But has it been a success or has it sewn more confusion . We talk about that in the program. European leaders discuss transatlantic duration relations in malta. Matt that will be an incredibly interesting must watch interview. Justin about an hour time. See very little change to equity index futures. Orlly, no change in london here in frankfurt. In paris, you see a little gain about 1 10 of 1 . Some really interesting moves today and i think the news is driving yield markets. Guy have you got the bunds up . Response to the news we had out a little earlier. And fundo doddfrank management. We will talk about that, is it a good thing, a bad thing customer we will talk about that. The yen is down a little bit. The bloomberg dollar Index Trading up by around 1 10 of 1 . It is payroll day. Remember the adp report we had earlier in the week. Well talk about the correlation later. Matt shoji the futures. Showed you the futures. Nd yields,e bud beginning to fade a little in reaction to what is coming out firmly from wall street. Its figure out what is happening around the world. Lets go now to our bloomberg first word. Sophie thanks, guys. The bank of japan offered to buy unlimited amount of onset a fixed rate at a scheduled operation to reassert control over surging yields. The central bank will buy five to 10 year securities from secondary markets. It is offering to buy the 0. 110ark 10 year notes at percent. The move comes after an earlier attempt of spending bond purchases failed. Residents Trumps Administration is set to play new sanctions on iran as early as today. According to two people familiar with the plan, the penalties are in debt punishing iran for sponsoring terrorism and testing ballistic missiles. 17 entities may face sanctions. Both trump and National Security adviser mike flynn have said iran is on notice. Has hikedntral bank its Monetary Policy by raising Interest Rates to charges in open markets operations, just as task cached demand is expected to gain. Day reversed agreement by 10 basis points each. That follows an increase in rates on mediumterm loans last week. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more , this iscountries bloomberg. Matt thanks very much. Breaking news as we follow this morning President Trumps move to halt an Obama Administration regulation that requires to work inadvisors the best interest of their clients. He will also order and it a review of doddfrank. For more, we are joined on the phone by Bloomberg Government editor in washington, d. C. Craig, let me ask first about rule. Duciary role moveould anyone want to against it . In theory, it sounds like the right rule. You want Investment Advisors to act in best interest of their clients. Craig what the Donald Trump Administration would say and what a lot of critics would say is that it creates a lot of new red tape and paperwork for these Investment Advisors on these retirement accounts and drives up the cost of the accounts, limits the choices, makes it harder for them to do their jobs and in the end, was designed to help his folks needing retirement accounts. It ends up hurting them by limiting choice. We could debate the merits of it, but there are a lot of critics of this in the retirement account industry and they seem to have found a hero in donald trump. Guy on that point, he who is he listening to . Craig we are seeing a lot of signs that gary cohn, who is running his Economic Program right now is emerging as a major player. Was one of the top managers at goldman sachs. In the absence of a secretary of seems to have slipped in and is talking to the president and getting him to listen to the way ahead. A lot of the stuff trump is. Oing tomorrow, today he has signaled on the campaign trail that this is not a surprise. He talked about rolling back doddfrank. For it to happen two weeks into his term, hes moving quickly to take some of these regulations down. Matt this targeting of the fiduciary role rule is very specific. Youre right, we could debate that all day and it has been debated since 2015. The doddfrank review is more broad. What are you expecting there . Craig i think what we will see later today is that he is going to sign an order asking for review. That might so sounded oculus, it, we arend of looking at every part of doddfrank. , systemicallye important financially financial organizations. They says they save luigi havesay too many regulations against them. I think you will see scaling back there. A lot of rules of the road from 2010, we expect trump to try his best to lift a lot of them. Again, they would say by easing regulations, it will make it more effective for investors, consumers, thanks to do their jobs. That is their position. We will hear from the president today. Guy doddfrank is not a single piece of legislation and there are certain parts of it which the republicans dont like as much. Can we talk of little bit about how this is actually going to work in terms of mechanics . How parts of doddfrank are funded . How the fed will fit into this . How complicated are the mechanics . One of the things we are hearing from the white house is that they are going to really dig into even some of the agencies. There is one called the financial protection board, put in place around the time of doddfrank. It is meant to be a consumer advocacy group. A lot of republican groups think that group has gotten out of control, it is doing too many things beyond its original mandate. They want a scale that back. I think you are going to see the Trump Administration moved against the current head of that. One of the things we are getting out of the white house is we are not looking at the agencies and the rules, but the personnel as well. I think he is a person