bloomberg speaks with the ceo about donald trump, and threats to the price of crude. >> libya coming back to the market. august -- i strategy is for a breakeven event. anna: the central bank doesn't want to surprise markets. we await the fed minutes later today. immigration takes center stage. the trump administration out lots plans for sweeping deportation of undocumented migrants.

♪ anna: a warm welcome to "bloomberg daybreak:europe." let's get to the breaking news. airbus, where the french companies that is reporting this morning. adjusted earnings before interest and taxes, 2.3 billion euros. that's against an estimate of 3.80 3 billion, so substantially below that estimate. in aboverevenue coming 65 .4.imate of we will delve further into the details and find out what's been going on. this is a company that many had the would be focused --

analyst for saying before the results the focus would be on the commercial unit, its fourth order performance. cash flow was also seen as crucial because they turned the corner from 2016. were getting some detail of what it's all about in terms of that number. chargeillion euro against one of the aircraft, one of the programs they are running , the military program that remains a concern. some of theains weakness around the numbers against estimates, taking the charge against the project. they see deliveries of 700 commercial aircraft in 2017. we're also getting numbers from act or in the french hotel sector, europe's largest hotel director. terratec seemingly taking their whole -- terror attacks seemingly taking a toll.

ofline with the estimate 5.60 4 billion for the 2016 year. net income came in at 265 oflion, below the estimate 317 million. they appointed nicolas sarkozy to their board earlier this week. he will be an independent director at the group. falling from a year earlier according to data compiled by the french national statistics agency, underlining the challenges for business or 20% of your rooms aren't france. they operate in the asia-pacific and globally also. corporate earnings and bring up the risk radar on various assets. we start with the dollar index. the point to be made, it's a narrow range as we wait for the fed minutes later today. what without tell us about

donald trump's policies and the fed perception of them? the fed does not want to surprise markets. were also waiting for data on the u.s. housing market later on. a little momentum is go through the session. the japanese market is fluctuating as dice fluctuating as it tends to do. stocks in the retail space doing nicely. .4%, pricing in its best rally in two months. the message from the secretary general of opec saying it's going for 100% compliance. hery: the u.s. government has outlined a sweeping crackdown on

undocumented immigrants. donald trump's administration will seek to swiftly deport many more people without board hearings and target migrants charged with crimes or thought to be dangerous, not just convicts. the homeland security secretary ordered the hiring of 50,000 more border patrol and immigration agents in the building of the mexican border wall. the president of the cleveland federal reserve has told bloomberg that policymakers don't want to surprise the market on interest rates. in an interview from singapore, she said the fed has to be nimble to adjust its outlook. hong kong's former chief executive has been sentenced to 20 months in prison for misconduct in office. friday he was convicted for failing to disclose a conflict of interest that arose when he was negotiating rent for a luxury apartment with the landlord who is applying for a broadcasting license. since cap to stunning downfall from officials who helped spirit

of former british colony through a series of financial shocks. increased, news home prices including government subsidized housing gained in 45 of the 70 cities tracked by the government, down from 46 in december. it signals a property curve to deflate the potential housing bubble taking effect. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. find more stories on the bloomberg at top . anna: thanks very much. let's get a check on the markets in the asian session. not a bad session in asia. the focus on the bond markets in australia during wednesday session. we saw australia sell 11 billion australian dollars worth of november 2028 bonds, a very

strong demand for those. i want to focus on hong kong because were seeing these market , spurredfrom yesterday by hsbc. today we had signs that china's property curves are starting to take effect. we saw the number of new home prices rise in the fewest amount of cities in january in the year. so strong demand coming through the hang seng, really rallying. a bit of a fluctuating day on the japanese equity market. the nikkei rounding up the session fairly flat as we see the yen start to gain a little against the dollar. a couple of stocks to show you, we did mention the chinese , japan up 10%s after announcing a share buyback

just quickly checking the yield on the 10 year note after the big bond sale, it's higher by about three basis points. anna: a quick correction on the numbers on airbus a moment ago. t 3.90 sixadjusted ebi billing ahead of the estimate of 3.83 billion. let's turn our attention to the oil market. downs chairman and ceo sat micklethwait in this exclusive interview. john asked if he thought opec would need to extend its production cuts past may. >> i'm convinced we will have to do it. it's not only opec, it's also russia. the real driving force was russia, for the first time under

the leadership of let 'er rip putin and accepted to make some cuts. foras really the driver changing the policy. it's not only opec, it is opec and non-opec. the inventories are going down because inventories are finite. beyond may.nd there seems to be quite comprehensive good news overall within the industry. about shale, does that play into it at all? the industry in the u.s. is very dynamic. you see money coming back into this industry. krejci said you think it is quite expensive. >> if you want to invest to inquire position, it's expensive. if i want to acquire position in

the permian, i need to get $80 a barrel. the steps to invest are very expensive. the winners for the time being have been the landowners. but $40,000 for an acre is very expensive. >> you increased your dividends and beat analyst estimates. how itjust described looks like opec will probably continue beyond may. do you think the bad times for the oil industry are over? convinced about it. we are in a volatile market. yes, there's a positive trend, -- i think the markets are the shale oil will increase, will all the country be compliant? to policy and strategy is

