Can Angela Merkel can face off against her own party . Asee that as a list risk, are they underpricing it . We have an exclusive interview, tells bloomberg he is looking at this aggressively. This is bloomberg. Lets look about the markets, matt. Matt take a look first off at where futures trading, less than a half hour to go before the start of the castrate in europe and we are looking at a positive trade in futures across the board. You can see a little stronger on the continent than it is in the u. K. Right now. Bunds. Look at i have a three date chart of german bunds here, the yields have been heading down. Its going back up a little bit today and it came back little on friday, as well, so maybe investors selling off that debt, pushing yield and using that to buy equities as mark cudmore tells us, the doesnt seem to be a lot of bearishness left in london. Guy absolutely not. He was taking a temperature of what was happening in the markets. Here is the picture. Commodities doing nothing. The market is very long. Its also pretty long on the euro area the s p has had its essence starts since 1999 on the euro. Startp has had its best 1999. Matt has been indicating. In terms of where the commodity story is feeding into the equity market story, look at the aussie dollar, trading down. 3 . China is off a little bit, but the bid is up. 2 . Lets get a bloomberg first word update. Heres juliette saly. Juliette in the u. S. , steve bannon has issued a lengthy apology to donald trump and his family over comments in a book. The former white house chief strategy said donald trump junior is both a patriot and a good man after fire and fury at your read comments to been in over his 2016 meeting with russian nationals to get damaging information on hillary clinton, saying the gathering had been treasonous and unpatriotic. In the u. K. After a year marked election, thesnap departure of several highprofile ministers and an unfortunate conference speech, theresa may is looking to enter 2018 on a stronger footing. She ended months of speculation and confirmed a Cabinet Reshuffle is imminent. Price that the after green departure before christmas changes will be made and i will be making changes. Juliette the u. S. Federal reserve wont need to pick up the pace if the rate increases in response to the tax overhaul package. Thats according to the white house chief economist. He says the administrations peter modeling of the economic effects resulted in Interest Rates that arent inconsistent with the feds current guidelines. In the united states, travelers face more chaos yesterday after flooding at new yorks Jfk International airport caused fresh fright flight delays. Are restrained by a snowstorm and freezing temperatures. The meltdown two days after the first major snowstorm left passengers to deal with long lines and canceled flights and to search through mountains of luggage for their bags if they could get into the airport at all. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Guy, matt. Guy thanks very much indeed. It will continue to hit new records, volatility edging lower. Our investors suffering of fear of losing out . Mark cudmore back in asia joining us from the mliv team. Is it driving the markets . Mark i think it very much is. Rally to a the circuit to a certain extent. There is a narrative that people are looking to buy in the markets and everybody is bullish, at least nobody is harris is heavily is bearish is probably a better way to clarify that. They think they would get opportunities to buy in, but no one is looking for a bear market in 2018. Matt does that mean you can expect investors in london to buy the debt . Every time we have to dip in markets, they will buy it up . Mark thats the mindset in a moment that people are hoping to get opportunities. There is an expectation there will be more volatilities. They had rock bottom lows and has been a sustained was, the people think it will pick up this year. People have thought that for a long time. We have gone through this narrative of volatility must be at an alltime low and everyone is expecting it to pick up. They might be optimistic thinking, but they are definitely looking to buy into pullbacks. I dont think couple back will lead to a greater selloff, certainly in europe that is the mentality. Closee are looking at a on the vix. What will that signal . We have a chart here. You can pull this one up. Its been moving lower and lower. What will the close tell you . That exact level is arbitrary, but there are two things to think about. What narrative shows is the excess complacency. I find it hard to call it texas complacency. Excess complacency. Its extreme in terms of people dont have the position. Last year, we saw this rally despite everybody being suspicious. Now they arent suspicious, but they werent suspicious last year and im not sure if there is a panic because vix is low. On the flip side, there are some causes in these etf markets that are short the vix. Datee vix jumps 80 on a then they have to close by short positions. Weve never had an 80 move on a close to close basis. On a close to close basis, its very hard. The lower the vix closes, the easier it is to get an 80 day and date move. That would bring us back below the average. Matt we had last year everyone agreeing that the dollar was in for a good year and then felt most 10 over the course of 12 months. And now obviously everyone thinks the dollar is going to continue down this year. What would be the ramifications rally in 2018 . Id mark is interesting because i think the price action at the moment is very constructive for the dollar. We have disappointing limited up on friday and the dollar is trading well. It does look like the dollar wants to rally. This morning, particularly in eurodollar, we have seen euro elysian news. News. Uro bullish the dollar is struggling to go higher. It looks like that position is saturated. What i think is interesting is that last year the market super excited by u. S. Growth even though the u. S. Wasnt the fastestgrowing economies in g10, that alone emerging markets. This year, only australia and new zealand are set for higher growth. Suddenly going, he was growth is not that great. Its weird. Last year, fundamentals were bearish and the markets were bullish. This year, fund metals work marginally bearish, but i dont think they are negative. Yet the market seems very negative. I think that means we see the doctor dollar depreciate and we might do for a correction in the shortterm. Matt thank you for your time. Mark cudmore there, numbers mliv strategist out of singapore. You can follow his Market Insights on the blog. Coming up, then and apologizes. The former bannon apologizes. The former white house strategist apologists is. This is bloomberg. 