british industry, saying he is not an enemy of free markets. >> have a look at that manifesto. have a look at the principal and the arrive at, investments in the future. look at our plans and education. and if you wish, come and talk to us. ♪ anna: a very welcome welcome to "bloomberg daybreak: europe," our flagship morning show here in london. manus: breaking news coming through, but first, the red headline. nikkei closes at the highest level since 1992, and with that -- anna: japanese corporate's reporting toyota will buy back 1.5% of its shares for ¥260 billion. also giving of guidance for the full gear, lifting operating profit outlook. that guidance moving in the right direction. a decent year in the united states, their biggest market, helped by good sales of the u.s., by the weakness in the yen. that has been playing out across the industry. but they had to pay for it a little bit in the u.s. with higher incentive, which is why they were questioned about whether it would be upgraded guidance today. in the three months from september, toyota took a 15% share in the u.s. market, outsold ford every month in the quarter. that's part of the story. second-quarter numbers, net income higher against an estimate, but as always, it is the guide is that they give for the full year that attracts the most attention. looking back at those second-quarter numbers it seems as if they have come in, ahead of estimates. manus: and that share by that will drive the market. when it comes to employment, the deco has the finger on the pulse. 25% to the business comes from the united states, 25% from france. third-quarter net income comes in at 123 million euros. the estimate was for 218.5. when they talk about the revenue trend, they say october and november were slightly above the third quarter. i spoke to us on the 22nd of september and said july and august were growing by around 6% on an organic basis. the top line for them in their earnings, they say, had positive momentum and progress of the third quarter. those questions in terms of the strategic progress they are making, we will put those questions to the ceo, a la date has. -- alan hayes. markets are moving, donald trump likes of you sees coming from saudi arabia. but the oil market -- we showed this yesterday. this is december futures this year against december futures next year. the current is the most bullet since -- the most bullish since 2016. this tells us that the barometer of supply tightness is tightening. so it's not much work obligated in this, stockpiles are falling in the markets are bullish. this is the momentum of the tightening supply scenario. anna: and the saudi story, the political saudi story, seems to be the focus of the market, but it looks like this is a broader story, commodity investors catching up with the synchronized growth story. we talked about that earlier on. let's talk about what has been going on in the asian session. manus, you told us about the strength of the japanese session, the nikkei at the highest level since the early 1990's. and we have strength across the board, the highest in a decade for the msci asia, energy stocks getting a boost from the continued strength, general strength and commodities. s&p futures have been put in as well. global stocks withstanding the commodities rally, it seems. the all caps index up for the eighth day i, the longest streak since july. manus: and we have gone from week thing to strengthening -- from beginning to strengthening. so that just turns the new zealand dollar around. let's get to juliette saly, who has your first word news. juliette? juliette: in washington, the house tax-writing committee has begun four days of work to hammer out the details of the republican cut plan. house republicans on the ways and means committee adopted a package of changes, including a measure to limit the so-called carried interest tax break. the light changes provoked furious reaction from democrats after they appeared 5.5 hours into a expected 40 market. u.s. president donald trump has about to the saudi arabia leadership after last weekend's anticorruption crackdown. he tweeted "i have great confidence in the crown prince. he knows exactly what he is doing." including princes, one of the world's richest men, four ministers and dozens of former ministers were taken into custody. meanwhile, donald trump has arrived in south korea for a bringing him, praisin near north korea on the talk that will discuss trade deals. the second leg of his five nation asia trip includes meeting with u.s. troops, a joint news briefing with president moon jae-in, and an address to south korea's parliament. new zealand's prime minister has said her nation would benefit from a transpacific partnership. thehas been talking about newly elected prime minister, indicating she won't let concerns over dispute resolution clauses stuttered the trade deal. >> i have been very keen to make sure i maintain and presume the negotiating position, and will continue to do so. and by not preempting the position on the all-around negotiators. but let's make sure we are very clear. there are clear benefits for our exporters in this agreement. juliette: global news, 24 hours a day, powered by over 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . a solid session coming through in asia. we have heard about the nikkei surpassing that 1996 high, closing out the session up by 1.7%. but have a look at the asx 200, a market that has underperformed in asia, closing 6000 points for the first time since january, 2008. very important, because every australian is indirectly invested in that market through their retirement scheme. it's down by .2%, and hong kong's market is listed as up by 1.3% in late trade. gains on theading back of what we are seeing in saudi arabia in the crude oil space. sinopec is headed for its biggest events in 15 months. ,latinum asset is up by 6% with the price tag of $7 million aud. up by aboutel is 8%, being sold out by its parent dealny in a share swap that will create a $9 billion food and beverage company. anna: thank you. juliette saly in singapore. the federal reserve bank of new york president plans to retire in the middle of next week, adding to the number of vacancies at the u.s. central bank. does spoke yesterday at the economic club of new york about the transition. >> i think the financial system can be handled much more stress-free than it was in 2007 and 2008. and i think the economy is on a much more even keel. i don't see anything in process that will lead