Unlikely to go ahead after a new regulatory hurdle. Constance goes to washington. Dimension mexican central with rnor will meet we will speak to the global head of em. Less than half an hour away of the european open. Take a look at what futures are doing. We are seeing gains across the board. Theftse and the cac strongest right now. I wanted to look at bonds. Twoyearyearold twoyear yield. Look at this, record low on the german twoyear yield. Today a little bit higher. Here you see another record reached for negative rates in germany. Let me pick on a couple of points. First point, the british pound is down. Bothvernight story affecting sterling. That is and is shooting barometer as well. But taken out a little bit as well. Back to the bond market. That was mentioning what is going on with the german front end of the curve. Upnce and germany tightening. As he can see, we are tightening up. Mr. Ct that is down hael has better pulling better pulling numbers. Lets get an update on what is happening elsewhere. Heres julia. The London Stock Exchange at a 13 billion tire up is unlikely to perceive. Proceed. European Union Officials inuested that the lse divest government bonds. The lse said it could not commit and would not submit a remedy proposal. Donald trump is proposing major defense increases and big cuts to the Environmental Protection agency. To white house officials said the outline of the budget will be made public as early as today. Governors have been told millions of americans could lose their health plans after republicans plans to replace obamacare. Gained coverage under the american Affordable Care act. Trump wantsuse says nobody to lose coverage. Macron has won a third endorsement in a week, suggesting he is in favorite to win the upcoming election. Leader le pen. Xpected to win the first round the south Korean Constitutional Court holds its final hearing on the impeachment of the president. The court will rule on the legality of her impeachment within two weeks. Meanwhile, the countrys Prime Minister has rejected calls to extend the investigation into the scandal. Nato country shins and focus on security. It the countries present told bloomberg says want to britain leaves the eu, the remaining members must focus on the blocks founding principle. It is not question about brexit, now it is a question of how the remaining 27 countries play with each other. Nearbya feeling someday more and more people understand the bottom soeen we have to construct again julie julia there was a dramatic finale to last nights oscars. Moonlight one best picture. La la land was mistakenly announced the winner. Despite the disappointed, it was a good night for la la land. Guy thank you very much juliette. The pound has taken a beating overnight against most of the major crosses. A second independent referendum, theresa may is setting aside time. Bloomberg strategist joins us now from singapore. Your mli be colleagues are debating. Which is more important when it comes to be scottish folks or what has happened or what could happen in the house of lords . Which is the consensus trade their . Overnight, the Scottish News was the new element. Definitely, the lords development this week will absolutely dominate. It is important to know that a Scottish Referendum adds a scout element of risk. Theresa may did say her plan is to vote after the ua actually es the eu after the how this feed to other risk assets this week . Continues to be fractured. It makes it more likely traders will not want to hold on risk. Probably see local to the moves. The problem is traders have no either way how each development is going to pan out. He may get the lords to amend the bill which is a negative and then, over the coming weeks they may go back to the house of commons and overrule those m a swing back. Weeks it willxt remain volatile and known will have High Conviction about longterm direction. Particularly transatlantic. Do you get a sense you will start Getting Movement on this because the market is pushing the feds. It really is the only question out there at the moment. Obviously, that is the big thing everyone is focusing on. From my point of view, i think march is very unlikely, but we will keep the risk premium until we get closer. Speech tomorrow might remove that premium and we get the guidelines from yellen on friday. More and poorly, if she does not guide us to a march hike, it is not going to happen. That risk premium will be priced this week. It is important to note that in the u. S. While inflation is going up, in the u. K. It is going the opposite way. Inflation is not quite as high. Quickly, and life i love you can type any central bank and get a slew of data on that central bank and its neck decision next decision. At some point, is the market going to think of janet yellen as the boy who cried wolf as if she doesnt actually go . Got thatk she already repetition from the last two years. I think the fed overall has promised all these hikes and has not delivered. Committee. Is the fed they predict these hikes that dont arrive. I think this week the market will react more than anything else apart from the trump speech, is the core cpe. It is hard to say the fed are behind the curve which means they still have excuses not to hike. Higher,t to percent or people will start to panic. Guy great stuff. Thank you. Ilb on my in the and screen. Its often about what is happening on the oac market. Gmm go there first and the morgan in the morning. A jumpstart for your day in terms of what is coming up in what is going on. It is a great function. , news fromn the show the mobile World Congress. And later another interview with ericsson. The opening is just 20 minutes away. 15 minutes until the catch lets get you caught up. Deutsche bank has cut its by almost 80 . Chief Administrative Officer largest lender is reducing the payments with an eye towards shareholders and it will be a frustrating for employees. 