Make their singhas biggest theye day moves as move toward a brexit deal. President trump says u. S. China trade talks are going very well. They continue in washington today. Plus, reports of an explosion on jeddahian tanker near send oil prices spiking. Matt we are 30 minutes away from the european open. I have got those oil prices on my screen. This is a threeday chart of brent crude. It has been climbing anyway on optimism for a u. S. China trade deal, so it was already up to almost 60 a barrel. Now it has jumped over that at 60. 40 on these reports, first from reuters, then from the oil news agency that i missile has struck an oil tanker and it is leaking oil into the red sea. Lets take a look at futures here. Weer we saw stackocks rally, are seeing futures rise on european indexes as well. On thet on the dax, and continental indexes, gaining when you have a big rally in the pound, then you expect to see a loss in equities, that negative correlation. Is it breaking down . I know you were talking with the possibility of a breakdown. Anna certainly that was around the no deal story, so it does remain very intact as we have seen the surge in sterling. As you point toyed the negative committee as you point toward the negativity. Risk assets are clinging to the positive. The reasons to be positive rather than jumping on geopolitics and the nervousness around oil prices and saudi violence. That is clearly moving the oil prices. Other markets looking beyond that, looking at places to be helpful. Trump says talks are going very well, a pathway to a deal on brexit seems to have revealed itself. Lets talk about what is going on in the markets. We have moved to the asset moves to the upside in assets. It is very clear to see on the gmm. We can see the story on commodities, we have brent crude rising, wti rising. That is all to do with what is going on in iran, plus to do with the Global Growth story. It had been on the rise already. Plus the message from the secretary general of opec said whatever it takes to prevent a slump in oil prices. There is a lot going on. Managingberg markets editor joins us in singapore. We mentioned the individual stocks stories, but the market clinging to these troves of optimism, both on trade and brexit, rather than being derailed by geopolitics. Your thoughts on the trade narrative as we go in toda day two. Guest there is an immense amount of positivity. There are hopes there will be a trade deal. On brexit, we had the most optimism we have had in a long period of time. In the last hour or so, i received morning notes from u. K. Commentators and previous cynics, expressing more optimism than they had seen before that because the irish side is standing up, that means they are having faith. The narrative is going to the fact that there may be a brexit deal. The narrative is in the camp that there will be a mini deal. It does not change the fact we have this massive data global slowdown. As we get this many trade deal, if it does not remove tariffs it will not be sufficient to change the story. The bigger backdrop remains strong as ever, but i would say that the asymmetrical word is for more disappointment. You probably should have seen there will be some sort of trade deal. We have a surge higher in stocks. There is some reaction still to play out. Matt a many trade deal is easier a mini trade deal is easier for me to envision than a brexit deal that solves the irish border problem. Isnt this a chance to make some money selling the pound . I think both deals are very feasible. I think the eu has a history of going against the wire and ultimately getting the save the bacon. That would tie in with a lastminute brexit deal. The nuances and subtleties around the u. K. Politics story are immense and too much to discuss in a five Minute Program , let alone a several hour program. Many people believe that Boris Johnson ultimately will be happy if he has a deal. That means he can deliver brexit, and that would help his support base. The fact that ireland is standing up gives me faith that there may be some deal before the deadline. The base case is both sides probably want some kind of deal. They are both negotiating. They probably want some kind of deal for the sake of the economy. I think the positive narrative makes sense, but both are massively uncertain and the downside of a no deal brexit, it is not priced. If there is a no deal brexit, it would be cataclysmic for assets. Do not make the mistake of thinking negativity is priced, absolutely not. It is the same with a trade deal in the u. S. Some progress is assumed that if there is a complete progress and no sign of further talks it would be terrible for u. S. Assets. While the positivity is understandable, the downside is very scary if something goes wrong in either case. Anna i came back from dublin wondering if the irish wanted a delay and the chance at a second referendum rather than a deal, but the optics do not seem that way. Let me ask you a question because i think it is interesting. It will test your faith in the rally we are seeing in equities. Even with an agreement between the u. S. And china, do you think it is comfortable with the bull makrket and the data . There is a loop between the two. There is a loop between the trade conversations and the weakness in the macro data. There is no chance of this bull market continuing. I have been in this camp for several months. Formately, what we need this bull market to continue is the removal of the tariffs that are already in place. I do not think an agreement of andval for huawei nonescalation of tariffs is sufficient. Manufacturing is starting to broadero the economy. Unemployment will start to rise. We have too many Major Economies in recession or getting very close to it, places like germany, the