She pledged to pull britain out of the european Single Market. She said staying in parts of the customs unit is preferred. She aims to avoid a cliff edge. She wants transitional arrangements for Financial Services and no more huge contributions to the e. U. Budget. We are leaving the e. U. , not europe, she said. What a day to use our wonderful wcrs function. The big mover i want to talk about sterlingdollar. Biggest intraday move for the pad against the dollar since 2008. Shows the oneday percentage moves. We have risen as much as 2. 5 . The biggest move since 2000. Yesterday, we fell 1. 1 . Close sinceowest 1985, yesterday. Day after brexit, when sterling fell against the dollar most it percent. The part investors seem to like is that mps get a vote, they have to rubberstamp the final brexit deal. Ands stick with Sterling Sterling volatility against the dollar. Yesterday, we saw a fourth consecutive gain in sterling implied volatility. 19 , we are falling down the most in september, the second after rising to 15. 94. We are well below those levels we saw before brexit. This is implied volatility. Expectations of Price Movement in the pounddollar Exchange Rate in the next week or so. How things have changed the last on it for hours. 30 minutes into the trading day. How are things looking there . Abigail theres a distinct risk off feeling in the u. S. Markets. Dow, s p 500, and nasdaq all trading lower. A feeling of uncertainty, a continuation of the intraday volatility we saw last week which led the dow and s p 500 last week to decline. The dow did put in new record highs, but today, the nasdaq down 6 10 of 1 . On paper, its worst drop of the new year. Across the Asset Classes, it is confirmed. Looking out the bloomberg dollar index, down more than 1 on paper, the worst drop since july. The 10 year yield down seven basis points. This is in the green. It shows bonds are rallying. But when rates drops, it usually tracks the dollar. That rate drop is also tracking the s p bank index. So lots of risk off. When we look at the commodity complex with other assets, we see oil is trading higher. To thef a non sequitur risk off, but probably because of the dollar weakness. Tradinging gold higher, also on the dollar weakness. X the highest up since the election. Only still low, but if risk off your lets take you to the World Economic forum in davos. Lets take you to Erik Schatzker. Erik this is what is happening here on the mountain in switzerland. China stealing the spotlight. Hisident xi jinping used first ever address of the World Economic forum to defend the World Economic order and to take a backhanded swipe at trump. Said no one is a winner in a trade war. The president elect making news here even though he is not here. Anthony scaramucci told me the president elect is likely to do away with the tpp trade deal. Ceo discuss banks one of the biggest topics up here automation and how it will just on the economy and the banking. Industry and the banking industry. When we upscaled the work, people add more value. And may get computers to automate what we hope will be more standardized business. That is the latest from davos. Back to you. Mark thanks. Erik schatzker. Lets get to bloombergs first word news. Alisa parenti is in the newsroom. For banksig setback in the u. S. Up in court. Justices turned away an appeal by bank of america, citigroup, and jpmorgan, refusing to stop antitrust lawsuits that accuse big banks of trying to halt libor suits. Turkey says it has taken into custody that gunman who killed 39 people add and in stumble at an istanbul nightclub. In an apartment, where Authorities Say they found almost 200,000 in cash. President elect trump to send officials to the syrian peace talks in turkey scan in turkestan in ky rgyzstan next week. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im alisa parenti. Up, sterling getting a boost as Prime Minister theresa may outlines her brexit vision. More on her market moving comments. Look at sterling. This is bloomberg. Live from london and new york, i am mark barton. Julie i am julie hyman. Time for the Bloomberg Business flash. Exxon mobil it is more than doubling its basin assets. It is acquiring companies owned family in fort worth, texas. It will total as much as 1 billion. The Permian Basin and resources will be equivalent with the acquisition. General motors may be feeling the heat to increase hiring from the president elect. Move some jobs from mexico to the u. S. In all, it will add 7000 jobs. Named ascaramucci adviser to donald trump and says he has almost sold skybridge capital. Would not disclose the buyer or how much she is slated to receive for skybridge, when the biggest how much he is slated to receive for skybridge, one of the biggest funds in hedge fund business. Mark sterling rallying after Prime Minister teresa gay sterling rallying after Prime Minister theresa may gave a that britainid will leave that you market but will focus on global trade. Britishll be for the parliament to decide on any changes to that law after full scrutiny and proper parliamentary debate. ,nd when it comes to parliament there is another way i want to provide certainty. I can confirm the government will put the final deal agreed between the u. K. Antie. U. To a vote between the u. K. And the e. U. To a vote. The may said that government is determined