programs with coxe cuts. slashing costson be enough to keep investors on board? matt: less than one half or now or wait till the open. european stocks futures pointing down after a down finish yesterday for both the u.s. and europe. the narrative here is that investors are concerned about political uncertainty, political terminal. as a result, fleeing for the safety of safe even assets. are you seeing that on your gmm screen? is: let's see what happening. mario draghi saying the euro is irreversible. certain people in france may disagree with that. the markets on the equity front got smacked around yesterday. italy down 2.21 percent. the euro is weak for this morning, down by 6/10 of 1%. trading at 106.84. on the markets getting into gear now. -- bond markets getting into gear. france tighten their -- tightened. italy and greece both whiter. wider. the focus on the periphery. it blair yesterday. that story looks like it may have traction. thatep talking about throughout the program. let's get a bloomberg first word news update with sophie. sophie: the trump administration will return to court today to authorityas broad over national security and demand reinstatement of a travel ban on seven muslim majority countries. justice department lawyers are to appear before a panel in san francisco to seek the reversal of a lower court ruling that its the executive order on hold. the move stranded refugees, triggered protests and handed the get new government a first crucial test. the house of commons speaker said trump is not be allowed to address parliament during a state visit to britain. john perko voiced his opposition to trump's stance on an address to mps. >> as far as this place is concerned, i feel very strongly that our opposition to racism and sexism and our support for equality before the law and an independent judiciary are hugely important considerations in the house of commons. sophie: new zealand's central bank governor will step down when his term ends in september. the deputy governor will lead for six months until a prime minister successor is appointed in 2018. appointed in 2012, his tenure has been marked by a battle to revive inflation even as new zealand's economy outperformed its developed first and the housing market boomed. german industrial production unexpectedly fell in december. output adjusted for a seasonal inflation declined 3% from november. the volatile indicators worst reading since early 2009 compares with a median estimate -- eight point 03% increase .3% increase. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. guy? france's political landscape has been driving a s.dge between yields on bund 76 basis points. joining us now, mark. mark, is it the denomination concern that seems to be driving this? >> absolutely. i think france is at the center of this. as we know, a lot of europe has their own political problems coming up. there is worry about elections, what is happening in italy. theies in greece, as well imf coming out of the commons overnight. about france. seen as critical, part of the core of the solid base of the eurozone. gettings -- people are more worried about marine le pen has a greater chance of winning. the spreadually have of an apple clients can access it is well on the bloomberg, you an almost al gore inconvenient truth hockey stick up term here at the end. you suspect that that is going to continue. that there is no reason for this spread to turn around. mark: absolutely. in fact, if you go back a few years during the height of the crisis, theeece spread was high then. that is when france was part of the core and any chance of the euros on breaking up, germany and france would be part of the countries that stayed together. and yet, even then, the spread is greater. focuses on's -- on france specifically. that we have seen recently is a bit squeeze out of complacency. we are probably do some consolidation here. spread can go way higher. 10 year yields in france still at 1.2%. let me ask you an odd question. europeanb meddling in politics via its qe program? is quite a controversial one. people have different views depending on the country you come from or have you believe. mariod say, rocky is -- draghi has done what he can to keep the eurozone together. he has acted sensibly, done whatever it takes. eurozone has stayed together because of the ecb's actions. at some point, they need to tone down some of that support, but i'm not sure that time is due yet. i would say they are not meddling too much. mark, thank you so much. you can follow mark and all of the other team on your bloomberg. it is a fantastic function. with us, andrew. onset, the head of equities who helps manage 26 billion pounds in assets. walk me through how you see her investments over the next six months in europe. >> i take a slightly different perspective on the political risk. in many ways, political risk is getting to be overpriced in europe and maybe underpriced in america. guy: blackrock certainly change to their thoughts on this. that mightething happen that is getting priced in and america's uncertainty now that we have the election. america is a late cycle in its economic expansion. there are some tailwinds in anticipation of tax cuts. it is still late in its cycle. the market is quite expensive. europe is offering some good value and the uncertainties running into the french and dutch elections will quite -- possibly give the pop -- opportunity for cheaper assets. also remember, it is a general rise in bond yields, anyway. german tenure has more than doubled in the last 10 to eight weeks. -- marioing druggie draghi talking about easing quantitative easing. but where the politics comes in, fromcb, it is the change kiwi and unconventional monetary policy, handing it over to politicians to say we need fiscal expansion. central bankers around the world can't be the driver to the economic recovery forever. andrew, it possible, that rather than being worried about a drastic shift towards populism, to be europeans should be worried about a consolidation of eu power. i am thinking about this because the swiss are going to hold a and theum on tax reform european union is putting so much pressure on its own member states and those around it not