2017. anna this is bloomberg. Manus we have breaking news. This is in the retail sector. We have numbers from the worlds number one closing retailer. Clothing retailer. Ebit of 2. 9 9 billion. Those are some of the headlines coming through from in the tax. From inditex. Seeing earlyry fourth quarter, according to some of the analysts. Analysts will be weighing the continuing impact. Story thatting a they are seeking to sell some sores. Stores. In iberia. Is as a result of online sales taking a taking off in spain. Lets check on the risk radar. Program with the shock result in alabamas senate election. The had an impact on dollar. As of also down. The democrats won this seat. Trumpsoing to influence ability to get his legislative agenda for the senate . Maybe he tries to speed up tax plans to get this done before the change in the senate. The s p down on this news. We touched new alltime highs yesterday. It was back to the economic data. Though some of the headlines that we will be watching for an economic front. In terms of the asian equity session, we are up by. 2 . 3 . Fed, the ecb, the smb. We are getting some headlines through from adnoc. 60 16 . Rose we are seeing that valuation come through. It will be a good lesson for the whole region. Adknock business noc business is the petrol station business. Coming through, we blew up the spread. It looks like that 10 Million Dollar 10 billion valuation has been blown through. They are ringing the bell the Abu Dhabi Exchange as we speak. You mentioned the politics of the fed. The markets perception of what happens next year. Yellense of janet announcement. The alabama result means we need to rehandicap the trump agenda and that agenda is tax. What with the fed think now has to gop Senate Majority drops 51 . This is a spread between january 20 18 and january to a 19. It widened. Translates to two. 25 point increases. This is what the market believes. Is it too late to rewrite the Growth Numbers . Investors were not even pricing a single hike back in september. What a difference a day makes. Anna in terms of the fed question, as the market comes around to the feds way of thinking, we see the fed move even further . Coming up today we have some great conversations. Seeing theg to be conversation with the former wrench french president Francois Hollande. The loss of the talking to ceo. Upert lets get to first world news. Democrat doug jones has delivered a stunning defeat to roy moore. They projected him as the winner. Ith 49 point 5 the senate race in the strongly republican Southern State of the before with the gop even the nominee was accused of Inappropriate Conduct with teenage girls. Alabama has been at a crossroads. We have been a crossroads in the past and or we have usually taken the wrong fork. Tonight, you took the right road. Juliette the u. S. Secretary of state has reiterated that america is prepared to negotiate with north korea without preconditions. Rex tillerson said the Trump Administration would first want to have a quiet. Without Nuclear Tests for the discussions to begin. We are ready to talk anytime north korea would like to talk. We are ready to have the first meeting without precondition. And talk about the weather if you want. Talk about a square table or roundtable. Juliette the European Union has warned the u. K. Against going back on the agreement submitted last week. Alert of the goes britain trying to unpick deal. The eu is planning to hold the u. K. The carrots and future discussions. Former french president Francois Hollande sees the possibility for britain to strike a trade deal with the eu. Speaking to manus cranny, he said that there are certain lines. A trade agreement is always possible but it needs to be clear that it cant happen at any cost. There have been discussions held over the past year they have continued. There are some points to europe that remain truly absolute. Agriculture and cultural section cultural exception. Donald trumps position on trade agreements is not very encouraging going to discussions with europe. Juliette u. S. Stockpiles probably have dropped for a fourth week. Byentories may have declined 7. 8 nine barrels. Forecast supplies of shrunken. Major steps have been taken to support the market. There is significant progress that we have made together with friends. Pec trend to bring the market back to stability. We have seen massive the stock across all week regions. Global news 24 hours a day. Is bloomberg. Here in asia, the reaction from alabama ahead of all these key centralbank meetings has been seen in asia currencies. The dollar falls in the yen rises which means Japanese Equities have fallen. The hogs sank in late trade in lateng the trade up. Watching the 16 billion bid. Jpmorgan saying dont rule out the fact that another company could happen as well. 14 field closed down by was up by was 14 . Air china also strong. Look at this company. It is a game developer. This is on a wall street journal report that it will be working with nintendo to make some more games. Quite a few big movers. Westfield was the biggest in terms of market cap. Manus thank you very much. The westfield store in london is is the with the holiday season. Traditionally its a deep red state. But doug jones has delivered a stunning defeat to the republican roy moore in a Controversial Alabama Senate race. Even before more was accused of Inappropriate Conduct with teenage girls, it was contentious. Markets moved. Genesis victory is beginning to irk markets. Lets bring in our strategist. Garfield reynolds. It was almost immediate. Repricing