u. hourly earnings could be the figure tos. watch today. korea in crisis. trouble on the streets as president park is ousted from office. the nation faces elections within 60 days. deal delay. theresa may hits back at claims of a post brexit trade agreement with the e.u. could take 15 years. good morning, everyone. francine lacqua and london. we have great guests coming up

and we go through brexit, what is next. let's check on your data and your markets. we have seen a little bit of an easing of the rout we saw on government debt. treasuries steadying after a long slide. the kospi, south korea's benchmark rising after the president was.removed from office . the other thing i wanted to show you which is on the data screen -- oil climbing from a three-month low but remains below $50 a barrel. we will get plenty more on the markets throughout the hour, but let's get to bloomberg first word news. nejra: there has been violence south korea's president became the first democratically elected leader to be forced out of office. icourt upheld parliaments decision to impeach her over a rolen a corruption scandal.

it opens the door for park to face jail time and triggers a presidential election within 60 days. police in germany have arrested a 36-year-old man who injured seven people with an ax at duesseldorf's main train station. it happened before 9 p.m. last night. the suspect is from former yugoslavia and has mental health problems. in chianna, the governor of the rate shouldae yuan be relatively steady. rates will best based on the domestic economy. the u.k. has been warned that a post brexit trade deal with the european union could take more than a decade to conclude. the danish foreign minister reckons an agreement could be 15 years in the making. in response to recent may said she is still working for the planned two year time >> tables for negotiations. >>that is the timetable that the

european union is working to. if i am optimistic that we can achieve a good and comprehensive free trade deal with the european union, why am i optimistic about that? because it is not just what is in the u.k.'s interest that is about what is in the interest of the european union. nejra: meanwhile, the u.k. foreign secretary boris johnson says it would not be reasonable for the e.u. to expect for them to accept a vast bill to settle liabilities brexit after. he expects the tab to be 60 billion euros. global news 24 hours a day powered by 2600 journalists and analysts in 120 countries. this is bloomberg. francine: thank you. the market is seeing a u.s. federal reserve rate hike next week as a foregone conclusion but if there is one thing that could derail a move it is today's nonfarm payroll numbers. of data before the

meeting to have added 200,000 last month. but economies have underestimated employment growth in february. will that be the case again? we and find out at 1:30 p.m. u.k. time. as the global bond rout deepens yielda u.s. 10-year suffering its first run and 40 years. for today is julian chillingworth. always a pleasure. welcome to "surveillance." give us a sense of what would need to happen for the fed night ot to hike. julian: even a pretty bad number would still see a hike. all of the evidence we have been picking up over the last few weeks has been pretty strong and the adp number on wednesday was a very strong number. jobless claims were not bad last night. so, i think it would have to be

a truly awful number and i think that you would have to see un employment rising dramatically to shake the fed's result. francine: what happens that the market reprice? presidentne frazzleed after the other saying that they are a lot more hawkish but is there something in the data or inflation forecast that is justifying it. they are data dependent. julian: i think that they obviously when they were deliberating their next move, they were very mindful of the noises coming out of washington. and obviously, the likelihood of onther stimulus packages infrastructure coming out this year but next. and also i think they could -- the economy was performing pretty well across a whole range of data. and, obviously, as you rightly say with a keen eye on inflation and seeing that rise. francine:, he hikes are you

expecting this year? let me bring you over to the world interest rate probability. 100%. it's 100%. and probably cut a zero. i do not think i've ever seen it like that. do you think it is worrying because it is such a done deal , if you were the fed, would you wanted it 100 or give it a little bit of breathing room? julian: they always like to feel that they deliver no surprises. and yellen's tennessee has been a no surprise regim -- tendency has been a no surprise regime. the debate has been, is it three rate hikes this year or not? obviously some of the claiming ifes are inflation does get more of a grip and the u.s. and we see more wage inflation, then maybe three is not enough. francine: what does it mean for treasuries? julinan: we have seen a backup

and treasuries in the last few days. i think they are reported well pricingin three now. francine: where would you be, the short and? julian: we are at the short end. very defensivebe and our bond allocation. i think we continue to see volatility and bond markets. we will come on later today to talk about politics but obviously, you know, the political backdrop is uncertain. and that is something the bond markets do not like. francine: but they are ignoring it for the moment. what would you point to the most worry? we were speaking to jamie dimon yesterday and he was saying, donald trump is awaking the animal spirits. he does not worry about a trade war because this is just noise. do you agree? julian: i hope he is right trade war would be disastrous for the whole developed world. i suppose it is difficult for us

sitting this side of the atlantic and receiving all of tweetsgoing donald trump not to be worried. and i fully take on board what jamie dimon is saying and he is based in the states. i have worked out there and i can fully buy into the animal have seen onent i wall street in the past. but from this end of the telescope, i think we are concerned and will remain concerned. francine: are you concerned will not be enough tax cuts coming to? you can argue this is one of the reasons why markets were so high. what happens if you cannot deliver it? julian: two elements to this. the market is expecting the back a tax package.r, whether he can get that through congress we shall have to see in a form that will please markets. and the other side to it that we should not forget is the strong dollar, which i suspect we are going to enjoy to the rest of this year, is likely to see profits particularly from some

of the u.s.'s largest companies under some pressure because willusly inflation have them as well. it will not be as good as some market analysts are suggesting. francine: thank you so much for now. we will also talk about your vision for europe. we will drill down into those jobs numbers. u.k.gary cohn at 2:45 p.m. time. if you are a bloomberg customer, you can watch the show using tv go. see the video stream and follow all of our charts. this is the wirp function. you can steal them and put them in your library and data. and you can also message the show's producers and ask us to ask julian chillingworth his call on the euro-dollar. nejra: ubs has reduced is 2016 bonus pool and lowered the ceo's

restatedr the bank income for the year to settle legal case. the bonus call dropped 17%. has a total compensation of $13.5 million. the ceo of aberdeen asset management has said he will focus on next turn affairs after his company's merger worth standard life. martin gilbert was speaking exclusively to bloomberg and his first interview since the deal was announced. singapore property developer stocks have soared as authority curves.ket authorities will adjust a framework that limits the amount homebuyers can borrow. the time that owners must hold a property to be exempt from the duty will be shortened. and that is the bloomberg business flash. francine: european union leaders sent a clear message to the u.s. from their latest summit that they will continue to promote

free trade and international pacts including nato. creditors as greece's depart without an agreement on emergency loans, we spoke exclusively to the head of the country's new democracy party which leads poles. he had a very clear message for the prime minister. don't count on us to biaail out your government. >> the creditors are requesting that we consider to be excessive fiscal measures, which go beyond program,f the 2019-2020. we are not going to vote for those fiscal measures. we feel these fiscal measures greece hast that to play for their incompetence of this government. been catchinge's up with the delegates in brussels. carolina, how exactly was he -- he seemed very clear. >> he seemed very clear that he

does not want to vote on the current measures accepted by tsipras. he wants to call for snap elections. he told me that snap elections could take three weeks if they were to happen in the next few monthsin greece, and he was confident he could become the next prime minister if those snap elections were to happen. tsipras has got a very short majority of only 3 in parliament, so of course, he does need the opposition to vote on the measure. he might face some issues in parliament. the opposition leader, who also bed me that if he was to elected the next prime minister, he will introduce more growth oriented reforms, including privatization to send a clear signal to investors globally open force is still

business. he also wants to convince creditors to lower the targets for the budget surplus. he thinks that is necessary. and he is confident that in the willr term, greek bonds end up being included in the quantitative easing program of the ecb. he said if he was an investor himself, he would look at the medium to long-term prospects of greece witchy things are good. -- which he things are good. francine: you also spoke with theresa may. what did she tell you? i asked her reaction -- the danish foreign minister telling bloomberg that a trade deal with the u.k. could take up to 15 years. so, i put that question to theresa may, whether she was -- she could actually achieve a trade deal within a two-year period. the timetable we are

working to and that is the timetable that the european union is working to. if i am optimistic that we can achieve a good and a comprehensive free trade deal with the european union, why am i optimistic? because it is not just about what is in the uk's interest. it is also about what is in the interests of the european union. is not intheresa may brussels anymore kerry today the leaders are meeting in order to prepare the rome summit in march 25. theresa may next returns to brussel, brexit will be on the agenda. francine: they do so much. meanwhile, in yesterday's monthly policy announcement, mario draghi says the banks governing council will continue to improve changes in inflation if they are judged to have no application for the medium-term outlook. >> headline inflation has again increased largely on account of

rising energy and food price inflation. inflationnderlying pressures continue to remain subdued. to julianlet's get chillingworth, the chief investment officer of rathbon e's. i do not know if you look more of what the european central bank is doing or if you follow the e.u. brussels summit closely to see any indication on what happens with greece, on whether we have an agreement with the imf, and especially what happens with brexit. julian: dealing with the ecb, as he talked about removing certain instruments that he then did not tell you what those estimates were, that they had taken off the table. but he has got to manage the next 18 months effectively with people calling for tapering to kick in and a possible rate increase and the debate is