[indiscernible] it's a commodity, where my job is to be sure that we are profitable. the answer is to lower the breakeven. that was the ceo of total speaking to our john micklethwait. a warm welcome, derek. thanks for joining us this morning. let's talk more about the oil price and where you see it heading. oil in quite a range. what opec is doing and around the stock cause in the united states. this is very crucial for the inflation conversation. >> yes. our forecast in terms of what we've assumed for our oil related fx is a gradual increase from here, so we have a bit above 60 for the second quarter of this year.

then coming back to 60 at the end of the year. some modest upside from here but it to fx, we've had some very big news already, and that gone beyond what we had forecast and assumed almost prices that are just mentioned a moment ago. we could very quickly get to a level where fx starts to look at -- the kroner for example has had a very big move and the russian ruble as well. the canadian dollar has lacked a because of the monetary policy. anna: you divide the central banks into banks that can afford to wait a bit longer and live through this inflationary pressure for a higher oil price and those you thinks that will be a little quicker on -- those you think will be a little quicker on the trigger. divide them up for us. >> inclusions were that at the top the pile, though central

banks that have the least tolerance and will have to act as quickly against the inflationary story as it builds, the central bank that we deemed the least amount of spare capacity in the economy and therefore would have to expand -- respond as quickly, followed by the fed, followed by the bank of england. at the bottom of the table was the rbnz in new zealand and the bank of canada and the swiss national bank. anna: we'll talk more about the fed and the bank of england in a moment. you mentioned the russian ruble. there was a lot of excitement if that is the right word around russian assets at the end of last year because of the nascent trump policy and what we knew at the time about a rapprochement between the united states and russia. things are little hazy on how much that will take place, and does that hold a great deal of value in terms of where the russian ruble goes? right, and looking at

what i said a month ago, the currencies that would be stressed, and the ruble would be in their. when we model it just on oil, we are overshooting. trump-putin is the story. the balance of risks are beginning to go the other way in terms of the movement for the russian ruble. anna: thank you very much, derek. coming up on the program, the the cleveland, fed president tells us the u.s. cannot wait to long to raise rates. what will it take to make her back a hike? australia makes its biggest ever bond sale, but what prompted the boost in borrowing? we are live in sydney. we asked the total ceo about how political risk affects france's

biggest company. this is bloomberg. ♪

anna: welcome back. this is "bloomberg daybreak:europe." the hang seng is up by .9%. the rally we saw is gaining ever more momentum yesterday in the united's eight and seems to be continuing in the asian session. let's get to the bloomberg business lash. of french oilceo giant total has warned that opec and russia will need to prolong the six-month deal to cut crude output if they want to ease the global glut. guest says the oil market is still facing headwinds. >> we're in a volatile market. the markets are in a positive trend and ready to go up.

but you get negative impacts potentially. market.ming back to the our strategy and policy is to continue to lower rates. >> wells fargo has hired -- fired the head of its consumer credit card business and three others. the bank said they won't get bonuses for 2016 and will forfeit equity awards an outstanding options. wells fargo has been examining how abusive sales practices spread before spiraling into a national scandal last year. the other managers did not immediately's respond to messages. in singapore, former currency traders have been sentenced to jail terms for cheating the bank by making false traits. a former data resentenced to 15 weeks.

was given an eight-week sentence. according to their lawyers, neither man plans to appeal. that's your bloomberg business flash. anna: thank you very much. let's turn to the fed. presidentand fed spoke to bloomberg earlier today from singapore. >> we are not there, but my forecast is we will continue to move that up gradually over time. i would become vrable with interfaith moving up. our job is to be as transparent about the rationale for our policy plans. we certainly never want to surprise the market. you don't want to delay too long because then you will be behind. i don't believe we are behind the curve yet, but i think if we continue to make progress and keep delaying then we would potentially get behind. in an environment like this we might see more changes in the forecast and the associated

appropriate policy pass and we might've seen over the past couple of years, but i think that's good in the sense of we want policy to take into account economic conditions. we will have to see how the economy plays out and assess the package when we get more details about what the impact will be. and we have to be nimble about toin terms of being willing change our policy path if we think the economy is if all than we anticipate. anna: later we get the minutes of the last policy meeting at 7:00 p.m. u.k. time. follow all that coverage of the release of the minutes and analysis on your bloomberg. guest is still with us. thingsone of the key being reinforced there is the fed doesn't want to surprise the market with interest rate hikes.