or rehandicapping the trump trade. Yes. There is a fair bit of that behind. I think the immediate moves are going to evaporate fairly quick the once again into the u. S. Session. The fed is going to dictate waters matters. , andmmediacy of the shift the result was a big surprise, that underscores that there is going to have to be a rehandicapping of what trump can achieve. Its not so much about tax reform because the gop can still get that passed before jones takes office. They will probably have to rush it a bit more and the raises the risk of a misapplication. It also makes it that much harder for them to go back next say, whats, we dont like this line, we have to exit. Then they will be down to that one person majority. Anna thats the implications it has for the tax lori. Perhaps they are story. Perhaps their limited. As we see trumps a little more hamstrung that it was. Potentially, yes. We have to see how it develops. It is potentially a great shock to trumps aura. Investors need to be asking themselves, how much to my calculations as to where the s p 500, where the yen, where the dollar, where treasury yields will be, how much of that was on expectation that trump would achieve some percent of what he has stated. Its going to be harder for him. Not just goes of that razor thin majority but also because he could not rescue roy moore. He campaigned for him. The republicans have not been particularly disciplined over the last six months. Its hard to see how result like this makes them anymore disciplined. Thats a potentially serious Downside Risk for a lot of trades. Anna interesting to see to what tell us aboutes the wider republican party. You very much for joining us. The latest on the Market Reaction to the Alabama Senate race. Markets are gearing up for the last fed Rate Decision of 2017. They are widely expected to raise rates. Janet yellen also deliver whats expected to be her last News Conference before handing over the reins to jerome powell. Oining us now is dean turner he is with ubs wealth management. Good to have you. Our focus is on alabama and the trump agenda. More broadly, the story you have been focusing on, around the fed. Expecting for next year and what you expect to hear today . Think the more its an aspect of today will not be the policy decision. I think markets are fully expecting a hike. Its been our base case for some time. Statement,tonight one thing that might become apparent tonight is that all of the fed members will start to factor in the impact of tax cuts next year. Its likely we could see Growth Numbers increase for next year in terms of stocks. Risk toalso some upside break projections as well. The market still seems to be on the other side of that. Our senses the fed will look to push to hikes next year. One in q2 what a q4. The market seems to have caught up with that thinking. Manus dean, i caught up with a Nobel Laureate yesterday and he said this is going to be one of the worst tax bills that he has ever seen in the history of tax. Scathing inutely terms of any momentum that this was going to really add to the u. S. Growth trajectory. I dont know if that was politically driven or whether it was pure economics, that he was utterly skating that this tax cannot drive u. S. Growth. Is that a fair unfair assessment . Fiscal easing should have a positive affect. What is the multiplier that any tax cut should have . Is less than one. Have a clear idea in terms of the specifics of the tax bill. We also dont have the timing of some of the measures. From 0. 25t anywhere and 0. 5 to gdp growth over 2018 2019 thats dependent on the specifics of the timing. Anna what is that disney bond market . What does that do to the bond market . Doesnt push the short end up, the twoyear, and not to budge the 10 year . Does that worry the fed . Dean i dont think that worries the fed. Thats probably the most likely outcome. Our senses at the longer end, yields are closer to fair value. Certainly, most of the work is likely to be done of the short end of the curve. Clearly, inversions of the yield concerning quite signal. In a new worldre of low interest rates, i dont think that same immediate concern right now. The changing complexion of the fed. Exiting a pair of doves. The complexion of the fed will demonstrably change. We dont know the new deputies going to be. Youre going to have a more hawkish fed. I dont think thats the immediate takeaway. We have to see what comes through from the new members. I think what we are expecting to see, in the shortterm, is a continuation of what we have seen. We think the path of fed rate hikes will be pretty cautious and steady. We are not expecting to see a dramatic shift. Where are we in the cycle . Bloomberg economics, i have another chart for you. Btv 4896. This compares growth in the 1990s to what we are seeing now. If we extend into the second half of 2019, we will exceed that record 40 quarter cycle. That is Bloomberg Economics best case. Is that your best case as well . U. S. Ep expanding in the and we have this record expansion. Youre right. If we get to 2019 it will have proved to be the longest postwar expansion. One of the things to note is the rate of growth has been significant a slower. Average, the real growth in gdp has been much lower. Anna inflation must lower. Dean exactly. Our assessment is one where looking at some of the traditional factors that we , were just to see not seen them. We have to be sensitive to the fact that the rate of unemployment is very low and the labor market is very strong. Thats a potential source of risk. If