Its 30 minutes until the end of the session. We are lower right now after being up and down. Volume is lower today because of the thanks giving holiday even though there isnt a holiday here in europe. Its a spill over a spillover effect and these are the currencies against the dollar with the dollar drifting lower after eight dovish fed meeting. After a dovish fed meeting. Silver, bonds, communities and cdss. Shortgs just felt fell of estimates. In the cognac business. The french spirit makers cognac sales have been improving in china after a fiveyear government crackdown on extravagant spending. The company has been expanding its ultra premium versions is prices run as high as 80,000 louissix liter bottle of roma xiii cognac. There is a 15 jump in annual profit by germanys largest steelmaker, forecasting higher earnings this fiscal year. Steel producers have been bouyed as china cuts plants to curb pollution and exports. Demand remains a strong and prices are rallying and the key steelmaking ingredient is iron or which has gotten cheaper. The Company Announced last year its taking steps to combine its european steel business with tartar steel to create the regions secondbiggest producer and tackle overcapacity in the industry. Shares are up a 3. 5 today. Anishing with matters of spanish nature spains economy is going to pay a price for the catalonia bid for independence. The prime ministers stepped in to take over the nation and elections could prove a flash point. That means lingering uncertainty posing a risk to sentiment, share prices, bonds and the worstcase scenario, spains expansion would be weaker, the economy would be 17 billion euros smaller and 2019. That would otherwise have been the case. That followsdex economic uncertainty. As you can see, the index spiking post the catalan crisis. Lets check in on first word news with taylor riggs. Taylor in new york city, President Trump wished Service Members a happy thanksgiving today. The president thanked them for their bravery and said they were not letting you win before. Later, he met with members of the coast guard at their base in riviera beach, florida. He thanked them for the work they did in the aftermath of hurricane are be in texas. In germany, chancellor Angela Merkel may get a partial lifeline from the social democrats. Leader, martin schultz, is prepared to offer her limited support for a fourth term. Back Angela Merkel and a minority government but he has ruled out repeating the grand coalition that govern germany for eight of the last 12 years. The uns International Energy agency says iran is living up to its and of the nuclear agreement. Its monitoring a deal with the u. S. And other nations. President trump refused to certify last month that iran is in compliance. My and martin bangladesh have myanmar y and mark myanmar and bangladesh have signed an agreement on immigrants. More than 620,000 refugees are now in bangladesh but its not clear many will be allowed to go back to myanmar. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than one had to countries. I am taylor riggs. This is bloomberg. Mark thank you. In economy gaining ground november supported by ultralow rates and asset purchases from the ecb. Unemployment has dropped from a record and is enjoying its most synchronized expansion since before the single currency was founded. Fors bring in Richard JonesBloomberg Markets live in berlin. Data goes from strength to strength, doesnt it . Yeah, and the interesting thing about it is that its synchronized. Parts ofjust certain the euro area that are growing. It seems to be widespread. The cmi data today, the german and french were strong but even the euro area data was at a several year high. Widespread and thats what i think policymakers are looking for, not just pockets of growth but growth across the entire area. Data the only piece of which the ecb will still have concerns about is the obvious ran its cpi which which remains below their target of just below 2 . They will plow on when it comes to the bond buying program. It will be a slow process. Its been an interesting week for bloomberg stories when it comes to how they will communicate in 2018. Yeah, i think communication in 2018, given the strong growth bashar growth backdrop will be different for the euro. When wage growth picks up, they will probably remain very accommodative. With the backdrop, it is driving growth. Tos a complicated notion sell when you see growth being as strong as it is and the data being as buoyant as it is with the fact that we still have a very accommodative monetary policy. Its a fine balance to strike and i think that will be the big challenge in the next year for the ecb markets. What about the accounts of the last ecb meeting . Its the equivalent of their minutes. There is clearly a disagreement about when the end date should or could have been for qe. Some were a that the market may expect more qe extension. Is this healthy . We know there are various policymakers on the board like the germans who would rather have preferred the qe program to have ended in september. Is this a healthy debate happening within the governing council . I think it is healthy. I also think you would be surprised if we did not have that kind of debate. We have seen it on the fed and of the bank of england. Why wouldnt we have it at the ecb . Its a broad group of people ofresenting a big economies so it should not surprise anybody we get this level of debate. I think there is a consensus amongst the board and i think they have been able to bring in viewpoints and come up with a consensus but the debate itself i think is a healthy development. Mark