to cut taxes. competitive ass they possibly can internationally. is that a worry for you? i think this is a great opportunity generally for politicians to really work out what they believe in. powerfulis quite a force but quite a dangerous force. i think what we are beginning to see is the transition. transition into a new political and economic order. what we will find is what the ecb -- the eu really believes. i think that was part of the challenge in the brexit. it was hard for people in britain to get their hands on what the eu meant as a political entity. i think there was that disconnect between the voting populace, not just in the u k, but across europe with what they feel is somewhat disconnected eu. we will have to see them rise to the challenge of global competition. this is a world where we have a choice of whether we want to become inward looking, insular or whether we want to carry on the post second world war era of collaboration and seeing things in a more sustainable, global context other than just in that isolated parochial viewpoint. matt: how do i position, thinking that backdrop. how do i position for the french election? have to soon that if marine le pen does not win, we get a pop in european equities. and libor bell might portfolio to taking -- barbell my portfolio to look at what is a probable outcome and people are pricing that out. how do i politically run my portfolio? i think you look at last year, we had brexit, the trump election, the italian boat. markets went up each time after a few days lag. part of the reason was pessimism was rife last year. now we have optimism. i don't think you can save money the pen is a reason for markets to go up. i think there is a lot priced in. i am cautious about markets in the short term. not just in europe, but across the world. they run very hard, they are anticipating all the benefits, not pricing in any of the risks. i he trimming back some positions. holding some power to drive for the summer mark -- months. we will see a lot of volatilities. guy: by bonds? adrew: i wouldn't be buying bonds yet, i would be holding. i think you get rewarded more in the private debt market than the public debt market. in equities, we have seen a massive swing from quality too low quality. there are a lot of companies missing expectations. baked into the markets pricing of the hope of this cyclical recovery. the way i would be increasingly positioning myself would be going back to companies generating income, with quality growth. to discuss with you. if you are a bloomberg customer, you can watch the show. you can also follow all of our sharks -- charts and contacted the team directly. you can always send met some great messages. i'm sure he would appreciate that. coming up, we talked the banking sector in europe. and cost cuts are a big feature of what is going on here. on theot the latest french story and an exclusive interview with marine le pen's project court nader. that is at 8:40 london time. that is going to be a conversation you don't want to miss. this is bloomberg. this is the open. we're approaching trading in europe. ♪ ♪ matt: welcome back to bloomberg markets. this is the european open. investors selloff european futures and seek the safety of the yen and the dollar. its get the business flash. for that, we go to sophie. bp has reported fourth-quarter earnings that mists estimates. profit adjusted for one-time items and inventory changes. more than doubled from a year earlier to $400 million but fell short of the 6500 -- expected by analysts. that is after higher oil prices failed to compensate for lower refining. statoil has reported a loss in the fourth quarter after deepening write-downs on u.s. shale assets. $40ust did net loss was million. that missed the forecast of a $618 million profit. statoil has slashed spending and cut costs, which has led to the deepest market downturn in a generation. kkr has agreed to combine its hedge fund unit with pacific alternative asset managing to create one of the world's largest investors in hedge funds. intoill have a 40% stake holdings, which will manage about $34 billion. the deal, expected to be completed in the second quarter, will bring them to the higher end of the funds leak, which is dominated by blackstone. partial government data for january showed china lending possibly exceeded the previous monthly record according to people close to the matter. the same regulators estimate loans rose last year that could beat the record in january 2016. the credit surge highlights the challenge policymakers face as they strive to prioritize reducing leverage and deflating asset bubbles. that is your bloomberg business flash. matt? matt: thanks very much. bnp has missed estimates for the fourth quarter. earnings fell at the french banking business. that fell from a year earlier. the ministry was looking for 1.6 3 billion. we spoke to the cfo about the company's results. >> during the year, we have improved our lending rates. we have increased lending rate in the last quarter. they having proved by 4.2% compared to the year before. that is a positive thing. however, the low interest rate environment will most likely remain for the year to come. so i think that next year, we will remain difficult, although the trend is positive. one of the things we will have to see is how it evolves? enter, we -- andrew, we have a situation in which european banks seem to be making a comeback. but it is estimates, still doing fairly well. here i have european banks price-to-book comparison. we're looking at a number of banks below one. what do you think about bnp compared to the week pack? bnp is in the northern european quality and not surprisingly one of the banks that led the rally. minx in the northern part rather than the southern part of the region. , the markets run the banking sector more on the steepening of the yield curve rather than fundamental improvement in the businesses. bit, buts picking up a it is still a competitive market. i think market has taken the expectation of an imminent revival in their business too far. some of the challenges of the industry still remain. bnp is invest 3 billion euros in technology. technology is going to change the landscape of inking