whether that is in 18-19 or definitely into 2019. the ongoing press coverage as we are going to have around ecb meetings are going to be followed closely in the next six months, particular i suspect after the french and dutch elections where he may feel he is in a strong position to say more about the future. francine: what is the main were you have, that greece gets kicked out of the eurozone or that something happens on greece, or is it france and italy? julian: as we stand today, and one should never make these comments emphatically, it looks unlikely that greece will be kicked out of the e.u. i think we have come down such a long road that all the senior members, the french and germans, are prepared to keep the greeks in for the overall unity of the e.u. particularly with brexit. over the french elections, yes,

there is going to be a lot of noise around the french elections. it looks as though we are ofting a coalition together people who are going to come together who will be anti-le pen and therefore probably around macron, but we shall have to wait and see. at the moment, that is the way the markets are seeing it, she stands little chance of getting elected. francine: how would you play it? i have the picture of the french-german spread. there must be another way of playing it. volatility or? volatility.can buy the other thing that people have been doing, which i'm not convinced is the way ford, is there has been buying in the gi lt market as well. francine: there has, a little bit. julian: whether that is the answer is a different matter. francine: exactly. that is what we are talking

about next. he stays with us. up next president park is sent packing. south korea's leader is ousted for her role in a corruption scandal. we're looking at live pictures where there are protests, both for president park and against park. court unanimously confirmed parliament's impeachment removing her from office from today. that could also open the door for her to face jail time. the latest from seoul next. this is bloomberg. ♪

francine: this is bloomberg "surveillance." now, south korea's president park has become the country's first democratically elected leader to be force out of office. after a court unanimously upheld parliament's decision to impeach her over her role in a corruption scandal. it was a decision many south and fought hoped for. the court explained president park committed a grave violations of the law by leaking classified documents to her friends. court president said that part betrayed the trust of the people. now, the move triggers a presidential election within 60 days, with opposition figures leading in the polls. the democratic party is the front-runner with more than 30%

support according to a gallup poll. the decision brings south korea closer to moving past one of the most turbulent periods in history. millions of people took to the streets, to demand probes targeting some of the most powerful business and political elites, including samsung's vice-chairman jay y. lee. south korea's remain on the streets, some to celebrate the ouster of park, others to protest the court system vision -- the court's decision. francine: still with us as julian chillingworth, the chief investment up us are at rath bone's. i made a timeline charting parks doubtful. the kospi index, the korean stock exchange and then the various circles up until the purple one are basically when some of the offices are raided at samsung. this is the apology in purple of, actually her third apology,

this is when we are seeing jay lee arrested. the markets to not really care. they bet on the other side of it. julian: you can argue a bit of a relief rally that by the impeachment we are seeing atters go forward and election is being tabled which the markets views as a positive and i suspect your correspondent said probably this is going to be a slight move towards the center left. and market views that overall as the possibility of reform coming through, which will be good news for the economy overall. francine: so, what does it mean for you? do you look at it from a geopolitical point of you? do we really believe that north korea could come closer to south korea? julian: we believe that it may hopefully over time come closer. i think unification is difficult to envisage. it would be extremely costly for

south korea. it would dwarf the invitation of east and west germany. it would undoubtedly require u.s. and chinese agreement, and obviously, i do not think that's likely anytime soon. so, consequently, reform within south korea hopefully will be good for business generally and stability. francine: are you invested in the region? are investedwe in that region in general and the longer-term growth undoubtedly yes. i think in the short-term, we were talking earlier about fears of protectionism and strong dollar, you will see volatility in the region as well. francine: would you wait it out? julian: we have been very long-term investors in asia. i wouldn't necessarily say this was the entry point. francine: stocks or currencies? julian: mainly stocks. francine: bond exposure in

specific countries? julian: more general, because it is easier for our client base to buy across the board then to target specific countries where you will see greater volatility. francine: thank you so much. julian chillingworth, the chief investment officer at rathbone's joining us for the first half hour. up next, as theresa may heads back -- hits back, a post brexit trade agreement could take 15 years, we speak to the finance minister of luxembourg. yesterday we also spoke to jamie jimon. we will get his views on brexit. he certainly believes that bankers should be prepared and they should get prepared together. this is bloomberg. ♪

francine: welcome to our weekly brexit show live in london. i'm francine lacqua. here's nejra. nejra: the uk prime minister

formed the for -- fired the former finance minister. the upper chamber rewrote her draft law to guarantee parliament a meaningful vote on the outcome of exit talks, potentially vetoing any final agreement and stopping the premier walking away without a deal. u.k. chancellor philip hammond has some rare good news to announce in his budget. stronger than anticipated tax receipts mean government borrowing is predicted to be lower over the next five years than forecast in november. since earlyrst time 2014 office of budget responsibility has upgraded its medium-term fiscal outlook. demand for u.k. housing dropped to a six-month low in february. a measure of inquiries from potential buyers fell to 0.3% in january. economists expect home price growth to cool as inflation

erodes household incomes and brexit uncertainty clouds the economic outlook. and prime minister theresa may -- may increasingly expect the u.k. to trigger the start of brexit talks late this month, according to the european union diplomat. while the end of next week remains an option if may can secure approval. signs are mounting in london and brussels she will hold back after a march 25 summit of e.u. leaders in rome. this is bloomberg. francine: thank you so much. we are just getting breaking news out of the u.k. bitu.k. is losing a little of momentum when it comes to factories and builders. u.k. manufacturing and uary,ruction shrank in jan pointing to a loss of economic momentum in the first quarter. factory outputs falling 0.9% from december and total adjuster production declined 0.4%.

if you look at building firms, they cut their output by 0.4%. this is the picture for the pound and we are getting breaking news for the trade deficit for the fourth quarter of 5 billion pounds revised from an earlier figure. it is quite a hefty revision. now, it is exactly three weeks until the u.k. government's own deadline to trigger article 50 starting the official process of withdrawal from the european union. today's brexit show will focus on financial services. financial and professional services are responsible for 12% of the u.k. gdp and a total of over 2 million jobs 2/3 of which are outside london. later, we are going to get the british view, but what position will the rest of europe agree when they discuss brexit at their summit in brussels today? one of the countries around the table which is also a key player in the financial services sector is luxembourg. i'm very pleased to be able to

speak to the country's finance minister who joins us now from singapore. so much forank you giving a little bit of your time to bloomberg. first of all, do you think -- good morning,. dold be a great template -- you think that singapore could be a great template or do you think that luxembourg should take singapore is a blueprint? >> i think luxembourg and singapore have a lot in common. they are both natural gateways into their region. luxembourg for the e.u. and singapore for asean and all the southeast of asia. we are both places where a lot of foreign direct investment th places where investment fund industry is very well developed. in fact, our bilateral cooperation between singapore and luxembourg is quite good. i signed today a bilateral agreement for allowing the

automatic exchange of information between luxembourg and singapore. so, we have a lot of things in common, and even more so in the future. francine: minister, i know you're one of the eternal i knowt on europe, and you want to make sure the people understand that europe is doing better than some people are reporting. what is your main concern on europe? the recovery is recovering but we are not talking about 3% growth and unemployment is still very high. >> well, in fact, what we have in europe is a recovery that's not celebrated because it's being like locked it. growing at an average in europe close to 2% this year. aresame was the case e.u. planet is going down. it is less than 10% for the first time since a long time. and debt and deficits are going down. we can see that in many countries the forecasts are even getting better by the

month. so, what i'm saying here is that it's useless to focus only on the negative news. and what we really need is to have confidence pick up so that also investment can pick up, because that is still the weak spot that investment in europe is not at the same levels as it was prior to the crisis. francine: minister, what have you learned about how i guess the government of theresa may will or won't protective financial services? do you believe it is one of their priorities or is it further down the list of the things they need to do in the next six months? >> well, as i just heard in your ine, it is such that the financial services account for 12% of gdp of the united kingdom and financial services account for 25% of gdp of luxembourg. these are the two largest financial centers in europe.

so, you can imagine that this is extremely important also because in that sector the added value is very high. issue of the whole access to the single market, you have the destruction coming from digitalization. so, these discussions are going to be very difficult. i think there is some recognition now off the-- in the united kingdom, you cannot have total access to the e.u. single market when you leave the european union. so, there needs to be a constructive approach, which needs to found. francine: how do think it will end? good, which means some kind of positive agreement, or it ends quite badly for both parties, the e.u. and the u.k. if you had to put a prediction, which one is it at the moment? >> my prediction is always positive, and i give you one good reason why this is the ca se.

