Markets, yields are continuing to move up. When you look at the japanese 10 year, we are flirting with the zero line. At some point, maybe, we will see if we break above the japanese 10 year. Let me end on this. Some markets are substantially down for the week. The dollar is also seeing a drop. 1 , that is ahead of the u. S. Jobs numbers, which comes out later today. Su keenan is with eyes. She is going to update is with us. She is going to update us. Su lets get right to the newest. We are going to start with china, which has competed has repeated it is going to remain in close contact with the u. S. Over trade. Reports suggest the two sides montharing a recorded 20 spat. The u. S. Intends to impose duties on more chinese imports if a deal is not struck by december 15. A new report says Political Uncertainty in the u. K. Is planning have playing havoc with the job market. Wage pressures continuing to ease. The Employment Federation says companies delayed or canceled plans last month. Workers are hesitant about seeking new jobs amid confusion about brexit and the general election. Indian markets fell after the reserve bank unexpectedly kept Interest Rates on hold. It was the fifth time this year the r. B. I. Downgraded its outlook will economists had been expecting a sixth consecutive rate cut. Policymakers lowered growth forecasts to 5 from octobers 6. 1 . Heldg, the jet maker, has talks with pilot crew pilots and cabin crew in attempts to build trust in the changes it is making to the 5 two the 737 max. It is confident the new software Regulatory Approval. It had been grounded since march. Say boeing isrews a long way from regaining trust. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im su keenan. This is bloomberg. Opec has reached a deal on oil supply. The market forecaster turned to a surplus next year. Ministers in vienna agreed to deepen the target by 5000 barrels a day, normalizing the supply restrictions that had been in place for most of the year. Still a lot of details on how they are going to comply. David the decision must be ratified by the wider group. Lets get more details if we can. Stephen, our Energy Reporter, is with us to talk about talk to us about market expectations. Is also, 500 k , but that but that is all we know. We have been hearing since yesterday there had been some l deal for 500a k. They were having meetings with opec plus, which includes russia. Once that is formalize, we will have a better idea of who they will be cutting and how much it will be spread out. The market is expecting 500 k. That is what folks were telling our reporters. Who is going to making the cuts. Since there was an agreement last year to cut 1. 2 Million Barrels a day, there has been an saudit led by arabia to add 500 k barrels a day. By making an agreement for 500 k from the first quarter, that is formalizing something these countries have already been doing. You look at countries like iraq or nigeria, they have not been cutting not been making the quota they have been promised since last year. We will see whether or not the opec and opec plus members will be looking to get nigeria and iraq had more and cut to add more and cut. How the 500 k is spread out something the market is watching closely. Yvonne watch for a beautiful news tomorrow according to the saudi oil minister. You think it all lived up to the kingdoms expectation . In 2016 said they were hoping for a 2 trillion valuation. Yesterday, they set the higher level for their ipo price at 32 riyals. That values the company at 1. 7 trillion. It is still a large valuation. It is not the 2 trillion dollars that mbs had been looking for. This is a smaller ipo then they had imagined. They thought they would ipo london and japan. All these places. Most of the folks investing in this ipo look to be local people in saudi arabia who have the wealth to put into this investment. Did it live up to what they were hoping for . Not quite. It is still going to be the biggest ipo in history. There are a lot of eyeballs on it for the moment. David it is going to be a big story. Thank you so much. Scott darling is with us, the research and gas. Onust want to get your take what did not take place overnight. I believe it was yvonne the saudi oil minister. David waiting for beautiful news. What do you think it will be . Said i think what stephen was broadly in expectations. We will see what the deeper cut is. The Energy Minister was pushing the deeper cut and extending that through 2020. It will come down to compliance and which countries are complying. Moree can opec achieve discipline without deeper cuts . What are you foreseeing . The demandhink on side, there is recovery for Global Oil Demand growth. This year has been around. 7. We have had a little bit of sluggishness on the demand side. If demand picks up and you get some countries like iraq and nigeria complying more, that should see a slightly more tight market. David give is a number then, whether it is when give us a number then, whether it is 100 what is the number that takes oil off the market . Ittt a better way to say is, what oil price doing need to invest in an oilfield . We have a view of 60. Jp morgan, a couple years back, did a survey of companies we cover. We basically said, what oil price tonight what oil price doing need to cover my spending . 65. Ame out with we are at the cusp of offshore projects, whether you actually want to invest or not. Yvonne we have been talking about the 500,000 barrels cut. At least to rebalance the market at all, or is it cosmetic at this point . , 60 to 75general brent forecast. We are around that. Most analysts and brokers like our selves whether it is 59 or 65, i do not know. Around these types of levels is the level which may be slightly higher the opec field comes. David your outlook, you just published that. Scott you see European Energy companies had to justify their Business Models to investors this year, especially around environment. That has not been the case for asia energy coverage. We think 2020 will be the first year where investors and the public start to talk more about the companys listed here and there environmental track record. We believe that goes in hand with social and government and governance aspects as well. We also have our esg data, which we look at Different Companies and rank them on a certain esg score. What we found where we when we look at our companies, there is a correlation between good esg and good cash yield and dividend yield. Those companies are doing a good job. We think that will differentiate the energy companies. David is there a cost attached to that . At some point, the Business Model changes slightly. Scott agreed, on the environmental slide is environmental side. On the social and governmental side, that can be done with the amount of women in the workforce, just doing a better job. Yvonne can you give us some examples of some companies that have made progress . Scott companies with good esg a woodside walling company. Countries that are making good progress, petro china, those type of companies. Screening also good for improving esg and free cash and dividend outlook. David what is driving that . Those were the big chinese names. I was not expecting those names to top the list. Scott partly, it is the drivenent that has and ingrained in some of the national companies. It is investors. Investors are talking to us to say, who has the best esg score of your coverage . They are being told by their investors. Yvonne we were just talking to a previous guest about commodities as a whole this year have not outperformed the rest of the Asset Classes. Do you see that to be the case for 2020 . Scott our strategic view is there is very much value in commodities stocks. We see a value rotation as we go into next year. Performance has been, the macro has not been strong. If you look at price action of the underlying commodity, oil has not done much