See whether tariffs will be impose or not, the focus is on jobs. At 63. 30. E well have a roundup of opec and saudi aramco and the pound. We are six days away, the u. K. Election is holding at the moment. Today, have an important Leaders Debate. Coming up a little later, dont miss our interview with the u. S. National economic director at 2 30 p. M. U. K. To. Time. First, look at straight to first word news. Lets get straight to first word news. President donald trump might be impeached before christmas, but theres no chance youll be convicted in the senate. Nancy pelosi says the house will draft articles of impeachment against the president for abusing his office High Pressure ukraine. Donald trump remains defiant. North korea may be preparing to conduct engine tests. Base kim jongun sexy dismantled as a concession to President Trump. Says he dismantled as a concession to President Trump. Political uncertainty is quote playing havoc with the uks labor market. This is according to a survey. It says demand for workers is rising at the slowest pace for a decade. Companies are delaying or canceling hiring plans. People hesitate taking on new jobs amidst a confusing over brexit. Famed investor is closing down his daily newsletter. Sell. Ting advice is he is a critic of the administrations protectionist heart of theing it economy and sends a terrible signal. But that is not the view of citis 2020 outlook. Its message is that next year will be quote brighter than ever. It is dissipating corporate earnings will rise another 7 . Areas of opportunity, cybersecurity and clean energy. Global news, 24 hours a day on air, on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Francine . Francine thanks so much. Lets get you the latest on the oil story. Opec is on the verge of a deal to cut official targets. Ministerss of talks left headquarters before a final agreement was nailed down. Saudi arabias Energy Minister left us a promise that beautiful news would be revealed today for more, manus cranny is in vienna. Is this an ominous sign . I would say the house of opec is under pressure. There is a new leader. Words, francine. Meaningless, pathetic, a lack of cohesion. They are not happy group. The essence of the message is that they all have to do more. They want Something Real and meaningful and the question being discussed is whether there is a new baseline to come off production. But will it be from the original paperless cut . Or is there a new baseline to be considered. That is something much more meaningful. By the way, mr. Novak left much more happily. He got the condensate removed from his quota. So the russians have gotten what they wanted, but its all about the others doing more. The point, its all about the baseline. And will the market see some real substantive cuts . Therein lies the point. We will have that shortly. Theres a great title on this paper, but i wont try for a third time because theres no point in tempting fate. The ministers of opec have done that the past 24 hours. Francine i am intrigued, manus. Our anchor in vienna. Out withmco is finally the numbers behind its ipo. The price tag values the oil giant by the Largest Company in market cap. Here with the details is dani burger. Dani with more than 25 billion, saudi aramco has cemented the worlds biggest ipo. 100is different from the billion ipo first envisioned. Upper endriced at the of its range. Saudi arabia pulled out all the stops to ensure the ipos success. The Share Offering was more than 4. 6 times oversubscribed. Total bids, 119 billion. Struggles, did have first derailed by problems at home, then a Global Investor base that hesitated at the valuation. Fundslying on neighboring , the final value comes in at 1. 7 trillion. That means profitability overtakes microsoft by 600 million. More fromlets get our executive editor for energy. This was a painful come along process. Did the saudis get what they wanted . No and yes. They had insisted this was worth 2 trillion or more and its not. But yes in terms of they got an ipo the done. But as our columnist pointed out , it is kind of cosmetic in the sense that it does not achieve what they had wanted, which was to bring in outside money for investment. In effect, they have tapped the saudi coffers for 70 projects saudi projects. Francine you were telling me that this merger was run pretty smoothly. Stuart its a fantastic company. Theres no question its absolutely worldclass. Not just the reserves there projects their projects. No one can draw fault with aramco themselves, it is marked the process. And more than anything else, the valuation no one in the world agreed with. Francine is that because of oil or the renewable space . Stuart its the valuation. They have taken the reserve and multiplied by eight dollars per barrel and no one else does that. Everyone else is looking at cash flow, dividends, yields, and someone someone. Son on. On. O francine once the ipo starts, does the ipo depend on london . What price to they need to be a success . Stuart it is an odd situation where they dont need a four listed foreign listing. In terms of the oil price. It needs to stay at the levels its at now so they have enough cash flow to pay the dividends promised. If not, they will have to go out and raise debt or play around with the accounts. This oil prices where they needed, if not higher. Francine thank you. Stuart wallace come who runs all of our energy and commodities sectors. Coming up, we preview key data on u. S. Jobs. Plus, dont miss our interview with larry kudlow. This is bloomberg. Francine this is bloomberg surveillance. I am Francine Lacqua in london. Lets get straight to the bloomberg is the business flash. Investors are planning to sue glencore. The move is due to share price declines from recent bribery to kitchens. Investigations. Disclosed alencore probe. Glencore declined to comment. soenix agreed to buy swiss re unit. It values division at 3. 5 billion pounds. As part of it, they will receive shares in phoenix. A planned ipo of reassure was called off. The ball is in the u. S. s court, according to frances digital minister. They say their response to the Digital Services tax will benefit anyone. We need to create the level playing field. The best level is internationally, if the americans dont want to follow that solution, will follow the european one. Stuart thank you so much francine thank you so much. We will get an update today on the november payroll numbers. Economists forecast the worlds biggest economy rebounding partly due to the resolution of the strike at gm. Bloomberg subscribers take a more pessimistic view. See an average estimate of 140,000 jobs. Of corporatee Head Research at societe generale. A lot rides on the u. S. Consumer. Falters, weconsumer could see a recession. We are actually quite concerned about the u. S. Economy. We forecast just 1. 1 growth. Also related to the tensions, which have thrown sand into the gearbox of the economy. Francine do you agree with that . We are a little below that number, so quite pessimistic as well. Areorate Profit Margins likely to worsen next year, perhaps resulting in higher unemployment and aggressive cuts. Francine why is the market not seeing it . We have record highs in the u. S. And you are talking to me about a faltering economy. Tradeoff . E we think that some of the microeconomic channels are still making their way to the economy. Time effects tend to take but eventually they will bite. Francine does the fed have the tools to deal with the downturn . I think they have. They have done that successfully. This certainly have ammunition to respond with lower Interest Rates, potentially expanding the balance sheet. ,hey could go out on the curve but it has been interesting for the dollar specifically. It has had a week start to december, and todays question is whether the Data Confirms the technical pullback or if it is another false break. We have the fed next week and dont expect any change. But could be the start of something for next year. Francine how much the numbers today reflect uncertainty or weakness between the u. S. And china and trade . Reinhard i think it does a lot. This is the driving force of our forecast next year. We also dont expect anything in januaryd, but through march, and june, we have further rate cuts. Francine wouldnt the president realize this is what is dragging on the economy and therefore the stock market . Therefore, would he not do a deal with china . Reinhard eventually this would stand in the way of a major escalation, but some limited conflict would also be part of the campaign. Francine how do you look at u. S. China trade . For the administration, the trade war is to get the fed to cut rates. We know he wants rates at zero. For him, i think the trade war today is still a stick to beat the fed. I dont think todays payrolls will tell us much. It is more about the recouping of lost jobs so today could be a bit of a wash. But u. S. China trade lets see. I do not surprised if they do raise tariffs. It helps the fed to cut rates next year and thats what trump wants. Rates, it is certainly clear it would be difficult to signal another rate hike. What does that do to the World Economy . When will we ever normalize . Kenneth the peak may already be behind us. 2. 