clues seeking food from our type. manus: more than 60 french politicians say they can no longer support the presidential candidate at the investment scandal engulfed his campaign. chinaawmakers from across to send on beijing. ♪ anna: a very warm welcome to

"bloomberg daybreak" europe. i am anna edwards. manus: i am manus cranny. are you exhausted? have you already spent your possessions on affects? . the probability event of a rate hike has gone from 30% to 90%. what has happened to the dollar, it has faded. butd glory this morning passes the moving average. band, we aren a trying to make our lined up what we want to move, fire, or aggressively trade. the best winning streak since may. anna: we wait for janet yellen to speak. putting for thoughts. let's put up the risk radar to show you where we are. and japan dropping after three days.

japane the number out of and an increase since december 2015. that is being overshadowed by the biggest questions. appetite how much anybody has to continue the global rally. we saw stocks retreating from those highs. raw materials in retreat which led the stocks down. markets are talking about a fall in rick -- attacks. you have the total volume however, 40% below the 100 day average. the bottom line is this -- do you believe in stockpiles in the united states america is going to trump what opec does? a volatile picture in the

oil markets. you mentioned we are as a three-week low. earlier this week we arrest a seven-week high. it seems these two competing andors still competing driving more movement. breaking news if we can get to it, numbers coming through this morning. a host of breaking news in the insurance vector. operating profit 1.4 billion. andng a new ceo for germany giving us the assets under management at the end of december. 204 billion swiss francs. manus: welcoming any global move. good news for life insurance companies. thank you.

jeff sessions has removed himself from investigations into russian influence in american callscs to it comes amid from democrats to resign over his conversation last year with a russian ambassador. president trump says he has total confidence in his attorney general while jeff sessions says his discussions were not related to the election campaign. >> i never had meetings with russian officers -- operatives about the trump campaign. the idea that i was part of a continuing exchange of information during the campaign between trumps surrogate and intermediaries for the russian government is totally false. donald trump has set his defense secretary will lead a great rebuilding at the u.s. military.

uss gerald ford whose construction is delayed and over budget. we will have the finest equipment in the world. planes, ships, everything else. soone going to have very be feisty movement in the world. a marine le pen victory would spend dust spell the end of the eu. >> marine le pen whence it is game over for europe. it is impossible to have a leader of one of the most important countries of the european union as somebody who is against the european union. japan's inflation rose for the first time in 14 months,

offering some hope that price gains may continue inching toward the target. household spending fell 1.2%. three times the forecast drop. higher inflation is at the heart of the environmental revival efforts. and you and i'll -- higher oil prices and a weaker yen. friends all fillon's woes deepen as elected officials this own his campaign and police searched his home yesterday. the string of departures including campaign treasurer's gerald boyer and bruno. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. stories ond more bloomberg at top . we are rounding up most of the agent -- asian equity session. the nikkei down by .5%.

we can is coming through in hong kong. its declineending ahead of the npc in beijing. australia really hurt today by the weaker muscle prices. a huge slowdown and travel related socks in korea. really hit hard down by 13%. reports that china has proposed a curb to south korea in terms of trying to crack down on travel path -- travel packages. nintendo swiss consul, shares of 4% in japan. extending losses today. have a look at this shot as well. we know that the hong kong rally has been going very strong.

the hang seng itself has had a great start to the year but that has started to teacher out. we are seeing mainland inflows into the hong kong stock market starts to dry up. the hang seng up 8% over the course of this year. anna: thank you very much. joining us from hong kong. he packed week. resulting in a drastic change in the rate expectations. three crucial voices, all of which carried the same forces. manus: today we hear from a voice that really matters. janet yellen. she delivers her economic outlook at 6:00 p.m. u.k. time. ahead of that the market is going to be focused on a shot. life tv has not been kind to me. let's have a look at this. we have of course a graphic version of this.

into the studio head of strategy and economics at ubs. we are you exhausted? we arrest 90%. nail in afinal verbal rate hike from janet yellen customer -- yellen? onehe message has been explaining why the market is moving this direction. this not a done deal. good in thet of u.s. data but there are some reasons to be careful as well. >> why do you think the market adjusted so quickly? we have heard commentary from the fed for some time.

