Anna welcome to bloomberg daybreak. I am anna edwards. Manus some breaking news from banks to oil. Kicking off with bmp. Anna reporting numbers. They have missed fourthquarter net profit. It came in at 1. 4 4 billion euros. The estimate was 1. 6 3 billion euros. It was a resilient business. The q4 trading revenue rising. But the pretax profit is down by 36 . They are booking a few items as well. Booking goodwill at their polish unit. Restructuring costs in their belgium belgian and australian units. They are trying to get to or targeting levels. They are also talking about caustic calving and investment in technology. Laying out the they are also anding about cost cutting investment in technology. Missing estimates in the Fourth Quarter. Manus this is one of the big nordic Oil Companies out there. Net loss in the Fourth Quarter. 40 million. Taking on an impairment charge. Fourthquarter net loss for statoil. Capital expenditure. Ceo wants to bring it down. For exploration, spending about 1. 5 billion euros 1. 5 billion. The government is one of the biggest shareholders. Positive be cash flow in 2017. Those are the top line in the numbers. We will have a conversation exclusively with the statoil ceo. He will be joining the Daybreak Team at 7 00 a. M. U. K. Time. The twoyear anniversary since he sat down with us when he took the helm. Anna risk radar. Let us show our viewers where we are. Asian stocks have been a touch weaker. Topix down. New Zealand Dollar and Australian Dollar making the news overnight. The new Zealand Dollar up on Inflation Expectations. The Central Bank Governor is stepping down in september. Telstra yen currency no change in Interest Rates from the rba. Manus keeping an eye on the bond of markets. Fed is hawkish. March is on the table. Government bond yields hitting the lowest level in two weeks. For a variety of reasons. The european situation as well. Slightly more risk off in the market. Snp unchanged at the moment. Anna let us get the Bloomberg Business news. The Trump Administration will return to court today to argue it has brought authorities over it has Broad Authority over national security. Justice Department Lawyers are to appear before a panel in San Francisco to seek the reversal of a Lower Court Ruling that puts it the executive order on hold. The move stranded refugees, triggered protests and handed the new government its first crucial test. Drop will not be allowed to adjust the u. K. Parliament during a state visit to britain that is the view of john virgo following calls by lawmakers to not give to the u. S. President the honor of addressing both houses of parliament after the introduction of a ban on people from some majority muslim countries traveling to america. This imposition of the migrant band, i would myself have been strongly opposed to an address by President Trump in westminster hall. After the imposition of the migrant band by President Trump, i am even more strongly opposed. New zealand centralbank governor will step down when his term ends in september. The Deputy Governor spencer will for six months until a permanent successor is appointed in 2018. Appointed in 2012, the governor s time has been marred. The reserve bank of australia has left Interest Rates unchanged as a stronger global backdrop boosts a commodity prices. The cash rate was kept at 1. 5 of 28ecast of by 27 economists of bloomberg. Reaffirming the forecast predicting the economy to rebound after an unexpected contraction in the Third Quarter and headline inflation to rise above 2 this year. Steeredmay has easily off efforts. Mps voted down to opposition amendments that wouldve required administer they also shut down attempts to make may government inuks scotland, wales, and northern ireland. Global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. I am shery ahn and this is bloomberg. Manus thank you. Before we get to the bmp story, on thee lines from value of the euro and mario draghi defending the currency yesterday evening. The french people do not want to apropos what Marine Le Pen may be suggesting. Higher debt level would not produce french growth. Interview is from an in france. Bmp has missed estimates for the Fourth Quarter as earnings fell. Net income doubled to 1. 4 billion euros from a year earlier but that fell short of the 1. 6 billion that Analysts Expected. To bloombergs caroline on the potential impact of brexit and trumps work. , if we go back to the g20 they said any new regulation should have no material impact. If that ise to see in force. If one remains in that framework, it should remain manageable. Caroline this puts european banks at a disadvantage. The world is bigger than just europe and the u. S. There are 20 states that have to come up to an environment that makes it possible for their banks to operate. Caroline you do not see any impact. It is too early. Things are evolving. Caroline one thing that is coming soon is the triggering supposedly of article 50. Are you planning to move some london staff to paris . Isoline our headquarters there. We have to stay close to our clients to serve our clients so that is typically what we will see once we know more detail. The main question on the moving comes from people that have their headquarters activities in the u. K. And who might really need to pull those people out of london and into other areas. We are first a european bank. We already have activities in paris, belgium, and the netherlands. Going to youre not change the balance after brexit . We will have to see. The bank has gotten a huge boost since Donald Trumps election on the hopes that deregulation would hit the industry. Gary has said regulation has prevented the banks from lending. Took aario draghi different video yesterday in brussels. The last thing we need at this point in time is a relaxation of regulation. Extent, the fact that we are not