u. K. , south korea. That is heading into the bigger economies. Deal will not save this bull market. To the mean you can get top in the shortterm. I dont think we will make a new record high again, but if we do, it will only be marginal. I think we can see 300 up on the s p if we get a mini deal, but i would not expect us to be there long. We would get there for a day or two and people would say, what has really changed . Tariffsx will the will remain, Global Manufacturing is declining, global trade is declining. Earnings are misaligned. The earnings projections for next year are completely fantastical. They have not been cut yet. All those earnings forecasters think the growth is wonderful and there has been no trade war. The bull market will not continue unless all those tariffs are removed. Matt awesome to get your view. Thanks for joining us. Mark cudmore, bloomberg mliv managing editor. You can follow their work by typing mliv on your terminal. So far, so good. China expressand optimism after a day of highlevel trade talks in washington, but analysts remain skeptical. We will talk more about this next. Remember, Bloomberg Radio is live on your mobile device or on dab digital in the london area so you can tune in as you drive to work or anytime. This is bloomberg. Back to bloomberg markets. This is the european open. We are 17 minutes away from the start of catch trading. See ftse trainings down, we see ftse trainings down. Gaining on trade optimism. Lets get over to the oil futures right now and see what they are doing as well. Extending gains following ian tankerat an iran was shot by a missile, according to the oil Ministry News agency shana, and it is now leaking oil into the red sea. Annmarie hordern has details. Annmarie we are learning that the ship has been halted and the staff are safe. This risk premium coming back into the price of brent, which is trading north of 60 a barrel. We are up nearly 2 on the price of brent. This oil tanker was about 60 miles off the Saudi Arabian coast near the port city of jeddah. Shana, the oil ministrys own newswire, said it was attacked by missiles. I spoke to an oil analyst, and she is saying the market has been way too complacent, overly complacent given the fact that we are one security incident away from a conflict. Talks aboute had the threatening of the escalation, and if that were to spiral out of control. All this comes as we have had serious escalation of tensions in the region, given those massive attacks on saudi arabia. Seemed to be struggling shrugging it off. I have been asking ceos, is there too much money in the market . They are focused on the demand picture. Annmarie hordern with the latest. Lets get a first word news update. The u. K. And eu are a step closer to determining the terms of a brexit deal after a positive meeting between the british and irish Prime Ministers. Leo varadkar urged negotiations brussels. Talks in the discussions continue to hit a major stumbling block. What to do about customs checks at the irish border . There was a meeting today with the Prime Minister and our teams together. Very positive and very promising. Now i am absolutelynow i am absd that will ireland and britain what there to be an agreement. That is in the interest of the European Union as a whole, and i see a pathway to the agreement in coming weeks. Now to syria, and President Trump is pushing back against bipartisan criticism on his decision to have u. S. Forces pullback. Let turkish troops move in and attack kurdish forces. Trump says he is carrying out his Campaign Promise to stop u. S. Involvement in endless wars. But critics say he is exposing loyal allies to the risk of slaughter. Europes biggest Carbon Dioxide polluter is going green. Cutsays it wants to emissions by 70 by 2030 four foregoing Carbon Neutral. Going Carbon Neutral. We spoke to the finance chief of germanys largest utility. On a are going to embarq huge transformation and going to become Carbon Neutral and have a very diligent carbon reduction path from now to 2040 with clear measures. Of course, it is not the goal in itself to reduce carbon emissions, but also to compensate the lost Power Production by significant growths in the reusable space. Reporter global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna, matt . Anna thank you. Trade talks between the u. S. And china will continue later today. President trump will meet with chinas top negotiator, liu he, at the white house. That is after an apparently positive first day. This is how the president described it to supporters. I am dealing with china right now. They are in washington. We are going to see if we can make a deal. But they want to make it. We will determine whether or not we want to make it, but they have been very nice. Anna Kathleen Hunter culvers politics for bloomberg and joins us on set. How optimistic should we be here on trade . The markets seem to have decided to be optimistic about some kind of deal. Reporter i think this is positive news, however i would urge caution because i feel like we have been here before. It is telling in the tape you just played. Here we are, trump has promised a trade deal with china. The 2016 campaign trail, promising a deal. There are Political Forces here, and that is important to keep in mind. Matt what kind of deal do you think trump would accept here and china would give him . What do you think we might see . Oforter there has been talk a currency path, a first phase deal. That has the effect of leaving the more difficult issues for later, and allowing both xi and trump to claim a shortterm victory. Particularly for trump with 2020 coming up, that could be a really positive thing because he is being hurt in firm states by the trade war. If there is an ability to reach a shortterm deal, that would