>> inauguration day, president-elect donald trump will be sworn in as the 45th president of the united states later today. we take a look at what to expect from his first days in the white house. >> janet yellen backs a strategy for a gradual rise in interest rates and seeks -- sees risks in an overheated economy. the dollar drops after the fed chair's comments. >> ending on a high note. china's economy accelerated in the last yarder of 2016. g.d.p. rose 6.8% but what price growth? >> and live from the economic forum in switzerland, doom and gloom from george soros.

he says that president-elect donald thrump will fail. -- president-legend donald trump will fail. and an exclusive interview with toyota chairman at 11:45 london time. "day ome to bloomberg's break europe." 'm anna. >> eric good to see you, george soros punched everybody i think one at a time.

what's the lineup today? eric: this is the first year in my experience that the world economic meeting has extended to a full fourth day. moments from now we'll hear from the vice president of the e.u. commission. te they are morning, joe jimenez, the c.e.o. of the giant drugmaker novartis. cannot ignore obamacare, it means a lot to drugmakers. back to you. ana: amazing that donald trump is not there yet he has such a presence at this event. conversations about him extend to all corners. a couple minutes past 6:00 here in london. let's throw up the charts and see what's happening outside of the davos world as well. janet yellen talking about it

being prudent to gradually adjust policy over time. she said the fed is not behind the curve. a move in may priced around 50% now. it'll price in to the 50%. that's from 42%. >> there's a couple of different dynamics driving the market. there's a two-way risk in the dollar again. yellen says she's not behind the curve but when thuff the treasury secretary elect, steve mu knew chin, he said trump's comment is not long-term policy. we have the data from china. the three bing things -- big things driving the market, mnuchin's comments. china grew by 8% in the fourth quarter, accelerated for the first time in the final quarter. it's now up .7%. anna: this being inauguration day perhaps people's attention will be elsewhere.

the dow locked in a 1.1% range since december, the tightest trading range ever on the day the 45th president will be inaugurate. we got the gold price there for you, up .2%. >> time for some first world news. cherie ann is standing by. >> good morning. donald trump promised to unify america as he prepares to move into the white house. speeng the eve of his inauguration in washington, the president-elect vowed to carry ut his campaign pledges to strengthen america's borders and the military. >> it's a movement that started, it's a movement like we've never seen anywhere in the world, they say. there's never been a movement like this. it's something very, very special. we're going to unify our country. our phrase you all know it, half

of you are wearing the hat, make america great again. >> george so ross called donald trump, quote, a con man, and he will fail because his ideas are contradictory and the new white house team will fight with each other. > right now, uncertainty is at peak and certainly the enemy of ong-term investment. i don't think the markets will do very well. right now, they're still celebrating. when reality comes, it will prevail.

>> u.s. sec retare treasury nominee steve mnuchin said he's willing to label china a currency manipulator if warned. that despite donald trump softening his stance on that. janet yellen has backed a strategy for gradually raising interest ratings in a speech at stanford university. she argued the bank habit been behind the curve but admitted it can't afford to let the economy run too hot. as trump is set to enter the white house, yellen said fiscal policy is one of the many uncertainties the fed has to deal with. the u.k. prime minister offered her strongest support yet for the city of london as brexit moves closer. theresa may's comments come as they prepare to move staff

abroad after u.k. leaves the e.u. >> i value financial services in the city of london and i want to ensure we keep financial services in the city of london i believe global britain will do just that. >> you can find more stories on the bloomberg app. this is bloomberg. anna, manus. anna: let's go back to davos. eric is standing by. i've got a feeling he might talk brexit. eric: we might get there. the european commission vice president and commissioner for euro and social dialogue in the e.u., great to see you. >> good morning. eric: thank you for the early start. let's begin with inauguration day in the united states. donald trump will become the 45th president of the things he has said and the thing he is has said he's going to do, what encourages you the most, what

are you most concerned about? >> well, europe and u.s. has a long-standing strategic partnership which dates for many decades and we think it's very important to continue in the spirit of this strategic partnership and this is our message also to the u.s., we are willing to continue to work closely together. eric: is that something you feel optimistic about or something you're concerned about? i can't tell. >> i think today is a day of the inauguration so we must see what the real first steps of the new administration will be and then we'll be able to tell. eric: you have to worry, i would imagine, about the kind of interfering roll that mr. trump may play in european affairs. he's already been calling on european institutions asking which is going to be the next country to lead the e.u. after the u.k.?

what do you do about that? >> clearly that kind of statements are not helpful, especially in a sense that after the british referendum, 27 member states, leaders of 7 member states said very clearly that they see e.u. as indispensable for other e.u. country, other 27 e.u. country, so clearly there's intention to work together and to make e.u. a success. eric: there is a voter backlash, you might say , in a number of .u. country, not just britain, over the position that the e.u. has taken, particularly on growth and stability. and you have elections approaching this year in france, you have elections in germany. an election coming up in the netherlands. should the e.u. in retrospect have been more flexible on

growth and stability? >> as regards growth in e.u., e.u.'s economy is ready for a number of years back to growth, this year we expect 1.6% growth, .:'s g.d.p. is god levels, unemployment down to 2009 levels, what we need to do now first is really not to jeopardize this recovery, to continue with stimulating investment, with structural policies. with fiscal also we are put manager emphasis on growth so that people also feel all parts of society the benefits of this economic recovery. eric: we've heard a will the about that here at the world economic forum, it sounds great and should be great but is it too little, too late?

