of policy tightening. back to the commons. theresa may will be hoping tory mp's fall in line as she looks to quell a revolt from within her party over the brexit bill. and diplomacy needed. hostile rhetoric between the turkish resident and the dutch administration. good morning. this is "bloomberg surveillance ." i'm francine lacqua in london. tom keene is in new york. we lose an hour in london so i have the pleasure of tom keene first thing in the morning. donald with angela merkel tomorrow at the white house and we have to look at the dutch elections. tom: over the weekend, the theuage from a distance in dutch elections involving turkey, really extraordinary. headlinest makes the in europe today. francine: we will have plenty more on that. first let's get to the bloomberg first word news. here's emma chandra. sayn the u.s., lawmakers

they haven't seen proof of trump's claim that his predecessor kept his phone. senator john mccain spoke to cnn. the president has one of two choices. either retract or provide the information that the american people deserve. if his predecessor violated the obama, we've got a serious issue here. >> thank you. according to abc news and the associated press, the house intelligence committee gave the justice department until today to provide evidence backing up president trump's claim that president obama tapped his phones. in europe, david davis is trying to avert a revolt within the conservative party. the house of commons votes today on a bill that gives prime minister theresa may the power to begin the brexit process. someone parliament to have a say in what happens. davis is asking lawmakers not to tie mays hands. he wants them to overturn amendments to the bill approved by the house of lords.

the dutch election has been upended by a dispute with turkey. analysts say the incident could re-energize the campaign of geert wilders. politicians on both sides criticized turkey for sending ministers to the netherlands. the dutch escorted one turkish minister out of the country. turkey says the dutch will "pay the price." america's northeast is bracing for a late winter blizzard. the storm could drop up to 18 inches of snow on new york city. the winter storm watch extends up to new england. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm emma chandra. this is bloomberg. tom: thanks so much. let's get you started. the jobs report. you see it with euro-dollar. 1.0672. oil is a big story. [coughing] excuse me.

48.34 a barrel. on to the next screen. the fix 12.15. not near record highs on equities. down below, the netherlands two-year, -0.80. the real linkage of their financial system. francine: i really like that, tom. in fact i have a chart showing the spread between the two-year dutch yield and the german. i'll show you that in a second. this is my data board. i want to show you pound-dollar. this is ahead of a rumor. we don't know when theresa may could trigger article 50 but it could come as early as this week. we're seeing a little bit of movement. this is on the back of movement with the dollar. crude a low $49 a barrel. tom: thanks so much. let's dive into the bloomberg now. i was fascinated by this story

on the netherlands and the people of turkey living in the netherlands. here's the blame chart if you want. this is per capita -- excuse me, this is nominal gdp for the netherlands. here is the boom of the netherlands up to 2008 and the financial crisis. it simply has not happened. what is disconcerting is the leveling here, but then the very subtle but tangible rollover in nominal gdp from 2012. 2012i've marked right here. it is a subtle story. it is not visible. it is not out front. but the flatness in rollover of the netherlands economy is one of the most subtle stories we look at. francine: that is a chart i like a lot. i did chart the difference, the spread between the dutch 10-year and the german 10-year. this is my chart of the day.

i picked out something with the snb because they are meeting amongst other central bankers. in white you have the german two-year yield. in blue you have the swiss two-year yield. as a lot of central banks including the swiss national bank are lumping up their foreign currency purchases, short dated high-quality bonds are seen as a likely landing spot for their cash. you can see the difference if you bring it back 12, 14 months. here, practically at the same level. we need to keep an eye on this, on the fed. the fed looks even more certain to raise rates on wednesday. strong wage growth also adds to the momentum. joining us as our guest host for the hour, stephanie flanders, j.p. morgan asset management strategist. she joins us for the next 55 minutes. do you look more at snb?

the fed is pretty much priced in. really expecting more of the path of trajectory for the fed going forward. stephanie: in the u.k. we have the small matter of article 50 conceivably the trigger. it is possibly that won't be a big market event. i think on the global stage you still have to be looking at the fed. even though we have changed our expectations with a lot of help from fed officials over the last two weeks and we're not expecting a big surprise, i think how the market more broadly response to that and how equity treasuries respond to that will be maybe be a signal of more things to come. people will be watching that as well as some of the basic data. francine: how many rate hikes are we expecting from the fed this year? stephanie: at the moment, everybody is increasing their expectations, but also where he of some of the false storms in the past. i think we're still around the three level. thought twoose who

or fewer are changing their scenario. tom: help me with your view and the jpmorgan view of everybody's economy is doing better. is it all clear? is there a boy and global growth , a synergy of 8, 9, 10, 12 economies doing better? stephanie: i think you can see it in the data. if you look from autumn on words of last year, you had more convergence in the economies. we had not just the developed economies doing better than expected, but emerging-market economies like russia and brazil that really held down that side of the world also now turning around. it is not that we're looking at fantastic numbers, but you are quite right to say it is the first year where we see that more synchronized increase in activity. there is a real growth story underpinning the markets. tom: file by it.

son why is chair yellen alone? i'm fascinated by the idea that everybody is converging and yet we have this one central bank all by itself, way out in front, raising rates. why is that? stephanie: at the basic level you've got the u.s. a lot further along this path than anybody else. we've had a very slow recovery by historical standards in a little parts of the world. the u.s. is the only one, going into the ninth year of recovery, that you don't see a lot of inflationary upside in other places. we saw from the european central bank last week that they see less downside, but we're not seeing a big increase in those inflation forecasts from the ecb. things are getting better, but not necessarily the kind of self-sustaining growth in europe and elsewhere that you would need to see if you were going to raise rates on a regular basis.

