A move that would mark a stark change for the owner of craft and burger king. Nejra welcome to daybreak europe. We are coming to the tail end of earnings season. We have numbers breaking from abm amro. The thirdquarter operating income comes in at 2. 1 billion euros. The estimate was 2. 13. Buts a little soft thirdquarter operating income pretty much in line. The thirdquarter profit income ratio, 59. 4 . Comments coming through here is that the timing of the completion of the dutch probe is uncertain. A few things to digest. We will speak to their cfo, coming up. To the markets. We are seeing a down day in asia. We heard a lot from President Trump yesterday, speaking about trade and the fed, comments we could see a trade deal. If we dont have a tariff hike. We are seeing risk off in equity markets. The hang seng leading declines with a Third Straight day of protest in hong kong. Volatility rising in that index as well. The kiwi is jumping the most in nine months. Switch over the board to take a look at you as futures. Yesterday, we saw a slight gain in the s p 500, closing shy of a record. Thats with the latest bank of America Survey shows. Expectations for Global Growth surging the most on record. Cash levels have been plunging as well, to the lowest level since june 2013. The dollar holding onto the gains from yesterday. Global stocks have dipped as donald trump says the u. S. Will increase tariffs on china if the first step of a agreement isnt reached. He said beijing once a deal to happen. Wants a deal to happen. They are dying to make a deal. We are the ones that are deciding whether or not we want to make a deal. We are close. A significant phase one trade deal with china could happen, could happen soon. But we will only accept a deal of its good for the United States and our workers and our great companies. Nejra traders havent been interested in betting against chinas you want and months. Its close to the lowest since before it weakened in august. Bnp paribas has warned over complacency, saying theres no reason to be optimistic about trade resolutions. Now is Portfolio Manager for fixed income at marion global investment. Welcome to the show. Do you think we have reached peak trade war . That, the era we have gone through with the tariffs will go higher and higher, perhaps it is coming to an end now. To hike tariffs if a phase one deal isnt reached. There is reason to feel optimistic. Interests tosides come to a barebones agreement and set the course on a progressive deal. Think about it. The electrical cycle may be coming. I dont think trump can afford to have a downturn in the economy. You heard his speech yesterday. It was focused on his economic achievements above everything else. Stocks are around 50 higher since he took office. Thehey fall 10 before election, that is the tempers and people will remember. View, a china point of lot of the stuff that has been in the phase one deal is stuff they need to do anyway or want to do. Thing is in their interests. But helps with trump and swing states in the midwest. Intellectual property, they want to encourage capital inflows. Capitald to encourage into the country when hong kong is under threat. That has been avenue for capital into china. There are plenty of reasons from both sides why it makes sense. Nejra the market has been getting optimistic about this. Bank of americas latest survey shows investors are now rushing to the equity market. You manage fixed income. Your portfolio, are you skewing the bias more towards risk at the moment . We have been for a while. There has to be a thought in the trade war. You can see there has been a Movement Towards risky assets. I wouldnt say it has been overwhelming. If you look at the core Government Bond market, yields are low. Extra bit of yield they wanted to be in safe havens. It is deeply negative. You are seeing that unwind. Core Government Bonds have been unwound. I wouldnt say theres overwhelming optimism to get a reflationary boom. There is money to be made in low inflation bonds. The capital flowing into the u. S. During the trade war coming you see people by whether it is u. S. Fixed income or simply u. S. Money market funds. The fed rates are higher than the rest of the world. You have not seen that unwind yet. You have to unwind these short positions but you are seeing that capital flow out of these usa pagans into the rest of the world. I dont think that actual cash flow is taking place yet. There is still room. You need investors to have more confidence on the trade front. A pickup and acceleration in that. China credit data was a bit too weak. Your positioning for that rotation, what does that mean for the dollar . They are a risk. People are reluctant to come out of those u. S. Capital markets. The situation is still uncertain. Trumps speech underwhelmed Market Expectations. And tor to get that flow weaken the dollar, which we think will come, you need better data than the rest of the world. It will be interesting to see what powell says later. You have seen already some Interest Rate convergence with the insurance cuts. He clearly wants to be on pause for this of the foreseeable future. The dollar still trades quite strong. He indicates that hes willing to cut rates further, if the data does come lower, that would support people moving out of dollars. Policy, we see some stabilization, and no further escalation in the u. S. China trade talks. It hinges on china. What are your expectations for china policy . Would you be buying chinese bonds . I would not just yet. There will be a Good Opportunity to. Before i get more comfortable, i want to see how, whether there is any spillover from high oil prices. You are seeing a big jump in headline inflation because of this jump in oil prices. I want to see if that feeds through into broader inflation. In terms of the chinese response, you are seeing a tiny cut in the loan primate last week. Thats a good signal that there is easing on the monetary side. It is not aggressive yet. The premier said that there is pressure on the chinese economy and they acknowledge that rates have fallen substantially. They are at multidecade loads. Lows. They are hoping for a phase one trade deal to give chinese growth a break. Along with the more elusive physicals from china, i wont by chinese bonds