bloombergome to marcus -- markets. i am matt miller. european stocks rise and futures in asia point up. trade at thes open? i am live at westminster after theresa may's narrow victory last night. the cash trade is less than 30 minutes away.

matt: pressing on. theresa may survives the tory coup attempt. the she still have the clout to see a brexit deal through? the italian prime minister proposes a budget target just over 2%. btp yields down. the league said to be plotting a new election. plus, asian stocks rise with u.s. and european futures turning up into the green. talks across the pacific show signs of headway as china boosts importance of american soybeans. let's take a look first off at futures. an hour ago, we saw euro stocks and dax futures in the red. they have now turned positive.

we are looking at a gain of a quarter percent. since he futures up 011% after theresa may -- ftse futures up 0.1%. it does look like we could open higher. we did see asian markets climb higher up into the close as well. anna is outside parliament to run us through the latest exit developments. what do you have from the green? good morning from a chilly westminster this thursday morning. , stumbledy survived on in the words of some like colleagues. she has won the leadership challenge. that is not entirely comfortable for her. comparisons made to john major who survived other challenges against his leadership but it was weakened as a result. we roll onto brussels.

the big question is whether the labour party will respond and a different type of no-confidence vote. that alone.o they need support. conversations going on behind the scenes. that is what we will be looking to. talking about that right after the vote, saying it is a question of timing, guessing the numbers. where things move from here. theresa may heads to brussels. she is mindful of the fact nothing has changed getting her deal through parliament, through the commons. she spoke about that last night. here's how she responded to the critics and her conservative party. >> i have heard what the house of commons said. when i go to the council tomorrow, i will be seeking legal and political assurances.

we are in brussels, good to have you with us. we can say here domestically she is safe for 12 months. she is not as strong as she could be. how strong will be should -- will she be seen by ecb leaders? thingsall the commotion, have not changed. they are not dealing with -- they are dealing with theresa may. she will be the woman to carry this through. the u.k. well leave the european union and do so with a deal. nobody wants the u.k. to crash because of the economic repercussions. the question is what concessions can be had.

they want to help her get to the finish line. legally binding assurances it will never be traded. get soft, warm language from the eu. i heard in december, we will not get much about brexit. urgencyere a sense of on the continent to give her concessions? awareryone here is very brussels is just the start. really what matters, is whether the final deal can go through the u.k. parliament. it has become clear it will not unless she gets concessions. what will be key is whether we get new member states to come out and move away and say, hang on a minute. we need to soften up on the u.k. or else this is not going to pass.

from brusselsve on the ground, continuing to cover this developing story. let's get the latest market moves as prime minister may limps past the confidence vote. the pound held onto gains. ftse futures flipped and turned around. we are seeing the futures trading water. in asia, stocks have risen. the dollar edged higher for a moment. it is slipping back down, although treasuries are steady after three or four days of gains, yields i should say. joining us from singapore, a strategist. about the

no-confidence vote. it seems clear she would win. some speculating she set this up herself in order to secure a position of power. has she achieved that? >> certainly i have heard that theory. she has gained a little bit more power. she cannot be challenged by her own party for the next year. she can try getting this deal by parliament. it is not significant what it does remove one distraction. the market was spectating when she would be challenged. it does not get us much greater clarity in terms of what is happening with brexit. traders and analysts seem to be having grid or conviction about what will happen. it is going into bank different directions. it meansle are adamant we are going to hard brexit. it is's passe know

or hard brexit. nobody wants hard brexit. some are taking it positively, others negatively. people are getting convictions, strangely. that fascinating to see play out. on the other matters, markets captivated by where the trade story goes. the mood music seems to be a little more positive. where is the latest twist and turn on trade? are they adding to our knowledge about where relations and up here? yout is interesting the way ask it. i am not sure we have much certainty about where trade is going. the narrative has shifted. maybe until the last couple of theme of had this being suspicious of positive

