His campaign to become the democratic president ial nominee. That brings us to about 12 now, the number of those vying to be the democratic president ial candidate. Of course, the field started off at about two dozen, so it has halved in the last few months. The first test will come in less than a month at the iowa caucuses. Once again, democrat cory booker to drop out of the president ial race. Lets take a quick look at how markets are performing. In the u. S. , we are waiting for earnings to start this week, but starting off with the s p up more than 0. 3 , the 10 year yield up three basis points come up or merely to do with the move in germany. Holding in adex range, and wti crude above 58 a barrel. Yields you say, bund just less than 16. We are seeing selling when it comes to the european bond markets today. Weve got a lot of data still to digest. Earnings season is going to kick off. Look at where cable is right now. Weve got a negative bid when it 1. 2980. Cable, we continue to see short sterling being bid. Expectations of a boe rate cut keep growing and growing. It increasingly looks like it could be on the table. Carry on the market conversation and try to get some analysis on where we go next with the pound and with what is happening with the dollar. Weve got earnings season this week, trade deals to be signed as well. Ing bankta, strategist, joins us now. A lot of people say you want to sell the dollar this year. You dont agree. Why . Petr we think the dollar will do well against the major low yielding currencies. Youre a, swiss franc, even sterling. But the dollar will continue depreciating against highyielding em fx. Last year, the easing trade tensions and International Trade such as a bid for highyielding, undervalued emergingmarket currency, but when we look at the g10 core currencies what the error or the yen, they have no yield, and monetary normalization is completely off the table. Guy what happens with china . Sub seven. Ing what you see for the rest of the year . Petr we are positive on renminbi. Theres a case for moderately stronger renminbi, but for us, the main point is that with a phase i deal being signed and the expectation of the trade tensions to be lowered materially, this should provide some effects and should be good for some asian currencies, mainly korean won, which remains deeply undervalued within the asian space. Almostwon and cny are 10 undervalued against the u. S. Dollar, the biggest undervaluation in this regional space. If you have a motto to vliet a moderately positive risk environment, it is good for value, and these two. Vonnie we saw korean exports increased pretty exponentially thanks to supply chain changes and so on. If we have a phase i deal and negotiations continue into phase two, does that make the outlook a little bleaker for south korea . Petr i wouldnt necessarily say bleaker. The rally we have seen maines pretty undervalued, but importantly, as long as there is no escalation, but rather a deescalation, profitseeking investors will continue to look for value, and from that sense, korea is still not bad because fores big exposure to cny, korean won, and also, our economists see the growth bottoming, inflation to pick up , beingar, so netnet short korean won has been one of our top trades for 2020. Vonnie give us a sense of where in the world you are least certain about. If you look at the turkish lira, it is a very difficult currency to evaluate right now, right . What with the Central Banks working slightly differently than usual. We dont disagree, and that is why we look at the sub and put oura space trades for 2020 together, we precisely because of visibility, currency valuation, and the fact that the lira sometimes trades in a way from a unexpected, so , weallocation perspective have been overweight the ruble. We probably move it to be overweight the south african rand. Guy bank of england communication stepping up over the past week or so. We heard over the weekend another member pointing to the fact that a rate cut is coming. The market has gotten may is the base case right now. That . Comes earlier than todays data not good. We get more retail data this week. Could come earlier . Petr it could possibly come in january because the last time to members were looking for a cut, potentially another to members looking for a cut in january, and also leaning towards potential loosening monetary policy, it cannot be ruled out. The very fact that the speculative positioning on sterling changed very sharply over the last few months from a deep speculative short to more modest longs, the reversal could ifmeaningful, particularly everyone is expecting after the elections that there will be an extension of the transition period. Boris johnson saying he prefers some type of deal to be done by the yearend, but given the very short time for a deal, it may not be a very good deal for the u. K. , unlikely to be frictionless trade. Sterling,ll call for they reprove today a little bit shorter. The this back to positioning, as you say, people are long. What does that tell me about what the potential downside could be . How much lower could we go . Tor we think it could go one dollar 26 cents, potentially 1. 25 into midyear. If you have a cut by the central bank in january or in the first half of the year, and also if you get towards the perceived deadline on a transition and there is nothing, investors may get a little bit concerned. We saw there would be an initial bounce and sterling, but then it declined into the middle of the year precisely because of the uncertainty about a transition deal. All of this is coming faster because of potential easing, and also because of uncertainty about the transition or eventual trade deal. Guy petr krpata, think you for coming to see us. Looks like it will be an interesting few weeks for sterling. Check ofets get a Global Markets now. Heres kailey leinz. Kailey stocks are in the green ahead of the kick for earnings season tomorrow. And the s p dow higher. In europe, we are seeing markets lack the dax, as is the stoxx 600, by nearly 0. 