guy: good morning, welcome to "bloomberg markets: european open." i am alongside matt miller in berlin. cash trade less than 30 minutes away. ♪ guy: gridlock. u.s. government workers get ready to start the working week with no resolution to the federal government shutdown. will the equity rally in this crisis? bioveratives to buy for $11 billion. is it a taste of more m&a for

this year? and the world's largest wealth manager promises a $2.1 billion buyback. are tracking an opportunity to share buybacks. matt: we are less than a half-hour away from the european open. take a look at futures. we see very little change as far as futures in france go. dax futures are up almost 0.2%. ftse futures are down 0.1%. probably more interesting to look at treasuries now. you could look at treasuries or bunts. investors are watching bunds to

confirm the rise in treasury rates as well. will this continue, this rise in treasury rates? will we see a rise in the bunds continue as well? this is interesting to watch amid the government shutdown and continued coalition talks. let's get the first word news with juliette saly and singapore. juliette: ubs has said they will buy about $2.1 billion in stock over three years and merge is to wealth management businesses. the program will begin in march. it is also starting a new dividend policy. ceo sergio ermotti said they hope it will lead to growth each year and return excess capital through repurchases. >> we are able to continue and refine our capital policy. the fact that we are announcing 8%, we announced our share buyback program that

will possibly be executed in 2018, i would say is the highlight. juliette: opec and russia have --ffirmed they will continue they will not into new with cuts until the year to clear a global glut and a signal their readiness to cooperate. in an interview with his saudi counterpart, energy minister alexander novak says that russia is prepared to continue continue -- continue cooperating with opec even after the cuts expire. >> we assume that cooperation between our countries is long-term. regardless of whether it is in terms of the markets stabilization is another area. it is based on the agreements we september and the over the past 1.5 years, we have shown a lot of success.

juliette: german chancellor angela merkel has moved forward in her bid to form a fourth term government. that is after her perspective coalition partner agreed to swallow its misgivings in inter-negotiations -- and enter negotiations. willarty and their allies discuss today. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. guy, matt? guy: thanks very much indeed. shut thine stalemate. the u.s. government remains closed. mitch mcconnell hopes a vote at noon eastern time will end the impasse. democrats seem unwilling to accept the terms. for more on the first shut down since 2013, kathleen hunter joins us on set. how significant was it we did

not get a deal done this weekend and what does it tell us about what happens next? kathleen: think it is very significant. there was a pressure point to get a deal done by the time markets opened this morning. the fact that it didn't happen creates a bit of an incentive or both sides to dig in now. because this will last through the week and the last shut down days, thested 13 ship has sailed in terms of political applications for either side. now it becomes about both sides wanting to have something to show for it and say they got something out of the pain that was caused by shutting down the government. we may be here for a few days now. matt: obviously there is pain that comes with this because employees don't get paid on time. that makes their lives difficult, and obviously there are a lot of government employees. it goes to show the dysfunction in washington, which makes americans angry. who gets the blame for this?

kathleen: i think that is really an open question. when you look back at 2013, republicans only controlled the house of representatives. polls showed that overwhelmingly voters blamed republicans he does it was because it was republicans who did not want to fund obamacare and that became the essential issue. republicans are hoping this will play out in reverse, but it is democrats pushing for immigration, for protections for the so-called dreamers brought here illegally. they are looking for protections for those people, and i think that republicans are thinking on on thet -- are banking fact that democrats will be blamed. but we won't know for a few weeks who it falls more heavily upon. matt: kathleen, thank you very much. let's get more on market

reaction right now. let's bring in mark cudmore from singapore. mark, how much does this affect markets? there have been 18 shutdowns in the last 42 years, and the equity markets don't really react to politics anymore in the u.s. are we going to see it in other assets? mark: we are starting to see that again today that there has been very little reaction. investors shrugged with the shutdown. part of the lack of reaction is an assumption that you know a soon.ill be found could this is a soft deadline, this is just noise. the longer this situation goes on, this will become a serious source of stress. we are seeing equities softer today. they are mixed in asia. there is a bit of negativity andping in, but it is minor