signs. suddenly, i have read many more comments of people wanting to believe there are real, genuine signs. it is not just coming from one side. where trump made positive statements but china was not telling the same story. we have the first concrete measures since g20, china importing more soybeans. people are seeing a narrative shifts. belief a deal might come through. >> on the other hand, canadians keep disappearing in china. let me move on to the ecb. we could see the euro move. what are you looking for him to say? >> i don't think it is going to be too shocking. people are distracted by other

issues. the ecb, everyone has been focused on when they are ending qe. it is happening, the end of the program is happening at a time when european growth is not looking great. it is not just the problem initially, the recent collapse of the reforms. also slowing down aggressively. chinese comments on the outlook for growth may be the most interesting part. that is where we will see the real swing on the euro. suspect he will take a more positive tone and imply it is temporary. no doubt he will be pleased brexit stays on the front pages

that is one of the questions they want to help answer. where do you think the assets will and in 2019? let's get a first word news update. theresa may is headed back to brussels after winning a confidence vote among fellow conservative members of the house of commons. more than a third of lawmakers voted to ditch may despite an emotional concession when she said she would not lead the party into the next to election. with may safe for a year, she returns to the task of getting her brexit deal agreed to by parliament. i am grateful for that

support. a significant number of colleagues did cast a vote against me and i have listened to what they said. we need to get on with the job of delivering brexit for the british people. >> the u.s. senate is to vote on to withdraw support for the military campaign of saudi arabia and yemen. it would aim to end u.s. assistance for the goal state -- support of the hutu rebels -- houthi. rebels. >> they are on notice. if they keep bombing civilian centers in yemen, guess what. this comes back up. we will get to a veto proof majority on this saying no more

arms to saudi arabia. cohen is willing to reveal publicly what he knows about his former client once the robert mueller investigation is complete. his lawyer says his client expects to testify about what he knows in front of congress at some point. that comes after he was sentenced to three years in a federal prison. 2700ed by more than analysts. thanks very much for that. up next, bt yield drop. he gives an actual number. we are live in rome with the details. remember, when you are traveling to work, bloomberg radio is live on your mobile device or digital

radio. this is bloomberg. ♪

welcome back. you are watching the european market open. 14 minutes to go until the start of the cash equities trading day. let's get a bloomberg business flash. >> thank you.

china has started delivery of its first commercial model. the sport utility vehicle gives the company instant credibility and revenue for hundreds of other start of -- while other startups are working on their prototypes. hope thee always chinese government would lift restrictions around licenses and terrorists. section could and if it us in the short-term but in the long term, it would damage us. amazon has come under attack over plans to offer money to create a satellite hq. crumbling,system is there is record homelessness, and many people have no access to health insurance but the company is being offered incentives. the council has few legal powers

to block the deal. that is your bloomberg business flash. matt: desi humphrey in dubai. the italian prime minister has proposed to reduce the deficit target to just under 2%. it represents a significant concession to the european rejectedn, which had an initial target of 2.4%. has said good progress has been made, but the risk of sanctions could still remain. joining us from rome, bloomberg's western european economics editor. is everything settled now that italy has made this important concession? strife?ere still some >> the details need to be worked out. you couldn't say the shouting is over but the game goes on.

the commission will want to see lots more in writing before it makes a final decision. how our markets reacting? we saw yields coming down yesterday as this was being discussed. matter of fact, the yield on the 10 year bond is below 3% as of yesterday, for the first time in september. you can see that the markets are reacting to this. been turned into some turmoil. there is the possibility of some turmoil. i am going to guess there is shouting in rome, internal shouting. i can't see the possibility of

getting everything the league and five-star want. is mean for the opposing sides of working together? the deputy prime minister once his lower taxes. the five-star movement, they want a welfare support for the poor. can see both men will be scrapping over a limited amount of resources and perhaps less than they were originally counting on. anna: you wonder whether goes back up. thank you very much for joining us with analysis from rome. we are minutes away from the open. taking a look at the stocks we are watching.

keeping track of u.k. politics live for you in westminster. ♪

welcome back to bloomberg markets. this is the european open. six minutes and 20 seconds from the start of trading.

