The oil market rebounding faster as opec implements the deal that i do not know if it has had an impact. It seems pretty selffulfilling, right . We knew they were looking for some kind of agreement to freeze production. If that is implement it, it will help the oil markets. The iea coming out with its monthly report, saying they see the Oil Market Rebalancing faster if the opec deal is important in. It seems a given, but who am i to say . You see brent at 33. 01. We will have plenty more on the iea and go live to a stumble for the petroleum conference. First, here is sebastian selleck. Seb the Republican Party a conferencecalled on Donald Trumps embattled campaign after paul ryan said he will not defend or campaign for the candidate after the comments about women. Stick to illegal immigration and stop running him. A new poll Shows Hillary clinton enjoying a 14 point lead, the largest gap so far in that survey. Since i has suffered its biggest intraday fall in a month after asking all retailer partners to stop sales of its galaxy note 7 smartphone. There may be a new defect in the phone and they advise users not to use it. Since im has lost more than 13 billion in market cap today. Goldman sachs says chinas currency outflows maybe worse than they look. Of increased outflows could stem the recent column in chinas Foreign Exchange market. More than 2600 analysts and journalists in more than 106 countries. Im sebastian selleck. Salek. The dollarncine climbing on the bed on. The european stocks are pretty much unchanged. Touchutures declining a after a retreat in asia. We saw stocks fall, led by technology shares, after samsung told Retail Partners to stop sales and exchanges of the galaxy note 7 smartphones. I want to focus on the ftse 100, and the pound. We will speak to the ceo of saints very a little later on on the count full and whether it is helping or curbing retail sales. I decided to go for oil because will kennedy is here to talk about oil. This is the kennedy graphic, an homage. The latest is the blue graphic on russia. Saudi arabia, you can see, is the white line. It is at a high compared the last two years for them, down a touch. The wti price you see it is really russia that has been producing and let more in the past, which is why this agreement may be in place sooner than later. Is training. Our guest is diane, founder of ncods economics. Also to join us is bloombergs managing editor for energy and commodities, will kennedy. You are an expert in oil, right . We have the iea saying markets will rebound if the opec agreement goes through. That is a given, isnt it russian mark isnt it . You have seen acknowledgment that some kind of meaningful action is going to happen. Saudi arabia came to this big meeting of Energy Ministers goingday and said, we are to change the market than mi. Things need to change. Putin said he is willing to take part. Goldman sachs said, we think something meaningful is going to happen here. It is important to remember, since the opec meeting in algiers, price is up 15 . It has had a material impact. That has taken place in the face of a rising dollar, which shows the markets really responded. Francine how significant was putins intervention yesterday . Will people are skeptical about whether russia will ever engage in real demand management. Run byn oil Industry Private companies. They have very difficult weather conditions to contend with. But the fact he was there and send it i think means they are willing perhaps to freeze production, at least. That said, your chart shows very clearly the record level. They pumped 11. 3 Million Barrels a day in the first of this month. Francine how much do you look at oil . Diana oil is really important. In the u. S. , the oil dividend was not as much as people thought, because we now produce oil. Between 40 and 50, the shale fields are productive. Investment has begun to pick up. It is the element that is not really being taken into account in terms of how much oil will come on. We have to go through the balancing act of next year. By mid2017, i think you will see a pic of continuous production which could put a lid on these prices. The oil dividend is something most people do not understand. Not only was it the oil dividend for consumers, but it was a dividend to be able to accept jobs at low wage rate. People literally could not accept minimum wage jobs. Not only has minimum wage gone up at the state and local level, but we have seen commute costs we do not have much mass transit. We do in chicago, but not the u. S. In general. That has had a major impact on peoples willingness and ability to get jobs. Francine i grew up thinking Lower Oil Prices means good things for the economy. On oil fresher producers. But what we are struggling to understand in the last five years we cannot get inflation. This is partly due to the fact that oil is a stop. But it does not give the lift we thought it would to the economy. Diana it has more complex reaction functions than it once did. Everybody initially, when they saw oil prices plummet, said this is great for u. S. Consumers, consumers in europe, consumers in the uk. At the end of the day, it is not the same equation it once was. We want to be in a sweet spot of oil. Hink 4050 five dollars 40 55 is a sweet spot. You are not causing too much displacement for businesses that, when Oil Businesses are high, cannot luncheon in the economy. Francine the Saudi Oil Minister said 60 by the end of the year is achievable. Is that achievable . Will it seems prices could be heading to test that level. But the reaction of producers of shale the iea director this morning said 60, most shale production is going to come back. What the market is going to be looking for is the shale cap. Where does the u. S. Shale industry cap prices . It is probably going to be very hard for prices to get much beyond 60 per share. They can produce oil more efficiently and reduce the cost. What opec is really doing is taking the short out of the market. It once oil prices, but also wants to guarantee we do not see the slump like last january, down to 30 a barrel. At the very least, reactions from algiers mean that is not going to happen again. Diana one other point. The saudis were attacking not be shale fields in the u. S. , and they are going to freeze production at record levels as well. There are a lot of things at play. I think the ceiling is there. You are right. That is a floor. Francine will kennedy, bloomberg plus managing editor, of ds economics. The ftse 100 ticking higher, gaining 0. 