Turnaround the european operation. Morning. Ery good this is daybreak europe. Lets talk about the asian equities session. Another boy in story for stocks. Japanese returning to the market. Msci asia pacific up. 3 . T is not all positive samsung is one of the negatives over on the seoul market. Their Earnings Report suffering a little bit because of the dollar weakness. That is weighing on the equitys story a little bit in south korea. Our focus on south korea and north korea is around geopolitics. More details of that in the samsung story. Lets talk about what is going on in fx markets. Later our attention will return to fed speakers. Today lets focus in on the yen and euro because interesting moves in both of them. The yen, and overnight story. We see the yen gaining this morning as the boj trimmed some of its bond purchasing. A small tweet to the long ticket buying. Governor kuroda told us there is nothing to see in terms of expecting to see any big changes in policy. Plenty discuss that with of expert analysis. We have the euro that on the move. The euro was down a half of a percent yesterday. That disappointed the markets and had a stalemate and german political talks. Data and theg confidence data coming through in the eurozone. The currency markets got a great line of guests to do that. In terms of the stock market, are we overvalued . Weve got more views on that. Thes if you think about dividend yield in the bond yield. The dividend yield is below the bond yield, that is one of the drivers. You maybe want to question the meltdown. We have it all. With this chart is talking about, i know everybody is going to bang on this is a historical retrospective you. Retrospective view. The rsi is pounding into overbought territory. With to nameong but a few. Stoxx 600 isnt aggressively overboard as the other. This is a 14 day rsi on the major indices. We have gone back to 1980 with our data. The chief culprit is the conglomerate. The dividend yield on the s p 500 has fallen below the twoyear yield for the First Time Since 2008. Do you go for this great rotation . We have run the data and theres nothing new. All the way back to 1977, we are seeing this is a typical thing. We are mounting up and markets is melting down the analyst estimates. We have a pounding on these levels. 2800 by the end of the year. Bank of America Calling for higher s p. The politics and markets and earnings have got to deliver to sustain this kind of move. Those are your markets, anna. Lets get your first word news. Juliette saly standing by. Juliette u. S. President donald trump is close to making a decision on his nominee to be vicechairman of the fed. The number two position has been vacant since Stanley Fischer retired. The nomination will be a part of a wider leadership shakeup after trump picked Jerome Powell to yellen. Janet Robert Mueller has raise the likelihood with Donald Trumps legal team that his office will take an interview with the president. According to the washington post, moeller brought up the issue of interviewing trump. The newspaper said the special counsel team could interview trump soon on some limited portion of questions possibly within the next several weeks. The u. K. Prime ministers attempt to give her government every boost has been mired s senior administers refused to follow her orders. Theresa may flagged things went off script. Greeningnt and justine were locked into discussions with her after rejecting proposed moves. The u. K. Is band on making takests with microbeads effect today in an effort to protect marine life. The beads are so small that they flowthrough treatment filters floating waterways desk polluting waterways. Barack obama signed a bill to outlaw the beads in 2015. New zealand and canada have also done likewise. Global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. The equity momentum continuing here in asia. Japan playing catchup following yesterdays holiday. Have a look at the hang seng, up by. 2 . Higher for 11 sessions in a row. This will be the longest winning streak on the hang seng since 1999. Australia closed higher as well. We have seen a rebound in the korean won. The kospi is looking weaker. The stocks we have been watching. Samsung, the front runner. That is weighing on the kospi. Remember some of this have been baked in and that have been a couple of downgrades. Tencent lifting hong kongs market. It has risen talk percent over the course of this rally. Coal india is ready to your high. This is the Worlds Largest coal producer. That is posting the index in india to a record high. Anna thank you, very much. The korea said able send athletes to the Winter Olympics in south korea next month and wants to resolve issues through dialogue and negotiations. Delegates from seoul say that south korea wants both nations to march together. At awo sides holding torch village in the joint security area. Steve engle joins us from the unification bridge on the south korean side of the dmz. What has been the pervading move pervading mood . Steve ohen absolutely, the prevailing mood would be optimism, because they came to an agreement