Daybreak europe. Some on the Federal Reserve have repeatedly warned about the appreciating value of the dollar. What has that done to the markets . The dollar is lower against the d10 currencies. Back, and we would go this is what we got. This is the dollar position. At the start of 2016. The market data suggest we are long, but we are no word near as long on this dollar run as at the start of 2015. , dont forgetions the 181. If you go by that theory, there is still the propensity for this dollar to move in syncopation with where the cash price is. About theeed to talk currency market, the dollar being one of the big stories. The yuan being another. Lets talk a bit more about the dollar to emphasize the weakness weve seen overnight. Cutting the bullish positions overnight. Its not normal and one. Vernight trading session the fed grappling with uncertainties about what the trump policy will mean for the u. S. Economy and the stress in the dollar as you mentioned. 35 , youve got to pay 35 . Nobody wants to fight the possibility that the chinese are putting up the wall against the dollar yen. To the level we saw december 30. The question is, are they even prepared at seven . Anna how much effort is the Chinese Government putting into stopping the capital out lows, stopping the chinese currency from devaluing . Is it working already . The effortsabout they taken on state owned enterprises. Is that building the momentum in keeping that number away from the market as we approach the Lunar New Year at the end of the month . We have gold in there as well, up by around 1 today. People getting out of the dollar and into gold overnight. Recovering from the quarterly slump we saw in the Fourth Quarter after the victory of donald trump. Manus this is one of those that will play out for the rest of the year. By with theanding bloomberg first word. For the latest fed minutes, they show Donald Trumps land may force rate hikes at a faster pace. Policymakers on increase in the upside risk to the growth forecast and many worry they will have to quicken the pace to head off inflation. The next session will start at the end of this month. Donald trump has picked a wall street insider to be his top regulator, despite railing against the industry on the campaign trail. Clayton has represented Financial Firms throughout his career, including Goldman Sachs during the 2008 bailout. Them for attacked their ties to the sec. Protesters unfurled banners in the lobby before being ejected. They criticize goldmans role in the u. S. Housing crisis and the long history of its former executives taking post in the government. They vowed to protest again on january 17. The head of the u. K. Financial regulator has issued a strong and regulated rebuke to donald trump. That economiesrg are held back by too much regulation, saying that is too much of a childish approach. How does one know what donald trump is going to do as president , given the many things he has said . There is no good case for a major deregulation. The idea that america is held back by too much regulation is a fantasy. It is a childish approach to the economy which really has no justification whatsoever. One of opecs loudest opponents for cutting production has been ousted as Venezuelas Oil minister. He has been a roll since 2015. He will be succeeded by nelson martinez, ceo of the u. S. Subsidiary. Thepresident made announcement which included the shakeup of other cabinet positions in an address on state television. Jason katz, a former currency trader has admitted to conspiring to fix prices in the Foreign Exchange market. He worked at three different Financial Institutions from 20072013. Hes the first to plead guilty in a longrunning swiss criminal investigation into the rigging of currency rates. This coin has hit a record high as its popularity grows in countries where traditional currencies are tightening controls. It hit 1140 yesterday. Its value has been driven up as an investment last year. Day innews 24 hours a more than 100 20 countries. Find more stories on the. Loomberg at top this is bloomberg. Anna lets look at the latest Market Action in asia. Some big moves in currency markets overnight. Absolutely. Weve seen the dollar a little bit weaker after the fed minutes and weve seen the offshore yuan advance the erase the advances the most since 2010. Looking at equity markets, youre seeing the nikkei closeout the session down by. 4 , one of the losers in terms of the Dollar Movement because weve seen the yen come back after couple of week sessions against the dollar. A lot of carmakers coming under pressure. Remember the nikkei had a positive start to the trading year yesterday. Not surprising weve seen a little bit of a pullback there and coming through in korean stocks. The shanghai composite looking good in late trade, up by. 25 . Month, butan last still seeing a lot of movement coming through in a Railway Companies on plans for expected infrastructures ending. Solid movement coming through from petrochina and shanghai energy. Australia closing out. 3 . Extending bull market we saw the asx 200 reaching a couple of days ago. Mostly a positive session on the asian equity right. The regional index is at a threeweek high. The great round up there from hong kong. The Federal Reserve officials are grappling with a new problem under the president elect, donald trump. The new administration plans to boost the u. S. Economy with tax cuts and spending influence the flats Rate Decision and could mean a faster pace of hikes this year. That december minutes almost all indicated the upside risk to the forecast had increased as a result of more expanding fiscal policy. The chief rating officer of s p weighed in on how the trump policies could impact the fed. If you have a fiscal expansion in an environment where you might think youre getting close