he were to see inflation , that coulde encourage to take action. Our senses at the moment that we are still somewhere away from the end of the cycle. Thank you very much. Dean turner stays with us. Hes an economist at ubs wealth management. Up next, we have the fed. They will deliver their decision at 7 00 p. M. London time. We will bring you that here. The former Donald Trump White House comedic asians director Anthony Scaramucci joins us at 1 30 u. K. Time. Anna . Anna lets go to the Bloomberg Business flash. Initex has declared a growth. The words largest clothing retailer raised their operating profit to 3 billion euros. Revenue advanced 13 . Toshiba and Western Digital have ended a monthlong legal battle. Western digital is dropping arbitration claims in the u. S. That were aimed at stopping the sale to Consortium Led by bank capital. In return, the Japanese Company will in its legal claims against Western Digital. Ceo tom enders has reportedly decided not to stand for his third term. Figaro says he wont renew his mandate for airbus. This is just as the plane maker grapples with a bribery probe and slack demand. I never bust spokesman told the report pure immediate and said no decision had been made. Thats your business flash. Anna thank you very much. The ecb gives its next policy tomorrow. The market is still position for a stronger euro but he likes of Deutsche Bank are warning that investors arent fully pricing the risk of a less dovish measures. Dean turner is still with us. That shows thert expectation for when we start to see a hike. Economists are not putting this is something that will happen next year. There are couple of outliers. Assume 2019. T if we were to see an earlier hike would be because theres a risk that inflation bills faster than previously expected . Dean thats clearly the risk. One of the things for the euro zone economy is its performing very well at the moment. Twice its trend right. Theres still a lot of slack in the eurozone, in particular in the labor markets. Inflation pressures, while building, are unlikely to force a much more hawkish decision. In terms of the currency, week seemed to be moderately cap. We have this momentum. Economy is literally barnstorming ahead. How strong would you define this european recovery. Can it withstand the withdrawal of the ecb from the center. Dean we are seeing extraordinary trend of growth. We are expecting to see over 2 expansion. Its a strong expansion. Our feeling is we are expecting to see the euro higher. Clubs it easing is likely to come to an end as of september. Those couple of headwinds are likely to affect eurozone growth. Were not pessimistic but its likely that slip growth slips below the 2 level. Is stubborn. On even in germany, where the growth story is, we have inflation persistently below 2 and forecast to stay there. Dean thats a valid point. One of the things to watch over the next few months is what to having a number of key union negotiations. They are pushing for stronger wage settlements. Said, if we start getting signs manus we have a little bit more to come. Next, we hear from Francois Hollande. Brexit is a reversible. Cannot live without it. So if you cant live without it. Why arent you using this guy . It makes your wifi awesomely fast. No. Still nope. Now were talking it gets you wifi here, here, and here. It even lets you take a time out. No no yes yes, indeed. Amazing speed, coverage and control. All with an xfi gateway. Find your awesome, and change the way you wifi. Anna this is bloomberg. The yen, 113. Inst moving around. We see the tokyo stock market outperforming the rest of asia. Plenty of central bank to get her head around. Lets check on the Broader Market action. Heres nejra cehic. Japan close lower but elsewhere you are seeing quite a lot of green in the asian equity session. Shanghai higher. Hang seng higher. Many rebounding from yesterdays losses. Looking at the dollar, we are seeing a touch of weakness come through. We can bring the dollar chart coming up. This seems to be moving on politics. Democrat doug jones beating roy moore the senate race. The bloomberg dollar index is dropping for the first time in eight days. It had its longest winning streak since january 2016. It is dropping towards its 50 day moving average. When it comes to the dollar, but also to treasury, the focus is on the fed decision about a rate hike. Next year ist to the spread between january 2018 and 2019, yields are actually rising. This suggests for the first time in many months, trade is pricing in two fed rate hikes. The 10es that mean for year yield . Its unchanged today but its at the higher end of the range. We are at 2. 39 . Our trade is to stop fighting the fed . Political shakedown changes the bond market. Francois hollande was speaking out the topic of brexit. He says the u. K. Cant expect to keep the same trade deal. I spoke to him at the Arab Strategy Forum in dubai. I have said that the United Kingdom would have to pay and the deal that has been found, what referred to as phase one, did indeed lead to a general contribution by the british. Anwere able to find agreement on the question of european citizens. The second phase will do with the place of the United Kingdom within the internal market or outside the internal market if a trade agreement is made. Europes attitude is one of respect but there are also certain demands. Protect aw have to europe of 27. Brexit is irreversible. Aiming to punish the british but clarify future relations. With france, i was always determined to keep a special relationship with the