fairly quickly at least in the morning session on allowing the North Koreans to participate in the winter games which are open one month from today and nearby pyeongchang, south korea. They would march together at the opening and the North Koreans would send a highlevel delegation to deal of the games, as well as athletes. We know to athletes have qualified for the Winter Olympics so they could potentially be either incorporated into the south korean team and have a unified korean team. The mood going into the afternoon session, at least from the dribblings we get from the officials through the press pool is that they are fairly to nail down some the fine details, because it is just a month to go. Some of the other issues, again, the deep the denuclearization of the peninsula was on the list of proposals. The South Koreans want to restart talks on the nuclear peninsula. Korean the North Koreans are poorly remain fairly quite when that issue was brought up. In those talks which are happening across the bridge about five miles from here. Manus it is fairly impressive between north korea and south korea. Symbolism, what does it do to the theater of geopolitics . Yet the u. S. And china really been down on north korea. Strategic move by north korea to provoke the air of donald trump . Steve yeah, it could be several different motives for accepting the south korean all of branch for the stoxx. South korean all of olive branch for these talks. , has chinascenes played a significant role flacco absolutely. Significant role . Absolutely. Perhaps that push North Koreans to say maybe we should make a move right now to have it rapprochement with the South Koreans before donald trump and the United States can do something that would ignite the tensions even further. We dont know the behindthescenes but what we do know is there is progress being made. Baby steps but progress. Manus we will take baby steps any day of the week. Reporting there in korea. Warmertretch, little bit jeremy stretch, a little bit warmer. Stephen, encapsulates this moment. If you think of all the talk we did last jeremy stretch, a little bit year was about the heightened since of a global war. If you look at what the markets are saying, the default cost for south korea trooping to a 10 month low. How do you look at this symbolism, the tiny rapprochement between north and south korea echo is it to provoke korea . Is it to provoke the air of donald trump . Jeremy bringing people together and having a window of opportunity to encourage the dialogue between the north and south. That has helped to these those fears which perpetuate through the course of 2017. We can see this process expand and it will be encouraging for south korea and for geopolitics. When we talk about the accelerated period of Economic Performance in the exaggerated equity markets and the risk parameters, geopolitics is one which we continue to consider. We see this reduction in the political process and that has to be positive in terms of the risk dynamic. Anna you talked about some of the movement. We talked yesterday about the south korean fx authorities were saying about taking stern action if the currency you talked about who wins. If there is a produced tension displayed, then japan wins. That is the conclusion. Jeremy it is interesting because we have had this period of uncertainty. That has a destabilizing impact of the yen as the big regional player. That has had an underlying impact. The yen is an interesting one. Been the case that markets have been incredibly short of you short of yen. That is one of the surprises we are likely to see in 2018 this reduction in geoPolitical Risks. That does open up the possibility of the yen materially stronger than we have seen. That is the markets are not necessarily positioned for. Manus todays announcement, the bank of japan has cut the purchases of debt on a 10 to 25 year. It is the longer end of 25 years. They have cut the amount of debt they are buying. Many people are saying this should of been expected because 2 zero targeting is working. They dont need to buy as many bonds at the 10 year end the curve. Is this sending a tightening signal to you . It should invoke a second policy tightening but what it does indicate are the markets are too complacent. Hat is the ultimate scenario we have been in a world where markets have become so accustomed to zero rates for easy monetary policy, the exemption had been the japanese would be remaining in a very easy policy stance for the future. Weve seen subtle changes over time. That does underline is complacency. It is evaded the market in regard to japanese policy. Anna are we too complacent about things . You mentioned about the risks around the central bank policy. Ive got a chart here. This is 5050 six if you want to pull it up. 50 56 if you want to pull it up on your bloomberg. The bloomberg profit describing this as the just in case trade. We have seen four straight weekly gains. Investors wanting to protect themselves is the obvious solution. Jeremy just in case. You want to have that hedge against this perceived melt up