna. Algorithms being mentioned as is the norm. As we bridge this period between christmas and the new year holiday. The dollar a little bit of weakness in the dollar once again as we head towards the end of the year. King dollar certainly a theme post the trump victory. That spike in the euro one of the factors going on here as well. W. T. I. The price for Oil Per Barrel is up. This is after the price decreased yesterday. Bear in mind the w. T. I. Is up 45 year to date. Up for the fifth session. That also has had a decent year. Up around 9 . A quick look at the futures. Very early in the United States or late. Up by. 2 . The s p up by 10 year to date. He dow up by around 14 . We saw fairly flat trade yesterday. Well talk more about that later in the program. Lets get to bloomberg first word news. Here is angie lau. A ceasefire agreement came into effect in syria overnight after they brokered a deal they hope will pave the way to a peace settlement ending the nations civil war. The u. S. Had led peace efforts without success for years. The European Commission has approved a Liquidity Support Program for the worlds oldest bank. Banks a capital shortfall cannot schemes. The euro surged as much as 1. 6 . Computergenerated orders caught traders off guard. An algo rhythmic order nowballed. Europes single currency jumped o a high of 1. 053. And shinzo abes public Approval Rating has risen to a threeyear high after a visit to pearl harbor. His rating rose six points from highestearlier, to 64 , since october 2013. 84 of respondants agreed with his decision to visit pearl harbor. Nly 9 of those surveyed opposed. Trading fairly flat after spending much of thursday edging toward the seven per dollar mark. Yesterday china said they will dilute the weight of the dollar in their exchange basket lowering it from 26 to just over 22 . And the outlook for britains labor market is fairly police vehicle. The uncertainty surrounding brexit and low productivity levels according to the chartered institute of personnel and development. It said Slower Growth will be major challenges for the businesses over the next 12 month and warns that companies could be faced with a shortage of workers from the e. U. And claire city needed on the status of e. U. Citizens on clarity is needed on the status of e. U. Citizens from brint. You can find more stories on the bloomberg. This is bloomberg. Anna . We talked about how u. S. Equity markets closed a little bit lower on the back of thin trade as well and the news around the russia relationship train straining a little bit. There is definitely a lot more activity than there was in the u. S. Overnight. More activity here, yusuf. Casino shares helping lift the hang seng with stocks like alaxy. We are seeing some swings, up about a quarter of a percent but set for the biggest annual drop since 2011. Also a day of fluctuation. Toshiba, definitely a comeback hear, hear rebounding from a threeday plunge, adding as much as 10 . All in all, shares in asia set for the first annual gain since 013. Metals returning 214 this year. This year stocks slipping into the red today. Bullion begins to sparkle as a safe haven trade. Were seeing gold prices gain of course given the dollar weakness. The your the euro rising and the yen gained strength earlier but now weaker in the afternoon session here. Earlier touching 1. 1605 to the dollar. The yen is set for a second week higher. Overall for the year weakening. Eight months of 2016. Four out of the past five, that is the picture in asia. Thank you very much. U. S. President barack obama has announced fresh sanctions against russia for alleged cyberattacks aimed at interfereing with the 2016 president ial campaign. The sanctions will hit russian intelligence officials and agencies with obama expelling 35 russian operatives from the United States. The announcement came as the f. B. I. And Homeland SecurityDepartment Released a wrort technical evidence intended to prove interference. President elect donald trump said he will meet with intelligence officials next week to be updated on the facts of his situation. Great to have you on the program this morning, charles. What is it that you want to hear as we head into 2017 . What is it you want clarity on from trump . Fiscal policy . Monetary . The geopolitical . All of the above . I certainly think it is all of the above. We wanted to see clearer evidence of some of the things we promised in terms of Infrastructure Spending and fiscal spending generally is going to come through. We also want to be certain that he is not going to surprise us because surprises to equity markets generally often cause volatility and cause people to reassess what they are thinking. Clearly some of the infrastructure type plays we have seen lately have had very trong moves for very good reasons. Some were deeply oversold earlier in the year. As we got closer to the election, they did very well. Investors in those type of companies will be nervous trump might do something that will make them uncertain. Lets take a look at this spat between the u. S. And russia. U. B. S. Put out a note saying that the rule book could be improving the relations between the two countries. Do you think trump will stick wisdom his commitment to improve relations with russia . I was a little bit surprised by what i heard overnight from obama. I very much hope that trump can continue to build better relations with russia because poor relations with russia will make equity markets nervous and will cause quite a lot of other concerns which we can really do without. Picking up on this russian theme, investors own Record Number of snares russias biggest stock e. T. F. The oil price is a separate story, what opec is doing trying to limit the downside of the oil price and to lift the oil price. That