We will learn later today. A saudi rate output confirms its commitment to stabilizing the market. Questions swirl about opecs ability to manage the price of oil. Let us take a look through 30 minutes until the cash trade right now at the futures action here in europe. We are looking at gains across the board. Fight gains, but nonetheless, green arrows there, slight gains, but green arrows. What do you see for bonds . Guy want to talk about the pound. Bunds pretty critical as well. Let us deal with the first columns. Let us talk about a bit about what is going on here. Im not sure exactly what scream we have got which screen we have got up at the moment. Let us see what happens when i move this. I think that is going a little strange. Anyway. We will come back and talk about the markets in just a moment. Let us go to Juliette Saly for the first word news update. Guy, thank you. President donald trump made more than 152. 7 million and paid 38. 4 million in federal taxes in 2005 according to two pages of his federal income tax returns that were revealed by msnbc. The white house confirmed those amounts. The figures suggest trump paid an effective tax rate of more than 25 . Trump has refused to make his tax returns public. Meanwhile, President Trumps choice for trade representative have said china is high on the list of things to worry about. Robert lighthizer also said that although china was a substantial currency manipulator in the past, it is not clear if that is so the case. Lighthizer told the hearing that trump will shakeup relations between the two countries. Between now and a time i leave, and you will say bob, you were right. He really is going to change the paradigm on china. I believe he is going to change the paradigm on china. If you look at our problems, china is right up there. Juliette well, meanwhile in beijing, chinese premier has downplayed tensions between his country and the u. S. Speaking at a press conference at the close of the people conference, he said the two nations share extensive common interests on things like job, foreign exchange, and security. Ties between china and the u. S. Has been moving forward in spite of various twists and turns over several decades, so i am optimistic about the future of our relationship no matter who is elected. The European Union is said to be considering forcing the u. K. To wait until june for formal negotiations to begin on terms of brexit. The 27 other members of the e. U. Have pinpointed a meeting of government ministers and luxembourg on june 20 as the moment to authorize the opening of talks. That would cut into the two years the perimeter had to cut a deal. Todd by more than 2600 journalists and analysts in more than 120 countries come of this is bloomberg. Guy. Thank you very much indeed. The gmm really highlighting a number of factors we need to focus on this morning. Let us turn our attention to what is going on. The first thing to note is that the british pound is trading up 5 this morning. The other thing i would mention is well talk about commodities throughout the program. Iron ore continues to catch a very strong bid out in asia. Well be talking to our Commodities Team later on. Brent bouncing up 1. 41 . Let us talk about what is happening in the fixed income market. I want to show you what is happening with the bunds. There is a bund yield rising a little bit this morning, as you can see, picking up the pace. A bit of context, it has been softening up over the last few days, popping higher this morning. The price is up as we come down on yields, just beginning to soften up a little bit this morning as well. Let us start to talk to mark cudmore. This is the u. S. Twoyear break even, inflation two years hence. As you can see, what we are looking at is inflation coming down. Two years forward, inflation starts to come down. Why is the fed going to raise rates today . Is it a done deal . Time is when. We find out what is going on. Probably one of your more important section functions, anl ivey mliv. Mark, is deflation defeated . Today is a done deal according to the fed. The question is, what kind of a message do we get from their . That will tell us a lot about where the fed sees inflation going from here in the u. S. Economy. Mark i do not think inflation is defeated. It is definitely not running away, though. I think the reaction to breakevens is because the hike is priced and now the market believes the fed is on top of inflation, but it is certainly not, you know, it is going to be an ongoing situation p what we are going to watch for our three main things. The ongoing situation. What are we going to watch for, threeeory things these things. I was interesting for a core member, a dovish member. That would be one thing to watch your the last thing to watch is if they mention about the balance sheet. That is probably unlikely. I would be quite that would be quite a hawkish statement on what they plan to do to wind down the balance sheet. Matt do you think we are going to see a fed that is more hawkish than the Trump Administration wants to hear from . Mark probably. Only because i cannot imagine why they are going to want a particularly hawkish fed longerterm. I know the history of trump having criticized yellen on the committee during the campaign, but a lot of that was political rhetoric. Trump, we know, mikes debt and the idea of having fiscal stimulus. He likes that we have a weaker dollar. Whatever they do on a hawkish side will be more than they essentially want. Will he actually get to clearly hawkish fed tonight . It is hard to say. I have no inside track. I think the data would indicate they should be slightly dovish tonight. A hike, but of dovish hike. I do not know what they will do. Guy one thing that feeds back into this situation is what is going on with oil. Oil markets have been softening as you know over the last few sessions. The saudi comments yesterday the opec line that saudi is raising output. The saudi