u. K. Especially on defense. This will be up cap. Said we hopemm fox for a virtually identical call identical trade agreement. Is this realistic . A trade agreement is always possible but it needs to be clear that it cant happen at any cost. Discussions have continued and there are certain points with absolute likemain agriculture and cultural exception. These are important issues. Donald trumps position is not very encouraging going into discussions with europe. Manus services are incredibly important. Agreement. S, plus Services Must be included. Generalance tolerate a generous Financial Services components . It will necessarily need to differ from the conditions of the internal market. The internal market there is Free Movement of trade and past 14, which also applies to british activities today. If theres no way of accepting the Free Movement of goods and services, there will be a trade agreement and with that britain will lose its access to passport in. Manus no passports. Is this pariss biggest opportunity to win Financial Services . Why would exactly have been in great britains interest to remain in the European Union. Manus is brexit irreversible . The britishuse people decided on it and we arty engaged in negotiations. Manus will brexit make europe stronger together . Yes. Radoxically, i never wished for the u. K. To leave the eu but now that has occurred, this europe will be stronger. Europe also needs to be stronger to prepare for its future in the domain of technology and energy. In needs to be able to speak to its exterior partners outside its borders to control immigration and deal with it with a responsible and respectful manner. It also needs to be stronger speaking to the u. S. You can speak to theresa and gifford vice, what would that be . I have worked with theresa may and i have respect for her and i would say that our countries are linked and even through brexit, france and the United Kingdom will always be together and we need to work towards that goal. Manus Francois Hollande with me yesterday. May, this to theresa deal to to be a tough cut. Lets bring back ending turner. In dean turner. What everyone is saying, the trust issue is being violated. We will not accept backtracking. Just when an a and i had broken stepews that this was a forward, the brits managed to undo a lot of good faith. Dean will we have to recognize here is this is a negotiation and will continue to be a negotiation. There will be things that on both sides that will be there to please domestic audiences. Willvery likely that talks continue into the European Council meeting. We are the possibility of talking about transition and trade. Concerns for key investors in the u. K. Has been the possibility of a cliff edge moment for the u. K. Economy. It seems that has been avoided. Anna it seems the change in the mood music, talking about the fantastic speech, and the deep lasting relationship, to talk about the u. K. Year relationship. That positive mood, could that indication of where the eu is willing to move . Dean its too early to conclude that. The eu are going to continue to pursue their own interests. Has said the a deals on the table the want to see. Norway, canada. Maybe there is some opening there. Dean there is space for the u. K. To achieve a deal that is canada plus. U. K. Trade relationship with the European Union will be inferior to what it was. That said, i dont think we need to be overly pessimistic about the longterm outlooks. The u. K. Economy is great flexible and will adjust to the new trade relationship. Whole point. The a lot of guests have lambasted the outlook for the u. K. Were going get some more data today. We get the jobless claims, average hourly earnings, the employment rates. This is still a low unemployment economy but not with a very past fast paced of wage inflation. If we passed the cliff edge, and we talk about trade in transition, that could be an opportunity for little bit better mood music and 2018. Dean i would agree with that. I think things will slow little further next year in the u. K. I believe there are some upside risks to the forecast now. The key things weighing of the u. K. Economy have been inflation incomes, and as we saw from yesterday cpi data, we are probably close to the peak in terms of inflation. As we move into next year there should be some easing pressure. Whats also happening his business investment. If things proceed relatively with that agreement on transition and trade, then there could be some upside risk to the Current Business investment. I wouldnt be overly negative on the u. K. Outlook. You make does forecast fully knowing we saw yesterday. Squeeze on the consumer took another leg higher. U. K. Inflation is more than a percentage point away from the bank of englands target. What indications this is half a policy . England willk of most likely wait on hold throughout next year. ,he couple reasons for that although Economic Growth will be positive it will be weaker next year. Inflation also should start trending down. Well back within that target. If we saw much higher numbers, that could put pressure on the bank equally. Could bring the bank back into play. Manus you will stay with us. The internal stays with us. Dean turner stays with us. We will talk about the emirates. Shares surging of the start of trade. This is bloomberg. Anna good morning. Its 645 its 6 45 here in london. The Empire State Building is lit blue in honor of hanukkah. Down very much to do with the special election in alabama. Losing is quite a surprise and perhaps affecting trumps agenda. Lets