francine: this is from a bloomberg view piece where he basically argues, this bull market isn't as old as some people think. he says understanding how old a bull market is may affect your expectations of future returns. misunderstanding when a bull market began he says is a very expensive error to make. where do you see this starting? stephanie: i think you can drive yourself man. if we did it back to this or do the 25-year with a 50-year average -- you have to have some broad sense of where you are in terms of the maturity of the cycle. that wewe're all agreed are at a more mature stage. but you are looking for signs of the durability of the recovery. if you get caught up on arbitrary things, it has to be this long for that long, you can miss that big picture. what everybody wants to assess now is when is that next u.s.

recession going to come. we don't know for sure but we know it is going to be affected by u.s. productivity this year. that is one thing i'll be watching more than worrying about the data of the bull market. tom: very good. stephanie flanders to help us get started. what a busy week it will be. chancellor merkel visiting with mr. trump at the white house. i believe that is tomorrow. on wednesday, the federal reserve decides -- this has been front and center and wheat seen it with the certitude of a rate increase. the fed decides, 1:00 p.m., wednesday. this is bloomberg. ♪

francine: --

taylor: this is "bloomberg surveillance." john allen is backtracking on his comments that white men are endangered. alan says he's always been an advocate for diversity and regrets that his remarks is the opposite perception. some shoppers said they would boycott tesco. goldman sachs has become the last major bank to join the rush on chinese stocks. oldman strategists are overweight chinese shares. the msci china gauge is already up 11% this year. that is the bloomberg business flash. francine: thank you so much. the brexit battle reaches fever pitch today. theresa may looks to quell the rebellion in her conservative party as house of lords amendments on the article 50 bill reach the comments. joining us now is simon kennedy. still with us, stephanie flanders. thank you for joining us.

what are we going to learn this week? there's a lot of speculation that the house of commons could reverse what we heard from the house of lords, putting theresa may writer to trigger article 50. simon: what we learned today is probably theresa may will get the power to invoke article 50. the rebellions that we reported over the weekend, whether they have enough people to overcome the lords amendments, it is suggesting they don't. in theory, as soon as the parliament passes the law, theresa may could have tomorrow invoking article 50 as early as tomorrow. bloomberg reporting that one option being discussed, she doesn't pull the trigger tomorrow, she says she's going to do it at the end of the month. francine: when article 50 gets triggered -- i have a short -- a chart showing daily moves. are you expecting this to be a lot more volatile? stephanie: this is one of those

times where economist say, surely this isn't a surprise. it can be a matter of the mood music. if you have a bit more of a tussle over the next day or two in the house of commons, or some possibility of going back to the house of lords, that can cause a bit more volatility. i think the basic path we're looking at is a bit clearer than people suggest. cleara may has been quite that it is going to be a hard form of brexit. if you think that has implications for the currency, most of that should be priced in. ast people are subjecting trending down of the currency. tom: simon kennedy, help those of us removed from brexit. do you know the date calendar? do you have a better idea what happens this year and next year as well? as soon as theresa may invokes article 50, the power is seated to the european union. she's controlled the clock so far. she votes article

50, that puts her on a countdown, the end of which we fall out of europe regardless of the deal. is thatdiate calendar as soon as she pulls the trigger, if she does so this week or gives enough warning that she's going to do so by the end of the month, the europeans will set their guidelines. we could see delays in actual engagement after the french election. ,hat really happens this week if it is this week or beyond, is the control of the countdown goes to europe. tom: who in europe controls the debate? if they vote and it shifts to a european discussion, what institution controls that debate? simon: in theory, the negotiations will be led by the european commission. that suggests there won't be any friction between the commission

and the capitals. we're already seeing some signs of it. we're also seeing remarkable unity. angela merkel's government releasing a document in which they talk about the importance to negotiate with one voice, maintaining unity. the british will probably hope they can pick off allies perhaps in the eastern part of the block, perhaps even spain. while he may be the lead negotiator, certainly someone like angela merkel, jean-claude junker, even perhaps the new french president, are going to have quite a say. the hopes of europe is they will stand united and it will be harder for theresa may. francine: stephanie, what is the likelihood of these negotiations being concluded in two years? isn't that the big fear? stephanie: by definition, this particular process is supposed to last two years. you are quite right that no one

looking at the breadth of agreements that are going to be needed thinks it is going to be possible within this two-year timeframe. the back-and-forth we've had with parliament could be just a dry run for some of the constitutional complexities that start kicking in. who is it who is really going to be able to extend the process or just allow the u.k. to fallout? is it the u.k. parliament, the european court of justice, or is it the european parliament which is the other member of the mix, which is causing quite a lot of ruckus at the moment. it is reminding everyone that it needs to approve any deal with the u.k. as well. if you don't get an early agreement on extending the process and giving yourself a bit more the way, could be very messy in the. francine: thank you so much. stephanie flanders stays with us. simon kennedy leads our brexit

coverage. later this morning, we speak to michael spence. he will discuss globalization. catch that 7:00 a.m. in new york. this is bloomberg. ♪

francine: "bloomberg surveillance." tom, let's talk about banks. mark tucker will be the new chairman of hsbc. he will start at hsbc on october 1. tucker's major task will be to

find a successor for ceo stuart gulliver. let's bring in jonathan, who covers banks from bloomberg intelligence. still with us, stephanie flanders. jonathan, when you look at the share price hike, what do people like? jonathan: the key thing is the asia focus. deleverage 300 billion of risk assets. they've cut nearly 600 billion of costs. it is all about asia. the rally, paul asia focused. mark tucker has a good track record in asia. francine: this is my chart. in white age hsbc. what does hsbc need to do to move up in terms of share price and properly become a stronger bank? capital: its positions improved dramatically. it is about the tough line. they put the basic cost to the right level.