all of this year. We are already seeing that kick in. For a better refining year of 2020 then we have had this year. Van Bloomberg Markets balance of power bloomberg than hit we have had this year. Yvonne thank you for joining us. We look ahead at the situation in hong kong after a relatively quiet few days. There are plans for more protests this week. David up next, nancy pelosi says the house will draft articles of impeachment against President Trump. Possibly coming before christmas. This is bloomberg. David welcome back. You are watching Bloomberg Markets. Speaker nancy pelosi is stepping up the timetable for impeaching President Trump, putting the house in motion towards a historic vote. The president leaves us no choice but to act because he is trying to corrupt the election for his own benefit. The president has engaged in abuse of power, undermining our National Security and jeopardizing the integrity of our elections. Yvonne lets bring in our Senior National editor, jodi schneider. What happens next . It looks like nancy pelosi moving the house towards a rapid timetable towards impeachment. Next would come the articles of impeachment. So far, it has been an impeachment inquiry. They are looking like this could happen by the Time Congress leaves for the recess, the holiday recess, on december 20. She has instructed the chairman of the three committees dealing with the impeachment increase. They are all democrats as democrats have and troll of the chamber. Two draft article have control of the chamber. Start doing that. We heard from jerrold nadler, who was the who is the chairman of the house judiciary committee. That he thinks there is at least three articles of impeachment on abuse of bribery, and obstruction. The house reminds to remind everyone, the house acts as a prosecutor in this process. They bring the articles of impeachment. They say, here is the case. The senate acts as the jury. They will have a trial on the articles of impeachment. David 30 years ago, a history lesson. People have forgotten. Republicans expected to fight this . Republicans are already fighting this. We heard from the majority leader. He said this is politically motivated. It is an election cycle. We expect there will be a fair bit of that, people siding with the president. He tweeted out President Trump that he would like to see this go quickly. He would like a senate trial so he can clear his name. The senate will act as jury. It is republicancontrolled. It is highly unlikely they would vote to impeach and would not vote to remove the president. There is a real question of whether some republicans will vote with democrats given how strong the case may be. Yvonne thank you. Our Senior National editor. We have plenty more ahead. This is bloomberg. Yvonne lets get to your latest business flash headlines. Hong Kong Airlines is expecting a cash injection by saturday. That is according to an interview with the carriers ceo. The ceo says the money will ensure the survival for now. The hong kong aviation Licensing Authority said it would make a decision by saturday after assessing the improvement to its finances. Uber fell in late trade after it reported more than 3000 allegations of Sexual Assault last year. Evenlyims were split between drivers and passengers. Around 50 people were killed in over collisions over the past two years. The findings are part of the ride hailers safety review. At 2020ets have a look the lists of worries and how these rank. We talked with steve schwarzman. He is not afraid of a recession. He says it is political disruption when it comes to geopolitics as the biggest risk to global politics. He spoke with bloomberg and discussed what it would take to end the trade war. The gradualakes is opening of china. If we are just talking about china. Moreheir adoption of traditional types of practices in the developed world. I think they recognize over time, that needs to happen, and it would be good for them. It represents major change from the way china has been managed. Negotiations have not been the easiest because you are asking someone to adopt different types of approaches that are more common in the developed world. I do not think china will ever abandon a lot of the fundamental system. Of its the game is to rebalance it in a way that makes more sense as china becomes wealthier. I know you said you are not afraid of an eminent recession. There are of an i mminent recession. They were all kinds of unusual things that happen in the world. Sixth sense is that geopolitical issues are the great unknown, which could have very substantial consequences. With iran, do they become militarily aggressive and interfere with the supply for the rest of the world . You have issues like north korea. Hat happens there you have issues with china on numerous kinds of levels. You never know which one of these things, let alone other things, are going to happen. The world has become much more integrated for a lot of Different Reasons including the internet where peoples behavior, which used to be not correlated. All of a sudden, people around the world star acting in the same way. The conventional start acting in the same way. The conventional cycle of overproduction of certain types economicthat lead to slowdowns and so forth does not worth the risk for me. What has happened with Interest Rates, which are now so low that it is almost a natural. What happens if they reverse . If we get some inflation, a little inflation would be fine for most of the world, but if that goes up a lot, there are always risks to economies. At the moment, the low Interest Rates have stimulated the world enough that it seems to be rolling along. States, lower income workers for the first time are getting much bigger increases. Somewhere around three and a half and 4 . It is 70 of the spending of the american consumer. They spend more. More they spend, the more the economy keeps growing. It is not in conventional cycle. And in conventional cycle. I did not see it falling off a cliff. David that was steve schwarzman, the chairman and ceo of blackstone. Yvonne lets take a look at the movers in the asian section. Watching tech punching higher. Up 8 . A solid two day session. He japanese pharma company. Out with a drug for the alzheimers disease. Shares close to 7 . Upgrading the stock here to and overweight for the sherries for the ashares. A Construction Company in australia has been cited for a probe on a financial irregularity. That stock down 7 . This is bloomberg. In hong kong9 a. M. And shanghai. I am su keenan with the first word headlines. We start with the u. S. State department, which says evidence is emerging that more than 1000 people may have been killed by Government Forces during recent protests against higher gas prices in iran. Thannternational says more 200 people have died. The u. S. Puts the total for higher. Iran acknowledge for the first time that it Security Forces have killed protesters. Isthe saudi aramco deal, it it has successfully owned to worlds biggest public offering. Billion raising 25. 6 billion. The ipo values the Energy Company at 1. 7 trillion dollars. That is below the kingdoms hopes of 2 trillion. It is part of their plans to wean the saudi economy off of fossil fuel. Australia has issued emergency warnings over bushfires raging across New South Wales and the queensland border. Several communities are being oo late to expect rescue teams. The air quality is rated as hazardous. Shows thethis week air as more polluted than shanghai. Violence flared in paris and across france as trade unions went on strike in protest against plans for pension reform. The Train Service, nuclear plants, and garbage collection workers all walked off the job. People a half million took action across the country. It is the biggest protest against president macron since he took office two and a half years ago. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im su keenan. This is bloomberg. Yvonne more signs of the trade war is affecting china. We are expecting numbers from november. Lets go over to beijing and analyst anor, the the latest in this trade war. Eleanor, ed has been quite a crazy week when it comes to catching up on all these trade headlines. Trump president downplaying the prospects of getting a phase one deal before the election. Which we put that into should we put any value into that statement . I think he was talking off the cuff. Anytime get close to signing the deal, there is a lot of spit bowling from the white house and mixed messages. What i see happening now is the theater around signing the deal. These are the political elements. It is not about the content of the deal or whether or not tariffs will be rolled back. These are the issues that are being spoken about for phase one. Ifid would you consider we do get to a point where they sign a phase i agreement, do you that is you think that is an agreement on the Purchase Agreement or phase i agreement . It will leave to the side more structural issues guarding chinas industrial policy or data around protectionism, which is going to be a key problem in terms of china and the u. S. Relationship going forward. Yvonne when it comes to december 15, do you expect the current tariffs to be lifted . What would it take for the u. S. We sawally lift tariffs in september and previous ones . What would china have to give in that situation . We see it as unlikely the previous tariffs will be lifted. We are expecting the 15 december tariff deadline to be extended to continue negotiations. In order for that to be a widescale drawback of tariffs, they would have to tackle more structural issues regarding policy and data protectionism. David all of this is happening against the backdrop of a slowing economy and the backdrop and the appetite to strike a deal would be contingent on the pain they went to alleviate in the economy. It is interesting some of the things you would want to bring up in your report. When you talk about the localized problems china is seeing within the local government, talk about those cracks you mention. The early signs we are seeing bank, there is definite hang seng bank. They do not have the stability of banking deposits. Slowing, theseis cracks are beginning to emerge in the most sensitive parts of the economy. The political implication of this is a reordering of the relationship between central and local governments. Local governments are being asked to take a lot of the burden of restructuring these local financial risks. Going into 2020, we are going to see more occasions of these issues and more experts being dispatched from beijing to help out with those issues. Yvonne they were years ago, seen as a ticking time bomb when it comes to the financial sector. Now, they are seen as coming to the rescue of a lot of these private sector companies. Is there a risk of this overreliance on these type of investment arms that are also facing a wall of debt . Definitely one way of looking at it. What we are also hearing is there is also a problem regarding privatesector lack of demand for credit. The private sector is disinvesting. State owned banks are under pressure to get more credit to the private sector. In beijing, the demand is not there. Authorities are going to try to stimulate that demand somehow. David are these problems something beijing cannot handle . What do you think . To the comes down ageold question of how to deleverage the economy, which beijing recognizes it needs to do whilst maintaining economic growth. Too not think it has managed find this balance. This is something they are going to continue grappling with. It is going to be a painful process. Yvonne in your notes, you mention taiwan looming as the next challenge. We have an election coming up next month. What is going to be the next stress point you are watching out for next year . Taiwanesena the expecting a are victory that will pose a challenge for cross trade relationships. We see that as the key issue facing beijing. Ofse issues on the periphery Greater China are obviously a problem, but they are not as significant as the looming debt problem and the problem localized in banks around rural china especially. David to take things fullcircle, all of these things are related. Toot of people are waiting see how beijing will retaliate. They have come out verbally and said certain things. Companiesnk american are about to see or feel more difficult operating environment in china over the next 12 months . Yes, so i think if you look at the way in which the leadership town has changed over the past two years, if i were a foreign business operating in china, i would have concerns. Inwe look at xi jinping 2015, he was talking about chinas role and leadership in globalized free trade. If we look at the situation today and the messages coming out of beijing, it is, china needs to rely on itself. Threats from the outside are problems rather than opportunities. The practical implication of this change in tone is a preference for Chinese Companies over foreign competitors. Yvonne thank you so much for joining us. Lets talk about hong kong. Part of this overall conversation. This weekend, we are bracing for another possible disruptive next few days. Rally organizers calling this large scale march through the Business District sunday. There is a possible general strike on monday. Yvonne lets get to Stephen Engle joining us in the studio. What is this protest going to be a single of iesco we are watching the crowds. Stephen whether this protest movement has momentum. We got a little bit of a boost the protest movement got a boost whether district counsel elections on november 24. It was dominated by victories by prodemocracy camps. Encouragement to some of the hardcore ones. Also, the broader supporters. Those who are not in support of violent but the preservation of their Civil Liberties in hong kong, which some say has deteriorated due to china interfering. The big question is, this has been called for and approved by the civil human rights front, which is not received which has not received approval for a march in four months. Rf called the big rallies in june. They were fairly peaceful. Since then, there is not been any large peaceful marches like the one planned for sunday from Victoria Park to central, which is the same route we saw in june. The question is, is the weather going to hold . It is cold. This time of year, the get one or two weeks a year where they collars andre fluffy jackets. David we went from flipflops to boots all the way up. Lets talk about the economy. Have lost count with the amount of rounds of fiscal measures. Tophen we are heading recession if we are not already in recession. The financial secretary already says two percent of gdp is going to be shaved off. The damage tally now, 240 million u. S. Dollars. It sounds low. A lot of stations were damaged. The malaysia bank, they have units in hong kong. According to the wall street journal, they are pulling the plug. They are requesting they are closing down their units. Hong Kong Airlines fighting for survival. Yvonne thank you. Our chief north asia correspondent purity coming up, india, that a single economist we surveyed expected the r. B. I. To hold rates yesterday. We cover the fallout from that decision. This is bloomberg. David lets do a quick check of your business flash headlines. Hsbc is under ratings pressure. The longterm issue or default status has been downgraded from a to aa minus. Cut from stable to negative on a ratings forecast. Earnings could face trouble. Yvonne aston martin is surging through a sales slums on a formula one billionaire lawrence draw is planning a bid for the company. Report fromon a industry magazine auto card. David Morgan Stanley says shares of tesla could soar if the cyber truck is a success. Ranch adam roach says stocks could hit 500 bucks. Assuming the tesla will be able byso 100,000 cyber trucks 2024 and deliver the number of units in china. Yvonne lets talk about india. Stocks and bonds fell after the shock decision from the reserve bank of india to keep rates on hold. In Bloomberg Opinion columnist dan mopping all of the continent danmark. All the conmen all the columnists we surveyed got it wrong. Get itthe economists wrong art of the r. B. I. Make the wrong move . If bank surprise, they like to go in the direction but observers are forecasting, but go that step further. It is not just that no economist surveyed by bloomberg got this decision right. Isis that this decision contrary to a lot of the Economic Data coming out of india at the moment. A gdpast week, we had number showing that growth had slowed to 4. 