anna: hsbc sinks in hong kong. a billion-dollar buyback sales out away the orderly loss. the banks cfo. back a dividend from the three-year retirement. their results in an hour. trumps latest pic for u.s. president-elect -- select national security adviser reassuring administration. bloomberg sits down with australia's prime minister to talk trump, trade, and the nation's future.

♪ anna: a warm welcome to "bloomberg daybreak" europe. our flagship show. the biting -- the mining sector, reports from both already this morning. what we have going on in the u.s. dollar, stronger by .4% against the japanese yen -- 25ro down by .25% adding to the hawkish commentary around the united states. adding to some people's expectations about whether libel -- march is liable. he said mark is not the table. now into the mix overnight.

asian sessions. tech markets coming through. we also see futures moving higher. quietday in trade was a day and trade for the u.s. -- europe. we might have hsbc weighing on the european, that's just a moment. --ther high being taught planned production cuts at mills ahead of key political gatherings. boosting some of that commodity complex once again. strong there's coming through. let's start with what is going on in the banking sector. hsbc shares are falling in hong kong area fourth-quarter loss of interest. billion forof $3.4 the three months ending in december compared to an $858 million loss a year earlier area

$1 billion share buyback. we see what is happening with the share price today. any positive from the results analysts are telling you about? let's get to the news first. ofrth-quarter pretax loss $3.4 billion. two point $60 billion, that missed estimates and it fell 3%. also a miss. disappointment regarding this share buyback. there were some that were looking for more. ubs looking for $3 billion share buyback. $1 billion seems paltry in

comparison. you will see how last year's share buyback gave hsbc shares in london a boost of 56%. that is the pound as well. without and dollar amount recovery against the dollar. hsbc as well. adjusted doors of 1.2%. revenue growth is greater than cost him a indicates there are efforts finally seeing some results. equity. she led 13.6%. 13 bank has been aiming for -- 12-13%. 10 present is pretty much as good as it gets for any

universal bank this day -- these days. an exclusive interview, i spoke earlier to it just easy cfo ian mckay. his reaction in hong kong. see if they are missing anything in the release. ian: we have had a good operating performance in 2016. in the fourth quarter we took an impairment on the goodwill in the european private bank and that along with the u.k. bank contributive to an upgraded loss in the fourth quarter. clearly in the first three quarters of the year we had good operating performance. that was sustained but it was impacted by a couple of significant items coming through as i just mentioned. analysts interested in

whether you are able to change the course of revenue growth at hsbc.re you -- you confident you will be able to do that? ian: we are encouraged by the loan growth coming through. i would point out over the course of 2016, an interesting year by many accounts. all the revenue pretty much flat. our global market -- supporting runlarge corporate giants the network. that was very encouraging. retail management had a tough start to the year compared to a strong start in 2015 on the back of the hong kong connect. the progress that the markets has beendemonstrated

very encouraging. loan growth in the fourth quarter gets us to a good start in 2017. if investors are disappointed by the one billion shift, will there be more to come? ian: i wouldn't read too much into the one billion we have announced. this is very much the related to the -- we close out in july of last year. we returned to .5 billion in the second half of last year. that is a total of 3.5 billion. wouldn't encourage any investor to read too much into the one billion now. we have clearly got clearly 13.6%.ratio at well above the range we

targeted. we are well capitalized. we continue to focus on invest and capital and the growth of our victims -- business. we will contemplate as we have done, share buybacks. note isother thing to , a little over $10 billion to shareholders. the returned to the shareholders in 2016 has been a very strong performance both in terms of cash and total shareholder requirement. anna: when you at what the share price has done, how do you evaluate share buyback versus the other things you could be doing with that money? what is the analysis that goes on there? 13.6we're sitting on a

ratio. as we shared with investors back in 2015 some of the targets, we set off a range of 12-13%. we are operating comfortably above the top end of that range and with well-capitalized subsidiaries around the world. surplus inate that the most appropriate use of it. to return cash to shareholders in the form of the buyback. we concluded that in this occasion it was the opportunity to return some of that to shareholders. concerns around