5000 positions will get a longterm incentive tied to the banks performance and paid out as long as six years. Mussina merging with egypts two of asias Biggest Technology companies are joining forces. With foxconn. Identifyingwill be targets their investors, but not said what areas it will focus on. That is your Bloomberg Business flash. Global tech leaders are gathering in barcelona for mobile World Congress which kicks off today. The event will host panels on ai, 5g, the future of telecom. Caroline hyde is there. She sent by with the guests. She is standing by with a guest. Im joined by ceo of telenor. Meetingwith the gsm a yesterday. 5g. E are thinking about 5g is probably three or four years into the future. The distributors taking our business. That is why we need to be prepared. How hard is it to monetize . You are having to invest more more in infrastructure. It is really hard. More spectrum, more investment into the data network and to monetize that is hard. We are trying to do to full. Alsos good pricing, but introduced our own services so. E are trying our best servicesing to medical , trying to do our part to be part of this growing part of the pie. Less investing, less capital expenditure. Where are you going to put that money that you no longer have that india . The reason we decided to exit is is our position was not sustainable. We had to find someone who can handle operations. On theoing to focus market in malaysia and thailand. Markets verythese cookie. Did say there were potentially other assets of less strategic importance. Can you give us an idea of what is less strategic . Review our portfolio. We cannot go into details, but that is what we are doing. The reason now is to focus on the main strategy. And be relevant for our customers. You have been promising to pick up in dividends. Where do you see Dividend Growth going at the moment. Can you give us more finetuning . We have been very clear on we Value Creation spirit want to continue to have a good Balance Sheet and the prodex in our ma approach. And continue to pay dividends to our shareholders. We will have an actual increase in yearoveryear. That is the plan to do in the coming years. Does that mean more acquisition . We are focusing on developing what we already have. Most of the investments go to Building Data networks in the nordic and asia. Right now, we are focused on. Inding a solution for india that is the main priority. What about more local markets . Denmark, for example, continues to cramp margins because of the competition. Denmark is the third market we find we need to find a longterm solution for. Is competition in denmark not sustainable. Nobody is making money so they need to find a solution there. When you look at the industry , whether it be health care or finance, youre trying to pump up the use of your messaging services. How do you do that . How do you compete against these tech juggernauts . Us signedmple, which a friend agreement with google on a communications service. Backis one attempt to take into those services. Can you take it back . Not take it back, but at least be relevant or it another, storage not take it back, but at least be relevant. Much was calling for the likes of google and facebook to contribute to the infrastructure. Is that a fight that you have given up . Relationship with these companies, we also need to find a balance and a Business Model. In that sense, there are two different ways of approaching. Andway is the bond market another the asian market. To benefit in the asian market is weak are the only one that has connections to the millions of massmarket customers. Are in charge of those customers plus the distribution. Those more relevant in parts of the world dan europe. Thank you very much. The ceo of telenor. It has been too long. See you in a bit. Guy nice to see you back in barcelona. Thank you very much. Caroline is going to be back a little later on. The bossbe talking to of ericsson. We are minutes away from the start of european cash trading. Deutsche bank deal seems to have gone south. It seems to be the time part that has caused it. Once we saw the approval it was always going to be tricky one. Mac the question is who is next to tie up the London Stock Exchange . This companys has try to come nations over the 1015 years that have not worked out. Cutsche bank the bonus to 2016 bonuses, 80 . That is a massive cut. And magnitude that was completely unexpected and rbs is going to cut bonuses by a percent. 80 is just unbelievable if you want to retain talent. That makes it difficult. Guy yeah does. It will be interesting to see how that one plays out. Matt, the other thing we should mention is the what is happening with tesla. We were talking about exchanges getting together. The Bank Insurance model has been around for quite some time. Like it will not work for intesa. Appears he is saying we businessted you of a and making shareholders get by. That means money comes back to them in another way. Another deal that is struggling. It is interesting to see how the european ceos are trying to move their businesses forward and make the Business Model works. Mac they want to do consolidation and they are looking for ways. With intesa, it was a business decision. With the lse and dr. , they would not be able to meet regulators demands. They figured they will not bend over backwards and run the business. So different reasons, but all calling off these maa deals. A shocking number. A big big cut. Coming up, it is the market futures are still pointing to positive gains. Remember, some shareholders like this. The open is next. This is bloomberg. Guy you are watching bloomberg markets. Must story that looks like it will open positive. You get this line here and what that tells you it is we are looking positive. Looks like we will be opening up around half of 1 . Theres a lot of individual equities we need to keep an eye on. Today we will see how shareholders feel about m a. Maybe it does work out, maybe it doesnt. This is my imap. Intesaeresting thing, Deutsche Boerse that type would have been preferred. Guy lets take a look at the opening. Expecting monday to be positive. You can start