X boost. One amazon and alphabet also deliver results. Anna good morning everybody. Lets go to some of those. We getting numbers from sony. They had seen it at ¥630 billion. This is sony guiding the market higher. That is a forwardlooking statement. That tends to be where the market will focus. Ninemonthhe operating income and net income levels. Not only do we have these numbers and the guiding higher from this business overreach in japan, we have also had a change of management. Been told that the is cfo will be promoted to the ceo role. The ceo will be stepping up to the chairman role. Someone who is respected for bringing financial discipline to a business as a transition away from being fully focused on consumer electronics. As just talking there, the red headline there. In the auto sector, you have honda racing their outlook again. ¥775 billion. When it comes to the net income, another upgrade to guidance there. ¥1 trillion. Third quarter, japanese operating profits. The net numbers, the guidance is what is going to be key for them. This is about selling suvs and china. They introduced a new accord model in the u. S. In the latter part of last year. Hondas Third Quarter excluding 134. Profit is forecasting a sales growth. Anna lets have a look at the broader markets. Lets get to the broader picture. This is what we see on the asiapacific region. We see sony lifted by that Management Change news. Marketsal, these choosing to focus in on what we saw in the u. S. Yesterday which is on the markets and stock markets losing a ground together. What tightening the Federal Reserve is going to do to bonds market. People making very wise comments about when it depends on the pace. This is the bond yield they are talking about. Is where it managed to begin yesterday. The highest since april 2014. Make the looking point, because we have this host of technology earnings, we are looking for a substantial bounce in the nasdaq. We have good news from apple in terms of the pricing of their iphone and cost. Also good news out of amazon. The bank of japan has announced its first unlimited purchase operation since july. The central bank offered to buy tenure notes at a fixed rate of. 11 . The boj target tenure yield is around 0 . Theyre offering to buy an unlimited amount of debt. Merkelchancellor angela has secured an agreement on education policy even as large differences remain after four hours of top level talks. They said negotiators are willing to compromise. The parties are closing in on a deadline to complete talks by sunday. U. S. President donald trump has decided to allow publication of a republican memo arguing the fbi abused its surveillance powers in the russian folk and is unlikely to reject any of the content in the document. Up byve is likely to wrap partisan warfare over robert millers investigation Robert Muellers investigation. To bloomberg during his visit to china set a new redline for theresa mays negotiation with brussels and her own party. I would say that her middle name is resilience. That is exactly what she is showing and i do wish more people that have seen the commitment she is showing to Britains National interest on this trip to china. Slipped to its lowest value of the year. After reaching a record high of 19,500, it has dropped. Global news 24 hours a day, powered by more than 2700 journalists and anaylsts in more than 120 countries. You can find more stories on the bloomberg top. The asian markets are set for the worst week since april 2016. Is seeking the most in five weeks. They are leading the rise. Tokyo losses have eased a touch somewhat after the bojs unlimited buying operations. Indy india, the nikkei is sinking. Lets check on some of the movers in asia. Over in tokyo, we are seeing steel serve after its profit update recovering from the scandal. We are seeing a mixed bag in the region when it comes to apple suppliers. Manus indeed. Thank you sophie. As you saw there, asia stocks are being weighed down by the technology stocks. The bond markets, this is where it heats up. Investors will be soon turning their attention to the u. S. January jobs report which is out later today. An increase of 118,000 nonfarm payroll positions in the last month. Joining us now to analyze where strategy the cohead of research. Lets start with the big picture. How concerned are you about the bond market yields going higher and this speed at which that is happening . I am not too concerned to be honest. I dont think it is something specific to do with the u. S. With the fed as a matter of fact. You can actually see in the blue we prompted the boj. I dont think it was a big surprise to be honest. I think overall, there is a Global Growth. This is driving yields higher. I think the important thing is whether we are going to see an overshooting in yields. So far, i would not be too worried. Chinese growth is doing fairly ok. The eurozone is definitely in a strong state. It is a balancing act between rising yields and Global Growth. Ityields go up too fast, will start presenting problems, but we are not there yet. It is the december 20182019 eurodollar spread. You talk