Tomorrow. We have great interviews. Will president elect trumpish escher in protectionism, and what will it mean for global trade . We speak to the owner of the Worlds Largest container shipping line. Plus, is the Banking Industry headed for an uber loan . We talk about bitcoin, Cyber Security, and disrupting the banks with the former barclays ceo and the block chain cofounder, later in the show. Gett things first lets to the data check. We have a special guest from asia. This is the picture of these markets. Breaking news out of the iea, saying the opec deal will create on oil supply deficit in the first half of the year. We will monitor that. I wish i had the picture for oil, but overall stocks unchanged. Unicredit gaining 4. 2 . There you go. This is the picture for oil, gaining 3. 2 . 55 point 67. First, lets get to the news with nejra cehic. Plans to raiset 13 billion in an offer to sell off bad loans and slash costs. Italys biggest bank is targeting 4. 7 billion euros net profit in 2019. As part of the strategy, it plans to shed 6500 jobs, bringing the total to 14,000. President elect donald trump will announce today that he plans to nominate exxon mobil Ceo Rex Tillerson as secretary of state, according to a person familiar with the decision. If confirmed by the senate, it would hand the job of top diplomat to a man whose ties to Vladimir Putin go back almost two decades at a time when possible russian interference in the u. S. Election is under scrutiny. At the same time, gary cohen of Goldman Sachs was the air blank fine andyd has been named top Economic Policy adviser. He will have the economic council, one of the most influential panels in the white house, hoping coordinate the president s economic program. Google news 24 hours a day, powered by journalists and analysts in more than 120 countries. I am nejra cehic. This is bloomberg. Francine as the fed prepares to tighten monetary policies, home prices hitting a 2009 hi, taking it more expensive to borrow to buy stocks. When let me introduce my guest, the managing director and vice chair of asiapacific for j. P. Morgan chase. Always great to see you. Coming on. Or when you look at the world, when you look at china we do not worry about china like we used to. Are we lulled into full security . There is still outflows and get to deal with. A stabilizing chinese economy, which is good for world growth. Right now, the single biggest concern is what is going to happen about u. S. China trade when Trump Takes Office in january. Also, what has happened in u. S. China relations. In the recent several weeks, we have seen more money coming out of china. We have seen chinese currency reserves bundling. They were around 3 trillion u. S. Dollars, but that is down from 4 trillion u. S. Dollars about a year and a half ago. The single biggest concern among investors is, what is going to happen to the chinese currency . Also, if there were a trade war between the u. S. And china, what would that do to chinas growth rate . Francine we talk about the falling renminbi, the outflows, and what we are seeing in the reserves. The three are not really compatible. How do you fix that . Tog i think china has generate more growth from the domestic economy, rather than relying on exporting, even though, in recent months, chinese exports recovered. It is still very much down from the highs achieved some time ago. The chinese leadership is looking at trying to stimulate domestic consumption. So for this year, they have been quite successful, because the Housing Market has been on a rebound. Consumer sentiment is high. Ecommerce is bullish. Service industries are beating growth. Owing forward to 2017, there are uncertainties. Trade is still very important to china. With trump threatening to name china a currency manipulator on things he saidhe on the campaign trail he would put a 35 tariff on chinese exports at the endrancine of the day, he is a businessman, and the most important relationship for the u. S. Is china. Jing but i think were in a new era. Trade has been rolling over the last many years. Ince the economic downturn 2009, trade between the u. S. And china is critical for chinas economic health, but also very important for u. S. Companies that produce hundreds of billions of dollars of goods in china. Also important for u. S. Consumers, who have been enjoying lowcost, highquality products from china. Francine lets say that donald trump, when he gets elected, either on the day or a couple of weeks afterward, he insults china in some form, either by not adhering to the one china policy, or by calling them some kind of manipulator of some sort. Will china retaliate . Jing china absolutely will. Francine by closing of borders . Say how is hard to china will react in situations like that. So far, china has been very common reaction to the rhetoric. What china might do is, thinking about the terms china is the single largest holder of u. S. Treasuries. China still holds 1. 1 trillion u. S. Dollars of reserves. Right . Nk about it, china is the single largest banker to america. China is the single largest holder of u. S. Treasuries. If china were to sell down u. S. Treasuries, what would happen to u. S. Treasuries, which are already on the rise . Francine if the u. S. Is retrenching Foreign Policy, this gives a great opportunity for china to step in and be the big guy in the region. Enormousna has an economic pull in the asiapacific region. If you look around chinas neighboring countries, from japan to korea to the 10 island countries in australia, china is the largest trading partner for all these countries. All thesentime, countries have to balance their relationships with the u. S. And china. Strategically, a lot of the countries in asia are under u. S. Protection, from the philippines to south korea, etc. But economically, china has an enormous influence on these countries. How do these countries balance relationships between the u. S. And