25 . The one exception is the ftse 100, higher now by more than 0. 3 . That has a lot to do with the weakness we are seeing in the british pound, which we were just discussing. We happen to the terminal, take a look at the currencies in the g10 space. We can see the dollar has given up some of its strength from earlier, although it is still significant we stronger against japanese yen. Take a look at the british pound , lower by 0. 7 . That has to do with expectations for a boe rate cut. Sterling is now lower for the ay. Th consecutive d extending the worst week since july that we saw last week, lower by the better part of a percent over the past five days on its longest losing streak since back in october for oil, sitting just above 58 a barrel on wti. Take a look at one group of stocks in particular and what they have in common, they are all apple suppliers. There is a broader chipped rally underway, but you also have positive comments on apple coming from gene munster, and that is giving a lift to companies that derive their revenue from apple. Skyworks is higher bow about two pipe by about 2. 5 , as is and ll technology ortho. Vonnie this is bloomberg. Vonnie live from new york, im vonnie quinn. Guy im guy johnson. This is the european close on bloomberg markets. Lets get a check on first word markets. Heres riddick a group to. Gupta. s ritika admittedrans leaders that the countrys military mistakenly shut down a ukrainian jet. President trump warned the arena and government not to kill protesters. In the philippines, and erupting volcano south of manila has forced thousands to flee their homes. It could getarn worse. Scores of earthquakes could signal and another eruption is eminent. The british economy unexpected lay schrank just before the general election. Gdp unexpectedly s hrank just before the general election. Officials are debating whether an Interest Rate cut is needed. House speaker speaker in a civil oc is accusing Senate Republican leader Speaker Nancy Pelosi is accusing the Senate Republican leader of trying to the impeachment. 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 ritika gupta. This is bloomberg. Vonnie thank you. Lets get back now to the j. P. Morgan Health Care Conference in San Francisco. Ofning us now is the ceo sanofijump a piece chasseloup de chatillon. M a . S next in terms of anbaptiste thank you very much for having me today. It is a very exciting time at santa fe right now. Sanofi right at now. With the new leadership, we are going to make a difference. Gross on we have growth and marginal expansion, and we need to build on both. Vonnie are you purely focused on organic growth, or are you still looking for more bulk on n and morelto strategic opportunities for m a . Jeanbaptiste of course, we had a greatdrug with it drug which is expanding across several locations. Have vaccines. We also have our pipeline. We are relying on internal development of this pipeline, which doesnt prevent us to try on valuation and acquisition. We are just in the process as we speak of closing operation in is a greatco bay example, because it is all about science. When we do m a, it is really that we are going for early science to create as much value as we can for shareholders. Market catchs the up with what youre doing at sanofi and the new plans you are putting in place . Jp morgan just upgraded your stock because they think it still trades at a discount to the rest of the sector, that it shouldnt. The upgrade basically said sanofi trades on 12. 6 times, novartis trades on 14. 3 times, i. E. You are right a discount to your peer group. ,t the j. P. Morgan conference you should trade on similar multiples to your peer group. Jeanbaptiste thats a great point because we do trade at a discount, and we have already proved points that we were able in q3. To the market of course, we will go on giving us on how we execute. I think the timeline should not be too long to get a full recognition of what we are doing. We can really focus on growth,ng internal acquisitions to build a great company. That is what we will be doing. Quarter afterbe quarter, we will deliver. As you say, depiction is a big part of what youre doing. This is a therapy that a lot of what you are going to do next is based on. Weve just seen eli lilly make an acquisition in this space as well. Demira did mira was the acquisition it made. Do you think it is going to be harder . What kind of compass and you think you will get from lilly . Is hotptiste yes, that news. Demira was around for quite a while. Hide yields alone is not really matching but we can see. Seely, we are happy to there is growing interest in the area, but as you know, because of a whole range of indications theworking on absolute high level of security we have in the product is pretty unique. We are very confident that we are ahead, and we will be leading the pack on those indications. The newyou mentioned leadership, and indeed, he has made an impact already by making the consumer a separate business. Should we expect more on that point . Jeanbaptiste the choice is very clear. We have been very outspoken about it. We have a great business, a highmargin business, a high cash flow generative business. What we want to do is bring it back to growth. That