Opening, comparing and switzerland. And theynd is drowning defend their domestic economy this morning. I know jon ferro where is he . Somewhere lost with an important conversation. Francine lost in the outs about about the alps franc. British warplanes will target Islamic State in syria, including oil pumping facilities and emma dumps. Thel recently infrastructure targets have not been hit because of the kurdish ground troops. At the climate talks in paris there is a dispute of who will pick up the tab. Developing nations will receive 100 billion a year. China insists when it comes to Climate Change it is a developing nation itself, so they will not be contributing. India and pakistan have agreed to resume peace talks. The two countries have a disputed border and increased fighting and the region has made it difficult to get talks going again. In washington, congressional negotiators are moving closer to a deal that would make a series of tax breaks permanent. They will heat up talks on the spending bill to keep the government and operation. Republicans want to avoid a repeat of the Government Shutdown in 2013 and will likely pass a spending bill tomorrow. Other World Leaders have denounced trump for his proposal. Netanyahu says he will meet with trump even though he rejects his comments. To get more on these and other breaking stories 24 hours a day at the new bloomberg. Com. Tom caroline, thank you so much. Lets turn to the markets this morning, a little bit of a left. The euro goes nowhere but really order. Two 110 is in oil has a bid and i am going to call it. Please rightard now if we can. I spent the whole morning thinking it was wednesday. Birthday overload. 5. 71 showing some of the angst in the market. Here is the keynote. Nothing going on with the two year which really lacks in blocks in two janet yellen on december 17th. Francine you are right. This is a picture of european equities and a lot of the focus is still on commodities. The ftse is down 2. 028 . This is the kiwi, the new zealand currency. We have seen it stronger after the Central Bank Act there, and awaiterling, 151. 77 as we the boe. We are not expecting it to be that much. Tom also have a terminal chart. 16. Is the move to december i am not a big fan of confidence statistics but here is Bloomberg Consumer comfort, here is what the pros look at every week. Here is the boom of the previous decade. Down leg go. I think a lot of people do not realize we have come back. And then recently just this little avenue and flow. Eb and flow. Francine we often say, what does it mean for the Global Economy and the emergent that janet yellen is confident enough that the u. S. Economy can withhold it. Joining us is the managing director at Blackrock Investment institute and one of the smartest minds out there when it comes to geopolitics and markets. As we wait for the fed, is there any chance that they do not hike . Does it make a difference if they hike by 0. 2 or 0. 3 . Ewen i think no chance, and no difference is the answer to that. I am not quite sure whether 5 comes from. This should be the least surprising rate hike in history. Francine it should be but the markets have this little thing called volatility. Are we expecting it to be smooth . Ewen tom was talking about it earlier saying it is approaching the 20 year average. It has been below that average for quite some time. 50 twoyear has risen from 292 in the last couple of months so i think a lot of the immediate trader response, that is not to say there will not be people pushing out churns of stuff, but the trader response i suspect is not going to be enormous because it has been so well prepped. The centrala that bank of the world can ignore the worlds economics, would you please explain how a u. S. Central bank can work in a vacuum . Ewen i would love to be able to do that because i think we have a two speed world. A two speed world in terms of geography and sector balance. It is very simple, the emerging. You pointed out yourself on consumer confidence. Like you, i am not a big fan of those displays, but it has been rising for a fairly long period of time. I think this is the first time in memory we can see the fed raising rates when the isn is so low but i think that is how the economy has changed. Tom with how the developed changed, are you willing to write that this is in asset bubble . Ewen i dont know that there are huge bubbles around. The Business Cycle is lagging the financial cycle by a long way so by definition, we have borrowed returns from the future. If you simply took valuations as your sort of guide, you would hardly say a lot was extended other than the obvious points where governments have bought in a lot of assets, and that is the bond market. Francine your strongest call . Ewen follett tillery is going to rise, it is going to be a year where volatility is going to rise, it is going to be a year where profits are hard to come by. Question, suppose in 2016 we look at an outcome throughout the year where the European Growth is running roughly similar to american growth. Aboutne when you talk volatility, and we have an Index Volatility will happen in emerging markets because they borrow so much money. Ewen it has happened in emerging markets. If i can look at one crisis and try and work back from that, it , probablyhe dollar not the dollar against the euro, the dollar against sterling. The asian dollar index because if the u. S. Dollar strengthens again materially against the asian dollar index that puts china on the spot and leads to more potential for a chinese devaluation. It puts the hammer down on the emerging markets again. Conversely, if it goes the other way we will see an asset switch back toward the must maligned and hated asset class. I would love to know where the asian dollar is a year from now. Plus, the lottery numbers for friday. Tom i agree with you on the asian dollar. What have you observed