>> pressure on the greenback treasury secretary. he calls out an excessively strong dollar. manus: revamping trade. president trump signs another executive order, this time with .rawing the u.s. from ttp he threatens u.s. businesses with a major attacks. the u.k.'s acclaim court will deliver its decision -- the u.k. supreme court will deliver its decision on whether the prime minister can trigger article 50.

manus: you are welcome. this is bloomberg daybreak: europe. our flagship morning show. i am manus cranny in the city of london. anna edwards is on her way to the supreme court on the article 50 rolling. this is philip's which has itselfed it -- divested an organization. the fourth quarter adjusted comes in at a billion euros. in line. it is a slip below. a billion euros is what we earned in the fourth quarter. it will maintain a dividend of 80 cents per share in line with

what the market had anticipated. they still have a shrew -- a huge -- the diagnostic business -- what will happen with it in terms of the u.s. from once to make america great. will that force people to buy shares in something other than phillips. have a conversation with the ceo very shortly. market, there is one pervasive theme. the dollar is offered. it all comes back to last week donald trump talking in the wall street journal and overnight it treasuryews of the secretary nominee. from time to time an excessively strong dollar, may be negative for short-term implications.

that is the dollar index. 0.9%. november 11 lows is where we are heading. we have fallen for four straight weeks. i like what stephen englander has said over at city. -- is losing using patience. donald trump moose the fx market to irrational fear -- from irrational fear to irrational exuberance. we are waiting for the supreme court ruling to come in. she is there. she is live outside the supreme court. it is anna edwards. good to see you this morning. this ruling. take me through what it means and the ramifications if the government loses. you very much. we will get to that during the

program. we are here at the supreme court. the government will here today from this highest court in the country. rulingl remember that a in november said the government cannot trigger article 50 a loan. they have to take the houses of parliament with them. has the people in the house of commons and the house of lords been able to delay things. those people are not expecting this to stop breaks it but only slow it down and reshape it a little bit. 9:30 a.m. is when we will get the judgment today. we will cover all of that. here is shery ahn with the first word news. --ry: donald trump has told has pulled the u.s. from the tpp . he left the north american free trade agreement with mexico and

canada in tact for now but action on that is still in the works. he also vowed that "there will be major border tax on companies that move jobs outside of the u.s.." treasury secretary nominee steven mnuchin says an excessively strong dollar could haven't had -- a negative short-term effect on the economy. slumped.r the senate foreign relations of rex tillerson's nomination as secretary of state clearing the way for the full senate to confirm one of donald trump's most critical cabinet choices. the u.k.'s brexit plan will become clearer today when the supreme court rules on whether the process can start without parliament approval.

if the decision goes against the move, the government plans to russian legislation to article 50 by the end of march. the ruling will be announced at 9:30 a.m. today in london. and of course and that is out there for the latest on that. global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. stories on there bloomberg at top . i am shery ahn. this is bloomberg. let us find out how the comets by steve minutia and are playing out in the fx markets and across the asian session as a whole. juliette saly has the details. juliette: we started the day with not a lot of conviction but things are looking brighter at the end of the day. some great games coming through in the australian market, higher by 0.7% at the

close but we did see weakness coming through from the nikkei. not too much movement with the yen against the dollar. but this really is a story about the dollar index being down for a fourth consecutive session. weakness still coming through in that currency living support to the export stocks in japan. pretty good gains being seen in china. still one hour of trade there in the shanghai composite. up 0.2%. liquidity squeeze. ahead of the china lunar new year holiday. that is having an impact in shenzhen as well. a lot of energy players today. elsewhere, you are seeing the dollar weakness lift the emerging-market currencies and assets so emerging-market equities are looking quite good. overall, it has not been to bad of a day for asian equity markets even though they did

start on a fairly cautious tone. also worth noting that the pboc today strengthened the yuan, the most since november 14. we are seeing a little bit of weakness in the offshore renminbi but that is pertinent to note the strengthening of the one particularly as we start. very full roundup on the markets. our top story of the day or one of them. it is a split between donald trump and brexit. donald trump has signed another executive order to withdraw from the transpacific hardware ship abruptly ending decades of free trade. he does promise to renegotiate the nafta and fulfill the campaign pledge to rewrite america's trade policies. to impose anded

major border tax on companies that move their operations out of the u.s. to firepany that wants all of its people in the united states and build some factory -- andce else and thing then things their product will flow across into the u.s. -- that is not going to happen. manus: the u.s. treasury secretary nominee steven mnuchin says the excessively strong dollar could have a negative short-term affect on the economy. let us bring in bob parker, senior advisor at credit suisse to see what he makes of this. the president on friday using executive orders and pulling out of the tpp. i don't think that is a huge shock. he is is the message that sending that is causing concern.