they view as hostile to their view and are probably going to go after him. They are going to dig into that personnels policy. That comes back to the funding of his agency and how the fed works. Do you think are the republicans going to find a way around the democrats on this, is the essence of my question. Craig sure. A 52 seaticans have majority inside the senate. Thee are some rules of senate the tiger hands on some of these things. On a lot of things, we think they can move ahead. Dirty little secret is, even democrats think it has gotten ahead of its self. I think republicans can find even some, some sympathy among democrats there. Systemically important institutions, what this says is if you are a big firm, i think it is 5 billion is the current number. If you are higher than that, if you go down, you can take on the whole system with you. Republicans say, look, we have made to many firms in that designation. It makes it too hard for folks to do this. We need to make it a little easier. Fewer firms in there. Even some democrats have been sympathetic to that. Community banks right out of the bubble up against small that have been caught up in this. Even some democrats would say, maybe we need to revise the regulations there. While this will be painting a broad brush by a lot of democrats as trying to take down the rules of the road on the Global Financial system, i think there are a few rip democrats supporting this. I think they will actually be able to a cop as most of what they want to do. Matt thank you very much, craig gordon from our Government Team joining us at almost 3 00 in the morning out of washington, d. C. Im sure you will be looking forward to a heavy workload today. Joining us now is the chief Investment Officer as across bridge capital. It is great to have you here. I know one of the stocks you own and like his blackrock. Im looking back Eddie Morningstar report on the from the role rule department of labor and stephen ellis, the analyst there says this rule could drastically alter the profits and Business Models of investment product managers like blackrock. What do you think about the fiduciary role question mark role and camewere decided into effect last april. One thing is that if you are an schemes, one of the rules tells you to do is to recommend the cheapest product. Cheapest product may not be the best product for the client. Adviserses are are given the leeway to it buys the best product, you could add to the earnings. Youre not paying only by pricing. A lot of banks Asset Managers are already into a trend where they are not making enough money. I have spoken to people who said doddfrank has been like the affordable air Affordable Care act of banking. You are either in complaints are not in complaints. Compliance or not in compliance. It is like comparing the car industry to the truck industry. Rule, is this a significant blow to the industry . The patent industry . Blackrock is interesting in this, but the flip side of it is vanguard. Does vanguard suffer as a result . I dont think so. It is just a good way to make allocation. An easy way. Cost has struggled to keep up, which is why vanguard has done so well. Benefited from a smaller management fee. But i would still say it has outperform it is recommended as part of the allocation. I dont think it will be a huge hit, but what it means is you may have more money being made by Investment Advisors. If you are constrained and recommend only the cheapest product, which comes with the strollers smallest of margin. The client wont make enough money because it is not the best product for them. That is where the discussion is, i would say. Matt the spirit of the directive is obviously that you recommend the best product for your clients interest, not necessarily the cheapest product. Maybe that needs to be overhauled because it isnt unfair to expect that your Financial Advisor has the fiduciary duty to you as his client. Absolutely. I think it should extend to the best advice and the best advice. I think that is where the fine line has been drawn. If you make regulations to restrictive and are afraid of falling foul of that, and youre not doing your fiduciary duty. Im sure the democrats are going to paint this as, going back to the old days of 1990 and having a free run. This is where the debate is. How can you make this good for andlient the investor, the Consumer Finance investment bureau. Some people like it, some dont. You want consumers to be protected but you dont want over regulate yourself out of the business. That is one concern with the Financial Sector for some time. You like jpmorgan. You like bankamerica. You like blackrock. Are you in these stocks because you think President Trump is good for those share prices. Do you expect the Financial Services industry, which has done so well since november 8 two really benefit to really benefit from having President Trump in office question mark office question mark maybe the first one, which i hope and was hoping came in march would come in june. I expect you will see Interest Rates go up. If you look at the underlying data in the u. S. , underlying data is not bad. Very decent set of data. The second thing is that republicans are seeing seen as more friendly to the market. We are discussing now about regulation and getting the economy to perform better in terms of gdp growth and financials to do well. Definitely based on that. I would say there is a bit of a paul on the trump trade at the time. Is his first hundred days. You will have a lot of and two steps back, one step forward. But i still believe we are on track and will see growth. If things were to get much better, you might see an inlationary thing happening the second half of the year