the financial crisis was almost a decade ago, hard to believe, but here we are eight -- almost 1/2 years later. only now, only now are we talking about inclusive growth. something is wrong with that. >> well, clearly we have been dealing with financial and economic crisis overtaking this crisis but the consequences of this are still felt including the social consequences. we need to deal with those social consequences. it means both tax policy, shifting away tax burden from labor, special low-paid labor, better targeted of -- targeting of social systems, making sure it addresses the most needy parts of society. skills agenda which is important in terms of technological change. dealing with youth unemployment. youth guarantee we are providing in europe and a number of other things we can actually do and which we're already doing.

eric: in nearly, inclusive growth will blunt the sword of populism but let's talk about populism. would you say populism is the greatest threat facing the integrity of the european union? >> well, we clearly see some kind of populist backlash. it's not limited to europe and -- and in a case we must see what the adequate response. is in terms of economy, it's first to continue with our policies to support economic recovery and second to deal social consequences to work toward inclues i world. these are two things we need to address the populist backlash. this is very much a conclusion which is felt also here in the world economic forum. >> how do you engineer inclusive growth at a time when the european central bank is still pursuing extraordinary monetary

policies over the united states, they're already beginning to raise interest rates. but the extraordinary monetary policy is what allowed people with capital to do so well in the years after the financial crisis. and in europe, those conditions are still present. >> as regards monetary policy, i must say that as european commissioner, i must respect independence. erik: of course, of course. i'm not talking about what you want the e.c.b. to do, it's how to you create inclusive growth when there's still policies that exacerbate inequality? >> as regards low interest rate quantitative easing, among other things it also helps border wars, it helps in a sense member states financing their budgets so they're also side effects of this monetary policy which are

actually stimulating the economy and with economic stimliss you also can better address social issues. ric: mr. dombroski, such a pleasure, thank you. he's vice president of the european commission. manus: that conversation, the challenge about inclusive growth, what does that mean 10 ears on, 8 1/2 years on. >> china's growth accelerated for the first time in two years for the final quarter of 2016. g.d.p. increased 6.% from a year earlier. four-year expangs of 6.% was right in the official target range but the slowest since 1990678 economic stabilization s giving -- amid trade tensions. toyota's chairman says he has full confidence in his company's prospects in america.

speaking exclusively to bloomberg, the comments came in the wake of criticism from president-elect donald trump over the carmakers plans for a new plant in mexico. >> we were a bit surprised that our name was mentioned by mr. trump. what he's trying to do is expand jobs and gain competitiveness of the u.s. industries. we have many factories in the u.s. and we've been increasing the employment there so i believe our contribution in the u.s. is quite significant. >> j.p. morgan's c.e.o. has given them a 1% raise. jamie diamond got an $8 million compensation package, .7% more than a year earlier. they overtook wells fargo which stumbled because of a bogus

customer account scandal. that's you're bloomberg business flash. anna: a little breaking news on the brewing sector. heineken saying they are in talks on a potential brazil deal with kirren who said around midnight u.k. time that they have not decided anything on the sale of their brazilian operations but said it's true they are in talks with heineken. manus. that business in brazil is a loss making business. is the riskn brazil they're chasing. china is at the top of they have agenda, along with brexit and inauguration day. those are the subjects that will dominate the conversation in davos where eric is stand big. ic: i'm here with inge beal,

c.e.o. of the world's largest insurance market, lloyd's. one thing i've picked up in my conversations, particularly with british bankers this week here in davos is there seems to be, or at least they seem to per see, somehow, brexit as less of a risk than they might have, say, even a few weeks ago. has something changed? >> it's not really changed but they came -- but theresa may came out and gave more certainty not just to the u.k. but the whole world. for us it confirmed that staying member of a single market isn't a priority and is not going to happen. that means we have to go ahead with our contingency plans. it hasn't affected us that much, it was somewhat anticipated. for the insurers, we rely on

being able to provide e.u. business, passporting, we're going to lose that licensing. so we're going to be setting up a subsidiary somewhere else in the e.u., a company that we had will remain in the e.u., that's how we'll provide seamless coverage to our customers. eric: you've had conversations with heads of state here in davos about where that subsidiary is going to be. >> we have. hopefully by the this quarter, we'll have chosen and then start working on it, it can take 12 to 18 months. eric: i can understand why you now, want to tell me right particularly if you haven't decided, but are there ones you