let's get your stocks to watch from around the newsroom. looking at telefonica. rodrigo let's start with you. what is the story of telefonica? news story in big spain. a publication saying the fund owned has been circling around and may have potentially considered buying a stake. looking at ways to protect themselves. this was likely to generate interest. .lliott has taken a big stake it could be interesting to see how investors react to this. it is amazing to look at elliott's european stakes. what is the story on the

incredibly collapsing stock? 70% of their market value. it is hard to imagine they do not get crossed -- crushed. scrapping their dividend. also a limiting 10% of their jobs. , sapping scandal assets and performance. matt: what is a cotto sating -- a cato saying? >> retail revenue has picked up slightly, they say that is in line with guidance for the year. generally the market will not be upset by that. current trading not what it is about. international licensing deals and what happens in the future. business isng the about the future. they are going to have to do more of those deals to maintain

the share price. take you very much. you can get all the latest stock stories by checking out first go. the open is next. ♪ >> less than a minute from the

open of equities trading. let's look at what the markets are indicating. let's look at the euro and the pound. spikes as we see dollar weakness across the board. the euro is gaining some ground. also seeing asian equities across the board, rowling overnight. the nikkei is closed 1%. 300, what ithe csi has been doing overnight.

here ecb ftse futures have been down between gains and losses throughout the session. there is not a lot of movement. futures have now come up. dax futures open up early these days. you can get an earlier look at the markets. interesting with the ftse in the first few seconds of trading. to gain oninuing ftse 100 stocks. the smitake the dax and a lot longer to open up. we also have a decision coming out, in about 30 minutes time. the world's lowest interest rates in switzerland.

see this up out of the gate as well. gaining, up two thirds of 1%. stocks are opening up positively. those that are taking a little bit longer to open are still down. going on,ade is now about 8/10 of 1% as well. let's take a look at what is going on. 348 stocks up. 147 down. this is not the overwhelming threat we have seen in the past few days and weeks. looking at 400 to 200 on the stoxx 600. losers, ininners and

terms of actual percentage seege, you are going to these smaller stocks that are not as widely held here. what you were looking at in the market. will see a story here. we will see shire putting up some gains. some of these smaller companies held,t what -- as widely but do tend to put up a bigger percentage move. can -- see the u.k. ten-year yield rising a little bit. investors are selling the stock. this is going up.

we are seeing yields rise. the same is true on the 30 year yield. don't see us getting too close to an inversion. at a 75, 130, and 184. here is a look at the european market open. and there is a look at the yield curve as well. let's talk about the european market open. theresa may one a no-confidence vote late last night, and is the head of rate strategy. thank you for joining us. you have told us on a number of occasions you think the u.k. curve could invert.

what would that require? we have seen some of the elements of this. market gets over the spout of risk on we are getting, the prime minister still has confidence from her party and the developments in italy. there is uncertainty and doubt over whether or not to be will get a timely resolution. then we will have another general election. the jock -- along and yields will be driven lower. we have to think about the bank of england reaction function. i would expect we will have cable going down.

the bank of england is concerned about this inflation, that it will have a negative impact on the economy. could be more likely to be raising rates, rather than cutting rates. you get front and yields going up. before we get to the bank of england response, we are looking at the nature of brexit. does your thought process rely on a fairly hard brexit? those the still lead to a possibility of this inversion? this is about the market being focused on the uncertainty in the near-term.

this is about the long end being dragged down by that uncertainty. past the uncertainty of the withdrawal agreement not being able to get passed through the house of commons, the road -- there would be some upside to long-term deal yields. >> this is the crux of the issue. parliament is not going to pass a withdrawal agreement that legally agrees to stay in the customs union and the european union indefinitely. europe is not going to change that one legal agreement theresa may has given them. pounde we looking at a

floating back to 127? >> it is short-term dynamics. this is an opportunity to be selling sterling. look at eu is looking for -- with the european is looking -- what the european union is looking for is a stalemate. this would mean more certainty for the u.k. economy. the likelihood of there being a vote of no-confidence on the government at some point is growing by the day. >> we will talk about that.

