Abu dhabis National Energy company, another m of prolonged resist and oil. Its 8 00 a. M. Across emirates, this is Bloomberg Markets middle east. Get you up to speed in terms of the melody, the rhythm, in terms of equity markets in this part of the world. We are two hours away from the open. This is how the gcc pans out. You can see Downside Pressure that oil price is putting significant risk into this equation. There is a lot more conviction in overall volumes. A 60 jump. Retailer is jumping a 10th of 1 . Of telco down 10 . Also more petrochemicals are expected to report earnings in the coming days. Saudi stocks of been the worst performers in the last trading day. Egypt and oman were close for public holiday. We are looking forward to some Inventory Data from that your iap we are seeing big moves on the gcc bond. Bits tightening a little further. As the optimism and equity rallies, the momentum continues 1060 4000. T turkish lira is in focus because we have the Central Bank Decision that is coming in today. Economists are expecting the bank to stay on hold. Lets check in with the first word headlines from around the world. Citigroup is back in saudi arabia after a 13 year absence and has received approval to provide a full range of financial services. Kingdomhe kingdom having lost its license in two dozen four. Saudi is becoming more attractive to Foreign Language as an overhauled its economy. The upcoming saudi aramco listing could be the largest ipo ever. Hsbc and rbs are in talks with potentially combining their ventures and saudi arabia. Owned andis 40 agreed to start initial discussions with saudi british bank, which is 40 owned by hsbc. A merger could give rbs a merger and assets that have been trying to sell for years. About 1. 3 billion. President trump is said to have intervened personally to toughen the language in a letter to congress on irans compliance with the nuclear deal. The president change the tone from what he considered too far. The letter says the administration will review whether to reimpose u. S. Nottions on iran, they may be in washingtons interest. Global news 24 hours a day powered by more than 2600 or no list and analyst in more than 120 countries. This is bloomberg. Release a set to broad outline of a tax plan later on. Bloomberg news has learned that a plan to propose a 10 tax, 10 on a more than 2 trillion earnings that u. S. Have stacked offshore. Chief economist told Bloomberg Television that he expects the president to lower taxes for corporations and individuals. We do expect something that is not neutral, that does increase the deficit relative to what would have in. It increases disposable income and delivers a modest boost to growth. Yousef lets get more on this story, in terms of how the markets could be reacting for the next few hours. Joining us is our macro strategist. Global equity rallying against positive. Treasury still at session lows. What directions will bes assets take . Mark at the moment, sentiment is very positive. We are really seeing that globally. China is the one exception. Assets it as u. S. Optimistic. It is important to note, from theons that come trump meeting are not very high. They expect a lot of ground state minutes, but without approval it does not mean much. Lets wait to see whether it will get through. What is interesting is, despite these expectations, there is a positiverisk for surprise, just because investors want to get involved again. , theythe French Election are seeing a market rally, so they will be looking to spin it any positive way, if they can. Yousef i am looking at the twoyear paper in the u. S. , the strongest demand in 2016 in some 11 months. What is the story on the fixed income side . Why is the paper showing some breakout signals . This we are really seeing across bond markets globally. Only a week ago we were wondering whether the fed rate hike cycle might be over, there was a panic more than a week ago. Suddenly there is a big change in sentiment. We got past the French Election and pass the north korea situation without having any major flare up, especially with the army day being celebrated yesterday. Data has continued to be good globally. U. S. Home sales were strong yesterday and they were getting strong earnings as well. It is positive for equities and parish for bonds. Yousef what about commodities. We are not seeing a lot of conviction. If the reflation trade was on, it would be represented and able to be identified in the commodity spectrum. Mark that is a very important observation. For the longer term global reflation ray, we see commodities pickup. We are not going to get inflation and less input prices are rising sustainably. I think we will need to see commodities turn higher in the weeks and months ahead. Longerterm to validate the inflation. There is no time for that. The sector is trading poorly and that is something to watch. Dont worry about that in the short term. We will leave it there, mark. Chiefoins us, the global economist. Great to have you on the program. Of the latest possible tax reforms, and the initial numbers that we are seeing, i they big enough to make a meaningful difference in the u. S. Economy . John if you are talking about the tax and has been proposed or announced to be propose, i think it will deliver some revenue that is barely needed to provide some of the stimulus that should come from the lower text. It will be relatively mild. We put this up in terms of where u. S. Growth. We have Additional Data coming out at the end of the week that will give us additional guidance. You could see the u. S. Economys First Quarters have fizzled to test results since 2014. How fizzled since 2014. How bullish are you about the numbers . John we are relatively optimistic about the u. S. Seeing a growth of 2. 