A bny mellon forecast really concerned investors because deposits, both interestbearing and noninterestbearing, will be lower. So the next earnings quarter is in doubt. Not so for Morgan Stanley. That stock is getting rewarded. Here in europe come of the equity markets dont look as exciting in the United States as we are tracking now towards 30,000. Hints that may be more stimulus is on the way. The South African rand taking a hit today. The reserve Bank Delivering a surprise 25 basis point cut. , this isd bombardier kind of a joint story. Bombardier being pummeled today, mainly around the airbus aircraft, basically a narrowbody shorthaul aircraft. Bombardier may walk away from that project. Muchs not really reacting to this today. The expedition was that airbus was ready for this, but it seems like the market wasnt. Basically, the rampup of this aircraft costing more. Is worried that this may affect the turnaround planned, and thus may walk away from it. That stock down 35 . Vonnie lets get to our first guest for more on the impact of the phase i one trade agreement with china on the markets, currency markets in particular. We are joined by jane foley, rabobank head of fx strategy. Is this broadly seen as positive or negative, this phase i deal . Guest i think we had the Market Reaction really over the last few months that had been building over the course of last year on hopes that the trade deal would mean that we wouldnt have that negative pressure on economic growth. Optimism has been building since the end of october. I think the question now is that now that we have the trade deal signed, will we have over the the shortfalls that we are hearing about in the phase one . Will they come to the fore . The market will start wanting answers as to whether or not phase ii can really be signed. Will those questions come up before the november election or after . I think if they come up before, certainly theres a risk that some of the optimism we have been seeing in markets in the last few months of the year and beginning of this year could get lost. Vonnie briefly, i want to break some news. Has concluded that the office of management law on withholding aid to ukraine. Once again, the white house ukraine aid freeze violated the law according to the federal watchdog gao, the Government Accountability office. We will bring you more details on this story when we have them, but once again, the white house found to have violated the law ed aid to ukraine. Do you see the market moving all because of trade negotiations, or is this something that is just being manipulated separately . And i dont mean manipulated in the local term in the political term. Economistsu ask about the outlook for chinese growth, china is still expected to slow down this year. We had a more optimistic forecast from the vice premier in china yesterday, but even so, i think there is a market view out there that even if we havent had the trade negotiations over the last 18 months, china would be slowing. If we do have another stage of tensions between washington and china, and that is quite likely there is still hawkish commentary in washington, within some of the u. S. Generals about chinas military prowess if we do get more of those tensions, the market will begin shavenk that is going to even more off of chinese growth, and that could stimulates the renminbi to push lower again. Guy good afternoon. Lets talk a little bit about your call that the fed is going to cut aggressively this year, your banks call. Todays retail Sales Numbers look pretty good. They point to a decent and strong consumer story over christmas. The philly fed nubbers. 2 stabilization within manufacturing. Numbers pointfed to stabilization within manufacturing. Do you still feel that way . Jane clearly, todays data is good. The consumer is in really good shape. We did have some disappointing numbers on wages last week in the payrolls report, but not enough yet to judge that that is falling into the consumer space. Clearly, we do need more buildup of evidence before it looks certain that the fed cut Interest Rates, but that is quite interesting with respect to the u. S. Dollar. Even though last year we started off with a much more bearish forecast for fed rates then the market consensus, we were very bullish on the u. S. Dollar. It is quite interesting to see the transition between what the outlook for the u. S. Economy is to the dollar, and we are still a little more bullish on the dollar this year despite our dovish view on the fed. Guy what about the ecb . Christine lagarde speaks tonight in frankfurt. We have the accounts today, a big policy meeting next week. Where there hints in those accounts that the ecb may be willing to go a little further on the easing story . Jane jane i think it would be surprising if the ecb shut the door to further easing because if you look at fundamentals, particularly at inflation, with inflation this subdued and the euros own, it would be perhaps full hardy for the perhaps full hardy perhaps foolhardy for the ecb to signal that that door is shut. In theeen some slow down Employment Situation in germany. As long as concerns are out there, i think the ecb has to leave that door open. Particularly given the hike we saw in sweden some weeks ago, there is a lot of talk as to whether or not the ecb really has enough room to cut again, but i think at this stage, with lagarde having only just taken the reins, shes got a lot of work to do to fix the divisions within the ecb board, etc. I dont imagine that she wants to close off her options at this stage. Vonnie the january 30 boe meeting is now definitely live, which was something that hadnt been considered up to fairly recently, perhaps even until mark carney readied the market for a lower set of projections for economic growth. Where do you see the next boe move, and what will it do to sterling . Jane well, i do think sterling is perhaps vulnerable. Cable has been below and above 1. 