things like their target of growth in asia, growing loans faster than gdp, that is very much the focus. stephanie,e here, with what long-term is for a banker today. i was sort of flabbergasted that peter hancock was shown the door at aig late last week. he's a first-class guy and he didn't do it for a couple quarters. he's gone. is the new long, what, three quarters? stephanie: you are talking to the wrong person. we are a bank that has been pretty long-term in its leadership. this is a situation where you had a very difficult macro environment for banks along with these structural challenges they inherited from the financial crisis. different versions of that in every major international bank. then the more positive mood which has come with steeper yield curves and all these

things that make life easier for banks, i think has taken the sector a long way over the last six months, but we are getting to the point where banks, whether it is thinking about their leadership or general strategy, are realizing, we can't just rise the treasury of. we have to start finding new ways to give business. i think in a sense the recovery in banks has been quite easy so far. now there are some quite important strategic decisions to make. tom: jonathan, where does the revenue come from? all my analysis says nobody has a clue. to me that is pretty original. why the mystery? jonathan: hsbc is relatively unique as are the asian banks. they've got a huge excess deposit. they generate income over the next 18 months from that. traditionally we've been wider interest markets.

clearly the problem in europe is that loan growth has been deleveraging. hsbc is uniquely positioned for the revenue outlook, which is part of a very strong rally. tom: thank you so much, jonathan tyce of bloomberg intelligence. coming up later today, david gura in conversation. what a perfect time to speak to the former vice chairman of the federal reserve system. but really, what a great time to talk to alice about the cbo and the health care debate. worldwide, this is bloomberg. ♪

willchancellor merkel visit washington. look for that tomorrow as she visits with president trump. the backdrop, domestically,

within washington is the debate over the nation's health care. kevin cirilli will join us in 30 minutes. right now, let's get to the first word news. >> russia's president may meet july's summitp at in germany according to a kremlin spokesperson who spoke to cnn. russia has no plans to raise issues to ease the economic sanders -- economic sanctions. possibility for the of a no deal brexit. prepare to take the u.k. out of agreement rather than accept a bad web. any to plan for the consequences. may has promised to trigger a formal departure this month. presidential alice after the highest court removed

her from office. she may have to defend herself over charges that she pressured business executives. south korea will hold a special election on may 9. china's economy has shown signs of improvement with little risk of a hard landing. the industrial output grew more than 6%. china releases a number of economic reports tomorrow. global news, 24 hours a day. powered by our more than 2600 journalists and analysts, in more than 120 countries. i am emma chandra. this is bloomberg. tom: -- has the meeting with angela merkel at the white house tomorrow. this comes after he chastised the chancellor for ruining germany. derrickow with simon and still with us is stephanie flanders. when you look at clinical risk in europe, angela merkel shows up at the white house and i

wonder how friendly trump will be. one thing i think that investors have been slow to catch up on is that there is political risk that is tended to be thought of as negative. so you think of what is going to happen with the economy. i think over the last few months, we have seen glimpses of the upside risk. europeanohesion among governments on key issues. and also a waiting of support or a capping out of support for the popular sources. it isn't that i necessarily see but it future for europe, do think we should bear in mind that there is an upside political risk as well as the downside and trump may help with that. you get people to circle the wagons. francine: how much does this way on europe?

does this have an impact on europe? simon: it did, marginally will be got the double pressure relative to everywhere else. it did have a marginal impact. -- when you see political stresses, you do see money going back home and the reason for that is straightforward. euro has been the funding currency of choice for the carry trade in a risk off environment where the money goes back. julyat the greek crisis of 2015. euro traded up to 1.13 against the dollar. so it doesn't follow the high risk on the political side. that she is matter a currency exploiter? i remember six weeks ago, the uproar over dr. navarro and the exploiters of germany?

how does the president and adapt to that? is it a nonevent? was one of those surprises we had with the rhetoric coming out of the trump administration having expected only focus to be on china. and then there was a focus on germany and germany had as well contributed to the global imbalances. there is an extraordinary 9% of the gdp account surplus and the germans are borrowing a lot of their demands from the rest of the world. angelat clear that merkel can do a lot about that. but it is one of the big imbalances in the global economy and it concerns a lot of people. the euro b forld germany if they were non-exploiters? first things first, a lot of that talk was about germany's

position within the euro rather than the euro itself. so what you are talking about, where with the deutsche mark be if it came back? and i don't think we are talking about that soon. the key point about this is the currency story and the manipulation story because over the course of the last few days or has been talk of the g-20 meeting coming up later this seen ad we have are a talk about the shift in the text mnuchinards to steven quoting japanese papers overnight. agree. help me, i'm confused. the euro is at 1.06. would germany be a 1.20 equivalent or a 1.40 equivalent or a 1.60 equivalent? that isn't a

realistic equivalent. you could make up any number you wanted. but usually we overshoot. so it is probably a stronger number rather than the weaker number. i do think, one of the key things for this will be whether we are seeing a shift in the central bank's attitude with the euro. and we had a little of that last week. we did have an unhealthy focus on using the euro as part of the monetary stimulus. a greater relaxation on the side of the ecb towards where the currency guys and no great desire to see it go weaker, i think that could be significant. arecine: my readings looking at what steven mnuchin said on friday. he wants to drive the message held that they won't tolerate in country engaging manipulation. he doesn't have enough little

staffers to develop detailed positions to actually make that argument? to what isn't speak happening in the white house. but what i can say is that the changes in the wording in the g-20 central-bank and final meetings does matter. weback to 12 months ago when told you about the pressures that came on japan in the shanghai meeting. and 2004 when3 they change the wording when talking to japan. will beght my eye was looked at the comments about trade. regardsheard that with to g-20 properly since the late 1980's. i hasten to add, i'm not suggesting we are going back, but that is what the wording looks back. stephanie: if they're going to make a difference, they have to move on some level with the fundamentals. ofit can't just come out nowhere and say they will change

the direction. simon: but the very fact that we are suddenly talking about the worries of volatility to talking about international trade and macroeconomic imbalances, that is the sort of thing that hasn't been directly connected to foreign-exchange in 20 plus years. it is a change that we can't ignore. francine: what are the markets looking at? i have often been told that markets look through the tweets from trump. how does the market actually react? stephanie: grand talk around the end of globalization or currency wars and when it comes from a specific country -- i remember years ago waste started talking about it with the brazilian minister who mentioned it. that sent a clear message to markets.