something this week and who said them, maybe the fact that there were voices in there. something about that really captured the markets. they have sounded as if they are getting ready to vote for a height -- a hike in rates. economy has been doing quite well for quite some time. the fed is keen to get rates higher. in aare keen to do so optimal way, not get them fire as soon as you can. ultimately in a way that allows you to get them well away. manus: the one thing that struck me as we read your note. consumer confidence is all taken off in 2016. that versus some of the consumption numbers, you have a different one when you look at the construction numbers. you are more irked. early data fory

the first month of the first quarter of the year. real consumption, it looks like, was pretty significantly weekend in january. we think it is tracking around 1.5%. that is ok but not stellar. if you were that consumer confidence hasn't shot up. there been moves since the president was elected. at this point we don't have a lot of clarity about what the fiscal plans might be. we just have the framework. as those plans are put into action it may be disappointments ahead. it brings consumer confidence down a little bit and campers the optimism we see. whether that is enough to derail or trigger a much hike we will have to see. we are pretty stable as

for the overnights on u.s. tenure 3% by the end of the year? we think the yield will end of the year not far from where they are now in we think growth is going to be all right. we think the fed ultimately will raise late -- rates. we question whether those hikes are employed and ultimately will materialize. we are pretty mutual on those. manus: thank you very much. we will bring you coverage of that speech by janet yellen. can followustomers it all on key live . anna: annual u.s. monetary policy -- a wealthier host of speakers. the keynote will be speaking -- given by stanley fischer. jeffrey lacher of richmond and john evans are due to appear. to 3:15 p.m.. break, it is

trading day. the company is now bigger than deutsche bank. it's $28 billion market cap. anna: china, 3000 kilometers dissent on beijing is the president lays the groundwork for a political reshuffle. ahead of the national people's conference. we speak to data on the very latest in the presidential election. this is bloomberg. ♪

♪ anna: welcome back, this is "bloomberg daybreak" europe. it is 3:16 in tokyo. the dollar against the yen has more militant than earlier this moment -- more movement than earlier this morning. let's get the bloomberg business flash. here's juliette. the ceo has said he

sees as the big holy grail in asia. speaking exclusively to bloomberg at his companies senior management conference in central and. >> as you know, it is to try to aderstand and deploy successful on short strategy. we are continuing to work through joint venture partnerships so that we have find the right model. management will be more broadly accepted and recognized. juliette: most companies are planning to continue intense negotiations through the weekends with the aim of announcing a deal on monday. the deal would create europe's second what this -- second-largest automaker. manus: thank you very much.

was day one for snap. it went pretty well. that is the understatement. the biggest ipo since twitter. the stock rose 44% from $17. that is what you call coaching -- ca-ching. anna: translate that into various european linkages. let's get more with bloomberg economist tim and taipei. snap had a fantastic first day 10. what significant does that hold? >> compared to a few european it names. it was not bigger in terms of profitability. clearly, there's a lot of hope and dreams tied up into the snap

ipo. 44% first-day close sounds fantastic. put it in context, if you look at the average of internet ipos in the u.s. over the last 10 years, those are priced at or above the range with an average of 49%. those broughton day one think it will go further. what does this say for the others who have had up momentum and desire to get out there and get a string of other highly valued startups? they want an exit opportunity. this sets the stage for them doesn't it? >> it does absolutely.

spotify has two -- part of their recent funding stipulations, they have to come to market some time. what we are seeing with snapchat is there is a lot of demand up there. to buy intonts ipos. a lot of supply and -- not enough demand side and supply the ipos. anyone who comes in the next year or two should do quite well compared to what happened to snap today. anna: thank you very much. a fascinating story. about u.k. politics. -- accusing her of sacrificing a living standard in scotland. says: in recommence eight

the departure from the eu will take more than two years. brexit negotiations will take a long, long time. two years is not enough. one facing out on many fields and it would be very complicated. on the british side, because at the end of the day there is not one brexit you theresa may is wrong when she says brexit means brexit. there are many brexit. head of u.k. economics with us here. this is something you're watching quite leslie. what story does it tell us? >> it was the focus earlier this week because they sold out 7 million guilds in january and there has been some demand for u.k. assets might fade as a result of the referendum. we put that in a wider context