: you have had statements overnight from australia and new zealand saying they want to try to retain tpp. i believe it will end up as a regional trade lock amongst the pacific nations. a critical factor is what is going to happen with china? originally, a lot of people ledrpreted tpp as an obama american deal that excluded china. i think there is a high probability that the chinese may that they are trying to present themselves as the new champions of global trade. consequently, i would not be surprised if the tpp evolves into a non-american but chinese led regional trade deal. i think that fits with the pattern of regionalization in trade. the next question you have to look at is what does it do to

the american trade deficit. in fact, there will be a number of special effects. i think a key factor here is not tpp but the impact of a strong dollar. that is why steve mnuchin's statement is so interesting. i want to interrupt you because we are going to bring you the s&p numbers. for the fourth quarter, the sales numbers need to estimates. their 2017 andg 2020 estimates. the fourth quarter sales come in at 6.7 billion euros. that met analysts estimates. the forecast.d

that at 23.2 up to 23.6. the numbers, 6.7 billion for the fourth quarter pretty much in line. are upline is that they in their view. when it comes to software -- the marketnue was looking for 2.15. irsy have raised their non- revenue. and that, join the great dollar conversation. -- anna, join the great dollar conversation. bob, where do you invest around this? for companies with global supply chains, they must be in a high state of uncertainty.

how do businesses manage and how do you invest around those businesses with these globally integrated supply chains? bob: the discussion that has been led by the new president donald trump on a potential border tax is very simplistic because nowadays we had these very complex global supply chains. we may end up in a situation -- actually, take apple as an example. when you purchase an iphone it was designed in california, made by a taiwanese company and manufactured in china. and all of the various components may come from a variety of countries. example -- the example after example. another very good example. if you fly a new dreamliner, the bits and pieces that go into a boeing dreamliner probably come from well over 50 countries.

make global supply chains things very difficult to practically impose this border tax that donald trump is adjusting. conclude isink you that there will be a huge push to the new u.s. administration to max out on investment spending in the u.s. i do think american growth accelerates and i think that will be led by investment spending. i do think that the rhetoric on border taxation will not be implemented. manus: moving back to what that means for the dollar. very people are saying that there will be three rate hikes. i believe that is what goldman sachs thinks. as far as the investment level in terms of the dollar, steve englander is said we have gone from exuberance to irrational fear on the dollar. do you think that is a fair representation of the moves on the dollar? look at the

situation at the end of last year, there was a clear concern that the u.s. dollar would towards parity on the euro in the first quarter of 2017. the market it -- the market got itself clear elong on the u.s. dollar. what we have seen in the last week is profit taking, some de-risking of those long dollar positions. ofre was a strong consensus a stronger dollar at the end of 2016, i think that consensus has broken down and that is why we have seen this reversal and some weakness in the dollar. and in a way, donald trump and steven mnuchin have been talking down the dollar. their right to say that they are concerned about the impact of a strong dollar. it has been a negative factor in the last few years. thank you very much. parker will stay with us on the program. we will see what those dollar

comments had to say about the strong dollar story. a little later today, we will get more details on the european inflation picture. with pmi numbers from the eurozone. at 9:30 a.m., we will get the anticipated u.k.'s up on whether the prime minister or parliament can trigger the brexit process. at 11:00, we will get an interest rate decision in turkey. most expecting a hike as the lira has been the biggest fall are in emergent -- in emerging-market currencies. there is a disagreement between the president and the central bank. isus: and that gulf widening. ceo of speak to the philips in his first interview of the day. then we have an exclusive interview with bill make hermit, the sap ceo. 7:00 a.m. london time we will

from easyjet. has the weaker pound impacted the low caste -- the low cost airline? this is bloomberg. ♪

anna: welcome back. this is bloomberg daybreak: europe year. morningry early in the outside the supreme court. i am here at the supreme court because theresa may enter government will find out today their ofhey have won appeal. many people expecting they will not be successful in their of appeal. what will that mean politically? what will they need to do to get parliament permission to trigger article 50. appeal. what will that mean politically? 9:30 a.m. is when we get the decision by the 11 justices. we will get that decision. active the earnings news. manus: this -- back to the earnings news. manus: phillips. says it would maintain its dividend guidance.