protectionism and the like. business, theing finances for trouble around trade financing. anti-globalization and protectionism measures being brought in. ian: we live in interesting thes geopolitically and in industry. this is what hsbc does. we operate in seven countries around the world. our businesses cover 90% of global trust -- trade. our focus is very much having both the product and the capability across the network to support the customers regardless of the environment. as we have done for many years in the last six years i have been in this role it would be -- we continue to adapt the business, the model, the network

to support the customers across our network. it becomes more interest ring. -- interesting. anna: the cfo of hsbc talking about interesting times. one of the scenes of the report we've seen coming out. comments around the share buyback so far and what will be to come. the earnings report for a moment, we had, coming through not taking much rate rise on the table. at below capital joins us here in london. great to have you on the program. i have a giant wake-up call. there is a fire under the dollar on tuesday. in the asian session, much stronger dollar. the dollar index start by .2%.

through what he is trying to get at. guest: if i were the fed, i would want the markets to know that the decision to hike may in one-to morendent on tier one data releases. we are still below 50-50 for the fence. to believet market that if we see a stellar report for february, maybe one or two other pieces, the hike is possible. read/write --he 36% of the rate hike in march. guest: one-to more databases may do just that.

i happen to believe that it should be closer to 50-50 anyway. at march. it is a tossup between the anna doing too early and hikes this year or waiting and potentially doing three. i'm not sure exactly if janet and the f1 cc thinks that way but that is a vanilla way of describing the tossup. anna: we have these structural things, legislative things around order attacks. the head for the u.s. dollar if we get some kind of over tax legislation? unashamedly dollar-positive. guest: it will be depending on the size of the border adjustments. our base case is not for wholesale tax reform.

we do see the dollar appreciating. it will appreciate a lot more if the trump administration goes with the house plan and announces a cash flow tax reporter adjustment. we see 5-7 present appreciation now over the balance of the gear. we think it will be concentrated to q3. it would be a lot more if wholesale tax reform. we think it would be difficult. anna: thank you very much. joining us from below capital capitolbmo anna: we break down the numbers next. ♪

anna: welcome back this is "bloomberg daybreak" europe.

commodity prices surged in china. to break down the numbers let's get out to singapore joining us from there, alexander feith kospi. better than anticipated about some methods. alexander: it would've been a significant upset if we've not seen compared to last year. indeed profits beat estimates and the companies payday is much bigger than expected dividends. there is that a broad recovery in commodity prices since the beginning of last year. that has really transformed the mining sector and the likes of dhp for example. what is happening is you have got a stimulus in china

translating into more spending propertytructure, on and that is translating into more demand for raw materials massive 80% last year. see that andrew mackenzie, the ceo, is currently commenting the latest earnings are very strong. he pointed to some of the positives. iron ore and rebounds in the mufti prices. alexander: copper mine in chile because of the wage dispute. the company shut down operations early this month after failing to reach a wage accord with the union and has now been shut down for 12 days.

fearing -- failing to them up to thehedule and indeed today company said it was going to have to review its copper outlook guidance for this year as a result of that ongoing shuts down. you also is still got the closure of the iron ore mine in at the end of 2015. anna: thank you very much. from singapore with the latest. we will bring you our exclusive interview. and u.k. time, that will be here on bloomberg. headed investment strategy in europe, joining us now from his office in london. rates to have your the program. -- great to have you on the program.

some of these may just to have benefited from the rebound we have seen in commodity prices. what kind of assumptions do you have to make about china, from instructing under -- infrastructure spending. at thisommodities stage, i think a lot of people now are starting to think that we are getting closer to that last phase of the economic cycle. in seem to be heating up again. the pmi's suggesting they are starting to maybe return. odysseysat faced him tends to do pretty well historically. set against that's what you probably have is skepticism that president trump's administration is going to get through all they want in terms of infrastructure spending. by, you get goes

