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You are welcome. It is bloomberg daybreak europe. Our flagship show in london. Breaking news in the past 15 minutes, coming from you bf switzerland, a bonus pool reduction. Be cut in the bonus pool. Poolas reduced the bonus to 2. 9 billion swiss francs. The ceo remains the highestpaid executive, earning 13. 7 million swiss francs. Are going to to reflect in agreement in principle. This on the retail mortgagebacked securities. Net income will be restated by some 102 million swiss francs. Those are the headlines in terms of pay and bonus pool over at ubs. When it comes to markets, the bond market, the whites in the eyes. This is the personification of what the market challenges are permitted the blue line are the ratcheting higher bond yields. We have indeed double that. Breaking 2. 6 . For bill gross, that means there is a technical indicator of a fair market set to kick in. Bear market set to kick in. Not since Richard Nixon, Richard Nixon in 1974 have we seen 10 gains best 10 days of gains in yields. Run of gains in yields since 1974. Have a look at the risk radar as we go into jobs data. The numbers from the market, 200,000. Thats what we are looking for. The bloomberg dollar index, up 0. 75 percent. The fifth day of a rally. That is what the market is talking about. Not about whether it is hikes this year but next year. Gold is also in there. The has been dropping for fifth day in a row. Finalized,peachment the korean won, will it do any good . David ingles is standing by. Constitutional court the koreano impeach president. It opens the door for her to face jail time. It also triggers a president ial election within 60 days opposition figures leading in the polls. China, the opposition governor even as rates contribute rates will mainly be based on the economy. He added the currency markets are sensitive and difficult to forecast. The u. K. Has been warned of postbrexit trade deal could take more than a decade to complete. Speaking in brussels, the Danish Foreign minister suggests it could take up to 15 years to strike an agreement. Theresa may says she is still the timetable for negotiations. Global news, powered by global journalists and analysts. You can find more stories. This is bloomberg. Thank you very much. Markets are moving. The bond market, how is dollaryen looking . It is fairly positive. The nikkei has been stronger all day on the back of the yen. Closing high. Korea also in focus. You did see a big plunge before that announcement from the court. Lets have a look at some of the south korean stocks. Samsung is going to be a focus with the vice chair also been called in relation to the influence scandal. Some of these chinese related stocks getting a boost. This is after the Parent Company said it will not be pumping more funds into the cable company. Lets have a look at this chart in terms of that trade. It shows the divergence between the white line in the blue line. Bonds sliding across the globe since President Trump took office. Saying, japanese stocks look like they are the way forward in terms of trade. Manus well wrapped up. With the latest on the markets. Futures, pricing in a 100 probability of a fed hike in under a week. What could make the market pass mettle . Markets to have is estimated added 200,000 jobs in the economy. Bonds, government yields, hitting the highest level since 2014. Seniorley is the currency strategist. Is there anything at all in your mind todays data that could unseat us from being in a march hike. Not justgot to watch the headline figure at the earnings number prevent that is going to be really crucial permitted markets expecting it to rise. Remember, at this point in the economic cycle, we have been looking at a number with a 4 handle. Soft,gs data, relatively given the low unemployment rates. Week Earnings Data in many countries. Keeping Wage Inflation down. Keep an eye on that one. Really, i think this is more of a done deal. Manus i am wondering if we are getting ahead of ourselves. Hikes, it is about three whether it could be for bank. Are perhaps overly aggressive. I want to try to get your opinion. The dollar spot index, the white line. The blue lines a twoyear treasury yields. I dont think you are getting as much bnag for your buck. Are wetion for you, fully priced on the dollar . I think yields are rich. I think they will bring people back in. I think they will top out the dollar. Do hold a hugeds amount of the story. If yields were to suddenly lurch higher, that would drag the dollar to higher levels. But we dont really believe that story. As long as you dont believe this story, it is difficult to get bullish on the dollar. Looking on the bloomberg terminal, ppp estimates, the , fair value, it is 134. We are down at 106 read i many academic measures, the dollar is very overvalued at these sorts of levels. In the second half of 2014, the dollar really did move higher on expectations of Interest Rate differentials moving in favor of the dollar. The fed pushing Interest Rates up relative to everybody else. Yesterdays story, we saw the ecb, the markets beginning to may taper quantitative easing even further. The markets again different leave out