line that it is committed to stabilizing the market. Are we beginning to see some serious cracks emerging now in opecs ability to manage the crude price . I think it is partially that, but i think it is also, this is a market that was ripe ar a bit of correction. The positioning was extremely long oil. As soon as there is a little bit of fragility, it needs clean out. What is happening with opec . It is hard to know. Opec does not control the price anymore. Even after the cuts since before christmas, the increase of shale supply has, you know, cap oil. One of the things we are seeing is fragility in the hole of that context. How much they control the price. We are going to get more details in the coming months about how much they are actually supplying. Are they supply more than they are saying . They have a reason to talk up the price so we have to wait for more details over the coming months. I am not bullish on oil. Matt this, clearly, plays into the inflation question as well, right . If we see oil prices coming down or stabilizing at lower levels, that takes a lot of pressure off inflation Going Forward both for the u. S. And europe. Mark i think that is a really important elements to what is happening fo. It is hard to get sustainable inflation in any country where input prices are falling. We had very low commodities one year ago, so generally, the last couple of months, we have had positive to get the going opposite dynamic if commodities continue to fall. I think the recent fall in commodities over the last month and will last week is a worrying sign for the stabilizing reflation trade scene. The direction at the moment is quite negative and i think that will pull the fed back to being to hawkish tonight. Guy always a pleasure. Thank you very much indeed. Coverage coming out of the top v teams is something you do not want to miss. Milv and top live. President ,mond fed we are looking forward to both of those conversations as they come through. Coming up, the future of finance. We are in frankfurt talking to of International Finance president. He is timothy adams. Matt will be talking to him. The latest from amsterdam and paris. Is charged with misusing public funds. We will get more coverage on it. Oil dropping in than popping. Saw thei and stockpiles market yesterday. Oil from her this morning, but it is an important story to focus on. The open, 19 minutes away. Guy let us go to Bloomberg Business flash. Here is Juliette Saly. In the tight has reported a decline in profitability as higher discounts squeezed earnings. The Worlds Largest retailer said its margins narrowed in the 12 months since january, missing its own target. That was lower than analyst estimates. Munich sees lower profit this years. This year, the company said it aims for the net, of 2 billion euros to 2. 4 billion euros. The worlds biggest reinsurer also plans to buy back another one billion euros in shares before its 2018 shareholder meeting. We will be speaking to the ceo of munich re at 10 35 u. K. Time. A record annual loss caused by charges of the spin off of its coal and gas fire generation business. Writedowns talked about 25 billion euros as a power price slump eroded the values of its conventional plan. U. S. Officials have said to been to issue indictments related to the hacking attacks against yahoo according to a person briefed on the matter, the department of justice is accusing for people are participating in massive Online Security breaches that compromised hundreds of millions of user accounts. The hacks came to light last year and threatened to derail the sale of yahoo s fail to verizon. Asias Largest InternationalAirline Posted a net loss of 74 million u. S. Dollars for 2016. Cafe also scrapped plans for a second half dividend after competition from Chinese Airlines and losses from fuel hedging dented earnings. Several executives said to be leaving after a tough old with johnson about 13 billion in the past 13 months and its shares dropped. Among those departing are a top analyst, and the head of Investor Relations and paula drake, chief compliance officer. Drake inclined to comment while none of the others leaving return calls or emails seeking comment. That is your Bloomberg Business flash. Met. Matt. Much. Thanks very i am here in frankfurt with tim adams, president of the iif and this is their signature european event before the g20. It is a massive event and you have probably the most powerful nongovernmental board of any organization in the entire world. What do you expect to hear from the g20 this weekend . I think they are going to exaggerate the positive that this is the best set of Economic Conditions since the crisis. More growth, capital formation, job creation, retheme productivity. There are going to be concerned about protectionist language we are hearing from places around the world. I think they are going to focus on the positive. Matt do you feel like the u. S. For example has a team that is already fully put together and ready to engage at the g20 . Timothy Steve Mnuchin is a great selection. I know what that looks like. Gary cohn was on my board for four years and he is a professional as well. The president has surrounded himself with really topnotch, Quality Advisors and leaders. Matt they seem to be moving on street after this. A lot of finance professionals are going to go and work on regulations there. Is that a bigger focus for you as the biggest Bank Lobbyist in the u. S. Than in the world than the g20 meeting . Bothhy they are important. Gathering around financial official together is important to talk about the macro risks. Financial regulation is an important part of our dna and wrapping up this basel iii process is part of our work stream. Matt that is a big piece of the good news for banks ceos to finally get more movement on Interest Rates to the positive. Timothy sure. That would be nice to get a net interest margin. I expect the fed will do what everyone expects them to