5 . Izing for the fed is ofhave taken 75 basis points and i dont think we will go back for a number of years now. Francine agree . Francine the european perspective reinhard the european perspective is that we will not normalize for a long time. We are on track for easing for multiple years. Francine does Dollar Strength make you uneasy . If you look at some of the concerns, theres the u. S. Consumer and the forecast on inflation. The low inflation environment in europe will stay with us, meaning no reason normalize soon. Francine do you agree . Kenneth yes. The strong dollar is a point. The world would potentially be served with a weaker dollar. The problem is there are not many alternatives. What else do you but . Buy . Y francine what else do you buy . Kenneth it is a good question. Sterling could be a good trade in anticipation of the election. I think it could be an outperform here. Ncine will have more time we will have more time with our guests. Both there with us. Dont miss our interview with larry kudlow after we get u. S. Jobs data. Coming up, safety first . More than 3000 Sexual Assault claims. Their chief legal officer calls it a reflection of society. This is bloomberg. Francine this is bloomberg surveillance. Lets turn to uber. The Company Found over 3000 allegations of Sexual Assaults involving drivers or passengers. The report was in a response to Public Safety concerns. Joining us is bloombergs tech editor in london. Wasnt surprising overall, but are there specific subsets that are even more surprising . Nate one thing that took me surprise by surprise was the frequency of the driver being the one to report. , we have generally perceived victims as being the rider had maybe the accused being a driver. But the report really showed her was not always the case. Showed it was not always the case. And just under 50 of assaults reported were reported by the driver themselves. Subset that is not always the person who booked an uber is not always the one assaulted. Sometimes, they use a term guest rider. The we haveike that seen that has been, to me, surprising. Francine how can they make us more safe and do they have data to compared with . Nate we dont have any data to compared with. This concerns the u. S. During 2017 and 2018. There is no comparable data set. In london, we know uber gives similar data to our local regulator. That data makes its way into safety reports, but on the u. S. Side, the taxi industry does not collect or publish the sort of data. It really was a first. Its worth noting this is voluntary. Uberuber something something that uber did not have to do. Over the next years, we will see more reports of this nature being published and then we will have a much better picture. Right now, its a first. Francine thank you very much. Nate, who will have plenty more on uber throughout the day. Coming up, the viennese waltz. It has been a volatile week, but can opec ministers finally reach an agreement . Will be live in the austrian capital. Plus, your european stock movers. A lot of focus is on jobs and the week that was. U. S. Trade it really took center stage when President Trump was here at nato. Saying it all depends on whether he wanted a deal and if a deal could come after elections. Well see what happens december 15, extra terms or not tariffs or not. This is bloomberg. Francine pricing. Saudi aramco raises 25. 6 billion. The magic number, november jobs report shows resilience in the u. S. Labor market. Will this give powell or reason for patients . Uber reports more than 3000 Sexual Assaults. The chief officer calls this a reflection of society. Good morning. This is bloomberg surveillance. I am Francine Lacqua. Just over 1. 5 hours into the trading day. Lets check in with dating burke with dani burger. Movers andhe biggest the stoxx 600 market is its an. Spent treating a rare generic disorder. Because of that we are seeing shares dropped the most since the ipo. One of the analysts called the latest development a serious consequence because this is for treatment for pediatric patients. A rally today, shares up. There profit next year looks like it is going to make some also going to make getting an update from j. P. Morgan. We are just below that amount. Finally swiss re finally has a buyer for its u. K. Insurance division. Phoenix will be buying it for 1. 2 billion pounds getting cash and stocks for that. They trieddivision in ipo but couldnt find enough interest. If it had ipod it wouldve been at the top end of its range. Francine dani burger with all of your stock movers. With get to bloomberg first word news. Viviana we begin with saudi aramco filing posting its shares last night. Finally posting its shares last night. It makes this the largest ipo in history. Cry from the much touted to trillion dollar valuation. 2 trillion valuation. Donald trump may be impeached before christmas. Nancy pelosi says the house by pressuring ukraine to help him when the 2020 election. Trump remains defiant. The u. S. Jobs report is out. Bloomberg survey showing in november employees employers added 183 thousand jobs, but that figure reflects a temporary boost from gm workers returning from a strike. It is likely to give the Federal Reserve a chance to be patient. North korea may be preparing to conduct an engine test. Activity at a site. Kim jongun says he dismantled this as a concession to donald trump. It wants the u. S. To ease up on sanctions that are choking its economy. 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. An viviana hurtado. This is bloomberg. I am viviana hurtado. This is bloomberg. Francine opec on the verge of a deal because the official production target. Ministers leaving vienna yesterday. Lets get back to vienna for an update. Manus cranny is joined by an oil specialist. Manus francine, a very good thank you. I am joined by mohammad darwazah. Latest your take on the procrastination . We are waiting to hear what the is what do you think it going to be . Mohammad all indications we have heard so far in terms of the leaks yesterday, really that it seems from 2018 levels. Theres a big difference. If we are going from the 2. 1 Million Barrels a day to 1. 7 Million Barrels, we know that as of october, opec is already around those levels. It doesnt seem like this will have a real impact in terms of removing physical barrels from the market. Manus how disappointing is that going to be . You have an interesting title. Mohammad in many ways it does seem like a fudge. When the market is assessing where the first what the first half of next year is looking like, it does seem we have this tsunami of nonopec production coming online, not just from the United States, but from others like norway and brazil. Manus i am reading analyst notes. If there is no real cut gan stanley talking 45 with a tsunami of supplies, where does that put prices to . Mohammad for a market over the past few months, really the beginning of summer, it has been driven by developments regarding to standard trades. Should we see a breakthrough there, we could see a little selloff but it might be a range between the 65 brent range. Manus if there are new quotas delivered, what does it mean for saudi arabia in terms of their new level . Mohammad what we are hearing from last nights saudi might be assigned a quarter assigned a quota above 10 Million Barrels a day. They have been producing below. In many ways, that is not a cut. It could open the door for saudi to increase production if they are feeling that other members of the opec cartel are not pulling their weight. Manus do you think this is iraq pushing back against the new leader of saudi arabia . Challenging the new tenure at the top . Mohammad it very well may be the case. The dynamics that have played out are a bit unclear. This is a unique meeting given that it is the first meeting for the prince. It is happening during the ipo pricing he does seeing to be more open pricing. He does seeing to be more open to talking. Today we really need to see more clarity from the king of saudi arabia. Manus is there risk he could cancel . Communicate to the world that it is going to be a beautiful day. Dont you run the risk that you lose control . Mohammad absolutely. In the absence of Clear Committee case and, others have stepped in to fill the gap. Also having the extra day with Alexander Novick stepping and confirming that russia not only has been able to exclude potentially russia is not going to see a new quota. We need to get more clarity on these issues. Manus something to be learned for all of us. Francine, there is a bit of a benefit in having this scrum. To having aenefit journalist talk to you. Francine there is benefit in everything. Manus cranny in vienna. Stay with surveillance. Plenty coming up including the final headtohead debate. We will look forward to next weeks u. K. Election. We will focus on france and the future of resident my crohns desk president macrons president macrons reform. This is bloomberg. Francine bloomberg surveillance. I am Francine Lacqua we will talk about the u. K. With reinhart and kenneth. Heres a quick Bloomberg Business flash. Viviana cell, this is the sell, this is the advice from an investor. He says Donald Trumps trade wars mean it is time to raise tax. Sends ahe says terrible signal to both importers and exporters. That is not to view of the 2020 outlook. Next year will be brighter than ever. The bank predicts expansion will continue. And anticipates corporate earnings will rise another 7 . That is your Bloomberg Business flash. Weekse ahead of next elections in the u. K. , reports are rising at the slowest pace in decades. The recruitment with u. K. Labor market paid meanwhile, the election trail, Boris Johnson and Jeremy Corbyn will go headtohead making the debate this morning. This morning, reinhard cluse and kenneth broux. Reinhart, when you look at the u. K. , the economy is in bit of a limbo. Are we going to get clarity . We will get some clarity on the timing of brexit. That might imply we might get a brexit on the 31st of january based on the deal negotiated. That will lead to some relief. A bit more clarity in the shortterm. After that, we will be haunted by the question, whether or not the government will declare that it will leave the current and whetherangement it will extend. This is going to be very interesting. At ubs we do expect the uncertainty will weigh on the u. K. Economy and there will be another rate cut. Francine kenneth, i dont know if the markets are pricing in the facts that reinhard, as he says, you have a low election and then you go through a traditional period and then trade deals. Kenneth it is a very good point. In terms of election outcome, lets cross that bridge next week. Then we have the exit from the eu by the 31st of january. During that, you could have a decent few weeks. You have seen a Short Covering of positions. Then, the rest of 2020, we will see the gains will be fleeting. There will be no progress on trade discussions. We do, again, set a deadline have the risk of no deal at the end of next year. We may see a reversal of those gains. That is going to be a risk for more volatility in sterling next year. Francine do we need to wait until we have a deal . Enneth we will see a bit more some of the sterling games have been the flipside of dollar weakness. Just Sterling Gains have been the flipside of dollar week Sterling Gains have been the flipside of dollar weakness. After january, are we going to unleash some of that investment . Let that be positive. Francine we are listening to Jeremy