and it is a very open-ended tweet against global trade globalces or broader language, i think it is harder for investors to hang their hat on it. tom: let's come back with stephanie flanders and simon derrick. coming up, alice rivlin. and before that -- will join us and if you don't know her, she is outstanding on the beltway and budget. on the need to score trump care. this is bloomberg. ♪

francine: this is a "bloomberg surveillance."

we need to go to the middle east where there has been a hostile rhetoric between the turkish president and europe in leaders this weekend. the focus of his attention was on the neverland's after the dutch government withdrew landing rights for turkey's foreign minister. dutch officials cited concern of public disorder as the justification. we are joined by andrew barton. still with us is simon derrick and stephanie flanders. andrew, thank you for joining us. first of all, does this play ,nto the hands of eurosceptic extreme far writers in the netherlands? andrew: i think it plays into everybody's hands. we saw throughout this campaign attack right.ster he was trying to stop voters bleed off.

so this allowed him to come out and put a strong face on. we also saw -- come out to see that it is more energized. and it helps the turkish president. he has a referendum one month from now that is net and neck. those the short term, for three, it is a win-win-win. in the short term, we will have to see about that. francine: does the row escalate from now? how do you deescalate it? willw: i don't think you the escalate it until after the turkish referendum. we will get this one on the dutch election and then you will see them wind down the rhetoric. and then you will have the turkish referendum one month from now. once that is over, we might see

the turkish president hit the reset money and go. you look at the turkish's spat with russia, it took a long time to play out and it didn't come to an end and till turkey was ready to make the first move. so don't watch for anything until april 16. tom: here is the emotion. dutch nazi comment sparks backlash -- that is from this morning. after this election, what would be the benefit to mr. builders and his party? if we have these tensions, does that improve at the election and then after the election? andrew: we will be watching closely to see that. if wilder's comes out with a big

win, it will make things awkward, politically. the guy who wins is now part of it. and from the sidelines he will be able to snipe. we did see this come out in the campaign. this will keep him maybe a bit more quiet. we will be looking at the next pull to come out the next afternoon to see how this plays out. help me here on the momentum of populism. i couldn't get my handle on this saturday and sunday when you see language like nazi and fascist. this is very strong language. does this play to a trump like populism in the netherlands? stephanie: one of the things you have seen before this weekend, which may explain why you had the language that you had, was a bit of waning and support for s party.er

theasn't expected to win highest percentage of the vote in the election. that was trying to get back some of the populace feel. but i do think that there has ien a lot of good coverage -- recommend the financial times coverage over the roots of populism in the netherlands and how this techno crossfit country was one of the first places to also see the populist explosion. obvious one of the trump stories and it isn't the same people who have been supporting him. it is a more subtle story and potentially, maybe more positive. thingne: what is the one when looking at the lira today, the worst performer among the major currencies because of the political spat? simon: we have had plenty of

political spats on the international stage that have come along and yet by far the most dominant factor driving the turkish lira is the yield differential story. theare the performance of turkish lira against the yields in the u.s. and i think that else, more than anything and the fact that we have a central bank doing anything they possibly can to try to control the inflation story with skepticism about whether they will be able to use that as an effective policy, i think that is what ways on turkey and as a result, it will be a focus on the foreign debt. the dollar dominated debt. francine: how should the eu deal with turkey? the eu kneels turkey to deal refugee crisis but turkey wants access to the eu. on the previous point,

turkey shot a russian jet out of the sky and then had the russian ambassador assassinated in his country. there was a lot a rhetoric and it quickly went away. so to your question, once the referendum is past, there are a lot of issues on which turkey could come to europe and ring solutions. we have the refugee deal. trade ties. is this ties between the two are strong. and then we have the recession talks. europe needs turkey. so i think this is the opportunity for a more pragmatic approach, it is there. but it will come out until we get through this referendum. so probably more rhetoric and then april 17 we may see them, and try to take a different approach. it is in both of their interests and the markets are moving on it which tells a from the dutch point of view that people are

not that worried at its core. francine: that was andrew thank you. he will join us in the next hour. and we will be back with simon derrick and stephanie flanders. if you are a bloomberg user, log on to the terminal and go to tv . we have been talking about this. turkey. and you can also do this -- go back and searched some of the other cool stuff we have been doing all morning. and you can message tom keene directly about some of the rhetoric and the graphs. you can ask the quest -- ask the guest a question. you can steal some of the charts. this is bloomberg. ♪

emma: this is "bloomberg surveillance." eight years after the banking crash, iceland is back. the government says that effective tomorrow, it will lift the remaining capital controls. that allows icelandic citizens,

corporations and pension funds full access to markets. the banking collapse led to iceland's worst recession in more than six decades. consideringson is the first bond deal outside the u.s.. it will meet with investors in australia and singapore. in recent years, other big names have tapped asia specific investors to tackle corporate debt. to data, home values increased 6/10 of 1% to an $362,000.62 -- london housing prices rose as well. francine: japanese shares hit a 15 month high. there was a boj monetary policy meeting on thursday. the third day of gains, jumping to levels not seen since 2013. still with us is simon derrick and stephanie flanders.

me start with you. what i'm looking at is the fact that the bank of japan bond bechases for march seems to putting policy for bond buying on track to miss an annual target. what does that tells about the boj policy. the boj made a clear that it was an approximate target. and i do think that when you look at the bank of japan and what they have been doing and the occasional flurries and -- maybeto the market they're thinking about a shift? this is a chart i have shown a lot over the past couple of weeks. and -- the bank of japan had to come back.