38% probability of a hike at the march meeting. as things stand at the moment, if the fed doesn't want a surprise, march does not look very likely, does it? >> something will have to happen between now and the march meeting for that probability to ship. a lot of times i would look at the minutes and say they are not that important, but i think tonight's minutes are very important. anna: help us get excited about it. >> if you look at the statement from the meeting, it looks like an important change in terms of increased confidence in reaching the 2% inflation goal. before it was likely to. they changed it to will. you might think it's pedantic, .ut it will have to do it's a clear indication that the conclusions from that meeting are that the committee members are more confident about inflation being reached.

anna: i will bring up the chart of inflation i was going to show you, one of the fed measures of inflation expectations. you can see the u.s. 10 year yield on here as well, this is ticking up a rate little bit. how much clarity will we get in the minutes and how much should we that. how much is trump related and how much stands regarded of what he does -- regardless of what he does on the fiscal front? >> one of the messages may well be that this is all regardless of. we've had comments from fed officials indicating that. a lot of what is in the inflation figures at the moment in terms of action inflation, that is behind us. that's the real economic conditions in the u.s. economy. from that perspective, a good betion of the message will

we are here anyway because the economy is improving. on top of that there is the trump element. for sure the fed will be quite cautious in terms of what they will indicate in regards to what might,. but it will be on top of what they already expect. that is the important message from the fed. at policies that could be enacted right the trump administration, what do you expect, or where are you focusing your attention? is it how the dollar will move based on those factors? we have the euro at parity and a little below at the first half of this year. we don't have a border tax adjustment in our fx forecasts. certainly if that was to materialize we would have to raise the dollar forecast by

perhaps 5% to something quite significant. that, when youd take an estimate of congress, it looks like it's going to be something that is very difficult to do. our senses that a lot of the rhetoric eating used in the trump administration is in terms of the negotiation strategy. sitting down having these bilateral conversations, if they have the border tax hanging in the background as a threat, that is perhaps the strategy. in terms of getting it through, it's going to be difficult. tax: if we did see a border and you did have to put up your dollar expectation, how long before you have to put up other expectations? it depends on the politics, i guess. >> it does. but the u.s. is the biggest

player in terms of consumer spending, that's the crucial component in all of this. the u.s. does have some leverage if it did go down that route. anna: because it boost consumer spending? and creates jobs in the u.s. economy? thet could rapidly diminish current account deficit. in that sense, the supply of dollars into the global economy shrinks even further. that's the story that was starting to play out last year where the expense of swapping into u.s. dollars was rising as the year went on. anna: thank you very much, derek. he will stay with us here on the program. it's 7:26 in paris and berlin. highlights from your day head at noon. the south african finance

minister is set to deliver the nation's annual budget. theresa may faces questions in parliament at 7:00 p.m.. we will bring you those fed minutes. this is bloomberg. ♪

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anna: welcome back. this is "bloomberg daybreak:europe." let's get some breaking news from germany. the german-based company given as their numbers. point 18 billion euros against an estimate of 2.0 7 billion. that looks to be coming in ahead of estimates. they say they're confident of closing the monsanto deal before the end of 2017. this is a business that is dominated by the need to raise more cash and finance their

takeover of monsanto. they need to stay on a solid financial footing to refinance a $57 billion loan for the takeover of monsanto, the largest transaction in the company's history. they are seeking approval trump monsanto, prompting quite a stir around protracted antitrust in the u.s. and europe. away from the months and so side of things, there is the drug business as well. weaker over-the-counter medicines and agricultural product trends, we see that in these numbers coming out ahead of estimates. we will speak to the ceo of bayer live at 11:35 a.m. london time. the new edition of daybreak is now available on your bloomberg and your mobile. let's look at some of the

stories that it made it into today's edition. we start with the u.k. political agenda. the cover story is theresa may's brexit bill, clearing his final lords.in the house of evers expressed discomfort with the blank check the current bill hands to the government. the next story lords. is the minutes from the last fed meeting, they are out today. we discussed that during the first half hour of the program. discussions on the battle -- balance sheet and the possibility of a march rate hike and how much the outlook is dependent on what donald trump does or does not do fiscally. finally we focus on our exclusive interview with the ceo who says opec and russia will need to prolong their six-month deal to cut oil output if a plan to trim the global industry. the head of global markets

