sayor: euro area officials there may not be a call until 2007 team. we are in athens for an interview with the central bank governor. downward project three. the japanese figure falls for the eight straight month. a big deal in the making. sent to haveohnson approached the largest biotech firm. the prospect of a hike in the u.s. next month has the dollar extending its rally again.

while treasuries and gold fall. welcome to bloomberg daybreak. the dollar strength playing out. let's put prospective for you. rate of change. these are three-week moves, all the way back, 21 years. that is how big the move has been. this goes all the way back to the year 1995 when he and was trading at a 102 against the dollar. trading at 102 against the dollar. let's show you some of the other asset classes.

haver-yen, currently 113.39.- at it rose five basis points overnight. gold, $1178. pressure from the u.s. dollar. also, those are nine-month goals. on zinc which has been on a tear. let's get the first word news now. consumer prices have fallen for the eight straight month. primary gauge of inflation

dropped 0.4%. it underlines just how distant the world's third-largest economy is. abortion took center stage in the primary last night. defended hisner views as the rival attacked. this illustrates this is social, not economic policies differentiating them. are setes before they to pick their 2017 presidential candidate can read donald trump says he is making progress in his effort to prevent the moving of a factory to mexico. he said, we will know soon gimmick he said he was working on thanks to me to keep the plant indiana. carrier replied, saying it had held discussions and looked

forward to working with the incoming administration. thechairman of nordic -- bank said there is little chance they will held talks to merge. allowed thehave biggest bank to move its headquarters to the netherlands. this was an exceptional ,pportunity to ask the question whether the dutch government that has committed itself, would consider an alternative route which would have offered them better liquidity. it would have also transformed the landscape. it turned out they were not interested. day, more hours a than 120 countries. you can find more stories.

this is bloomberg. anchor: we talk about the stronger dollar. let's check in on market sentiment. we have the details. a shoppingertainly spree in equities. up 0.25%. the broader topix index up. the longest streak we have seen since june of last year. the weaker yen pushing higher. a number of the companies. casio computer, the front runner. mitsubishi motors among the carmakers with a good rally. asian markets, do a .4%. i didn't in gold stocks. a dip the golden mile --

in gold stocks. 0.4%.ng seng, up by the shanghai composite, also higher. a little bit of mixed movement from emerging markets. the philippine peso, falling shortarply. having a quick look at some of the other currencies. up 0.1% against the dollar. this is despite the fact that the few doc weekend the rates -- weakened the rates.

anchor: thank you. those are asian markets. let's talk about greece. prospects, with bank stocks surging. we have been speaking with banking ceos about investor confidence. let me take you to this chart, but enthusiasm we have seen for greek stocks. oversold, we were in territory. now suggesting we are overbought. let's get more perspective and some of the broader implications. guy johnson joins us from athens. the key meeting, the day after the italian referendum. why aren't greeks worried? a guy: greeks probably are a bit nervous.

there should be nervousness. if the italian referendum more ook -- if the referendum maybeo spook markets, that meeting would start to be tainting with what is happening. maybe it would be more difficult to deal with the deal. the reason the stocks have been rallying, the chart is doing what it is doing, there is a sense of optimism the docs are finally in line. there will be some deal done. on board.ll be interesting to listen to what the greek bankers have to say. .hey are quite positive they see better trajectories

coming through. that will affect their balance sheet and the all important nonperforming loans. we spoke to the chairman of a big, the ceo of another ank, to banks that have footprint. and itould be a signal, all mark not so much quantitative aspect which you have been pointing out. if we validate that international creditors are putting the stamp of delivery ofthe greece's program. usthat sense, it will help regain investor access. it will take us to the next step.