5 in the third quarter. Little more than a year ago, those indian gdp numbers had an eight in front of them. India an economy like should not be growing at four and a half percent. I went to bring up inflation. We have a chart of real rates. We took the repo rate of the r. B. I. And subtracted inflation. Is real actually see rates are about to fall below zero. If they cut 25, i had a look at the forecast for the inflation of november. This falls below zero. It is not a case for them to hold rates. It is a chick it is a case they made the right decision. You do not want to be on autopilot forever. Point a case at some does the r. B. I. Take a breather and look around and see what is on inon and what is going some of these price issues . The r. B. I. Statement paid great attention to rainfall and what is happening with particular crops. You do not see jay powell and Christine Lagarde talk like that very often. Normalwe are not in a situation in india. This is expected to be the next big thing. China and the u. S. Would rule commerce in the 21st century. Were not off to such a great start. Yvonne that is to say the least. We are looking ahead to some of the u. S. Jobs reports that came out. That is about to come up later on today. We have seen a slowdown in the economy overall. How is that going to affect hiring . One of the things we are facing in the u. S. Right now is, payroll growth is slowing and slowing significantly in part because the economy has slowed. People areis a lot, having trouble finding appropriate skilled workers. The labor market is pretty tight. You have a jobless rate has been under 4 as long and has had as long as it has been in the u. S. , youre not going to get these payroll gains of 200,000 plus we have been used to. It is not going to happen. Is, does thetion payroll number materially alter the federal reserves outlook . Yvonne dan, thank you. Bloomberg opinion columnist joining us out of singapore. We are going to be talking to the National Economic council, larry kudlow, after the jobs report comes out. How that actually impacts these trade talks. David absolutely. The timer is set. We are a coming down to the open in india. After that shocker of a decision out of the r. B. I. The market had a little bit of a chance to react. Divina, good morning. Morning. Looks like it was a shocker for the market. It had seemed the market had digested it pretty well. The bank had recovered from the instant shocker. Towards the end of the trading session, it dried the indices lower. We list a quarter of a percent. For the nifty bank, we lost 2 . All of the big banks that have been running up, they gave back in yesterdays session. This consolidation is something that is not unwarranted. We have seen the runup to the record highs. Analysts are using these dips in the market to make sure they are along because the structure is still extremely positive. An individual stock you need to come and he did keep track of, yes bank. That is going to see a negative impact. Two other stocks. Logistics board has approved a 40 stake. David all right. Thank you. Coming up, it is battle of the charts. We are talking agent best performing stock against a different asset class and market we do not talk about a lot. Stay tuned for that. This is bloomberg. Yvonne happy friday. We are going to do battle of the charts. Lets get to are two contenders. Itll celebrating movember seems like should it seems like. David at the insistence of the tv studio. You need a trim. Of letshings kick things off. What i have for you guys today is precision industry. It has more than tripled this year, outperforming nearly every stock from the msci asia pacific. That is thanks to a certain apple product they make, air pods. According to bloomberg intelligence, demand for wearable products may remain strong through 2023. The reason for that is the are increasingly popular as they are increasingly popular. Another reason is a bio makers might remove audio jacks in five generation fines. Global shipments of earbuds and bluetooth headsets are likely to surge 60 this year. Here pod shipments next year air pod shipments next year are likely to rise to 90 million and 120 million in 2021. The looks shares the looks shares yvonne you know, want to get those air pods, you cannot go back to lawyers. Back to wires i cannot believe i am saying this, but for the last two years, mongolia has been like a safe haven among frontier markets. That is a quote from an analyst i heard this week. I just about spat out my yak burger when i heard that. See, the yields are moving in the same direction. That is the top panel. Look at the bottom panel, and you can see a consistent range in spread. It has 100 basis points. We need to drop the conceit at this point. It is a tiny bond market compared to the u. S. Treasury market, which is best. This is a country which is vast. This is a country whose bailout has been the blade has been delayed. Coal exports to china on the way. It is a country where they are facing because of overgrazing by goats. David i think i have heard enough and seen enough. You had a mongolia chart. No one told you to bring the mongolian costume. For that reason, i am giving it to you. You know that feeling when you overpay for something . That is the feeling i have except i did not buy anything. Thank you for that feeling. Yvonne this is bloomberg. David go. Markets are counting down. We await trade data from china. This is Bloomberg Markets asia. Asian stocks higher, pretty much on sentiment. Investors expecting the phase one trade deal to be struck with the u. S. And china. Trump saying negotiations are moving along well. We also have reports suggesting they are when it comes to agricultural purchases. Sentiment is uncertain. Asia index up to tens of 1 . Were keeping an eye on the jobs Market Report due out later today. Of course, a good number means trump will be less inclined to strike that deal with china. Take a look at where we are on the nikkei 225, also higher. Were keeping an eye on technology stocks. Big tex stocks theyre under pressure to be more transparent in terms of ipo further units. Taking a look at where we are, the dollar is trading, back in play. Dollar index currently flat, heading for the biggest weekly drop since october, the head of the jobs report on the back of optimism. The greenback gets pretty choppy this time of year. Yvonne everyone talking about the dollar heading down. Well see if that place through. Had the decision to keep rates on hold. It was a sticker shock when it came to the markets. We saw the brief drop, the policy position, and then things recovered. Some say perhaps they are pricing in the prospect of further combination down the road that the pause is just a stall at the moment. They might remain accommodative and a fiscal stimulus could play for 2020. Thats fresh on the minds if we extend the declines, despite things pairing of at the get go yesterday. Futures were still slightly dealing with the aftermath of all this. The bond markets saw a lot of fears. Yields ticked up on the back of that. If there is a combination, perhaps we could see a bond rally in india and the rupee strengthening on the back of that decision, much more hawkish than the market was expecting. So far, things looking pretty steady so far. The first word news, weve got su keenan in new york. Su we start with china, which has repeated they have remained in close contact with the u. S. Over trait, and called for tariffs to be proportionally lifted. Reports suggested the two sides are nearing an accord in a spat that has led to tariffs on 500 billion with of goods. The u. S. Intends to impose on more chinese imports if a deal is not struck by this december 15. Now, aramco and the ipo the Company Successfully launched the worlds biggest initial public offering, raising 25. 