to the ups and downs, putting stress on the system. i understand that there is a lot of change at the fed, but what people miss is that the people who have been named are high-quality people. i'm a big fan of powell. first thing, we have really high-quality people taking the reins. second thing, it's not just about the people at the top. if you remember too big to fail, in that movie there were just the principles around the table. that is not how it works. there are hundreds and hundreds of people that come up with ideas and good analysis that informed the principals. the principles are not making this all up on their own. that really good staff will still be there. certainly, i would say the mission of the fed doesn't change. the objectives of the fed don't change. you have new people but they will still follow the same set of objectives. the last thing i would say, the current committee is really very much of the same mind. there is not a lot of discord going into the transition. i think it will be a smooth transition. governor powell and chair yellen are well aligned. i think this will be evolutionary. manus: mr. dudley there, the head of the new york said, since 2009. if you are going to have a transition, this is a heck of a lot better time to have that transition than 2007. we are joined now. it's not like that in the movies. is this a good time to add more spaces, more vacancies, to the fed? >> it's an interesting theory. certainly i think it gives the opportunity to president trump to lend more of a stamp to the fed, and perhaps have it more malleable to some of his ideas that he wants to exercise. anna: we heard from dudley, talking about the lack of change, emphasizing the power of the institution, not putting too much emphasis on the names in bold type, emphasizing the power behind the scenes. >> i think that is perfectly reasonable, but with one caveat. i'm expecting that we will probably see some support from the fed to roll back some of the financial regulations that we saw. manus: i love what you wrote about u.s. equities. "u.s. investors data throwing up unnerving signs." out, and there are a number of facets you look at. you talk about this sulfur in the water. >> yes, exactly. we're constantly surveying for all the different aspects of risk that make up the market. we think there is too much focus on plane volatility. we think there is a danger of complacency in a number of asset markets. anna: so tell us, what is your complacency indicator picking up that is not just volatility? >> it seems to us that everything is very calm and ripe at the moment. in a sense, you have the bond market, the towo-year spread, telling us that it's not far away. everyone else is ignoring that. anna: and do prices tend to come when we are ignoring risk? >> exactly, exactly. manus: you talk about the shattering of complacency. we have wrecked our brains every day for 20 days on a different question on volatility. we'll come up with another way. i got to's in there, be involved because it is so low, but you talk about this shattering of that complacency. have -- that it jumps and there is a long memory. what do you mean by that? >> two aspects to volatility that we now, one is that when it moves, it moves rapidly and quick. secondly, when it moves, historically, it has had a tendency to only slowly move back to its original levels. but in the last five or six years, that hasn't been the case. my fear is that what we will see is a jump and a very slow return back down, which will take the market by surprise. anna: and it hasn't been the case because we have been cushioned by a lot of fed money. >> huge balance sheet intervention, plenty of liquidity. as we begin to see the fed and other central banks unbind that liquidity, who knows what will happen? manus: from a five nation state tour, he is arriving and having discussions. we know the differences are a bit more stark compared to shinzo abe. let me take you to the data. anyway you cut this up, he needs to shift the dial. this is the economic challenge. what difference would it make if you move the dial of the economic deficits? >> i think it is important, and i think for that reason, vice president moon and xi in china will be looking to make small, limited, twitter-able concessions on a number of trade issues. manus: is that how low we have gotten to? >> i think it probably is, manus, yes. anna: it is about windowdressing. but that will not address the structural differences between the chinese and united states economies. >> and i think that is perhaps reflective of the approach that the u.s. presidency has taken to the region as a whole, with thus far in the trump presidency a huge focus on north korea and the very limited focus on trade. there's not really in place any holistic framework for the region as a whole. is shaving the short position. do you join that? do you believe in that term? what exchanging with the said, do you think the dollar has the ability to move higher in 2018? >> yes, of course it does. i will take a longer-term perspective. we are nowhere near lows over more reasonable timeframe been over the last year or so. anna: very unreasonable. are.: all right, there we ther'e's a trend line. [laughter] >> if you can spot that, you are doing better than i. [laughter] manus: eoin murray. anna: a better memory. work, are traveling to bloomberg is on your radio. coming up -- manus: u.k. labour party leader reaches out, reassuring businesses he has plenty in common with them. we spoke to him. this is bloomberg. ♪ this is "bloomberg daybreak: europe." in seoul, president trump has landed and is conducting the second part of his asian tour that takes many days this week. we have seen him in japan already. he has to china soon. let's get the bloomberg business flash with juliette saly. juliette: thank you. -- renewable energy is cutting its global workforce by almost a quarter as demand for wind turbines slow. the turbine maker plans to eliminate about 6000 jobs in 24 countries, 23% of its staff. the company expects sales to slump in the current fiscal year. it will begin in lamenting cuts immediately and expects to complete the restructuring before 2020. fitch has cut table pharmaceuticals credit rating to junk. they have been struggling with high debt and declining prices for generic drugs. they say they are facing significant operational stress at a time when it needs to reduce debt from the $40 billion acquisition. a teva spokeswoman declined to comment. steps tocryan mulls renew growth