ground after last night. em stocks extend their winning streak on a weaker u.s. currency, the fed continues with bill dudley in london today. repairing for the divorce, our sources say make of america and barclays -- in the post-brexit world. good morning, this is bloomberg surveillance. i am francine lacqua in london and tom keene is in new york. on the u.s. and donald trump and james comey, the french elections. italy mumbling under with concerns. tom: a lot of speakers with the american fed, mr. dudley in london. am i right in that he and carney are together today? matt: yes, -- francine: yes i think you are. let's get to the bloomberg first word news. has delivered a

couple of political blows to the donald trump administration, he revealed that the fbi is investigating whether any of the presidents associates collaborated with the russian government during the election campaign. he said there is no evidence to back up the president claimed that he was wiretapped his predecessor. in europe, french presidential front runner marine le pen and emmanuel macron went after each other in a televised debate, she attacked his record and call for a ban on all immigration and a 35% tariff on certain imports. macron blasted her for her lack of ethics. a former irish republican army commander who helped negotiate peace in northern ireland has died. he was 66. he denied allegations that he took part in terrorist activities during the time known as the trouble. he later became the chief anotiator -- negotiator for arm and eventually became a leader in the power-sharing

government. a former south korean leader has appeared for questioning for the first time since the corruption scandal that ended her presidency. she apologized to the korean people and promised to cooperate with investigators. she had immunity from prosecution while in office. global news 24 hours a day, powered by more than 2600 journalist and analysts in more than 120 countries. i am taylor riggs. this is bloomberg. tom: one day the screen. quieter equity market. you get that after the central bank festivities of last week. a lot of fed speakers today with the curve flattening. oil still a 48 handle. francine: a similar data check but i need to look at euro. it kind of moved on the back of what macron was saying. not a big win for emmanuel macron but the markets betting that marine le pen did not come

out as presidential as they were hoping and emmanuel macron did an ok job. european stocks flat. pound 1.2414. tom: events at 11.13, i miss that -- missed that. michael purvis will join us to talk about the complacency within the market. let's go to the united kingdom chart, i love this chart, this is inflation in britain back 60 years. andinflation in the 1970's 1980's. the john major collapse, higher inflation in 1992. amazing stability, the crisis. here is a pick up, this puts in perspective the rise in inflation. year-over-year,

the rise in inflation, putting it in historical context. years ago, my best back out of u.k. is they were treatolive oil in ears to your infections. -- ear infections. this french election tracker, this may seem confusing but these are the five candidates that were debating yesterday. le pen at 26. these are odds for the first round. le pen, macron, fillon. line is fading away. who is that? francine: fillon. he was doing well a couple of months ago. i will bring it back six months. the scandal about the misuse of public funds which was when he fell off the trail.

and 18.is between 17 he is -- we will get back to the french elections. a big week of fed speak with will add fuel to the debate over the pace of policy tightening. the new york fed president bill dudley speaking with mark carney in london. this before speeches from mr. george and -- the dollar is holding its ground after a four-day drop. the move has closed emerging-market stocks to their longest winning streak since august. thank you both for joining us. charles. give me a sense of what you see in the market. will it be a lot on politics or the french elections? or more on what central banks say? >> the key point is growth. if you look at the french election, we all understand that

there is a very high probability .f macron winning a big surprise if it does not happen. the dollar has been weaker even before the latest polls. the dollar is getting weaker for different reasons, not only for politics. you have global financial recovery -- i think the key point is still that growth is still -- we should not forget that learning -- it is very positive elsewhere in francine: -- elsewhere. francine: if you look at why earnings have gone up, the expectation, a lot to do with tax cuts and inflation. which may be longer in the waiting. >> expectation should not be too much in the u.s., especially in the terms of growth. it is very important to stress -- thereu.s. markets

is complacency about politics because you have seen president trump, obamacare, not easy to implement all of the tax cuts that were announced. tom: one of the great debates we are having is the quality of uncertainty. there is financial and investment uncertainty, and political uncertainty as well. does your political uncertainty 's investmentuca uncertainty? >> it does, he said he thought emmanuel macron's victory seem likely. the best case but not a given. le pen did not do as well as we may have expected but i do not think that really matters to her core collector's and it may be slightly underestimating in the polls which is why the risk she wins is still high, even if not the best case. that plays into the investment environment and i think growth is picking up in europe.

most people have their growth assumptions pending on these political uncertainties. if le pen wins, that unleashes difficult circumstances in europe. i think we will find their way into the investment outlook and the growth outlook. tom: what is the gdp outlook for europe? is it a 2% consonant or could it be better? >> in the first quarter, european growth can be better than 2% which is interesting because -- tom: better than the u.s.? >> better than the u.s., europe grew faster than the u.s. something astonishing, when you speak to investors, everybody believes u.s. -- u.s. growth is booming and europe is in a recession but it is the other way around. moving forward, the u.s. will pick up, but european growth is solid. you have an acceleration in bank lending and consumer spending is up. and a significant improvement in

investment spending. , also a: yes, but nightmare because you are setting policy. if you look at politics, you cannot tell me that fundamentals in economic growth in europe are sound. you have germany that is ok. italy is doing badly, unemployment is 40% for youth. >> the divergence is a problem for the ecb. let's not forget that if you look at the euro as growth, the improvement has been significant. europe has been in a recession since 2013 and now we are going back to a more normal cycle. trend growth is very low in europe, 2% is very high in that sense. francine: people feel unhappy. we have seen more and more polls , i do not know if it is a problem with distribution or this huge youth unemployment. i was reading something today, 40% of the youth between 18 and 24 would vote for le pen as a protest vote. 1.5, 2% growth outlook

is not enough, even according to the cap relations we have now, to greet enough jobs to bring down youth unemployment sustainably. that is why you see populism of the left and right, depending on the country, doing well in most european economies except germany, the netherlands, where the economy is doing well. the european central bank has used most of their artillery within it -- and that has caused some tensions with berlin. over the next few months, you tapered or theg interest rates going up slightly. that will remove one of the measures that have sustained european growth. the question is whether european growth remains as rosie without the ecb being deployed. tom: a great conversation to get us started this morning and we will continue with our guests in london. a real treat later, james will

join us and we will focus on his wonderful new book. it is lovely. it is a compendium of other books on leadership. he made it for his students at the fletcher school. that is the 6:00 hour. this is bloomberg. ♪