it is not such that if you the the automatic access or passport to the european union for financial services and goods and services, that does not mean you cannot do trade with the european union. banks that have never been part of the european union. they use subsidiary's in luxembourg to take advantage of the single market. so, what i want to underline is that business always finds ways and means to make sure that they can build on the markets and sell their goods and services. so this is not a black and white issue. it's something where business can bring many answers also if the legal framework changes. francine: minister, i spoke to jamie dimon, the ceo of jpmorgan, and he was telling me they have various options when they look at moving staff outside the u.k. the so-called hard brexit. he says he only has something in

luxembourg. have you had any agreements a verbal or written with ceo's that luxembourg would be there natural place to move? -- their natural place to move? r expression that luxembourg is the natural place to strengthen the presence or to just establish a headquarters if you are not present. many banks, many players have set up their structures in such a way that they are only in london and they cover all of the e.u. through london. now, very many players have decided they need a second leg. and we are very natural choice. as a matter fact, large insurance companies have announced and in the last days they have chosen luxembourg, the same goes for asset managers, the same goes even for some -- companies and we are very pleased about that. on the other hand, we are also part of the solution. our goal is not to attract

massively people from the united kingdom. we want to build bridges and make sure that the substance -- in luxembourg is credible to such an extent that the cooperation between london and luxembourg can be optimized. francine: thank you so much for making the time to come to, speak to us. in our london studio, the finance minister of luxembourg. stay with "surveillance." still guessing. jamie dimon says he is still unsure how many jobs and services will be shifted from london posts brexit. more for marx was of interview next. that interview next. we round up the news and have your market update. we will speak to citigroup's chief economist as investors await payrolls numbers. this is bloomberg. ♪

francine: you are watching our weekly brexit show. i'm francine lacqua. jamie dimon says he is still getting -- guessing over how many jobs and services to shift from london as the u.k. has towards brexit. we spoke to him exquisitely in paris yesterday. >> on day one, whenever the exit takes place, jpmorgan has to be able to conduct this is with our clients and your. that is a sine qua non. they include hospitals, schools and individuals at etc., we have to do that and meet the new laws. we have to anticipate someone build up structures. we will be ready because at whatever cost, we have always been public that we think that that initially will be zero to 3000 to 4000.

the other important thing about day one, because there is day one and then you have the next 10 years. ist happens on day one different than what you will be asked to do. the british people will decide in the european, the policy makers will decide. we'll simply accommodate it. wants is to disrupt financial markets on day one. francine: between zero and 3000, are you saying the first 100 i send ahead of triggering article 50? >> people hiring locally, and how much it -- we're just guessing at this point. francine: but is it a phaseout, step-by-step? >> we are just guessing. the only thing i know is that on day one we have to conduct business in europe and we need different legal entities and regulatory requirements and certain expertise hired locally. francine: are you speaking to other ceo's to look at this together? >> we talk to each other.

we get good insights from each other. london, the clustering of london is hugely efficient for all of your. and now you will have a de-clustering, which is expensive declines. but we have no choice. that is what we have got to do. we have got the best we to do it for the client and the short run and long-run. francine: theresa may's government preserves the financial sector -- >> i really don't know. it is not up to just her. she has to negotiate with 27 other people. no one want to see disruption. some say they want to punish britain. others are more rational and thoughtful about how they want to go about it. again, as the ceo of this comfy, i have to prepare for the contingencies. if any one the viewers were on my board of directors, you may think, you may prepare for a, b and c. that is a slightly different way to look at it. francine: joining us in the

studio is miles sell it, to the executive of city u.k. which represents u.k.-based professional services. great to have you on the program. we're just speaking to jamie dimon. he said we have to assume the worst and do not execute until we know what happens. the problem is the timeline. do you think a lot of ceo's will move staff before we hear the government's exact plans? >> i think what people are doing as they are looking at the contingencies but equally people do not want have to put costs in action and execute actions that are necessary. this is ultimately about making sure you can minimize the cost, minimize the disruption but most important to be able to continue the able tod, to serve customers and clients in europe and the u.k. francine: can you put a figure on how many job losses the city of london will see? i asked that question to jamie, any said that they are obsessed with the but it is imported to give an idea of what the financial picture in london will look like. >> at the moment, we are in

something of a guessing game until we have greater certainty about what the final deal looks like, what the adaptation period might look like. we released a report. we listed a high access brexit versus a low access brexit. the high access, something proximity to eea membership, we are talking between zero and 3000 and 4000 jobs across financial services in the u.k. at the low access, something that is approximate wto rules, 35,000 jobs. francine: do you know from ceo's that a lot of e.u. nationals want to go back to their own country following the fact that first of all the -- their rights in a protected under banks say it may make more sense because it is cheaper in the continent? >> i think that is going to depend on where the deal goes, what the mood music is for the negotiations. you can talk about anecdotes but

there is no hard data in this space. i think what we are hearing and we have seen this today in terms of the comments we have seen appetites there is an on both sides and we saw this an interview with a luxembourg finance minister early. for a constructive outcome. there is a recognition that poor relations and a lack of access to london is not in anybody's interests. what is your relationship like with may's government? >> it is terrific. also, in brussels and member states around the e.u. 27. as i say, there is a recognition of people need to get their heads around what this means, what this requires, what this entails, what risks are and how we can navigate the waters over the next two years and beyond to make sure there is a good outcome here about one works in the interests of clients, customers and citizens. francine: i'm assuming the government has a list of priorities they want to safeguard when they start negotiations with the e.u.

where do you think financial services is in this list? >> we are confident that financial services is seen as one of the underpinnings of the uk's long-term success and that is been the case for the long time. we have three priorities we talked to her with government, under the mutual rightly tory recognition, the right process for exiting, and agitation per -- an adaptation period, continued access to high-quality talent and that is something we had a constructive engagement with government on and a constructive engagement on the other side of the channel as well. what we talked about is abridging period between the end of article 50 and the start of the new relationship, and then an adaptation period. i'm hoping that we get that and i think everybody sees that is in their interest to get that. this industry is a mutually advantageous to do to gassett for both sides of the channel and retaining access to that and we saw that with a common is that you had yesterday on

bloomberg is something that is recognized across europe. francine: what happens if you do not get it? optimist by nature. i'm caught that we will get it. and the reason i am confident is that it is in the mutual interests of both sides, that we continue to have this kind of access. francine: how much would it hurt financial services if we don't get i t? i think a lot of people are hoping if you are the ceo and looking at contingency plans, you assume the worst and plan for the best. we haveost for analysis talked over the treasury and the bank of england and we talked through it in europe, talked about 35,000 jobs in financial services, but it is worth airing in mind, the largest single slice of those does not go to your. -- to europe. it goes to new york. then asia and a bunch of businesses and thn it fragment across europe. francine: they do so much. for joining us today, the chief executive of the city u.k. up next, lords, a budget and we round out the brexit news of the week, and have your market

update. this is bloomberg. ♪

francine: you are watching our

weekly brexit show linve in london. i'm francine lacqua. let's get a roundup of this week's news. nejra: the u.k. for mr. fire the government advisor after he led 3 for rebuild the house of lords hoping to inflict a second brexit bill defeat on theresa may for the upper chamber -- we wrote her draft law to guarantee parliament a vote from the outcome of exit talks a be telling any final agreement and stopping the premier walking away without a deal. u.k. chancellor philip hammond in good news to announced his budget as the country prepares to trigger brexit talks. struggle than anticipated tax receipts means that government borrowing is predicted to be lower over the next five years than forecast in november. it is the first time since early 2014 the office of budget responsibility has upgraded its medium-term fiscal outlook. and demand for u.k. housing

dropped to a six-month low in february. of increase from attentional buyers fell to zero from three in january. they expect home prices to cool as brexit uncertainty clouds the economic outlook. global news 20 for hours a day powered by 2600 journalists and analysts in 100 and 20 countries, this is bloomberg. francine: time now for your market check. mark: we are up for the second day after a four day drop. there is only one game in town, the u.s. jobs report. 10 days of gains for the u.s. 10-year yield, an 11 day stretch, through april the 13, 1974, that is when president nixon handed over partial watergate tapes. the fed raise rates in april's and again in may that year, lifting bowring -- following costs in an effort to

combat inflation. next week the fed widely expected to hike rates again. ahead of that, the dollar rising to its highest level since j anauary amid speculation today's jobs report will add to signs the world's biggest economy is gaining. a more intense focus from clients on the central bank's dot plots rather than the agile decision as we said it is widely forecast. expecting a 200,000 gain in today's nonfarm payrolls. average hourly earnings forecast 2.8%se .3% on the month, on the year, and oil below $50 a barrel after a surge in u.s. decline raise or gains over the last three months from that opec deal. but futures climbed today as much as 1% in new york. .6% plunge over the last four session that ended

in the lowest close since november 29, the day before opec agreed to trim supplies. it is clear that opec's strategy to balance the oil market is facing its clearest test. oil below $50. francine: bloomberg "surveillance" continues with tom keene out of new york. we will be talking deutsche bank. later on, looking for to this conversation, we speak to -- and get treasuries and look at what is happening with kora. we will have live updates from seoul. the content is to take over from president park. and the south korean won pretty much flat as we speak. european indices attach higher. this is the. -- this is bloomberg. ♪