seeing the of significant Financial Stability reached is the reward of the action that legislators and regulators and supervisors have been undertaking since the financial crisis. We are joined by paul donovan. Global chief economist at ubs. Deregulation and doddfrank will be review. Here is mario draghi saying this is the last thing we need. Is the Playing Field for banks potentially becoming more unbalanced in terms of what the banks might be able to do for the u. S. Economy versus european banks . There is a question. Because the u. S. Changes regulations that an American Bank in europe faces changed regulation. And the fact that some banks are still global mean you have to abide by the toughest standards wherever you are in the world. There is another question. Acte see the dodd frank being repealed or changed, that easing of regulation is just like a rate cut. What does the Federal Reserve do in response to this with either quantitative or Monetary Policy . There are three pillars. If you are going to ease on one of the three, is that going to change the first reaction and what does that mean for the u. S. Banking system . Anna we are talking about rate cuts and building walls across the mexican border. All kinds of activities that could be seen as stimulative to the economy. Theare contrasting that to 1930s. Proposal of the fiscal , in particular around the infrastructure section, this is likely to be more inflationary. The impact is on the inflation because not on real gdp we are not an economy that is showing signs of full employment. The big change in the u. S. Last year was at the low skilled started to get pay rises for the first time in roughly a decade. That is a clear signal in my view that the economy has reached capacity and any attempts to push it further do more to inflation anna the week numbers the weak numbers that we got on friday are not a concern to you. This is something called a fed wage tracker index. That has skyrocketed in the last two years. Doesnthy dont why the fed flag that up as a benchmark . The markets have been so focused on the jobs reports. It is not actually what youre supposed to be looking at. You need a far broader range of measures. Great to get your thoughts so far on the program. Manus we are staying put you. That is what the rba has done. Heaping rates on hold but ubs says it is unlikely to move it all this year. Anna Francois Fillon says he will not quit the race. Manus a miss from statoil. Ceo about thee earnings this morning. That conversation at 7 00. This is bloomberg. Anna welcome back everybody. Kong, 2 17 p. M. In the afternoon. The hang seng pretty flat. Let us get the Bloomberg Business flash. Statoil has reported an unexpected loss in the Fourth Quarter. Adjusted net loss which includes financial and other items was 40 Million Dollars. Had aerage forecast profit. Later in the program, we will speak exclusively to the ceo of statoil. At 7 00 a. M. U. K. Time. Combine to create one of the Worlds Largest investors in hegemon in hedge funds. Kkr will combine with prisma with palamco. It will vault them to the higher end of the hedge fund industry. Data combine withpartial got exceeded the previous monthly records. According to people familiar with the matter. They say regulators estimate new loans rose last month to a range that could beat the 364 billion record. The credit search highlights the challenge policymakers face as that is your Bloomberg Business flash. The aussie dollar left ratesthe rba unchanged. It comes as bloomberg launches another debris. Another daybreak. Anna good afternoon to you heidi. What is the takeaway . I want to say this is the first daybreak because we are setting the agenda for the asian trading day. We take a look at the news. From the rba. No surprise. We had not heard from the central bank for about two months and they held rates on hold. No fireworks. Philip speaking to script. It was always more of a Factfinding Mission in terms of having a look at the wording of the segment. All in all, it seemed quite upbeat. Did reaffirm its growth and inflation forecast saying we could expect to see gdp growth trending at about 3 over the next couple of years and it expects inflation to pick up to about 2 . Theraction in the gb in gdp in the Third Quarter. A lot of this is hinged on the commodity story. Really surging. To they are relying on this give the improvement when it comes to growth. Almost sort of take two of the commodities on the mining boom in australia. When it comes to the aussie dollar, you spoke earlier about the spike from this statement. Job earning going on. The rba says this complicates things, the stronger currency, especially when it comes to the things they are trying to do which is transition away from the reliance on mining and focuses more on services. You still see that strength resilient for the aussie dollar. It is up about 7 your today. Year to date. Ubs anderson do not be surprised if the rba stays on hold all year. Bloombergs top rated rba analyst expects a cut in august. He expects the commodities rally to peter out. Anna never boring. Haidi lun is the anchor of that program from sydney. Manus she is in there early. Australias trade minister will be joining daybreak australia. Manus staying with the asiapacific. Asian equities decline after the yen led a rally in haven assets. Lyrical uncertainty is rising affecting markets around the world. Political uncertainty is rising, affecting markets around the world. I think the dollar is the underlying driver here. The dollar has absolutely been the driver in the last few weeks but since sunday, there has been a shift. It has become more focused around europe and french elections in particular. What we have seen since the weekend is dollaryen has slumped while the dollar and have done pretty well. A lot of the crosses technically it looks like the yen can rally much further. China. Alking about it may have exceeded a monthly record, the loans. I think that was confusing to people. There have been measures to slightly tighten policy in the last couple of weeks. And then we get a headline about record lending again. It is causing confusion in the market. The main explanation is the recent tightening has been more about removing excess liquidity in the market free chinese new year. 70 of the credit in china is bank loans which is connected to the benchmark rate. There has not been too much tightening yet. I am not too surprised by the new lending record. Manus let us see if they can keep the fuel in the fire. Stay with us staying with us is paul donovan. You have a bandwidth for chinese growth of 6 7 . You said youre not too worried. My proposition is that we are obsessed about whether it is 6. 