and say nothing to worry about you very volatile and the back end of last year they bought a record amount. there is no sign of a drop in command from overseas investors. what an eye by working at is the convergence between u.s. 10 year bonds in the u.k. and in the u.s.. u.k. over u.s. is looking very stressed. do you agree that u.k. over u.s. is incredibly stressed and the end of qe may change the direction of this spread? >> a remarkable charts. if you look at the pope before 2016, these were almost hand-in-hand. they have completely decoupled. two basic reasons for that. two main drivers. one is brexit and the referendum and all that, where the first

rupture came from. the second is the outcome of the u.s. election and the stuff we touched on about the possibility of large fiscal stimulus which is where they shot higher compared to other markets. this spread is a historic wide but there are good reasons for it. we think they stay around this level. end and that is already priced in. in our view unlikely to be the last we hear of the story. we think the u.k. will slow significantly this year and we'll have to enact further monetary easing. anna: the next move is not a rake -- rate hike? >> is going to be an easing of policy. what does that do for sterling?

you -- you need a transition cocoa. -- wet heard from the just heard it was going to take longer than two years. it risk proponent is that drops below 120 and there is no big transition. currency, i the think the conversation is shifting. >> we think sterling has started 113 >> relative to other economies as we expect to see. a lot of talk about how the so far referendum has not had a got in cap on the economy. there are optimistic noises being made about how this should be negotiated smoothly. we don't think the market is telling you that and we would agree with the idea that two years is a very short timeframe to agree on such material and

radical changes in relationship and the closer we get to that deadline the more the markets are going to worry, confidence is going to sour. we think that that is a likely course of events. anna: how do you look at political risk as we approach the french election? a risk reversal rate, the relative movement can put things around. it drops to a record in february, not a new story, but dropped to a record. more risk to this french election since 2004. this is a big item. >> there is reason for that. friendly, we have seen this before. a couple of times recently where the unexpected happens and if you look at any gauge at the likely outcome, it consistently chose that the shots of marine

le pen winning are low but not insignificant. were there to be another shock it would dwarf everything we have seen. manus: a binary outcome is possibly helping us. she is still not ahead. this spread, is that the benchmark we use or do we use currency as most volatile elements? >> for us it is peripheral spending. if you saw expectations mount that somehow things will be different and she might help somebody have a real chance of winning, peripheral spread is where you going to see the most distressed ahead of time. then the currency becomes very vulnerable anna: it would not be france, it would be italy, spain, all those other markets we talked about. 2011, 2014. thank you very much. we're going to talk about china. the key economic type -- and

what we can expect from the congress. decide theogether to future plans. this is bloomberg.

♪ anna: welcome back everybody "bloomberg daybreak" europe with hong kong. moves lower in some of these key equity markets over in the asian session. we are getting breaking news, let's get to that. japan's pension fund posting a therd $92 billion gain in october-december quarter. and whatund this story they are able to invest in and what they are not. saying,oment a are 15.2% gain on japanese stock.

for now equities added 16.1%. manus: on the bonsai they have lost 1.07% going into negative territory. they gained 8.82%, the same story as you saw in sweden the other day. rocking it out on the equity exposures. that is japanese pension fund, all very well for them. nowhere to go, you know where to go. cover story? anna: all about the fed waiting for janet yellen and stanley fischer, a roundup this week. don't miss the economic outlook at exit clock p.m. u.k. time quite like that

image. the question we have been asking is are you exhausted? the fed volume, 1500 contracts, normally they trade for million in a day. the market is more cautious going into that. at 9:30, that closes a.m.. inbably jogged along february 254.1. anna: daybreak focuses on the pimco story. $75.4 billion in assets. his income fund, surpassed the federal funds considered the world's largest. manus: markets are far from the heart, how is the dollar looking? reporter: i will come to the dollar and a second. good morning. the global equity rally has taken a bit of a pause.

it has carried through to the asian session, the index lower. after threeg losses days of gains. australia down, singapore lower, south korean stocks tumbling the most since november on reports that china ordered travel agencies in the country. he bloomberg dollar index is losing momentum after five days of gains. you can see a number of these currencies weaker against it. the 10 year treasury yield study around 2.48%. day slides.a three nickel of 1.3%. a mixed picture with metals. the yen actually gaining against the dollar today. it is weaker on the week, down 8%. you can see this week's action here. stallingd momentum near the 55 day moving average