us to include everything, including governor carney's thinking. they really don't want to make a mistake. also raisedhe ecb rates after the crisis and then had to go back so nobody wants to be in that situation. but i think it is partly a central bank policy story going on with japan and i think there story goingconomic along with that as well. we had positive numbers coming out of japan and the growth rate wasn't that different by the end of the year. it was at 1.6%. and with that, we had productivity growth. that is what ik am obsessed with but when it , whatto the future story the potential growth rate is in a country that has a shrinking labor force is completely dependent on that. so i think the micro optimism we

had in japan for a while is combining with the macro story to have a broader currency story which pushed up japanese markets for the last six months. tom: stephanie flanders and simon derrick, thank you so much for joining us today in london. weinberg. carl a really good time to speak to him about the global economy and how it links to chair yellen. much more through the morning -- alice risen will be with us and maya macguineas. next is carl weinberg. this is bloomberg. ♪

tom: this morning, markets touring. with aait chair yellen

key press conference. the rumor is that they will raise rates. democracy at work in the netherlands. look for a vote in the netherlands as they decide on immigration. is president trump distracted by angela merkel visiting tomorrow. he and the gop attempt to repeal and replace quickly. good morning, this is "bloomberg surveillance." i am tom keene with francine lacqua on a busy week. what is the thing in europe you are most focused on? francine: spreads. french spreads and swiss spreads. it gives us the image of monetary policy. gives us a sense on how the market perceives political risk. i thought that was extremely important. a lot of the right wing

concerning politicians are plateauing in terms of popularity. tom: we will keep you up-to-date on that as we can across the bloomberg. right now, here is emma chandra. emma: u.s. lawmakers say they haven't seem proof of trump's claim that his predecessor tapped phones. senator john mccain spoke on cnn. either retract or provides the information that the american people deserve, because if his right assessor violated the law, we have a serious issue here. according to abc news and the associated press, the justice department gave them until today to provide evidence that obama tapped phones. todayuse of commons votes

on prime minister theresa may on the brexit process. they have a say on what happens if the talks end. he wants them to overturn an amendment to the bill. -- has been upended by diplomatic dispute from turkey. this could re-energize the campaign as it appeared to be fading. ministers in the netherlands for political purposes. turkey says the dutch will "pay the price." america's northeast is bracing for a winter blizzard. it could bring up to 18 inches of snow on new york city. the snow is likely to start falling late tonight. global news, 24 hours a day. powered by our more than 2600 journalists and analysts, in more than 120 countries. i am emma chandra. this is bloomberg.

thank you. bonds, currencies. let's do this now. amex with the market. dow futures this morning are in the present it he of flat, flat. soggy. been there is no other way to put it. there is the netherlands and the german yields. in lockstep fair with large negative rates. iron looking at global stocks and chinese shares are surging in hong kong. there has been the job report helping investors position themselves for a week of policy decisions. very good. this is one of the most subtle charts i have put up in ages. stephanie flanders was quite good on this earlier. here is the boom in the

netherlands from 2001 up to the peak of the financial crisis. and critically, they go level where many others struggle. what is so subtle here is this rollover that we have seen over the last three years. let me draw the line better. i think it is incredibly subtle up to now. the nuances the people in the seeerlands face, you will -- i'm trying to dowse you with my dutch language. francine: it is great. wilders who is anti-muslim. let me bring over to my chart. this is the s&p fallout. i added the zero line for tom keene. this chart is spotless at the moment. in lieu of the swiss two-year

yields, i want to show you that wrapup foreigns currency purchases, high-quality bonds are seen as the likely landing spots for cash. we are seeing something very similar. the change in the interest rate differential threatens to go even further which is why you see that. tom: we have go to washington. kevin cirilli. maya macguineas will join us later and all that anyone is talking about is the rush to trump care or gop care. theyumor we have is that will score by wednesday. what is the rush for republicans? kevin: they have to pass health care if they want to get to tax

reform. why repealing obamacare is a top priority. republicans on the hill know that paul ryan's office pushed back against the notion that this is being rushed. they say this is the crux of their proposal and is something they discussed in the last congress but they are being attacked by democrats. a great piece over the weekend by david brooks on this. tom: bring up the brooks piece. this is a morning must-read. as anbeing pushed through elitist, anti-democratic rush. -- the old era was a big government versus the state. thisore of the new era is -- if you are pro-market, you have to be pro-state. republican senators tilting towards being concerned about pro-market, pro-state?

a new era? kevin: here is what i am looking at in the cbo report. not how much it costs, it also another number -- how many people will lose health care as a result of the new plan? itthat number will put moderate republicans ask -- republicans up for risk in question. people like rand paul and markley, they will be even more involved. the weekend, mike pence campaigned in kentucky. as well as mitch mcconnell. the white house has done a lot of outreach to try to get off -- tom: the timebomb of this late last week was -- coming out with a 15 million statistic. and they hedged that. you really wonder where we will be on wednesday, after we got

the deal with aei and then we go to the cbo thing. francine: you are right. it will be a very busy week. i want to ask you about the g-20, let'sbut the not forget. steve mnuchin will have to deal with the counterparts. how will donald trump receive angela merkel tomorrow? have had a storied relationship, to say the least. it will all come down to trade and immigration. this is a situation in which trump has routinely criticized angela merkel on the issue of immigration and let's not forget that this comes one day before he formally reveals his budget proposal. to nashville on wednesday to preempt this. so it is a busy week for the administration. and the outreach efforts. francine: what is the latest on

the wiretapping? picturewe have a bigger of what actually happened? kevin: the whole country is talking about this. the house committee members have said that they are giving the administration until today to provide evidence. this comes more than one point five weeks after top intelligence committee officials testified before the house intelligence committee next week. the fbi director will be there as well. it will continue. it will impact markets. tom: kevin cirilli, thank you so much. now, we talked to carl weinberg. right now, on the president, we have a president with nobody in office. undersecretary. you have done this before. how can you do this with so many vacancies in the executive ranch? carl: i haven't done this before