to balance and full employment, this is something that puts the central bank on guard. Thats not a surprise at all. Manus lets bring in our guest host for the next hour, hes the european head of Global Markets research at mufg. Happy new year. Welcome to the confusion land. Be key take away seems to uncertain, but they are also warning about dollar headwinds. How does that juxtaposition set with you . They are worried about the dollar. Looking at it briefly through the minutes and comparing it to the press conference from december 14, i dont think there is a huge amount in here. Its all pretty consistent with what was said on the 14th of december. An obvious area of potential negative impact is the dollar, especially given the fact that it has bounced so far from before the election. Theres nothing hugely surprising. Anna but the dollar index is down by. 7 . Moves. E outside i would say expectations going into the because a dollars moved up another 25 basis points this year, that shaped expectations going into it and the markets are reflecting more hawkish sentiment than we actually got. Manus its only a proposition, not my opinion, but were looking at the long positions here. Relative to where we are in the marketplace, how stretched are we . Feeling we are misrepresenting the possibilities here in terms of another move in the dollar . Positioning wise, we are not extremely stretched. On that basis you could argue there is more to go. Shorttermr regression valuation model of the dollar, it does look stretched. Particularly against the japanese yen and the Australian Dollar and the norwegian krone. Fxe of those keep dollar pairs that looked over extended. In that sense, given the fact we started the new year, theres not much clarity in terms of where we go from here. A lot of what the dollar has strengthened on is based on trump, and we still dont know whats going to happen. Its not hugely surprising we are getting this correction. Anna the dollar yen up 15 in the Fourth Quarter. I do you go about modeling what happens to the dollar . What were trying to do is make a point, if Hillary Clinton had one, think we would still be in the same position. Its easy to forget, move trump and the fiscal uncertainty away, the economy in the u. S. Is strengthening and it justifies the move from two to three anyway, and that is a very important point. Wages are now accelerating. 3 could have wage growth by by the middle of the year. Thats the key underlying inflation in the united states. Noise isying the trump very important, but if you strip that out, theyre still reason to be bullish on the dollar, certainly in the first half of the year. Manus i thought we could get away from this for a while, but it is here. The probability of a hike. If you look at that and focus on july, the market really only julys to kick in in this period. Are the hikes back ended . What thek partly minutes mightve done at the margin is just lower the chances of march being the potential. The fact that the emphasize the uncertainty, and we might not know it huge amount by the time of the march meeting. We will have greater clarity. Idea since the march i still would not rule it out but just on the news weve had over the last 24 hours, it is slightly less. Its more about if its going to be three, and im not so sure it will be, its more likely to be june or september. Tightening is already being done behind the strong dollar and perhaps removing the need for some of the tightening from the fed . That is tough to answer, but i would say that just looking at the information we have in front of us, you take the manufacturing data, one of the surprising elements was the export orders which jumped to 56. 30 them mortgages are spiking. In terms of rates and the dollar , but actual Market Conditions have tightened, for sure. A lot is builtin on the equity side, which is helping to support growth. A lot is builtin in terms of earnings expectations related to trump policy. On that site is very important as well. Anna stay with us, lots more to discuss. Manus dont miss our exclusive interview with robert kaplan, the Voting Member of the Federal Reserve. He will join us from chicago at 5 00 u. K. Time. Anna heres some highlights for your day tomorrow to at 9 30, pmi data, then u. S. Initial jobless claims. And we get more pmi numbers. Manus and the consumer electronic show opens in las vegas. Full control, or knows finger this no Single Market. A new brexit envoy. Manus the answer to the most in the year after chinas efforts to choke capital flows. Are they working . It looks like they are. We are live from hong kong. Anna we will speak to a ceo in a bloomberg first interview. This is bloomberg. Manus its 2 20 in the afternoon in hong kong. Is fractionally higher, up 1. 5 . The biggest move sense 2010 on the yuan. The yen moving as well, a little bit of yen strengthening as well. Juliet is standing by with the buzz business flash. Volkswagen has been told it must face claims it misled u. S. Installingfter devices to cheap emissions test. The chairman said investors in american depository receipts can companysnding the diesel issue. A spokesman did not immediately respond to requests about the ruling. Deutsche bank is considering unusual reproach for subprime borrowers with the settlement with the u. S. Government, lending money to private equity firms and hedge funds. According to a person with knowledge of matter, one option lungsding to firms like are funds we specialize in buying bad mortgages and lowering consumers obligations. A spokeswoman for Deutsche Bank declined to comment. Apple is planning to invest 1 technologygiant new funds, adding the iphone makers name to a glut growth list of interested parties in the fund which is due to launch in london this year. Qualcomm is also said it will participate in the fund while