peter stays with us. we are live from the city of london with a response to what has been happening in westminster. next, the stocks on the move this morning. gam is falling considerably. telefonica, rising after possible interference from elliott. this is bloomberg. ♪

>> welcome back to bloomberg markets. we are you 11 minutes into the trading day. we see some gains across europe. the kind of move we saw in asia overnight. we saw the nikkei up 1%. are all very focused here on what is going on with brexit and italy. movers,s the individual let's focus on some of the stock stories. another day of elliott management to moving markets. today, it is telefonica. been interested in

telefonica. sodon't have any indication far whether they've actually taken a stake in the company. they became aware that elliott was interested around the summer time. this has been going on for a few months. i have commodities stories showing how difficult it has been for traders. ecuador is down 1.7%. this was after a downgrade. natural gas started to slide. it'sompanies don't think operation is going to be profitable. >> thank you. joining us outside is our bloomberg editor in chief.

let's get back to brexit. we talked about a confidence vote in one cents. , to talk aboutss a no-confidence vote get-go >> it depends on what labor does. if labor is not quite sure what could make sense that whoever has the vote, loses it. may lose the packages she brings and. mcdonald could thrive in this atmosphere. i heard someone on the bench saying it is a question of time and numbers. they need alliances.

is nothing more thrilling for one political party then to see another shorting its circuits. from a european perspective, is there an addendum? the addendum is, we will think quite hard about giving you slightly more. it is not going to be anything dramatic. if there was a second referendum, we would think about saying something. they have wounded theresa may. badly. it may end up going back to the

people. you may think a second referendum is something you begin to flock towards. british, obviously. you work in new york. you are constantly traveling around the world. you are not here in this bubble. you are talking to world leaders on a regular basis in europe. what are you hearing from the european side? are they willing to relinquish on the backstop clause that will legally holds the u.k. in the customs union if there is no solution found to the irish border? >> i see no sign of that. the europeans are used to these games.

there is no point in them coming forward this week. they expect this to carry on for a while. even those people suspect this is a card they might play in january, or later. then you have a big negotiation. i don't think presidents micron is in the mood -- president isri on -- president macron in the mood to give her much. she has to come on back with a dramatically different deal. >> why is the backstop so important?

perspective,h there is no need for a border there. is this about protecting the european union from the u.k.? they desperately want to hang on to that idea. to i richemont to hang on the idea that border between northern and southern ireland remains. are going to have one country outside the european union, you have to have a frontier somewhere. have thatwould rather border be somewhere across the irish sea. for the british conservatives, that is anthe dup,

abomination. said, whenever you make a speech impression, you have to always talk about the u.k., not great britain. you cannot encompass northern ireland in that. >> even before theresa may was elected, she was making great to mention before the alliance of the dup. >> thank you for joining us. btp yields are falling after the italian prime minister proposed to reduce the deficit targets to 2.04% for 2019.

a significants concession to the european commission, which previously rejected the country's target of 2.4%. set. is still with us on what do you think about this concession? i found it surprising that they had gone pretty far considering that in between these targets we 3.5% the french may go to next year. i find it humorous on a number of levels. the government does not care about the decimal places. deficit can be delivered, that is fantastic for btp.

the tenure spread can come in below 250 basis points. it could improve the performance of the real economy. >> this is one of the most important points. even if the european union were 2.5%, thehem to go to spread would hurt their growth. isthe tighter deficit stimulative. the real economy is comparative to where the economy has been. spread, theyen the can get genuine economic performance that way. if they can accept it is going but with a, political backing, that is a good thing for btp's.

peter, you will stick with us. we have a lot more to go through. the green outside of parliament in london. we are not only focused on what is going on in europe. china is said to plan more purchases of u.s. soybeans. we will discuss the trade tensions. this is bloomberg. ♪

>> welcome back to the european open. we are 23 minutes into the trading day. on u.k. political story the day after theresa may survives a no-confidence vote. china plans to dominate high-end tech. china may postpone the made in china 2025 program by a decade. is still with us. is all of this news around trade more positive? is that changing the debate in your mind around trade?