that some of the tariffs take effect later this month. I think that has very clear up shots for trump. Anna we talk about the timing of all of this, 2020 and the election. Clearly they are linked. Some people are raising concerns as to whether you can remove all of the impediments to global trade that have been put in place in time for 2020, whether impact onve an an the ballot box. Remind us of why exactly this is tied to his prospects in the campaign. Kathleen in some of the farm states, it is difficult because of the tariffs. Those are rural states where support has been strong, but where democrats are looking to make inroads. To your point, i think that whatever is happening in the economy, on the eve of the election, it will certainly affect trumps fate. I think if he is able to claim of a victory, that will resonate with his base. Matt thanks very much for joining us. Kathleen hunter on the possibility of a trade deal and the position of President Trump. We are moments away from the open. We will take a look at which stocks to watch, including another cut to the ad agencys revenue forecast, showing the industrys woes are not over yet. This is bloomberg. Matt welcome back to bloomberg markets. We have to bring you breaking news on turkey. The European Union is considering sanctions against turkey for invading syria and attacking and killing kurdish rivals there. This according to france. Bections against turkey may debated at the European Union next week. We are minutes away from the open, six minutes to go. Out of the newsroom, Annmarie Hordern is looking at publicis. Publicis. We are covering sap, and dani burger is focusing on hugo boss. What is with the french ad agency . Annmarie they have their Sales Guidance cut again. This is the second time in three months. Oft is taking a bite out this is the traditional advertising. We are seeing Companies Cut spending on tv and billboard advertising. They have not been able to make that up. Anna and what is going on with sap . Announced their Third Quarter results that look pretty good. Revenue went up by 13 , but more important, thei Cloud Business went upr by 33 . That is coming after mixed results. Announcedcompany their ceo is stepping down and will be replaced by two other ceos. Matt danny, you got the story on boss. Dani they cut their outlook for the financial year. Here is where we are seeing concerns about growth affecting companies. They say sales are looking weaker because of growth uncertainties and economic uncertainties, as well as unrest in hong kong. We are seeing shares that are sharply lower. We have seen analysts cut their rating on the stock. Anna thanks very much. Thank you for joining us. Get the you can on the on first bloomberg. We are five minutes away from the start of the equity trading day, and futures will be stronger. The story around optimism, trade, and brexit. The brexit story will weigh on the ftse 100. Matt absolutely, weighing in on the ftse because it is the pound. Otherwise, we see indexes across europe rallying on optimism for a trade truce between the u. S. And china, and maybe optimism from the eu side. A hard brexit would not be great for the European Union either. Britain is a big customer. This is bloomberg. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of wireless network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Equity trading. 8 00 in london, from the asian session, up i 1 . President trump thanks talks are going well with china as we go into day two. Should we because this and buy into optimism . The pound a subject of optimism around brexit negotiations. Boris johnson meeting their little pull yesterday, and they found a pathway to a brexit deal. S p 500 futures suggesting , ther, also bouncing Global Growth story connected to trade. What is being reported as an attack on a tanker in iran. We continue to track geopolitics there. Currency markets, we will get to that in a moment. They should show up nicely for us on the gmm. As we wait for europe equity markets to get into full swing. The pound is flat but we did see a move upwards at the end of yesterday when the ftse 100 closed. Inverse see the correlation between the pound and the dollar ftse 100. The ftse is down, but do not take that as part of the Global Growth story. 100 down by 0. 3 . The euro stocks fairly flat. Market giving a picture of optimism that has gripped markets in asia. Italy opening up by 0. 3 . We see more green than read. Than red. Staples and health care in the red. We have a risk on picture on markets. Energy, basic materials going higher on the back of the higher oil price. Positive Global Growth drivers there. What do you see in the individual movers . Matt i see more winners than losers, 340 stocks gaining, 235 are down. If you look at the stocks that are adding the most points to the stoxx 600, lloyds bank is there at the top. A british stock leading the pack because lloyds is gaining almost 3 . It is a big stock to begin with, but the bank is up 3. 5 . It continues to gain. Brexit Sensitive Companies may be boosted on optimism for a deal there. You see that evidence and lloyds shares rising 3. 5 . On the downside, nestle one of the biggest losers, and linda, 1. 6 putting up a decent loss. Nestle is not moving much, but it tends to take points off of the index. Linde is not small, we are talking about a 93 billion euro company. Out you are right to point what we are seeing and a large multinationals in london. Banks and retailers are a different story. A different take on the pound of course. A seemingly positive first day of highlevel negotiations between the u. S. And china. We talked to bloomberg guess on how the trade war is impacting the economy. Tomost businesses i talked want to stay number, and they realize there could be new p