anna: good morning. it's the european open. i'm anna edwards, live from the city of london. european futures point lower. the cash trade is less than 30 minutes away. ♪ anna: morgan stanley ousts traders. they remove at least four traders who concealed losses of up to $140 million i mismatching securities. downbeat data. german retail sales dip unexpectedly, and india braces for a slowdown, with hong kong

leading losses. one thing not on sale this black friday is apparently health care. boris johnson says he would walk away from a u.s. trade deal if it included the nhs. we are 30 minutes away from the start of the european trading day. welcome to the program. it is 7:31 here in london. this is what the futures look like at this hour. they look weaker. we are expecting the fall of the asian session into negative territory. it has been light in volumes. the markets were closed yesterday. today, we see a shorter trading session as a result. do not expect to see the volumes that are normal.u.s. futures also pointing downward. clutching our ongoing concerns around trade, so let's think about where we have been in the asian session. lots of interesting theories as

to what is going on. there is a narrative around trade. we talked about how trade tensions, and particularly president trump signing that bill around hong kong, how that threatens to weigh on the conversation. that was an issue yesterday in the session. we have that in the mix, but also a host of factors around hong kong that could be idiosyncratic for the markets. we will go to the markets life team in a moment. the colombian peso is featuring on the fx green on the gmm. the story has been weakness for the chilean peso, touching a record low for the second straight day. crisis in latin america on various fronts is slowing gdp numbers from india, putting e.m. back on the agenda. let's get to our conversation with our markets life team, as we see money coming out of equities. let's get to mark cranfield, our markets life strategist who joins us right now.

let me talk to you about the selloff we are seeing in hong kong. a number of theories seem to be around health care. what is happening there? what explains this? had a whole string of things. you could pick any one, but let me go through some of them and see the most. as we say, pharmaceutical stocks are under pressure. there is talk that china will do more to oppress prices of health care related stocks. we had a senior executive from a major chinese company apparently arrested. that is always a bad signal in china. his stock is down by a lot. that is in the brewing related industry. in hong kong specifically, we have the number two airline in hong kong deferring wages on it staff because the economic environment is so bad. that is pretty serious.

that tells you how bad the economy is in hong kong. we have had some of the factors more technical. earlier this week, the index tried to rally on high-volume. those gains.stain a lot of people bailing for the month end. telling right from the market kicked off in the morning and in the background to all of this, we had deterioration in the situation because donald trump signed the bill which favors the unrest in hong kong, or supports the protesters there. there are a number of things coming together, and there has not been any positive thing to offset any of that. plus, we have chinese pmi coming out over the weekend, which is likely to be soft. a whole slew of things. nothing singular, but a cumulation. not a pretty picture. anna: let's talk about what is going on in japan. it seems like a long time since we have focused in on the fiscal or monetary story.

we see that part of the conversation in europe as well. what can we learn from what japan is doing, the extent to which they can do this fiscal stimulus, even? with high debt metals? mark: they are talking about very big numbers. were talking about a supplementary budget, which could be a few trillion yen. the numbers are getting larger. there is talks that the headline number could be as big as ¥20 trillion. that would make it the biggest increase in the budget for at least seven years, so a very substantial number. even the net figures would be more like ¥10 trillion. very big numbers. that would be a boost to the japanese economy. japan is already a country with a very poor debt to gdp ratio. they are doing that in a

situation where they are borrowing a lot of money. the japanese bond market is a little nervous about all of this, even though the data today was horrible. the industrial production number was a real collapse on the downside, which suggests that fourth-quarter growth in japan will be very weak. you can see why they are considering having this extra stimulus in japan, because they need it. the economy is at a low level, and they need something to spur action for next year. anna: do they really need it in germany, is another question we should ask? retail sales number is of interest. retail sales falling 1.9% month on month. some of the bottoming out of the german data is this gdp number. recently supporting arguments that we don't need fiscal stimulus. what are your thoughts? mark: you probably will have this argument going back and forth for sometime in germany. they are quite diverse -- quite

adverse to putting themselves in a deficit. but when the economy is as weak as it is, perhaps it is time that they threw that away. it has not been very exciting. we had a negative quarter of growth already, and it is still bumping along pretty close to zero. there is nothing exciting happening in germany. they appear to need something to help them out of this. it appears the ecb has gone as far as it can in trying to do what it can for monetary policy. germany is a government who is in a position where they could increase spending without too much trouble, but they need to make that decision. it will not be an easy one, but the conversation is not going to go away because people will look at germany taking a lead. anna: what about the oil markets? the markets life question of the day concerns the oil markets. how far can crude oil rally? on yesterday's program, we were

wereng about whether opec going to roll over the cuts into next year, not cutting any further. what is the thinking on the markets life team? -- markets live team? mark: the consensus seems to be building around this. if opec insists on holding the cuts to where they are now, and that is probably priced into the oil market already, we cannot expect too much more upside. $58 a barrel,d that is close to the upper range. people would not be surprised if they hold the cuts where they are. pretty much in the price already. nothing exciting for the oil market there. they need bigger cuts than the market is currently thinking about for them to get the oil price much higher. if they don't meet those standards, the downside potential is pretty good for oil because we have already had a rally in anticipation of this opec meeting. there is quite a lot resting on this, and we could see a decent move either way.