>> whether we like it or not, we will do the best we can with innovative measures. if the greek economy does not perform, that will not allow us to go very far. higher than the rate at which we are collecting. are improving.ta we are starting to see a pickup in the performance of the greek banks. they still trade on book value. markets see considerable risk. anchor: the market is pricing in -- how risky is the trade? greece is by no means out of the woods and that is what people are thinking about. the fifth, the

day after the a tying tworendum, designed to do things. give the rubberstamp. that is something most people feel is ok. we are running into next year. life in european politics is going to get interesting. set -- 2017 could be interesting. , is hethe key characters going to be in place after the dutch referendum? what happens in the german election? beenang short blair has part of this. nevertheless, greek politics, german politics, that's politics all get interesting. it is kind of now or never.

if not, some of that will be taken out. it will be interesting to see how that one trades. these are questions i will be putting to the governor of the bank of greece. council ecb governing member. we will not only talk about what is happening in greece but up against the critical meeting on the eighth. about a little later on. i'm looking forward to the interview. yousef: plenty to look forward to. guy johnson live from athens. broaden the conversation and bring out our guest post. he is a key strategist. great to have you on the program. chart,d up this enthusiasm in terms of investors buying up the greek stocks.

what is your read on some of these events? is this a positive? >> as far as greece is absolutely. if this can be pushed through, it is a positive. , any kindof valuation of positive news. me is theteresting to backdrop, the broader backdrop. gotin global markets, we've this curious bifurcation where we have high yields. higher in a lot of equity markets. the backdrop of greater political uncertainty. yousef: that is absolutely key. the ecb might have room to delay some decisions until early 2017 according to euro area

officials. they suggest yields have east scarcity concerns and there is no longer a sense of urgency. the ecb, it is what they are going to do at the next meeting. understand, there is a consideration there might be a delay, shifting some of the modalities. what should the ecb do in your opinion, going what is going on? >> i think the ecb should because she is. one reason to say that is if you look over the course of the last couple of years, one of the causes of short term motility has been ecb meetings themselves. they need to be aware in a fraught market, a market where bond prices are under pressure across the world. what happened to

italian bond yields. they have to be cautious. you remember last time around, that was the only hint we got out of mr. draghi. he said, we would not curtail bond purchases. particularly in focus. how much of this is political risk? thate key to understanding is not to look at yields on their own. it is to look at the spread comparison. compared to the u.s., germany. french spreads. atari and yields are heading higher. that is to a large degree

political risk. sense have been going up since the fraca. this is primarily about political risk. what happens on december 4. we are talking about something dramatic in politics. fine detailot of and what happens. saying, overall in terms of the european union, that is not necessarily on the table. >> there is one extreme outcome. it is far more about going to uncertainty, the kind we used to see three 2000. amazing how short people's memory can be. you are staying with us. highlights.e of the

let's look at that. thek friday, the start of shopping season. consumer confidence out of france. wholesaletime, u.s. do.ntory data also, looking at japan. another drop in prices leaves a long way from his inflation target. then will we hear back from greece. the chamber of commerce president will weigh in. happen our later, in paris, the remaining republican candidates in the french presidential race squaring off. this is bloomberg. ♪

yousef: what a live shot from the harbor area. the hang seng trading higher. feeding into sentiment with equities. juliette: johnson and johnson has approached another company about a potential takeover. they say to liberations are still at an early stage following the initial offer and they are working with an advisor to ask for options. representatives declined to comment. 's ceo says donald trump's critical stance to free trade could affect business. gameis really is a

changer. there are a number of conditions in the u.s. that are not yet dealt with. the president elect hee statements about how sees trade. that is a big issue because of the way in which nafta is configured. the implication it has on the industrial footprint. havette: shareholders backed the ailing at italian banks plan for a capital increase. it was approved by 96% of investors attending the meeting. shareholders approval is the final step to implement the recapitalization after that ecb approved it wednesday. japan airlines preparing to sell its first bonds in more than vacate -- a decade. they are planning to sell notes next month with the amount evenly's lit between five-year

and 10 year notes. ordered 31 planes with delivery set to start in 2019. it has options to purchase 25 more. that is your bloomberg business flash. consumer prices have fallen for an eighth straight month, marking the longest fall since 2011. the inflation gauge fell by zro 14%. still a long way from the 2% inflation target. boj expects prices to drop. contrast fromk in prediction of a 2.1% gain april. about juneack to