Corbyn. Corbyn and Boris Johnson go headtohead in the final debate ahead of the election on the summer 12. On december 12. There is very there six days left. A public spending problem. The decision that will be taking for the longterm. Taxation is very important. It matters for incentives. It does matter. Francine i dont know whether the coalition, how difficult is it to see what it means for the economy . Does it mean there is a low spending or taxes stay where they are . There will be prolonged uncertainty until we can have a government. Having a clear and final understanding of where we are heading is going to be very difficult. Francine what is your take on what the u. K. Economy can and cannot do . Will they be able to this is a small, open economy. What can the boe actually do . Is do weucial question get an extension . We all know that negotiating a trade deal is very difficult. It might be impossible. Perspective, it is very important by july 1 that the transition period will be extended. The publiclarity to sector. They can try to calm the waves but eventually it cannot prevent the uncertainty. Francine gilts follow pound . They have underperformed bunds and treasuries this week. The election is helping when you see the unwinding. That can continue in january. The gilts can underperform. Bunds spread so wide. Unwinding and the conservative government and the budget in february which will be tax friendly. We could see more money coming out of equities. Francine thank you both. Kenneth broux and reinhard cluse, both stay with us. Jeremy corbyn giving a speech to the press and Central London. He says he has evidence to the press in Central London purity says he has evidence that the brexit deal by a Boris Johnson government. He is going through it now. I dont know if it is a game changer but keep an eye on it. Out. G up, everybody garbage collectors, railway workers, more than 800,000 people strike in france. We will focus on the country and the future of president macrons reforms. Francine economics, thanks, politics. This is bloomberg surveillance. Lets discuss france and the future of president macrons economic reform. 800,000 workers walked out yesterday. Said itsion the union was over 1. 5 Million People. We are back with reinhard cluse and kenneth broux. Kenneth, when you look at the strikes, they are pretty dramatic. Dont know how long they will last, what kind of impact they will have on gdp. This must make a difference to investors. When you look at your research, this must have an impact on thes ecology. Kenneth the outlook doesnt look right. You get this on investors, people are wondering about what does this mean for fiscal policy and so forth. Agree, it is a finger on the accused problem in europe. On the acute problem in europe. Reinhard, your take on this. How difficult is it you are doneng me that macron has quite a lot of reforms already. If you get this through, how dramatically will it be a Different Society . Reinhard the reforms that the president has initiated in the area of labor market reforms, they have made a real difference. I would remind you that the french growth rate was twice as high as the german. They are different economic structures but we do think the results have made an impact. Inn the protests started Many International investors said, the reform effort is over. That was a bit too quick. The current effort shows there is more to come. It will have an impact on the economy. How bad the damage is going to be, we will see. We will need to see how long it will continue. As we discussed, we were concerned that in the First Quarter of last year, the damage to french gdp would be to significant and it turned out not to be. Francine you look at the pictures and you wonder is france reform a bowl. It is an obvious question. I would reiterate that what we have seen so far has made a difference in difference economy. Sometimes it takes time for this to show up. We have seen this in germany from 2013 to 2015. Francine how do you look at this . Again, are we expecting this . It is impossible but if it is two or three weeks, the impact this will have would be transformable . Kenneth for investors looking where do they, put their money . It doesnt reflect well. If you do see it reflected gdp, it is stuck in this limbo. Maybe another rate cut. It doesnt help the overall pitcher for the euro. Picture for the euro. Does it give you a compelling argument to buy the euro . A bit more circumspect. Francine reinhard, how concerned are you about the economy . We have a decision this thursday. She needs to convince a lot of countries to spend more. You have france, the rest looks like they are paying the brunt. Europe was not in the global slowdown. Yearoveryear we think that the slowdown will continue for the Fourth Quarter when in fact we will get oh point 1 . The year on Year Growth Rate will drop. The worst part is not yet over. The winter is going to be quite weak. That means the story of how much fiscal stimulus do we need. It will not go away anytime soon. Francine thank you both. That was the hour. Reinhard cluse and kenneth broux. Bloomberg surveillance continues in the next hour. Tom keene will join me in new york. Theill be talking with white house adviser, larry kudlow. A lot of the focus is on u. S. And china trade. A look ahead to the u. K. Election. Tom keene will join us for sunday. Jeremy corbyn saying that had arn ireland he confidential report from boris on the island. Francine study aramco raises 25. 6 billion in the worlds biggest ipo. Job report should reaffirm the resilience of the u. S. Market. 3000reports more than Sexual Assault claims last year. The chief legal officer because a reflection of society. This is bloomberg surveillance. I am Francine Lacqua in london, tom keene in new york. There are u. S. Jobs, u. K. , Jeremy Corbyn briefing reporters about a secret plan Boris Johnson had, we have the french strikes, and the ecb next week. A lot going on. Tom i was flabbergasted on the United Kingdom elections and the antisemitism issues heating up. It will be a fascinating weekend in london. Francine it certainly will. We are excited to have you in the u. K. First, lets get to the bloomberg first word news. The verge of on cutting a deal to cut its official production targets. The Saudi Oil Minister promised reporters there would be beautiful news today. The opec repair is trying to prevent its request from returning in 2020. Saudi aramco closing a deal linked to the crown prince, raising 25. 6 billion dollars from the Worlds Largest ipo. Act 1. 7 our aramco trillion. The u. S. Jobs report out at 8 30 new york time is likely to give the president and the Federal Reserve a rare chance to be patient. A Bloomberg Survey showing that employers probably added 170 5000 jobs. That reduces the urgency for a trade deal with china, for the president. For the fed, it values the view that Interest Rates can hold. And the European Central bank is done cutting Interest Rates, despite persistent Downside Risks to growth, according to a survey. Most responding said the next willears Monetary Policy be on hold. Global news 24 hours a day on air, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im viviana hurtado. This is bloomberg. Tom data check now. One screen this morning. Upures up eight, dow futures 71. Other than that, a colossal chart. With thelar weakness euro bumped right up to 1. 11. Francine if you look at european stocks, they are tracking what is happening in the u. S. The focus is u. S. Jobs. Treasuries edging up before that. The pound is actually moving sideways. It was significantly higher after the polls came out. Then oil fluctuating as opec is failing to impress traders with what appears to be a cosmetic addition to its targets last night. Tom we want to reset with the view for 2020. George saravelos of Deutsche Bank noise joins us. And we want to bring Carsten Brzeski as well. So what is the single nuance of your report . I put it in the backdrop of focus landau upset about Interest Rates. What is the front message for you for 2020 . George there are two messages. The first is all of these issues and questions around trade uncertainty will not go away. It, fortart with rags instance, it is only really the end of the beginning and that we will need to Start Talking about the future relationship. Trump is discussing starting a 302 investigation on europe and european trade. But as far as currency goes, we published this report on the euro where we are really looking at the dynamics of the last couple of years and saying that the euro is being transformed in a way that has not happened before thanks to draghis negative rates. That is his biggest legacy, that the euro has become a big funder for the world and the world and they euro zone financial system, funding the rest of the world. That is not something that is likely to change next year. The only way the euro can go up is this dollar weakness with the fed potentially cutting rates. But on the european side, it is hard to see something that would push it higher. Tom do you agree that it is hard to find the catalyst here . We have heard that in any number of conversations. The euroespecially for zone, i fully agree. 