about the trajectory of the speed of rate hikes. Only 35 basis points tightening in their. There. Prepared the how market is for a more aggressive tightening cycle. I go back to my previous comment. I dont think the bond Market Driven by the fact that the market is having second thoughts about tightening. I think the market is currently pricing in what should be priced in, and the market is also anticipating that due to the maturity of the u. S. Business cycle, sometime along the line of 2019 we will start seeing a slowdown and therefore we will start seeing the end of the tightening of the fed. I think what is driving the bond market right now, is a repricing of google growth. In the u. S. , the market is getting slightly spooked about the lightning of the deficit. Widening of the deficit. Youre saying this at a time when the u. S. Economy is at full employment. They should be saving for a rainy day because a slowdown will come. This is when the deficit to expand. Anna bond yields can go up for a host of reasons and some are more probable than others. Storyis the Global Growth and also the concerns about u. S. Debt. Manus as far as the u. S. Market is concerned, even if you go , we are notly really seeing, we are seeing a consolidation of debt. U. S. , we are seeing a widening deficit, therefore there has to be an increased supply. Manus what about the dollar because you come in and got the i was just about to say you have been consistently bearish. As you said, you would go on to say in your notes that it is still mostly overvalued and you just regret that you are not even bearish on it. Ok. Our narrative has actually changed slightly in the sense that over the past one and a half years, we have saying been saying that the dollar has been grossly overvalued. We are approaching fair value faster than expected. I think the dynamics and workings are going to change slightly. Manus just to get you to hold that thought because we have breaking news coming through. Fullyear lost and tax comes in at 500 million euros. He promised modest growth. Euros of fulltext loss. Fulltext loss. In that respect, for your loss, pretax profit of 300 million. Goldman sachs had the worst end of the trading tax. Anna lets see any strategy or commentary we can get around the business as well. He has spent the last couple of years really trying to get a handle on cost. Decreasing risk and increasing cost control or improving them. You wonder where the forwardlooking stuff is and if we get a little bit of that. Manus back in january, we got the news of what the Security Unit has done. And to a certain extent, those costs that come with that fullyear net revenue. 26. 4 billion, the estimate was for 27. 6 billion. You can carry through with the rest of the numbers on the team. That is where matt miller is this morning and he is going to sit down and talk 00 lunch time. 12 00 lunch time. Anna lets move on. Coming up, Coalition Talks in germany. Can they reach an agreement before sundays deadline. This is bloomberg. Costs and8 and credit as theyons will rise say they still have a buffer of capital of 14 . Fourthquarter loss was 2. 8 billion. The compensation costs are rising. That is for the Fourth Quarter. Costs are rising. That could be a smidge of good news for the stock bonuses. 5. 7thquarter net revenue one billion. That is below the estimate. That is a bank in transition. Apple has investor concerns with the results showing solid demand. The average selling price for the iphone app most important crucialas 796 in the holiday quarter. That suggests that people are gravitating toward the iphone x. Also thats fourthquarter profit missed estimates. Alphabets fourthquarter profit missed estimates. The 9. 9 billion tax dividend resulted in a net loss of just over 3 billion. Net income came in at one point 9 billion 1. 9 billion. Amazon said its profit included 89 Million Dollars benefit 789 million benefit as a result of the tax break. Anna the general secretary of the Christian Social Union says the two parties have come to an agreement on education policy. After more than four months without the government, germans are waiting as dividing social democrats struggle to come back to power with merkel. Much has been written about how well economies can do in the absence of effective governments. We still have a chance. We are lacking full government in germany and yet the german engine continues to motor on. In terms ofuse foundations, it is very wellfounded. There is a political uncertainty. In all likelihood, it has delayed the some works. It has not really been in the end of the world. I think that in the end, we are going to get a sorting out of this through a grant correlation. I think the market rightfully so has not been paying too much attention and has not been focused on that. I think the market is pricing in the fact that we do have political risk. The risk of eurozone disintegration is no longer there. I think that is what really matters. Manus the debate this week, over at the duchess central bank bank, what doal thatake of this accusation aids miss equals volatility and that the dcb needs to