much of the policy proposals through. alongside that you are seeing activity in the chinese housing market start to moderate. --icators are showing that it is starting to roll over and that should be more of a headwind for commodity prices. we are neutral on commodities. your minerss that have done well but the prospects are probably more muted for us. you are neutral on miners. your positive on the banking sector. numbers all through the week from various in the banking sector. is this around the rising interest rate? guest: that is a large part of it. it is interesting that some of in results you're getting

are actually what they expected this and but in the market is people are being more positive about interest rates. still making things quite difficult for these banks. yield curve will steepen ultimates. a proper backdrop -- profitable if you look -- superficially at the minors and the banks, the earnings, it is roughly similar. the same for the stoxx 600 as well. better business coming through on banks. interesting that banks have the momentum.

anna: we saw a record highs in the united states, do you think this rally has much more to go? you talk about entering or approaching the business cycle. what impact fiscal policy has on it? guest: they are not overheating yes. that is worth pointing out. inflation is benign. things are trickling along quite nicely. it is in the fury indicators. very easyyou have monetary policy. easing fiscal policy about the .ramatically eased confidence consumer and business multiyear highs.

peter cook said i can remember my mistakes. i'm sure i can repeat them exactly. in the shorter term, there is nothing to factor in. that is those economic surprises running for a six-month plus. we must be running out of steam. the capacity of the economy to surprise economists should be running out. stocks look overbought. you may find that there is a bit of a pullback or correction. further out we still see good reason for stocks to outperform bonds on the basis that the economy seems to be entering a phase. some people point to the wider anticipation in the stock rally in the united states. that should beng

a concern for peter cook? i would argue that animal spirits returning in an economic cycle. it should happen. most cycles it tends to have an earlier. for the deficit and severity of the recession we suffered in 2008, in europe that rolling existential crisis scar tissue has taken the best a lot lumber to heal. banks have found it hard to lend. sectorrs in the private are more reluctant to borrow. in absence of animal spirits for the most part. that is starting to return. you have to be careful that we don't enter the next bubble. that is really what we have to watch out for.

our worry is not enough exuberance. it is too much. we are not there yet. we're watching the indicators as they come in. that is probably something to watch out for. anna: thank you very much for your time. stephen gallo is still with us here on daybreak -- on "bloomberg daybreak" we're seeing these numbers come in better than expected. how do you approach the mining iron ore to mark futures the highest since 2014. this is all seemingly positive. guest: it has been. i don't believe it is unashamedly positive over the next 3-6 months. not resoundingly said. a large reason for that is that

china once again has managed to stabilize its currency. trade in base metal prices which helps fuel the rally. people tend to elected by the balance. people like to get involved. ofould be looking to fade the 77-78 range and aussie dollar. we think china's currency will resume the downtrends. we think it will weaken. strengthneral dollar over the balance of the year. php and the australian dollar in one place. comments from the ceo speaking on a media call. this is something to watch very carefully. suggestse latest data

we are stabilizing global trade. there is not going to be a massive rebound anytime soon. playof the same forces in 2014, 2015. yes of course, the rising tide of -- protectionism is something worth watching. the other thing is inventories in metals. i'm not sure exactly if the rally can last. another commodity currency is the canadian dollar. the protectionism conversation very relevant with what is happening with nafta are you what are your expectations around what all that does to the weadian dollar area guest: see the dollar heading to the mid of one 30's.

does not the main focus of issues within nafta. it has a relatively balanced trade with -- trade with the united states. what we have seen in terms of leverage money positioning is as of early last week they are the most they've been in years. expectations that canada will benefit from a stronger u.s. economy. ultimately we think canada is a week balance of payments story. thank you very much for your thoughts on that. -- the lowlo, u.s. capital. he stays with us.