quite significantly. for me, it is more interesting to think about the transition to -- economy. other stocks that will benefit from technology changing the way that banking is done rather than banks themselves. great point. a consumer banking, the real question is who needs a traditional old-school bank anymore. to findould you look the winners in your take? adrew: the payment system , thenies, the wildcards world is very interesting. we can find new companies emerging with disruptive business models. we're in a transition economic, whether political, technological or economic. i think some of -- looking backwards, what worked in the past is not necessarily going to be a good guide to pick for the future. we are going to begin to see a lot of those traditional old-school industries actually begin to suffer, in my opinion. will european banks be disadvantaged because of the deregulation of the financial sector in the united states? we are going the other way. all of the challenges that we have in our financial services are aboutcross europe greater regulatory burdens, greater transparency. whereas in the u.s., they are going the other way. in the u k, we will probably cope with that as well. there is a lot of talk about the financial service sector fleeing continental europe. if we do lose jobs in the long term, it will be more likely be to new york where they have the culture and background -- >> city you think the bank of england will lose out? adrew: some continental europeans will not be the winner from brexit that many ceos think . london still has a lot to offer. it is built on several hundred years of talents and experience. is it an industry you stay away from or is there any saving grace? the investment banking business is going to be tough to deal with. adrew: i have to admit, it is not effective that we have got over enthusiastic about. it has had cyclical recovery. and the italian banking sector have come home to roost. there are challenges still for the balance sheets of many banks. guy and i were talking off-camera about greece. i will probably begin to raise concerns about credit quality in parts of the banking sector. i look at their top line. we are not looking at businesses growing much more than money gdp and where competition grows within the sector. for me, that is not an exciting dynamic for a long-term investment. is: at some point, the issue how you deal with performance and benchmarks. if the european banking sector were to come back and price books shot north. the danger is that, depending on if we don't see europe on the front foot again, you don't see these banks being significantly revalued. adrew: significant revalue has taken place in the last six months already. we have had about three or four false dons in the period. we're not just driven by the weighting of a second or are in this year or that. our job is not to look at the short-term, but keep our eyes on and thinkther horizon about where industries are going to evolve and where the long-term more sustainable growth prospects are for a business. i just don't see the banks having that incremental excitement. open money gdp, they are essentially conduits for money in the system. if the banks recover, i suspect a lot of businesses recover a lot more substantially. aboutmuch more excited other place. the open.es away from let's look at stocks we are watching. bp at a headline level was a miss. dudley is talking about cost cuts this morning. i am fascinated to see how this opens. matt: i think statoil is one of the more interesting stories of all the earn mrs. we've had. but stat oilbp, had a loss of $40 million. we were looking for a $618 million profit out of the survey we did. 16 analysts. so basically missing by a long shot. willrprise that statoil continue to keep its dividend payment safe. even less surprising than the fact that bp is going to. coming up on the market open, futures pointing down. this is bloomberg. ♪ guy: welcome you are watching the european open. matt miller is in berlin and we are moments away from the start of european trading. matt has the morning brief. matt: good morning. spreads widen in europe as trading spreads with the front nationale's plans to leave the euro. we will speak with a key advisor to marine le pen. and bnp profit doubles, but misses estimates. investors have driven the shares to a level highest in almost a decade. how long can the lenders outperformance continues ? bp misses estimates but makes progress on cost cuts. will the ceo focus on slashing costs, keeping investors on board? we will go in depth into the oil majors. guy: we will in just a moment. we are approaching the european equity market open. it's going to be a bit negative. let's take a look at what's going on. this is the ftse 100. we will see what bp does any moment. stocks will be important on an individual basis. we'll wait and see what the cac does -- it's now up. but flat is probably the trade. manus: it's very much through the prism of currency that we look at gmm, up nearly .5%. eurou go second down, the is down 6/10 of 1%. again, really defending the position on the currency. the federal bankers are out in force after draghi's comments about the reversibility of the dollar. how does that translate into our fxp? financials off by .5%, the industrial production in germany is certainly not boding well in terms of the risk. number,retty volatile the worst since 2009. have we stepped away from the anxiousness yesterday about european elections? money is flowing into bonds, and this is the shape of the yield curve you are looking at over germany. obviously italy is leading the pace in terms of the width. nejra cehic is with us. nejra: thanks. you showed on your imap how financials and energy stocks are leading the stoxx 600, leading losses. i am highlighting that with a deeper dive into these individual stocks. miss, down is where we are going. bnp paribas missed estimates in earnings, falling at the french consumer banking business. it declined by 36% in the quarter. fixed income trading revenue did rise 23%, but it was still below estimates. however the bank did lay out a multiyear plan to lower cost in boost investment in technology, but we are opening lower on france's