to push it higher, opec needs to surprise the markets. anna: good to speak to you this friday. mark cranfield, our bloomberg markets live strategist. join the debate on today's question of the day, how far can crude oil rally to year-end? give us your thoughts on that. reach out to the team. let's get the bloomberg first word news. for that, we go to oanh ha. has: the conservative party accused channel four news of breaking impartiality roles after the broadcaster used an ice sculpture to replace prime minister boris johnson. he failed to attend the live climate change debate. the program featured leaders from other parties, but two chose not to attend. making a trump surprise visit to afghanistan. he met with the country's

president and u.s. troops. he says peace talks with the taliban have resumed amid a push for a cease-fire. >> the taliban wants to make a deal. we will see if they want to make a deal. they want to make a deal. they only want to make a deal because you are doing a great job. oanh: the bank of korea says the nation's economy is bottoming out. it has kept policy unchanged as it has gone through its most painful moments, but this optimism is unlikely to curb calls for rate cuts. some are saying further policy actions are likely next year. global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm oanh ha. this is bloomberg. anna? anna: thanks. up next, europe's biggest

economy is ignoring calls for fiscal stimulus, or at least sticking with their plans as far as they go. they are doing some stimulus. bloomberg radio is live on your mobile device or dab digital radio in the london area. this is bloomberg. ♪

anna: welcome back to the european open.

17 minutes until the start of cash equity trading in europe. it looks like we will have another down day, and that is around trade and a negative handover from hong kong. here are things we are watching out for. the u.s. markets are closing early today. they were closed entirely yesterday. the holiday shopping period kicks off in the u.s. with black friday. e-commerce expected to stay strong. as we have been discussing, germany is likely to continue calls for further stimulus. they are looking to confirm the balanced budget for 2020. goldman sachs says the country needs a large fiscal stimulus, but probably will not do it. there is economic data to look out for, including cpi's from france and italy. india will release their gdp numbers. gdp are expected to see growth for a sixth straight quarter. let's focus on the german story. we talked about the economics,

let's get to the politics. germany is expected to continue ignoring calls for greater fiscal stimulus as they look to confirm their balanced budget for 2020. meanwhile, a potential shakeup in politics could endanger the future of the grand coalition. two candidates face off in a leadership election that could determine the fate of angela merkel's government. with us, chad thomas joins us from berlin. can you explain to us in the context of these budget conversations going on, what is happening with the spd? what is the politics story at the moment? guest: good morning. what we have is a face-off of leadership from the spd, that is the german coalition. they will find out the results of this face-off. the voting has been going on among party members for the last week or so. we will find out tomorrow evening who won that. it is really important for the future of the government because

if the finance minister wins this, it is likely he will push to continue on in this coalition with merkel. the challenger to him for the party leadership has basically set he does not believe in this grand coalition with merkel and that is hurting the party. it is much more likely the social democrats would consider pulling out of the coalition if this challenger were to win. that vote will get announced tomorrow. anna: what are the risks for angela merkel? as you painted them there, the big risk is the major coalition partner is not keen anymore. guest: this is a two-step process. we will have the leadership vote decision tomorrow, then a week from now, the social democrats have their annual party conference. at that party conference, they have already said they will look closely at whether they continue on in this coalition or not. there will be a vote about

continuing on in the coalition and if they were to continue on, what demands they would put on merkel's party to continue to do that. depending upon who wins the vote tomorrow, that would give us a sense of how things might go next weekend. even if olaf scholz wins, there could still be party members who say we don't like this coalition, and they could vote to leave or put on demands that merkel's party will not go along with. if the social democrats pull out, she only has two choices. it is to go ahead with a new election. she said she will not run for reelection, so that would be the end of her chancellorship. or she could continue on in a minority government. that would keep her in power, but she would not be able to do very much because the votes would be hard to get in the bundestag. on thes a lot riding next week and a half in terms of the social democrats. weak coalition, a

