Difficult to understand. We will speak to the cfo and 10 minutes time. Marketu. K. Housing token . We will ask the ceo of retro if he agrees. Europeanalf hour until trading. We saw gains in the u. S. , overnight gains in asia and we see gains in european futures. On ftse futures and dax futures and a quarter percent on cac futures. Stocks of the moving higher and that is pushing through to the futures market. Guy lets talk about what the gmm is showing. It appears to be one of the drivers. The euro is down by. 21 . That bloomberg dollar index is breaking out of its fiveweek range. We will show you that chart later in the program. Keep an i am both of those. We will show you what is happening with the euro. This is the eurodollar trading down as liquidity kicks in. That is the bond yield. Areession lows and prices rising. Lets get the first word news update. Here is shery ahn. For donalders Trumps Administration have told a San FranciscoAppeals Court that the travel ban is within the powers granted to him by congress and the constitution. That as the Justice Department is seeking to reverse a Lower Court Ruling that put the executive order on hold. The judge is questioning [inaudible] and skeptical of the u. S. Government. The court says the ruling will probably be made this week. Trumps pick for education secretary has narrowly made it through a history making Senate Confirmation vote by Vice President mike pence broker 5050 tie. Vote tested the ability to sort the trumpet agenda. Version ofl wants a the Transpacific Partnership despite the u. S. Dropping its involvement. He said plans will be up for discussion but a meeting next month for for a meeting next month in chile. There were a lot of hardfought gains that were achieved through intense negotiations over many years in relation to the tpp. I do not want and i know a number of other countries do not want to let those gains slip through your fingers. That is why i put a focus on whether or not we could have a tpp 12 minus one. Tpp list the United States given the United States does not want to be part of it. We will be having a meeting in chile in march to canvass all the options. Aery lonnie a trump is suing reddish newspaper saying a defamatory article deprived her of the chance to launch a lucrative brand. The suit against the publisher of the Daily Mail Mail accused the london tabloid of causing tremendous harm to her reputation. The complaint prompted fresh questions about whether trump and his family understand the ethical conflicts created by mixing Public Service with commercial opportunity. Beateviving the fight to to the french presidency. The former Prime Minister returned to the campaign trail yesterday. Find by former gas the former finance minister. He apologized in a honor an hourlong News Conference on monday. The uks Prime Minister has kept her clans on track after defeating a rebellion from some of her own conservative party colleagues. She promised them a vote on the final deal with the european union. It was an attempt to force her to give lawmakers more power to shape the final Brexit Agreement by 326 votes to 293. The commons is due to conclude its debate on article 50 and hold the final results today. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Guy thank you. Yesterday the uks Energy Secretary told parliament that the British Housing market is broken and says the solution is to build more houses by relaxing planning rules. This morning the u. K. R redrow. E the British Government says the Housing Market is broken. Do you agree . I am not too sure it is the right phrase. I think there are areas where the market needs to improve to increase supply. Itsthe industry as increase output over 50 in the last three years. It is hardly falling apart. Guy when we think about what happens next though, are you surprised that the government was not harder on the bigger House Builders, the move from three to two in terms of when you actually have to execute after planning is granted strikes me as being a little easy. Think the government recognized the large House Builders are making a big contribution. You have to look at our numbers is of 13 t completion in the first half, 67 in the last three years. We are all doing our bit. In terms of the white paper and changing the planning from three years to two years, that is the time that we will have to implement a planning commission. It is not an issue, as soon as we can get on sites once we have a plan, we are on there and selling this as quickly as we can. Gf screen that shows your revenue and green and youre white in earnings share. It is a consistent climb. You could look at a relevant here but i am guessing that is seasonal because it happens every second have to first half. Where do you, how do you feel about the level of the climb here, how do you feel about your continued rise in revenue, is that going to change because of government policy . Do you need that boost . Business,are a growth we have a strategy to grow the business, that is what we have been doing and we have a pipeline of sites coming to the Planning System that will allow us to continue to do that. We have issued today some guidance for what we intend to achieve by 2019 with revenues up to 1. 