5 or 7 . Why are you less obsessed . Because it does not matter as much to the rest of the world. The way china is growing with the credit, the careful management of growth ahead of is party congress, what this basically doing is creating a very inward looking economy. My question as a global the world selles more to china at 7 growth if this is the nature of their growth. The answer is not that much more. The difference is fairly academic. A differentat is story because the u. S. Is growing more strongly. You know how americans are, they are spending all of the time. Doing that are not because this is more of a housing, infrastructure, investment story. Anna on the other side of the pacific, how easy is it to invest in china and they are doing a lot to open their doors. Foreign investors are still worrying though. Theyare seeing signs that will not want to get involved because they cannot get out. People invest because they want profit. They want to get money out. And the capital controls china is imposing leaves things in question. As well as lack of transparency. Inch is somewhat heightened this environment in china at the moment. Anna paul donovan will stay with us. Manus earnings from the worlds biggest insurer and we speak to with your cfo schneider. For bnpeen a miss paribas this morning and statoil. We have that conversation at 7 00 a. M. Ive spent my life planting a sizesix, nonslip shoe into that door. On this side, i want my customers to relax and enjoy themselves. But these days its phones before forks. They want wifi out here. But behind that door, i need a private connection for my business. Wifi pro from comcast business. Public wifi for your customers. Private wifi for your business. Strong and secure. Good for a door. And a network. Comcast business. Built for security. Built for business. Anna welcome back. 6 30 a. M. In london. Dollaryen fairly stable. 111. 79. We are waiting for breaking news. Manus i love your optimism. As we wait for the numbers to break, we are looking for a dividend of 8. 25 euros. Less catastrophe in the world. Must come in the must come in t half hour. Manus schneider will join anna and myself. We will be catching up with the munich re cfo. Dividend, 8. 6 euros. The number the market was for 8. 25. R a. 25 the landscape is changing. In that context, there is much to talk about regarding the shifting movement in the market. 8. 6 in dividend. We wait for the net income numbers to come across the terminal. Let me open this up for you in terms of the other information. They have a variety of things to say. I am going to wait for proper details. Net income, 500 million. That is a miss. It is a miss on the net income. Anddends is a nice comfortable number rewarding shareholders. Anna let us get to todays version of daybreak. Let us have a look at some of the stories. The cover story is around greece. The imfs slamming greeces saying the government will not come close to meeting fiscal targets. Butce is making progress has stopped short of making any decisions about financing the next stage of the countrys bailout. The imf has continually said there needs to be more Debt Forgiveness for anything to progress. Otherwise, there is no Debt Forgiveness. The next story. Statoilstatoil emp 500 million euros. The market was expecting 630. We have bp numbers. They hit the tape at 7 00 a. M. U. K. 10. Focuses on the race. Francois fillon says he is sorry for employing his wife and children. The former favorite is now running third in the polls. Manus markets. Risk off yen. Naomie msci asiapacific index is pretty much unchanged. The shanghai composite is lower. Political uncertainty infecting markets across the globe. Let us take a look at gmm to see how this is playing out across asset classes. You can see a bit of a mixed picture across indices across asia in terms of the equity space. Space, the at the fx euro is down for a second day. Weaker against the aussie and the kiwi. The aussie has raised losses. The kiwi is rallying after Inflation Expectations jumped. That currency is up for a fourth day against the dollar. The 10 year treasury yield is lower down two basis points. The biggest drop in more than two weeks. Talk about the flight to safety. Yields coming down in the asian on to space. In the commodity space, Oil Rebounding and downward pressure on industrial metals. This is the msci asiapacific index. Prettyex overall was much unchanged. Real estate and utilities consumerming energy, discretionary leading the losses. And talking again about flight to safety. You mentioned the yen. Dollaryen, 111. 83. It jumped 0. 