a new edition is available on your bloomberg and your mobile . the cover story is around the banking sector in a just see. , if he incomes to client, and a one billion dollars by back. vanguard targeting europe. to boost market share as it benefits from the increased cost of managing money. , marine leelection pen is catching up with her rivals. polls pointstest to marine le pen losing heavily in the second round by 61.5%. both good check in the markets. details of what is happening. reporter: overall we are seeing

stocks higher. treasuries yields higher. we opened today after presidents' day. we are e also seeing some dollar strength. you can see what is happening. highest since july. a weakness of hong kong. japan up for a second day. can see the range of currencies weaker against the greenback. new zealand dollar, weaker yen, weaker aussie dollar against the greenback. if we take a look at what is happening in the fixed income space, the 10 year yield was heading higher on the treasury. if we take a look at what is happening and commodities, you cannot see it here but gold is lower. you are seeing a little bit of strength for shanghai futures for copper. you're seeing metals down on the london exchange. this is what we're looking at in terms of the index and are very

-- various index for. material stocks leading those gains. i want to show you what is happening with the large across a couple of currencies. the 10 year yield up 2.44%. the dollar tracking that that dollar-yen, up .4%. 113 .60. a voting member this year set a mark hike is not off the table. the changing the expectations but we are seeing a stronger dollar there. the yen will slumped to 1.20 in six months and rebalance to 100 by early 2018. wanted to quickly show you the hh -- you just ec reaction.

a loss for the fourth quarter. $1 billion stock buyback following last year's $2.5 billion repurchase. we also saw lower net interest margin. you see everything you want on their. down 4%. it is dropped as much as 4.3% in hong kong. the biggest drop since brexit. let's turn our attention to commodities again. oil producers cutting the output. global oil prices shifting. russia has overtaken saudi arabia is the world's largest crude oil loser. -- producer. good to see you this morning. how much should we read into these latest? they are pretty close in terms of production. we be rewriting this story after one month more of data?

there's is not much daylight between them as of december. 30,000 barrels of production or so. the reason the market is interested in this is of course while the focus is currently on the opec deal, that deal included russia. we are looking at a horse race between the two countries. how much can you read into it? let me give you wider context. russia eclipsing saudi arabia is coming off the back of saudi arabia increasing its production to record levels last year. something like 10.4 6 million barrels. if you think that saudi arabia production is already at a record at russia is eclipsing that record event you have to start wondering how much impact that production agreement is going to have on prices. what does this mean for oil prices?

reporter: we have seen the market almost entirely focus on opec. they have been looking through what is happening in terms of inventories around the world but especially in the u.s.. really strong stockpiles of buildups and we see u.s. oil rigs, coming on really quickly. be focusedseems to on whether or not opec will renew or extend its production meeting. it is getting interesting because the thing opec wants to .void that would lead to a credibility issue. is aiming to bring stockpiles down to a five-year average. that seems to be taking much --ger than expected a anna. anna: stephen gallo still with

us. we talk about the commodity currencies that we talked about. we have not talked about the european perspective. wcrs on the bloomberg. this is a snapshot of what is happening overnight. is this more concerned about political uncertainty in europe? reporter: euro strength is diminishing because of the credit spreads. in terms of the news we're seeing on a daily basis, greece, france, the netherlands. anna: what we are seeing in the spread, the yield spread. be in the eye of the market storm this morning. we're watching investors getting more nervous about france and to some extent getting into some of the more solid german assets.

reporter: you are now looking -- the fx market, the markets are right to focus on the visual high-profile events like the french presidency. the right to focus on that. loses, --it uses -- you are selling the euro. ultimately 2017 is going to introduce political this big librium. a range of competing forces and the risk that it leads to policy analysis. you're talking about medium-to-long-term reform planning. completing the architecture of the zone, boosting growth potential. these become less possible after 2017. anna: sophie: not a year where we sees populist take power.

it is the year maybe where power-sharing with populist and those were not big fans of the euro presence reform agenda. guest: and even ways on economic confidence and it puts the ecb into a spotlight. what is the port ecb to do with this awkward monetary stance in terms of the streak -- the week strong divide. we think in particular because of the lack of fiscal stimulus at the eurozone level, that is a monetary policy. in particular we have net think that the ecb will end up or be forced to maintain loser for longer. economies in the eurozone still have week with potential. therefore real interest rates cannot rise sharply across the block. will some suggest they start the conversation. that is not very far off? the end of quantitative

easing. we will rule out a further reduction in the monthly purchases. we think that there is a reasonably high risk that the and get -- and gets extended want again. a bellwether for political nervousness. guest: one of our preferred ideas at the moment is 95-want to-112. it is more expensive than it was a month ago your putting on a relatively low cost way of a valuation trade. our concern is one of euro weakness but this consistent recycling issue is not able to export enough capital to offset the current account. despite what the s&p is saying about the frank being massively overvalued, and suggested is.

