Equities and trading. It is all about fed chair Janet Yellens 6 00 p. M. European time we are up for the third week in 4. The currencies are rising against the dollar. The most yields are gaining today. Commodities, sovereign, the worlds big Advertising Company the most, falling following 8. 9 , down 8 right now. Slowd a relatively start, setting budgets conservatively. Assuming an increase of 2 this year on a light from light basis setting its budget revenue on a light to light basis. It rose 3 last year. It is a bellwether of the strength of the global economy. Companies expanding or cutting Marketing Budgets depending on the strength of the global economy. Global ad spending may grow 3. 6 this year versus 5. 7 last year andto Economic Uncertainty the absence of the olympics, which bolstered expenditures last year. A fascinating piece of Economic Data from the u. K. Brittons Services Index expanded the most in five months. Of ans the early part indication the u. K. Economy is suffering from the brexit vote in june. Pmi falling to 53. 3 from 54. 5 in january. Bigger than economists forecasted, showing the Services Sector, the main driver of the , the reason the economy has fared better than expected since the brexit vote, is it showing the Services Sector could be faltering . It combines services, manufacturing, pointing to Economic Growth of. 4 this quarter, the weakest growth in a year. Ascinating piece of data consequently, sterling is down for the sixth day against the dollar, the worst stretch since december 2015, at the lowest level since january 16. The lowest level is 120. 40 seven, that was the close january 16, the lowest since may of 1985. The median forecast is 122 but the next couple of quarters. Bank is theers most bearish with a Second Quarter forecast of 1. 30. One of the many things you can look up on the bloomberg. Julie breaking news from the Trump Administration. Suspending and Obama Administration to have transparency in airline fares. The action has been stopped by the airlines and the washington trade group. They issued these notices on the government website. The department of transportation to spending and obama proposal to require transparency in airline fares. I dont know the details, but we are seeing a reaction. This is a ual. Airlines, the other this is delta, which is just up half a percent. Not as much. 1. 5 . An, that is up we will get more details when we have them on what this proposal entailed. We are seeing these chairs go higher. A quick look at the major averages in the u. S. , declines across the board. That the s p 500 is set for its first 2day slump since the end of january. Saw smallh we movements through february, we did not see 2 back to back drops in a row. Snap on its second day of trading. The stock up 71 in its first 2 days of trading. Even though a lot of the analyst commentary so far has incautious if not outright negative. Investors dont care, at least not yet. Onnie thank you for that bloomberg first word news with courtney donohoe. Courtney pressures foreign minister calls that are replay theccarthyism responding to controversy over attorney general Jeff Sessions and his meeting with the the russian ambassador. Sessions has recused himself from any investigation into russian meddling in to the elections. In the 1960s mccarthy led a search for communists in the u. S. Government. The first facetoface meeting with president trump. The German Government said it would not deny u. S. The reports that the president plans to meet with the president on march 14. Mike pence at a security conference in munich two weeks ago. In the u. S. Demand has been arrested in connection to the threats made with Jewish Community centers nationwide. Better Authorities Say thompson is accused of making the threats. Nameed to the victims while making some of the threats. In malaysia, they deported the only north korean detained in the killing of dictator kim jong uns half brother. A car was surrounded by photographers at it arrived at the airport in kuala lumpur. Malaysia set they did not have enough evidence to hold the suspect. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. I am courtney donohoe. This is bloomberg. Mark lets get to the latest on the french elections. Macron over taking antieuro candidate Marine Le Pen. Our parisned from bureau. There are polls then there are polls. This is fascinating and what it is revealing, isnt it . Is fascinating because it is the first time Marine Le Pen is not leading. She would be second behind macron. Also shows an alternative. We dont even say on this graphic. This poll asked the people if they would consider a replacement candidate for Francois Fillion. They would leave the race thereof Marine Le Pen is was a replacement for Francois Fillion. Mark how many have to jump ship before he exits the