anna: revised travel ban exempting green cardholders. we had to the middle east for reaction. the presidential candidate wins support from the republican party after calls for him to step aside a miss any criminal probes. anna: carmichael's and the new world order. the trump trade and breakfast. brexit. ♪ anna: a warm welcome to

"bloomberg daybreak" europe. i am anna edwards. manus: back from paris, the euro star is a wonderful thing. if you're are waiting for the ecb, they used -- the u.k. budget, what is happening to volatility? there's a couple of different things he can walk away from this, the 260-day and fight volatility. the lowest since 2015. all of the usual rules seem to be breaking down in regards of volatility. that's located get development in.et participants you don't need a stomach for risk. anna: talking of emerging markets, how some of those have

been doing overnight. volumes are pretty thin despite the tension. the one of by .9%. yuan up by .9$ the aussie dollar and stocks in australia maintaining their game. scrappingtsche bank and additional easing from the australians. still probably against the again. -- yen. merkel referring to europe this that rhetoric has done nothing.

how overvalued is the dollar? saw the euro moving with the french politics story and we will continue to get more details. iron or downplay -- iron or down by 1.7%. let's get the bloomberg first word news. president donald trump signing in order restricting people from six muslim majority countries from entering america. it takes effect the 16th of the month and iraq citizens cannot into the country for hundred 20 days. dual citizens will not be denied entry.

repealing and replacing the formal care act. just parts of obamacare or several years as they try to break the stalemate between moderates and conservatives and their party called the american health care act. the proposal review -- includes a tax credit to help people buy insurance and will and eight taxes. -- eliminate taxes. dropping an explicit pledge to resist protectionism indicating by bloomberg. ministers and central bankers filed to resist all forms of protectionism. which comes after president trump entered the white house saying he will prioritize u.s. interests. therenance minister said

is flexibility to adjust the ratio. increase government spending in line with the governing economy while paying off the country's debt. is 36.7%.t ratio year on our projections to and this ratio will not see a big change. compared with global levels, the chinese government has room to issue more debt. francois fillon has support from the republican party. in paris to discuss this situation. accusations he misused public funds. 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 your bloomberg top . manus: let's get into the markets. the lack of volatility for the schedule in the next few days. standing by in the asian markets, juliette good morning. juliette: i like of volume today. you have seen some weakness coming through from the nikkei. up .6%, one of the best performers in the region. the best-performing currency in the region, missile launches from north korea in their stride if we have a look at some of the specific stocks we are seeing those chinese stocks lifted in hong kong yes again today. china life insurance of 2%.

in korea you saw korea pacific as we continue to see inflows from the korean market. energy players leading the game, a front-runner. this is of course the likelihood of those from opec. know they left the show cash rate on hold. and weakness or obstacle level of 75. you can see that reflected on the chart there. 76, not very happy with that. anna: let's talk about something

happening in the auto industry. the biggest players have descended on switzerland. looking to showcase of course their top models. this year issues as political uncertainty and u.s. protectionism are set to dominate talks. we asked them about the prospect for a border tax in the united states. >> we are a global company and we stand for free trade. theave to wait and see how american administration is going to react and if those plans will be a reality. >> we have a globally balanced distribution network.

we see more trade barriers going down than up. reporter: the u.s. has the most u.s. has the most expensive tax rate in the world at 35%. i think we are encouraged with what we are hearing from the administration. they are we looking at the tax policy but it is way too early to tell. he said we are, we did not of course. main themes coming through from this year's show. >> people are talking a lot about donald trump, brexit, general motors. ceo. find me the

as far as the cars are concerned it is really interesting that people are questioning whether or not consumers are willing to pay up for the new technologies he carmaker's spent so much money developing. made from the ground up as their own a new model. themeeems to be be dominating this also show. manus: i was in paris during that news conference, what was of response to the purchase gm? there is a. of views. they are going to try to turn this business around. matt: one of the responses has been, the economy is what this