refine its language . I personally would not agree with that. The central bank has pretty much the same information weright noe matter is that inflation is missing its mandate. It comes up with a policy for sure, you have to bear in mind that what is the error that the eurozone is coming out of and it appears as a massive widening and peripheral spreads. A lot of pricing. At the same time, it is a global phenomenon. Problematic inflation is not a problem specifically for the eurozone, but it is a global phenomenon. Japan has been facing it. In the u. S. , it has declined over the past one and a half years. Anna how strong is the euro get with this as the backdrop . I think that right. I think that is about right. I think we have moved right now into an environment which to me, is very reminiscent of what was back in 2015 when there is a and nowf dollar loans we are moving into a frenzy of euro loans. If you look from the cycle in various angles we can discuss, what we find is when you have long periods of violation, and that was the case with the eurodollar, the fact of the matter is it was undervalued for a long time. It is typically followed by periods of over evaluation. Our focus has been upgraded. At e looking initially now wer of months ago, are looking at 142 for the share. This is going to be a key thing because recent managers drop during the. Of the eurozone crisis. Theres only just started restoring. Manus a little more to come. This is part of a strategy. He is going for an ipo of the Asset Management business as soon as possible. He sees rate normalization and enabling improved revenues going forward. Down withg to sit matt very shortly in germany. Anna we will also bring you some comments from the u. K. Delegation over in china. More on that next. This is bloomberg. Anna this is bloomberg daybreak europe it is 6 00 over here in london. 3 00 over in tokyo. Had to act in yields in the japanese markets to bring that 10 year yield back down to 0 . That has been a plan was healed targeting for some time. We also have a move in bitcoin. Dropping this morning down another 6. 8 . You may want to think about if you are thinking of getting into the coin. Bitcoin. That is the guidance path of things. The Share Buyback program, they are announcing a shared buyback program. Has come inuarter at 6. 0 4 billion which is ahead of the estimate. They are giving us various metrics around the business. They see an improving economy which means they were able to increase their guidance. They have suffered as many banks in europe and japan and elsewhere from a negative Interest Rates. Ratesad negative interest in 2012 so we will see where they go on here. Interesting to see commentary around capital levels. We will keep an eye out for that. Update from the markets. Youre seeing a little bit of weakness coming through in asian equities. It looks mixed. You can see us scalia and china doing ok. Underperforming in japan and south korea. It is those tech stocks that are providing the biggest downward drag on the index. If we look at the chart, here i yields. N that 10year gilts continuing to move high. High. G a fresh 2014 yesterday is where we saw the big move. Some people wondering why it was yesterday as opposed to wednesday. Perhaps they were gaining was gaining momentum. This is where we are on the 10 boj yields and also the intervening for the second time this week. Oil if we can get on to the next chart. We have had some jitters in the oil market and the beginning of the week. Weve actually rebounded. Goldman is targeting oil to surpass 80 in the next six months. We are pretty much unchanged on the week. Looking at been quite bitcoin, for the First Time Since november, it has gone below that 2018 low. You can see the various Technical Levels that bitcoin is testing in the next targeted level which you can see at 7,552. Manus a little bit of breaking news coming through. Visit this is a small island off of china and it will be interesting to see how this knocks some of those mckay stocks. This would be a major step in terms of the policy direction. Anna that is a sizable island. Watch out for stocks in relation to this sector. If the market see views this as rivalry to macau or an expansion opportunity. Another hot headline , too many banks. Lets talk about the u. K. Theresa may has welcomed a golden era of Chinese Investment and trade. She met the chinese premier yesterday calling for closer ties between the two countries. We spoke to the secretary of accompanying theresa may. He spoke about building the timeline for the london shanghai stock connect. We want to see it up and running as soon as we can. We also want to see a gradual opening up of the Chinese Market and services in general. This is an aerial where the u. K. Excels and we have a lot of skills that china is very keen to capture. Andything from a design also we start to look at areas like education. Our educational exports topped 17 billion. When you look across the section, we have a large delegation of business. Bring in ando deliver some of these services will actually help some of the chinese sectors mature even more quickly. Tradeer to do formal free agreements after brexit, you have to leave the eu. It is very difficult to see how being in a Customs Union is compatible with having an independent trade policy because we would be in dependent on what the eu would do. We have to the upside of that to take advantage of those great markets. Been telling us that 19 of global grateful occur outside of Continental Europe during those are ready to be focusing our attention. Have 220china will cities of more than one way people. 