3 . Points,ill down 118 almost at an alltime record level. That has to do with the weakness in the pound on the back of brexit. Stay with surveillance. Coming up, fed watchers could these minutes provide clues and sasons behind last month dissent . We discussed brexit and why sterling keeps sliding. As paul ryan backs away from his Party Candidate or president , we talk about Political Risk in the Worlds Largest economy. This is bloomberg. Francine in london, this is bloomberg surveillance. Lets get to the Bloomberg Business flash with sebastian salek. Seb shockers in asia and the u. S. Shoppers in the u. S. And asia snapped up lb hm handbags and perfume. Gains from the fashion and Leather Goods division. Fell 11 t takata after it was said to be considering bankruptcy protection in the u. S. The airbag maker says no decision has been made. The commitment is providing a stable supply of products, and talks with related parties are ongoing. A decision to pull a ukip oh due to pull its uk ipo due to uncertain market conditions. Francine a busy week for the fed. Tomorrow, we get minute on the fomc decision. Three dissenters came out in favor of a hike. On friday, jelly Yellen Janet Yellen gives a speech. In the meantime, a bold call from pimco. For more on the rate debate, onk is the ceo of ds economics. It is a real pleasure to see you on this side of the pond. It may a sense of where you see the fed going. Diana i think we will get a december rate hike. Remember, the Federal Reserve does not do policy analysis related to the election in any of their modeling. Whatever the Election Outcomes are, there are things they might have to take into account once we get there. With that said, yes, yellen is there. Francine which would be what . Can we expect the kind of brexit let us say donald trump wins. The markets are not pricing in for it. Is that a brexit scenario . Diana they are also not pricing in a route with clinton, where you have the senate and the house godin the democrat. I do not think that is likely. The senate could, but i do not think the house is likely to go. If something happened like that, you could see a reaction the market has not priced in. Financial stability is a fed mandate. We do not like to see the tail wagging the dog. But it does put them in a precarious position in december. That said, i do expect a move in december. The interesting part is that even small moves it is only a quarter point. Jamie dimon i used to work with jamie. He says it is a small move. It is a doubling of the fed funds rate. In the context we are in, even small moves can have outsized market impact. That is what the fed is trying to be cautious about, is make it as orderly as possible. And they are starting to ask ofaccept Larry Summers view the world, secular stagnation, or the new normal. Francine let us say they do a small hike in december. What are the chances of them having to reverse it because we see a recession or something, inflation going nowhere in 2017 . Diana i think the chances are pretty small in 2017. We overestimate how fast policy works. Thator good policy policy, it is sort of like that leaky faucet you did not fix. It continues to leak, or maybe you have a pipe and you put a bucket underneath, and all of the sudden, you have a flood. You do not connect it to the fact he did not fix it for years. I think that is how policy is. The same thing with brexit. It is a huge move in the pound right now. Before the average person on the street, it does not seem cataclysmic. It discredits the forecasts themselves. The same thing is true of trump. There are issues he could move quickly on, with large market implications in the u. S. Economy. But the chances of it happening in 2017 in general are still pretty low in terms of disruptions the fed will have to stimulate. The real issue for the fed is, is fiscal policy going to be more stimulated . I do think we have bipartisan support. Francine it is difficult to see what policies donald trump will put in place. Diana the uncertainty factor is an issue for markets. One thing people do not realize is, what could he do right away . You cannot renegotiate nafta. But he could use legislation clinton signed into effect where he says, you are being hostile, mexico, so we put tariffs on you. That would shut down manufacturers in the United States. That would shut down major retailers, doing the same to china, and raise prices rapidly. There could be massive economic things. But what would people let him do . How fast could he do it . We do not know. Francine this is insiders telling us that he does not really have a transition play, which is a little bit like the brexit for the uk. If you have a political vacuum for one or two months, what does that mean . Usually, president s on either side of politics have people in place to keep it smooth. Diana even during 2008, it is one thing hank paulson commented about. It was horrible to go through the transition. Things were happening so quickly, you could not coordinate policy between two administrations. In the uk, you had a plan b, with mark carney saying, we did nothing brexit was going to happen, but we had planned a stopgap. We do not have that in the u. S. Fed. We do not have an ability to deal with that at the fed. Nor do we have that in the