china . It is critical in 2017. Francine thank you. Ulrich stays with us. 20 coming up including, how is the owner of the largest container shipping line dealing with overcapacity and sluggish growth in trade . The u. S. Deals as president elect gives clues how he will step away from his businesses. We bring you that story and the latest on his pick for secretary of state. And could the Banking Industry beheading for an uber moment . We talk Cyber Security, bitcoin, and disrupting the banks. Francine this is bloomberg surveillance. The fomc meets for the First Time Since the election of donald trump. Longterm bond yields in equity markets have soared while expectations of a hike are priced at 100 . For more on the rotation from debt to stocks and what it means for the Global Economy, we are back with j. P. Morgan chases jing ulrich. When you look at our wirp function on the bloomberg terminal, 100 of a hack tomorrow. What happens next year . Jing we forecast another two hikes. All Central Banks or data dependent. They will look at what happened to inflation next year, what happens to unemployment. Two hikes for now. It could be three. Interestingly, emerging markets are looking at the u. S. Rate hike with some level of capitation. In the u. S. Of course, it is baked in. We are seeing bond yields rise in recent months. We are seeing people wanting the fed to hike. Otherwise, they will be well behind the curve. For emerging markets, what it means is basically capital outflows. We had the taper can from a couple years ago. Now, we may have a different tantrum, because we have had a selloff in emerging market currencies. Francine i thought everything was priced in. You look at the dollar move. Is that it . I do not know if that is it. I think we will see continued pressure as the u. S. Dollar grows stronger. As u. S. Rates go stronger. That would pressure emerging markets, especially with current account deficits. Ar china, the situation is little different, because the currency is not freefloating, although in recent weeks the currency has been very weak, right . We have seen basically since august of last year, the chinese yuan depreciating about 13 against the u. S. Dollar. That sounds like a dramatic movement. But the currencies are relatively stable. For the chinese leadership, they need to focus on, number one, stimulating the domestic economy, as next year, remember, we not only have the european elections, which are very anticipated, but also chinese leadership transition in november of 2017. We will have the 90th party congress. There could be a second term. Francine the outflows are something we follow very closely. I have always been told because they are held by local authorities, they can roll over. But the outflows must be a huge concern in the government in power. Jing yes. Capitals a close account, but the capital account is quite leaky. Corporations and individuals have been trying to diversify out of r b assets into hard currency. It has been an ongoing trend. When the currency weakens, we see those outflows accelerate. What will happen in the next several months is i think the chinese leadership will aim to stabilize the mystic sentiment. So domestic sentiment. They will introduce measures to stem the outflow from china. For instance, individuals cannot use their pay card overseas to get as much foreign currency as they wanted in the past. Even corporate investments, if they are investing in speculative assets real estate, capital receipts he will be subject to more scrutiny. The outflow in the coming months, after the introduction of these measures, may slow a little bit. Francine if it does not slow, are you going twoseamer volatility . We have nothing volatility in the Chinese Market since january of last year. Or this year. His 2017 going to be a different story . The chinese20 16, leadership has engineered a soft landing in the stock market. They stabilize the economy. But in 2017, i think the biggest risk is u. S. For relations, and what that might mean for chinese exports to america and the asiapacific region as a whole. Both economically and strategically. Francine what is one thing you worry about the most, away from china, away from the donald Trump Presidency . What is something this priced in the markets now . Elections arepean a wild card. We have three major elections coming up in 2017. Onple have digested the news brexit, because it is a long process at least running into 2019. But somehow, in the first half of 2017, we could have election surprises out of european countries. Then, we could have another question mark about holding the e. U. Together. If the e. U. Work to deteriorate, all bets would be off. Francine thank you for all of your insight. Rich of j. P. Morgan chase, vice chair of asiapacific. How is the owner of the Worlds Largest container shipping line doing with overcapacity and sluggish growth . Speak to the ceo. Francine this is bloomberg surveillance. Heres nejra cehic. Donaldpresident elect trump has given his first clue as to how he will step away from his businesses. In a series of tweets overnight, he said he would put his sons in charge by Inauguration Day on january 20. He also said he would make no new business deals during his time in the white house, but offer no information about his own role. The largest provider of digital wallets for bitcoin has included a former barclays ceo to its board as the company attempts to persuade the wider financial industry to adopt opensource Ledger Technology to settle transactions. We have an exclusive interview with the former barclays ceo, Antony Jenkins, and black chain ceo peter smith, at 9 40 u. K. Time. In a credit plans to raise 13 billion, selloff bad loans, and slash costs. Italys biggest bank is targeting 4. 