european equities are trading. just under 30 minutes left in the trading day. luxembourg is up and iceland is down. everyone else up driven by corporate earnings with two main currencies rising against the dollar. the others are declining. big moves in the periphery bond ,arket in france and italy switzerland, netherlands, all those yields rising. the grease yield is falling. a've seen a failure to strike deal over a plan. busy day for corporate earnings. the second biggest bank reported a 20% drop in quarterly profits. setting aside provisions to court with a european ruling on adjustable home loans and announced plans to switch and all cash dividend next year. revenue from lending was better than expected. shares down by 1.9% today. euro area manufacturing expanded at the strongest pace in nearly six years. is euro areae manufacturing. germany is the other line. input costs,nies high demand driving price growth to the fastest gain in five and a half years. we have had strong days with inflation at 5% and unemployment falling to the lowest level since 2009. january at the best month for , coming cents march after it slumped 6.4% in the fourth quarter. the month ended with a 1% gain after donald trump's top trade germany excisee surplus is a sign of a grossly undervalued currency. according to four different measures, the euro is undervalued by anywhere between 9% to 25%. parity shows the euro remains the most undervalued against its peers but analysts say headwinds for the euro include the benign economic outlook, a devilish central bank and rising critical risks. the euro-dollar best monthly performance since march of last year. 90 minutes into the trade in the u.s. how is it looking there? isie: the rally here faltering. if it does and that closing down on the day, it will be the fifth straight day of declines. the dow hanging onto gains if not by much. ,f you look at the bloomberg i'm looking at the bloomberg economics prize index, that is the white line. is above the yellow dotted line, that means economic data has beat estimates. , we gotning manufacturing rising for the fifth straight month. we got the adp employment report that showed the biggest gain in jobs in seven months. that means rates are pushing higher but it doesn't necessarily translate into a first stock. treasury yields are rising, you would think interest rate sensitive groups are rising. it's not happening. it is not happening with utilities, utilities are down 1.8% and that has to do with earnings. take a look at some of the earnings -- dominion resources leading the losses, down 5%. the midpoint forecast is below estimates. it's seeing lower nuclear power prices for its millstone plant in connecticut. it's also seeing a step down in credits and ant slow recovery is what it is predicting and that's having a ripple effect among other utilities. would updateu we you on oil prices in the wake of oil inventory numbers. oil is still on the rise. in the face of the build and supplies we saw, gasoline supplies, the highest and 27 years, yet we also learned opec cut its supply by 180,000 barrels a day, so that appears to be offsetting the u.s. data. it could be make or break for the dollar as the rally turns into the federal policy decision. anything could spur bulls with the dollar already on the rise after today's blowout jobs data. joining me now is the head of g 10 strategy. a bit of jawboning taking place in the last 24 hours from the chief trade advisor for donald trump. does jawboning work? will it cause the dollar to fall? if job owning worked, the swiss currency would be the weakest in the world. so jawboning doesn't work. sort of the surprising comments when they come out but if we have a protectionist administration, we have to expect that kind of comments about currencies. that you thinkng jawboning does not work but your long-term view over the dollar for the trump presidency, whether it is for or eight years is for the dollar to fall. we have some upside to start with. what's behind that call? guest: a number of things. that's how republican presidencies have often affected the dollar. the dollar has generally done worse under republican presidencies. very often in the early phase of the presidency, it has gone up strength for six months followed by a number of years in decline, that would be a typical cycle under republicans. a lot of policies trump is pushing through, some seem extreme and a little manyoversial, but corporate tax cuts for instance might be regular for what we expect under a republican president. it tends to create dollar strength early on the cozy federal reserve will follow that and raise interest rates. but over time, that effect wears off and it will wear off on the dollar. if the dollar does not fall naturally, we will find we see more of this jawboning and the trade improvement trump is looking for. something that's not going to come through, so i think there will be a lot more frustration. at this stage, i don't think jawboning makes that great a difference. in the future it might, if it is backed up with other actions which could involve active intervention. clearly have a strong position on this. are you willing