political process. That is the larger arch you larger issue. Brexit as a look at symptom of an illness we are experiencing in the western world. It is not just the uk. It is in the u. S. , in the eu. Isolationism, nationalism we have seen come out, and hate is a very popular thing and politics these days. Francine and that has longerterm implications for everything we do. Thank you so much. The founder and ceo of ds economics. We will be talking a little bit more about some of the models we can use in this day and age, and we will talk brexit with diane a little bit later. Up next, why the nobel economic prize is a win for micro over macroeconomics. We are also getting breaking news out of south africa. This is the South African falling on reports the finance minister, on the show just a arrested. Will be the South African rand is falling 3 . I will get the chart up and we will follow the breaking news closely. Francine i am francine lack what here in london. Over the last six minutes, there has been a Sharp Movement in ram, weakening as much as movement in rand, weakening as much as 3 against the dollar. South a report that the african finance minister, who was on the show last tuesday, will be charged with fraud. We understand that in johannesburg, there is now a briefing with the police, and as soon as we have news one way or the other, we will bring it to you. Last week when he was on the program, he was asked repeatedly whether the probe means that his job and the stability of the South African rand will be at risk. That heme three times did not believe in it and had not been kept uptodate by the police whether they were still investigating him or not. This was only last tuesday. We heard from a couple of leaders in the country, saying whatever happens, the probe must not destabilize south africa. You can see the huge move as we listen to the police giving an update on this probe, with huge moves in the rand. Still with us, i ad with us, diane swonk. The first reaction is it is a mess because we have not been kept uptodate. As an investor, you would shy away. Thisto this is diana is an issue in emerging markets. Thisl prices fell, it corruption emerged. Brazil is in a depression. There at least is an actual action to deal with the corruption. E have yet to see this is the beginning of a tip of an iceberg. Titanic, but this is a tim of an iceberg in emerging markets like south africa, where you really have corruption that is broadbased, and they have yet to deal with it. Many people thought it would happen more rapidly. It is not. Francine the other concern is that this was a finance minister that at least by the markets was well regarded. Which is why you are seeing these huge swings. Storyhave a big profile today about bob diamond, the x ceo of barclays. Betade a massive personal on africa, and it is not going well because of the corruption. This is not just money. This is peoples lives. I was in south africa in the early 90s. I met nelson mandela. The optimism was incredible. The potential of the whole continent. That all seems to be disappearing. It is terrible. I would be careful about too broad of a brush. Ofre is still our pockets optimism. I think africa is an interesting place to be. But you have to be more careful how you tread, because nigeria is down at 180, not only because of terrorism, but falling oil prices. We have seen with these companies it has really been revealed, unfortunately across many emerging markets, how much they did not deal with by using the paper of those profits on oil. Francine thank you so much. This is the picture. 14. 22 four rand. For rand. If you look at the six members ranks index, it is falling 3. 2 on the backs of a report. We still do not have confirmation. Francine i am Francine Lacqua in london with the first hour of bloomberg surveillance. Breaking news out of South African, the rand falling 3 after a report the finance minister is to be arrested. This is according to a local news station. We have two reporters on the ground in johannesburg listening to a News Conference given right now by the South African police. The Market Reaction has been quite significant and quite violent. The9 for the rand against dollar. Lets show you the banks. This for the moment is just on ordhan will ber. G arrested because of the probe that we knew was going on. About speak to him just exactly seven days ago on this program. He was talking to us from new york. We repeatedly asked him whether he was concerned about the probe. His was seven days ago he told us he had not been kept in the loop on whether he was still being investigated or night. Or not. When i asked him whether it would put his job and therefore a little bit of the stability of south africa at risk, here is what he answered. As far as the socalled investigation, that is no more than a political mischief. You have the elections in the u. S. , you have seen the brexit in the u. K. , and the police do not get involved in those situations but i am sure we in south africa will resolve these difficulties. Francine the story seems to have moved on from last tuesday. The Deputy President of south the Deputy President of south africa saying the probe would not steve destabilize south africa it also reminded that no one is above the law. Lets get to the bloomberg first word news. Sebastian the Republican Party chairman has held a hastily held conference. That is after paul ryan says he will not defend or campaign for the billionaire. Said that brian should focus on illegal immigration and stop attacking him. Poll showing Hillary Clinton and join a 14 point lead. Suffered its biggest intraday fall in a month after all Retail Partners have been asked to stop selling its smartphone. They are advising owners not to use it. They have lost more than 13 billion in market cap today alone. Charles evans arguing in favor of keeping the Interest Rates low. Who is slatednker to