europe. That could give the euro a little bit of support. Formcularly if they cannot governments in the netherlands or france. Manus another spoiler could be what trump says about it. Dollaryen. Want to close with this. Had the ability to break substantially 115. That is what makes me think it has run and done. This,ou have a look at dollaryen, it doesnt have the ability to break parity. Is it running out of steam as well . Go back to that end, after the election. The market has become a little bit more wary. The market is concerned about the fiscal hawks. The ability to get through the inflation this year. The market is concerned about other impacts, impacts on growth. If we look at dollaryen particularly, there are concerns about chinese growth. There are dynamics. Jane foley, we have a lot of issues to get into. One of these is the jobs numbers. With the u. S. Economic National Economic Council Director director. Joining us. Coming up, the south korean president almost did ousted from office. We are live to seoulk. Europeanstic tone on economy. N friends again, erdogan meets putin. One of the ceos comes out of one of these meetings and says, we have never had such a pro business president since the founding fathers. Consumernce confidence all sky rocketed. Lets get a business flash with juliette. Julia thank you. Ubs has reduced its bonus pool in a year where profits plunge. Income. Restated net to bonus pool dropped 17 2. 9 billion. He remains the highestpaid executive with a total compensation of 13 5 million. 13. 5 million. This comes as a westinghouse appears to be assembling a team of lawyers and advisers this issue bill reels from the breakdown of the Nuclear Power operations. A representative declined to comment. Property Development Stocks have soared. Authorities will adjust a framework that limits the amount home buyers can borrow. Will also be shortened. That is your Bloomberg Business flash. You very much. The south korean court has backed parliaments decision to raisingo the president , the possibility of a prison sentence. It also triggers president ial elections within 60 days really good to see you. How did the courts explain this decision . What kind of language that they use to uphold the impeachment motion . Reporter the court just said she committed a grave violation classifiedby leaking information to her friend. The protests dont look like they are ending anytime soon. Im surrounded by police where the ruling took lace. Still,ric ruling but South Koreans out on the streets. This morning, we have already heard once a order was killed in the demonstration. Still, the acting Court President says she hid the influence and abused her president ial power. Theoing so, she betrayed trust of the people. Happens now in the electoral process . 60 days, is that deliverable . Days, it would be until may 9. It has to happen. That is according to law. Acting president will have to announce a date for the elections. Opposition gears are currently leading the polls. The Democratic Party seems to be the front runner. 30 or moree has support according to the latest gallup poll. Viable viable no candidate has come out from the ruling party. Rebranded the liberty korea party. Manus what are the challenges the new leader will face . Where do i start . , threats north korea all over. Missile launches. Retaliatory launches. Most importantly, corporate reform. Improving corporate governance. That was a key part of the scandal that led to the downfall of the president. She has to leave the blue house. Now that she is losing what not that she is losing power but she is losing immunity so she can be arrested and charged. Manus great reporting in seoul. Lets bring james foley back into the conversation. The release at certain moments. Samsung rated. Arrested. Mark critz change a dynasty story. We see the same story in the corian juan. Korean won. List ofheard a whole problems. Issues with north korea, of course the concerns about china, too. Which the changes market is hoping can go through. None of this can go through until we have a new president in place. The idea there could be is a positiveay 9 factor. The economy can move on. Manus lets see where we end up. Up against the pound. 4. 39 . Number two. To that momentum continue for you . A lot of the better news will be priced in. It will be back to more daytoday activity. What sort of progress can the new government make . What sort of regulatory reforms . Get to a pointd where it begins to run out of steam. Manus we have had two conversations. The recurrent theme is china. Global geopolitics. Talk about the pboc. We had the governor of the pboc on the tape this morning. I find it fascinating. He talked about Interest Rate differentials. They can motivate traders to make shortterm satisfactions. In the meantime, every countrys rate is determined by domestic economic conditions. I take umbrage with that. Of relative a sense calm. Is he hoping all the money flows into the dollar . Not necessarily. The reason they have to do that, theyre as or has been a weight. Money flowing out of china and back into the u. S. Dollar. I think it is problematic in terms of donald trumps. Ttitudes toward china china istands