43 minutes past the hour, cutting down to the market open. Two stocks that make moves this morning. The belgian rival has rejected the takeover. He is pressuring to open talks on a bid to could value the business at 2. 6 billion euros. The maximum payment come up 44 more than the stocks Closing Price friday, which you cant describe as an undisturbed price. Lets talk about the logic stranding this. The managing editor joins us now. What is the industrial logic here . What does nolo hope to achieve . Is them trying to make itself less vulnerable to the main market. This is beefing up area. Is looking to make an m a play, but is making large cash plows. Theyve clearly done their homework. Matt what is the history of this relationship of this offer . We know this is the second offer they are telling us in a Statement Today and is also 14 higher from the first offer. Ceo has telling us the spoken to the ceo of avenue the case put forward and they are hoping to shareholders will persuade the , the to see the deal preempt suggests the deal. Novo doesnt intend to do much m a, so the significance of the bid would imply they have done a bit of groundwork for going ahead with this did. Matt thanks so much, the bloomberg mentioning editor in copenhagen. Acquiren talks to majority stake in its China Securities joint venture. In an exquisite interview with tom mackenzie, Sergio Armani weight in on equity and olatility and what policy normalization will affect the economy. We see a robust economic growth. The 3. 8 should be repeatable. The growth will be different. We are probably owing to lose some momentum from the u. S. , or at least not as strong as we had in 2017. Some are from the rebound of commodity prices, generally speaking. Some of it from the property are in china. On the other end, we expect still and india to develop well and we expect to watch the other end. Whats the repercussions of the monetization of the Monetary Policy by Central Banks . Are equities starting to look a bit frothy or is that signal has Global Recovery underpinning those valuations . I think we can say that starting the year, they could the a good place to be. At least in terms to other asset classes, it also on their own, i think at current levels we do believe it is the place to be. Valuations across all asset and they wantgh to focus attention on quality and diversity. Tom what are you seeing in terms of trading activity with your clients in terms of volatility . Are we seeing a pickup now . Are you more bullish about that . The reason january is too early to talk about the quarter, but in general it was like january in the First Quarter to be more active, that in terms of market volatility and realized volatility on Financial Markets on fx, its still very low and therefore, i dont see a change. In the last six or nine months. 2018, imxking to pecking amort normalizing environment for volatility than the one we saw in the last few quarters. Tom had you factor in this move to normalization from the Central Banks . From the boj to the ecb to the fed . How will that play into the markets . I think to a large extent, they are anticipated. They are discounted in the markets and therefore, i do also look at the Positive Side of a normalized rate environment will create some benefits to a diverse and also, in general speaking, having a normalized rate environment should also have some positive effects on the rest of the economy. Ermotti, was sergio ubs ceo speaking to bloomberg. The fallout from the bombshell look about donald trump and his fitness for office was the focus in washington over the weekend. Former chief strategist steve bannon apologized to trump for comments that you did to him in fire and fury. Meanwhile, the president fired back in a series of tweets. Numerous demonstrations officials, including cia director mike pompeo and u. N. Ambassador nikki haley defended the president in a Television Interviews on sunday. Joining us to get a take, jodi schneider. Jodi, why did then and feel it necessary to apologize . Jodi obviously, the president came out very strongly against the book and mr. Bannon obviously does not want to be out there on his own. He wants some connection with the white house. I think thats why he apologized. The larger question here is, what does this mean for the white house in terms of their agenda . Instead of talking about, sort of doing a victory lap on tax reform, which is what one would have expected after the big win they had at the end of the year, instead, the president is having to have his top advisers and cabinet officials go on television and defend his Mental Fitness. Its really a distraction from what they hoped would be a good start to the year in terms of the agenda. Its an election year, Midterm Election year, and certainly this is something they have to be worried about how its going to play out when those elections start happening. The primaries are just a couple months away. Matt do they really have to be that worried . It seems like this is a bombshell book for people who didnt like trump to begin with and those who do support trump just think its more fake news. Doesnt this just polarize . I mean, isnt everybody already polarized enough that this doesnt make much of a difference . Jodi there is certainly an argument to be made for