is all about and that is good for opel. because they time have a home force advantage. the interesting thing i've seen ,rom the executives i talked to as long as this makes company good for everybody, those with told us.y consolidation will continue, this could strengthen the european market overall. anna: stay tuned it with a interview with the jaguar. manus: raising rates on the policy meeting. his voice to a cause for a hike. janet yellen and her team

should get on with that. >> they have been pretty created the last couple of years coming up with reasons why they cannot raise rates and i think they have just about run it began us of those. they would do their credibility a lot of damages. it is all about the credibility. let's talk about that. these are the reasons it is about employment, full employment. 4.5%. their own measure is crushingly close. >> the question is how many

times will the fed ago? will they fall behind the curve? we are looking at an accelerated u.s. economy over the next two years. that if some risk trump's policies create too much inflation, we may see a faster rate hike. anna: certainly the treasury market seems to be doing at the conclusion. because of uncertainty around trump's policies, the market is not expecting any more waiting. >> i don't see why the fed cannot go in march. the policy is still very easy. u.s. economy is in its eighth year of expansion and close to full employment. an president and that he would have a negative rates. manus: the couple of things we will focus on.

the overvaluation of the dollar, is would say it fundamentally overvalued. this is a kernel of g-20. -- structure of your economy which tells you whether or not you can grow at a solid race. -- rate. it is a question of what your perspective is.

consistently in the last three or four years. suppose trend growth will at least increase following the trump reforms. the dollar may not be overvalued because you will get a tighter policy than we would have expected. the question of whether or not trend growth will increase in the long run and it is sustainable. anna: one very important player in what happens with the dollar and the donald trump, we are looking ahead to next week. it is fine with the leaders try to get together and agree his haste to something, usually the media and general suggested these words are not meaningful but this time around they will have to agree on quite a lot to get the u.s. and china on the same page. could the recent more meaning in this that -- in that this time?

me is if i take the two-year outlook on any arm of u.s. policy, programs or isolationism, it seems strong. if suddenly the u.s. goes for hurt itss, it will trading partners more than it will hurt the u.s.. anna: please run this morning we have the chart that shows the progress they have made. try to shore up support. manus: 2.9 6 trillion, the eighth drop. the longest losing streak in three decades. anna: staying with us on the

program, here are highlights ahead. :00 a.m., the final fourth-quarter eurozone gdp. how strong is it? the house of lords is due to start. it's final session as it scrutinizes the government will to trigger brexit. questions from foreign reporters. program, coulde fall to translator gilt eight record low? manus: france's republican candidate goes forward after partly backing. the polls do not look good. anna: will the new executive order make it further than the last? reaction from the middle east next. this is bloomberg.

manus: 6:20 a.m. here in london. juliette, take it away. juliette: exxon mobil has announced a $20 billion building spree in the car to the u.s. chemical refining industry. it would create 45,000 jobs. donald trump tweeted his support calling the oil producer a the companyany you began making as far back as 2013. after the euphoric market debut, snap shares have fallen for the first time in three days area closed more than 12% lower yesterday, below the $24 opening price on the first day of public trading. analysts weighing in with their thoughts on the true valuation. the stock is still almost 40% higher than the $17 ipo price.

deal after beating out efforts -- offers. the agreement could be announced as soon as this week he at helmet and treatment built out a candidate -- because the candidate -- 1.8 billion euros. that is your bloomberg business flash. much.thank you very philip hammond may deliver a 110 billion pounds in the next fiscal year. the lowest since the financial crisis. the reason for this is the strength that we have seen in the u.k. economy. >> better than expected since the brexit vote.

a letter under 2%. it probably means over the andcast horizon, a deficit the chancellor is way ahead of his target. we did a poll of what the chancellor should be focused on. 40% say it should be infrastructure at the top priority. of course you would point out there is a blending to be had. >> it is an increase in capital spending. private firms have been cautious. they have hired an unprecedented rate but the capital spending

cycle has been very weak. below 2009 and 2010 levels. we had to decline the issue of to capital. that is the real problem. if i take a long-term view brexit is a supply side event which will reduce the trend of growth. stepsimportant to take through structural reform to offset that. the obvious ways to encourage investments. anna: the previous of what will be announced, productivity. and robotics and research, the message also needs to be around infrastructure spending. > i am almost certainly underwhelmed on budget.