and equity markets. It makes sense to have that small degree of comfort, to have the insurance policy. Whether we see the gold going higher, it is maybe a sign that we are starting to see some debate about whether we are going to see the global secret night recovery the global synchronized recovery. We have also become accustomed to ultralow inflation over a prolonged period. Weve seen this Prolonged Scenario growth, perhaps we need a little bit of protection. Anna we will talk more about that in our next conversation. As reading about retail jeremy, thank you very much. He stays with us on daybreak europe. Moving the goalposts. The boston fed president says it is worth rethinking the 2 inflation target. We would hear what he has to say next. Bhanu how stable is to manus how stable is theresa mays house of cards . Manus a live shot of singapore. A lovely shot. Equities are absolutely on a roar. Japanese stocks are heading high. Technology stocks roaring ahead. Msci asia building on the u. S. Story. U. S. Stocks up for a fifth day in a row. Of course all about the japanese. You are looking at the topics topix. 1991 . Juliette saly in juliette Samsung Electronics have missed fourthquarter profit estimates. Operating to 14. 2 billion compared with an average analyst billion, a 7 5. 1 surge in the korean surged karen currency. U. S. Ies is to spin off its maintain control of both companies. 67 and lts usa will be distributed to shareholders by the end of the second quarter. Aston martin is targeting evaluation of his much as 6. 8 billion in a potential ipo of the british sports car maker. According to people familiar, the company has held talks with advices about valuations invested interest in an ipo this year could be bolstered by the plan expansion into the lucrative sportutility market starting in 2019. That is your Bloomberg Business flash. Anna thank you very much. President trump is on to announce his bed his fed vice chair. Meanwhile Eric Rosengrens says the central bank should reassess whether a specific inflation target is still warranted. In my own view, the cost of hitting the prolonged period should cause us to have a reassessment and think about what the implications of that are. We might like the bank of canada choose not to do anything. We should be having those discussions. Rosengren. Was eric lets talk to jeremy stretch. 2 inflation, discuss. Is it better to have a range . After, weat we are have seen this view around this 2 inflation target over the last generation. Anna we dont touch the target. Jeremy you could argue, is it ,rudent to reconsider that especially in a world where we have seen low inflation . Having the debate is a worthwhile one. You could argue about the measurement of inflation and how accurate that is. Good asget is only as the measurement you are using. I think it is a debating point. I dont think it will be substantial change in policy. Canada, that was an interesting point because weve seen these arguments on and off. He debate in think perhaps there is value in reassessing. Manus one big subject is not this relationship. You said montreal, january 23. Couldthinking of nafta accelerate global trade extensions which unpacked would stick a nice the growth story. Circle all that back. Back toif we scrolled the back end of last year, the Trump White House was focused on it tax package. That is been pushed to the sidelines. Back thee that brings focus from the white house to trade relationships. Nafta is in obvious embodiment of that. We have the trade relationships elsewhere and that does no up some concerns. If we are going to see this focus in terms of bilateral trade relationships and trying making americaat great again whenever euphemisms he wants to use, it may will be the case that that synchronized recovery that we are assuming will be perpetuated through 2018 could be started threatened. That is bad news for em because they are beneficiaries of the synchronized recovery. It is a less risk on environment. Jamieis a concern around 23rd . Is a their concern around january 23 . Chart, 5060 that shows the loony implied volatility on the rise. Jeremy in the context of canada, yet look at the impact of the Interest Rate debate, because we have seen markable gains in terms of employment. We so that being demonstrated on friday. Just we saw that being demonstrated on friday. Also the much faster absorption of the economy. That is the real driving force. Manus gma, we will pick up on some of those topics. Jeremy, we will pick up on some of those topics. Life shot of tokyo there. You see a bit of a shift in dollaryen. The dollar is falling and the yen is rising. The bank of japan has cut the amount of bonds that it is bike atthe longer and buying the longer end. Dollaryen is the focus of our market moves. This Swiss International bank have made a profit. Of 49 billionofit swiss francs. The was just talking about purpose of a gold in the past few weeks. Holdingst on the gold comes in. 32 billion swiss francs goes back. Nejra cehic will take us to the markets now. The msci asiapacific index is rising. You can see that Japanese