♪ >> this is bloomberg surveillance. i am taylor riggs. ppg industries is preparing a second takeover bid for axon noble according to people familiar with the matter. the first offer of $22 billion was rejected earlier this month and it is said the bid undervalued decoupling. softbank group has invested $300 million in a giant.

the investment values the new company -- at $17 billion. they rent out desks and offices to small businesses, freelancers, and other people six taking -- seeking temporary working space. investigators expect to find deutsche bank according to persons from the with the matter . they are the largest lender who has not agreed to settle the currency case. they said the justice department had closed a criminal investigation without filing charges. that is your bloomberg business flash. francine: thank you. the leading contenders for the presidential -- french presidency took the stage, from runners marine le pen and emmanuel macron lock horns in a 3.5 hour showdown. the first round of voting isn't about seven weeks time -- is in about seven weeks time.

>> the best way to send an honest signal that says we cannot work with you anymore is .o cut off immigration state medical care, access to social housing, assistance, subsidies, and so on. >> big trap you are falling into with your provocation is to divide society. to make the more than 4 million french people whose religion is islam and the great majority who are not into humanitarianism, but who live in our public, we could make them enemies of the republic. for me, it is no. francine: let's talk more about the debate. charles lichfield from eurasia and luca with us in london. we had some polls after the debate which put macron at the top. >> i urge taking the polls with caution.

they are snap polls that do not necessarily encompass all voters, just people who watched. what is important is that macron -- not that he won more or expanded his face, he needed not to lose the debate. he went into this as the front runner in a difficult position as the centrist. getting attacked from all sides. he came out standing and that is what matters. francine: there is 40% of french voters undecided. is that true and will they make their mind up with this debate and others coming up? >> i think the debate is an important moment. we had about 10 million viewers last night. of 60 million, that is huge, probably the largest television audience macr on among others have ever faced. i think -- will this be a turning point, that is hard to

say. it could have been and macron comes out standing which is what he needed to accomplish last night. tom: help me with madame le pen and how she garners the marginal vote. fascinated by the core constituency and compared to the president of the united states, how does she get the next boat -- vote? >> that is a good question. she has essentially already leading the polls. for le pen, if she had a major screwup, that would have mattered. she was incredibly solid, very blunt, very heavy statements, i want to been all immigration -- ban all immigration and same globalization has been a disaster and i want to fix it. i do not know whether she managed to expand her base but her armor was not dented. tom: was this a discussion of the leads -- elites?

it looks different than the u.s. debates. how to the rest of the nation take this, or was it a debate for the people of paris? of 10 million, the biggest television audience in 2017. it is huge. it is important to take it with a grain of salt. you are saying -- if you think back to the u.s. debate between clinton and trump, clinton came out as the glorious. -- victorious. the intelligentsia was loving it but it did not make a difference in the end. we will see what happens here. tom: thank you, brilliant, great perspective on a different tapestry than what we see in the united states. charles lichfield is with us and help me out with the rest of france. the prison i see is through the

newspapers and the think tanks -- prism i see is to the newspapers and the think tanks, forget about that, what is your perspective on the rest of france as they look at this election? >> the rest of france is looking at this election through two main perspectives, jobs, the economy with the second being security. on both of them, france is not done particularly well over the last five years. unemployment is still high and you have had three very large terrorist attacks. they will look at each candidate and tried to work out who offers the biggest departure from what i have currency that's currently. -- currently. a lot of the candidates come from the french elite but none etiquette,cept the everyone says they have a completely different approach to the current government. even emmanuel macron who served under the current government

until august. the only person who distinguishes themselves is mrs. le pen who has managed to broaden her base over the last 10 years and now at a ceiling of 30%. the problem for her is that the majority of french voters do not want to see her when. -- win. francine: you have another outsider on the extreme end. what are the chances of them uniting? could that be troublesome for the rest of them? >> there are still barriers for them doing that, not just party rivalries and ego problems, the fact that there are ideological differences which came out in the debate. they may both be far to the left but there are differences may have, especially on europe and on labor. that prevents them from coming together.

another problem, i do not think the numbers, i do not think you can mathematically assemble them if they came together, a lot of the far left voters would go to other far left candidate. unlikely they conclude an alliance. voters on the left could decide to vote tactically and move so there can be a left-wing candidate in the race. if the polls move up at the last minute, that may be the sign there is a three horse race in the second round against le pen. tom: we will come back. 2:00 this afternoon, let's float away, she has been trying to improve for international business machines. look for that in the 2:00 hour. an important interview. this is bloomberg. ♪

♪ root -- bloomberg surveillance. currency moves, i was surprised on the move yesterday in town and we have a date for triggering article 50. traders, we pound had a surprise member asking for a rate hike which change the game. a lot of people looking at france coming euro 1.0794. when you look at the market, why are trader still surprised that brexit is happening? >> we know all this.