6 billion after pricing shares at the top of the market range. The ipo values the mammoth Energy Company at 1. 7 trillion. That is below the kingdoms original hopes of 2 trillion. It is a crucial part of plans to ween the saudi economy off fossil fuels. Hong kong is set for another mass protest march sunday, this after the human Rights Groups said it has been given approval from the police for the planned demonstration. It is the first time the group has won such a permit since july 21. They will head to the main Business District and central and will take place one day before the protest breaches the sixmonth mark. Finally, violence in paris and throughout france as trade unions went on strike to protest plans for pension reform. Workers in key sectors such as the metro, Train Service and garbage collection all walked off the job. It is the biggest protest against president macron since he took office two and a half years ago. A new report says Political Uncertainty in the u. K. Is playing havoc with the job market, demand for staff rising at the slowest pace in a decade, and wage pressures continuing to ease. The Employment Confederation says the companys delight or canceling plans last month and workers are hesitant about taking new jobs amid the confusion about brexit and the next general election. Global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. Im su keenan. This is bloomberg. Haslinda thank you. To the top story, opec nearing a deal to official to slash official production targets. Ministers left without nailing down a final agreement. Sharon joins us now. What happened . I know the ministers are to speak to the media. Sharon they did. They canceled a press conference scheduled for thursday but the talks ended around 11 00 p. M. Vienna time. They took six hours to top, but there is a deal. Its only in principle and they still have to come down to a final agreement. And the Saudi Arabia Oil minister told reporters to expect beautiful news tomorrow. Haslinda whatever beautiful means. Sharon exactly. So were still kind of waiting for details to how to distribute production cuts. Haslinda its almost said the 500,000 barrels cut will be in limited. The question is what does it mean for opec, and what does it mean for oil prices . Members of iraq and nigeria, who have been increasing production instead of reducing, so i think its more about compliance coming forward and what were aware of is that the deepening of production cuts will only come once it comes to 100 . So, a lot of uncertainty. A lot of people think its modest. They dont think it will make a huge difference because the oil market is going into a surplus anyway in 2020. So, i think thats what pushed the Opec Plus Group and the ministers to come to somewhat of an agreement to deepen the cuts. Whether that will have a real effect on the market were not remains to be seen. Alright, sharon, tell us a little more about opec plus. What happens if they dont opt for deeper cuts . Sharon right, we are seeing a Slower Growth in terms of demand,a nd were seeing record high Production Growth from nonopec members such as the u. S. And brazil is likely to produce more in the coming months. So, if opec doesnt come to an agreement, it might mean oil prices will come down to 50 a barrel level again. And thats not good for opec producers who have their budgets set at a fixed oil price, and also for saudi aramcos ipo, which is just going to happen in the weeks and months ahead. Yvonne yep, biggest one ever. Sharon, thank you, big oil reporter. Lets bring in our guest, isaac. Youve been pretty bearish the last couple times youve been on the show. Oil is a good indicator of where we are in the economy and this trade war. Do you expect a repeat of any rally . Isaac i think what youre seeing next year looks like prices are going to slow next year looks like prices are going to slow. Globally. Trade disputes seem to be growing. It might persist. Even with production cuts from opec, and i think they are going to be scrambling to try to cut production and put a floor under prices to try and deal with that lower demand. Theyve got problems, enforcement problems, compliances, as we heard. Overall, i dont see a meaningful increase in oil prices in 2020, and probably dont see it going down drastically because we will see supply cuts, if required, but it doesnt look like it will push up much higher. Yvonne were seeing more of these guests that come on and they are looking more optimistic than you. I see things turning around a bit. The pmis in china, as well. Why is that not enough for you . When i think about potential risks to the economy, theres a few things that stand out. Profit share of gdp is falling in the u. S. Weve had an inverted yield curve. The other Thing Holding the economy up is the services and consumer side. When you see these things slowing and weakening, you have this nonlinear progression towards recession. Thats the real risk here. Its easy to say things are different this time. Pmis flow does mean recession. Thats a big argument to make. Yes, we see some small improvement in manufacturing pmis, but the reality is below 50 they are in contractual territory. There is a real risk that bleeds into the Services Side of the economy over the next few months. Were not past that point of concern yet. Haslinda isaac, you see a recession at some point. Have assets priced out a recession for now . Isaac i think current valuations are fairly optimistic. But the difficulty with equity prices, which i think discounting a fairly rosy outlook in 2020 and beyond, is that trading a lot of noise, we see them being whipped around by every headline on trade. The reality is thats just noise. Its not a signal. I think about what the phase one trade deal means, not a lot. It may happen this year, early next year. Two and thatsse the real signal we ought to be looking at. From where i sit, a phase two deal looks very unlikely anytime next year and probably the next five years. Ultimately, theres probably a lot of good news being priced in. And that leaves a risk to the downside. Haslinda would you say equities are poised for a correction and that may not be a bad thing after all . Isaac yeah, there is definitely risk we see some significant fall over the next couple of years. I think a better way to think about this is currently, a lot of returns are being brought forward into 2019. The real risk is if we look out over 2020 and beyond, returns are significantly below historical averages. Thats something that is probably going to come as a shock to where markets are currently priced. There is a risk of some volatile correction, the real risk is returns disappoint expectations. Yvonne isaac, youre sticking around. Still ahead, we speak to the eu and besser to japan about brexit and what it means between brussels and tokyo. We count down to the u. K. Election next week, as well. Haslinda but next, we preview data from the worlds two largest economies and discuss a possible market impact. This is bloomberg. Yvonne markets are looking for the next big thing, watching data from the two largest economies. Later, we have the job numbers, which offers a gauge on how hiring is doing given the fact the rest