is being superseded by other narratives. u.s. treasuries versus the yields. the spread has widened out. there are a whole bunch of tentacles surrounding the market, which points to the fact that treasuries are getting overbid. there is a backdrop to this which has come over the last two days. is this oddly going to be the week treasuries catch up a bit? mark: i am very much in that camp. we may have one of those ironic situations where we have lost the incentive to get a quick resolution. since they did not make it by sunday night, there is no point suddenly solving it in the next 24 hours. that might feed into some risk aversion. overall, the story is very

positive, particularly in the u.s., the fact that they have this new tax reform. equities might be a little softer, but nothing major. where the dollar goes is hard to know. most people think the dollar should be softer. i think it is already so skewed negatively toward the dollar and people have been overselling the dollar in an outdated narrative already. there is a chance the dollar will rally in the short-term. we may see treasuries find a bid despite a break in technical terms. matt: the euro is treading water right now, just barely up against the dollar. you would have thought maybe agreeing with angela merkel could boost the euro. where do you see the euro going from now?

you are talking about someone who is very biased in the situation. i think it is the opposite side of the dollar story. my point of view, i am seeing confirmation in the price action this morning. we have had negative views out of the u.s., and the euro-dollar could not get back up to highs. it is unchanged from the friday highs. it backs up the idea that the positioning we know is a very long euro. it is showing a premium for growth that has not been seen since 2009. are tryingnt, they to see everything at a positive, which means it is probably harder for the euro to fall. if it does fall, it will caught a lot of people -- it will catch a lot of people offside. now we have the upcoming ecb meeting and we know draghi likes

to be dovish. i expect that to be reiterated by the ecb this week. i expect the euro-dollar already looks under pressure, and i expect it to be lower by friday, unless something else comes in from the sidelines. anxious to see how the trump story plays out this week, whether the european or german surplus becomes something he talks about as well. -- mark more joining us cudmore joining us. , one of them surrounds the ubs numbers. next, we will hear from sergio ermotti. they plan a $2.1 billion share buybacks. details on that next. this is bloomberg. ♪ matt: will come back to the

european open. looking at a shot of our new european headquarters in london. we are looking at markets that are a little bit mixed right now, after the germans voted to go ahead with coalition talks, but the u.s. government shutdown continues. let's get all your headlines with juliette saly. sanofi has agreed to in a bid to add

treatments for rare blood disorders to its portfolio. maker has aia drug premium over friday's closing price. richemont has paid it to buy out ynap. investors would receive a share. richemont already owns 25% of ynap. units havena group fallen after more of its subsidiaries dropped stocks pending a major announcement. hna has been facing increasing pressure with some banks after they missed payments after a debt fueled acquisition that left it with global assets ranging from hotels to

refrigerated trucks. goldman sachs did a report last week and says they expect the conglomerate to fulfill those obligations. telekom's ceo says that wireless -- the company will be the 5g monetize platform. customers will benefit from revenue sharing agreements. he also mentioned the benefits of having a major presence in the united states and the impact of the tax overhaul. >> being in the u.s. is a great asset. it is a very liberal market. where the payback of your investments is something which is predictable because it is not something just regulated as it is here. reform, we have

been getting tailwind here. we are supporting our investors in our u.s. operations. juliette: that is your bloomberg business flash. guy: busy morning for the banks here in europe. eager eye on deutsche bank. ubs has announced a share back buyback of $2.1 billion. that will take effect next month. >> we are able to compensate for this environment we are operating in. >> in terms of bonuses and

compensation, you talked about a neutral positive, not a neutral negative. is the bonus pool an indication in terms of payments? >> i think those bonus payments performance, and i do think this year we will confirm our policy that we pay we have thence, balance between rewarding our employees but also keeping an eye on shareholders. that will be the difference. guy: markets are flying. sum up local management in great -- engagement for me. ofi do see a continuation the positive environment. you look at the macro picture and it is a positive momentum. the results are as we enter the

quarter is a relative factor. i do expect this momentum to continue. geopolitical risks are still there. we cannot avoid them. general, it is still there. impacting productivity, but it is nothing from what we had the last three or four years. able tofident we are manage any market positions in a successive way. how confident are you that the united states of america have imposed a tax? we all own a 20% more of our companies. do we need to rerate it? >> i think we know that our clientsw want to see this happen, especially midsize companies and they were very keen to see that signaling.