to make currency bets on this or is it so uncertain that you would rather just move elsewhere and take decisions somewhere else? guest: that depends on what sort of time perspective you have. the problem at the moment is things are quite volatile in terms of the day-to-day movements. we saw that yesterday in currencies like the yen which was attacked by president trump. difficulty in short-term positioning as you may take positions at it stopped quickly because of the whip sawing nature of the moves. probably a better strategy for a short-term strategy, more like the six month or 12 month horizon. and to reverse out of that to sell the dollar. my targets as far as euro-dollar are concerned, we could see the euro-dollar down into 95 into a parity type region. that's an area where i would look to buy the euro for the longer-term. i think it can certainly become undervalued. i'm not sure those valuation measures help us a great deal, but by the end of the trump residency, i think the euro will be back up in the 150 range and that's a good trade in the long-term. mark: how should we be positioned ahead of tomorrow's boe super thursday? some say bullish in the near term on inflation growth, that could be a boon for sterling? movement in sterling we have seen today reflects the market might be thinking that direction. the problem for me is any lushness is misplaced. i think the economy is going to suffer significantly, more significantly than the bank expects. i certainly don't think it is a done deal. therefore, i would say strength for now perhaps or at least in terms of reaction tomorrow. mark: what about political risk outside of the u.k.? being paidtention is to what's happening in france right now with the presidential election upcoming. is that the biggest potential hurdle in europe and what impact does that have on the fx space? we mentioned the pressures we are seeing in the bond markets. not just the french bond market, but as these spreads widen between periphery bonds and what we originally perhaps called bonds and the german bund market, that's when the euro is under pressure, so you would expect it to be some weakness. think this comes associated with peter navarro's comments about germany using the weakness of the euro as a screen to hide behind and i think that reflects not just his but the administration in general's concern and maybe even dislike of not just migration policies which trump has criticized germany for, but as a concept. it will be a questioning of who is next to leave and isn't it good idea that the u.k. is leaving? i won't call it pressure but these kinds of comments undermine the euro in my view. for the moment, we should keep the focus on the downside for the euro and the upside for the dollar but that's going to flip around. mark: the head of g 10 strategy at standard. complete coverage here on bloomberg coverage starting at 2 p.m.. can't wait. theie: let's check in on first word news with courtney donohoe in the newsroom. courtney: happening right now on capitol hill, the senate judiciary committee is debating confirmation of general jeff sessions. his loyalty is a top target by the panel which is expected to .ote among party lines democrats are concerned about the senators immigration views. we will keep you updated as soon as that vote happens. with no democrats present, the senate finance committee has approved two of president trump us cabinet nominees to emergency action. they okayed the nomination of steve mnuchin and tom price. democrats boycotted the vote yesterday. to me chairman orrin hatch says the boycott left us with a few precious options. the confirmation battle over president trump's choice for the supreme court is on. judge neil gorsuch had to capitol hill to meet with senators who will vote on his nomination. meanwhile, senate them accredit clear, chuck schumer, says he doubts that he could be a strong independent justice. defense secretary, james mattis, is off on his first trip since being sworn in. he left for south korea and japan and will try to reassure allies they can still count on the u.s. president trump has suggested in the past that asian nations were not paying enough for american troops stationed in their country. global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. i'm courtney donohoe. this is bloomberg. now --appening right u.k. lawmakers are speaking in the house of commons in london at of the vote on the article 50 bill. you can watch the full debate on live go, day number two of the debate. the vote should be sometime this evening. this is bloomberg. ♪ mark: live from london, i'm mark barton counting you down to the european close about 15 minutes away. world: and from bloomberg headquarters in new york, i'm vonnie quinn. mark: the u.k. has scheduled to vote on the article 50 hill which would give theresa may the authority to trigger the brexit process. one number talked about the future of the country's trade with the eu. >> the truth is that while britain is seeking the maximum possible access to the single market for goods and services, and while we hope the fact we have a trade deficit and important financial center will count in our