yet. ,nce those prices hit through there will be opportunities to buy chinese bonds. Nejra lets get the bloomberg first word news with one half in hong kong. Good morning. Hong kong security chief has warned of unthinkable consequences if violence continues. This as the citys Financial Center braces for a Third Straight afternoon of protest. Earlier, commuters passed under the first trains amid calls from activists to impede rushhour traffic in a show of anger over police tactics. The International Energy agency says Global Oil Demand will likely plateau around 2030. Its as the current growth rate of 1 will hold for the next five years. Says lower Global Demand growth once it has been. The president of lebanon has sparked public anger by calling on demonstrators to give up and go home. His comments out a new surge of unrest which claimed the first death. He urged people to stop being negatives. He warned lebanon could die. Demonstrators reacted by blocking roads and setting fires across the country, restating demands for the removal of corrupt leaders. New delhi is choking once again. The air quality reading rose above 400 on tuesday, eight times the safe level. Wind blowing from the northwest brought smoke from burning rice fields, piling pressure on the government to find a solution. The World Health Organization data shows india has the 10 most polluted cities in the world. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Nejra thank you so much. 3g capital has a new evidence elevator pitch. Vying for an elevator unit. It is competing against a number of other firms and strategic bidders. Here with the details is dani burger. Why would this private equity germane interested in a lift business . It comes down to returns. Its as simple as that. And consumer goods, they are wellknown for their kraft deal. They see their consumer goods business see multibillion dollar writedowns. This is really a story of crowding. Private equity is so crowded. You are seeing players having to move away from their core focus in order to look elsewhere for returns. 3g is moving to this elevator unit. It has to do with how much dry powder there is in private equity. 3g has about 10 billion of Investor Capital they need to employ. They are getting a lot of pressure from their investors to do something with it, to go after those big deals. Lot of investor interest it would me the bill of a big deal. Nejra is this an asset that is insulated from the economic slowdown in germany . Any german asset, especially industrial conglomerates, feel the pain of a german slowdown. Deals actually why this has been made possible. When you have slowing growth, you have big German Companies thinking, we cannot get as much organic growth as we thought we could. We need to look at spinoffs and narrow our focus. Germany,pply side in you have more assets coming into the four. On the demand side, you have investors that usually would look in the u. K. When it comes to european deals. They are fine moving into germany. Conair raise their biggest European Fund which focuses on western europe specifically. This is just one of many deals taking place in the region despite any of the economic slowdown weve seen. Up, looking for clues. Jay powell appears before congress today. Investors will be looking for confirmation that he sees the economy on solid enough ground to hit pause in december. Protests have continued across hong kong today. This comes as hong kongs security chief cautioned that unthinkable consequences may come. We have plenty more coverage ahead as the hang seng leads losses in asia. This is bloomberg. Listen to me. Dont listen to them. Freedom of speech. Nejra a day of protests in hong kong. They have announced suspension of all schools on thursday. It comes amid protests across the city today and Hong Kong Security chief has cautioned that unthinkable consequences may come if violence continues. Lets check in on the markets in asia. Juliette saly has more. Good to see you. The hang seng wheezing leading losses today. It certainly is. Protests continuing throughout the week. The hang seng index on track for its lowest close in a month. A number of property stocks have fallen through. That negative sentiment from hong kong really flowing through to the ridge rest of the region. Asian stocks are having a bad day. The nikkei giving back yesterdays gains. Australia stocks closing the where for a second session. Marketz surprising the by leaving rates on hold at 1 . They say they are waiting to see the impact of recent rate cuts flowing through the economy. Fx traders have been caught out. The kiwi jumping the most in about a year. Holding onto those gains. Its the best g10 performing currency today. Have a look at my chart. The interesting to see fading correlation between the s p 500 and the hang seng index. It had been moving in tandem until we started to get these protest ratcheting up over the last couple months. Falleng kong index has while the s p 500 has risen about 12 since june. Mark cranfield saying traders in hong kong can no longer wake up and see what has happened on wall street to dictate their days trade because it all really is being driven by domestic issues. Those who have tried to chase momentum on the hong kong index by tracking the s p 500 could have lost by around 12 so far this year. Nejra volatility has been increasing as well. Thank you so much. Lets get the Bloomberg Business flash from hong kong. Thanks. Roundusk says tesla will out its Global Manufacturing network with a factory in berlin. Willsay the german plant build both batteries and vehicles. Until now, the company has relied on a single facility in california but its now on the verge of starting sales made at its chinese factory. Says media in Hong Kong Alibaba has won approval to pursue a share sale that could raise more than tell billion dollars. 