13. you have the sales tax, oil. t uptick.t , how many more chances to they get? in some ways, i am tempted to add a bit of optimism. that does help the bank of japan right now. it gives them additional flexibility. to take the view that one of the prime targets of abenomics, to have a weaker currency, the policy is working well. yieldsve managed to keep effectively low. yousef: the chart shows we are

far away from the 2% inflation target. can drive lower and lower without it necessarily ng seen as targeting the yen. plausibledapt but liability. is that working? yes, absolutely. where does dollar-yen go from here? it must be a difficult call to make. --re is real appetite for term, thathe short is the easy bit. enough times over the last 25 years to know that is the rate.

past, if we go back to 2005. move, clearlyhe very different to what we are seeing in the past. comparable thing was late 2014. that is going to be what we are having. it is how the u.s. responds. you think might be a political move. fed has always been concerned about dollar strength. historically, there have been concerns raised about japan. go back to 1985. tax cuts, monetary policy. once you bring up

reagan, we can open all kinds of doors. more to talk about. plenty more including greece. stay tuned, this is bloomberg.

is 6:30 here in london. 3:30 in the afternoon. people gearing up for their weekend in japan. there, and we were talking about the implications of all of that on the boj policy. let's first get you to a new edition of daybreak. one of the favorite parts of the program. available on your mobile. at the top stories making this edition. the top story is turkey, the lira trading at a record low.

one of the beautiful shots from downtown istanbul. tempest is the headline. the lira at new depths. of pressure from the heighten, it will only concerns there will not be any counters. 'se next story looks at london property market. homes less affordable than ever before. er -- ts the annual london home prices have surged. how did i miss out on this? finally, daybreak focuses on the oldest bank in the world. not ailing at italian

lenders capital increase. that was the capital injection. let's see what is in store for the markets. anna edwards has the bigger picture. anna: how did you miss the housing boom? let's talk about safe havens. seems investors are not particularly in need of gold. the dollar index, seemingly relentlessly on this line. it seems we do not need this safe haven. markets don't need to get into gold as a result of concerns around inflation. focusing instead of the boom the potential president elect might bring to the united states. the dollar heading for its deepest increase against the yen. commoditieswith the market, copper in blue.

that has been doing well in wake of president elect trump's victory. winners and losers on the market chart. the big move in the lira. surprising markets with that move. they could not counter the downdraft. what is in store for treasuries today? at least in theory back at their desks. possibly taking the day off. this is a 10 year yield chart. talking about going to 3%. they say this is going to cause more pain for emerging-market assets. we are waiting for vienna,

focusing on the meeting that takes place. the opec meeting next week, wednesday. 47-44 is where we trade. second week of gains for the oil price. iraq signaling they will agree to cuts. the focus turns to iran and russia. from the japan pension fund, the government fund. gainposted a ¥2.4 trillion in the july-september quarter. stocks off the backs of rebounding. we will stay across that story for you. let's go to greece. the stock market has rallied 10%.

we spoke to the ceo the national bank of greece. optimism isthe warranted. >> i think we have reached a plateau. i think the economy has stabilized. year, wehe sense next byl see growth as projected theconsensus estimates in area of 2.6%. portland --e in important. >> what will be be drivers? as an ambitious number, but you have to remember we are coming from a time of years of recession. there is some sort of energy in the economy that can be unleashed as we move forward. there are a couple of issues

here. a quite important part revolves -- greek assets into qe, the quantitative easing program of the ecb. that can be an important landmark because it would access.y provide market the reversal of negative confidence into positive. overall, it will help the investment climate in greece. yousef: what's get more on this story as it develops. thank you very much for coming. let's get into the statistics. much sure do we read into these numbers? what is the reality on the ground?

>> the reality is very difficult. weo agree with the stability have seen. 0.3% closes off the year. we are expecting growth, if not 2.5%, at least 1.5% for 2017. remind viewers greece is entering the seventh year of recession. all has broken down economic theories of an economy surviving such a lengthy time. we have seen signs, primarily from the service sector. tourism this year has improved considerably. we are waiting to assess the financial side in a few days time. but positiveo be

year for tourism. the privatization program the , we will see more success stories in 2017. -- we areex to for us seeing investors picking up greek stocks and bonds. is there optimism misplaced? since you touched on the political issue, the last thing we need in this country is another election. parties areon asking for an early election. it is the last thing we need. chambers of commerce and industry have been in favor of cycles.ng the electoral anything else will bring instability. the last thing the market needs at the moment. what we need is consensus,