and maybe more response from the federal reserve. Will benefit the financials. That is my play on that. All right, you will stay with us. Friday morning, it is jobs day. Lots going on out there around these markets at the moment. Lets catch up with the bloomberg is this flash. Sophie snap ink will become the first u. S. Social Media Company to file for an ipo since twitter. More than three years ago. The maker of the disappearing photo app snapchat filed for 3 billion. They say snap plans to raise as much as 4 billion in the ipo for a market value as high as 25 billion. App amazons expected earnings for the quarter indicates step up spending on warehouses, movies and gadgets will continue. Both sales and the forecast missed analyst estimates. Operating income for the current period is seen at 250 900 million. Less than one year earlier despite forecasted revenue increase as high as 22 . Honda raised its forecast for operating profits for a second time this fiscal year on rising demand in its two biggest markets. The u. S. And china. The company says operating 6. 9it will probably rise to billion dollars in the fiscal year ending in march. That is an increase of 21 from an october forecast. Those projections could be clouded with protectionist u. S. Trade policies raise costs. That is your Bloomberg Business flash. Guy . Guy thank you very much indeed, sophie. It has been a busy morning. This is a fight to assert control over bond yields after disappointing bond purchases earlier the boj has offered to buy unlimited amounts of fixed rates. Nietzsche you the chart. Let me show you the chart. This is the first boj move in. You can see what is happening in terms of pricing. Prices go down, then we get a second reaction coming through with fixed rate operation coming through here. You can see a fairly bumpy morning and afternoon sessions coming through. Joined by our macro analyst strategists. Mark, will the boj be happy with it stays work . Mark probably not. They have success, yields back to where they want in the tenyear part of the curve, but they have sown confusion amongst investors. It is notable that when they offered to buy unlimited bonds in november, no one want to sell any. Today, they managed to buy over ¥7 billions worth. That shows the the people took them on. Matt Bloomberg Intelligence argues that may the boj doesnt necessarily want to keep the curve so tight in the middle. Maybe they are willing to let it go more than 0. 1 in either direction. 10 basis points in either direction. What you think about that argument . Mark i think that is potentially fair. Main problem is they are not making clear that policy. They erode credibility. We dont have an exact target, we wanted to fluctuate around 0 but will let it move a couple of weeks. Make that clear. If you imply you are planning to keep it a yield target and then completely ignored, you send the wrong signal to traders and markets. In terms of the size of the operation we could expect, are they going to sequentially have to get bigger . Mark definitely. While global yields are rising, it is important to note that this yield came along with the u. S. Driven yields from november , and ofame a bit behind global yields start falling, it will be less of an issue. He will have to keep stepping up purchases but have the ability to do so. Matt i wonder about political concerns and whether that is a consideration here. Shinzo abe is scheduled to meet donald trump next week, february 10. Earlier this week, trump asserted that japan isnt playing the money market to keep its currency devalued. He said that about other governments. Was the bank laying off as far as yield curve control and an attempt to get out of eight currency manipulator spot . Perhaps. That is a valid observation and maybe we havent given it enough weight here. When they did come in and make those unlimited purchases,. Ollaryen spiked if they say, we are tight in the yield and wont let it flow, dollaryen will pop. That doesnt look good ahead of this meeting with abe and trump next week. Matt you have argued over the past week that his executive orders have eroded the brand of the usa as the place to do business and the place to invest. What you think about his move now to remove the fiduciary rule and fulfill his Campaign Promise to instate a broad review of doddfrank . Mark i think a broad review of doddfrank is essential. There is far too much regulation in the industry. What is worrying is if it will be scrapped without replacing it with something better. As is a slightly worrying sign about how it is presented, but i have not had time to see the proposals for a replacement. Owing how the policy has been working so far, i am not sure there are better suggestions yet, but i hope they will come in time and a better solution can be found. Guy we will leave it there. Great stuff. Go to your bloomberg, you get this blog which runs around the Global Market day and get you a running commentary on some of the more interesting elements to what is going on, some analysis, the latest on what is happening with the turkey and cpi story coming through. Mark is still with us. You can see what the boj is doing. Ende dont know what the game is. Theythe boj wants to will continue to buy. They are targeting the 10 year yield at 0 . Whatever they dont buy, will spike. When i see dollar japanese yen is going to rally, i end up buying more japanese equity and 112 we saw yesterday is a sign you are going to have stronger dollar and bigger japanese that weaker japanese yen. I recommend going long dollar. That is my trade. That is the only way i play. I dont look at the bond market in japan. It is interesting to see, given the size of the Balance Sheet boj has, you dont