10 billion. It has given the green light to the move. Alibaba is proceeding with the years largest Stock Offering despite violent protests within hong kong. Amazon,breaking up with ending a Pilot Project where it sold its products on the website. The company says the decision is part of its focused on more direct relations with partners. Nike ads that it will continue to use Amazon Web Services to power its apps and services. That is your Bloomberg Business flash. Nejra thank you so much. President trump has renewed his assault on the fed, saying policymakers are hurting the u. S. Economy. Is at athe u. S. Competitive disadvantage because the fed has failed to follow other Central Banks into negative rate territory. Now many are actually getting paid when they pay off their loans. Known as negative interest. Whoever heard of such a thing . Give me some of that. Give me some of that money. I want some of that money. Our Federal Reserve doesnt let us do it. I dont say thank you. The smart people are clapping. [applause] nejra investors will be watching jay powells appearance before congresss joint Economic Committee today for confirmation that he sees the economy on solid enough ground to hit pause in december. In new zealand, the kiwi dollar surged the most in our ninemonth. The Central Bank Held out on the fed, saying it is standing by to add further stimulus if needed. Our guest is still with us. Lets start with the fed. It would be surprisingly rare for the fed to not change policy in one direction or another during a president ial polling year. It has done so in each of the last 10 years. Willoughby on hold through 2020 . To row Jerome Powell would love to be. It will be nasty as we head into the u. S. Election. It will be a luxury that he doesnt have. View, political point of he will probably have to cut rates again next year. The u. S. Data has been reasonable. We have not seen bases saint week next a sustained weakness in the u. S. Dollar. Even though the u. S. Economy is dollar is still the predominate currency out there. Two thirds of global liabilities are in u. S. Dollars. If you get a stronger dollar and you have high Interest Rates in the u. S. , thats a burden on the rest of the world. , this haseen recently enabled em Central Banks to cut rates as well. Before, they had this dilemma where if we cut rates in our domestic credit and demand, our currency is going to we can you getcan get capital outflows from the country. Loath to cut rates to aggressively. We have seen some of those cuts in em. Nejra i want to get your take on the rbnz. Does that signal to you that develop market Central Banks are hitting the pause button . Is that something investors need to take into account . There has been a partial thaw in the tray were trade war. New zealand is an incredible open economy. The trade war would have a big impact on how that currency trades. The rbnz cut quite aggressively in august. They want to see how those rates play out in the economy. You sawres any Inflation Expectations drop. The rbnz forecasted a sharp we acceleration in growth next year. We will wait and see how that plays out. They want to keep their powder dry for now. If the economy does continue to weaken, they will be back. It is handsoff, much the same way a lot of european Central Banks, who have slightly different problems because their rates are a negative territory, theyve hit the pause button two. That has allowed this to take place. People are no longer to worried about excessive rate cuts happening in Central Banks. Nejra you are short core Government Bonds. Long with a lot of em rates. The fed is on pause and not cutting as far as we know for now. Did that complicate your long em trade . The long em trade would be easier if there wasnt an easing bias in the fed. If the fed is on pause, it relies on the improvement in Global Growth and continued thaw in the trade war. Some of the european banks we have seen recently, it is not incredible. Weve seen underlying improvement in things like new orders and future expectations. The iso was better as well. You are seeing exports pick up in some of the more tech focused economies in asia. There seems to be some improvement. If you get that translation into hardly hard data, em can do pretty well. Nejra staying with us. Coming up, what is holding back a Banking Union for the euro area . We will bring you that. Hong kong has announced an extension of all schools on thursday. Continued protests across the city today. We will keep you uptodate. This is bloomberg. Nejra this is bloomberg daybreak europe. Chinese giant tencent releases thirdquarter earnings today. Its expected to report fairly any growth in net income. Thats because a number of concerns have snarled what was supposed to be their year of recovery following a brutal 2018. This includes a sharp chinese economic slowdown, competition , in the hong kong protest. Our opinion columnist joins us. Great to have you with us. Traders are bracing for big moves after these earnings. They are bracing, the options that would be the make us move since august 2018. What are they bracing for . They will probably overreact either way. There are so much going on at tencent. You just listed some of those issues. What we are looking at is macroeconomic headwinds that we all know about. Weve been talking for a long time. That would impact advertising businesses more than anything else. Its not a small part of their business. 20 . You reference their troubles last year. This year, it is more content. They are spending more money on it. Sports is one area of content they are spending money on. The nba has been controversial for them recently. Thats almost a distraction. Its not a huge deal. They have content in other areas. Tencent has a video streaming service. They are developing their own content. They couldnt actually bring it to the audience as quickly as they expected. They are not able to get the benefit of suspicion revenue. That is why they are spending money. Even though revenue will grow 23 after the quarter, we are seeing costs hurting them a lot more. Nejra youve written a column about the fact that the value of isntt fintech unit getting the recognition it deserves. Is this one of the upsides in a story that contains a lot of bad news . I totally think so. They dont necessarily have to separately listed but spin it off in a similar way that alibaba spun off their financials. That would unlock a lot of value. Investors look at that separately, realize what they have got. Its an unprofitable business right now. They would not take a lot for them to leverage what theyve gotten and spin it into a profitable business within a year or two. We are talking 150 billion market value in that business