Equities have been higher. In china we are seeing some gains, flat in australia. Samsung has been weighing on the index in the session. Overall we are seeing gains in asia. You talked about the boj. What that has translated to in the market is dollaryen down, so stronger again and a weaker dollar. We have seen an impact on the jgbs. We havent seen a touch of curve have seen a we touch of curve steepening. Corroded talked about that reversal rate. What is interesting is that the correlation between the yen and the 10 year yields in the u. S. Has fallen to its lowest since august 2016. You can see dollaryen there. Finally i am taking a look at oil extending its again, going about 62 a barrel. Run s news about i iran play into this as well. Lets talk about one of the corporate stories that is on our radar. Altice is splitting off its u. S. Unit. Bloombergs reporter joins us from paris. Good morning to you. Tell us more about the intent here. It will create value for a company that has been struggling because of the european operations. Altice usast it shares, they have lost 30 . They want to give assurances to the u. S. Shareholder that he can create value with the u. S. Business. He is this a billionaire who has been building an empire just over the past few years. A spending spree in europe and the u. S. In europe he brought he bought a mobile company for 13 billion euros in cash. That business has been struggling. The full that were trying to the people that were tried to turn around this company decided to quit. Drahi is trying to separate the businesses to create value for the u. S. Before billion dollars in the u. S. Over the past couple of years. He says that he does not want to stop there in the u. S. Manus he does not want to stop there. 242nd richest man. Lets expand the conversation. This airbusng for deal. I really wish that it would happen. Where are we on this . A lot of rhetoric but no deals, what is happening . We are going to have the details on all the commercial deals probably in about two hours from now. This is day two of macron in china. This is the day that most of these deals are expected to happen, as much as 50 commercial deals, according to the press. Airbus could actually be offering china a production role , working onjumbo cabin interior. There is a condition come of course, attached to this. Orders foraces some the plane. Couldl Chinese Companies also become a new suppliers of airbus as part of this deal. We will also be watching for a deal in the nuclear industry. That progress should be made, so that should be goodness for the french company. Manus and probably helping the president s writings as well. Thank you for joining us. Jeremy stretch is with us. Big on theis very world stage. He is doing fine. I know the euro is on its way up. But the market, take a look at this. This is the risk reversal. What, you have to be around a wild to remember what the italian job was, good movie. It is about the risk of berlusconi. This is what the market is most concerned about, puts over calls. If we scroll back one year, there was an enormous risk at the beginning part of that chart. There was a. During the First Quarter there was a period during the First Quarter of last year. Have seenat we markets become rather complacent. Again, if i can use that word in the context of political dynamics. Markets took the view that Political Risk in europe was essentially dead. We still dont have a german government. Manus yes. Jeremy at the same time we have the upcoming italian election. We are not assuming that we will see the formation of a government. It could be argued that the Political Risk has been diminished to such a degree that there is scope for a repricing of a risk premium in the euro and the First Quarter in the First Quarter. I think it may well be the case that the markets become a little overblown, overextended. I think that gives us a need for a pullback, maybe getting back to the 117, 118 level. I think those who are buying next week could find it last week, could have found it a rather expensive trade. Anna why are you not more worried about italy . We went into 2017 with a great of caution and weariness. It does not seem like we are going into 2018 like that. A little too complacent . What is your base case . The the frack to us tious nature of the government anna that we end up with some kind of Hung Parliament or a grand coalition . Manus we end up with parties that dont have jeremy we end up with parties that cannot substantiate political change. The nature of a italian politics, because of course if were talking about historical precedents, there has been any number of italian governments since the second world war. I think that nature of italian politics is what might save europe. Germany is a slightly different beast. If we find ourselves facing a new election, that underlies a degree of ownership in the europe inner chef. The weak state of any insulin government will preclude uncertainty. Voices cominge of out there. Calling for a clear and to quantitative easing. Many are saying that this reflects what the fed