know where it is headed. Lets take a quick shot of theresa may arriving at the event in malta today. A firm focus on what donald trump is expected to deliver for the eu the leaders are arriving today. This meeting is about immigration. About how to control immigration out of north africa, but i expect what is happening here is a eager conversation, particular ly around recent events from the washington side of the pond into the eu and how this will affect how the eu progresses from here. Leadership source from Angela Merkel. But i expect theresa may could be an interesting person to talk to at this meeting. The world is confused. They dont understand what donald trump is trying to deliver here. We are waiting for the fiscal news. Immigration,ews on a little news on Financial Regulation now, but what we want really in essence is how big this fiscal pushes going to be. The fed waiting in the wings, what is your take . Manish i expect the payroll all be in line of what we saw few days ago. You are absolutely right. We have not seen or heard much about infrastructure spending. Repatriation of capital, we havent heard anything on that. Maybe these things come down the line. I still hope have a feeling these things are going to come down the line and he will follow up on Campaign Promises. But to me, you mentioned about trump, the biggest impact i am looking at in europe is his policies. One thing with people, they are forgetting the greece bailout. That can be a bigger thing to talk about. Matt that is a huge issue to talk about. Im glad you brought that up. We are going to talk about that because the u. S. Has an important vote at the imf and the imf has an important vote in the greek ballot bailout. Coming up, the market open four minutes from now. Futures pointing up. The open is next. This is bloomberg. Guy welcome. Mr. Matt miller has your morning brief. Trumpismmatt present ordering a review of the wall street reform. . He congress back change our yields moving the bank of japan . Trying to control the curve but hasnt been a success or has shown that confusion has it s ewn confusion . Transatlantic relations. Here you seem all caps off of the graph getting ready to me. Meet. The possible ambassador to the eu from the u. S. Will it help or hinder relations between the two . We will talk to manus about what is happening in europe in a few minutes time. Are seeing a positive start to the day. Manus cranny, what is going on . Move . Is it a doddfrank stocks are actually better. The bank of japan is one of the messages that is coming through. The Central Banks remain unwavering in their ability to be in the markets. Have a look at this. This is the market. It spikes up to 1. 5 . The bank of japan said no, no. That is not part of our plan. We are not going to allow you to dictate where the yields are. We are targeting you. They came in unannounced, did what they needed to do. They brought to the market back to base. 1. 41 . The bond markets are going to be something the bank of japan obviously something they want to defend. We are overly pricing the negatives when it comes to Political Risk. Especially in france. Off to global radio, come join me if you get a jump in your car. Anchor looking at the movers, i will talk about the metro. Recording profits for its christmas quarter that missed estimates. Especially in russia. The ceos planet to try to boost shareholder return by breaking the media market in Electronic Stores away from cash and carry. Shareholders will vote on that plan next week. And has a intesa responding in a statement to press reports a share bid for generali imminent because part of the Bank Management regularly carries out the groups options for internal and external. Keep an eye on these stocks and intesa. Arly on keep an eye on those to watch the dividend and any comments on potential m a. Matt lets check on what banks in an managers are doing this morning. Rise after the comment from the President Trump camp. Asset managers and hedge fund managers, they are not much reaction. You see man group moving higher. What deutsche bank, berkeley, Credit Suisse are doing. They are up across the board. You make two interesting distinctions. The doddfrank news is separate from this true news because it represents all the big money centers. Will have winners and losers. Accounts you have factors in factored in the costs. But a stockbroker deals with buy and hold investors this was never part of what you counted on paying for this is where the extra cost come in. Guy theres an interesting aspect of this as well. The longerterm stuff related to the cost of funds is interesting. If you look at some of your different and how fundus perform you take relative performance into account and you advertise the cost of our own purity of Time Research suggests cost is a bigger factor in the ability of a fund manager to generate the former. There are all kinds of elements havingwill going towards a meaningful impact on the passive side of the industry. Really important that we do the two different industries. Businesses,ferent separate markets. If they are classified as also spoke they are in very different businesses. Does thisfactor is favorite london or new york . I think it favors new york which feeds into the Brexit Debate as well. Matt new york is where we have seen the most concern. Morningstar says it will cost 13 billion per year. About thealking Morgan Stanleys of the world. The Merrill Lynchs of the world. Mother merrill will bear the biggest burden of these costs. The interesting thing is as an investor you get clear winners and losers so you can place it is easier to place bets when you have Something Like this in your news flow. The outcome is binary. Who do you think