this is the headline measures, work well in the press but don't have economics it against -- economic significance. the 500 million funds for research and development trivial. manus: what could he do that could push the dial and overwhelm your? you> >> how do they know that debt is not a problem? u.k.,ich to me like the rising borrowing costs from high debt. this will consolidation easier.

he said he chose to borrow to invest. >> after eight years of a capital spending deficit the numbers are big. you are talking one to 50 billion, two hundred billion deficit in the capital. in the whole economy. manus: senior u.k. economist at nurnberg bank. a lot to get him excited. anna: lots of coverage of the budget. to theoday we will speak former bank of england governor at 11:00 a.m. london. fillon fights on but does he still have a shot? this is bloomberg. ways wins.

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anna: welcome back this is "bloomberg daybreak" europe. wishing for big events later on this week. the jobs report out of the united states as well. different is available on bloomberg. the cover story manus. the contortion of westminster, the debate between the lords. that is not real. absolutely. this is not the view this

morning. it is about theresa may. a large defeat potentially on her hands. the final deal, not good enough -- if it is not good enough. she was the issue legislative changes -- changing without proper scrutiny. fare when they go back to the commons. gdpnext story is the expanding by 0.4%. also -- out this morning. projecting a 2.5% drop. they can be volatile series. finally daybreak

processes that focuses on russia's crude output. the plan is ahead of schedule. byduction is already down half of the 300,000 barrels per day. morning producers to be prepared for a difficult 2018 amid the risks of resurgence. 53.11 on the uci. all the other market action you need to watch this morning. reporter: most gauges moving high at the pacific index. south korea, taiwan and hong kong leading the gains. the bloomberg dollar index slipping a little after gains yesterday. the aussie dollar and south korean against the greenback. treasury yields the study.

in the asian space you are seeing the 10 year yields moving higher and there as well. the aussie spike higher before policymakers left the benchmark rate unchanged at a meeting tuesday. then it's extended gains after a statement from the central bank said the conditions in the global economy have improved and local consumption growth was stronger as well. speculation will cut interest rates this year. how they have been performing over the last few days, the top end of a bullish channel. 76.19. the euro, another currency in focus, we saw this drop .4%. after he said he will not enter the race for the presidency, that creates concerns. drop, it is studying today.

concerns about european political risk also playing out. amisha you the term premium. the reflation trade also how it getting everithout -- extra compensation. this at premium went positive in november after spending most of last year in the negative. it has now gone negative again. the hopes of trump reflation fading a little. risk european political and also happening despite the fact that expectations in march are getting ever and ever higher. manus: there are for the auto industry. matt miller spoke to be for

president and asked him about brexit. >> 30% of european sales are in the u.k.. the we can see -- the beginning of the currency of the sterling is a headwind and our property is at $1.2 billion. it is an impact on us. we have been in business 100 years. things we can do about it -- it means we are going to have to be more diligent. reporter: are you going to lose jobs in england? certainlyt there is more pressure on the cost-based for the country -- company. distribution costs are as amazing as they can be. we made tremendous progress last year year-over-year.

>> brexit devaluation is what we can happen if we see the border tax. producing cars in michigan. is that a concern as well? >> it is too early to tell how it works out. u.s. has the most expensive corporate tax rate at 35%. trump president antibusiness leaders are discussing the best policy. we are encouraged with what we're hearing with the administration looking at the tax policy. we did have a profit here. a record profit year. we're optimistic we can do things here in europe. anna: that was matt miller speaking to the president.

