The yen extends declines beyond 155 per dollar as the boj meets. Bhp approaches rival Anglo American with a takeover offer. The move could spark the biggest shakeup in the industry in a decade. The launch of earnings begins in europe with much of the focus on this mornings data around the banks, starting with Deutsche Bank. Crossing the screen, germanys largest lender coming in with a beat for its fixed income trading team. There was an expectation they would do well and they have outstripped u. S. Peers with fixed income sales and trading revenue coming in above estimates, 2. 5 2 billion euros above the estimates of 2. 4 one billion euros. The bank seeing 2024 revenue slightly higher year on year so a beat on the revenue front and the fixed income trading team at Deutsche Bank doing the heavy lifting in the latest quarter in terms of sales and trading revenue. In terms of 2024, the private bank revenue has been flat year on year and in terms of expectations, 2024 around fic, fixed income and currency trading revenue, slightly higher year on year is the expectation. The ratio is expected to remain flat. In terms of net revenue, seven point seven 8 billion euros net revenue in the First Quarter for Deutsche Bank. Estimates were for a 7. 7 3 billion so that is a small beat in terms of revenue but importance of the focus on fixed income trading. Adjusted costs was in focus around 5 billion euros in the first order. We will be hearing from Deutsche Banks cfo. That conversation at six 30 am stay on the banking space but switching to bnp paribas, a different story versus their counterpart Deutsche Bank. The First Quarter fixed income currencies and commodity sales trading revenue coming in below estimates. It is amiss for bnp paribas on that front, revenue 1. 6 billion euros in terms of ficc sales and trading. Estimates were 1. 7 4 billion so amiss on that front. In terms of revenue for bnp First Quarter, 12. 4 8 billion, above estimates so revenue, a beat but there will be concerns around the softness in the fixed income trading part of that business. Not a huge surprise, it was a concern leading up to the drop but we will get more details of the from the cfo. That interview, seven 15 am u. K. Time. We will bring you earnings for nestle as well. A focus on volumes and prices for this business. The stock has been struggling and the details as well coming through from this provider globally of all things from nutrition ingredients to food sources. Those results are coming through. Expecting nestle First Quarter organic revenue, numbers coming in up 1. 4 percent. Estimates were an increase of jet just shy of 3 so a big mess for nestle. In terms of the four year organic revenue forecast for four years they see an increase of about 4 , the estimates now being for. 1 so a modest miss for the organic revenue outlook. A strong rebound in terms of the Second Quarter potentially, firstquarter sales at just below estimates for nestle. Semiconductors, fd micro, there has been focus on inventories around chips in the industrial space and autos. Full year net revenue of 1415,000,000,000 dollars below estimates of 16. 2 billion. There will be disappointment there from some investors in terms of expectations around four year net revenue from st micro. 40 versus 42 was the estimates, secondquarter net revenue 3. 2 billion come almost also of on this. That continues around the industrial auto chips. A focus on the currency space on the yen. We will get details. Disappointment around the metal results. Quarterly earnings, decent but the outlet coming through from Mark Zuckerberg and the uptick in spend around ai caused the after hours slump in the stock. The ripple across the tech space, you feel that in europe. European futures lower, ftse futures flat, s p futures lower, nasdaq future is looking at a drop. 1. 2 . We had another treasury auction yesterday, well absorbed, not as well as the two year earlier. U. S. 10 year for 64, the japanese yen 155, biggest drop in three decades among against other g7 currencies. 88 on oil. Intervention watch, april hung is standing avril is standing by. U. S. Yields moving overnight. The dollar yen, at levels we havent seen since 1990. Back then when it reached 155 it was a matter of days, and it breached 160. A seemingly pace of depreciation of the japanese currency picking up. As to whether it meets the finance ministrys criteria for intervention of rapid moves is another question. The finance minister speaking in parliament today, saying he cant comment on the forex moves although they are watching it closely. He cant say much because it has to do with the boj, the meeting underway. Lets take a look at the yen, not just against the greenback but against the aussie and euro, weakness coming through. Some see this as another reason why the finance ministry might have to step in. They see this coming in post boj when the Central Banks are not expected to move on rates but could send hawkish signals because of the yen depreciation. The timing, dont forget we have u. S. Pc numbers coming in late friday night asia time. Monday is a holiday in japan so what would be perilous for the finance ministry not to move. In asia stocks, there is a divergence but what stands out is how quickly sentiment can turn. Losses on the nikkei, on the kospi are no thanks to what we heard from metabut chinese stocks pull ahead. Tom thank you very much. The focus on yen intervention. Big day in terms of dealmaking. Bhp making an unsolicited takeover bid for Anglo