will be the winners if donald trump is able to be reverses legislation . The bigger ones had in an advantage. Smallerto closure of firms. It will probably give more choice to investors which is good for consumers. Have more to pick your advisor from. They will probably make more money than at this time. Consumer point of view and you will have more choices. That is but i think about. Guy increasingly the speakers i speak to are telling us that effectively the fight is not is with new york. It is been interesting to hear them talk about this with berkeley. That is where the fight really lies. If the Regulatory Burden is going to become easier in new york, is london going to lose out . Reporter youre right because the fight is between london and new york and whoever has less burden will benefit. We have to see how the u. K. Will respond. That is why the u. K. Is coming out of the eu to have control nd we haven laws not seen that yet. If you take into account travel bans, funny about having a lot of people nervous. Passporto do with your. That could swing it back to london. The Prime Minister is not in favor between london and new york and new york will have an advantage if they get rid of doddfrank. That will come about we will come back to that. All this coming into the same idea. Manus will stay with us. Of the multisummit. Meeting to discuss migration and donald trump. Was u. S. Job numbers late today. What it means for the fed and the Trump Administration and the definition of full employment. In the running for the job of u. S. Ambassador to the eu. An organization he is not in favor of. 8 40 u. K. Time. This is bloomberg. Matt welcome back in berlin. We are up across the board. The are games the end the dax and the ftse but everything is. Reat and President Trump is going to try to halt the fiduciary rule and take a broader review of doddfrank. Turning a lot of those regulations allowed. Around. On the financial tile, clicking on this part. You can see that banks are doing better in a diversified financials. Insurance companies are in the middle here. There isnt a heck of a lot of movement on the bigger index, you can see there are winners and losers on the news today and it will be interesting to watch it the out throughout the morning. You can see this very clearly on the screen as well. In to theing back stocks that got hit earlier this week. Calexico trading higher. What youre seeing is money rotating out of the mining stocks. That is an interesting little twist in terms of the way the money is flowing. The market front and center but what you are seeing is a live shot of the eu leaders arriving at the security shutdown. Guy i suspect Christine Lagarde will be paying a great deal of attention to what is happening here lets start turn our attention in more detail to the conversations happening in the lesson. Theresa may became the first head of states to meet the issident last week caroline, how front and center will trukmp be . Theresa may walks in about 15 minutes ago. She did not comment on her way question of how to response to donald trump declarations about europe. Europe wants to stand united two days before the summit. Post ancil president letter urging europe to remain united. He said donald trump has not now joined china and russia along the threats against the future of europe. We caught up with the Eu Council President last night in the letter and he said his main goal is to find a solution to the crisis with all these refugees coming from the libyan coast. Our goal is to stem the flow of a regular migration. This is the only way to stop sea and also the only way to gain control over migration in europe. About clearly it is all defending the european value. Defending what the European Union project actually means. Poland who does not want to alienate donald trump because they are concerned that he is a key ally for europe. Theresa may seems to be in a good position to broker the two parties. How much influence will she have on the talks . She wants to be a bridge between the United States and europe. A s expected to push for she wants to relay the message of donald trump after she had a meeting and Donald Trumps office in the sea. Hes backing the Nato Alliance so clearly she wants to act as a bridge. She wants to join the eus illegalin fighting the migrants roads. A very subtle way to handle his comments. They are aware that theresa may might a new relationship between the u. K. And the uss leverage in negotiations. Continuing our coverage of that meeting and the letup. You say mrs. Angela merkel better watch out. On the one hand she has challenges from the reich right. On the other hand she has here in germany, a challenge from the left. It is starting to look like a real election a Real Campaign for september. She may not win as easily as previously thought. That is one reason why you have to look beyond the data. Talking about millions of jobs created. Should have one. The democrats would have stayed in power. People have a thing beyond booking at the data. Weve seen a gdp growth and germany. Is coming from spending on the Refugees Program people have something to say about that. My point is we should not take it for granted. Im not saying that he will be a better leader because lets not bleat forget this is a Coalition Government and if anything she is any more leftwing than Angela Merkel. People are not looking for a rational explanation. That is something to definitely bear in mind. Guy she is the definitive leader of europe. Matt is it logical one donald trump wants to break off with the eu . Guest in that administration there is an ideological violence that they see germany as somebody who has taken more trade or business away. Economic and