alone. Tencent is a 400 billion market. We are talking 50 value right there that needs to be unlocked. They could do that quite easily. Will see whether shares have their biggest post results move in 15 months as Options Markets are indicating at the moment. Thank you for joining us. Lets check in on the markets around the world. Here in london is annmarie hordern. You are looking at commodities and the new Zealand Central Bank rate decision. Good morning. I want to talk about how the markets are really just focused on trade once again after President Trump spoke yesterday, saying we could see an agreement but there could be more tariff hikes. Outside of equities, gold edging higher. Crude down for tents of a percent this 4 10 of a percent this morning. Earningse we have season starting to wrap up. President donald trump took aim at the fed, saying the fed is not following suit like other Central Banks in deploying negative Interest Rates. New zealand, we are seeing a bit of a Global Policy shift. New zealand defying widespread expectations, deciding to keep rates unchanged. The biggest jump in the kiwi since february. Two standard deviations to the upside for the kiwi dollar after the new Zealand Central Bank decided to keep rates unchanged. The market was not pricing that in. This is a potential policy shift from the fed last month. Our Central Banks starting to look at positive . Nejra thank you. Oil down for a third day. You wonder if that will continue. American inventories are expected to rise again. We heard from the iea today that Global Oil Demand will hit a plateau around 2030. Lets get the bloomberg first word news. Is ratchetingrump up the pressure on china by warning he will substantially raise tariffs if trade talks failed to produce a deal. Club, heat an economic says beijing is desperate to reach an accord. The west president renewed his assault on the fed, saying it was hurting the economy by not only negative Interest Rates. It is going to 15 very soon. I tell this to larry and everybody. If we dont make a deal, we will raise those tariffs. It will be raised substantially. That will be true for other countries that mistreat us. Weve been mise mistreated by so many countries. Hong kongg kong has announced the suspension of all schools in the city as the security chief warns of unthinkable consequences if violence continues. Commuters packed onto the first trains amid calls by activists to impede rushhour traffic in a show of anger over police tactics. Of lebanon has sparked public anger by calling on demonstrators to give up and go home. His comments saw a new surge of unrest which claimed a first death. He urged people to stop being negative, warning it protests continue, lebanon could die. Demonstrators reacted by blocking roads and setting fires across the country, restating demands for the removal of corrupt leaders. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Nejra thank you. Unicredit ceo says the bank may consider m a but only if the share prices of european lenders rise. Will we see a Banking Union in europe within our lifetimes . Thats a very important question. We need to define what is a Banking Union. A lot of people say we need to complete a Banking Union. Its aople say we, bit technical to me. For me, a Banking Union means we are a Banking Sector which is seen by investors as the european sector. Lets take an example. When you speak to a u. S. Investor, he will say, i invest in a u. S. Bank. If you speak with the same investor about europe, what they will say is, invest in a german bank, and italian bank, or a french bank. It is not the european sector. Aboutnking union is making sure we have a strong european Banking Sector. Andant to attract Capital Investors to buy into the bank capital to give banks the resources to finance the economy. Finance 70 ofs the jobs. Its important that the banks can finance the economy. If you dont need this create scheme, if you the european champion, you have that bank to rival the u. S. The banking market in europe is more fragmented than the u. S. Look at the combined capitalization of the top five european banks, it is smaller than j. P. Morgan. Why . The u. S. Market is one single market. And thee no borders same language. In europe, it is different. We have 27 markets. What is important is to make sure that we have more unification of rules and that the banks look the same when you look at them from the outside. Its an important part barometer. Not sufficient to make sure that the Banking Sector is completely uniform. Nejra that was Francine Lacqua talking to the unicredit ceo. You can catch the full interview on leaders with lacqua. Europe, we are awaiting cpi data out of germany later today. We will find out whether germany is in a technical recession. You are short boones. You have High Conviction in that trade . Pretty high. Germany has been hit very badly in terms of its economy by a number of factors. Its a manufacturing dominated economy. It has been hit by the section 232 tariffs on autos. It has been hit by china. It has also been hit by brexit. Thats why you see boones bunds trading some expensive. Some of these factors are starting to turn. It will be interesting to see if germany goes into a technical recession, whether that is the cover the politicians need. They already have plans to increase fiscal expansion next year by 0. 