on the fed, theres clearly the debate about the part of inflation and what it means for policy. How does that affect the part of rate hikes in the next 12 months . I think the debate amongst the fomc will probably see the migrateut what happens closer to what the market is saying. To Interest Rate in 2018 but three or four that thedot plots are calling for his little too much. Event in theer big last 24 hours was the budget in the u. K. Which seems to have been given a thumbs up especially when it comes to Philip Hammonds performance and what he gave away given his constraints. Today we had gdp data, business netstment was strong and isde is attracting subtracting the Household Spending is holding it all together. The economy is growing but you have to look back to the Philip Hammond comments yesterday. It is not going to be a Strong Economy going out to 2022 . Obro, if you look at the forecast for gdp growth, its sub 2 which is a long time that has been the case. When you contrast that with growth in the euro area and the behind. s lagging behind. Going forward with the brexit overhang and behind. Going forward with the brexit overhang and the challenges facing their, its going to be a pretty tricky balance for the u. K. Economy. There are reasons to think that perhaps the pound might run into some pretty serious headwinds. Mark on german and domestic are we looking at elections in the next three or four months . It feels like there might be some sort of deal to be done between the different Political Parties in germany. Great job, thanks a lot. Up next, you will hear from the chief executive of germanys a guest steelmaker. This is bloomberg. Mark live from london, i am mark barton. Germanys biggest steelmakers rising in recovery. There is a jump in annual profits forecasting higher earnings. The chief executive says the last six months of them positive for the industry and the companys merger with tarcher steel is still on schedule. If you look at the underlying ,igures, most of the markets the outlook on growth is quite positive. The figures for germany and europe got confirmed this morning. Think the order intake where there is a record high and five years, growing 18 , is a commitment to our customers which is perhaps the most important group. Its also convincing Going Forward in the underlying factor is why we have guided the market from one point 7 , we believe we can grow our earnings to 1. 8 . Thats a nice firm guidance. Gotten anhave advantage from china and russia, what about the heavy hand of tariffs . One of the strengths of our company that we have a well balanced regional profile. This was our major achievement Going Forward. This may get quite robust if we have a distortion in one of the companies are markets that we have a decent footprint in asia and europe and in america. Overall, this allows us to more or less find our way through what will happen. As i said before, the overall underlying factor is quite a positive one. Could you see a supply squeeze in the market next year . It depends which segment you are targeting. Our offering is quite broad. Market, the last six month, we have seen quite a positive development. We do notate that but miss judge that. The underlying factor is that we have underlying supply remains. Also, our business is developing nicely and we consistently are going to merge with tarcher steel. Tartar steel. What more can you tell us today about this new deal with tartar. Said, all still companies in europe and germany have continued to restructure in recent years. Restructuringthis was eaten up just by the fact that the underlying problem was never tackled. We tried to overcome that fact by consolidating the market. We believe in forming a very strong number two in combination with tartar. Secure what we can do to 10,000 workplaces in the steel industry. They are eight quiet they are quite a large later and they are a strong number two in the market. Over the years, we can tackle the overcapacity problem for the benefit of our customers because they will have high Innovative Products but also to the benefit of our employees. The preparation for the signing is right on schedule. Mark the chief executive of thiessen krupp. Just ahead, one of the biggest deal makers and hsbc is leaving. This is bloomberg. Mark live from london, im mark barton and the european closes one minute a day away. Advisers fromef hsbc is leaving. He has agreed to live by the end of the month and the former Goldman Sachs partner brush management style classed with the culture at hsbc. Stephen morris joins us now. What was wrong with his brush style . Brought in with great fanfare 18 months ago, promising a new style at hsbc. It was focused on bringing in more money from the biggest low returninging loans off the balance sheet. He pushed his employees hard and it looks like he push them to art. Whomain sponsor was the ceo is leaving in february. He is being replaced by one of his top managers so it looks like his style classed with the more traditional and british outlook of hsbc. Mark does this suggest that john flynn has pushed him out . Maybe mark tucker, who pushed him out . Be a combination of the new management team. He has few allies inside the bank so i dont think that many tears will be shed. If he was driving a market improvement, he would probably still be there. When you crush the data, the have not marched up in investment banking. Mark he still generated 2. 