♪ francine: the final hurdle.

to tightennds policy. today's jobs numbers could give policymakers food for thought. electionssts and new in 60 days. isn'texit bill reasonable. in the u.k. the prime minister faces a growing revolt over taxes. this is bloomberg surveillance. i'm francine lacqua in london. tom keene in new york. we are looking at all of the turmoil in korea and with that did mean for unified korea. the dynamics we see in korea, the dynamics in the job report. there is some of the drama in seoul. stuff beneathrket the radar, look at oil in america below $50 per barrel. francine: that is one thing we

need to look at. first, let's get to the bloomberg first word news. taylor: we will start with the turmoil in asia. the south korean president has been removed from office. the unprecedented decision versus her to face jail time and one of the most stunning political downfalls in the country's history. she was impeached in december over corruption investigation. you must be held for 60 days. thousands of protesters demonstrated in seoul. at least 2 were killed. deal withrexit trade the european union could take more than a decade. they will not rule out a 15-year timetable. they want the arrangement to take place during me 2 years allotted for withdrawal. it will not be discussed until other elements are settled. in the u.s., rex tillerson has

recused himself from the controversial xl pipeline heading off conflict of interest concerns while he was president of exxon mobil. signed antrump has order revising the pipeline, which begins in canada. the oversight board rejected a plan from the puerto rico governor to pull the island out of debt. it relies on overly optimistic projections and doesn't cut spending enough. puerto rico is struggling with a $70 billion debt. they have given them the power to impose its own resolution if needed. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. riggs.ylor before, mentioned oil american oil $49.73. this is the curve steepening.

dimon, happy like he was yesterday. never steep yield curve in the u.s. we will see where we are after the jobs report at 8:30. data, the two-year yield at recent highs 1.38%. tom cannot believe where treasuries are. energy stocks a gain for european equities. crude prices rebounding. it is still below $50 a barrel. longest losinghe streak in four decades. it is all about the u.s. jobs report. 1157 after what happened with president park. tom: we will discuss health care in america. michael cannon on the cato institute will join us.

we're looking forward to his controversial writings on how much he dislikes the health plan. divergence in the tone of mr. draghi's comments. italian yields have been flat near zero bound. the u.s. yields off the .lection, up, up, up to 1.38% the diversions, i have never seen before. thecine: i am looking at south korean stock exchange. there has been turmoil, but not in the stock market. you have thercle, first report of allegations in september 2016. step of the way, the stock market isn't doing much. this is the third time president park has apologized.

moving torliament impeach her. this is when samsung gets arrested. it is going other way that is intuitive if you were to look at it from march. the market is seeing a federal hike next week. if one thing to derail the move, it is today's payroll numbers. the final edge of data before the meeting. 200,000 jobs are estimated to have been added to the economy last month. joining us is jim reed, the deutsche bank global head of strategy. .et me start with you overall, what would need to happen today for the fed to change course? it has been telegraphed, priced in. is there any way that they

cannot hike? >> it is extremely unlikely. i would expect to see it stronger based on what we have seen from the adp survey of small companies. small companies other real employers of the u.s. economy. at february, it is the second month since 1895. surgep report picked up a in construction jobs. it doesn't seem any reason why this won't be a strong report. famous last words, but it feels like this could be a strong report. february was very warm. francine: what could go wrong? is it hourly wage growth? question not this hike, but the one after?

jim: they might change the profile. hourly earnings were not as strong as people were hoping, but they have not been a disaster. it seems to us, famous last words, that next week's rate hike is a done deal. tom: when you look at your bloomberg, which is the spread that describes the two virgins best? which spread shows the transatlantic tension between the yellen world and the draghi world? jim: for the front end of the fund curve is. -- bund curve is. there's a shortage of bunds and the ecb exacerbated that. the announcement on monday was they are buying bunds shortened from nine years to four years last month. the front end of the bund curve is incredibly expensive. tom: a week ago they were at

record low yields. how does that fold over to the equity market, and will it lead to instability when it unwinds? james: i anticipate there is a in the u.s. equity markets. i anticipate values of the s&p 500 no higher than 2500 points. said inat mrs. yellen chicago she would be steady, i worry that will fuel sentiment, and we will get a significant risk of material of science in up sides anderial prices. tom: you made 46%. where do you put the new money,

united states, europe, blue-chip japan? for that matter, do you put it in korea? opportunity is an in korea. i expect that economic growth to be 2.5 percentage points. i do not think the central bank will shift rates for the foreseeable future. that we would have this problem in developed markets. taking the fiscal and corporate government situation seriously. , i made there many problems, i would say we could see the share price get to 230000 and one. in the united states i think it is the defense sector. mr. trump wants more money to be spent in the navy in particular.

francine: yesterday we caught up with jamie dimon. he said no doubt that president trump is reawakening the animal spirits. bus listen to what he said. >> is aims like he woke up the animal spirits. one came out of the meeting saying we have never had such a pro-business president since the founding fathers. i am not sure of that is true, but business confidence skyrocketed. pro-business, but at the same time and a lot of unknowns for foreign policy and possible trade wars. do they cancel each other out, or does pro-business makeup for the uncertainty? jim: the pro-business element, probably the overriding factor until something goes wrong. on the back of expectations of pro business sentiment. a client this week said to me

for the past few years clients have awarded me for capital preservation. in the last three months all they have said is open to make me some money." that is animal spirit in sentiments. everything i'm hearing from clients stateside is that animal spirits is back. on to our jobs report. we will go beneath the headline data. bill gross, always thrilled that he will give us time after the jobs report. adjusting and adapting. yield higher, price lower. this is bloomberg. ♪

francine: removing her from office and she is facing jail time. and sold there are demonstrations pro park and anti-park. this is an anti-park demonstration. tom: an extraordinary moment for our global audience. this goes back to john fitzgerald kennedy. 1961. 's father, who i remember from my childhood, a conservative dictator of korea. a number of experts suggest today is the death of authoritarian korea. can see the democratic party supporters, the more liberal audience, celebrating this impeachment.

it is really a change in korea bordering on 55 years of style. anti-parkthis is an rally, a reminder for our viewers. we had huge demonstration into an investigation of the most powerful businesses and political leaders. we would get to that. now, let's go to the bloomberg business flash. bidor: preparing another for acts of noble. to a newscording keeper. the $22 billion offer was reject thes too low and not in interest of shareholders, customers, or employees.

full-year profit as the swiss bank plunged and they had to reflected agreement to settle a legal case. boeing has paid air india $320 million to compensate for the ladies of the 387 dreamliner according to india's auditor. that is your bloomberg business flash. weeks until the self-imposed deadline to trigger article 50. we spoke to the jp morgan ceo , whohairman, jamie dimon says they will be ready but they are guessing how many jobs will be shifted from london. >> jp morgan has to be able to conduct business with our clients in europe. , schools,nts

businesses, individuals. anticipate. we will build structures. we will be ready. public thatys been we initially think it will be 3000 to 4000. we don't know. francine: what did you learn about brexit and the impact of financial markets? much: i'm amazed how optimism there is a u.k. economy. i look at the underlying and i assumessures the consumer price index will be up two point three, the consumer price index up 3.5. inwere constantly selling currency defamation and buying and pounds. that will rollover. defendant on over

consumer borrowing. we make it to rates of no more than one percentage point by the end of the year. francine: do you see the success from the u.k. from now until the end of the year? dictatedpound will be by what happens to other currencies as well. if the u.s. raises aggressively, the pound will fall because of that. that is misleading in many respects. the data has softened in the last two to three weeks from what we've seen. a lot of the brexit talk will be in the context of what happens in the global economy. it has been strong, which helped the brexit story. tom: you don't talk about governor carney. carney, whaternor are his options given the lords actions? how restraint is he in action

given the immediate politics of march? i think governor carney will do as little as possible. i worry if the pound fall substantially, he may be pressure to raise rates, which he wouldn't want to do. i'm sure for the time being he will do as little as possible. tom: off the deutsche bank desk, what is the positioning on sterling and full facing credit sovereign in the united kingdom? jim: the official deutsche bank view is sterling will fall 2017.y into th international events will be just as important as brexit. it is difficult to look at it in isolation. francine: thank you so much. coming up later on bloomberg radio and television, a conversation with the u.s. ,conomic council director