8 in just the last session. And gold, the highest since november, taking a bit of a breather after three Straight Days of gains. Anna Angela Merkel is falling behind in the polls for the First Time Since 2010 underscoring the uncertainty for her bid for reelection. Isus Francois Fillon seeking to save his bid for the presidency. Is us go to caroline who following all things in paris. Francois fillon maintaining his candidacy and asking for two weeks to fill or kill his bid. Caroline that is what he was asking last week. Two weeks to go in order to fix his credibility. The press conference was very much on the french radar last night. It was operation transparency. He disclosed everything go bank account he has, every single real estate and the value of the houses. That he owns. He says his wife paid his wifes pay was perfectly justified. And the jobs he asked for his children were perfectly legal. Acknowledgedhe that this created a lot of ethical questions in the minds of the french people so he wanted to apologize. my working with my wife and children, i prioritized a trust relationship that today is met with defiance and it was a mistake that i deeply regret. I want to present my apologies to the french people. Caroline and when Francois Fillon was asked if he was worried about his recent drop in the opinion polls, he said in any case there is no plan b and the opinion polls will not make me change my mind. I mean to win. Attentionus turn our to the National Front partys project coordinator. That is later this morning. He will be joining the european open team. You can catch him on Bloomberg Radio at 20 past the hour. Matt is in berlin. In germany, chancellor merkel and the latest polling data. What is the significance . Matt the first time she has followed behind the social 2000 10. Since she is knowledged yesterday in a press conference with her allies that she does face a formidable opponent in Martin Schulz and she will respect him during the upcoming battle that they will wage. We spoke exclusively with the minister president of an rw of nrw. An important figure in the spd. They are currently in a grand coalition. She would think about the possibility of another grand coalition possibly joining the greens or the extreme left party in germany. This is what she had to say. I think it depends. I made a very clear after the last election that we will not tie ourselves to a particular outcome. It is clear that we do not want a coalition with the afd. So we need to see in the end what can be achieved but even then, you cannot just combine majorities randomly and see what comes out of it. We need to look at the policy programs. I am skeptical about the left party not least because of its attitude towards it europe and nato. Those are important issues to us as social democrats. The left party would have to move towards us significantly. Matt the spd does not feel like they can work with the left and they are not looking forward to another coalition with Angela Merkels party. The polls show they may have a chance to win this election. Manus matt miller and caroline. Matt in berlin and caroline in paris. Is paulin london donovan from ubs still with us. The shifting politics of europe. Focusing on france. My question is this the ability of Francois Fillon to sustain himself in this campaign is under pressure. The next 48 hours will be critical to arbitrate whether he stays or goes. In the broader picture, the concerns of the markets are essentially about Marine Le Pens position rather than the alternative candidate. Is this ist remember a two round vote. Thirdr Francois Fillon is or fourth is less relevant than what happens in the second round. Is he a credible challenger if Marine Le Pen wins the first round and we have a race in the second round which prevents an antiestablishment, antieuro candidate from winning the presidency. Anna on the bloomberg, we have with lacqua less a lech walesa. He said that if Marine Le Pen wins and Angela Merkel loses, then the eu will fall apart and we have to be ready for this. And you said we do not need to be ready for this. When i travel internationally, the further one it reflects ape, lack of understanding about the political will to stay together. If you look at the opinion polls in france and they have a dubious track record that there is a Strong Majority in favor of the eu and one that has grown since the u. K. Chose to leave. There may be an antiestablishment sentiment but not to the extent that france would leave your. We should not disguise the consequences if any country leaves the euro. I think the thing then collapses. It becomes a rapid domino affect. Manus if you look at the german story, Angela Merkel calls behind the social democrats for the First Time Since 2010. Does this raised the specter that scholz could be the next chancellor . They have 30 and Angela Merkel tips below that. Europe andchange for globally. The case can be made that Angela Merkel is currently the leader of the free world because there are not many other candidates for that position right now. There is an issue in terms of global the bolo missy guys she has because in terms of global diplomacy because she has great experience. These are opinion polls and there are margins of error as we discovered last year. It is too soon to be speculating on this sort of a shift. Manus when you see a spread like the Franco German spread, the italian spread, all of the spreads are rising. Zenithe nowhere near the of the crisis but they are rising. Is the market still underpricing the political shift . The issue is here when we see the spreads rising, there may be political risks or economic risks, but we also have rising inflation in europe which means that at some time, mario draghi will have to admit to his complete addiction to easing and go cold turkey. If we do not get the support, the underlying economic fundamentals will start emerging more strongly. I dont think that is necessarily about politics. Anna will the germans do not want a weak euro. May be requiring a degree of sophistication which will be difficult to get into 140 characters. Anna great to see you this morning. If you are a bloomberg customer, you can watch the show using tv go. You can also follow all of our charts, functions, and message of us. There it is demonstrated. Show, aoming up on the lot more big earnings conversations to be had through the day. At the top of the next hour, we speak exclusively to the ceo of statoil as they take a 2. 