Transcripts For BLOOMBERG Bloomberg Surveillance 20170426

Credit suisse. Mark barton in london with your data check. Mark looks as if the fiveday winning run is sputtering or stuttering. Choose your word. Down by 0. 1 today. The stoxx 600 boosted by results of the firstround of the french president ial election on sunday. The optimism is among investors that Emmanuel Macron will emerge victorious. Eurodollar, weve been as high as the november high yesterday, just crossing 1. 09. The recent rally also spluttering, stuttering, or spluttering. German 10 year yield was at a end of march high yesterday. Yields creeping up in germany and across europe. Towardsd a propensity riskier assets this week in the wake of the French Election. Nymex crude, big stockpile data today. Down by 0. 3 . 49. 39, francine. Francine stockpiles really in the last couple months have been able to change. Now, mark, lets get straight to the bloomberg first word news. Heres nejra cehic. Nejra donald trump is set to propose a 10 tax on more than 2. 6 trillion in earnings that American Companies have stockpiled offshore. That is according to a white house official the milieu with the tax plan. They say the administration will call for cutting the top income tax rate on passthrough businesses to 15 , down from 39. 6 . Stock market valuations have become divorced from reality as the likelihood of tax policy changes could drive Company Earnings to slip. That is according to David Einhorns greenlight capital. The cautionary note came as the nasdaq closed yesterday above 6000 for the First Time Ever. Einhorn has warned previously of inflated prices caused by central bank easing. The firm said earlier this year that tax reforms could be a boon for Economic Growth and favorably affect some positions. The latest letter has revised the more cynical outlook. Marine le pen as sought to soften her position on europe. Speaking on the countrys mostwatched television channel, le pen said the euro has been a weight on the french economy, but refused to be pinned down on whether she wanted to leave the single currency, a position shes previously championed in her campaign. U. K. Prime minister theresa may will host Jeanclaude Juncker and the e. U. Chief negotiator michelle bonnier at downing street later. It will be her first facetoface meeting with ba rnier since she took office. This afternoon, may will face labor leader Jeremy Corbyn for the final Prime Ministers questions before the june 8 vote. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. Im nejra cehic. This is bloomberg. Francine. Francine thank you so much. We are here in zurich. Critics we see is to raise 4 billion francs and abandon its plan to sell part of its swiss business. The announcement ends weeks of speculation. Credit suisse posted a profit of 596 million francs. I asked the ceo, Tidjane Thiam, about the banks capital measures. Circumstances, [indiscernible] that was always part of it. We always said complete restructuring. We still have about 900 million of restructuring to go through. Francine Tidjane Thiam also spoke about the Wealth Management business, debt insurance, and his plans to cut costs. Wendy more from the ceo shortly. Mark, i think were going to berlin. U. S. Commerce secretary wilbur ross says the decision to slot tariffs on lumber imported from canada should serve as a warning to its partners. He told bloomberg ties between the two nations leaders havent changed. The u. S. Is planning stricter enforcement of trade laws. Irk i dont know that dont know that anything has changed in the relationship tween President Trump and mr. Trudeau, but whatever the relationship between the two of them, trade violations are trade violations, and will be dealt with. Francine lets go straight to matt miller in berlin. Hes joined by canadas minister of foreign affairs. Matt thanks very much. Minister freeland, appreciate your time. Let me first ask you what canada plans to do about this new tariff on lumber. How serious is that and how quickly will the trade ministry spring into action . We are springing right away. As you know, the lumber dispute is sadly familiar to americans and canadians in the industry. This is actually now known as lumber five because it is the fifth time weve quarreled over this. We have won the canadian position has been upheld every single time in court, both at nafta and the wto level. We are confident our position is going to be upheld again. We really think these allegations are just wrong. We are going to take it to court and we are confident that, as has been the case every time in the past, were going to win. In the meantime, we continue to negotiate. The president and the Prime Minister spoke last night and both agreed the best outcome is to get a quick negotiated settlement. One of the reasons that is a great outcome not just for canadians but for americans is, your economy is really starting to take off. For the u. S. Economy, homebuilding is so important. For middleclass americans, being able to buy a new house is so important. What people may not be aware of is, lumber prices are very high right now, which tends to undermine the idea that the market is being flooded with cheap, underpriced canadian lumber. Lumber prices are very high in the United States. The average price of a home according to the Home Builders association has gone up 3600 just this year. Dispute isving the in the best interest of canada, but also of the United States, so those middleclass americans, including the ones who voted for this administration, can afford to buy a house. Matt you said the Prime Minister and president spoke last night. You spoke with the president s daughter yesterday in berlin. I know that Angela Merkel has seen ivanka trump as a possible conduit into the white house. Some would say a back channel. Im not sure that is the right term. Do you feel you can have that relationship as well . I mentioned our trade issues to ivanka. We had a conversation. Im the foreign minister responsible for the relationship and this is very high at the top of my agenda, but it is not her particular area. Wilbur ross is the guy in charge for the u. S. I had a good conversation with him on sunday, a good conversation on monday. Lines of communication are open. Matt how do you think she can help you, that ivanka trump can help you into the white house . Justin trudeau has also invited ivanka to canada to participate in some issues. Also sees her as possibly a conduit. Our main conversation with ivanka and the issue shes focused on in berlin and what ive been working with her on is empowering women in business. We set up on our first summit meeting with the white house a canadau. S. Business womens council. That counsel is really starting to do some exciting work about promoting Women Entrepreneurs in north america and around the world. That is really on cause focus, as well as really ivankas focus, as well as childcare and leave. Matt so you are speaking mainly with secretary ross about the trade issues. I know that renegotiating nafta has been an important issue for the Trump Administration. I have a screen on the bloomberg. This shows the United States trade relationships with other countries. Canada is the second biggest, half 1 trillion of trade every year with the u. S. Canada buys more stuff, to put it in laymans terms, from the u. S. , than any other country in the world. Needs toink that nafta be renegotiated . Chart me pause on this for a minute and say, well done, bloomberg. Your charts are amazing. This is a really important chart for me. It is an important chart for americans to understand. Cannot and the United States have such a seamless economic relationship. Sometimes americans dont think about it that much. The reality is, we are your number one client. Almost double china. Matt and this is only goods, right . Exactly. This understates it. So i would say to my american friends, be nice to your clients. We work hard at our relationship with you guys and i think it is in the interest of the United States to keep the relationship strong as well. Nafta, we areto ready to come to the table anytime. The u. S. Process is quite elaborate. , as there waiting for administration has told us, and has told americans, is they plan to trigger a 90day process with congress. Only after that can discussions begin. That process hasnt been triggered yet. Matt do you expect that this year . You know what, its not my process to run. Weve heard from secretary ross and from the president that they would like to get going and canada is ready to come to the table anytime. Matt ive put canada in the dropdown menu so you can look at it from your perspective. Youve got the u. K. There in a solid three. This is only exports. Let me put it in terms of total trade. Countries as a conglomerate would be a much higher position than japan, mexico. How is the deal you are working on progressing . The europeancanadian trade deal. Im very familiar. I hope your viewers should be too. Iar with ceta im going to be clear. Free traderashed and canada is a trading nation. We believe global trade is winwin for our country, for the world. I know that is not such a popular sentiment for governments to express, but i think probably Bloomberg View was believe in trade. Canada really believes in trade. We were proud to get ceta done. 2016, 2017 were not easy years to be promoting trade. Ceta is in many ways as close or a closer treating relationship than nafta. In itsnow been approved third reading by Canadian Parliament and the European Parliament has no voted to approve ceta. They did that earlier this year. There will be provisional entry into force of about 90 of the agreement in the next couple weeks or months. Ceta is going to be a reality. Really great training opportunities. Britain is going to be part of it. Matt the u. K. Is on its way out of the e. U. How will that trade relationship progress . You cant legally negotiate with the u. K. Until after the brexit is complete. You are absolutely right. The good news for canada and the u. K. Is the u. K. Is still part of the e. U. Enters intoeta force, it enters into force for the u. K. As well. What we have said very clearly, what we have heard from the british, from boris johnson, from Prime Minister may, they are extremely keen for ceta to be a floor of our economic relationship. That is just going to be the start. We hope we will be able to develop, when britain is ready to come to the table, a closer relationship. That brings ceta, down almost all tariffs immediately. One of the things we love about ceta is it opens up Government Procurement on both sides. Matt thank you, minister. Unabashed your time, free trade proponent and foreign minister for canada, christina freeland. Mark barton, back to you. Mark great job. Lets get back to banks. Credit suisse, weve had earnings from banko santander, spains biggest lender, reporting a profit. Political stability returning to brazil. Income rising to 1. 8 7 billion euros. Lets get more with bloombergs European Finance managing editor, elisa martinuzzi. Also joining us, Peter Kinsella. Is that it . Capital concerns put to bed or not . Elisa that is pretty much where you are today. Both in terms of what the ceo told us and the reaction on the markets. Shares are up against a declining market for banks today. People really seeing a turning point in the capital, but also the operating performance. This was a good quarter. Analysts called an impressive beat with all the units driving profit. Mark still, you would have to say the jury is out on thiam. Hes under pressure to show that global marketss division are paying off. Are they . Elisa the quarter was a beat. Equities wasnt as strong, relatively weak actually, but the cost cutting is bearing fruit. Compared to this time last year, when there was surprising bosses, they are in a good place. Mark i look at one stat on our am gmt function, total return 19 , his peers up 3 . There is a divergence. Now is a time to raise money as unicredit and Deutsche Bank have shown. Tosa what theyve set out do is raise capital from 2015. Theyve given themselves the option that they could do it through this ipo. What investors have told them is, hang on to that crown jewel and try to bolster capital through other means. Mark lets talk about santander, one word, one country, brazil. Elisa having said that, this is the first time in a while in which the bank are seeing Economic Growth in the 10 main markets in which they are present. The u. K. Has taken a hit with the weaker pound. The economic story is still strong. Question to quick you. Thanks benefiting from this upward movement in the yield curve, which is based on the premise of this reflation trade. Is the reflation trade still present or is it lacking a bit of momentum . 