minority government, or a fractured coalition does not sound like the political backdrop to decisive fiscal spending decision-making, does it? we started this talking about the budget conversations taking place today. is there a link between the two? guest: that is exactly the issue here. the social democrats probably are a little more in favor of fiscal stimulus. it is something merkel's party is dead set against. it was humorous this week, the christian democrats had a post on twitter where they said the balanced budget is like a fetish for them. it shows how entrenched that is for the party. if you end up with a minority government, clearly there is not going to be much movement in this front. that budget that has been going through parliament this week, there have really been no changes in terms of any sort of fiscal stimulus. they have stuck with the

balanced budget. there is modest spending growth, but do not look for any fiscal stimulus anytime soon here out of germany. anna: bloomberg's chad thomas joining us from berlin with the latest on the politics and the physical story out of germany. let's get a bloomberg business flash. for that, we go to hong kong and oanh ha. firing oran stanley placing on leave at least four traders in london and new york over an alleged mismarking of securities. to 140ealed losses of up million dollars. morgan stanley is investigating the moves linked to emerging-market currencies. the lender declining to comment. china's latest big bank listing is trying to lower retail demands in almost a decade. it is the nation's biggest bank since 2010, but it highlights concerns over trouble in the country's banking system and a lack of exuberance in the stock market. china is hoping to raise over $4

billion from the listing of the bank. and that is your bloomberg business flash. anna: thank you very much. it is black friday. i think we have mentioned that. the official start of the holiday shopping schism in the u -- shopping season in the u.s. with thanksgiving following later this year, it will be shorter. annmarie hordern joins us with the breakdown. will the shorter period impact retailers? annmarie: it will not, especially when you think that some of these choppers began at the beginning of the month. we have the shorter period with angst giving falling on the -- with thanksgiving falling on the last possible day. americans are planning to spend big, with shoppers shelling out an average of $1 trillion. it will be huge in the states. where are these dollars being spent? department stores and bricks and mortars are still popular.

caketill, online takes the , 56 percent of consumers going digital. speaking of the digital world, many consumers, especially the millennials, are turning for inspiration on instagram, facebook, and pinterest. i have seen a lot of emails and posts on instagram, but i still like going into stores. anna: nothing like the full black friday experience. we have seen you do that. annmarie hordern with the hustle and black friday. up next, we will take a look at the stocks to watch during the opening, including the german energy company rising or guiding higher with its 2019 expectations after the acquisition of an energy company. this is bloomberg. ♪

to bloomberg back markets: the european open. six minutes until the start of cash trading. we have the equities team looking at a company. ambitions inig asia. reporter: it is a licensing

company. it is usually significant this morning that they have announced and international licensing agreement. aeon will become the first partner not only in japan, but all of asia. what could that mean for ocado shares? they have gone up over the last few years on the back of these licensing deals. it is 16% of their record high, which was set in april. short interest in the stock is still high, though with stock news coming through today, it is possible we might see a test during the trading session. anna: we are going from one aeon to another eon. we have a look at the german utility. what is the story? this gianton, energy company, has just

released its earnings for the third quarter and raised its outlook for 2019. we will have to leave it there. thank you for joining us.

anna: a minute to go until the start of cash equity trading before the final trading day in europe. it is a weekend. thanksgiving, black friday in the united states, so no trading yesterday, limited trading today. moves in significant hong kong. down quite significantly in the asian session, down by more than 2%. the specific sent general macro negative categories. half-day ofortened equity trading in the united states later. keep an eye on that. the pound a little bit of

volatility coming through after we saw get another debate taking place last week. we look ahead to the nato meeting. that could be of interest if you are watching election developments. we have president trump landing in the u.k. next week. we are expected to be weaker at the start of trading. 0.3%. we don't seem to have a great deal of news surrounding trade. it was thanksgiving yesterday. president trump was otherwise occupied, heading to afghanistan. mind is been where his at. we have not seen any progress necessarily in the trade story, nothing released. they are talking. that was the conclusion of our conversations. the market worrying about the hong kong bill. , these thingsand have not collapsed. if we have not seen any retaliation from china get, perhaps that is good enough. not good enough from european equities.