what is interesting is to see how they react to the weakness of the dollar. more like a weakness in the dollar than strength in the pound because currency is getting stronger against the dollar. the fed is more dovish and u.s. growth not taking up as much as in europe and other parts of the world. francine: thank you. both stay with us. coming up later, erik schatzker live fromwith a ceo investor days, they will talk about expansion and ask about china. this is bloomberg. ♪ the biggest week in tv is back.

wow, watchathon has netflix? hey, drop a beat... [ beatboxing throughout ] show me orange is the new black. wait, no bloodline. how about bojack? luke cage. oh, dj tanner. maybe show me lilyhammer. mmm, show me last chance u. on second thought, maybe pompidou. narcos, fearless, cooked, the crown. marco polo, lost & found. grace and frankie, hemlock grove.

season one of... show me house of cards. xfinity watchathon week starts april 3. get unlimited access to all of netflix and more, free with xfinity on demand. the dinosaurs' extinction... got you outnumbered. don't listen to them. not appropriate. now i'm mashing these potatoes with my stick of butter... why don't you sit over here. something for everyone is awesome. find your awesome with the xfinity stream app. more to stream to every screen. ♪ tom: good morning. "bloomberg surveillance." francine lacqua in london. bill dudley and mark carney -- central bank speeches to be had.

will join us in the next hour. usedr: in the u.s., trump a campaign style rally to urge the house to pass the obamacare appeal bill. the president spoke in louisville, kentucky. >> as we move towards the crucial house vote on thursday, the seventh anniversary of passagee's very painful , this is our long-awaited chance to finally get rid of obamacare. taylor: republican leaders have made changes to the obamacare replacement bill to try to get support from their own party. still, the head of a house conservative group says there are not enough votes for it to pass. and trump's pick for the supreme court seat faces a marathon day of questions. democrats say they plan to hold neil gorsuch to a higher standard, partly because

republicans blocked keyrings for merrick garland. gs for merrick garland. from north africa will have to store devices larger than a cell phone into their check baggage. declare the macron winner of a televised debate in france. he was attacked on immigration, terrorism, and the economy. polls show that marine le pen lost ground. 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: thank you. we are getting some u.k. inflation data. more thanaccelerated economists had forecast in

february. that means it has managed to breach the bank of england's target for the first time in a few years. inflation rising to 2.3%. economists we spoke to estimated 2.1%. what this means -- the rate is up largely because sterling had a 17% drop since the brexit vote. this is significant, because mark carney has decided he will inflation, because it has to do with the pound weakness, instead of sticky inflation, as they like to call it. -- last week,ng we learned every nation's inflation is different. now we turn to washington. i do not know where to begin. let's look at the big story here. schenker has been up all

night. barry down here is the news you need to know. it is unbelievable -- buried down here is the news you need to know. it is unbelievable to see the health care back and forth. are the counties of new york ryan,getting a deal from and governor cuomo is furious. that is just one of the baseball going on in the health care bill. >> this is blocking and tackling at its best. the house vote on thursday is critical. unclear whether or not paul ryan can muster enough support to get this bill passed. they are pulling out all of the stops, including getting the president to come to the hill convince resistant republicans to vote for this bill. tom: someone has to get out there and put the whip to the republicans. is that old school politics?

does that formula work for a health care bill in the trump world? past years, you'll get a president to go in there and make promises, a bridge, a tunnel, a road to some congressman who is dragging his heels. you cannot do that with this president, because he has in the federaln deficit. so it will be interesting how he will twist arms and what happens thursday. the bedding is somehow -- the betting is somehow they will muster enough votes to pass. francine: i am looking to our coverage, your great coverage, go to bloomberg.com and then politics. me deals a blow to trump when he can least afford it. it feels like the citizens of

the u.s. do not care at the end of the day. are they listening this time? marty: there is a certain amount of truth to that pay the allegations that president obama wiretapped were pretty well kanaaned before comey said they were not true. and the administration is taking a calm approach to that. the word we get is that they are confident that the trump campaign will be cleared by this investigation. but remember the hillary clinton email investigation took a full year. so this may be a cloud hanging over the white house for quite a long time. francine: i know senators have nomination of neil gorsuch. are we any wiser about what he wants to do or his thoughts on policy? marty: no. he did a pretty good job about not tipping his hand on any specific issue. i am sure he is well coached and

will not go any place that could jeopardize or gave ammunition to members of his own party. he did a pretty good job yesterday of approaching it in a humane way. score, back toe health care come on for the senate is now. that is something i have not seen over the last five calendar days. to the vote, ies really do not know where the senate sits in. marty: as our story points out, even if the bill gets past the house, the senate is quite unclear. all it takes is three republicans to oppose, and the bill is dead in the senate. and we already have the republicans on record saying they will not vote for that bill. clear, is the president a hindrance to speaker ryan now? marty: it remains to be seen. the president has basically gone out there and said that

obamacare is a disaster, but he has not made a very compelling case as for why the ryan plan is that much better. that is where the senate republicans, who are in opposition to this bill, have a case. that this bill does not go far and isin -- obamacare-light. marty schenker there, overseeing all of our global economics and government coverage. now let's get back to luca and charlesictet lichfield of eurasia. when you look at the u.s., how much damage is mr. comey doing to trump? think he iso not doing that much damage. theepends on how long

negotiation of obamacare goes on for. i would not be too worried about it. francine: does this translate into your world, luca? does it translate into the president being able to go to congress and asking for things to help the economy? luca: this could be a turning point. the assumption is trump will get at least the tax cut down, infrastructure spending. if obamacare goes wrong, investors are asking questions. it is a key potential turning point in the trump administration. tom: thank you for much. with mr.ontinue paolini and mr. litchfield. the west is one of the differences for judge neil gorsuch. he is not from

universities in the east. this is bloomberg. ♪

♪ "bloomberg surveillance." lookat that. it looks like a painting. it is so cold, but welcome to london. i am francine lacqua in london. tom keene is in new york. we have to talk about frexit -- brexit, because the prime minister is ready to invoke article 50. she says that will happen on the 20 next. -- 29th. week tohave a whole repair for that. let's get back to luca paolini, pictet asset management, and charles lichfield, from urijah