research is still with us here in the studio. let's talk about the u.k., we have this nice backdrop of the house of lords peer-reviewed taking place here. the pound was fairly strong at the start of this week, up .2%. going on in is europe, i think the way to play the pound is, the pound is strengthening versus the euro. we are still expecting euro sterling to move down to around the 80 level. heading into the french election. >> i think so. to ourn arguing customers, we think the pound will start trading more like the u.s. dollar. we've had the brexit and therefore to our u.s. is stronger now with trump in the white house as

well. we could go back to the way we were trading flyer to tony blair and when labour came to power back in 1997. back then that's the way the fx markets were. dollar,d more like the less sensitive to movements of george martin versus dollar. now i think euro-dollar moves are going to be better tracked by euro sterling with cable remaining less sensitive and therefore more sensitive. if there is this belief of the u.s. and the u.k. being on the same point in the economic cycle, which is an incredible point to make, and then the perception of a tightening of relations between the u.s. and the u.k. anna: the ecb is still carrying on with its quantitative easing plans at the moment. his mark carney definitely neutral?

yesterday we saw him declining to confirm whether officials at the bank of england are still committed to that neutral claim. , in termsk of england ad aur positive view has re-tweaking of the assumptions in regard to employment. that's pushed out the time and potential of when the bank of england will move. i think sooner rather than later the market will come back to the idea that the economic fundamentals are stronger than people have anticipated post >> it. that means the august move from last year, the rate cut, perhaps that should be reversed and we should start to see the rates market price that in more seriously in the second half of the year. that's part of our positive story as well. anna: thank you very much. let's check out what's happening in the large markets now.

>> we're seeing gains in asian stocks. the industry's rising. the bloomberg dollar index is pretty much unchanged. a little more movement in treasuries for the 10 year yield. in the asian space, you want to keep an eye on australia after the government's biggest ever bond sale. oil up for a fourth day and some weakness in aluminum and steel in shanghai. yesterday we saw the s&p 500 reset an all-time high as the market reopened after presidents' day. asian stocks taking their cue from the u.s.. the msci asia-pacific index rising the most in six days and trading it is highs level since july 2015. comments from the cleveland fed president, saying in an interview to bloomberg that they don't want to deprive markets and they have to be

nimble. seen a slight increase in the probability for a rate hike up to 38% now. dollar-yen therefore still staying in that range between its 50 and 100 day moving averages. the dollar-yen pretty flat. we're looking ahead to minutes from the federal reserve later which might give more movement in that trade. we want to end with oil, up for or day. -- for a fourth day. it's about increasing confidence that opec's supply curve will outweigh gains of u.s. stockpiles. anna: australia's government of 11 your debt notes in its biggest ever bond sale today.

the third time and listen six months australia has set a new borrowing record. the government has been wrapping up issuance as it struggles to rein in its budget deficit and seeks to finance a debt pile that could top 600 billion australian dollars in 2020. withphil reynolds joins us details. good to see you on the program. what is prompting this boost in borrowing in australia? despite the ramp up in some commodity prices recently, australia suffering the effects of a transition from what was a record mining boom. it doesn't really have enough income to cover the welfare programs, the spending that's baked can do what governments plan to do. it's also facing its own populist attack from the right. they're starting to rein in their budget deficit and that's

why they are picking up borrowing at such a rapid pace. anna: demand is also at a record. pimco estimating more than 20 billion australian dollars. why are investors willing to look past the global bonds slumped and worries that australia could lose its aaa credit rating? somethingia offer that is still very rare these days and the global bond market, and that's high rate of debt that offers a positive real yield. after adjusting for inflation. australia's inflation-adjusted yield is about 1% for a tenure bond. 5% that yout 2.40 reference before, is actually lower than the inflation rate of the u.s.. yield just turned positive and lots of german debt is still negative in nominal terms and inflation terms as negative. that is very attractive,

japanese investors have been boosting their purchases of withalian debt options smaller, regular debt sales. there's a chance they played a strong role in today's report. anna: thank you very much, garfield reynolds, joining us from sydney. derek is still with us here in the studio. something that supports the australian currency as well? garrett: yes, it does. it's also a play on reflation as well. ,nd the fact that china sentiment on china has improved as well. in terms of g10 performance year to date, the dollar is the best-performing g10 currency. it's being supported by all of those factors. anna: we have a chart that shows

the aussie dollar up against iron ore. asking the question, will a aussie climb above its trend or will iron ore come crashing back down? some suggest what we've seen in isn't quite in keeping with history and one needs to catch up with the other. >> are short-term models looked at -- suggest were little over strategy here. if you want to play the reflation story, you have the yield story there as well. i would be more inclined to look at it as perhaps aussie versus new zealand. the aussie kiwi in terms of the reflation story, if you look historically a chart of 20-25 years, during times of positive global reflation and growth, the aussie dollar tends to outperform the new zealand dollar. that's a safer place to play it.