3 i would say it is lacking a bit of momentum. If you look at certain commodity priced developments, the kind of flatlined in the last number of months. I wouldnt say the reflation trade has huge momentum. If we look at the socalled trump trade, that also seems to be running out of a little bit of speed. Were kind of losing momentum rather than gaining it. Mark we will talk more about trump in just a second. Elisa martinuzzi, thank you. Peter kinsella stays with us. Up next, trump tax tactics. The president said to be planning a 10 charge on cash abroad. We will look ahead to the administrations big announcement. That is next. This is bloomberg. Mark donald trump said deborah was a 10 tax on earnings American Companies have stockpiled offshore. They also say the administration will call for cutting the top income tax rate of passthrough businesses to 15 , down from 39. 6 . Still with us, Peter Kinsella thomas strategist at cba. It is the big market event today. You were saying the trump trade has lost some momentum. Is this going to give it some momentum back . If most of these revelations about trump tax plans come true today . Peter im not sure that it will. What weve seen from trump in recent weeks and months is that hes quite high on big bbing, headline grabbers, but they are short in detail. Are going to basically see principlesbased approach to what he wants to do. Whether he can actually get that through congress is a different story. If you look at it, the tax cuts hes proposing over a 10year period will cost about 2. 2 trillion give or take. Many members of the Republican Party wanted to the revenueneutral. It will have to be offset by tax increases elsewhere. Getting it through republicans is going to be difficult. Im sure they will compromise somewhere. We do have midterm elections next year. No politician wants to go back to his constituents and he handed. Mark what about a tax repatriation plan . The plan is to propose a 10 tax on more than 2. 6 trillion in earnings that u. S. Companies have stockpiled offshore. Trump thinks the figure is much more. If only a small portion of that comes back, they could pay it in dividends, if they put some to the u. S. Economy, surely that has a big impact. Peter i think first of all the 2. 6 trillion number bandied about here and there, in reality most corporates old probably half of those profits in dollars already or in dollardenominated securities. The effect on the dollar wont be as aggressive. It will be a big deal. Theres no question about that. Just not as big as many are making out. In terms of an equity market perspective, we will likely see increased buybacks, a positive effect on equity markets which are already trading at rather expansive levels in the states. I think that is the main effect. Whether that gets spent in the economy in terms of actual investment, a lot of these corporates are already cashrich. Not invested when Interest Rates were incredibly low, im not sure this is going to lead to further investment now. Mark lets look at the u. S. 10year yield. 2. 3 . Rangeg that 2. 2 to 2. 6 that weve been in since november. What does that tell us about trumpflation . What does it tell us about the fed . What does it tell us about the u. S. Economy, the Global Economy . Peter weve kind of come a long way. Prenovember, we were trading around 1. 7 , 1. 8 . We got as high as 2. 6 before the march fed. Weve seen a steepening. That is kind of consistent with the message the fed have been telling us, that they want to hike rates three times this year. It tells us the u. S. Economy is in better shape. I find it interesting that weve been unable to break higher than that 2. 6 . Thats quite relevant. If you saw u. S. 10year yields around 3 , 3. 1 , that is a big benchmark for mortgages and everything else. Who wants much higher Mortgage Rates . Mark back to you in a second. Peter kinsella stays with us. Were going to talk about employment, the Global Economy, the Worlds Largest staffing company. This is bloomberg. Ive spent my life planting a sizesix, nonslip shoe into that door. On this side, i want my customers to relax and enjoy themselves. But these days its phones before forks. They want wifi out here. But behind that door, i need a private connection for my business. Wifi pro from comcast business. Public wifi for your customers. Private wifi for your business. Strong and secure. Good for a door. And a network. Comcast business. Built for security. Built for business. Ways wins. Especially in my business. With slow internet from the phone company, you cant keep up. Youre stuck, watching spinning wheels and progress bars until someone else scoops your story. Switch to comcast business. With highspeed internet up to 10 gigabits per second. You wouldnt pick a slow race car. Then why settle for slow internet . Comcast business. Built for speed. Built for business. Mark you are watching bloomberg surveillance. Lets get the bloomberg first word news. Nejra Credit Suisse has announced plans to raise 4 billion in a Rights Offering, abandoning its intention to hold a partial ipo. That after the original plan ran into opposition from analysts and investors who questioned the merit of splitting a business that generates more pretax profit than other units. Credit suisse announced firstquarter net income of 596 million swiss francs. Under normal circumstances, without external disruption, that should be it. That was always part of we always said that to complete this plan, we would need [indiscernible] about 900 million of restructuring cost to go through. Nejra panko santander is benefiting from the return of political stability to brazil with a rising real driving a jump in profit. That income rose to 1. 87 billion euros. Rough it from brazil jumped 77 from a year earlier after the president boosted the economy following the impeachment of dilma rousseff. Propose amp is set to 10 tax on more than two point 6 trillion in earnings American Companies have stockpiled offshore. That is according to a white house official the milieu with the plans. They say the administration will call for cutting the top income tax rate on passthrough businesses to 15 from 39. 6 . French president ial candidate Marine Le Pen has sought to soften her position on europe. Speaking on the countrys mostwatched television station, look and le pen said the euro has been a weight on the french economy. She refused to pin down whether she wants to leave the single currency. U. K. Prime minister theresa may will host European Commission president Jeanclaude Juncker and they use chief negotiator and downing street later. It will be her first facetoface meeting since she took office and comes six weeks before the snap general election. This afternoon, may will face labor leader Jeremy Corbyn for the final Prime Ministers questions for the june 8 vote. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. Im nejra cehic. This is bloomberg. Mark just getting some breaking earnings from standard chartered, the u. K. Lender that derives two thirds of its revenue from asia. It is a beat. First quarter adjusted pretax profit 1. 045 million dollars. Analysts estimated in the region of 850 million. It is a beat. Competition in markets remains intense. Total quality remaining stable. Total credit quality remaining stable. Shares are rising, a bit of a spike in the betterthanexpected figures from standard chartered. Shares up 2. 7 . My next guest runs the Worlds Largest staffing company. We speak about uncertainty over u. S. Immigration policy and the e. U. Pushing companies into wait and see. Lets get his thoughts. Alan days, chief executive officer of adecco group, is here. Your company is a perfect bellwether of the Global Economy because you operate in so many countries. Weve just come off the back of an imf meeting. The imf has tweaked its Global Economic profit forecast. From what you are seeing, is this an economy showing signs of improvement, the Global Economy . Alain were living in a world of still modest growth in all parts of the world, in the u. S. , in asia, and also in europe. We have some signs of strengthening, especially in europe, especially in france. We have always said france will be the last country to recover in europe and that is what we see, especially with a strong automotive industry, with construction picking up, a little bit in all the european countries. A word of modest growth, but yes, strength. Mark were just going to remind our viewers. David davis is speaking now. Davis says that brexit compromise will be needed on both sides. Hes speaking in london. He says there is a desire to avoid cliff edges shared by other e. U. Nations, as if that isnt a perfect opportunity to speak to alain, because the u. K. And ireland represent about 20 of your revenues. The uncertainty is not only beginning of the brexit negotiations causing, but this surprising snap election that has been called . Alain what we see today in the brexit is a little bit kind of wait and see mode. We see the first sign of the brexit uncertainty especially in the Financial Services in london, where all clients and all candidates are not willing to change because they want to get more clarity about the europeof the u. K. Inside or the relationship with europe. A lot of wait and see mode at this stage. Mark does the election theresa may has called for june 8, is that going to cause another layer of uncertainty for u. K. Plc, for your business, in the coming weeks . Alain i dont see an increasing uncertainty. Article 50 has been triggered. We all know there is now a period of 24 months to get this deal with e. U. Down. I think the election is mainly a spectacle movement for theresa may to get strong support in early negotiation with europe and i do hope that both party will really go for a winwin deal. There is a lot to lose, but also a lot to win for both parties. Mark if banks, and the process has begun, if banks have to move parts of their business to europe, if the u. K. Loses passporting rights, which is looking likely, what is the effect to a deco . You are still present in europe. Is that detrimental to your business or not, if banks have to move a large portion, and we dont know what the ultimate number will be for european Financial Centers . Alain we will be involved in both sides. We will be involved in u. K. To help the local people find another job, and you know we have plans here. We have the carrier Transition Company here in u. K. Profitable inery the Financial Services. We will help the local employees to find another job. Eventually retrain them, and on the other side, in all the countries where Bank Sanctions will be created, we will help customers to find these resources either locally or internationally. Mark david davis is saying the u. K. Wont a lot the drawbridge on immigration. He says hes confident of an early agreement on residency rights. Yougration uncertainty, cited it as a factor in the u. S. And the u. K. When we last spoke. Alain u. K. Is one of the most attractive countries in the world. Year theiting every index. England is in the top five of this ranking. One of the key assets of u. K. Besides a strong education system, very reputed university, is what we call the brain circulation. Having a very open economy to receive students from abroad, but also send your own students abroad to gain experience. We see that countries like u. K. With a very open economy has been very successful in the attractiveness. A lot of the students in england , in london, are also starting of new companies, very successful companies. One of my hope and recommendation with this brexit negotiation is to keep this brain circulation asset for the u. K. Economy. It is a very strong global asset. Mark back to you in a second. Alain dehaze. Stay with surveillance. The state of the race in france, the latest on the contest between Marine Le Pen and Emmanuel Macron. And we will discuss the bank of japans push to get close to its inflation target. This is bloomberg. Mark youre watching bloomberg surveillance. Lets check on the markets. Nejra we are talking about the rally in global equities. Theyve hit a record. The stoxx 600 steady today. It has been rallying since early february. It did hit its highest since 2015 yesterday. Banking surges have been surging. They still trade below book value, near their cheapest prices relative to the u. S. Fears, since 1980 according to barclays. That is what this chart is showing. 