cooperation at all levels. the full article system needs to comprehend this is a national crisis and therefore national criteria should prevail in finding the right solutions. i hope this message from the business community in general will pass through to the political system. with the general instability we we seeing throughout europe, will be able to have a strong and united voice. you talk about consensus. the reality is when we are emands madethe d by the labor unions, where do you stand where it comes to labor reforms? is the imf right in terms of collective bargaining rights? who will lead discharge? this charge? --

antithesisthe between the parties. essentially, it does not involve the business community which comprises of small and medium-sized enterprises. it is an issue that involves a large companies which unfortunately, are very few. sector, from the last information we have from the negotiation taking part andeen the greek government our lenders and partners, it looks like the layout percentage will be set at 10% per month. the massot involve business community in this country. you,f: how concerned are as we look to elections, italy

in terms and others, of the rising tide of populism and how that could feed back into a dissatisfied electorate? >> the dissatisfaction of the electorate in a number of countries is giving the push toward nationalist movements. referendum in italy, the fourth of november. on the same day, the second reelection for austria. is quite worrying. we have another election early next year in april in france. should all be alerted that austerity upon a steroid he does not bring the right solution. we need to find different methods.

side, the stance concerning the greek economy through the reduction of greek and of course the diversification of the interest rates. i hope once we have completed the second review, mr. draghi will stand by his promise as far as inclusion in the quantitative easing process of which will relieve the banking sector and the business community. yousef: thank you very much, the president of the athens chamber of commerce. guy johnson will be speaking

exclusively with the greek central bank governor, happening 8:30 london time. give the sound of break -- how to break. a break. they say that means there is little reason to aggressively sell or buy the currency until the details of the brexit economic implications are known. i know simon has a lot of thoughts. i pulled up the charts which of scottishsition investors. what they are expecting going forward. do you agree with what they are saying? simon: to a degree.

what i think is fascinating about the chart is, it shows sterling. there is no reason, a point by which yield differentials are not the driving force. it is now about the politics. iti look at that chart, would have weakened from june until september. it did not. yield jefffollowing rentals, it would have strengthened between september and october. it did not. over the course of the last few weeks, it has stabilized. it has all been about the politics. yousef: what is going to drive sterling, politics? yes.:

could it drive sterling lower, yes? but massively lower, probably not. it is the simple fact, the valuation is right. the moves are starting to become mild. tony blair has been talking to media outlets. he also said, if the deal does not stack up, you can stop that process and go back. simon: whether that is true or not, i do not know but it will be a long and complicated road. one of the reasons sterling stabilized, the fact that we have a polar limitary -- parliament terry vote. outill be a long and drawn process. me, we are in a situation

where there are lots of unknowns. but probably most of it, most of the negative stories have been factored in. give me a few ranges to work with karin simon: in the extreme, could we see another selloff? yes i do. not much below 120. situation, ag at a time, anything below 120 is going to look like a good value. yousef: he stays with us. also, we will go to johannesburg to releaseprepares the results of the south africa credit review. and then we are in paris after the remaining republican candidates in the french presidential race squared off. and then we will look at the dollar's record rally.

we will get you those answers. ♪

is 1:49 in the morning as you were looking at a night shot of new york. this is a city that never sleeps. we hope you enjoyed your thanksgiving holiday. a reminder treasuries and the u.s. dollar are back online and back in focus. let's switch gears briefly. there is a chance they will resume talks with a dutch rival. -- we spoke exclusively in stockholm. was an exceptional

opportunity to ask a question, whether the dutch government which has committed itself would consider an alternative route. work -- but would also transform the landscape. he reiterated his desire for the lender to remain headquartered in sweden despite stricter capital requirements. >> the playing field is not quite level. we are standing in a part of it where it is a marginal, uphill battle. at present, i think the benefits of being in sweden, because of its stable economic climate, outweigh the negatives of heavier capital requirements. moody's kicks off the