biggest bank. moving on to oil majors, an unexpected loss in the fourth quarter after deepening write-downs on its u.s. shale assets. i wanted to look at bp as well, because quarter assets missed after high oil prices failed to fully compensate for lower income from refining. unlike its peers, royal dutch shell and exxon mobil, which says it covered spending, bp said it wouldn't achieve that until the end of the year, and only if brent crude rises to about $60 per barrel. perhaps investors have expected a turnaround too soon. guy: thank you. for civil, we have the child -- first of all, we have the china reserve. unsurprisingly, it's exactly at ¥3 trillion. lovely have those numbers work out. fiat chrysler is taking a hit, and i will get to the bottom of that. bp is also softer, too. let's talk about that. fourth-quarter earnings missed estimates after higher oil prices didn't compensate. when it comes to the other side of the balance sheet, the refining operation. statoil reported an unexpected fourth-quarter loss. the company's ceo spoke to us about statoil's earnings exclusively this morning. in terms of impairments, the billion usd net, and main reason for that is related to the fact that we have a long-term price assumption for oil. we are looking at oil prices in 2020 at the $75 usd barrel. guy: let's speak to our managing editor for energy. good morning. in 2020 at the $75 usdbp. let's work our way through what we saw. in some ways, the miss was not as bad as some oil majors posted, but nevertheless, the markets are taking the story negatively. >> there's a big difference between shell and bp. if you look at shell debt peak, it has continued to rise. the reason for that is the oil price at which they break even. balance against cash flow. shell seems to be on top of that, but bp had bad news. they said this year that oil price has gone from $55 to $60, in theth oil trading an 50's that lets investors know it will continue to rise. matt: does that mean investors are concerned bp will have to cut dividends? >> i think we are a long way from that. there is still some room for them to maneuver in their balance sheet at the moment. and want to cap it at 30%, that is clearly with room to rise. but if oil prices failed to go up, then they will have to look at maybe selling assets or cutting capital spending, because i think the dividend is the bottom line. they will not, cannot afford to cut it unless something exceptional happens. guy: what about statoil? >> interesting, a massiveness. w miss. it seems they have some real problems in the u.s. shale business, where they had to write off expiration costs as higher-than-expected, and that has had a big impact. matt: so will, is that company specific, then, or will we see other oil producers having issues with u.s. shale assets? >> statoil made a big bet on u.s. shale, buying a big oil producer in north dakota. that was a slightly difficult acquisition. i think it is probably specific to them. companies like bp and shell have less exposure. what was interesting is that exxon, the biggest company at of all, made a big acquisition in the permian. is having effects on different companies. guy: hydrocarbon socks? >> not not particularly. the underlying commodity is pretty hard to predict, so you are trying to make bets on something you find it hard to predict from day-to-day. it's not about still of the and sustainability. and that's the reason we don't like it -- we are in a transition economy, transitioning over the long-term despite the arrival of trump in the white house to a lower carbon world. that will make it more challenging for the big carbon producers, whether it be through taxation and regulation, but also people looking for transition and other forms of energy. our preference in the energy production has been an alternative, which has outperformed in the last three years. matt: that makes a lot of sense, theoretically, but what if donald trump just became the president of united states and the ceo of exxon mobil just became the secretary of state? bye forat a screaming the company? >> will be have seen with the results today that there is a lot of differentiation in individual company levels. the oil price is partly a trump -- thereut it was also was a factor move, people bought energy because of the general exposure to the oil price. however we are beginning to get to the point where oil prices stabilize, and people are differentiating between different business models. you have to look longer-term than the markets. while trump and tillerson might be influencing policy, there are trends that are continuing irrespective of political desires. 2016 was the warmest year on record, according to nasa. we do have to actually address the challenge of our environment for the longer-term, and as investors we have to encourage that transition to a lower carbon world. we have to look for alternatives. if the oil price goes up, than alternative producers become even more attractive. they are beginning to be more on the oil price goes up i am perfectly happy to still be involved. guy: i wish we could brought it this, but this is fundamental. we'll do it another time. thank you very much. will kennedy, bloomberg's managing editor for energy and commodities. andrew perry will stay with us. still to come, trump watch. the ministration will return to court for the reinstatement of its travel ban. that and more to come when we talk about the crisis in greece. we will talk about that story. on, we have an exclusive interview with marine le pen's project coordinator. that's coming up at 8:40. an importants issue. this is bloomberg. ♪ is bnp paribas. the trump administration will return to court to argue it has brought authority international security and demand a travel ban on seven muslim majority country. before are to appear panel in san francisco to seek the reversal of a lower court ruling that that the executive order on hold. it stranded refugees, triggered protests, in hand of the new government its first crucial test. still with us, ahead of equities at hermes investment management. from an investor's point of view, is donald trump making america great again? >> he is certainly making some great headlines. from