to make a clean break from that you the e. U. We will seek to avoid a deceptive cliff edge and do whatever we do can do as we move towards our new parliament. Optimistic. Mains julie lets get back to davos, where Erik Schatzker sitting down with the head of syngenta. Erik thank you. That would be michel demare. Thank you. Lets begin with the obvious. There is some concern, and you can see it in the price of your stock, that the 43 billion sale of syngenta to chemchina will not go through. Comment onannot market prices. They are what they are. Still confident. It takes time. Gotten approval last august. The agenda is the ftc in the u. S. And the european union. Finally will be the approval of china. It takes time. All of the things happening in the industry, although the competitors marching together, it will take time. Erik is anything you might run into that investors would be worried about . Michel really nots. Of announcement deals issanto all mainly a change of control. Chemchina did not have a lot of activities in the ag business. But leaders want to understand the full picture. Nothing i am under nothing i am worried about. Of overlaphere areas that may cause lawmakers to say you have to get rid of some things . Michel there is a Company Called pajama, which is quite adama, which is quite difference from our researchbased is this. But there is nothing that will fundamentally change the business of syngenta. Erik you mentioned of the approval from the committee for Foreign Investment in the United States. Is there any reason to be concerns out with donald trump coming into office, he may ask them to reopen in consideration of the syngentachemchina deal . Michel there are reasons i am not concerned. From a legal point of view, it is difficult to reopen that. Trump is donald especially focused on producing in america for americans. Syngenta highs pretty big activity in the United States. We figure well into his business model. Erik you will continue as vicechairman of the Company Wants the deal is done. Will syngenta and chemchina answer Donald Trumps called to bring more manufacturing to the United States . Michel we have a lot of production in the United States. Also the Corporate Action side. Syngenta will continue to be a global company, even with chinese ownership. Foundone of the things we attractive in this transaction, is syngenta would remain syngenta. We just change owner. Erik what about all of the done talk mr. Trump has about china and the concerns. I have heard them here already at the World Economic or them. This is only day one. Concerns of about concerns about a u. S. Trade war with china. Michel will the chinese president gave a bit of an inspiring speech, not only a promise in terms of being wide open but also about acknowledging china needs to do some homework as far as policy and bilateral requirements. The chinese are answering in the right way by staying open and willing to talk. We will see how the situation will develop. Erik what do you think the chinese could or should do to try to signal to the incoming u. S. Administration they are willing to have a twoway conversation about trade . Michel today was perfect. The first minutes of the chinese president in davos. He made a speech a few years ago you were not have expected a chinese president to say. I put the acquisition of syngenta a little in his direction. We will have four independent rectors on the board of the new company. We will make sure we keep this governance going. It is how china is evolving in global. D to become eyes the populism we see is symbolized by donald trump even if we see the populism supplies by donald trump not become a trade war, what does that mean for you. Michel we are very global , so we cannot just erik part of the promise of is to make a truly global company. Michel but that is not always the case. Each region has different inmates, different tastes terms of food. You have to localize production anyway, especially on the Corporate Action. But also you have formulas asian that can be done locally. So we are not too concerned. To 2017,you look ahead what are you most optimistic and what are you most concerned about . Michel shortterm, the measures announcing are probably positive for the u. S. There is a lot of things the u. S. Needs to do. The first impact could be quite positive. Cons could come later. Reductionism has consequences protectionism has consequences. It depends on how trump acts and communicates while president. It might once responsibilities kick in. Erik it might and it may not. We will see friday. Michel demare, chairman of syngenta. For the time being, back to you. Mark great chats. Thanks. Do not miss our exclusive ubs governor. With stuart gulliver, hsbc ceo. This is bloomberg. Mark live from london and new york, i am mark barton. Julie i am julie hyman. Smart data is a growing segment of the investment world. Etfs that track this are growing higher faster than c. T. S. As a whole. Heres aired balaji miss here is eric balchunas. What does smartbeta mean . Smar eric we will weigh it by dividends or momentum. It is a twist on the market cap index. Anything outside of it is smartbeta. It is rooted in Academic Research and how Asset Managers have gotten alpha. They determine they have screened based on those things just mentioned. It is saying lets look at