>> asian stocks extend a rally. games as opec fails to have talks with iraq and iran. short sellers are taking aim at the big gauzy banks -- ausie banks. >> you don't want to just address issues here and there.

you want the economy on the right track. >> egypt remains in the spotlight as the finance minister confirms his commitment to a floating pound. alloway.0, i'm tracy >> i'm heidi. what are you looking at for us today? i thought we would start with something across the atlantic. panel look at the lower on this chart trading volume dipped below its average. the reason this is interesting. because of the thanksgiving holiday coming up. donald trump trades that have been behind the market rally seemed to be coming off. if you look at the dollar, it has been weakening. infrastructure, stocks are

getting because button. and we have seen some selling. trade trump reflation losing steam? speculation about whether these will come to fruition. those records set on wall street overnight, take a look at mumbai trading. we are up 3/10 of 1%. the real gains, a robust session from australia. this is on the back of the energy play and resurgent rally onn it comes to metals, increased infrastructure.

is just under two years. let's take a look at how they closed yesterday. there was a mixed picture in dubai. they were up initially in the day but closed down, dubai down almost half a percent. tadawul was up. we are going to check in on the first word headlines. here is sophie. trump hasnald abandoned his pledge to prosecute hillary clinton as he explains his agenda for the white house. he looked her in the eye and said if he were president she would be in jail. now he says he has no intention of pursuing clinton over her use of private emails saying such a

move would be divisive. facebook is key to reenter china. it has created a tool to censor information in the country. while it may please beijing they return his -- is by no means certain. trans asia shares fell by the daily limit after the board said the airline is to shut down. after two disastrous crashes they said they cannot pay notes due next week. closuree said to reject and will fight the plan. they are calling other creditor banks today to discuss other proposals. >> in the quarters of this year the company lost 70 million u.s. dollars. the future does not look any

better. the board has made the decision to dissolve the airlines. begun extinguishing fires. the area produced 2000 barrels a day. united nations has warned the smoke will have long-term effects on the health of local people and the environment. local news powered by more than 2600 analysts. this is bloomberg. >> thank you. we are going to stick with oil. after crude making gains opec failed to resolve how they would cut global output. a bit of a discrepancy. sam joins us now.

if you look at this chart of oil production you can see it is surging quite a lot. how important are those players when it comes to the deal? >> if you look at this chart, both countries have increased their production significantly. half -- up over half. that is quite a big proportion. they are looking for exemptions. if you take a quarter of opec production out of coyotes that leads to a lot of coyotes elsewhere. >> we have been getting ahead. deal mean for supply given that we are talking about a quarter of it not being involved? of thishas a lot

towards reaching a deal. the question we have to ask ourselves, what do you are we going to get? is it going to be something longer-term that may have an impact? that is a cup potentially of more than one million barrels a day. delegates have said they are targeting the more ambitious and. that for six months, even if it ,rings markets into balance there is huge global stockpiles that need to be drawn down. even if we get a deal, we have to look beyond that and see that we might be in a situation. heidi: has the market price the deal? you see this faltering trade. does it rely on the details that we get?

isas you can see the market being quite volatile. trades are at a three-week high. everyone has an opinion on this but there is no consensus. earlier in the week as optimism seems to converge around that deal. they have dropped since we got this talk again of having these reservations. we have to wait and see. i think the market expects some deal to take place. it is the details that will indicate where prices need to be. our market energy reporter. egypt is trying to reduce its borrowing cost. he canm cairo, he thinks

help the finance minister. lighthe minister shed any on the timing? >> i think you have to hold onto your knuckles when it comes to this. they are ready. donald trump has really upended the emerging markets. it has unsettled the credit rating. they have raised it to stable from negative. the finance minister here really should have put the details on in terms of timing. president-elect spoiled everything. >> we were planning to do it i the end of november but there has been volatility since the election. because of the change in the philosophy of how the economy would run and the plan of the

president-elect. so there has been some volatility. we are waiting until the market is settled. me an they gave indication on the size. next year if he can do it he wants to try and get to those bond markets. when you look at the data, it has dipped slightly. we will talk more about that and a short time. target, they are quite happy. >> we know egypt has bloated its currency. it has removed energy subsidies. that is a lot for one country to handle. what is the latest in terms of the progress report for egypt? >> when you look at the emerging markets and the currency, one of the most popular stories is about the lira.

the market is testing that. he is a finance minister. what i took away from the discussion was things have done a little bit better on the report card then the egyptians thought. >> they are encouraging in terms into the official market, which was very harming to the economy. the results so far are positive. broad canvas of a conversation. there is still that understanding with them. they set some ambitious targets. it is doing so. look at the deliverables. these are numbers which improve.