the ftse 100 down 0.5%. we don't have a great deal of corporate news flow, let's be honest. as a result, we see the moves to the downside. it is pretty broad-based. it is not really breaking down sector by sector today. acrossthese sectors european equity markets moving to the downside. not very manye reasons to buy as we come off record highs for u.s. equities. certainly, that is part of the story. we had come so far in expectations of a phase one trade deal, but also talk of what the fed is doing in the liquidity bounce from the central bank balance sheets. let's have a look at the movers. let's get to what is going on in individual stocks. 490 stocks trade down. there was a broad-based selling taking place today. only 93 stocks to the upside. let's look at the individual movers. upside.o the

we had some. positive broker coverage of this one yesterday virgin money up by 4.7% in today's session. that is one of the bigger movers to the upside. a host of other movers. deutsche lufthansa moving a touch to the upside. having a meeting with an italian minister. what nature of cooperation might we see there? eon, one of the movers to the upside. 0.8%. a utility business out of germany adding a little higher. let's get down to the losers and see what is moving on the other side of the ledger. over in oslo, the biggest follower is dnb. dropping by 3.9% this morning. policere than 4% after start a laundering investigation into that business. that is the headline coming through to us from oslo on that one. a little weaker. some of the money managers also under pressure. there has been some news flow around that sector and the

developments over the last week. european markets opening lower this morning. approaching the end of the year, analysts have begun to publish their 2020 outlooks for european equities and beyond. bank of america said in the event of a stronger-than-expected growth rebound european equities could rise up to 13% next year. see at at barclays moderate upside. joining us now to discuss where we had at the end of 2019 into 2020, a global economist and an investment committee member. welcome both of you to the program. let's get your thoughts on european stocks, shall we? let's start with the calls from various houses into 2020. your thoughts first on european stocks in 2020. >> we think that there could be some upside in 2024 european stocks, primarily because we think that economic growth

should start to recover in 2020. i think markets will need to rerate european equities. also, we think that the trade tensions will de-escalate in 2020 and that is why europe is a region, that has been heavily exposed to the negative trade tensions. if that gets a de-escalate it, that would be a boost to european equities. matt: your thoughts? >> very similar. consensus seems to be that growth next year in the euro zone is going to be close to 1%. my own view is that that consensus is too pessimistic. i think we could come closer to 1.5%. the ecb maintaining its easy monetary stance, though i think .f his uncle old -- on hold corporate earnings growth probably, 6-8%. i think the key point, which

janet alluded to is that european equities are cheap relative to the u.s. the u.s. with a p/e ratio well above 17. europe close to 14. anna: where else to be go to get gains in equities? bob, you like asian equities. i have a chart that shows the ratio of the s&p 500 to the shanghai composite. the fact that we have seen this strong performance in the u.s. compared to what we have seen in china. bob: recently. anna: is that something that continues or do we see a pickup in other chinese stocks or more broadly asian stocks? bob: there is a very interesting analysis at the moment. investors are overweight the u.s. and underweight virtually everywhere else. barbell, they have a so they are long u.s. trade come along cyclical stocks come along growth stocks come along tech. if you have a risk spectrum where you have low risk, u.s. treasuries at one end, high-risk

cyclical stocks that the other end, i think cyclical stocks will be characterized by investors removing both those positions and moving more to the middle of the risk spectrum, which means into undervalued and south as china korea. but also into more high dividend , more defensive value stocks. tech sector,e the janet. the tech sector is an area of growth for the u.s. is that something you are getting more exposure? janet: it is actually a long-term thing for us. we see that area is being able to generate better profitability versus the other sector. we still like the sector. i also agree with bob that u.s. equity markets generally are quite overvalued versus the underdeveloped market equities. we do like asian equities for next year because we see a number of tailwinds. with global accommodative monetary policy, we have

escalating trade tensions. the fundamentals of emerging markets are quite bullish at the moment. we do see some sort of tailwind going into 20 22 support asian equities. anna: bob, you would be short tech in the u.s.? bob: i think you've got to make it very clear distinction between the separate components of the tech sector. there are elements of the tech sector which are very expensive indeed. msci tech is up 40%. think it is vulnerable to profit. the area of the tech sector which i like is what i call tech infrastructure. whether it is server farms, whether it is the cabling companies, whether it is companies that do consumer tech, like smart meters. it is the nuts and bolts of tech, as opposed to the very overvalued consumer facing areas. anna: the more tangible tech, perhaps. bob and janet, thank you very

much. they will both stay with us on the program. up next, the stocks on the move, including one jumping after announcing a partnership with the japanese retailer eon. this is bloomberg. ♪

to theelcome back "european market open." we have a negative picture for

european equities. we don't seem to have much in the way of positive. the stoxx 600 in europe down around 0.4%. the ftse 100 down more than 0.4%. the hong kong market was under pressure in the asian session. india is bracing for a shock today. gdp could show the weakest growth in more than six years. that is bad news for narendra modi, who has already taken bold steps to reverse the slowdown, from slashing corporate taxes, privatizing energy, the pm may be running out of policy space to act. let's get some analysis now. isning us to discuss bloomberg economics. what do you expect from the data picture today? >> good morning. i'm expecting the gdp growth data for the july-september quarter to come in at a flat 5%. i'm a bit optimistic that the