6000w the nasdaq go above for the First Time Ever yesterday. The s p 500 and dow not far off alltime highs. S p 500 and the shanghai composite, they have not been this split since 2008. That was just before the collapse of lehman brothers. Part of this driven by the downside in the shanghai composite index. What has been driving stocks higher is partly corporate results in hopes of u. S. Tax reform, not to mention european Political Risk taking a backseat for now. What weve seen is dollaryen strengthening to a twoweek high today. The 10year treasury yield has been grinding higher. It is coming off a little bit right now, 2. 32 on the yield. Trade has beenn thrown off course when it comes to treasuries. Yield forecasts for the Second Quarter are up the most since september. Not an easy time to the forecasting. Franklin templeton has called u. S. Treasuries one of the biggest financial bubbles. Ive shown where we are with this yield, but also where some of the forecast are. Morgan stanley saying markets underestimating the fed. Hes calling for 3 . Scott at guggenheim saying the low yield camp will ultimately prevail. French president ial candidate Marine Le Pen is softening her position on europe , speaking on the countrys mostwatched television station. Downn refused to be pinned on whether she wanted to leave the euro, a position shes championed in her campaign. She also used the appearance to attack rival Emmanuel Macron. Are they going to vote for someone that has the globalization of the society as a whole . The project of mr. Macron is petra seidl. To rise upg communities against one another, to rise up employees against one another, especially with a directive on workers that he wont question. Mark Emmanuel Macron returns to the campaign trail after a criticism that a victory dinner he offered his team was premature. Also speaking on French Television, the centrist candidate attacked le pen for what he called her brutality. , when i hear madame le pen her formulations, her tone, her gesture, i see much more brutality than on my side. Brutality chooses its side. A brutal project, heinous project, project of rejection, is not on my side. I am not presenting a project of a gleeful generalization. Joyful globalization. I just say we are part of the world. Mark alain dehaze is here. This is our odds checker, probability of le pen winning. It has come down to 16 from above 20 . As a guest reminded me yesterday, trump two weeks before the election, probability was below 10 . Do you share the optimism among investors post sunday that macron will be the victor . Alain i do share this optimism, but also this hope that macron will be the next president of france. In thebeen reflected figures last sunday, also in the polls. For the First Time Since long, the polls have been in line with the results. Lets hope that on the seventh of may the polls will be aligned with the results. Mark which brings us to the next hurdle, which some might say is a bigger hurdle. If you assume macron will win, the legislative elections, is he going to get a majority . If not, is cohabitation going to work in an environment which needs reform . Alain it is very important that there is a strong backup of this new president in order to reform france. We all know that france needs to further reform, needs further actions to become more competitive globally, more attractive globally, and we need both a strong president , but also a very strong backup from the parliament. The election on the 18th of june will be very important to have this alignment between the program of the president and the parliament. Mark as economy minister, he pushed for more flexibility for labor market reform. What more is necessary when it comes to labor market reforms in france . Alain what is needed is to face the reality of today. It means all the companies, all the economies are working in a very volatile, uncertain, and big risk, and complex environment. All customers and Companies Need to cope with this environment. They need more flexibility. On one hand we have to develop new, flexible solutions. On the other hand, we have also to grant security to the employees. That is somehow the proposal. This new government under this new president will have to develop. We know that in france it is very important, flexibility, but also security for the employees. The data shows the backdrop is quite healthy and france. Pmi data, confidence data, especially in the last couple of weeks. Has france turned a corner economically or not . Alain france is definitely in the Recovery Process. Again, i said that in previous interview france would be always the last in the Recovery Process in europe, and that is what we see. We see it since many quarters now and we see currently. Mark its outgrowing germany in pmi. Alain they are later in the Recovery Process. Is much further in the maturity of the recovery. When you look also at this industry, which is industryh france still needs this response. Mark thank you for joining us today. Alain dehaze, chief executive officer of adecco group. Thats get the Bloomberg Business flash. Nejra has posted a drop in earnings. Spains largest our company was hit by a lack of rain in its home market and a weak british pound. Dropped to 1. 8 6 billion euros. Just shy of estimates. Has raised its outlook for 2014 on surging profit from the mercedesbenz luxury car unit and improving commercial vehicle operations. The carmaker predicted growth in profits compared with its previous forecast. Estimates compiled by bloomberg suggest earnings before interest and taxes this year will rise 8. 5 to 14 billion euros. Has exhaustedit all options after workers voted against job cuts aimed at salvaging the italian airline. That pushes the carrier toward administration for the second time in a decade. The company says its recapitalization tied to the savings plan is effectively dead and it will start legal procedures as funds run out. sxury goods giant kering firstquarter revenue has exceeded analyst estimates. Comparative sales way above expectations of a 13. 3 rise as the gucci and same amount brands turned in industryleading growth and declines reversed at bottega. Shares have hit a record high in todays session. Mark . Mark the barclays chief executive is speaking at a conference. Hes speaking with Douglas Flint, the hsbc chairman, and he says barclays seconded people to the government for brexit work. Hes speaking with flint, who says quick brexit preferable to excellent longterm deal. Big day for Central Banks tomorrow. Assessment of the european economy. Officials have indicated a little policy change. Investors will be focused on any signals from draghi. Boj,so hear from the widely expected to keep the settings on its monetary easing unchanged. Inflation still below the 2 target. Earlier, the finance minister said the nations regional economies are experiencing moderate recovery. Still with us, Peter Kinsella. Time to change the forward guidance, time to say the balance of risks is balanced rather than to the downside, or is it too early . Peter a little too early. For inflation, they are still well below the ecbs 2 target. We dont have a deflationary scenario anymore. That was already acknowledged in the march ecb meeting. The messages, steady as she goes. Draghi will have to face a problem. The problem is trying to temper expectations. It is pretty clear that some members of core europe, germany, austria, otherwise, they will want the ecb to say, this is how we are going to get out of what were doing at the moment. That is a risk. Ecb, we mayg the end up with some kind of fudge on it, but it is clear the direction of travel is, we are getting out of this. Mark does that mean the direction of travel for bond yields is higher . Peter modestly so. If you look in germany, where 10year yields are 35 or 37 basis points, in the context of german inflation, and better growth all over the eurozone, that looks a bit strange. Mark the spread between that and the u. S. , some would say hang on, doesnt make sense either. Peter indeed. The thing for the bund yield is inflation expectations. In the absence of that moving more materially higher, it is hard to see the bund yields getting to 1 anytime soon. In move towards 50 or 60 is reasonable. Mark euro has had a bounce following the macron victory. November highs against the dollar. 09 now. Nt 09 1. 10 . Peter it is possible. Many investors were avoiding europe because of this Political Risk rhenium. Now that that has dissipated, overseas investors saying, u. S. Equities are expensive, eurozone is pretty cheap, lets get involved. Mark theres a nice chart. If im a genius, ill find it. Because im not a genius, i want. It is a lovely chart that shows risk reversals for euro against the major four. It is the pound, oneyear risk positive, pound rates still negative versus the yen, the dollar, and the franc, which tells us it is only the pound that investors thing has upside over the next year. Peter that is a bit more tricky. From sterling, the fact that we got the election with theresa may, that to my mind is a positive for sterling. Assuming the majority assuming she gets a majority, which is projected in the polls, that reduces the influence of the hardline rec centers brexiters. I think the comments of trying to get a transition deal is definitely a good thing for sterling. In that context, it could be the risk reversal. Mark sterlingdollar . What do we think, 1. 30 . Peter 1. 28 now, so it is not impossible. Mark what is the roof on that . Peter i think 1. 40. I would think we will struggle to get above three brexit levels. Premium fore risk the Brexit Process as it goes along. Mark great to see you. Peter kinsella joining us today , bloomberg surveillance which continues. Francine is in zurich. Tom is in new york. Stay with us. Credit suisse 24 billion right as plans to sell a part of its business. What this ease concerns about their capital levels . Donald trump tax facts, planning a 10 charge on cash u. S. Companies have ported a broad and the dollar rises ahead of the policy announcements. Brexit battle, theresa may prepares to host greg gagne with the u. K. Election six weeks away. How aggressive will she be . I am Francine Lacqua in the zurich. York. Ene is in new two weeks away from the president ial election in france. We look at brexit, canada, and talking about President Trump. Tom the backdrop is the huge moves in the market yesterday, the equity markets with many records and the dollar revisits 21,000. Stability away from the bond market. The first time i saw equities not linked with bonds which is very constructive for the equity markets. An important interview of you had with the leader of Credit Suisse on this. That in a moment but first the first word news in london. President trump plans to reveal the Broad Strokes of a tax overhaul plan today. According to a familiar one of the muscles calls for a 10 tax on the trillions of dollars in earnings u. S. Companies have stockpile overseas. That could offset some of the deep cuts the president wants. Of a Congressional Committee says President Trumps former National Security advisor Michael Flynn may have broken the law. Jason chaffetz says he failed to disclose business dealings with russia and turkey and his Committee Reviewed documents of flynn from the Defense Intelligence agency. In china, the military has launched the first domestically built Aircraft Carrier which is of the heart of their effort to build a socalled blue water navy, capable of projecting power well beyond the coast of china. They have one other caria carrier. In france, le pen hasnt ducked the question of whether she wants the country to leave the euro. Her campaign has focused on European Union but she understands the concerns of many french that their savings could lose value if the country returned to the frank. Global news 24 hours a day, powered by more than 2600 journalist and analysts in more than 120 countries. I am nejra cehic. This is bloomberg. Tom lets get to our guests been features at negative one. A stronger euro and affects a part of what we discussed and oil at 49. 