the Good Strategies and package them better. What do people do like about mutual funds . They are high cost. Times, there is human error. Take thoseta will messages and put them in a youth in an etf message. And when rebounds happen, it takes human judgment out of the equation. That is essentially what smartbeta offers. Julie this is also a fascinating shift in the etf world. Etfs are traditionally known as passive investment. But this is not passive. Etfs, passive is for a certain crowd. But you have people who want to try to outperform. But they may not like the other detriments to an active mutual fund. This is filling the gap between a Traditional Index Fund and an active stock ticker. Far, they have been doing well. How do they compare to etfs . Eric they basically doubled assets every four years. They are growing a little at a little bit of a faster rate. There are 500 of them now. From theof people active mutual fund world are coming over and turning their secret sauce into a smartbeta etf. Julie where have we seen some of the money going . We have a chart to illustrate performance wise what has been doing better. Since the election in particular. This is a chart that looks at the traditional s p 500 etf in the purple and a couple of value etfs. Talk to me about what those are. Smartbeta will have times where it outperforms and underperforms. Last year, low volatility was the hot factor. Now it is value. You can see the shift. Billion dollars have gone into value etfs, and 40 out of 50 of them have taken in money. The big booster they got is because value etfs tend to overweight. Tend to be overweight. Julie eric belching this eric balchunas, thank you. Mark great stuff. Still ahead, u. K. Prime minister plans aboutoutlines britains relationship with that you the e. U. Sterling jumps. Details next. This is bloomberg. From bloomberg World Headquarters in new york and from london, i am julie hyman. Mark i am mark barton. Lets get to alisa parenti. Alisa the fbi rest of the wife of the orlando nightclub shooter. Noor salman is accused of upshot shannon and providing support to omar mateen. Salman is accused of obstruction and providing support to omar mateen. Malaysia, indonesia, and australia and the search for the miss seeing malaysian , whichs flight disappeared in march of 2015. And a volcano is spewing hot sky inof ash high in the indonesia. The volcano had in dormant four centuries before erupting twice the last six years. It is one of 120 active volcanoes in indonesia. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am alisa parenti. This is bloomberg. Mark thanks. U. K. Prime minister theresa may laid out her vision on getting Great Britain out of the e. U. She remains committed to honoring the will of the voters. I want to be clear what i am proposing cannot mean membership of the Single Market. European leaders have said many times that membership means accepting the full freedom of goods, capital, services, and people, and being out of the e. U. But a member of the Single Market would mean complying with e. U. s rules and regulations without having a vote as to what they are. Mark may also said she will get parliament a vote on the final deal. Are you perplexed by the Market Action . Not really. There was a lot of talk about that the pound would theresa may had to say. While indications were there in the Single Market, there was a lot of uncertainty. It sets a direction of travel. Mark on the vote on the final plan, explain more. Can they really voted down in the last minutes . Clever no, it is politics rather than anything else. It is unlikely parliament would on prices,plan because he would leave the u. K. In a state of limbo. And parliament will never really feet so brexit. Than very different setting out the actual process. Julie it seems as though the market is increasing increased is welcoming increased details from theresa may. But what did she really give us . There is a lot more that needs to be worked out. This is a negotiation stance to set off in changes in transients intransience from the european block. I was a prize markets do not get that. Now they have. We have seen the response, which clarity approval of they wanted. Julie what kind of reaction are we hearing from the members of the e. U. To her speech . They want to clarity, now they got it. Mark it has been ok, has it not . Svenja it has. There have been overtures in germany, saying at least there were these talks. The final bit of her speech was pretty aggressive. The phrasing of no deal is better than a bad deal. That is pretty aggressive, throwing down the gauntlet. Is seeing dangers sigence as aran negotiating strategy or is it literally what europe stands for. Mark here is more reaction. We will cherry pick all of the benefits in terms of trade but we will not do financial transfers. We will do our own immigration policy. What it seems to me as it does not begin the clinical process of preparing the british people for the inevitable compromises. Fine as an opening position, but it is truly unsustainable. A great piecee yesterday. It was a gadfly piece. 