let us bring in for the first interview of the day, the ceo. great to see you. looking at the topline numbers for the fourth quarter. you promised a bit more cheer. looks like we are just shy of what the market was looking for. >> i look at it slightly different. importantntext it is to know that the philips group had a defining year in 2016 separating out lightning. the stock to exchange. we are still consolidating lighting. we are going forward as a health technology company. in the fourth quarter, we saw 5% 190 basisth and

points of profit improvement. you can inc. -- you can conclude that our health technology activities have momentum. that ispleasing because our future. our innovations are in demand from radiology to consumer products. manus: my question to you is this -- do you fear that on the hospital side of the business, the monitoring side, that perhaps some of your american clients will have to buy america first. is that a threat to you? >> the united states is an important market to us. more than one third of phillips in health technology. the second point is that phillips has always taken a balanced approach towards manufacturing. we do manufacture a lot in the much an we are as

american company as we are european as we are asian. we take that integrated, holistic approach because we realize that when you benefit and have a lot of revenue, it you should do r&d and manufacturing to a certain extent in the same region. i am seeing heightened uncertainty and that is a concern. and i think we will just need to see what is going to come through in terms of policy adjustments. at this point it is too early. nevertheless, celebs has momentum at this time. our innovations are much in demand also in the u.s. where we just recorded a great contract with the company in phoenix, arizona driving better solutions and outcomes for patients. we see the internet of things is really coming through in how health care is being delivered. and phillips, with its focus on and to and health care and

delivery through the health continue them -- customers are saying that they want to strike contracts with phillips. we have 15 new large-scale contracts. manus: that is good news. sticking to the dividend policy. you have shaken up this company. you sold off the lightning business. you have done an ipo. looking at a performance -- stocks up 15 percent. i know you will tell me to be patient. sellords you tempted to another bit of the stake? manus, be patient. indeed. but without joking, philips lightingng -- philips is a very good company.

we will sell down over time. we did here yesterday from eric grand ole opry that the company will participate in eventual further selldowns through their share buyback program. we saw a very good dividend announced. overall, we will be patient and take it one step at a time but we are determined to go to where our focus is as a health technology company and overtime idatesolidate -- deconsol lighting from phillips. manus: you say you expect a meaningful impact of the d for word -- defibrillator. i understand there is a certain amount of restriction for what you can see a -- for what you can say. can you expand on that please?

>> of course. findings of past inspections of 2015 and before where fda and doj have engaged with us in discussions. we believe that this will be focused on the defibrillators, a relatively small business in the u.s. but nevertheless we need it to flag that it will may -- that it may have a meaningful impact. it is too early to estimate. when these discussions come to a close we can inform the market exactly what it means. manus: thank you for your candor. through these quarterly moments together, i will remain very patient. is the wordpatient from the philips ceo. be patient he says.

oil. we will talk about that next. oil advances. we take a closer look. this is bloomberg. ♪

manus: there is the palace in tokyo. 3:30 p.m. in the afternoon. dollar-yen trading -- a little bounce. at 113. to try and do something regarding the transpacific partnership. there is a new edition of daybreak on your mobile and your bloomberg. hopefully, you are familiar with the function. this is the cover story of the

day. tpp. theld trump has axed agreement. make room prepared to for other countries to take the lead on global trade according to goldman sachs. the eu trade commissioner will address the trade issues in a speech today. u.k., we are also focusing on the trade story but first the supreme court. the next story is the ruling they on where -- on whether parliament must be involved in the triggering of article 50. the decision is priced to in. high court ruling against the government acted in november. the expectation is that the government will lose the ruling. but perhaps the fate of sterling lies in how much scrutiny they

will have over the may plan. defying warnings that it would be illegal to do so according to a british official. the government argues they can talk even though they will not enter into any of those trade deals. manus: the european counterparts would say that everyone has played by the same rules while we were there. turkey -- policymakers are expected to raise the rates. plans tohe presidents lower them to boost growth. the dollar is on the move. bonds have not responded. the dollar isra: in focus. most of these currencies were in

the green against the dollar. more mixed today. the mexican peso powering ahead. on the weaker side, the euro and sterling down for the first day in four against the dollar. we are looking ahead to the supreme court ruling. the yen also showing a little bit of weakness against the greenback after two days of gains. bloomberg dollar index trading at its lowest level since early december after u.s. treasury secretary nominee steven mnuchin said a strong dollar could hurt the economy. and we saw a protectionist stance of from donald trump. what it has been recouping some of its losses. the reaction in treasuries, the 10 year yield has been less pronounced. down by less than one basis point. dollar though some observers of this relationship has been saying that it has been tracking

the 10 year yield more tightly .ince donald trump's win looking over to asian stocks, we were seeing the msci's mscipacific -- the asia-pacific index. we are seeing a rally in industrial metals. energy stocks not doing too badly with the oil price higher. certain sectors. if i click on the region i can see how various regions are performing. a lot of weakness in japan. some of this driven by the concerns about donald trump pulling out of the tpp and also imposing a border tax on companies moving operations out of the u.s. concerns over that protectionist stance. thank you very much. let us talk about the oil price. athad the oil price trading