-- the president of four. francois fillon one support after backroom dealmaking and the rivals said he would not run. manus: he will live on as a candidate in the election that he trails in the polls. this is actually what you see. real of acceleration away -- the perfect spread. the dissipation of the on has come back. 31.05. back into the conversation, this change.t runners and riders. risk, look at paris

at french risk, just how contagious is it? how heightened is it? >> effective a look at the hot first round of looks like it is head of le pen. round he is 20 points ahead. even feel is 10 points ahead of a le pen in the second round. don't forget, they will need to win the election before they get the referendum. anna: there's something else to go, the dutch election. there he knew. they are losing ground a little bits in the polls. ,he leadership they were given down to one seat in the polling.

suggesting you had one of the. set donald trump and the things he does that mean that play that well for a european audience, level. all that support an interesting idea to whether the dutch elections can be a firewall in the surge of populism we have seen. >> those could win 20-25%. it is so splintered. what we have seen after the brexit vote is that the support for anti-eu and eurozone parties has eased. and cap fells when the promises they say they can, you find that eventually people's pragmatism does reservists and they say it is better that we stick with the devil we know. you are seeing that in europe in little bits.

three elections and we will see how that plays out. polls live. what is going on on the ground for confidence? you have the ecb meeting tomorrow. the highest level in 10 years. i don't think growth at 1.7%, 1.8% is -- please correct me. >> that if the trend rate of growth in the eurozone. of turning global demand, meaning that growth accelerates above its trends. commit the moment at least

discounting research and the headline rate. points nine, have not seen evidence of its picking up recently. it is my forecast that has it is where it was. space there is plenty of to continue for the next 18 months. apart from a modest increase in inflation, i don't think we will see major changes. anna: the ecb can dismiss the higher inflation number. you are talking about when the ecb will move and lots of people say it won't be for a long time. your team talking about nudging up the deposit rate perhaps.

>> we see a by mid-2018 in the first hike in 2019. there's a small possibility that it decides to penalize banks to do nothing but the cash at the ecb. lola set is it -- it is that -.4. just to get the symmetry around the rate, you should not hurt lending rates. . that would be called a rate hike? >> it really depends on how much -- on what type of language is associated. what we needed to do is help the bank out a little bit. language around the rate change. it is about the potential

nuances and changes that may come to pass. in terms of the propensity of the germans to tolerate headline inflation, that is what the germans are banging about. what is the timeline in apt actual tapering? >> a better job with the german economy and stabilizing inflation than the previous central-bank ever did. kudos to the ecb. they will taper finishing by mid-2018. as long as unemployment is , probably around 8%, we will see the guidance come in .

it will be very gradual. the ecb can afford to be gradual. anna: thank you for your time. turning to oil, u.s. crude trading around $53 per barrel. ready to release production in the second half of the year. joining us now with a chart of the hour. take us through the oil story. let's jump straight into it. comments from the key opec members you mentioned iraq. this is a tricky one because last time iraq was the one they had to convince at it took considerable effort to do so. no small fish in the opec

basket. they produce the same amount as nigeria. interesting in how this all how the u.s. industry is working up. that is how much opec is producing. a beautiful blue, those are the u.s. inventories. goldman sachs adding that the rebound in the was sale and to see has surprise them slightly. manus: nobody else has bloomberg it could get as excited about a histogram as yourself. it -- running us through the latest. if you're a customer you can go on to bloomberg and watch and and myself.

we are streaming there on video. reach out to the show directly by clicking on send at the bottom. of anna: up next, will the new executive order make it further than the last? reactions from the middle east next. manus: life from the auto show, we speak to the jaguar ceo in the ceo, this is bloomberg.