according to a person familiar with the matter, Larry Ellison also intends to contribute. Thats your Bloomberg Business flash. Prime minister theresa may is prepared to pull out the u. K. Single market unless britain is given full control of it orders according to the telegraph newspaper. Manus it says the speech will be a response to the charges by Ivan Rodriguez resigned by ivan rogers who resigned this week. Guessed rarely has modeled thinking. Muddled thinking. The whole Brexit Debate is a juggernaut, the resignation, the appointment, theresa may saying were ready to pull the ripcord if we dont get control of our borders. You divine things at your institution, do you think were shifting toward a harder brexit . Is the hard brexit cake fully baked . Ive still think theres potential for further weakness to the downside. We are going to be in this environment for three or four years, who knows . In that sense, im not so sure we will get this kind of cognizant response in the Financial Markets to comments like this which is all part of the negotiation strategy anyway. In terms of sterling volatility to rhetoric and developments like this, im not so sure we will get that much volatility. I would say broadly speaking, given the news we had last year, its notck of it soft, not hard, something in between. Anna thats continue this thought. To moritzgue spoke kramer and he set a hard brexit is now more likely. Negativentain a outlook even after the downgrade rating on the u. K. And in my mind the likelihood of a hard brexit has been increasing over the last couple of months, meaning that basically the u. K. Would leave the eu without any substitute agreement in place. Saying the likelihood of a hard brexit has increased. Its currently up. 2 despite these reports that theresa may is going to say shes ready to pull out of the Single Market. We thing Going Forward from here, given what happened last brexit,th trump and were going to go back to the correlation of the pound trading more like the dollar. That means it will become less volatile on moves related to the euro dollar and its euro sterling that tracks it more closely. If you have a dollar bullish view over the next couple of months, i think its difficult view,d a pound bearish but that is essentially where we are. Webreak away from the eu, dont know yet for sure, but the perception of a tighter relationship between washington and london, a faster trade deal between the u. S. And the u. K. , that is the perception. That means the linkage between the u. S. And u. K. Becomes more pronounced. , theng at the labor market u. S. And u. K. Are on a similar point in the economic cycle. Manus this is the bestperforming developed market and foreigners are still buying the most since 2015. Market underpinned the briefly . With the concerns about inflation, that is valid, given what happened in japan last year. There are number of examples where currency devaluation has not had the expected impact on domestic price pressures. Mid 2014. Europe post anna thank you very much. , is the cash crackdown working . An update on what is happening in china overnight. This is bloomberg. Manus is 6 30 a. M. Here in london. Ollaryen is moving thats the real indicator from the markets that the dollar is lower. Concern about the strength of , this unfolds across the g 10 space. Theres a new edition of daybreak available on your bloomberg and your mobile. Lets take a look at some of the top stories. Its a changing mood from the fed. What a difference a few months makes. The cover story, the feds fresh concern over faster growth at the december meeting. The focus on the possibility of fiscal stimulus under the Trump Administration and what it may mean for the economy. Anna the next story is theresa may, she has named tim barrow as the new u. K. Ambassador to the European Union, 24 hours after ivan rogers surprise exit. Survey of u. K. Business and inflation is a hot topic. Moles itstsche bank options in its options in subprime mortgage settlement with the u. S. Government. It may lend money to private equity firms instead of using its Balance Sheet to buy down mortgages. This is according to a person with knowledge of the matter. Perhaps a little less litigious and contentious. Anna the yen extending gains as we get a quick check of the market. A lot going on in currency markets this morning. Good morning, you say the yen strengthening for a second day, this is the picture, the korean won has jumped the most since september. Yesterday was the euros first gain above the dollar this year and its extending that today after the eurozone pmi and inflation data. Overall its a picture of dollar weakness. Youre looking at the bloomberg dollar index, falling for us with session out of six. It seems as if investors are focusing on the uncertainty comments in the fed minute rather than the fact that rate rises might be faster than currently anticipated. Of whipsee a little bit sawing there, down two or three basis points. Gold on the other hand climbing to its highest in four weeks, up for a third day. It has only seen gains in 2017 after its worst quarterly slump since 2013. Looking at asian equities, the msci asiapacific index has hit a three week high. Ive changes up to show the different regions in terms of developed markets here in asia. Singapore shares have jumped the most since november and the hang seng is headed for its highs closing level in three weeks. Fx, ive gotg with to show you the offshore. Yuan. The offshore intraday. it looks like chinas efforts to choke out float are beginning to pay off. Anna the biggest twoday move on record. Lets talk about commodities. Iron ore will properly held its ground and 2017 or maybe advance. Manus thats according to a survey conducted by the Singapore Exchange which operates derivatives contracts. The mall joins us with