30 level. I think the risk is that it tends to be below. Just 1. 3 , the manufacturing is weak, and signs that the retail servuy the Retail Survey had a weak period as well. We have the risk that we could have a rate cut, if not in january, perhaps in may. And then, of course, we have the possibility that there will be more focus on the politics as well. Lull in political tensions in the u. K. Since the election. We know that brexit will happen on january 31, but only then can they start to talk about the future arrangement. We had some posturing on both sides, and it seems that there are going to be significant gaps on various issues around regulation, fisheries, the rights of eu citizens living in the u. K. It is quite possible that those tensions could also chase cable a little lower from february onwards. Guy bit of a surprise out of south africa today. The reserve bank cutting but when he five basis points. Was it a surprise to you cutting by 25 basis points. Was it a surprise to you . Jane it was a significant surprise to almost everybody in the room. The governor has a reputation of being extremely cautious, a credible reputation, so the market was not poised for this at all. The press conference was also extremely short, so perhaps we dont have all the answers as to why they moved today, and hence you have the reaction in the currency. Vonnie jane, thank you for joining us today. That is jane foley, rabobank head of fx strategy. Lets check in now on the bloomberg first word news. Heres viviana hurtado. Viviana hows impeachment managers returning to the senate floor to read out loud the articles of impeachment again president donald trump. Afterward, Supreme Court justice chief john roberts will be sworn in to preside over the trial. U. S. Retail sales rising 0. 3 in december. For all of 2019, the value of retail sales increasing 3. 6 . Consumers remain the primary driver of the economy, benefiting from a strong leader market. Phase one of the trade deal between u. S. And china bringing clarity. Companies like visa and mastercard moving a step closer to gaining access to the chinese payments market. Some doubts remain. We end first word in russia, where authorities are moving quickly to make Vladimir Putins vision a reality. His new choice for Prime Minister pledging to make changes in the cabinet. That happened one day after putin shook up the government, asking for a constitutional overhaul that could allow him to stay in power after his term of inice ends in 22 any for 2024. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im viviana hurtado. This is bloomberg. Guy thank you very much. Coming up next week, its that time of year. We will be live in davos. This week, a big week for the banks. Next week, a massive week for interviews in the world of finance. , theyllon, mr. Gorman all be joining us live from the swiss alps. Looking forward to that. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is bloomberg markets. Lets check those markets now. Abigail doolittle has all the details. Abigail theres a risk on muthu markets after the signing of that phase i trade deal between the u. S. And china risk on mood to markets after the signing of that phase one trade deal between the u. S. And china yesterday. Russell 2000 joining in, up 1. 3 . A bit of a move lower, take a look at the shanghai composite. During the asian session, chinese stocks not reacting favorably to the signing of that deal, but not a huge loss there. Here in the u. S. , it is risk on. Lets use the imap in the bloomberg. All 11 sectors are higher. Consumer staples and utilities near the bottom, among the defensive sectors. 1 , bouncing back from yesterday. Consumer discretionary also up 0. 7 . Yesterday, after defining of that phase one trade deal come of the chip sector come a very sensitive to china via the supply chain, sold off of the lows. Today reversing that, up 1. 5 . We also had a move lower for soybeans, some of the other commodities. Take a look at this two day chart of soybeans, down 2 . Traders want more details on when and how china will buy 30 billion of ag goods over the next two years, if it will happen. Vonnie Abigail Doolittle, think of her that. Abigailvestor doolittle, thank you for that. Activist investors are joining. Orces on a bet on tax refunds tom farley will become chairman of global blue. Silver lake agreed to buy control back in 2012. This deal would value global blue at about 2. 6 billion, yse listing. H an n congratulations on the deal, tom. How did you reach that valuation given that to really, the only metric we have are the global blue revenue by 2021 . Tom as a financial matter, you can look at comparable companies. We are valuing this business at 12 times forward enterprise value to ebita, but quite a conservative valuation for a business that is growing 8 yeartodate organic, 42 percent margins, highly cash generative. If you compare it to other , it is aompanies significant discount. Equally interesting for me is thinking about the strategic stability for the business. You mentioned luxury travel, consumer data, the ability for more consumer marketing. Just the crossborder payments nature, which is the most lucrative area of payments. This business is writing a sweet spot for us, and for a fintech like us. Sonali the last time you were with us almost two years ago, you mentioned that you would be able to do something with 10 billion to 15 billion in enterprise value. This is 2. 