have ruled out? >> one we ruled out is malta. it looked like it would work for us but there's not enough, it's not going to be the right location for lloyd's. we write with such a global business that it felt that was wrong. it's more likely to be somewhere on the continent. eric: lloyd's like other insurers have suffered from two factors. low returns, terrible for your investment portfolio, and the pricing environment. how do those things lock now, particularly since we've seen an uptick in bond yield and a resurgence in risk asset prices. >> what's been happen, because of the low yield, more and more capital want to invest, i think as the yield pick up, perhaps they'll find other attractive places to invest. hopefully that will ease some of the pressure. the margins are being really squeezed. and at the moment, i mean, obviously we're making estimates about the future profitability of underwriting. we're always saying, we think

the claims will cost us x in the future and a big part of that is what -- we're getting the price right. right now it looks like margins are slim on the current year underwriting. very slim. eric: donald trump takes office today. he'll be the 45th president of the united states. you do a lot of business in america. what do you think trump means for you? >> jureblly -- usually insurance isn't high on a president's agenda. eric: in fact i haven't heard him say one thing about insurers. >> but we do have a sort of special place in the u.s. market, having been part of the sort of progression that the u.s. has had over many, many, many years. we've always been there and we've enjoyed a really healthy relationship with the u.s. regulation for insurance tends to be at a state level. we don't imagine immediately there's going to be a major impact on insurance. we're usually low down on the priority list for any president. obviously we'll keep a watchful eye.

what we're really interested is, if the economy starts to grow, businesses will perhaps want more insurance. it could be a great opportunity for lloyd's. eric: thank you for spending time with me here at the world economic forum. safe trip back to london. at's inga beale, c.e.o. of lloyd's, the world east largest insurance market. anna: that's eric in davos. coming up today on bloomberg, we'll bring you special coverage of donald trump's inauguration as the 45th president of the united states of america. that's at 3:00 p.m. u.k. time. manus: we're going to talk trump taking office next on bloomberg. ♪

manus: it's just gone 1:24 in the morning in washington, d.c. where the world prepares for the inauguration of the president-elect. his last tweet, keeping you up to date, thank you all for joining us at the lincoln memorial last night a very special evening. and of course let's make america great. hat was the slogan and what he reiterated again. anna: china, the second largest economy in the world, keeping an eye on this. manus: you get 6.8% growth but what did you do to get that? 6.7% for the whole year, the slowest growth since 1990, enviable for any other nation, but they got there via debt. they saw debt levels grow. the amount of loans in the economy grew by about 15%. loan growth doubled the amount of growth. what does that come with?

that comes with risk and that comes with the propensity for bubbles. >> if you look positively on the story you say, we have a year where growth has come through for the middle class and now the central bank can turn to neutral policy to try to deflate some of the debt bubbles. if you're a pessimist on china as george soros was and remains you wonder when this will all atch up with them. manus: trump said he would label this country a currency manipulator on tai one. now he's stepped back. they're saying the conversation with china is still there. it doesn't sound like they're going with currency manipulator on day one. anna: coming up, we bring you special coverage of donald trump's inauguration from 3:00 p.m. u.k. time. up next, we are going to be

talking a little bit more about this in the united states. but also talk drug policies in the u.s. with the e. -- with the c.e.o. of novartis. ♪

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download the xfinity tv app today. into government and he really habit. i think there's a lot of political peril ahead for donald trump. manus: it's just gone 1:30 a.m. in washington, d.c. preparation day for inauguration. many of the celebrities have said they were not going were never invited according to donald trump in a fox news interview on wednesday them city preparing for the inauguration in washington, it's at noon eastern time, donald trump will be sworn in as the 45th resident of the united states. anna: speaking at the concert, he vowed to unify the country and make america great again. mr. trump: it's a movement that started, it's a movement that we've never seen anywhere in the

world, they say. there's never been a movement like this and it's something very, very special. and we're going to unify our country and our phrase, you all know it, half of you are wearing the hat, make america great again. manus: megan murphy is editor of bloomberg "business week." the slogan has been reinforced and pushed home, make america great again. this is a big piece of theater for this president-elect who has communicated and shifted gears in terms of how the world and industry communicate with one another before he set foot in the white house. >> yeah, this definitely is going to be a big piece of theater today, even yesterday we saw two of the elements with donald trump taking over an official air force plane, getting rid of his beloved yet and switching over his smart phone to an encrypted device, we'll see how much that's going

to affect his tweeting. today in washington will be pageantry, it will be the sort of traditional changeover of power but it will be untraditional in the sents that we have a president coming onboard who still has a big push in terms of getting his nominees for his cabinet through for sort of filling these crucial executive positions. he till is has a huge, long way to go. what people will be watching for, yes, we'll see the pomp and circumstance of today but really is going to happen on monday when he starts actually making executive actions as the president and what he's going to target in his first 100 days as his key priorities in what he wants to roll back. anna: what do we know about what he's likely to focus on in these 100 days, global investors and businesses really keen to hear his views and his policies around china, around globalization, around mexico, around fiscal stimulus, so many areas of policy that he's talked about but we haven't seen the etail yet of course.