formally from goldman sachs. 2:45 p.m. in london. this is bloomberg. ♪

>> i just hope 2017 will be the year that we push back against this rise of populism. if we were to have an election in 2017 it would defeat populism in a country that first elected the populist government into power. that will be a positive message

for greece and europe. francine: that is the leader of greece's opposition new democracy party in brussels. bevan and with james jim reed. in europe, is it greece and that they could be kicked out, or is it france? jim: it is probably longer-term the biggest concern. the next time europe goes into recession, what are the bullets left to protect europe as an entity? i think populism will be in your miss in 2017 -- will be a near 80 wonder with the bullets will come from the next time there is a downturn. you just looko of for consolidation within financial europe? do you think greece is the

metaphor? we see the combinations that jamie dimon didn't talk about yesterday? perhaps you need a crisis to get minds together to have consolidation in europe. to get the ultimate come together of europe, you probably need a problem that proceeds it. james: we have plenty of problems already in europe. 57% of italians would vote for a euro-skeptic party. although the greek debt problem is insoluble and will have to be is a huge italy economy. they have had no growth for decades. of the italian people will eventually run out. francine: what is the one thing people aren't understanding in the markets? one is thek the

market has become overly worried about madame le pen in france. i would encourage adventures investors to look at the french banks. francine: thank you. coming up in the next hour of bloomberg surveillance we speak with the citi chief economist and the person who coined the term grexit. it would be interesting to get his thoughts on what donald trump means for the possibility of a global recession. this is bloomberg. ♪

day, nois friday, jobs one on the capital in america cares. they are focused on health care.

michaelsation with cannon. a libertarian. set againstead speaker ryan. ist friday, jobs day, this taylor riggs. taylor: in south korea the court affirmed the parliament impeachment of president park and removed her from office. it will trigger an election in 60 days. inosition candidates lead the polls. thousands of pro-and anti-park demonstrators marched in soul. two people died. residents economy might be losing momentum. -- britain's economy might be losing moment. there is little evidence of a dramatic slowdown, but the vote to leave the european union sent the pound plunging, boosting

exports. a chopper crashed into a tower, killing five people. there was a crew of 2. mexico is proposing a faster track four pro advising nafta than the u.s. suggested. the chief diplomat hope to that formal talks with start midyear and wrap up in december. they say they will rock away from negotiations if the u.s. insists on imposing taxes on any of its products. i am taylor riggs, this is bloomberg. i cannot convey the historic moment for korea. jobs day, the linkage in the greater economics. shock.

focused on wage growth. i did suggest more than any other jobs report, wage growth is front and center. >> we are close to the level where the fed gets twitchy. 3% by the middle of this year. about a year ago exactly, we were told that 3% is where the fed wants to be. the danger is we will get there because of the jobs market. tom: there are a number of ways of looking at it. this needs a little explanation. but if you had wage growth and deducted the headline inflation, high service sector inflation through the chart is a little artificial. here it wage growth. here is wage growth. here is the beginning of the crisis. to a lack is standing of felt, real wage growth.

it hasn't been there. flat, goal to get back to or could we see real wage growth over the next 2 years? will see real wage growth. there is the balance of they want people to be better off. they are not a lot of hair shir that do not want people to get richer. the problem we are facing is because productivity growth is so low, the rate of wage growth they can tolerate is lower than the past. it used to be 4% is where they would panic, trigger a slow down, now it is 3%. that doesn't leave enough room for people to feel richer before people squash them down. it is not the fed being aggressive or determined to make the market not better off come they are afraid of inflation push through coupled with the

soft productivity we have been saying. , iscine: soft productivity that here to stay, or will be six productivity leading to higher wage and nation? will come back eventually. i am talking about the next cycle. capital spending has been so weak for so long all of the equipment, software, intellectual property has accumulated and mixed with general gdp growth. it got older, there's less of it, that makes it difficult to generate productivity that we had 50 years before the great crash. the next will be a strong cycle putting us in a better place in seven years. this year, it won't get the fed off the hook. it won't magically rebound. that'll make it difficult to keep the inflation rate below 2%. gdp ofe: we are used to

2%. this environment is enough for the fed to hike rates? jim: we have not had creative destruction for so long that there is a misallocation of resources at the global level. you probably aren't going to get high productivity. until we right side the economy, until we get that, you won't have productivity back to where it was. this chartssed yesterday. nice perspective. is stanford university, ian shepherdson, out we go with an extraordinary rule and algebraic formula. the first order difference equation with 4 plug-ins.

the answer is yellen is behind. what is the panic to get back to here? we have to do this for michael mckee, what is the panic to get from the white line to the red line? red and white, we did that for john taylor, stanford red and white. the change in tone has been remarkable. one thing that has done this is the global goods prices, which have been following for years have started to rise. -5%, now is 6was %.agh that is upsetting service pressure. tom: do you care about algebraic certitude like the taylor rule or do you want to be like a

rubik goldberg machine? which works, algebraic certitude or more behavioral tasks on guessing of where we are going? jim: i think the data are wrong. one thing about drivers of productivity, two things. the excess application of leverage allowing people to believe they were being more productive when they were layering on more risk. a lot of the productivity is being achieved with a new industrial resolution that creates wealth, but not jobs. live the onset of factories and fantastic companies that will lead to further job losses and wealth creation. i think that is why taylor rules for the moment are not working. francine: been tom goes to things we learned 36 years ago, innovation is changing the name of the game.

they are changing the way we look at the economy. snapchat's valuation is 28 billion. are we measuring wrong? do we need economists to come up with a radical new way of looking at it? james: we have to work out if this innovation is different than other innovations. we won't know that until a few decades time. we have always found new jobs and industries. there will probably be a point where robotics do destroy jobs until new industries for. that is where governments have to fill the gap. adam smith said it was about felt interest, making profit. it is all about great products and great service. tom: adam smith was with us a

couple of weeks ago. day today, are we setting ourselves up for shock under the mark? great adp report and jobs report, everyone is certain it is trumpenomics. the margin of error is 100 plus or minus. they make it a sampling error. the thing is the trend has been improved. there is a clear slowdown in apparel growth last year. all of the surveys have gotten better. 200 plus is very likely. tom: ian shepherdson from pantheon, thank you, so much. let's get adam smith and ricardo kidd on next week. coming up, william gross will join us on the bond market. a perfect time to talk to bill

gross. this is bloomberg. ♪

taylor: this is bloomberg surveillance. let's get to the bloomberg's nests flash. the blockbuster ipo of saudi aramco, according to people familiar with the matter. likely be ipo will the largest lifting and will generate millions in fees. bp making the push into mexico. they will develop 1500 gas stations there by 2022. they plan to buy fuel from the state owned oil company and other liens three months after deepsuccessfully bid for 2

ocean oil blocks off the mexican coast. airbnb close to getting approval in japan. shinzo abe's approved rules to allow people to share their homes for up to 180 days he year. they have been operating in gray areas of japanese law. .rancine: thank you political risk is intensifying in the eurozone, especially in france. emerging as a potential source of risk. reed arean and jim both still with us. we touched on this, talking about the possibility of greece leaving the eurozone. you were concerned about italy

because there is an anti-euro sentiment. james: the worst-case scenario is the italian people are tired of not having any growth. they have not had real growth since 2000. a long time of economic stagnation and disappointment. 57% of the people are eurosceptic, that is an environment where they may give up on the commitment to the central lending bank in europe and may decide they would opt out of the euro altogether. francine: does this uncertainty play out in yields? i have the french-german spread. i also have the italian-german spread, a similar fluctuation. jim: i think that this year is a near miss for political risk. it doesn't mean that 2-5 years down the line you want to get a

bigger problem. the biggest problem will be the next recession. chaosle bit of political is relatively normal in italy. i do not think the next recession will be pleasant in europe. francine: if we don't find a common purpose the eurozone will break apart? jim: knowing can say that at the moment. the tensions will be there for years to come until you get a bigger scheme for the continent. there is a behavioral reality were people dislike a reduction in living standards more than they are tolerant of stagnation. my problem with italy is because the norse -- italian politics could become

toxic quickly. jim: no doubt there is a risk of that. at the end of the day, it is too early for italy to probably get a referendum that passes. it is more of a probability. today is not the time. tom: i do not want you to talk iecifically about banking, want you to talk about the linkage of finance to the people of italy. gdp iseal per capita back to 1990 levels. that is unsustainable. what is the bet within the markets on how they react? markets tendnow, to be short-term focused. if people in the markets. there would be a big problem in italy in three years they wouldn't

trade it today. they would look at the probabilities in the short-term. ecb is still buying a lot of italian government. next month, they will still be buying italian. tom: jamie dimon wouldn't answer the question. francine was brutal with him in paris. let me ask you the question he wouldn't answer. are we going to see cross-border finance mergers in a broken europe? level?at the corporate the only way that we make sense long-term is to adopt a federalist agenda. there are lots of people who cry out for a single fiscal system to make sense of a single monetary system. that has to be the end game if it is going to survive. the corporate level, there will be cross-border cooperation.