-- eurasia group associates. how much do we know about how the e.u. will manage this? will it be acrimonious? charles: absolutely. it does not mean the e.u. is not preparing for this triggering. they have already coordinated on a response to this. and the timing of the negotiations, they want to talk about the formal exit first before we can move on to track negotiations about the exit and the future relationship. but they are waiting for the exact contents of ms. may's they canfore it trigger if they have to respond in a more aggressive way. they have -- they are hoping on some precision from ms. may.

they e.u. -- the e.u. member states to have an interest in the markets, but they have to know what she is preparing. francine: what do banks do? prepare for the worst and hope for the best? is still unclear what the situation will be. what i think we know is because of the elections in france and germany, especially the german and french will be tough, i think we will not know much in the next three to six months. honestly, i think it is too early to tell, especially this early. tom: i look at this day today. charles, let me go to you. who is prime minister may speaking to in europe? i cannot get a straight answer. isrles: maybe because she not speaking to the europeans

that much. she is very clear that she wants to talk to them in person and explain her strategy to them in person. it is what they may be getting through the british press may present her strategy as something that is anti-european. she does talk to trump and merkel and to the different is additions in the au -- the dif ferent institutions in the e.u. my sense is she does not really go to them for advice, though. she has put together her strategy with her british fromors, under pressure some of her ministers who supported brexit in the referendum campaign and who represent the radical pro-brexit view in the tory party. as we know, it is not involve many concessions to that you -- the e.u. she wants to leave the single

market, she does not want any payment into the e.u. budget. she has not had much of an opportunity to talk to e.u. partners. tom: francine, i am interested in your perspective into what charles said. is this debate occurring in the press? from where i sit, it seems like it is an all the media, yet no one is talking to anybody. francine: people are talking, but it is difficult, if you are negotiating, to say exactly your starting position. i urge everyone watching us to dign to bloomberg.com and out a story about where the banks want to move their people. maybe dublin, which is kind of what we have always said, being that the english language makes it easier moving of their then to frankfurt or madrid. than tog it there

favorite or madrid. is this another burden for the u.k.? luca: i think it is. for some parts of asset management, they may have to move some of their stuff. but it is too early to tell. i think the banks want to stay. but itve a plan b, adjusts. tois probably not going happen in the next three to six months. francine: is the first thing the u.k. should negotiate an exception of the two-year timeline? charles: you can extend the timeline by staying in the e.u. but that is the deadline for holding her own general election in 2020. currently, we are scheduled to which is her ideal

timetable. it is unlikely that she tries to prolong negotiations within the e.u. but two years are not enough to construct a long-term complex relationship, which means that i think most people are striving towards some sort of transition deal. it is unclear what that means. it is important to understand from the brussels inspected, transition means continuity. so the terms of trade will not be the same once we leave in 2019. tom: so i have to make money. the pound-sterling is a million miles away from the weak sterling call. --der why sherk sterling when do i sherk sterling -- shi rk sterling? -- wei think we have

expect the pound to move a little bit higher. if it goes anywhere close to bank.. to- 1.30, that is the time shirk. much,ne: thank you very luca paolini of that asset -- pictet asset and charles lichfield of eurasia. if you are a tv viewer, you can bring up tom keene. our best video. you can watch as live and also send messages directly to our guest. this is bloomberg. ♪

♪ this is: --taylor: "bloomberg surveillance." billionaire investor leon cooperman faces a lawsuit in in insider trading case. a federal judge rejected his request to throw out the case. cooperman has denied any wrongdoing. new york fed president william

dudley says the wells fargo scandal shows that the banking industry still has work to do on improving its culture. wells fargo employees may have opened more than 2 million deposit and credit card accounts without customers' permission. said u.s.l reserve commercial real estate is expensive, but the largest money manager in the world says it is time to buy. blackrock says poverty can deliver yield of 3.5%. real estate recovery still has room to run because of deflation and resilient yield. that is your bloomberg business flash. francine: thank you. now time for the morning must-read. something about trade's angela merkel and other shinzo says that there must be free trade.

free trade forces consumers to compete, making the economy more efficient. we are back with charles lichfield of eurasia group. beingoblem with globalization heavy is he often get categorized as the elite that gains from it. how do politicians and academics make the case for globalization without being seen as the devil? charles: it is difficult. show -- yous to merkel has been careful to show her electorate shedding and battering down the hatches mean. it means less growth, less prosperity, and it will be bad for germany. the problem is if you go somewhere like france, which also pretends it has an open stance on free trade but has not been as competitive recently.

react toorate tends to it in a difficult way. it has been difficult for politicians to fulfill what they call in france the put a logical -- pedalogical duty. we are seeing that polarization clearly in the french political debate now. some countries have already moved into a post left and right debate, where it is now a debate between those who want globalization and those who want to protect the country with the national boundaries, not just for security but also trade. that seems to be what the french second round would be. mr. macron, represents openness, pen,s. lepen, -- ms. le who represents protecting france. within their borders tom: are we beyond post will work to french

politics? have we -- are we beyond post-world war ii french politics? have we simply moved beyond what we have grown up with? charles: i think that is true. this has been an extremely important campaign where the two mainstream parties of french politics, the center-right and centerleft bloc, are disintegrating. they will survive in some shape or form, but the reasons why they always stuck together besides -- despite ideological afferences was it guaranteed nation between left and right, and at some point, you would be in power if you are part of these parties. but now because of their own contradictions, they have not been able to satisfy french voters, who are now turning to penernative options, ms. le and mr. macron, who has become

successful in a short amount of time. the french electorate will be split, i think. on the center-right, it could be dangerous, because those who do not support a president macron, if he wins, could be tempted to make an alliance with ms. le pen . there are huge differences between the right and the right of marine le pen. tom: let's leave it there. charles lichfield. coming up in our next hour, with speakers, chris rupkey. this is bloomberg. ♪