38. The dow at 21,000. Vix 10. 69. A lot of that move on friday and monday. We wonder if we are migrating. Dollar canada a big thing, 135. 75 1. 3573. A weaker candidate is a big theme. Canada is a big theme. Francine the feeling on the market, global stocks extending a third day of gates and corporate results are giving a lift to european stocks. Reform the u. S. Tax increasing optimism for growth. A currency check, i need to see whether i can get home. Eurodollar a big want to watch out for tomorrow. Tom this is trade weighted loony, Canadian Dollar. Here is the 1990s, the big commodity boom. Stronger Canadian Dollar out to these peaks. Here is the lehman low of the 2008 crisis. Like the united kingdom, it is rolled over below where it was in 2008. This is a very weak loony and the recent rollover on the trade discussions with the United States shows the weakness of the canadian currency over the last 23 years. You had an important conversation in zurich. Francine it was an important conversation. The First Quarter for Credit Suisse figures better than expected and the ceo announced plans to raise 4 billion and the rights in a Rights Offering this morning. It means they will no longer hold a partial ipo with swiss business. This is what the markets wanted to know. I asked to ceo about his Capital Raising expectations. Circumstances, i we always said to complete this plan we would need a review in 2017, which we are doing. We have 900 million of restructuring costs to continue with cost cutting. Francine we are so excited about this next interview. Jim oneill, formally german of Goldman Sachs Asset Management. Chairman of Goldman Sachs Asset Management. He is also a lifelong fan of manchester united. I am giving the whole spectrum. Our viewers know you very well. It is important not to forget any aspect of your life. What struck me in my conversation with the Credit Suisse ceo, he is much more confident in the markets in the future, a reason he is going for the Capital Raising direct to the markets instead of selling off part of the swiss back. Would you be so optimistic about the markets overall . Good morning. From a cyclical perspective, all the things that i have that i follow, not as closely as i used to but i still tried to. In terms of the state of the world cycles, all very supportive of the equity rally we are having around the world. Six of the publicly available key ingredients, global leading indicator, many are at the strongest level since 2008, whether in the u. S. Or elsewhere. On that basis, it makes a huge amount of sense. What is trickier, by definition, the higher we go, the less cheap equity markets are. If the strength of the recovery becomes so powerful that it results in some kind of a shift in Monetary Policy to an end up qb all over the world, as well as a more accelerated timing in the u. S. , i guess that will be the ultimate challenge. It looks surprisingly good from a surprisingly large number of different parts of the world. Francine are you concerned at all, we have been trying to figure out when the real talk about the Balance Sheet redressing starts. Are you concerned the market seem to ignore all geoPolitical Risk . Jim i have what seems to be a nonconventional view about this. We have had geoPolitical Risk since i first started in this business. I remember, many decades ago, flying into q8 and arriving there, finally got news kuwait and arriving there, finding out news that they were attacked by iraq. The idea that deal Political Risk, and other uncertainties are new. I do not buy what is new is we live in a 247 world of media commentary where everybody can comment and is aware of everything. The fact there is uncertainty is not new. Tom when your premier League Soccer career was over, you work for the Swiss Bank Corporation. This is ancient history, going back 20 years. Jim when i went down to the middle east a lot. Force byas a research a bank taken out by ubs i believe in 1998. Help me out with the character of swiss banking. Inre does Credit Suisse fit to too big to fail banking . I cannot figure out if they were a big bank, middle back, little bank, or merger candidate . Which is it . I am four question, years removed from the world of finance. To talk aboutppy anything, even if i do not know anything about it. The merger was a centrally Swiss Bank Corporation taking over ubs. Tom excuse me. Boththat was a time where sbc and Credit Suisse were essentially trying to make a very aggressive attempt to become as big globally as the big u. S. Guys. For a very brief time, they persuaded themselves that they could. The reality is that much of the problems that been followed for the next 20 years and predating ubs got aicularly bubble in the 1998 ms. They have perpetual problems. Stillk Credit Suisse struggles with aspects of the hangover from all of that, more than ubs. Ubs hast i can see, dealt better with the shift into Asset Management and retaining its preeminence in that. It shows a pull away from some of the most unprofitable or competitive parts of the socalled Investment Banking business. They are still trying to figure the way. To answer your question, they are both very big global backs. Tom within the very big global banks, we had the merger with fortis of belgium, a number of years ago, can the american banks come in and add value to the european banks . Or is there such a Cultural Divide that any transactions and combinations of Credit Suisse are unthinkable across the atlantic . Jim again, i do not think about this as much as in my fire levels of my life with gs. But i do think about it quite a bit. The american banks have by and large played an incredibly successful game, relative to the big european globally ambitious players, almost across the board. For the past 20 years plus. It is partly because they have dealt with better at home with their problems, quicker. And partly because they deal with the challenges by and large when they come, and my goodness, they come for the big u. S. Banks often. They deal with them quicker and more viciously than the europeans do. The other important point i would say, relevant to the eu issue tangentially, one of the is thatfaults of the eu they have never embraced what they have claimed they would plan to do under the lisbon agenda, and have true Cross Services reform. I was reading this morning in the paper, the latest tale of nonsense involving alitalia. A similar parallel. In the banking industry, we have yet to this day have a truly. Aneuropean leading bank because of the restrictive practices within european countries. Until you get that, you cannot have them competing with the big u. S. Guys. Banking. Lous on eu jeff curry of Goldman Sachs on oil later today. Stay with us, jim oneill in london, Francine Lacqua in zurich, this is bloomberg. Francine this is bloomberg surveillance. Donald trump has proposed a 10 tax on more than 2. 6 trillion dollars in earnings that American Companies have stockpiled offshore. That is according to a white house official familiar with the tax plan. They say the administration will call for cutting the top income 39. 6 . 15 , down from lets get more from stephanie talk tod jim oneill, me about the tax plan, 10 . And 15 . Will the president get it through or see opposition from paul ryan . He will face opposition, how will he pay for it is the chief question. A 10 tax on repeat. It profits from overseas could provide a temporary uptick in revenue that may make his tax cut plan look a little more affordable. Longterm, most economists would say that repatriation plan will end up costing more. It would encourage companies to think these tax holidays and tax breaks are a regular feature. Encourage them to keep profits overseas. Tom a question i will ask kevin in washington. I love the fact you are across the atlantic with a different lens on this. I was flabbergasted on how the executive branch seems to not understand that we have a legislative and Judicial Branch as well. Are you seeing that . Day 90 is no different from day five. One of the most remarkable things, i agree, donald trump has surrounded himself with people who do not have experience negotiating in congress. He has proposed a Corporate Tax cut to 15 , deeper than most republicans have proposed. Paul ryan wanted a 20 tax cut and others said 25 . Almost as if donald trump approaching this like a business negotiating deal. You propose a low rate and hope to meet in the middle, not how you negotiate with congress. He will have to wake up and realize this is not the way to try to build support. Across different factions within the Republican Party, let alone the democrats. Francine i imagine the Business Community are thinking on whether they have to bring some of their revenue back home and what it means for taxation. Also looking to see whether ceos in the United States will rekindle these animal spirits. Whether they will spend and see go up. What will it take to put real money . Jim i am about to write something about this issue. Despite what i said about the super bowl strong evidence cyclical strong evidence across the world earlier, what is missing everywhere is investment spending. A part that is interesting that seems to swirl around donald trump is about the Interest Rate taxdeductible they, which, based on things i did in my brief time in government and other things, it seems to me this it is so easy to borrow money, partly to help buy back shares, keep the management strong, a lot easier for ceos and the u. S. And everywhere to do that. By cutting the Interest Rate deductibility for borrowing money, that would be a bigger game changer for investment spending in my opinion because you are forcing ceos do think more carefully about what is genuine investment than they currently do. It is weird from a guy from real estate where it is so predominant to be thinking of doing things like that. Interested and what you say about that. Something that keeps coming back. Tom because of time, stephanie we will have to cut it short. Can we get stephanie on for two hours next week . Days. K about 105 thank you, stephanie and we will continue with jim oneill. An important conversation later, certainly with what is going on in washington, and admiral will join us. Stephanie baker, thank you. I am is her and tom keene is in new york i am in the surrey and tom keene is a new york. We have a conversation with Douglas Flint and jes staley. Surveillance, he comes on the show regularly. The relationship banks will have with the u. K. , whether the city will stay. Mr. Flynt says the u. K. Must stay involved in the Capital Markets union and have hopes the government has more room to negotiate after the election. Jes staley saying brexit uncertainty is something they need to live with. Lets get more with jim oneill. Do you believe that theresa may will have enough Political Capital if she wins the election by a landslide, to negotiate better with europe . Jim i am speaking at this conference you made reference to in a few hours. To do with the northern powerhouses. On your question, i am quite pleased as an independent person with experience of being in government recently, that the Prime Minister has done this. Ever since the referendum was ago,d, now what, 14 months the u. K. Has been living in a world of tactical politics, including the negotiating stance up until this moment has been dominated by internal politics, particularly within the tory party. She gets a bigger mandate, that, by definition, gives her a more free mandate to do a lot of things that, in theory, are very important, including a rational as possible brexit. It is interesting to see the Foreign Exchange market reaction. It makes a little bit of sense. I do not think it will be easy for her of course. If she does get the result, the polls are currently saying, it makes life a little bit easier than otherwise would be the case. Tom lets bring up the capital flows chart for the united kingdom. I will keep this short, the gloom has not happened, not migrated down to a big flow deficit or the united kingdom. Do the flows tell the Prime Minister what to do, or does the Prime Minister tell the Capital Markets what to do . Own briefnch from my dealings with her which were primarily quick you first appeared, i think it is the later. She is somebody with quite strong not necessarily believes but quite strong principles about how to operate. She is very thoughtful and takes a bit of time before deciding on things. To beot think she wants pushed around by anybody, including the market. Tom jim oneill, thank you for being with us. Good luck with your speech this morning. This is bloomberg. Tually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Hey youve gotta see this. Cno. N. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. I saw a statement from the press secretary last night at 11 36 p. M. We will get perspective from kevins are really. Kevin cirilli. Events from the branches of the government of the United States. Let me get the travel plans right, i believe it was washington, paris, london, zurich, what she in new york . I forgot new york. Francine you forgot our day together, we will always have new york. Tom we had to pretend we were on speaking terms. We will get to Credit Suisse in a moment. In london, with the first word news, mark barton. President trump has lost the first round in a legal fight over socalled sanctuary cities. San francisco and Santa Clara County have one preliminary court orders blocking the president edict and threaten the budgets of cities safe harbor to undocumented immigrants. A judge says the order by later the constitution, the government will appeal. Congress has until friday to pass a 1. 1 trillion spending bill or face a partial government shutdown. Lawmakers have not seen any of the details which could complicate its passage. Republicans and democrats negotiators are hashing out details in private, congress could still pass a shortterm extension to allow more time to approve a larger bill. In paris, prosecutors have arrested 10 people linked to the 2015 attacks at Charlie Hebdo. Agazine the suspects are said to have been involved in supplying weapons to the attackers. 17 people were killed in the attack. Saudi Arabia Energy minister says there is a general consensus, the agreement to cut oil output should be extended but he says he is not 100 sure opec and russia agreed to cut production for six months in an attempt to end the world wide oil glut and boost prices. Global news 24 hours a day, powered by more than 2600 journalist and analysts in more than 120 countries. I am mark barton. This is bloomberg. Tom, francine . Francine Credit Suisse announced plans to raise 4 billion in a Rights Offering, abandoning plans to hold a partial ipo of its with business. I spoke to their ceo who reassured me this was the best way, because of dilution. We are quite pleased. Something we got right. We raised we needed to billion dollars to 4 billion, internal capital. In 2017, a refuel by capital as and with the ipo the ipo, because it was under our control. We have not accomplished we raised 27 billion last year, 12 billion this quarter. We have been demonstrating the power of this platform in terms of Wealth Management. And beating the competition. The proposition of simply raising capital to back this growth much more palatable. The department of justice, when we thought in 2015, we had two big things come a big writedown weeks ago via the 2015. We could have had a broad range of outcomes, some which could have been bad. We moved that to december january. We can look at the Capital Planning without a huge uncertainty over our head. In that context, the ipo has had no downside. We knew it was diluted. Something we were willing to consider, giving the magnitude of our capital needs. More congregated, but if you need capital, unique chemical more complicated, but if you need capital, you need capital. The company had to prepare to the ipod. Having looked at both with straight capital raise, that is less diluted than the ipo. We dilute for shareholders this and keep 100 of a very good cash flow. Francine are there costs associated with the preparation of the ipo . Yes, but they are minimum. Francine for the Capital Raising, 4 billion instead of 2 billion, is that it . Under normal circumstances, with external that should be it. We alwayslways said that to complete this plan, complete restructuring, we we would need to review in 2017, which we are doing, we have 900 million of restructuring costs. To have this growth you need show without deteriorating your capital position. The growth is there an profitable. Our business is a returning more than 15 on capital. 31 . H management at these are attractive investment destinations and we want to drive capital there. We are in a business determined by trust and we want our clients to feel they have positive with an institution not in doubt every quarter about capital position. We felt, the board made the decision. Francine that is the Credit Suisse ceo. We are joined by began fly, and is to specializes he was at pains to explain, within the metrics, they were hoping to raise this much and the ipo of the swiss bank was one of the options. This simplifies things, he needs the markets to be on his side. Thats, it is an something we are hearing this and being declared as a victory. A Capital Increase at a bank is actually part of the plan. And the share price jumped and that reflects that. We are in a world of investing in banks, Interest Rates are seen going up and the economy looks brighter, even in europe. A bit more capital helps the Balance Sheet and maybe helps investments. I think there is a lot of trust being placed in the is ceo and management to make sure this is enough to protect against any sequels that unexpected or fraction, which is still possible unexpected disruption, which is still possible. Tom i think of cfa level one. You do not need a level four cfa to know there is something going on. They will do a diluted share deal. Does he have the support of the board, from where you said . Yes, again, i think it is the market environment. We saw the French Election go investors weigh. That opens a window. It is true that selling part of the underlying business, which is most profitable business, would make it would make sense to shareholders now, a market friendly strategy. I think, in terms of saying that should be it, the Cash Dividend they are promising to pay out could be as much as 2 billion. That is half of the rights issue total. A lot of confidence being played and i think he is making promises he has to keep. Tom if you look at the chart, i overlaid Deutsche Bank and decided not to put it on it because it looks like the same line. There is where he took over in 2015, the ceo of Credit Suisse, doing better than goodyear right now. Who would take out, or who would make with Credit Suisse mate with Credit Suisse . We have talked about this, who would take these people out . , it is not happening yet until they can prove that they are on a reliable earnings path. Credit suisse has come out of two years of straight losses. We are back in two trust territory. Patheliable is the earning Going Forward for Credit Suisse . That is a question you have to answer before you talk about merger potential. Tom i joke about it but there is serious doublespeak going on when you see an ipo come over to a diluted share Rights Offering as well. Thank you so much. Great charts along with smart essays from lisa and others. Time top, what a great speak with jeffrey, ubs Wealth Management on the loonie. This is bloomberg. Francine we need to talk about what the Foreign Exchange market is doing. We need to talk about the French Elections. The Credit Suisse ceo was relieved that the worst possible outcome did not happen. Marine le pen has said to soften her position on europe. She refused to be been down on whether she actually wanted to leave the single currency and also slammed rival macron. We are going to vote from someone with the global of the society as a whole. I will to you, the project of mr. Macron is patra seidl. It is aiming to rise of communities against one another and employees against one another, especially with the director of the posting of workers that he will not question. To francemacron spoke 2 and said her campaign is based on brutality. , theen i hear le pen formulations come her tone, gesture, i see much more brutality that on my side. Brutality chooses its side, a brutal project, a heinous project, a project of rejection is not on my side. I am not presenting a project of a joyful globalization. A naive one. I say we are a part of the world. France is a part of it. Francine for more we are with the ubs Wealth Management head of u. K. Investment office, geoffrey yu. Give me a sense of where you think the markets will go from here. A small chance, that a turnout is low, le pen becomes president. If she does not, will we see more market rally like we have seen since sunday . Saw sunday waswe where the position was, in a house not position in your along or eurozone assets, that the broader community. Get pastphase, when we france and how the ecb and policymakers and how corporate react, but clearly there is some way to go and we like our euro view at this point. Francine you like the euro view which means you will go stronger. Does it have an impact on italy . Do yields the polls are right, europe is less eurosceptic than we thought . Geoffrey one of the winners from the election was the polling in france. More credit than those in the u. K. And u. S. If they are to be believed, the 20 percentage point gap will hold, not reason to worry about fragmentation or any form of sovereign stress at this point. I go back to the face, euro higher, european rates higher, but without growth in italy and growth in the south. That will complicate a picture the ecb will have to deal with and politicians will have to deal with. Tom congratulations to you and all of ubs on a terrific sterling call over the last number of months. Ubs nailed it. You mentioned the capital flows of an ascendant europe against all of the political backdrop. Here is eurosterling. We do not usually look at this in america. The idea of eurosterling was stronger euro off of the brexit move, the blue circle. Do those flows continue and euro is just supported back to a 116 level . Can i get back to 1999 on flows into a good economy . Geoffrey at this point, as long as the economy continues to is willing the ecb to entertain notions of an accident and its own policy. Then, the euro can continue its resurgence. Tom this is critical, mario draghi, first, do no harm, it is at his benefit to have euro migrate back to an historic 116, right . Geoffrey from his point of view, wherever the euro is, as long as inflation is where he wants to be, he will be happy. He is comfortable at this point of where the euro is and would perform it prefer it to underperform and get the earnings channeled to households consumer and let them spend. The market wants a look ahead to see how much euro strength they can get away with without mario draghi beating you down. There is a bit of a balance. In terms of politics, that will take a backseat. Lets see how the ecb stance on this and things starting to emerge now, political outlook cleared. Francine do you like euroyen . And lookingzerland at swissie, would that be a good pairing . Geoffrey i would favor euro swiss over euroyen here in japan, it feels like you wanted to be positive on the japan story but not because of the yen structurally weak. Not because of earnings translation, reforms are starting to happen. That has not happened in a long time so you could get an awkward situation where japan outperforms in an fx neutral manner. Tom i demand we talk about the Canadian Dollar and we will do that next. He is with ubs Wealth Management. Coming up, with oil back with a 49 american, west x intermediate, Jeffrey Currie on