-- this is a first, we have a lot of holes in the administration. we have a lot of experts that are missing and we have a big agenda. so when we have been traveling around europe, we keep on getting the same question. how is this administration doing everything it is promising and how do they get it through congress and those of the questions we are getting. francine: how much will that influence the markets? or are they completely spaced out? is a bigger issue with what america wants to be like? are: investors right now paying attention to the physical aspects of the agenda. and we get a lot of that. optimism about stocks. have skepticism about consumer and investor confidence. i wonder what will happen if the agenda is not delivered. we have to be a little bit cautious.

tom: we have a great chart i made for carl weinberg. we will come right back and talk about the meetings and the press conference on wednesday. scarlet fu and myself this wednesday -- the fed decides at 1:00 p.m. extended afternoon coverage with a terrific lineup of smart, smart guests. this is bloomberg. ♪

emma: this is "bloomberg surveillance." is a backtracking on his comments that white men on corporate boards are endangered. he says he has always been an

advocate for diversity and regrets his remarks give the opposite impression. some shoppers say they would by court -- they would boycott tesco. goldman sachs has become the last major bank to join the rush on chinese stocks. they are now overweight chinese shares. a note today forecasts a 25% gain in 2017. the china gauge is up 11% this year. that is the bloomberg business flash. tom: how about carl weinberg with a great chart on what janet yellen faces. let's go right to the chart on high frequency economics. we show that a lot. this is highly unusual beginning in 2012. way above where we are right now. -- as we can only do on the bloomberg -- the dots.

18, 19, 20 and i put long-term out here in 2021. dots are way below. do you know where the neutral rate is for chair yellen? carl: i do not. but we know that the market is behind where the dots are. which is scary because they have some catching up to do. chair fischer has said we are altra accommodative. and i have not seen a single intelligent article about where restrictive click in. i think somewhere between two and three. a lot higher than where we are now. francoise -- francine: what will make this change? seen withwe have

treasuries? does it have to be a catalyst or is it market sentiment that could turn any second? carl: i think people will be listening to what the fed says. move the, in order to dots up, you have to see a change in the forecast. and nobody at the fed is changing the forecast as fast as the market is changing its expectations of what the economy is going to deliver. he market has bought into the presidents hope to get a higher growth rate. they're looking forward to fiscal stimulus. they're looking forward to tax cuts and deregulation. a think this will all make the economy grow faster. and that is probably going to be disappointing. the fed will be able to change its forecast with a higher rate of inflation to a lower rate of unemployment. to accept that we would go to the 4.5% level is key. you will get that sometime over the course of the next year. francine: are there things that

trump cannot disappoint on otherwise the market will see a reversal? is it really taxes and tax cuts that he has promised? carl: i think the market is equally balance between the fiscal side and the regulatory side. to move businesses forward. they're looking for infrastructure spending. it is a clear whether congress will deliver that, as expected. it is a clear that congress will give them that. one of the things here is the great distortion. and the idea of forcing rates up. help me here with the linkage of the completely absurd, nominal and negative rates with central-bank policy? which is the horse and which is the card? the fed has act before we break distortion, right? are right.nk you the fed has to act.

people love to that the fed has the goals in mind and it is in position. towill do what it has to do keep unemployment rates from going so low. , it is a monday morning a leap of faith that we are asking, right? tom: the bottom line is that they're having a leap of faith that the economy is doing better. the job market is good but at the end of the day it is a leap of faith. carl: the market has to come to the realization that the market will do what it has to do in order to keep the enemy limit rate going below -- tom: fascinating. absolutely fascinating. francine: absolutely fascinating. we will get back to that conversation with carl weinberg and we are also going to hear from francois fillon this morning.

to back down on some of the promises to overhaul the french economy. this will be one of the most important weeks for francois fillon. after last week over when he had he vowed to -- actually fight on. he says his project remains the deliver a needed shock to competitiveness. remember, he himself called himself a saturate so we will see if he has real chances of winning. this is bloomberg. ♪

francine: this is "bloomberg surveillance." let's go to turkey. more hostile rhetoric between the turkish president and european leaders this weekend. the dutch government with through landing rights for the foreign minister before he was two to address a rally. the dutch officials cited concern of public disorder as a justification. we are joined now by andrew barden. also with us is carl weinberg. you on theat to have program. how bad will this get? are we talking about possible sanctions against the netherlands? is this far-fetched? andrew: i don't know if it is far-fetched. there will be repercussions.

there was a spat with israel. turkey had a spat with russia. were consequences. a lot of money was lost. turkey had the courage of its conviction on those issues. eventually they passed. in this case, we have the referendum. this is a man who has never really lost an election. i think he will seek to hit the reset button. that is what we saw in the case of russia and israel. there may be choppiness in the short term but i think long-term, both sides will seek to dial it back. francine: we have elections in the netherlands in 48 hours. will this play into the voting over there? andrew: yes. the early results are absolutely that this is having an effect on

prime minister route. it worked. the polls.nd in -- was fading in the polls so this is energize the base. saying they will definitely come out so it has been a win for him. coming out in the next hour or two hours. the two leaders tonight square off and they have a one-on-one debate. there is a debate with everybody and then it is off to the ballots. tom: with you are ballots and your knowledge of the european atmosphere, it seems to be about too much immigration. not actually immigration and migrants and refugees, that the size of the inflow.

is that the heart of the netherlands debate? andrew: that is at the heart of everything. 1.5 migrantshad .ome ashore in europe literally and figuratively two years ago. they reached a refugee deal with turkey and that is starting to fray a little bit. numbers startugee to come up again. there is a big worry it will come up again. it is at the heart of the negotiations. tom: terrific perspective there. maya macguineas on the cbo and the scoring next. this is bloomberg. ♪ ways wins.