favor, the government has chosen, and i respect this decision, not to make the economy the priority. mark: for the latest on the article 50 debate, let's go to westminster. former chancellor george osborne's comments highlight the division within parliament, within the conservative party itself on this very sensitive subject. what these rather acidic remarks illustrate is not so , ih the opposition to brexit think most mps see this as a done deal but to the direction be takingy seems to the brexit -- a hard brexit, leaving the single market. there's a great deal of uncertainty as to what kind of deal and what kind of access the u.k. is going to get from the eu. when fort was a little the remainders because the white paper will be published tomorrow ahead of the committee stage of the bill, which is when we really get down to detail. that is a mini when for the remainders. guest: absolutely. and in a way, it's more significant than the bill itself . we don't expect that much in the white paper. it will pretty much be the speech theresa may delivered in ituary, but what it does is sets down in legal form and parliamentary documents how priorities, the stages and it is a point of reference. it means parliament can hold it to account as negotiations progress. that going to happen? this is the big talking point -- the remainders want more say in the process. when we go through the interesting part of the bill next week when it goes through the committee stage, do you think more amendments will be added to the bill? all of that depends on the speaker. there certainly the anticipation that we haven't seen the last of it. i think the white paper will bring a fresh point of reference for the remainders fighting for a more moderate brexit, for scrutiny on a step-by-step process. the idea is they need to be updated on a regular basis on how negotiations go and intotionally have a say whether they are happy with how negotiations are going. interesting comments from the trade secretary speaking before the parliamentary committee. he said there would be no divorce payment, but the former ambassador to the eu seem to go against that and suggested the process is going to take a lot longer than two years. who do we listen to? this is a big question. campaigningf the pro brexit mp's and is now in charge of trade. he suggested interestingly that a wto deal would make no difference and would not require britain to raise tariffs for trade. this is all uncharted territory. the diplomat side, someone who it forn dealing with years says it's not as easy as it seems and it's going to take years of negotiation on every level. others are saying it's all going to be fine. there's been a lot of daymonious talk around resignation because he released a memo that was pre-hard-hitting , suggesting they were not being listened to. until we get to the negotiation stage, we will have very little clarity. mark: great to speak to you. we've got some breaking news on jeff sessions. breaking news -- the senate judiciary committee has approved jeff sessions for attorney general. confirm,senate must but the nomination has progressed and the senate panel has advanced jeff sessions for attorney general. this coming just after the senate finance committee chairman boycotted, orrin hatch receiving a letter that my nation and price gave inaccurate testimony. however, they, too, past the committee. this is bloomberg. ♪ vonnie: live from london and new york, i'm vonnie quinn. barton.d i'm mark this is the european close. six minutes until the end of the wednesday session any new partnership in the airline industry. have announced plans to form one company. lift anza chief executive spoke to bloomberg in abu dhabi. anza'sg part of lift success has been built on partnerships which made us the global number one aviation group and europe's number one airline. when we decide to partner, we choose carefully. i consider this the start of a new partnership with a huge catering and potentially cargo. his counterpart echoes the words about the further deal. >> our teams met today and there are a range of opportunities in cargo systems and information technology, how we work with other equity orders, so we are keen to continue that dialogue. mark: lift anza says it is interested in it cooperation with alitalia. we are five minutes away from the end of the wednesday session. stocks are rising today, the first day in for. the biggest gain on the stoxx 600 since november 9, the day after the u.s. presidential election. sterling against the dollar, solid pmi data and the euro down against the pound. with our bond board. have a look at where yields are trading -- all up today. the close is minutes away. this is bloomberg. ♪ . have a look at what is happening live from london and .ew york, i am mark barton stocks finishing higher today, rising for the first day -- driven by better than expected earnings from the likes of volvo , basic resources the best industry group. electrolux falling as much as 5% , tracing some of those losses, fourth-quarter operating profit missed estimates and banks weakening demand in latin america, and cost-cutting measures, it appointed a new head for its major