the chart yousuf joins us now. Ore,f the story of iron 42 of participants think chinese imports are going to rise. Story, what ive done, thats iron ore with 62 content. This is normalized as of december 20, 2015. The line incrude as white and the line in purple is copper which also has seen considerable gains in the last few weeks. Around november we did see speculative enthusiasm in these commodities. A lot of it is connected to the chinese demand story. Consensus opinion being the chinese it iron ore imports will increase in 2017 and the anticipated decrease year on year in terms of chinese still demand. Not everybody is on the same page with the story. Quite a few contrarians think the rally has run its course. Evenikes of barclays, rbc, though the consensus suggest a higher price in 2017, in terms expectations it calls for lower price across all four quarters. Manus thank you very much for that latest chart on the outlook of them usg. The commodities advance in 2016, that was the first annual gain since 2010. Energy and iron ore were in there. Those bulwarks that underpin that move, it did that continue in 2016 . Again, i think certainly the momentum can continue, we think. Given the dollar uncertainty and what happens with trump, i think a better way to play it would be qe. Aps through forhink there is potential qe2 move back higher. At an analysis on centralbank tolerance of keeping Monetary Policy easing and circumstances of global reflation. Our scorecard of Central Banks as most tolerant for keeping policy on hold. When we look at where rate hikes are price, the fed has the most price relevant to the rest. The secondmost is actually new zealand. We think that is wrong and the rbnz could be more tolerant in keeping policy on hold than the market currently expects. That would argue for an aussie appreciation. Manus what sort of move could you get in that . Were targeting 110, 112. If you look at a 20 year chart, thats not a particularly big move but it certainly back toward the recent highs. Anna what will drive commodities higher this year . Talkingrom barclays about the threat to commodities in the year ahead. Trade policies have the potential to disrupt Global Supply and thats one of the things that could drive commodities higher. In terms of the reflation story, its a good story for now. When we go further into this year, we become a little bit less optimistic and up eat in regard to this kind of reflation optimism. The think there is the potential for trump to disappoint, just on the reflation story. That would make us less polish on Commodity Prices further out. Its a kind of trade we would suggest is more valid through q2 maybe. Us, lets getth into the chinese story now. The overnight demand from. Ffshore yu surgedan anna the currency so its biggest twoday advance on record. The deposit rate hit 35 . Robin joins us with the details. Describe what we are seeing in the offshore market. Inits pretty significant the sense that weve seen a repeat of what happened in january last year. We are seeing the turmoil, the timet was start for a long declining. Had beenan everyone was looking for a signal that the pboc would try to control the currency at some point. We did a story yesterday about how chinese policymakers are conferring contingency plans. That has a strong effect on the currency aspect. Perspective,s in several asian currencies are up, but this is the big move for the uan. Hore y going back to your question, is it sustainable . Im not sure it that it can be sustainable in the long run. Being a dollar move rather than anything chinese policymakers have set out to do. Manus its a dollar move thats pervasive across the globe. One thing the chinese dont want is a currency manipulator. To a certain extent, is this smoke and mirrors that goes on to say to the world, we are not a manipulator of currency . We are back below 116 again. Exert turning ever so slightly in terms of the dollar story. Absolutely. If you look at it from chinas perspective, the threat is that chinaas promised to brand a currency manipulator on his first day in office. If that does come about, its a sky slightly scary scenario. The consensus is that china will try to keep the currency, they will not let it decline a lot at least until donald trump takes over as president. After that, it will depend more on what trump will do and what the dollar index will do, but that said, dont see the pboc or anyone in china willing to let uan tumble and create panic. That would create immense financial risk. While the chinese policymakers may be happy to let it decline to an extent, im not sure they will let it fall rapidly at any point. Anna theres more of the thisrsation, do you see move move seen in a chinese gain on the Biggest Record going back to 2010 . . S it just a short squeeze or is it something that has some legs . This has got positioning written all over it. In december we were hearing more and more about this idea of it breaking seven, and i think there was a substantial long dollar position that has been built up. We all remember how 2016 kicked off. That was the turmoil in china related to fed expectations 2017. Tightening in in that sense, this was very much the authorities stepping in at an opportune moment when the dollar generally has started to correct a little bit and its a reinforcement move. It doesnt make sense, the idea weakenina would let cny to make trump look foolish or make it difficult for his presidency. That is nonsense. That would be far more damaging to china than to the u. S. In a circumstance where you had massive capital outflows, thats focus of chinese authorities, not the trade benefit. Theres a fundamental story behind this. Theuld be dubious that its start of something more sustained. The fundamental picture does not change. The anticipation of weakness Going