6 billion. Do we see more acquisitions ahead to grow this business . I washen i was here, thinking about it in the green room, we thought, well, we want to do a fintech business. Got to have a little bit of structural growth that can create value for investors. When you were introducing it, i never thought we would have the dream team of jack ma, silverlake, dan loeb, jack stern. Yes, m a is certainly part of the strategy, but the business is growing, so we dont have to do m a. We can be very opportunistic. We have run Public Market m a plays that have made lots of money for investors in been helpful to our customers, so that will be a part of the strategy, and we think the business will be able to do that. Sonali you have some very powerful coinvestors. What do they bring to the table . Tom let me just enumerate them. It is a hugely strategic business, perhaps the most impressive Financial Technology company in the history of the world for those who follow it closely. It brings tremendous expertise, and a customer race and a chinese Customer Base that is growing more and more, shopping luxury more and more. The third point is investing incremental 100 million, so incrementalting in 100 million, and some new investors for far point. When you tally all of that up, it is a 1 billion investment, a real validation of this business in the deal that we struck. The second major Fintech Acquisition we have seen this week. What is wall street not getting about technology that is making these up and comers rise so quickly . Tom fintech is hot. We are seeing it everywhere. Payments, connecting banks in the case of plaid, consumer marketing in the case of honey, self billing to paypal. That is the exact reason dan loeb agreed to partner with me in the first place. Hes a pretty smart guy, for three decades among the smartest stock pickers and all wall street. Its precisely because fintech is positioned to invest in all of finance right now. Guy ive seen the kiosks down at the airport here in the u. K. But as you say, fintech is super hot right now. Any resistance about going public . It hasnt exactly been the greatest year for Tech Companies going public. Tom not at all. Silverlake has been excited about it the entire time. The ceo has been excited about it. These are Public Markets people. Years, ran for six tripled the stock price while he was there. Silverlake has many investments in public companies. View being public as helpful for a variety of reasons , one of which is to have an additional currency, potentially to do acquisitions. But no, there really wasnt resistance to going public whatsoever that i picked up. Sonali you used a very interesting model here. Does it allow companies to go public with more debt . Is that part of this . Tom no, the market will bear what the market will bear with respect to leverage. In our case, it is quite conservative. I think we will be 3. 2 or 3. 3 ebitda. En 3. 3 times spac enables is really simple, a known fixed proceed amount at a known price. T also involved expertise i will be going in as chairman of the business. I certainly have a lot of Public Markets experience. Ofre have been a number spacs. Draftkings going public was also a spac. They work. Vonnie im sure youve thought about this, what happens to this kind of business in a time this type of business in a time of currency not leaving, of global recession . Luxury is not there in the amount they were. Tom great question. Over the longterm term, this business grows. That is the beauty of structural growth. Other people for that term around. There are middleclass, wealthy people in emerging markets that want to travel and spend. That is the 8 yeartodate, 10 Revenue Growth over the last 10 years all of that is really favorable. If you look at recession, the business actually grew through the recession. I think it was up from percent was up 18 over the worst two years. Please dont quote me on that figure, but it was up during the recession. An emerging market and the value of your currency drops dramatically versus the hero, you may not choose to go to shop still issei to thep the lycee champs alizes that summer. Vonnie guy final quick question guy final quick question for me. When you look at how fintech is regulated on both sides of the atlantic, the u. S. Versus europe , europe has a different approach. London is certainly going to get pretty different pretty quickly once brexit has happened. Is the approach better on my side or on your side of the atlantic right now . Here in london, we are trying to figure it out. Tom ive learned to be really double medic in my career, having run the New York Stock Exchange really diplomatic in my career, having run the New York Stock Exchange. Backfires. I was i will tell you that this regulated, and in some cases heavily regulated, that doesnt really negatively impact the business at all. The regulations are well known. This business started 40 years ago. There were no back taxes 40 years ago. Sweden and permitted that. Sweden implemented that. Now there are 73 countries was back taxes. It has grown up with the regulatory regime, so it has become second nature. It is not a particular concern. Vonnie we have to leave it there, but thank you for coming in, and congratulations. Tom great to be back here. Thanks for taking interest. Vonnie we are going to find out from you what you are going to do next. Our thanks to tom farley, far point acquisition chairman and ceo, global blue chairman as well, and thanks to bloombergs sonali basak. Next week, we will hear from the finance from in davos. We will be asking whats next for negotiations between the e. U. And the United States, also the outlook on brexit and u. K. Negotiations. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is bloomberg markets. Lets get the first word news with viviana hurtado. Viviana the impeachment proceedings against President Trump resuming on the senate floor. Several House Democrats will read out loud the articles of impeachment after the Supreme Court of impeachment. After that, Supreme Court chief Justice John Roberts will be sworn in to preside over the trial. The Government Watchdog Agency says the white house broke the law when it withheld money appropriated by the u. S. Congress for ukraine. Whats next for President Trumps efforts to change the economic relationshi