Anna a warm welcome to bloomberg daybreak europe. Were here in the city of london. Manus well get straight into breaking news. Anna merck numbers coming through, First Quarter numbers from the German Health care business, matching estimates. Billion, 3. 83. 8 6 had been estimated. , interestingbitda to see what they say about the outlook. This is been a year that has been pivotal for merck. The Health Care Unit has made steps forward with its first new drug in more than a decade. It was clear tos sale in the u. S. Or quickly than expected. Thats where the focus will be. May put itssaid it three divisions into subsidiaries. We will keep and ill these numbers coming through and will be speaking to the management of this company a little bit later on coming up today in programming on bloomberg. They see fullyear net sales of 50. 5 going to 16 billion. Their are sticking to gut. Lets look at the list that we run here in bloomberg. The risk off sentiment grip the market yesterday. Wall street finally woke up to the Political Risk. The question is, is it pricing in impeachment, or just a long, bumpy road. At amazon loss 1. 7 billion. In total, are rich list at bloomberg demolished, 35 billion of their wealth. Does it marked the end of the socalled trump rally, rather than the type of plunge that list with the risk radar up. We can see that little bit. 3 on the s p at the start of the u. S. Trading day. Remember we fell more than 1 on the indices yesterday. Yesterday the s p 500 down the most since september, the worst in eight months. Manus you cannot beat the classics, they last a long time. Up on theg dried market yesterday. Japan actually had good numbers. First quarter gdp actually expanded, thats the fifth straight quarter of expansion in japan and the havent seen that since 2006. Moneyas had five days of sloshing in. Anna the Political Uncertainty moving from europe it seems to the white house. That will keep gold in the spotlight and keep upward pressure on gold. Lets get the bloomberg first with juliette saly. Prime minister theresa mays conservatives are expected to unveil their Party Manifesto ahead of the uks general election that takes place in three weeks time. She will tell wealthier elderly voters that will have to pay for their own care and promise further earlier controls on hiring Migrant Workers, according to a person familiar with the plan. They leader pledged to give british people a referendum after any brexit deal has been finalized. Its obvious when you think about it, someone is going to have the final say over the final brexit deal. It could be the politicians, or it could be the people. I believe it must be the people. Japan expanded for a fifth straight quarter, as longest run of growth in a decade, thanks to the continued strength in exports. The last time japan strung together this many quarters of growth was in 2006 and the pace wrote exceeded all expectations. There is concern that spending might falter again with stronger wage gains needed to support household and allow retailers to prices. Brazil has plunged back into political crisis following reports that the president was coverupin an alleged scheme with a jailed former speaker congress. A brazilian newspaper has reported a tape has been submitted to the Supreme Court with a secret recording approving a payment to the mastermind behind last years impeachment of former president Dilma Rousseff. The press Office Issued a statement vehemently denying the allegation. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. Risk offto see the sentiment right across asia field through from what we saw in Global Equity markets. The flight to safety is weighing on the nikkei, down 1. 5 despite that better than expected gdp growth. You also have a strong jobs report coming through out of australia and unemployment going down. Weakness coming through in the china markets as well. The tie ask was about 10000 and the beginning of this week and now well below that. Hitting a record high in hong kong after its numbers came through well above expectations. Firstquarter revenue rose 55 . The biggest lighter on the regional index came through with for your earnings that missed expectations although the ceo says there getting close to hiring ahead of sales and marketing in the u. S. And chinese property stocks started to way into home prices in april, subsiding from the large highs. Looking at this chart, it shows what were seeing in the gdp picture in japan. We did see that expansion for a fifth consecutive quarter as we mentioned, although there is a little bit of concern that japan may not be able to keep its momentum going. Very much watching the numbers to see if we can see the economy turn on that reflation trade. Manus thank you very much. The Justice Department has named former fbi director robert overer as special counsel the investigation into russias possible role in the 2016 election. The appointment comes as the white house is reeling from allegations that President Trump asked former fbi director james comey to end his robe into the former National Security adviser michael flynn. Anna lets bring in Jodi Schneider. Great to get your thoughts this morning. Does this appointment calm the waters or change the tone at all in washington and on capitol hill . He is certainly well received as a choice to lead an investigation for the Justice Department. Is respected by both republicans and democrats. Dianne feinstein, the top democrat in the Justice Department and the Justice Committee and the senate has said he is and excellent choice. So the white house was able at least for now to change the conversation a little bit. However, the