appliance business in latin america. the chief executive has been looking to tackle the region's drag on his profit, seeking to boost profit by $1.6 billion. by reducing costs and improving efficiency to offset higher prices for raw materials used for its refrigerators, ovens, and other products. shares have risen by 23% in the last 12 months. charts, was a of the this is what i would have done, a wonderful feature on the bloomberg called wbix which shows blonde gauges, bloomberg bond gauges. -- that is the green gauge. benefitedaland dollar from a breakdown in the correlation in the u.s. dollar and treasury yields which benefited high yield in the commodity type currencies like the new zealand dollar and the australian dollar. the best-performing currency against the dollar in january, out of 156 we tracked on the bloomberg. a wonderful stat, it rose like with 6%, led benefited from the weak dollar, it had its worst month since march, that and other base metals rose in january because of the weakness in the dollar and because of the optimism of this reflation trade spend on infrastructure, but big lead by 17% way stock exchange index was the best-performing stock market in the world in january and the best-performing asset, the view is that capital markets authorities will open up the exchange and try to get more external investors. it is an index that is heavily geared to the price of oil. a view that opec production cuts have been beneficial to the market. the kuwait stock exchange index, the best-performing asset in january, who would have guessed? vonnie: if there had been a battle of the charts, you would have been the flyaway winner, that is so clear, no matter who would've taken you on. mark: thank you very much. , the averagee u.s. more or less unchanged, the s&p 500 down about a 10th of 1% with the mastec in positive territory -- the nasdaq in positive territory and the dow half-and-half, companies higher and lower making for no real change. abigail doolittle joins us for a look at the month of january. >> february may be starting off we had thenews but s&p 500 in generally finishing up more than 1.5% and haven year yield- the 10 climbed higher, represented in red because it tells us about the selloff but what is puzzling , two of the big haven assets, the yen and dollar rally the most on a month since brexit. because it in red, is saying the dollar declined against the yen, a mixed asset picture in january. the reason this matters, this is --hart of the nasdaq in blue excuse me, and white, and the 10 year yield -- since the election and016, the nasdaq rallied the 10 year yield sold off, the relationship of bond selling off and stocks rallying and the felts of gold and the yen that since the beginning of the year, a puzzling picture as we assets and risk assets rallying, perhaps the start of something new. very important to get an eye on the divergence -- keep an eye on the diversions, stock white in january, the two biggest boost were facebook and apple. apple rallying into the very strong december quarterly report yesterday, driven by iphone strength. the worst drags, exxon mobil, a put up the worst euro a result since 1996 while verizon fell on a disappointing this summer report. .- december report the traditional wireless business a drag for verizon. was for stock investors january. vonnie: thank you. let's get to the first word news. the senate judiciary committee has advance the nomination of senator jeff sessions to be attorney general. he is expected to win confirmation easily in the full senate and senate democrats have stalled action on president to head thece environmental protection agency, boycotting a committee vote that could advance oklahoma attorney general scott pruitt's nomination and boycotting a vote on congressman mick mulvaney who was named the head of the office of management and budget. choice for the's supreme court has begun what is likely to be a contentious confirmation fight, neil gorsuch is meeting with senators today and the president announced the nomination of the federal appeals court judge last night, hoping for a quick approval process. have ant trump: we fantastic hopefully new justice of the supreme court which hopefully he will be approved quickly. >> if the democrats alabaster the nomination, republicans will need 60 votes to finish it unless they vote to change the rules. strong words from theresa may today about president trump's travel ban. she called the order divisive and wrong, however, she said bytain's interests are good working with trump. 