4 . There were some of it going on but this could give it cover to do more. Hitgerman economy has been on multiple fronts. Wrongould look terribly if the tariffs do go on. I think there will be a cause. Best policy. Be a cause. German autos, german capital autos will improve. You start to see all of that already. When i look at these factors and think, boones were very expected. They priced and a lot of negative impact from all these factors. If it goes in the other direction, this massive rally we have seen this year can continue to unwind. Nejra i spoke to somebody yesterday who said that the only a is starting to price in hikes by the ecb. The person i spoke to said, that is not going to happen anytime soon. Thats an opportunity in the rates market in europe. Would you be wanting to play that opportunity at all . Are you making trades around european curves . I think its hard. Its hard to see the ecb hiking rates anytime soon. Curve can maybe give a few mixed signals. The markets are adjusting to the impacts. You are seeing borrowing from italian banks, for example. They have room to deposit money at ecb. They can borrow money at negative rates. Maybe lets see that clear for a bit. We will see if the market is pricing higher. No one in the market is willing to put themselves on the line and say they can see the ecb hiking in the next 12 months. The economic picture is still too crowded. The ecb is fixed in on Inflation Expectations. Nejra is there an opportunity to buy the front end of the curve . Absolutely. Nejra with italy as well, you are long btps. That is a position you have held in a test for a while. What is your thinking . Btps have had a week few days. Theyve been a great trade this year. You continue to see rate conversions between the peripherals and german curves. Long. Were quite if you want to own european duration, it has rallied so much. People got sucked into it. Perhaps you felt there was cover in btps. That has increased a lot. There is shortening being put on. If you see an improvement in the european economy, people will factor in less ptb buying. That is part of the reason. Seeing the politics deteriorate around the margins. The local elections did quite badly. Salvini is on the ride. Rise. People have one eye on that with the controversy around metallic not going through with their buyout of big steel manufacturers and italy. Factors around politics clouding them matter. The matter. Weve been biased around these levels. Nejra coming up, we will speak to ecuadors cfo about the progress of its giant oil field. A good day to catch up with him. Global oil demand will hit a plateau around 2030. Dont miss that exclusive interview after the 7 00 u. K. Time. We will pick up on that story on the iea talking about Peak Oil Demand. Do not miss that either. This is bloomberg. Nejra this is bloomberg daybreak europe. Is predicting that Global Oil Demand will hit a plateau around 2030. Growth will see a marked slowdown after 2025 and f to 100,000 barrels a day in over a decade. Lets be to our Energy Reporter in singapore. Great to have you with us. Take us through the details of the report in terms of what will leave leads the drop in Global Demand for oil. They are expecting about one Million Barrels a day of growth annually through 2030. It will slow down drastically 100,000 barrels a day every year. Thats quite a drop from the last years report which had 200,000 barrels a day. What is causing this . It has to do with china and cars. We have the emergence of electric vehicles as well as more efficient vehicles that use less gasoline. Because of that, gasoline demand will be falling. You also have chinese demand drastically dropping into the 20 30s, according to the iea. With those two factors combined, you will have a slowdown in growth in oil demand into the 20 30s. Its not all bad news. The producers of oil, their wells are drying up by 2030. They will have to find new wells and produce new upstream sources. Because of that, the price of oil is expected to rise to about 90 per barrel by 2030. Its around 60 now. Thats a bit of a hike. By 2040, it will reach 104 per barrel. Despite the slowdown in demand, higher prices could help the we the Balance Sheets on some of these Major Oil Companies going into the future. Demand doesnt mean peak prices. Thank you so much. Our guest is still with us. I want to get a quick thought from you. You are long european, u. S. , and japanese inflation. Oil plays a factor in that. We expect some demand for oil in the next few years to pick up a little bit as Global Growth improves. We expected to move more towards trends. We think Inflation Expectations japan vacation of the entire world. Thought you would get reaction from policymakers. You have seen inflation breakevens come back. What will be interesting is, you will see a sixfigure share of National Income recently. Wages start to increase as the labor market starts to siphon. It just hasnt happened. It is fairly easy still. You can borrow for near to nothing. You are seeing a big increase in corporate debt as well. If you see Interest Rate cuts raised, perhaps you start to see some feedthrough into Consumer Prices and you can inflation on the back of that. It has not played out as yet. Margins are under pressure from high labor costs. Nejra lets get the Bloomberg Business flash. Elon musk says tesla will round out its Global Manufacturing network with a factory in berlin. The electric car boss says the german plant will build batteries and vehicles. Now, the company has relied on a single facility in california. It is on the verge of starting sales of callers made at its chinese factory. Firm 3g capital is set to submit a bid for an elevator business. The move comes as a surprise with 3g having made a name for itself buying food giants like burger king. Bloomberg understands the elevator unit could fetch more than 15 billion euros. They are still debating whether to sell the majority or minority stakes. Says media in hong kong all of bob a has won approval to pursue a share sale in the city that could raise more than 10 billion u. S. Dollars. Has given the green light to the move. Alibaba is proceeding with what could be the years largest Stock Offering despite violent protests in hong kong. That is your Bloomberg Business flash. Nejra thank you. Turning to the u. K. We are watching out for cpi data do it 9 30 a. M. Inflation is due to decelerate in october, down from september. Our guest is still with us. We were just discussing the fact that you are long inflation. Short u. K. Inflation has been eight popular trade since brexit has looked more positive. Is that a trade you would want to take . We are playing in a different way. We are moderately long in sterling. Inflation has been in line with sterling. When sterling depreciates, inflation goes down. It has been linked to peoples expectations on brexit. If theres a good brexit outcome, inflation goes up. We are not outright short on u. K. Inflation yet. We have long sterling positions in their which will work the same way. Nejra you are targeting how much upside from here . We are take playing it day by day. The pool yesterday that came out suggested that the tories have increased their lead despite their