at deutsche bank. the frankfurt-based lender added 24 managing directors at its american corporate finance business this year, a record hiring pace. among the goals, to become a top ranger of leverage loans, the risky debt that has surged among low interest rates, and the possibility of a rollback of postcrisis regulations. that is your bloomberg business flash. manus: thank you. let's get to seoul, for the president the united states has touchdown. stephen engle is on the ground, covering his asian tour, and has a guest. stephen, good day. >> good day, manus. we are in south korea, after donald trump this morning. this is the second leg, and then on to china in a couple days. the three big legs of the five nation tour of asia, two the themes are front and center -- north korea and the security situation in north asia, and of course trade. donald trump wants to reduce the trade deficit that the united states faces in all five of the nations he will be visiting. one company from the united states, tdg, the digit group led by paul doherty. he's on the presidential delegation, business delegation, and he joins us now, live in seoul in front of the prime minister's official residence, just down the road from the blue house were donald trump will be arriving soon. talk about your trip to beijing. you will be going back tonight. how does your company, that is traveling along with the likes of lloyd blankfein and goldman sachs and the ceo of boeing, a long list, your smaller company, how does this move the dial on the trade deficit? >> we feel that, being a small business, being on the world stage with other titans of business, what that does is provide an avenue for us as a real estate development company to shine, because we have a new way of looking at real estate, which is also to combine technology in real estate. we will be signing contracts for chinese company that will show an example for projects that can stand on the world stage. >> what kind of barriers do you face? you are not a goldman sachs, not a boeing. how do you get that access, and the message to those small to medium-sized enterprises in america who say, how do i cracked china? >> kid takes resources. but it is not just the financial resources, it is about taking the time to get the project. you have to pay your dues. we have been working on the specific projects now for six to nine months, but that is after years of other projects. what we are announcing our four big contracts that will be challenging us as a business, not justas an example, for american companies but for chinese companies. the chinese policy they are looking at now is moving away from the large state owned enterprises,, large-scale companies like that, and taking a look at the entrepreneurs. how can you start to leverage that? that is the story we will be telling. >> this is $4.85 billion worth of contracts. that is quite sizable. four different contracts, software integration, a vr theme park, and joint ventures with electric buses and gate guards, safety and security. what will be the main emphasis, and when does this get ready to roll? >> we are looking to start business on friday morning. have thes that we means to partner and look for those opportunities from the world's best. what are cities about if not things like autonomous vehicles, or sensors, drones, those types of things? those are great but we need the deep-seated intellectual knowledge behind it. while we are providing is goods, products, and services, partnering with the industrial light of china, as an example to the rest of the world. even with small companies, we can go to market for the rest of the world, to show how they can start saving things like the environment, the water issues, power issues, transportation issues. that takes big vision, but we are looking at the pragmatic side of things, that this money is not just about the size, it is about the quality. >> donald trump among many industries, he wants to facilitate breaking down barriers for the likes of the financial services, which was what lloyd blankfein was trying to do, breaking down the restrictions for entry to markets. what barriers to you face? >> intellectual property rights, to begin with. two years ago, we were here with then secretary of commerce, and she led the delegation. what was cool is that we said we are starting the process to get judicial systems in place. if we are going to be a nation of entrepreneurs, we have to protect our own rights. we're also starting to see that the policies of this administration, the wonderful economic place where we can thrive. >> paul doherty, thank you so much for joining us. we're going to have continuing coverage of donald trump's visit to south korea, right here in seoul. anna: stephen engle, speaking to paul doherty. we'll bring you live pictures from seoul in the meeting with president moon. we will see whether they talk trade. trade was part of the conversation in japan, not at the press conference, which was more about geopolitics. no doubt geopolitics will be on that agenda. we will talkt, business with jeremy corbyn. he reaches out to u.k. businesses, emphasizing that they have a common ground on brexit. we will hear that interview from the leader of the labour party to the cbi. that's next. this is bloomberg. ♪ anna: this is "bloomberg daybreak: europe." 6:30 here in london. live pictures coming to you from seoul. president trump is making a visit to the president in south korea. a a lot of the conversation no doubt will be about pyongyang. we need to check on the markets. let's get up-to-date, a strong and asian sessions. the msci asia-pacific index trading high, the nikkei closing at its highest level since 1982. -- 1992. equities bid in general. , dollar-yenid big 1.14 on the nose. you can see the cloud, dollar-yen has been tracking the conversion line quite closely. another thing to keep an eye on is the treasury jgb spread. it has closed off a little bit today, but still interesting to keep an eye on jgb, and where we are right now is 0.03%, half the level of where we were on the tenure last week. the significant drop we saw yesterday was around three basis points, something like that. some analysts commented, saying it was to do with a short squeeze, but jpmorgan saying the 10 year yield could drop down towards zero on liquidity issues. manus: thank you very much. breaking news coming through on bmw. bmw full-year adjusted operating margin will be 8% to 10%. kc set -- they see a slight increase in terms of automotive