get the Bloomberg Business flash. Initex has reported a six increase in the mornings. Worlds largest clothing retailers said operating profit rose to 3 billion euros, matching analyst estimates. Revenue is up 13 . To sheila and Western Digital have ended a months long legal spat. It threatened to derail the 18 billion sale of chivas flash memory business and cut the company off from a future supplier of products. Western digital is dropping arbitration claims in the u. S. In return, the Japanese Company and its legal claims against Western Digital. At airbus is having the prospect of finding a new leader. The french newspaper the figaro says the ceo will not renew when it expires. This is a leadership contest just as the playmaker grapples with flagging business. Shares in westfield jumped as much is 15 in sydney trailing trading. Jpmorgan has said that although a rival bid is unlikely, the quality of quality of rest portfoliowestfields means a competing offer cannot be ruled out. Manus thank you very much. The Company Opened up 16 . It is their ipo. They debuted on the abu dhabi. Its the fuel retailing business. Its the first one of the city for more than six years. Tracy alloway is life. Just put the significance of this ipo to our viewers. What is a mean for the markets . As i was to a new earlier, its difficult to overstate the importance of this event. Comes as a time we are expecting a bunch of the state owned Energy Champions of the gulf region to come to market. Saudiast of worst is aramco which would make it the biggest ipo and history. Their listing a 10 stake. They sold the shares from national 2. 5. He gives the company and overall valuation of about 8. 5 billion. Now its about 2. 75. This is what had knock wanted to see. Adnoc wanted to see. They wanted International Investors. This is the first time that International Investors have been able to be involved in upper darby securities. Good morning. Thats outperform today. What are the implications more broadly . What are the implications for saudi aramco . The valuation at the hyatt is that 2 trillion number. We have seen estimates lower than that. Bots will be looking for a hint. What are some key differences. This is a small stake in a particular business. But there are some lessons you can try to glean from it. Government violations dont always match up with the expectations of investors. The messaging is the important thing. If you speak to people on the ground, they will tell you its about open off that perfect ipo. Theres one where its attractive but theres still some growth coming in. I was talking to the chairman of the adx exchange. He was telling me based on todays performance, there are expecting to see two to three more listings. Mostly government owned entities. These of the potentially of the gulf markets. Manus the optimism down here in paulegion, i did a paul 67 thought the price woudl rise. Thanks so much, tracy. Lets talk about oil. Opec said it is nearing its goal of rebalancing the oil market. The opec chief told the bloomberg that the efforts are paying off. We have made significant progress in aiding the oil markets to return to stability. Seeingcontinuously massive the stocking across all and oils. Oth crude dean turner is still with us. My question to you. Betweenut relationship opec and russia. Does russia need opec . Dean thats an interesting question. Prices. Oint to the oil in the shortterm, stronger global growth. For some of the technical factors. The shutdown of north sea pipeline. It might put a squeeze on all prices in the short term. As we move through next year its quite likely we see the markets move back in the balance. Is of things we have learned that we have significant rise in oil price, that tends to be a good signal that production is going to come back on stream. Little bit of a time talking about the supply story. What about the demand side . What gives you this optimism about oil prices . On the demand side of the driven by the Global Economic backdrop. Shouldbal economy could should continue to expand at a pretty decent clip. That would be a modest improvement. Alone should support the demand side. The big question is synchronized level of growth and what that means for centralbank policy. If you look at the oral story, and what juncture only going to talk about adding to inflation . Extent do you look in oil and the commodity recovery as inflation contributor . As an economist the oil price is clearly something thats going to it going to affect inflation. View is that the oil price should start to stabilize as we move through 2018. Itll probably settled somewhere in the high 50s. It something we clearly have to watch. Anna you cant make a call around Golden Globes without talking about china. We talk about the china debt crisis. The site your base case. In our 2018 outlook we highlight top risks. The china debt is one of them. Fact thatgnore the the growth in credit that we , our sense is the situation can be managed. It should be something that we should be overly concerned about. Thanks are spinning the last hour with us. Dean turner. Up next, well be speaking to the circle group ceo. How his turnaround at the plane out. Get an update on the companys performance. We will talk to the markets about how they are doing. Transportation, health care, many other areas. How does this is performing. The get his take on brexit. We will also get his take on brexit. Should be a fascinating conversation. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Daybreak europe. I am manus cranny. Anna i am anna edwards live from bloombergs headquarters in the city of london. Manus alabama upset. Democrat doug jones wednesday wins. A crushing defeat for the republicans. The dollar falls. Anna the hike before christmas. Market gear up for the last fed Rate Decision. Janet yellens view of the year ahead. The eu warns the u. K. Against breaking its promises. Even as it appears to offer britain ever award before their summit tomorrow. An award before their summit tomorrow. Welcome to daybreak area diamine is cranny in dubai. Inflation data later in the day. Hadrises 1. 8 , the market penciled in 1. 8 . That is the yearly number. The market has penciled in plus. 3 . This is in line. You are seeing a very strong confident numbers confidence numbers. Is where was a short time ago. Saying they believe in strong momentum in the european story. The german cpi numbers. It is all about the cpi. Anna keeping it german this morning. Etail numbers from germany firstquarter sales 1. 9 billion 1. 9 3 billion the they achieved the previous time. Metro profit up 10 . Iss is the german retail this. Of a lot of focus will be on the outlook and what they have to say about the busy christmas period. Treating this as a transitional year. The focus is on the outlook for the full year so keep our eyes down and see if we get any outlook statement. Also coming through we have metro. There is a big shakeup going on. With the demise of one of the carriers there. 18. 5 billion euros against an estimate of 18. 2 billion. Just a touch ahead. Expecting doubledigit Earnings Growth through 2020. That is the outlook statement coming through. What they have to say on 65 euro cents a share. The market was expecting an increase and we have seen the change in supervisory board. They want to see him on their best and that will be the decided in february. One of the futures telling us . Isus i am surprised there not more movement. We saw the bond markets rise and take a look. London, paris, and frankfurt, london stronger and we are up couple of chicks. Moore defeated this rebuke to try and. Will it be shortlived and the markets . What will the debt plus dot plot tell us . The other side of the story is the vigilance as the party warns against backchecking in the see. So it it is a hold and you had the inflation data from germany which is less than thoughtprovoking. E caught up with holland yesterday. He warned about war on the global stage and north korea and here, around the region. Could be the biggest risk and his view was the biggest risk to Global Markets and to the world was donald trump. We can talk about it coin later. I am sure we will. Anna his view was the biggest risk to Global Markets the ability of donald trump in the u. S. President , his ability to deliver his agenda. Fascinating comments coming from where you are in the middle east at that conference. In terms of the market focus it is around the special election we saw the ability of donald for the senate seat overnight in alabama. The democrats won and the republicans reducing the majority in the senate and that has had an impact on the dollar down one point. 1 of 1 . We are seeing in the shortterm expectations that we go weaker on the u. S. Equity market but here in mind we are touching new alltime highs on do a stocks and futures taking a touch away from that. That gun that on the back of ppi data. What will we see in the data as that comes down later . Mscit in the mc asiapacific market. South korea and hong kong going higher as japan falls. Lots to talk about on the central banking front this morning. Manus this is what is going to move the market. A developed market, seeing the foothills of contraction whether that is reduction from the ecb is turned around and you saw this spike higher in u. S. Government bonds on the back of the alabama victory. That has dissipated on the democratic wind, jones and alabama. What is the view . They set the global town. The fed will set the tone, the ecb will track and monitor and perhaps mirror and you have the bank of japan, that is the theatrical piece. We are a bit lower. You had the german inflation data coming in in line with what the market had expected. 3 of 1 . No doubt about it. This market has decided to move itself on. Between january 18 and 19, you will get to rate hikes in 2018. The market moves to meet the doves. Anna the dots. And will the dots move . Coming up we will space to the to reporthe soams. Rupert here is juliette saly. Juliette Democrat Doug Jones has delivered a stemming a stunning defeat to roy moore. Winning with 49. 5 percent of the vote. In alabamarace [indiscernible] alabama has been at a crossroads. We have been at crossroads in the past and unfortunately, we has used we have usually taken the wrong fork. Tonight you took the right road. Roy moore did not citing the concede tight outcome of the election. I want to thank you for coming tonight and realize when the vote is this close it is not over. And we still got to go by the rules about this recount provision. Warned thehe eu has u. K. Against rolling back the agreement it made last week. The chief brexit negotiator said the block was on alert against britain trying to unstick the deal struck on friday. Europes leaders are planning to hand the [indiscernible] when they held a two day summit in brussels tomorrow. France were holland has said he sees the possibility of striking a deal with the eu. He cautioned the block has certain red lines. Treatment trade agreement is possible but it cannot happen at any cost. They have been discussions over the past years and they have continued and there are certain points that remain extremely resolute. Agriculture and what would be called cultural exception. These are important issues. Donald trumps position on trade agreements is not encouraging. Juliette global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. It was the dollar reaction to what we saw in alabama and ahead of the fed as the other central bank meeting. No surprise the nikkei closed down by. 5 01 . There has been a rally into the hang seng up by 1. 