3 billion because of the longterm pricing in the market. And then we speak to you and agree to munich re cfo. Anna welcome back. Here in london, it is 6 48 a. M. Let us get a Bloomberg Business flash. Statoil reporting an unexpected loss in the Fourth Quarter after deepening down on its u. S. Shale assets. Was 40sted net loss million. Missing the average forecast of eight 680 million profit. Program, we will speak exclusively to the statoil ceo. He will be joining us on daybreak. Has posted its Fourth Quarter estimates that missed the target. It fell short of the 1. 6 billion Analysts Expected. The lender also laid out a multiyear plan to lower cost and boost investment in technology. At the same time, the cfo said the bank will take a wait and see approach to Donald Trumps review of the doddfrank regulatory framework. We will have to see. If you go back to the g20, the ones that gave guidance with respect to banking regulation, it said any new regulation should have no material impact. We will have to see how that happens. Sophie that is your Bloomberg Business flash. Manus thank you. Back to banking. Back to basics. A good start of the year. Shares soared the most since june after it unveiled a new Buyback Program forecasting growth and net income interest. Anderson is the cfo. Thank you for joining us. Well done. Great set of results. The market wants to know the kind of Buyback Program can you assure the market that we are so strong i can see that continuing into 2017 . It is the right question to ask. When you look at capital levels across european banks we are one of the few with a large by that. We were in a fortunate position to have a large excess Capital Position and we feel very confident in our by that. This is the third year in a row we have done buybacks. Growth andto fund pay out excess capital. I would prefer to fund more profitable growth but at the moment, we can do both and we do not see that changing. Anna what is the Growth Scenario . What kind of growth can you achieve . Last year, we achieved 5 growth across the group. I would not be surprised if we deliver something close to that in 2017 as well. We are taking shares in norway and sweden. We are growing up of the market. Arctic growth a couple of percent. We are growing that in double digits in both sweden and norway. We seem to be gaining traction. Manus talk to me about costs. You see substantial cost opportunities. The cost to income ratio is above 50 . The nordic average is lower. I will correct you a bit. We are at 47. 9 . There you go, you are still above average. We are still above average. We brought down absolute costs every single year for the last five years and we will continue to do so. We do not manage cost income ratio. It depends on the business mixed year. Mix then ourferent peers. We still need to bring costs lower. We continue to bring down costs. When of the ways you are trying to tackle the negative Interest Rate environment in denmark is by diversifying the income stream. Wealth management seems to be part of that. It is a crowded field with banks trying to get in there. How much more can you do on that diversification story . I think we can do a lot. It is a crowded field because it is attractive. We feel that in the last couple of years we have not been able to use the scale of the business well enough. We have been punching below our way. That is why we announced a Wealth Management unit last year. Now that is fully up and running. In 2017 good potential and onwards. It is about picking up the pace for us. Manus there is one story at the top of the agenda for everybody. The proposition that donald trump will go on to regulate. We understand some officials have contacted the fed and said pull back a little on your discussions regarding basel. If doddfrank is reviewed significantly, how will the consequences play out for you . , thereou look at trump are several fx. Us, we are a little bit conservative in our approach. Let us not celebrate too early. There are some elements that are ok in terms of the deregulation agenda. What is important for us is a level Playing Field and we do not get a u. S. Deregulation that is not hobbled up by a european deregulation as well. Us see what the concrete measures will actually be. That it hasdoubt thrown things up into the air. The level Playing Field is the most important. Anna wherever the u. S. Goes you would hope europe would follow. In the end, the Playing Field is the main issue. Anna you are the biggest bank in denmark. Can are the lessons you teach other european banks in how to survive negative Interest Rates that are not as severe as those you have had to tackle . It means that if you look at our results in the last few quarters, you can see the positive side. Is the need tont reprise other services. As a bank, you are set up to make money on liquidity which is suddenly gets thrown up into the air in a negative rate environment. We have been rebalancing the business model. Value defining new propositions for our clients. In the nordic region, especially with corporate clients, we have been charging negative Interest Rates for our clients. Manus i was in zurich last week. Can you assure your small retail clients that youre are not going to charge negative rates . Nothing has changed there and we will not charge our private clients. Manus when of the other issues is of course generally there are big moves. There is a move for consolidation. How do you look at the consolidation story . Are you interested in insurance at businesses . If you had an option to buy a business, what would it be . I dont have any irish banks in my pocket. That i amthing is here in