we hit the peak in terms of inflation. those are the discussions we bring up next. tracy. >> thank you. let's get the latest in the markets. >> we're seeing another day of gains for stocks. are leading. that is not surprising given the 1%. they have a lot of minors there. the highest level in more than a month. such asother markets korea gaining. .e are starting to surge it was hurting exporters. the shanghai composite gaining. it is at the highest level this year.

five, if you look at the relative strength index. breaking past a 6.92. it was the first time on record. another currency you have to againn eye on in asia is weakening half a percent. we have the central bank decision in three hours. they are expected to hold the rates. 5% sinceground, about donald trump's victory in the

u.s.. expectations the fed will hike rates next month as well. tracy. latestsherry with our yuan fix. later in the show, india's classic power all -- power. >>, the question for the fed is well donald trump -- what does donald trump have in store? ♪

welcome back. you are watching bloomberg. while the fed considers high,erest rate -- rake

donald trump will move quickly to reshape the fed by filling to vacancies on the board of governors. let's get more on this. -- there economist seems to be this debate about what donald trump means for the fed. how he may be able to shape the board of governors and what his potential policies mean. i want to bring up this chart. .t shows the spike it has been quite high. 1994 which wasce a time of much drama. my question is even without donald trump doing things to the fed specifically, pointing board of governors, what does he actually mean for monetary policy?

>> so far janet yellen said she does not know. we don't know what mr. trump is going to do. -- thes i will focus message is i will focus on current conditions. current conditions are strong enough for a rate hike in december. i feel she suggested she will deal with the future situation when it becomes known which makes sense. is thesk ourselves what most likely future policy, we have to worry about stagflation. you cannot pursue lower inflation.

conundrum.a a donald trump conundrum. we are continuously talking about the uncertainty of his policy. markets are reacting even though we don't have understanding of what he plans to do. i want to ask, do you think donald trump has a particular school of economic thought he's interested in, if not adhering to? >> that is an amusing question. digress.be tempting to stuffis some unorthodox coming out. we can look at the u.k. for a similar discussion. is notion higher inflation somehow good for the world economy is something i would contest.

that is nonsensical in the sense that u.k. trades a lot more with the eu than the eu trays with the u.k. in terms of volume. is comingrous stuff into the consensus view. spoke, i'm time we not sure what the state of play feels global trade is changing day by day. the previous guess copy replacement because old members are exporters. if that is a defining trade deal

for this region where is the demand going to come from? a negativethis is for the world economy because people have calculated the potential impact of the tpp as increasing gdp for the signing 0.3%.ies by it might not sound by -- sound like mode -- it may not sound like much, it is the one thing we look to to hope for greater world gdp growth. >> this is unique opportunity latine asian region and american region to step into the void and put into place more pro-trade policies.

that will be the way to offset this threat of less world growth. 2016 has felt like a year where black swans out black swans. event haveeseeable actually materialize. into 2017, what are the risks we are not seeing? is geopolitics of what may happen in europe with elections? >> we clearly have a correlation between income inequality and the rise in right-wing and populist sentiment. if i were a world leader in any country i would try to work on improving income distribution. the europeans managed to get

more returns on their gdp in terms of distributing. that is going to be key for it. heidi: coming up, why short interests in australian banks is rising. ♪ why some call it the widow maker. ♪

heidi: welcome back. sure interest has spiked in australia's biggest banks. it is a trade that has been named the widow maker. what is driving this increase in shortselling at the moment?

>> it is national to blame donald trump. let's blame him for this as well. seenlection, we have yields rising on bonds. that makes dividend plays less attractive than australian banks. they fall into that category. they are dealing with other difficulties. increased regulatory requirements. always uncertainty about the potential risk of the housing market in australia and what happens if china experiences a hard landing. makes the banks attractive. >> i remember writing about concerns in the housing market as much as five years ago. onse worries have been going for so long.

nothing has happened. why is it hard to get this trade right? banks aretralian extremely appealing to domestic investors. pension funds for so many australians hold these shares. well.y yields as there is also the tax break for holding stock like this. every time the price falls back local investors take that as their q2 by with both hands. this is among the reasons we are seeing short-sellers try to do this and get burned. up, the outlook for eject. we hear more from the finance minister on his expectations for growth. this is bloomberg.

heidi: it is 12:30 in hong kong. these are the first word headlines. fluctuating after opec deferred agreement on outlook, talks in vienna failed to resolve the question of exemption. iran is determined to boost production after years of iran is determined to boost production after years of sanctions. they want to pay for its war with militants in the north. asian stocks are extending the global rally. that is after all of the major indices closed at all-time highs. declinedt bond yields

as odds of a rate hike held at 100%. the offshore yuan has kept a record against the u.s. dollar breaking through for the first time. they resumed to fix after a one-day break setting the official rate at 6.8904. it is a key level for the timesheet. tradingore currencies at its nearest level since 2008. international bond sale should raise $6 billion through 2017. the first issuance may be delayed because of market volatility. the window is closing fast. -- ets will be very global news 20 for hours a day.