3 in late trade and the csi 300 has closed 1 . 00 the asx 200 was slightly higher on the close. What drove the region and the us trillion market was the westfield deal. Jpmorgan saying do not rule out a competing offer. It is unlikely. Westfield closing up by 14 and it was the best performer in the region in terms of member right returns. China looking in china looking good. Dena falling in the tokyo session on a report that nintendo is looking to tie up with other gaming partners to create a new product. That has sent its joint venture partner down. Apart from what we saw it was a positive session and asia. Up. 3 of 1 . Juliette saly joining us with the latest. Companyourcing Services Says it sees 2017 process near the profit near the top and. Y announced the acquisition of health assets. Three to have you on the program. Ockham to bloomberg. We have heard about the deal but now we get confirmation. What difference will that make to your business . Guest it will increase the size of our business. We do all the nonmedical. But we already look after the hospitals. , puts us at number one and number two for looking after hospitals. It sets a opportunistic m a in the field. Of being aaccused me meerkat earlier. Thingson the lookout for that might arise. The sector is pretty troubled at the moment. We were early into financial carnage. Are, we launched another acquisition of a small u. S. Company. I think we take the opportunities as we see them. Anna tell me how the turnaround has going. You are only a couple of years into your plan. How is it delivering against expectations . Guest it is a hockey stick. We have gone down the bottom of the stick. It is time to start going up the handle. We mentioned today were pretty confident. We have met our guidance that we gave at the beginning of our plan. Think we are doing to be 18 and 19. We will work our way to the top of the handle. Anna a lot of focus has been on your u. S. Business. One third of your u. S. Revenue comes from work to do with obamacare. You said youary salessee chip seals deteriorating. ,uest it is not being reformed we do eligibility testing. When peoplegibility get subsidies. That contract is up for a rebid. 3. 5mploys a lot of people, thousand people. We are waiting on that in the first part of 2018. Anna what do you do in the u. S. If you lose that kind of contract . Guest we will have to make it up elsewhere. Buts relatively low margin the defense market is beginning to wake up a bit in our area. You do not strike me as a yourhat choose fingernails. A good morning. I want to talk about what is happening in this region of the world. You told the market back in november 13 is getting tough and taking longer than you thought. That thingsshock take longer. Where are we at with that . The middle east business was 2. 5 million pounds. Is it anymore firmed up . Have a big business in the middle east, we run things like the dubai metro and help run the air Traffic Control out of the dubai airport and baghdad. Hospitals such as the cleveland clinic. Treasurepent a lot of and effort digging for two major operationso run rail one in doha and the other in riyadh. A few weeks ago we took the decision we were going to withdraw our bid teams from those because it struck us we were not going to win them. We took ae reason was different view of risk. So that has been, it was one of a range of contracts we were hoping to win, we worked hard at them. Big pipeline of opportunities Going Forward. That would have reduced our pipeline. We stood down the bidding teams on those two major opportunities. Manus that is telling the markets clear and definitive. You take the bid teams and focus on other deals. Where is the priority . I get the feeling that defense is something that france while ois holland spoke with me about yesterday. This business. In where is the priority on the hockey stick . Are a we do, we specialist business to feldman supplier. We cover lots of things. Our biggest order has been to build and operate a prison in australia. All the sectors that we operate defense, justice and immigration, health and what we call citizen services. In each country, in each region there tend to be different priorities. It depends what is going down in any particular sector. In the next couple of years in australia we are focused on the prisons business and we have a. Ig rebid over immigration in the u. K. There are opportunities in defense. Big contract to run Fire Services for the ministry of defense. That will be adjudicated in the next couple of months. Likewise, defense and also traffic management. We are we have some big bids in for traffic management. Anna lets talk about brexit. You are global but you are based here and to have been vocal in the subject. Is there opportunity in brexit for your business because the weakness of the pound is one thing but also in the u. K. With the government distracted by what is going on in brexit negotiations, is there kind some kind of opportunity . U. K. T you say the government is incredibly distracted and the challenge that our civil servants, sometimes