ideological. That theviously think government is not the way to go forward. If you look at what the u. S. Wants, the u. S. Will not get lowpaid jobs back. In germany they are in japan. These are places that need jobs billionapan has a 70 germany has the same number. Is it being driven by currency law . There is a view in the Top Administration that the euro is weak and germany benefits. They may be right or wrong with that is something in the thinking of the administration. Matt you had a boulder take than most on your thoughts to the viability of greece in the eu. How does this affect your daily k as an investme guest we dont get caught in currencies as much. Like in the short term i am long european equities. I the pen has a smaller chance of winning. The market will keep pricing that risk. It becomes evident that the pen may not win. European equities as well. Then you see what happens in greece. This is what some people are talking about. The u. S. Has a majority stake in imf and imf has an Important Role to play. I am long european equities but i would review that in april or may and see how things are going with respect to reason. Thank you very much. Get to talk to you. First word news with sebastian. Sebastian. Japan buying it now limited amount of stocks. The bank will fight 510 year securities from the markets. Offering to buy the 10 year notes at 0. 11. Apanding upon purchases and operation that failed. Retirement advisors to work in the best interests of their clients. The new it menstruation reviews the rules. President ordering a review of the dodd frank act in response to the 2008 crisis. The ceremony around noon eastern time following a meeting of a tightening Monetary Policy by raising Interest Rates in market conditions. Cash demand is expected to ease into the new year holidays. 740 by 10 basis points each. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries this is bloomberg. U. S. Jobless rate held in january at 4. 7 . That of todays report 1 30 p. M. At or near full employment. President donald trump and his team spent last years Election Campaign it phony and it overstates the strength of the labor markets. An alternative indicator that discourages workers and those not looking for work. We talked about this for a while and the measure has always been that issue. The unemployment measure that may be stands a little bit or substantially higher. United states at 9. 2 . Good morning to you. How significant is todays payroll number . Reporter consensus of 175. An economy at full employment. A little bit of wage growth and not going to be super exciting in terms of growth and wage growth. U. S. Sectorsthe like energy, material, infrastructure which are going the firstl there for half. Slowly. Es are going up trade going to significantly lift u. S. Wages because if it does invest in implications . Theres a limit that comes back to productivity growth. It comes back to investment spending. The big question around the world and in the u. S. Is how much investment spending are we going to get . Trump could take initiative. In terms of being able to write off investment spending, there is a negative aspect of not being able to use a debt payment and use it at pentecost. Think matt you favor mid caps and Small Companies over small ones. That is based on the protectionist policies . That trump wants to make America Great again and will take a number of initiatives on that side. Trumpflation until now has led to u. S. Dollar strength. Think u. S. Dollar strength matt continue talking about what he likes and what the Prime Minister will be planning. To bloomberg. Back we are preparing for a big day of news in malta as the eu gets together. Rising policy risk in europe will hamper eu integration and merkel will meet later on. Those are a couple of headlines to watch. At the miami for screen the u. S. Administration sometimes doesnt understand the eu. Paving away for a fight between the two global superpowers . How things are shaping up as far as the equity trade. Take a look at markets, gains across the board. Half a percent. Cac is up. 6 . He see the big banks and Financial Centers gaining in paris. Bp helping toust push up that french index. Watching . Ou reporter the Holding Companies specialist insurance. We have seen the stock gain for the most since 2009. Uptime percent. . 10 per share. These lines along with numbers, return on equities, net investment income. Market reacting positively. One of the best performers of the stoxx 600 on the session. One of the worst performers down 5 at the moment what the session has hit a 2017 low. Dropped the most this year so far as well. One genotoxic real estate a fourthquarter loss of 3. 6 billion euros to 3. 9 billion. Drawing a line under the property bust. The ceo speaking on a webcast this morning saying that the core business is strong, so much solvent, and can count on internal levers to boost capital. Nonetheless the shares we call not trading quite as well. Dropped as much as 9 . Tinto, glencore seems to be after the china and the tightening by the pboc. Guy we continue ct to see a at the summit of those leaders. Exactly what comes out of this in terms of the response to donald trump. The u. S. Administration sometimes does not understand the eu. , do u. S. Investors understand the eu market . Reporter european voters potentially dont understand. Area and from an investment perspective we are selective because in spite of the lower valuation, the Political Risk is significant. Think it will be difficult for investors to really take a stand just before an election and be bullish going into that. There are signs of life guy if you could take the political noise out, how much better with look . Tuation