real question is whether they will be able to get back to business on capitol hill. This has consumed so much of their time and energy and its all been about investigations and the allegations and probes that its hard to see that theres been a lot of movement in terms of policy and moving forward with the president s agenda or the agenda of the republicans on capitol hill. Continue they investigation side by side, is there any sense of a timetable yet . We havent heard about a timetable. The democrats are saying they want them to move quickly. We heard from paul ryan yesterday, basically said we want to move forward in a judicious manner. But they will continue and their they will go at the same time as the Justice Departments investigation is continuing. Thank you very much, Jodi Schneider with the latest on whats happening on capitol hill. The allegations swirling were a hot topic in las vegas. Set downik schatzker toh a number of executives get their take on what the turmoil really means for the trump train. Im counting on the president to be a leader. I think the president has the competency and all of this unfit for office stuff is just a bunch of stuff. Train that weve all embraced and that has driven the market to new highs in equities is coming to an in here. Weve had more than four months of straight inflows of Foreign Investment into emerging markets. Reversing the November December trade. The big selloff going back to the u. S. , weve already seen that reversed. Its going to be a little more difficult. Think achange, and i sickly it will create new opportunities. Its more evidence that the markets are pushing back even further, discounting completely two or three, or one or two of fund rates, so some concern, but nowhere near panic. Youre not someone who runs around with your hair on ira. Lets talk about what this all means, the latest as we heard from our colleague, the Justice Department naming a special director to oversee the investigation. Marketsof some calm in before the storm . This is the first shoe to drop, the allegations, anything which is an attempt to bring some kind of natural administration will pause. The appointment of a special investigator, for example, will allow markets to just take a breath and recalibrate exactly when they should start planning and impeachment. Where donaldoint trump is still in power, but were not seeing a torpedo to his administration yet. Francis wilkinson wrote a piece this morning saying that washington is enrolling in trump university, and what does it take for republicans to abandon President Trump . The markets have a different interpretation and thats what manifests here. This is the bond market. Weve seen positioning here, were going to get an update on this. Money is going into bonds and its turning into a wall of money. I think there is the element of republican support which is very important here. Brand is being damaged by these allegations and the white house brand has been damaged but the republican brand has not been damaged yet. Thats why paul ryan can say he backs the president and the administration. The allegations are somewhat against what the gop party is trying to do in congress. Some people seem to think that with this appointment, there can be some returns to other business. Paul ryan saying that congress will be able to walk and chew gum at the same time. The markete saying doesnt believe that congress can walk and chew gum at the same time. Every minute we debate this is a minute away from health and, away from the wall away from tax reform. Its away from the regulatory reform. All for ave been put couple of months already waiting for some, in game around this. Its probably not going to be done by september and maybe done by the end of the year. There was a lot of faith put in the ability for this administration to get something done in the First Six Months and at the moment, theyre not getting anywhere close. Love that line, walk and chew gum at the same time. I thought every american can do could do that. Thisr back to the markets, is the proof in the pudding. The window for the fed to do something seems to be getting shaky. The odds of a june hike have gone to 60 from 80 of week ago. This window seems to get narrow were as politics just crashes into it. The fed is trying to remain above the fray as it stands at the moment. Question is does what happens further down the road in washington impact what happens at the moment. Still not above wanting to surprise markets. Given the improvements that were still continuing to see in the u. S. Market, retail sales were pretty awful last week Industrial Production manus these markets are paranoid and schizophrenic. Weve been told 25 times, they get anaphylactic. They do, and the speeches we get will be crucial and set the scene for june and probably the rest of the year if the news out of the Trump Administration doesnt turn positive. Will thewhat extent fed officials come out and say we were counting on any of these policies yet in our forecast . Theyve not talked about it, as far as laying out groundwork of expectations, they have not done that. For them to say we are drastically reducing our charts as a result of the fact that he can close the door, that would be very interesting. Here are some highlights of your day ahead. Manus Deutsche Bank is holding its annual general meeting today. From and a Rate Decision mexico at 7 00 p. M. U. K. Time. Brazil plunges back into political crisis less than he year since the president was sworn in. Find out what it means for all the markets. Thats next. This is bloomberg. Manus theres a lovely shot of hong kong. You can see the hang seng at the bottom of your screen. Dropped over 1 at the start of trade, very much following the political machinations in the United States, the selloff of u. S. Equities. Those concerns over the Trump Administration seem to have dissipated with the new prosecutor having been appointed. The hang seng tears its losses for the day. We talked a lot about the United States in isolation. We still have emerging markets very nicely yesterday. 