and of course in terms of what we might get terms of stories on tax policies from trump. on his everynging word with regard to trade policy. around trade in protectionism, i have a chart that shows emerging-market shares beating , but it of the world wonder how much this applies to your world as well. back in november, if you remember, we had this very significant first leg up in 10 year yields. wherenly in circumstances you have sharp rises in u.s. rates, then those emerging-market currencies that have financing issues, there are certainly higher risks in those currencies. since then, of course we've seen

the 10 year yields generally stabilize these higher levels. that's allowed for these fx currencies to outperform. i still think those risks going forward, obviously the trump policies are one story and the yield story is another. you could see some reversal of those moves. anna: thank you very much, derek. bloomberg customer, you can watch the show using tv and follow all of our charts and functions and reach out to the show directly with the link at the bottom of the screen. coming up next, with presidential elections looming, how political risk affects the

biggest companies. then we had to amsterdam, could the netherlands be the next election shock? and has brexit brought a hiring freeze? a hiring director. this is bloomberg. ♪

back, everybody. 1:47 in the morning in new york. flat is the expectation for equity markets. depot helpingme the s&p touch another high. >> airbus said its earnings fell 3.6% last year before one-time items dropped to 3.9 6

billion euros, still above analyst addictions of 3.8 billion euros. as a late surge in aircraft deliveries fell to offset cost from wrapping up output of one model and engine glitches that curved handovers of the narrowbody plane. wells fargo has far the head of its consumer credit card business and three others. the bank said they won't get bonuses for 2016 and would equity awards an outstanding options. wells fargo has been examining sales practices spread through branches before spiraling into a national scandal last year. .reeman declined to comment the other three managers did not immediately respond to messages. in singapore, former currency traders have been sentenced to jail terms for cheating the bank by making false trades. former senior officer was

sentenced to six weeks and another given eight weeks. according to their lawyers, neither man plans to appeal. that's your bloomberg business flash. francis two months away from the first round of its presidential elections. john micklethwait sat down with the ceo of total and asked him if he could support candidate marine le pen. winners is one of the of the whole world. -- thisot in favor trend of thinking it's better to be inside their borders will lead to catastrophe. i cannot be in favor of it. , but init is important countries like france and germany and the u.k., we have a

certain responsibility with the emerging world. they don't think about anti-globalization. there are less poor people in the world because of the global world. we can't be selfish and just want to protect ourselves. total is in fair of open trade and fair trade in the global world. everything is possible. >> surely you cannot support marine le pen. she is not in favor of anybody. i think the euro is a powerful currency. i also have to recognize [indiscernible]

for globaltion leaders. i think it's back to what is our commitment in which we have grown our company. company.global we have people around the world. i think we have a special responsibility and we need to give an answer to that. as a ceo of a prince company -- -- of a french company. >> theresa may has said if you are a global citizen, your actually a citizen of nowhere. do you think that applies to multinationals? do yu think all across europe, people are getting angry with multinationals? i am french in france, i am

german in germany. total is a french major. i public-private company, for sure, but i'm international and i should recognize that. if total is truly a global company is because i've been able to build this in the past years on the french base. we have to assume responsibility for that. of totalt was the ceo speaking to our editor-in-chief john micklethwait. the netherlands goes to the polls on march 16. the freedom party is riding high in the polls. joining us from amsterdam to talk more about the political events ahead in the netherlands

is the head of survey research at central data. thank you for coming to talk to us. give us the latest data you have on the heights that could be reached in the vote coming up in march. ,> what we see right now together with the liberal party, they are ahead in the polls. we have our own poll, we have the panel, we have a special scientific quality panel, and in what isel we ask people your intention to go for voting? because not everybody is going to vote. and we asked people to give us an indication of what is the chance you will vote for this party? you have to realize at the moment we have 28 parties where

people can choose between. about 13e 28 parties, parties will be in the parliament. then from the 13 you have at the moment in the polls, two parties ahead, at the moment about equally large. it's about 15% or 16% of the people who have their preference for those parties. you mentioned the large number of parties that voters can vote for. but many of those have ruled out doesind of coalition, what it mean, how unstable a coalition are we going to be looking at? >> that's very difficult because the liberal prime minister indicates he would not want to cooperate and a lot of

others don't want to cooperate with his party either. of probably have a group , andd 15% of the voters i'm not sure, but he will probably not be in the government. those voters obviously will not be happy with that, but on the other side, there's a group of 75% of the voters that somewhere will be in this government. he does not get into a position of power, what are the chances that he moves the conversation or and a populist direction? to some extent that is already in the netherlands, but even from the sidelines he can influence the debate. ,> he definitely does, i think talking about islam and immigrants now.