they're fighting a tough battle. anna: good to have you on the program. the australian prime minister has several frank exchanges with donald trump. the details of the conversations are not meant for the public domain. he touched on his relationship with the u.s. president and underscored australia's commitment to free trade. >> it is vital that we maintain the drive toward more open markets and free trade. trade means jobs. australia is a trading nation. our future depends on not simply selling things to 24 million australians but telling them to the whole world. year,aid at the g-20 last protectionism is not a letter to get you out track, a shovel to dig it much deeper. that is why we are committed,

australia is committed and as china has committed. to free trade, opening up more markets. the very important elements and our successful transition from the historic lifetime. many economists said we would have a hard landing. we did not. that is in large part because of opening up those big markets in asia. anna: it is become a guessing game over whether the president means what he said. in your interactions, your experience which has been well whethered, --guest: they are accurately is another matter. anna: do you have things in

common? >> we have had for several beenrsations that have constructed from a frank, and forthright. the very deep engagement with the american administration. relationship is very deep. it is built over a century. and alliance, and economic partnership. built on millions of people-to-people links and family links. big personality and he has a very big job. in terms of the added difficulty of the decision-making, he is someone who does diplomacy by social media. by twitter.

certainly an element of the unexpected. does that change the way you deal with the u.s.? >> we pursue our national interest,, consistently. we make our case. frankly. with good friends we are fairly circumspect about what we say in public. frankimportant to give advice and frank exchanges with our american counterparts but we don't lecture them through the media. it is very important to be able to talk frankly is good friends should. we are trying to work out what is trumped the candidate, what is trumped the president. a lot of that has come in fruition. do you think he means what he says? anna: that is a judgment that

you have to make. as part of the -- presidents are -- peopleng to be assume they mean what they say. in terms of a commentary on u.s. politics, i will leave that to the collected talent at bloomberg. it's not my job to comment on u.s. political elements. anna: coming up next, we had back to sydney to talk about canada's trade minister after the historic deal on trade with eu. we wrap up the numbers late in the program. more on that europe group meeting.

a very warm welcome back to "bloomberg daybreak" europe. u.s. equity markets out yesterday, back in the next today. a little bit stronger at the start of the trading day in the united states. here's juliette. juliette: hsbc third-quarter profits missed estimates of lower revenues. to $2.26 jumped 39% million. below the 3.70 million dollar estimates. the lender also extended a stock buyback. it's london shares to a three-year high. i would not encourage our investors to read too much into the one alien. we've clearly got a very strong ratio at 13.6%. that is well above the top end of the range we targeted in

terms of ensuring we are well capitalized in our businesses around the world you we continue to invoke -- focus on the capital and growth of our business. we will certainly contemplate as we have done. it will. -- pay dividend for the first time in three years. whicheadline earnings exclude one-time items at $11 million. currencies weakened in the companies where it operates. looking to raise $8.8 billion from the sale of its memory stick business. hoping to complete the transaction by march of next year. the $6.3rapples with billion run down at its nuclear division.