♪ feet widehip is five

and 10 feet long as speaker ryan gives $5 billion to placate republicans. director stops traffic in time in washington. there is possible coordination between the kremlin and the campaign of the president. as an aside, no wiretapping discovered. get five people together in pairs, and they talk brexit. the candidates debate. madame le pen defends project fear. this is "bloomberg surveillance ," live from our world headquarters in new york with and francine lacqua in london. what did you learn from the french people and the french? francine: i learned that the left was stronger than people thought. we had some snap rolls saying centristnuel macron, to the left, won the debate.

i think it is more nuanced than that. we did learn that marine le pen is trying to be the french photocopy of trump. she stopped short of saying "ma ke france great again." tom: mark deen with great reporting out of paris. and right now in washington, here is taylor riggs. director james comey has delivered a couple political blows to the trump administration. he revealed the fbi is investigating whether any of the president's associates collaborated with russia during the campaign. meanwhile, the kremlin says the u.s. has no evidence that they meddled in the election. is aimed atew role travelers coming from north africa, and having to stor

electronic devices more -- having to store a la tronic devices larger than a cell phone into check packages. airlines 96giving hours to implement the changes. marine le pen and emmanuel macron went after each other in a televised debate. le pen attack macron's record, called for a ban on 100% of immigration. blasted le pen on her ethics. and a former irish republican army commander who helped negotiate peace has died. martin mcguinness died at age 66. he eventually became the deputy leader of northern ireland's power-sharing government. global news 24 hours a day,

powered by more than 2600 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. tom: thanks. let me do one data board. let's get to francine with sterling. futures are there in the mix -- the vix. crude oil churning here at $48 as hedge funds reaffirm a short bet. francine: i would point to a currency move. europe rising after the french presidential debate. emerging stocks keep on climbing. you mentioned of inflation, gaining more than forecast. that means it is reaching doe goals -- boe goals. whipnow our chief

,orresponded in washington kevin cirilli. who is getting whipped the most? kevin: many of the more conservative members will be whipped hard. trump spoke in kentucky to gain support for the house republican plan to repeal obamacare. tom: do the whippees feel they are going through the motions because this has no chance in the senate? essentially, things will have to change in order for it to pass the senate. because this is such a big promise from then candidate trump on the campaign trail, they feel they can do it. later today, i will interview of the house and

we will put those questions to her. the bottom line is this is moving quickly. i spoke with a senior aide to speaker ryan, who told me that trump will be on capitol hill later today, meeting with members of the republican caucus, trying to rally support. tom: what is important to me is there are eight flows of money. has anw york times" article about the counties of new york state dialing with governor cuomo about who will write the check. the president does not care about that. he wants to look presidential when he walks into a room. is there anyone to him? kevin: he has the support of speaker ryan and other top republicans in the house. the question comes is whether the rowdy numbers of the house freedom caucus, the tea party members, whether or not they will buck the president and go against him and whether or not their opposition will stall this

plan. onwould be a major blemish the half of the administration from a policy standpoint, should this not pass on thursday. francine: went we find out more about what james comey was saying yesterday -- when do we find out more about what james comey was saying yesterday? kevin: there is no timeline on when his investigation will be public, but the fact that he did a there is an ongoing fbi and investigation -- ongoing fbi investigation raises questions. because of publicans were also questioning this, putting the president in a weaker spot when things like health care get to the senate, and he wants to get to other legislative items. francine: how can you quantify that? how much support has he actually lost within his own party? that he is lost

support, it is that it has dominated the chatter in the halls of congress p.a.d. have people like senator dean heller, from a popularity standpoint, a moderate from nevada, looking at this president and viewing him in a position of weakness. because the more these popularity polls dip for the president, it makes it tougher for moderates to have to back him. tom: kevins, thank you. after the fed thunder, the only fed speaker not speaking is chris rupkey of mufg union bank. he writes a research note loaded with shards and linking together in what rate dynamics our central bank does pay we will get to the central bank in our next set, chris rupkey. right now, what came up three times in conversation is how is the economy is doing. you have a great paragraph on

your note in industrial production stuttering along. congenital optimist. are you beginning to see tea leaves that are like "maybe not" on economic growth? chris: it is interesting. we have lost the power of industrial production. manufacturing is only 8% or 9% of total employment. not a lot of people are doing factory-type jobs. industrial production is an important indicator of telling the business cycle from peak or trough. right now, it is murky. is: the line from optimists about the first quarter is always bad, and then we come back. do you have a lot of enthusiasm for that theory? or is there more tentativeness about second and third quarter economic growth? chris: that has been a good

story. we have had colder winters. ado not know if this is colder winter, except for the last couple of weeks, but usually growth ticks up later on in spring and summer. i am not worried about that now because the consumer seems to be doing well. it is really all about investment. so that will not come back that quickly. francine: do you think of the gdp is noisy, like chair yellen? chris: yes. i just put a graph of every quarter's gdp, looking back since the 1970's. it is one of these up and down wiggle things. economiclot of trump's advisers, who are ceos, are saying we need to pump up growth. but if you look at real consumption expenditures, what all of us are spending at the shops and malls and innocent ,ales -- internet sales

consumer spending is pretty much completely normal. just investment, investment, investment. in a way, maybe we have already -- companies have already bought all of the equipment they need for the cycle. but we are watching. francine: and there is still a problem with productivity. the pagenaud -- that has gone nowhere. chris: productivity is more or less gdp growth. you separate gdp into productivity, and labor force growth, or the population. right now, population is dead. tom: bring up this chart -- go to tv -- we tried to be smart here. this is the acclaimed rupkey wiggle-wiggle chart. twist and shout.