anna: welcome back. this is bloomberg daybreak europe. a business flash -- business flash with juliette. mobil announced a $20 billion building spree in

the heart of the u.s. chemical refining industry. calling the oil producer a special company. chris pointed out that the announcement gave a name to a series investments the company begin making as far back as 2013. before the collapse in oil prices. euphoric market debut snap shares falling since three sessions. analyst began weighing in with this. however the stock is still 40% higher. that is your bloomberg business flash. manus: thank you very much, let's focus on the presidency and mr. trump, his administration has one -- felt a .ew executive order

it takes effect march 16 and narrows the focus. anna: nevertheless sending -- across the globe. abu dhabi we're joined with tracy alloway. how they effect the region, the differences between the previous one and this one. of the keyne differences is iraq has been excluded from the rest. in seven countries we now have six. holders, green card exempt from the travel ban. minority religion. a provision many interpreted as a preference for christians in muslim dominated countries. it has been dropped as well. you can see the trump administration trying to harden

of the illegal rhetoric and go on the defensive against accusations that this is a band specifically about muslims. the new ban is 6000 words long. the old one was 3000. they are getting down to the nitty-gritty area. manus: what is the reaction been in the middle east? we have seen some corporate reaction again in the united states of america. the democrats have come up with #muslim ban. >> officials expressing report -- supports. we actually had parliament in iraq threatening to implement a reciprocal ban against u.s. citizens. they are happy with this new version. when it comes to the other countries, i think it is fair to say there is fair sense of

discrimination. that trump has to , also locally and -- in d.c. and elsewhere in the u.s. courts. constitutional requirement that says you are not allowed to discriminate against religions and a lot of people feel that the travel ban 2.0 does that. anna: the chinese president has championed an international system of rules for free trade. his treatment of south korean companies amid a missile shield is raising questions about the globalization credentials. bruce einhorn in hong kong. what will the impact the on the tourism industry?

the teddy bear museum is in crisis. : it is not as crowded as it once was. the chinese accounts for a very large amount of the tourist arrivals in korea. is on the island coast of korea. 85% of the form visitors there are chinese. hurtown could really places like that. anna: talking about the tourism industry, one other industries are we talking about? about this talking feeling into those areas? >> immediately the concern is

related to industries not connected to tourism. free shopty operators, cosmetics companies. all those companies are seeing significant drops. there could be problems for the korean automakers in china. agoid see a couple of years when there is between china and japan that japanese automakers fell sharply and took a long time to recover. >> that is the benchmark if we ask about china and japan it's worth over the islands. do you think the full reflect on the japanese-chinese span as a benchmark response? >> takeey do then long-term

solace in the idea that in the end japan did not change policy and eventually things calm down. the korean government is thinking about ways to help governments. they announced a plan to help a billion of in a loans each. smaller companies are affected by this specialist china. that might help some but for places like the teddy bear museum it may not be enough. anna: thank you very much. a wide range of industries in this geopolitical tension. up next. manus: getting back to the geneva motor shop, the trend and spectacular stuff. joining that on the ground, the land of -- random -- land rover

at 7:00. brexit,e trump trade, all of that comes to mind for the also a sick is gathering. -- also executive gathering. this is bloomberg.

♪ the u.s. president issues a revised travel ban. lisatime, exempting iraqi and green cardholders. the presidential candidate wins support from the republican party after calls for him to step aside amid a written -- criminal probe. the newarmakers and world order. auto executives weigh in on the trump trade and breaks it. we are live from the geneva motor show.

welcome to bloomberg: daybreak europe. our flagship show in london. program.come to the 7:00 in london, 8:00 in germany. that is where we had now in terms of the data. we get germany factory orders, they don't make pretty reading but remember, he should put them together with last month's number. 7.4% month on of month in the factory orders number. against an estimate of 2.5% contraction. this was a very volatile series. in the last month of 2016, we saw a surge in this number and that was way ahead of estimates. to give you a back story, big-ticket items were below average in demand. the steepest plunge in eight years as demand for investment goods was eroded.