1 billion in revenue. Thats not good enough . Its showing a little bit of improvement especially with low volatility and tightening spreads in asia. I think they are 14th globally so they are not up there with the big boys. Was he supposed to be a potential successful successor to gulliver . They brought in a new chairman from outside the bank. They went with a veteran inside. Outside at andn he probably would not have been upset that his name was linked to that. Phillips keeps running the unit . Yes, he will keep going. It remains to be seen if the strategy will shift back to what they had before or whether it will be kept similar. There has been a lot of management turnover at hsbc lately. He left maybe because of westermanns style . Some opted to leave and some chose to leave. And some were forced to leave. When that happens, people loyal to the old guard plan to get upset and the new ones will be looking over their shoulders. Mark you say he jarred with the culture. That came up a lot when they were talking about the culture. What is it about the hsbc culture . Compared to other investment banks, it tends to be markedly lowered turnover. They encourage lower tenures. Engender a greater sense of loyalty. Clearly, some thought this was affecting the performance. They thought they could push their employees to earn more from clients and maybe take more of a Goldman Sachs approach to dealmaking. Quite clearly, this is not worked but we must remember that this is not a clash between cultures of Goldman Sachs and hsbc, its just a personalized departure. Mark great story, well done. Time for the Bloomberg Business flash, the busiest i biggest stories of the day. Jamie dimon says the u. S. Needs to cut corporate taxes to Keep Companies from moving abroad. He said thats more important than his own tax situation. If you want to raise my rates, so be it but whatever you do, do not have an uncompetitive tax system in a very competitive world. That is the mistake for america and to confuse the two i think is a huge error. That he also said he bet President Trump does not win a second term but he warns the democrats will have to come up. Ith a reasonable alternative he says if the current if the a leftistelect candidate, donald trump will win again. The angry birds plunger angry birds maker made a 25 plunge. The Broadcom Ceos willing to boost the price of qualcomm as it drops its 47 billion bid to mxp semiconductors. Qualcomm says the current offer undervalues the company. Opecs biggest producers are trying to regain lost ground in the Worlds Biggest Oil importer. Saudi arabias aramco is in talks with a petro chemical conglomerate. The saudi state is the biggest oil supplier to china and has been overtaken by russia. That is your latest Bloomberg Business flash for this hour. Looking at european markets, we are four minutes away from the end of the thursday session. Its down because of the thanksgiving day holiday, little changed on the day. The closes next. This is bloomberg. Live from london, im mark barton. This is a european the stoxx finishing up. It is a quiet day today, thanksgiving day, of course. 25 aboveime of day, the 30 day average. We were down for the third day, but a lot of things thinking chinese stock market with a dovish fed meeting. Lets start with the eurozone data picking up momentum in november with companies boosting higher. To 57. 5 versus 56 in october, highest in months. This is the manufacturing white line. The purple line is servicing pmis. Charge, 1774 if you have a bloomberg. Michael regan noticed the difference between six months bills and 10 year spanish bonds. He asked does this portend some ahead, and said probably not. For a tear starting in mid2005. Twoyear period starting in mid2005. This to this evergrowing path. We will talk to john in effect we will talk to john a minute. Year and lower class and lower prices for turkey. Bird, 22 38. 5. 7 lon of whole milk down to 2. 99. Inventory has spurred turkey price decline. Bread for whipping cream, stuffing, pumpkin pie mix, fresh cranberries and veggie trays all up. Caused by higher consumer demand. This is the cost of thanksgiving going back to 2012. Up, down, up, and then down the share. Lets check in with bloombergs first word news. Taylor tomorrow, zimbabwe gets a new president for the first time in him is for decades. Pledging to leave the country. The former chief returns from south africa where he fled after being fired by president robert yougov a. Mugabe. Three euro economy is on track for its best performance since the crisis. They see Economic Growth speeding up in the fourth quarter. Companies in the euro area increased at its highest pace. Opec wants to know of extending global oil cuts will trigger new polo trillium trigger new petroleum . Cartel may have to make a decision on the cuts about a consensus on shale. Opec meets next week. Australia warns of power in asia could shift to china if the u. S. Withdraws its political ties. Australia said it is concerned that chinas military expansion in the South China Sea would lead to clashes. Ball saidminister a they will seek a bigger role and global affairs. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Thank you. Fears rattling chinese stocks and bonds overnight. Posting its biggest law since june of last year on concerns about this bond rally Deleveraging Campaign taking a toll on the Corporate Bond market. Here with me is john. John, your take on china . Csi 300 biggest drop. What does this spillover mean . There is a tightening of liquidity going on. Investors have learned that china goes through these patents on tightening liquidity and then loosening again. Organizedeen a better episode of tightening. Reformse made descent along the way. It is worth watching, and the speed of increase and bond yields has mark we have periods of Global Markets in china increase over the years. Are we approaching another january, cited as a time for this kind of thing . Are we approaching another global, chinainduced period are not . John there are signs of slowing. You have seen a fairly significant tightening of liquidity when you look at money supply growth that slowed very sharply. I guess people are saying, well, things not much has happened, so maybe we are fine, but ignoring the fact that you can get quite long lags between policy changes in the market effect. We are not ruling out some chinaled we put a low probability on it. Mark you look at probabilities, john. You talk about probability of a recession, the united states. Talk to me on what that means for the market . John we take a view that it is not valuation that causes a bear market, it is some combination of economic slowdown and policy tightening, and maybe the latter often leads to the former. When we look at a range of historically indicators, things that have tended to deteriorate ahead of an economic slowdown, all of the data looking six months out is pretty bullish as there is a synchronized Global Expansion going on that looks like it has legs. Looking further out, probabilities are beginning to rise. There are charts showing that there could be a recession. And then indicators like the yield curve, flattening quite quickly and the lead time in recent cycles has been one to two years. Theou translate that into probability, the likelihood of a recession, it looks as though it might be a one in three chance by the end of 2019. Mark what does it portend . John historically, it has been the best indicator of tightening financial conditions. The long end tends to react to tightening. The short end, you see the yield curve flattening as policy becomes less looser. Clearly, there are less distortions with kiwi. Interpreting at this time, you have to have some portions are you have to look at some other corroborating evidence, but on the face of it, it is getting to levels where it is beginning to suggests that we are towards the end of the Economic Cycle even if we are not quite there yet. It is an unusual situation. You would normally expect tightening by the fed to then have some knock on impact of financial markets, irritability of capital and so on. But while the fed is been tightening, the feel for the economy ironically has been going the other way. So equities continue to rally in highyield spreads continue to come down. We will not get the slowdown in the shortterm. It suggests growth will remain pretty strong for the next six months or so. Mark im going to get my spain, 10 year tbills. Please bear with me. This better work. 1774. It is showing off in a way, isnt it . Just compare different bond markets, it highlights what mike regan was saying, this distortion that has taken place. What is this chart tell you . John it is telling us a number of things. It is telling us the fed is tightening which is why the short any den of the u. S. Is rising. Everything they said last night said they will gradually raise rates, but there are some question marks about were inflation is going. On the other hand, bond markets are pretty solid. China notwithstanding. U. S. Treasuries, despite the fed tightening, 10s and 30s have not done anything over the last year or so. If you then look at europe, clearly the ec be continues qe and concerns about peripheral problems have faded into the backdrop, not helped by stronger growth in europe and central back buying. The marketighting doesnt really believe that we are going to see a significant selloff in bonds globally. Secondly, for the time being, european concerns on the back burner. All goldilocks, isnt it . John that is the big fear, right . A globalght years into bull market, which is driven everything higher. Ofhave had a similar period quantitative easing, so we have had an usual situation where everything has done well. Bonds, equity, and yields have done well. And indicators like the euro curve maybe flattening. The other big concern is what happens when Central Banks began to remove the punch bowl. Time we thinkch his second half of next year when the ecb start some of away from qe. The governor is beginning to talk about maybe allowing the yield curve to rise as well. For now, on average, Central Banks are still buying, but by the later part of next year, qe will be over. Cutting off the crash protection. John we think the yen, will be rank global currencies, it is the second cheapest out of 30 global currencies, and it is cheaper because the bank of japan has been printing money. There are to delve scenarios japanare two where could be stepping away from q2 q, or having negative consequences. And it has had some benefits in terms of sightly higher inflation, better growth, and someone. The other one is the japanese are savers. They recycle their excess savings and other markets. Whenever you hit an economic or , they stop doing that, or they bring money home, and begin can move quite quickly. We think the guinness very good protection against an upset in the stock market, or the yen appreciates brother reasons. Mark john, thank you for coming in. Angela merkel fighting for a fourth term. Particulark about uncertainty. This is bloomberg. Im marke from london, mariah carey this is the european close on Bloomberg Markets. At skidmore insight on the challenges facing german chancellor Angela Merkel. Bloomberg spoke with alexander stubb, Vice President of the European Investment bank. Alexander European Union is in constant crisis management. You go from one crisis to another, and find a solution at the end of the day. When you look at the