race . The newspaper, the national newspaper, on their website they are doing a live fillion deserters. Republican elected officials have now said that they will not support Francois Fillion anymore. This weekend will be a very big test for Francois Fillon. He will hold a rally in a suburb of paris tomorrow. On sunday at 3 00 p. M. , you have some of his supporters who have organized a protest in favor of fillon. A protest against the people abandoning him at 3 00 p. M. Near the eiffel tower. We will see who shows up. He is playing his last card. It is also his birthday weekend. He will be 62 tomorrow. Vonnie what are the odds that juppe will jump back into the race . Caroline it depends on if fillon asks. He has been saying he wants to maintain his bid. Jappe says he is not ready to step in unless fillon asks him to replace him. Submit 500o signatures. Looking at some of the rules in terms of the signatures earlier those elected officials who have already given their signature for Francois Fillon can transport their support to alain juppe. If the Republican Party wants to replace their candidate at this point, they basically will have to find 500 new signatures. We have reports in various french media that some who abandoned Francoise Fillon of a the past 24hours would be happy to give their sick etcher their signature to a replacement candidate. Mark joining us from our paris bureau. Hows get more insight into markets are reacting to news out of france. Yellen speaks in a matter of hours. A lot to talk about. On our function you can check out the weekly move of the spread, as it is known. We just checked. It has narrowed by 14 basis points. Hcp, ive gone through the week. A rough calculation, this is the biggest narrowing since july of last year. Before this we had seen 16weeks of 19 when the spread widened. Which of this chart highlighted perfectly. Incredible, a touch of political risk. A good gauge of Investor Sentiment or anxiety about what is going on in the french election. We are at elevated levels of 15 to 20 basis points wider than last year. 20 basis points off the peaks of last month. Penhese new polls, le support is eroding. Even a juppe candidate would be he decidedndancy if to run. Those are working in the favor of the spread tightening. Mark 49 minutes. A whiff of complacency . Calm ahead is there of this . Richard it matters, but it feels like the big reprice already happened. This is what we have heard from build ugly. Will be consistent. If we had not had the price move already mark lets look at it. Richard the chair will be happy that march is in play. As a result she will deliver messaging we have already heard. Vonnie are we in danger of worrying who will win . There is support for marine depend whether she wins or not in the country. Richard it is one of those things where i have not seen any cominghat have le pen out of victorious in the second round. We have to take these with a grain of salt. We can see what happened in brexit and the u. S. Election. There has never been a poll with le pen winning. Vonnie forget about the polls and winner. The point is there is a brewing feeling, populism, right wingism. If we get a macon win, will it calm markets . The underlying sentiment is still there. Pen support has been underestimated and chances of her wedding is higher than we expected. If macon we get a rally in french yields here and youre right to highlight there are challenges ahead. That will be the biggest thing themacon, if he has won election, to deliver on the promises he made. Also to deal with the populism. It is not only france, it is germany, the netherlands, the u. K. , the u. S. , it is a global phenomenon. Innie it didnt happen britain and the united states. Firstd this would be the result that was a more populist. That is something that i think will be an additional challenge for investors. Mark lets highlight the calm ahead of yellen. That is chart number one. Tame. S dollar yen, very pricing in numeral for rate hikes from the fed, is it too early to start repricing, or is 3 enough . Richard we have 2. 5 priced in by the market. 3 is in play. A step too far. We make it a reprojection in march. For now, 3. 5. Mark richard jones. Janet yellen will be giving a speech at 1 00 p. M. Eastern, 6 00 p. M. In the u. K. Chicago. Rks from stay tuned for the premiere of bloomberg real yields at the top of the hour right after the european close. Cant wait. Vonnie should be fun. That is with jonathan ferro. Optionser is exploring for raising capital, more details from the reporter that broke the story. Next. This is bloomberg. Vonnie i am vonnie quinn. Mark i am mark barton. 15 minutes from the european close. Lets check out Deutsche Bank shares, falling as much as 2. 