1 againsts falling the dollar ahead of mes ma ys speech. When lighted does what led you to believe this may be the floor. The risk reward was pretty clear, i thought. That she was going to say what i thought. The logical Market Reaction was a squeeze higher. A classic trading squeeze. Julie is there anything the u. K. Government can do, currency and markets aside, to better prepare the economy for what is to come . What is frustrating as theresa may is being as clear as she can, but she is not the type of person to show her hand. She has given the minimum she has to, which is leading out parts of what people expected. Nonetheless, this is a negotiation. Probably be softer than this. That the house of lords can also make a piece as well. On a phase svenja and one of the important things is her willingness to look at a transition period, especially for Financial Services regulation. Business is ring really wanted to hear in her speech. That means after two years, you could get, say, three years to adapt to the environment. The other thing is there could be a secret plan she is not revealing. Coming back to this, what does it mean for the Supreme Court decision . Which votes on article 50 . Svenja this is two separate things. It is a nod to parliamentary sovereignty. Technology parliament has a say. But there are a lot of gray areas. Theres also a question of the idea of fast tracking laws once brexit happens, which will discuss by the house of lords. 50, triggering article which is on course for the end of march. Mark how far does sterling balance . Marcus certainly it will go higher over a decent amount of time. Here, it willfrom make back some of todays games tomorrow. Ains tomorrow. Sterling 2. 6 higher against the dollar. The biggest intraday Movement Since 2008. Julie the other big focus today besides the u. K. And those comments is davos. Do not miss our exclusive interview with stuart gulliver, 11 00. M. In new york, p. M. In london. And we talk about the challenges facing pensions. Ron mock, head of the ontario teachers pension plan is our guest. This is bloomberg. Live from london and new york, i am mark barton. Julie i am julie hyman. Lets go back to the World Economic war and in davos, forum in davos. Here is Erik Schatzker. Erik thanks. I am here with ron mock, ceo of the ontario teachers pension plan, a pioneer in investment management. Teachers created direct ride. Have teachers we thought longterm expectations in light victory, andumps how . Ron longterm expectations are defined by what it takes to pay pensions for the next seven years. Those rock those liabilities are what drives us. It is about innovating adequately within all of the Asset Classes to pull that off. Of its yoump, all political issues taking place, they are important, but we look beyond an election cycle. We have to. Takees not mean we do not geopolitical risk and the changing landscape into account. We have to. Erik does it affect Asset Allocation . Ron it affects the risks we are willing to take the next three to four years. Our portfolio is a pile of risk factors. Equity, inflation, Interest Rates, a whole pile of things. We end up doing is deciding whether we want a little more risk in each of those factors. Taylor benson watching out for that is the watchword the next couple of years. Like you are dialing down risk. Ron we are watching where it could, at us. Interest rates, currency. What equities look like. We have to be careful where we take it. Whatat role may have role may ontario teachers have with donald trump . Ron we have been in the u. S. With interest structure infrastructure for a while now. Erik i am thinking more on the lines on what kind of assets you are interested in and what kind of acid vehicles and shutters you would dissipate in. Ron willing to go direct and operate directly. This is interesting when talking about infrastructure. We had invested, and most lands globally, invest in brownfield infrastructure. It is already operating. What they are talking about is green field. That is a whole other world. The time to get that up and properly isexecuted not a year and half or two. Yacht to go a decade out before those have traction you have to go a decade out before those have traction. Erik so some of the things he is promising could be a couple more years after he gets out of office, even with two terms. Ron i am talking infrastructure like a highspeed train between new york and chicago. That type of infrastructure is a different story. Mentioned Interest Rates. What if there is a bond barrel market . What do teachers do. Ron if there is a bond bear market, we would be excited. The reason is our liabilities are highly Interest Rate sensitive and they do the opposite to bonds. Interest rates go up means our liabilities drop. That is something that comes into the whole equation of how to pay pensions the next 70 years. Erik but you are sitting on a whereincome portfolio will be market to market along the way. Those numbers will look awfully ugly. Ron it depends what you are objective is. Fullyjective is to be funded. If our liabilities are dropping, down, if wets come stay fully funded, we can yet pensions the next 70 years. Tilde out into variable Rate Insurance and more spread stuff . It around not move like that. The liabilities are twentyyear durations and longer. Therefore the portfolio is a long bond portfolio. View onw is teachers the debate over public and private markets evolved . Thesen private equitys days, it is tight, to be honest. When we are looking at private assets like infrastructure and private equity, the