up-down wiggle-wiggle. are you kidding me? that's not a cfa phrase. it's like a japanese bank phrase. up-down wiggle-wiggle. today, important testimony. the nomination process of judge neil gorsuch pay look for that in the 9:00 hour. from london and new york, we u pdate wiggle wiggle. this is bloomberg. ♪

♪ this is "bloomberg surveillance." let's get the bloomberg business flash. bmw forecasts sales and profits

will rise slightly. it has to deal with an aging lineup and electric autos. the ceo says the company will launch 40 new and revised models this year. in new york, regulators are expected to find deutsche bank for misconduct. that is according to persons familiar with the matter. largest bank is the lender who is not agreed to settle a currency case. thatustice department said they had closed and investigation without filing charges. francine: thank you, taylor. now a big week of fed speak adds fuel to the debate over policy tightening. doe --dley speaking with boe governor mark carney today. the dollar's holding its ground after a four-day drop. let's now bring in michael

purves. still with us in new york, chris rupkey. welcome to london. michael: good to be here. francine: tell me about what the markets want to find out from these fed speakers. we introduced the lone dissenter when it comes to inflation in minneapolis. his is significant, the shift in how market should do this? michael: one of the things i would like for them to expand on more is how sensitive they are to the global growth. over the last three or four months, we have seen this more hawkish narrative developed. maybe three -- definitely three to four to who knows how many. something they need to address and articulate is how sensitive they are to the fact that global synchronized growth has moved a

lot over the last few months. we have the u.s. story. that is pretty much understood. there is the unknown about t agenda.iscal that is the elephant in the room. the other elephant is how sensitive they are to globally synchronized growth. if growth falls off outside of the u.s., how much will that impact the narrative going forward? question.cleakey francine: how do you see inflation going in the u.s.? chris: the irony is the fed saying they are not on a preset course, but they have rate hikes this year into 2019. they have that even though inflation never goes above 2%. they do not care. to me, once you get it to normal 3%, then we can start arguing about the strength of the world economy and things like that. but at the moment, they are on a preset course, even though

yellen says they are not. tom: it is a lot of fun to bring --s chart up with ago pers michael purves and chris rupkey. we have added here a rate increase on march 15. here are the next two fed meetings. maybe here is where chair yellen is shown the door by the president. help me with a vector that we see here. there is an assumption of higher rates. can you make that assumption, or are there surprises like soggy economic growth to get in the way? the inflationr as discussion, we have seen this huge rise in headline inflation creeping up. the headline inflation numbers that will help define the fed hike trajectory and therefore the two-year yield, that discussion will come to a lot of

core economic data about the get output gap, which will a lot more as well. some of the political aspects. and how quickly and in what quantity the trump agenda comes. i will draw a rectangle why does the calendar start january 1, add in the december meeting as one of the rate increases we see over the next 12 or 14 months. we have had to them quick rate increases back to back, essentially -- we have had 2 rate increases back to back. chris: my story is there are not as many traders as they used to be at wall street firms, but for two-year notes are

1.3%. the fed says we will be at 1.5% at the end of the year. what is the two-year note doing, so low here? tom: michael purves, why do we have this being here? michael: let's not forget that the two-year bund was at record lows. a certain degree, that has been containing and moderating the rise of that. that is why they continue to bund yieldsre the on the short and particularly the long ends could be the catalyst to lifting our rates higher or not. francine: michael, thank you so much. .ichael purves of weeden and co stays with us, as that is chris rupkey. coming up, erik schatzker sits

down with arne sorenson. they will talk about china, growth, and the u.s. this is bloomberg. ♪

♪ is "bloomberg surveillance." i am francine lacqua in london. tom keene is in new york. we need to talk about brexit as theresa may gets ready to invoke article 50 on march 29. according to people familiar to the plans, frankfurt and dublin are emerging as the biggest

isners, where barclays considering dublin as their e.u. base. have chris rupkey here, as well as michael purves. it seems dublin, the normal transition capital, just because they speak english. >> yes. dublin is emerging as one of the winners. fews interesting that american banks, like bank of america and standard chartered have also identify the city is where they will have to move at least some of their employees. what is interesting is that there are several locations. not just dublin or frankfurt or paris. banks seem to be redeploying, getting ready to redeploy employees across europe. ofgives london a hope

surviving as a financial center. because the act means there will be no one big rival emerging to take london's business overtime. francine: i spoke to jamie dimon 10 days ago. are sayinghe ceos where do we moved to, because that would help in building an infrastructure system, there does not seem to be talk of that. stephen: the problem is there is no single city that has the capacity of regulatory infrastructure to regulate a huge influx of banks, nor the office space, schools, or apartment rovings to accommodate these people are that may be part of the gravitation. the other may be that if london maintains the infrastructure, it can maintain the status quo, which the banks want. 2500ve had estimates from

to 100 times that. it depends on what kind of deal the u.k. government can negotiate, which starts march 29. but we may see some banks move their employees earlier in order to give clients certainty they will be able to keep doing business. francine: willoughby's or in the next two or three months? stephen: i expect it to get movement the next three or four months, but it depends what kind of noise comes from the u.k. government. francine: stephen morris, thank you. coming up later today, a conversation with the ibm ca are -- chair and ceo. ♪