near $53 a barrel. toq says it is close implementing its share of the pledge to output curb. we have the latest on the oil market. how close are we to getting confirmation from all of those involved, opec and non-opec about their levels of commitment to these curbs? yousef: iraq was always a wildcard. they are the ones that took issue with how the barrels were counted. the numbers they are putting forth are interesting. they say they of already cut 180,000 barrels and 130,000 will follow. the story of iraqi oil production. this is bloomberg data. you can see four point six one million barrels per day. as we heard from the oil minister, most of those cuts are

coming from the territories controlled by the government but baghdad is also cooperating with reductions with the semiautonomous region of kurdistan. we are hearing from the oil minister that it is not clear whether a six-month timeline will be extended. ahead head of commodity research at goldman sachs says at the moment compliance is at about 86%. crudel lynch says brent will reach a $60 a barrel by the end of the year. we are watching carefully the inventory in the u.s. the uk's brexit plan will become clearer today. when the supreme court rules on whether the process to leave the eu can be triggered without a

parliamentary approval. the decision -- if the decision goes against the government, the prime minister plans to rush through legislation to launch article 50 by the end of march. the ruling will be announced at 9:30 a.m. anna is outside the supreme court. this is a little moment -- this is a pivotal moment in the great brexit debate. this is a big legal challenge. the government of healing the november decision of the high court. it said it cannot trigger toicle 50 by themselves start the two-year divorce process from that you. it ruled that the government would have to take the parliament with it to do that. this would not be the end of the legal challenges. we have article 120 seven creating a legal challenge of its own which revolves around

whether there is a difference. hearing a dublin court whether article 50 can be revoked once triggered. that could be heard by the european courts of justice ironically. there is also a paper around whether other parts of the eu administration would have to get involved. manus: what happens if she loses today? said, theou expectation is that the government brings a quick piece of legislation before parliament which -- we will wait to see how the justices say about detailed that has to be whether it can be just a motion or full legislation. a very drawnout process.

the key question is does this delay brexit. does it take the heart edges off of -- the hard edges off of brexit. could that be something that delays the implementation or the triggering of article 50. also, it raises questions about what detailed we will get from how theices today about government will trigger article 50. from, we do i come not even have a -- government right now. bob parker is still with us from credit suisse. react ifthe markets article 50 goes against the government? there has to be a significant case today -- the supreme court will not go with the government so they will have to trigger a parliamentary vote

on activating article 50. series ofa whole political hurdles. a comments vote. potential amendments to how article 50 is triggered. what happens in the house of lords. a very messy situation in parliament. should labor vote for or against article 50. role of the scottish parliament, the northern irish assembly and the welsh assembly and let us not forget that on the european side we have a raft of elections this year. starting with the dutch election in march. as a result, it is not just the hurdles on the uk's side but we also have significant potential hurdles on the european side. actually, i think the most intelligent common that was made in the last year -- in the last week was from germany saying the uk's should try to focus on a

swiss style solution. manus: indeed. bob, when we look at what is built into the markets and how there is an expectation that the government will lose that they will go before parliament. what is your expectation if you were to put a percentage on it -- what is a percentage that they will not meet a march deadline? bob: there is a significant risk of delay. and there are these other hurdles. what does that mean for sterling? sterling is the pressure valve. i do think that if we see these delays and given how the market is positioned on sterling, my own view over the last month is the government has got itself are too short on sterling and therefore there is a risk over the next months that we will see a move back to 130. the risk of a breakdown below 1 -- below 120 is very low.

by thewe were challenged relationship between the pound and the ftse. they say -- you say there is an inextricable linkage between dollar-yen. are you a buyer of u.k. assets? post a referendum we have sterling moving down to what was our low point of close to 120. that has fueled a significant rally in the ftse. the rally has been led by the export factor. to 130o get a move back that rotation in the u.k. between the domestic sector and the export sectors will reverse. overall, i think it leads to a downward movement in the ftse and possibly a breakdown below 7000. manus: looking at this chart. --close up of one to the 5 what does it take to shift the

discussion on sterling? bob: the first point to make is that if you look at any purchasing power parity analysis, sterling is significantly undervalued. that is a tracking foreign capital inflows. an ongoing problem with the current account deficit but recent export numbers have picked out. currentment in the account deficit is one of improvement. capital flows are attracted by the undervaluation of sterling. as a result, i think if you look at the capital account and short-term momentum, all of that points to a break above 125 and a potential move in february towards 130. be less bad.l i will be able to buy a few trainers. thank you bob for joining anna and i. our attention into

emerging markets and specifically to turkey. a have a central bank decision today. it is expected to step up its efforts to prop up the lira which has been under tremendous pressure. the economist have forecasted that it will raise its rates today seeking to build on a series of extraordinary measures. let us get to tracy alloway in abu dhabi. it is anrest rate -- inevitability, is it? >> that is the question to be asking. the economists are looking at the cost of central bank funding. that has surged outside of the turkish central banks interest-rate quarter -- corridor in the last few weeks. the central bank has been introducing unconventional measures to tighten liquidity