's make comments after a former british envoy warns that the u.k. could be presented a divorce bill of 60 $5 billion, haggling over such a payment could shake the final agreement. -- $65 billion, high going over such a payment could shake the final agreement. global news 24 hours a day, powered by more than 2600 journalist and analysts in more than 120 countries. this is bloomberg. mark: markets moving in france today, french 10 year bonds falling falling -- following new revolutions about the republican candidate after the revelation about his wife last week. he allegedly employed two of his children as parliamentary assistants, bloomberg news caroline joins us, what about the latest on this scandal, what impact is at handing -- having on mr. fillon? >> at the moment, he says he is maintaining his presidential bid. areof these allegations starting to impact his popularity. today, for the first time, one that theoll shows independent candidate could in the firstlon round of the presidential election. we have to be cautious, as you can see, marine le pen still leading in the first round with 27%. fillon's 23% and andlarity dropping to 20% if we believe the polls, that would mean marcon could beat marine le pen in the runoff of the presidential election. he is the favorite to become the next french president. mark: a very exciting race, if fillon dropped out, what his plan b? >> the first time in the history of french politics, a republican nominee dropping out but a scenario that we now have, we cannot exclude any more, if you look at the front page of le monde, fillon, can he still hang on? at the moment, this is a real question. lawmakers publicly questioning his situation. b's are being discussed, one option would be the runner up in the primaries -- hevember, the mayor said he did not want to step in, but some observers saying he could change his mind. another option is the former president nicolas sarkozy, he came in third in the primaries. other names -- including the former finance minister, and the head of the north region, who already has an advantage, he has beaten marine le pen in regional elections in 2015. vonnie: lets the a with the candidates we have now, how does campaigning work in this next stage? , the campaign is in two rounds, the first round is april 23 and the two candidates who will come with the best result in the first round will face each other in the runoff on may 7. at this stage, marine le pen, even if she is leading in the first round, has little chances according to the opinion polls, she would be beaten by macron or fillon in the runoff. the interesting thing, time is running out for the republicans if they want to change their candidate because any presidential candidate has to submit 500 signatures from elected officials in france by march 17. mark: you will be there to take us through every step of the way. this is the outlook in europe, coming up, general electric ceo jeffrey m l gives on take on help -- immelt help desk gives his take on how political uncertainty could shape things up. this is bloomberg. ♪ live from london and new york, i am mark barton with vonnie quinn. let's look at the bloomberg business flash, the biggest business stories in the news -- -- once the u.k. leaves the european union according to , her chairman howard davis told bloomberg television the bank would only have to move tens of employees, not the number some other banks have been discussing. george soros has named ubs wealth management executive to run his $25 billion family office according to people familiar with the matter, he will replace the man in the role for a year. ♪ mark: that is the latest bloomberg dismissed/-- business flash. elt wroteeffrey imm the great wave of globalization, he discussed the state of europe, a place where general electric is heavily invested. europe is oversold in many ways, people have been so dark on europe because they need to differentiate between the weight europe is governed, which is difficult and sometimes poorly, to how good the people are on the ground. some of the most productive workforces in the world are in italy and france and we could export out of europe all day long. if you could ever combine reasonable governance or competitiveness in the continent, and if the economy comes back, we will do great in europe because the people, the individuals, are quite good. >> do you worry about what happens to the eurozone if there is something like a marine le pen presidency? mr. immelt: i am not surprised anymore. happened,ing that is if anybody wakes up and says they are surprised by anything. we have never looked at europe as europe. we know the difference between france and germany. when we were doing great into that -- 2014, we were stopped in paris by a set of decisions that violated brussels rules. as an are sitting there american company, something our thumb in paris and we have to fight our way out of -- fight our way out of paris and brussels, it did not feel like the european union at that time. we learned how to manage paradox as a company, learned how to manage subtlety as a company which -- globalization, people see globalization from 30,000 feet at a resort or in a townhouse, or a think tank. they do not know a dam thing dam -- damn thing about how globalization works, it is country by country and deal by deal, i wish it was about free trade but that is not where we are. makeu increasingly investment decisions on that basis, you look at it as country by country? .r. immelt: market-driven early in my career, it was about where -- how can you make a refrigerator cheaper in mexico then in louisville. now it is -- how do we penetrate the african market and the turkish market and europe? that is a change. people are going wage arbitrage and the nafta are quite in the 1988 