Forward. Manus we will get the capital outflow data over the weekend. Just to emphasize the point, overnight rates of 35 , you will see these moments of extreme pricing in rates markets when there is skittish and it about not wanting to fight the fed or fight the bank of england. Nobody in the world wants to fight the pboc. In terms of managing the supply of the currency in causing spikes like this, its still relatively easily for the Chinese Authority to do. Anna were seeing some big movements in dollaryen, falling below 116 for the First Time Since december 14. Thats the type of moves we are talking about this morning, the weakness in the dollar index and a lot of that reflecting whats happening in dollaryen. In terms of the shortterm valuation model, dollaryen was looking the most stretched. Found is that those moves generally are not sustained. Real Interest Rate differentials are much more important. Its nothing like what you would think from the dollaryen. Thats why we thought it was overdone, given the surplus that is returned in japan and given the valuation story, the yen is extremely undervalued. Anna thank you very much. , is 2017 the up europe divergence . The it lead the ecb and bank of england trailing . To a ceo in a bloomberg first interview. Manus inflation expectations. British businesses see no choice but to hike prices according to a chamber of commerce report. This is bloomberg. Anna it is 1 49 in the morning in new york. Of theflat at the start u. S. Equity trading day. The asian market broadly speaking a more positive one. The japanese market set up in underperforming, perhaps the big story overnight whats happening with the yen and the dollar and the chinese currency. 6 49 here in london. Lets get to the Bloomberg Business flash. Volkswagen has been told it installingines after devices in diesel vehicles used to cheat emission test. A San Francisco federal judge rejected a request on claims against the former bw chairman who said investors in the american depository receipts could improve. He knew the of the countrys diesel issue. A spokeswoman did not immediately respond to requests for comments on the ruling. Deutsche bank is considering an unusual approach to giving relief to subprime mortgage borrowers as part of a 7. 2 billion settlement with the u. S. Government. That is lending money to private equity firms and hedge funds. According to a person with knowledge of the matter, one option is to lend to firms like Lone Star Funds which specialize in buying bad mortgages from government auctions and lowering consumer obligations. A spokeswoman for Deutsche Bank declined to comment. Apple is planning to invest 1 billion in softbanks giant new technology find, adding the iphone makers name to a growing list of interested parties in the one hundred billion dollar fine that is due to launch in london this year. Qualcomm has said it will participate in the find. Also intendings to contribute. Thats your bloomberg is this flash. Manus our next guest says that while the fed is clearly on a different trajectory, he remains skeptical about the extent of the feds policy to diverge from the rest of the world Central Banks. Anna joining us is a portfolio manager. Good morning and thanks for joining us. You remain skeptical about the extent to which we could see this divergence but how much can the fed go it alone with the hikes we see priced in at the moment . To yesterdaysk minutes and look at what theyre saying, you take it at face value, it looks like their own a hike trajectory. Two things are clear to me, actually. First they are pricing in a lot of fiscal stimulus from trump. ,econdly, the timing of this theyre going to be very reactive rather than proactive. For a fed that talks about being data dependent there was a lot of discussion. That the take me it at face value, its very hawkish. If you listened what they are saying, they want to see whats going to come first from trump before they act. Youve seen yields spike up, you price inive moves to inflation trade. But basically its lets hold off and see, lets wait to see trump move first. They gotten ahead of it. Lets take it back to equities. 00 has tromped theyre up by 9. 5 . Effusive . Erly i dont think so. You have to dissect what trump is saying. A lot of the things hes promised to do are really good for the economy and others are not so good for the economy as a whole. If you look at the small to mid cap space, the deregulation line hes taken here, reduction in taxation, this is all beneficial to companies and especially small companies. Over the last decade weve seen the stifling of new business growth. That is one thing the Trump Administration is very conscious of and will work hard to reverse. Anna at the other end of the spectrum, are you concerned about political meddling in business decision may sing decisionmaking such as we have seen in the automobile sector . He seems to be influencing, although ford said it would make the decision anyway about pulling out of mexico. Companies seem to be to some extent listening. Like i said, good and bad. Protectionismal and intervention or meddling, for me, is something i would like to see him create an environment for companies to flourish and leave it up to them , and remain in a free market mode. Good, bad, lets see what happens. Europe, i had a great conversation yesterday saying there is a misrepresentation of information. Recovery in europe is strong, and consequent silly what consequently what is that do to the u. S. . Positionedwant to be in europe, relative to the u. S. . If youre positive about the macro environment, on a headline multiple basis its cheaper than the u. S. Having said that, there still the big asterisk of political risk. Questionl still be marks and volatility going into 2017 as the year unfolds. Having said that, in terms of positioning, its great. If you are a longterm investor, it creates great entry points. So the biggest dow you opportunity in europe for 2017 . We like industrials and tech. Anna thank you. Of next, we will bring you a bloomberg first interview with a u. K. Ceo. The offshore chinese currency with the biggest tuesday move on record. Big moves in the yen as well. Manus a good problem to have. Officials grappling with faster growth. U. K. Companies seeing the floodgates opening on the pound. Theresa may naming the next the messenger to the eu. 24 hours after the previous resignation. Gain byn extended today the most on record. Payo off. Forts t to pay off. Manus welcome to bloomberg daybreak. Our flagship show. Anna breaking news in london. The housing sector persimmons earnings this morning. Manus their revenue at 3. 