an investor's point of view, that big problem with trying to analyze anything about trump is the rhetoric versus the policy action. we have a lot of rhetoric, and so far from a financial markets point of view, we have had very little in the way of policy action. if you actually brings in favoring tax credits to focus on capital investment as opposed to debt, so equity rather than debt, that could be quite a transition into encouraging fixed capital formation, bringing investment back into the real economy. a lot of that gets clouded by this bellicose, somewhat xenophobic rhetoric that we get in the headlines, which is incensed. it makes it difficult to judge the economic policies. from an investor's point of view, you would rather see him drop many of those policies and focus on delivering the underlying economic problems. we do potentially have the ability to generate jobs and growth. matt: even leaving aside, hasew, the policy that he enacted so far that have incensed hundreds of millions around the world, if you look just at the economic issues that he has promised and hasn't come through with yet -- assuming he does give you the tax reform he wants, assuming he gives us the infrastructure investment in the u.s. that the u.s. so desperately needs, and assuming that he rolls back regulation, is the u.s. a long-term buy, or is it just the bond in the medium-term -- the bump in the medium-term and cash out? >> a lot of if's in there. the u.s. offers and has always offered a huge opportunity for individual companies. it's the world's biggest economy, dynamic, very creative. the potential for changing the way that capital is allocated is quite potentially profound. i'm not a big fan of share buybacks. i know they are very popular amongst many investors, but i would rather see money go into fixed capital formation, and some of the problems around infrastructure, if you travel around america -- you can see the infrastructure has been neglected for a long time. will it transform the trend growth rate in the u.s.? i doubt it, but it will give pockets of growth pockets of opportunity, and maybe will lead to some form of rebalancing and the economy. what it won't do is suddenly make dying old industries great again. what it might help as a transition to a newer, more sustainable economy. tohaps some of the promises specific people in the economy will not be met, but there is a potential to see an uplift to the medium-term growth, especially in the u.s. economy itself. guy: stay with us. earlier i misspoke, saying that china reserves fallen -- they fell just below ¥3 trillion. a slight misread,. sorry about that. coming up, the latest from greece as the imf says it won't miss fiscal service targets. to athens next. this is bloomberg. ♪ matt: welcome back to bloomberg markets, european market open. european equity markets are holding up fairly well with a gain of almost .3% on the ftse, even after drops around the world on concerns of political turmoil. let's get the bloomberg first word news. for that, we go to sebastian salek. an: china's foreign reserves just below ¥3 trillion. the bank of china said reserves decreased by $12.3 billion in january. push policyion may makers to control outflows and transfer to other countries. new zealand's central bank governor will step down in september. the deputy governor will take over until 2018. joining the position in 2012, wheeler's tenure has been fighting tension. productionindustrial unexpectedly fell in december after seasonal swings in inflation declined 3% in november. there were worse readings since early 2009 compared to a median estimate for a .3% increase in a bloomberg survey. global news, 24 hours a day, powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. guy: thanks very much. i want to go they about what's happening with the cable rate. the euro was under pressure, and that is one of the reason europe is doing as well as it is. you can see it on the euro sterling rate -- the pound has dropped, down by nearly 8% on the cable rate -- down by nearly 1%, a fairly aggressive move to the downside. we will come back and talk about that in a few minutes, but the single currency is also softer against the dollar. we are down by .8%, euro-dollar. certainly some softness coming through, the bloomberg dollar index is up by .7%. we see a bit of liquidity in the european book. let's look at greece. the imf says greece won't miss its targets under the terms of the bailout. they reiterated the view that greece's debt is unsustainable. eu officials told bloomberg that the imf's productions aren't based on reality and don't take into account the form of its public finances. joining us is bloomberg news reporter marcus henderson. any response out of greece about what the imf is saying? >> morning, guy. so far, greece has been pretty neutral, and this is because reports have been pretty heavily leaked in advance. the imf position is pretty well known. greece doesn't want to make a bigger deal out of it. there was a lot of irritation on the greek side because they feel that at the moment the budget target they are outperforming, and when it comes to future projections the greeks feel the imf has a pretty terrible record on this front, and yet it is thrilling a spanner in the works. nevertheless, they are in a real bind right now, because the greek prime minister -- european creditors, even though they are more sanguine about forecasts on greece, they won't lend greece anymore money without the imf coming on board. while the imf is digging in, staring at the prospect of more tax increases and pension cuts. matt: when is the next deadline for when they desperately need the money so that the imf can indeed come back in and help to kick the can down the road again? well, the next deadline for when they desperately need the money is in the summer, which means this could draw out for a lot longer. there is not a hard deadline beyond that to close, but there has been an informal deadline set for february 20, which is when euro area finance ministers meet again. various european countries get into their election campaigns, and it becomes a lot harder for decisions to be made. greece harbors hopes that it wants to be admitted to the ecb's