battle -- are fighting in the 1988 battle. >> technology probably costing more jobs. mr. immelt: technology is the biggest disruptor but if you are selling things in saudi arabia, they want jobs too. it does not matter where you are, everybody is after the same thing which is jobs, . that is the currency of the realm everyplace. vonnie: that was the general chairman-- electric and ceo in boston. mark: apple's big earnings while sales zoomed during the holidays, is there a slowdown ahead? this is bloomberg. ♪ mark: live from london, i am mark barton. vonnie: live from new york, i am a vonnie quinn. apple shares rising after the company reported record earnings in the holiday quarter, the strength of iphone sales, to $70.4evenue up billion. a longtime apple analyst says the company still needs to innovate. >> what they can do better is make a phone that looks more futuristic. i think we will see that with fall. 10 fall, -- next look at aers need to phone that is different but the substance of the phone, they are doing a great job. vonnie: joining us is brownstone to talk apple -- brad stone to talk apple, the author of the -- a brand-new book. in bookstores since yesterday. the apple quarter is the holiday quarter, the fourth quarter, not fiscal quarter, revenue up 3.3% and stock up almost 6%, is that justified? >> we can start with what did lot, ipad sales were down and they did not do that well in china, apple tv did not do very well. the other revenue segments kchrock and yet the -- shrun and the iphone did great because the competition literally went up in flames. 78 million iphones sold, and incredible quarter for apple. mark: services revenue, 18% increase, a big, big business for the company, isn't it? >> a long-term focus, relatively small but the growth is important, tim cook has been talking about that a long time. in the perennial search for the next app. mark: sorry, you go. vonnie: i believe you were about to get to facebook? mark: which is what you should do it that's why you should do it -- why you should do it? vonnie: talk about excellent results. instagram,bile ads, 600 million users, becoming a mature advertising business at the longform video, a new emphasis in the newsfeed on longform video, hopefully they will talk about that. it is the same story, how are they dealing with the new normal and the trump administration? sheryl sandberg and mark zuckerberg spoke out against the executive order. mark: in your book, you made the point that in the inauguration of obama, there were a couple of anonymous lives who happen to be the founders of airbnb and uber and out worth $99 billion, it made me think, who could be the anonymous executives in the donald trump inauguration parade that may be worth an equivalent amount in eight years? >> a great question, we do not know yet, it raises the question -- was there something special about the last eight years and can we replicate that? and airbnbs of uber wrote a wave, that was the emergence of the iphone, facebook establishing its identity online and gps, broadband, wireless getting better. we will see what the shifts are on the next eight years and maybe the maturation of artificial intelligence order to reality and we will see whether this administration will be friendly to innovation in the same way. vonnie: these companies you mentioned in your title, will they be around in 10 or 15 years? will the areas they are berupting the around -- around? selfr uber, the concern is driving cars, any human led business. motorsogle or general leave that -- lead that? has been getting resistance from local governments. vonnie: what is the thing you learned that surprised you in writing this book? >> ferociousness pays off, a love companies try to do that a lot of companies tried to do uber -- a lot of companies tried to do uber and airbnb. there is a benefit to being ferocious and hard-driving. vonnie: the executive editor for global technology, and of a new book, have a look at it in bookstores now. mark: take a look at where european equities finished the wednesday session, up for the fourth day -- first day in four . theng mppmi numbers out of -- out of europe and the u.k. peter navarro said the euro was grossly undervalued. let's finish up with the bond board, yields rising, continuing to gain in spain and italy. bloomberg markets continues. this is bloomberg. ♪ vonnie: we are watching pictures of the donald trump, the president meeting with supreme atrt group, the meeting 11:30 eastern at the white house and some of the comments he made up to the meeting, it is mitch mcconnell on the supreme court vote process but he does not know how anyone could up toe -- oppose neil gorsuch be the next supreme court justice and says he is almost perfect for the supreme court. and that he does not know how anybody could oppose him, let's listen. from the trump: standpoint of experience and education, columbia, with honors, harvard law school, oxford at the highest level, a great student, great intellect, supreme court justices white and kennedy, he worked. great we are having this meeting because we want to have him go through an elegant process. they are very demeaning on their sid