it is not just about investing in financial markets. having enough incentives and clarity to invest in their own day-to-day activities, and i think overall it is going to be positive. wehough of course long-term will see how this will play out. xericlet's get out now to -- to zurich to manus cranny. what did he have to say about the share buyback that made headlines this morning? it may be pouring rain out here in zurich, but he is a rainmaker. the first time since 2007, it is him.t delivery for that is why it is a red headline. i walked out of the conversation with sergio and the sense i got was this is not a reboot.

this is an upgrade to the operating system. bezel, wea clearer understand the capital requirements. we will continue to build capital. but this is the first major buyback since 2007. and they have new dividend policies. the language to save the shareholders. i looked at the price values. stock,look at ermotti's it is creeping. i reckon just above it. it is about setting the differential in the spread. manus, let's talk about the takeaways. let's talk about what is going on in terms of the details we need to focus on. which ones are important, which ones are not? in theone billion euros

next three years. jamie dimon did at jpmorgan. i had a conversation last week where someone said jamie dimon owns 20%, but he did not spend a dime unless it was on technology. ermotti committed to a billion dollars over the next two years. asset management died. they had a target of one billion euros, 10% of gross targets. that was a bit lower. no blockbuster change in the target, but think of it this way. he is not slashing the targets which brings a little more substance. costs seem to be one thing they are focused on. there will be less than 75% of the business, but for me, the detail is a bit lower. return on equity, 15%.

it is about investment in technology over the next couple of years. guy: absolutely as you say. certainly delivering on one of the key metrics. manus cranny, thank you very much. fascinating news. eye on what is happening. in you will find and you will find a blog that is running. this may be a nonstory. to the ownership structure. i will bring this up for you. hna on the right-hand side corner of that screen this morning. look at the ownership structure. keep going, hna group. nearly 10% of deutsche bank. keep an eye on that stock at the

open, i think. matt: very interesting stuff. that is the second page of the description page, if people are theing as i am at ownership structure. we are minutes away from the open. let's get other stocks to watch this morning. joining us is casper vida. we are looking at an open here that could be interesting because of so much news of the weekend. what are you focused on? casper: it seems like monday is for m&a, so we have the drug industry m&a heating up. it is also third higher than last year. a have sanofi going for hemophilia drug maker. we might still see further on the story. there is some discussion on counter bid on the euro. maybe other online retailers would be interested.

richemont has embraced the online channels. the market around the space. kasper: but it has a series of skeptics, and now has a new partnership in canada. it might put a squeeze on the shorter's. . another one is a spanish retailer, 25%. another company that has been shorted quite a bit. come down to a reasonable level, but elevated still. matt: thanks very much for the update. you can get the latest stories from our equities team by typing in first on your bloomberg. is also available via the mobile

app. app. it is a great way to get the news you need before the market opens. that is coming up in four minutes time. this is bloomberg. ♪ four minutes time. this is bloomberg. ♪ guy: minutes to go until the

start of cash trading. we have davos, the ecb, the government shutdown. zero-dollar is trading at 1.2240. oil, wti -- this is brent here. take a look at the d data, record net loss. up in positiveed territory. where the s&p finished, 2810. what are the future is telling us about where we can expect this morning to go. there is a lot to price in, at a ngle stockevel, sigel stop level.

london looks like it will open softer than the german market is going to open. it looks flattish, but never the less, the story below it will be fascinating. let's deal with the numbers and figure out what we are looking at. the 7730 is where the ftse closed in the auction. we are dipping a bit at the get go. 0.2%.x is opening up in terms of the sector story and corporate story, i am watching over here, waiting for the imap to open up. we will move across. 5526 on the close. we have this macron meeting today out of versailles, talking to a host of similar global corporate ceos. financials are softer this morning and we will keep a watch on ubs and deutsche bank as well. energy is bid this morning.