as it did in mid-february. yellen and fisher speaking today, it could get the boost it needs to push ahead to the next area. g #metv, six triple for -- 6444. the dollar-yen, 113 .13. the two-year treasury yield, the touched 1.33% on thursday. the highest since 2009 and it is holding above 1.3%. tight most closely to that policy. wellhas not performed to off the back of a stronger dollar. down .2% but is down almost 2% on the week after four straight weeks of gain. anna: think you very much. let's talk about the chinese

story. the political elite will reveal their economic tide -- it kicks off on sunday. joining us from china. what is at the top of the agenda? arerter: top of the agenda the economic priorities for china's leadership. they're going to unveil many of these on sunday and what investors will be looking for is how much of a stomach they have for slower growth as they switch their focus to these financial risks, the credit of the expansion we have seen in the last 12 months. to that end we will be looking for the new gdp target for 2017. 6.7% last year, they may lower that target to get more wriggle room.

that may be increased marginally. more fiscal space since the fabled bank of china starts to financialsteps toward regulation. we have heard colorful words from china regulators about crocodiles in the financial system manipulating the market and an amount of chaos among regulators. we may see more coordination between china's regulators insurance, security, and spanking. on the economic front and the political front. manus: talk to you about foreign much would trump dominate these discussions? be pepperedely to on questions about donald trump and u.s.-china ties. theent have eased since

phone call in february. the silencing acts for china is showing it can be strong on issues like taiwan for its domestic audience while not aggravating trade. it is not want to get into a trade war with the u.s.. it does not want that to damage its economy. another area of focus will be north korea. intentions -- tensions there are rising. division amongst china's leadership with how to deal with north korea. we are likely to hear about military spending. taiwan,lso hear about the south china sea and hong kong's leadership a couple of weeks after the meeting. obviously a political meeting. the largest legislature govern for this event. what role do china's private companies speak -- play?

>> for some of the billy -- the billionaire owners, they are also in town. many of them will be putting forward proposals that the legislature will take a look at. some of them will be implement it and some of them will not. sometimes, they do get traction and you see them playing out in policy later in the year. telling us he will be pushing for focus on artificial intelligence. think you very much. in beijing for must. he is the head of economics at ubs in london. listening to tom setting the scene, we want to wake for the details. have you join the -- grow the chinese economy question mark the risk that they come in with 6.5 down from seven. would it be that surprising? that is the question.

>> no probably not. we can cut it to 6.5 rather than 6.5-7 last year. expecteding of growth but pretty modest. nominal growth around 8%. have is that that followed by using fiscal policy to support the economy and keeping monetary policy where it is. we don't think the rate changes this year. obviously adapting to circumstances in the u.s. and seeing how the u.s. dollar trades. some saying it might be wise to bring that the dollar down. what happens to the currency? it was quite a preoccupation from 2000 16 and 17. quite quiet on the china front cents. i was reading comments from the manager, he was saying if you're

talking -- you're looking backwards and you should be looking forwards. what are your thoughts? >> we think it weakens 5% this year. a target at 7.3 against the weekend -- the u.s. dollar. if it were to become more than that, the chinese would probably extend any decline because of the tensions in trade and so on being just test. it is true clearly in a relative sense that china's good news story if it manages to grow. when you compare it to the u.s. dollar, it strengthens. drumroll, she a does not like me doing it. drumrollive kuroda a since he has seen a rise in his prices gauge in more than a year.

of .1%r prices at a rise from the year low. finally the japanese have woken to some level of reflation. there has been a shift. >> it has been a long time coming. one of the drivers of this is what we're seeing in other places as well, energy prices and so on. when you compare this to the eurozone where inflation shot up from over 1%, most 2% in a month in january when you compare it to the level of the u.s. and the u.k.. butrly as a very low level better to have it in positive territory than it negative territory area this this change the story at all? are these smaller baby steps? >> at this point clearly they will be cautiously optimistic that things are working out as they hope.