American and what could be the biggest shakeup of the Global Mining industry in over a decade. For more, let us bring in martin. How potentially significant would this be . It is a very big deal for the Mining Industry and it could be one of the biggest ever deals, transactions this year, as you said. This deal i would say, the top line is it is all about copper. The company bhp that is bidding for anglo is one of the worlds biggest copper producers and if this deal goes ahead, it will become the worlds biggest by a clear margin. If you have followed for commodities space you find a lot of miners muscling in on copper because they see this decade of demand blooming ahead of us. You have seen rio tinto try to build its copper assets. You have seen glencore the International Trader and miner try to take over tech resources, and trying to get copper. This is set to be one of the biggest transactions in the mining space in many years. Tom martin with the details around that potential tie up between bhp making a bid for Anglo American. We will watch that story. Disappointing earnings from metahave investors on edge of ahead of results from alphabet, microsoft today. Metaplunging 15 after the Sales Forecast missed estimates and and announced plans to spend billions more than expected on ai development. What stood out to you . Disappointment around spending . Deja vu when it comes to meta. This is something they talk about, big projects metaplatforms choose to take on. They put money behind it with a time horizon that is hazy. Investors are shaky because they have seen this before with the metaverse and when it comes to Virtual Reality for meta, not to mention the rebranding and trying to tack on a more youthful demographic. Nobody uses facebook anymore. Someone forgot to tell me. They are doing that yet again when it comes to the aai space and that is where you see a lot of this. But it is coming amid a background were a lot of big tech names are rallying on the ai raised we had metanot getting in on that and that is interesting for big tech names. Businesses are more adjusted and may be more vulnerable to the ai space which brings up the microsoft and also that story, reporting after the bell microsoft when it comes to the cloud revenue growth, the Asia Business is significant not to mention the 40 49 stake in openai. For alphabet, they need to reclaim the market share. Microsoft aws of the Major Players in the cloud space, only giving getting bigger, able to capitalize it in no way that metahasnt and alphabet has to prove its worth to show it can do the same. That is where the cloud market share is important. Can alphabet compete with the big boys, microsoft and aws . Tom breaking down the detail on the metastory and investor disappointment around spending plans, setting us up for a big day of tech earnings. Ai unicorns. A new generation of ai avatars. A ceo joins me for an exclusive conversation. Later, eight a ceo joins me as they report revenue. We have interviews on gas and oil prices as well. Stay with us. This is bloomberg. Tom welcome back to bloomberg daybreak europe. Ai unicorns and thieves yet is synthesia says so card socalled expressive avatars can react emotionally to what they are required to say resulting in more humanlike digital twins. The company saw the valuation hit 1 billion last year when it raised 90 million in funding. Joining me is victor, the ceo. Good morning and thanks for joining us. A major upgrade for you and the business. What are the use cases for this and what have clients said so far . It is early but what does this tell us about the ambitions of synthesia . What we are seeing so far, for the last few years after we released the first version of the technology, we found an initial grade use case. Most people thats all those videos, we have had amazing avatar views put this isnt onetoone with the real video. As we approach that, we have more use cases. With the beta testing, the avatars that can show motion and sound empathetic and friendly end up, we have new use cases. Health care is huge. We see companies wanting to build more personalized patient visits, where this technology is useful. Sales and marketing begin to open up with these avatars able to be more excited than to have more energy than before. It is the first version. This is based on our express model which is a model that has decoded the relationship with the between what we say and how we say it. By the end of this year i think we will be more close to being able to generate more advanced videos instead of someone talking at the screen. When we go down that path the more use cases we will have. Tom that could happen as soon as the end of this year. We will take a soundbite for what some of these avatars can do. Lets take a listen and i will followup. Im very happy. Im so upset. Im frustrated. Tom you can see the emotion. You feed the avatars taxed and they react emotionally. This is something we talked about before, a question you get all the time but we have a wow factor with these. Some of the producers, the wow factor is followed by the fear factor. It is Society Ready for this . I think it is, but rolling it out responsibly is important. For us it is important to be the leading company in terms of responsible ai. We treat safety as a product inside of synthesia. It is Automatic Systems and algorithms and also humans who make sure our systems are not misused. I think these technologies will be used by bad people, they will do bad things with them