20 20 could be more of the same, but it will also be the start of the new decade, and it could be the start that we will see more coming from fiscal policies in the euro zone. In the next decade, it will be about debt, about fiscal stimulus, and we could see the first pieces of this happening in the eurozone. If it does and leads to more growth, we would have a bit more of a positive story muddling t hrough. Francine to the point where we have a recession . I am so excited to have you in london, by the way. Carsten me too. [laughter] recession or not, what is in a name . We will not get a recession like in 2008. The German Economy will continue flirting with stagnation. Brexit brings relief we still have low Interest Rates. The euro zone as a whole could escape stagnation. But this is the decade in which we are becoming japan. Francine but can we survive being japan, and what is the likelihood of a recession . Arsten says whats in a name actually quite a lot. George i wish we could have a model that looks at what the economy is next year, but if you look at the forecast this time last year, pretty much everything proved offside, because the key driver of the market has been twitter. Not only the market and the economy, the major events that have moved growth have been geopolitical events. Again, if you look into next year, we talk about trade, about brexit, of course we have the u. S. Election. Historically, the u. S. Election tends to have quite a negative impact on u. S. Capex. More unusualen election in terms of the divergent policy. The reality is things will stay quite uncertain. However, the ecb is keeping policy so easy that european domestic demand is holding up despite that. For instance, european house prices are rising the fastest in the world, even quicker than china. So i think europe can survive, but the external headwinds will not go away. Tom in the last 48 hours, one of the great points of debate in america is the ideas of the haves and havenots. Yesterday we were talking about the gilded age. How gilded age is europe . How far is a separation from the haves and havenots across europe . Carsten when you look at the data, i think we are not as far as the u. S. Yet. But we are following in the footsteps. And another term is that anywheres and the somewheres, linked to the haves and havenots. When we look at it quality measures, gq efficients, eurozone is not as unequal as Climate Change will also add to this inequality measure, and the only way you thetackle it will be increase of debt, it will be more redistribution. More trends of the economies are in the eurozone as a whole to make up for the increasing differences. Tom lots to talk about and dive into their specialties. Carsten brzeski and towards saravelos with us. George saravelos with us. It is jobs day in the u. S. This is a different jobs day. There is a real debate about the outcome for unemployment and wages. Larry kudlow in the 9 00 hour. This is bloomberg. Viviana this is bloomberg surveillance. Business flash glencore will soothe the Worlds Largest commodity trader over bribery accusations. The suit is expected to demand millions. Yesterday, the Company Exposed it is being investigated by the office. Erious fraud it comes on the back of overlapping probes in the u. S. And canada. Has some final advice as he shuts down his daily newsletter cell. He says that the multiple trade wars and others means it is time to raise cash. That is your Bloomberg Business flash. Francine thank you pay lets get the latest on opec. Ministers left the cartels headquarters before a final agreement was nailed down. Saudi arabia is Energy Ministers promised beautiful news today. Saudi aramco is finally out with numbers behind the ipo coverage, who oversees our combined energy and commodities coverage worldwide. Thank you for joining us. First, what will we get from opec . Why is it so fraught to come up with a decision today . It has been fraught. They are all pretty much in through the door now. This contentious issue seems to be is it just codifying what is already happening in the market in other words, will we use the october 2018 baseline . There was a little hubris over it would be a real cut, but that does not seem to be the case. That them line is breaking news we have is that saudi aramco will go to 10. 1 seven. This is what we think may happen. That is a small cut from the current quota. Iraq, we have seen a drop from their current quota. Nigeria likewise. Certainly, the analysts ive spoken through say the big worry for the markets is that this is really just on paper. There has been a stony silence on this red carpet. Not one of them would stop to talk to us, not one minister uttered a word. The saudis apparently said have a good friday. Francine i do not know whether i should ask about opec, because we have come in the past, seen such difficult meetings, because finally saudi arabia has pulled it off, but it will be a tough task to stay at these levels. Yes and no. In terms of the share price, we may see a bump in the first few weeks of trading, because all of the index funds have to come in and buy shares, and there are not a lot out there. Not only that, but you have a lock in from shareholders. The strategy is to keep oil somewhere between 60 and 70 per barrel. It justifies the aramco ipo valuation, it keeps the budget more or less inline, although it is still well below what they need, but at the same time, you will not have demand at those sort of levels, they think a particular next year, with a somewhat fragile economy, that is kind of the strategy. Tom yet my question was you think they want oil 60 to 70 per arrow. What are the ramifications if oil locks in under 59 per barrel . Stuart it depends how much below 60 we are going out and for how long. We get very excited if the oil price dips or spikes. You have to think about it in terms of quarters or years. But there is no doubt they have a systemic problem. What the crown prince is trying to do is turn around this economy and make it a little more diverse than it is currently. But he is struggling to do that. There is doubt about whether this ipo will, in any way, achieve that. Most of the money coming in is saudi. Said. Rilliantly thank you for painting the fx instead of the blather i am hearing. Is this an additional Public Offering . Offering . Public stuart sort of. Kind of. A bit. This is the first time in a decade that the worlds Biggest Company will be trading outside of new york to the last time that happened, when hector china took over from exxon petrochina took over from exxon. Is it a real ipo . It is sort of half an ipo, but it is sort of interesting, and it is particularly interesting for us to have a look at the details of aramcos business. And it has cemented this notion that despite all the problems around the ipo, aramco continues to be an amazingly wellrun company. Francine thank you. Coming, political pressure. Plannedch president s Pension Reforms stoke the biggest strike in years. Issues areolitical the great unknown, which could have very substantial consequences and really a lot. Tom good morning. Bloomberg surveillance. Francine lacqua and tom keene. This has snuck up on me. For me, at least. The violence, the strikes, the protests in france. 800,000 protesters yesterday, particularly in ordo borde aux. Chart first,t a which explains the french difference. This is a chart mr. Micron macron does not want to talk about. United states unemployment under 4 . German on employment a miracle at 5 , in europe. And the persistency and angst of france, better recently but well over 8 . And carsonvelos brzeski us. Does the ing team is mr. Macrons tenure at risk . Carsten no, strikes are pretty normal in france. We have seen strikes before. Macron has delivered in the first couple of years. What you should on the chart is the Unemployment Rate has started to come down. Also you look at confidence indicators, we have seen more decoupling of the French Economy from the rest of the euro zone. Saying this is tricky, this is risky, but i think it does not risk the entire micron president s macron presidency. Tom this is not the yellow vests, is it . Francine this is not the yellow vests, but it goes to the same movement. Some sayests say macronicron miscalculation. It goes back to a general sense of discontent with reforms, with transitioning. I do not know whether this goes back to a lot of the french feeling that they want the same privileges that their parents had. , looking at these pictures, is france performable reformabale . George if you look at what macron has achieved, he has achieved some things. For stability in the labor market is going up. Part of the reason of this unrest is that reform is going through, but from a market and macro perspective, a lot of the focus next year will not be in france but in germany, the possibility of finally providing a bit more fiscal stimulus, but that is the key question, as opposed to france. Francine does emmanuel macrons popularity ride on this . He has actually done a lot of reforms and he is better prepared than other president s. Carsten we heard the Prime Minister saying he will also push through these reforms, actually. The problem with france is something we see in the u. S. And other euros on countries, which is the discrepancy between urban. Reas, paris, and rural areas because if there is taxation, discrepancy in the divergence between the ones who have and the ones who have not and the ones who live in urban areas on the ones living euro areas is increasing, this leads to unrest and shows how tricky it is to reform, but i think it will continue. Tom the dynamics is simple. Every country for itself, there are cultural and historical differences. It is one of the prime reasons for this that they are all linked by the euro . Would you suggest they would be less cultural tension if they the leakages of their own Currency Pairs bears . George the euro zone is creating these tensions around fiscal policy, where the average physical positioning in europe is essentially fiscal positioning in europe is essentially too tight. Other than that, you have to think the European Union provides positive influence, for instance in terms of its ability to negotiate trade. We see that with negotiations around brexit. Next year, critical issue will be the question of digital taxation and how they can negotiate with the u. S. Trump is threatening fresh trade sanctions if europe goes ahead on some interval taxation on u. S. Companies. We have the oecd proposal as well. Yes, europe is creating issues between monetary and fiscal policy not being compatible, but on other issues, notably trade, europe is creating francine what does Christine Lagarde need to do . Carsten continue to talk about other stuff then Monetary Policy. There is little she can do on top of what she has done already, so i think she will at least a on point. Stay on point. There is still a need for france to reform the pension system. There is a need for fiscal stimulus in germany, because it is in the domestic interest. It is too easy to always blame the euro for these things. Francine so we will try to bring blame another currency. Starting monday, a new show lineup. Daybreak europe, do not miss it. Whether youre out here on lte. Or here on a wifi hotspot. Xfinity mobile has more coverage to keep you connected to what matters most. Thats because its the only Wireless Network that automatically connects you to millions of secure wifi hotspots and the best lte everywhere else. And now get 250 off when you buy a new Samsung Phone during Xfinity Mobile beyond black friday. Plus, you can save up to 400 a year. Click, call or visit a store today. America,s jobs day in Francine Lacqua in london, tom keene in new york. Lawrence kudlow in the 9 00 hour with jon ferro. Right now, heres viviana hurtado. Oilana saudi arabias minister promises beautiful news from the opec summit. The cartel and its allies are close to a deal to reduce their output target, ministers reaching an agreement to cut production by half a Million Barrels a day. That would formalize the reduction they have already made for most of this year. North korea ramping up the pressure on donald trump again. Kim jonguns regime may be siteing tests at a rocket and referred to the president by a familiar insult dotard. Waivena china will some tariffs it slapped on during the trade war. They are processing applications from Chinese Companies buying u. S. Products like soybeans and pork. They have asked to be exempt from retaliatory tariffs. The u. S. And beijing signaling they may be close to agreeing on phase one of a trade deal. The election was supposed to be about breaking the impasse over brexit and now it looks like a referendum on Jeremy Corbyn. Upset, he will have to guarantee conservatives do not break the socalled redwall they run across the middle of the u. K. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Friday, jobs day, we take a look at the markets for the next year and right now, lets try to get to next monday. That would be through the weekend. George saravelos and Carsten Brzeski with us on trade. Is it a trade war . They use this phrase. Is it a trade war . George it is a trade war in the sense that is constant back and forth, and there is multiple fronts. We have been so focused over the last few months on u. S. China, but the reality is going into next year, the risks are these other fronts remain open. Brexit, i see in the form of trade war in the sense that it will be all about the new trading relationship between the u. K. And e. U. Of course there is the relationship between the e. U. And u. S. , and if you follow the Common Threat thread of what trump was saying this week, it was all about potentially using trade as a tool to get germany instance,ore, or for to disagree with what the friends are doing on the dignity digital track. I do not see this going away and there may be a truce, but come november if he is reelected, the issues will come back. Tom what is so interesting is Economic Growth is something that would adjust the socalled trade war. If we could dampen Economic Growth, does that matter, or is the rhetoric nobody cares about where gdp is . Carsten people do care where gdp is. If you look at exports, which countries suffer most, it is not the u. S. Or china. It is germany and japan, european countries, or japan is a huge export oriented country. As soon as we work to see this trade conflict weighs on gdp growth in the u. S. , i would assume that we will get more than a truce. This will only be a temporary truce and the conflict which goes beyond trade will continue to accompany us for the next years. Francine what does this all mean, if the trade war is here for 10 years, what does that actually do to gdp levels . Gdpten it probably means models have to understand that globalization and the benefits have to be modeled out of the big model, so we have a reversal of this trend of globalization benefiting most economies, pushing down inflation. We will probably see a reversal where we will have more protectionism and probably in the course of the decade, somewhat more Inflationary Pressure coming from deglobalization. Francine talk about currencies. If you look at the u. S. China trade war, renminbi versus dollar, they are not moving that back that much. George they did earlier this year, and if you look at what is happened, the dollar tends to do quite well on the back of the trade war, closed economy, Central Banks easing. If i think about next year, we are rotating to a world where the fed is the only game in town. The ecb, especially if lagarde is coming in, sending a signal they are uncomfortable with more easing and there is the risk of destruction around tightening policy in europe because they have reached the reversal rate. In the u. S. , it is about risks two more cuts. The trade war risks having more dollar, impact on the one via the fed if the fed things are becoming more u. S. Centric. We have done quite a lot of work to model u. S. Capex and the impact on capex is similar to trade war uncertainty. It causes to be weak, and the u. S. Election is very unusual. That theou suggest guys at Deutsche Bank are looking at the top of the labor market, this is as good as it gets . George when we are looking at the potential risks around the fed, those are being skewed towards cuts rather than hikes. If we look at the labor market in the u. S. , it is slowing. The u. S. Consumer has held up but there is a definite slowing, and capex is weak. Then we have inflation. The fed is undergoing an important Strategic Review. Inflation is below target, so any Downside Risks to inflation, and we do not see upside, put the question back on the table which is different for the ecb. The ecb is about to engage in the Strategic Review when most of the questions will probably lean the other way, should we be less dovish and have rates that are not negative . Should we wait more time . That is a big pivot. , georgewill come back saravelos and Carsten Brzeski with us on this jobs day. We will wander the morning. At 8 30, we will go beneath the headline data. The spin from the white house, no doubt from the lawn, Lawrence Kudlow with our jon ferro. A spirited conversation. Stay with us from our conversation on finance, economics, investment, and international relations. This is surveillance. Surveillance. Jeremy corbyn and Boris Johnson logo head to head to head. O George Saravelos and Carsten Brzeski. What are we looking for . The polls are volatile. Had a piece yesterday saying they are knocking doortodoor. Therese the ground war in britain is more important than in the United States. Minie u. K. , you have 650 campaigns where canvassers are knocking on doors, handing out leaflets, facetoface contact with voters, voters, and those e a big difference but are not necessarily measured in the national polls. Jeremy corbyns last hope, apart from tonight debate, is that that ground war is convincing it is anvoters outside chance, but that is whether hope is lying. Francine when is the last time we voted in december . The british are not used to voting in december, school plays, school holidays, students are no longer right university. Therese the youth vote will be interesting. It has gone up in the registration of young people but they often register and dont vote. This is such an important election that we will see higher voter turnout, that would be my call. Insaw more people turnout 2017 and we might see more turnout this year as well. Tom thank you so much for your work, but i have to go somewhere else. , their essayegraph antisemitism,nd i have never seen in my career. It is absolutely scathing in his language. How definitive is this key issue for the labour party as we are 6, 7 days out . Therese i think for the labour party core voters, those who have voted labour their whole and, will look through it they will often be inclined to dismiss it as conservatives finding a way to attack Boris Johnson. For most others, this is a big issue, partly because any vote for the labour party would seem to be a tacit acceptance of this institutional problem. It is not just the conservative daily telegraph. It has been jewish leaders, israeli officials. It just suggests that either he has not been able to get on top of this in his party or Jeremy Corbyn simply doesnt want to, and either way it doesnt look good. Tom i have the clearest memories of the arguments in the hallways of my house in 1960 on John Fitzgerald kennedy and the catholic church. Cant Jeremy Corbyn fix this . Therese you would think he could, and i would argue this should have been fixed a long time ago. It is simple. High schools have a zerotolerance policy toward drug use. You simply dont tolerate it. There have been so many instances over the years where it has been tolerated, and now we have a commission in britain investigating the labour party. Blights been a constant on Jeremy Corbyns campaign and you can bet at will come up in the debate tonight. The sense to escape that it is a problem of his own making, or at least one that he did not do enough early enough to tackle. Francine one question on politics. We have a bloomberg piece saying this brexit election is a referendum on Jeremy Corbyn. When people show up and vote on december 12, are they voting on brexit, voting on who they like, what are they voting on . Therese that is the key question. One message that has cut through the collection to my mind has been they get brexit done message Boris Johnson has put forward. My sense is that on the tory boristhey will vote for johnson despite the tory party which has been in power for nine years and has a record voters are not pleased with. For labour, they would be voting despite Jeremy Corbyn. An incredibly unpopular leader. The brexit vote is still in my mind the key one, but Jeremy Corbyn makes it impossible for those who dont want the tories or johnson to find an alternative. Francine how do you trade the pound . Distill that into market mechanisms. George the time to be positive and bullish on the pound was knocked over when this new deal was in the making. We are increasingly becoming concerned the market is too optimistic on the pound and the outlook, for two reasons. One is the Boris Johnson election victory is increasingly in the price and that is why sterling has been rallying. The second thing is as soon as this Withdrawal Agreement is done and passes through parliament, reality will bite. The Withdrawal Agreement is an extension of the hard brexit deadline for 12 months, and the new negotiations will start in march. By june, there needs to be a decision to extend the extension again and there needs to be an agreement on money and it will be impossible to do a full trade agreement with the e. U. In that space of time. If they do something, it will be very slimmed down, similar to a wto brexit. It is hard to be optimistic that we have this huge, Clear Pathway ahead after the election. Carsten i think this transition period will be extended and negotiating a trade agreement is not done in five months, six months, can take to touch up to five years. Take up to five years. The brexit discussion will keep the e. U. Busy. Tom jobs day with Carsten Brzeski and George Saravelos. El, looking forward to reading your work. It is jobs day. It is about the data, but far more tangential, wage growth and dissipation rate worth watching as well the Participation Rate worth watching as well. You are watching bloomberg surveillance. Tmobile is preparing for a crucial battle over its sprint deal. Monday, the fight begins in federal court in manhattan. The judge will weigh arguments from a group of states that say he should block the 26. 