anna: less than a week after the major trade deal between his country and the eu. canada's minister of international trade is in australia for the canadian australian economic forum. oregon to have you on the program minister. thank you for joining us. sydney. us from australia's pushing ahead with the transpacific partnership even without the united dates you -- states. does the future without the united states -- does it have a future without the united states? canrter: anywhere where we benefit cap that. want to have a strong -- we are a pacific nation. weekd a good week last

with europe. we spoke with a strong voice for open trade. that is very positive. we are engaging with our colleagues to see what we can do together. trade is over decades. we certainly want to play a constructive role in looking at that for the future. the tpp minus one as it has been dubbed. what are your expectations from the meeting? reporter: we go there with an open mind. different initiatives that may be. canada will be at any table anywhere where we can progress our relationship and our position in the asian pacific. this is very much important for canada. to make sure that we

have the right for sprint to be able to trade in this very important part of the world. canada we have this progressive trade agenda. does what you saw on the free-trade agreement with europe. this is the most aggressive trade agreement in the world. still advocating for a progressive trade agenda on this side of the asian pacific region. the chinese table much talked about. what stages have they got into question mark to have a delegation on the ground in china at the moment or will you send one soon? following the leaders we have engaged with officials. we are in the early stages. we will take it step by step. we are discussing it at the

official level. -- canada said we won't be open -- want to be open. always focusing on people, making sure they can be heard. we can see what could be the concerns. weston be -- what could be engaging in the weeks and months to come. anna: what the future of nafta from your perspective? does it serve your purpose is to do as much bilaterally with the united states as possible? cut mexico out? i think it was encouraged by the common by president trump when he preferred to -- referred to nafta. this is an agreement that is more than two decades old. an acknowledgment of the breadth of our relationship.

canada and the u.s. exchange $2.4 billion in goods and services every day. canadaes which depend on as their direct export market. 400,000 people who cross the border every day. we just don't sell to each other. we make things together. for me this was very encouraging because this is an agreement that is been good. president trump on a platform to work for the middle class. ist i can say about nafta that this has provided millions of good jobs on both sides of canada and the united dates. many of the goods you find across the border, many times before the end of the country. i took this comment to say we start from a very strong basis. anna: your economy is very different from the mexicans one. is it not make sense to rip up nafta? two a bilateral deal instead?

well. nafta is working if you look at the supply chain, it is very much integrated. for is been working well our country. if you look at the way things are made in north america it is very much integrated. last week he saw an acknowledgment of the importance of that relationship. the 9 million u.s. jobs dependent on canada. canada is the largest customer to the united states you first energy supply in the united dates, oil, gas, electricity. this has been beneficial for the middle class and jobs on both sides of the border. the canadian minister of international trade.

up next, turning to the earning scenes. the mining sector. numbers from bhp. he reported a jump in nonprofits. we speak to management later area this is bloomberg.

anna: a billion dollar buyback failed to outweigh wider quarterly loss i. and google brings back the dividends of three-year retirement. from slate's script for u.s. president-elect, general mcmaster. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries

welcome to "bloomberg daybreak" estimate between numbers from dhp. numbers from anglo-americans. nubbers command from 2016. 6.80 billion. of all 5 billion anticipated. one dollar, -- $1.72. company talking about net debts coming in. the adjusted for year adjusted $1.70. $1.71.

if there is committed as they once were the asset. given the rebound we have seen at these prices, continue with their plans. those last desperate else last year. a lot of that will be part of the conversation when we speak to the ceo. here first on bloomberg at 8:00 a.m. u.k. time. no word on the asset sales right now. more details of earnings when they come through. this is the hotel group of course. i h g intercontinental saying before you're just to profits will come in at $707 million. pretax profit coming in at 621 million -- 620 million. above the estimated 600 million. 1.7 2 billion against an estimate of 1.74. mrs. estimates just a touch.

commentary around the outlook from this company, they remain confident in their outlook for the year ahead. -- up bybout global 1.8%. love this business is based in the united states. what they say about the trump economy? what he means for immigration, all that coming up. we talked to the iht's ceo. ceohg on the, just to put macro things in their place. commentary coming through from -- expecting to ftse to be underwater. that has traded lower in the asian session over in hong kong.