-- that, muscularity. it also depends on the regulator. do you see the eurozone coming closer together or breaking apart? it is an either or? will be to goure one way or the other. i don't take any of us can know what the situation will be when the conversation is most pressing. the moment with the pressure is welcome. very much.hank you this is the picture of what you need to do now if you have a bloomberg terminal. .o to tv you can look at tom's graphics.

you can steal it from tom as he is stealing words from james bevan. you can follow our interviews. you can talk to the show producers to ask questions you want us to ask to our guests. this is bloomberg. ♪

francine: this is bloomberg surveillance. korea. to go to south the south korean court has unanimously approved the impeachment of president park geun-hye, triggering an election that must be held in 60 days. joining us on the phone is bloomberg's shery ahn. sscribe to us the scene in eoul. there are a lot of demonstrations? shery: it was very dramatic. in a constitutional court, even going therecs on were politics for and against park geun-hye. this morning, protesters that supported her became upset.

they were trying to march into the constitutional courts. local mediang from that to supporters died during the demonstration. not surprising considering a lot of the park supporters were elderly people. we are seeing demonstrations in the central part of celebratory dismissals of president park geun-hye. francine: it seems like the runner-up to park in 2012 holds the lead. him do we know about ? shery: he is in the democratic party. 30% support according to gallup

poll. the party will need to hold a primary in a month. end nine yearso of conservative rule. the second-most popular right of a southgovernor providence with 15% support. when it comes to the president's party, there is no viable candidate. some hope the acting president and prime minister will run, but at this point that seems to be difficult. we have no details on that end. that means the focus is on park geun-hye. she has to leave the presidential house. she is still there. she has to leave soon. given she lost her immunity, she can be charged and arrested. tom: i'm sure we will hear more from you in the coming days. these most historic days. bevan speaking on the

asian tigers. you know the history of the president. she is the daughter of the guy we grew up with it korea. the idea of a way of doing capitalism, asian tigers pseudo-democracy, a lot of dictatorship to that democracy. there seems to be a change. what is the state of the asian tigers? james: i believe korea will come out stronger and better positioned. i believe we will see economic growth of around 2.5%. this prepares it to allow the market to determine the way forward. better governance does mean long-term buying opportunities for contrarian in testers. i would be lying samsung at these levels -- buying samsung

at these levels. secretary tillerson, president trump, their focus will be critical in the coming days. next we come in a hard and soft power of korea. let's get to the next hour on this jobs day. so many other things. citigrouptch up with and a wonderful call on slower gdp growth. also, the new janet yellen. francine lacqua in london, tom keene in new york. snow, a march snowstorm is coming. ♪

tom: called it the transatlantic divide. both chair yellen and president

draghi considered a bland america. a europe troubled amid tepid growth. in this hour, willem buiter of citigroup on an historic the virgins in monetary policy. the great mystery -- will wage growth rebound? forget the democrats. republicans are outraged over gop care. we speak with michael cannon of the cato institute. a terrific review of what is going on in washington. good morning, everybody. this is "bloomberg surveillance ," live from our world headquarters in new york. jobs day. i am tom keene in new york. francine lacqua -- where are you, in london or paris? my thoughts on james dimon. francine: he was impressive. he was cool. he seemed to be very on target. he believes that president trump is revisiting animal spirits.

the only thing he is concerned about his brexit. i guess he will assume the worst and hope for the best. the other thing we need to talk about is treasuries, as they have been fluctuating a touch. the yield on the 10-year, the largest losing streak since 1974. tom: there we are, at 2.60%. 9:00-10:00in the hour. with first word news, here's taylor riggs. taylor: we are starting in asia. park geun-hye has been removed from office as the president of south korea. most telling the political downfalls in the country's history. lawmakers had impeached her in december over a corruption investigation. now an election must be held in 60 days. of pro-and anti-park protesters demonstrated in seoul, korea.

two people were killed. denmark's trade minister will not route out a 15-year timetable. the u.k. once talked over the trading agreement to take place during the two years allotted for talks. it will not be discussed until other elements are settled. in the u.s., secretary of state rex tillerson has recused himself from a review of the controversial pipeline. president obama had rejected the keystone project over environmental concerns. president trump signed an order revising the pipeline. a u.s. oversight board has plan to pull out of a crisis. puerto rico is struggling with a $70 billion debt load. congress has given the oversight resolve thewer to

conflict as needed. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries, i am taylor riggs. this is bloomberg. francine? tom? tom: equities, bonds, currencies, commodities. oil below $50 a barrel gets our attention. thanks to ed more of citigroup for his perspective it we could go on this most interesting time for oil. screen. yen, 115.38. a weaker yen. francine? --ncine: i do not have any the 10-year yield in the u.s. is really significant because treasuries are more or less on the longest losing streak in more than four decades. european stocks are actually higher.g

crude oil is a touch -- crude oil is up a touch but still below $50. kevin, we could literally talk for an hour today. he is our chief washington correspondent. playe president going to golf this weekend? that is what everybody wants to know. kevin: even if he is playing golf, he is going to have to work on health care and winning over republicans in his own party. top members of the house freedom caucus not only had a nice lunch with him, but they went bowling in the white house. clearly he is in negotiation mode, trying to unify this party . i am assuming his selling method, which is untried and untested, is unconventional for your washington. what is his response to trump selling? is it lbj-like, where he is

holding the dog and the ears picture from years ago? what advisers to president trump say is that they are able to win this over with republicans simply because next week he is going to hit back where he feels best, and that is impact stadiums. he will hold at least one rally near nashville, tennessee, where he is going to try to rally the troops. later this weekend, vice president mike pence will be in louisville, kentucky. the senators from -- the senator from kentucky is one of the folks leading this charge, senator rand paul. tom: and the senate majority leader. it is extraordinary. let me bring up a quote from michael cannon at cato. he is with the cato institute. he is supposed to agree with the republicans.

forget about that. he is skating. -- he is scathing. tom: kevin, that is from their friends. kevin: yes, and i think mr. cannon is reverberating and leading what i think other folks throughout the washington thing tank conservative -- washington think tank in certain institutions are also saying. then candidate trump was able to bring -- was able to win over the grassroots conservative organizations like cato and heritage. these institutions themselves have always been apprehensive about then candidate trump and now president trump and whether or not he is conservative enough. this is his first political referee.

everyone is waiting for the congressional budget office to score this thing. francine: i am looking at some of the stories that we are writing, whether president trump can bring jobs back. he has vowed to bring jobs back -- where are the industries that he has felt to bring jobs back, and which ones will not be enough? kevin: this is the first policy hey he has to get to if wants to get to tax reform and other policy areas. coalregards to call, -- to , the strategists i talk with note that coworkers were a large -- that cold workers were largely backers of president trump in order to get him to the white house. they will also be some of the first people to lose health insurance as a result of the repeal of the affordable care act. tom: there is something going on here that is really important. the president has his first legitimate crisis.

secretary tillerson will be in seoul march 17 and march 18. is he prepared to represent the president in america, given a nation turned upside down? kevin: this is the first test of foreign policy, particularly in that region of the world for this new administration. secretary tillerson has his work cut out for him. this has not dominated the main stream news flow in washington yet. until theunder a year winter olympics in south korea, he will have his work cut out for him. tom: thank you so much. joining us now, someone who has been out front on weaker economic growth. you can look at this or that, but the work of citigroup and willem buiter has been extraordinary. right now we speak trump theory. lectrump economics in your textbooks that you used to teach? unnecessary fiscal

the mostis part of populist economic agenda. so, yes, deregulation across the board is also part of the traditional animal spirits oriented policy. so, yes, nothing he has done so far except for protectionist and anti-immigrant policies are at all unconventional. francine: how did he wake up these animal spirit? do you believe that president trump has woken up the animal spirits, or where they already on that trajectory? willem: it depends on the animals. animals willing to feed at a trough? you probably see a bit of both. i have not seen any hard theence, although clearly business mood is up. capital expenditure is

increasing materially. so i think at the moment it is mainly a selective feel-good factor rather than any hard evidence that the u.s. is ofting out of this period very low information and doing something to raise its growth potential output, which is probably more than 1.5%. dimonne: here is jamie from yesterday talking about animal spirits in the u.s. it seems like he has woken up the animal spirits. one ceo said we have never had such a pro-business president since the founding fathers. i am not sure that is true, but business conference, small business confidence has skyrocketed because it is a growth agenda. francine: what does the president have to do for the animal spirits to go into capital spending, to make sure that the economy gets reflate it?