5 billion acquisition but they say will raise prices on consumers by eliminating competition. Tmobile says by combining with sprint, they can reduce costs and lower prices. The backlash against telethon could be palatine could be a good thing. Experts say the increased attention could end up boosting sales. Just on their youtube channel, more than 3. 6 Million People have watched the ad. Tom thank you so much. It is jobs day in america. Good to talk to a Foreign Exchange trader. , this jobs day is a little bit different. Team, to goonomics to chairman powell with the glass halffull in the labor market or not . George it is definitely the bright spot in the u. S. Economy in terms of it is helping the consumer side of the economy. Slowing, andn some i really wish i could say the payroll numbers mattered quite a lot, but as soon as they are over, we will start focusing on the december 15 tariff deadline ,or the u. S. , the u. K. Election so unfortunately in terms of importance and relevance of the fed, i would argue it is right at the bottom. The dollar affected off of domestic Economic Data or is it a beast of its own and very international . George as we think about next year, it really is going to be a u. S. Centric year. The reason is the only player in town is now the fed. If we get weaker european data, what can the ecb do . Not much. The discussion on the guard is shifting toward side effects, the reversal rate, negative rates being too negative for europe. Year,l be a u. S. Centric as we have the u. S. Election as well, and the dollar will be more asymmetric. It will react tomorrow to negative data because it will put fed cuts back on the tate table. Francine when can the fed given what we know and i know it could changes when can the fed signal a hike next . That looks like it could be years. George it is unlikely for next year. We have a Strategic Review focusing on inflation. Inflation is weak so any likely outcome is likely giving a lower for longer message on rates. The market is pricing the risk of cuts next year. That is the right thing to do. Thinks are very things are very unsymmetric. On the others of the pond, the views will be towards unconventional policy. Period will reinvent a of introspection. Toward the end of the year, we dont have small view strong views because of all the geopolitical events. One needs to be cautious into these political events. Into next year overall, the dollar will be on the weaker side. Tom George Saravelos with Deutsche Bank, an important call and something we will revisit after the first of the year. It is jobs day. Much more on the American Labor economy. We are thrilled to bring you James Sweeney, our economist. He has been absolutely brilliant. Do not fear deflation. Should we fear a slowing American Labor economy . Carl riccadonna with an important discussion on holiday sales as well. It is a beautiful new york. Go, mets this is bloomberg. This morning, it is jobs day in america. Indicators indicate the Great American job machine is slowing. Is the end of 2019 as good as it gets . The speaker speaks only of good and pushes back against hatred and a dysfunctional discourse. Gloom looms. Lose the contagious laughter and good humor. Appearing, Carl Riccadonna as scrooge. York,ondon and new francine and tom. Significance to this weekend . Francine i cannot get over the fact that you called Carl Riccadonna scrooge. There is a Leaders Debate tonight so Boris Johnson going head2head with Jeremy Corbyn. We know Jeremy Corbyn just about a half hour ago was showing us a paper he said was a secret paper on the Boris Johnson plan with Northern Ireland, and a lot of doorknocking. Will go with a to tell them to vote. Viviana opec is on the verge of a deal to cut its official oil production. The Saudi Oil Minister promising reporters there would be beautiful news. Opec plus is trying to prevent an oil surplus in 2020. Ondi aramco closing a deal the plans to reshape the nation, the oil giant raising 26. 5 at 1. 7, valuing aramco trillion. The u. S. Jobs report is out at 8 30 a. M. New york time, likely to give donald trump and the fed a chance to be patient. In november,ing employers probably added 185,000 jobs. That reduces the urgency for a trade deal for the president and for the fed, it validates that Interest Rates can stay on hold. A survey saying the ecb is done cutting Interest Rates despite consistent Downside Risk to growth. Years, Monetary Policy will be on autopilot. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Tom one screen right now. Upures ease up seven, dow 59. Atncine when you look european equities, they are trading sideways. The focus is on jobs. Treasuries edging up. I wanted to look at oil because of what is happening in vienna, crude oil at 58. 36. Tom this is a chart of how good does it get. How good is it really . American laborhe economy and the pink line is a president ial moving average. How ugly it was off the great financial crisis, that we had never seen before. As good as it gets in the times of eisenhower, the glory days of the 1960s, and the president ial moving average dropping down. You is what you get when read James Sweeney and his team at Credit Suisse. Barely describes his work on disinflation, inflation, and reflation. Is the American Economy legit . The number one mail i get from my listeners is guys like James Sweeney do not know what they are talking about, we are not fully employed. James there are wage and income gaps that are large, so when you move into a tight labor market and you are seeing ok wage growth, that is not the same thing is something that will fix these Income Distribution issues. People have different perspectives. Europee we becoming like where we are a partitioned economy, take friends with the protests. There is a group france with the protests. There is a group that is employed in a group outside. Participation has done pretty well in recent years. The issue is these income differentials. They are starting to improve at a glacial pace. If you took this labor market and ran it forward 20 years, you would still be dealing with that. Can we run this for many years or does the Unemployment Rate shoot up sharply . Francine what is the answer . James history says it shoots up eventually. The data suggests it is not about to shoot up, the Unemployment Rate is not about to shoot up. We think payrolls growth will be ok. They are slowing on trend, but Income Growth from the labor market is not slowing on trend. Whichlabor Income Growth, is the number they emphasize after the numbers come out, has been growing around 4 for some time, for most of the last 10 years. We think that is set to continue , and that is driving the bus on this consumer economy. Francine what is your take on inflation in the u. S. . Is this the one thing that could turn and therefore change everything . James we have been expecting a modest move higher in core inflation towards the end of q1. ,asically the core pce measure the most important measure to achieve 2 by march. , there is this Financial Services category in inflation which is constantly revised and almost impossible to forecast which has surprised on the downside again, suggesting meaningfully above 2 inflation is not looking like something that will happen soon. At thearles evans about, on is aggressive lets jumpstart it and get above 2 and have the courage to goose it like the 1960s. Do we need to jumpstart the inflation machine, or are we healing at a rapid pace . James i think it is more a question of having these late cycle developments of the tight labor market, ok overall wage growth. Are you willing to let that run for a while even if core inflation is up . It is clear the fed has given their verdict, yes. Tom i have to get an update on your claim of two years ago when you said you stopped worrying about deflation. You were brilliant. James deflation is there in specific goods. Deflation has never been there and historically is exceedingly rare. I dont understand why people see it around every corner. Tom we are looking for deflation intuition. Not out there this morning. Dr. Sweeney is with Credit Suisse. On jobsful conversation day, Carl Riccadonna joining later. After the market reaction, Jonathan Ferro and Lawrence Kudlow. Is on the lawn of the white house and larry is with us. 9 00 hour. W, the this is bloomberg. Her,love her or hate Francine Lacqua in london, tom keene in new york. Love her or hate her francine me . Tom not you. Speaker pelosi came forward and advanced the impeachment debate. As she left the lectern she was asked a question about hatred, and the roman Catherine Catholic of baltimore turned around. America on anized friday morning. Pope francis to hate is to murder in your heart. The speaker, as a catholic i resent youre using the word hate in a sentence that dresses me. I do not hate everyone that anyone. I was raised in a way that is full, a heart full of love, and always pray for the president and i still pray for the president all the time. Discussed, to a catholic, is not the same as hatred. Chiefcirilli is our hatred correspondent in washington. The president came right back. Catholic andam a resent the word hatred. President trump after that press conference tweeting out he thought Speaker Pelosi threw a fit and urged her to pass usmca. I will say this, it was business as usual for democrats and republicans on capitol hill where i spent most of the day, as well as the white house. I was speaking with sources all day. Thiser pelosi ends impeachment saga the way she began it with a likely vote and no votes moved on either side. That galvanizing message, western pennsylvania is one example of moderate democrats in traditionally