difficulty at the start of their campaign. That suggests that labor is not making inroads. That would suggest there is more sterling upside to come. If you get a strong tory majority, it will be a hard brexit. You might be able to see sterling move towards the 140 level. Nejra on guilt, you are short. Is that purely because of your view around Global Growth . Is it specific to the u. K. . Relative to other parts of lts are cheap. There is nominal yield there. The u. K. Has generated a bit of inflation. We have not had deflation scares much in europe. In real terms, it looks expensive. If you get a fairly benign outcome from brexit, you get the Withdrawal Agreement through, you get that certainty of Boris Johnson steel. On the other side, you can expect a lot more supply. The conservatives have moved away from fiscal prudence. They are breaking their own fiscal rules. They have pushed labor into being even more aggressive on the fiscal front and in their fiscal spending calculations. You can expect a lot more fiscal stimulus. You can certainly get some downside in the near term. Nejra is the next move from the bank of england a hike or a cut . It depends on the brexit deal. If the polls are right and the tories are looking like they will win a majority, you dont i dont think we will get a cut. They are waiting to see how those fiscal policies hit the economy. They will keep their powder dry for a time when they need rate cuts more urgently. Nejra thank you so much for joining us this hour. Coming up, President Trump rams of the terror threat. Where does that leaves the proskauer prospects for a deal with china . Bloomberg users can interact with the charts shown using to tv. Browse recent charts to catch up on key analysis and save charts for future reference. We are seeing risk off in the markets today. Tune in to Bloomberg Radio live on your mobile nejra good morning from bloombergs european headquarters. This is bloomberg daybreak europe. These are todays top stories. Downside risk. Jay powell will steal headlines later today. Asia trades lower as President Trump says the u. S. Will increase tariffs on china if a phase one deal falters. We dont make a deal, we will raise those tariffs. They will be raised substantially. Nejra peek into the future. Oiliea predicts Global Demand will hit a plateau around 2030 with the rise of electric vehicles and waning demand from china changing the landscape. The executive director joins us this morning. Diversifying. 3g capital is set to make a bid for an elevator unit. It would mark a stark change for the owner of burger king. Nejra welcome to daybreak europe. Weve got the german cpi data breaking right now. A number of 0. 1 which is bang in line with estimates and the same of the as the prior reading. Year on year, 1. 1 . Bang in line with estimates and the same as the prior reading. If you look at the eu harmonized a gain ofain 0. 9 for the year. Joining us now is chris turner. Great to have you with us. Numbers, we are looking to find confirmation of whether germany has entered a technical recession this week. What is your outlook for the euro based on the data weve been getting from germany recently . Some of it is more positive. Its interesting in terms of the euro. It has not been benefiting. It is marginal improvement out there. Even though we saw the european yield curve steepening last week, and european banking shares doing well, theres no sense of rerating. To answer your question, we think the euro is staying soft. Pick a beach it could be transitioning. Nejra do you expect the trend to continue in any way in terms of a bottoming of global pmis . Perhaps particularly in germany. We are looking for more stability. Eurothat means to the doesnt necessarily mean the euro has to rally 3 . Nejra chris turner staying with us. The unilever chairman is stepping down. Im just finding these headlines for you at the moment coming through from unilever to give you more details. The chairman is stepping down. Anderson is being named the chairman. Maria decker stepping down. This is a red headline crossing bloomberg at the moment. We will bring you any more details as we get those from unilever. Looking through the announcement, it will happen with immediate effect. A decided has to step down. The nonexecutive director has been selected by the board to be chairman of unilever. Marion has chose to stand down so we can focus on his growing responsibilities at noblest life sciences. Lets get to the futures. We saw gains in european equities yesterday. We closed shy of a record in the u. S. Mixed pictures from President Trump entree. He said a deal could be done. He will look to hike tariffs if a deal doesnt get done. Cap 40 futures softer there. Led by the hang seng. Juliette saly will take us through the details. A little bit of risk off. The latest bank of America Survey says foam oh is growing. Expectations for Global Growth have surged to the most on record. Cash levels have been plunging. The 10 year treasury yield has been ticking down a basis point. A one i did you handle. Futures in europe not giving us a lot of direction at the moment. Juliette saly in singapore with more on those. Hong kongs hang seng index on track for its lowest close in a month. Schools will be close in the city does borrow. In the city tomorrow. A lot of Property Developers getting hit. Negative sentiment from hong kong. There is no real new news in terms of a phase one trade deal between the u. S. And china. Flatly 0 just slightly lower on the close in japan. The nikkei closing out the session lower by 9 10 of 1 . A massive pickup and kiwi today after the rbnz surprised by leaving rates on hold at 1 . Saying they are waiting for recent rate cuts to filter through to the economy. The kiwi jumping today. I want to focus in on tencent. Its earnings in terms of net income expected to be pretty flat. Operating profit up by 6 . Expect to see an increase in its mobile sales as it comes off a pretty low effort from last year when china had that gaming freeze. When you look at their share price, earnings during a 12 month low. Data, theto bloomberg options Market Pricing in a 2. 9 move either way. Whether or not tencent comes in my with estimates for its thirdquarter numbers or is a miss or a beat. Expect volatility coming through tomorrow for . 