>> i think we have pessimism in the past couple of months. clearering to become that the tariffs are implemented. they can be reduced in the future. this game of implementing tariffs has had its most impact in suppressing risk appetites, particularly asian markets. going forward, you still have to be cautious. asset classes going forward is going to be about the trajectory of the u.s. economy. this is still going to be a super important factor. i don't think we will see much more in terms of downside because of fears of a trade war. >> does that mean you like

emerging markets now? >> if trump starts to give in and the president of china gets nicer, do you like emerging markets? >> better risk and reward. main pain a story for next year is in the investment-grade sector in the united states. that is how next year is going to play out. in theporate sector united states is going to be looking to deleverage. the spreads on the , the risk is not as great as the reward. >> great to get your insight. thank you for stopping by.

next, isn't the end of an ecb era?

>> theresa may survives the coup. does she still have the clout to see a brexit deal through? the italian prime minister proposes a budget target. but he could be plotting a new election. loss andillion dollar cutting 10% of the workforce as scandal decimates the stock. a very good morning everybody from a chilly westminster.

welcome to bloomberg markets, the european open. >> we are 30 minutes into the trading day right now. i want to see how things are shaping up as far as the individual stocks. up, 278 down.ocks as far as the gainers what is ?> ding us above water >> we have that all of these banks that are giving points to the stoxx 600.

the health care and the energy are evening out a little bit. john, it is good to have you with us. how close are you in the labour party to a confidence vote? we will judge the content of the statement in see where we go from there. >> who are you talking to at the moment?

assessmentday by day of the deal itself. dup?e you talking to the there are conversations across the house. channels.re normal us is what will theresa may bring back. back,ou bring something have a vote on it. >> will you have a vote? thehey want to see what deal is before they take a final decision. if the deal still has the

backstop clause, the u.k. is end thegally bound to customs union indefinitely. if there is no solution found it to the irish border, does that make you unhappy? >> a lot of our european partners would you support that. we can get that, that be the first step. the second step would be the relationship with the single market. that has come up is a concern across the house of

commons, that the prime minister has not given us the protections that we need. issues, you can see something that could unite the majority of the house of commons. >> it sounds like you wouldn't the unhappy if there were a second referendum, that you don't want to leave the european union at all. the labour party conference was in this timbre. but if you cannot get a deal that protects jobs in the you don't just discussed the issue, you discuss the wider conflicts.

that, we willt work through that sequence. what is your sense for the overall shape of what parliament could support? >> on tuesday, everyone was expected to vote. tv studios said the vote was off. >> there has to be another way

that parliament will take charge. how do you see parliament taking charge? >> she makes her report and we .ecide we decide what form that will take. it is about the future of the country. >> thank you very much. -- thedow chancellor chancellor joining us in westminster. it's the end of an era for the european central bank. mario draghi is expected to cap asset purchases today.

we have a move that comes with the backdrop of a murky economic outlook. frankfurt tow from discuss is our fx strategist. ?ow do you see mario draghi they have to not get too optimistic. investors have to get more cautious. >> what do you expect mario draghi to do next year? even though they are ending quantitative easing, they still have $160 billion coming back to them.

is it important how they do that? >> the focus is still ongoing. i think next year they will have to deal with the long-term. they are not going to signal this time. end, it depends on whether they have succeeded bouncing the signals. -- balancing the signals. i want to ask you about the growth story across the

eurozone. how concerned will mario draghi be about the slowdown in growth data? officials in the ecb have tried to downplay the growth momentum. they have to do that in the end. if it gets too cautious, it does not justify the purchases right now. we will take extra measures if we are seeing further growth deterioration. there are temporary effects in the we are going to return to the growth next year. >> bloomberg economics expects them to play down their growth estimates. we have seen the oil price dropping as of late.

