President trump has offered tougher screening of immigrants following the attack in new york. Down a bike lane in manhattan a truck injured almost a dozen. A Police Officer was shot and arrested the suspect according to the New York Times he was found near the truck indicating that the suspect was not related to the islamic state. On capitol hill, a House Republican scheduled the release by a day. There are unresolved questions about the Corporate Tax rate cuts and other proposals. Republicans also sell disagreeable about whether to repeal a tax break for local taxes. Resident of catalonia now has to choose between a possible prison term for a life in exile as the Spanish Court has summoned him to appear with charges. He fled to brussels after spain seized control of the government in response. His declaration of independence. A new study says the decision to leave the eu has cut income by over 800 per household that come from the National Institute of economic and social research. They say the vote has pushed inflation ever higher and has also her productivity and investments. Global news 24 hours a day powered by more than 2600 journalists and analysts, in more than 120 countries. I am taylor riggs, this is bloomberg. Thank you so much. Lets get right to it. Odd day before we get to the news of wednesday, thursday, and friday. The dow future is very much near a record high. It iss american crude, near 55. 11. They show the elevated low prices. It is extraordinary because it shows the solid market i am sorry that is the wrong screen. It is 9. 82 right now. Stocks upeed european on 10th of a percent. Cable also holding their gains from yesterday. There were more on the news, of course in focus it will be the bank of england meeting tomorrow. It also has a twoyear high, in general they are big in the session. I thought i would also flip the script and put bitcoin because they will be traded by the end of the year. It has led to another surging cryptocurrency. These isnook at manufacturing series. They go back before eisenhower and truman. What we are going to look at is a remarkable volatility in the ancient age graded that is starting at 1985, a much quieter level of volatility. Here is the ugliness of 1973 of the double recession of 1980. Here is the lehman financial crisis. It is not as bad as what we saw here. We are getting out near two standard deviations of enthusiasm. Speaking of enthusiasm, mike chart shows a labor differential when it comes to the Conference Board of sentiment. Americans becoming even more upbeat on the labor market. Something to keep ahead towards friday coming after the decision. Very good. It is important to set up where we are with the global market. At this hour it is more of london focused. Of course there is the meeting tomorrow. Guests too wonderful drive your conversation forward. G10ave the head of their research. As well as management. Wonderful to have both of you here. I guess you have to look at what is happening globally and cyclic key is what you expect the local outcome will be. We do have this global synchronized upswing, that has certainly benefited the u. K. And europe. We do have the strength that is very important. All of the questions you have about the eurozone and productivity in terms of demographics that is still there. It looks good, five years from now will we have that no so much. This goes to some of the assumptions of the shortterm and where we are. You wonder out there, the euro pricing right now is very much near the 1998 level. Where does germany want this right now . Also on a broader scale if eurozone it is still looking relatively cheap. There is still a outside dollar of purchasing power using this as a whole. The euro is definitely cheap. That underpins our call for this. The euro is a big part of that. It is a cyclical upturn which is broadening deepening with the investments and consumer confidence, it is high as well. There is a fairly steady uptick in demand. That could certainly help it from here. Let me ask you ahead about cable. This shows what could happen under various rates are you first you have a hike which could take it above 133. This could be around 130. Actually, could we see a even bigger drop than that given all of the expectations . The pound has moved already ahead of the market. Whole the pound remains a function of where we go with the brexit negotiations. It makes it so positive on paper. If carneyn the look is hawkish, on the whole it will really matter for the markets and it is the credibility of the boe. The way we see things at the moment, the u. K. Data, all of those brexit prospects will lend credibility to the masses. Hike the rateo outlook would depend on the inflation outlook and the potential to hike will come across as more credible than what we had in august. They could indeed come after tomorrow. Expectderstand that you rates to hike again ahead of tomorrow. Let me ask you, if we get that hike signal there will be further rate hikes. With that be a policy mistake . Intent that wes are not quite sure they are going to other than that. There is a question of the economic justification. I think it would be a little dismayed if that was the signal. If there areto see new expectations that we have not heard. We are going to get this later in the hour. This question is so important i have to ask. Daniel morris, how do you raise ,ates with the negative rates how do you do that politically . I am trying to come up with a explanation. Saw tohearsal that you postpone the vote, it does seem to go back to status quo given that the reaction of the economy was not quite as bad as people predicted. If you look at what the data is telling you it is difficult to see why it is very necessary. All of the questions we have a read those negotiations, i agree if you are trying to justify and explain what this make sense it is difficult for