friend cooking dollar is back at goldman sachs post the bottom. 50% surge in the next few years. to discourage -- japan's biggest company braces for its first quarter profit drop as the strength -- as the yen strength crushes the outlook. president roosevelt is lost in office. -- president rousseff is lost in office. ♪ francine: welcome to the post. live from -- to the pulse live from europeans -- from the burst

european headquarters at what we are seeing, gains across the board. yen gaining a touch. this is on the speculation that currencies biggest today rise -- slide. two day there been wariness that the japanese government will intervene. this is dollar spot, one of the biggest stories. lifted to first word news with nejra cehic. nejra: the brazilian president is facing what may be her last day in office. the senate is gearing up for a vote to force her out and into an impeachment trial. surveys suggest the president opponents have at least 50 votes . donald trump has won the west virginia and nebraska primaries driving his can test driving his

competitors out of the -- driving his competitors out of the race for the white house. enter theays he might contest if he performs well your desk performs well. well.forms toyota has said annual net income will probably decline for the first time in five years. japan's largest company todicted net income may drop $13.8 billion. that is below analyst estimates and comes as currency swings at record profits. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the bloomberg at top . francine. francine: the dollar has found the bottom. goldman sachs says expectations for u.s. economic strength.

the bank says the dollar will bounce. this get straight to our guest, valentin marinov. valentin, great to have you on the program. give me a sense of goldman sachs. valentin: we do agree that the dollars on the upside. a greater confidence -- against commodity currencies. -- valentin: we do expect the fed to hike rates. they have proved less enthusiastic about hiking rates. francine: do you think they will hike in june? changed: they had have -- they may have changed to july. further delay cannot be excluded. if anything, but i think is the likely cause of action is the dollar could gain ground but

risk related currencies. investors start to west and the sustainability. that is keeping the markets driving at the moment. francine: let's say the dollar rises, 10 janet yellen really afford that guy: she verbally intervenes -- before that lack valentin: our expectation is not for these type of gains. -- partlyurrency because the dollar has featured so prominently in its rhetoric. also as we are approaching the europe elections soon, that is the case that protectionism or u.s. official rhetoric they be favoring a weaker dollar against its main trading partners like japan, china and even your. -- evenn euro cash

europe. a donald trump in the white house. valentin: donald trump was so successful so far. votersthe marginalized -- all of a sudden -- exactly. the response i would expect from officials on this current administration would remain close to the median voter. if they want to bring jobs back, trading partners ford literally -- the biggest risk because if that rhetoric changes, we have the meeting in tokyo. his encouragement that the currency wars have to and. from the current perspective, japan is running trade samples

to the u.s. their currencies are still somewhat cheaper. francine: if donald trump gets the white house, no one has any idea. if he does, he is talking about building walls and bringing jobs back. is there any good that could come out of it? valentin: [indiscernible] u.s. struggling to fund itself which i think is unlikely. it is ultimately positive growth. by bringingined some jobs back home from abroad. jobs that are in mexico or china. from that point of view, a weak dollar policy cannot be excluded. my analysis, i see a potential election of donald trump negative over long. with that risk in mind, the longer-term risks on the upside

the fact that the u.s. economy -- however that rhetoric will be changing from here. that is going to be important and growing negative for the dollar from here. ,rancine: valentin marinov think you very much. he stays with us. we will be talking about yen next. company braces for its first profit drop in five years. e.on profit jumps. we speak to the chief financial officer this hour. brazil votes on the president's impeachment. more on what could be processed last day in office. ♪

francine: it is the pulse. lifted to the bloomberg is is flash with nejra cehic. nejra: e.on's first order profits rose 30% after a one-time adjustment. underlying net income rose 1.3 one billion euros. that beat estimates. the agreement -- a two-year long arbitration process that enabled them to cancel its provision, boosting first quarter earnings by 40 million euros. ge is to sell its specialist group activities as a part of a

process of may -- of focusing on his mainline tourism. revenuerants generated and 56.2 billion euros in operating profit last year. europe's largest tour operator ges it will be paying -- shares are trading lower. disney shares have fallen and extend trading after a miss -- mixed second-quarter forecast. the network struggle and the summer dollar hit profits from star wars merchandise. earnings were one dollar point -- $1.36 per share. efforts tot from make console games. calls berkshires are lower this morning after the maker of beer recorded a slight revenue gain as a rebound and russia offset

that is yourter -- bloomberg business flash. francine. francine: toyota's missed fourth-quarter estimates. japan's largest company says that earnings could follow by as much as 35%. tokyo.o straight to jody, great to have you on the program. is it the only company saying such things echo jodi: -- things? jodi: it is the first one we have heard from that is making the yen argument. clear is suffering from a few other things. u.s. demand has stalled. it did have a few disruptions including the earthquake that affected its production. it is mostly the yen.