74 -- 7.4 percent, the biggest drop since january 2009. an estimate of 2.5%. --tring of data points to a serves as a reminder that it isn't fully insulated against risks, despite a strong set of data coming out of the german economy last year. manus: the ministry says the week start to the year should be manageable. it is a volatile -- volatile series, but car manufacturing significantly broadened -- brighter. the revival of manufacturing can still be expected. let's talk about markets. we have a little bit of a rise. rise in european equities today. volumes in asia have been typically thin. estimates they are not in a mood to raise rates aggressively. you are looking at a slightly

better european equities. despitee -- francine: julie -- geopolitical tension, currencies of bit higher. the australian dollar is in there for you because we have seen no change from the rba. we did spike quite aggressively before the rba make their decision. manus: deutsche bank is easing inadditional 2017. they prefer to buy the aussie against the yen. the euro in there this morning, still trying to make up its mind which direction to go in. that german data has done nothing to move the market. merkel referring to europe facing a nervous phase after the brexit analogy. politics certainly one thing currency investors are watching. also, we talked about even

number, it canon be dismissed as mostly about oil. let's get the first word news. in the u.s., president donald trump has signed an order restricting people from six muslim majority countries from entering america. it revives a policy overturned last month in the courts. the directive takes effect march 16 and removes iraq from an initial list of countries whose citizens cannot enter the country for 90 days. visa holders and green card holders will not be denied entry. republicans have unveiled legislation to repeal and replace the affordable care act. it promises to phase out key elements of obamacare over the next few years as they try to break through a stalemate between moderate to cash moderates and conservatives. called the american health care act, it includes a refundable,

age-based tax credit to help people by insurance and eliminate taxes used to fund the 2010 law. g-20 finance chiefs plan to drop and next -- a pledge to resist protectionism according to a draft communique seen by bloomberg. is aftere in language a meeting where it ministers and central bankers about to reduce all forms of protectionism. which comes after president trump entered the white house saying he would prioritize american interests. global news 24 hours a day, powered by more than 2600 journalists and analysts in more .han 120 countries you can find more stories on the bloomberg at top . let's get to matt miller on the ground at the geneva motor show. with the head of chad -- jaguar land rover. thank you for your time this morning. let's talk about -- before we

get into the cars, what about donald trump's executive order? are you concerned about that pushed mark does it affect your company at all? we arehe end of the day, an export company, which means we need free and fair trade. you have any plans in place in order to try and work around, in case there is a border tax for example? >> at the end of the day, we have to see our limits. politicalinfluence decisions. we have to make the company stronger with better products. higher, which have is which are special for the customer with excellent design. that is our reaction. we will make even better products. matt: you are having tremendous success at jaguar, but most people think instantly of great britain when they think of jaguar. briggs it must be a more pressing concern. how will you work on brexit? ralf: we have to make sure that

our cars have high desire. clear europe is a most important market. that means that we not only sell finished goods into europe, but we also buy components, parts out of europe. about 600,000 units we are producing in the u k. given that, we need free and fair trade. matt: what about the plants, what about the production? even have any special agreements with the british government? do you think they can offer you , concessions are being made to other carmakers? ralf: we don't see any concessions and have a fixed operational footprint and cannot change that operational footprint quickly. willfore, the product decide and the customer will

decide. matt: let's talk about that product. your new model has met with success. a number of products are growing rapidly. about topping -- talking doubling of growth. can you sustain the growth? ralf: we have a very good product for you. is an absolute market success, but today at the geneva motor show, we are going to unveil two revolutionary comments. -- products. tom: -- plan?is that your i know ranger or land rover hasn't quite put up with the growth at jaguar. last year we grew by 77% on the jaguar side, not with that kind of strong growth on the land rover side. but why? we changed from discovery to the

new modern discovery and in addition, we stopped production of the defender. you will see growth this year on the land rover side and behind you is a new vehicle which really has design excellence. the new design language, modernity and elegance. even in her value with the kind blade.nology we call it serves you like it butler. this type of technology will increase growth. but i also have to say it is not just growth for the sake of growth. due to the fact we are in the premium business, we deliver outstanding vehicles for the customer. we do not do ordinary, and therefore, we really want to grow sustainably. matt: we are standing here in front of the new discovery, it seems to be almost encroaching on range rover territory. the amount of technology in the vehicle. the you still need to have these two separate brands?