oil, the gold the global view and the north american dynamic. We will do that in the 8 00 our. Worldwide, stay with us. This is bloomberg. Bloombergs get the business flash. Spains biggest bank posting First Quarter profits that beat estimates. The reason, 77 jump in earnings and its biggest market, brazil. The benefit is from the return of political stability. Robbinsdale and their british oft, hit by the depreciate the pound against the euro. Hsbc exploring a potential merger. A deal would create the thirdlargest lender in saudi arabia. For years, rbs has tried to sell its saudi arabia unit and the Saudi Arabians have launched a privatization plan but still block foreign control of local banks. That is the Bloomberg Business flash. Tom it is an uproar between canada and the United States. Speaking with the Canadian Foreign affairs minister, she is from alberta. She was most certain about canadas position. The canadian position has been upheld every single time in court, both at the nafta and wto level and we are confident our position will be upheld again. Tom a stunning development. Goesdebate, geoffrey yu, back to 1982, a lumbar debate in the modern age with canada forever. When i look at canada as an export nation, what dynamic is there in their currency right now . It is shockingly week, isnt it . Geoffrey the two aspects, oil prices, in a canadian oil, high oil prices, traded at a discount, and it has managed to reduce exposure to the u. S. Over the last two decades. Cheaper by 90 . Down to 70 but still very high. You have to reassess the Canadian Dollar. Tom dollar mexico, the idea that the president would job own china but go after canada. This is one of the most fun charts i have come a chart of. He true trudeau ok, way back, the 1970s, where mr. Trudeau senior leaves office, this is weak canada. Here is the collapse of canada, here is the massive commodity boom. Right back to where trudeau junior is at the same level as trudeau senior on the way out the door. Can mr. Trudeau junior stand a new canadian weakness . Bothrey at this point, the canadian governments and even the bank of canada would not be too upset about it. To shift canadians their export markets and with the Housing Market under more restrictions, that is a tightening, why not have a weaker dollar . Tom what about the idea that the president of the United States can go after china and then go after the adjacent nation to our northern border . Why is he doing that . Geoffrey a matter of meeting certain Campaign Promises. Noting that nafta has to be renegotiated in favor more of the u. S. Household, u. S. Jobs. He views it as a bad deal from the u. S. Point of view. This is part of the process. From canadas going of you, the border tax adjustments seems to be slipping off the agenda. On a structural basis, canada will welcome that a lot more him. Francine what is your take on currencies related to oil . We heard from the saudi Energy Minister, not 100 sure the opec deal will be extended. Geoffrey one of the crucial things underpinning, especially the reality, also the peso, the energy linked currencies, very important. Opec compliance has been strong heading into this year, surprising markets. With shale production picking up on Global Growth outlook, how much additional kick we can get, high currencies under increasing scrutiny. We have taken off our em basket, we do not think they will differentiate sin but i think Market Outlook has changed somewhat. Francine if they decide that they do not cut, do they give up because they can see victories to show producers in the u. S. Concede degrees to shale producers in the u. S. . Geoffrey that will be an important element and lets see how the dollar response to that, a Dollar Strength story rather than nem a week story . Have these en countries em countries use the opportunity to restructure their economies . We have not seen that yet. Tom he is with ubs Wealth Management. We will drive forward the conversation, news out of Credit Suisse with Francine Lacqua and zurich. Much about talked they can come in the trump fake, where are we in the nominal and real rate market, we will do that with guests in the next hour. From zurich and new york, worldwide, coasttocoast, this is bloomberg. Tom do you love the bull market , are you in the bull market . The skeptics of the short must on bettern 21,000 than good earnings and a buoyant transaction, and combinations market. If i am elected, free beer, or at least tax cuts for all, how will the republicans balance the unbalanced budget . Click for larger difficult deficits. Look for larger deficits. This is bloomberg surveillance. Live from new york i am tom keene. In zurich is Francine Lacqua. That was not a neural a normal interview with the leadership of Credit Suisse. Francine this is a man at the tom who has had to deliver markets bad news after bad news but the share price you can see is recovering a touch although still behind their main peers. They decided to go to the markets directly for Capital Raising instead of ipo part of their swiss bank unit. Tom moore on Credit Suisse this morning. ,epsicola out with earnings low single digit growth as we saw from cocacola yesterday. You wonder where the rationalization is. 1200 cocacola bodies out the door. With the first word news in new york, here is taylor riggs. Taylor the president plans to reveal the Broad Strokes of a president tax cut plan, one of the proposals calls for a 10 tax on more than the 2. 6 trillion in earnings u. S. Companies have stockpiled overseas. Onetime proceeds from the repatriation taxcut offset some of the deep cuts the president wants another business taxes. The head of the Congressional Committee says the president former National Security adviser Michael Flynn may have broken the law. Jason chaffetz says Michael Flynn failed to disclose business dealings with russia and turkey. Jason chaffetz Committee Review documents from the Defense Intelligence agency. And china, the military has launched its first the mystically built Aircraft Carrier, the program at the heart of their effort to build a socalled blue water navy, one capable of exhibiting power well beyond the coast of china. They have one other carrier which they bought from ukraine. Le pen as dr. The question of whether she wants the country to leave the euro, her campaign has focused on opposition to the European Union but told French Television she understands the concerns of many french that their savings could lose if the country returns to the frank. Global news 24 hours a day, powered by more than 2600 journalist and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Tom moore on pepsi, there organic Revenue Growth a measly 2. 1 . Their Gross Margins came in 45 basis points. A lot of discuss a lot to discuss on a conference call. Continuesck, futures to advance. Students read has gone nowhere. Oil under 50. Eff currie later this morning the dollar canada, 1. 3568, remarkable, we will touch on the weak loonie. Francine . Francine the dollar climbing which is significant. The u. S. Government bonds are the story. They are climbing before President Trump unveils his tax cut plan. What is surprising is that this filtering through europe, good news we had from the French Elections and Going Forward. We need to look at euro because tomorrow is the ecb, talking about tapering, it may be too soon. Tom lets do an update. For all of you, a chart we have shown it may be than any other since november 8, the trump faith. Trump fade. The election, the morning after, we roll over and in this no mans land, just above where we were on november 8. Kevin cirilli is in washington with a surreal discussion of the last 24 hours. I said this earlier, i do not think in day 90 whatever is that much different from day five. Does anybody at 69 or pennsylvania avenue understand there is a legislative and judicial ranch in the united ranch in theicial United States . It is looking like they will give the government open, today may be well as known as the tax plan. Tom i get the idea of free beer then for everybody, do i assume i will see a larger deficit to gdp . I do not see any fiscal responsibility out of the president. Concern of some republicans in the house with some estimates, the number the rumor in the halls of congress is that this plan could cost as much as 2 trillion. We will have to wait and see what he is calling for the Corporate Tax rate to be reduced to 15 , something the Business Community will like, if he can pay for it. Francine do you think are they expecting or hoping they will do enough to keep the Business Community happy . When you look at the Campaign Promises of what he said, he would be able to reduce Corporate Tax rate and address tax reform as a whole, this is just day one in kickstarting a longer process of tax reform. Also, lawmakers in the house of representatives will be looking at doddfrank and ways to repeal parts of that. A big day in washington for Financial Services. Francine give me a sense, you have a lot of sources within the white house and the trump insiders. What are you watching out for, body language, any talks that went well, so that the market looks at to see whether this tax cut is really coming . , consistency, consistency consistency is what people will look for, the House Freedom caucus met in the house of representatives to talk about health care. Also, secretary mnuchin meeting with Republican Leadership on tax reform. Today, the tax plan will be unveiled. In terms of whether or not there cannot be Major Political hiccups and the government has to stay open. If that happens, it is a solid week for the president as he enters into the 100 day in office and the big rally he is planning in harrisburg. Tom hold on to your wallet when they talk tax reform, your taxes are going up. Thank you so much, our chief washington course wanted. What a wonderful our chief washington correspondent. Let me bring up a chart. This is not be to 10 spread, the tony dwyer threemonth fiveyear spread. It looks the same but down we go with a greater vengeance. Can you be comfortable in fixedincome instruments, or is it so painful you have to be under the desk and tell people to load up on equities . Bounce inas been a terms of the shape of the curve which is somewhat encouraging. T the front end of the curve Bond Investors are looking for places to hide. Looking for places to protect their capital. Yields are low. There is Price Sensitivity in your portfolio and not a lot of places to hide. There is marginal spread in other parts of the market to protect you against some of those capital losses. When Bond Investors look at this market, they are cautious. Looking at a market that has Price Sensitivity and the president is looking for someone out there to fund his program. Tom the math guys call this gamma or conductivity. Global wall street, the average mother and father who want to save money, how bad will they get hit if mr. Trump gets his taxcut . Will wells fargo labor day statement, will it be painful . I do not think it is painful but over the next couple of years, it could be. On yields, 10 year treasuries, currently around 2. 