2 over the year. We will have to gear up during the year, because when these because the First Quarter has been tepid. We have to gear up, but we are quite confident that the growth in number of that in the range of 2 , slightly higher with a little bit of stimulus coming from the administration. The fiscal policy will be achieved. Yousef we are seeing a euphoria and some of the equity markets. Devaluationk market of tax policy changes to , thatcompany earnings really has slipped. The traditional evaluation metrics no longer apply. He says he is making that counter argument. We do jump with him on that side of caution to say, these numbers, these figures, these metrics are getting stretched . Stretched are getting their it we have seen the French Market exuberance. The Economic Forecast has hardly changed since december. Share prices have gone up, definitely. Earnings forecast has been relatively stable since then. Based on these two arguments, you would argue that share prices has risen a little bit too high. A gradual collection may be coming up. Areef Global Markets breathing this collective sigh after the election in france. Forerms of what that does monetary policy, for the feds equity ecb, are we going to see any shifts and adjustments to reality on the ground . John not yet. I think inflation has indeed touched at 2 . Recently in february, indeed. But it has come up in march, it has come down in march again. It is not relative, not robust enough for at least the ecb to come up with firm measures. We do not expect at this moment to see change in policy or announcement in the european region. Yousef what is the biggest risk as you look at what is going on with the u. S. Administration . For the most part they talk a big game but investors are looking for tangible numbers. What is the risk . John there is a lot of talk about changes coming from the u. S. Administration. The trading is a little bit react relaxed about what is coming up. It will be very difficult for come upnistration to with real tangible, fiscal measures, or measures that stretch the fiscal deficit in the u. S. There will be a constraint from congress. The trade policy, there will be definite restraints coming from geopolitical conservation. As you could see from china and Interest Groups in the u. S. Who will not be pleased with trade policies. Yousef hold that thought, we still have plenty more to get through that is john. We will be joined by more on the program. The ceo of the middle east companies. Dubai aerospace enterprise. The abu dhabi National Energy company gets its credit raisings up. More on that any moment. This is bloomberg. Yousef lets talk about crude oil. They appear to be digging their way out of the gold run. I spent a quite a bit of time on these charts. Nonstate Oil Producers are seeing an increase by 67 last quarter. That is good news for some investors, partially due to the oil price recovery. It is not just because of that, it is because they have been cutting cost aggressively. , Abu Dhabi Oil company. S P Global Ratings to a minus. Based on a higher rate risk. It is lowered. They have written off assets. Sold business desk sold businesses and cut jobs. Has been losing money to acquisition the prolong oil prices. Its get back into the conversation. The global chief economist at after the us atradius global. What strikes you the most about how the Company Companies are reacting to the story . I think the most important thing here is, in the u. S. We have seen a slight increase of production since there was a slough in 2016. Very you see their reaction producing somewhat more oil to the market. , i amrrent prices convinced on that. The other part of the equation is how long the opec agreement will hold. Renewed in the middle of this year. The question is, where we see the oil prices. We do not see a lot of changes here. For this year, but over time. Yousef we built this chart on the basis of some of the important points ebita in your research. This is the one you are pulling up and bloomberg. I like to call this the reality check chart when it comes to crude oil. Inventory and. S. You could see your opec production line in yellow. How basically, u. S. Production and inventory have offset the efforts of opec and some of the nonopec countries. Do they need to raise their bar at the upcoming meeting in vna in may . Will it ever be enough to extend this agreement . Overtime, yes. We think the demand from the emerging economies will definitely drive up the oil price over time. In the rising of tradius we see a lot of volatility and that is what we see in this chart. Rbc reduced its 2017, 2018 gas Price Productions projections as well. In terms of where you see Oil Prices Going in 2017, what is your call if you had to pin down a number . John we see the range of 55 for u. S. Dollar for print. For brent. That, prices in the short term are very volatile. Yousef i want to go back to the corporate part of this story, in terms of what happened with exxon mobil, shell and chevron. They have canceled billions, billions of dollars worth of projects. They have dumped thousands of jobs and amassed towering debts to weather has been a difficult time when it comes to crude oil prices. It raises the risk that you could be looking at a ford edge. That is what the saudi minister is repeatedly saying. There is not enough investment in the sector and consumers will plate pay the price. If this one has to gear up. If you look at the charts from last year, investments have almost half in the year in the oil sector. A definite impact on supply. Investments have to go up over time. Therefore the oil price definitely has to rise. At this moment in time, the andly is still sufficient there are 6 sufficient stocks in the market to provide for the markets. Those stocks will be running slightly lower. Yousef speaking with the Kuwaiti