you can look at the ecb, inflation is shooting back up to we thinkget you but, they're going to warn that this is not the full story. it needs to become sustainable. it needs to come durable and we're certainly not at that point. a conflict of interest between the bank of japan and the tv i have. roughing it out in equities, well done. the global equity rally is fantastic. they are losing money on domestic government bonds. point youint, at some have the potential for conflicts or do they just keep on going deeper into negative territory? experiment allowed for the world foreign policy >> that is a good example for the sort of disconnections that still exist all over the place. it comes back to why policymakers are treading very cautiously. all sorts of strains under the surface which risk being exposed

as policy rates normalize or inflation starts to climb and so on. i think really for this specific case as with any central bank they have to set policy with the whole of the economy they are trying to influence in mind. in the u.k. there are winners and losers with all of these policies, but you can only set them for the greater good and therefore we expect the bank of japan to continue on the path they think is best. in a european context, in the eurozone, you mentioned the strength in the data. i'm talking about tensions that data inut of the strong bolton -- embolden the hawkish voices? >> that is exactly the word we have used of course. for the more hawkish members of the committee who have never been enamored of this easing

policy, inflation is slightly above their 2% target. they will feel the case has been made to stop this. there's a different between headline and core isn't it? >> the difference between the more hawkish and more conservative members of the committee, the hawks will say prices are on the rise and we don't see -- we don't need the policy. others will say hang on and core prices are subdued we need to see something more broad-based. you look in france, it cool down to 1.4%. story of strongly rising prices across the eurozone that needs to be addressed. the more hawkish movers of the committee will say this is pushing things in their direction. thank you so much. good to see you. ahead of the u.k. macro rate strategy at ubs.

if you're a bloomberg customer you can watch the so using tv . all the charts and functions during the program and you can contact the show directly by clicking on the send id bussan. the little bottom of your screen. sitting down and waking to answer all your questions to what have we got? the scandal and the french presidential election. we are live in paris and and banding the campaign. areil sales figures released. said members say march is very much alive. will we see a rate hike? we discuss white opinions drastically changed as we wait to hear from janet yellen. this is bloomberg.

anna: welcome back.

very early on a friday in new york. the futures weaker at the start of the u.s. trading day. investors questioning the rally we have seen this week, whether that that can work for janet yellen to speak later on today. juliette: each adding $1.6 billion to the fortune. $24 48, 40 4% above the listing price. other widows including benchmark capital and benchmark partners stakes rising 900 $4 million and $613 million respectively. the ceo has said he would welcome a fed rate hike as it would help to build market confidence. speaking exclusively to bloomberg at his companies senior management conference in

switzerland. building confidence on the outlook and increasing rates is a signal of strength. i think that is what we all need right now. lots of cash on the sidelines waiting. i think that is going to be one more in getting people back into action in the market. shares at anne important mile stone. bill growth left in 2014. bloomberg, itby swelled at the end of last month to $75.4 billion. that is your bloomberg business flash. switching your attention

to europe, french republicans abandoned as was the owns campaign. 50 politicians have said they can no longer support the presidential candidates. he charges for alleged embezzlement of public funds. training -- is trailing. pulling france out of the eu telling supporters the concept of free trade and globalization is already over. >> this is a moment to put an end of the borderless economy. look at the world. everywhere from donald trump's america to india from china to britain, the economic patriotism is winning. look at the tens of thousands of jobs repatriated.

in the u.s. companies are relocating jobs in factories are being reopened. done with the illusions of free trade and naive globalism. paris,joining us from great to have you. very good day to you. let's get straight to the second round. his star is rising with more and more endorsements. >> good morning. marine le pen is of a high level today. first if thea first term would be here today. term,,n the second

francois fillon would defeat marine le pen because of the majority of french people and marine le pen, a lot of people are still worried about what would it marine le pen do if she was the french president. we still have a majority of people who would not vote for marine le pen for a second term if she was qualified. >> looking at how fillon is faring giving the scandals that have engulfed his campaign, one of the interesting lines overnight is many of the lawmakers from the republican side, more than xp, say they can't support him. some of them according to anna, to replace and. giving your knowledge of the political scene, is that even possible at this late age in the campaigning? >> i have to tell you the truth. this is a political crisis on

the right wing today. what is going to happen in the next hour, and the next few days. everything can happen. this is a never seen before situation for a french presidential election. francois fillon is the candidate for republicans but everything can change in a few days in a few hours. more and more people in this political family does not want it anymore. there are serious doubts about it capacity to be the candidate for the right wing and the breast president. saying he would vote for marine le pen and this is why francois fillon is at the third-place. in the polls. ago, he was months

the favorites. he is now challenger. everything can change as i said everything can change in a few hours were in a few days. ago, he was the favorites. we don't know what is going to happen. manus: one thing which the market and the pollsters will look at, what proportion of supporters may move toward marine le pen? we just play view a piece of her channeling trump. how has that been absorbed by the french? do they welcome the nationalist rhetoric from marine le pen channeling donald trump? >> people are worried about this.