critical credit rating for south africa. let's go straight to johannesburg. what is expected at this point from the ratings agencies? >> correct saying munis will make its announcement later today. in aof the 12 economists survey done expect moody's investors service will keep its rating two levels above junk for south africa. that could mean some reprieve one s&p global ratings makes its announcement in a weeks time. we do know that will definitely happen before the end of the year. chances are early december. ,ousef: what is it stake exactly, if the credit gets downgraded to junk? we coulds at stake is

see some people sell off some of their bond holdings. am funds are not permitted to have holdings in sub investment grade countries. we know the south african reserve bank said they could expect the south african rand will remain sensitive around the assessment and announcement time. pressurecould see some as these announcements are made in the next couple of weeks. crucial,hing that is the cost will increase. that will put more pressure on itsomy that is growing at weakest pace since a recession in 2009. exacerbated by a drought the country is facing. yousef: thank you very much for giving us that update. let's bring back the chief currency strategist. south africa and the ongoing political turmoil, there are a few people will wish on the

brand. spectaculareen moves in the currency. where do you stand? simon: it is always spectacular moves and has been since the 1990's. it was one of the great yield plays in the first half of the year. benefitlways going to and did so. in a world where commodity prices were doing so well. clearly, since the shift in the u.s., given the rising bond yields, the breezily and -- brazilian real has suffered. the moody story is the last thing the south africans want. if it goes away and there is no change, that helps to stabilize things a bit. i think some of those high-yielding currencies are going to remain under pressure. again, those are some of the returns for all countries.

you can pull it up on your bloomberg paris this graphic is skewed by the they losses of the egyptian pound percent. what other currencies are high on your radar? is it the russian ruble? there are things you would not be surprised to see move over the course of the month or so. is, as, south africa repeat of 2013. two interesting ones for me. 2013, it wasck in suffering through everything else. it has not moved this year. it is a different world than 2013. we floated the ruble. we have the sanctions. nonetheless, astonishingly stable against some of its compatriots. that resonates in my mind. clearly people are looking address it in a different way.

absolutely, again, here we are in a situation, 12 months ago, we were getting deeply concerned about what was happening with the cmy. think 80 spending, i billion in november. then they spent 100 billion in december, trying to defend the currency. here we are quietly. hints that intervention is starting to pick up from the pbo c. do we get a repeat in november, december and january? yousef: thank you very much for joining us. fantastic conversation. still to come, a french presidential face-off. we will bring you the highlights between the final french presidential republican debate.

stay with us. ♪

yousef: yielding results. the euro area officials may not make a call on the bond buying program until 27 teen. -- 2017. downward trajectory. as they stumble in the quest for a 2% inflation rate. a big deal in the making. johnson and johnson set to have approached europe's largest biotech firm. raised expectations. the prospect of a hike in the u.s. next month has an extended rally.

welcome to bloomberg daybreak. what get you straight to is happening with some of these futures across the board. i am looking at, you can see, tapping into some of the positive sentiment we got out of asia. they're in mind u.s. futures are open. let's get across to the risk of radar. dollar, barelys. above the flat line. those are still very much nine-month lows for the precious metal. zinc, up 1.4%.

you thought it was being driven by u.s. expectations. the investment banks watching. u.s. treasury yields. looking at a graph every back to levels we last saw in december, 2015. 0.26. bonds, let's get to first word news. consumer prices have fallen for the eighth straight month in japan. the longest streak of decline since 2009-2011. it underlines just how distant the third-largest economy is from achieving 2% inflation. donald trump has said he is making progress in his effort to prevent carrier from moving its factory to mexico.

the u.s. president elect tweeted, we will know soon, saying he is working to keep the plant in indiana. the manufacturer replied with a tweet of its own, saying it had held discussions and looked forward to working with the incoming administration. biggest fundsd's have a message for the currency market. give the pound a break. slide reflects a changed economic reality. there is little reason to aggressively sell or buy the currency. global news, 24 hours a day, howard by more than 2600 journalists. you can find more stories on the bloomberg and let's check in with the market action.

juliette: it has been a good finish to the asian trading session. as it is in a bull market. also, the rally we saw from japanese equities, helping to lift the regional index. the first weekly gain in a month. export stocks, very well supported. the strong dollar weighing on the japanese yen. index up foropix 11 straight sessions. session.solid most of southeast asia and hong kong. insurance stocks very well supported. also on the back of a note from goldman sachs.

fairly positive in terms of the equity picture. where we have seen weakness is asian currencies. you are seeing the chinese currency fall for the third week in a row. that is where we have seen a weekly decline. pushing toward seven. yousef: joining us from hong kong. let's go from the asian markets to the markets in greece. the improving prospects for debt relief have seen markets rally. we have been speaking to banking ceos about investor confidence. and whether it is warranted.