in the asian currencies away from japan in the last couple weeks . I cannot make a direction of it, a vector of it, can you . Wen not particularly i prefer to focus on the fact that some of them have declined then duringeir peak the financial crisis. I am not calling the rupee up but we have seen a lot of this already. What would drive the next leg i think would be disorderly capital flows away from those countries, and potentially obviously also, a stronger trend by the fed and more rate rises. Tom lets look at the chinese remembering right now. I think this is an important chart to bring up. The sharp devaluation of the. Emember the remember the francine we are doing a chart. Ewen i can hardly say that it is weak. It has weekend and the last couple months weekend. If you look at it against the , the tight, or any of those currencies, it has been extremely strong. This is sucking the blood out of a lot of the rest of the world through the deflation. Onncine coming up also bloomberg surveillance, you vw ceo. R from the yourberg tv streaming on tablet, phone, and bloomberg. Com where the conversation turns on economics, finance, and business. Tom good morning, everyone. It is thursday morning, a quieter market for gorgeous new york city. Wherever you are in the world, you need to know that temperatures are not normal in america. I am not going to say it is paris, it is Climate Change. I can say the ice in central park is a threat to doing prehockey it is so warm in new york. Francine makua in london, i am in new york. Here is caroline hyde. Alcor has agreed to pay 2. 9 billion to the owner of the luxury Fairmont Hotel lines. Walmart will start letting shoppers pay with their smartphones using the chains own mobile app. They will offer this service at stores near its headquarters. A nationwide rollout is set for the first half of next year. This could put walmart in headtohead competition with apple pay. Reports indicate the momentum in the British Housing market is not going away. 441,000,e price is up 6 from a year ago. The number of properties being put on the market fell. Francine thank you. Tom, you want to Say Something. Tom do you have lululemon in london . Yes, we do have it. There was a scandal. Danaa tells the her outperformts on lululemon today. She calls the recent news disappointing but importantly, she is iconic at bear stearns a couple years ago, she really is her outperform on lululemon. She says it is completely because francine makua darken the door repetitively. Not aoki but we have a yogi. We have had some news from glencore after they have announced they will reduce debt by 18 billion or 19 billion by 2016, and is considering the possibility of an agriculture offering. Year javier, glencore needs to reduce debt. Why do you spin off Something Else that is different . Javier they are trying to sell as many assets as they can in a very difficult environment is prices are very depressed. They have been talking for the last few months that they wanted to sell and Minority Stake in that business. Now for the very first time today they said they would also open to the possibility of doing an ipo. Francine does it tell us that what they are left with is something they may consider taking private . Javier in a way it is indicating that everything is on the table to try to reduce debt as quickly as possible. This is not something glass and berg would do if he was not in deep trouble and the fact that he is doing it shows that he needs to reduce it as fast as he can. Tom when you look at the chart and anglo america, i understand there is a spin to this. What is the level of sweat and panic this morning . It is an ugly chart . Javier tom, you are absolutely right. Let me give you a sense of how ugly it is getting. During the Conference Call with glencore, one of the top managers of blackrock has taken the very real step of publicly asking him what he is going on with the nickel business. Them going publicly in a Conference Call, this is a company that could just grabbed the phone and say, can we have a private conversation . It is an indication they are getting very nervous. Tom the room to move on reducing capital expenditures, is glencore boxed in or can they take a couple billion out of irther question mark javier think they can but that is going to have an impact on growth. Companies have been telling investors, we are going to reduce cap x but will continue growing. We areure growth, and talking about what these companies are going to deliver in terms of future production in 2016 to 2020, that is going to be a handicap. Francine blackrock is turning up the heat on glencore. Ewen i will make the point that a company such as glencore, the mining industry, has to decide whether it strategy is is,ivable growth and if it then maximizing cash flow becomes a really important, and it gets proportionally more important in the mix. As an aside, it is extremely rare that we would make a Public Statement of that nature. Francine when is it going to get easier . These are extremely bloated companies because in the good times they probably overspent, profits are down, we do not really see an end in sight to the glut. Javier it is true for the whole Natural Resources sector. It is going to get better when china gets better, and the demand for commodities recovers. If that does not happen, it is going to be a very painful prices because lower prices, lower investments. A bit of an increase on demand, and that takes time. Turns around very quickly, the Natural Resources sector needs to be prepared for a long drive. We are hunkering down, and i think that applies for the whole sector. It is hunkering down for a long period of low prices. Tom that is the first intelligent thing ive heard from them. Are they going to reduce production . Javier glencore has started to reduce production. Tom that is really cool, they actually reduced reduction. Francine