the data shows you where crude is going. we have the sanofi story down i n healthcare. industrials are mixed. i am curious to see how industrials are trading today. the financials look like they are operating today. absolutely. let me pull up the mov screen here, and let me figure how much the stocks are adding to or subtracting from the s&p 500. 2.25%.is down it is pulling down on the stoxx 600. he was also got to as one of the losers this morning -- you have also but hsbc as one of the losers this morning. data look at bhp billiton, rio

tinto. you have got the consumer staples stocks down as well. as far as the winning side of the ledger, total is up there, royal and shel. oil stocks are gaining this morning and you have a couple of other banks on the upside this morning, barclays on the upside. banco santander on the upside as well. it's just hsbc that is dragging on the stoxx 600. lawmakers in the u.s. have failed to negotiate an end to the government shutdown, leaving the market without a resolution for the situation. in europe, equities have open pretty flat. david, what do you see as far as market reaction, typically the markets do not care that much about a government shutdown.

they only care when it gets into the possibility of a debt default. david: correct. typically the government shuts down a maximum of two to three weeks. you normally see a little bit of a risk off and a little bit of lower equities and lower body else. really, it lasts just for the period of the shutdown. those losses are normally quickly reversed and the market reverses the usual trend. i think the debt ceiling is more of an issue for march. the we continue the resolution that is now funding through the shutdown. the more important one will be the march timeframe. guy: let's talk about what this means for individual markets. we will start with treasuries. this is the u.s. 10 year. look at the top, some of the interesting lines. nevertheless, walk us through what we are seeing here, and how

does potentially be a story in washington affect this? is all the markets have been talking about since the beginning of this year. treasury yield are testing the secular downtrend. earlys the cycle from the 1990's. you could probably join this in slightly different ways, but this is the most appropriate way to draw this picture. even if this trend is not actually here, 2.64 is the high. this is a significant area of support and we are entering the shutdown. i think that reinforces the near-term risk in the treasury of come back lower from here. the bigger question is, is that a corrective bounce? we will see this trend break. it is probably our view, that the border risk is shifting. we will see a global move higher in yields. canada has seen a significant break.

the japanese bond market has started to show this shift. the risk is, we hold here for now but over the next few months, we see this trend break. if we break the secular downtrend in the bond market in the u.s., does this mean we are beginning a secular bear trend? guy: what is the alternative? david: there are two possible options. the near-term risk is we hit 2% or 3%. i think what you see is a 3% hold. the risk is going from the secular downturn in yields, will we see a long-term sideways range? i think on the situation you can only talk about a secular bear market if you start moving up from 3.05%. matt: we heard from gundlach that he is waiting for bunds to confirm the move higher in the u.s.. of the german

ten-year on my screen here. we moved up to 58 basis points in now we are back down to 56. do you need to see that, david? david: bunds have technically broken in support levels. we have broken -- the fairly different downtrend in 2013. but technically, we have the levels around 62 in bunds. i think that means we hold here in the near term, but the border risk is that shifting higher and you need to break 67 and then you are looking at levels around sis point. guy: let's talk about equities >> it is having no market rally. there is this near-term risk we see softening.

if you look at the underlying threat measures, and the bond measures and the sector makeup, there are no big negative signals out there. it is a market that has become highly overbought. if you look at the s&p 500, it is the highest it has been since 1971 and it gives you an idea of how far it has come. the underlying structure is still good. it is a market that needs to see some kind of cause. we look at the s&p 500, it is 10% off the moving toward hundred day average -- the moving 200 day average. zone where you need to be careful, but not to the point where you say, this is the more important top. matt: david, repeat if you would for me, the weekly rsi is the highest it has been since 1971. do you think this market is the most over body has been since guy is born? guy: that is actually true, he

has got the right year. david: he looks a lot younger than that. guy: thanks, dave. david: if you change the perimeter of the rsi, that could change. but if you look at the nine week rsi, it is the highest level it has been since 1971. you need to be careful with rsi and momentum because momentum is measuring the speed of the trend, not the tread reversals. it is all about how fast the trend is moving. it shows that we have moved this fast in 40 years. signalen, an actual sell is not there, which is only when that momentum drops out of the overbought area. guy: how does that compare with the european equity markets? what are the technicals looking like around europe versus the u.s.? david: i think the technicals

very constructive. they have done very well with the headwind of the high euro. if we see yields begin a more significant path higher, we will see a retracement. i think that will be a positive. countries in europe, italy especially, is getting close to significant long-term levels. 24,500, thatround would be a pretty significant base. france is still very constructive. they have just underperformed the u.s. if we see a positive the u.s. equity market, maybe europe will start to take up some of that fight and we see a short u.s. long europe switch. guy: david sneddon stays with us. before we talk about the oil story, let's talk about europe this morning. sanofi making a big acquisition.