premium relative to public is very tight. Feel you getnot much of a deal going private . Go private the pick a response one asset at a time. They are out there. It just means you have to take five times harder to find them. Erik what do you mean . Ron 10 years ago, private equity traded 1000 basis points over the s p. Today, it is squeezed into Something Like 200 and sometimes tighter. Erik not getting much incremental return. Ron unless you have a clear plan on how you will drive growth. Erik what is your balance in equities between passive and active . Ron active meaning our private 60 init is about private equity. Erik i am interested on where you stand on the debate versus passive vehicles over actively managed vehicles . Indexreating your own project and either taking stocks or investing in equity or some other fashion. Ron we have a core index portfolio that runs globally. We act actively around that. It has worked for us year after year. Erik what about external active managers . Do you see a future for external active Equity Management . Is there a region to find, for a pension fund like yours, to hire a stock picker . Is yes. Answer the reason is pretty straightforward. I do not think no one has outlawed smart people. When we dig, we dig deep. There are bright people who have skill. Erik and an update on pensions. Kolber somewhat infamously got out of hedge funds. What is your view these days . Have hedge funds and external managers. The reason is we find there are a lot of smart people out there doing interesting things. It is not just about the return profile, it is about the return. And we are looking for correlation benefits. They helped settle down the whole portfolio. Teachersyou do not see being 100 internally managed . Never, but right now, our partners globally are really important. Julie, that is ron mock, ceo of the ontario teachers pension plan. Julie thanks so much. One of the folks we heard about earlier in davos, anthony scaramucci, has said he was selling his firm skybridge capital. That has been confirmed. Transatlantic,n an Advisory Firm apparently headquartered in d. C. And in cooperation with hma capital. Those are the buyers. Beingial terms are not disclosed. Toramucci will step down become assistant to donald trump. For now from new york, this is bloomberg. More from davos. Tidjane thiam says plans to make his firm more efficient include cuts to the global markets. He told Francine Lacqua what he expects from the banks ahead. There is an expectation 17 will be better than 2016. We sought in Interest Rates. We have seen talk to about low Interest Rate environments. I remember our conversation in june, things were more difficult in terms of valuation. But positive or negative, it is the same for everyone. There is all of the uncertainty in the political world. So it is always a balance between some positive and less positive factors. Francine do you worry about regulation in the u. S. , because you are not on a level Playing Field. Ane fair and sean competition is healthy. We want competition, because it provides innovation. Usa level Playing Field for is not negotiable. This is something we hope we can achieve. So anything that happens in the u. S. That is beneficial will impact us, but we are also in other regimes, so it is important to raise the level Playing Field. Francine i know you hate talking about your sharing price, so lets talk about it. I hate talking about it shortterm. I love talking about it long term. How would you describe 2016 for Credit Suisse . Tidjane we had to reset things and did it in an incredibly tough environment. Because itome out was urgent to raise capital in 2015. We did not have a choice. That was the worst possible time for a bank to announce a new strategy, because it caused markets to melt down. We had to launch a whole new strategy in a very challenging environment. At least like anything in life, you try to turn it to your agenda. We use it to accelerate the transformation. And frankly, i think we have achieved a lot in the first four ofths, and we got the level savings achieved, we have continued progress on collecting assets. And finally, the last event of 2016 was to reach a resolution with the department of justice in america, which was honestly the biggest cloud hanging over shares since preceding my appointment. Julie Credit SuisseCeo Tidjane Thiam from davos. Coming upng mark on the european close, Prime Minister theresa may promises to paul britton out of the european market. Sterling soaring today. We have a look at european stocks, 30 minutes away from the tuesday session. Stoxx 600 marginally higher. This is bloomberg. Mark it is 4 00 p. M. In london. Midnight in hong kong. There are 30 minutes left in the trading day in europe. Julie in new york i am julie hyman. This is the european close on bloomberg markets. Mark we will take you from washington to switzerland and cover stories out of london, wall street, and china today. Here is what we are looking at. Lets take you to Erik Schatzker with todays top headline. Feeling theis spotlight. The president is using his first address ever to defend the Global Economic order. And taking a backhanded swipe at donald trump. He said no one is a winner and a trade war. The president elect makes news s the president elect will likely do away with the tpp trade deal. John