Is heavy regulation the risk for 2018 . Retail sales and production rise in the worlds thirdlargest economy. Lets talk about the markets. Lets figure out what is going on. This is the wei screen. That is what is happening around the story on the london market versus other markets. Right now, the london market looks like it will open a little bit more positively. Earlier it looks like it would have a more negative start but that seems to be reversing. The ibex in the ftse look like they will be down around. 3 of 1 and the italian bond auction. 50 down. X and futures are down pointing to a positive start. The lackluster session yesterday. Lets talk you around the gmm, give you a sense of what is going on. We talked about the data out of japan, that is affecting the markets. We have seen the yen trading up by. 5 of 1 . The nikkei is down by. 51 . Roduction data was strong , numbers are bouncing back. How significant is this data is the question i am asking. The bloomberg dollar index continues to weaken. That is affecting need to be aware of. The curve is flattening out and the dollar negative story is having an impact around the world. Light continuing to see volumes. The aussie dollar is interesting. The market continues, the mliv guys believe the aussie is gaining speed. What is the aussie dollar doing . Lets talk about what else we have on deck. The story continues to be when we should watch out for. Copper up a 1 . We continue to see commodities in focus but he relates back to the china story. Gold is rising and the calmer bloomberg Commodity Index branch was negative and brent is trading up by. 3 of 1 . Here is sophie kamaruddin. Production rose last month. Expanding to 3. 7 as a whole. Toppingales growth forecasts. In the u. S. The rs has [indiscernible] they pay17 return if the bills before the end of the year and only if the taxes were assessed before 2018 homeowners in states with the highest property taxes have been peppering officials with questions about how to prepay the levees to take advantage of a tax break. The eus lead negotiator has [indiscernible] former chief official in a breach of protocol that was provided as evidence of [indiscernible] isiss secretary [indiscernible] robbins is dealing directly with michelle bernier. Roy moore is going to court to stop alabama from certifying Democrat Doug Jones as the winner of the race. He believes there has been irregularities and there should be a Fraud Investigation and a new election. John merrill has said jobs will be certified as [indiscernible] has found noe evidence of fraud. Angela merkel promised support labs. Other term for the stalemate since the election may be working against the acting chancellor before Coalition Talks with social democrats begin in the new year. Barack obama has been donald trump in the gallup poll to be the most admired. Others in the list include the elon muskohn mccain, and jeff bezos. Hillary clinton was the most admired woman for a 16th straight year. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Guy bitcoins tumble has resumed. Sunk to around 14,000. 20 down from its middecember high. Paul dobson is with us on set. Is this the risk for 2018, the regulatory site that could end crimping the cryptocurrency story . Paul that is something that people will have to pay a lot of attention to end it will be good for the longterm. A frameworkmore behind it. If that is the sort of thing that deters people from getting in their it will cause the kind of volatility we have seen over the last few weeks but also likely to slow down the pace of appreciation. Guy it is the asians taking the lead. Paul that is where bitcoin has been most prominent. It is not such a big story as it has been especially in pacific rim japan. South korea in particular. A lot of young people have got into it and that is one of the things that authorities are worried about. There is another place where there is excitement and engagement. Guy lets talk about the u. S. Curve. I have the chart up here, trading 52 point six. The curve is flattening at the yearend. Is this just Something Else that we can think of as the continuation of a trend . Paul a bit of both. It feels like there is a yearend slide. Had aefore christmas we pretty big selloff. We had a pretty big rally. That was because of the tax legislation. We reversed that again going into yearend. It has been a good trend this year. There is no reason why it cannot keep going for certain amount of time. People are watching out for inflation and when that comes back whether that starts the push to spread wider or is it the bogeyman for the economy. Ther that tips us into over the wrong way and that would be a worrying signal for Global Markets. Guy your colleague wrote a piece on the mliv talking about this coiled spring that is the euro. Underestimating the potential to go higher. This is on a day where we will the dissolving of parliament in italy and set a date for the elections that is going to be in the beginning part of next year. This time lester we were worried about 2017 and what would elections would bring, we had the French Election and all kinds of political uncertainty. Why is this time different question mark are the markets so unconcerned about what is happening in italy . It is the lessons we learned from this year. France was something that was systemically worrisome for the euro area. Because Marine Le Pen had a mandate to take france out of the euro if she had got elected. There was a lot riding on that one. The fact that we came through , for all the turmoil , markets justn got on with it. It is immunized to the risks now. The italian election could cause some trouble but if you look at the polls, it points to a continuation of the status quo. Which means that nothing really changes in terms of the political makeup but also in terms of reform. Both good and bad. Shortterm there is a continuation but longterm nowhere in a hurry and that is the problem. We will even