connection with our annual roadshow and everyone is asking me about m a. Are not seeinge any great opportunities. The Management Team is running an organic growth agenda where we are seeing great opportunities. We may do some small acquisitions which fit our footprint but the large scales but the large scale stuff i think we are pretty far away from that. Manus coming up, more earnings. Re going to talk about bmp bnp. Anna at 7 20 a. M. , we speak to the cfo of munich re. This is bloomberg. Manus the deregulation debate. The ecb says relaxing the rules is the last and we need as the Trump Administration says it wants to make banks lend again. Anna u. K. Commons speaker blocks the president from speaking. Manus political risks. Scandal, minon lingers on. Bpa we get numbers from after an unexpected loss, we speak to the ceo staff oil. Statoil. Daybreak is Bloomberg Europe circa numbers have the bp hitting the bloomberg now. 400 million adjusted profit. Another miss. Hat miss coming through deafness raft of mrs. This morning from various sectors. Oil sector in terms of what they delivered in the Fourth Quarter against profit expectations. Fullyear 2017 to be higher than 2016. They are talking about reported print thirdquarter production being higher than 2016. They are giving downstream profit of 187 million. The question in these numbers was the same as shall. Can hire rices compensate for lower prices in refining. It seems perhaps they have come under the same travails. Some headlines crossing the bloomberg now around upstream profit and downstream, but it looks to be a big miss. For hundred Million Dollars compared to the estimate of 567. 7 million. Manus yesterday, german any factors throws. Today, we talk about industrial output and it falls. Contraction of 3 . The market had an estimate for rise of 3 10 of 1 . This is the worst reading on german industrial output since probably 2010. The market has penciled in a growth rate of 3 10 of 1 . Reduction was down 7 10 of 1 last year. German confidence skipped a little in january. When you have here is a little bit of concern creeping into the numbers. Order intake in the industrial and construction sectors, as well as an increased and sentiment in these areas signaled in arrival in Production Growth according to the economy ministry. Breaking news at the top of the show. We have a little futures action for you. Anna lets see where we are on the futures. We could be dipping lower because u. S. Futures, we may be looking pretty flat. Flat at the start of the trading day for europe. A lot of companies disappointing in terms of numbers, whether the Banking Sector or the oil or. Plenty of numbers that have disappointed. Manus futures, i pulled it up on the radar, we also have what is unchanged at 1. 5 . The new Zealand Dollar, as well. The kiwi rallying to a threemonth high. First quarter expectations. Bond market, marches and play on the table. Yields, there is that risk off sentiment around the market i think when it comes to some of these currencies and dollaryen, s p unchanged. Anna lets have a quick look at the bond board. Were at 2. 39 on the u. S. 10 year. Not quite at the 2. 6 or the 3 . Capital had been talking about marking the end of that bull market. We have seen it turned tail since december. Lets get a first word news. Meanwhile, we have the u. K. House of Commons Speaker saying trump must not be allowed to address parliament during his visit to britain. He voiced his opposition to the president s stance on several issues yesterday. In a strongly worded act address to mps. As strong as this place is concerned, i feel very strongly racismr opposition to and to sexism, and our support for equality before the law and an independent judiciary are hugely important considerations in the house of commons. [applause] bnp has posted fourthquarter profit that missed estimates. To 1. 4 4me doubled billion euros from a year earlier, but fell short of the 1. 6 3 billion Analysts Expected. The lender also laid out a multitier plan to lower costs and boost technology. At the same time, the cfo said the bank will take a wait and see approach to Donald Trumps review of the doddfrank regulatory framework. We will have to see because , with go back to g20 respect to guidance, they said any new regulation should have no material impact. We will have to see. New Zealands Central Bank at ther will step down end of september. The Deputy Governor will need for six months until a permanent predecessor accessor successor is appointed. The battle to revive inflation after new zealands economy out developed its peers and the Housing Market boomed. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more , you can findries more stories on the bloomberg. Thank you. Statoil has reported another unexpected laws laws. Digested net loss excluding financial and other items was 40 million compared to a profit of 185 million a year ago. Happy anniversary to you years thehe seat two years in chic. You have done a lot, but we are in the Fourth Quarter, 2. 3 billion of a writedown. Catches me is this is impart tied to the longterm assumption on prices. This concerns me the most. Obviously impacted by the low commodity environment. Not is predominantly an oil and Gas Producing company. Oil and gas prices are very important for us. In this quarter, we had. In terms of impairments, we had impairment this quarter of 2. 