intervening to support them, not the other way around. If very much depends on the markets perception. There are still a lot of structural issues to be faced in china. Again, i watched that chinese currency closely. The senior fx manager. The ceo of the largest internet Search Engine says they are more open that ever. They talked about how they cracked the crackdown might benefit Tech Companies in china. Right now, there is a the Trump Administration is antiimmigrant. You get a clear sense is more open than ever, especially for global tell it. It is willing to take on the responsibility as a large, faster growing economy. I think a high growth rate will generate a lot of alternatives. People naturally want to go to a market where there are more opportunities than elsewhere. Chinese, people naturally go up words. Water naturally flows down. It is naturally like that. Past, china was not a country known for embracing immigrants. Global talents. Policies wets of need to improve. We also need to make it more clear and let more people know ofna welcomes all kinds talent and nationalities. At what will you be doing as baidu toof by do attract that talent . What steps are you going to take . We already have a Research Center in silicon valley. With scientists and engineers. Lots ofdy attract bright talent. In china, we have more than 10,000 engineers. Greatr people attract people. We already have a good talent pool. Great conversation there. We have more conversations for you right here in bloomberg rate i will and you and exclusive interview. He joins guy johnson and myself. That will be available on bloomberg tv. Tapof course, you want to in. We are also speaking to the luxembourg finance minister. Draghi keeps qe unchanged. The european recovery gaining momentum. How do markets interpret it . Is the move done . Pictures of seoul where protesters have taken to the street. The president has been removed from power. She loses immunity and there will be elections in 60 days. Opposition figures are leading in the polls. Violationed a grave of the law, leaking classified documents. The president margin the rule of law and Representative Democracy with her anticost the two shall antitilegal and antilegal beads. It is employment day in america. If we start with what is happening in asia, asian equities rebounding from a drop. Resilient in south korea, despite park being removed from office. Weaker yen, down 0. 4 . You can see the south korean a juan won higher. 10tralian 10 year yield, up basis points. 10 year treasury yields moving higher. Gold down for a fifth day. The longest losing streak since october. You get the trend. Oil rebounding, staying below 50 a barrel. The 10 year yield, 2. 61 . It is about the threshold where bill gross says there is going if ita bear market continues on a weekly basis. We did move higher yesterday. 10th day. Is up for a the last time that happened, 1974. I tracked it against the bloomberg dollar index, the dollar at its strongest. Coming back to oil, i mentioned it was rebounding today. Still below 50 a barrel. The price rally triggered by opec cuts has vanished on those concerns about u. S. Stockpiles. We are seeing a little recovery, but still below 50 a barrel. And finally, then you juan the yuan will be stable this year. The Market Pricing in the least then ability volatility. There is a new version of daybreak on your mobile. Unibody get there. Lets have a look. Payrolls, we have been talking about it for the past 40 minutes. Could provide the final about whether the reserve can safely raise rates. The next story all about brexit. Theresa may saying it is time to leaving the European Union and attended the summit in brussels. Brexit means brexit. Focuses on theak ousting of the south korean president. Protesters taking to the streets. A president ialrs election in the next 60 days. To the ecb. Mario draghi struck an optimistic town. Are Monetary Policy has been successful. Headline inflation has increased, largely on account of food prices and inflation. Underlying inflation pressures continue to remain subdued. The ongoing economic expansion will continue to farm and brought in from april 2017. The net asset purchases are at aded to continue monthly pace until the end of december, 2017 or beyond if necessary. You probably, like everybody else, listen to every new wants. I want to get your review in terms of the buyout, the shift. Im not to the hawks . A nod to the hawks . We have something new he didnt say before. For aquite noticeable double like draghi. He said the market has found some support on that. Mix, thealso, in the Economic Data we have been having. There is also political news in that story. End of the last year, when we had the italian referendum, the market was very concerned about european politics. Opinion polln even beat, they may the fed in the first round. All opinion polls have suggested he cannot win the presidency. That is the difference between the polls regarding the French Election and trump and brexit. They were much closer. If le pen doesnt get the presidency, there could be a relief rally. Election, the market was quite concerned. It is very difficult. Impossible for the far right to form a coalition