we only have one brand. the top brand is land rover. below land rover, you have three legs. range rover, the discovery and the defender. and you will see that only these legs will get more products. matt: defender will be great to see more of that. the outgoing car was an absolutely classic cold hit. people must be yearning for it. i am sure they ask you every time they see you. ralf: yes, they ask every time. the new defender will be better, more connected, more safe, cleaner and unbelievably capable. talk about the sales in europe. the situation as far as the european economy is concerned. what you expect for this year? everything seems to be firing on all cylinders in terms of the economy and auto sector. ralf: i am cautiously optimistic

about not only continental europe, but also the u.k.. we will see the results. matt: what about in china? there have been a few more stumbling blocks there although there has been tremendous growth and growth potential. how does the situation look to you right now? ralf: china is continuing to grow. gdp p growth rate of about 67 -- 6%. we see very good prospective in china. --t: chinese command customers demand big discounts. we have heard anecdotes of other premium brands offering up to 25% discounts. you have to go into that rebate territory to get a bigger foothold in the market? ralf: no, we don't want to go into this kind of territory. matt: what about selling into

the big cities and tier two and tier three cities? how important is it for you to get in and in fact china with the jaguar land rover brand? ralf: china is the biggest market, therefore it is important for land rover. but land rover still has a very limited network and there is huge growth opportunities. the opportunities in growing the network and growing opportunity to sell more cars in the cities but also now tier two and tier three and go more to the west. matt: let's talk about the u.s.. we touched on the border tax and issues in president trump's executive order. but what about growth there? are you optimistic for economic growth in the u.s., especially for your brand? ralf: u.s. was already on the high last year and i am pretty sure, that i cannot read in the crystal ball, it i am pretty sure we will see continued growth in the u.s. this year. matt: what kind of numbers are

we talking about? ralf: i think check a land rover will be very successful. we have a very good team there and trust the team will grow over proportionally. matt: all right, thank you so much for your time. the president and ceo of jaguar land rover. back to you in the studio. anna: matt miller joined their by jaguar land rover. let's talk about what is happening in the properties sector. we will return in real estate. safe haven flows driving to germany. we speak to one of the countries leading companies about its four year performance. this is bloomberg.

♪ 8:16 in berlin. there are-dollar just in. 105.88 ahead of the jobs report. let's look at gmm.

you've got a little bit of equity story there. asian equity markets finished the day not too badly. fedrgan warned the hawkish rhetoric could mean a pullback over the next few days on the equities side. anna: 3/10 of a percent. on the fx story, the south korean you want up despite political tensions. up as the rbat does nothing with interest rates. this hour, we have 45 minutes until europe gets underway. juliette saly is standing by. exxon mobil has announced a $20 billion building spree in the heart of the u.s. chemical and refining industry. a program that will create 45,000 jobs. donald trump quickly tweeted his support, calling the oil

producer a special company. critics have pointed out the announcement gave a name to a series of investments the company began making as far back as 2013, the for the collapse in oil prices. euphoric human for -- market debut, snap shares have fallen. they closed more than 12% yesterday. that is as analysts began weighing in with their thoughts on the company's true valuation. but the stock is still almost 40% higher than its $17 ipo price. a sale of 4 billion euros of shares. the subscription price for the new shares is a 34% discount to yesterday's close. the french state, which owns about 80% -- 86% of the company will subscribe for about 3 billion euros of stock. adf says it will use the proceeds to balance its sheet -- alan sheikh.

-- balance sheet. how much in friedman's said to after eating out rival bidders. the agreement could be announced as soon as this week. they also said hellman and anddman beat out candidates funds at about 1.8 billion euros. the ceo of volkswagen has given bloomberg his reaction to psa groups takeover of hotel. in the past, we had competition from opel and have been dealing with it. we always respected them as competitors and will respect that new combination. this is not going to stop us, to look at ourselves and implement our plans going forward. we are very confident. juliette: we will be talking to 8:00 a.m. u.k.at