♪\ tom: it is beautiful and warm. spring here as chris rupkey mentioned earlier. a cold you in new york city. a bit of chill this weekend.

right now it is spring in new york. here is taylor riggs. taylor: in the u.s., president trump used a campaign style rally to urge the house to pass the obamacare pealed bill. he spokin kentucky. president trump: as we move towards a crucial houseboat, the seventh -- house vote, the seventh anniversary of the painful passage of obamacare, this is our chance to finally get rid of obamacare. republican leaders have made changes to the obamacare replacement bill to try to get support from their own party. the head of a house conservative party says there are not enough votes to pass. donald trump's pick for the open supreme court see faces a marathon day of questioning. an aircraft say they plan to hold them to a higher standard partly because of republicans

blocking obama's choice for the seat. -- appeared for questioning for the first time in that corruption scandal that ended her presidency. she apologized to the korean people. she had immunity from prosecution while in office. 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. tom, francine. francine: thank you so much. we are getting breaking news. we know mark carney is speaking by youtube. he is speaking with the new york fed president. they are taking part in a panel discussion at the bank of england on ethics and culture. this is extremely important. charlotte hollis said she would resign at the week of england. mark carney says had learned the

lessons of the sudden resignation. where monitoring that as that panel is ongoing. let's move on to france and the five leading contenders for the french presidency. their first tv debate last time. faced le pen and macron off in a thread half hour showdown, providing a taste of the head-to-head fight they make face in the second round of voting. >> the best way to send a signal , and honest signal that says we cannot welcome you anymore is to call all the paths of immigration, state medical care, access to housing, various assistance and subsidies and so on. >> the trap you are falling into with your provocations is to divide society, to make more than 4 million french people whose religion is islam and the

great majority who live in our republic, to make them enemies of the republic. for me, it is no. francine: let's get more on the debate. we are joined by mark deen, who is following this closely as a lot of us were as well. still with us, chris rupkey. me through who actually won and lost the debate. mark: i don't think anyone expanded their base massively. the main candidates, le en, m acron, and fillon managed to consolidate their support. they managed the tasks that to seebase needed them to do. particularly this was important for macron's voters are less

sure that they will vote for him. that he cannot as having theentially won debate according to balls may shall be has firmed up his position. decidee: will this help who voters will vote for? debatesere are two more before the first round. this is an unprecedented exercise. previously there were only debates between the two rounds, so only two people debating. this is very different. it is difficult to say. if you think back to the u.s. presidential debates. you have different events. it depends on the tommy, what else is happening in the campaign. this is a significant moment for all three leading campaigns. they have all maintained their positions. trump, and the

debates, and was he used as a weapon or a total of optimism -- tool of optimism? >> only briefly did he come up. fillon said we are in a world of instability. without elaboration, the u.s. has not been the ally it has been, and we need to look after ourselves in a dangerous world. brexit came up. marine le pen about the brexit vote and held that up as an example. macron attacked her on that, saying rings are not as rosy for britain as they seem even though the economy has not collapsed. francine: thank you. mark deen there. let's bring up chris rupkey and michael purves.

are we going to see a lot more volatility every time there is a political risk in europe until we get france and the german elections out of the way? >> if we look at equity volatilities across japan, europe, the u.s., across asset classes, it is subdued. one thing the volatility markets have come to term with post-brexit and those trump -- , they are realizing that for these types of all the ,olden's, -- political events the shock at all, what happens after that, the process by which brexit were to occur, it is like watching a boring movie in slow motion. it is very detailed. it takes years to get from concept to some sort of tangible

reality. along the way if you are trading volatility, you have to look at what is right there. the volatility surface, if you , they are not picking this up. they have been bearish for a long time. they have been right. tom: we have to do a jargon alert. this means they are looking for less volatility, less fear, or complacency. that is what we are seeing. what a great call. give us an update. here is asia dxy. up we go. strong asia. the purves rollover. tell us about the distributional effects of strong dollar. will we still see an excursion in asia currency weakeness? >> it is funny.

if you look at the technical on that chart, you can come to a couple of conclusions. one thing that is very clear from when we saw that -- go back to august 2015 when you had real volatility shock when vix went up off of that china deval, some of the chinese economic data is starting to slowly show signs of stability, maybe not greatness. from the global response of you, that is what is at work. you are starting to see a lot of metrics that have shot up dramatically. some closing gap over there. you are starting to get a sense that they are not out of the woods, but it is not august 2015. tom: union bank, a japanese bank, what is your vision on the u.s. dollar? >> primarily, it is commodity

driven. to 120.en went from 75 abenorst 75 to 100 was mics. tom: are you betting on that? >> the final move was commodity prices. that is over. i would not look for the dollar decline even with u.s. interest rates going up. tom: chris rupkey here with us. thank you, michael purves. greatly appreciate it. coming up, the conversation that is very important, a conversation with james to be tufts. sturvidis of we will talk to the admiral about trump. this is bloomberg. ♪

♪ >> this is "bloomberg surveillance." let's get to the bloomberg business flash. facing an fcc lawsuit in an insider trading case. he is accused of making more than $4 billion in illegal profits. cooperman has denied wrongdoing. the federal reserve says u.s. commercial real estate is expensive. the world's largest money manager says it is time to buy. they can deliver average yields of 3.5%. the recovery still has room to run because of inflation and rental yields. that is your business flash. tom: thank you. this is a real pleasure.