1 4 billion pounds. The total volume of completion they have executed comes at 15,171. The average selling price, of course, will be to the ceo when we speak to him. The selling price is up by fourport sent 4 . The builders were the hardest the dayrexit, 40 down of brexit. Persimmon is one of those companies that have driven the margins higher and returned on investment capital. They have brought this new cost system. The implementation of how they put them together. Output. Heir overall pounds. We will ask that question to the ceo jeff, we will speak to him. He will join us a little later on. Stay tuned. Anna lets have a look at the futures. We expected to open up around these markets. We have got fed up minutes to digest into the equity pictures area the asia pacific up by 1. 3 . European equity markets expected to move a little bit lower at the start of trade. The risk radar, here are where we are overnight. A currency driven story in the asian session. The dollar index, not by a small fraction. 0. 9 . The feds grappling with the uncertainty around what trump policy means. The stimulus for the economy, emphasis on uncertainty and on the strong dollar effect. Play outeing that right now with a little bit of weakness in the dollar against the yen. Manus that was below on december the 30th, those within markets. Down 1. 28 . Weve gone 1. 4 . The biggest one day move since december 21. The biggest oneday move since august of last year. Quite a big turnaround. The market is long. We have looked at the dollar positioning at the start of this year, nowhere near as long as the market in 2015 or 2016. Bond markets . Lets mention the chinese currency. The offshore you yuan. A week dollar story as well but the yuan is surging. The most on record. Are the efforts working, or is this a short squeeze in the currency market question mark market . How determined is the Chinese Government to stop that number, 6. 80 . Manus coming through on the gold. We had the worst quarter on gold 2013. Hundred 13. The bond markets are rising. Yethave not seen anything in terms of the bond markets. That is a whole other debate for another day. Anna first word news for you right now. Donald trumps plan for tax cuts and spending may force rate hikes at a faster pace. Policy saw an increase in the aside risk to their forecast many were worried they would have to quicken the pace to head off inflation. Session due to start at the end of next month with a decision announced on february 1. They donald trump pick wall street insider. Fcc. Layton to head the throughout his career, including Goldman Sachs during the 2008 bailout. Donald trump has attacked his his opponents do to their ties to wall street. Donald trumps plan to roll back relations on wall street. Saneld bloomberg that economies are held back by two many regulations is a childish approach. What donaldone know trump is going to do as president given the many things he has said . There is no good case for a major deregulation. The idea that america or any economy is held back by regulation, this is a fantasy. A childish approach the to the to the economy that has no justification whatsoever. Printout of a tweet donald trump used with Bernie Sanders using it as a prop. He promised not to cut medicare, medicaid, or Social Security and now urging mr. Trump to veto any urging mr. Trump to veto any supposed cuts. Manus the next ambassador to the European Union. 24 hours after his head assessor precdecessor. Togers piled criticism on theresa mays government. Anna cutting production has been ousted as Venezuelas Oil minister, who has been in the role since 2016, will be seceded succeeded. Nicholas euro may be aspects nicholas made the announcements. Manus a former currency trader admitted to conspiring in the exchange market. Participating in conspiracy in emerging market rates while working at three International Institutions from 20072013. The third individual to be charged and the first to plead guilty in a long running investigation into the rigging of races. Anna traditional currencies are highly controlled, according to continueddata, 1134 adoption of the Digital Currency in china and in the sea in dia. Bitcoin bit every other currency as an investment last year. Manus you like bitcoins, dont you . Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. Lets check out the markets in asia with juliette. Juliette yes, not just about bitcoin what it is about a loss of currencies today including the japanese yen which continues to strengthen as we saw japan closeout the session and hour ago. It is up by over 1 against the dollar at 115. 77. Coming off of those strong gains we saw. We saw automakers coming under pressure and closing out by 0. 4 . The other big movement has been the yuan, the biggest twoday event since 2010. The offshore erasing some of its losses. If a structure companies in byna, it has closed higher 0. 2 . A strong rally in hong kong at 1. 4 with Energy Players leading gains. Australian market in bull market territory. Closing out at 0. 