of the u. S. Economy seems to be slowing down. Of course, is this vital to validating the feds view that rates can stay on hold after three cuts . The full site is strong payroll gains could reduce incentive for the Trump Administration to do a deal with beijing. Over the weekend, we get insight on how the trade dispute is affecting china. We get the november numbers with polls indicating exports and imports picking up slightly in october. Haslinda so much to digest. Lets bring back isaac, who expects a recession at some stage in the next 1215 months. Theres so much talk about the reflation trade. How can we talk about a reflation trade when some banks are considering qe, talking about negative rates . How do you justify all of that . Isaac yeah, i mean its a very difficult time at the moment to get a strong read on whats going on in the economy. The range of outcomes in the u. S. , china, trade, geopolitical risk in the u. K. Is very wide. That does mean there is increased risk of policy errors from a range of central banks. I think the u. S. Fed is one of those in the firing line. Weve heard them say they think the glass is more than half full for the u. S. Economy and there would be a significant hurdle for them to start cutting rates again. The real risk is they fall behind the curve and they impose their view of the economy on an economy that is actually struggling still. If we get through the middle of next year and they are Still Standing firm on not cutting rates further, there is a risk that policy error becomes a cause for a downturn of itself. Thats not our model view that the fed will look at the economy and whats happening and change their view and change the communication slightly. But there is a clear risk that they impose an error on the economy. Haslinda some say there is irrational exuberance, actually, and there is for great disappointment. How much do you think stocks and other Asset Classes will fall if there is disappointment if there is no phase one deal . Isaac yeah, i think irrational exuberance is part of it. There has been a lot of liquidity pumped out by the fed, not qe, but in the repo operations. What thats really done is collapsed risk premium and really helped bring forward returns from the future. Very significant part of the rally seen in equities over the back end of this year has been driven by that rather than better fundamentals. So there is scope for those returns to go away and there certainly scope for a correction. We saw that the end of last year in 2018. Something along those lines is in the realms of possibility over the first half of 2020. Yvonne which brings me to my next question. If stocks arent going to be there next year, what stocks are going to move . Isaac thats a big question, not easy to answer. U. S. Treasury yields are very low, relative to history. We still think theres value there. We think the push higher in yields at the back end of this year is the markets saying they believe the fed for now. Theyctually, in our view, cut rates significantly down to around a quarter of a percent again, quite likely implement real quantitative easing towards the back half of next year. There is scope for u. S. Treasuries to perform quite well relative to market expectations. I think importantly, at this stage, its about moving up the quality and credits, away from high yields to the highest quality you can find. Ultimately, thats a risky position if we enter recession. Yvonne what sort of cash position are you having . What are you preparing for your clients . Isaac we hold short data bonds as a proxy for cash at the moment. We think thats a fairly sensible protection or defense against some of these risks for the medium. But as we move through the cycle, it will be important to have cash to deploy because recessions dont last forever. They become good value and we think at that stage, its about being nimble and dynamic and having power to deploy in that situation. Haslinda im looking at your conviction calls, one of them to reduce exposure to the aussie. Why is that and where does the aussie go from here . They wonteems clear cut rates below 0. 25 . But theyve also been looking for a turning point in the economy and that doesnt look like its coming through. Australia is in a retail recession, private sector demand recession. The only thing propping up growth is government spending. In our view, the real risk is that they are forced to cut a couple times early next year, implement quantitative easing toward the middle of next year, and that leaves a fairly significant potential for the aussie dollar to fall below where it is and back to previous recessionary, periods, it has allen below 6 and theres plausible chance that happens over 2020. Yvonne if we do see some type of qe, local investors are bracing for it, couldnt that lift assets as well . Isaac i think thats the playbook we see. When qe starts coming through, it will help risk premium again and that helps put a floor under the potential declines in equity. Were not at the point where markets have priced in real negative potential outcomes in earnings and equity growth. Still downside scope. Yvonne sticking to your calls. Well see if things look brighter. Isaac joining us in hong kong. Check this out. Its open now. Were looking at where you think nine different Asset Classes come around this time next year. Visit was go to get your forecast in. This is bloomberg. Yvonne a could check at the business flash headlines. Hong Kong Airlines expecting a cash injection according to the ceo in the local newspaper. He said money will ensure the companys survival for now. Hong kongs aviation Licensing Authority said it will make a decision on the future of the airline by saturday after assessing the finances. Indonesian fly carrier garuda snapped a three day fall after firing its ceo for allegedly ordering a classic harleydavidson motorcycle to be smuggled into the country on a new airbus jet. Res kara will be dismissed after the Committee Found he ordered the purchase of the bike. The finance minister smuggling of the bike and other goods deprives the state of 38,000. Yvonne time now for the stock of the hour. You are looking at the upside. Tell us what. Guest haslinda why not look at a drugmaker . Theuch as 7 gain today, biggest gain are on the nikkei 225, the company and its u. S. Studyr will resume the and treatment that was abandoned in iran. The first indepth look at experimental treatment. Failure att was a that time they lost 8 billion of market cap on the news of two trading days. Today, turned around given that it is the biggest gainer up more than 7 . You get a glimpse of this and other stocks. Your itsn you most go on your blumberg. Wheredo a quick check on theyre shiny stocks are at this point in time. This is i 300 up three tons of 1 , tracking gains in the region. This is bloomberg. Haslinda looking at live pictures in singapore, in the middle of the trading day, currently looking like this. The region boosted by optimism that will be a phase one trade deal. The singapore economy expected to slow the commercial rent pretty much across the lion city. Office rent growth could fall to lower single digits, given a more subdued hiring outlook. Not so good there. But sti flat. Lets get the first word headlines with su keenan in new york. We start with china, which repeated they remain in close with the u. S. Over trade, and called for tariffs to be proportionally lifted. Reports suggested both sides are nearing an accord in a spat that has led to tariffs on 500 billion with of goods. However, the u. S. Intends to impose on more chinese imports if a deal is not struck by this december 15. To the u. S. Now, and the congressional inquiry into the president , House Speaker nancy pelosi is demanding a fast vote to impeach President Trump, with the process potentially concluding before the christmas holiday. She says Congress Must hold President