deliveries. when it comes to sales, 23.4 2 billion. it looks as if, a cursory glance, they have the new 5 series and the financial services unit, the two bulwarks. earnings interest slightly lighter than the market had estimated. a pretax number of 1.179. they're saying 2017 will be a slight automotive revenue increase. you have to stick to the challenges the whole industry has got, dieselgate, probes into d bmw and daimler. those are the kinds of issues they've got. they are launching a new 8 series and the new full sport-utility vehicle. anna: a tough time for the sector in the midst of all those crises. lots of capital expenditures as well. "daybreak" is available online and on your mobile device. here are the stories. the cover story is saudi arabia, authority started freezing accounts of those suspected of corruption, according to two people familiar with it. president trump backs the saudi king and crown prince, in a tweet, and we understand that what we saw was only phase one. manus: we don't know exactly what they have been charged with. you can see he lost just over $1 million, year to date down by $2 billion, but he is still the 50th wealthiest man in the world, with a net worth of $17.8 billion. you can pop on to richgo and get that. ter in theigh pocket. the next story is draghi, who takes the stage in frankfurt to take on the zombie banks. nonperforming loans is what he wants to focus on, and that may be heard at the ecb forum. anna: and u.s. tax plan. the market begin with house republicans approving changes to triple the length of time assets must be held to qualify for the carried interest tax break. manus: and remember, if you are a bloomberg customer, you can go back and get all the video, you can track the conversation, review an interview, and ask a question in terms of the ib. one less light on bmw, raising the pretax 2017 profit guidance, predicting a solid gain. regard toge i used in 2017 being a slight automotive revenue increase, there's now an upgrade to the original one-liner, 2017 pretax profit target rejecting a solid gain. that is a shift. anna: the u.k. labour party leader jeremy corbyn set out to reassure british companies in a speech the confederation of british industry in london. he repeatedly emphasized that his party has common ground with business, oath on brexit and investment. i spoke to jeremy corbyn yesterday at cbi. >> have a look at our manifesto. have a look at the principles behind it, which are about a fairer and more equal society, and also about investment in the future. look at our plans on education. and if you wish, come and talk to us. wey may not like it all, but are putting out a serious offer there of how the british economy and society could be much better and much happier if we spent a bit more on the public welfare so our economy can grow to the benefit of all. anna: the cbi, after your party conference a month or so ago, said that some of the policies you were talking about would have investors running for the hills. if that were to happen, what would your response be to that? >> i wasn't quite sure which hills they were running for or why. what we are doing is saying we need stronger infrastructure in britain, railways particularly, but broadband. a much more intensive rural investment strategy, and a letter regional strategy -- a better regional strategy. what they would be getting is a better basis on which to invest. if you're in the northeast and northwest, you have inadequate transport infrastructure, poor broadband connection, and an insufficiently trained local workforce. how are you going to go there? anna: so the future labor government would offer plenty of opportunity to private business. >> yes, we offer opportunities with a better trained workforce and an ability for us to invest in new and high technologies, and also being prepared to go in partnership with the private sector on new industries, new businesses, and new technologies. there was a good question at the cbi conference about the fourth industrial revolution. areas, particularly with technologies, and sustainable energy sources. anna: that was her jeremy corbyn, speaking at the cbi. an interesting comment, in the context of the criticism he has leveled at public-private investment partnerships in the past. manus: that was the first time. last year when he wasn't a contender for prime minister. this year he is, and there's a difference on how he gets there. he went and theresa may went. id. don't think either of them necessarily inspired the cbi. when you look at his comments and you think back to what mark investment is dying in this country by 20%. his admission is laudable, but that is the reality. >> that's true, but it is great to hear them talking about wings like infrastructure and housing. if you are looking for a perhaps brexit, has the opportunity to reset on some of those issues. i still don't think it necessarily fixes one of the biggest problems in the u.k. economy, which is our productivity. core productivity relative to the states or continental european partners. anna: is the fix for that more education, infrastructure, broadband technologies? at least two of those things take a long time to deliver. if so, who would pay for it? yes, he definitely does need the private sector to help pay for it. i think to a large extent you will find many parts of the private sector willing and able to put their capital to work. the other problem which i haven't heard yet is the breaking of the traditional rmb couplet. &d couplet. the key piece of development, or the diffusion or dissemination of research, were not super adapted. manus: i know we are in a state of flux, brexit flux,. that's a given but what can or should hammond deliver in research and development, in productivity and investment? what should he deliver in this autumn budget, as well as the housing market? what kicks the economy? >> we have a real problem, and if we look at the distribution of productivity in the corporate world, the bottom quintile is where the real problem is. if we could shift the productivity to u.k. corporate's up toward the fourth quartile, that alone would have us catch up. so focusing in on the least productive companies, making sure that the research is properly disseminated so they can alter their production processes, that would certainly make a big start to helping things. anna: in terms of the other things that influence asset that you might have something for, where do we go on the pound next? we talked about mark carney, the