A bond rout in overdone . Been overdone . Another survey said 50 Job Vacancies have slumped. It talks about a seismic drop in brexit starting to bite. Bitcoin has a bad day. The cryptocurrencies slums on new south korea is planning a crackdown on bitcoin exchanges. We are half an hour way to the european open. Take a look at the futures. The wei trading up and futures mispriced, we will have a slightly positive open. You can see the cac less than. 1 of 1 , the ftse even less in the positive territory. Take a look at what is much more exciting and that is treasuries. The 10 year yield is what anybody is watching. The question is, are the biggest names in finance wrong . Bill not bill gross, jeff dunlop gundlach. Continuing to buy treasury. That would be hard for the market to bear but we have the yield coming back down, 2. 45. Lets get the bloomberg first word news. Says in report claiming officials reviewing the countrys Foreign Exchange holdings have recommended halting purchases of u. S. Treasuries, they might have reported a wrong source. The administration of foreign they may have cited wrong sources or maybe from the news. It was not clear whether the recommendations had been adopted. Has President Donald Trump predicted the crisis between america and north korea will free be resolved without war. He promised the south korean president he wanted to protect the [indiscernible] were building up our military to appoint we have never been before. We are also, we were weakened over the last long time but not with me. I do not expect that. Were going to have because of strength peace through strength. Germany is maintaining its hardline stance on brexit. Demanding the u. K. Pay for the privilege of its Financial Firm having access to eu markets after it leaves the block. According to german officials britain cannot hope for a trade agreement that includes Financial Services unless it agrees to make substantial contraventions to the eu budget and adheres to european law. The Canadian Dollar and mexican peso fell after canadian officials said there is an increase in likelihood that President Trump will give six months that is to with straw from nafta. A white house official insisted there has been no change in the president position on the trade pact. Wto complaint over american duties, a move described as an illadvised attack. Is trading lower after south koreas Justice Ministry said it is preparing a bill that would shut down Digital Currency exchanges. An earlier report cited the ministry expressing concern about serious risks associated with exchanges. Fevered demand has driven up demand. Arm slaves has have stolen jewels from a boutique. At 5. 5 million. Police arrested three suspects but to others got away. Several Jewelry Stores have been targets for dramatic robberies including cartier, Harry Winston and ship off. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Saly ringing us up to speed. The big question this morning is , is a great treasuries selloff over . 10 year yields flirting with the highest level since 2014 yesterday reaching up the but we seem to be using the word bondmageddon. Yearsillion auction of 10 drove the strongest demanded more than a year. Lets talk to mark cudmore. That the markets put two fingers up to bill gross . Mark there is a little bit of that. A onedayon is festival. Every time we see 10 year yields spike up, we recognize the names calling for this bear market in bonds. Yearbecause we had a 30 bull market in bonds that has come to an end it does not mean we need to go into a longterm bear market and we will stay where bond yields are bouncing around in a wide range. They may make higher highs. Even when bill gross was asked to clarify his comments he talked about it bariatric where yields would go 20 basis points higher. We are not talking about a proper bear market. I think we will see 10 year treasury yields come lower in the next two weeks. We had this price blowoff top on this misleading china report. There has been a clarification on that. That story was overhyped in the first place which many macro investors started to interpret which is why treasuries rallied. It did seem to be based on wrong sources or fake news. That story is out of the way that treasuries can rally. The market will be left chasing it. The price action seems like a blowoff top in yields. Later this year he might go higher. Disinflationary pressures remain strong and i do not see the start of a bear market in treasuries. Att are bonds attractive 2. 5 . Do investors look at that and think i can get it or yields elsewhere . A very valid question. We saw in the option that yields up our attractive. You saw a massive bid to cover. People want these yields in the one of the most liquid assets in the world. It offers a proper yield. We are seeing many yields and many assets giving the bull market shrink elsewhere. Getting a supposedly the most safe asset in the world, one of the most liquid assets and a decent yield seems like an incredible combo. This does not mean we can have cannot have yields a spike higher. You will see demand coming in. Matt likes to use the other cpi data outrows of the u. S. Is that if that number comes through strong then we are back vist story. Cti mark bonds are in focus. Not much left to the weekend pvi today and cpi tomorrow are important. We get a high print. We might get another like spike in yield. That is unlikely. We would have to surprise on the top side. We have not seen inflation run away to the top for a long time. For many years. I do not think one rent is going to change that story. If you ask when yields are higher yesterday i would have gone, yes. The market is vulnerable so they can squeeze further. We saw yields come from their highs. Given that retracement, even that china clarified those comments, it is the treasury bears on the back foot. They are