35 whole of europe will have you think a customs future will be really hard . We have to have an independent trade policy. One of the reasons for leaving the European Union is to take control. You said then that the proeu establishment in britain was peddling fiercely for people to fear that the tendency is still around. I think you compare the rhetoric between the reality. Toldu remember we were that voting to leave the European Union but push our economy to recession, who is see a rise in unemployment and a flocking of investment hikes. In the last year, we have seen it more Foreign Investments in the u. K. Than at any time in our history. A Record Number of people employment. We have a 14 rise in our experts. Hardly the economic armageddon that was expected. I think in relations we are seeing with china, they are recognizing just that. I think there will always be an element that will be not reconciled. I think that we have been given an instruction. I think it is our duty to carry that out to the best of our ability and i hope that once we do, that people will then decide to pull together for the sake of our national interests. The british cabinet is in the perp process of finalizing trade agreements with the eu, are you close . We are very close to agreeing with our next steps will be, but we will not be surprised that i will not be discussing the on the air. You have known theresa may for decades, what would you say her best qualities are . I would say that her middle name is resilience. That is exactly what she is showing. I do wish more people could have seen in the commitments she was to Britains National interest on this trip to china. I think it was inspiring and it has had a great reaction here in china. Manus that was the u. K. Trade secretary. The u. K. Cannot be in the you Customs Union after brexit. That point of making time and time again. Your reaction to the. That. He is right. At the end of the day, if the u. K. Were to be part of the Customs Union, that would mean it would have to abide to yous trade agreements with the rest eus traded agreements with the rest of the world. I dont know what the endgame is going to be, but i am really surprised that i am actually fascinated how we are losing the force and concentrating on a number of traits. Let mering this just say this, brexit has not happened yet. Aside from this, lets not forget the u. K. Was featuring at the top of the g7 list in terms of growth for our five years ago. Right now, it has trickled down to the bottom of the list. The u. K. Good numbers have a lot to do with the Global Growth beaker as opposed to syncretic factors. Im certain it has weighed in the economy and weighed in Business Confidence and it is squeezing real and games because has picked up on account of depreciation. Anna there has been no brexit as yet here it when the politics start to knock the pound . Let me just say that i think the rally we have seen largely affects dollar weakness. Weakness. Perspective, it is a dollar element to it. The other main point is because we do not know the extent of a structural damage in the economy, it is very difficult for us to see where pound should be trading in terms of longterm variation models. From that perspective, it could inject a to acs volatility, but you may not see what do you expect from the bank of england . Bank of england this year, liquid to be connection . Are they going to be in action . All of the risks are significantly skewed toward tightening policy. Dont think there is any serious consideration as far as next week is concert. Concerned. Almost all of it has been due to starting depreciations. It is inflation that is due to imported prices rising because of the wicked exchange rate. The bank of england has a mandate. Thank you very much for your thoughts this morning. We really appreciate them. Cohead of strategy research. Our heads to the auto industry. Bloomberg is launching a dedicated coverage of the industrys feature called hyperdrive. Everything. N top of joining us now from hong kong is just in. Justin. What is the outlook for electric vehicles in 2018 . Just over one million electric vehicles were sold globally in 2017. That represents only about 1. 