government. The politics is potentially not going to be as bad as the market was fearing. The ecb is recognizing that. Weve got the 100 Day Moving Average in the green. This is the Bloomberg Euro index. I am not going to say the dutch election has been downgraded, but the risks have been downgraded. Still touch and go. Im going to plagiarize tom keene. In the the velocity euro . If we clear the hurl . Eurodollar, euro yen. I think it is going to be eurodollar. If we did see a result combined with an ecb that is going to be tapering from next month or so, that is very much part of the eurodollar story. Many people are looking at this story, expecting inflation. Story is this euro very important in the outlook. Short less than last year. There is scope for the euro to go higher. That is going to prevent the eurodollar from going lower. Many people are anticipating the inflation story will do that. That creates a flaw for us. We begin the technical reduction. Do you see any shift in rates at all . Some people saying we could go two native. 3. Was that me being overly optimistic . It might be too soon. If you look at the inflation, the fouryear high, it hasnt lost that much at all. Core inflation is a better proxy of demand. I think it might be a little bit too fancy. Weve got a lot of the structural issues with respect to Wage Inflation. High levels of unemployment. Issues in greece. We are seeing better Economic Data, but i think it may be too early to talk about hiking Interest Rates just yet. Manus the seniors currency strategist. Creditors have left athens after 10 days of talks. Failing to reach an agreement. Negotiations will resume next week. He will not support demand for additional hikes. He spoke exclusively to bloomberg. Creditors are requesting what programs which go beyond what we are expecting. We made that very clear. Measures,ese fiscal are the cost greece has to pay for the incompetence of this government. If anything, we have been advocating the government to move faster in that direction. Liberalization or hybridization. Unfortunately, on that front, we have seen little progress. The government calls for the opposition to support the measures to avoid grexit. How would you react . I dont even want to contemplate that scenario. We think it is inconceivable ve what itl reli experienced. He shoulde it clear complete the review as quickly as possible. It should have it completed a year ago. Nobody would be asking for additional measures. On. Ave the option we drag we blackmail again, hoping to find some sort of political solution. He has brought us into this mess. It is up to him to deliver. Any delay right now is at the expense of the Greek Economy and will undermine the possibility greece will achieve the estimated forecast for growth in 2017. You are asked if to support the current inflation . We have never been asked to support that. Im accountable to the greek peel. People. I have made it clear this is a bad government for greece. The sooner this government leaves, the better it will be for the country. The cost is significant for the greek people and the Greek Economy. Exclusivelyng around the issues regarding the possible change in greece. We will bring you more exclusive conversations. Witht the ceo in at 8 15 guy johnson. That is on bloomberg tv. And on digital radio. You can tap into it. I hear people say, we had a crisis. We want to be a reason to voice to look at those things not just inside doddfrank, there are too many people involved in mortgages. It is hurting lower paid, first time buyers. No one, when it was done, could say it was done rationally, coordinated. Where the unintended consequences are. Can we get the economy growing faster . If you dont have a healthy financial system, you dont have a healthy economy. It is good for the citizens of the country. Nothing financial players, the citizens of the country. Damaging the rental system is a bad idea if you want jobs and growth. Do you think the Trump Administration . Through gary cohn, the ceos are part of the dialogue. I believe collaboration will win. Fingerpointing will not. Problems. Solutions to i would say, what do with the outcome to be . If you have Civil Society and business collaborate together. , we of these businesses really try to take care of our people and clients. We did not need government help to read we were trying to help people. I want to make sure we do our jobs, hoping the economy grow. To bank ceos saying, if donald trump deregulate wall street too much, you are not on vel playing field. I think at the end of the day, they will work out things that make sense for everybody. We dont want an unlevel playing field. The fact is, i want the european banks to thrive. If the european banks do not thrive, europe will not thrive. To me, the regulators should look at those things to help the banks thrive and grow their economies. U. S. , the economy is only 25 . What are the chances of the u. S. Ignoring regulation in the world . The u. S. Made it harder. I am hoping to reduce some of basel. It is closer to this next round is properly calibrated. Enhanced growth. D be looking at both, not just one. If you that the u. S. , i think mortgages have been higher. Proper legal safe harbors. Things like that. People have been very reluctant. I think in the u. S. , the fed said a recently, Small Business formation is lower. The next formation is negative. For the first time, a lot of banks, not just big ones, got out a lot of Small Businesses. Unintended ones, how hard it is to hold certain real estate loans. Because of that, banks are pulling back. Manus jamie dimon covering a wide range of subjects. Regulation, and complication with the banks and the new administration. By for the standing business flash. Juliette they have reduced their bonus poll and lowered bonus pay. Settled a legal case. The bonus pool dropped 17 , to 2. 