big play 2012,ng in 2010, 2011, and 2013, i feel better in those shares, but political instability is what we will see. If we have a weak Angela Merkel, being the beginning of her kind of, you know, what does it mean for further integration for the periphery and for brexit . Alexander the e. U. Usually surprise survives. You will see more messy election results. I will go back to the fee niche elections i will go back to the finish elections. Ae french elections gave it good result and in germany, we have seen an election result that is fully democratic, but a government that is not been established. In the future, we will see more and more of these types of coalitions and democracies democracies becoming more complicated and more messy. Europe, it will not make things easier, but we have a beacon of stability. Europe needs to move faster than it does in making decisions. Is that going to be harder . Alexander probably harder, but at the same time, you have 28 Member States that realize they have to forge a compromise. The financial crisis, we took enormous steps forward, whether it is about banking, union, or european stability mechanisms, deposit guarantees, etc. Now we are trying to all caps holiday this current system, some integration moves forward regardless of all of the compositions of government. Francine will begin thinking union . Alexander at the end of the day, we will get a banking union. The solution will be found, but institutional change when you are not in a crisis is a little bit difficult, but when you look at the euro crisis as such, i think it was quite spectacular that we were able to find solutions. We created this rescue package, eitightened controls, the came up with a yield curve plan and pushed itb forward. The system, at the end of the day, works. And there is one more thing i want to add. People fail to see that when the president sters and comes together, it is a collective session. You tap your friend on the shoulder and say, lets try to find a solution for you as well. Usually a solution found, but it does not hurt to have a leader there, and that is what i think some of us proeuropeans want to see a solution and the German Coalition as well. Former primes minister a finland, alexander stubb. Blues u. K. The shopping doing day. This is bloomberg. Mark live from london. Im mark barton. This is the european close on Bloomberg Markets. Black friday is on andreaeuropean joins us now. We have the heralds chief executive. My colleague spoke with him yesterday. They did not need to go there, but he was saying it is about but he was saying it is a bad thing for retail. Is it . This is the time a beer that you want to maximize your profits. The golden quarter. You dont want to be squandering away on this. The trouble is mark how can you not get sucked into it . They just did not participate. They really brought down there discounts and it has become a point of difference for them, and that is the only way you got to do it. They have done an excellent job in pulling back on promotions. That has been of great benefit. Mark when did black friday start in the u. K. , 2010 . Is it is biggest ever . Push and pull. Retailers are trying to control it. Are trying to control the amount of discounts, but thing discount who never and a participating in black friday in a limited way. Mark if you are going to do it, you have to do it well. Particularly when it comes to delivery and web offerings. And just the offers you get. It got a bit worse than it might have been because october was so poor. Our you are going to find stock because retailers would have hoped to sell in october. Mark and black friday does not last a day, and last forever. [laughter] mark it started a week ago, didnt . Driving people into the store. Mark do they use traffic that would have started later . Does is people hold back. Thatd a very bad october was partly weather, partly People Holding off waiting for the new iphone. People were holding back for bargains. Then it will ease off, then it will be another coach ahead of christmas into january. Said we have a twohaupt harold christmas. Who was surviving these tough times . The discount retailers. I was in primark a couple of weeks ago, and i could not get through the store, it was so busy. Mark what are they doing right besides price . It is price, and also a cheap offering. That is the key, people want to value for money. Has greatamazon capacity, which is troubling for their competitors. I had a look at some of the offerings. Mark are there some goodies . There are some good deals, so if you want something you have been waiting for, you may be able to get 20 to 25 off. Some of the offers will not be broughters, or things in a specially for black friday, that is not necessarily a brand you want. Andrea, good work. You can catch out her column on the bloomberg called black friday is eating itself to u. K. Retailers former. Quick bloomberg fast. South Africa Central Bank holding its key rate unchanged. The Central Bank Governor spoke to reporters. Mainly due to Higher International oil prices and a weaker then exchange rate. Despite a deterioration in the forecast, the purchase rate is at 6. 75 . Englands at the bank of are paid less than their male workers. 70 of the employees in the highestpaid quartile are men. That is your latest Bloomberg Business flash. It is goodbye time. The european close, that is it for me from this building after 22 years and eight months, counted the days. On monday, i will be joining you from bloombergs brandnew European Headquarters in the city of london. This is bloomberg. 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