bank of england. that the conclusion after the rate rise was that we would be back to talking about politics. carney will be on the sidelines, and will guide much of the short-term. >> that's right. i think everybody is looking for some progress, any amount of progress, before we get to the break on the brexit story, and that will continue to dominate. we have heard that there has been certain movement with regard to accepting the cost and perhaps to the extent of rates in the u k, but we have heard that before and seen the politicians and negotiators back away from the suggested promises. manus: that's the fear and greed index we just showed our viewers. it's below zero again, and that is a momentum indicator. you broke the next numbers just a couple days ago. they were pretty tortured in numbers when they talked about the weather. anna: subdued consumer confidence is the word they used. manus: right. so if that is the word they used, the most in seven months, you are still looking at the underbelly of high school spending slowing to 2.4%. this is a manifestation of a domestic economy which is really beginning to feel the pinch. >> i think that's true, and i think the bank of england probably signaled that they recognized we should export lower normal growth from here on, not to 2.2%, more likely 1.5%. reflectsheir rate rise that we are currently running at 1.6%, 1.7%. they are saying we will respond to the new normal. anna: i spoke together and we haveyesterday, and asked many businesses this, went is the transition deal become too late? winter they start to make other plans? that is when we see in the growth dynamic in the u.k. economy. he says next year. do we start to see businesses reduce cut back on their investments even further if you don't have any transition deal, and does that risk that 1.5% growth forecast? >> i would imagine most businesses are down the road of making this. yes, it's a real risk, i think. what we need regarding a transition deal early enough for people to make decisions. manus: are you modeling any election rest in 2018? >> yes, it is still a tale risk, but it is a real one, and we should give a small probability something worth running through the risk system. anna: eoin murray, thank you. he stays with us. manus: coming up, brent is back. it's official, crude is trading near a two-year high after a crackdown in saudi arabia. we are live with the latest. anna: later, as william dudley announced his plan to retire next year, we will discuss the future of the u.s. central bank. this is bloomberg. ♪ anna: this is "bloomberg daybreak: europe." stronger at the start of the trading day. this is new york at 1:47. quite a global equity rally, global stocks in the all country index up for the eighth day yesterday, the longest rally of gains since july. let's get the bloomberg business flash with juliette saly. juliette: thank you. toyota has raised its annual profit forecast for a second time this year, helped by a weaker yen in u.s. sales that outpaced ford. in the three months to september, they took a 15% share in america for the first time since 2009. sales also got a boost from the july launch of a completely redesigned camry sedan, the best-selling car in the u.s. siemens renewable energy is cutting its global workforce by almost a quarter, as demand for wind turbine slows. they plan to eliminate about 6000 jobs in 24 countries, about 23% of its staff. the company expects sales to slump in the current fiscal year. it will begin implanting cuts immediately and expects to complete the restructuring before 2020. fitch has cut teva pharmaceuticals credit rating to junk as it struggles with high debt and declining prices for generic drugs. teva is "facing significant operational stress at a time when it needs to reduce debt from the $40 billion acquisition last year." a teva spokeswoman declined to comment. that is your bloomberg business flash. manus: thank you very much. president trump vouched for saudi arabia leadership after the weekend arrest of the prince's businessman and officials in anticorruption crackdown. in a tweet he said, "i have great confidence in king solomon and the crown prince of saudi arabia." anna: meanwhile, crude is trading near two-year highs in the wake of the political shakeup in the world's biggest oil exporter. yousef gamal el-din joins us from riyadh, following the weekend activities. good morning. what is the situation in saudi arabia, and what is trump's enforcement going to mean? rishaad: it definitely helps the credibility of the crown prince. two important developments overnight, one from the attorney general, which excludes the possibility that this would be a slap on the wrist for the powerful, influential businessmen and current officials that have been rounded up. he made it clear there would be a trial. bloomberg understands that some of the bank accounts are already being frozen as we speak, and that there could be another. even more people rounded up in the future. that sets the tone for more to come as we see how it falls out. as far as the market reaction, it is fairly contained on the saudi benchmark, but that doesn't tell the story of a lot of government activity. if you take a look at the rest of the region, a major selloff in the indices from dubai to kuwait, to egypt as well. as is the case with a fixed income space. manus: yousef, there was some pretty dramatic moves yesterday. we will see how it opens today at 7:00 a.m. but the market reaction, you talked a little bit about the fx program. bucks poorer in terms of the day's trading, but from a market perspective, where do you think the dial turns to now? think thet's -- i fact that this is going to go to another stage, to another level, that there is plenty more to come on this front -- this is not a warning sign, there will be followed. investors will have to divest among implications, which is why you see a lot of selloff in markets like dubai and kuwait, companies that have exposure to thatcts in saudi arabia might be in jeopardy because someone related to it is being rounded up. that trickle down still needs to happen. anna: yousef gamal el-din, reporting from our bureau in riyadh. eoin murray is still with us in the studio. when you look at the commodities space, oil this morning, a strong rally yesterday, $57 per barrel. $64 on brent. the immediate focus is the saudi story. people drop a line between the clampdown and more power in the hands of a man who backs the opec cut. will that be the guiding force for oil markets, the extent to which they are committed to cutting back on production? >> i think that probably is the case for the oil market. i think the saudi story is broader than that, perhaps more to do with the general theme of economic liberalization. we see members of the royal family and senior people being held to the rule of law, which is an interesting first. still, there is possibly some tail risk in terms of civil unrest, if we see an the lines between the conservative clerics and the members of the royal family that have been hurt. manus: we saw quite a punchy move in the commodity index. new swell -- the dollar is bid as well, which is a paradox to me, but does that say something more bullish in terms of the commodity complex? 