religious and catholic communities. Did this shift for moderate democrats yesterday . Kevin there is an interesting poll that shows one of the most driving issues has been impeachment, but they have not switched any votes. When you look at the Kennedy Catholic coalition from decades ago, and the new Trump Coalition which switched over some of those reagan democrats back to the republican coalition, this is a battleground fight in the rust belt portion of the country. That is why someone like joe biden yesterday which he had that viral moment going head ti to head with the voter. It could be a risk or an asset, we just dont know. Francine when do we find out if impeachment goes ahead, goes swiftly, or is put a stop to . Kevin yesterday, Speaker Pelosi giving the relay to the committee to draft articles of impeachment. The next step in this process is the committees put forward their articles of impeachment and it goes to the house floor. Are the articles of impeachment getting out of committee and onto the house floor. That is what we will be keeping an ion in the next few days eye on in the next few days. Tom kevin cirilli, greatly appreciated. There is an exceptionally important headline out of china. Committeeleadership vows to avoid systemic financial risks. It is saturday morning in china and perhaps this gets out in front of maybe a few more of the i am justk failures, guessing, that we have seen. Buro vows to avoid systemic risk. Francine the saudi minister is saying the markets will have to trust us, and further commitments will allow us all to benefit. The tension is that they want the price a little higher, but saudi will only cut production if the rest of the group complies with quotas. We will have plenty more on opec and will cross live to manus cranny in vienna. This is bloomberg. Francine this is bloomberg surveillance, tom and francine from london and new york. We have been talking about opec and saudi aramco pricing the ipo. We have to understand the market. The Saudi Oil Ministers speaking to reporters, saying he sees a more shortterm opec plus consultation and the deal will be without any loopholes. We are trying to figure out the difference between what saudi needs to do and what the others need to comply. It is the carrot and stick approach. Tos get straight to vienna home for lock, senior home alakshahi. Homayoun f there seems to be a lot of fraught between the opec ministers. Why so hard to find an agreement . Homayoun thanks very much for having me. , it is difficult to get an agreement because the compliance levels have been extremely low. Exports rather than production because exports andcts direct markets, countries get most of their direct revenues from exports rather than through production. Andocused on analysis compliance has been extremely , which are part of the agreement. Morehave cut their exports than what they were exporting a year ago. It was based on the reference export number in october. The compliance number has been extremely low. It differs on a country by country level. Saudi arabia has been the most compliant among big producers. If that had not been the case for all big producers. Bebelieve there are going to difficulties reaching a deal. Francine what kind of price target . I know opec has a price target, but given the saudi aramco ipo and a million things having to do with each individual country and their budget, what are they targeting for price, even if they wont say it . Think what we believe is that saudi arabia has managed to put itself in a strong position at this meeting. In a very tricky position as well. Saudi arabia has been the most compliant among the producers and one of the only ones that reached on hundred percent. 100 . They have actually cut more than what they were asked to do. They are in a position to bully the others. But the aramco ipo, higher prices are a big boost. Prince, his first meeting with the Energy Minister of saudi arabia, we believe saudi arabia cannot get out of the meeting without a strong message coming out. In terms of prices, for sure they are looking to boost prices by about 10 over the next few weeks, but we dont think this will be the case. Chase me cut to the what is the export elasticity of the royal family of saudi arabia . If exports are the beall and endall, can they strut down shut down their exports to make up for the 1 gap . Homayoun i did not hear the beginning of the question. Tom what about saudi arabias exports . Do they have the ability to shut them down at any level . Homayoun saudi arabia has been compliant. It has completed its part of the deal, so if i were them i would not cut more in terms of exports. They are trying to get the other members to comply much more. When it comes to the message, the message we will get is, we are going to cut deeper, probably 500,000 barrels a day more. From the previous deal from last year, the previous target numbers, you can see not a Million Barrels a day being taken out of the market, simply buying measures being members being more compliant, 100 compliant for all of them. Saudi arabia is trying to gain the most because they know they are compliant and are trying to bully the others to do their part as well. Tom thank you so much, greatly appreciate it. Thely wonderful on distinction of production dynamics and export dynamics. With us listening is James Sweeney of Credit Suisse, and i thought that was brilliant on the countable units of exports in oil versus all the blather about something existential as production as well. How does that fit into a gdp call, a global slowdown that Credit Suisse has including the 1. 7 statistic for the United States . James oil is dancing around a level which is not difficult for the u. S. Economy. Somewhere high 50s with a flat forward curve is not a big deal. A four dollar move in either direction will not have an impact on the u. S. Consumer economy. It is, however, a drag on investment in the Energy Sector in the United States and we are seeing that. And credit markets, we are seeing differentiation, wider spreads. Tom i dont want to get you in trouble at Credit Suisse with mark flannery. I used to read this stuff like gospel. The oil market cleared themselves 4, 5, eight years ago, are they their own victim and that they cannot develop and cannot get in on the great economic, they cannot help themselves . James the u. S. Has beaten supply forecasts over and over and over again and that has added oil to the world. We are half where oil prices were five years ago, stuck dancing around this level. For the household sector, that is one of the tailwinds that oil prices. Francine James Sweeney of Credit Suisse joins us. Kickstarteurope will from 6 00 until 7 00 and then the European Market open as equities start trading across europe. Onhave the u. K. Elections thursday and Christine Lagardes first ecb conference. Tom bloombergs surveillance, it is jobs day. Lets get to it, your first word news. Viviana saudi arabias oil minister promising today there will be beautiful news from the opec summit. The cartel and its allies are close to a deal to reduce their official output target, ministers reaching an agreement to cut by half a Million Barrels a day, finalizing the cuts most have made this year. North korea ramping up the pressure on donald trump again. Preparing anybe engine test at a rocket site and referring to the president by a familiar insult dotard. Exchange for a Nuclear Disarmament deal. China will waive some tariffs at slapped on. They are processing applications from Chinese Companies buying u. S. Products like soybeans and pork who have asked to be exempted. Signaling they may be close to the first phase of a deal. It was supposed to be about breaking the impasse over brexit and now at looks like a referendum on Jeremy Corbyn. His personality cult has cemented a group on one of the largest political parties. He will have to guarantee conservatives do not reach the socalled red wall of labour leaning districts. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Tom going to squeeze two ideas into this single best chart. James sweeney is with us, and we are thrilled to bring you Carl Riccadonna as well. The chart is the Unemployment Rate. This. Onna has a tattoo of we are down below 4 and have only been here twice, going back 60 years. Thisore issue is today, is day where we finally break that vector . Carl i dont think we will break the vector today or anytime soon. My team thinks we will be back to 3. 5 today, which tied september and back to 1969 for a low. Given the residual momentum at the hiring pace at the moment, if we are at 150,000 or better where we have been running, we or 3. 3 e up to 3. 4 territory next year. Election day 2020 the Unemployment Rate could be 3. 3 . Tom how do you interpret adp . Adp, does it matter that it was so grim . James no, we dont regard it strongly. Carl adp doesnt handle the gm strikers the same way so it counts a stryker as still employed. Tom what is their problem . Carl it is two different ways of counting. The number is whipsawed, gm workers down last month, up this month. Adp does not have that volatility. Francine how will the fed look at this . Carl through a vaseline covered lens. They are not interested in adjusting policy and made it clear the hurdle is high to continue responding to subtle changes in the economic outlook, so they stand pat on repo issues trying to smooth the yearend volatility, and remain on hold for most of 2020. Francine on hold for 2020, and 2021 if things stay as is, is that it . Carl 2021 if we are continuing along at the pace of jobs growth in the vicinity of 100 50,000 or 125,000, that probably means the Unemployment Rate is lower still in a fed could be getting back and the fed could be getting back into the tightening game. Tom i want to bring up a chart. This is a steve roach chart. Consumption in the greenline and the greater slowdown in aggregate of u. S. Consumption, dropping 34 looking back 60 years, and the pace we spend at. You pulled this into the Holiday Season with an outlier call that says it will not be that good. Why are you scrooge . Carl not going to be a great Holiday Season. Our modeling of Consumer Spending on holiday sensitive idea items are putting to a downbeat holiday. A downbeat trend. Consumer spending not looking great as a whole. Holiday shopping, 3. 4 nominal sales growth so adding inflation of 2 . Tom you have nailed 1. 