>> they will have to take down the growth forecast. the lower growth momentum is generating headwinds. they will stick to minor downside adjustments. the economic background is right to end asset purchases now. >> thank you for your time. next, we are going to talk about the buildings behind deutsche bank. the german government is set to be intensifying at -- efforts to fix the troubled lender. it looks like they are considering a merger with a

german owned bank. this is bloomberg. ♪

>> welcome back. we are 44 minutes into the trading day. one bank over in germany has gained 10% in the last two sessions.

that is deutsche bank. the german government is said to be intensified effort to merge it with commerzbank. those moves, really interesting to watch. there are record lows over and over again. various ceos try different solutions. joining us to discuss all of this is the bloomberg german bank reporter. what is the government now planning to do? the government is really taking steps to help deutsche bank as well.

they are making changes to the tax code that will make it easier for deutsche bank to merge. it is preliminary and exploratory but a sign that the german government is interested in this. good morning to you. it is exploratory. what can it really mean for the markets? the market is seeing that berlin is taking steps. this increases the chances it will happen. it will make it easier and less costly. when ever the merger is being

discussed, it could potentially have positive consequences. there is a lot of concern. it will plunge the banks into a long restructuring. what do these two managers think about the idea? are they fighting against it? i don't think they are fighting against it. i am sure they are seriously considering the idea. i think the ceo of deutsche bank wants a plan that can work. i think the share price will go up on its own.

i know for certain he is not close to the idea at some point. he could agree nothing else could really work. the change the government is considering would make it easier for that option to be realistic and viable. it is nothing imminent. it is laying the groundwork for something to happen in the future. >> thank you. let's turn to another big market story for today. and of the year, really. gam. the asset manager posted a billion dollar loss. company has lost about a

quarter of its value. shares are down 80% since january. joining us now is are investing editor. we have the latest in terms of the gam story. >> what a year it has been. july, with one of its money managers. thereigned and since then has been a downward spiral. the damage cannot be contained. the share price kept flipping. some point we heard investment banks were circling. strategic options are on the table. them,work is cut out for

with the new ceo taking over a month ago. looking at the possibility of cutting 10% of their jobs. are they in some sense a vicious cycle? don't want to invest a time of money with them right now. it is a notoriously difficult business to run. when a money manager has one issue and it starts affecting difficult,ion, it is short of some drastic restructuring. it becomes difficult to change course. it is not just how they attract

talent. it is retaining their best talent in the house. there are serious problems ahead for gam. >> thank you. another terrible day for the shareholders. bloomberg terminal users can interact with all of the charts we use during the bloomberg tv broadcast. next, the battle of the charts. this is bloomberg. ♪

>> welcome back to the european open. we are 55 minutes into the trading day. it is time for our battle to -- battle of the charts. may just survived her no-confidence vote. those a trading idea for who believe in her. we have the 12 month price to earnings ratio. we have the u.k. mid-cap index. mid-caps tend to be more domestically oriented. see the volume nations

have fallen to their lowest since 2012. as the ceo of marion global u.k. domestic stocks are now in the bargain basement. you see some hidden gems and last season fashions. there could be some good deals. longer-term time horizon, this could be a good deal. danny --dani? >> the soybean trade. are going toters go about buying u.s. soybeans. let's look at the argentinian and u.s. soybean futures. china says it will go through with its plan for 25% tariffs on the u.s. exports.

we got a boost within the argentinian commodity. not much has changed to date. both are moving together. we can see what these trade tensions turnout what to look like. out to look like. >> i feel like this chart is a little bit niche. justinang to give it to lee. congratulations. brutal.tt, that is it for the european market open. we will hand it to surveillance to take you through the next few hours. theresa may fights on.

will we see a challenge to the entire government? we spoke to the labour party. they are taking it day by day. this is bloomberg. ♪

♪ francine: pressing on. theresa may survives a coup attempt. but does she still better way to get a brexit deal through? and comer trade talks show signs of headway. as china resumes imports of soybeans. plus, mario draghi is set to have the bond buying program. good morning to you. i am francine lacqua here in westmins