7 billion euros of in 2019. T it plans to shed another 6500 jobs, bringing the total to 14,000. That is the Bloomberg Business flash. Francine thank you. For more on the unicredit story, lets bring in the managing editor for European Finance here at bloomberg. Thank you for coming on again. Yesterday, we talked about monte dei paschi. Today, unicredit saying it wants 13 billion from investors. Will they succeed . The market at the moment is telling us it will. Shares are up, notwithstanding the 13 billion at the highend of what the market was expecting. There had been rumors about a figure in that order. But it has been doing a couple of people were saying it would be less. Essentially, it is turning a corner, cleaning out its Balance Sheet, cutting costs, doing whatever it can to make that palatable in an environment which is not conducive to much revenue. Francine yesterday, we were talking about monte dei paschi wanting 4 billion from investors. There is a question mark whether monte dei paschi can raise that money. If you are an investor, do you say i want to give it to unicredit . Or does unicredit get affected if monte dei paschi cannot raise capital . Elisa there are things to consider. There is a limited pool of funds that can go into italian banks and lets face it. Investors will the sting was between the banks. The banks are at very different junctures. Monte dei paschi is also doing a clean, but is also retooling considerably. Remain it is a bank that has had legacy issues, where lending has not been top class. They are really presenting a monumental change quite rapidly. Having said that, if monte dei paschi does not proceed, one does need to look at the effect on the broader confidence particularly in italy of households, banking stock, banking debt. That of course could potentially impact unicredit. Francine the timing is unfortunate, i guess. The deadline is the end of the year or 20 december . Elisa monte dei paschi is looking to wrap up by the end of the year. They have been told by the ecb they cannot have more time. In a credit have said they will do their capital rates in january. Very close timing. Francine thank you so much. Always great to have you. Part of our finance team in europe. The owner of the Worlds Largest container shipping line is going boards in copenhagen today. Matt miller is there. Skou,i am here with soren the ceo of Moller Maersk. Right now in the middle of maybe period of breaking up or splitting up the business, is probably a better way to put it. The shipping side, transport side, logistics on one, oil on the other. Does the Rising Oil Price make you want to keep some of these businesses . The oil price going up is clearly a huge help for oil. Also of all, Oil Companies by oil service businesses. Over the past couple of years, we have worked hard to build an oil business that is profitable and growing. 50 oil or 45 oil, we eventually achieve that, the breakeven oil business is less than 40 a barrel now. When the Oil Price Goes up to 55, 57, that is a good day for us. But it does not change the Strategic Direction of the group. We believe that the future of on globalgoing to be container shipping, container logistics, and that we will separate out our oil and interrelated businesses, so they can continue on their own. Matt so this will maybe help you get a better price when you sell or depressed these assets. Lets focus in on shipping. There is about a 30 estimated overcapacity in the world for these vessels. And you want to also be very conservative on your, so you are ships. Ng to buy more you are going to hold ships. You are going to hold your capex down. How do you have older ships last longer with lower capex . Soren in shipping, there is a clear consolidation wave ongoing right now. In the 12 months, a total of seven out of 20 carriers, what used to be the top 20 carriers, either merged or announced being gone out ofave business entirely. So we are seeing the industry consolidating. The old model of growth through acquiring new capacity, building new ships, is not working any longer. There is too much capacity, and the Industry Needs to consolidate. So if you want to invest in shipping today, you are going to have to buy ships that are already on the water. Matt you recently purchased or are in the process of purchasing hamburg sued. There were 20 large shipping companies two years ago. As you said, seven have been taken out. How many do you see room for in the future . Soren first of all, i believe we will continue to consolidate in the industry, continue to become more efficient, take cost out. There are players in our industry that have not been profitable for a long stretch. So i see consolidation continuing. Theterm, i would expect whole industry would end up looking very much like the packaging industry, where you have dhl, fedex, ups. Those are businesses where you operate capitalintensive global networks, distribution centers. Shipment. It is a similar type of business. And i would expect that longterm, our industry would converge toward that model as well. Matt you have about 19 of the Global Market with the merger. Let me ask who is next for Moller Maersk to pick up . Soren i do not know that we have plans. Matt nobody in your sites right now . Soren first, we have to clear this transaction through regulatory approvals. It is going to take 6, 9 months. And then we need to integrate it. I think that is going to be the transaction we want to do in the short to medium term. The future, we will see, once we have consumed that transaction, what happens next. Matt what about Pricing Power right now . Obviously, prices have fallen. They have been in the doldrums. It has been a problem for your share price and every other player as well. Do you see more Pricing Power coming back . Do you see, in 2017, stronger pricing . Soren the global container shipping industry went into what i think we can call a global price war. Basically, in the Second Quarter and it was driven by a lot of capacity being added into a market that was not growing. We are very much the victims of supply and demand.