that, that people are set in their opinions about the president , about the white house, and how things have been running. But the real issue is how much energy does is take away from trying to legislate, from trying to run the country . And if you are having to defend your Mental Fitness to put cabinet members on television, talk shows, to do that . Is that really the tone you want to be setting . I think this is a huge distraction for the white house. Is it a temporary one . Perhaps. Guy quite a big one. Thank you very much indeed. Jodi schneider joining us later about the stories running washington. I also think it was quite interesting, the comments regarding the fed. Clearly the white house worried the fed would up the price of rate hikes, which would take away from the tax story that jodi was just talking about. Minutes away from the start of european trading. Up next, lets take a look at stocks you need to be watching, including at the links it is rebuffing its takeover bid. The start ofed at trade. It will be interesting to see when it will happen. The open is now eight minutes away. This is bloomberg. Guy five minutes to the start of trading here in europe, a huge week for the pharmaceutical sector. We have a conference taking place in San Francisco that will kick off later. Plus you have this novo transaction they are pushing to shareholders. They are making this offer novo nordisk best known for its diabetes therapy. Ynx continues to look to see if it is suspended to trade. Just be aware of that. The markets are way underpricing this judging by the anr. The price target is sick the significantlyis below with the offer could come through. Then we are talking about airbus in china. Matt absolutely. At a time when macron is there making a call for the vinci to open up desk for president xi to open up the globalization that xi stood for at davos last year but hasnt come through with. A380us offering an partnership to a Chinese Company and on top of other interesting airbus stories, that the Turkish Airlines accord, where it got rid of some more metal there and the fact that technically, the stock is down below 50 day moving average. A lot of reasons watch this stock is morning. Guy it will be interesting to see if they look to do transactions. Watch, keep an eye on micro focus. , keepn eye on mothercare an eye on fertilizer stocks in europe. There is a liver of note on real estate. But european stocks generally called higher again at the getgo today. The open is next. This is bloomberg. Guy discussing the start of cash trading. Lets talk about what the equity open is likely to look like in europe. The dollar is trading stronger this morning to be aware of that when you think of how the commodities are going to train. That is interesting given the backdrop of this vibrant commentary. Oil trading down. Be aware of that when you look at the oils and commodities. Closed today. Hong kong, to be honest, drifting sideways. But here is the real story. The s p was up. 7 on friday. A moderately disappointing payroll number. The best start to the year since 1999. Think about what happened in 2000, the runup. The european equities this morning, higher once again. Lets show you what the fair values look like. By. 6 this morning. Lets take a look at the numbers on the board. I will give you an idea of how this open is coming through. London could be more mixed this morning. You are not going to get much coming out of london. , and i think the commodities are struggling. 2 . Bex up similar numbers coming out of the cac 40 as well. The docs could be an interesting story this morning. Lets take a look at the sector story. Its interesting, with focus this morning. Energy is trading higher despite the lower story on oil. Health care is interesting. Well see how novo nordisk trades. Financials look reasonably well bid this morning. Consumer staples trading a little bit off. Im quite surprised at how much strength we are seeing. Some strength. I wonder with the dollar up this morning, you have got copper fading a little bit. The market is long copper at the moment and oil fading as well. The market up by. 2 . Lets see whether we have got a german story yet, to focus on at the moment. We are waiting to open up the German Market this morning and get some details on what is going on. I blame matt for the tardiness, so lets go back to him and see what is going on with the stock story. Guy the docs always takes ax always take the longest to open. At the german stock exchange, a couple of humans down there drinking a couple champagne. They need to get that to open a little bit quicker. Thats take a look at the stoxx 600 here. The index move, you can see the winners and the losers. The hundred 86 stocks up. 127 down. Winners toy, 31, losers. You see, guy, your Health Care Index sector was lit up on the imap, and we have health care gainers. Novartis is a gainer. Thehave got some of up aser staples stock well again today. This is a trend we saw last week with nestle gaining among the big gainers. Take a look at Fiat Chrysler automotive. Ofery interesting stock late, up 20 over the last month. It looks like there is some thought about the value, the undervalued price. Investors are looking to move that around. As far as the losers go, you did see a big green slice of the high for financials, but hsbc is the biggest loser as far as who is taking index points away from the stoxx 600. You see some more consumer stocks here, although these are the ones you cannot really live without. Tobacco is up. N unilever as well. Consumer stated box doing poorly. Again, unilever on the red side of the leisure. Ledger. Thele on the green side of ledger. Equities have started 2018 on a tear, pretty much. Up, with its best start since 1999. In europe, the stoxx 600 gained more than 2. 86 . It has opened fire this morning. Joining us now is the Senior Investment manager at aberdeen standard investments. Saying hek cudmore met with 20 Equity Fund Managers last week, none of whom were bearish. Is there any reason to be conc