francine: do we expect see other effects of the stronger yen? jodi: yes. the unit is not the only one that is in the situation. exporters who have benefited from a weak currency in the past three years which is been at the core of prime minister abe's .rogram to reignite the economy everybody is going to be seeing this, and interest -- a 10% increase. in the first quarter we are seeing the yen strength and 3.4%. francine: the japanese government is concerned. we had the finance minister talking. what has he been saying? placed u.s. has

japan on a currency watchlist. you says that does not mean that japan cannot take action that is necessary. so far there has not been any action taken, nor details about such action. there's been a lot of talk by officials, primarily the finance minister that they will take action if necessary, if the yen continues decline this month -- this much. francine: jodi schneider in tokyo. let's get more with valentin marinov. as we were just hearing, the problem is this is the first time that we have had such a huge company looking again saying this is being problematic for me. it seems like it is a most

unfair, despite coronas best interest -- poodle does -- governor kuroda's best intentions. valentin: gaining ground to rapidly. it started the year starting with negative inflation. report isatest really highlighting is potentially the -- a number of japanese exporters. why is that important? the exporters are also the ones that the other administration is encouraging to boost wages. get the economy going again. for that, they do need weaker yen. francine: the yen strength is against abenomics. is this the first time we really realized? >> the yen is trading at the moment.

it is something close to purchasing parity. that is also the level at which the exporters like toyota, the exchange rate is at the label's is compensating. isncine: on a five for you -- valentin: the yen this onreciates beyond the level a sustained basis, in addition to stock market continuing to underperform. it slows from february. that will increase the probability of official involvement in the market situation. the fact is -- francine: why have they not done until now? valentin: when you try to model, you have to look at different measures. one is exporters. they are already losing money. they are under hedged. in level is also important that it highlights where the yen should be. we have the nikkei all of these

measures, for all of these drivers to fall into place. before that, it would be very difficult for the japanese to justify any decision. it is clear that markets relation that the japanese will not do anything ahead of g7 meeting at, especially given the u.s. criticism as of late. francine: do you think it will go below 115. i spoke to mr. yen who has been right in the past. valentin: that will be met with -- there will be intervention before that. the fact is if we do get there, the exporters will have to continue hedging. they will have to continue selling which will trigger another bout of disruption and gains. that will bring them back to what they are trying to escape from. predicatedowth is

upon exporters making money so they can create higher wages. that is why the yen is so important. francine: the problem is this is something governor kuroda is aware of. he is going into negative rates. he is probably the most experimental central-bank governor at the moment and yet it is not working. valentin: the latest yen rally is indeed the fact that foreign investors have been expressing -- selling nikkei and unwinding hedges. for the longer-term outlook, when i am saying is the downside should be limited. the fact that we are much closer to intervention, the markets are expecting. the longer-term outlook remains more challenging because that was just the boj has proved difficult that growth will recover.

they will be up to cheaper the currency on a sustained basis. we do expect them to remain on course, deliver more easing. francine: what kind of easing? valentin: that is a part of the story. in the case of japan, it may ite -- inmate not have as beneficial package as elsewhere. from that point of view, that may come as soon as june. we have the fiscal stimulus that is expect later this month ahead of g7 meeting. measuresould deliver ahead of the upper house elections. francine: valentin, thank you so much. beats --cronenberg carlsberg beats to make budweiser great again. ♪

francine: the unicredit ceo has faced a torrent of questions. that after lending growth led to an erosion and in net income fell. he is not worried about bank strength and he is confident the lender will meet 2016 credit -- earnings. >> i don't consider critical the

capital position it wiki working -- position good we keep working at -- [indiscernible] we have created capital against much more banks. we will continue in this way. francine: coming up later, we speak to italian finance minister. we talk about capital needed in the banks. this new fund expected to sure up some of the bad loans. tomorrow here on the pulse, we banking to from beer. desk rosenbergn is down. -- carlsberg is down. let's take a look at the numbers with ryan chilcote.