5 of total vehicle sales globally. It is a tiny but growing amount. China is going to account for 60 sold in 2018. Nowfundamental fact right is that most electric vehicle sales are still supported by subsidies. Definitely seeing this market grow and it will probably grow even accelerating growth in the next 10 years or so. Very good morning to you. Why is china the dominant player here . If you go back to the 19th congress that we just had in late autumn, i think the andrence to clean air things being over the economy were very high. Ges policypart of in terms of cleaner energy . Is definitely part of it and a lot of policies in china do support electric vehicles over those higher emissions. I think it is more than that. I think it is an industrial policy. China feels it has missed out on Global Vehicle sales. You can buy a japanese, german, cannotican car, but you buy a chinese car outside of china. Anis thinking this might be opportunity to get in on the electric vehicle boom and start getting a dominant position in this industry early on. One of the things that is focusing on his batteries, which is a major Cost Component that goes into every electric vehicle. In some ways, this is a very strategic play to focus on battery manufacturing and let that lead to a dominant, potential dominance and electric vehicles in future. Anna good to get your analysis. Lets check out what is going on in the tiny china gaming story. Basically the top line is china is thinking about allowing an offshore form of legal island. On the these are the Key Competitors that are really placed to lose. On any of these you will see that all of them are under pressure. Resort is down nearly 10 . Anna it is setting up a rival to that macau gaming mecca. Briefly, we have numbers from this business. The Fourth Quarter in particular much weaker than the estimate. Manus it is all about the bad loans. Spain still a little ahead of the italian counterparts. Jeff bezos made a dollar or two. This is bloomberg. Manus lets talk about tech. Three giants reported their earnings today. Fewer iphones than what was expected in the first quarter. The firm and showed a solid demand for iphone x and pledged to use the cash to buy that dividends and acquisitions. We also have numbers from alphabet as well. Carsing for phones and seems to be the theme. How is it that investors can warm up to apple so easily after quite disappointing headline numbers . Tim cook and his team really minutes to put the stick lipstick on their because the numbers did not look that great. You really hit the nail on the head there. Unit shipments were less than expected. Weve been talking about this for a month or two that things were not looking good. They managed to sell them at a much higher price and that is how it has cheered people on. Lets talk about jeff bezos and amazon. They reported their earnings card. That is the key there. It is not a really huge part of revenue, but it is very profitable. It basically prints money almost. That is really the ara people have been looking at. Thank you very much. Lets stick with the technology theme. Silicon valley bank has released its annual outlook report. They have found that many and businesses believe that conditions will be better this year compared to 2017. It is a generally positive message from this large number signaling confidence. What are they worried about . Going into 2018 positively. 80 are hiring, which is a good thing, but 95 of those surveyed say that accessing talent will be somewhat or extreme a challenging. That would be the number one issue. Manus good morning. Good morning. Funding,u talk about there must be plenty plentiful capital for these businesses. Re lowering the bar in terms of who we are lending to . Capital goingto into 2018 is better than it has been with 28 saying that access and capital will not be difficult this year. I dont think we are lowering the bar. I think we are seeing a real maturing of the ecosystem and the quality of companies we are producing is phenomenal. As you have mentioned, access to talent as part of the concern, but what about the idea increasedups willingness to put outposts in the eu . Challenges arthur . Arent there . There are. Over half of our clients say they are not looking at expanding into britain because of exit. Brexit. Many are staying here. Year, this year versus one and five last year are looking. I guess i would say is these companies are global by nature and need to compete on a worldwide scale. Their clients are scattered all over the world. Manus do they talk about brexit in tradition. Periods . Travel chat a little better about brexit, but they do not get from buy it. Our clients are usually small teams that tend to focus on enterprising and expansion. Theyre not thinking about brexit that are really focused on creating the next anna is actually the global story . Global. Have a november doubling the amount of skills possible. Thank you very much. Manus a couple of big pieces of news. We had that gambling coming home to roost in china. Revenue down 29 . 14 in capital. Anna we saw those big movements in chinese gambling stocks. A landmark shift in the industry. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Manus good morning from bloombergs new european headquarters. Anna these are todays top stories. Manus debt selloff. The treasury yield had the highest level in four years and triggers fresh boj action. Meanwhile, asian stocks slump. U. S. Fox bites back at the trade secretary. He spoke to bloomberg in china. Its very difficult to see a Customs Union compatible to trade policy because we would never be dependent upon with the eu negotiated in terms of trading policies. Manus iphone x boost, apple climbs on handset pricing as a pledges to put cache files to work. Amazon, alphabet liver results. Deliver results. Anna this is bloomberg daybreak europe. Means 00 in london, which we have reports from u. K. Corporate to get through. Lets get to the numbers from bt, telecoms business. Their pretax profit numbers. They are talking about their transmission program, restructuring initiative. They are all on track. No news perhaps there just yet. Thats one of the things we are watching out for. They tried to trim that by changing the way they index inflation. That didnt have the effect they wanted. Any news on that pension activity will be interesting. Anything will be interesting. The rights in 2015 cost nearly one billion pounds. What will the cost of this time . Crucially around the rollout of fast fiber in the u. K. , yesterday we heard they are stepping up the speed which they are rolling that out. The increased of their target by 50 of the number of fiberoptic cables they are going to install by 2020, trying to squash criticism. We have other breaking news. Big blockbusters, one in drugs, one in finance. From thes is guidance pharmaceutical company. Low singledigit percentage in terms of 2018 core earnings. Fromis the guidance astrazeneca. Quarter earnings is the highest ever. 30. Earned 1 there is a lot of activity in the farmer. Farmer space. The Fourth Quarter operated on come up the billion most familiar drug you think of when you think of after zeneca is crustal. 496stimate was for million. We keep an eye on the revenue news flow on after zeneca. On astor zeneca. Zeneca. Az this is the number coming from mufg. Net income for the nine months, 863. Astra beating the highest. Japanese banks, the banks index high you nice pacing have the bank of japan getting involved. Was look at the actual stocks in europe. Session. A trickier the equities are being tested by the bond yields. But are they . Is it going to unseat the equity markets . Thats the question you need to deliberate. Up by. 05 . That is called margin, that is called profit and dividend. That sets the tone for google and alphabet, which missed on their earnings. We have been through the mufg numbers. Lets touch base on Deutsche Bank every they are doing revenue Deutsche Bank. They are doing revenue at the sevenyear low and thats not going to go down low with investors, falling 3. 5 in pretrade versus where it was yesterday. We will keep an eye on that one at the start of the trading day. The revenue drop reflects strategic decisions. Thats the other side of that story. Lets talk about the asia sessions. We have seen bright spots around sony. They changed management and that got a boost in stocks. They are choosing to focus on Big Questions around rate tightening in the u. S. And what that means in equity markets, how quickly yields will go higher. We will focus on there and what happens on the street yesterday rather than the brighter spots in the earnings story. The yield is at 2. 7 i percent and thats where we manage to 2. 79 and thats where we managed to peak in yesterdays earnings. We happen to go higher in particular and the other futures in the u. S. Not expected to put on such gains. But. 6 higher than the nasdaq. Amazons investments are paying off over the holiday season. Lots to talk about and we build up towards that jobs report. Manus bloomberg is going beyond consensus. Again, the todays report will be significantly important because we will understand more about the wage story in the note states of america. The bond markets are being driven by the jobs report driven today. You are going to hear the clamor from the clap, a bond market, bear market in bones. Throughpaper hurtling 2. 8 . ,here was no month and buyers which is what im hearing from bloomberg reporters. The Pension Funds and index funds. Januarywas the worst for the biggest bond market since 2009. More supply coming on board. The bank of japan got involved. Theyve had enough. We would buy everything from you. It is an unlimited on buying program to cap out those yields. Thats a message very clearly from the bank of japan. We are on the different road than the u. S. And potentially the ecb. Nobody is going to mess with s bonds kuroda market. Juliette more on the bank of japan, which announced the bond operations since july, seeking control over the nations yield. The central bank offered to buy tenure notes at a fixed rate of and expanded personages purchases for the second time this week. Around 12 . Yield is they offer to buy an unlimited amount of death amount of debt. German chancellor Angela Merkel and is just democrats have an agreement on policies as large differences remain. After toplevel talks, the secretary of the Christian Social Union says negotiators remained willing to compromise. The parties are closing in on a deadline to close. U. S. President donald trump has decided to allow publication of a republican memo arguing the fbi abuse its surveillance powers and it is unlikely to redact any of the content of the document according to a white house official. It is likely to ratchet up the partisan warfare over the special counsel Robert Muellers investigation and the 2016 campaign. Trade secretary has said the u. K. Must not enter into a new Customs Union with the eu after it leaves the block. There is a new redline for theresa mays negotiation with brussels and her own party. Fox voiced his support for the inbounds prime minister. Imbalanced prime minister. Her middle name is resilience and thats what shes showing. Wish more people would see the commitment she is showing to riddance national interests. Bitcoin has slumped to its lowest level this year. After reaching a record high of more than 19. 