consensus projection for a further slowdown. the reason being that public jumping has seen a sharp and i believe that it is likely to counteract or offset the weakness seen elsewhere in the economy. i broadly agree with the consensus view that the economy is seeing a very broad-based slowdown and even you can see that in the high-frequency indicators. slowdown, slowdown in exports, capital expenditures. the economy is in deep trouble. will need aat you bit more monetary policy easing to support growth going ahead. is that about the recovery that remains elusive despite the actions that have already been taken by the government of narendra modi? >> i guess one really needs to

understand why the economy is in this place in the first position. as you mentioned, the government has taken a lot of major structural reforms. the economy should have already been in a recovery track by now. but it has not been the case. the reason for that is largely that the rbs tied monetary policy last year, which essentially created a liquid economy and delivered rate hikes when the economy needed further easing. it has delivered a big financial shock to the economy. it takes time to recover from that short of -- sort of a shock. has largelyposition reversed all of that monetary tightening and delivered 35 basis point rate cuts already this year. since monetary policy acts with

a bit of lag, my sense is that going ahead, we should see some recovery and the july to september quarter is likely to mark the lowest point in india's gdp growth strategy. anna: thank you very much. it will be interesting to see whether the r.b.i. decides to ignore the uptick in food prices and focuses on the other weakness in the economy. the food price moves with inflation. thank you very much. let's talk energy markets. janet and bob are still with us. let's come to you, bob. not in india, but in the latin american story. you have seen real weaknesses in a number of latin american currencies this week, some unifying factors between them. to some extent, they are different stories. you are in chile recently. bob: i think the first point to make is that across the whole continent, growth is mediocre. it may be subject to further downward revisions.

the consensus for the two bigger economies, the brazilian growth will reach 2% in 2020. bolsonaro is deliberately having to slow down pension fund reform and public sector financial reform. i think brazil is going to struggle to get to 2% growth next year. mexico likewise, all the data is very clear, mexico just had two quarters of contracted growth. it again will struggle to get 1% growth. ishink we will see, and this an interesting discussion, the impact of social unrest in economic activity. anna: we have seen that in hong kong, haven't we? argue,e impact, i would of social unrest in economic activity is quite serious. in the face of chile, if we had had this conversation three or four months ago, the consensus for 2020 growth would be well above 3%.

one has to revise that down really quite sharply, similarly for columbia and bolivia. what we have seen is huge divergence between growth factions and equity market performance. whereas in the case of mexico, cable growth in the equity market if you look at the mexico ipc, the returns this year have been very low indeed. less than 5%. in contrast, brazil, the returns have been well above 20% year to date. that will be subject to profit. anna: this is in part because of the currency moves and we have seen some of the currencies in latin america under pressure. janet, you have more in emerging-market debt, in particular. where is it you want to get exposure on that front? janet: yes, we need to be proactive. we rely on asset managers to help us make selections. overall, our case for emerging-market debt is three reasons. in a world of low interest rates, emerging-market numbers

-- secondly, we think that emerging-market central banks still have room to ease policy if they need it and much more leeway. lastly, we think our view is that growth is stabilized. we don't see every session. if we do see global growth picking up, we expect the dollar to weaken somewhat in the fed is on hold. we think that emerging markets should do better in this environment and they are actually quite cheap at the moment. that is our case to favor emerging markets. carrydoes emerging-market justify holding emerging-market debt? bob: i think if we get a trade pause, not necessarily a trade deal or comprehensive trade deal, but if we get a comprehensive trade pause, i think there would be very asiantive of the currencies and further down risks might carry the you in and remember the -- yuan and rem

imbi. i would make similar comments in the indonesian rupiah. there the downside risk is very limited. if you look at em ea, we look at a very different picture. the russian ruble's rocksteady and also reasonably high-yield. turkey is a very interesting story because turkey, the currency that earlier in the year got hit very hard indeed, we are now seeing turkey come out of recession. a are also starting to see more favorable outlook for capital flows. i think that is supportive. south africa frankly, i would avoid south africa because the economic data remains a huge debt problem with sovereign debt. anna: thank you very much. parker and janet stay with

us. let's get to top stock movers. annmarie: good morning. i want to kick it off with the german utility eon. 2019 guidance after the acquisition really helping to offset a decline in earnings. as well as some struggling operations in the u.k.. to japan,ooking announcing a partnership with japan. they did say they may look into china one day, just not yet. st. james place is to the downside. they were down graded by goldman sachs. a number of headwinds in the balance sheet may weigh on their dividends for the future. anna: big ambitions, big share private -- price move for ocado. boris johnson is riding high in election polls, but a closer ally might wreck his campaign. we will discuss that next.