did last year. This is a chorus of voices talking about the end of qe as we know it. How did they avoid the shakedown that we saw in the markets last year when the fed did the same thing. Jeremy it is difficult to reverse policy. That is the difficult part for the ecb. Those voices are going to get louder through the course of this year. If we look at the pmis, those are clearly suggesting that there is no need for bond buying in this current environment, outside of some of the political dynamics. I think it is going to be very difficult for the ecb to try and extract themselves from their bond buying process. I think it is going to be case that investors need to be wary anticipating of anticipating the ecb action. I think the next question is, how quickly should the market be considering the ecb thinking about rolling the right back after the bond buying process . Draghi is talking about the process of changing rates. I think that time parameter may very well be drawn in. There might not be a change in the deposit rate. There is perhaps a need to reconsider that. I think the euro will and the the yearer than end higher. I think there is debate that will be brought in that context. That is going to be the subtle distinction that the ecb will try to highlight. Of course it was not tapering, it was just a reversal to the previous policy. I think it will be a subtle management of market expectations. I think it is something we should be considering before the end of this year. I think it is a possibility and that will be endemic to the euro. Anna jeremy, thank you. Stay with us. Lets bring you up to speed with what has been going on with the United Kingdom. Theresa mays Cabinet Reshuffle did not go as planned. Things quickly went off script. Secretary jeremy hunt than education secretary were locked into discussions with her after rules. Ng proposed lets talk about the pound and what matters for the pound when you watch this kind of story. I was expecting you to say that it was all about the peripheries, the edges. You think that we if we see the appointment of a u. K. Who is eu without a deal, you think that could be quite significant . Jeremy the nature of those conversations that have been going on under light the up underlie the weakness of the Prime Minister. It seems to be the case that some of those leading politicians decided that they had a rather different view than the Prime Minister. I think it does underline the fact that, from a political standpoint, there is still this legacy of that election of last difficulties that the Prime Minister has faced following that. Going back to the point about exiting the eu without a deal, i. K that is i think it is very much emblematic of trying to a of giving something to both wings of the party. Manus i just wonder to what extent are we overly enthusiastic about the pound. Reversals at the risk , actually i think this has come up it is the wrong chart, so lets not take it. I just wonder if we are overly enthusiastic. Listened, does the transition agreement materially joined the pound higher . 1. 50, but threemonth volatility is the lowest on the pound. Is that bullish . Jeremy i would suggest that possibly us. Yes. I think that we are going to see ongoing headline risk as far as the u. K. Is concerned. I would not necessarily expect sterling to perform particularly well. We have obviously seen markets rebuilding in the long position. We continue to seek headwinds on the consumer side. Some of the details overnight or rather disappointing were rather disappointing. We may end of the year with sterling a little higher than the dollar, but i think we go lower first. I think ultimately we will see moves back towards the low 90s over the course of the next 36 months. Manus of course we have that meeting between the eu and the u. K. Jeremy, stay with us. We got a little bit more to extract from you at the start of 2018. Continuessation on bloomberg radio. You can catch that on your way to work. Ing up we will break down the missed estimates. Is set to name its bankers for what could be the worlds biggest ipo. This is bloomberg. Fourthquarter profit missed estimates by at least 1 billion. Eroded theyuan sales. Its been a rocky start. The lows of the day, after hitting record highs back in 2017. Joining us is our Bloomberg Asia technology reporter. Samsung, youve seen records made in terms of pricing, what is the biggest challenge for this business . As you know, samsung is the biggest maker of memory chips. There is a big gap between the estimates and the actual earnings that were announced. That means a lot for the company. You would want to blame the offry chip prices leveling somewhat, but i see here that the yuan is getting so strong in the past quarter that it has started to hurt the earnings of many companies. Not just samsung, but Companies Like lg. Strongest the yaun was thethe strongest currency in asia. Manus what does this mean for samsung . Peak pricing in terms of their chip business . There is a lot of conversation about whether memory chip prices have stopped rising. Who saye analysts that the