is our first priority. In part of our plan , and we opportunities are working hard on those 1tches to unleash another billion of sales on top of the growth we are looking at. It is a very exciting perspective to deliver on those actions. That is what we are looking at right now. Vonnie you have announced in aim of a 30 operating margin by 2022, but analysts are suggesting that could be beatable. What are your hopes for beating that 30 margin . Well, the spirit of the Competitive Team is looking at the max performance we can deliver. We are looking at those Growth Drivers i mentioned before, but also to deliver on significant plans. We will deliver on a 2 billion euros setting plan. We think we can deliver on that. Already in 2019, at the , a bitthe Third Quarter of a new thing in sanofi. We will be able to monitor what we it trickle down to the bottom ite as savings or reinvest into the growth engines of the company. So yes, we are very confident we can hit those targets we set up for ourselves. Vonnie thank you so much for joining us today, jeanbaptiste de chatillon, the ceo of sanofi, coming to us from the j. P. Morgan Health Care Conference in San Francisco. We will take you back to the conference for an interview with the ceo of Cox Smithkline later this hour of glaxosmithkline later this hour. This is bloomberg. Vonnie checking u. S. Markets now, we are in the green for all of the major indices, some more so than others. The nasdaq is up 0. 5 . Chip stocks rising pretty substantially. The s p holding onto a gain of 0. 3 . The dow just up 0. 1 . The vix pretty calm today, just a little more elevated than it was on friday, but below 13 nonetheless. Guy european markets look like this. The ftse is up, but the pound is down. The dax is certainly down, the carmakers leading the charge lower. Some of the banks are in the mix as well. Wirecard, though, trading to the upside. European close is next. This is bloomberg. When you move homes, you move more than just yourself. Thats why xfinity has made taking your internet and tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. The president ial administration plans to lift its destination of china as a currency manipulator, removing the obstacle to the trade deal that is supposed to be signed this week, so once again, the u. S. Will lift the china currency manipulator tag before the signing of the trade deal, which is expected on wednesday. It would remove the obstacle to that deal which has been one for several months now and has complicated talks. We are seeing a movement in that currency now. It is getting a big lift from the idea that the u. S. Will lift the china currency manipulator tag. The european markets are about to close. This is the picture. Some of that mining stocks providing that lift. Most at that lift. Most of the markets are softer today. Look at this session that has developed good we are down by around. 3 percent, but weve got to bear in mind what is happening over in the United States. Decentted out with a legacy out of middle asia. Subsequent to that we have rolled over again. There are plenty of things to get into today. The main markets, you can see the differentiation. 1 , the up by. 3 of pound is lower today. A series of conversations that are coming out from the bank of england which suggests the bank is getting ready to pull the trigger on a rate cut. The main story could get put forward possibly to january. The dax is lower. Some of the car stocks are trading lower. Lets take a quick look at what story,ening with this this is helping london. Real estate tech, construction, all trading to the upside. Where are we seeing the weakness . Are trading down, and that is the drag on the german market. This is the story around europe, lloyds out of london also showing signs of weakness. Take a look at some of the names , kkrf europe moving today apparently looking to take its waste business, the stock is rising as a result of that. From bank of america, that stock is rising as well. Renault a lot of headlines about there. Happening they were down by two. 82 . That is the european close. The markets just got a little bit of monday cheer with the u. S. Dropping the currency manipulator tag on china. Last august Steve Mnuchin labeled china a manipulator and the Treasury Department will now get released a little bit coinciden order to with the signing of the trade deal. We are going to get that report in the next couple of days which will remove the tag of currency manipulator on china. Since we got that news we have seen a big lift for the offshore yuan, and that is causing the dollar index to get softer, but a big move there you will notice the s p 500, so risk assets enjoying this. The s p 500 up. 4 , if you points higher. The 10 year yields trading mainly on the move out of germany, there tenured yield trading up a little bit. Lets dive into the stocks moving just a little bit. We have some raw material. Ompanies china said it was not going to reduce subsidies on cars, and that is giving this lithium maker a boost. Inhave a lot of interest ultra beauty again, and some gaining stocks are higher as well. On the low end of things, we will be hearing about this when in a little bit, the stock of the hour for that has been extraordinarily volatile. We have some of the Health Care Companies lower once again. This is not a new story. Guy mark carney has signed the decision which could prove to be a dramatic one with a cut looking more and more possible. Could it come earlier . We have a former policymaker joining us now on the phone. A lot of people are beginning to price in the possibility of a rate cut from the tank of anglin. Some people are starting to talk about january. My question is, are they getting ahead of themselves . Will this bounce back postelection . Will, butbe the data a lot of these things take a while. I think the gdp data was pretty 2. 