>> i wouldn't expect to see detail in area of foreign policy right away. what you will see, he will make good on his promise to push, to roll back obamacare, to push that back. that's a key try priority of the administration. another huge priority is jobs and manufacturing and putting the stimulus through in terms of getting jobs back. you've seen so many american companies try to get ahead of donald trump in announcing that they're put manager jobs in america, talking about moving jobs away from mexico. companies like ford, other automakers, amazon, etc., trying to get ahead of this push but he's really going to push forward on his economic plan he will also make taxes a priority as we know, one of the key components not just of donald trump but of a republican-held congress is to reform taxes not only domestically but international, to make the u.s. more competitive place to do business that will definitely be something in the first 100 days they'll be focusing on

intensely. manus: something we haven't talked a great deal about are divisions within the grand old party itself. the fiscal plan, they say is up to $1 trillion. the prere-pay tration of money back to the united states is key. what does he have to do with the party to get behind his policy? are there underbelly of tensions with the g.o.p. as we pass through inauguration day? >> there's tensions but i think what people are say, what's being echoed here in davos and others, very much a spirit of optimism which people didn't expect to happen so quickly. people want to give him a chance. there are tensions within the republican party, you've hit on the tension between fiscal hawks who worry about ballooning deficit, particularly when you talk about infrastructure, so that may rear its head as they go forward, whether it's going to be the paul ryan tax plan or

whether they're going to make adjustments to that. overall the spirit is very similar. they have a chance, an unprecedented opportunity to push through legislation in washington that they haven't seen for decades on tax, on infrastructure, on jobs oren manufacturing stimulus. they think they have the chance to get these things through. i think they're too smart to screw that up, particularly in the first 100 days. where he's going to face the biggest pushback is if democrats can mobilize on ms. nominees and on some of his plans. they're going to let him try to make some of his own mistakes. you see that with obamacare where democrats sense that the g.o.p. and republican lack of plan is giving them an opportunity to try to push back. anna: megan, thank you for joining us today. a new edition of account day break" is available on your obile. it's daybgo. manus: it's inauguration day of

donald trump. he arrived yesterday, will be sworn in as the 45th president today and plans to start on his promises to withdraw from he transpacific partnership trade deal and give notice he'll renegotiate and a half tasm my question is how long will he walk down pennsylvania avenue for. anna: the next story is janet yellen who backed gradual rate increases, arguing that the fed isn't bind the curve in containing pressures. she did acknowledge the big uncertainties around the policies of donald trurp and what that mean thopes fiscal side and for her dash board. manus: she gos from no mention of fiscal policy a year ago to 14 or 15 mentions now. have you done any shopping? anna: not this morning.

manus: the data, a rise of .%. a .1% drop after last month's .2% bounce. a good holiday season and an extra saturday this month could tribute to stronger growth in the numbers. anna: let's go check on the markets. >> good morning. lots of markets to digest, of course looking ahead to donald trump's inauguration later today, alsoity jesting news from e.c.b. and janet yellen's second speech of the week. in terms of yellen, you could say her speech was balanced between hawkishness and dovishness. you can see pretty much every currency gaining against the greenback with the south korean and mexican leading those gains against the dollar. the blomberg dollar index is heading for its fourth straight weekly loss. that is the white line rock about .%.

this is despite it touching its highest level in more than a decade earlier this month. gold on the other hand, the blue line, on course for its fourth weekly climb this week it has touched its highest level since november. interesting fact. in the years marking the inauguration of a new president, since the 1970's, gold has average gains of almost 15%, gaining in five of those seven years. so perhaps history could be one reason to be bullish on gold ahead of this inauguration. now speaking of equity, gold has a good week, like the dollar, equities are easing this week. we see the dow locked in a 1.1% range since mid december. thee the tightest trading ever. if we look at asian equities, pacific indeblings down on the week so far. mixed picture across the region. gains in japan, gains in china off that better than expected g.d.p. data. seeing weakness in south korea

and australia. manus: time to get back to davos. erik is stand big. erik: thank you very much. jiminez, th joe c.e.o. of swiss drugmaker no varties you didn't have far to come to get to davos. i'm afraid we have to turn our attention from the world economic forum to the united states. today is inauguration day. donald trump is taking office. he said the drug industry is getting away with murder. he's specifically talking about drug pricesful. what's going to happen to drug prices in the trump era? >> i think the new administration understands the value of innovation and what research and development brings to the u.s. economy. for example, this industry generates about $70 billion worth of industry in the united states and yen rates about 4.5 million zwrobs. i believe prices will be under pressure. could be under pressure in the

u.s. i also believe that the administration recognizes this is a great industry. high paying jobs. e're going to work together. erik: how do you fix it, not just the concerns of the president-elect, who will be president in a few hours, but members of congress and others. >> no varties made a bold must've -- novartis made a bold shift into new pricing models, we have to move away from a transactional approach, to an outcome based approach where we are getting paid on what we deliver. we have outcome based contracts, that eliminates waste and improves efficiency of the drugs. erik: it's a fragmented market. >> it is. it won't happen overnight. we're going to continue down the path of moving from a strans action to outcome based approach. erik: how about more