the market is not that keen. being smashed lower this morning. we come back and talk about these stock stories in a moment. this is bloomberg. ♪

matt: welcome back to the european open. we are 12 minutes into the trading day. let's get our top stock stories with nejra cehic. n ejra: let's start with

dealmaking in the pharma industry. sanofi agreed to pay $11.6 billion. treatments to add for rare blood disorders to the portfolio. it is also its biggest acquisition announcement in seven years. moving,see the stock lower, touching a 2016 low earlier, so it moves back from earlier. ubs i am watching as well. ubs buying back to $.1 billion of stock over three years. the first of by back since the financial crisis. you can actually follow the earnings call on tliv on bloomberg. finally, barlcyas moving on a report, saying that tiger global is taking a space. we are seeing a little shift that on th eb ack oe back of report. announced the $11.6

billion takeover. the deal values the hemophelia maker at $5.6 billion a share. good morning. was this a surprise? why does the market like it? >> it is a surprise. been trying to make a big acquisition for a couple of years actually. you remember those acquisitions. we worked pretty hard on those, too. this comes as a surprise because sanofi had been looking for acquisitions within the oncology center. this one comes more into the hemophilia, which is not a sanofi,clear add for

though they have made it clear they want to grow in rare disea s, r and this addresses rare diseases for blood. it is an interesting acquisition. one could wonder, why didn't s anofi make this acquisition b off byore it was bought sanofen? ist: our first question usually, what is next? it looks like they are hot for m&a. do we expect anymore big deals from sanofi? if so, which areas? >> i would think so. they have not been very successful up until today, basically.

but we could expect them to be inquisitive. there are few as it's the market that everyone is aware of, like, let's take pfizer of the otc franchise. for included the target sanofi as well. guy: thank you, manuel. there is plenty of stuff for our team to get their teenth into. find it on your bloomberg. we talked a little bit about europe. you talked about the individual spaces from a geographical point of view. where else do i go? >> i still think banks and commodities and resources and materials. the commodity mom has been quite impressive. -- the commodity boom has been quite impressive. it is a little bit richer in the near-term.

the risk is if oil comes back from the levels, we see weakening. sectorshe two clear to stand at our commodities and financial regulators. matt: if i look at year to date 600bdd break down the stoxx by the sectors, you still see auto-parts wailing on everybody else, up 0.2% this year. why do you think that is, and it does that continue? >> i think it does. i think the auto sector looks very strong, but that is not a european story. if you look at the u.s. auto story as well, it is a similar structure. so, yes we like the alternative. that is a store that again, we think could continue as well. guy: how big a headwind from the telecom point of view is the euro? how does the euro feed into

the european story. and eb.got a ubs if draghi is hawkeish, we could get to 1.30 quickly. how does that then relate to whether or not i want european stocks? >> i would not relate the euro story of u.s. treasury markets. how far can the rest of the damaging the equity market. i.think the euro i don't think that's going to be an issue. myself --what equity

markets do not like is when you see these is that in, rapid appreciations in

the trading day. gridlock, u.s. government it readynd the markets to start the working week with no resolution to the federal government shutdown. affecte equities rally this crisis? saonfi agreed to purchase america's bioverativ for more than $11 million. is more pharma made to come? surging on a reboot as the largest wealth manager promises a $2.1 billion stock buyback. the markets remain unimpressed.

welcome to "bloomberg markets: open."opean i'm matt miller. stockeally individual names we are talking about. ooil and gas, well bid. we;ll talk about that with david sneddon. the market has a lot of shorts on in the retail space. a, we have got a interesting news flow and b, it's a sector. trading lower. thanks also down. take a look at the ubs chart. market is not impresses

morning. we're working our way through towards the close of the session. let's get the bloomberg first word news update. reporter: u.s. lawmakers have failed to negotiate the end to the government shutdown, despite the bipartisan efforts to broker a deal. federal agencies begin closing at the start of the normal work week. ofs reflects frantic efforts the publicans and democrats to blame one another. buyback as soon as $1.2 billion of stocks over the next three years. the by that program will begin .n march with .ill return