this is bloomberg. ♪

back to "european open." 22 minutes into a negative trading session. holidays shortened the trading in the u.s. we have less than two weeks since the u.k. election. boris johnson is riding high, but tories think the biggest

threat might come from a close ally, donald trump. the two leaders are set to meet during the nato summit. party leaders are worried about off the script remarks by the u.s. leader. accusations byr the labour party that johnson will put the nhs on the table. bob are still with us. both here to talk us through the u.k. asset story at the moment, through all of this politics. bob, i have a chart that shows the polling and it has been quite an incredible collapse for the brexit party and the lib dems and the labour party despite very much being behind in the polls, actually benefiting from the collapse of the lib dems. the conservatives, according to polling, expected to win on december 12. as your base case for what happens here? bob: in the politics, i think

johnson and the conservatives seem to have successfully captured the brexit party. whereas in the european elections earlier in the year, the brexit party came out as the lead party, that essentially has now been destroyed. it would be unlikely that the brexit party actually getting any seats. they may possibly get one, but that's that. i think the second observation is that it is almost surprising failure to capture this center ground. i'm quite surprised. you have seen further advances. the problems for the labour party. most notably, the opinion polls show them losing significant numbers of seats in the north of the country. the central case is that you get a conservative majority, therefore johnson will proceed with the withdrawal of the u.k. from the eu in january. because we have a transition period, let's say we leave, just pick a date in january, let's

say we leave then, because the transition period, actually nothing happens. the next phase, which markets will really start to worry about, is how can they achieve a new arrangement with the eu in a free-trade deal by the end of 2020? that is going to be very difficult. anna: difficult. the time will be ticking. janet, you have been looking at the state of u.k. growth. you don't expect it to get above 0.8% in 2020. is that because there might be some relief in the markets if we get certainty of direction about brexit, but that will quickly be tempered by the realization that there was a tight timescale for a lot to be done by the end of 2020? the possibility of a rolling cliff edge, of course. janet: our position in u.k. gdp is the low consensus. one of the reasons is because we don't expect investment to bounce back. another reason is because the

indicators that we are looking at are all pointing at slowdowns at the moment and leading indicators are pointing to even weaker momentum. we are heading into 2020 in a very weak economic position in the u.k.. that is why we think that the gdp growth will remain just modest. anna: the pound, does it bounce in a conservative party victory? or do you think that is priced in? bob: on the bloomberg two or three months ago, i said by sterling at 1.21, 1.22. if you look at market positions of sterling, the short positions have now been closed off. so, if you like good political news or political certainty, it is now probably discounted. we might get a mini bounce, but then i would actually say there is an opportunity to short the pound, possibly back to 1.27. anna: thank you very much.

forks to both of you joining us. janet will continue her conversation with us at bloomberg on bloomberg radio. up next, we will talk more about germany moving to confirm its 2020 budget. this is bloomberg. ♪ whether you're out here on lte.

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trading day, here are your headlines. for traders who concealed losses of up to $140 million. german retail sales dip unexpectedly. india embraces free gdp slowdown. stocks slide from hong kong to london. the one think not on sale this black friday is health care as boris johnson says he been away from a trade deal if the u.s. insisted include the nhs. the european open. i'm anna edwards here in london.

this is the session we find ourselves with his friday. 511 stocks to the downside. -- sellingd-based so taking us down. points had negative data , perhaps enough to move markets and a host of negatives surrounding hong kong. other they are that we don't have a great deal of news to trade around. certainly no open progress being admitted to and so we linger. this is the picture across the individual movers. deal in japan, they are talking about asian ambitions the stock is up by more than 12%. virgin money, another day of gains. eon, we heard guidance to the upside.