11% rally on the bloomberg commodity index, quite punchy. >> i think it probably does. we are basically seeing another element to the everything bubble. commodities are simply another risk asset, and they join equities, bonds, and many other assets. anna: commodity investors, investors more broadly, they are a little later to the party then we have seen in other asset classes. this equity rally is long in the tooth, but the oil market went on their own very journey and we saw were that ended up in 2014, with so many of the mining companies and energy businesses. and we have the largest u.s. multi commodity exchange trade product, we saw the biggest weekly inflow since october, 2014. do you think this is playing catch-up? >> yes. i think commodities have been waiting for this synchronized global growth picture to really develop. now that we are seeing that, i think commodities are responding. manus: i wonder, this is on the fly, i just pulled up treasuries. we have been talking about the curve, so let's evolve the story, so to speak. with that kind of bang for your buck, you are not supposed to technically -- let's just kill it. let's just, on their, who has text on their chart? this flattening in the chart, how long can the bond market ignore a commodity bid? clearlyond market is seeing concerns with respect to inflation and that commodity bid, as you say. my expectation is that if we see inflationary pressures, it could well be the wrong sort of inflation rather than good old demand pool. that being the case, the inflationary move could be very short-lived. manus: a a lot of wrong inflation, mark carney has the wrong inflation. [laughter] anna: talking about commodities, let's get into a conversation about one sector that is topical, the auto sector. bmw raising the target, toyota giving us a lifted operating outlook. this is a sector that has been beaten up by investors, because there are very near-term challenges and longer-term structures of the industry -- is this a sector you stay away from at the moment? >> it's a sector we are following very closely. i think you are right to say there are challenges both in terms of the development and possibility of an end to can internal combustion engines, and more broadly, the possibility of automated driving, cars becoming a service rather than a product. if we think about that as a technology, and that follows a traditional s-curve growth path, depending on where we are on the s-curve, that could take off in the next five or 10 years, quite rapidly. rupture is still to come for the automated industry. manus: thank you very much for sharing offensive us. eoin murray. let's have a look at gmm. good toyota numbers, doing a share buyback. bmw raises pretax profit guidance. they talk about a solid again in the market. we are setting up with slightly better openings, in these commodities are nice and brisk. we had a pretty punchy update from toyota, lifting their operating profit outlook. as we continue to focus on the car sector, we will also talk about the fed, the future of the fed. dudley announces his retirement, adding another open spot of the central bank. a a lot of changes, although we are told not to worry. this is bloomberg. ♪ withu.s. president arrives tensions with pyongyang said it to dominate discussions. we are live on the ground. anna: trump endorses the anticorruption herds. oil hold gains near a two-year high. guy: an early departure next year, and easy move from yellen. >> i think it will be a very smooth transition. wellnk they are very aligned so this is going to be evolutionary. u.k. opposition leader jeremy corbyn reaches out to british industries suggesting he is not an enemy of the free market. >> have a look at the manifesto. the principles behind it, which are about a more equal society and investment in the future. look at our plans on education. come talk to us. ♪ manus: the flagship morning show right here in the city of london, i am manus cranny area -- cranny. anna: breaking news, we have the revenue numbers at 15.3 6 billion pounds. that is the full-year revenue number and oddly in line ahead of the dictation or the guesstimate at 15.22. that is 1.31 in line with the 1.3 billion forecast. in line for the operator at the primark brand, the retailer in the u.k. and other places far beyond you grocery businesses in here, sugar businesses, a range of businesses. the focus is on the retailer. retail sales down at the most in seven months. reportthat disappointing where the ceo described the consumer atmosphere as subdued. manus: yesterday the factory orders showed german economy powering ahead. this morning you have german industrial output and it dropped as the manufacturing number of powered ahead. dropping x percent. a contraction of 9%. the activity remains live. a vigorous export environment yesterday. manufacturing will remain, so we are still waiting to come through. anna: the online retail business in germany because their number. they see a just market just margins -- margins below last year. the faster third quarter sales will be driven by seasonal weather and likely higher promotions. that will help keep full-year guidance on track. we will see what more they have to add. momentum continues to be lively. germany is strong. we had nice equity stories to tell from the u.s.