>> it will be a signal. mark not so much a quantitative aspect but it will not so much a quantitative aspect but it will validate that international creditors are putting the stamp of approval on the credibility of the delivery of greece's program. it will help us regain investor access it will take us to the next step. >> whether we like it or not, we can do the best we can with all kinds of innovative measures. that will not allow us to go very far. it will be higher than the rate at which we are collecting the problems.

staying in europe, the republican french presidential hopefuls went head to head. france.his case for >> i want to reinforce the voice of france. reestablish our economic partner. particular, vis-à-vis germany. from that point on, we are free to make our own choices. i don't want france to be a vassal of u.s.- or russia. >> the real danger is not russia. it is economic. it is called the asian continent. it is a danger in terms of global economic dominance. get more on this story. how did the debate go?

how does a change the battle between these men? he was lagging behind 16 points so he had to give everything to catch up. he was accused of being too soft, to moderate. to attack, especially on international relations. he accused his opponent of being too pro-russian. him to be careful about vodka. he also attacked on social issues such as gay marriage and abortion. his opponent had the opposite property. to soften his approach during the debate. he has, he is -- anti-abortion views that are personal but he doesn't want to change anything. he wants to restrict the

adoption for gay couples. overall, people could vote to a polld according published last night, 57% of people who watched the debate fillon more ois convincing theory the reality is anyone can vote including people who did not vote in the first round. including people from the left wing. those people more sensitive on some social issues. yousef: people look to the u.s. and u.k. and they complain about a lack of policy certainty. tell me more about the fundamental differences in the programs of these candidates. >> he has been defending what he

, shockhe happy identity therapy for france. he is an admirer of shocks iraq. chirac.e they have differences in terms of the economic program. both one public spending. françois fillon -- both want to cut taxes. both want to extend the retirement age to 65. want to add flexibility to the labor market so it will be a very tight runoff this sunday.

yousef: thank you. that story, live from paris. the ecb might have room to delay decisions on the future of the bond buying program. areais according to euro officials. they suggest there are eases of scarcity concerns. fantastic to have you here on the program. the governing council set to meet in the first week of december. what can we expect? how significant is this rise in yields? the trump affect is not just a mirage, yields will probably go up a little further. you get growth injected into the system. in terms of draghi and what he says, our view is you start tapering around september. you may extended six months.

a little less, a little more. we are in a year or next year where we put qe behind us. global liquidity support from central banks it's a peek. and then it is a downward trajectory. we are in a downward stages. it makes sense for the ecb to postpone decisions? need time tops they digest what donald is actually going to do. the impact on currencies. stopping in having a think makes sense. i have spent quality time with this, you can pull it on your bloomberg. details of the bond buying program. it goes across all the countries, across the continent. it breaks down the countries here.

what is going to be the key challenge for the ecb going forward? it looks like they are running out of bonds to buy. guest: and looks little better than in july, the summer. careful not to move too far into risky arenas. violate a laws, legal flame max. file laws and legal frameworks. i think the focus will move away to a new regime. yousef: what about yields been driven up i political uncertainty? the focus will be what is happening in italy. how is that playing out in the broader yields story?

guest: you have seen me a bond spreads move quite a bit. i have to be careful because we are publishing sitting on italy. we see more upside in the bond spread in italy and france. probably priced in the uncertainty. in france, it has not. cheaper than european countries. i see more downside in italy, -- i'm sorry, in france. italy, a lot of the downside is in the price. youef: how concerned are about the viability of europe at the moment? ofgot this rising tide populism. a lot of people on the set that are concerned. others saying, you are making too big a deal. let's move back in the other direction.