10 share price. Tencents share price. Nejra pretty big swings expected in the Options Market for tencent. Global stocks have dipped as President Trump says the u. S. Will increase tariffs in china if the first step of a broader agreement isnt reached. He said beijing wants a deal to happen. They are dying to make a deal. Ones who are deciding whether or not we want to make a deal. We are close. A significant phase one trade deal with china could happen. Could happen soon. We will only accept a deal if its good for the United States and our workers and our great companies. Nejra traders havent been this in interested in betting against chinas yuan in months. Bnp paribas has warned over complacency, saying theres no reason to be optimistic about growth or trade. Do you agree with that . That there is not much reason to be optimistic and the Options Market might be getting it wrong. We think chinese growth is going to slow further, down to 5. 8 by the end of next year. Theres a lot of currency markets pricing that and. They price that slow down in. They are already undervalued. You are talking about trumps remarks yesterday. That is maximum pressure to get that phase one deal over the line. We think that will happen by the end of the year. The renminbi can stabilize around this. We no longer think we will put up to 730. We think there is more value around the renminbi. Nejra what does that mean for other currencies around the region . Would you be looking at a weaker dollar versus other asian currencies . Yes. Some of them were undervalued. Clarity ondy the trade story is poor indeed. In october, when the phase one deal materialized, the korean won has been the benchmark for the region. It had a really good rally. It is too early to say yet to buy it today. We would see value in it. Nejra do you see dollar weakness from here . That would be against other g10 currencies as well. Where does the dollar go . In terms of broad dollar trends, we are cementing it. The euro and yen still funding currencies. Thats a really interesting story merging at the moment. The euro dollar doesnt have to push of aggressively. There are things we will talk about shortly, the new Zealand Dollar, the australia dollar, the Canadian Dollar as well. They will be rerated worse if clarity emerges on the trade story. Nejra are you still liking safe haven currencies . Does that have a lot further to even though you that feels a bit of a stronger for than we thought earlier in the air. Perhaps it could actually push little bit higher. Nejra lets get the bloomberg first word news. Kong has announced a suspension of all schools in the city on thursday. The security chief warns of unthinkable consequences if violence continues. Commuters packed onto the first trains amid calls by activists to impede rushhour traffic in a show of anger over police tactics. The International Energy agency says Global Oil Demand will likely plateau around the year 2030. The current growth rate of 1 will hold for the next five years. The iea sees lower demand growth in the 20 30s once the use of oilbased fuels and passenger cars has been. New delhi is choking once again. The air quality reading rose above 400 on tuesday, eight times the internationally expected safe level. When blowing from the northwest has brought smoke from burning rice field, piling pressure on the government to find a solution. Year showed india has the 10 most populated cities in the world. Global news global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Nejra thank you. The iea is predicting the Global Oil Demand will hit a plateau around 2020. 2030. The use of more efficient cars and electric vehicles ands an expansion that has dominated the past century. What is the outlook for the biggest players in the sector . Ecuadors profit dropped by half. It was the groups last earnings time before the norwegian statecontrolled Company Started its giant oil field. Its a project that is expected to give them a massive production boost over the coming years. Joining us now is the companys cfo. Welcome to the show. Lets talk about the fed field first. Production is wrapping up quickly. Are you still on track to reach that 300,000 barrels a day capacity by the end of november . Could it be even higher now . We will be producing during november. Another 24 wells to be whichd to reach plateau we expect to happen during summer next year. That is 400,000 barrels a day. Have a costs will below two dollars per barrel. Of 50. Gin next year nejra you talked about summer next year for the plateau. You were thinking about that max phase one capacity of 440,000 barrels per day. Could you reach the level earlier than this summer . Some analysts and shareholders are expecting that. Is, we need towar wells 24 wells. If we only need to, we will do it sooner. It might happen. This is our current plan and best estimate. We are hopeful like everybody else. Nejra if we talk about the outlook as well for oil demand, it has been a conversation around for a while. Global oil demand will hit a plateau around 2030. Does that line up with your expectations as well . Peak demand during the next decade. Nejra youve said that there is a chance it might happen even earlier. How are you preparing for that, if you do have a case that we could get Peak Oil Demand even earlier than 2030 . Is looking aty how much oil they need to deliver to supply whatever demand you predict, whether that is be demand in 2020 or 2030. Even in the most Energy Transition optimistic scenario, if you look at 2050, this have newneeds to capacity of 300 billion barrels. Its a lot of oil and gas that needs to be discovered, developed, and in production for even the most pessimistic oil demand outlook. Nejra if we talk about Energy Transition, you stepped up your gain in offshore wind. You has said have said you are ahead of schedule. You are investing 11 billion in new Energy Solutions by 2030. You will push that category to 20 of total by the same date. Are you likely to exceed those targets in 2030 . We have had good industrial development. One asset started production in germany. Inve had good project manhattan in new york. We had a development in u. K. 3. 