Trump accountable for what she calls his profound violation of public trust, saying the president abused his power for personal benefit. Trump says the democrats have no impeachment case. The u. S. State department presents evidence that more than 1000 people may have been killed by Government Forces during recent protests against higher gas prices in iran. Amnesty International Said at least 200 people have died. The u. S. Puts the total higher, and says 7000 people have been arrested. Iran did acknowledge that is a forces have killed protesters. Pilots, cabin, crew in an attempt to build trust to the changes it is now making. The company says it is confident new software will win Regulatory Approval and let the plane back into service. It has been granted since march after two fatal crashes linked to altitude sensors. Some crews say boeing is a long way from gaining trust. To australia, which is issued warnings over brushfires rating across New South Wales and the queensland border. Several Rural Communities are being told its too late to expect. The air quality is rated as hazardous, with more northern suburbs ranked between very poor and hazardous. Sydneys air is more polluted than that of shanghai. Global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. Im su keenan. This is bloomberg. Yvonne lets look at markets. We are seeing green when it comes to equities to end the week. Are coming225, we back from the lunch break one third of 1 , hang seng up 191 points here. To put in perspective, we look to be ending the week on a positive front, a weekly gain, which is better than the last three weeks, where things ended in the red. Things are slightly better, but we are inching closer to december 15. Indian markets today, the rupee should be starting trading here this morning. 7132, we saw the strength holding after the shocking r. B. I. Decision to not do most, ifdespite what not all economists were expecting. The nifty seem to be steady as she goes. We did see the brief drop. Things have recovered a bit. The question is where yields are going to be. We saw a 13 basis point jump. Haslinda speaking of the u. K. Election, Boris Johnson reiterating his plan as the general election enters its final week, including a budget, and delivering brexit by the end of january. Hes also committing to securing a new trade deal with the European Union by the end of next year. Lets discuss brexit and implications with patricia, you and bessette are to japan. E. U. That are to japan e. U. Ambassador to japan. How much urgency is there . You for well, thank having me here. Let me say that 2019 has been a very good year in terms of relations with the Partnership Agreement coming into force. Of course, that means we want to show off our economies, ensuring that we can benefit with trade between the eu and japan. Let me make one comment in regarding the brexit issue. Yes . Haslinda go ahead. Patricia yes, of course there has been traditionally a lot of investment from japan in the eu, including the u. K. , and that means from the yield perspective, the key is to ensure an orderly brexit to get them to certainty for businesses so both the eu and the u. K. And all our foreign partners can then continue to do business with each other. Haslinda but how critical is japan as a partner in an increasingly bifurcated world . View,ia from my point of japan is really essential. We are close to 30 of the global gdp, and that means if we manage to do well in our trade and economic relations to increase investment and services and also to do that in a rural space way, then we can weather the storms better. Thean do better in environment and it would help stabilize a large portion of global trade. Yvonne we talk about how critical japan is for the u. K. Economy, a thousand Japanese Companies similar that operate in the u. K. What are the conversations youre having with japanese businesses . What are the key concerns when it comes to brexit . Patricia the key concerns from what will be been the future of relations between the u. K. And the European Union and at that point we want to withdraw to be agreed because it would give us uncertainty in the interim period. But we want a close economic relationship in the future. That would also ensure for japanese businesses that they will know the terms of the point of entry from the u. K. And that is critical for them. Many of them have asked how should we deal with brexit . Many of them have made decisions. For instance, relocating. I think its clear for all of the partners concern, including japan to include an orderly brexit will be key. Seene so youve already people or Companies Moving out of the u. K. To the eu . Have you Seen Movement on that front already . Patricia of course you have to talk to the individual companies, but yes, i know some banks and other companies have major they have an office and regional headquarters, which is in within the eu 27. President ambassador, trump is mulling imposing auto tariffs on both the eu and japan. Are the two sides collaborating to counter trumps efforts . All,cia well, first of let me say the eu has always insisted on them doing trade and them thes, within rules given by the trade organization. That means weve always said that is part and parcel of our trade deals, like the economic Partnership Agreement with japan. Therefore, of course its also clear we do not want to see more damage to the Global Economy being done by increasing tariffs. The epa between japan and eu has brought all tariffs down on 95 withr trade immediately, the first of february of 2019, and we are looking at 99 of the tariffs being gone at the end of the next 15 years. From our point of view, this is the way to go forward, a fair, level Playing Field based on wtos. Haslinda there is a general retreat from globalization in the auto sector. Japanese manufacturers are pulling out of factories in the eu. How worried are you about this . Patricia first of all, let me say we have today a global value chain and Global Supply chain. And that is why, to break down the Global Economic economy into the bilateral issues or Bilateral Agreements is not the way to go. Let may also emphasize here that u. S. , eu, and also the have a strong cooperation to address wto reforms. Because of course, we need a global rulebook based on the wtos, which would then allow all of us to benefit from good economic relations, including in the industrial area, meaning other industrial products. Yvonne last question, we were talking a bit about the auto tariffs, the banks a little bit. What about the farmers . We saw that the u. S. And japan struck a deal, a trade pact. How does that impact eu farmers and agricultural exports from the block . Patricia if you talk about the current u. S. Japan trade agreement, which was ratified by the japanese parliament, this deal, now that it would come beingulsome, is currently studied tentatively in brussels, attentively because trade deals or always very complex. Therefore, we will be looking at this agreement in terms of what it will mean for our interest and what it means in terms of global standards. But this is an ongoing exercise right now. Yvonne thank you for your time. Ambassador Patricia Flor joining us out of tokyo here today. Just want to check on japanese fixed income for the moment. We are seeing this melt up in yields when it comes to the jgb market. The five year yield rising to three basis points right now to about 0. 125 , the highest weve seen in a year when it comes to the japanese fiveyear. Were watching the one year, as well, closer to these yields getting out of negative territory. Thats the next thing to watch when it comes to the fixed income space in japan, given the boj hasnt done anything. Theres is also the fiscal package announced this week. Well see if that plays into the rise in yields weve seen for the little part 2019 has. Haslinda zero being an attractive bond. Sally around raised 25. 