and financial conditions including forcing banks to use financial windows. these are all of the things that the deputy prime minister is calling that door measures to tighten liquidity. the thing that is not necessarily inevitable, the place that there is still some disagreement is over exactly how much they will hike rates. we have seen consensus for 50 basis point but some are calling for 100 basis points. a lot to watch out for. much withk you very the latest on turkey and the rate decision and the politics. coming up here on daybreak europe, we will talk about software and sap. towill speak exclusively bill mcdermott. that is coming up next on bloomberg daybreak europe. this is bloomberg. ♪

manus: you have u.s. equity futures up. a business flash from juliette saly. profit moremsung's than doubled in the last three months of 2016 on robust semiconductor sales. it was also driven by a recovery in its mobile business. back apany will also buy billion dollars worth of its own shares which will be canceled. its mainid the sale of web operations to verizon has been delayed until next quarter to make closing conditions as the company recovers from the disclosure of massive hacks to its user accounts. it also reported fourth-quarter numbers which showed minimal declines after last month's announcements of a second major security breach. boss berniemula one

is stepping aside. he is being replaced as ceo by former 21st century fox chase carey. he will become chairman americas. the change comes as liberty media completes its takeover of f1 which it bought last year for $4.4 billion. that is your bloomberg business flash. manus: thank you very much. sap has just reported its fourth-quarter earnings. joins us now for an exclusive interview from headquarters. great to see you as always. you are optimistic. i like it. 2020re hiking the estimates. your glass must be more than half full. where is the extra land of plenty for sap. tell me about your bright spots

to get you to the 2020 targets. much, manus.very we are happy to have overachieved our 2016 increased guidance while raising our 2020 targets. we have the de facto standard in memory platform. . reinvented cloud is growing fast. and the business network assets are growing fast. we are clicking on all cylinders now. manus: and the market -- you grown your customer base. >> what is interesting about this is that you are right about

the 5400 customers but we doubled it. and we continue to double the adoption rate. keep in mind, we have only penetrated 15% of our install base. at the same time, 50% of our newness is coming from net customers who are switching from older, less capable platforms. in ais truly a once generation growth opportunity and that is why we are hitting the accelerator and raising our goals. spoke to you in october, you said you wanted to be an excellent dividend payer and the possibility of buying back shares in the second half of 2017. are you still committed to that? given the uplift to these numbers. question that the free cash flow in our business

continues to improve. it is up again by another billion. we have a pristine balance sheet and we have a lot of things we can do with that capital. we will continue to pay out the dividend and we are a strong dividend payer. what you doys weigh with the capital including share buybacks which is an option as we progress through the year. we could do some talk ins, buybacks. the most important thing we can innovating for our customers. if you see all of the changes going on in the global economy and everyone looking for a digital strategy, sap is at the heart of that and that is where we want to focus on a bold innovation agenda to continue to grow the company organically, put off a lot of cash flow and drive income which is what we are doing. we are talking about

donald trump and brexit. donald trump wants to make america great again. i asked the philips ceo and i will ask you -- how do you see making of america great again --is that a threat to you? making america great is about buying america products -- american products. what is the risk for make america great again to you? >> when you look at brexit and change, our business in the u.k. is up now post-brexit more than it was before the brexit announcement. we tend to grow faster in times of change because you need digital to manage through disruption. if you think about the u.s., our presence is well known there including the fact that we employ about 25,000 people and we are growing jobs asked her in the u.s. than any other the it

or in the world. the major government agencies run on sap from the department defensese to the logistics agency and the army and the navy and others. in terms of commercial accounts, enterprise company operating in the global economy is almost always running sap. we like to think that our purpose in the u.s. will only get stronger because we can help the new president take cost out of the occasion -- out of the equation and focus on growth instead. that is why you need sap as a global partner. manus: have you met him? have you assured him that you will add jobs? will that be your biggest expansion in 2017? >> what is interesting is that of course the administration and

our office are having ongoing dialogues. we opened a major facility on the hudson yards project on the hudson river in new york city. we are adding all kinds of jobs. clearly, we will be at the epicenter of the digital inategy in any government or any commercial company if they want to take cost out where they showed and grow where they can. we will be right there with the current administration. i must pay the vice president a compliment in running indiana. he used to sap to do special things including reducing infant mortality rates. they are a way -- they are aware of our technology. manus: thank you very much. bill mcdermott, probably the best salesperson in the world. thank you. anna. anna: when we come back, we will

continue on bloomberg daybreak: europe with more earnings news. will -- how will the airline take the brexit news? this is bloomberg. ♪

shery: pressure on the greenback. revamp jim -- ing trade. president trump signs another executive order, this time withdrawing the u.s. from tpp. he threatens business leaders with a very major border tax. and tell down to the brexit rolling. the u.k. supreme court will deliver its decision on whether the prime minister has the power to trigger article 50.