9 billion. Guy what is happening in the middle of the p l in terms of margin. Inputrious to know about costs in particular. There was concern when it comes to the trade, we are seeing rising wages. What is going on in there . Not think we are seeing much current impact from currency. You have to bear in mind the largest components and elements of u. K. Houses tend to be from u. K. Manufacturing. For us, the underlying pressure on cost is skill shortage which is putting a bit of pressure on labor costs. We estimate that cost have gone up by 4 over the past year. We are expecting that to continue to be the rate and that is down to increases in labor. As a result of a shortage of skills. Matt what about lending levels, do they bother you, we are at historical lows here as far as mortgage approvals go. Do you need that to rise . Think mortgage approvals are ok, the Mortgage Market is very competitive. I know, ok, the bank rate is very low but Mortgage Rates are higher than that. I think peoples ability to pay is built into a mortgage it approval. I am not really expecting mortgages to be an issue moving forward. Step that canke a look at what how the industry is structured, do you think that we need to have a look, particularly the small and mediumsized elders. This is a question i always am asked. Builders do ok. You have to credit lines to be able to buy land, you have got the access, where is the gap in the market that needs to be focused on by the government . The nail on the head there, really. There has been a decline in small to mediumsized buildings over many years, not just as the consequence of the last year session. There was work that was done by the hbf that showed if we have now that we had in 2007, we would a building 25,000 more are year. That is an area that needs to be addressed. There were a number of measures in yesterdays white paper. We trying to encourage more small and medium housebuilding and trying to lower the barriers for entry which generally are planning and competitions with planning and technical challenges and also financing. Matt let me ask you about demographics. There is a much discussed lack of home buying in the 25 to 34yearold group. The does that or group turn around and start to as other generations have . Guest if you like to think it will turn around but perhaps we are going through a bit of a demographic change and people might be buying their houses a bit later than historically the half. They probably will work longer and live longer so there is no reason they cannot put off the house buying for just a few years perhaps. Guy thanks for joining us. Numbersts on the delivered this morning. If you are a bloomberg customer you want to watch the show using tv go and you can dig into the church we show on the program as well. You can do that by tv go and you v is as well. Doing a good job, i am sure we can do better. Matt we can always do better and we strive for perfection. Coming up on the program. We will speak exclusively to the cfo of santa fe after the Pharma Company said profit may fall in 2017. Their diabetes drug issues and we talked to rio tinto as they post their first profit increase since 2013. Also, a dividend and a Share Buyback that beat expectations. We talk yields with with hsbcs stephen major. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. Anofi saidgmaker s profits may drop as the Company Profits pursues new [inaudible] the cfo joins us. Coming on the program. Let me ask you what you think of Donald Trumps comments that drug pricing is a problem in his spokesmans comments sean spicer that we could see negotiations for medicare soon. Good morning. S there are a lot of comments made by the new Trump Administration on drug pricing in the u. S. Which has been a hot topic i of time. For a period it is a bit early to say what would come out of this intention. The way, it is clear that, increase on prices which has been happening in the past year is not necessarily justified, [indiscernible] beingd to find a way and recognized by President Trump as well in the meeting he had with thatharma ceos in the u. S. There needs to be room for innovation and innovation needs to be priced properly. I think it is difficult to know where all this is heading. As we know in general, republicans are in favor of a free market and negotiated prices. Is it part d or commercial, what about different channels, altogether, we expected something to happen. Responsible shows [indiscernible] when it comes to price increases, there should be a way forward. Matt have you got innovation to do with the diabetes problem. A lot of drug makers are having issues with their diabetes units. There is pricing pressure, the treatments are little bit older. You have a new drug, do you expect that to do so well that you are able to retake market share in the diabetes market . Guest that is a good question. First of all, when you have a drug,nit, it is a good you get under pressure because you have competition. What is happening for the last 17, wers heading into and inth new treatments, 16, [indiscernible] the 30 . And we can also [indiscernible] fort is a new class treatment. We are going to be the first one to launch it and we hope also that it will fill the gap of needs for old patients. Not at goalnts are even if they get the right treatment. A morey, it is competitive area. At the same time, there is room for innovation, i will give you two examples as far as were concerned. Guy good morning. Yousaid this morning that are in no hurry to do m a, why do y think your bigger rise of rivals appear to be in a hurry . To speak is difficult about your competitors. They are in their own situation. Some them as well having loss of exclusivity and decline coming from some of their product. As far as were concerned, we do have new x coming to market. And one which is going to come to market hopefully this year is a topicortant is for during titus. We put a lot of hope behind this one. The question is to say we have a lot of things to lunch, we would like to do some acquisitions eventually to enhance our growth. We want to go into an acquisition which will not meet financial criteria. Do not havehat you the cash to make these acquisitions, they have huge cash piles. It seems that in particular, u. S. Competitors are huge cash buys. They [indiscernible] what makes the difference is more important