6 gigawatts to be installed. You could argue that these will be sooner than 2030. Nejra can you give us more precise detail on the funding of the projects . How much are you likely to put on the table in terms of investment . Projects, 9 billion 9 billion british pound. It is a substantial, big project. It placed were strength. Its a big project. Line of manybly windmills to be installed. You get learning, technology development. This is an asset that we really need. Shale,if we look at u. S. One thing that the iaea talked about is that the u. S. Will account for 85 of growth in production worldwide through 2030. In terms of u. S. Shale, you agreed to sell last week. Should we expect more impairments on your other u. S. Shale assets . These assets are different from any others that we have in our portfolio. They have been acquired and have a higher value as a starting point. You have volatility in prices. You reach that threshold. The prices go down sooner than from any other assets. Thats why theyve had the impairments and reversal of impairments. There is no indication of further impairments. The price to development will have an impact on that. Nejra there has been some reports in norwegian newspapers that ecuador has started the the successor to the ceo. Would you take that post . Should the candidate be an internal one . We read articles like this from time to time. I was told about this article during the week. Took on the role as cfo august 1 last year. Thats what im focusing on. Nejra should the next candidate be internal . Lets of for the board to decide. Nejra the cfo of ecuador, thank you for joining us. For clues. Looking jay powell appears before congress today. Investors looking for confirmation that he sees the economy on solid enough ground to hit pause in december. Do not miss that. This is bloomberg. Is bloomberg. Nejra 7 21 a. M. In london. We are 39 minutes away from the equity market open in europe. 3g capital has a new elevator pitch. The private equity firm is vying for an elevator unit. 3g is competing against another of other firms. Here with the details is dani burger. Why would this private equity group be interested in a german lift business . Buildup of massive dry powder. 10 billion to be specific. They are pushing them to spend. They are moving away from consumer goods. Kraft has had multibillion dollar writedowns. That shows how crowded the market is. Films have firms having to core focus. Om their a lot of private Equity Investors have said that germany is a huge beneficiary of it. It is one of the last begins where value can so be found. You have big conglomerates that have had to spin off different units, having to deal with the slowing growth in germany. These deal hungry private Equity Investors are more than happy to snap them up. Pacesay that germany is on to outdo the u. K. When it comes to deal value. Potentially 3g buying it. One in many german deals we are likely to see. Nejra thank you so much. We will keep an eye on shares when the market gets going and 40 minutes. President trump has renewed his assault on the fed, saying policymakers are hurting the u. S. Economy. He said the u. S. Is at a competitive disadvantage because the fed has failed to follow other Central Banks into negative rates territory. Now many are actually getting paid when they pay off their loans. Its known as negative interest. Whoever heard of such a thing . Give me some of that. [laughter] give me some of that money. I want some of that money. Our Federal Reserve doesnt let us do it. I dont say thank you. Thank you. This my people are clapping. [inaudible] the smart people are clapping. [applause] nejra do you see a pause from the fed in 2020 . Taking the 10 year treasury yields above 2 and holding there. No. Was looking at the slowdown in the u. S. Economy. The fed could be cutting once in the first quarter. Maybe even twice seems aggressive. The market doesnt price one cut until september. It probably means that 10 year u. S. Yields are pushing above 2 . Sharplyhe curve steepen over the last six weeks. Testslooking at the range to stay. Looking for it to return to the 1. 5 area. For the dollar, that means it is steady. It is set against the euro and the yen. Not a big downturn. Could see some undervalued activity. Stock could outperform of the trade story comes down. Nejra what does catch a bit of that, we do get cuts in a weaker dollar. Is it the em currencies that benefit . There will be some out there, highyield potentially. We are seeing some easing cycles going through in the likes of russia and brazil. We had a rate cut in mexico this week. Probably a bit more to come. Russian portfolio data out yesterday. 3 billion went into russian currency bonds in the month of october. Maybe that story is late to the table. We might have another one or two months of that as they continue to ease policy. Bit,ing trade settles a there should be some good stories out there for undervalued activities. Nejra what does this mean for other developed market Central Banks . You start to wonder whether developed Central Banks in general are hitting the pause button. Is that your base Case Scenario if you see the fed cutting in 2020 . Very good question. Zealand, they new would not be pushed into easing even if Market Expectations were firmly upon that. The new Zealand Dollar was very oversold. Got a great rally there. Think those three cuts are enough for australia and new zealand. More, thatcuts 25 should not force them into more cuts. If the u. S. Does slow in a benign way and there is one more fed rate cut, that should be a fortunate environment for risks. More negative Global Growth expectations. Nejra thank you so much for joining us. Thats it for bloomberg daybreak europe. The european open is coming up. When you are traveling to work, tune into Bloomberg Radio. We didnt get a whole lot of direction from President Trump entree. We could see a deal. If we dont, tariffs could be a hike. Futures on the back foot along with u. S. Futures after the s p 500 closed shy of a record yesterday. This is bloomberg. Anna good morning and welcome to Bloomberg Markets european open. Here in ourwards headquarters in london. The cash trade is less than 30 minutes away. A substantial threat, asian stocks take a hit as President Trump says the u. S. Will increase tariffs on china if a phase one deal falters. 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