do, raise rates, and this will be part of the normalization cycle which the chair will continue to do for the rest of her tenure. Matt how does that look to you . Timothy i think the economy looks pretty good. Things seem to be picking up in the Trump Administration, a very progrowth, deregulatory, cut taxes agenda. Things are pretty good. Matt does the Trump Organization look like it is really ready to follow through on the progrowth strategy . Timothy they have to get the rest of the people in place at the subcabinet level and get the Affordable Care act out of the way. That is an obstacle to getting tax reform done. It is wintertime. Matt i should it is going to take time. Matt there have been a lot of complaints from bank ceos that we are going to hear from at this Conference Today that the negative Interest Rate situation is hurting their p l. What do you expect from the ecb as far as that . Timothy conditions are not quite as robust as the United States, but not that far behind. We are seeing improvements across the continent. We are seeing improvements in lending. We need an up or sloping yield curve here as well. We are heading in the right direction. Matt it is a must like waccamaw. Im sure you feel like that sometimes. That has one of those picked up pace lately. How do your ceos you about brexit . Are they prepared ceos feel about brexit . Are they prepared . Timothy the Prime Minister will trigger article 50 in the coming weeks and we will begin the process. Im hopeful for an amicable outcome i think there will be ups and downs, but i hope you find our way through this with the least amount of production. Matt you have 37 bank ceos and chairman to meet witwi you and your boardt every evening. Do they move from londonh to frankfurt . Have you heard about dublin . Timothy they are all great cities. I think london is going to remain important. It is one of the great Financial Centers in the world and a great city. I think it remains important. Movement in new york and frankfurt and amsterdam and other places. I do not see a mass exodus in the shortterm, but they are preparing for eventual potential hard brexit. Im hopeful we will avoid that. Matt thank you so much for your time is money. Tim adams here at the iif ahead of the g20. We are going to speak with another guest as well, the new chairman of the iif after dublin is cycling out. We are going to talk to him tomorrow in an interview you do not want to miss. Guy perfect timing. Take. Ating to get his plus what is going on in the banking circle. Minutes away as you know from the equity open. A look at the movers in todays trading. Take a look at zodiac, take a look at what is happening with inditex. It is a Beautiful Day out there in london. The fog has lifted. The market open, eight minutes away. This is bloomberg. Guy democracy in action. Dutch voters going to the polls. You are looking at live pictures coming to you from the hague. We await the outcome later on today. Fantastic coverage coming up for you and we will continue to track all the Market Action around this story. We are of course five minutes away from the European Market open. Politics, front and center today. There are plenty of stocks to focus on as well. Inditexs margin coming down to an eight year low. Emerging markets looking fairly solid for inditex, but that margin story is what the people will be focusing on. , something us we want to focus on. Suffering from the negative rates we are seeing. You only have to look at the front end of the german curve to appreciate the problem. Toy will be returning money shareholders, softening the blow. We will speak to the ceo of munich re. Zodiac, it has been having problems and continues to have problems. It is downgrading some of its andmates for the full year as a result of which, it is going to be interesting to see how the stock opened. It has been a little volatile of late. Consolidation is something i suspect they would like to see in tloose in to lose oulouse. Treasury volatility really has come under pressure of late. That has been popping low. We know equity is very low. The market seems comfortable with the fact that the fed will raise later on. The question is, what will be the four minutes away. Guy lets talk about where the futures are pointing this morning. Box you get futures the fair value calculation. We are not going anywhere. Why . Think about what is going to happen. We have the fed coming up later on. We know there is going to be a hike. The question is what is communicated with that hike. That is what people will be looking for later on, the kind of communication. It is absolutely pivotal. Then you have the volatility in oil. To keep bearing in mind as well and it is solid on metal. Watch out for some of those iron or heavy companies. They could be a slight positive at the getgo today. We will watch them later. We are expecting a fairly flat open but we have seen volatility in the fx market. We have seen pound buying this morning which we will Pay Attention to. Lets talk about what is going on out there. This is the picture as we find it. A little bit coming through. It is the london market. E are up 0. 1 a close last night at 7366. The ftse is competing with a stronger pound which takes a little out of trade. You have the dutch election taking place. You have what is happening with the feds. Many reason to do absolutely nothing today and i think that is exactly what we are seeing. There are stock stories to focus on. There are interesting things going on but not to be found in fx right now. If we canng to see find anything exciting in the gilt markets. Sterling rebounding after hitting an eightweek low against the dollar yesterday. Gnp is on to break. If we look at the 10 year yield, we are up 1. 23 . It is tracking what is happening in european bond markets with the 10 year bun bund yield edging higher. As you say, pretty muted in the equity markets. Interesting because we saw the vic spike yesterday o