and we need to do what we can to make sure they dont. It is important to take leadership in the industry. Some players will take us seriously, and i hope we can set a great example so everyone who is developing these technologies truly care about making sure. Tom 10 of the workforce is focused on risk issues and safety issues. It is a big deal with elections and the u. K. , the u. S. And india. Is there anything you are doing around potential misuse in this big Election Year . It is an evolving product for us. The last few months we have taken of restrict give approach to new content. If you are creating Current Events or new content, you need to be an Enterprise Customer which means we know who you are, we know you are reputable. To some extent there is a tradeoff. There are lots of great people who work at a big company but we think it is the right thing to do, to be a bit restrictive on these technologies until society has adapted to it. That is happening rapidly but we want to do the right thing. Tom who do you see as your main competitors . There are a bunch of companies, some startups and bigger companies. This is clearly, everyone understands the technology is valuable. It will be huge and people approach it from different sides. Some companies go for the bottom end of the market, which means more focus on social media content, fewer safeguards and we are more focused on enterprise market. We see big Big Tech Companies showing early iterations of the tech. Tom what advantages does synthesia have over openais product . We dont see ourselves as a deep research company. Openai wants to provide infrastructure for other companies. We are focused on a very specific use case which is talking head style contact content for enterprise use cases. Openai is, give me a video of a dog running on the beach. We operate much more in building a product with enterprise so we can create fantastic videos for Patient Communications are training our sales. As long as we focus on our sliver of the world we can be had the best at that. We can be the best at that. People buy products, not just access to models on that is where we play. The model is a component of the product but this year we will see companies there now are the companies that solve real problems with their products and we will move away from the ai model centric view of the world. I think ultimately when the dust settles, people buy products. They want to solve problems. They dont just want to buy technology for the sake of technology. Tom you have been around doing this for a long time, before the sugar rush of the funding. You look at a 5 billion company in france after 12 months. Are we in a bubble . You could say or bubble tendencies. What we see right now, for investors it has become not very attractive. Multiples, it is like any other business. Focus now is on ai to some extent. Investors are probably redoing some of the things that left due to 2021 when the bubble burst. Ai is a real shift in technology. One example, last year was the year of experimentation. Everybody was piling on to try out these things which they did with vr and previous, crypto and other bubbles we have been through. This im seeing enterprises that although people have done pilot projects, many havent lived up to expectations. People are running more. That was not the case with vr and crypto. The value is there. Valuations, may be out of whack but over the longterm ai will be transformational. Tom victor, thank you. Last time is i spoke to you you said we had a two year time frame before i was replaced by an avatar. We are keeping track of earnings for you. This is bloomberg. Tom welcome back. A big day on the earnings front. The latest lines, in the last couple minutes, the Company Behind the beefeater and malibu, a sizable mist in terms of thirdquarter organic sales from this company, coming in flat, 0 in terms of thirdquarter organic scales sales. Estimates were two point 8 increase and that didnt happen. In terms of regional, there is a focus on the americans, latam. Organic sales contracting by 7 , estimates were that it would contract by just shy of 4 . Thirdquarter sales for Bernard Ricard pernod ricard, below estimates. There is a challenge in terms of the drawdown from some of their customers. The buildup of inventory particularly in the u. S. And china has been a focus. The interim dividend, two point 35 euros. Deutsche banks first order fic sales and trading revenue, beating estimates. Our interview with the cfo of Deutsche Bank is next. Dont miss that. Good morning, im Tom Mackenzie and these are those stories that start your agenda. Wall street lower, big tech taking a hit. The yen extends beyond 155 as the boj meets. Bhp approaches Anglo American with the takeover. Earnings in europe with the tale of two lenders. Deutsche bank beats. Lets recap earnings. The key one, First Quarter income sales at a solid beat for the team. 2. 52 billion euros. Dont forget in terms of stock performance, stock is close to 62 . Firstquarter net revenue is coming in at 7. 7 8 billion euros above estimates. Estimates were for 7. 