Rising supplies in the u. S. And libya. Matt welcome to bloomberg daybreak europe. Our flagship mornings show here in london. Im standing in for manus cranny. Anna todays the day of the queens speech. The name is a little misleading, is not written by the queen, but its delivered by the queen. Is the first glimpse of the legislative agenda that is over the intended next two years by theresa may and her minority government. How many domestic policies does she need . The voting takes place next week. Lots to talk about but more broadly, we need to talk talk about whats been happening in china. Take us through some of the market action. Said there was muted reaction in the market today with chinas msci inclusion, but of course its been long suspected, they tried three times already and failed. Here you can see over the last year a runoff of investors piling into a share etfs before the decision. We talk a lot about buy the rumor, sell the news. Today it was by the rumor and save the news a little bit, so you can see that investors have been waiting, maybe some pulled out and maybe some got in, but there had already been a big position here. Also, take a look at the risk radar here, i want to start off with oil because that will be one big market mover. As it was yesterday and overnight, oil coming down. You see crude right now, that two cents move today not a big deal but obviously we dropped yesterday and that brought down the s p 500. Biggest, but still the slide in the s p 500 since i believe may 17, so a couple of eggs weve seen a drop this and the index was hovering at an alltime record high. Also take a look at what happened in australia overnight. We saw the asx 200 index fall 1. 5 , a little more, and its still trading right now, down 1. 4 . Gold is interesting as investors are getting into that right now, it still is not broken out of. 3 . Ange but up about anna a quick look at the markets there. Lets go to hong kong. Crown rate is deputy prince has been promoted to the position of crown prince, replacing his uncle in a surprise announcement that reverberated through the kingdom and put the next in line for the throne. It was a noun it announced by the press agency and then on state television. Belgian soldiers have shown a. Uspected assailant in brussels the station was evacuated after a 30 p. M. Local time and all trains were halted as passengers fled onto the rails with the sound of the detonation and gunshots. Had intervened to neutralize an individual. In the u. S. , Republican Karen Handel has defeated a wellfunded opponent in a special election for a house seat in georgia. The result is a setback for democrats who hoped donald trump saw Approval Ratings would help them when congressional races. Moneye raising far less than the democrat in the most expensive house race in american history. U. K. Prime minister theresa may is to publish a legislative program today happy on brexit and likely to be light on anything controversial. The queen will read out the plan to lawmakers at 11 30 a. M. London time. Marking the start of the two your parliamentary session. Meanwhile negotiations for the support of northern irelands the ub would give her sufficient votes to pass legislation in the commons is still ongoing. South africa must protect the independence of its central bank and must evaluate what effect the recommendations of the ombudsman to offer its mandate will have on the institution, according to the countries. Inance minister speaking in an exclusive interview with bloomberg. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Stories on there. Loomberg at top its been all about the msci inclusion today. Wishing a little bit of fluctuation coming through. Up by. 4 . Hong kong is weaker and weve seen weakness coming through in a lot of the Energy Players asx 200, downhe by 1. 4 . Toshiba coming through in its Board Meeting today saying it has picked preferred bidders for its member chip business. Toshiba down by 1. 2 in late trade. Bhp billiton and rio tinto not only in correlation with the energy space but iron ore and hase has been news that rio we had a little bit of weakness from qbe, falling the most in tenmonth. Fourth time lucky for the inclusion of a shares. Showing that what weve seen in terms of these shenzhen and outperforming the overall dow jones index which is the clean line and the purple line which is the shanghai composite. But a lotbolic move of analysts say its just the start and were expecting to see more inclusion of the age shares in coming years. Thanks very much, Juliette Saly bear from hong kong on the asian markets. Our top story is in china where the msci is designed to take the countries equities global including them in its indexes. It gives the market a bigger role in the world stage than it already has. 222 a shares will be included next year comprising. 