6. 9 to the dollar, facing pressure as we see what develops from capitol hill. Upper pressure to the chinese currency. Dollar china has been at 6. 9 for the better part of six months now. After the august mobile that we saw last year, its gone very quiet. This is the pboc actually doing their job and should be very happy with the job they are doing. Does it necessitate further drop lower in dollar china . You have the correlation on that pretty good. To back offy have from that if they want to keep it at 6. 9 . I think well have to move down to Something Like 3 , for example. They also have to sit there and say this is political news, he has been able to extricate himself from political news in the past, so this could blow over. A fresh political crisis following reports that the president was involved with an alledge coverup scheme. Anna one of the countrys largest newspaper reported that approving atape payment to the mastermind behind last years impeachment of former president Dilma Rousseff. Thats get to Justin Kerrigan, our managing editor or Global Markets at bloomberg news. Give us the latest. This comes from a paper that exposed a threeyear investigation. Its a Major Television media giant in brazil and claims to have a recording supposedly approving some kind of payment to keep him silent, the lower speaker of the house in the brazilian congress. He is now in prison. He was a major figure at the center of the impeachment of Dilma Rousseff last year. We are talking about a Major Development here that could spiral out in any number of ways. Spiral out in a number of ways. Weve seen protest in the street. What does this mean for the governments plan for economic reform . That is the crucial question. If you look at the environment we are in now in brazil, brazil is riding the emergingmarket wave of confidence at the moment. Hes been at the forefront of efforts to introduce our drive through the pension reform plan that is so crucial to brazil. The markets are like in that. The riau recovered hugely after Dilma Rousseffs impeachment. The stock market is in a good place. The yield have fallen on the countrys bonds, but on the street level, the brazilian people do not like this at all. Anything that will cause turmoil in the country is going to be negative. Manus thank you very Justin Kerrigan there on the latest from brazil. When you look at this story, its almost like deja vu, isnt it . Last year this time we were looking at the impeachment of Dilma Rousseff. Politics has always been there. The Political Risk goes back up but everyones watching that emergingmarket currency of the day. Theyre obviously has been the u. S. Fiscal risk which is come back into the crisis and the eeoc and credit nature of the rise in the oil price and the ability for the u. S. To maybe not be as avaricious and trade terms that are boosting these kind of currencies moving forward, but the reality in a very good spot. And the yen trading higher these are commodity currencies. Trade but the story was nowhere near the Canadian Dollar or the aussie dollar yesterday. Its in a bit of flux at the moment. The narrative weve had around the oil price obviously has boosted these things. The Canadian Dollar dealing with that and the downgrade of the Banking Sector in the past couple of weeks, these currencies are volatile within a range at the moment. They are not breaking through levels. As it stands at the moment there is still more volatility to calm more volatility to calm. Manus oil struggles to gather momentum. Will hear about the latest attempts by russia to lift prices as we go to the opec meeting next week. The rapprochement between the two as weve never seen. This is bloomberg. Anna welcome back, six 30 here in london, 2 30 over in tokyo. Risk aversion trade today looks a little different, unwinding a little bit of what we saw yesterday. Equity market session is still pretty weak as the asian equity markets catch up with what happened on wall street yesterday. Slightly stalling at the top. Manus mr. Macron is probably going to be smiling this morning , his Unemployment Rate as he starts his tenure has fallen from 10 , coming in at 9. 6 . Amen unemployment has also dropped by 31,000. We wrote a couple of stories on this. He would be one of the first president s to start with a real tailwind in terms of employment. Rated at a six year high. Growth of 1. 3 this year. His come off doubledigit unemployment and that is the critical point in that story. Lets check in on the over the last 24 hours. It has been a busy one. Volatility has been reawakening from its slumber. The vix cert surging the most since brexit. This as were seeing the stock selloff that we saw in the u. S. Spreading to asia. The s p 500 dropping the most in september and yesterdays session. The msci asiapacific index lower today as well. Were seeing other assets showing a little more calm after wednesdays sharp move. So the dollar coming up for air, the bloomberg dollar index recovering slightly from that sixmonth low. The dollar in has been in flux but it is higher about. 4 . The dollar dropped 2 against the yen yesterday. This chart shows you some technicals. The dollar in broke through in but someesterday