there is a majority of french people that are worried about marine le pen. -- poll 63%t poll of french people say they are worried about marine le pen. as you can see in the second term holes, she would be defeated by macomb by 63%-30 8%. among nicolast sarkozy in 2012, that should vote today for for the field, between 15-20% of them, this expense why she is at a high , but we the first term also have 20% of the former voters of nicolas sarkozy. thank you very much. a point well made.

joining us there from paris. up next, more about the fed and all eyes on janet yellen in chicago. odds of a hike this month near 90%. this is bloomberg. . .

manus: investors receive clues from yellen's speech today. odds for a march hike around 90 pebble beach. anna: more than 60 french politicians say they can no longer support the presidential account as the embezzingment scandal engulfs her campaign.

manus: it is day break, europe. it is our flagship morning show. i'm manus cranny. anna: i'm anna edwards. manus, you have some numbers out of germany? manus: i do. retail sales declined .8 pblet. the market was looking for a rise of .3%. that is a month-on-month figure on the retail side in germany. could it be the little bit of confidence with ve seen? -- we have seen? shaky in the u.s. etail sales come the at a drop of .3%. a little bit of a shakedown for germany in terms of data. anna: things looking different in the year-on-year number . mixed looking picture in that data perhaps. breaking news from the l.s.e..

the big m&a story we talked about many times has had cold water poured on it. today they say they are continuing to work hard. l.s.e. said last weekend it was a factor because of the demands to sell the trading platform in italy. they did not want to do. they did not expect to get clearance for it in europe even though the deal is still on the table. they are also giving us their numbers. ull year revenue 1.45 billion. the adjusted operating profits. up 17% year-on-year. manus: let's talk about one of the world's biggest advertising companies. w.p.p.. revenue for the year 17.6% rise.

14.4 billion pounds. the estimate was 13.9 million. now when it comes to those margins reported net sales, margin rises by .5% and comes in at 17.4%. you have this rise in revenue. you have this slight build-up in terms of margin and you also have a final dividend. 37.05. bloomberg dividend forecast 35.5. that is a nice comfortable beat on the original estimate. you have politics. you have everything moving these markets. the promisings from donald trump in america versus the political woes in europe. it has been above budget but relatively slow start to 2017. revenue rose by 1.5%.

they say the 2017 budgets are set conservatively. around 2% for both of those things. when he talks about that, it is about the quality of earnings. that was a great story. a huge conflict of course we're here in the u.k.. -- and theyunilever said you can't have sainsbury representing when you're representing kraft. anna: we talked yesterday and asked why do you see the world so differently on this market rally? it was in euphoria mode. they are getting a dividend of 2.2 pence. this of course they say they are still sticking to -- trying to

work through this measure despite what they said last weekend. there has been some talk in the u.k. press talking about whether there might need to be special dividends on exinterest returns of cash to shareholders. manus: a little bit lower in london, paris and frankfurt. a little bit of skittishness, nervousness. what will janet yellen say where the probability of a rate hike as gone from 30% to 90%. a very, very, very quiet morning. the most interesting thing i ead, closing up all of these portfolio risk positions to ocus on a new s&p 500. anna: the french politics seems interesting. let's show you where we are on the equity story for asia.

the asia pacific down. the futures in the u.s., weaker there as well. a lot of questioning whether this rally has gone too far, too fast. that's where we seem b to be on hat story. manus: oil, 40% below an average date. you have u.s. stockpiles again hitting record levels but the traders building up their long position. the 50-day moving average, the first time since that opec-nonopen peck agreement. -- non-opec agreement. anna: let's talk about what's happening in the broader news

agenda. bloomberg first word news. >> anna, thank you. just attorney general jeff sessions has removed himself from investigations into russian influence in american politics. the move comes amid calls for democrats asking him to resign. president trump says he has total confidence in his attorney general while sessions said his discussions were not related to the election campaign. >> i never had meetings with russian operatives or russian intermediaries about the trump campaign and the idea that i was part of a "continuing exchange of information during the campaign between trump surrogates and intermediaries for the russian government" is totally false. >> just vice president mike pence regularly used personal