guest: we had a big conference. i think it was last week. probably hundreds, over 1000 investors, on what their biggest fear was. happens in the u.s.? the u.s. recession? is trump upsetting the global arena? the number one concern, 70%, populism and what happens in the euro area. a real concern in minds of investors. we have learned polls mean nothing. there have been big upsets. it is a real worry. we have lost control of what these countries are doing. genuinegeneral in -- worry. yousef: where does it leave the euro? guest: the euro it in at the moment. yousef: we are not getting any clarity about how people feel. guest: i'm not a strategist, but

i think the view is there is more upside, the euro reaching its downside limit. we are not saying we are going to parity. what about investment themes? and there are major moves across asset classes. how has that affected the thematic approach? guest: one thing that gets me excited is europe is the last post crisis trade to go for. if you look at the total return between bonds and equities, the gap in europe is bigger than japan, the u.s.. gap betweenmance equities and bonds over the last decade and that is in a crisis peaked today. isthing that moves bonds up going to close that gap. what do we need for equities? a bit of profit growth and we think this is the year that it

turns. we need to get through the political calendar. june is when people can relax about it. those things will close the gaps. yousef: bold calls. staying with us. from yo the dollars record rally. the three-week surge. will it contue? find out, shortly. ♪

are looking at what is said to be a gorgeous day here in london. homes in london less affordable than ever before. the averages than salary.

get more. juliette: johnson and johnson has approached a swiss drugmaker about a potential takeover. they say deliberations are still at an early stage. and they are working with an advisor to explore options. representatives declined to comment. saidit chrysler ceo has donald trump's critical stance toward free trade could affect his business in north america. he was speaking at an alfa romeo plant. >> it certainly is a game changer. there are a number of conditions i the u.s. that are not -- heard him, during his campaign, the president elect made some statements about how he sees trade. that is a big issue because of the way in which nafta is

configured and the implication it has on the industrial footprint. juliette: shareholders have backed the aging anti-en banc's plan for a capital increase. -- it is the final step to implement the recapitalization. japan airlines is preparing to sell its first bonds in more than a decade. the carrier is planning to sell about $176 million with the amount evenly split between five-year and 10 year notes. airbus planesred with deliveries sets to start in 2019. that is your bloomberg is this flash. let's talk about the

united states. that has kept the u.s. dollar at a 10 year high. let's talk big things, big picture. it is in the bag what is going to happen in december. the bigger question is what happens after that. what is your house view? it guest: the house view is 50 basis points hikes. there will be changes at the fed. yousef: had of these higher yield stories -- i like way out there. if whathe surprise is

trump does helps close the equity market cap for the u.s. europe benefits more than the u.s. if you look at energy, commodity, construction. are 5-10 times more important to european earnings then u.s. earnings. the things we have been hit by our things i just talked about. thatties, energy prices take a while to feed into earnings. a bit of inflation, we have had no topline growth. potentially, unless it is a trump maras, that boosts european earnings. the earning gap since 2009 is 77%. they were the growth story. ade.-crisis tr you will see some flows back into europe. haven't had a lot of those. that into put

perspective, the earnings analysis function. an amazing unction. it collates all of the earnings and shows you the sales surprise and earnings surprise. basic materials, the upside for the most part. health care. telcos as well. ones, the top of your list as interesting plays? guest: areas like the financials. havearnings happened -- been on a downward trend. the thing we like on the dividend side, 25% of the dividends come from the financials. we are delighted the capital base, the balance sheets have been cut the equivalent of close gdp.% of the eurozone the capital position has been repaired to 50% of european gdp.

we think that repair is largely done. we like energy, the earnings take a while to come through. if they do not go higher, there are earnings to come through. doubt, what should i what should i stay away from? yields arevidend some market to it doesn't look that compelling to us. leave it there. always great having you on the program. joining us on the set this morning. that is it for "daybreak europe." the commodities taste trading, 1.2% lower. gold trading slightly higher after the stronger dollar. guy johnson will be speaking with the central bank governor. and plentyfor that

more. this is bloomberg. ♪

anchor: welcome to bloomberg markets. i am anna edwards. guy johnson. here is what we are watching. dollar dominance. to cap itsck set biggest games. where is the rally headed next? is there room to delay? leeway ont to have its bond decisions. we will speak exclusel