3 . A 3 number by the end of the year is not out of the realm of possibility. Tom fuel with the discussion. Somebody has to pay with what he wants to do and the bond market is ultimately who pays, the money is there and we are willing to pay for it, but we need to get paid more to do that. Francine what is pricing at the moment . Meaning, does the market correct itself or does the if the tax fund goes through george a great question. Today, the last couple of days, the market did well off of the weekend, largely because of some short coverings driven by france and politics. Donald trump trusted to do the market towards his tax plan. Today, stocks are unchanged and bond yields are a little bit higher. Taxe is a lot of hope that cuts and tax reforms are ultimately going to make it through the market. In the world of bonds, details matter. Details matter more than headlines. Pitch toumps initial put out a big headline statement of massive tax cuts, that is great and would certainly be encouraged and well received by the market. How do you pay for those taxes . And what are the details underlying it . That is particularly true for the world of corporate bonds. Tom the news flow in the last 24 hours is bizarre. The old line from the 19 century, if i am elected, free beer. George. Continue with an important conversation, stocks versus bonds. How about japan versus north korea . We was big with james of the fletcher school. We will speak with james of the fletcher school. He has a great book. This is bloomberg. Taylor lets get to the Bloomberg Business flash. Rip citys bens parents has upgraded a valid for the year, they said to see Significant Growth in revenue, car sales, profit, the ceo says the company has the right products and necessary financial firepower to make necessary investments. For the First Time Ever, at t has lost wireless customers, 191,000s of grabs in the First Quarter dropped their service which reflects rising competition pressure in the mobile phone industry. At t maintained its profit outlook for the year. First quarter profit soared as standard chartered, Transaction Banking revenue, the british lender rose the most in three years and loan impairments fell by more than half from one year ago. Standard chartered ceo is trying ansimplify the bank and explosion of emerging market lending led to billions of writedowns and the first lock that is your Bloomberg Business lash. Credit suisse announced plans to raise 4 billion in a Rights Offering this morning which means it is abandoning plans to hold a partial idea with swiss business. I spoke to their ceo about their cautious outlook and cost cuts. I am cautious because it is a tale of two cities. We see strong growth and Wealth Management. The m a has continued to come in which is pleasing. April was not a great month in the markets because of the uncertainty of the French Election. We saw that in reverse, with the rally monday. A nomination in may or june but we are cautious. We have strong tail winds and to foreign assurance was enormous. We have low volatility and low spreads. A lot of debt. We did 19 ipos in the First Quarter. Those conditions were favorable. They may continue or may not continue. We are always cautious. Francine i know that very well. Talk about cost cuts, where we you lose jobs . We are making good progress. Make the bank more efficient. It involves job cuts unfortunately but we are focused cutting the are nonpersonnel, nonstaff costs which are down 15 , an enormous amount and on track to hit 18. 4 billion we gave for the end of 2018. A billion dollars of savings we need to generate in the First Quarter. On track to meet the number. Francine that was the Credit Suisse ceo. We are with Michael Moore who heads of our u. K. Finance team. He is cautious. Always been kind of cautious but intimated this was a great win for the bank and things may start to look better from now. When will the share price catch up with rivals . They need to show some Sustainable Growth in those areas he has highlighted as the key to the future of the bank. Whether it be asia or the Wealth Management business. You saw some progress on the net new assets in Wealth Management in asia. The Wealth Management side was good but the trading business in asia suffered in the quarter. I think people want to see some growth, given that they have state so much of a strategy on those areas. Francine the fact that they were able to raise 4 billion, how much does that do to Market Conditions that are so much more favorable than eight months ago . It helps a lot to be able to sell stock at a multiple that is above a third of book. That made it a lot more adjustable digestible to do that and there was some criticism of the plan to spin andpart of the swiss unit you have seen them go in the other direction. Tom let me look at a chart of Credit Suisse. Lets take it back to the beginning of the financial crisis, august of 2007 where the. Uropean banks were not touched out, down, a second crunched down and a third trounced down. This is where he took over at Credit Suisse. Is this a global back or is the final solution for Credit Suisse that they are not going to be a global bank . I think they are trying to be global in certain areas, certainly in the Wealth Management area. You have seen them scale back in parts of the world. They do not have the u. S. Business as large as it used to be. They have gotten out of certain businesses. Shrinking there way a lot of banks are shrinking, but still trying to be global in certain areas. Tom what is their number one skill set . Except being a dominant bank of the swiss government . The two strengths are the swiss unit and the Wealth Management unit. Ven at that has had its issues they are one of the Major Players in that business. They seem to be focusing on those areas and trying to grab some growth. Tom an update on Credit Suisse all francines wonderful interview in zurich. Continuing with george bory, linking the markets to financial repression and we will talk about oil, back under 50. Jeffrey currie on Goldman Sachs at 8 00 our. From zurich and new york, this is bloomberg. ,om from zurich and a new york this is bloomberg surveillance. Three days in a row in london come a good thing. Lets go to george bory of wells fargo, a credit guide, a fixed income guy. Bring up a chart, this is the great bull market that is so unloved. Major shout out to all of our guests who have been resilient and collegial bowls bulls. Like tony dwyer. 2009 george bory, up we go. We are 1. 5 standard deviations off of this trend. I will come in after a have made that work with a pen and go like that. We are a little extended. How did bonds compete with a total return, high singledigit total return . George bond returns have been the, the flipside structural drop in yields over the same time. Central Bank Involvement pushed bond yields down tremendously and helped fuel this bond market. The big challenge is do we move from Monetary Policy, fiscal repression, financial repression, to fiscal stimulus on the government side . That is why stocks are breaking higher and also bond yields are starting to drift a little bit higher. More traditional correlations are starting to show up. Tom we stopped traffic with bill gross, a bond investor you may know, suggesting Procter Gambles dividend was a yield proxy, is dividend and Dividend Growth a proxy for your world of fixed yields . George it has been the last couple of years with yields as low as they are calm investors rambling around the road to generate income. High dividend yielding stocks have been an alternative to fixed income. We have seen a growing number of investors move in that direction. There is hope there is some options. Picking up a nice dividend and hopefully that company will participate in any potential uptick in growth which will simply move you away from exclusive dependency on fixed income. Tom help me with bond issuance. Every cfo has to be there like lemmings on a cliff, saying lets put the paper up, will we see tax repatriation . Anrge significantly in greatbatch investment great and high yield, coming off a sequence of record years and companies have been borrowing like mad. We expect more of that to come, companies have a lot of funding to do and they will do it. Tom call me when it is time to 800bowtie. Ne we are making jokes but this is financial repression. Coming up on radio and television, bloomberg heveillance we do it all, keeps track of jamie dimons pound sterling. This is bloomberg. This is bloomberg surveillance from zurich and new york. We are looking for pictures out of london. It is decidedly less cold than zero is because we are at minus two degrees here and the snow i dont need to say more. Get the park is out in switzerland today. We need to talk a little bit about brexit and we have the brexit minister of the u. K. Mr. David davis, talking and saying he has a deep desire to avoid cliff edges share by other eu nations. I think they are now putting lines. If you look at it in the eu, they say look, this is what we want. Or in france, this is how we deal with Financial Services. The particularly the battlegrounds of being drawn and they will play out after june 8 and the u. K. Election. Tom this is remarkabletom . What is the path of the politics to june 8 . When do we get up to the front results before they get going . Francine this is get going u. K. Style so it is long by u. K. Styles but we have seen theresa may going on the defensive. The big talk is she has such a huge lead compared to the people training behind her but unless Something Big happens it does look like theresa may will become Prime Minister. What is more significant is these brexit negotiations, if it is Emmanuel Macron like widely expected, he is said to be tougher than Marine Le Pen would have been. For first word news, here is taylor riggs. President trump has lost the first round in the legal fight over socalled century city. San francisco and its neighbor, Santa Clara County, have for luminary court orders blocking the edict that threaten the budget of cities that give safe harbor to undocumented immigrants. A judge said the order violated the constitution. The government will appeal. Congress has until friday to pass a spending bill or face a partial government shutdown. Lawmakers havent seen any of the details that could complicate the passage. Republican and immigrant negotiators are hashing out details in private. Congress could pass a shortterm extension for more time. Canadas foreign minister says the country is in a lumber dispute with the u. S. And it has been upheld in the past and it is confident it will be again. The u. S. Has proposed tariffs. I would say to my american friends, be nice to your clients. We work hard at our relationship is inou and i think it the interest of the United States to keep the relationship strong. President trump imposed tariffs up as much as 24 on canadian lumber this week. The u. S. Says canada unfairly subsidizes the industry. In paris prosecutors have arrested 10 people linked to the 2015 attacks on Charlie Hebdo magazine. The suspect is involved implying in supplying weapons to the attacker. 17 people were killed in the attack. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Tom taylor, thanks so much. This is what surveillance is about. Weve got two smart guests from two different world. Steven friedman, senior economist, with terrific perspective hinging in the United States and the rest of the world. In wells fargo, worried about your financial repression. Jason, help me out with the camera if you can. Here is the fed meetings. At may 3,en is appear june 14, july 26. Do you think we have this memorized . No, we just use the bloomberg. Come down to the bottom and here a Bloomberg Intelligence article. Mplications of 4 nominal gdp lets begin this debate on where we are. Steven friedman, how kind is chair yellen with global events, political events, the guy in the white house who seem to be doing tax reform almost like free beer , cutting everyones taxes . How constrained is chair yellen into that . The economy is largely at full employment, inflation has been rising gradually to 2 and the fed is not in a position to remove the combination. They want to see the details of a tax plan but if we do go forward with this type of stimulus it does mean the fed would be on a steeper trajectory of rate increases. Tom do you assume, as a Bloomberg Intelligence article said, i just showed you, 4 animal spirits. Can they actually get it going to give them room to raise rates . Where is the nominal gdp going to come from . That is one of the big issues. When we see a tax plan like this, we have to ask, is it going to boost productivity in the long run . The jury is out on that one. It has been weak in recent years. It is pushing on policymakers and the administration to really think, are you going to raise productivity . Tom let me go to you and some credit strategy in the big picture. Paul krugman in the New York Times yesterday polarized campus kansas and california. Kansas did would President Trump wants to do, cut taxes, everything will work out, supplyside kansas. It didnt work out so well. Are we going to have a kansas at the white house . As steve just mentioned, a late cycle stimulus is something to question. The bond markets are skeptical. You have not seen yields move up materially and the