-- that the economy gets reflated? moving on fiscal stimulus not so much as on infrastructure spending and tax reform and deregulation. the most important deregulation, including the labor markets. he cannot do that himself because it is a state issue. , at theious tax reforms corporate and personal level, turn into an incredible, unsightly mess. it would be a huge step forward. i am not holding my breath, however. tom: we will come back with willem buiter later in the hour. up,ng up in -- coming

michael mckee. and william gross will talk to us about the new reality of build noteds, lower and bond prices. this jobs day, this is bloomberg. ♪

francine: this is "bloomberg with francine and tom from london and new york. taylor: ppg industries is preparing another bid for europe's biggest coding maker. they rejected the offer as too low. ubs has reduced its bonus pool his payplus the ceo had

cut slightly to $13.5 million. settle a legal case. that is your bloomberg business flash. much.aylor, thanks so jobs day, which means michael mckee is in washington. it is not just about the headline data, it is beneath the headline data. i am looking at wage dynamics this time around. what will you look at? michael: i will look at the headline number, tom. this is not much about what the fed is going to do next week. the markets have already decided the fed is going to raise rates, so they will not react on that basis. this is about how many times the fed will raise rates this year, and how quickly. everybody is talking about the idea that the economy is heating up, and that would mean the fed has to more than three times and earlier than people were anticipating. if we get a strong number today, that is what you could see start to get priced into the market. the numbers today -- you can

throw out the chart -- 200,000 is the forecast. you have 215,000 private sector jobs forecast. there is a chart that shows we tend to underestimate the number of jobs created in february. whispered number -- 230,000. we could have a very strong day today. it will take almost a complete collapse to get the fed off track. then we start talking about what they do in may. iancine: that is exactly what wanted to ask you. do the figures today give us more of an indication of what they think next time that they need to do? michael: the figures coming out today are about what wall street thinks the fed thinks. the fed is going to be very cautious. they want to see what happens month-to-month, and we are waiting to see what happens with obamacare, with a tax plan. the u.s. government runs out of

money it will 28, if they do not refund the government with another resolution. that will be an issue. mckee, let me get the major distinction out of the way. are we fully employed? bring up a chart. here is the unemployment rate in white, and everybody unemployed in yellow. it is a grim number. we have this gap, which is the number of people on a percent basis still looking for a job. who is right, stan fischer or david blanchflower? michael: they are both right. the gap is closing, but not fast enough. the issue is, do we pull people back into the labor force who would only go if there were a good reason. there are people who are unemployed who do not necessarily want to work right now. we saw this dynamic in the 1990's when unemployment got so low, into the threes.

people came out to be greeters at walmart just because they could get jobs. francine: michael mckee, thank you so much. let's get back to willem buiter of citigroup. is it a done deal that the fed will do something march 15, and what happens after that? willem: i think it is all but certain, yes. the fed funds rate is extraordinarily low, 52.5 basis points in nominal terms. correctedeflation basis point is lower than it was a year ago, and the economy is at close to full employment. even if we are not at full employment now, we will be there by the end of the year. a seriouslyng at improving economy. has to that the fed raise rates, and then of course

there is the financial stability argument. there is an early warning shot to tell the market that the fed building against financial bubbles, which interest rates would not be a waste of time and rates. francine: how much should the fed worry about a strengthened -- about a willem: strengthened dollar? willem: they can worry about it, but it is going to happen. if they do not raise rates, the dollar will weaken. a failure to raise rates would weaken the dollar. tightening market policy strengthens the currency. these are not things that economics worry about -- that

economists worry about. tom: let's get back with willem buiter. 9:00 hour,e worldwide, gary cohn, advisor to the president. the health plan and the health of the nation will come up. this is bloomberg. ♪

>> the european union is one of the great achievements of mankind ever. nationsa -- to have 28

live in peace, making political decisions, not wars, is very smart. it kind of got bogged down a little bit. the british obviously thought it was too much. when you are talking to politicians, they are devoted to keeping it together. francine: jamie dimon discussing the european union, while au a second --rn for while e.u. leaders return for a second day of meetings. phil about her, is this the end or could it be the end of the -- willem buiter, is this the end or could it be the end of european politics? there clearly are serious risks. the european union has never faced an existential crisis like the one it faced since the u.k. decided to go it alone. if, as we do not expect, but there is the material risk, that we have a marine le pen the president's -- that we have a

marine le pen presidency, a coalition of right wing, populist, anti-e.u. policies, it could be the end of the e.u. but my expectation is at least it will live on and muddle through without the u.k., almost certainly, unfortunately, but still keeping the peace of the forinent, which it has done the first time since the roman empire, really. tom: there was a headline, draghi saying the e.u. is inevitable. what is the price of muddling along? what is the price to the people of muddling along from theorists like you? think, therey, i is no breakup solution that is better than a muddling along solution.

the breakup of the e.u., even if there were no euro, would be a political catastrophe of the first order. a breakup of the euro would ni eurof a northern mi that would form in the d mark zone. it would be a nightmare. tom: phil about her is with us. i want to come back with a special chart, with willem buiter from the london school of economics. next, michael cannon. he is scathing on paul ryan's health care solution. this is bloomberg. ♪

francine: it is beautiful in london. it is a great day, a little bit rainy. welcome to london.

the pound, 1.2160. here is taylor riggs. taylor: we are starting in asia. there has never been a day like this. south korea has confirmed parliament's impeachment of park geun-hye over corruption charges, and removed her from office. there will be an election in 60 days. opposition candidates lead in the polls. in aast two people died march in seoul, korea today. factory output was down almost 1%. bylding companies cut out .4%. the vote to leave the european union sent the pound plunging. that boosted exports. conference,e press joe shah schwan acknowledged that rising interest rates will

add to volatility. dark of no one can accurately predict what kind of uncertainty could happen during the year of 2017. people should treat it as normal, when fluctuation of the exchange rate happens. taylor: he suggested that attacking china's soaring debt load will be a long-term goal. mexico is boasting a faster track for revising nafta. mexico has said it will walk away from negotiations if the puts quotas on any of its products. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries, i am taylor riggs. this is bloomberg. francine? tom? tom: talking with david gura yesterday, folks, about how much we are reading on the nation's

health care. one of those people we read his michael cannon. for decades at the cato institute, he has been definitive on the european tack of the markets fixing our broken medical system. he joins us today after a scathing essay a few days ago tearing apart gop care. with us as well, willem buiter of citigroup. mr. cannon, congratulations on the impact you have had. , laurenast 24 hours fiedler says 15 million people will go off the rolls. do you agree echo michael: i do not think it will be 15 million people. if you look at those enrolled in medicaid expansion, a lot of them were eligible before, care -- before obamacare past. regulation,l the which will cause the premium to plummet for the vast majority of isple in the exchanges, that why the bill is so inadequate.

it is not repeal those regulations. those regulations are destabilizing in the market, and they will cost 43,000 tennessee residents their coverage. these are people with cancer and expects of -- and expensive conditions. tom: within your note, you take eastern tennessee -- folks, what is important about this is the granularity of canon's work. you take eastern tennessee and expanded to the nation. the congressional budget office has to do the same thing. can you explain to me why we have to rush before a cbo scores or estimates the cost? michael: the republican leadership is trying to manipulate its own members, trying to get them to commit to a bill before they know how much it costs. the republican leadership has estimates of how much this is going to cost. i have spoken with staffers, to the leadership, who said we have

consulted with cbo and actuaries at multiple firms. they have numbers but they are not sharing them, and that tells us the numbers are not going to look good. the rank-and-file are not going to like the numbers, so why are they asking them to commit to the bill before seeing the numbers? it is because they want to make it harder for them to reject this bill. tom: kevin cirilli spoke with senator paul a few days ago. i think he is a libertarian, but he is not a michael cannon libertarian. what is the distinction between senator paul's outrage and your academic and careful work? michael: for one thing, senator paul has to get reelected. he and i share a lot of critiques of this law, of this legislation, and the biggest one is that it does not repeal. it preserves for the federal government all the power that obama gear -- that obamacare gave to the pro government,

including all the provisions not justdestabilizing in eastern tennessee for the 43,000 residents who will lose all covers, but across the country. there are a thousand carriers with -- there are a thousand counties across the country with only one carrier less than the obamacare exchange. francine: you are extremely critical of this gop alternative. they must realize there are a lot of critics out there. what would you do in their shoes to make it a little bit better? michael: i would not want to make it just a little bit better. he needs to get a lot better. i would do three things. one, partially full repeal, including regulations this law does not even try -- that this legislation does not even try to repeal. second, that will cause premiums to fall for the vast majority of people affected. second, you want to give states people ony to target