5 1000 in september, they have lost half its value. Expectationsown by of government oversight globally. And lingering concern that its just a bubble. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. Lets check out whats going on with asian markets as the region is set for the worst week since 2016. Sensible is leading the drop in tech shares. The cost be setting 1. 7 at the close, the worst drop in five weeks. The boj and the gd lawsuitst help prepare. Down nine. 9 . The proposed tax on stockades. The green is chinese mainland markets and hong kong gaining ground as energy and money stuff leading the event in those markets. Support from the region green lighting to increase the plight of cold. Coal. China may legalize gambling on islands. This unprecedented move comes with a move to contend with debt close with haitian nations. Hainan nations. Manus just another couple of lines coming through from Deutsche Bank. He says the share price doesnt reflect the banks outlooks. Banks outlooks. You find some of the sums. Took another tax charge, 1. 4 billion euros related to u. S. Tax reform. If it hadnt been for that, they would have turned in a profit. This is the third loss in a row. Took another tax charge, 1. 4 billion eurosthey have capie trading site is down 29 . The average in europe was down 22 , but i need to double check. Anna Deutsche Bank revenue at the sevenyear low. On the point you make about john outlook, aning the interesting and informative chart here shows the underperformance of Deutsche Bank versus the rest of the sector, many dealing with a host of complex issues like low Interest Rates and has been negative and all of that adding up to headwinds for the secretary of Deutsche Bank. He says Deutsche Bank remains too complex in the eyes of many. The progress they have been making is not all visible. Manus what sticks out in the eye, deutsche back Deutsche Bank strikes out its target. This is one of the things that will jar with analysts. I think our story has a couple of references. People are questioning whether cryan is getting closer or further away. Anna we will bring it an interview with him later today. 12 00 u. K. Time. Matt miller will be sitting down with him for that conversation. Lets talk about the Bigger Picture stories and hone in on something we need to be aware of , the jobs report. Investors will be turning their attention to the jobs report out later today. The consensus polled by bloomberg anticipate 180,000 payrolls created in the past month, following a gain of 148,000 in december. Lets talk to the investment manager at severn. Lets hone in on the details. The job creation engine in the nine states, s p talking about fall under thel percentage point from here, so there is still something to lay for terms of the jobs report. Guest i think there is. Theres a realization at the thisal reserve that unemployment numbers they thought was around 4 unemployment really isnt the case anymore. It might be that this is due to parttime work, but i think there is more scope come up more room for companies to hire more people. They dont necessarily have to be increasing rages increasing wages yet. Manus how do you want to be positioned in this race . Manufacturing turning out so the jobs numbers, Consumer Confidence. The headlines are the highest since 2001, but Consumer Confidence numbers are really quite incredible. How do you want to be positioned . Guest the small cap in the u. S. Is interesting come up micro caps are more interesting. You are looking at areas that are exposed to u. S. Domestic growth. We are talking about the tech sector this morning, but those companies are starting to show very good growth but running up against some challenges. You want to be looking at the areas of the u. S. , the local domestic manufacturers. There may be trade issues coming through, but its domestic u. S. Growth you really need to be expecting. Anna thats interesting. I have this chart driving higher. A lot of people are asking what throws this off course. You say you want to get exposure to the smaller capsules, others would point to this company and say the Global Growth story is just as exciting as maybe the u. S. Growth story. Does that argue for exposure across all of those size categories in the United States . Guest if you want exposure to the Global Growth, you look outside of the United States. At a slightly less valuation. Most of the european companies, some of the em companies, thats what you want to go for the global exposure. U. K. , argue play. We talk about the ftse being a global index. Its quite attractive. Manus the values are rising. I have 30 year bond markets here for you. This is the test of markets, isnt it . Bond market pain testing equity market game. 12 does that hold the adage to what percent is that adage true . You are looking at a trillion, ratio. S a 41 is that unsettling you, tenure paper hurtling through 10. 