anyone. Constructive on the rate hike cycle, why is that . It is about the credibility of the bank of england. The markets will pay close attention to what they have to say. Of cable output, there are two factors, we see the more constructive outlook. Seeing the pound to be cheap relative to the dollar, that is the target in the year of 2018. Things are looking a little bit different against the euro. We are seeing 90 would be that level where you have to spend longer, on the whole we believe a lot of negatives are there. From the point of view, it is a chief currency. Its ordinary news flow, we will continue on this with wednesday today. With all of the special programming we have a show of scarlet fu covering in washington, what a wonderful set of guests. Blackrock andfrom the former vice chairman of the fromnd William Gross janice henderson. This is bloomberg surveillance. Shares of Standard Chartered a today. The british bank offered a income that missed income. They also came up short. The ceo is in the third year of trying to rebuild the reputation and balance sheet. Have not had a high since 2008. The company has rose 11 after posting record profits last quarter. Sony also boosted their forecast with high mtvs offsetting Slower Growth in the playstation business. Honda set to move past the senate as the biggest japanese automaker in china. They raise their profit forecast after reports that their growth work up 18 . Chinese drivers have been snapping up the fullsize suvs. That is your Bloomberg Business flash. Thank you so much. Is trying to sift through the events we saw in washington on monday. A truly historic event. One place to turn is bloomberg view. Analysis ofien owns the president of United States finances. This goes back to a story written decades ago. This is him talking about manafort, papadopoulos and gates. They say some actions relating to collusion could be crimes. They also could withstand a collusion fight in the court of Public Opinion particularly with his intensely committed a stated we touch on that yesterday. Is what he fears the most in the probe. Not collusion. Ashas had a wonderful career a reporter and the editor within the market division. With politics and government, that means he is completely qualified to talk about this madness. What was the response to this, and that you saw in london paris . How was this taken abroad from washington this remark as much as there is american politics overseas, puzzled would probably be the best word. They arent scratching their heads at the partisan rancor and the republican response which should be fairly straightforward matter of wrongdoing and clearing the house. At the same time these countries withsimilar experiences russian meddling with their elections. They took proactive steps. Part of the puzzlement is why the resistance of the administration to the embellishment of the reality. The story moves forward, is there a belief within europe suitably with the president traveling to asia the this could dampen workmen Foreign Policy of the United States with this massive distraction at home. Hist is hard to see ted policy his policy towards anything weirder or more times. Build a bridge in france. For the most part he has stiffarms traditional allies. If there is any Foreign Policy this,hat results from that would weaken his position it may actually help transatlantic relations. Also writing on bloomberg you talk about all kinds of constitutional questions being raised here, notably how far the president pardon power runs. How far doesnt run, could this lead to impeachment . Really in the legalese. This was in response to a column that called on trump to pardon everybody and clear the checks. Is, i dont know, i am not a constitutional scholar. Are trying to switch the terms of the debate towards things like the pardon power and away from the facts that are on the ground. I would like to point out his monograph, it is a small book entitled impeachment. Oneducates folks forward this process and the odd word of impeachment. One final question, i have to ask you about paris and give away from the distractions of emmanueln, how is macron doing . The honeymoon is way over. , as he have a momentum positive momentum with the people . His polling numbers are certainly not great. The honeymoon as you put it is over. Selleople who he has to the business elite, they are buying in. , while his popularity is not great in the polls there has not been a tremendous amount of noise. It has not been a tremendous amount of resistance to what he is doing. There have not been days long strikes and marches. The pathnly say that is not clear and there are plenty of reasons for skepticism. So far he is continuing to put one foot in front of the other. Thank you so much. Our two guests are still with us. When you looked at the dollar. You focus much more on the prospect for tax reform and what the fed is going to do. These are the two key drivers for the inflation trait we have in the week. The primary beneficiary of that is the dollar. We are cautiously optimistic on the dollar, to highlight that certain risk ahead, if you want to express any bullish view with it being higher. We are seeing a continue to strangle against the european currency in general. On the whole reason i think it will be a game changer when it comes to longterm growth. We think productivity was mentioned earlier today in the case of europe. The case in the u. S. Was the same. It is less likely that you are going to see a sustained increase on the facts by trump. With the fed the facts that whoever succeeds whether it is jay powell, the fed will be facing a fairly subdued inflation outlook from here which will likely keep the policy where it is. Some of the voice places to go, we will continue with these two coming up. Austin at the university of chicago, he is the economicairman of advisers for