i know you are great reporter when it comes to numbers. problematic. the key to kuwait is -- russia is problematic but the key take away is china. the luxury market was in decline in china but how many people realized the chinese are drinking less beer? why is that a problem? that the -- that led to a decline in 1% of volume across asia. that is supposed to be a growth area for them. you in the last quarter eastern european we saw an increase. inbev turning his with announcements. ryan: budweiser is going to be rebranded as america. released oney also "america." e

ryan: i know you are a bottle kind of girl. this is only going to be in the united states. this is not going to be in europe, maybe because the country is owned by belgians. francine: this is taking advantage of the u.s. presidential election. it has the republican candidate connotation. ryan: they want to get involved in election fever. about one third of the beer in the united states is drunk in the summer. it could be useful for that reason. these guys are under threat from craft beers. they think americans are patriotic like never before. that is what they are gambling on. say thiswanted to america is for you, not this but

is for you. francine: first we need to have one on set at least to try. ryan: i think here we should have brussels beer. brexit beer. or maybe brexit ale. francine: an amazing story. we has got galloway and he was saying it is like apple rebranding itself as innovation. ryan: it is a dangerous thing to do because budweiser is so associated with america. apple is already associated with innovation, why would you rebranded as innovation. the marketing guys are convinced this is a good idea. see.all i am sure there will be a lot of discussion. francine: marketing guys, they always know the best. that is why they pay -- that is white they get paid the big bucks. up next, powering up. e.on profit jumped 30%.

we are speaking to the chief financial officer. we are seeing quite a loss for young. -- four e.on. ♪

to "the: welcome back pulse." we're getting breaking news out of the u.k. industrial production actually less than we had expected. industrial output rising 0.3%. we had expected 0.5% gain. maybe there is a little bit of a brexit sentiment involved.

we have seen sluggish figures just as people are holding out. i do not know whether that is the main reason but these figures a little bit short of expectations. but they are still rising. let's get to first word news. nejra: the brazilian president couldff is facing what be her last day in office. the senate is gearing up for a vote that would force her out and into a trial she looks unlikely to win. the president's opponents have 50 votes more than they need. donald trump has won the west virginia and nebraska primaries a week after driving his competitors out of the republican race for the white house. ted cruz's name was still on the ballot in nebraska and has hinted he might reenter the contest if he performed well. bernie sanders is the projected winner in west virginia. it would be his 19th state victory but has 37 delegates up

for grabs. canadian oilsands facilities represented 90% of production taken offline during the all purdah wildfire have emerged unscathed. of fortns north mcmurray are bringing back some of the one million barrels a day of supply that was curbed. although fort mcmurray lost 2.5 thousand buildings, the mast majority -- the vast majority survive, including the water treatment plant, hospitals and schools. netta has says that annual income would decline for the first time in five years. net income may drop to $13.8 billion for the fiscal year below analysts, estimates and comes as currency swings have spurred record profits now pose stiff h eadwinds. news 24 hours a day powered by 2400 journalists in 150 news bureau around the world. francine? francine: thank you so much.

markets pretty much flat this morning. a little bit on the higher side. let's get straight to mark barton with your asset check. mark: goldman sachs says the dollar slump is over. they are not always right when it comes to currency forecasting. they close the dollar position against an equally weighted basket of yen -- in february. they say the slump is over. rallyay the post payrolls shows that expectations for growth and fed reserve increases in interest rates have gone too far too fast, positioning the currency for a rebound. and estimates the dollar will rise 15% during the next two years as monetary policy normalizes. this is the bloomer dollar -- the bloomberg dollar spot index. that is the six month chart.

falling to a one year low, almost a week or so ago. since then, it has rebounded for five days out of seven. busy not only talking about the dollar. it has also talked about the price of gold, raising its forecast. but scaling back expectations of rate hikes over the next year, but it does remain bearish on the metal's prospects. it has increased its 3, 6 and 12 month forecast. $100050 to respective. appearhe upsides -- limited, we see a number of catalyst for gold prices to moderate, including a more ultimately u.s. policy rate diversions corresponding with gradual dollar appreciation over the next three to 12 months.

that was when golden december fell to its lowest level since 2009. seena rebound we have since then. best quarter in the first quarter in 30 years. we have seen a surge of 20% this ,300, surging through $1 last week. moving on to a number of companies that are released earnings today. rlsbergroke -- ca reported sales up by 2%. just narrow below estimates arrowly below estimates. beer revenue in eastern europe grew by 20% -- double what analysts estimated. these are the big four global brewers in the last 12 months. ab inbev down by 2.5%. heineken up by 12%. the best performer is sab

miller. want to tell you about e. on. first-quarter profit rising by 30%. a one time adjustment to natural gas profit. -- following a two-year long arbitration process in march. it allowed them to cancel some provisions recorded earlier. and the utility also reiterated billion tot of 1.5 s.9 billion euro e. on down by 41%. rwe 49% lower. francine: mark barton there with your asset check. of course, e. on, we'll be speaking to the chief financial officer shortly. now, this is my chart of the hour. it relates to power companies in germany. this is brent.