emails to conduct public business while serving as the governor of indiana. his account was compromised last year by hackers. that is according to "the star." during the presidential race pence criticized hillary clinton for her use of personal emails to do official business as secretary of state. former italian prime minister has warned that a marine le pen victory would spell the end of the e.u. >> if le pen wins, i think it is game over for europe. it is impossible for europe to have a leader of one of the most countries of the european union, somebody who is against european union. >> japan's core inflation rose in january for the first time in 14 months offering some hope

that price gains may be inching towards the b.o.j.'s target. however it fell last year. on s of a turnaround pinned higher oil prices and a weaker yen. you can find more stories on the bloomberg. anna: having a look at the c.s.i. 300. chinese stocks extending their declines ahead of the n.p.c. in beijing. it has been risk off ahead of janet yellen's speech in chicago. we see the yen gain. the korean market having its worst session since november. you're seeing property stocks under pressure in hong kong. having a look at some of the

stocks individually, we see a big slump coming through. leading the declines at 13% on reports that china has urged travel agents in the country to stop selling packages to south korea. we saw the iron other contract start to peter off significantly during the day's session. in terms of hong kong's hang seng, it has been a frontrunner this year. we have started to see represented by the white, incoming stocks from the mainland, peter off slightly. the likelihood of a u.s. rate hike is denting the outlook. anna and manus? anna: juliette, thank you very

much. it is a packed week of fed speech hears the resulted in a marked change of expectations. march is very much alive. manus: it is indeed. today we hear from one that really matters. the fed chair, janet yellen herself. she delivers her outlook. ahead of that, of course we're looking at work. the probably of a rate hike. back with pretty much 90%. so let's -- discern -- anna: many who use the bloomberg and watch the program, it is based on the midpoint of the fed's rates. there are other ways to calculate the probability which might lead to another number. we got the fed pricing in nearly 90%, 89% chance of a rate hike in march.

let's talk to a global investor strategist at global investors. let's get on to what you think about the united states and the chances of a rate hike in march. is that not your case? >> it is now. we were thinking two to three times a year but we're leaning towards twice a year. after the testimony, you could not ignore those kind of comments coming from yellen. we had a number of speakers. the data has been very strong. this time last week, what people were thinking is usually the fed likes to prepare people. that wasn't done. now we have the three additional speakers. the only thing i think is still lacking is we would have thought that we would need a bit more evidence that average wages were going up. after last month's data, that was a bit disappointing.

maybe we would expect another payroll figure with the earnings coming through before get the rate hike. manus: i've already started to see notes come out. i love the way analysts react. we're going to get four rate hikes now? it is going to be a more aggressive pace. that's what she needs to reaffirm to the market in my opinion, i'm still steady. i'm still gradual. there is another 10 months of the year to run. would you agree with that? >> yeah, does march still mean three or four? realistically if they want to do three, they have to do one in the first half of the year. it doesn't necessarily mean -- that you're going to have more rate hikes. it would be important for her to do that. if the market starts to believe there are four hikes coming in, i think you're going o get major reaction from the market. the interesting thing up until

now, usually when you have a rate hike coming through, markets don't tend to like it. this time really embrace it. the marks like it because they are sitting, embracing it as validation that the u.s. economy is doing well. before hikes, that tilts it. that pushes it off the balance and then you would get negative reactions from the markets. anna: stocks are going higher if the united states. you're saying because of the modest tightening expectations. it seems modest but you're comparing that to where it could be. >> also taking a step back and looking at where the u.s. economy is overall. you have unemployment so low. rowth doing so well. spending. that is really important. for rates to be this low, it almost -- i think they do need to go up. manus: almost insanity.

well done. this is consumer confidence. this is the linchpin. wages are not exactly where you want them to be duconsumer confidence is at a 10-year high. those in full time employment is the highest in nearly 16 years. so the consumer is absolutely on form. >> completely. you know, i think they can see -- they have had a difficult couple of years. the last meeting, not only do they have the data to back it up but a new president. people believe him and that trump is going to do some fantastic things and change is coming. manus: you sound skeptical. >> i think it would be wrong to be skeptical. we have had so many promises. we're still waiting for them to come to fruition. we need under details. infrastructure spending. having said that, the trump trade is not just about trade. there is a fundamental