it there. Thank you. Paul dawson, mliv auditor editor. Some quiet markets. Interesting to look ahead. The euro is a factor in that. An follow them at mliv on the bloomberg. It is the first thing i look at in the morning after the gmm. Next, the Antiestablishment Party leaves the polls in italy. More on that story and two q take you live to room to get another angle. This is bloomberg. Guy 15 minutes till the market open. Lets get a first word news update. Sophie bitcoin has resumed its tumble after south korea city was eyeing options including a potential shutdown of some exchanges. No immediate indication if the economy will shutter exchanges that have accounted for more than a fifth of Global Trading. Concernss expressing about private digital currencies. Apples ceo has received an increase in his annual bonus for 2017 as they posted higher revenue and the income after a rare decline a year earlier. Yearotal package for the came in at 102 million. These got bonuses of 3 million bringing their total to more than 24 million each. The u. K. Jobseekers so the first annual increase in salaries in more than two years in november. While the average salary climbed below the pacel of inflation which exceeded 3 last month. The cap highlights the squeeze and finances that is expected to extend into next year. The white house has interviewed Richard Clarida [indiscernible] for the position of vice chairman at the fed. Is beinglerian considered. The paper said a spokeswoman declined to comment while lindsay did not recall respond to requests for comment. He is a great listener, iseptional, exemplary and he expert. If chosen, he would be well suited for the job. As much as i could say, i can only say great things about rich. Sophie that is your Bloomberg Business flash. By minister isn flagging the end of his administration today. Element will dissolve before general elections are expected to take place on march 4 or 11 next year. The antiestablishment Fivestar Party is five points ahead of the ruling party. Lets deal with what happens today. Walk us through the structure of what were about to see. Procedural and firing the starting gun. The president or the head of primeconsults the minister, Cabinet Meetings are held and one of them will set the election date which is expected to be march 4. Once the second Cabinet Meeting is held that is the start of the campaign. Keuchel and the issue seems to around how badly the pd will do. Is renzi going to run, is the party going to split, what would that do to the polling into this election . The democratic heart he has split already. The former premier is in a weaker position and he has been sliding in opinion polls while the fivestar parties, the Antiestablishment Party is now the leader with about 30 . They could end up the Biggest Party in parliament. Or isormer government that going to be enough . A tall order, fivestar should be the first party. The president is under no obligation to ask them to form a government. He could try and see whether someone could get a coalition together because fivestar, their position has been they will not form a coalition, they will not carve up ministerial jobs. They want to win and ask the Political Parties to back them on their manifesto pledges. There is plan b. Entrustnot want to forming the government. Because the might not have the majority. They might carry on for a few months. Or we do have a Hung Parliament. Guy thank you. Next week, this is a big deal. This will reach it every inch of the eus market. Lets talk about the research industry. This is one big part of what is going to change under method mifid 2. Slow a big bang or a dribble in terms of how this will affect us . Even though it comes into force january 3 we have seen sides are both preparing to comply with the new rules. We are likely to see further contraction and more consolidation on the buy side as a result. Managers will have to Value Research and pay for research. Theyre having to put a price on this. Brokers are putting a price on their research. They will shop around from one provider to the other. This will open doors for the independent Research Community and lead to reduced numbers. The rule is having Global Impact already. Brokers based outside of the eu will be required to invoice for their services when they are providing these two managers in the eu. There has been a huge conflict that was remedied late november. Brokers based outside the union are having to invoice services. Impactaving a knock on in the u. S. And asia. Other thing that could is happenings what surrounding brexit. Do you think will get clarity about how far Financial Services will be treated . The next eight or nine months will be critical in theresa mays government negotiating a new relationship with the european union. Most of the negotiations have been focused on trade rather than Financial Services. Whitevernment promised a paper would be published in the Third Quarter and we are waiting for that to surface. Bernier did say there would be no bespoke deals for the city of london. Unfetteredk. Exits, access to the market will fall away. The u. K. Will be on shaky ground over the next nine months in trying to get a new deal for Financial Services. Thank you for coming to see us. Analyst joining us. We are minutes away from the open in europe. We are looking at the stocks we will be watching this morning including novartis, after dismissing an appeal by the company. Keep an eye on the carmakers. China is making moves to reduce the manufacturing of certain types of cars. That could impact the sector. The market open is seven minutes away. This is bloomberg. Guy welcome back. We are five minutes away from the start of european trading. Stocks to the attention to this morning. Novartis is one of them. Ruled against in an intellectual property case. Keep anon a con eye on akon and on the car companies. China is curtailing car production. This is a small fraction of the number of cars that is sold. And daimler. N vw it is thursday. Three stocks are going ex dividend. On,ones you want to focus batts and bt. A fairly mixed story in europe. The market open is four minutes away. This is bloomberg. Until theinute to go cash trading. Equity issues and the factors you need to put into the market with money. I want to highlight the fact that the pound is rallying this morning against the dollar. Think about when you look at the market open in london this morning. The pound up. Generally, ftse down through the nikkei down because we had decent retail and production data out of japan today. The other thing i want to highlight is the crude is gathering this morning. Trading up by around. 