Oil Minister a couple of weeks ago, he was saying that they are looking at expanding that agreement to include more nonopec countries. Is this perhaps the next catalyst that could really determine who is winning this tugofwar between u. S. Outputs and opec china rebalance the markets . John it is already difficult to control for production in the organization. If you go outside the organization, russia has been part of the agreement. The recent agreement in november is going to be a lot more difficult. For that score, i am not really optimistic. At the same time, we see that agreement at the moment reasonably holds. Yousef looking at what has been happening with natural gas, it is a fifth of 1 higher, but it does not tell the story of the tremendous volatility we have seen in the asset class. Price is oil specifically in the european markets, in the asian markets it is definitely the lng. It comes into the equation. We see a mild increase in gas prices on the back of slightly higher oil prices. We are not extremely excited about prices racing up, but increase is definitely on the ground. Yousef great having you on the program. Also a quick reminder that you can check out one of our key features. About this up on the bloomberg. This is tv. This is a fabulous function. It is easy to bring up and you can watch back some of the footage, some of the programming. I rewound it too much, but that was the beginning of the program what we talked about what is driving these markets off the back of trumps fiscal reforms, or the plans. On the right you have the key functions for the charts when we talked about u. S. Economic growth. Plenty to explore. You can message just if you agree or disagree with john or anyone else throughout the show. Tv. Thats give you a preview of what is still to come on the program. Taking them come back for citigroup. The lender is returning to saudi arabia, that is at a time when some banks are still looking to exit. We have the details on that story, next. This is bloomberg. Yousef lets get you a quick check of the latest business headlines, starting off with japans holdings. They will book a six point 3. 6 billion charge. Australias Company Turning a projected profit into a 360 million loss. 1400 more by next march. They paid him as 5 billion with full in 2015. The price was too high. Toll, given its significance in the asiapacific was a great buy. However, we miscalculated the state of the australian economy and ended up being a little too much after the economy slumped. Yousef they will bid to build a 300 megawatts Solar Energy Plant in australia. Part ofrt of this their plan to reduce the dependency on oil. It may require investment of up to 50 billion. A cw a power says it has considered bidding for solar products in iran and united arab emirates. Lets cross over to one of our top stories. Citigroup is back in saudi arabia after a 13 year absence. For have received a license Capital Markets and research services. Lets ring in bloombergs Tracy Alloway. Lets bring in bloombergs Tracy Alloway. This return was not entirely unexpected, was it . Cy that is exactly right. We saw city laying the groundwork for this license earlier this month when it announced that carmen would become the ceo for its saudi unit. She was widely expected to be the one task with expanding citigroups new presence in the Saudi Arabian market. Of course, this all comes hot on the heels of saudi arabia opening itself up to foreign investors. Ipo in the saudi aramco the works, that could be the biggest ipo on record. We have things like bond sales. We saw saudi arabia selling a mega 17. 5 billion worth of bonds back in october. We have msg i coming up. Lots of people competing in that market. City is coming to it slightly late. They already have competitors with Investment Banking licensors including hsbc a. Yousef giving the interest we are seeing in saudi banks and the saudi story. Is another element we are watching in terms of consolidation in that sector, right . Right, this time it is foreign consolidation. We have hsbc and rbs potentially in talks to combine their saudi ventures. This is a slightly different story than the Investment Banking one. This comes as concern about Retail Banking in saudi arabia heats up a little bit. Lots of things under pressure by lower oil prices. You might imagine their concerns about loans. We know rbs has been trying to it hasnt0 stake saudi banks. That has proven difficult. If you take one thing away from it, it is the dichotomy between what is going on with Investment Banking and cannibal Capital MarketCapital Markets versus the retail operations. Us. Ef do stay with lets get you up just speed with what is up to come for Bloomberg Markets middle east. Short capital turns a profit for the first time in seven quarters. We speak to the chairman, next. This is bloomberg. In hong kong, 8 30 in dubai. These are the first word headlines from around the world. Chinas navy has launched its first domestic aircraft carrier. It was floating in the northeastern part of zahl yen. A former soviet care that china bought and refitted, putting it to see in 2012. The new president of xi jinping ahead of the communist Party Leadership reshuffle. Turkey has strained relations with its russia allies have been frayed after it was on the lossless. The agency said the turkish governments crackdown on its opponents compromised human rights and the rule of law. Turkey says that it is politically motivated. We are evaluating this decision as an and just extremely unfair decision. It is not a fair decision because none of the discussions made way and are corresponding to turkeys troops. Debra is really Prime Minister abruptly canceled talks with the foreign minister. Sparking a diplomatic few between the two. The lastminute move was the plan to meet a Whistleblow