demand is still booming. Samsung is going to benefit a lot from the price of memory chips rising, but there is also skepticism about the company. Samsung is not going to overshoot, in terms of making memory chips this year. Its going to be very careful about the process of meeting demand and supply memory chips. It is wise for us to manage our expectations about samsung this year. Manus managed expectations for samsung this year. Thank you. Anna lets talk about the oil story. Saudi aramco is set to appoint citigroup and Goldman Sachs to manage what could be the World Largest ipo. Stanley is expected to be named a global coordinator. Yousef. Ning, give us the details around the story. Yousef saudi aramco is obviously the crown jewel in the saudi arabia transformation story. That would be huge for these banks. 1. 5 trillion dollars, that is according to the people familiar with the banks involved in this conversation, which is higher than some analysts might have anticipated. Crude is up about 30 , so that is feeding into that valuation story. Perhaps sooner rather than later in 2018 might be a good idea before we see a correction in crude oil. Mandates could be finalized as soon as this week. Which Major Exchange has not been interested in getting a slice of this cake . We understand there will be a local listing. Whether there is going to be an International Listing remains to be seen. Anna thank you, yousef. The mega ipo that will someday be saudi aramco. Lets get back to jeremy stretch. We have not talked about the oil story today, have we jeremy . Momentum. En it gained it gradually gained. About thea lot inflation story in the United States on the how much is this inflation story to do with this . Jeremy absolutely. We have to keep in mind that Commodity Prices, including oil, are showing resilience. It did not have a major impact on the supply dynamic. You can argue whether oil at thisns look frothy current point. I think markets are still assuming that we are not going to see an exponential rise in the oil price from current levels. That would have a major influence in terms of the inflation story and also in terms of what the Central Banks will be doing. We are going to see Commodity Prices remaining well supported. I think that provides ongoing impetus, in terms of em, or terms of those dollar bloc Commodity Prices. Manus thank you for joining us, jeremy stretch continues his conversation with us later on bloomberg. The bank of japan have cut back bond buying. End anna this is bloomberg. 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. New European Headquarters in the city of london. I am manus cranny. Anna and i am and edwards. Manus north korea says that it will send athletes and a delegation to next months winter games in south korea. On theopes to move talks military. Trump seems to be very close to deciding on his nominee for fed vice chair. Manus altice spinoff. He looks to turn around the european operations. Manus welcome to bloomberg daybreak europe. The first of the Food Retailers in the United Kingdom have delivered their numbers. This is the first time these major retailers are telling us how much consumers are spending in the u. K. If you reflect to some of the data that we had yesterday, you bing theirmers cur spending for the first time in 2017. S in place of the retail contribution was expected at 1. 4 . This is the performance over the year. All of the retailers have been under pressure, down two point 2. 2 . Stripping out the gas element, 2. 6 . Perhaps it will set up a better store for. It will be super thursday when we really understand what is going on in retail. 20172018 year and views remain unchanged year end views remain unchanged. Anna german Industrial Production for the month of november coming in above estimates. The estimate was for an increase of just 1. 8 . This looks to be a strong number. It comes a day after we got some disappointing numbers in germany. This goes to points towards strength at the end of the year. This is a global story because of the trading nature of this economy. Is the globally synchronized recovery that is doing well for germany. Unemployment is low. The domestic side of things are coming together as well. Manus many are saying that germany can survive at this time when they do not have a de facto leader. Synchronizedglobal growth. U. S. Stocks rose for a fifth straight day. North korea is sending a delegation to the Winter Olympics. North and south korea talking to one another as progress. Progress. Did you spend your pounds in morrison . Anybody ess echo proseco anybody . The relative strength index is punching out for many of these markets. The bears are roaring out there at the moment. They are saying that you will want to sell equities. Is anything to go by, perhaps ithat is not what you want to keep your eye on. Anna lets have a look at the markets. This is the risk radar. The msci asiapacific up by 0. 