5 . Is consideringer a Capital Increase in its strategic review. Steve, i thought capital concerns were put to bed. The doj settlement share price rebound from the lows in september. They have not been put to bed, have they . That is true. What is true is that the immediate capital concerns have been put to rest. The doj settlement was a gigantic step. Advance capital still falls short of its target. They need more. They have rebounded, making it a palatable to shareholders. That is one reason why Deutsche Bank is considering this. Vonnie what about the partial sale of its Asset Management business . Steven i think that is another to raise capital. Would it be easy . It is hard to say. The business has been hemorrhaging assets over the past six consecutive quarters. It does not make it a very attractive asset at the moment. It does yield stable returns. Probably people would be interested. How much of the steak with Deutsche Bank be willing to sell, and how much would that . Arn Deutsche Bank one estimate said 25 would yield 2 billion for Deutsche Bank. Is that enough . Hard to say. Vonnie with all of the fines and problems that Deutsche Bank has faced, isnt retaining talent . Steven they are concerned. They recently announced a big, unprecedented on his cut. 30 much in Deutsche Bank and the banking industry. They say they are not currently. It is hard to say, but it is a big concern. We will see if the bonus cut is to recur, people would not respond to that in a very strong way. Desire tomuch of the raise capital is down to new banking standards, which could increase the riskweighted assets in 710 years . New banking regulation has been a big factor in inflation of those riskweighted assets. Want to raise capital ratio, which is a big benchmark in those regulations. Delayed reform of that regulation, no one knows when it will be completed. They wouldd that complete it by the they getting of the year. It was delayed to march and has been pushed out to april or later. People are waiting and Deutsche Bank does not know what the reform will entail for capital requirements. They may go ahead with the the Capital Increase they are planning anyway, but it raises questions if that will be enough in the end. Mark any figures how much they might need to raise . Analysts over the last couple of months say anything between 5 billion up to 10 billion, perhaps even above that. Have not identified huge capital gaps to get to the desired capital level. We could see anything from 5 billion to much higher. Mark great story. Thank you. Still ahead, Prime Minister theresa may makes the economic case for scotland staying in the United Kingdom postbrexit. This is bloomberg. Vonnie live from new york, i am vonnie quinn. London, i amom mark barton. This is the european close. Six minutes until the end of the equity session. Thats get to theresa may speaking to conservatives in pushow saying the scottish for independence doesnt make sense. Prime minister may there is no economic case of breaking up the United Kingdom or loosening the ties that bind us together. Economics are only part of the story. The National Security of the union in a changing world has never been more important. Mark the Brexit Debate was center stage as bloomberg talked with the former labor Party Minister and former conservative chancellor. Here is what they said about the issue. Of course we are leaving the european union. One has got to accept that. Do role of the lord to sit their best to try to be cure for deal. Tion the best theyre trying to scuttle the deal by carrying an amendment of this kind. I dont know what the governments priorities are, except they recognize, and i agree, there needs to be a different relationship with immigration with the european union. Law and regulations are completely compliant. In many areas we can replicate them. What is essential for is having a mechanism to change them in the future. Earlier on bloomberg television. Look where european markets are heading as we move to the close. Stocks falling in london and across europe. A look at the currency board, sterling down for the sixth consecutive day against the dollar. The close is next. This is bloomberg. Mark live from london and in new york this is the european close. I am mark barton with vonnie quinn, finishing up the friday session. Rising,aining, banks the Industry Groups that are falling are all but the benchmark. Stoxx 600 down for a second day, still up for the second weekend second week in 4. The biggest gain since middecember. That is the weekly gain. Deutsche bank shares did fall lower after the news that came out at two 30 london time, down 1. 4 . Planning to review its Strategic Options over coming weeks, including a Capital Increase in partial sale of the Asset Management business according to people with the knowledge of the plans. They will meet march 16 and 17 to discuss attentional measures. Stocks sale would help deutsche replenish stocks if they come under pressure if they decide to reintegrate it subsidiaries. They have not been lucky in that endeavor with shares down 1. 