7 3 billion. They are seeing revenue higher in 2024 but fixed income did heavy lifting. Deutsche bank outperforming rivals. Weve been speaking to cfo jason. Take a listen. We are pleased with results. Financing doing well. Advisory for products quite well at 54 up year on year. Strong momentum and engagement. We are also seeing resilience and growth across the other three businesses, nice to have a shining star. Resilience on the balance sheet, sensitive businesses is in encouraging condition. Revenues are growing. Encouraged by momentum. Into the future, what are you seeing . Trends have continued. In our fixed income in currencies business, slower macroenvironment, volatility low. Continued momentum in credit trading and emerging markets has been ok. We do think that the recovery on the wallet will continue. Quarter one was strong. Investment grade recovery. We expect that to continue and see further recovery. Animal spirits in europe. The rate story. Are the spirits back . Coming back if you look at volume, it has recovered. The revenue is delayed, but the trend is there. It has been more reticent with equity markets at alltime highs. There is a degree of uncertainty, a path of rates and uncertainty. Some things are holding spirits back. I want to talk about trading, are you looking to build the business further, doing more on u. S. Rates . James no dramatic change, but targeted investment, the team has been deliberate and filling in gaps. Flow credit, weve made investments and had his showing. We invest in u. S. Rates and build our business there. It has been filling in the wider spaces and we are encouraged by the platform. Not just people, but conductivity with clients. Post what are you expecting from the ecb . We saw weakness on the private bank, commercial bank. This that the story, net interest dead . No. Youre on your decline in Interest Income we called for and we are seeing pressure roll through. Performance is better than anticipated so in the private bank in germany, margins have held up. Volatility but underlying performance is stable. 3. 3 billion revenues quarterly. The path that we will walk from here is further down in quarter to and recovery in the back half of the year. Host do you feel inflation is under control . Guest june is the beginning of the cut cycle. Europe has been in a Slower Growth mode. Transmission mechanisms very, but have been felt, so we think that the cyclical point has been reached which is encouraging. The back half of this year, numbers and germany have increased. That seems encouraging. Host what is driving decisions . Is it the first cut in june, fewer cuts than anticipated or the fed . Guest outlook for economy. Our clients look at growth in sales markets. One indicator will be loan growth, which is slower to build than anticipated. We been running flat and anticipating some increase in demand. There are a variety of factors, but we think momentum is there. Interest rates play a role, but the general outlook is more powerful. You think they will be a catalyst for growth in europe . Pull are reticent to give that forecast. General environment and catalysts are there. Declining environment will support growth. As you go through the back end of a cycle, Construction Trade has been do a two year decline and it finds a floor from which developers and builders find confidence. Prices find a floor and we grow. Tom Deutsche Banks ceo speaking to bloomberg on the back of that with a focus on fixed income and trading sales upside. On the earnings story, the french i. T. Company that struggled with accounting issues and downgrades with its latest earnings. 2. 4 8 billion euros and estimates were for 2. 8 billion. Holding back and clients not signing new contracts. Delaying a deadline, pushing that deadline back and saying they need to cut debt, those are some key lines. Contraction of 11 . Switching to drugs, a different story, a beat when you look at sales number for the french drugmaker. Estimates have been for 10. 3 so a business that is trying to restructure and focus on key drugs, to carve off less performing arts of the business. One is really standing out, hemophilia products. Strong pickup in the u. S. Investors will scrutinize that. A lens on new drugs. Stock down 11 in the last 12 months. They reaffirmed their guidance, reiterated guidance for the year. Firstquarter beating estimates. Plenty more including earnings in the banking space. A beat from Deutsche Bank. Barclays earnings dropping at seven u. K. Time. Really interesting given the restructuring. Boeing yesterday, airbus reporting earnings. Boeing earnings as well. Think about whether or not they get an uplift and get aircraft out to clients. Meanwhile big tech is in focus. Concern around metaswitch is focus to alphabet and microsoft, amazon and intel. Two what extent . Coming up later today. The ecuador ceo joins me as the energy giant reports a revenue beat next. His views on oil and gas and how they are shifting. This is bloomberg. Tom welcome back. Ecuador reported a decline as a result of gas prices. Numbers were better than previous with liquid output offsetting weak demand. Lets bring in the ceo. Norwegian government is the largest shareholder. What these results tell us about the position of the business . Anders we are wellpositioned to the future. Wary strong results. Driven by production and will and gas and solid operation enabling cash flow. 5. 