transparency. congress doesn't understand the way this works that it's done through pharmacy benefits manager, i'm sure novartis is more than familiar with that and the high prices people debate in congressional hearings, are prices, there's no doubt that people pay but not by the majority of people. how can you get transparency. >> there was a recent study that said of drug price the manufacturer captures 40% of the price and the rest goes to the chain. i think there are increased awareness around the supply chain so people understand it's a complex issue, it's something we have to work on but -- i think transparency through the supply chain is one way to get there. erik: how about indication based pricing here in europe? >> one of the things we have done at novartis, if you think about research and development, to get a drug aproved for a more

indication, sometimes costs much more than for other indications. that's also something we have been able to begin to execute in europe and right now we plan to continue to do that. erik: how long until we see one of the major e.u. countries move in that direction? >> i think you're going to see a number of countries that are ooking at the specific diseases, which diseases, which indications are driving a lot of value on a particular disease, which pharmaceuticals are helping deliver an outcome. you'll see value put on these different indications. erik: could be transformative, right? >> it could be. erik: the -- there's a lot of interest, as you might imagine, particularly among our viewest, in what novartis might do as far as acquisitions goes. you've talked about it before. what are you thinking right now? >> we've been clear that our acquisition strategy is focused on what we call bolt on

acquisition, ones that, companies or businesses that would be in the $2 billion to $5 billion range that will enhance the pipeline of either our pharmaceutical business, our oncology business, our eye care business, or generics business. erik: why not go big her >> we don't need to. we have a very rich pipeline. now this -- 2016 up to the first nine months of the queering we announce our earnings next week, in our first nine months our sales were flat but only because we're going through the biggest patent expiration in one of the biggest in our history and as soon as we get from under that at the end of 2017 we've got a good growth trajectory. we don't need to do something bigger that doesn't mean we won't do something bigger but we don't need to. e're focusing on that. erik: you might be able to generate cash by selling your stake in roche. >> we have a number of assets

that could be monetized that we could use. we've said that our capital allocation strategy is clear. we first focus on ensuring that we have a strong and growing dividend. then it's investment in the business. these acquisitions, then shared after that. right now that roche is a -- stake is financial asset with a bit of a strategic component to it. there's no new news on that. >> one of the areas in which you're committed to developing -- rugs is immune therapy immune noh therapy and other they are i bies. there's been some good news with some, an bad news with juno. as someone looking at that as an opportunity, are you, the balance between are you frightened by what you've seen happen by juno more than you're

excited by what happened in kite? >> our program is advanced and very positive. we said in 2016 that we're going to file the first indication for carty for pediatric lymphoblastic leukemia. we'll file the first one in 2017 and the second one late they are year. that is going full speed ahead. erik: thank you for spending time with us here. novartis.z, c.e.o. of anna: coming up next, trump and toyota. the incoming u.s. president criticized the japanese carmaker over its mexican plant. we have the chairman's response, that's exclusive. manus: the billionaire investor

says the new president will be bad for markets. anna: and we continue our coverage from davos where we'll be speaking to the c.e.o. of a retailer, this is bloomberg. ♪

manus: new york, new york, inauguration day. futures 22.64. those high tech stocks have been outperforming since donald trump won. what happens next? that's the question. we haven't even started the first installment of the movie. 1:49 a.m. in the new york -- in new york. juliette is stand big in hong kong. >> thank you. china's growth accelerated for the first time in two years in the final quart over 2016.

.d.p. increased 6.8%, facing estimates. 6.7% estimate was right in the official target range however it was the slowest since 1990. economic stabilization is giving a buffer amid potential trade tensions with donald trump's incoming administration. u.s. treasury secretary nominee steven me knew chen said he's being -- mnuchin said he's willing to label china a currency manipulator if warranted that comes despite trump softening his stance on china, saying he wouldn't name them a currency manipulator on his first day in office as previously promised. j.p. morgan gave its c.e.o. a $1 million raise after the stock climbed 31%. jamie diamond who is also chairman got a $28 million pack farge 2016, 3.7% more than a

yore earlier. j.p. morgan became the most valuable lender last year overtaking wells fargo which stumbled because of a bogus ustomer account scandal. anna: donald trump crilt sized toyota's plan to build a facty in mexico. he warned there would be a big border tax and suggested the carmaker should create the plant in the united states. in an exclusive interview with wloomberg, the company's chairman said his firm isn't concerned about being singled ut he spoke to francine. >> we haven't shared any concerns about a trump presidency among other carmakers. we've already announced at the detroit auto show recently we will invest $10 billion in the next five years. >> can you give me a sense, chairman, of the more specific plans under way to increase production and what kind of

timetable? it's $10 billion over five year, how much will it be this year? >> we have full confidence in our market in the u.s. if it means more growth for us, we are willing to spend more in the u.s. >> are you confident about the u.s. economy? because through, i guess, tax reform and infrastructure spending, will people buy more of your cars in the united states? >> what the new president is aiming for is to create more jobs and raise g.d.p. in the u.s. if that works well, i believe the spending will increase and we can see more growth in the u.s. we had expected what would happen when the brexit was voted in favor last year. we think our factory in the u.k. is a u.k. company. any of the u.k. companies would try to survive in a given situation so we'll just do the same there. we don't move or quit our operation each time the