9 billion. He remains the highest paid executive at ubs. Westinghouse electric is said to have hired a person to advise restructuring the business. That is according to people with knowledge of the matter. This appears as westinghouse appears to have been assembling a team of lawyers and advisers. A representative declined to comment. The ceo of search giant baidu has warned a trade war between the u. S. And china would hurt both countries. I think trade war is bad for everyone. It is so clear. Arele, or politicians, using that as a bargaining chip to get more. They understand, it is going to hurt everybody. I dont like that. Havepeaking of baidu, we Research Facilities in the u. S. We provide jobs. We pay taxes. We actually dont have a lot of revenue there. It is something that happens. We are not the ones who get most. He juliette the banks directors have sent a draft to authorities in hopes of obtaining approval. They did not give details of the proposal. Authorities will adjust the framework that homebuyers can borrow. And that is your Bloomberg Business flash. Manus thank you very much. It has been a big week for the oil markets. We have seen wti crushed after u. S. Data reminded the markets opec is not the only player in town. This currency, it is a currency in many ways. The currency is crude. We are back to where we started. We are back to these oil prices. Back to a level when opec agreed to cuts. There is a bit of a shakedown coming. Translate that through the prism of your world. How it works out for you. Commodity en playing out this story. The Canadian Dollar is significantly weaker. The chart for oil says it all. Stuck. Going to be a lot of people say, as we hit levels, as we look at the amount of supply we have had, we can make a mess, to cut back. Supply of oil, we are seeing it higher than it was before november. We have still got too much supply relative to demand. That will put pressure. You have got some of the commodity, and by the way, the bloomberg Commodity Index has been pummeled over the last couple of days, that huge run in iron ore. If you look at this, thoe aussie up 4. 4 . Some of these slightly. The canadian is the laggards against the dollar. That is having to do with potential order taxes, the reconsideration of nafta. Candidate is interesting. Horrible trade data. Is this economy recovering at all . It is not. Ggesting recently, there has been better data. Nafta is a concern. There is the argument, trump saying, we are just going to tweak nafta at the edges. The reality is, how do you tweak nafta for canada and change it for mexico . It does not seem to work. There are concerns in canada and there should be. At thathen you look trade deficit with mexico, i am looking at the researchers, the trade deficit narrows since 2015. Not exactly the story that comes out of his mouth. A bit of a side twister for you. I have a lot of people come in and say they want to be long aussie. On a Global Growth trade. Euro, is it the ironic . That story is a little bit out of date to meet at the beginning of the year it was a good story. If you look back at iron or, coal, ridiculously strong gains last year. Is a china story fundamentally. There has been closing down of in china because of environmental concerns. That will weigh on the prices. If chinese growth is a little bit wobbly this year, that will affect the aussie. We are seeing this turnaround right now. Manus thank you for sharing your thoughts with us. We are going to talk german trade, that is next. This is bloomberg. For march. Or break we get the u. S. Job numbers later today. Markets 100 certain of a hike next week, anything for the fed fright. The u. S. 10 year is set for its first run in over 40 years. Twoyear yields the most since 2009, european bond markets opened today. Iseas political crisis permanently removed from power immunity from prosecution. The nation faces elections within 60 days. Youre welcome. It is bloomberg daybreak. Right here in the city of london. We have made it to the job state. Little breaking data coming in across the terminal. In terms of germany and their trade. The topline numbers, we welcome matt miller into the conversation. The trade balance comes in a 14. 8 billion euros. Markets have penciled in 18 billion for the trade balance. On the import side of the german story for january, 3 rise in imports. Barely a rise of half of 1 . On the exports, rising by 2. 