strengthening in the u.s. economy. can add to this but there is a genuine improvement in the economy that can push markets further. anna: thank you very much. we are going to take a short break on the program. let me see if i can find the -- manus: we're nearly there. turkish 10-year yields rose eight basis points to 11.5% after we got the inflation data. the inflation data coming out in the last minute or so. rose 1% year-on-year in the month of february. we are seeing reaction in the currency and the 10-year yield. manus: up next on day break, brexit and president trump have changed the global perspective. now the french presidential

hopeful, marine le pen is supporting a so-called frexit. we discuss the political risks that are rising globally. this is bloomberg. ♪

manus: beautiful day. beautiful friday morning in berlin. inflation around europe the headline. 5,000. below have a look at g.m.m. and see what's going on. this shows a little bit of skittishness that you have on the equity story. anna: suggesting weakness in the global equity story. yesterday you had moves, weakness on the s&p 500 there, the australian market and the south korean market.

interesting story around south korea. down 1.2%. the most since december. china ordered travel agencies to stop selling packages into the country. let's get the bloomberg business flash. >> thank you. evan speigel and bobby murphy have each added $1.6 billion to their fortune. that is the shares in the mobile sharing app. other winners from offering include bench mark capital. stakes rose $904 million and 613 million re-respectively. boris slani was speaking to

bloomberg from davos, switzerland. >> it will certainly help continue building confidence on outlook. i think including rates is a signal of strength. and i think that is what we all need right now, especially wealthy clients. there is still a lot of cash on the sideline waiting to be deployed and i think that could be one more in getting people back into action in the markets. >> t.s.a. group is said to be closing on a deal. both companies are planning to continue intense negotiations through the weekend with the aim of announcing a deal on monday. the deal would create your second largest automaker. manus: juliette, thank you very much. the u.k. prepares to trigger article 50 at the end of this month. markets and businesses have been working to mitigate any losses

as a result of the brexit decision. anna: with france, the netherlands and germany holding lkses this year, planning political risk is becoming more difficult. when you look at the latest moves around the french political story, we have those omments from ledda earlier. the troubles that the e.u. project would be in if we see victory for le pen. that is really what is at stake, even if it doesn't look as if she is going to win now, at least according to the polls. we know the polls are not always an exact prediction over the future. if she does win, this would be a serious event for the markets. >> i think it can be exaggerated how large it would be. you can take one of the other smaller countries out. taking france out of the european union, they were one of the -- the beginning.

with germany and france. without france, i think you're really talking about the beginning of the end. people already say maybe that has started. that really would be the final touch. manus: even though le pen is talking about redenomination, she is talking about pulling france out of the euro, still the french, i still think the majority in the polling suggest they would not go for it. this draws a much bigger question about risk and reward when you come to the currency and eck city story. the the kind of risk we're seeing over the next couple of months, there can only be more pressure. i know in your notes you say actually the european growth outlook compared to developed economies, it looks to be in fair shape. the currency is going to come under more and more pressure. is that a fair assessment? >> there are a couple of things. we were talking about le pen has

80% of her support is very staunch. they are not going to be swayed. whatever negative news stories may come out about le pen, that is not going to change support for her. if anything, le pen's support is on the rise from here until the election. the other contenders, it can take away from that support. the risks are going to increase as the day approaches. anna: what does that leave for the e.c.b.? we have seen tension around the e.c.b.. inflation is on the rise we have seen strong german data. there might be increased political pressure to change course on the e.c.b. at a time when the political scene looks very uncertain. >> i don't think it goes with the story that we have had from the e.c.b. about being a very supportive institution in what has been a difficult number of

years. from my perspective, we need the get through the political risk before the e.c.b. can be ready to move forward with continuing to move. we already have the semitapering i guess going through. i would expect more -- once get past the german elections which looks like the least risky of the ones that we have got this year. there is a lot of talk about rate hikes coming through. i think that is premature. manus: mature on the rate hikes. thank you so much for being with us. anna: bloomberg markets, the european open, that up next. nass nating, the dutch political story. that is something we're going to be covering a lot more as we go through the next month, of course. anus, you're off to raidiaio

manus: come join me while you're in your car. there are nerves for the market ahead of the yellen speech this evening. this is bloomberg. ♪

guy: good morning. happy friday. welcome to bloomberg markets. this is the european hope. i'm guy johnson in london. matt miller is over in berlin. what are we watching this friday morning, matt? well, the french republic has starteded to jump ship. saying they can no longer support fillon after his embezzlement scanned l. where will supporters turn?