4 . A busy day for data with eurozone pmi data rising to the highest level in almost six years. This is the combination of services and manufacturing. Level we reached in february, proving this economy behindittle bit of oomph it. Climbing to 56 from 55 point four in january, putting it on track for a quarterly growth of 6 . Back in line with the flash input, led by manufacturing, a gauge for services, also strengthening. The ecb meets on thursday. With inflation of 2 , it will be an interesting meeting. Allude toraghi will saying that proves we dont need to do anything. No doubt the hawks will have some say on the headline, which discussion of tapering. Those of the biggest abuse that will take place. The prospect of rising rates in the u. S. Pushing investors to take on more risks as they take on returns relative to treasuries. High yields an emerging markets rallying faster than investment rates. A emerging market highyield is the white line. The spread is there. , developingpremium nation investors own highyield bonds, the lowest level since november 2011. We have so many wonderful charts on the bloomberg. Vonnie its true. Im looking at the mexican peso. Our commerce secretary moved it by 2 . He talked about having a sensible arrangement in terms of trade with mexico. We see the mexican peso below 20. He has been in the market and talking up the pace out. The Canadian Dollar, maybe next time the secretary needs to talk about canada trade deals. The Canadian Dollar is weak or. Weaker. Is yields higher and in interestrate increase. The twoyear and 10year back up above 2. 51 . Lets look at the movers in the u. S. Major indices are lower. Not much happening before janet yellen speaks at 1 00. The vice chair is speaking at 12 30. 65. 60 aude above barrel. Abigail . Abigail all eyes are on the fed yellen chair janet speaking at 1 00 in chicago. Well be looking at if the fed will raise rates at the march 15 meeting. 6347. S g btv in blue, world interestrate probability that a 25 basis point hike will happen in march. A week ago 40 , a month ago 20 , now 90 . Very close to 100 . The december 2016 rate hike in in a decade. Investors think thisll happen. Volatility also showing in the 10year yield. 53 56. G btv we see rates back up after the. Lection with Growth Prospects after the fed raised rates we have this range of uncertainty. I tightening oil. Which way will it break . The downside, then the upside. The 50 Day Moving Average tells you which way momentum is going. That mighting down, be bearish. How with his impact the dollar index . The dollar may tell last more about rates. Coming to usv 6299 from a bloomberg user. A longterm chart of the bloomberg dollar index on a weekly basis. The point is when the maxi goes above 14 we see the bloomberg dollar index all the times that this has been, the bloomberg dollar index takes a 15 drop. By implication, rates will go back down. Maybe the fed raises, but they back off. That would give them ammo in the toolbox. Lots of uncertainty and excitement. Vonnie a phenomenal chart. Totally deserve the honor of being the chart for us on a friday. Lets check in with courtney donohoe. Trump easingsident regulations on the airlines. The Trump Administration suspending and obamayoure a proposal to require transparency in airfare. Though stocks are higher in trading. Vice president mike pence used his personal in email to conduct state business as governor of indiana. The account was compromised last year by hackers. Comparisons with Hillary Clintons use of personal email saying that his emails did not deal with classified information. Governor jerry brown doubts many of Donald Trumps proposals will come to pass. In an interview, he said the president is fighting battles on too many fronts and will be forced to temper his plans. That it will not derail californias record transparency. The chinese president wants no drama at the National Peoples congress this weekend. Looming over the conferences the communist party leader conference. Want to backing for his attempts to overhaul chinas economy. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. Donohoe. Tney this is bloomberg. Vonnie thanks. Now back to janet yellen, due to speak at 1 00 p. M. Wall street time. Joining us is the executive editor for global economics. And everyone in was talking about how the fed wants to raise expectations for march. Do they want to raise it to 90 . Lets look where we started to week. Everyone was saying they wont do it. Look where the markets are be. Ng the fed will on friday we have 70 80 probability. For me, the key moment was tuesday in a window of 40 minutes for you had john talking and hill dudley of the prospect of something happening soon. The icing on the cake was the seenwing night, generally as the dovish leader of the fed, saying we need to do something soon. They all say we need to do something soon. Does the chair hang back . That she deliberately wade in, or does she go sideways . Vonnie what about letting me economy run hot for a minute . If what you mean the fed has in the past almost always waited for inflation to become a serious problem before it moved, things are different. It looks like the fed will move before hand, preemptively, to stabilize inflation at 2 . Fedie im not sure the wants inflation to be a serious problem. They have expressed the opinion it is ok for the inflationary to be above 2 . Hot. They have let it run last year, people were walking projection of rate increases. The economy wasnt strong enough, the International Environment was too brittle. Onlyyear theyre not embracing it, they are walking. Own the aisle with the dos nothing happens in march or may, you can confront the issue John Williams talked about with mike mckee. Free andill believe in you dont go in march or may coming the arithmetic can box even. Mark the International Environment has put the fed off in the past. Would you say this is it sweet spot given the calendar is skewed for later this month with the netherlands, grants, april, may, germany later this year. Perfect not got a more opportunity to raise rates looking at the international picture. How we have written about both emerging and developed market indicators appear to be on an upswing. This is a benign International Environment. Last year it was like, is china going to fall apart . Once more. It didnt international factors are working for them, not against it. If they wait until may do they risk tightening before the final rounds of the french election. When they chose last year when it was just about to be the brexit vote. Mark the trump word, how does he play into this . Not a greatow, deal. The fed says they dont need fiscal policy to kick in to get closer to their goals. We have a series of policy statements and noises from the hill. The fed will want to wait to see what the legislative looks like. Year, three point 09. Fiveyear, 3. 05. We have a list in yields. We see more of that . Moved the market before janet yellen does . Dan Stanley Fischer is his own man. In the past, fed officials, the day the chair is speaking, have not wanted to get in front of her. We will see what happens. Mark i know a piece was written saying if you look at the survey data, it is strong. The hard data is weak. Maybe march isnt the right time. What you think of that view . Have had rigorous internal debates. The fed has been very consistent saying they are approaching their goals, getting closer to full employment and inflation of 2 . Are they there yet . No, but theyre close. If you believe that, why would fed funds stay down here when mutualism or . It hasnt been weak. It is consistent heading up to the 2. 5 environment. Fed funds is less than 1 right now. Vonnie well have this conversation again, monday no doubt. Janet yellen will be giving her speech 18minutes from now. Remarks inge of her chicago. Also the premier of bloombergs new fixed income show debuting at the top of the next hour right after the european clothes. Favorite phrase of the day, legislative sausage. Coming up, the future of the wolverine franchise. Can it survive without hue jackson at the helm. Vonnie i say, no. This is bloomberg. Vonnie live from london and new york im vonnie quinn. Mark i am mark barton. This is the european close. Julie, you are back with us. Julie reuters is reporting that macys is not engaged with talks about a potential deal with hudson bay. About, buten talked the market has been skeptical anything would happen. According to reuters, macys is skeptical hudson bay can get financing for a deal. This is an update to the story. You can see macys shares falling 4 . Shares not a reacting as much as. They are down somewhat on the day as well in canadian trading. It looks like they are off by 2 . Macys shares have not already been trading as if the deal would happen. They are off considerably over the past three months or so. This may not be shocking to investors, nevertheless we are seeing stock reaction. Mark the most acclaimed xmen movie to date, logan debuts this weekend, saying farewell to the wed hugh jackman. Franchise is delivering the best Box Office Sales according to box officepro. Com. What will happen with the xmen franchise after his departure . Joining us into a deep dive into the movie logan from san francisco, i have seen every one of them. I have every single one of them. Miss, butit and logan goes out on a high. Critics love it. It will make a ton of money. What does fox do next . It is a very different