nothing really bad happens, what does the picture look like . Of what we arese seeing in terms of growth, for the moment we are selective. With like germany. The election that is the most important to watch. To be more optimistic, a barbell that strategy of germany and italy would work to be able to dance electrical difficulty. What do you see happening there . Are you not convinced that the eu will come together solidly and pull up those that have not been as successful as germany . Question,back to guys the belief in the european project is higher to europe and in the u. S. This is what we see with clients. Hesitation ahead of the election goes all in and the periphery is a higher data, more on tile while we have that relatively cautious overweight in germany. I assume youre talking about the equity markets. What about debt markets . I have read you like highyield in the u. S. More optimistic in the u. S. That we are looking for the u. S. Treasury toward the end of the year. Lot. Ield come down quite a we are at 1. 35. That would help returns. We have the acceleration of the u. S. Economy. The Energy Crisis helping very very slowly is clearly with yields going oneways with volatility spreads which we are seeing now ahead of the election. Guy how hedged on currency do i need to be . , increasingly 100 focusing around what is happening with currencies. When you talk to clients what are they saying . Guest over the last number of months, the real driver has been the u. S. Dollar. Much more than risk on a risk off. You cant have your cake and eat it here. You cant have a weak u. S. Dollar and markets rallying. On the u. K. , on the japan in particular. Important to look at hedging through those markets. If that is not your home currency, a result of your investment should be considered at the same time. Guy a Significant Impact on what is happening here. When you are looking around the world and youre looking at how you position yourself, you talk about japan and what happens in europe, the u. K. , the strong dollar obviously features in all of this. You said you had to lead with us. In terms of the effect that will have, how big are we talking . For the u. K. We think the sterling will slide the whole year. For most of the other currencies the u. S. Dollar has strengthened the first half. In terms of magnitude the maximum we see for the emerging markets is a 10 move. For china it is more a 5 handle. The euro probably ahead of the election. Afterwards crisis. There are good things going on in europe. That probably means the euro is the first one to be able to recover. Angela merkel just arriving. We will see what she has to say. Clearly an interesting summit for her to be have to manage. She figures out a strategy for dealing with the immigration policy as she deals it with a house. Out of the white we will get the flash is for you. We will figure out exactly what she is saying as you look over somebodys head to see the chancellor. Thank you to the chief strategist, conversation will carry on. 9 00 a. M. Matt, philip, and i will be on digital. Trying to get an analysis of where Angela Merkel sits on what her policy will be. The summit is getting underway and this is the president says the changes in washington have put the block in a difficult situation. Iscussing those relations that conversation coming up next. This is bloomberg. Matt Angela Merkel in malta for her meeting. N a two minutes time you can meet with all the leaders there. She told a group of reporters outside the building she is going to seek to improve conditions for refugees. Really going against the grain of what the u. S. Has been doing. She says the eu has its own fate hands. This will be a meeting to get together and provide a united that to the populist wave has swept across the u. S. And britain. Interesting to see theresa mays role as well. We will continue to bring you headlines from the eu meeting in malta. Halting and obama legislation to require ordering a review of the dodd frank act in response to the 2008 crisis. That is going to a white house official. Scheduled to issue it around noon. The first u. S. Social Media Company since twitter. The nature of a despairing photo app 3 billion. The app has 158 million daily users. Amazon indicates spending up on warehouses, gadgets will continue. Operating income for the current. Despiten a year earlier a revenue increase of 23 . A fourthquarter loss, 3. 6 billion euro. Pages eight happening uber ceo is stepping down from the Trump Advisory Council after criticism. \on social media after his particular order. Immigration is vital to the u. S. And his company and remaining on the council would get in a way of advocating for just change on immigration. Eu leaders are meeting for the First Time Since resident trump forecast the end of the eu. Eu president donald tusk ranks threat trump as a threat to the future alongside china and radical islam. Own fate in its hand. Our next guest, what he will be doing next. Reported to be in the running for the job of u. S. Ambassador to the eu. Good morning. Thating to ask you about running a program for nonexecutive erectors. Reporter current job guy there has been some speculation that you may be the next u. S. Ambassador to the eu. Can you give us clarity . As i is set ive obviously talked to the president , been interviewed by the Transition Team for that job. Other than that there is nothing to report. One way tour nomination. One does not get a nomination. Currently waiting for the confirmation of secretary of state rec wrecks tillerson which just happened. Deputies,vestors, under secretaries in the state department will be named. These decisions will be forthcoming. Sometimes the new u. S. Administration sometimes