7 . Lets cross to matt miller. Good to see you. It has been a turbulent morning in terms of the data. Crutch we havet had. What does it do for the german story today . Matt it is interesting because yesterday, mario draghi bought brought this up at the ecb saying germany has a positive trade balance, a positive current account balance and defending the germans against implications they have been currency, which came out a couple of months ago from the donald Trump Administration. If you look at the trade balance over time, and i have pulled up a chart that goes back to the 1970s, we havent been negative on the trade balance since the early 1980s. This is one of the main issues the Trump Administration has the german economy. They are constantly selling more stuff than they are buying stuff. Now that is a bilateral relationship and this is a global picture we are getting. It is just interesting that although it missed expectations of 18 billion, it has been up to more than 25 billion in recent years and is still very positive at 14. 8 million. Manus we have changed in the last hour. The undervaluation of the euro in terms of purchasing power, parity, according to their model it could be anywhere up above 125, 130. That News Conference yesterday afternoon shifted the euro. The question is, is this enough to keep donald trump off of the euros back . I doubt it very much. Know how thent reaction of the u. S. Is to the moves in the euro that the right the market. The euro and sold the bunds after draghi struck a more hawkish tone less dovish tone. With regard to the euro, draghi did say over the longterm average, the euro isnt terribly undervalued. I recall an anecdote coming over 1990s, earlyte 2000s and it was . 88 for a euro. A dollar was well above what it was when it was first introduced. Manus now you are just showing your age. You have been there quite a while. Matt miller live in berlin. We will see later on. Equity markets. Is it a bond market day or equity market . Bond markets have been marched yields have been marching higher. On equities, you are seeing european equities set for a better opening. U. S. Equity futures as well are better bid on the day we wait for unemployment numbers to come through. Markets are getting ready. Jamie dimon talking about animal spirits in the united states. He wants a strong europe. Those are the messages coming through from one of the biggest ceos on the banking scene. Youre upset for a stronger opening as mario draghi has tilted his had a little more towards a slightly more hawkish news flow. European equity markets are set for a better opening. Bond markets in terms of how they are doing, we are seeing yields continue to rise. U. S. Government bond yields have been marching higher. Bund, these are the german yield curve. These are futures prices declining. On the very short end of the 112. 35, shuts foot. On the bonds we want to bring you breaking news coming in across the bloomberg. To bt. In regard open reach to be a separate company within the bt group with its own board. This has been perhaps one of the biggest issues for the currency current ceo to deal with at bt. There have been many investigations, quite a bit of discussion in that regard. Breaking news, open reach to be a separate company with its own group and its own board. This is something Gavin Patterson anna and i have spoken with him. The ceo will report to an openreach chairman and open reach limited will have its own branding. Employees will transfer into the openreach structure. A governanced agreement. It will become a distinct and separate legal entity to that of bt. 32,000 employees will transfer across openreach, it will be at separate company. This is the latest for Gavin Patterson in terms of restructuring at bt. Pt recently having had a tough time in their italian assets. Molds into more detail, we will bring that to you. Lets talk about bond markets. They are on the march. From Blackrock International is a manager there and joins us now on set. We just had that opening sweep on the futures, again, moving slightly lower. German curve. What did you make of the nuances of yesterdays druggie conference . Owen i would say it was slightly more hawkish. There was a recognition they are not fighting deflation in europe anymore. They revised their projections up for core inflations for 2018 and 2019. They didnt talk about the measures they have had in the past like ltros being necessary anymore. Generally that was pretty hawkish and in the absence of political events this year, i do feel we could see higher bund yields for 2017. Manus what kind of levels are you looking at . This is the german curve. In the white line. It is steeper than the u. S. Help steeped in that get . Where can the belly of the curve go to . Tradede would like the to be steeped in europe because we have a cautious ecb. It was slightly more hawkish but they are still extremely cautious and need to be. Isyre in place reflation not a target. This chart shows you a central bank that wants to get going. That will flatten the curve and the ecb is reluctant to get going. They are buying bonds for their qe program and buying more frontend bonds. That means the only part in the curve that can react to better economic prospects is the long end. We like that steeper trades. Manus the person that works with this