check this out. this is, when you look at the blue line. this is the picture of brent, the whilte line. brent -- in purple. foraverage price for brent the past 50 days is set to rise above the 200 day moving average. this is what we call a golden cross. that is typically seen as a sign of bullishness. the price may go up of we look at the technical level. up next, has the world's biggest sovereign wealth fund but a slumping oil price has seen theay tap into savings for first time. we will look ahead to this morning's budget. ♪

francine: let's get straight to the bloomberg business flash. itsa: two years to sells specialist group activities as part of a process of focusing on mainline tourism operations. the unit comprises 50 travel brands with generated 1.85 billion euros in profit. europe's largest tour operator says it will retain only the crystal ski -- business from the portfolio. disney shares have fallen an

extended trade after it missed second-quarter earnings forecasts. tv network struggled and the strong u.s. dollar -- profits from star wars merchandise. closingso said it's its infinity game unit which marks a retreat from efforts to make consul games. themepark profits advanced 10% ahead of disneyland shanghai's opening next month. are lower after they reported a slight revenue gained and a rebound in russia offset by declines in asia and western europe. that revenue rose 2% on an adjusted spaces to -- adjusted basis. francine: thank you so much. has reportedn first-quarter profit of 30% after a one time adjustment of a natural gas project with gazpromm. earlier it shifted its fossil

fuel unit. now for more, let's speak to the chief financial officer, michael sen. he joins us for an exquisite interview for the company's headquarters. thank you so much for joining "the pulse." give me a sense of the shift that a lot of these power companies, including your power company, is having to go through in germany. it has been a tough ride. very good morning from our side as well. happy to be on the show. allas been a tough ride along. not really new. for the last couple of years what you in essence see is a structural shift of the industry. our answer to this one is splitting the company in order to have two entities which then can focus on what we say is going to be two new energy worlds. model,ly, from plant to

having integrated utilities is not valid anymore, and this is our answer. francine: when are we going to see more satisfying results in e.on, but also in your industry as a whole? i'm not trying to single e.on out as a non-performer. when are we going to see better times ahead? michael: i think there you would have to differentiate between different segments. obviously, everyone within the industry that is exposed to commodities is have is having -- is having a tough ride. of theyou think renewable industry where we have a very strong position, then, and also thinking about energy net worth, which will be the core of the future energy world, the basically the internet of the new energy world. this is a very stable business with high visibility and stable

earnings and returns. then you have a customer business, which gives you a stable basis in order to grow going forward with solutions. francine: of course. executive and a letter to shareholders is writing these results are no more satisfying and those of any company in our industry. when will we see satisfying results again? michael: that is obviously always industry-specific. the entire industry is going through that shift and that is not satisfactory neither for players nor for owners of the stock or bond holders. so that is true for everybody. but within the industry, you still have pockets where you can have a strong position, and this is where future e.on is going to be positioned. what in terms you can do in order to counter is you know you are very diligent on your capex how you at least

can cater for satisfying earnings vis-à-vis the expectations of the market. francine: your share prices down 4%, and yet you announced today it was not bad at all. in line with what was expected. do you believe that the share disposall is linked to payments, because of that commission to fund germany's nuclear exit? francine: i have always learned -- learned note always to comment on the share price but to talk about performance and the underlying parameters. the core came in nicely at face value. by thesaid it is driven one off because of the challenging environment you have been alluding to. veryp of it, i've been clear this morning also to the market what i've been h inting at the capital markets in london that if and when the commission comes out with a result, and there would be a premium which is

financially punitive, then we would have to take measures. we are also ready to take measures. as that obviously is baked in. francine: is that why you said, how much do you estimate the cost of that? 10 billion euros or more? michael: you have to differentiate between the cash outflow and what is being transferred as in liabilities going out of your balance sheet. so, these are only rough numbers. we all need to understand that currently there is a proposal from the commission on the table. this is not a law yet. this has to go into lawmaking process. a lot of details have to be hammered out. we are open and ready to have this dialogue with the government. on top of that, becoming a law, we also want to have certainty, i.e. a contract. if we were to make the first rough estimates on what the commission disclosed and they only disclosed industry average numbers, the first rough