8 billion u. S. Dollar. We are wellpositioned for a future earnings as well. Tom we focus on the european gas story. Quite a turnaround. What was the Investment Case . You are essential during the start about conflicts and gas challenges. What is the Investment Case . Anders youre right of course, gas prices are lower now than it used to be. And ecuador has been able to get Energy Security for europe. Still producing an extremely high level. We can deliver gas in euro at very low production costs. We are wellpositioned for future investments. Also to deliver gas to europe that will need it. Remember, gas prices are not set by the energy price. Used to be set by the gas cost, now it is set by the energy costs. We see good Investment Case for gas in the future toward europe. Tom what is your outlook toward the end of the year . Anders so what you said earlier, europe is wellpositioned in gas. It has been a mild winter. Theyre able to fill up the storage. The supply and demand increase in china will affect the prices. We see the market is balanced. But there are small changes in geopolitics and supply chain disruptions. Big changes in gas prices. Slight ups risk. Tom the labour party and the u. K. Is positioned to take over as leaders in the u. K. The opposition saying they would remove investment in oil and gas. Will the economics of the project that you have hold up . Anders it is important to make sure we have a stable condition for longterm investment in renewables and oil in gas. It is too early to say the effect of the proposal if they get into the government. But we will have to look at these proposal and see what it means to our future business and then make kind of the necessary decisions. All kind of these changes create an additional risk that we need to bring into Risk Management of the company. Tom unplanned issues for some projects last year. You talk about uncertainties. What is your expectation is we look to the Summer Season . Anders disruptions were one offs due to special cases. Weve seen solid operations. Highefficiency and planning maintenance, well communicated. Production guidance is stable. We expect good production according to guidance. Tom you talk about projects online, some investors and shareholders, partners in london say that runs counter to your targets around climate. Is there more that you can do to address those concerns . Anders we are focusing on lower admission. This is needed these days. I just visited the german industry. We are building up renewable portfolio so we are investing in oil and gas, lowering emissions and also into new energy with lower Carbon Emissions over time. Tom you are in norway talking about production increases. What are the plans . What can you bring online from that part of the world . Anders we have energy, a plan for security to europe. We are using to produce energy from 2030 and onwards. It is hard to compete. This year we will start a field in this area focusing on how we can have expirations activity in these areas. The activity is quite high. Tom i want to review on something, the valuation gap between european oil and gas and u. S. Counterparts. Do you think that closes soon . You expect the gap to reduce . Anders it is difficult to say, investors will decide. I want to ensure we are delivering oil and gas higher production efficiency, making our business more resilient in demonstrating high value to investors. And im sure that would fit the right price our stock. Tom thank you, indeed. On the back of earnings. Other stories making the news, Pedro Sanchez is considering resigning due to the attacks in recent weeks as a court launched an inquiry targeting his wife for influence peddling. They halted all public duties and announced a decision on april 29. Secretary of state Antony Blinken has raised concerns over trade in china made a rift between the worlds two biggest economies with a threat of sanctions over beijing the port of russia. President biden signed a 95 billion dollars Security Package into lore that includes security assisted to ukraine. Officials acknowledging they will include a longer Ballistic Missile system sought by ukraine. Plenty more, stay with us, this is bloomberg. As we are scaling Energy Expenses for ai we will focus on the rest of our company, but with shifting resources, we will grow meaningfully before we make revenue from new products. Metaceo malta sukkoth boat. First Quarter Results were pretty decent. Up 27 and we saw profit doubling. None of that really matters. Even smart investors. It is the outlook, close to 40 billion u. S. Dollars and that caused concern. A sharp move lower for a stock that has rallied on ai. Down 15 in those words are not doing much. Investors see the product is scaling. They have questions. Lets see the read across. This was the ripple to other big names. Emison and alphabet and microsoft reporting. We will see if the story is different. Microsoft with a stake in openai. Another story is the japanese yen. Volatility is at the highest level all year. Three decade lows for the yen. We get the decision on friday, but pce comes out on friday, that could be a factor. Weve had comments from the finance minister, he is monitoring the currency. 155 as we watch intervention. Lets see volatility. Spiking at levels we have not seen all year. Plenty more interviews including conversation with the ceo of barclays in five minutes. Interviews with ceo of astrazeneca and airbus. Markets today is next. jennifer the reason why golo customers have such long term success is because we focus on real foods in the right balance so you get the results you want. When i tell people how easy it was for me to lose weight on golo, they dont believe me. 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[announcer] go to snhu. Edu to get started. Mosys bloomberg markets. Cash trade less than one hour away. Stocks in asia are lower as metas Earnings Report spooked investors. Bhp produces a takeover offer and the biggest shakeup in the industry