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you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. francine: a bit shakespearean. or not to article 50

trigger article 50. hey, it is sunny so that is that. let's get to the bloomberg first word news. putinin europe, vladimir may meet trump at july's g-20 summit. that is according to a kremlin spokesperson who spoke to cnn. russia has no plans to raise the economiceasing sanctions. theresa may will try to quell a report of a brexit. they will speak today on the house of lords. may wants those rejected but a number of her conservatives are in favor. says 85% of french people are afraid of far right presidential candidate marine le pen. she is virtually tied

with the independent candidate in the first round but macron is expected to beat marine le pen in a runoff. the south korea's president is now back home. she left the palace after the highest court removed her from office. she now may have to defend herself from charges that she pressured business executives to donate millions of dollars to foundations run by a friend. south korea will hold a special election by may 9. and the american northeast is bracing for a blizzard. the storm could drop up to 18 inches of snow. likely going to start falling tonight. global news, 24 hours a day. powered by our more than 2600 journalists and analysts, in more than 120 countries. i am emma chandra. this is bloomberg. tom: the leader in china may

attend mar-a-lago april 6 and april 7. that is known as the winter white house. over the weekend, a lot of discussion about the security structures. not only electronic and computer but also physical. but they are reporting that he will attend in early april at mar-a-lago. we will see. right now, something a little the continued deficit in the nation's budget. ata macguineas is very good keeping score of the score and carl weinberg is joining us with high frequency economics as well. i looked at where we are and i want to know what cbo is doing today. how can they pass a health care bill without basic scoring? maya: i am with you. i have been sitting here waiting to see what cbo is going to say.

i think there is a whole lot of attention on the fact that oddly, they are moving forward in congress with this legislation to change the health-care bill without a score in place. and given that there are main objectives of the health care reform -- it is nearly impossible to justify. if you don't know what the effect on the cost is going to be. so today is important from the fiscal perspective. for ahe committee responsible federal budget is knowing what matters. to have a headline at brookings where millions of bodies will lose health care. the medicaid and medicare analysis of what this budget will do? how will they deal with the complex math. maya: first off, health care is

one of the most complex pieces of the budget. biggestecause it is the part of what is growing, policy wise and contributing to national debt. a pity rising is what goes along with insurance and how insurance works. abouting i point out health care costs is that on one hand, we want people's costs to not be too high but on the other hand, one of the other ways that you help control costs is letting people have a little bit of skin in the game. so you want to be price-sensitive to the cost of things. keeping the cost down. the structures of the health care bill and how much consumers are involved in premiums or co-pays does have more of an effect on the long-term cost projection re-. solvency, whenre

does it become insolvent? theree're hearing is that will be a big fiscal metric want to pay attention to. francine: how much can the bill actually change? the senate is scheduled to vote today on whether they can person to lead medicare and medicaid -- does that make a difference? they have quite an oversight of the overall program. this bill could change not at all or it could change massively. so the bill us to get through the house and the senate. moderates, with the effect it would have on medicaid for low income people, which has been expanded in many states, where those folks will be left,

and concerns from people on the right to say this isn't repealing obamacare. obamacare, slightly altered. and it has way too many of what they consider entitlements. they're worried about the refundable tax credit. the problem is solving one of these problems could exacerbate other problems. so the question of whether it gets through the house is less of a question. does the senate take what they gave them, throw it away and start all over? amend it to magically and start all over? this is a game with a number of moving pieces. it is hard to predict where we would end. francine: what is your take on it? launching the offensive to get the congressional spotlights on -- charged by pharmacists? there are a million different angles. carl: isn't there an underlying tax cut under this all?

in terms of the super taxes that we put on to fund this under higher income tax rates? maya: a great question. taking a step that is the overall pay force. passedre, when it was was that whether you liked it or you didn't like it, it was paid for. it was paid for in two major ways. medicare reform, using medicare to control the cost of medicare and a significant tax increase. all of those tax cuts are on the chopping block and many of them or repealed in the new bill. what that does is it takes away the revenue base -- it takes away the amount of money that will be available to pay for new coverage options and a means the federal government will be collecting less revenue. we move toht before the next issue of tax reform. which is expected to prove no --

which is excited to bring down a record levels. that is where i wanted to go. i want to bring up the chart which is a standard affair. you have to show this chart to maya macguineas or she won't come back. clinton surplus up here. here are the ugly points. there is a wide presumption down here. within what we are going to observe on wednesday, with ceo scoring, and what we will next sixn the months-one year, where does the director of the omb fit in? to should he acts or behave the legislative branches? and to that matter, the president of the united states? maya: right. the director has eight tough job in front of him and i do think he is the right person for the job given what we have been -- seeing best far. trump is inheriting a bad fiscal

situation. not a bad economic situation but what obama inherited, fiscally, the highest it has been since truman entered office and it is projected to be growing. so what you know -- so what you need in an omb director is to get the debt under control. trump doesn't want to leave office with the debt significantly higher than it is projected to be or higher than he inherited but he is on track for that to be the case. making sure that there looking for savings and paying for new initiatives. the biggest piece of all of this -- we don't know where the white house will stand, are we going to tackle entitlement reform? there are three trust funds that are projected to become insolvent.

there is the growth of health care. the growth of requirement -- the growth of retirement. that means people are participating in these programs will get automatic cuts so that doesn't help anybody. and we need director will they need to be the spokesperson to tackle these issues. --: help me and the audience when the cbo scores, what is the first thing you will look for in the summary report? maya: bottom line cost. that so often gets lost. when i think about health care, i think three of the most in working factors are -- we should not reform the health care system that adds to debt, that makes medicare in solvent more quickly or doesn't help control health care costs.