to see that. London is expected to open up around half of 1 . You have to member that the pound softer and that is a controlling factor. Mechanical process because the way the ftse is structured. The teco being positive, of around 4 10 of 1 . Lets find out what is going on. Youve got oil a little better. Sterling is up in the prospect of tax cuts in the United States would give you a growth rate. A 5 gross weight is what could be achieved overall. That would have an interesting effect on the global basis. Energy is up 2 10 of 1 . Oil is strong. The market seems to be focused on compliance. Arrive at 86 . Is trading stronger. Have a look at this. This is the the stock. This is last year where you had a june, july spread. This is our april, may spread ade but you have their this is our aprilmay spread. Preparing for slightly more volatility. Have a look at the german bonds. Next in the german bond market, weve had the spanish inflation data come through. You are seeing the polls for better macron and that is the essence of what will drive the frank german bond spread. The concerns in the bond market are overdone. Closing the and gap in le pen. It may not be a real risk, but it will shift market attitudes. Let me hand it back to matt. Matt very interesting markets to look out this morning. Let me show you the mobile demo be new line back over to the map. Shares are down hard. A 6 drop. We saw lse here. Lse down 1. 6 . Not a lot of big names on the leader side. If i come back over here and drop it and see what names are moving, you p, rio tinto, glencore. Looks like a little bit of a safety play as far as the reason that markets are up right now. The failed mergers hurting. Enerali see and waiting to teslas intesas opening price. If the share has bounced today, sense ithere is a dont know if it is confidence or lack of confidence in management to say it was the wrong planned planned. Planned planned plan. March is live as on paris says her it with less than three weeks ago, traders see a 40 jump in the central bank. They are both sub 50. Heres a chart that we pulled up here. 6277. S you have march all the way down here. May here, june here. The probabilities of a hike coming through. Good morning and thank you for spending time with us. The market called the fed bluff. Are we going to find out this week because we are going to get trump and then yellen on friday. Both of those things pan out, then maybe march is done and dusted. I think more important is the data. I think that will be important in judging whether march is live. Theres a few things that suggests they cant wait for a little while. If you look at longterm , the market base expectations have gone up. Wages have increased, but not a rapid pace. You have only seen a nascent recovery. In all the places it does seem ,ike the powered gap is closing i think they can wait for a little while. Is the market underpricing . If core pc comes a little bit higher. Guy im just wondering where the bond market got this wrong. We are going to get inflation before the fed gets to make the decision. Yield. The real on. Is based when it comes to real yields, the samely we are in place. The one not in the same place is your. Europe has continued to come down. In the u. S. , you have seen nominals rise more than expectations. Especially at the backend, 10 year yield. But the twoyear and fiveyear yields are low. The frontend is likely to selloff, the backend not likely to selloff as much. You areation pricing close to 2 . We think it will be about 2. 3 . The curve should not selloff tremendously because of inflation. Where i think views are across the curve. The u. S. Is low at the front end and i think that will go up. It is unlikely to see them selling off 5070 basis points. In europe, i think the whole curve is much too rich. You dont have a major physical fiscal impulse. Where real, keeping yields are, i think that curve is the one. What kind of affect the think donald trump could have on fed policy, rate markets . What do you expect to hear from him . The real yields are already down, said they are telling you said they are telling you there so they are telling you they are less excited. Clear if you look at how theyre going to find that, it is not about expenditure. Theyre going to find that through trade policy which perhaps means raising import tariffs. It is not that easy. I think the market is beginning to question the trump trade right now. We think growth is likely to be 2. 4 . That is an improvement, but we are not expecting a major fiscal stimulus from the u. S. We expect inflation to go to 2. 5. Is going to be more around respond toarkets that . If they are disappointed by trumps address, how do you see markets responding . I think the backend will come in so the curve can flatten a little bit. I think the market that has probably more room for disappointment is the stock market. That is where you have indications go up. ,f you look at the cyclicals all through last year it was the cyclicals doing extremely well. This year, they have more recently begun to plateau out and come down so the leadership marketou that the stock i think the bond market is better does better than the equity market does. Next, dead deal. Its type with the Deutsche Boerse is unlikely to go ahead. We will have the details. Plus, sterling slides. The report suggests theresa may is apparent for another Scottish Referendum. In later, macron on the move. Narrows the gap on le pen. The latest on the french race. This is bloomberg. Guy welcome back. Watching the european open. Have a marker of stocks this morning. A number of movers. The 600 a little light. I suspect there were is generali impact. A timeind out what the sort is doing to the markets. Im starting with persimmons. That projects number jumps 23 when it comes to the home builder. Also, plans of an additional dividend. The biggest moves have come because of m a news or lack of it. Time withllion Deutsche Boerse is unlikely to proceed and new regulatory hurdle. Traders are putting the odds of the deal complete