qe program in the first quarter. that said, that looks very optimistic. they very far apart, and can try if they want to close it, but there is no guarantee that he can pass him if he does. he has the majority, popularity is dipping greatly. guy: has ever, thank you very much. marcus henderson. joining us out of our athens bureau. are you worried about greece? >> we always worry about greece. guy: muscle memory doesn't teach you that it blows over? >> well, you use the classic phrase kicking the can down the road. you can see why the imf and the ecb are right on greece. greece has made a significant progress on its budget. that has gone into a surplus. but the economy is still pretty small versus the size of the debt. for the imf is right is the sheer volume of debt that greece is sustaining. come the next recession, or even when they raise rates eventually, that is when it really begins to the common issue. are going well you can relax but it is when things turn down that you can see whether it's a challenge. guy: great to see you. thank you. up next, a miss for b.n.p. paribas. we will hear from the french leader's cfo. this is bloomberg. ♪ mattguy: welcome back. let's talk about what's happening 30 minutes into it -- it's an fx story. the ftse is that because the pound is down. the continental markets are down because the euro has just spiked up, though not against the dollar. it's just a pound story, and interestingly enough, a sweats story. what are you seeing inside the fx story? matt: we have a number of great ways to look at this universe on the bloomberg. first off, wcrs is what a lot of people look at to judge a basket of currencies versus one currency. andase is the u.s. dollar, you can see that these expanded majors are all down against the u.s. dollar. you can change your drop-down chart to look at a different universe. the interesting thing, and one of the things i like to look at, is fxc. currencies,trix of so you can see along the bottom that there is a lot of dollar strength against all these currencies, but you can also see, if you look at the euro, euro gdp weakness, euro swissie weakness. this is a great way to look at a whole bunch of different pairs. you don't have to be based in one currency like you do with wcrs. fxc is one of my favorite screens look at currencies. guy: you almost get the feeling that -- stocks have been triggered here, or somebody has put a big program trade in. what you have seen as the euro going up against the pound, but not against the dollar, and it is also against the swiss franc, which is what you're looking against here. in some ways, that is a non-safety trade, which is interesting, that the swissie is a safe haven. it feels like someone has put something into the market here that is very specific to what they are trying to do. it will be interesting to see where the stocks were in the positioning's where. we will figure this out. let's get more details with nejra cehic. nejra: thanks. we are focusing heavily on the oil majors, namely bp, but also statoil and bnp paribas. that i want is you just highlight three stocks that may have slipped under the radar, but we have some news flow and pandora forecast lower profitability and sales growth accelerating because of higher gold and silver prices, making sure production more expensive. gold had a pretty strong start, trading near a three-month high on that safety bid. pandora also announced plans for a bonus dividend and share buyback that it seems investors are focusing on, that lower probability forecast. that is one of the worst performers on the stoxx 600. unit the world to, -- munich also heading lower. it plans to have the for your dividend payout but for your profit declined to 29% on higher claims for natural disasters. and finally, i wanted to look at bellway. ,e are seeing a number gaining today up more than 3%. we are expecting prime minister theresa may to outline a proposal to ease planning rules because of the proposal that describes home prices skyrocketing in the u.k. says earningsas fail at the french consumer banking business. income doubled from a year earlier, but fell short. to usnders cfo spoke about the potential impact of brexit and trump's push to repeal financial regulations. >> we'll have to see, because if we go back to the g20, which keep banking regulation, they say any new regulation should have no material impact. we will have to see if that unfolds normally. if it remains within that framework it should be beneficial. >> but is repealing dodd-frank putting european banks at a disadvantage? >> let's say -- the world is bigger than just europe and the u.s. there are 20 states that have to come up with an environment which makes it comparable for banks operate. >> so you don't see any impact? >> it's too early. typically they take a lot of time, and that is one of them. >> one thing that is coming very soon is the triggering, supposedly, of article 50. are you planning to move to paris? >> it's not that our headquarters are there -- we don't have to move headquarters. what it is, we have to stay close to clients, serve our clients, and that is what we will see once we know more. -- will you take it >> the main question on the incomes of people who have their headquarter activities in the u.k. and who might really be needing to move, to pull those people out of london -- for us, we are a european bank. we already have activity in paris and belgium and the netherlands. you don't change the balance after brexit? >> we will have to see. that was the bnp paribas cfo, speaking to carolyn conan in perlis -- caroline connan. there were hopes that donald trump would deregulate the industry. gary cohn has said the rules that prevented banks from lending should get back to work. meanwhile, ecb president mario draghi took a different view yesterday in brussels. >> the last thing we need at this point in time is the relaxation of regulation. fact that extent, the we are not seeing the developments of significant financial stability risk is the reward of the action that legislators and regulators and supervisors have been undertaking since the financial crisis. a very interesting take from draghi, but of course european banks and u.s. banks are a