7 real gdp. A lot of people tell me it is good. Is it . James consumption growth over the next year and the Holiday Season is likely to be slower, because it has been really good in 2018 and 2019, probably better than we can sustain unless we get some big upside some sizes surprises in the labor market. Tom bring up the chart. Here is what sweeney is talking about, this movement up. This has been sort of sprightly. Carl consumers have been the only game in town. If you take consumers out of the picture, the economy is in contraction. Francine if we have a phase one deal between the u. S. And china, how much does that have an impact on the consumer if at all . L tom we go from scrooge to byron. Carl i dont think a phase one deal does much of anything. It is a little bit of agriculture purchases and no meaningful role back in tariffs, so nothing meaningful for the economy. The best we can hope is enough agreement to push the december 15 tariffs off the table, but i am doubtful. The best case for trade over the next few weeks is december tariffs get pushed back and we continue to hem and haw over a phase one deal. Francine what kind of a deal would change the dynamics in the labor market . James positively, we are looking at the average tariff rate this summer was set to be 15. In august it went to 26. Part of the tariffs since then have been canceled, so tariff rates are looking at the low 20s. A deal which wipes away everything that was announced in august and gets us back down to 15 tariff rates, that is a homerun and strong for the economy. Tariffs were 3 on imports from china two years ago. 15 to 26 is the range where things could end up. Tom the summary of all of this, and we get done with jobs day and the fed meeting, i take your 1. 7 and i add on inflation. That is not a lot of oomph in this economy. Is it sub 4 nominal . Carl we are at 1. 7 as well. Tom we have two economists that agree. Carl we dont agree with the estimates coming out of the new york and atlantic fed, the gdp which is running cooler for the quarter. 1. 7 growth is the worst quarter of the year and the second worst in about four years of data. The economy is on a sour trajectory. Tom do you agree it is a bottoming 1. 7 . James he is talking 1. 7 for the quarter and we are talking 1. 7 for the year as a whole. Tom a correction, Carl Riccadonna is not scrooge. James sweeney is. We thank both of you. On jobs day, a lot of good discussion across bloomberg surveillance, and that goes to jon ferros conversation with mr. Kudlow, 8 30. Please stay with us. This is bloomberg. Viviana you are watching bloomberg surveillance. Tmobile is preparing for a crucial batter battle over its deal. A judge will weigh arguments from a group of states that say he should block the proposed 26. 5 billion acquisition. They say at will raise prices by eliminating competition, but tmobile says by combining with sprint it can reduce costs and lower prices. U. S. Regulators take a step therd returning to ground boeing 737 max to service. Boeingis final like is finalizing changes. Investor Dennis Gartman has some final advice as he shuts down his daily newsletter sell. He says Donald Trumps trade tos says means at is time save cash. Francine lets talk about france and the future of emmanuel macrons economic reforms. , hospitals, schools, air traffic controllers, broadcasters all walked out yesterday. 1. 5union says it was over million. Joining us from reagan is james regan. France is james regan. How does president macron try to get the job done . James it is true he has a difficult challenge, but what we now in france is the previous governments have failed to tackle this delicate issue of pension reform. Keen to pushron is ahead. He is saying he is remaining calm in the face of the demonstrations and is determined to make the case for pension reform. We have seen in the last 12, 13 months in paris, the yellow vests protests which obviously made headlines across the world, with images of violence on the champselysees. Protests wentests on for many months and it is clear there is a real tradition of people hitting the streets in france when they are not happy about government reforms. Tom the great distinction in the article in bloomberg and the New York Times is the yellow vests of income inequality and this being much more embedded labor and protest. Can the two groups meet into a much larger, National Protest . James i think that is an interesting question, because if you go back to the beginning of the yellow vests protests, they to join ineluctant with any kind of political persuasion or any particular union persuasion. It was very much an independent grassroots movement. They were reluctant to have specific spokespeople. It was really not a union movement, not a political movement. Now i think it remains to be seen where we go from here. This is a more Traditional Union led movement. Vestse seen, the yellow have not completely gone away. The issues are still there. It is a question of whether sometimes i think the lines will be blurred going forward. We have another major day of marches on tuesday next week, so lets see what happens as this advances. Thatchirac can relate to the unionists and i am having trouble seeing mr. Macron relate to the unionists. How removed is he from the images we are seeing on our screen . James i know what you mean. Job ahead ofreal him, to make the case for his reform. In the first instance, it will be his Prime Minister and his health and welfare minister who will be meeting directly with unions next week and getting their hands dirty in the initial phase. They managedther to make the case and persuade unions in direct talks next week and presenting the details of the reform. Macron absolutely remains slightly above it in a sense, but still saying he is determined to push it through. Tom james regan in our paris offices. James sweeney watching. Another form of populism. There is a french character to that lower gdp angst. Seem to seeand we some form of political protest on every continent and just about every part of the world, local characteristics where it happens. It is interesting how you can have this kind of problem in so many places at once. Tom very good, James Sweeney with us as well with Credit Suisse. We will leave it there. We have got so much going on moving forward into jobs day, into the idea of the labor economy. Francine six days away from that election in the u. K. Tom will be joining me at westminster for full coverage. Jeremy corbyn saying Boris Johnson is misleading on brexit and the deal. Pound, 1. 3130. More on the u. K. Election and the leaders, next. This is bloomberg. Francine news from opec in vienna, we have had Team Coverage throughout the day. Opec plus, opec and russia and others have agreed to reduce the output 500,000 barrels a day. This is according to a delegate. They negotiated well into the night and it was very fraught because saudi arabia wanted to make sure other members were complying, and only then would saudi arabia decide and agree to cut production. We seem to have an agreement. It is not moving oil markets that much. Opec plus has agreed to reduce some of their output targets. On to another exciting thing, next thursday is the elections in the u. K. Tonight is the night Boris Johnson Jeremy Corbyn will go to head inad head a debate. What would move the dial . You were trying to figure out what is riley voters, if anything. David it has been strange, this campaign. Nothing has shifted the narrative and there has not been a moment that tilted the election. The missteps by theresa may changed the game. Headht is the head to debate. I do not know what your plans are. Francine the debate. David things are heating up. We are into the final week in the public may not have been paying much attention up until now, but probably are now with six days to go. We will tracking that closely. It seems to be that most peoples opinions are pretty entrenched in the polls have not budged much. In any normal circumstances, some of the missteps and accusations might have changed things and they have not so far. Francine we had Jeremy Corbyn showing off a pack of papers saying this is the secret plan Boris Johnson had for the brexit deal and it is wrong and misleading. David he has done this before. He did the same thing about the nhs to say their secret plan is to sell british interests to donald trump. But did not really break through either. You could have found this stuff on the government website. Perhaps if you read mr. Johnsons deal, a lot of this detail is in their, and he has been in there, and he has said there will be no checks in ireland but this document contradicts that. Customs arrangements between Northern Ireland and britain, will that sway the voters . The people that want the brexit are the people he is speaking to, not the people in Northern Ireland who will be affected. Francine we had a poll in 2017 that gave the tories the majority and now we have other thes giving conservatives majority, but are we in the margin of change . David we are still within the margin of error. Lead,erage is about a 10 comfortable for a johnson majority. Just shave four points off of that, we are in Hung Parliament territory. The market may be baking in a conservative majority, but they may be too complacent. Just a couple of points different and we could be with a different result. Francine Boris Johnson as Prime Minister, we are not sure what that means for the transitional deal. David merritt with coverage next week, tom keene and jon ferro also joining us. Do not miss the interview with the u. S. Economic Council Director larry kudlow, 9 40 a. M. New york time. This is bloomberg. Alix more cuts on the way. Increase itsl production cuts. Spotlightobs are the on wages. We talked to martin, ceo of mucci, ceo oftin paychex. And raising concerns that any green shoots in manufacturing have disappeared. Welcome to bloomberg daybreak on this friday, december 6. Im alix steel. It feels like i want to say risk on, but you are also seeing bunny in the seeing money in the bond market, so maybe it is both. Yields down in the u. S. By about two basis points. Crude off by 0. 5 . Opec delivered the goods, and it wasnt enough to move the needle on the oil price. Time now for global exchange, where we bring you the market moving news from all around the
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