a very warm welcome to bloomberg daybreak. just gone 7:00 in london, our flagship morning show from london. i'm anna edwards, outside the supreme court. manus: and i'm manus cranny. stay warm throughout the day. we have breaking news for you from easyjet, their numbers are just coming in across bloomberg. first-quarter total revenue, 997 million pounds. analysts,eat on the which was pegged at 928 million pounds. however the revenue per seat decreased by some 8.2%. 51.64. they're carrying more passengers at a lesser bang for your posterior, so to speak. 8.2% rising passengers.

the load factor drops ever so slightly by .3% in this high-volume margin-orientated business. every load factor counts, so they decrease the load factor, ey're saying in the first half they will expect a capacity growth of almost 9%. at a topline for the first quarter, it's a beat. 997 million. full-year capacity growth, they see it at around 9%. no material move between the first half in the full-year. rising, the dollar is down. london, paris, and frankfurt are all indicated higher this morning. as the president of the united states of america signs another executive order to withdraw from the transpacific partnership, don't forget ubs, the team told

us yesterday that europe is overpricing political risk in these markets. london, paris, and frankfurt indicated to trade higher, helping the energy complex as well. let's have a look at the risk radar. it's evident of what is going on with donald trump. the dollar has bounced off its lows. there's a line on top live. to rational fear from irrational exuberance. we have broken four straight days of declines and are bouncing off november lows. the treasury secretary nominee has said, has warned on an excessively strong dollar. stephen engle under at citi says they are losing patience with a lack of clarity. cable coming back off the break above 1.25. anna is outside the supreme

court. is article 50 against the government? oil is up .5%. iraq says they are close to their full opec pledge and could do another 30,000. that's the state of play on the markets. anna? anna: thanks, manus. ura suggesting that they think a loss for the government seems to be priced into the pound. for the moment, let's get the first word news with juliette saly. good morning. juliette: anna, thank you. donald trump has pulled the u.s. from the transpacific partnership by executive order. he left the free-trade agreement with mexico and canada intact, but according to an aide, action is still in the works. he also vowed a "very major border tax" on companies that move jobs outside the u.s., and said he would cut job regulations by 75%. treasury secretary nominee steve maneesh and says an

excessively strong dollar could have a negative chart term effect on the economy. the comments were obtained from answers he gave two u.s. senators. the dollar slumped to the weakest and more than six weeks after the remarks. the senate foreign relations committee approved rex tillerson's nomination as secretary of state, clearing the way for the full senate to confirm one of president trump's most critical cabinet choices. the senate confirmed representative mike pompeo of kansas as cia director yesterday. the u.k.'s brexit plan will be clearer today when the supreme court rules on whether the process can start without parliament approval. if the decision goes against the government, prime minister theresa may's plans to rush legislation to launch article 50 by the end of th march. it will be announced at 9:30 a.m. today in london. global news, 24 hours a day, powered by over 2600 journalists

and analysts in more than 120 countries. you can find more stories on the bloomberg at top . we're just getting the close of the chinese trading session, thie shanghai composite up on comments by steve mnuchin and the tpp -- what we heard from donald trump. the focus of asian investors is will that be the focus? the hong kong market is up by around .3%, still just under an'ours trade -- an hour's trade. we have seen some weakness coming through in japanese equities. the nikkei is falling, as we have seen this fluctuation against the yen and the dollar, although the yen isn't moving too much stronger against the dollar at the moment, but we did see some weakness coming through from those exports stocks. australia reverse yesterday, up by .7%.

a lot of support for those material players, particularly steel, after it came through with a fairly solid profit outlook. also you have seen the dollar weakness we saw for most of the asian session really boost emerging-market currencies and equities, so that has given a solid boost to some of these markets like indonesia and malaysia. manus: juliette, thank you. let's turn back to one of our major stories of the day. president donald trump has signed an executive order to withdraw from the transpacific partnership, abruptly ending decades-old u.s. tilt to free trade. the move came alongside a promise, to renegotiate the accord with mexico and canada, and that's a feels his campaign pledge to rewrite america's trade policy. in a meeting with business leaders, he said he intended to impose a major border tax on companies that move their operations out of the u.s. wants to firehat

all of its people in the united states and build some factory someplace else and then thinks that product will just flow across the border into the united states, that is not going to happen. you will have a border tax, a substantial border tax. manus: meanwhile, u.s. treasury secretary nominee steve mnuchin said excessively strong dollar could have a negative short-term effect on the economy. the greenback slumped to its weakest and more than six weeks on the remarks. it has since bounced. we have ahead of g 10 fx strategy at credit agricole. , welcome good to see you. last week, he lambasted the strong dollar. nuchin said it wasn't a long-term policy. four days later he's now talking about a strong dollar. does rhetoric trump policy divergence, with the fed having to raise rates? >> that's rhetorical.