1 week, a. 3 and suggests probably negative date of this quarter. Services doesnt like that strong. You were just talking about, that the u. S. Will no longer say that china is a currency manipulator, that will have positive news on the global economy, but it will take a while to have an effect. Row,em to meetings in a and we had a speech yesterday that there were hints that one was coming, so we have the prospects of a cut. If you worry about downside risk, why wait . I think that is probably where you will see them go. Markets are pricing in at about 5050. What is the risk of going to soon, much better than too late. I suspect that with that mood music moving in that election, january is in play. Giving that it is his last meeting, is there any possibility that would sway the decision that he should or should not do anything on his last meeting . Danny i dont know that it would necessarily sway things. , any sort of political thing than election coming, that would certainly be something that you would be wary of. I dont think it makes that much difference whether it is his last meeting or not. I mean he can convey the majority. I dont think this is a big deal. We will see. The movement doesnt just come from him, it comes from all three external members. Weve not heard from the internal members. I do think that that is not a big deal. He may decide that he doesnt want it to happen. There are members of the committee, but i do not think that is the big deal. There was al, minority in the last final meeting. Guy you have published Research Today which seems to be getting traction. Honest, ially, to be probably already knew this, you are at your lowest point when it comes to morale in your late 40s. While that does not sound like something that is meaningful, you point out that it is, not only economically but also politically. This is represented around the world. Its something that we need to think about as we approach november and when we think about the elections. Anny right its early has seemed to grab the attention of people in the financial markets. The evidence that i put together, from all around the world, basically everywhere, there is this trough of midlife. A great part of the paper is that i have looked at other things like your views on the economy, on politicians, on finances, about your a confident service that bloomberg talks about all the time it appears the primary focus is less optimistic and more unhappy, but it looks like the interaction with that midlife crisis and economic shocks is a big deal. These primary folks are vulnerable. In the u. S. We have this phenomenon going on which is despair. Economicen their conditions deteriorate, no good jobs out for them, and we see an increase in suicide and death from heavy drinking, so there is this vulnerability in the shockage to an economic with society having fewer institution to help people. About peoplen talk not being in communities and not dining with their neighbors, so this looks to be an important social thing as well as a biological thing that we need to recovery,of, a week and at the point we are talking today about the possibilities that the economies are starting to turn down. I think this is the big deal, and it has a residence with people especially financial commentators. They have been calling me up and saying that is me. Guy i certainly feel that one. Always a pleasure. Lets check with your pain stocks have settled for this is the extra as we head towards break. The stocks are doing well. Car stocks are weaker today. As we head into the end of this show, we will carry on the conversation on Bloomberg Radio jonhe top of the area, and ferro is over in the United States. I will be joining you in london. This is bloomberg. Vonnie live from new york i am vonnie quinn. Johnson, live from london. Lets check in on the details. Cory booker is dropping out of the president ial race. The new jersey senator said thank you to his supporters and said he is sharing the news with a full heart. First africanamerican senator from new jersey, he drew comparisons to the former president president obama at his campaign ever caught fire. He faced struggles in the polls and fundraising. President trump is warning the uranian government not to kill protesters there. Iranians took to the streets again, and they say arrests have been made and police fired tear gas at crowds. Shotovernment admittedly admitted to shooting down the plane saying it was mistaken for a missile. Dinnermpeo will attend a in San Francisco tonight. The hope is to drum up support for the Trump Administration in silicon valley. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 this is bloomberg. Lets get back now to San Francisco with the j. P. Morgan Health Care Conference. Taylor riggs is there. Walmsley. Have emma this is notable that we are here in San Francisco and it feels like this area has played a role for your company. Where do you see the intersection of energy with technology and health care . Innovation is the first of our priorities, and we are thrilled with the progress and momentum we are ringing here whether it is with what we hope will be at least six new approvals for 2020. Technology for us is an enabler of innovation. Fundamentally it is so exciting to see the advances coming both in biology critically with the science of immunology it also with technology. The r d is here and we have been building up new partnership whether its 23 and me, or whether it is pioneers with self therapy. This is a fantastic ecosystem here. See a lot of opportunities to improve through genetically validated targets the rnd. Bility of success of that is the point of coming here. A whileyou had a deal back and analyst at the time worried, but the recent success has proved them wrong. Where do see the future success of that . Thosebelieved that beyond thecould go women with this gene and potentially we could treat far more of them. We thought the hypothesis was 50 percent, but the data played out over the summer, this medicine would be relevant and could be. Mportant for 100 of women withis a horrible disease 85 recurrence. We are excited about this and some other medicines. Taylor in a big portion is within that cancer space. When can we see some of these drugs potentially become blockbusters . We went from having seven medicines in the clinic last year to doubling that, and part with this acquisition. We had to positive readouts and also another edison for endometrial cancer, but another player was the bcm a results in multiple my oma. We also hope to get some approval for that for people who , andunning out of options we saw good results there. How can went thing, move that medicine into earlier lines of araby, and we are ambitious for that. Taylor you are also making progress in the hiv space. You have a strategy there. Where do you see your market share within that space . gsk is committed to leaving no hiv patient behind. We have long pioneered in this area. Now fundamentally we are pioneering to drug regimens. This is a chronic disease per this is not a death sentence. You can take thousands of medicine in your lifetime. I am thrilled that these drug andmens are on the horizon, he can get the same protection but with two drugs, not three, so there is economic benefit. We also hope we can bring forward first long acting injectable medicine for hiv. We are working with the fda to see how we can bring that through. Taylor speaking with analysts this also looks like you are incorporating some higher reward strategies as well. Are you confident that you can do both . Committed and there is no change to our Capital Allocation priorities. It starts with investing in the future pipeline. I am thrilled to see how we have been able to demonstrate success in that, and hopefully these new ones that are coming through, there is no change to our policy of distribution. Theres been a lot of concerns recently about drug pricing and transparency particularly as the elections heat up. Transparency more while also being able to innovate . Fundamentally we have always been responsible about drug pricing and that is why weve topped the index pretty much since inception. Support any kind of regulation that continues to support innovation where value can be demonstrated but also more transparency and particularly passing on the discounts that manufactures have for patients. This escalating challenge, which is a real one, and no one should be having to ration their medicines. We support more transparency. Taylor both of us are in our green dresses. Guy ive got on the wrong type definitely. Thank you very much indeed. Taking a tumble today, those are the figures, and we will take a look at why it is our stock of the hour. That is coming up next. This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone wifi up there . Uhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your local xfinity store today. Liliana viviana shares are really tumbling nearly down 20 at one time and now they are hovering at about 13 . Shares are down more than 25. You might be asking yourself why and it has to do with a cut to fiscal year revenue below lowest estimates for analysts from the 885 to nine 25 million range now cut to 846870 7 million range. Why is it . We will go to another chart so you can see what the drop has been. It follows a five year trend as you can see. Worldsmakes the smallest heart pump for Heart Patients with acute heart failure. Americanue to negative Heart Association presentation for the company says adverse data was presented. It is the worst performing Health Care Stock in the s p 500. Not everything is negative for this stock. Investors who have played the long game has seen in the last oneears the stock starch thousand nine hundred 50 . We will leave you with this information. Is expected to speak today at the j. P. Morgan Health Care Conference in San Francisco at 3 00 p. M. Eastern time. That is your stock of the hour. This is bloomberg. Up, in the United States we will be talking about what will be on balance of power and david westin will be taking you through the hour and i suspect he will be spending some time talking about cory booker dropping out of the president ial race, the iowa caucus just three weeks away. Vonnie taking a look at where ,e stand with u. S. Markets indices in the green. This is bloomberg. David i am david westin. Welcome to balance of power, where the world of politics meets the world of business. On the planned assigning of a phase i trade deal in washington, bill faries is in washington on that unrest in the middle east, and we have a reporter in linda on the sudden contraction ahead of the general election last year. Finally i guess we are getting to the day where we finally signed this thing . Wednesday morning, absolutely, that will be a great lap for the Trump Administration. They finally will rollout this deal and we will also see for the first time the text of that agreement, and that will be for the devil is, always in the details. Two Big Questions going forward, one, how much substance is there, and secondly with the chinese