president obama. It is a good time to talk to him about economics and politics. This is bloomberg. In london with carla tom keene in new york, bitcoin climbed to a record high after the cme announced they would start trading futures in the cryptocurrency by the end of the year. The move i the World Largest exchange will up the gains or the software reader to asset and bring it some regulation. Senior investment strategist is joining us and the head of g10 research. Have a chart here joined the rise of bitcoin and showing the relative strength index. It has not been oversold in two years. I amthis announcement assuming demand may increase for bit going, what does that say about how sustainable these gains are . It is determined by a restrictive supply and by the same time it is limitless. The latest development, you can now bet on the future gains makes it more attractive for investments by further gains from here. The thing is i am certainly couldskeptical that this continue on a sustained basis because the restricted supply and unlimited supply could be elsewhere. So morecreated currency of that could pop up before long. That was quite good. I am a little skeptical. A little skeptical, a little bit. I am skeptical about the fed show, alan blinder will join us on the changing of the Federal Reserve system. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Welcome all of you in london , dont forget our fed coverage this afternoon. The New York Times will wonder in and bill gross will join us with Jeffrey Rosenberg and we are thrilled without lineup. It is a boring meeting but guess what . It is never boring and you have yes like these. City, right now for our first word news it is taylor riggs. There is take tighter security on the streets near that terrorist attack. A man drove a truck down a bike path injuring almost a dozen. A Police Officer shot the man and arrested him. He is described as a immigrant from opecs according to the New York Times think of was indicated that he had no allegiance to the islamic state. Five of the dead are from argentina. If former trump advisor who pled guilty has made a significant claim during the campaign. In a email George Papadopoulos said officials had agreed to a meeting before the election with a representative from vladimir putin. There is no indication this meeting took place and it is unclear if he was simply posting. In the u. K. Prime minister theresa may closest l. A. Is accused of sexual harassment. First secretary of state damien made denies this that he inappropriate advances. Seniored her most official to investigate. Gives 150d manager million to the university of chicago. It is the secondlargest gift in history. It will provide Financial Aid to students and their Economics Department. Will also expand faculty resources. Global news 24 hours a day powered by more than 2600 journalists and analysts, in more than 120 countries. I am taylor riggs, this is bloomberg. Thank you so much. We have some breaking news on the bloomberg. U. K. Data just crossing here. And you fracturing strengthening in october. This is the ihs market coming in at 56. 3 rising from 56 in september. Also beating the estimate. We have this showing a inflation ihs buildup coming from the buildup. Our two guests are still with us. , looking at this latest data coming through with the inflation rate professors pressures building up, you did hikeee the inflation rate going up tomorrow. I know it is only one data point, do you see this happening . We see the underlying factor is the currency. At theare going to look oil prices and the currency and will look at the effects. We know it is going to happen. It is hard to see underlying pressures despite this pmi figure. We will see this ultimately feedthrough support for consumers who have been hit by the currency. Going back to june and july of last year. This goes into england and the pessimism and gloom it has turned to resilience and optimism. Bring up the chart if you want. This is a chart we showed a lot back in 26 in. This is goods and services traded in the u. K. And the worry is that this would add away. As the United Kingdom falls off the atlantic cliff. This is the deficit for money flows and we have seen a nice pop up here in both series versus the gloom of 6 gdp. Why did this not the car . Why did so many people get this wrong . I think we have to keep two things in mind. The hitest focus was on to Consumer Sentiment and what people anticipated would be a fall in consumer demand because brexit. That clearly did not happen. At the same time people did not pay enough attention to was the inevitable benefit of fx from the sterling. It is going to help. Both of those factors were there. People focused on the run one. What currency level after that discussion is optimal for the United Kingdom . We saw a onetime shift in british pound sterling, where to from here . Given the success of sustaining flows in the country. The thing that is still undervalued here with further railing the of the exporters. More importantly the estimate is close to 90. The u. K. Exporters may benefit if this does move a bit higher. We will stay around 92, that may just be ideal both in terms of trade performance and income account that could be supportive. Especially if the return on those European Assets managers have reported over the years Start Performing with it moving gradually towards the exit. Have news that the u. K. Is preparing to compromise over the question of money in the brexit talks and those talks are going to resume for a twoday session. How much do you actually factor this into when you look at the pound sterling and u. K. Assets generally . Rallyn you look at the you saw in sterling following the election and the expectations that the negotiations would go better. Been the mostly determinant factor in the direction of the sterling. With the strip feeds o