time. that is your bloomberg flash. its look at markets. the nikkei closed down by about 2/10 of 1%. the topic in yen, very unchanged. testskorea's missile taken in their stride. we saw one of the best performers in the region, the one -- you on also strong. the fx 200 closing higher by a third of 1%. looking at stocks in detail we have been watching. rally continuing for a second session. china life insurance company by 18% year to date. korea pacific, a standout in the session. we have seen a huge influx of foreign investment coming into south korea. stocks 34.8 percent according to data obtained by bloomberg. also energy stocks getting a rally. this is a malaysian oil producer. it is on the likelihoods of

further output cuts from opec. the rba decision, no change. we have seen the aussie dollar in focus. 65.27. with those red bars, the aussie getting resistance trying to get below that 75 u.s. set level. this is where the rba would be more comfortable with the aussie dollar. today, we sold down a little when the rba came through with its decision. but then up again. $.76 for the aussie dollar. thank you very much. juliette saly from hong kong. itman properties vonovia, confirmed its 2017 forecasts. manus: the german real estate company proposed a full-year dividend of one euro, $.12. joining us is the company's cfo. thank you so much for joining

anna and i. good news for your shareholders, dividends are up. you are i suppose talking about a very successful five years to investment. my question to you on the dividend. how sustainable is that uplift in the dividend? is this a new benchmark for investors for vonovia. stefan: it absolutely is. the 1.12 is what we delivered in 2016. there will be 1.24 dividend without acquisition in 2017 already built in the system. acquisitione conrad on top, this is exceeding 1.30. we don't see the system of more inefficiency, more growth, more quality in our top line stocks.

a rocksteady stock to bank on in tumultuous europe. anna: let's talk about property prices. what are your expectations for property prices? they have been doing well in certain cities like berlin. how sustainable is that? values are going up. they have been in the last years, significant catching up. in the u k and the rest of europe, it has not been replicated in germany in the last 20 years and therefore, we have to pay cash up here. and in balance of supply and demand. berlin is a hotspot, there for growing significantly. our competitors -- prices are increasing. we see a bubble? there will always be pockets.

we also see valuations in berlin are to a certain degree, not justified by performance at the moment. in principle, i think it is still stable, but not a cheap market anymore. london -- look at prime london, they say there is value there as well. let's talk about europe activity. 1.20 four.d is that is the implied dividend. i am getting the vibe that you don't want to grow outside of germany. is that my take away from these numbers? you are not in the market for cross-border transaction, even after the austrian deal? stefan: no, the austrian deal we bought because 90% of austrian assets were in germany. we haven't agreed upon strategy, it is clearly to state domestic with our outfit. but it would not be truthful to

say that we are not looking. i think it is a matter of course the management team is analyzing moral support. the charge,hing on nothing strategy, nothing on the budget for that. you continue to increase rental incomes at the current rate of growth? stefan: i am confident we can even exceed that. 3.3 toa guidance of 3.6%. 4% inxpecting to exceed the year 2018. this has a lot to do with our investment modernization program, which is a lot of blood, sweat and tears but very helpful for our customers and our shareholders. manus: obviously you refer to germany being a rocksolid property market. you look at the landscape of german politics, how concerned are you about populism pushing through? how concerned about merkel still

being in charge? no, we are not concerned about the political landscape in germany. it has a long tradition of having coalition governments, which tend to do the country good because we are very consensus driven. --are also seeing that seeing germany become focused on federal elections that are inally more conservative these type of elections than in regional european elections. i am not too worried. anna: thank you so much for your time. we appreciate it. the cfo of vonovia joining us on the line from germany. that is it for daybreak: europe. the european openness that next year -- open is up next. terms of where we are expected to open on these european markets? manus: indicated higher. london up to 2/10 of 1%.

this as we see the dax set for opening up by an eighth of 1%. german factory orders slumped the most since 2009. that is it for anna and i. market open up next. ♪

♪ guy: you are watching bloomberg markets. this is the european open. first trade of the cash session shortly. i am guy johnson in london. that miller is in motor city. let's walk you through what you need to know. red light on the border tax. a call for trade barriers to go show.t the geneva motor we speak to the psa ceo. the conversation at 8:00 a.m. u.k. time. a step back. the