government policy changes. we also need to see our government supports industries and companies going forward. >> even if there are some kind of trade tariffs or you become much less competitive because of going out of single market. >> we can anticipate many things but they are just high poth cease. what we need to focus on is to continue to raise our competitiveness with the support of the government. >> when you look at the u.k., is the pound benefit at the moment or does it mean it hurts the revenues you bring back home? >> falling pounds doesn't necessarily benefit for us. we import car parts from the e.u. and japan. we try to operate in a way bewe get less impact fld the currency fluctuation. manus: that was the chairman of toyota speaking with francine in

davos. >> i did just overstate slightly the danger facing the european union, namely that is facing disintegration and that was a slight exaggeration because neither putin nor china want the europe to disintegrate. each have their own reasons. hina needs europe as a market. putin needs europe to provide the capacity to produce something because the putin regime is only capable of exploiting natural resources, they can't produce and they need europe to provide that capacity. so therefore, europe is not going to disintegrate.

but coming under the dominance a utin's russia would be destruction, an undermining all the values that europe stands for. o it's really not much better, being under, coming under the dominance of putin's russia than to disintegrate. >> you also have said that open society needs defending. why is it such under attack? because basically it is threatened by different model. i distinguish between two broad generalizations but basically there are two forms of government. one where the leaders are elected in a democratic process

and the they are supposed to serve the interests of the people who elected them. obviously i say supposed because there's an element of hypocrisy there. but it's much preferable to the other model where the rulers are manipulating the people to serve their purposes. the other model. and currently, unfortunately, that other model is on the rise. anna: joe george soros there. up next on the program. manus: we are going to get back o davos. we're going to talk about what's going on in retailing and what are the challenges of inflation or potential inflationish say.

dick boer will join the davos team in a few minutes. ♪ collar

manus: inauguration day. resident elect donald trump will be sworn in as the 45th president of the united states later today. we look at what to expect. anna: janet yellen backs a strategy for a gradual rise in interest rates and sees risk in an overheated economy. the dollar drops after the fed chair comments. manus: ending on a high note. china's economy accelerated in the last quarter of 2016. gdp rose 6.8%, but at what price for growth? live from the world economic forum in davos, i'm erik schatzker. doom and gloom from george soros.

the billionaire investor tells bloomberg in an exclusive interview, resident elect donald trump will fail. bullish on the usa. toyota's chairman says the carmaker has full confidence in the u.s. market. that exclusive interview coming this hour. europe's inflation conundrum. insight on yesterday's ecb meeting with the bank to france governor. that interview coming your way at 11:45 london time. ♪ manus: welcome to "bloomberg daybreak: europe," our flagship morning show in the city of london. anna: we are here in london. erik schatzker is at the world economic forum in davos. really busy first hour of the program. what have we got? erik: moments from now, dick boer, the ceo of apple delays, a

gigantic supermarket operator which you may not know generates most of its business in the united states. some questions for certain for subject of the trump inauguration and what to expect as pretty much everything in the united states it seems is on the cusp of changing. manus: on the cusp of change, what a great phrase. let's see what the president delivers in terms of china, the dollar. he's taken to twitter. it is policy by twitter. let's check on the markets. mnuchin, the-- treasury secretary elect, says trump is not talking about a long-term policy of dollar strength. futures in europe, london is showing a gain. chinese data undoubtedly set a nice stability town. 6.8% growth. anna: let's show you where we

are on various assets. the shanghai composite reacting to that better than estimated number. it comes at a cost in terms of debt and bubbles, but still, we saw growth better than expected in the fourth quarter in china. that has given the shanghai composite a little lift. the dollar reacting to those hin, yellen,m mnuc talking about the fed not being behind the curve. manus: it is the fourth week of declines in the dollar. the shading for a look's delivery from yellen, it didn't get that. you've got the dow jones industrial futures down. market hase cash erased its 2016 gains. it is a fifth day of slump, the first five-day run down since the election.

george soros saying the euphoria will end in the united states. anna: really in a tight range after the euphoria. we've been paused for thought, it seems, rallied in the dollar, and stocks easing. we got the bond yields for you. you can have a look at where we are on the various 10-year bond yields. 2.45% in the united states. let's get the bloomberg first word news. juliette saly has that. juliette: donald trump has promised to unify america as he prepares to move into the white house. speaking on the eve of his inauguration, the president-elect about to carry out his campaign pledges to harden borders and strengthen the military. started, movement that and it's a movement like we've never seen anywhere in the world, they say.

there's never been a movement like this. and it is something very, very special. and we going to unify our country. it,our phrase, you all know half of you are wearing the hat, make america great again. juliette: george soros has called trump a calm man and says he will fail -- a con man and says he will fail. the investor also warned about the stock rally since the election spurned by regulations to slash and boost spending will come to a halt. >> right now, uncertainty is at a peak. and actually, uncertainty is the enemy of long-term investment. so i don't think the markets are going to do very well.