moving to the downside, we have got more movement through and more stocks the downside. out of scandinavia down by 5.8%. at goldman sachs around the sustainability of the dividend. dnb was the biggest fallers straight out of the gate. 4% that's a look at where we are on individual movers, let's get first word news in hong kong. >> thanks, anna. president trump making a surprise visit to afghanistan. he met with the country's president and u.s. troops, saying peace talks with the taliban have resume. that's amidst a push for cease-fire to reduce deployment in the region. >> the taliban wants to make a deal, it's got to be a real deal

but we will see. that's the only reason we wanted to make a deal. >> saudi arabia has had enough of other opec plus producers cheating on quotas. for the last year, it has agreed to offset overproduction from the likes of iraq and russia but is signaling it will no longer compensate noncompliance. opec meets in vienna on december 5. is placing on leave at least for traders in london and new york. we have learned that is over at alleged mismarking of securities. it concealed losses of $140 million. morgan stanley is investigating the move but declined to comment. shares are searching after licensing this grocery system. it is expanding the e-commerce

company to a new market and will develop a fulfillment network to serve japanese consumers. it will have a sales capacity of around $9 billion. global news -- global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna? anna: let's focus on the german political story. they are expected to continue ignoring calls for greater fiscal stimulus with lawmakers looking set to confirm the balanced-budget. the shakeup could endanger the future of the ruling coalition. two pairs of candidates faced off in an election that could determine the fate of the joining us to discuss both of these issues from

bloomberg economics is our opinion columnist. there has been a lot of focus on the german budget meant being a source of stimulus -- budget being a sources dimmest, but how much does germany really have? >> it depends. 2020, it could be 2% of gdp without breaching worries. but according to the german government, there is a lot less. there are two sets of rules. the first is a political commitment to the idea that governments should not plan to run a fiscal deficit. the constitutional rule is just constraining.ess so overall, not a lot. is the underlying picture

that public sciences are not in very good health. if they are going to do fiscal stimulus without funding it without putting pressure on sustainability. anna: what is your take on the german story? >> it's unfortunate there is this fetish injure me about what they call a black zero balanced-budget. they have written it into the constitution. the whole world is calling on germany at this time when the economy seems to be stagnating to be providing fiscal stimulus. germany is one of the few countries in the ozone that has the space to provide fiscal stimulus by providing more they'll they are getting in revenue.

where's countries in italy should not be doing that. , they are inthat national terms. but not in terms of the resume. -- euro zone. anna: well of the german government judge that the conditions require stimulus? the fact that they avoided recession proof apps -- perhaps implies it is no longer needed. >> you are right. situation, the conditions are probably not bad enough. the data in last month has been stronger than as expected.

the expectations have not been as bad as we have seen. slowed butn has unemployment has remained stable. it might be a touch brighter even if it remains. in this environment, without a stronger labor market, we don't think there will be appetite for the government to do more. anna: whether the government thinks there is a need for stimulus, if there is more stability in the coalition, it might be difficult to agree to do something. on with the's going coalition. stp -- sdp is in a

long secular downward trend, famous for ousting their own leaders. now they are having an election to get new ones. the outcome will be announced tomorrow and is going to be one of two pairs of relatively obscure people. what a lot of the internal debate has been about is should we quit this coalition? one of the pair says no, we shouldn't. the other pairs are saying we should leave. does not mean they can, but it leads to the secular -- speculation we have but whether there will be instability.

well and have a power decide if they should break were not. -- or not. anna: thank you to both of you. we are focusing on the budget story over the weekend, and indeed the politics. coming up, morgan stanley has ousted at least four at -- fx tarders. -- traders. that's up next. this is bloomberg. ♪

anna: welcome back to the european open. european equity markets on the back foot. low volumes cannot because of thanksgiving and back friday -- low volumes, of course, because of thanksgiving and black friday. with thanksgiving falling later, it will be a bit shorter. the extreme shopping mania. annmarie hordern joins us with a look at the season ahead. given it will be shorter, does that mean bad things for retailers? annmarie: retails would like to blame it, but it's not going to be. americans are going to be buying. a have a report saying that trillion as a whole.

but there was a poll in november and half said they already started their shopping. so people are still shopping. it's really critical for department stores like macy's and kohl's. but a third of annual revenue comes in the third quarter. so it's just so important. it, theve it or hate phenomenon has taken on some global meeting. in some parts of europe, it sort of gains momentum. what is it hold in europe? annmarie: the u.k. has gained momentum the pace of slowing. there was a brilliant piece on bloomberg opinions saying that black friday hurts margins and the planet. retailersgin front will sacrifice margins and then you have to deal with retailers and the backlash from conscious shoppers. they want to know about the supply chain and the planet. in france, this is particularly

something to watch out for. they had protests today. at the same time, it could be an opportunity. look at what h&m is doing. anna: they have set up this rental store. annmarie: it may work for them. the problem is, it is labor-intensive. anna: hugo boss said to keep looking at it. thank you very much. annmarie hordern with the latest. atgan stanley has fired least four traders over an alleged miss marketing of securities. traders are suspected of concealing losses. joining us to discuss is the finance columnist for bloomberg opinions. how serious is this? it will depend on what we find out. clearly, the figure is not