7 of the Global Emerging Markets gauge. Fernandez saidy it would be focused on expanding the inclusion of midcaps. The next inclusion is probably going to have a larger inclusion factor. And potentially as well be midcaps, thehe second category is something we are very focused on. We would like to expand the universe of shares that are available to International Investors. Brian. Or joined from what clinched the inclusion on the fourth try on the msci . For time lucky. Basically the reason this has taken so long is that mscis main issue boils down to china and the control that the government has here in the market. Obviously regulators and authorities here have an outside level of control in the markets here which was anathema to some msci investors and index compilers. So what has changed . On the access level, china withd up a second link shenzhen and hong kong. Reduce the list of stocks included in the end and relegated mostly big cap stops that they focused on. Also addressing one big saying for International Investors is the trading suspension issue which is quite prevalent here in china. They limited the ones they were including, the stocks that had not been suspended for more than 50 days to address that concern. Lastly, the other issue was chinas assistance, another issue to do with control. Ive got to preapprove Investment Products linked to its stock. Some of that process has apparently been loosened and simplified to mscis liking. Anna so that some of the detail of what they changed. What it means for the main and market, the allocation within the msci emerging markets, some say is more symbolic than meaningful. What does it mean for chinese mainland stock . You are right, were seeing that in the reaction today. Its not an open arms sort of rally here that we are seeing. The index is barely up in shanghai and shenzhen. Ultimately i think its a good sign. Chinas main and market, while it is the worlds second big with 7 trillion of equity value, is still a very closed shop. This opens it up to pension funds, mutual funds, investors that track in index is. I think it will be a professionalizing force. It will give more scrutiny to some of the companies here and obviously it cannot be forgotten that this is a market dominated by we investors, which means it can be quite predictable. There can be heard mentality going on. The introduction of Global Investors with different perspectives and potentially more sophisticated strategies, so i think its probably only a good thing. Now here in the Christophe Donay. Thanks for coming in. Let me ask you, how important is the msci to Institutional Investors . Creates a it benchmark of chinese stocks. Considering that we could expect probably broader inflows in the chinese stocks. The introduction of chinese stocks in the msci index reflects. 7 only. The chinese equities could become more prone to volatility, according to international stocks. And probably more prone to volatility according to the chinese economic cycle, including the chinese earnings cycle as well. This is one of the reasons why, the introduction of chinese equities in the in this ci is marginal. The chinese authorities want to at the end of the 1990s, when we experience growth, creating huge volatilities with a huge inflow and huge outflows creating the crash. The chinese authorities a very the introduction of chinese equities at this stage of this story. Ask you,as going to what does this do to risk, because in 2014 we saw the big boom and bust in Chinese Markets. As our colleague was saying, we get more Institutional Investors ,n china, maybe thats a good but maybe crises in china will be transmitted around the world a little more because of this. Our does that overstate it . Your question is absolutely right. , what the Chinese Authority want since the beginning of the capitalist story of the chinese economy and Chinese Markets is exactly to what happened at the end of the 1990s when we experienced a huge inflow going into the country, going into the asian equities, creating a bottle and then a crash. Chineseexactly what the authority wants to avoid at the time. The chinese economy is stable because since 2008, in the wake of the subprime crisis, what we observed is credit growth is running 4 5 a year faster than the normal gdp growth, meeting we are in excess credits for a long run, creating over the next five years or Something Like that. The possibility for a sharp correction in the chinese economy and a sharp correction on the chinese equity as well with a consequence of the International Equity market as well. New story. A big thank you so much for joining us to discuss that. He will stay with us here on daybreak because theres a lot more to go through. Here are some of the highlights of the day ahead. In london, its the queens speech and 11 30 u. K. Time. Protesters plan to march on parliament in the wake of the deadly tower plays and in the early hours of tomorrow morning, Donald Trump Holds a rally in iowa. Program,ing up on the a heavy serving of brexit. Theresa may is set to publish likely to bes focused on britains break with the eu. That is next. This is bloomberg. Anna welcome back, youre watching bloomberg daybreak europe. Over1 19 in the afternoon in hong kong. Lets get the Bloomberg Business flash with Juliette Saly. Juliette rising Global Supply offset efforts by opec to drain the blood. The most inping four years while crude stored on takers reached a 2017 height is month. According to the American Petroleum institute, u. S. Crude inventories drop by 2. 70 2 Million Barrels last week. U. S. Government data is forecast to show of 1. 