right now, they are still celebrating, but when reality comes, it will prevail. mnuchin has: steven said he's willing to label china as a currency manipulator if warranted. he made the comment during his senate confirmation hearing that comes despite president-elect donald trump softening his stance on china's currency policy, saying he wouldn't name the country a currency manipulator on his first day in office as promised. fed chair janet yellen has backed a strategy for gradually raising interest rates. bankrgued the central hasn't been behind the curve in containing inflation pressures, but admitted it can't afford to let the economy run too hot. as trump is set to enter the white house, yellen said fiscal policy is one of the many uncertainties the fed has had to deal with.

the u.k. prime minister has offered her strongest support yet for the city of london as brexit moves closer. theresa may's comments in davos come as large banks prepare to move staff abroad. i value financial services in london and i want to ensure that we can london and io ensure that we can keep financial services in the city of london, and global britain, i believe, will do just that. juliette: global news 24 hours a day powered by more than 2600 journalists and analysts. you can find more stories on the bloomberg at top . let's check in on the markets in asia. we do have the shanghai closing lower, down around 0.7%. as you mentioned, we did see that better than expected read on fourth-quarter gdp coming in at 6.8%. that has given a bit of a boost to these markets trading in volatile terms this week, particularly as we had that

speculation of state intervention in the china market. hong kong giving back some gains, down around 0.5%. still seeing support coming through from those property stocks that had been under pressure. the yen gaining a little against the dollar, but still many gay still thed -- d nikkei has closed higher. we did see some of the commodity-based markets fall today. australia down 0.7%. a lot of those metals players coming together. the overall picture has been very next. what we're seeing is this wait and see ahead of the inauguration of donald trump. the offshore renminbi up 0.1% against the dollar. we did see a slightly weaker six from the pboc today. manus: thank you very much. juliette saly with the latest on

the markets in hong kong. it is the world economic forum in davos. erik schatzker is standing by with a company that has a bit of an interest in the united states retail market. erik: just a little bit. it is dick boer, the ceo of ahold delhaize, a very large supermarket operator that generates about two thirds of its revenue in the u.s. let's begin with the u.s. because it is inauguration day. much attention is on donald trump. we have some sense of what he's going to do and i have noted a great deal of optimism in davos about how he might supercharge the american economy. what do you think is going to happen? ,ick: we are in retail supermarkets in the united states. for us, economic improvements is always helping for our customers. know theher hand, we

measures to be taken by the new government will take some time. the u.s. economy has been doing better already over the last year. we are seeing some improvements. for our business, we are more in a deflationary environment. that has caused issues over the last year. happily, we could get our results yesterday. erik: of all the things donald trump has said and said he wants to do, what encourages you the most? dick: what i hear and what i read in all the documents that have been spread around, i think working on improving the current workforce, more labor in the u.s., that is good for supermarkets. at the end of the day, middle income is a core category of our customers. if they improve their income, hopefully we will benefit.

when customers start getting more money in the bank, they are most often not spending it first on food. we need to think also about that. resultsk: you reported yesterday. the market was encouraged. people perceive that you are doing a good job holding off walmart. how? what have you figured out? did veryt we've well to my opinion is having a good offering in fresh and healthier products. we lowered our prices a lot to be more competitive to walmart. some of the market, by the way, walmart is very active, like the carolinas and pennsylvania. some areas, less active. we focus not only on one competitor. we have much more than only walmart. erik: let's talk about one of the emerging competitors.

while you are having some success in the brick-and-mortar business, looming large in the ofkground is the threat online grocery shopping. you are in the business yourself, but amazon is disrupting retail, destroying the department store. how long is it going to take the for it destroys the grocery business? dick: i don't think it can destroy the grocery business andh is focused on fresh healthy ideas. customers also search to only for value, they search for product quality and freshness. what you can do in stores, we combine our physical world and line solution. then you have a good answer. that is our answer. we continue to focus on fresh and have an offering online to our customers. , because i'mhad to

asking you to, evaluate amazon and walmart, which of the two poses a greater threat? dick: it depends on the categories where you look at. in food, it is still the brick-and-mortar business. that is where the majority of our customers still shop. don't forget that only one person or to present of food sales in the u.s. is going online. we know how to counter that. first of all, i think brick-and-mortar is still the most competitive environment. erik: what percentage of your sales are coming from online? dick: currently, $2.3 million of our $60 billion, so roughly 4%. we also have a nonfood online business. it is growing. in the u.s., we are around 2%. erik: what do you think that

could be five years from now? dick: we estimate around 5%. that is a lot of money. the density and low margin business of food makes it difficult online. you need to have the supply chain. you need to have stores in the area to make it easier for customers to shop online and off-line. what more can you do to innovate in the grocery business? dick: i think we still can innovate a lot. make it easier for the customers, personalized offers, so when you have the offers you want, you get offers for products you buy instead of products you might never use. so personalizing and helping on a healthier lifestyle. i think the supermarkets can counter and can also be improving and helping out customers to buy healthier products. that is something where we can play a role. erik: how? i've looked into a stop & shop in the united is more than once

and there's a lot of stuff that is not very healthy. dick: that is correct. what we have implemented is, we now have a company, hannaford, which is using guiding stars. you help customers to navigate through the store. so, offer more in the fresh area. there you can start helping your customers. that is what you like to do. we still want to give choice to our customers. erik: thank you very much. dick boer, ceo of ahold delhaize. back to you. thanks veryna: much. up next, we will be back out to the snow to speak to the oecd secretary-general, angel gurria, joining erik and the team endeavors. this is bloomberg. ♪