something, that loss is not an ordinary business. but they will understand how quickly it was detected. but it's still an allegation. how did it come and how was it spotted? how quickly was it dealt with? to the systems and controls kick in sufficiently early? these are all questions that will help us understand. anna: so a lot of questions at this point. another, is it part of a broader trend? >> i think that some of the names involved will be of concern. with regards the board -- seeing trend, you are the options. a spike in fx trading

particularly. receiving a birth in the count that will bes something we should keep an eye on. anna: thanks for the update. elisa, our finance, must -- finance columnist. stocks are declining with u.s. futures also declining. this is the picture for european equity markets. we have most sectors in negative territory. just a few sectors in positive territory to the upside. we have retail, appropriately enough. ricardo is one of the big gainers. utilities also moving higher and basic resources moving higher. that was a big gainer and help the bond markets -- helped the london markets.

up next, not convinced. traders betting on a tory win. tight for hedges, despite polls suggesting a large majority. this is bloomberg. ♪

anna: welcome back.

50 minutes into the trading day, a negative session for equity markets. thanksgiving, we were without the volumes you typically see and that might apply today as well because it is black friday. we have trading in the united states and on treasuries. who keep an eye on volumes. those concerned about a lack of progress not coming in time for thanksgiving. boris johnson is heading for a firm victory but few traders are letting go of their hedges. this might not be all down to brexit. consumer confidence has remained subdued, putting in at the lowest levels since 2010. yesterday, the institute for fiscal studies warned that both major u.k. parties lack a credible fiscal plan. joining us is richard jones in berlin.

your thoughts on the pound? we have got the election in a couple of weeks. brexit will be back on the radar. with all of that in mind we focus on the consumer story of how that holds up. i think the consensus there was a feeling that this would lift the pound because we will get the withdrawal agreement passing quite easily in parliament that would give more certainty on brexit. but we have not seen that because that has been the best case for traders. the expectation is that the government would be able to pass a withdrawal agreement but some of the longer-term concerns about the length of the transition and how tight that would be were longer-term things. found it interesting and you

highlighted that the institute sayingcal studies is that both conservatives and labor do not have a credible fiscal plan. it is under either government taxes would have to rise. household spending is something that is key to the economy and the last thing they need is higher taxes. if you look at the key numbers, they are the weakest going into any numbers. so that could leave people to think the pound might get a little bit of a lift on a conservative victory, but further beyond that, i think it will be tricky because of long-term things weighing on the currency. anna: talking a fiscal stimulus, the german economy talks about a budget space. give us your thoughts we have had a number of voices talking about the lack of expectation around further stimulus in germany.

richard: fiscal stimulus is something that is not going to be engaged in with any sort of enthusiasm. if it does happen, it will be limited and something the government does reluctantly. saying we have had several leaders saying we do need those countries with fiscal space to enact some sort of fiscal stimulus in order to take pressure off the ecb. until recently, they have been the only game in town. but if you look at the political landscape here in germany, there does not seem to be enthusiasm for that sort of stimulus. that pressure will continue, it's interesting to see if it will actually result in anything. anna: some make a point that with germany having a recession and not sticking to the unemployment data consistently that maybe there's a lack of

impetus for stimulus. we will see what the numbers show us. richard: the one thing is the week --ales number were weak and shows consumers facing a challenging landscape. richard: the german unemployment number fell by 16,000 against an estimate of 60,000 gain. -- gained. set the politics does not play in that direction, perhaps the unemployment story gives you some ammunition because unemployment is then followed 60,000. it is a black friday they don't know if you are a man who likes a bargain, but your thoughts on whether this will be significant for the economy? if i am any indication

this will be a very slow start. like everybody, i've seen a lot of these deals and have not acted on them yet. i don't know if that makes me indicative of the broader economy, but it does seem there is a lot of stock put into this being very important for retailers. it is important, because the u.s. being retail-driven, it's important they have a strong black friday. it might be a little slower than people are expected. anna: somebody must be shopping colleges not you would die. -- shopping, just not you and i. join us for the debate on the question of the day. tv is the function to use on your bloomberg. so that's a look at the markets at this point. that's it for the european open. up next, we will have "bloomberg surveillance." we leave you with live pictures

of south africa. activists in south africa gathering in johannesburg to raise awareness of the environmental impact of black friday. this is numbered. -- bloomberg. ♪

nejra: global stocks retreat as investors wait for progress on trade. ports johnson says he would walk away from a trade deal if it includes the nhs. and make a break for retailers. we have winners and losers this black friday. nejra: welcome to "bloomberg surveillance." let's check in on the markets. seeing a second day of decline for equities. we are still down .2%.