very different story, especially a bank that doesn't units or work to do in the u.s. i am looking at bnp compared to credit suisse and deutsche bank, as well as barclays. this is price to book ratio. i should have drawn the line here, because all of them are under one. but bnp is at least getting close to that, at 0.84. it had problems with its consumer lending business, and that is what andrew perry was just talking about. that is a problem for these big money center banks, because financial technology has made them -- i do want to say you relevant, but definitely puts them on the back foot. guy: i have to say, the rise is quite amazing. bnp paribas, it jumped pretty quickly. that is something investors can't ignored. i wonder -- in a few minutes, we will be talking to a member of nationale to get his take on how his party will take france out of the single currency. nationale to get his your bnp paribas -- if you are the cfo, how do you make that work? you have a big, big slug of o. a.t.'s on your book, you are a french financial that has to be at the pointy end of this stuff. they must be looking at the next six months with a third degree of trepidation, i'd have thought. matt: i would think so. i want some serious for numeration if that were my role. guy: yeah. certainly they would want clarity. matt, we are going to be chatting a lot about this. if you are airbus, you want to see the sides of the hedging book. that sells airplanes in dollars around the world, and in huge numbers. the hedging book is epic. and if you were to try to redo nominate that, i don't know where you would start. if you are a bloomberg customer, you can watch the show. i will do what you need to go, which is go to tv go. what you then do is click on bloomberg television or radio, but you can also dig into some of the charts we have that we use on the program, and if you want to send matt an abusive message, which is what i spend most of the program doing -- i joke -- you can get access to the iv function. matt: they get my direct email address? guy: yeah. we can -- expect some communication. i think it's a good thing. talking is good. matt: i probably need that, yeah. guy: yeah. up next, the presidential election gives marine le pen a five point lead in the first round. we will talk to her campaign project coordinator, live from paris. his take on the single currency and an exit from it, next. ♪ guy: 42 minutes past the hour. let's get the bloomberg business flash with sebastian salek. sebastian: thanks. bp has reported fourth-quarter earnings that missed analyst estimates. profit more than doubled from a year earlier to $400 million, but they fell short of what was expected after higher oil prices failed to fully compensate. meanwhile, studied oil has reported an unexpected loss in the fourth quarter after write-downs on the shale assets in the u.s.. million, which missed the average forecast of $618 million profit. we spoke exclusively to statoil's ceo. >> in terms of impairments, we have impairments this quarter of $2.3 billion usd net. and the main reason for that is related to the fact that we have just a downward, long-term price assumption, mainly for oil. now we are looking at an oil price in 2020 of $75 usd per barrel. agreed to kkr has combine its hedge fund unit with asset management to create one of the world's largest investors in hedge fund. kkr would have a 40% stake in prison holdings, which manage $34 billion. the deal, expected to be completed in the second quarter, will challenge dominating blackstone. and that your bloomberg business flash. matt: thanks very much come sebastian. let's take a look at germany, where i am. for the first time since 2010, a : suggesting that chancellor angela merkel could be overtaken by her spd opponent, martin schulz. 's most promising avenue to leading a government would entail a three way coalition with the left party and the greens. i spoke to a senior member of the spd in berlin. here's what she had to say about working with the left party. >> i personally am very skeptical about the left party, not least because of its attitude to europe and nato. those are important issues to us as social democrats, and the left party would have to move quite significantly toward us on those matters. mattguy: let's progress from gey to france and get more on the french presidency. national front leader marine le pen has pledged to take that control of the country's central bank, lower immigration, and hold a brexit style eu referendum. she is also talking about reintroducing a national currency. that speak exclusively now to the project coordinator for marine le pen's presidential campaign. he joins us now from paris. good morning to you, sir. marine le pen has a task this morning, which is being led by -- leading the task force taking france out of the single currency. how advanced are your party's plans to give france back its own currency? actually working many years on this topic, which is a very topic of ours. this is one of our priorities. the task force is working very hard for some years, but recently we have been joined by many high-ranking civil servants, economic experts, people from private sector, basically a circle who is a new task force, much more related with public affairs, and with whom this task force is preparing code greatly regarding -- concretely, regarding our ministry of finance, the technical aspects of this frexit. we have the ideas in the theory, but we also have a few concrete plans. guy: have you spoken to french business about this? have you spoken, for instance, to airbus? a huge employer in france. it, sells planes around the world and has a very, very complicated hedging book, and it would be difficult to deal with. have you spoken to french business a great deal? been talking to french business for a long time. past was in the complaining about the over evaluated euro, and its negative consequences on its business. we must not oppose the private sectors, the big companies, and the international sovereignty. in fact, during many years, and also still available in other countries, we have a partnership between this strategy and the private sector. we are not against the private sector -- on the contrary, we are