he cares a bit more about the dollar than his predecessor, and that may be closer to what the fed is doing. it might be an exaggeration to argue that he will pursue a policy of the dollar. the various ways you can attract onestors to your economy, way is to maintain a fairly cheap currency which keeps the value of assets low, making them more attractive. in trump's casey made it fairly clear, the way he has chose will be order adjustment tax, and o ne-sided effects, which could be higher, imported inflation in the u.s. and having a somewhat stronger dollar may help in this situation. it will shield the american consumer, protect the purchasing power of the consumer. i don't see it as inconsistent, having strong dollar, and protectionist policies out of the u.s., at least for now.

anna: good morning. a stronger dollar cushions the u.s. consumer from that imported inflation, if we get those border taxes. what does that border tax in itself do for the currency? does that, in itself, strengthen the dollar? does it depend on whether we see retaliation from other countries? what is the circle there? then the whole, i think existence or implementation of the border tax could force the fed to tolerate the stronger dollar for longer, even if the fed itself may see any spike in the inflation of a temporary development. on the whole, that could be an initial positive impact for the dollar. however, the longer-term implications are less positive for the u.s. economy and consumer. if nominal wages failed to keep pace with the pickup in inflation, the longer-term impact may be less positive. on the whole, the prospects for

a border adjustment tax is supporting our case for some stronger dollar from here, and the longer term applications remain unclear. from what i can tell it is not supported for the currency altogether. manus: what i have for you is five-year government bond yields, correlated to the dollar. the point that a number of analysts have made, it's a chart they put together -- the relationship is inextricably with five year yields. treasury has hardly moved. theyou, the driver on dollar would get one week for a positive dollar, the next week and negative dollar, and ultimately it depends on divergence. is that divergence absolutely in play? anything could stymie the fed. all of this protectionist talk strongs rhetoric about a

dollar -- >> the way protectionism could affect reaction function strong dollar by impact on global growth outlook, global trade outlook -- that was the scenario investors were fearing, the fact that trump may indeed want to renegotiate the existing trade relationships so that the u.s. could hurt global growth. because we are talking about interconnected global financial systems, that could overtime you road support for u.s. equities and erode the wealth effect it is creating, and could actually force the fed to be much more cautious. that was the channel that we could see, protectionism. why it is not playing out the same way at this time around, i believe that right now it seems that trump's focus is predominately on nafta. if you look at the mexican or canadian trade that is prominently done with the u.s. -- the global impact of any measure to renegotiate nafta

may have global ramifications. that said, when it comes to china, and we suspect that he may try to erect trade barriers against china, the global applications of that could indeed unnerve investors, and they could then question yourself -- if global equity starts to selloff and the u.s. equities may be quick to follow, what will the fed do? maybe they will try to slow down a bit, try to prevent any further excess of tightening in the financial conditions. that is how we see that working. but for the time being, there is no real evidence that risk sentiment is deteriorating, or indeed, for that matter, that correlated and emerging markets are suffering on the back of protectionist fears. the knee-jerk reaction right now seems to be investors adjusting their extensive longs. anna: valentin, with that in

mind, do you have any currency plays around the fact that president trump stepped away from tpp? i know the australians want to carry on with tpp regardless. of if are talking about how the chinese could end up being beneficiaries of this. which currencies do you buy if you see the united states renegotiating or taking a slight step away from global trade flows? >> we think that the ultimate outcome may be the slower growth, global trade growth, and we think that currencies that have benefited the most from emerging-market currencies, g 10 currencies, it could be the biggest loser. in the interim, it does feel like the high-yielding currencies are nations like the australian dollar, that seem to be benefiting from that interim period whereby investors are still hoping that the likes of china may indeed replace the u.s. as rival of global trade

and growth. they think of it as a temporary development, but it's something we have to live in for the next 30 weeks. manus: i want to pick up on the theme. this is the mexican peso since the inauguration speech. there are a variety of views out there, from what you have heard, what way do you look at the peso? >> it depends -- the longer-term outlook, it looks challenging. it is the case that investors are pricing in what he has pledged to do on the campaign trail. it may be very much what he wants to implement as president and renegotiating nafta may take time. there are a lot of business interests that could potentially stop him from dismantling vertical integrated supply chains. that said, the longer-term outlook for the economy may be put into question, so from that

point, it's not really the time to become bullish on the mexican peso. anna: valentin, thank you very much. thank you for your thoughts. he stays with us. i'm here at the supreme court in london, why? because we are waiting for a decision to be handed down at 9:30 u.k. time on whether the u.k. government can trigger article 50 without the say-so of parliament. we will discuss that next. this is bloomberg. ♪