8 . Guest it to be interesting to me as a bond investor. That should be good for equity markets, that we saw in 2013 attention could come because people dont like changing to a. Equity investors it spooked when Interest Rate levels rise. There is a long way to go on the Interest Rate curve. It looks like a tantrum. Its not spiking. Yet. Not tantrumesque is it spiking . Rake if it was a double hike in one meeting, that would speak to market. But otherwise its slow and steady and gradual. Lesson, givingng advice if he may, ahead of jay powell taking over at the fed, Monetary Policy might be the easiest thing in ensuring the feds independence. We will discuss that in the months ahead when jay powell takes over. Thank you very much for your thoughts so far. Manus coming up, u. S. Tech earnings. Amazon, alphabet all recorded their what the impact of selling phones seems to be good for business. This is the regular, 37 minutes until the start equity trading in europe. We will keep an eye on the banking sector. We have numbers from Deutsche Bank. There could be weakness from that share this morning. We are also keeping an eye on stocks expecting downside. The u. S. Features u. S. Futures are up bit mixed right now. We see elsewhere, the other indices looking a little weaker. That could confuse matters in the early part of the european section. Heres sophie kamaruddin. Sophie that they highlight today, Deutsche Bank reporting revenue of 26. 4 billion euros, lowest below estimates and the lowest since 2010. A 27 slump in sales and trading revenue. We have an interview with the ceo at 12 00 u. K. Time. Tona is drafting a proposal allow gambling on china and island. Hainan according to people familiar, Government Agencies under a party reform group headed by president xi jinping are allowing online gaming, or sports. Ony ban gambling and casinos the main. Thats your Bloomberg Business flash. Manus apples revenue trailed forecasts, but the firm sold fewer iphones than was expected in the first quarter. The fiscal firstquarter. If you popped in late, late trading due to the iphone x solid demand and they have a pledge to use cash to buy back acquisitions. Anna meanwhile, googles Parent Company alphabet missed estimates way down weighed down by rising costs. Shares fell in extended trading. Ben kumar still with us. The tech titans of the world, it is not always possible to have such a tough conversation. Amazon is a fascinating one is they invested so much and here we see the investment paying off. Ben it wasnt that long ago we were talking, will amazon ever make a profit . Will it give investors assign its a longterm business a sign its a longterm business . Its probably come somewhere we would not have called on four or five years ago. Sot is really underpinning much of the technological world. People dont realize it. You dont see it. You cant diet, but thats where that is wherebut it is expanding dramatically. Manus the other thing is around the banks. Deutsche bank on the rv, the price is. 45, relative to the set here of 1. 1. This is the third incarnation from cryer. Price book at his value relative to the others, where do you like . Do you like americans, europeans, barclays . Low all of them look pretty compared to the potential. But there are a few, particularly in europe. An not sure Deutsche Bank would be top of my list. The third strike trying to have a go at Deutsche Bank, but the rest are going to benefit from the change in Interest Rate sentiment. When yields rise, the making sector does really well. Crynan making his point this morning. Just briefly then, the banking sector, we talked about japanese banks. Do you like that sector . Is that something to get excited about . Ben its something a lot of people are getting excited about. Investors are read engaging in their own equity markets to trade again and thats why brokerages are doing so well. Anna thank you. We appreciate you. He will be continuing his conversation with bloomberg on bloomberg radio. Manus thats it for anna and i this week. Anna i should make that point. Manus if you want to understand productivity, come and work for bloomberg. Theres one interview today. Ynan joins matt miller at noon. This is bloomberg. Welcome to Bloomberg Markets european open. Im an edwards in for guy johnson. Im an edwards in for guy in for anna edwards guy johnson. The castrate is 30 minutes away. This is bloomberg. The cash trade is 30 minutes away every 30 minutes away. This is bloomberg. Can he turn around europes Largest Investment Bank . U. S. Trade secretary liam fox tells bloomberg