this is bloomberg. tracy: thank you. we are going to be staying with egypt now. a very big story in the region. investors are finding a bright spot that has follow donald trump's election victory. you spoke with the finance minister. the stock market is on eight hair. the currency is under pressure. is this a story of future growth for egypt? >> it absolutely is. are looking at one of the best performing stock markets in the world. at 94 markets that we track it bloomberg there is a belief, that pillars this finance most or is trying to balance, one is

inflation. one is growth. there is a little bit of light for him. it is going to be a tough ride. he has gone for a free throw. -- free float. when it comes to inflation and growth i think he has a couple of important lines to tell the market. >> we should expect to hear something around 40% give or take. you are in a transition between taking certain action that may create not the fastest way to go. you need to see investment coming to the country. now we are seeing investment in terms of equity. the next that is to see the economy function. one of the hangovers with the

economy was the situation with this issue. we expect to see more. we are working on the investment , probably encouraging to the country as well. >> inflation is the other issue for you. 25% is the level on the street. what is your primary driver. reached -- the currency situation. affecting has been the inflation greatly. by reducing the deficit we expect to reduce. we are targeting to go down to 10%.

>> this is not a market. let's be frank about that. , itou put your money in would not consent -- he would not confirm one that would be cleared. the chinese are supposed to be paying $2.5 billion to egypt. is me the takeaway story they are doing better than they thought. they are saying a bit of progress. piece is the bond market. minister last night made it , in terms of market risk, he's ready to come for 5-6 billion dollars. he would not give me a level in terms of that currency. this is a market for the brave.

tracy. tracy: the brave and deed. thank you. india is boosting the availability of bank notes and rural areas. the recent problems with exchanging money, they ordered the withdrawal of people leaving the country with seven of the currency in circulation. while these and monste mastercad will see a surgeon transactions. plastics.king fantastic. how will they benefit from the decision to withdraw from the market? >> it has been debated payment

with a limited context. be decision to withdraw will 500. what is certain and startling, the benefit that this has had on companies like mastercard and visa, they are big winners. have a deep relationship with the banking system and have been there a long time. is inevitable. i can say i have not withdrawn any cash since november. it is not just mastercard and visa. they have seen a dramatic spike in transactions. seen 1000% surgeon money. 200% increase in app downloads.

payment well it's believe they will have 120% increase in annual transactions. having said all of this there is a caviar to. 600 million indians don't have access to a formal banking system today. ofy may not even be aware these options because only one has access to smartphones. the numbers are staggering. they are the worst affected by this decision. >> it is interesting you haven't with drawn any cash in recent days. people have had to resort to bartering rice to get services and other goods.

in an economy that is still developing, where a lot of people don't have access to digital payment, how feasible is it to move into a cashless society? >> that is the million-dollar question. it puts an end to black money in india. it has spoken about how there are benefits of going cashless. but going cashless does not mean becoming penniless. this decision that was taken option forreated an creating notes. removing cashless transactions, perhaps a few years away.

the immediate fate of transitions, we are not sure this is going to drive india to be a cashless society were not. >> a fascinating experience. coming up, why saudi arabia has grand vision for a post-oil from manye looks so bad for so young people. ♪

>> welcome back. >> a quick check of the latest headlines. the lira may fall and raise rates for the first time in a most three years. most economists predict the bank main rates.s seven of the 24 expect a 25 basis point increase. that is the most since december. they began their first easing cycle in march. they have not raised rates since 2014. the publicsing pension agency on the sale of its struggling financial hub. buy it forfering to less than the pension fund's investment.

they have failed to attract its target clientele. a deal has yet to be reached and the terms of the bid may change. boosting shipments to america to build. two 700,000ropped tons. most recent american producer to open was in 1985. tracy: saudi arabia's efforts to transform the economy has found little support amongst young people where a quarter of those under 30 are unemployed. let's discuss this more from the gulf research center. you are an expert on this topic and spend a lot of time in re-add as well.