-asia since 1992. back bone of sentiment. along with commodities, the bloomberg commodity index or bid all the way across europe. the: interesting debate how rally sits alongside the established rally in equity markets. strength ind economy businesses is part of the story on the risk radar. the highest in a decade. japanese buffet boosting stocks, the nikkei touching the highest level since the early 1990's. the new zealand dollar was higher early this morning. now is down by .3%. the government kept the central bank target for the pace of inflation. no change to the independent mandate that they might get a jewel mandate to include unemployment. manus: overall 400 companies in the united 8, 60 9% beaten on earning percentage. , again,ices companies the back home to these is in commodities and oil. synchronize level of global growth. the third-quarter revenue at over $8 billion. $8.05 billion. they talk about this. the bulwark of movements. you can see every ship in the world. where it is moving, when it goes. 2.5% from the cyber attack a number of different companies. delivery a loss of $1.56 billion. the interim reports and what they are saying, pleased with the agreement. a variety of lines coming through but those are the theers knocked back by attack. , full-yearrt unit underlying net income. anna: an update on the first word news. juliette: donald trump has arrived in south korea for a two-day visit near north korean leader kim jong-un on his top that will feature talks on a trade deal he says hurts american workers. the second leg of his five nation trick includes -- trip includes a meeting with president moon jae-in. the house tax-writing committee work --n no dates of tax cut plan. the ways and means committee adopted changes offered by care -- brady in could mean -- like changes provoke serious reactions from democrats, 5.5 hours into an -- an expected four-day markup. donald trump has about four saudi arabia's leadership after anticorruption crackdown. from tweeted i have great consequence in the crown prince of saudi arabia. they know exactly what they're doing. 11 anticorruption crackdown. princes, one of the world's richest men and former ministers and businessmen were taken into custody. most inales fell october, indicating caution amongst the consumers weeks before the christmas shopping season. sales fell 1% on a like for like -- up in were up by total terms. household spending slowed 2.4% last month from 3% in september. that was the weakest in more than one year. you can find -- global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. hen saying being rallied by what you are seeing in the oil market and tech players. the asx 200 closed over one hour ago above 6000 points for the first time since january 2008. a switch out as we see samsung shares traded lower today. other stocks we have been watching, this rally in tech players don't see any signs of slowing down. the frontrunner in the region on index points in hongplayers kono looking really good. a lot of upgrades after it had the $9 billion stake in a property unit to cut leverage. those efforts looking quite good and toyota after the bell and japan coming through with annual ¥250t outlook being billion. coming through the phone -- before those numbers tomorrow as well. line reaffirming online to -- $248 million. quite significant coming through for them. denmark's biggest mortgage bank counseling ibm. -- ipo. retire dudley plans to in the middle of next year, adding to the number of vacancies at the u.s. central bank. the current committee is of the same mind. there is not discord. i think it will be very smooth. manus: that what we are in line for. i'd say they are hoping for a smooth transition themselves. looking to the show. on the more vacancies fed. i don't have a phd. don't worry. there are more openings now on the federal reserve to is it's going to be smoother as they hoped? is now good time for change? >> intention certainly from his appointment is he wants it to be smooth. he wants the path yellen was set on. that is a fairly mercantile list president. strongoes not want a dollar and making problems are in america greater. -- once todoes what keep a lid on interest rates. >> he has gone from his drain the swamp mantra to do no harm when he comes to watching the market and putting people in place. 7 think jerome powell is going to stick to what the fed said ?-- >> defense have been much more hawkish than the markets. there is definitely a tightening in the labor markets. there is increase in commodity prices. now their view is rather temporary. the fed governors are going to have rising inflation at some point and maybe they will be closer in the market fields. they can't sit on their hands forever. they're going to have to move and be closer to the market is expecting. manus: the dollar is up one third of 1%. ands trending higher harassment from the last guess, you mentioned the dollar. donald trump does not want a strong dollar. turnedket seems to have on the dollar. gone strictly stronger. backat a risk to you as a to back 3% recovery? >> think it is a big thing in the minds of the market and rid the president trump u.s. is a domestic economy in the level of the dollar is much less important to america than the level of the yen is to japan. it is not so important. definitely the trade balance is something big in trumps mind. anna: these are live pictures coming to us now with the meeting soon of president trump and the south korean president. we talked a lot about commodities this morning. commodities doing very nicely. aroundrt-term stories saudi arabia but there seems to be a catch-up going on with regards to commodities. does it benefit from what is happening? >> equities are real assets. charges the companies can pick through are linked to the real economy unlike the fixed income. rally in the commodities is going to ultimately push through to inflation and then you have a weston of to what extent can workers withstand their salaries not rising in line with the cost of living? when that dynamic heavens you start to get into sustainable inflation and you might see interest rates rising. a bigger threat to bonds then equities. we gone all the way to .45 as of this moment, we have come all the way back. can the bond market really in the door -- ignore this rise in inflation? the fed governor was more of a freedomnd therefore from anything too aggressive on interest rate moves. certainly the market does worry about that over the perception that the central banks were two reactive. over the longer term if we do have sustained growth, synchronized growth around the world, modesty prices going up. salary rises, wage rises, or you get social disruption. our view is we will see salary rises coming through and would will ultimately have to impact. ceoe talked to the certainly. the ceo take -- stays with us. anxioushis businesses -- british businesses anxious about brexit. not convinced from the two main political parties, that is