creates some of the graphics and i saw this no outcome, this is the german curve in the white and two years ago, pretty much to the day, we begin quantitative easing. This is set for certain further steepening. How will that play out . In terms of the spreads against the rest of europe . His favorite counter trade with the pollock is there a counter trade with the politics and play from france . Owen my least favorite market in europe is france. Worse than german bonds potentially. The fundamentals of france are more akin the spain. That is Political Risk wont go away irrespective of how Marine Le Pen does in these elections. Regardless of how she does, Political Risk, populism is going to be a strong force for bond markets to continue to deal with . And for places like italy france, might be politically less stable and justify more of a premium. Is moretally, france similar in terms of its statistics to spain. That spread looks a little narrow. Manus french and german spreads, 80 over germany, that is france over germany. Is almost receiving fromand more anointments a whole variety of very powerful french forces. Interesting to see how that spread is unsure about what direction it wants to take. Owen the problem is deep skepticism about polls. Those are telling you the bond market should be too worried because this fiscal probability of a ring the penn winning the second round is low. This is why the first round is going to be important. Even if she wins, if her margins are very close to where the polls predicted, people will have more confidence in the poll predictions for the second round. What we want to see his verification of these polls to have more confidence. Thatpside, downside of spread is somewhat asymmetric because markets are expecting her not to win and we could see that spread get into 50 or 40. The trouble is the implications and rhetoric of her party are so redenomination, the upside to french treasury yields is very large. Redenomination risk on after riskometer as it were. Owen we have parliamentary votes in june, which will mean whether she can implement some of her rhetoric in terms of referendums. All the other Political Parties are very proeu. Elected, there are steps we have to talk about before she can implement a referendum. Things like redenomination. The credit market is interesting because they are dusting off bonds to see which ones are under domestic law, International Law and that is something analysts have been doing. Risk, redenomination owen, stay with me. We will get to u. S. Story very shortly. ownen murfin. All eyes on the u. S. Jobs report. But expectations of a march hike are sky high. What could actually spook or spoiled the party . Seol are shots of sale in south korea. Not so much protesters but they a littlering as we see bit of optimism in south koreas acting president is said to the to address the nation. These are the sights and sounds of jubilation. The president is ousted from rulingn an unprecedented. The ruling comes as an investigation into corruption allegations. 8 16 in the city of berlin this friday morning. A nice boostor this morning. The world waits for the unemployment numbers in the u. S. Is equities rising at the same time you see momentum behind a rise in the yields in the marketplace, the bond markets. In the u. S. Pe and of america. Lets get a business flash. Juliette saly is poised for her friday morning. Ubs has reduced its 2016 bonus pool and lower ceos pay in a year where profits plunged. Incomek reinstated net to settle illegal case. To 3. 9 billion. He remains the highestpaid executive at uf ubs with 13 and a half Million Dollar compensation. Toshibas Westinghouse Electric set to hire partners to restructure the business. That according to people with knowledge of the matter. This comes as westinghouse appears to be assembling a team of lawyers and advisers and toshiba reels from a 6. 3 billion writedown of the Nuclear Power operation. In representative at pgt declined to comment. Singapore property developed have stocks have soared. Athorities will adjust framework that limits the amount home buyers can borrow. Property forwn the less long. Lets have a look at how markets in the region fared. The nikkei up 1. 5 today as the yen weakened past 115 to the dollar. Hong kong stocks will bid and the court in south korea upheld the impeachment of the president. Having a look at south korean stocks affected. Samsung not moving too much but it will be one we watch as we know that feist chair jay y. Lee is going to be called in terms of the influence peddling scandal. A chinabased stock did very well on the back of that news. Some clarity for investors and i cable falling almost by its limit today in hong kong. Comingent company not to the rescue of the struggling paytv operator. The white line on this chart is the topics, the blue job blue line, jgb. Japanese stocks look very cheap at the moment. You have seen us a 3. 