is one of the factors. Is this an investment theme for you . Do you find investment themes in trumpenorcs . We have seen a strong recovery in the oil price. This is very important for investors in the large cap oil companies, the b. P. s, the total of this world. They have been paying pretty high dividend yields which below 5355 dollars, those dividends were not properly covered. That is a concern for investors. Short term, they can live with it. Longer term, those dividend also have to be cut. Therefore i think there is quite a lot of value in these names still here and some of the smaller names which have been perhaps by the oil prices up until april or may this year when they started recovering. There is some opportunity there but obviously some concerns. Hold on for a second to the u. S. Theme as well. In terms of this fiscal spending that everybody orb a lot of investors are pinning their hopes on. How realistic is it to have the kind of impact priced in the market given the fact that you have tightness in the labor market. Youre looking at 4. 6 in terms of the unemployment rate. How much can the market absorb . That is the concern here. As get into january, there will be some sort of january hangover or christmas hangover that well see and people will have to reassess some of the strong rallies that we have seen. Some of the names have just moved so much. It wouldnt surprise me at all if we didnt see a correction. It is probably a little overdue in equity markets. The s p, despite catching new highs lately, it has flat lined in the past few days and fell off a little bit in the last 24 hours or so. I dont like equity markets to continue to get new high or see new highs. Obviously it is a bullish sign. At some stage there will be a painful correction come through. We want to get clarity on monetary policy. As to who trump wants to be in charge of the federal reserve. It seems there could be some changes in that department as well. For sure. Obviously people will be looking closely at Janet Yellens testimony which is coming up in a few months time. I would like to see clarity there. I havent seen enough to make me happy yet. Coming up, modeis cash runch. Were live from mumbai. Crude headed for its first annual gain in three years and the biggest since 2009. Rump tralied. His win gave Global Equities a boost but will the bull run continue . This is bloomberg. Yousef it is 10 18 in the morning and in dubai it is already 133 18 in the afternoon as you can see. We had the theme of the weaker dollar of course overnight and that continues to play out on the dollaryen equation. An interesting note coming out of japan. The country is looking into letting workers get off early on the last friday of every month. Here is the thinking of the japanese government. How can we get people to spend more . Let them not work themselves to death so they can go out and spend their hardearned money. There you go. Something i can identify with. Thank you. Nomura holdings have announced a threeyear Christmas Campaign to eliminate waste. It is code named the waterline project which he likens to the fact that a ship will eventually sink if it takes on too much luggage. They have trimmed 700 million in expenses. It has been a tough year for chinas traders. Mainland equities surged 392 in the first month after listing in 2016. That is the best return since bloomberg began to compile such ata in 1994. New commerce soared as the composite index fell 12 . One of the worlds biggest declines. U. S. Oil is head for its first annual gain in three years. Crude is seeing its biggest fullyear rise since 2009 despite stockpiles remaining at their highest level in more than three decades. Thats your Bloomberg Business flash. Anna . Anna thank you very much. Indias Prime Minister modi looks set to miss his selfimposed deadline to restore order to the countrys economy and ease the hardship faced by citizens following his southern currency been a. Ban. Modi promised the inconvenience would be over by today. His selfimposed deadline to ease the chaos caused by the ban on cash ends tonight. I see reports that there are still ques outside of banks. Has he managed to restore order or is he going to fail . Like you said, he promised to end the situation today. Let me just complete it. A few day a. F. C. The banned the cash, he said if after december 30 there are sharp come information my work or mistakes of bad intentions found in my work, i will be prepared r for any punishment. Well, the situation is far from normal now. Maybe in cities, line in frontor banks have come down a little bit but things havent really improved for companies. The cash has been rationed since he made that speech. That is not going to change any time soon. We spoke to a few businessmen. We spoke to a jewelry maker and he said that he had to fire people and close factories because there is no work for them to do. In the short term, the situation is going to remain quite unstable. Modi, for instance, has said the bank bad loan situation could worsen. Economists have slashed their forecast for the economy for next year they have said that modis decision of november 8 could carry on for the next ear. Yousef im looking at the performance of equities then. It has been the best year for indian bonds since 2008. What is next for modi here and what additional step consist he take . Modi will be speaking to tomorrow is what we have been given to understand. There is a budget due february 1. What we are expecting, what analysts are telling us is that he will be keeping an eye on upcoming elections, state elections which is key for him to win to keep the momentum going. We see probably income tax cuts for people and acceleration of Corporate Income tax cuts that have already been announced. Those are some of