2 million barrel decline. Toshiba has picked a group led by japanese investors as the preferred bidder for its memory chip business. Toshiba said its an injury to final agreement by Shareholders Meeting on june 28 to close the transaction by march. The sale or bring much needed cash into the market to make up for losses in its nuclear operation. Alibaba chairman has said chinas consumption will be the engine of development for the next 30 years. He added his company is not trying to compete with amazon in the u. S. But amazon is a great company. They did a fantastic job in america and the world, but they are an ecommerce company. We are not an ecommerce company. We help others to become ecommerce. We believe every company can be amazon. Juliette that is your Bloomberg Business flash. Thanks very much, Juliette Saly out of hong kong. Prime minister theresa may will publish a legislative program heavy on brexit in the queens speech shorn of had entry unlikely to be light on domestic controversy. Westminster. Is in what will we hear about brexit, and just to clarify for those who are not from the u. K. , this is a speech from theresa may at the queen simply reads out. Is that the case . Yes, that is exactly right. The queen reads it, but the government rights it. That is essentially what we are talking about. Theresa may that she will respond with humility and resolved to the results of the most recent election. Its the first big test of her conservative minority government. There could be clues as to how big is how ambitious her plans are. In order to be sure the queens speech will be passed by a vote in the comments next week, thats the timeline here. 11 30 we get the queen delivering the speech, then follows the debate of the next few days and next week, wednesday and thursday we get the vote on what the queens speech contained. Interesting to see if we get any conversation. P those conversations are ongoing. We were expecting a week or so ago that we would have the answers to just what they demanded in exchange for their support. We have not got that yet. No doubt there are questions about the amount of investment and taxation in ireland. It could be the queens speech will be very general to allow it to be passed. Matt i have a question on the National Mood through the actions of the region here. To wear ais not going crown as she normally does. Will come in a car instead of horses, which is also different from normal. Is this kind of omatic, the is itf pageantry, implemented of the queens lack of enthusiasm for this upgrade, and the second question, how much would that matter to the british people . Its a doubt very much statement about enthusiasm for the government. The queen has met and worked with many Prime Minister stating back to winston churchill. She is quite used to governments of all different flavors. We are told the reason were seeing less pageantry is because of the closeness of this ceremony to other state events that require a lot of pageantry. She will be in a car and will not wear the crown. Its not entirely unprecedented. Similar decisions were made at the beginning of world war ii and also a 1974 during labor protests. News,we do have breaking also fascinating. According to the New York Times, Travis Kalanick has resigned as the ceo of uber. We had heard that he would be stepping away from his daily role as ceo. It sounded more like a sabbatical. The New York Times is reporting Travis Kalanick has resigned as the cbo of cooper, obviously a 60 billion company that has been it hard by allegations of Sexual Harassment as well as some other issues dealing with the press that have been problematic for investors. We knew that managers, some of the top managers were going to leave and some would be taking a leave of absence. The New York Times again reporting that Travis Kalanick has resigned as the ceo of cooper. We will continue the ceo of uber. I want to get back to the european picture. Stop Christophe Donay still with us. An election that most people saw as promising in france before that and one that was not disastrous before that. Lesson, ortical risk do you see the possibility that it sort of rises up again this year . Christophe terms of the political situation, i would say that hopefully political trouble , maybe except in the u. K. Im not a british strategist, but from abroad, the picture from the political u. K. Situation seems Something Like its in trouble. The second thing to mention that the the brexit is cost is very painful. The Economic Cost is very painful. Is supposed to continue to slow down. Dont forget that the u. K. Economy was supposed to be the strongest economy in europe with 3 real gdp growth expected. Now we are projecting only 1 for the u. K. Economy. Matt economically punishing from your point of view as a mainland european strategist. Looking in from the outside. We appreciate your perspective. Week well talk about a saudi surprise with the new crown prince. This is. 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. Matt good morning, its 6 30 in the morning here in london but 1 30 in the afternoon in beautiful downtown singapore. Lets talk about saudi arabia. The deputy crown prince has replaced his uncles crown prince. The groundally prints. The shock announcement puts the 31 euro leader next in line to the throne of the Worlds Biggest Oil exporter. Joining us is tracy alloway. How much of a surprise was this, given the power that had been building up . Its a good question. The thing that is surprising everyone is the timing. No one was really expecting this to happen so soon. The idea that it would happen eventually, people have been talking about it. We had seen the architect of saudi arabias Economic Transformation plan in 2030 and a lot of moves that looked ambitious to a lot of people on the ground in saudi arabia. He was cultivating support among younger s