6 ride rise this year. It is the place to go for the reflation trade. Manus thank you very much, juliette latest on the markets. Donald trump has awakened the animal spirits in the united states. Jpmorgan Ceo Jamie Dimon told francine lacqua. He weighed in on the act impact of the administration on growth and business. Jamie here is what is positive. The at the people on ground, top professionals in the military, defense, secretary of state, secretary of treasury, economic adviser, serious people with deep knowledge and experience. Their mission is to have a growth agenda and that agenda is reducing corporate taxes, starting to build better infrastructure, reducing cut growth. That job creation. You saw a jump. Probably because of the progrowth agenda. Francine you have any doubt he will follow through . Jamie republicans have the house, they have the senate, the have 30 plus governorships. They have a better chance of getting those things done. I dont know the exact timetable and the choice has to be made. Progrowth th and pro business is there. But the democrats knowledge corporate taxes too high in america. Everyone wants infrastructure. People acknowledge it is time to look at the Regulatory Regime and we look at it and recalibrate and make sure it is conducive to growth and doesnt hurt Small Business formation and things like that. Francine what is one question you get most asked by your big clients . Is it trump or china . Jamie how can you wont take up our deposits. These are investing clients. It is mostly around the new administration. That is traditional. You have a change of leadership, interested,rned, etc. Around the world, it is trump. With jamie dimon speaking francine lacqua. Lets talk about markets. A 100 chance of the Federal Reserve hiking late next week. What could break the markets total certainty . Perhaps one thing if at all. The u. S. Payrolls number is out and is expected to come into 200,000 jobs created for the economy. A global bond rout deepen with u. S. 10 year hitting its highest level since 2014 and suffering its first run in 40 years. Owen murfin is still with us. 65. 58. 10 years have doubled since july of last year. Is this the start of a new bear market . I think these yield rises are justified. We have an unusual situation where we have synchronized growth across the world. It is not just about the u. S. , i am encouraged by the growth in japan, europe, canada as well. Have real yields in the u. S. , forh are more suitable distressed situations or recessionary type real yields. Have a fed which is priced more appropriately than six months ago. Not really that ambitiously and we can talk about 2017, we have two and a half hikes priced in. If you go to 2019, you are talking about one hike for that year. I would probably say the pace of tightening is still quite shallow. One trade we like is to think there is going to be more rate hikes between 2017 and 2019. Trade issteepening wildly think this market is priced appropriately, 18 and 19 look pretty benign. Manus for europe, benign . And the u. S. As well . Owen this is the u. S. Specifically. Think you could get some kind of a shift. If that were the focus needs to move to, the dots . Owen looking for three hikes in the year. It is likely to come down a little in the longterm part of the dots. Say,is a big gap as you and this is something we expect to normal i normalize given optimism on economic growth. Manus the s p 500 and the dividend yield, and the 10 year yield, and that gap begins to look interesting. Extentwonder to what that differential begins to play in terms of the move in the tapping out the potential bond market move. The last time this premium was so large in september 2014. Markets tend to write themselves. Owen you have a lot of people looking for yield internationally and in the u. S. At the long end of the curve, if you look at corporate yields, it can be an attractive yield relative to equities. The other thing i am worried about is what the risk markets reaction will be to this repricing of the fed and what it means for equities and things like credit. So far the pricing we have seen has taken a relaxed manner. The trump policies have really overwhelmed any concerns about the fed repricing. Manus are you surprised by that . I was looking at futures, u. S. Equity futures, the dow indicated up a courtroom 1 . Likewise, european equities. A quarter of 1 . Yields rising, equities pumping away, and they are not even flinching. Owen we have a risk on market here. Even equity market volatility is very low. I think this is why we have very for error here, in delivery by trump or economic delivery. There is a lot of optimism in the market and that is a concern. We prefer equity markets in places like europe for that reason where we can valuations are better. Europe cans hope play that catchup game and stand by the optimism from mario draghi. Take you very much for joining us this morning. Murfin. Owen equities set for a higher opening and we are going to have a great conversation with this man. Artan gilbert joins the market open show at 8 15 u. K. Time. This is bloomberg. Guy welcome. You are watching bloomberg markets. Your first trade of the cash session coming up. I am guy johnson with matt miller. He is in berlin. While treasuries are on the verge of their longest slump since Richard Nixon, will at 1 30. Out of out a street not seen since 1974. Standard life for aberdeen asset

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