5 . Interesting inasmuch as it may affect the commodities story. S p 500. It was not a great session if you are looking at a sense of direction. You what isly show happening. The bloomberg geeking out for us this morning. We are looking at a story that is broadly negative. London could open and positive territory despite what is happening with the pound. We will how that gets calculated. Market open. Lets see what we are looking at this morning. Some of the stocks could be interesting today. Some of the minors could be interesting. 7620, the ftse 100 opening up. A Market Makers petering around the flat line this morning. That will be a similar story around europe. There could be interesting thoughts. The sector is below the surface. We will commit to those in a minute. The markets will be opening reasonably negatively today. Down. 2 . Reasonably negative. Keep an eye on italy today. That could be a story to bear in mind. There is an italian bond market worth paying a little bit of attention to as well. Work is beginning to open up. London doing a little bit better. The cac 40 in the dax opening down. Amit backs opening down. Trying to find a sense of direction of this. 7629 on the ftse 100. Three stocks going exdividend today. These are the two bigger ones you need to be focusing on. Here is the breakdown. The imap function for you. Financials looking fairly mixed. Thatlked about the fact the oil price is just beginning to look up. Materials trading a little bit higher. That is probably the reason why london is outperforming. Health care looks better bid. Those are the kind of sectors london has got a lot of. Webe those are the reason are seeing some outperformance. I. T. Looks reasonably mixed as well. The Financial Sector is acting as the biggest counterweight to these markets this morning. We will see what they are doing. The materials and Energy Sector trading higher. What does that mean for these markets . At a headline level, hard to get any clear sense of direction. Little bitstory, a of rotation around the commodities. That probably is the story we are going to watch. Lets get an idea of what is going on, bring those up on the is happeninge what here. Some of the banks are trading higher. Some of the u. K. Companies. Anglo is picking up as well. Telestrating a little bit up as well. It is the commodities that are doing better this morning around europe. Lets take a look at where the negative story is standing here in europe. That is a factor. They are trading a little bit softer. Erickson trading down by around 1 . Some of these aviation socks are in the industrial sector. Something to bear in mind. Something to mention is what came out of tokyo into this morning. There was a decent data that came out of japan earlier on. The boj is saying it plans to keep the current pace of bond buying in january. That is an interesting factor because we continue to watch. That is the back of the mind thought that actually the boj is going to continue to struggle where others are beginning to move in a different direction. You have the bank of england. The canadians are doing it. The ecb will probably be the story into 2018. How much longer can the boj sit on it hands and continue to maintain current policy . It is saying it will be doing just that. Talking of the ecb, italian bonds very much under pressure. Yields rise. The fivestar movement has to the polls. The president will be in Parliament Later on. Question have to ask is is this going to hit the euro . His momentum so behind the euro that it is that is coming up. This is bloomberg. Guy welcome back. Six minutes into trade into europe. Megadeth starred in europe. To be honest, i dont think that tells the story. The london market, basically nothing doing at a headline level. Lets talk about where we are seeing some of the sector action. Lets highlight this a little bit. Basic resources are bid this morning. You saw that overnight out of our straily australia as well. Brent heading a little higher, with a better bid. Technology is an area we are seeing weakness. Media trading stronger now. Technology and telecom has gone exdividend today. Ts trading. The Technology Sector is not. Macro point of view, we continue to watch the curve flattening. M inasis points between the the united states. The u. S. Economy running hotter next year. Investors pondered the political effects of trumps tax plan. I consider it an important priority to make sure inflation does not chronically undershoot our 2 objective. I want to see it move up to 2 . It is teacher directory of Interest Rates next year that is of importance. There is some uncertainty about that. Time will tell. But i do think we should be removing accommodation in a gradual, patient way. That is not priced in the market just yet. We maintain our cautious outlook. Significant, positive growth impact. It could trigger a lot of inflows into the u. S. We expect three further height next year hikes next year. If it leads to more capital spending, with regards to corporate, i mean, we really need that incentive. If we get the growth in the u. S. , in that environment, the fed can be faster with regards to the rate hikes. Chair yellen changes in tax policy will likely provide lift to activity in coming years. The m