we have seen it in the price. They are in debt. Is, glencoreroblem has been so far alone in production the company has cut too little too late. We do not see other minors cutting miners production. Everyone is trying to increase production and trying to float the market. It is a race to the bottom and it is not working. Francine we are very transparent on bloomberg tv. Aoomberg chairman grauer is executive at glencore. Thomas jordan, they are still saying the frank is overvalued. This is bloomberg surveillance. Francine welcome back, it is time for the morning must read. I picked out something from the financial times, the Free Movement of ease citizens the british publics asked over migration is so great that it justifies surrendering the huge economic benefit that britain receives from being part of the block. If you look at the great unknowns for 2016, donald trump for president. Brents at 27 . Donald trump for president , i will leave that to the americans. Pen. Ine and le ewen i think immigration is a hot topic across euro as it does europe as a whole. Francine we will talk china and more about the kiwi. We will also speak with the vw ceo. Tom new york. Gorgeous in london. But the clouds there. It is a most mild november and december. Caroline hyde has our first word news on a busy thursday. Morning. Caroline in syria, the government has strengthened its hold as a ceasefire was declared allowing rebels to leave. Officials in beijing have lifted the red alert imposed two days ago because of the smog. The roads were opened. Group sayss hackers it is responsible for the crashing of japanese Prime Ministers website. A tweet from anonymous says they did it to protest whale hunting. One of the shooters in last weeks california massacre may have planned an attack three years ago. Ofnd of sayyid farouq also in the u. S. , the Pacific Northwest has been flooded. Tens of thousands of people have lost power and neighborhoods have turned into links. Felln five inches of rain in portland, oregon. You can get more on these and other stories, 24 hours a day at bloomberg. Com. I am caroline hyde. Mueller heldthias his first extended press conference. Hans nichols was there. He has been speaking to him. It is a very rare interview. We heard from him. What were the main lessons . Speaking here in just a moment. We spoke to him moments ago. He is laying out his vision for the company and updating investors on the investors and the public on where volkswagen is. Heres what he had to say when i spoke to him. When it comes to co2, the situation is different. Looks different than what it did look earlier. We had 800,000 vehicles were affected. We initiated a number of the fish a number of investigations with the german authorities. I cannot say our initial suspicions of 800,000 vehicles affected was unfounded. Hans this was a wideranging vehicle this was a wideranging interview. He said they would not be disposing any of the 12 brands of the Volkswagen Group. Volkswagen. Brand, there have been hints if this company tries to cut costs, they million they may sell some assets. He is sticking with that costcutting plan that was implemented by his predecessor. It did not give any real updates on how much they expected to cost because they are still waiting for the regulators to approve their plan to the regulators and plan, the states. Thoseproposal to fix 800,000 diesel vehicles in the states. To gett your train ready. Head down to washington. That is going to be a Committee Hearing worth your while on capitol hill. Tom hans, can they compete with toyota . Vw, small and narrow. Are they so derailed they cannot compete with toyota . Hans hans toyota has gone heavy on hybrids and hydrogen. They do have great brand loyalty. Vehiclesand porsche are selling the slowdown in china. That is a question for volkswagen. Do they want to be number one . That was always a goal of martin winterkorn. In some ways, those were the seeds of the scandal. They want to grow too big to quickly, especially in the states. What were hearing from this ceo is there going to be a premium on Quality Control and changing the culture. Francine the scandal is narrowing on what . What are we expecting to find out apart from the figures . Hans the key question is will they bear will the plaintiff , will they fly by the regulators . Engines could be a Software Upgrade with miner technique with Minor Technology with a filter on top. It is going to cost the company a lot less money than they provision for. Theyve got to meet regulatory muster in the states. , we have these costs the engineering costs, central regulatory five, but then you have civil litigation. Thats the part one can quite put their finger on. Tom, you asked about toyota versus volkswagen. Is seeing look at it what is going to happen with currency wars. That euro is going to stay week for some time. That is all the indication that mario draghi has been given. It cuts both ways. Fencing, this is an important point francine, this is an important point. The strong dollar in the United States. Francine you are right, tom. When you look at the exports. This is something the french have been vocal about. Tom one of the key observations on bloomberg really on bloomberg radio. Adamant there could be elements to take us back to Something Like the plaza accord Dollar Strength of the early 1980s. He did not predict that but he said there is a set up to get the weak euro with significant Dollar Strength back to another era. Toncine and brings us back stop talking about parity. Hans nichols with a great interview with the ceo of vw. Lets get back to you and cameron watt. With Ewen Cameron Watt. It probably more a repetition story. Here is vw, they are going to be engulfed by this. , when the car industry is about to go through another Major Technology change as it moves toward driverless cars. I cant help wondering how much of vws corporate atten