the few things that modi could do going forward. Yousef thanks a lot for joining us live from mumbai, on the story coming oufert india. It has been a strong year, end of year for u. S. Financials with a surge in bank shares since the president ial election. What a run it has been. The trump trade has made stocks the best performers. Lets pick up the conversation with Charles Newsome. Charles, do you think the market has gone ahead of itself here . This hope that the thrashing and deregulation of the u. S. Banking industry is going to herald some kind of new horizon . We have been enthusiastic of u. S. Banks for a while now. Because we felt that they were ry werent particularly expensive and have been through a lot of change in and the likes of jpmorgan and Goldman Sachs were run by capable teams that have put these banks into a great position over a long period of time. And they were not particularly expensive. However they have had quite strong moves, we have seen recently. That doesnt in our view or in my view change the investment thesis. However for u. K. Sterling investors, because of the weakness of the dollar, the moves have been so strong people should perhaps stand back a little bit and maybe wait for a correction if they are thinking of buying in at these levels and be patient. That doesnt mean that clients should own them from here . Anna is trump going to set the tone . Yesterday we played a great interview with jamie dimon. We could see some big changes under trump, couldnt we . We could see some big changes and he has talked about them. I think some of the dodd frank rules that were put in place were too strong. Bear in mind that trump has got to get the banks to work and be able to lend and operate efficiently and with trust. I think were now getting to that stage where people trust banks again after trust had fallen away with them dramatically. Also the point about what trump is trying to achieve is get Infrastructure Spending. He needs the banks to partake in this. Yousef charles, give us some more context here. Youre positive on the u. S. Bank story. What does that do to the european financial story and what are you hoping out of that sector in 2017 . Im still a little bit nervous about what i see in european banks. U. K. Banks, barclays, hsbc. We are becoming much more positive about and like the look of what we see having been weight in them far long time underweight in them for a long time. Investors have really had such a bad experience over such a long time that evaluations have become very attractive and they have become very underweight and therefore will be forced to reassess them and get back to where it is normalized. Anna thank you. Charles stays with us a little bit longer on daybreak. After baunchy year for oil, we ask what is next for 2017 . What is in store for oil and commodities . Well discuss that next here on day break. This is bloomberg. Anna a warm welcome back. This is bloomberg daybreak europe. It is 2 30. The hang seng up 1. 3 . Asia pacific is up by. 25 this morning. Daybreak is now available on bloomberg and on your mobile. Lets take a look at some of the stories that have made it into todays edition. The u. S. Retail taluating against russ for for meddling in the president ial election. President obama has imposed sanctions and expold 35 russian operate is. A report with evidence linking cyberattacks to Vladimir Putins ervices. Yousef . Yousef a jump in the euro and swiss frank. Traders with caught off guard when the currency jumped 1. 6 in the asian morning trade before aring those gains. Anna finally daybreak focuses on a deep chill to come in 2017. A deep freeze is about to descend on north america and europe and asia. Brutal ogists say the cold will hit the u. S. And queand russia bearing the brunt on the other side of the globe. Yousef lets pick up on the story over the offshore yuan. It traded fairly flat. Yesterday china said it will dilute the weight of the dollar in its tradeweighted Foreign Exchange basket lowering it to just over 22 . What is this basket and what are the exact changes that china has made . It is a bit of a tweak, isnt it . Right. This time last year, china told us dont just look at the dollaryuan. Look at the yuan versus a basket of currencies. In addition to the original 13 currencies, they are adding 11 more, the South African rand and the south korean won. If youre adding currencies, youre going to reduce the weighting of the original currencies. Instead of the original 26 weighting that the dollar gets, that is reduced to 22 . Anna why are they doing this now . It comes at a time where we see the chinese currency under a lot of pressure against the u. S. Dollar. Are they trying to increasingly distract the markets attention away from that move . Right. We have heard chinese Officials Say many times this year that hey, look at the yuan versus the basket. It is still quite stable. In a way that is true. The chinese yuan tends to be less volatile than other currencies gebs dollar. Against the dollar. If you look at this index of the yuan against the basket of currencies, it is actually around a fourmonth high. They are hoping that youre going to Pay Attention more to this index, especially as were expecting a further dollar rally. Yousef the central bank has been very active. They are rolling forward in terms of moving on some of the anti mown laundering situation. Will these changes help unlock some of the knots in the system . Right. The problem here is no one is really going to trade the yuan against the basket of 24 currencies. Especially the people nervously watching the Exchange Rate in china wondering if they should go to bank and exchange their yuan for the dollar. That is the problem here. A lot of analysts we have spoken to say at the end of the da