3 billion u. S. Dollar net. The main reason for that is fact that we have adjusted downward for longterm prices price assumptions for the oil. Now we are looking at an oil taking oil20 and prices down in 2020. That has an impact on our balance sheet, both on our regional portfolio and international. Anna they sometimes want to know if this is the end of the impairment story. From what you said, it depends on where the Oil Price Goes and your substance of it. Do a lot of hard work to improve our operations and increasing efficiency and improve the value of our assets. That is supporting this. Than on the shortterm and longterm commodity have an important saying in terms of valuation. Anna why have you changed your views on oil prices . Eldar this is based mainly on our some chanel. Weve seen over sometime the is its coming down and going to stick . Is it sustainable . We think it is possible to sustain. That means that the longterm cost assumption in the industry is coming down. The implication of that, and a longterm perspective is that Lower Oil Price environment. Manus one of the hallmarks of a focus your tenure is on bringing him capital expenditure. You have slashed by nearly 50 . I see the number 11 billion. Are we at the bottom of your question mark are we at the trough . Eldar 13 billion, we came in at 10 million. This year, we increased it slightly. We are investing in a highquality projects. We have a portfolio which has a break in price of 27 u. S. Dollar per barrel. We would like to invest in the portfolio, so we are slightly increasing our capital number 211 billion. We will invest in these projects also Going Forward and will continue to explore at the same dollars. 5 billion u. S. That we did last year. Anna you have been cutting back on capex and get you are still streaking money to shareholders. Talk us to the thought process about how much investors care about the dividend return and how much that is almost sacred, you cant touch it. Eldar first of all, what is important is that we actually can generate cash to support it. Then we need to invest in projects and we need to generate cash every quarter. This quarter Fourth Quarter of last year, we had a positive cash flow. Almost one billion positive cash flow. Aftertax, after dividend cut and after investment. Anna so you are not having to borrow . Eldar in the Fourth Quarter, we had to borrow in the Third Quarter, we had to borrow. In the Fourth Quarter, we used cash from our net after dividend. Manus will that be the case this year Going Forward . Eldar this year, we see we will be able to be cash flow neutral. At around 50 dollars per u. S. Barrel. We are committed to the dividend, we have enough today that we will pay the same dividend level for the Fourth Quarter as we have over the last couple of quarters. We should expect the same dividend level over the next three quarters. Anna thinking about the strategy for your business. One analyst described as what you are doing as ceo over the past few years as back to basics. Norway and offshore production internationally. What does the future hold . What is your strategy, any changes that you foresee . Eldar an update on strategy today, it is a start sharpened strategy. It is an evolution. The backbone of the strategy is still the norwegian continent and shale. That is where we have the edge and would like to capitalize on that. We see opportunities Going Forward. Will continue to grow our International Activities and the quality of those assets is important. Manus talk about the u. S. Because trump is big on big oil and he has told us he is going to make america oil in the pendant. Independent. The want to see more from him . Rex tillerson is in the u. S. , how does that play into your thinking in onshore assets in the u. S. . Hard and are working have significant improvements on the quality of i want to know what you think. I want to hear about big oil. Eldar big oil, statoil is a longterm industry. Our projects are really longterm. We think through the cycles and also through political cycles, whatever you might see in the future. Or as to be consistent in what we do, continue whatever we have on regulations, we have had a policy of staying ahead of regulations. We will continue to do that. In climate policy, we have a clear policy on how to address the low carbon future, in our oil and gas business and in our others. Trump doesnt share that, does it . Eldar it cannot be changed. The world is moving towards a low carbon future. We need to move towards that development. Manus no conversation would be complete. If records are coming back. They talked about 62. They really opec do believe that opec has returned to the helm of austerity in oil prices. Is opec back . It seems it that they have regrasped the net. Strongthere is a determination in opec. There have been a lot of challenges. That says something about the determination. I think opec will definitely adhere to the quotas, at least to some extent because of that determination. There will be an impact from the opec policies. Exactly how much that turns out to be is still a challenge. There is still uncertainties when it comes to the commodity environment. Anna thank you very much for spending time with us this morning. The ceo of statoil on daybreak europe. Next, a conversation with the worlds biggest reinsurer. He joins anna and i. This is bloomberg. Welcome back to bloomberg daybreak europe. The Australian Dollar against the u. S. , no change in central bank policies. A great time to tell you we have launched a new show. Bloomberg has launched a new daybreak australia show. You can get your day started and or finish your day. They break australia. Every day. Out of sydney. It is 3 17 in the afternoon in hong kong. Lets get a business flash. Sophie question mark sophie statoil has reported an unexpected loss in the Fourth Quarter after deepening writedown on its u. S. Shale assets. This would exclude other financial items worth 40 million. That makes the average forecast 618 million profit. Whether the collapse in oil prices has led to the downturn in its generation. Kkr has agreed to combine its Hedge Fund Unit with pacific alternative Asset Management to create one of the Worlds Largest investors and hedge funds. In thel have a 40 stake amco holdings, which will manage about 34 billion. The deal, expected to be completed in the second quarter, bring them to the higher end of the hedge funds league, dominated by blackstone. Bnp has posted fourthquarter profits that missed estimates. The income doubled to 1. 