this was very different years before, but this is the case in a lot of european countries. ,o he does influence the debate but also other developments influence the debate. we talked very different about climate than we did 10 or 20 years ago. of course he is an important factor, but he is definitely not the only one. anna: who is most likely to vote for him? it used to be the elderly and lower educated. at the moment, the people in favor of him is a larger group. it's not so easy to target anymore. younglso popular among people under the age of 35. --y popular anna: that adds to our

understanding, thank you very much. thanks for joining us from amsterdam. we will get numbers from a recruitment company and talk about brexit. this is bloomberg. ♪

anna: bloomberg weeks with to about thetotal's ceo price of crude. >> would be a is coming back to the market. we will [inaudible] so our policy, our strategy is to continue to lower [indiscernible] fed and focus. the central bank does not want to surprise -- a surprise market. we look at fed minutes later today. immigration takes center stage. the trump administration outlines sweeping plans for deporting undocumented migrants.

very warm welcome to daybreak -- bloomberg daybreak: europe. i am anna edwards. 7:00 a.m. in london. a number of corporate to reporting. a egg week for the banking sector. let's go straight to those and focus in on what they have to say. profit 973 rejects million getting an estimate -- against an estimate of 1.3 billion so that looks to be light on the q4 strategy pretax profit line fully underlying profit looks to be ahead of estimates at 7.9 billion. estimate was for 7.6 6 billion. they are talking about underlying pretax profit at 7.9 billion, a special dividend and half a pence a share. the dividend at 2.55 pence a share.

a big focus on the dividend. held by many investors over the years as a result of that dividend. in ordinary dividend is 2.55 and a special dividend at half of pence per share. getting confirmation there across the bloomberg. missedy pretax profit 973 million pounds against an estimate of 1.3 8 billion. this is a company we are looking for an update on ppi. the company has taken 17 billion pounds of provisions since 2011 on the subject of ppi. they have been trying to fight against the record low interest illuminatingent by jobs, expanding at a higher margin lending with the acquisition of bank of america and the mbna credit card business in the u.k. when it comes to the detail here, we will see the government getting out of the stock where it bailed out the company at the

height of the financial crisis. u.k. replaced it as the largest shareholder last month. that is the retail around the lloyds story as the numbers come through. that is the banking story. we will get two more of that in a moment. we are getting money -- numbers out of hayes. giving us an update on their numbers. 's.ting the basic epf i will bring up the right page on the bloomberg. they are talking about net fees net fees% rising 17% to 465.5 million pounds. a rise of 3% on a like for like basis. pretax profit for the rising at 17% also. we are going to be speaking in just a moment to the finance paultor over at hayes, venables. futures suggest they will be higher at the start of the trade. we had a strong handover from the asian session, certainly the

hong kong market has done nicely. let's look at the risk radar. the dollar in focus because we get good news later. kept in a tight trading range. how much detail will get on trump's policies and the fed, assumptions around fed policies. and talking about how the fed does not want a surprise market. we will talk about that through premiering -- programming today. .2 of aoil price up percent as we heard from the secretary-general at opec that they want to aim for 100% compliance. let's get the bloomberg first word nude -- news with juliette saly. juliette: hong kong's ormer chief executive donald song has been sentenced to 20 months in prison for misconduct in office. on friday, he was convicted for failing to disclose a conflict of interest that arose when he was negotiating rent for a luxury apartment with a landlord who was applying for

broadcasting license. the sentence kept a study -- cap the stunning downfall. through a series of financial shocks. the u.s. government has outlined a sweeping crackdown on undocumented immigrants. donald trump's administration will seek to swiftly deport many more people without court hearings and target migrants charged with crimes or thought to be dangerous. not just convicts. john kelly also ordered the hiring of 15,000 more border patrol and immigration agents and the building of the mexican border wall. emmanuel macron says he tots talented people to move france after brexit. he was speaking in london as he met theresa may and sought to shore up support from french voters living in the u.k. his visit came as one poll showed him flipping back into third place in the country's tumultuous race.

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 . the shanghai composite closing out the session higher by around .25 05%. we have seen this strong rally coming through and property developers listed in china and the chinese property developers listed in hong kong. this after we saw the new home prices down out of china showing that we are seeing some of those property curbs start to work. the hang seng index up .8 of 1%. but by the property developers but also coming back after that negative day we had yesterday and -- on the back of hsbc's earnings. a flat finish on the nikkei. it was a tumultuous trade for japanese equities. we had the answer to give a little bit back against the dollar. in australia, the asx 200 by .251%. aussieia sold 11 billion