we speak to james stavridis of tufts university about our international relations and politics. he is out with a spectacular new book on leadership. it is completely original. let's say you were to go to the military and say what is the one book and the one quote that made it work for you, that is what he has done. this is an immediate must-read on leadership. why should president trump read david's best and brightest? james: first and foremost because it would show that he has to build a team. he better do it rapidly. we still don't have a deputy secretary of state, defense, navy, army, the air force. this shows us that the faster you build the team, the better. you have to guide and monitor

the team. occasionally they can go in a bad direction, as was the case in vietnam. willsecretary tillerson travel to russia, what should he nato? he snubs reade best one for him to would be team of rivals because in the middle of a cabinet that is a team of rivals. he is in a world that is a team of rivals. at the end, you have to pick the best friends you can. to walk away from nato to go to russia, aictator, or dictator, is a huge mistake. book andin the leaders chaos of the last 24 hours in washington is when the adults

enter the room. you close your book. we are waiting for the adults to enter the room. where are they? >> we have a few. i am putting a lot of money on lieutenant general h.r. mcmaster, who is on this list. his book dereliction of duty about speaking truth to power was a national essilor. read.k it is a terrific ,long with general jim mattis who has provided quotes for the book. there are some adults in the room. they need to really push themselves forward at this point. francine: do the adults in the room still read? this is the thing that has come out of politics in the last eight months. >> unfortunately, president trump famously does not read books.

i would argue that reading three or four of the ones from this book would make sense. people like general mattis has a personal library of thousands of books. john kelly and i have traded book recommendations for years. we need to go back to these core principles if we are going to have a successful administration. francine: is churchill still the best leader of all? >> i think he stands out in many ways. his book, the second world war, which is a six volume set, is on the list. when you look at the various times and faces of his life, how he brought that altogether during his world war ii service is remarkable. one of the most emotional points of your book is 90 -year-old hayword who gave

service to his country. we were less risk-averse than we are now. are you witnessing risk-averse all takes and risk-averse international affairs? >> i would say this administration has yet to really show us what i have in that regards -- they have in that regards. muscle in the big international system to build walls, tariffs. those are gross exaggerations. those kinds of risky bets have yet to materialize in this administration. if they follow them, they will be taking on too much risk. i would like to see them steer a moderate and middle course, much like you can find in a book like killer angels, about the battle of gettysburg. that is what we need from this administration, a centrist

course. francine: it is the same how qualities -- same qualities to be a good politician and businessman? aboutuld not worry deficits because president trump is a businessman. or will hisamage business hat prevent that? >> we will have a fascinating case study in rex tillerson, the secretary of state. my money is on him long-term to be successful. other business leaders have made that leap into government less successfully. i am hopeful that the core principles of leadership, which are the are as servant working for the nation in this case, finding collaboration, innovation. connecticut yankee in king arthur's court by mark twain, those principles translate well

from business to the government and back. let's hope we see that deployed effectively. tom: thank you so much. on leaders bookshelf bloomberg radio coming up with james stavridis of tufts. here, bonus over round. you can look at previous up, down, wiggle-wiggle charts. you can go back and look at our charts. this is bloomberg. ♪

♪ governor mark carney talking at the bank of england on transparency and ethics. he says the bank of england has learned the lesson from the sudden resignation of his deputy governor after failing to disclose a potential conflict of interest. it went on to say that for those with questioned whether we get it, we do. we will keep a close eye on that.

we have some inflation figures. that is translating into a little bit of pound strength. tom: inflation figures were interesting. not much going on. 125.ing strength out near euro at 108 is a big deal. mexican peso is strong. new strength in dollar peso. here is what nobody wants to talk about today. there are 18 speakers today, including governor carney. sheet of gdpalance in japan, and down here elevated europe, and the u.s. moving from this mark in 2008 to now. give us a quick primer on the worry of the balance sheet. they do not seem to be worried. >> in the u.s., there is more

talk that the fed should do something to bring down the balance sheet. it is roughly $4 trillion. it is not going to come from $4 tollion a balance sheet down zero. it is just going to come down to trillion dollars. the fed said they are going to let the mortgage backed securities mature over time. that is going to take it down roughly $300 billion at most per year. i don't have a big issue with the balance sheet whether or not to shrink it. tom: the speakers today don't either. it is not really going to be talked about. >> it is one of those issues out there with the debt to gdp ratio in the u.s. which is either 60% or 100% depending on how you measure it. people just want more of a financial accounting from government officials. they want u.s. individuals have

to keep their books in order. elected officials want some of these institutions like the fed and the national debt to come down. they want the fiscal finances to come into order. francine: i am looking at a balance sheet percentage of gdp. you have the bank of japan. this is a different story. we're talking about the fed. that is my line in white. boj if it cannot keep an eye on yen, this will be a problem at some point. >> it has not led to any inflation yet. qe wasginal worry with that it was going to unleash inflation like a wildfire. it has not happened. government finances are different than individual finances. we are not worried about debt to gdp in japan at the moment. tom: thank you so much. "bloomberg surveillance" on

radio with francine lacqua. brackets withcaa francine. i promise you, outrage. purdue york post reseeds 13th. that is a scandal. francine: i'm just focused on virginia. i don't know what they're doing. very impressive. tom: i am speechless. gorsuch at this nomination hearing at the 9:00 hour. stay with us. this is bloomberg. ♪

♪ >> it is as you were in the

french presidential race. macron comes out largely unscathed. the euro should tire. u.k. inflation surging beyond the bank of england target. u.s. equity stays focused while distractions in d.c. from new york city, good morning. for our viewers worldwide, this is "bloomberg daybreak." i am jonathan ferro. david has the day off. alix: a stacked week. why raise rates now? he made a compelling argument yesterday. markets are agreeing with him. the rest of the fed agrees with everyone else. vonnie: wondering -- jonathan: wondering whether this is a protest vote. this morning, this is how we are set up in the market this morning.