this chart illustrates the problem. this is the employment to population ratio for the younger generation in saudi arabia. it is low despite the government's best actors -- best efforts to get it to increase. what does the government need to do and how big of a problem is this for the transformation? >> everybody is aware that the unemployment issue amongst youth has to be addressed. orever the unemployment later challenge has to be addressed in the wider context of the economy. the economy needs to keep growing every year to create jobs. jobs have been created. 2016, i expect 130,000 jobs will be created. but you need to have a growing economy to create enough jobs. as the economy has been slowing

down it is a worry as to how many jobs can be generated. tracy: it is our most a chicken and egg situation. you need the youth to participate but you need the economy to be in place for the youth to participate. how did the authorities get out of that situation? >> they always need to give the incentives for the economy. they need to get saudi's with skills, educate them and have the private sector continuously grow. you need to increase confidence. the government says i'm going to pay back my dues. they announced they will be paying the private sector by the end of this year. this is positive because you need to have more than 200,000 jobs created every year to meet the targets of vision 2030. the efforts being made to fix this problem,

nationalizing sectors and retail but trying to replace the farmworker component, physical back to what kind of job candidates are being turned out of schools? is that a core of the problem? >> absolutely. towards that the government over the last 45 years has been educating through the scholarship program a lot of saudi's. at the same time you need to have the private sector engaged. since 2011 more than 1.3 million jobs have been created in saudi arabia. you need to look at it overall in terms of what the economy has been generating for the saudi's. more of being engaged than over the last three years. 50% of those jobs have gone to female saudi's.

the issue is how many females get employed. it is much lower. around 30% compared to egypt which is about 40%. that: one of the things has been bandied about is increasing fees when it comes to non-oil revenue, raising taxes. would that go some way to alleviate the situation? >> absolutely. you need to transform the economy from this dependency on oil revenue to something else. you need to have a growing economy. the government has been conscious of the concern the private sector has expressed with municipality fees and taxes. they revise those municipality these down by 99% and they do that because they are aware the private sector and the economy

overall cannot and should not be withstanding such high fees and taxes. thes trial and error in government is aware they need to be changing as they go along. tracy: one of the things we have been talking about is the opec meeting next week. will there be a production deal? the burden will fall mostly on saudi arabia. how much does that complicate their attempt to boost revenue? it's a difficult issue. saudi arabia needs to have oil above $55 in these times. reserves are falling. they need to issue more international debt. any to put their head down and say we are all going to cut. if there is no solution am a prices will go down. this is not good. tracy: let's turn to the political. one of the tight ropes that saudi authorities have to walk

is austerity and maintaining power, keeping the population happy. how difficult is that? >> ic saudi arabia transforming itself. nextder to move to the post oil era, certain pain has to be administered. consciousness. i do believe towards that, mohammed is performing that goal of a society of transforming the country. tracy: thank you so much. it is nice to get on the ground color from places. coming up, the view from iran. reality is expected to trump rhetoric. that is next.

♪

tracy: welcome back. you are watching bloomberg. a quick check of the headlines. chinese billionaire in talks with takeover targets for a backdoor listing for his property unit. discussions continue with --eral properties after he another group dropped out. the company that flies packages for amazon once a judge to force pilots back to work to avoid disruption in the holiday season. pilots are protesting staffs shortages which runs 35 flights a day and 45 per dhl.

online shopping surges spending forecast to rise to $91 billion. picking up the stake in -- as the automaker looks to spin off less important businesses. they are paying 20% premium for the shares if a special dividend is paid. the amount will be deducted. closer to home billions of dollars writing on donald trump's plans for the iran nuclear agreement of which he was a harsh critic. some think reality will prevail when he sees the potential of the iranian market. i know it is early stages. what do we know at this point?

>> what we do know about his policy is we are trying to have a reading based on what he said in the campaign. he was a fierce critic of the deal. he said he would adhere to the deal. he said it was a disgrace. on the other hand he has also said the deal was not good because it was preventing u.s. companies from doing business and not opening the doors to european companies. it is to opposing views. when i speak with iranians that is also what they raise. some say it is very dangerous because he could be unrolling the benefits. others say no, he is going to be ruled by his business mind and that is going to be good for iran.

>> what is at stake for iran and worst-case scenario? to access newping someology, hoping to see $50 billion of foreign investment, after the nuclear deal. they had high hopes from the iran side. they have had a number of big deals signs that have been at the preliminary stage. iranians are looking to complete those. fromupply of 200 aircrafts boeing and airbus. business deals are hanging in the balance. >> the other component is of course oil. they have ramped up production recently. what does a potential rollback of the iran deal under trump mean for that section of the

economy? have been speaking with traders. >> this really will remain to be seen. tracy: thank you. edition offor this markets middle east. anna edwards and others will have all of the top stories from london daybreak. that is next. ♪

>> it is 1:00 in hong kong. opec failed to agree on output levels for iran and iraq. they feel to resolve the question of resumption's -- exemptions. iraq wants to keep hoping to pay for its war with militants. donald trump abandoned his pledge to prosecute hillary clinton. during the campaign he said that if he was resident, she would be in jail. now, the president-elect has told "the new york times" he has no intention of pursuing her over her use of private emails. the chinese yuan