3 . A strong close at the end of the day in the u. S. Weve got japan back in action, so we move higher on the msci asiapacific. Weiung though, a bit of a ght on the korean market. The dollar is a little weaker. The yen is a little stronger. Arebank of depend japan not buying bonds on the long end. Weve had some better data out of germany, so perhaps that is helping things move along. We will talk more about inflation, arent we manus . Manus absolutely. We looked at the amount of money flowing into those treasuries. Inflation will be the core focus at the end of the week. The bank of japan has i think, set out a store. If the u. K. Has raised rates, if there is a debate in germany talking about the need for the end of. Signaling thatan they are just adjusting the rates at the longer end of the curve. It is certainly unsettling the bond markets. The is definitely igniting viewpoint that in the bond markets, you are going to have to reconsider. The bank of japan is beginning to fiddle with the long end of the curve. You may think about less negative rates before the end of the year, not rate hikes. Juliette saly has much more clarity. Shes got your first word news. Verytte donald trump is close to making a decision on his nominee to be vicechairman of the fed, according to a white house official. He has said that pimcos richard glared all richard is not the first choice. Trump picked Jerome Powell to replace janet yellen one hurt term is over when here term is over. Postding to the washington , Robert Mueller will likely seek to interview trump. The newspaper says that the special counsel will interview trump very soon, possibly within the next several weeks. The u. K. Prime ministers attempt to give her government a as theye is ruined, refuse to follow orders. Health secretary and education secretary were locked in discussions with her after rejecting proposed moves. Her ability tor navigate the next stretch of brexit talks. 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. Now the positive session in asian equity markets come up for a sixth consecutive session. The nick a coming back the nickkei coming back online. We saw the kospi impacted by what you have seen in samsung. Earningsissing its come off by 3. 1 there. It is having an impact on the Overall Index and a lot of analysts have scrambled to readjust their forecast on samsung. We have seen a downgraded from Credit Suisse to iphone the component makers. You also seen a huge rally in sector. In the tech a very strong rally. Manus. Manus juliette, thank you very much. Clarity as always from juliette on the markets. North korea is saying that it is want to send athletes and a highlevel delegation to the olympics in south korea next month. Says thatfrom Seoul South Korea wants it both nations to march together. Anna bloombergs chief north asia correspondent joins us now from the unification bridge on the south korean side. The mood has been positive, the fact that this meeting is even taken place. Give us the latest on the ground. The general mood has been positive across the table. They seem to be wanting to work out a deal, at least on the olympics. That is the low hanging fruit of the many issues on the korean peninsula. The talks have probably been reflected in the weather today. We had lots of sun. Early on we had snow flurries, sun we had some again again. Both sides have a lot to gain, at least on the olympics issue. South korea kicks off the Winter Olympics one month from today. They dont want the specter of war hanging over the games. North korea wants to participate. They have two ice skaters that have qualified it for the olympics qualified for the impex. They wil olympics. They will send highlevel delegates and a cheering unit. Stage does this set the stephen, good morning to you. Does this set the stage for progress . Going beyond the spore and actually dealing with what the world is worried about, which is the denuclearization of north korea. Is there a possibility of discussion around the area . That is the hope, right . These are the baby steps. That is why the South Koreans are willing to offer this all of branch to thee North Koreans. They want to get kim jongun to at least talk about abandoning the icbm program and the nuclear program. Until it has done that, you can forthat this is just a calm now, because what happens when the cameras from around the world leave . April, there will be more theame exercises between United States and north korea. Manus it could be a bumpy 2018. Marketsnaive of global to think that it will be anything else. Jeremy cook is the chief economist for world first u. K. He puts the theater of north korea and south korea in context. The risk that never happened last year and it sounds as if, listen tose and stephen, we are setting the stage for at least eight bit less risk. A bit the market has gone a bit quiet on some risk. Relationship between the north and the south, was one of them. Over can put that to bed the course of the Winter Olympics, obvious and this is chinese new year. Stephen also highlighted the military wargames. That is a huge geoPolitical Risk. They dont like the u. S. And the South Koreans coming together and practicing almost repelling a north korean invasion. Anna we should not underplayed the potential