4 4 billion euros from a year earlier, it fell short of the 1. 6 3 billion Analysts Expect it. The lender also laid out a multiplan to lower costs and boost investment and technology. Time, the cfo said the bank will take a wait and see approach to Donald Trumps review of the doddfrank regulatory framework. To see, because if you go back to the g20, the ones that gave guidance with respect to banking regulation, they said any new regulation should have no material impact. , if it have to see remains within that framework, it should be manageable. Sophie arsenal data for january showed chinas lending exceeded the previous monthly record, according to people familiar with the matter. They say regulars estimate s rose to arrange that could beat the record in 2016. The surge highlights the challenge policymakers face as assettrive to fight bubbles this year. That is your Bloomberg Business flash. Lets get a check on how asian markets fared this tuesday. We do have that four day event in asia. Crude shares dragging as fell below 54 a euro. We have to meet day closing at about one fourth of a percent below are. Following ies falling below volatility as we await data. Hunting seeing little change. Chipmaker also following today. The Company Confirming it has submitted a nonbinding bid for a stake in toshibas chip business. A four day event here ahead of the r. B. I. Decision and stocks swinging into the green. R. B. I. At 1. 5 . Equity movers of note in asia. And hitachi shares climbing after the announcement that they are going to be teaming up around electric vehicle technology. This is to launch in july with honda taking a 49 stake. They may use a hitachi moke texas. Oint in tech this comes after toyotas announcement it is teaming up with suzuki on monday. Investigators anna lets talk about reassurance. , despite a 29 fall in Fourth Quarter profit on higher claims from national disasters. Manus the company ceo joins us on the phone. Take you for joining anna and myself. The market is going to look at dividends, raising that 8. 6. In the fourthned quarter . You missed on your numbers and you promised the market a substantial excessive number back in november. Talk us through the back quarter . Joerg the last quarter was dominated by large losses. Matthewrom hurricane and an earthquake in new zealand. That is what our business is about. We willingly accept that. Also, as a good basis for stabilization reinsurance rates. Anna you are increasing your dividend, what does this decline in profits we have seen in this quarter mean for your dividend and your promise to keep it stable . Are you sticking to that today . Joerg it means very little. Frankly, i admit. Because we fully met our wasinal annual target, it. 3 22. 8 billion euros and we were a little bit about the million. 2. 32. 8 billion euros. Our general dividend policy is we strive for high distributions , slightly growing over time and that is what is currently happening with a plus of 4 . We cany confident continue on that path in the years Going Forward. Manus im interested to know. You mentioned the reminder that the market got from some of those natural disasters in the Fourth Quarter. Thewe at the bottom of pressure on pricing for renewals . Do you think those moments, those natural disasters have reminded the markets of how necessary this insurance is . Are we had a floor in pricing . Joerg interesting question. We have always been asked, what does it mean to stabilize pricing . Does it take a disastrous catastrophe . I dont think so. In my view, normalization of major claims would also be of theto remind people normal profitability of business and the urgent need in this slow interest environment to have a stabilization of rates. Renewal of recent our business for january 1 2017, which already have strong signs of bottoming of the trend of the last couple of years. 5 orte decline of only so. There are clearly signs for this to happen now. Aroundgh capacity all will also mean, it is a difficult path back to high profitability. Anna your restructuring the ergo part of your business. Update us on that. Is that going exactly to plan . Joerg yes. So, we have been suffering from the restructuring expenses, but i would call them a very good investment in the future, it is about digital lysing our business. It is about streamlining our forces. Ensuring there is a good future potential for the business. Was overallr this net expenses in the order of 250 million for last year. The argo and it together with a slight loss ended the year with a slight loss. Now i am confident we would see positive figures in line with the plan. Were joined on the phone from munich. It doesnt take natural disasters to put a floor on the pricing. You can always watch what anna and i do on a daytoday basis if you want to. The whole idea is you can pick up all of this. You can pick up all the video. You can follow the charts, a beautiful charts our producer hillary produces. You can even get in touch with the team, as well. You can send all your questions to manus. Francine anna. We will be thrilled. And as the end of daybreak europe, the european open is next. They will have a conversation about a french political story. On the Bloomberg Radio next. This is bloomberg. Guy youre watching bloomberg markets. The european open. I am guy johnson. That miller is in berlin. What are we watching . Spreads widen in europe. The plan for france to be the euro. We speak to a key advisor to Marine Le Pen on this program. Profits double but miss estimates. Investors have driven shares to the highest level in decades. How long can the outperformance can in you . B. P. Misses estimates