managing and planning to make a new partnership anin order to create a winning strategy, and a win also for the private sector in its international business. matt: jean, do you feel that the euro is currently too strong? we have heard voices from -- for example -- donald trump's advisor peter navarro, saying he thinks the euro is too weak. the german finance minister wolfgang schaeuble said he thinks the euro is too weak. how do you feel about the current valuation? >> well, donald trump is speaking regarding his own national interest of his country, so of course when you are american and you look at the value of the euro, it is always over evaluated, because donald trump understands that a weak currency is also a means to enhance its national exports. regarding germany, also germany is an orthodox monetary policy country since a long time, and as you can see, the euro has been frameworked exactly on the deutsche mark. regarding france's interest, because we are polarized on our french national interest, the euro is of course still over evaluated, especially regarding germany. we're suffering from a lack of ity regarding this distortion in monetary value. guy: jean, when you return to the national currency, that would be a devaluation. can i read that into what you are saying? >> yes. yes, it will be -- of course. adjustment, aan monetary adjustment that will be a devaluation, which is a good, positive thing. as all of us know, the euro since 2008-2009 has been evaluated by something like 25%. and who was complaining about that? we have heard a lot about what the french people will lose if our new national country, but the euro has been to evaluated for many years now, and nobody has lost anything, and nobody was impoverished personally by this devaluation. and nobody has lost contrary, th of the french economy is also devaluationthis after a very long period of over evaluated euro. matt: will you not be concerned, jean, about the inflationon thet is so likely to come at that? even if you are philosophically opposed to, say, using tires from germany or some food maker using palm oil from the middle east, this is still a global world, and the inflation impact would certainly hit all french people. right, butperfectly again, let's consider the circumstances. andre now in a eurozone, france is still part of the eurozone -- the european central bank is using many tools for two impeach years to try to the euro zone economy to go into a deflation cycle. as you know, when an the economy falls in a depression, in a deflation cycle, it is very difficult to go out of the cycle again, as we can see in japan in the 1990's. if by recovering our monetary sovereignty, we success in making a little bit more of inflation, we went have success in the place where european central bank has failed for this many years, because all the competitive easing of the european central bank has done for two or three years now did not have any success in making make alsor to inflation. guy: jeainflation. guy: jean, can i ask you about how the new french central-bank would operate? you have said -- the party has said it would take control of the central bank. would you expect the central bank to raise interest rates in this scenario to deal with the inflationary impact that would come from the devaluation? or would the central bank not raise rates? >> it depends. we are not replacing an ideology with another. it is very difficult now to give you the exact things we will be facing. liberty iseve that -- is worth the risk freedom is worth, the risk. iceberggo through the as the titanic it just because the maneuver is very difficult to make. regarding the french central-bank, of course, we will restore the possibility toward the french treasury to finance itself directly from the central bank as this possibility exists in the bank of england, and also in the american fed. renewing, making things like exactly what other countries are doing, just to break the monopoly of financial markets in our public financing, and this, of course, will make the public financing less expensive than it is, because any monopoly is higher price. when you break the monopoly, you have a chance to make the price closer to equilibrium. matt: jean, if you pull out of the eu, surely will pull out of nato as well. what kind of spending do you expect, then, to support the french military? well, france has always been voicetry that has its own in the world, and we believe that you are not able to have an independent voice on international issues and on international topics if you are not backed by an independent military force. the spending on our military force will be a priority, and it will be financed by other measures we are doing elsewhere. of example, all the costs the public financing, which no depends only on the market. guy: jean, one quick question. assuming that marine le pen makes it to the second round, who would be your preferred candidate to face her in the second round? we do not have this is specially -- marine le pen is the candidate of the sovereignty, the candidate of the new world, because all our opponents are actually in a very world changes as it showed by brexit and donald trump, and we are in history, because we are taking into world, and thew world program of marine le pen is the only one to be in the line of this new world that is to come. guy: it has been a great pleasure speaking with you. we will do this again sometime. project core data for marine le pen, it has been a great conversation. interesting stuff. news coming out on mr. sarkozy as we have been speaking. world,french prosecutors config that mr. sarkozy will face trial. french politics is nothing but dull -- is anything but dull at the moment. up next, francine lacqua and tom keene. matt miller and i are going to bloomberg radio. "daybreak europe." this is bloomberg. ♪ overine: frexit fears plans to take france out of the euro. llon says he is into win. b.n.p. paribas this is fourth-quarter earnings and lays out a multiyear cost-cutting plan to save the large bank. penarations for a le victory. >> if something is changing in our environment, we adapt to serve our client. francine:

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