we are announcing an increase of 8%. we are now talking about a share buyback program that will grading the same conclusion in 2018. talks have francine: been allowed to continue. beginning as soon as tomorrow. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. this is bloomberg. brent crude remains below .69 after her first week

longs is -- yes. speaking exclusively to bloomberg, saudi oil minister and his russian counterpart, alexander novak, said they will continue production cuts until the end of the year and a their readiness to cooperate even beyond that. we need to extend the framework. framework that are formalizing, hopefully. and we are finding a way to be able to get together quickly, and not wait for a year of negotiations. mechanisms that need to

be in place for this? >> we will continue cooperating, regardless of whether we need to extend the cards or not because that could help the market effort, help consumers and producers. guy: the russians and saudis, on the same page. we had an exclusive interview with this generated by emery horton. she joins us now. they are talking about 2019 only? why? mean,er: yeah, i during his opening remarks before it started, they said they need to get a rebalancing by 2019 that opens the floodlights on the fact this deal is in place until the end

of the year. these cuts remain until the end of the year. so, he said he hopes they would not have to extend a cut. but if this market is still not balanced. and if we see stockpile of, they will have to continue this cut 20. into it is pretty much status quo for 2018 and they are thinking about what they will do next. what happens on the deal and? matt: amazing. but what does this mean for the market when they are talking already about 2019? "bloomberg markets: asia -- >> well, we saw earlier this morning in asia, we saw brent crude trade up this morning. russia isaling that

operating to keep balance in the market. they say they want this rebound, but obviously they are happy at oil prices at three-year highs. clearly, they are aware of what is happening with the price. the saudi's have always said they are not worried about iaea painted a dark cloud ahead of this meeting. they are not worried about shale they say, and we need to look at the entire picture, seeing declines next quote in canada. they are not worried about shale , but that is what everybody is talking about and if oil continues to rise, we could see a massive come back from shale. guy: thank you very much indeed. as matt said, fantastic interview. the it back to david sneddon, the wi analysis.

let's bring this chart up. the market is incredibly long. where do we go from here? >> we're at this resistance of the 2015 high. the markets are very long. rally is the best you can say. our bias is that we think oil does hold here and we see a buyback. but if the dollar strengthens from here, if you look at the broader commodity indexes as well, there is significant placement there as well.

board risk is that this is too strong a trend and if we break 71.5, we have a significant resistance level. 2014u a prior to the level, we have this big collapse in oil and there is a big vacuum from here, you can argue all the way up to 89. but there is a big vacuum there. that is something that could suppress the markets quite sharply. when i look at oil, think about two things -- one, the dollar, where do you see that headed? and two, inflation. could it come back? >> the gxy has been trending steadily down. i think the risk is the dollar

trend is not done yet. i think there is further weakness. we could see the euro-dollar at one point way five. the strength is there -- we could see the euro-dollar at 1.25. but the strength is there. could go back to the highs we posted last year. and higher in our view. in terms of inflation, that is the risk in that is the broader risk for bond yields as well. we have the 10 year break even not at such a big level. we break the us and oil is the driver for that. then you are looking at higher breakevens in that raises the risk. with bigre dealing numbers this morning. david sneddon will be joining us on bloomberg radio. you can we get that conversation.

in just a moment, we will be via's finance minister, the first under the new boss. that conversation will be interesting. vice president on the agenda and this push to reform the eurozone. we'll have the latest, next. this is bloomberg. ♪

matt: welcome back to the european open. we are 44 minutes into the trading day. let's talk about what could be driving markets. essentially, debt markets in germany. chancellor merkel has moved forward in her bid to form a fourth term government. this comes as the social democrats agreed to enter a negotiation on the counter policy platform. coalition talks are expected to talk as soon as tomorrow and in four months, the political stalemate. toldeutsche telekom ceo us it is important a government is formed quickly. >> uncertainty is never good. people voted and now hopefully will get government as soon as possible. facing it because just

the environment, they are tectonic changes from the chinese environment and from the american environment and europe is getting squeezed out in the middle. matt: spoke with him at the dld conference yesterday. later today, mario's sentinel will chair his first euro group meeting. now for inclusive interview from the european capital of latvia and finance minister. thank you so much of for joining us. let me first ask you what you think about the german government formation. eurozone it to further integration? >> it is in port and that the is it shortnment up. there are so many issues on the table. the european union.