manus: it's berlin, brandenburg gate. citygone age: 19 in that -- 8:19 in that city. 07.40.ollar down at 1.0 let's get the bloomberg business

flash, juliette saly is standing by. juliette: manus, thank you. samsung doubled in the last three months of 2016 on robust semiconductor sales. it was also driven by a recovery in its mobile business after the fire prone galaxy note 7 debacle. the company will also buy back $8 billion worth of its own shares, which will be canceled. yahoo! says the sale of its main web operations to verizon has been delayed until next quarter to make closing conditions, as the company recovers from the disclosure of massive hacks to its user accounts. the company also reported fourth-quarter revenue that beat estimates and user activity that showed minimal declines after last month's announcement of a second major security breach. long-time formula one boss bernie ecclestone is stepping aside. the 86-year-old is being former 21stceo by a century fox executive. he cofounded the sport in 1978

and will become chairman emeritus. the change comes as liberty media completes its takeover of f whic1, which it bought last year. and phillips fourth-quarter profits met estimates as performance at the dutch company's health technology businesses improved. sales rose 3% on a comparable basis to 7.2 billion euros. we spoke to the ceo, who struck a positive tone on their health tech sector. >> it is in health technology in the fourth quarter -- we saw 5% sales growth and 190 basis points of profit improvement. you can conclude that our health technology activity really has momentum. that is pleasing, because that is our future. our innovations are in demand, from radiology all the way to the consumer health products. juliette: and that is your bloomberg business flash.

anna, manus. anna: thank you very much. juliette saly. let's bring things back to the u.k. i am here at the supreme court, why? because at 9:30 today we will hear from the 11 justices, or at least the president of the supreme court who leads them, about whether the government has to ask for parliament's approval to trigger article 50 or whether the government can do it alone. we will more about the brexit plans later on today. if the decision goes against the government, prime minister theresa may's plans to rush through legislation so she can stick to her self-imposed timetable and launch article 50 by the end of march, the ruling announced at 9:30 u.k. time. still with us from credit rinoff.e, valentin ma how high do we go is the government loses today, or is that really the expectation? >> i believe that is already very much the expectation, that

the supreme court will rule that a parliamentary vote be needed to trigger article 50. card ising, the wild what the supreme court will rule ,n the devolved parliament whether they will also get a vote on the trigger. if anything, the assumption going into the supreme court has been political uncertainty will likely abate, especially after the speech that the prime minister delivered last week, elaborating upon her vision of brexit and committing to a vote in the parliament on the final brexit. but that assumption may be challenged today. manus: you and i were chatting about globalization. potentially, the big question for 2017 -- are we in parking on the new year of of where the

globalization backlash begins. -- evenes that put though she says she is open for business and wants a global britain. what does it do to sterling? poundanything, a weaker is still going to please in some sectors -- financial services, but on the whole -- it is the case that the way things are looking and how things will be playing out from here, at least as long as we have the current government is that the industrial sector may have some catching up to do and from that point of view sterling weakness may be needed to help rebalance the economy.

given the prime minister's stated intention to change that, the weaker pound may be part of the solution to address the lingering internal imbalances and trade deficits of the u.k. valentin, what are you expecting to see when theresa may visits the united states later on this week? is that something that could become relevant to fx market, do you think, depending on what she intends to try to negotiate with donald trump? >> well, talking to some clients on the fx side, it seems to have attracted some attention, and it seems inherently positive for the pound, if only because we are going to strengthen her negotiating position going into the brexit negotiation. havee same time, we also the insistence by the eu partners that no official negotiations can take place

before the brexit negotiations has been completed. on the whole, well all that is certainly looking very promising for the future, we are really talking about very long-term futures. if it is positive, it will be on a small positive. right now it does feel that the predominant driver of the currency will become the u.k. data itself. political uncertainty is expected to abate. economic data out of the u.k. could be key for the near-term outlook, and the risk is that further deterioration on the back of the weaker retail sales last week, further deterioration could alter the headwinds for the pound again. manus: it could come indeed. thank you for joining and and myself -- and a and myself. and edwards is at the supreme court throughout the day. daybreak europe is done for the moment.

market open coming up next with guy johnson, and you can tune in with me. i'm off to digital radio the between 8:00 a.m. and i'm :00 a.m. but we are global everyday. this is bloomberg. ♪

guy: welcome, this is bloomberg markets. this is the european open, your first trade of the cash session coming up shortly. i'm guy johnson in london, matt miller is in berlin. what are we watching? brexit gets its day in court. a rulinging to get shortly on whether the prime minister needs parliamentary approval before triggering article 50. but is a loss for the government priced in? repricing reality. the greenback bounces back, despite steve mnuchin