estimate, what it means in terms of e. on would mean that there was a cash outflow as i cash outflow of roughly $10 billionn -- in cash outflow of roughly 10 billion. final storage an interim storage, would be around 8 billion-ish. francine: michael sen, they do so much for joining us today. the chief financial officer of e.on. norway's government is set to -- dipping deeper into its summer off recession. that is according to a person official with the country's budget. the wealth fund is the worlds largest. let's speak to a top broker. great to have you on the program. how does norway's fiscal policy differ from other countries in europe? great example of an

economy where the fiscal policy makes a huge difference. in terms of the monetary policy, they need to resort to, they have an enormous sovereign wealth fund, and they are oil previous decades of exploration. helping them provide fiscal stimulus. they're adding to their stimulus. they are also cutting their gdp forecast and cutting the forecast for oil. the reaction seems to be more on the back of that than the rate of stimulus. francine: what do we know about the level of withdrawals from the sovereign wealth fund? theeah, so this year was first the government said it would need to tap the southern wealth fund which had just been created as a piggyback. ir latest forecast from the central bank was 80 billion krona. it.hey are tapping into

they are relying more on the sovereign wealth fund then they indicate that they would. they have a lower forecast for the price of oil this year. francine: thank you for joining us today on "the pulse." brazil votes on the president's impeachment. more on what could be rousseff's last day in office. ♪

here are some of your

highlights for the day ahead. admit day in cape town we get a snapshot -- at midday, we get mortgage applications. two hours later, the lower house of congress is scheduled to vote on the impeachment of president dilma ab inbev. --dilma rousseff. ben george osborne will questioned on -- the permanent damage of brexit. last stand. today could be the brazilian presidents last day. it would force rousseff out and into an impeachment trial. investors have welcomed the possibility of her ousting. the benchmark index is one of the best performing this year. a globals is emerging market strategist.

when you look at dilma rousseff, first of all, is it likely that startss, the process from impeachment today. so this is likely to be the last day. what is the probability of that? >> the process has already started. it started with the lower house. inay we'll have the votes the senate. what we need is 50% of the votes plus one. i think it is extremely unlikely we do not get that foe. she will have to step down -- it is extreme the unlikely we do not get this vote. we do expect she will be in peace by the senate. she will have to step down for a period of up to 180 days. after this, the senate will have to vote again. then you will need a 2/3 majority for her to prominently step down. what is interesting to watch today, it is not whether or not we get a majority of the votes. what is going to be interesting is the marginal victory for the pro-impeachment camp.

when you look at the latest polls of senators in brazil, you have currently 50 senators intending to vote in favor of impeachment. 11 undecided. you need 41 for a majority. 4 for a 2/3 44 3 majority. francine: will she ever step down gracefully? she's always been fighting pitch has been saying this is a coup. she will never step down. if this gets ugly, how difficult will it be for the stock market? >> this is a constitutional process. we have been pleasantly surprise that this course has been pursued as it was supposed to. two days ago there was a hick with the temporary leader of the lower house -- a temporary hiccup with the temporary leader of the lower house trying to block the process. ultimately, she will have to 2/3 down, be it by the

majority in six months time or if today we get a 2/3 majority, it makes it much more likely that dilma steps down in the interim herself. much abouthis is as corruption then it is about economic mismanagement. do we think that what comes next is going to be any better for brazil's economy? the think that is one of key downside risks from here. i think the market will welcome the departure of dilma rousseff. she will almost certainly be replaced by her current vice president. but there is also a small likelihood that he himself gets pulled in at corruption scandal as well. for the time being, we are relatively confident he would be able to see out his term. put in place a market for link cabinet, including the finance ministry -- a market friendly cabinet. we welcome that. we cover brazil a lot.

but the first time, someone comes into office and one of the first three decrease you have to do? more labor, market flexibility? there needs to be something to kickstart an economy that is getting worse by the date. >> this is going to be a difficult process, given that from a fiscal reform side, the previous -- physicians found it difficult under dilma to push through reforms. the momentum in the congress now is better than it was over the past year. it is going to be limited success admittedly, but given have been ins brazil, especially over the past two years, what we are looking for is marginal positives rather than a structural shift. francine: thank you for joining us. em strategist. don't miss the conversation with the italian finance minister. we will talk about the new bank fund called atlas. "surveillance." is up next.

we have plenty more to talk about. we will be looking at eyn. we will be looking -- we will be looking at yen. at dollar looking calls. expecting a rally of 15% in dollar. is that true? we'll discuss that next. ♪

r is back.king dolla goldman sachs sees a 15% surge in the next two years. japan's biggest company braces for its first profit drop in five years. and dilma's final stand. brazil's political drama reaches new heights. this is bloomberg "surveillance ." tom keene is in new york. we have a lot of currency moves. not only that goldman call on the doll b