the ones who are nervous. Going into cpi and ppi, there is risk with ways but the greater risk, the more likely the bigger reaction will be for treasuries to rally much more strongly than they can sell off from here. What centralon is banks are preparing for at least a little more than they were a year ago. Yesterday i was at the golden conference andoldm it was a consistent view that the fed could hike four times rather than the three you see in the dot plot. Mark people are talking about that narrative. What is important about the treasury bear market, if we see four hikes we will not see 10 year yields go higher. We might see them come lower. We will see the curve invert for fear that there is excessive tightening. We will see further flattening overall. Whether we see three or four hikes. If we see four hikes we could get the curve inversion which precedes a recession by 18 months. If you assume we get that in the Third Quarter you are talking about a recession in 2019, maybe early 2020. The Global Market in equities is likely to continue. The Economic Cycle is continuing positive in the u. S. But this does not mean that treasury yields need to come higher. We are not seeing runaway inflation and that is the most important thing. Guy lets talk about equity markets. Chart ihe charred pulled off earlier. About to take a dip . Would be part of an onward ongoing upward trend. In theenerally we are camp that we are bullish equities. Economics are right for shortterm correction. Vulnerable,es look the s p looks a little vulnerable. Worryingfield had a prescience for predicting these things including the nikkei crash. We started calling him mark crystal ball cranfield. We should stress this is the shortterm. Globalee pillars of the bull market in equities remain strong and that is solid growth, great earnings, earnings boosted by the tax reform in the u. S. , even if that does not feature into growth, it feeds into earnings and there is rampant liquidity. You never boris and i am sure that there are other names out there. Mark cudmore joining us from the blog. You can follow the guys, the team at mliv on your bloomberg. Fantastic function. Cant speak highly enough of it. Tliv as well. We will use more [indiscernible] lets talk about what is happening with brexit. Brexit could see 5000 fewer jobs in the u. K. By 20 30 according to the findings of analysis an analysis. Job vacancies in the finance industry suffered a seismic drop in december. It could happen party season. Of survey found a number positions fell 52 . I bring this up because matt miller was in frankfurt yesterday. Matt as were hammond and davis. Widely business or serious newspaper in germany. They wrote an opposite an oped saying the Financial System in europe depends on them getting a good deal for Financial Services here in britain. Guy anecdotally, you talked to , was the sense that the Banking Industry is taking frankfurt very seriously right now because if you look at what we just read, that would suggest that is the case. Frankfurt seems to be the men main beneficiary. Matt Floyd Blankfein has tweeted about it. Goldman sachs is a big presence as do all the banks. What you are seeing across the industry, almost no bank wants to admit that it is preparing to move or move in jobs from london to frankfurt. Then a lot more bankers used to be in london getting ready to move to frankfurt. Maybe that is because they are older, it is cheaper, and easier to travel but a lot of it has to do with the preparation for the great unknown after brexit. Absolutely. We will continue to monitor this story. The numbers this morning, they may be affected by the fact we have had a december story breaking which could impact, could be impacted it is a big number. 52 is a huge timber and that is what we saw in london. Be thingsure you will attention to those numbers. The cryptocurrency reacts to possible crackdowns in south korea. We will talk about bitcoin and the others. Matt gets upset when we talk about bitcoin. Matt there are so many other alternatives. Guy that is next. This is bloomberg. Matt welcome back to the European Market open. I am matt miller here in london alongside guy johnson. Lets get the Bloomberg Business flash. We go to juliette saly. Has cut itsyer stake as part of its ongoing land to focus on drugs and life sciences. Due to strong investor interest the placement volume exceeded expectations amounting to 1. 8 billion euros. It has been peering at stake in the form a division as it shifts from Industrial Chemicals after agreeing to buy monsanto. The italian maker of the tele business. Acquiring a an agreement could be signed as early as sunday. The business which includes the butterfinger mbb with rand and baby ruth brand said business is declining. Bitcoin dropped below 13,000 earlier this morning after south koreas Justice Ministry said it is preparing a bill that would shut down Digital Currency exchanges. An earlier report cited the ministry expressing concern about serious risks associated with those changes. Withare investors thinking the latest Development Question mark we have seen governments clamp down like china and the Digital Currency has been resilient. The treating we are seeing is a sign that in the shortterm, investors are pulling out from cryptocurrencies. Bitcoin is down, some of its rivals are down. Ethereum hasn and dropped. It looks like a bit of selloff. Investors i talked to in the industry think this does not necessarily harmed the longterm prospects for cryptocurrencies and bitcoin because they are bullish on it. We saw a drop in bitcoin at the end of last year but he was up 1400 . A rangeeen trading in this year. It has come a long way in the past year. Guy the regulators are getting their teeth into the story and to get a sense that this is the beginning of the regular regulatory position likely to crowd in on