we do not recognize enough the worker of the work they do. It is covering all the departments. We do not import anything. We do not export. At the moment what is happening is government is extremely focused on getting all the brexit work done so all the reform work they might have been doing is sitting on the back burner. The one thing we do know is it was a lot more government going on in the u. K. There was 34 regulatory agencies which we have to bring on sure. Anna that is the opportunity, where the meerkat comes in. Rupert we will be scanning around to see if we can be of service. And helping the government. There is a Huge Investment that will be made into the borders and how those are managed. Government will need help doing that. At 340ou bought stock your as a demonstration of faith in your ability to turn around the business. Do you think youll get the share price up . Rupert it was a mistake. Coming into anybody an uncertain situation is give it a few months. People say did you know how bad it was . No. Thed work for free for first year or so. Having a bigble shareholding in the company. It will come around. Anna thank you very much. With your Capital Markets update. Rupert sums the ceo of serco group. The alabama election captivating the market. The deep red state has a democratic senator. Delivering a stunning defeat to republican roy moore after the. Ace split the gop the result has moved markets. Judgeslar slipped on victory. Which this extent to was a surprise. The has been some Market Reaction. This had been a deep red states a state for a decade. Since 1992t has been that a democratic senator has one in alabama. It has been 41 years since a democrat has won in a president ial campaign. This is the reddest of the red states in the u. S. It was republicans to lose and it looks like they have. Aen though roy moore was such troubled candidate, such an embattled candidate, he went to all the things he went through in terms of the Sexual Misconduct allegations. It is a surprise to see a democrat pull through and this will change the dynamics for the senate. As you move into the tax and spending debates in the next week or two before the end of the year. Just how did they get the tax bill done and through . When does he come to the senate and what will happen before then done ande tax deal signed without big risk . Kathleen democrats will push beforehave jones seated the final vote on the tax bill happens. Joins the senate, that will make the republicans margin of control even slimmer. We saw during obamacare and the repeal debate over the summer how tough it was for republicans to get a simple majority with their 52 seats margin of control. That will flip to 51 seats which means they are not able to lose even fewer republicans. If join jones joins the senate before the final vote on the tax bill which seems likely, it is going to be even more important for republicans to keep all their members in line whether or not they are able to do that. That is an open question. Given the details of the final tax bill are still being negotiated. Thes the devil will be in details. The dollar has recovered its initial spike on the downside. Indexllars it dollar and undoing the shock. By the time we have the european markets open it will be a past history newsflash. Thats get your business flash. Initex remodeled shops and boosted store efficiency. He said operating profit rose to 3 billion euros in the nine months through october matching analyst estimates. Revenue advanced or 2 exclude excluding currency. Western digital and it a spat that turn to derail the sale of toshibas flash memory business and cut the u. S. Company off from their future suppliers. Western digital is dropping claims that were aimed at stopping the sale to a consortium. The Japanese Company will end its legal claims against Western Digital. That is your Bloomberg Business flash. Anna another corporate story. Walt disney may announce the acquisition of a large piece of . 20 20th century fox. It would mark a significant point in the career of Rupert Murdoch. To more on this lets speak you. Fast Rupert Murdoch has been building his media empire for the last halfcentury. It seems like he is a willing seller. The latest is that we may get an announcement this week. The latest reports suggest we may get an announcement thursday. Manus why do you think Rupert Murdoch house turned seller . It is almost as if he has decided to catch in cash in a few chips. The market is somehow undervaluing the assets and if he can get a significant premium it is Good Business sense to sell. All this is not going away. He would get a stake in the enlarged disney operation as well. He would be left with a significant stake in his other operations. There is the issue of james murdoch, ruperts son and the ceo of fox who may get a senior role at disney as part of the deal. That would automatically make senior james a candidate Going Forward at some point. Manus it is all about the succession planning, is that . Thank you very much. That is it from dubai. We are getting ready for the european market. Keep an eye on steinhoff and that is where you want to keep an eye on, they are set to rally this morning. If you are traveling to work you know what to do, turn on the radio. We will see you tomorrow. Guy good morning, welcome. This is the european open. I am guy johnson in our new london headquarters. Matt miller is in berlin. In theoryh trading starts in 30 minutes time. No more moore. Doug jones delivered a stunning upset. What does this mean for trumps agenda . Much of