mixed bag for european equities, that's what we expected. fromisk radar, comments fed president harker, interest rate expectation getting a boost perhaps in the overnight session in asia. he said that march is not off the table. that is did dollar a little it against the yen. boosted the dollar a little bit against again. iron ore futures up i more than 3%. another high overnight in asia. steel futures in china, print production cuts as mills. one of the biggest themes we are watching when it comes to pricing and commodities. donald trump has chosen general h.r. mcmaster said he will serve

with keith kellogg who will return to his earlier role as chief of staff. seceding michael flynn who resigned. the fourth quarter profit missed estimates in a lower revenue. profit which excludes one-time items jumps 39% to $2.26 billion. below the $3.70 billion estimates. the letter also estimated a stock buyback to a three-year high. reporter: to read too much into the one billion. a crudely strong 13.6%. what a lovely topic and we targeted in terms of ensuring we are well capitalized in our businesses around the world. he continued focus on investing capital our business.

the opportunity arises from time to time we will contemplate as we have to. done. reporter: describe president trump has a very big job. bloomberg he had several frank discussions but the details are announcements meant for the public domain. push the continues to case for gdp view ahead of south america. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . asian ending out the sessions in terms of the same high market. hired by 4%. only through from those automakers and banks. hong kong was tracking higher you it was at its highest level since august 2016 or the result

weighing on the market. down 4.1%. hong kong closed in 15 minutes time. shares holding of the november 2015 highs. results pan out the full australia closed. australia was the flat. nikkei out .7%. the dollar strength across the region weighing on the end. it was to export stocks across the southeast market today. anna: thank you very much. both boosted by the rebounding commodities. joining us now to -- for the also withtephen cohan us on set. a little bit of time to digest that you estimate between numbers coming through.

give us the standout metric. guest: they raise the dividend way above what the minimum of their policy. well beyond what people expected. strong and is getting stronger. that does seem to be a change in strategy among the leadership. back tol give the money investors. they have invested in dubious projects. we will get back to our shareholders. to ourive it back shareholders. anna: delving into the numbers from anglo american. was crucial, interesting is what they can do with some of those assets.

more detail coming through. saying in their statement that you are correct on the pronunciation. assets to be retained. no further disposals planned for deleveraging purposes. reporter: they had to --guest: they have announced a massive plan to shrink the company. in the last year the share price has tripled. they don't have to do all the things they said. they're going to hang on to them and remain a bigger company. this is quite is change in strategy. anna: when you look at the rebound that we are seeing in commodity prices, as this gone too far too quickly?

what are the drivers? global reflation trade, started in the u.s. before trump. definitely has expanded into europe. a good data out of china. reverse of deflation in china. the psychology around was going on. pretty good fundament reasons try to be anes asset. clearly a very strong performance. oil being very stable as well. the psychological connection between the two. it has provided this huge breathing space to get themselves that they want to be in. for credit investors that was a big problem last year.

it really change the fundamentals. they're talking about their priorities for 2017, includes resuming dividend payments. adding $1 billion in net costs and improvements. guest: moore probably run the sector. commodity prices was falling. there are going to have to do drastic things. the pressure is being taken away from what we would want to see from any company in the situation. anna: you have to make aggressive assumptions about what trumps fiscal policy looks like?

that only one part of the story in the could go higher anyway? oforter: people overestimated the impact he could have. china remains the driver. of course that could change. transparencyns of in china, what the policy will be an thomas stockpile is actually held area a sensible bit -- investor would be hasious spread copper supplies issues well. anna: it looks like yet another property site is rolling over in china. is that what you would feel when

you look at these commodities? reflectioncycle is a of what properties and what is going on in china. commodity, what is more interesting is the industrial sector. when you are around this inflation-deflation scenario. that is to run through this year in terms of this. you see it in china equities for example. a focus on or shift away from deflation. property will always be a big challenge. somewhere in the cycle it is been talked about for several years. anna: they you very much piece stays with us -- thank you very much. he stays with us. greece and its creditors. bailout discussions in the coming days. missing another a lot deadline. in brussels for the latest. this is bloomberg. ♪

anna: welcome back this is "bloomberg daybreak" europe. fairly flat at the start of the trading day. let's get to the business flash. this is juliette. it will pay a dividend for the first time in three years. at the same time the third-largest gold producer, 2016 headline earnings, excluding one-time items come in at $111 million. after the price of gold increases and currencies weekend. raise $8.8looking to billion from the sale of its memory chip is this. crisis company ins to complete the transaction by march of next year. a spokesman declined to comment.