dollars worth of bonds. rosneft.uick line on at 300 billion russian ruble's, dropping in the last few minutes also. the u.k. risk crew -- recruitment specialist hayes released their numbers. let's get to the finance director, paul venables. very good to see you this morning. let's talk about how the business is doing overall and then we will delve more into the u.k. the vast majority of your markets were positive. paul: we started with a shock post-brexit. over theiscussed that last couple times a have been on the show. we have got a diversified business. we had 18 countries, an all-time

record and we delivered 100 million pounds profitability. the first time we have done that in years. we pleased with the results. net: talking about the u.k. fees are down 10%. operating profit down. talk about the sequential performance. last time you said 10% down in the u.k. but sequentially that was the same as the previous quarter. to improve.turning there is a massive difference between the private sector market, a massive shock last june. we saw an almost collapsed in levels. our activity levels fell 20%. i have seen that before, eight or nine years ago, it was not pleasant. businesse of july, the was sequentially stable. we lost 10% of our u.k. business. the exit freed in december was -7%. we saw that continued.

the positive part for us is the contracted business and we classified the return of what is happening in february. we have a good solid start in the take up in the private sector continued. anna: does that lead you to a more positive look -- outlook for the u.k.? all: iambic confident we have seen the worst of brexit. for us that is the frightening part of our business and the beauty of it. we are up front. we have three to five weeks visibility. we had a massive shock in july. since then we have seen private sector businesses be logical. a lot of focus on cost control. a lot less new incremental investment going and so we are seeing a lost -- a lot less large investment projects. our business has been stable and we start to pick up in the private sector.

another part of our business is the public sector and that continues to be tough. we are not saying we have a rollback in the business. a little bit of improvement in the next six months is probably the most logical framework. the positive is that is 25% of our business given 75% is doing well. anna: some different percent is outside the u.k. tell me how you are doing in europe. theof the contenders of whath presidential race, are you seeing in parts of the eurozone, are you seeing compensator he hiring in places where we are not seeing hiring in the u.k.? paul: just around the edges. what we have seen is most french institutions set up the corporate structure so if they have to move jobs they can do that. we have had high-profile announcements of certain companies saying they are going

to move. we have seen little of that so far. there was a lot of attractive features to it. all banks have to be ready for what the worst might bring after brexit. what we're seeing across europe is the continuation of positive stable and it may well be in 1.5%., we have a gdp of we have good conditions in germany. we were up 11%, the second largest beach this globally. we are up 18% in france and the conditions across europe at the moment for our business, parts of which are driven by confidence, for corporate's to make investments is good. anna: you talked about how you gdp into growth. does that come from grabbing market share? growing ande been we do permanent recruitment, we

have had this contracting inventory model that has gone well across france and germany. you have -- half of our european countries thatom have done recruitment. if you can find better people faster and i pay you when i issue or use your service and that continues to drive growth. we have a very good next six months. anna: thank you for your time. groupt, lloyds banking out with their fourth-quarter results. we will break down the numbers. this is bloomberg. ♪

anna: welcome back. this is bloomberg daybreak europe. let's turn our attention to the banking sector. lloyd's purporting a fourth-quarter earnings. joining us now our u.k. banking reporter steve morris. he is the cio of embarq group

with us on set. lloyd's is missing this headline pretax number, what was the story there? guest: they had a slight slowdown on their market with a little bit of uncertainty post-brexit. many people focused on the outlook. necessary for the result they posted. and still paid 2.2 billion dividends. and they did not take payment protection insurance. anna: it makes a change of 17 billion pounds worth. guest: from an initial look at the figures, the ceo had his pay cut 34% this year. he might not the quite as happy as everyone else. anna: good morning to you. weigh in on the banking sector. we are seeing an increase in the ordinary dividends and a special dividend at lloyd's, the dividend used to be a lot of the story at lloyd's. -- it did.ed to

it is an important factor. hsbc said the same thing yesterday about the u.k., some delay, some troubles. make not easy for them to money. these banking models change. are traditional banks again and more utilitarian in the way they approach things. it will be much more difficult to make money. anna: back to the basics of banking. talk to us about the cost income ratio they manage to achieve. guest: they have got the best income ratio, a lot of the banks are struggling to bring this down so they are cutting jobs, they are cutting businesses which means there revenue fold. they had to take out costs faster than that. they rip -- referred [inaudible] ultimately if you are looking to invest somewhere you do not want

something that is shrinking down. you want something that is looking for potential for growth in the u.k. it is not that easy to do. negatives ande that way on the stock. paul: they have a much better reach in the medium term. lloyd's is very domestic tank. -- has removed itself from all other activities. you have to place your bets that hsbc medium-term is a better bet. anna: it is a domestic bank and looking at the higher-margin at funding for businesses. that was the story with the acquisition of mbna, wozniacki to mark -- wasn't it? guest: i think barclays is happy about this. they can do more things and not appear to be too anti-competitive. it will be interesting to see how the ceo manages to integrate this. lloyd's is doing pretty well. he may have had a pay cut but he