does not understand the eu. What are your thoughts . Reporter sometimes the eu doesnt understand the eu. A fairly Bureaucratic Organization that is very difficult to explain internally and externally. It takes time to understand what the eu is. History, where it has been, where it is going. Its current state, its ambitions, whether it is an economic integration or has a big political agenda. Guy are you proeu or error you antieu . Or are you the party they have written to the commission accusing you of malevolence toward the values that define the European Union. Theyve never met me, talks to me, or read anything i have written. In this characterization. I have not read it the letter, i have read the account in the guardian. Is addressing the question of a future ambassadorship and whether a person should have only proeu sentiments or views. Within the European Union there are probably three or four different views on what the European Union should be or where it may go. In the parliament youre talking about the constellation is sprayed across the spectrum. Frankly the americans get to pick. It is never the case that the country gets to pick the ambassador is. You had a previous role with the you and and geneva un role in geneva. Bringing down the soviet union, maybe there is a union of that needs taming . What do you think needs to happen to tame the eu . Reporter basically overstepping its capabilities. The question is what the european states want to see for the European Union. The most significant political facts on the immediate horizon is brexit. There are other elections of course in the next number of months and over the course of 2017. The whole question of european integration, the future of the euro, the European Union in or out is very much on the ballots. I would like to see more countries have referenda. The citizens of the countries make democratic decisions about their own sentiments of a European Union of one sort or another. States,t for the united clearly, to define what a European Union is. Me still ask you to get a shot of the definition of what it should be. Dont you think it has been allow people and to travel, commerce across borders without having to . Eal with red trait red tape guest you just had that debate in the u. K. And there were arguments and i am an economist so there are arguments on both sides. Also very much part of the debate. Country you have a different answer to that question. The u. S. View is not proor anti, we are trying to deal with whatever constellation the europeans put forward as a way and inpean investment terms of European Economic integration. As an economist who studied at email and oxford and Margaret Thatcher called you her global sherpa, what do you think about the basic idea of free trade . What you think about barriers, beingtory and otherwise, struck down to allow people and money to transition across them easily . Whole economists, i would put myself in that category, favor free trade. To the benefit of free trade. However, increasingly, it is clear that we need a degree of fair trade as well. So that we look at the imbalances that struck up in the International System and sometimes currencies or countries manipulate trade to their own advantage. Obviously there is a dumping of goods in Global Markets and effeminate relation of currency so i think part of what President Trump and his new Economic Trade Council will be doing is looking at these questions with greater scrutiny bilateral treaties that there would be a fairer notion of this. Guy isnt there a danger that if we were to see a weakening of , that would lead to a strengthening of the dollar and not be good for u. S. Workers . Reporter we have witnessed a you weakening and the euro depending on which time frame youre looking at. Im not a currency. Reporter most of the economists i talked to are suggesting even an immediate future of parity between the u. S. Dollar and the euro. Some of which are Political Risks, becoming a part of the euro. This is an objective thing. Interest rates on the United States also leading to a stronger dollar if they are creeping up . Yes. Guy is germany abusing the currency . Economists have made studies. It depends on which timeseries you are looking at. Germany has tilted the tables towards itself. Particularly spain, portugal and greece. It is grossly to a disadvantage of the United States because it leads to cheap exports coming from germany and flooding even the u. S. Market. Do you think the registration has a view on what the role should be in the greek bailout passage . Guest i am not privy to that and not in the administration. A discussion frankly about whether there should be a bailout and whose responsibility thats would be and by greece continues and a stagnating situation it has found itself over past series of years. I dont want to speak for the greek there is from an economist perspective, a strong reason for greece away from the euro. Professor of strategic leadership at the business school. Stay with bloomberg television, surveillance coming up next. Bloomberg radio still on the airwaves as well. Will be walking over to our respective booths and join the conversation. Plenty to come. This is bloomberg. Francine rolling back regulations. Trump orders a review of doddfrank and else the socalled fiduciary rule. The first jobs day of the trunk era, but as the u. S. Nears full employment, the new Administration Says old criteria overplays the strength of markets. Theresa may heads to a summit in malta, hoping her relationship with donald trump can gain her leverage and brexit negotiations. This is bloomberg surveillance. We have a great impact show coming
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