3 . A lot of these of course also about this weakening dollar. Manus thank you very much. The very latest on the markets. Earnings at the top of the hour, 2. 3 billion pounds. An increase in the selling price. Jeff. Terview with the ceo think you for joining and i had i. Youre selling prices are up by 4 . Your completion is 15,470. Not a bad set of numbers. The back portion of 2016, was there any Material Change in terms of the footfall across the doors and the momentum continuing in 2017 for you . Jeff we are really pleased with thejeff performance during the course of last year and the second half was particularly strong. We saw a confident market. I ares are keen to buy and we did not see any changes in that. Buyers are keen to buy and we did not see changes in that. We are expecting to sell a well into the spring sell well into the spring. Anna how confident are you . You said if there was any problems, you have been investing and brought it down to invest in length to inland. We talked a bit of a pause as we waited to see exactly what was happening in the market. That was shortlived. We saw that the buyers did not stall, and came to our sites. We saw a good increase in sales in the second half of the year, which was up 15 from the prior year. That gave us the confidence to continue to invest. A bit of a timing issue but nevertheless we purchased 125 of what we used during the course of the year. Strong investment in land and Growth Opportunities continue as we move forward. Good cash on the Balance Sheet, so we are ready and willing to invest in the business. Manus the one thing that Everyone Wants to try to divine is where we are in terms of postbrexit. The Market Holding on to you havewe were warned tax changes. What is your outlook for pricing . Sustained . Are you going to have to offer more incentives . How are the First Time Buyers looking . Jeff interesting point. A relatively affordable price in any event. In the markets we are seeing good demand. That continues. There is someyes, uncertainty around the brexit issue but underlying demand is very strong. People still want to buy houses and get onto the housing ladder. This will continue. ,learly, we are more cautious of course, if we see any effect confidence. Thats good affect the sales tha there are no signs at the momentt could affect the sales. So far so good. We will keep it under review. We are pretty confident that we have got the product for the market and the underlying demand, giving the fort ability, is very good given the affordability, is very good. Getting anna are you getting concerned about the limited exposure . Do you want to pull away from the southeast given the warnings about pricing falling in london predominantly . Jeff we have not seen that. Are in inbrackets we london is a blend of the markets. If you aim at that are together sector, demand is going to be strong. We actually think that the real opportunities are going to be ultimately in the southeast in terms of volume because of the problems we have had with planning over the years. There was a lack of development, a lack of new housing in the southeast. I think from that perspective, yes, there is a bit more sensitivity around the brexit issue in london and southeast. Of demand is far stronger, in any event. Thats will carry that through. Trough. Will carry that with Mortgage Rates as they are at the moment, and the incentive entivizatio ton get the ball onto the bonds of pleasure, those are strong impacts on the market. We expect to see that continue. Manus we talked about the affordable end of the market, up to 500,000 pounds. , lets say,t is it that this government really does double down on its commitment to housing . You have had the gardens thousand villages, 14 new ones come through. You dont need to tell me that we had the policy before. This is good news. What else do you want to see from this government . Jeff good point. You have a village issue, part of the solution, but a small part. Nevertheless important. What we need to see is more sides being allocated for housing across the southeast. That needs to see further progression. As an industry we are producing more volume of houses over the same number of sites. We need more development sites. If we can see speeding up of the planning process, some real good improvements over the last few years with policy changes. Summit speeding up of the process of getting weough the Planning System, could expect to see some further good volume growth in those critical market areas. Anna do you feel like the government is listening . We talked about this in november, i asked you what he wanted and you said more streamlined planning process. The Industry Needs to build on more sites. We got 1. 4 billion pounds to deliver 40,000 additional affordable homes. Is the government focusing on the right places . Jeff it is confusing because there are so many different initiatives. Fundamentally they are listening because the Planning System is improving. We talked about the difficulty in relation to planning conditions on site and we are seeing proposal to amend those coming through. We are expecting further progress soon. We are seeing various proposals to improve that. It is definitely helping. Manus think you very much, jeff. Your first interview of the day. I applaud his optimism. U. K. Isrsity across the perhaps one of the strengths. Anna it is 3 18 in hong kong. A business flash with juliette. Juliette thank you. Volkswagen is being told it must face claims that it misled investors after installing but devices in vehicles cheating emission tests. They rejected a request to do miss the claims against the former chair who said investors in the american depositary could not prove he knew the extent of the companys diesel issue. A spokeswoman did not immediately respond to comment. Deutsche bank is considering an unusual approach to subprime mortgage buyers. Part of a 7. 