what interviews with many of the conference reveal. issa -- i sat down with jeremy corbyn and asked if he thinks we need a second referendum. >> we have not considered a second referendum. we want to negotiate this process. we don't know when the next general election will be so we don't know which we will be in government. i want parliament to be able to hold the government to account of what it is doing. challenge the bill as it goes through. this bill is everything i disagree with. parliament should be there to hold government to account. this bill has enormous powers over the secretary of state which he can -- he can override parliament. that is wrong. >> when we see the deal there is on the table -- >> we are not considering a second referendum. >> do you see a transition of something that can be achieved now by the government or is it that takes time to negotiate? >> i think is important that there is going to be a transition. thanwise we now want less a year and a half from the date of leaving the european union. if there is no transition agreed until march 2019, which business is going to be investing on any machinery that relies on market access to europe? the cliff edge and going on to wto rules. cleark we made that very during are many meetings in brussels with others than -- in the negotiating team. anna: they would say yes now to transition? >> the feeling i get is many of them recognize the sense of having us. britain is a big economy. one of the biggest in europe. therefore there has to be a good trade relationship. i don't think anybody wants to see ourselves in the direction of some massive trade competition between britain and the eu in the future which is why we want this access. manus: a great interview. broad ranging. he is still with us. interesting, you focus on the value of the transition. perspective, he comes to the cbi one year later area will -- real prospect, he could be prime minister. what risks does that post your portfolio? >> it adds to the overall risk that brexit presents when clearly brexit is leading to considerable this unity in the current government and a lot of uncertainty. we are seeing some slow down of the consumer. a lot of companies are at the point where critical medium-term , they are going to have to probably invest in continental europe. we are ready critical stage and we don't have the right level of clarity. this leads to a change in government that has the unknown means of business. >> expressing their take on this if you like saying they are concerned about abrupt changes. your food business operates across europe and beyond. you're going to be concerned about this. >> lots of businesses are quite different. certainly speaking from my own business, we're not too impacted because we have operating units in continental europe. there hasn't really been a lot of cross-border trading and so on. the businesses in difficulty, the one that have to be big capital investment decisions. they don't know whether they are going to be able to readily sell those goods into the continental europe market manufactured there. >> about 10% of businesses preparing by march. that number may rise to around 60%. ceo on the market. let's get a quick check of where the markets are now. looks like we will be higher around .2%. a strong session in japan. more broadly across the european markets. we can is coming through in the dubai market this morning. the saudi purge at the weekend, part of the story. manus: let's see what the network -- net worth changes today. there is one other company reported this morning and we have the numbers. temporary employment companies, net income at 123 million euros. ceo, good to see you this morning. what happened in the third quarter, they are telling us a very bullish story. does not sound like you are singing a joyful tune. >> we are very pleased with all the results. we are leading the profitability , not only for your results but also the outlook you we have entered with momentum slightly above the third quarter. tougher comparisons in the fourth quarter. we will look at geographies. region, we see that for example in the europe. end line strength in the european economy. also in-house. anna: tell me about the united rates. -- states. >> hurricane in the u.s. also we ared gdp figures you pleased with the 4% had. it is growing. we had 2% growth in q2. we are growing with 2%. it is more softer in the staffing. we are growing more than six years in the u.s.. that is the outlook i suppose from the recipient interview. we are looking for inflation. eventually will come in the form of wages you are you seeing any beginnings of a percolating wage market? specifically in the united rates because yuko -- you do a significant amount of business there. >> we see some inflation on the wages between two and 4% in the germany, mainly in the markets where you have full employment and very low figures. limited to 2-4%. ?? -- >> is that the same for germany? how quick is that inflation in wages? as it showed increased momentum? the same level at 1.8%. the economy is strong. in many factory -- manufacturing good economy in germany. inflation at 2-4% in some areas. manus: we deal with sensational headlines. the number of people from europe dropping in the united kingdom. as a result of brexit, directly as a result, what are you seeing at the front end in terms of impact on the number of european people coming in your business here? the activity in u.k., we don't see any impact of brexit reedit we had 19% growth in the third quarter. growth, we see impact of , and professional -- customers are reluctant to hide permanently. they were afraid to do that. we have a double-digit increase brexit andeas to certainty around brexit. great to hear from you, the ceo joining us there to talk but the earnings. manus: stocks set for a higher opening. the european market open is up next and they have a conversation with the ecb executive board members. anna: if you're traveling to work, switch on bloomberg tv. bloomberg radio is always available in the london area. ♪ guy: good morning. this is the european open. cash equity about to start trading. i'm guy johnson in london. matt miller back in germany, he will be joining us later on. this tuesday morning, asian stocks at a decades high as trump lands. the president holds a press conference with south korea's moon within the next hour of a half, coming things flexible at this point in time. my question is why is the

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