pointsill be the major on the agenda today during the year of group meeting. guy: minister. do you feel left out of this process? finance minister is talking about the fact that france and germany will lead this. basically, they will determine everything. they are talking about it happening this year. do others have a voice at the table, or are those two countries driving this? >> it is of course very important that the two big powers have an agreement among them on the conceptual raise forward. on the other hand, we have to tworstand that the european leaders are as strong as the weakest to the point

there is. there are a lot of issues on the table there. and first of all, i want to congratulate the european commission that comes from the political statements to the practical proposals and how to go further, that are going to be discussed the only between the countries of france and germany, but all the ministers and hopefully, they can come to the agreement, which of those are more important. for me specifically, the finalization of the banking power. the years end,o and the establishment of the european monetary fund -- that is also an important vote. there will be a move to institutionalize it, or it

should remain as the prerogative of the member states. important, another mandate has been given to it, so they would work on the problems themselves, make the decision not to work only as the cashiers. reforms are also very important and these are the questions we have been trying to discuss and hopefully, them being able to demonstrate the practical aspect will help as well. matt: with regard to the banking union, do you expect to see the european finance ministry established? and houston could we see that? -- and houston could we see that? >> -- and how soon could we see that? >> we have to negotiate and agree what the functions would specifically be. what the role of the potential

european monetary fund might be, and then just decide whether or not it is useful to establish the position of the common european finance minister. migrant as an issue of importance. it would not make the difference of how competitive are successful the european union and eurozone might you. thinkinister, do you spain would e make ac good vice b, andent over the ec would you support him? >> we will discuss the elections. the candidate has been announced publicly. he is one of the most experienced ministers. he's a very good candidate, though most probably some others would be at some point put on the table and we will have to decide. but i would personally also favor him at this point.

matt: can i ask you about your thoughts on diversity in brussels? you are the only woman in the race? do you feel there are enough women in positions of power in brussels? >> i was running for the position, but let comes first is the position. it is more important. guy: what progress can we expect on greece today? >> greece has been doing very

well with the obligation of the closing of the third problem. they have exceeded the requirements of repairing the balanced budget. they have the balance of 3.5%. other homework has been also completed, like improved tax collection. they have independent tax authority, the social security system has been improved. but still a lot of homework is on the table. we are going to further monitor what the situation is. the third progress report will be excepted. hopefully we will make a cash buffer for them, so they will be more successful in returning to the market.

minister, it has been a great pleasures eking with you. dana reizniece-ozola joining us ahead of the big ministers meeting later today. up next, we are talking about the stock stories delivering this morning. the online growth shares jumping on a licensing deal out of canada. the stock is up 11 cents. still he heavily shorted stock, though, down from where it was. the story continues next on bloomberg. ♪

matt: welcome back to the european open, we are one hour into your trading day. let's get the mid-cap movers with nejra cehic >> hitting a record high and rising the most ever. taking full control of the online retailer for $3.3 billion. we have ricardo getting a 2015 high, licensing the grocery delivery. this comes after the agreement with france. analysts see more deals coming. william hill moving lower with labrooks, with reports that the u.k. government could cut the maximum stake to two points. william hill, dropping the most

since brexit on that and dragging down travel on the stock since hundred. guy: plenty of opportunity to pick a stock of the hour. i want to highlight the chart of ubs. seen the stock come down sharply after a big move up on friday. we have not filled the gap that was generated on the beginning 18th. thatf we phifill gap. matt, we have not talk enough about the german story, have we? there is a lot of uncertainty left in germany. he did get the delegates voting for a continued coalition talks with the cdu. in a couple of weeks they will

have to go back to the party members, 400,000 of them, and ask them if they agree with any deal that has been reached. the likelihood is not sure. up next is "surveillance." this is bloomberg. ♪ we use our phones and computers the same way these days.

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francine: foot drilling, so. the progress they are making. the divisively with the oil ministers. then, ubs shares fall with a $1.2 billion by back. we hear from the ceo of sanofi this hour. good morning and welcome to "bloomberg surveillance. live from the world economic forum, in davos. joined by mark barton in london. i have