this space. Is the sense that we are seeing more of this . Eric it is interesting. We had a few people on bloomberg tv who mentioned in the sense it is welcome regulation. It is surprising given bitcoins past is a freethinking, libertarian side of finance. The industry realizes you cannot get away from regulation. In the case of south korea, it follows on something they got from china late last year. It is something that has been expected given the rhetoric that has come out of the south korean government for a few months. This was not necessarily a big surprise but there was a little bit of selling today. The question is and going Central Banks and regulators going to continue on this path . It seems like theyre going to continue but how that will play out is a question and for investors, they will continue to go to places that do not have the same amount of regulation until they run out of places to go to. The are not at that point yet that it is an ongoing story. Matt there is that libertarian total free market vane. , bitcointhe community which a lot of people mistakingly think is anonymous, can beseudonymous, easily tracked and there are new cryptocurrencies that have been built to avoid that issue or that problem if you see it that way. Montero enzi cash are two of them. You hearing about challengers to bitcoin for this kind of consumer . Eric we have seen that over the past year. Going into the beginning of last year, bitcoin amounted to 90 of the investable community. That number dropped in half by the end of last year. The positioning you have seen this year where bitcoin is on top in terms of market cap but you have rivals like bitcoin and bitcoin cash and ripple and a theory him. The community is looking for places to diversify. I would point to the investing community. That number has gone up which is a key point from talking to investors. As long as the pie keeps going the drop in bitcoin is not necessarily as big a concern. When you see the cryptocurrency investing community o or not continue overall growth, you might be more concerned about the future of the industry. Matt thanks for a much, eric lam joining us from hong kong covering cryptocurrencies. It has been still a great year for these considering where bitcoin started last year, 13,000 us better than a stick in the eye. Guy there are two great stories, one about bitcoins energy consumption. It could use more energy than argentina. It is a huge issue. It takes a ton of Computing Power to mind bitcoin. There are airplane hangers filled with machines that need to be cooled down and that takes a ton of energy. Guy absolutely. They discovered this huge prime number from this equation back in the 16th century. Potentially reduce the power consumption because of the way the mathworks or works around all this. The energy one is worth the read. Saying that bitcoin could consume more energy than electric cars. Then all the electric cars in the world in 2025. One of the things i noticed is bitcoin is no longer among the top five, top 10 most read stories on the bloomberg. At the end of 2017, it was 4, 5, 6. Tly guy we are five minutes away from the start of cash trading. Lets kick it off with the retailers, the big you pay retailers are out. There is a tliv going. Give us the skinny on what is happening. I will run you down the main events. Tescos numbers look disappointing compared to what we have seen from morrison. Recorddline numbers show Christmas Trading but the comp sales were up 1. 9 compared to the estimates of 2. 8. Two reasons they are citing. The collapse of the supplier of tobacco and general merchandise also pretty weak at 1. 6. That is tesco. It will be a bit week. , morganspencers stanleys says that is routine which is nice. Common clothing is down 2. 8 compared with three. The food is a slight beat, estimatesown against of minus one. The guidance has unchanged. Boohoo. Com. Are enjoying themselves. 90 ing their guidance to from 80 . Estimates have been increased. Matt what do they sell . It sells clothes. Access the stocks news with fris. On your lumber terminal. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. The a minute to go until start of cash trading. Lets talk about the background futures. It is trading off session lows this morning. The nikkei overnight down by around one third. Oil is Trading Software as well. The inflation theme is still there. Ppi data and cpi data today and tomorrow. Yesterday, down a touch, but the real story was in the bond market yesterday. The wei and look at get an idea of what the fair values are telling us going into todays numbers. Will watchs one we carefully. There is a tliv running on that, tliv running on your bloomberg. , the dax,00, the cac all called higher this morning. Just a step forward rather than a step back. That is going to be the big story, isnt it . Lets see how this open looks this morning. This thursday morning. Ftse 100, 7748. We are trading around the flat line. 40, dax, expected to do better. What the sector story breakdown looks like as well. The bond market story has filtered into the rotation away from some of the bond proxies into some of the bicycle calls, so the cac, the docs from of the estimize, looking to open. Ive asked looking at similar things as well. Take a quick look at the imap to show you what is going on. Financials are recently mixed. Energy is off, so thats interesting and could take some weight out of the market. Solidly bid as well, but the financials, a big piece of the pie, definitely trading softer. A quick look back at these markets. I want to see if we have the dax open yet. As ever, a little slow to get going, but im sure it will get going in a minute. I blame matt for this. He represents germany in the studio this morning. Thats see exactly whats going on with the individual stocks stories, matt. Takesthe system always longer to open