burger king international is an advanced talks with the louisiana kitchen about a takeover of the fried chicken chain. -- negotiations between the companies are ongoing and a transaction could be announced as early as this week. a representative for restaurant rants did not immediately respond to a request outside of regular business hours. that is your bloomberg business flash. anna: another greek bailout deadline is missed. on a quick disposal of new aid pavements. its creditors agreeing to pick up discussions in the coming days. in brussels where the reactions are taking place. the feeling of deja vu.

guest: the last chance again for greece. the only thinge that the eurozone finance minister could agree on is for the return of the bailout -- bailout. greece is racing against time because you have these elections coming up in the netherlands and france. even though we have elections coming up. doesn't mean we can't find out a local solution for greece. >> they'll a always pose a problem when trying to get good

decisions. from the other end we should not be -- we should not take another look to find solutions that are not really solutions. there are elections coming up. steady and well reasoned. reporter: the return was seen as positive by investors. we saw a two-year bond yield falling on this news. the possibility of a false bailout for greece. --. they have to pay as much a 6 billion -- euros.

a fourth bailout seems to be a increasing possibility. hear --anna:nt to what extra efforts are being demanded of the greek government? >> the creditors are on the same page. demanding more measures for after 2018. when the current bailout program expires. they don't want to lower the threshold. another reform of the pension system. they have been cuts 12 times over the past seven years. germans, thethe imf will participate in the program. the imf is not leaving.

being on board is also a prerequisite for greece to return to the easing of program. noweek official said in any that greece was ready to legislate new measures for after 2018. anna: thank you very much. joining us from brussels. about putting this in perspective. as a bond guy, is this something that is off the radar? is it something that comes back to haunt us? guest: we have been here several times before. impact on markets is very short-lived. get some sortly

of next package. it is really kicking the can down the road. a 16.e got to into a similar conversation two years later. improved economy has but the finances are pretty unsustainable. the political pressures that european governments are under means they are not able to come around to the way of thinking that they agreed that is unsustainable. that.an't do therefore we have to wait for these political hurdles to be gone through area guest: the european authorities don't want anyone leaving the euro or anything that would drive a country down that path. that is why see a bailout of greece. situation was worse to-three

years ago then today. do we getf this, how to the 11th hour? we both move the project forward. the challenge this time around is your running into elections. there's a bit of potential game changing. we have been in an environment where you have very much a consistent outlook for all of the european governments. your potentially going to move into an environment where one of those governments either in coalition or outright has a different view of things area that is when you start to get into greece measuring for the market. people said it was not relevant to the european story. vocab that we could use. if it were to set up a way out of the eurozone, that would be a dangerous precedent to sent to

especially when you have a really the pen campaigning on that agenda. -- marine le pen campaigning on the agenda. there is not been enough pressure from the electorate on the government to say we are not happy. that is starting to change. you're seeing that with what is happening in the u.s.. ultimately with exit. that is the big risk this year. the kind of thing that would change the overall environment. that brings greece more central than it is in a status quo environment. company to company talking about populism and the threats to global trade area political risk focuses on the french bond yield spread. seems to become a focus point for investors.

the french spread over germany. however so markets about france? anna: what is interesting is it is the last two weeks. you see the gradual widening before. what is really interesting the last few weeks and so when people focus on it. what is happening is if you go back to late last year after the primaries, it was a consensus that. you don't would win. suddenly, he has run into trouble. the sense that actually despite the opinion, if you have a situation where there is not a credible candidate in the second round everybody else can rally around the pen. then you get into a dangerous situation where anything can happen.

that is exactly what we saw last year with the u.s. election and arguably with exit. anna: thank you very much. the head of 16 cavities at --

♪ >> welcome to bloomberg markets, the european open where we bring you the first trade of the day. here is what we are watching. buyback blues. hsbc stocks slump. a $1 billion stock repurchase. the cfo tells us more buybacks could be on the horizon. -- and mining firms see