curve is flattening, which means some of the stimulus, while it may cause a shortterm boost, it may not have the longerterm implication that the administration is hoping for. I think you can capture some of that nominal growth by going through stocks but the bond market is telling you that over the medium term, at least right now, it is unclear if that is sustainable or not. Tom lets bring in Francine Lacqua in zurich. Thank you tom. When you look at the concerns the markets will have an may have in the economy is, is there a concern that the fed will mess up policy . Im not talking about raising rates too much but im talking about reducing the Balance Sheet to quickly. Discussions about the Balance Sheet have been absorbed smoothly by the market buspar. I think they will go very gradually on the Balance Sheet. My concern isnt so much on the Balance Sheet side but this idea that later in the year, if the expectations of stimulus are boosting growth further the federal signal that is going to raise rates more aggressively come next year could even start to see this show up in the projections come june. Francine right, and as we figured out on whether the president wants to replace janet yellen or not . He didnt at first but now he seems to support her . It is unclear. What is becoming clear is he is going to favor somebody in that chair who is not going to push back to aggressively against his policies. Who is going to want inflation to run a little hot to make sure that his objective, what he calls making America Great again, isnt compromised. I suspect that he would prefer somebody with experience, somebody where he feels that person will be loyal to him. Francine and what do you see as the biggest risk to the fed . Talking about the Balance Sheet, i imagine that when you look at , theyta, the hard data can only do so much without assuming a fiscal mishap. How is the deal if the tax cuts dont come . That is a good point. From the bond market perspective and particularly creditors, the cyclehere is that a late stimulus might have meaningful deficits attached to it. Pure crediture a perspective, the government is likely to go down at least in the short term whereas the net beneficiary for that could be the companies themselves. They could actually improve as earnings improve and profits hopefully trickle down towards the bottom line. Who do you want to fund . The government . Tom how about we Fund Retirees and favors. I get the emails from these people. They are getting crushed by the gilded age. When does that end . It ends when you can decide to boost longterm growth. Tom go back to nominal question mark gdp is 56 pop. Look at trumps policies on the labor side, they go against tyre longterm growth because the policy is in terms of deportation and immigration restriction, that is going to constrain the labor force. Francine george bory and steve freeman, thanks so much. Tom mr. Friedman will continue with us on bloomberg surveillance. The david guras show on bloomberg radio. Steven friedman will be there. Later at 9 00, this is a wonderful time to have a conversation with the occam feldstein about elections in france. Worldwide from zurich and new york, this is bloomberg. We think nike is doing well. Q1, we hope dividends of good work and the team have been doing. Had disturbance and really nobody exacted any pressure on us. The team was to give 40 . Really, we wanted to focus on continuing to turn around. Francine that was the Credit Suisse ceo speaking to me a little bit earlier on about firstquarter earnings, bonuses coming out. There was a bonus, so they basically increased some bonuses and because of shareholder upset, it is unclear how many shareholders were upset, they had to cut them by 40 . He was telling me that this is now completely in hand. Tom i noticed there is only one thing to do with that and go to zurich and see how expensive the city is. That is jawdropping. A simple mcdonalds lunch is 14 u. S. Dollars. That is outrageous. Help me in zurich with a cultural fit of Credit Suisse . How does Credit Suisse fit into the nations consciousness . Tom it is part of the consciousness now. If you think about it, the big banks are ubs and Credit Suisse. Associates,ook at ubs was much quicker turnaround the banks. Without a doubt. Associates, ubs was much quicker turnaround the banks. A one year low. China Southern Airlines has praised by 20 airbus. 6 billion, but usually airlines count on bigger orders. Chinas southern is a state own carrier that recently sold a stake to american airlines. 700lans to expand from planes to 1000 planes by 2020. That is your Bloomberg Business flash. Francine think you so much taylor. Bloombergs matt miller spoke with Canadian Foreign affairs chrystia freeland. Cheers here is what she had to say about lumber with the u. S. It has upheld several times in court. We are confident our position will be upheld again. Francine matt joins us now from berlin. I really like the introducing thelength of canada and trade span, it is on nafta and on mexico. And the minister was saying, this is like a trading or business arrangement, that you should be good and nice to your clients. Absolutely. What we were talking about today, was that bloombergs function ectr is a way that you can access this on the terminal. It shows you can that is the second biggest trading partner for the u. S. So half 1 trillion a year ago backandforth. Go to exports and you can see that canada is the number one buyer, even ahead of mexico and china, of u. S. Goods. All the stuff we make, most of the stuff we sell, is going to canada. They are the biggest buyer of any other country in the world. Tom when i look at canada, when i look at minister friedlands response, you see the key sentence is every time they go to International Tribunals they win. What is different this time . She doesnt think there is anything different this time except for the fact that the Trump Administration wants to show that they are being active as far as these trade views and their concerns on nafta. They think the bill prevails and they think that whether or not dependsts renegotiated more on what congress does than what the white house wants. Hayes andt comes to they will negotiate, we will talk about that with wilbur ross. She seemed very positive. Tom we all observed worldwide yesterday, near germany, the managing director of the imf, the leader of the western world and mr. Trump on stage. What was the german press response to that . You did road is you did Rosetta Stone german, you are a genius on that. What is the response to the three of them on stage . I have to say it was really an overthetop impression made by ivanka trump on the press. Lubricate the story about the crowd murmur and reaction to her talking about her father as a champion of families and womens rights and that is a slightly thats got a slightly negative tone to it. On the other hand, all of the all incredibly positive about ivanka, saying she conquered germany and chancellor merkel with her clever appearance in this channel. An incredibly positive review, i think. Tom thank you so much for our social hour here at bloomberg surveillance. The general on wells fargo comes, dont you dare ask mr. Bory about ivanka trump. We will try. Trade tension is never good for Economic Growth. That is one of the big risks. Trade tactics that get out of hand or escalate into a trade war. That is a big dampener on growth. I think what is interesting about the trade negotiations that are going on, whether it is tax policy or trade specifically , is this extra level implication. When we look at the world of corporate bonds, the accuracy has actually been relatively stable. Bond yields have been in a pretty tight range. You can make the same case for treasuries as well. But when you look at the sectors, the individual sectors that are either benefiting or being hurt by this, that is where you get some dispersion. That is actually investable. Energy, materials, these are companies that will either win or lose. That is where you make your bed, at the sector level. Tom george bory with us. We will do another chart with him later today on Bloomberg Television and radio. A m,ongressman from texas jeb hensarling, and the house Financial Services committee, always out front on a new fed. This is bloomberg. Now,foreignexchange right there is 111, that is a wild statistic off of the 109 level. Canada, 13575. Great interview with minister friedland in germany. Very valuable as well. Uris with the is at the weeks with bank. Lets get to bloomberg daybreaks alix steel. Just very easier from Goldman Sachs, head of commodities research. Two full with him. What does tax reform wind up meeting for oil and Energy Companies and what does a trade war mean for commodities like steel, for example, if we have china continuing to pump seal into the u. S. . The other conversation is about opec and we have the saudi emmett saudi Energy Minister coming out but what does that mean for the next four weeks of the meeting. Tom right now i want to get this in for switzerland and Francine Lacqua is joining us. The single best chart, and you can only do this in real time on the bloomberg, i want to thank you for the your best for your research. This used to be three and a half percent for the financial crisis. Down we go. 20 year swiss yield last year, well under 1 . To george bory here, what is remarkable about this is the financial repression printed in this chart, whether it is switzerland or england. George bory witnesses financial repression and whether you dark new york or zurich. If you have negative yields as an investor you will do a lot to not pay to save. We have money swirling all over the globe trying to avoid negative yields. If you point out whos yields are coming up and they are starting to move closer to zero, particularly in switzerland, europe and japan. Tomorrow, for the ecb, in my forion it is the linchpin this global repression story. Because aggressive qe last year drove yields down, drove yields negative and bought up a lot of corporate and Government Debt from across europe. If they are willing to hint that they are actually going to shift to a less easy policy we dont even have to get to tightening. Just let the hint towards it taper. These bond yields are going to start to revert back to more normal coat normal levels. It changes the dynamic for the market. Francine francine, are you going to frankfurt tomorrow . Rancine no, i am not im coming back to london. But i love your chart. What i think is significant is an interview that the swiss economy minister gave. This is the local paper. What he was saying was that the effect of a Swiss National bank swiss,n to give up that frank romero was just a couple of days before 2015, may not be judged for a couple of years. He says he is worried that a lot of exporters are being squeezed because of that. Because we have found out a few years from now. Tom that was a brilliant interview with the Credit Suisse company. A 4 billion right steel. Much. Bory, thank you so we will continue on the radio as well. We will systemize all of this today on the Bloomberg Television today. John morgan of jpmorgan is working out derivatives on a more holistic view of what the markets are doing. The backdrop of this is equities to the moon. A continuation of the great bull market. Lacqua. Francine london misses Francine Lacqua. This is bloomberg. Jon bring it home. The president is said to want a 10 levy on offshore cash parts. The big tex reveal is imminent. Into want charted territory, the nasdaq hits for the First Time Ever. Credit suisse will Cap Investors for 4 million, becoming the third major european banks to sell shares this year. From new york with an easy question, who wants a tax cut and difficult one . Nobody wants to pay for it. In the market, lets get you up to speed. Futures largely flat in the United States. S p 500 futures negative a single point. Treasuries at the margin, yields low. The euro a little bit softer after a few days of gains. We are down by one third 1 . Alix lets get your morning brief. Another big day for earnings. For seven Companies Reporting at 730 seven 30. Look at the treasury option. 5year note, 34 billion. Twoyear notes have the best recovery since last may