2 billion settlement with the u. S. Government. Lending money to private equity firms and hedge funds. According to a person with knowledge of the matter, one option is to lend to loan star funds, bad loans from government offices. Totsche bank declined comment. Apple is planning to invest 1 billion in new technology funds. The iphone makers name is added list in ang vision fund launching this year. According to a person familiar with the matter, Larry Ellison intends to contribute. That is your business flash. Manus thank you very much. U. K. Businesses will have no choice but to raise the prices. That is the latest survey from the british timbers of commerce. Anna pressure is great for the manufacturers, passing on Cost Increases to consumers. In 1989. Ince records here is Adam Marshall. Great to have you on the program. Your survey of many businesses, 7250. One of th stories is the cost inflation on the horizon. Kate the picture for us. Adam there is huge resilience because we did not expect to be quite as strong as it has been over the last couple of quarters. U. K. That thehe u. K. That adopted a business as usual approach. Im going to go out there and look for opportunities, market niche is and trade my way through. Ignore the uncertainty and do the best i can. Great results for the First Quarter of 2016 and they are expecting that to continue for the early months of 2017. Manus our business is just getting on with business . Constant white noise in the background. Are they trying to, as it were, separate church and state . Yes the simple answer is when a lot of firms tell me they have their head down. Saying i tried not to listen and focus on the fundamentals of my business and make Investment Decisions accordingly. The results of our survey bear that out. You see firms saying they are going to grow their investment in machinery. Growth is quot not at the highest ever, it is positive to see those doing that. The trouble is, are you in danger of being too optimistic . We have something of a sweet spot where we are benefiting from the weakness of the pound. Thehave not yet seen negative in reduced opportunity of trade with the eu. Adam change is coming and they need to be aware of it. What they are trying to do is take advantage of the that they have to do as well as they can in the intervening. Area nothing has changed in the trading relationships, they are getting on with it. Resourcesutting more into exports, into overseas trade. They know that Market Dynamics are likely to shift. When that does happen they want to be ready. Some of firms planning to gear up while keeping a business as usual approach. Theresa may set out her brexit vision and some people would say it is game theory. What conversations are you having with whitehall . With theresa may . Its she listening is she listening . Ive seen the prime minister, senior ministers on daily basis. We speak to business communities up and down to the united kingdom. These are the key things they see that they want to get from negotiations. Are wedding to outcomes. Lets stop talking about our future being canada plus turkey, what is it we want to achieve . We want the best possible access and terms of traded to european markets and other markets around the world. We want to see the ability for u. K. Businesses to hire both from the you and around the world eu and around the world. The difficulty recruiting remains a concern for many of them. A key thing for many firms. On a principlebased approach yourself andedding locking herself into a model. We have talked to them extensively about that. Anna does best possible access mean businesses will be ok saying that theresa may would be prepared to pull out of the European Union Single Market . Adam there is a huge amount of diversity of views as there was prior to the referendum. There are those that believe their own business and the u. K. As a coal would best be served inside a Single Market and those that believe their business and the u. K. As a whole would be best observed outside the Single Market. It is not the way silly because of a referendum vote, they are evaluating the options it has not gone away because of a referendum vote. They are evaluating the options. One better than the other . Adam it is binary. How do you get the best possible access . Trade withith a a Single Market without memberships of a Single Market. They traded successfully without free trade deals in place. We can i am i the models instead of looking at the actual practicalities. Manus is anything coming through in terms of immigration . We dont know what the deals are going to be. Coming throughng in terms of what we should be looking for in terms of immigration . Inverness cornwall to guarantee me for existing workers in the u. K. , there are 3 million of them here, in many cases filling gaps where they could not find u. K. National to do the work. That needs to happen asap. The future regime needs to be liberal and allow businesses to get skilled at all levels. You hear them talking about the highest skills only when talking about a future deal. That is not right because the sorted is happened at midlevel skills and in sectors like agriculture. The u. K. Is reliant on imported skills. They will be listening to businesses on those areas anna Adam Marshall with the latest start on brexit and business. Manus equities a softer opening. Dollaryen want to watch. Guy good morning. Welcome to bloomberg markets. This is the european open. Im guy johnson. What are we watching . The feds new worry. Policymakers fretting over faster growth under a trump presidency. This was in the december meeting minutes. The dollar falling, go figure, on that one. Overnight borrowing costs surge in china. Are we heading for a repeat of january 2016