risk that we go back to heightened tension . We will see whether anything more comes from the olympics. Another country that will be pleased with this would be japan. We talked about this with jeremy stretch. We have gotten some news. That is interesting no change in justy from the boj, implementing their preexisting policy. We be reading into this . It is a small tweak maybe they are getting a little over excited that we are going to see a huge innge in policy and 2010 2018. This may be the first element of a central bank is at rates at the moment. If we see the communication policy change, then that could be the advanced of something the advent of something changing. Their lives the point, you are saying to calm down. It is just a little bit too excitable. Nomura did a survey. Said that the equity market is going to run higher next year , 49 were going to pump it out over 49,000. Cibc said they they want to focus their attention on the nafta agreements at the start of the year. Big for him was one of the catalysts for risk. Would you concur . Yes. U. S. China has to be a big risk. It looks like the nafta negotiations will be the first thing to happen there. Thedifferentiation in positions within the u. S. And canada, and mexico and canada have not shown that we are to the point where nafta is not going to fall forward. We are going to see some changes, but this is not the end of nafta, regardless of what donald trump is up to. At the moment, it is about 8 risk. 20 risk. Rcen anna jeremy, thank you very much. Coming up, cabinet chaos. Theresa mays reshuffle takes eight turn for the worst a turn for the worst. Manus we have coverage from the Technology Show in las vegas. This is bloomberg. Manus welcome back to bloomberg daybreak europe , you are just 38 minutes away from the beginning of cash trade. If it is going to knock the numbers, they are cutting their 2017 earnings forecast due to the outcome of this arbitration. You see the full year revenue billion. Out 1. 7 it looks as if this arbitration is hitting them. Anna the stock has been doing very well lately, trading at 305 5 euros per share. It has had a very strong run on receding competition from cheaper chinese competitors. Juilette samsung alec tronics has missed electronics has missed its fourthquarter profit estimates. 7 surge in the yuan as the price of memory chips leveled off. Hi pursues a turnaround plan for altices operation. European his Holding Company will have at least 51 of the voting power. Anna theresa mays Cabinet Reshuffle did not go as planned. She tagged yesterdays event as a refresh of her top team. Education secretary was locked into a discussion with the Prime Minister. Lets put the immediate politics to one side, shall we . We have watched with interest how the data has been evolving in the u. K. We have reporting of a negative picture. It does not seem to be everybody, though. Last night we had the brc numbers that did show that tough as people are having to cope with higher spending. There is a slew of indicators that are showing a very mixed picture at the moment. A lot of sales went through in the novemberdecember. Period. A lot of that was online. You said that more since were good morrisons were good. The consumption picture here in the u. K. Is very strange. The real wage or is particularly wage sure is particularly weak. Ive never got a bit of plastic and done that in my life. Are we more productive . The u. K. Is more productive. Have a look at this. U. K. Productivity rose for the most in six years. The bank of england will be particularly emboldened by this, or it will give them room to breathe. What does this spike in productivity due to the bank of england . No one is positive productivity at the moment. Everybody thinks that nothing is going to be happening for a long time. It is a very volatile series. The bank of england is not going to put a lot of emphasis on one particular data point. But anything to show that the u. K. Economy is a little bit more productive is obviously going to be good news for them. If it is more productive than the has to be wage gain. Anna they watch it as sort of a measure of the ability of it u. K. Economy, the maximum speed, if you like. To be able to spend the amount of hours that we spend on our desks on a day to day basis, we obviously we constantly hear comparisons with other workers. How quickly are we able to get at full speed . We may be in the right direction, but we are not going as fast as we can. Manus mentally send you off with your economic folio formula let me send you off with her economic portfolio formula. Jeremy, thank you very much for being with us this morning. The chief economist over at world first. Altice europe aims to improve its Financial Performance in france. Markets look at the futures, suggesting a mix. This is bloomberg. Guy welcome, you are watching bloomberg markets. This is the european open. Im died guy johnson in berlin. The cash equity trade now less than 30 minutes away. In london, matt miller is in berlin. , hit hard in q4 after a surge in 2017. Is 2018 shaping up to be tougher . Altice