has been there a while. he may be looking at doing jobs elsewhere or putting up the mission encompassed banner and moving on. we have had none of that so far. it cannot be as easy time to be -- an easy time to be a ceo. anna: thank you for your thoughts on the banking sector. we will talk about oil next. total is not showing away from the climate change debate. --an exclusive interview ceo the ceo said climate changes affect. john micklethwait sat down in new york and asked how he expected the trump administration to tackle climate change. >>, changes affect. it is a question of science, it is a fact. 195 countries have adopted a treaty. the treaty has been put into force in less than one year. the global community is

feeling we have to do something. i respect them. the policy maker can do it. about climate change, that has been the emergence of shale gas which has replaced [inaudible] they prefer to invest in gas and coal. just because it is more economic in the u.s. and the president will not change it. difficulty with competition from china, is that an area where you would like to see more protection for american companies? guest: the u.s. and europe decided to put some barriers to her three years ago. lance outside of china, in vietnam, philippines, taiwan. we had -- i am not a strong

believer of tariffs and trade barriers can save this type of thing. what is -- what we should observe is more the competition is fair. competition should be careful. what is happening is that the today isolicy subsidizing a lot of chinese companies. it is unfair competition. ruleslve it using the wto and going to the wto panels and saying this behavior is not fair and we should correct that. >> would it return as a reliable profit eventually? >> it is [inaudible] i believe has a good management, strong management. very dedicated. we are committed. on havethey are focused to manage their cash.

adapt [inaudible] solar on the roof in the u.s. and good market share, we are supporting them and hope we will be able to continue. anna: talking about the renewables industry. in in line with estimates. full-year net profits a touch ahead of the estimate. against an estimate of 2.6 billion. we will be speaking later on to the ceo of [inaudible] you can see the times on the screen. that conversation between john micklethwait and the ceo of to tell -- total talking about renewal bulls. -- for nobles. -- renewables. i am struck by how many ceos tell you this has a life of its own and a momentum that goes down the white house.

energy is going to be under pressure if you look in the oil sector alone. also efficiency. that is also changing. let's be honest. do diversify and address themselves to a degree and the carbon footprint will change whether trump is in the white house or not. china is one of the biggest single investors. trends are not going to change. if you look at china and the air pollution, about the practicalities of how they need change. they will have to do something else and they are doing something else. .hat trend will continue it is a global phenomenon. people are getting the message. individuals are behaving in a better fashion. anna: is that investable through bigger energy companies that are seeing the light in that sense and moving on to other parts of the energy spectrum, is that investable in other ways?

patch are having a purple . solar power, it was 6% conversion, it is over 60% now. you can operate in daylight. it was -- decarbonization is also efficiency. that is the other point. all these things need to be factored in. the oil price has a limit. the priceasons why [inaudible] and that will stop capital investment. it may be cheaper people are looking elsewhere. what is keeping the price in check right now, the system uti holding $50 a barrel. rigs going up. the amount of production there. as a result, where do we go west mark paul: -- where do we go?

or 52 yearsas 40 ago. even their price point is coming down. there is this competitive force coming into play. that is not going to change. there will be, the emerging markets have been in relative tour poor. they will pick back up. and improve as the cyclical change happens. the likes of brazil, they are not recovering. when this happens physical -- physically, there will be a change. the longer-term trend has to be negative which is why the ceos of other energy companies are saying how do i do this? anna: energy prices will matter for the future. paul: it is a big factor. anna: where do we go in that inflation story as we see these energy prices, they have been picking up and now stalling. paul: you can see -- the next theumer move in the way

world gets better, energy will not cost free much in the future. the potential for conflict. go to 30 years forward. there is all sorts of ways in which this world is going to change in terms of the energy usage. it was seven or 8% of gdp. it is 1% or 2% and falling again. becomes less a preoccupation of policymakers. paul: to a degree. anna: what about levers on the bigger inflation picture him a inflation is going up. paul: not massively so. you may have cost inflation, good look pushing it through to the headline level. a costmains, is it problem or a pastor problem, good luck passing it through. there is no evidence, we still cannot generate a cpi number. anna: thank you. he continues the conversation on bloomberg radio. daybreak europe, bloomberg

markets, the european open is next. we will be speaking to the chairman during that program. this is bloomberg. ♪

♪ guy: you are welcome to bloomberg markets. it is the european open. we bring you the first trades of the day. here's what we are watching today. no supplies is. loretta masters says the central tank does not want to blind side the market while philadelphia [inaudible] three hikes in 2017. investors will look at the minutes later today. not totally convinced. the ceo of total tells bloomberg in an exclusive interview he does not