manus: they are getting ready in washington. beautiful picture of the capital building. it is inauguration day. the 45th president of the united states of america, donald trump, will be sworn in later today. juliette saly is standing by with a business flash. juliette: thank you. china's growth accelerated for the first time in two years in the final quarter of 2016. gdp increased 6.8% from a year earlier. full-year expansion of 6.7% was in the official target range, but the slowest since 1990. economic stabilization is giving readers a buffer amid potential trade conflicts with trumps administration. toyota chairman says he has full confidence in his company's prospects in america. hisking to bloomberg,

comments came in the wake of criticism from president-elect donald trump over the carmakers plans for a new plant in mexico. bit surprised that our name was mentioned by mr. trump. what he's trying to do is expand jobs and gain competitiveness of the u.s. industries. we have many factories in the u.s. and we've been increasing employment there, so i believe our contribution is quite significant. juliette: jpmorgan has given its ceo a $1 million raise after the bank's stock climbed to 31% last year. jamie dimon got a $28 million compensation package for 2016, 3.7% more than a year earlier. jpmorgan became the most valuable u.s. lender by market cap last year, overtaking wells fargo, which stumbled because of

a bogus customer account scandal. that is your bloomberg business flash. anna: back to the world economic forum in davos. tom keene has joined the scene. tom: thank you so much. this is an important interview at any time. angel gurria, oec secretary-general, on this day of inauguration in washington, it is a perfect time to have a conversation with the secretary-general. i want to get to mexico and the issues of the president in a moment. let's talk about this. you and i agree uncertainty is a theme here. what can your institution do to assist the politics of the world in 2017? >> go back -- angel: go back to the fundamentals. oe was created to promote open marketsc,d free-trade, and oecd, butot only the

also all the organizations, all the markets, all the institutions around those basic principles. to be theld continue fundamentals. are you managing for a multilateral future or a bilateral future? ,ngel: there is no alternative if you want to be more efficient, if you want to make it work better, for multilateral. that means also that each country has to do their own thing. and that means going to the fundamentals. that means taking care of your deficit, but also taking care of your growth, your skills, your productivity, which has been under a lot of pressure. tom: why is that? you are one of our leading academics on this. why is there such a challenge to efficiency? is it technology? angel: technology is disruptive by nature, which is good.

it is the only place where the word disruptive is meant to be good. the only question is, technology is not coming down as it used to the. there's questions of speed. the second is, there's a problem of the mismatch of skills. the workforce is less and less well matched to what the market is requiring. know whatdon't really jobs in 10 years are going to be. we're not creating the right skills in order to satisfy the market. tom: i would be remiss if i did not speak about your public service to mexico. mr. fox has been hugely vocal. let us start with a wall. i believe a mexican concrete company has said they will make the concrete to build the wall. most engineers i talked to laugh when you talk about a wall.

can you imagine a wall between your nation and the united states? angel: i was foreign minister and finance minister and we always said what we needed to do is build more bridges. the trade with the united states signed nafta.e we and we have not built six times as many highways and widened the highways and made more bridges. so i think this is what we should focus on. there have been global value chains built over the decades, not just nafta, a long time before that. they've been building the global value chains. in are american companies mexico? they find that it is good business. to be competitive in mexico, to be competitive in the united states, and with the rest of the world, integration is inevitable. tom: would you suggest that this

president nudges towards the industrial policies and the narrowness of the 1920's and 1930's? angel: there are two issues. one is the trade issues, to build on what we have already, maybe with some renegotiations, whatever, but the other question is, you mentioned investment. the investment flows come together. we are now seeing the lowest growth of trade and a very, very weak investment growth. that is at least partly responsible for the very anemic growth of the whole world economy we see today. very weak growth of trade and very weak growth of investment, because of the uncertainties. we have not been able to detonate investment. tom: i hope to speak to you in

our new york studios and in london. angel gurria -- angel: it will be a little warmer. tom: he is the oecd secretary-general. one of the great public servants of mexico. manus: tom, thank you very much. weight interview. a little bit of breaking news. this is the reserve requirement for some of the biggest banks in china. the pboc has reduced or cut its reserve requirement on five of the main banks. this takes us into the chinese new year. a lot of this is helping the market get through the chinese new year. anna: a lot of reports suggesting the monetary authority has committed a cut of one percentage point before the break. the pboc not responding to comments, but this being reported by reuters. manus: not having a huge impact on dollar-yuan. just trimming back some of the

gains. it is a davos day. this is bloomberg. ♪

guy: you are watching bloomberg markets. this is the european open. i'm guy johnson. i'm in london. matt miller is in berlin. erik schatzker joining us from davos. what are we watching? the trump era begins. the president-elect takes office at 5:00 p.m. u.k. time. what will the next four years old? treasury secretary nominee steven mnuchin takes on wall street, weighing the return of a law that split the banks. and china's