believe the synergy, the strategy fits on how you can create value versus foretitors who may be there small acquisitions to be acquired. Matt how about saving cash, cost cuts are first and foremost for you. I look at your, we have this function and i can see where you have cut jobs and 2013 and cut jobs in the middle of last year. Do you see more job cuts on the way . Guy i think we have lost him. I will try to make that work. What is interesting is to come back to the issue of cash pile especially for the big u. S. Companies. It will be interesting to see how the president deals with the issue of how country is going to happen. Some of this cash is held externally is potentially being used for m a. This is not just relevant for the drug sector, it is being used elsewhere. Particularly in the tech sector. It is a fascinating story. Lets get to the cost cuts and jerome. Matt we were wondering about cost cuts and we were wondering whether they would come through in the form of job cuts. Do you expect to continue the program of job cuts as you did in the middle of last year . I will not go into the specifics. Cost cutting is around also refocusing on and enhancing your p l. We have a few the headcount reduction which we announced to relevant parties. This is known and we are going to take it vantage of this movement and this implementation to have a more efficient [indiscernible] on giant companies. Were not looking to any further job cuts in the coming years. We believe based on decisions we have taken already we should be ripe the effects of what we have done. We as you may have noticed have [indiscernible] and we plan to continue along this line and 2017. Guy in 2015, you said that the declined through 2018. Where are we in that range . Still in the ranch. When it comes to 16 we are better than expected. All and 16 we have been down around a bit more than 2 . It is clear that when you go into 17, we will have more competition coming, in from lily from the or no vote. When we give this guidance it was a bit unclear where the pressure would come between 16 and 17 and 18. Probably in this range on the low engine and of the range for the overall time. I was going to ask, with the Trump Administration making announcements all the time and flipflopping, is a difficult for you as a cfo to make for cash . Guest of course. It is a bit more difficult. Just remind you that [indiscernible] is around 26 so it is a big piece of it but not as big as from other of our competitors. The good news in a way so we do based on the just u. S. Situation. The aim is to be flexible, to try to understand and try to see what the message of the direction could lead us to. And as i said earlier, i think that we clearly believe that the value will continue to be given to innovation. The good news when it comes to sanofi is we have a few important drugs to lunch. They could get this fair price and that will happen. And between it is clear that as you said. We are running up against a heartbreak but i appreciate your time this morning. Fi joining usno from paris. Guy the market open is next. Maybe some clarity after the break. This is bloomberg. Guy good morning. Welcome. I am guy johnson of bloombergs european headquarters. Matt has your morning brief. Matt thank you, guy. The book breaks out. Itsspot index trades out of downtrend. Can the greenback get back to its 2016 high . Tennessee looks for new ways to diabetes profits decline. The cfo tells me the u. S. Should recognize the price of innovation. It the Housing Market broken in the u k . The British Government set the u. K. . The British Government guy a mildly positive start for european equities this morning. A stock story more relevant than a stock market story. Let us show you what is going on. This is how we are opening up in europe this wednesday morning. Word,uld be the operative but it looks like london will disagree. The pound is probably a big contributing factor to what is going on. The dax opening a touch higher as well. Manus, the details if you will. Manus kick it off with dmn. You go straight to the bottom , bloomberg dollar index gone to 110 to 1 . How we broken the trend gone to. 1 . Have we broken the trend . What the producers said today. Is the dollar psychologically broken . 2 . Uro is down oil is softer this morning. I know you will talk to jeff this morning. Oil is up. Can that endure . Stoxx 600 showing a shade green. Energy flat, oil is down. The question is, the usa, it is pumping like 1970, and that is a critical point. The fractures are back and that is the cap on the Oil Explosion to the upside. When it comes to equity markets, this is what you want to look at, the treating differential for the stoxx 600 in verbal, versus the rebates to dollar terms, versus the s p 500 in the blue, versus is there a Value Proposition to be had there from this potentially weaker euro and stronger dollar trend . The bellwether of global trade, and sanofi. Rio up 3. 25 . They have pulled one out of the bag. The market was not expecting that because we moved away from lastgressive dividend year. Im sure he can add more value to that. 100 . 70, beat the market. Maersk will be profitable. They get the new chairman from going into the sea. Of 1 . Up 3 10 earnings down by approximately 3 . It is called, fill your product line. That is what they need to do to turn the story around. Guy johnson, i am off to Digital Radio. Enjoy the Bloomberg Intelligence feast you have in front of you. Guy on my screen, sanofi and rio are two big stocks. We want to come back to this mollermaersk story. Rio are the two biggest gainer on the subset 600 this morning on the topic 600 this morning. Tons of cash to investors that were not expecting it. The stock is trading higher this morning. Let us kick it around and figure out what is going