movie than some of the ones you are accustomed to seeing. Im sure you have seen the trailer sent you are such a fan. It in a dusty locale in texas. Wolverine is a very reluctant hero. It looks like a western. Even johnny cash is playing. It is an rrated movie, which the last big xmen movie, dead well. Was as fox is going for darker, more adult strategy that separates the superhero movies from the ones, the marvel movies from comicsand even the d. C. We see from warner bros. A different look. If you are superhero movie fan you will be in four different vibe than youre used to. Mark what about spinoffs . It is about creating a universe so you can bring all of these superheroes together. What does fox have in store when it comes to its superhero universe . Disney has marvel, warner has batman injustice league. What is foxs grand plan . Xmen franchise for fox their biggest franchise by far. Inis getting a little long the tooth. The first movie came out in 2000 starring hugh jackman. He has been will rain or 7 he for 17 years. Rine theyre trying to establish a model where you have the films based on strong individual l, theners, like deadpoo you can build towards ensemble movies in the same way that is needed with the avengers and warner bros. Will do with the justice league. You get attached to these characters, then when they are in a movie together at the Box Office Booms bigger because it is a magnet event. Vonnie hugh jackman has not been wolverine for 17 years, he has been wolverine all his life. He is wolverine. In the the darkness trailer didnt translate well in batman versus superman. It wasnt a mass success. It is a risk. The criticism of batman versus superman is that it was too serious. It was dark for sure, but so were the earlier Christopher Nolan batman movies, but those did very well. They were very gritty and serious. Some of the fun got lost along the way. Fox with xmen is still trying irreverence of the in there. There is some parts of the trailer that are funnier. May, patrick it stewart has claimed, it is his last xmen movie as well. There are some emotional moments between his character and hugh jackman throughout the movie. Theyre going for more of emotional resonance than the batman versus superman film achieved. Vonnie will fox want to keep its clutches, or is he free to be james bond . Just putting it out there. He can do no wrong in your eyes. It is a risk for fox. They put a lot of money into this movie. 97ewhere between Million Dollars to 20 million, depending on who you ask. We will see. , asere told that wolverine a concept, could appear in future movies. With you. T to chat thank you for telling us all about logan. The battle of the charts. Looking at the most elite Banks Companies moving together. This is bloomberg. Vonnie it is time for our global battle of the charts. Some of the most telling charge and what they mean for investors. These charts by running features at the bottom of your screen. The am back and looking at breaks between S P Companies taxed the most in the least. This is a portfolio i built myself. In the white, this is the highest effective tax rate is company is. Below in the blue are the ones with the lowest taxes. This is broken up into quintiles. Here i have the election. You can already see these companies, the most taxed took off. They performed 7 . The least taxed went up 5 . A clear distinction. Look what happened this year. These lines have normalized. They are performing pretty close. If anything, the least taxed companies are performing a tiny bit better, both around 6 . A lot of this is policy. We dont know exactly when we cuts, so investors are taking a little profit, pulling back a little you can check this out at g btv 6468. Vonnie she said a chart i built myself. That will be hard to beat. Mark japan has inflation, that hasnt happened since 2015. That is surely worthy of the big three. Consumer spending, wage growth forlow, set us up nicely the boj meeting. One member suggested if inflation hits 1 we could see an increase. The debate will change from loosening policy to tightening policy. The meeting takes place the day after the fed. The fed could tighten, and with the bank of japan having a loose policy, you get more of a divergence. We should be celebrating if you are japanese and into inflation. Vonnie you make it so hard for me. That was a wonderful presentation. You made a wonderful case. But danni. For the premiere of our fixed income show starting at the top of the hour. Join us again monday. Jonathan with 30 minutes dedicated to fixed income, this is bloomberg real you. Coming up, the final word along to chairman yellen. After a week of fed speech shakes of the treasury market. French president ial candidate gains ground in the poll has issuance. Is said toche bank be reviewing options to raise capital