medicaid. the most important thing is that you need to bring down health care prices. this legislation does not do that. it takes the obamacare approach, which is throw more government subsidies at unaffordable care, rather than make health care more affordable. the way you bring health care prices down is by giving theumers the money that government and employers now control. francine: what are the chances of them changing it and doing something that you just mentioned? there must be people in the trump administration that are looking at it and that are trying to figure out the best approach and the best way to deal with it? who does president trump listen to? michael: what will make a conservativesif in the house tell leadership they will not vote for it. then the leadership has to make changes. a number of house conservatives

went to the white house yesterday and spoke with president trump about making changes to the law and moving it more in the direction that i mentioned, the direction of expanding health savings accounts. hopefully they will get rid of the subsidies, the entitlement spending that this legislation would retain from obamacare. the government subsidies for private health insurance withnies, and replace that -- tom: help me with a question that came up three times yesterday. francine lacqua is coming to you from london. what is wrong with francine's medical coverage? i have three people yesterday say to me, why can't we do it like canada, like england, like blah blah? what is wrong with francine's medical coverage? michael: for one thing, it is not very responsive to the patient because the patient is the one controlling the money. there are some pretty horrific examples of government rationing

in those systems. i am not going to say that no one benefits. of course they do, or else the governments would have gotten rid of them. but they do not deliver the sorts of innovation that the united states delivers with new medical technologies, nor the sorts that no system delivers, in terms of driving down the price of health care and making it more convenient and affordable for everyone. only markets are able to do that. we see that in certain soup -- we see that in certain corners, but nowhere in the u.k. francine: i pay a lot of taxes, but my insurance is free. this is the problem with my health, that you have to fund it. you have to pay a certain percentage of your annual income for everyone to be protected. tom: francine, help me here. i know it is mr. lacqua's birthday. help michael cannon here. are you getting ok coverage for your offspring in england, or do

you have to fly to boston or new york to get a pediatric visit for your kids? francine: we are all healthy for the moment. long may that be, and that makes everyone's life a lot easier. but this is the point, and tom has hit it on the head. we may have certain concerns about our systems here in europe, but is it because people -- for the fact that you do not want to give free health care coverage to everyone in the u.s., is there a mentality that you kill what you eat, so people do not want to pay to look out for their neighbors, or is it the concern tom was pointing to, that specialist help would not be covered? michael: the reason i want to get the government out of health care is because i want fewer people to fall through the cracks of our health care sector. i want to make health care better, to make the price of health care fall so that more

people can afford medical care themselves and the rest of us are wealthier, so that we are better able to help those who cannot help themselves. in the united states, i am a critic of the u.s. health care sector. but one of the things we do better than any other nation is we develop new medical technologies, drugs, and treatments, and those help fill in the cracks not only in our health care sector, in the u.k., in canada, and all sorts of third world nations. that is an important part of nationszle, and other are not stepping up and delivering those innovations. tom: you have to write more this weekend. i would kill for an op-ed from you and laura nadler brookings. for you and lauren to add a cowrite piece, that would be great for the nation. we are going to come back with phil about her. -- with willem buiter.

all sorts of things to talk about. knows up later today, he lse, dr. el-erian of cambridge will appear in the 8:00 hour. this is bloomberg. ♪

tom: "bloomberg surveillance." busy this morning. willem buiter has been more than patient. let's touch on health care. you live to this, too. is nationalism of health care the same as socialism of health care? carem: i really do not whether it is or not. the fact is that private insurance for health conditions

is disappearing because too many health conditions are predictable and they are not private insurable. so we need private health care like the canadian system, or the british system. or we need what they have in the netherlands. if you want innovation, it is really inefficient to fund through corporate. tom: we will continue our discussion with professor buiter here. right now without bloomberg business flash, here is taylor riggs. taylor: evercore partners will be one of the advisers on the blockbuster ipo with saudi aramco. that is according to people with -- according to people familiar with the matter. it is largely to be the largest ever -- airbnb is getting

approval to legally operate in japan to richins at wave's cabinet has approved rules that allow people to show their homes for 180 days per year. now parliament has to sign off. japan is the fastest growing market, but for years it has been operating in gray areas with chinese law. that is your bloomberg business flash. francine: thank you so much, taylor. we need to focus on korea after the south korean president was theed from office, one of most stunning downfalls in modern political history. we are seeing and type protests and pro park protests. rallys an anti-park emerging, after she was impeached. what this means is that we will see a elections. they must be held within 60 days come with opposition figures leading in the polls. joining us is the bloomberg seoul bureau chief.

give us the sense of the chaos that is in the capital this morning. factions, one a rally from those seeking park's impeachment. there was also a pro park, anti-impeachment rally going on in the afternoon after the court ruling. that got very testy. two people have died. it got relatively violent, although it was not as big as .he anti-park rally it shows the division that is happening in this country. francine: peter, who will succeed her? peter: i'm sorry? who will succeed her? francine: we had elections in 60 days. specialhere is a

election. there will be one probably in the early week of may, and the front runner right now is the main opposition party candidate. he also ran against the andident four years ago, there is a feeling, at least based on the polls, that he is the leading candidate. he has 32% of the support of the public. the second runner is way behind by about 70%. is known as a central leftist candidate. the of reflective of pendulum swing that is happening here from conservative to more of the liberal side. yourone final question on friday evening. is this a generational change for korea? is it another day for turmoil and you move on to some new regime, or is it truly the end of an era for conservatives in korea? that is a tough one.

the country has had this pendulum swing left and right for decades, so it is hard to tell. i think what we can say is that there is going to be change. the degree is not certain. this has raised a bunch of calls for a significant -- this has raised significant, strong calls for a family of conglomerates, creating a more fair government system. there is also reforming the government system. particularly for the new folks,ion of younger there is this feeling that this cozy relationship between government and big business needs to end. so the movement is going on. tom: peter pae, thank you so much. to shery anh, thank you so much, earlier on "bloomberg

surveillance." if you have the bloomberg terminal, this is the new crown jewel. you can come over here and look at the old interview, click it right up, and you can see willem buiter on the taylor rule. you can see that chart before willem buiter steals it from me for his weekend notes. stay with us. this is bloomberg. ♪

at 8:30, i watch the yen. 100 15.39. that is the number i go to to .39.he jobs day -- 115 boy and. shortly, come up "bloomberg daybreak: americas." to getwhat will you try out of gary cohn? >> we will ask him where all these jobs are coming from, but what are these growth projections and how will they get to those growth projections? , i markets have anticipated

think it is fair to say. tom: i want to know what he does day today -- day to day. david: deregulation is a big one. and put together this budget. tom: the budget will be interesting to say the least. and an a real treat academic honor. here is the single best chart. thank you, john taylor, of stanford university. one form of the taylor rule in fund's targeted rate showing how far behind we are. professor bauder -- professor buiter, you used to wander the halls of lse in the faculty lunchroom, and there was a contraption showing the phillips curve. is chair yellen still wedded to this at lse when you were a kid?

i think that there really is no alternative view yet to some kind of a phillips curve. it does not work, but nothing else does, either. i do not think there is any logical commitment to a particular view, but until we come up with something that beats the phillips curve, we are stuck with the beast. francine: would you look at the beast, as you call it, and come up with something new? is now the time to come up with something differently? willem: i think we have to. macroeconomics has been a disaster area for the last couple of decades. it is not a failure to predict financial crisis, but based on the model we have, we cannot even rationalize or explain it after it happens.

economics, macroeconomics is in a mess. the phillips curve is just a small part of it. tom: within the great distortion, we do not know what the risk-free rate is. do you know where we become restrictive? do you have a number in your head where we go from ultra accommodative to accommodative to normal? willem: it is extremely difficult. neutralelieve that the real rate, the risk-reveal rate for employment and the inflation target is 2%, then we are way behind the curve. we should be at 3.5%. if you believe the rate is zero to negative, then we are only a little bit behind the curve. i think, yes, we are behind the curve even with a dual mandate. tom: we will continue with professor buiter from citigroup.

we will do that on radio. francine, congratulations on the dimon interview. i thought he was remarkably political about e.u. banking. francine: he was. tom: jamie, here is an exclusive. tom keene and jamie dimon agree. francine lacqua, wrong again. have a great weekend, america. coming up, william gross of janus capital will make us brighter after the jobs report. phil about her again -- willem buiter on bloomberg radio. this is bloomberg. ♪

jon: friday, a blowout adp

report sets the stage for higher expectations ahead of the monthly jobs number. the market shapes up for a rate hike later this month. a commodity rally begins to crack. from new york city, happy friday. good morning and welcome to "bloomberg daybreak." i am jonathan ferro, along with alix steel and david westin. twitter, up on 230,000. david: where are they? they keep coming out of the word where -- out of the woodwork. jon: the markets, as we cap -- as we count you down to the cash open. that is two hours and 30 minutes away. the euro is stronger, up to 1.06 again. the yields up by a basis in