6 billion in the Worlds Largest ipo, relying heavily on local investors. The most Profitable Company at 1. 7 trillion, somewhat below the kingdoms original target. Asias Energy Reporter joins us from singapore. Didnt meet expectations. Guest if you look back at when they launched this, they were looking for 2 trillion valuation. Obviously, the numbers were short of that. That was several years ago and the ipo has gone through a lot of ups and downs. At the end of the day, then being able to say the worlds biggest ipo ever, now the most viable company, they are going to feel pretty good about it. Yvonne and the expectations from what we saw now versus 2016, when prince mohammad bin salman floated this idea is so different now. Is this really going to be a retail driven type of ipo or listing here in order to keep and ensure the ipo is a success . Or do you think there is still some opportunity, too . Dan well, well have to see because like you said, the world is in a different place. Theres a lot of questions about the future of Oil Demand Growth and what kind of longterm the one thingoil, said aramco produces, will have. Theres a really strong push within the middle east to help support this. It seems its been harder to find backers. A lot of companies have decided to stay away from investing in this and it will be real interesting to watch to see whether Chinese Companies were big Institutional Investors around the world will ever back it. Yvonne dan, thank you so much. Coming up, the reserve bank of india surprises markets by holding rates that defy expectations for a cut. With the economy sputtering, is a resistance futile . Details coming up next. This is bloomberg. Yvonne welcome back. The markets cautiously optimistic. Lets get to mumbai, where natalie is standing by to take us through what to expect today. What have you got for us on the back of the surprise cut from the r. B. I. . Markets seem to have digested that surprise really well. In the opening session, we have seen markets recouping yesterdays loss. The nifty is opening in the positive territory, 45 is something where its currently trading. Weve defended the mark in the last many days. Traders will be watching out for support. Gains are about 100 points. They hit the falls button for rate cuts. The nifty bankers bounced back, and for the broader markets, we are seeing gains in the opening session. The nifty 500 index is sitting with gains of almost a quarter of a percent. Haslinda thanks among stocks are watching . That in the red, as well. Modis cut foreign currency sitting with cuts of 3 . An acquisition news from the logistic space, oil cargo bought about 90 stake in gati. They are one of the majority shareholders now. At Share Acquisition came in 75 indian rupees per share, and they are looking to apply another. We are seeing gains in the opening session. A lot have reacted negatively to that news. You. E thank for more on the r. B. I. Shock decision, lets bring in an economist with the capital, by. How surprised are you about the decision and you think the r. B. I. Got it right . It seems theht, decision has been well calibrated given the fact inflation continues to hover around 5 the next three months. You have concerns in fiscal balance sheet, and the fact that enough transmission has not happened. The wait and watch approach seems to be more appropriate in hindsight. It seems the primary concern was inflation. As you take a look at that, of course food prices have been soaring, but when you think of real rates and real inflation at the moment and you subtract the repo rate with the headline inflation, you actually are seeing rates are about to head negative. How much more room is there to ease for the central bank now . Meets, the central bank they will have clarity on the fiscal stance. The crop will have started to arrive in the markets. The biggest problem in the food 1015 basist 200 , points to headline inflation. Given that growth is unlikely to he a very bright recovery, still have concerns on manufacturing growth. It does make sense we are to continue to be an accommodative stance. Given the tonality of the policy last evening, it seems that r. B. I. Would be open for the rate cuts. Weve been sitting at 50 basis points for the rate cuts starting in 2020. Haslinda has growth bottomed in india . As you take a look at the stock market, its done pretty well, up 13 from september. That could be a leading indicator, no . Thats right. There is no doubt growth has bottomed out. For about 4. 5 , you will see growth of 5 the next two quarters. However, the growth will be optically better because you have a kind of elevated food prices are going to help, to some extent, income recovery. And you expect the winter crop alle robust and liquidity, of those issues are going to elevate concerns of weak growth. However, we are still some time away from reaching potential. Even if you reach a growth, you will still be away at least hundred 30 basis points away. While you would have bottomed out, youre still significantly away from potential. Haslinda investors also expecting the government to come up with more measures to boost the economy. What measures do you think will be implement it . With, what markets are expecting is the government to table the directx code, which is going to see partial income taxes. That is likely to happen in the month of feb. Also likely to suspect the government to throw Infrastructure Spending because the activity undertaken the previous five years. But there is a low in that sector because of funding issues. Ofyou can expect the month february clarity, more clarity in terms of what the Government Program is expected to be in terms of spending in the infrastructure space. Yvonne were going to leave it there, but thank you so much. If you are a subscriber of bloomberg, you can catch up with all of our interviews using tv and join the conversation by sending instant messages to our team and guests during our live shows. Check them out on tv. This is bloomberg. In tradeuber fell after reporting 3000 allegations of Sexual Assault in the u. S. Last year. The claims were split between drivers and passengers, and also said 50 people were killed in uber collisions the past two years. They are part of the first extensive safety review. The ceo says it will make uber a Better Company in the long run. Hsbc is under ratings pressure. The longterm issuer default status has been downgraded from aplus to aa minus. They are keeping an eye on the lender for further potential downgrades. It follows a similar move that cut the outlook from stable to negative on a forecast that earnings will face trouble in the coming quarters. Erickson set to end a longrunning corruption investigation in the u. S. With a deal that could cost more than 1 billion. Sources tell us a resolution could be announced in the coming days, ending inquiries into potential briberys in six countries. They said they were setting aside 1. 2 billion to cover penalties. Lets take a look at the markets, modest gains across asia, sentiment pretty tentative. For the moment, investors expecting a phase i deal will be signed, donald trump sang negotiations moving along well. They are at odds in terms of agricultural purchases. The nikkei 225 up three tents of 1 . 3 10 of 1 . Thats one to watch. The kospi higher 9 10 of 1 . Of course, we are also awaiting the jobs data out of the u. S. That would dictate sentiment going forward. Yvonne we got trade data out of china saturday, as well. Perhaps a bit of a pickup in exports. Thats it for us at Bloomberg Markets asia. This is bloomberg. Taylor i am taylor riggs in san francisco, in for emily chang. This is bloomberg technology. Coming up in the next hour, clouds gather. The ftc is widening its investigation of amazon to include its massive cloud business. We will have details. Plus, the stance from france, more on emmanuel macrons