there is a committee for the responsible deficit. thank you very much. the idea of taxes being saved. i believe when i look at that, they're mostly the upper 1%. equity,here with tax within what you read on trump care. now, with tax equity right the plan that is out there is to lower taxes on upper income people and that skews the tax distribution. ton. a revenue republican conservatives are very likely to take umbrage over the notion. where is it going to come from? it has to come from somewhere. they are looking at balancing the overall budget. tom: we will come back and carl weinberg will be with us. coming up, the conversation with

the cbo and the health care system -- alice rivlin with david gura, look for that this afternoon. london, new york and the beautiful east river, this is bloomberg. ♪

francine: francois fillon, the republican candidate in the french election, still talking and in selling to not back down on promises to overhaul the french economy. "myays the project or

projects" remains the same -- delivering a shock to competitiveness. he has come back in touch but he was hit from early january with all of this saga and scandal that he was paying his kids and wife whilst he was in parliament for jobs that there is wasn't done.hat his popularity went from 45% to 15% in a few weeks. tom: what happened over the weekend? we are distracted by the netherlands that to me, this is almost surreal right now. what happened over the weekend that you observed? francine: well, we had the escalation of tension between turkey and the netherlands. what i find worrying is something we need to keep a close eye on. the dutch election is 48 hours from now. and this bat was turkey gave a anti-muslim, very

far right. , we will have a different political landscape in europe. netherlandse election rebound upon the french election? francine: they are separate but investors will look at the netherlands. if you heard what andrew barden was saying, the malaise in europe is across the board. in,so if mr. wilder's comes -- the first round in france is on april 23. let's talk about corporate news right now. mark tucker will be the nonexecutive chairman of hsbc. on octoberrt at hsbc 1 and the first major task will be to find a successor to the ceo who led the bank for more than six years.

joining us now is stephen morris and carl weinberg. always a pleasure to speak with you on surveillance. give us a sense of why the markets like so much the appointment of mr. tucker? : he has a good record of growing financial services in asia which is where hsbc fortunes will have to live. they are in the middle of the process to split off from the bank and they will be hoping that mr. tucker can appoint a new ceo. that is his biggest first job in charge. that will help restore revenue growth which is declining. whilst the bank still pays a dividend, which not a lot of u.k. banks do, and it is keeping shareholders happy, i think they're hoping the new chairman will be able to drive performance. francine: who would be the ideal

ceo? they will have experience working in the u.k. and asia, and probably will have experience dealing with regulation. is one of the second highest ranked global significant banks in the world -- hsbc comes across a of different capital and conduct rules. and you have to be quite old. -- quite bold. do still have to manage the business effectively. francine: how does this rank compared to barclays or rbs? stronger than rbs and there is no issues with capital. his revenue slowing with our clays? beenen: revenue has slowing. and with a bank that makes money off the balance sheet as opposed to our clays you need to have

business generation and you need to be making more loans to the right people so they get paid back. so what hsbc will be looking at is an uptick in the dealings in loanand also lowering the repairman. you stephen morris, thank so much with the briefing on hsbc. i want to carl weinberg in a bid for a foreign -- for a discussion. tv is very cool. here it is right now. the live feed is delayed a few seconds. you can come over here on the right side and click on a previous block and it will start right in. better yet, you could steal the charts, bonus round, down here -- you could email francine lacqua and talk to her about her ncaa march madness bracket.

she is putting that together as we speak. ♪

francine: coming up shortly it is "bloomberg daybreak."

alix steel, and know you are excited. alix: we will be talking to michael spence. senior professor at akoni university in milan. week, ihe things this am most excited about trump and angela merkel meeting on tuesday. i want to be a fly on the wall. we are hoping michael spence can help shed light on what might be said in those meetings. tom: let's do the single best chart right now. we have been working on this. we will have even more today or tomorrow when we get the cbo score. carl weinberg is here with us to celebrate. we like to do this on a monday. we don't do that on a wednesday. we do that on a monday. ronald reagan, 35% debt to gdp. this is like total federal debt.

up we go with a big debt expansion. slope matters. this has to do with clinton and ofwe go is the huge mushroom two 100. analysis the -- analysis now has nothing to do with the past. no, it doesn't. the question is, what is the future trend going to be? do we go above 100% or do we go back down? it is in the hands of the current congress and the trump administration. make of: what you china? steve mnuchin is meeting his counterparts at the g-20 this week. i know i ask every time but are the chances of something ugly with china increased or decreased in the last few weeks? carl: the chances of something gone down.hina has it has come to the attention of the administration that we are partner here who is

important to the u.s. and that interest and trade go both ways. a lot of american businesses rely on china to make profits and do what they do. so i am looking for a cooling of the administration's view on china. there is noise about currency manipulation but i don't think we will get china declared as a currency manipulator. i am hoping we moved to a more positive footing. tom: within this is the idea of the united eights gauging abroad. you have mnuchin -- do any optimism that we will be multilateral in our engagement of people? is it just photo ops? we will be multilateral. how is the trump administration going to change the rules of the favor of theit in united states? look at what is happening in mexico. adversarial. look at china. both sides have stepped back from explosive starts to the relationship.

look at europe. i will be watching the angela merkel-trump summit to see if they can come up with something between the two of them. he has had harsh words for europe. see the interested to body language. it will be amazing. we will continue with carl weinberg on bloomberg radio, worldwide. this is an interesting monday. we have an eventful week, to say the least. i am watching euro swissie down at the bottom. 1.07 over the last hour. this is bloomberg. ♪

>> deutsche bank says go long

u.k. equities as the house of commons gives theresa may the right to brexit. and president trump repairs to unveiled his budget after meeting with angela merkel and confronting his first that ceiling limit. -- the fed on wall stree the fed and wall street see i die, in the super bowl week for central banks. >> welcome to bloomberg daybreak. week, so much going on -- we will put up some of the events all week long. what are you going to do? alix: i can't decide which i would rather be the fly on the wall for, the meeting between on the bloomberg or president trump, or the fed meeting. merkel and trump you can't get, two opposite. merkel going to have to explain how it works? david: she has been studying